April 11, 2017

Court of Appeals Reverses Verdict for Defamation and Blacklisting

Category: Indianapolis Law Club, Verdicts | Author: | Share:

In School City of Hammond Dist. v. Rueth, Chad Rueth was the Athletic Director at Gavit Middle/High School from 2008 until 2012. Early in 2012, Rueth interviewed for the position of athletic director at his high school alma mater, Bishop Noll Institute, and was one of two finalists for the job. He didn’t get the job at BNI and was not renewed for his old job at Gavit. Rueth then sued the school district for defamation and blacklisting. Following a jury trial, Rueth received a general verdict for $550,000 and the school district appealed, arguing that the evidence was insufficient to support a verdict on either claim.

Defamation requires proof of a defamatory communication, that is one which tends to injure reputation or to diminish esteem, respect, good will, or confidence in the plaintiff, or to excite derogatory feelings or opinions about the plaintiff. To impose liability, a false statement of fact is required.

On appeal, the court reviewed the record in detail but found no evidence of any false statement of fact by any school district official or employee that was communicated to a third person. Rueth argued that such a communication could be inferred by defamatory information contained in an email from the BNI principal. The Court of Appeals was not persuaded, finding that any such inference was speculative. “The failure of an inference may occur as a matter of law when the intended inference can rest on no more than speculation or conjecture.”

We agree with Rueth that the email from [the BNI Principal] includes statements that could be construed by a jury as defamatory. Nevertheless, the District argues that “the record is devoid of any evidence whatsoever that anyone affiliated with the District ever even made a statement to the effect that … Rueth was on ‘planned action,’ let alone published such a statement to third parties.” [I]n order to prove a claim of defamation, “the plaintiff must show that the defamatory matter was ‘published,’ that is, communicated to a third person or persons.” We agree with the District.

We must first note that, although we “indulge every reasonable presumption in favor of the legality of [a jury] verdict,” we will overturn the verdict “if it is legally or logically inconsistent, contradictory, or repugnant.” Here, we are unable to identify any evidence from which it could be inferred that the District published any information to the BNI Hiring Committee that Rueth was on a “planned action” and failed to fulfill the administration’s requirements.

Blacklisting is a statutory cause of action (IC 22-5-3-2) that allows a discharged employee to sue when a former employer takes action to prevent that employee from obtaining employment with another person or company. The Court of Appeals found that Rueth did not qualify as a “discharged employee” when the school district chose not to rehire him after his last one-year contract expired. “The fact that his contract was not renewed is not tantamount to a discharge” and precludes a verdict for blacklisting.

Lessons

  1. An inference based on speculation is insufficient to support a verdict for defamation.
  2. Only a discharged employee may sue for blacklisting.

Read the full February 23, 2017 Law Club Handout or listen to the recording here.