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HomeMy WebLinkAbout2012-1820 KUWAIT & GULF LINK TRANSPORT : IN THE COURT OF COMMON PLEAS OF COMPANY et al., : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiffs, : : v. : No. 2012-1820 CIVIL : JOHN DOE et al., : Defendants. : IN RE: PLAINTIFFS’ MOTION TO APPLY AND COMPEL DISCLOSURE PILCHESKY OF JOHN DOES’ IDENTITIES IN RE: DEFENDANTS’ JOINT MOTION FOR SUMMARY JUDGMENT BEFORE HESS, P.J. OPINION AND ORDER At issue before this Court are Plaintiff’s Kuwait & Gulf Link Transport Company, KGL Logistics, and KGL Transportation Company K.S.C.C. (KGL) motion to apply Pilchesky, and Agility DGS Holdings, Inc., Agility Defense & Government Services, Inc., and Agility International, Inc. (U.S. Defendants) and Agility Public Warehousing Company K.S.C., PWC Transport Company W.L.L., and Agility DGS Logistics Services Company, K.S.C.C. (Kuwaiti Defendants) (collectively Agility) joint motion for summary judgment. KGL argues that it is entitled to discover the identity of the anonymous speaker known as “Scott Wilson” who is alleged to have defamed KGL. Specifically, KGL argues that it has satisfied the requirements to uncover an anonymous speaker’s identity as laid out by the Superior Court in Pilchesky v. Gatelli, 12 A.3d 430 (Pa. Super. 2011). Agility disagrees, contending that Wilson’s identity should remain protected. The facts, thus far developed, may be summarized as follows. KGL is a family of companies located in Kuwait that provides shipping, transportation, warehousing and logistical services to the United States government in Kuwait and Southeast Asia. Agility competes with KGL for government contracts. In February 2011, the United States Government’s Defense Logistics Agency (DLA) awarded a contract to KGL to operate and maintain a military storage and distribution depot in Kuwait. On March 22, 2011 and March 24, 2011, “Scott Wilson” sent two letters (“the Wilson Letters”) to contracting officers at the DLA, the United States Army Sustainment Command (USASC), and the United States Government Accountability Office (GAO). In these letters, Wilson informed the agencies that KGL was in violation of the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) by maintaining business relationships with sanctioned Iranian entities, namely Valfajr. The Wilson Letters included emails in support of Wilson’s allegations purportedly sent by KGL employees regarding the leasing of a cargo ship to Valfajr. KGL alleges that the allegations in the Wilson Letters were false. While KGL admits that the Wilson Letters did not cause them to lose any contracts and they received all contracts that they bid on, KGL alleges that it suffered costs associated with defending itself against bid protests and addressing the concerns of the DLA, USAC, and GAO. Agility admits that Scott Wilson is one or more of their employees, and was acting within the scope of his or her employment for purposes of respondeat superior liability when writing and sending the Letters. In addition, Agility contends that the Wilson Letters are materially true and therefore not defamatory. On March 21, 2012, KGL filed suit against Agility and John Doe/Scott Wilson, alleging liability for defamation, tortious interference with contractual and other business relationships, respondeat superior, conspiracy, aiding and abetting, and negligent supervision. On August 14, 2012 and September 4, 2012, Agility filed preliminary objections, which were overruled. On September 14, 2012, KGL served a number of 2 discovery requests on defendants seeking the identity of Scott Wilson. Agility objected to these discovery requests based on the John Does’ First Amendment rights and under Pilchesky. On December 4, 2012, KGL moved to strike Agility’s objections and to compel a response. On May 21, 2013, this court granted KGL’s motion to strike the objections and ordered Agility to respond, reasoning that the speech in the Wilson Letters was commercial in nature and therefore Pilchesky did not apply. Agility appealed, and the Superior Court vacated this court’s holding, ruling that the speech in the Wilson Letters was in fact political and therefore Pilchesky applied. The Superior Court remanded to this court with instructions to apply Pilchesky. A hearing was held on October 8, 2015. Pilchesky First, we consider the application of Pilchesky to the present case. The First Amendment to the United States Constitution provides that “Congress shall make no law … abridging the freedom of speech.” U.S. Const. Amend. I. Under the First Amendment, different kinds of speech are afforded different levels of protection. Political speech, for example, is afforded the highest level of protection. Citizens United v. Federal Election Commission, 558 U.S. 310, 370 (2010). In Pilchesky, the Superior Court considered what was required to compel disclosure of the identity of an anonymous political speaker on the internet. The plaintiff in Pilchesky operated a website which published articles critical of the local government. Registered users selected a unique username to post on the site. The plaintiff filed a complaint against the defendant, alleging that the defendant had made defamatory statements about the site. The defendant filed a counterclaim, raising claims of, inter 3 alia, defamation and sought to uncover the identity of numerous John Doe defendants who had posted on the plaintiff’s site. The trial court ordered the plaintiff to disclose the identity of some of the John Doe defendants. On appeal, the Superior Court reversed and remanded with a direction that the trial court address four factors in determining whether or not to order the disclosure of the identity of the anonymous or pseudonymous speaker. First, the court must ensure that the John Doe defendant received proper notification of the petition to reveal his or her identity, and permit them a reasonable opportunity to contest the petition. Pilchesky, 12 A.3d at 442. Next, the party seeking disclosure must present sufficient evidence within its control to establish a prima facie case of defamation that would survive a motion for summary judgment. Id. at 442-43. Third, the moving party must submit an affidavit asserting “that the requested information is sought in good faith, is unavailable by other means, is directly related to the claim, and is fundamentally necessary to secure relief.” Id. at 444-45. Finally, the court must balance the anonymous party’s First Amendment rights against the strength of the moving party’s prima facie case. Id. at 445. In the present case, it is undisputed that KGL has adequately notified Scott Wilson of its intention to seek his identity and given him a reasonable opportunity to contest the petition. Therefore, the first Pilchesky prong has been satisfied. Turning to the second prong, we must consider whether KGL has presented sufficient evidence to prove a prima facie case of defamation. The Pilchesky court explained that to satisfy this requirement, the plaintiff must do more than simply plead his or her case, but rather much present evidence to substantiate the claims. Pilchesky, 4 12 A.3d at 443. However, only a modest amount of evidence is required and must be viewed in the light most favorable to the plaintiff. Id. A claim for defamation requires the plaintiff to prove the following: (1) the defamatory character of the communication, (2) publication by the defendant, (3) application to the plaintiff, (4) understanding by the recipient that the message is defamatory, (5) understanding by the recipient that the message was intended to be about the plaintiff, (6) special harm resulting from the publication. 42 Pa. C.S. §8343(a). A defendant claiming that the statements were true bears the burden of proving their truth. Id. §8343(b). Some statements have been held to constitute defamation per se and negate plaintiff’s need to prove special harm, or pecuniary losses. Brinich v. Jencka, 757 A.2d 388, 397 (Pa. Super. 2000). Instead, the plaintiff is only required to prove actual harm. Walker v. Grand Central Sanitation, 634 A.2d 237, 244 (Pa. Super 1993). Statements are defamatory per se if they impute "to the plaintiff a criminal offense, punishable by imprisonment, or conduct incompatible with the plaintiff's business." Brinich, 757 A.2d at 397. If the plaintiff is a “public figure,” they are required to prove that the statements were false and that the speaker either knew the statements were false or recklessly disregarded their truth by clear and convincing evidence. Tucker v. Philadelphia Daily News, 843 A.2d 113, 127-28 (Pa. 2004). A non-public figure “must demonstrate some fault on the defendant's part and, at least where knowing or reckless untruth is not shown, some proof of actual injury to the plaintiff before liability may be imposed and damages awarded.” Herbert v. Lando, 441 U.S. 153, 159 (1979). KGL argues that the Wilson Letters constitute defamation per se because they falsely accused KGL of violating CISADA. The Letters also described conduct that 5 would have negatively affected KGL’s fitness for business because KGL could have been disqualified from government contracts if the allegations were true. KGL avers that the allegations are false because KGL never had a lease with sanctioned Iranian entities. KGL argues that the Wilson Letters were “published” because they were received by multiple persons who understood the letters to be about KGL and to be defamatory. Finally, KGL contends that it only needs to prove that the recipients considered the possibility of the defamatory messages being true to suffer general damages. In this regard, KGL points to the numerous investigations regarding its status as a qualified contractor as well as letters sent by members of Congress and news articles written about the investigation. . We believe that KGL has presented sufficient evidence of a prima facie case of defamation. First, we conclude that KGL has introduced at least a modest amount of evidence that the statements were defamatory. While Agility points to evidence that the statements were true and not defamatory, we must view the evidence in the light most 1 favorable to KGL at this stage in the proceedings. Next, KGL has submitted sufficient evidence of publication, noting that the Wilson Letters were published to DLA, USASC, GAO, members of Congress, and others, and the statements clearly were about KGL. Additionally, KGL has submitted evidence that the recipients understood the messages to be defamatory, specifically because DLA and other government agencies commenced investigations concerning the allegations in the Wilson Letters. Regarding the existence of harm, KGL has presented evidence that it suffered reputational harm, as well as costs associated in defending its reputation against the allegations in the Wilson Letters. Thus, there is at least enough evidence to move forward on KGL’s 1 We do not consider at this stage whether the statements in the Wilson Letters constitute defamation per se. 6 claim. Again, KGL is only required to present a modest amount of evidence to satisfy a 2 prima facie case which we find that they have done. We next consider the requirement that plaintiff submit an affidavit of good faith and necessity. As discussed above, the Pilchesky court elaborated that the plaintiff must state that the information is “sought in good faith, is unavailable by other means, is directly related to the claim and is fundamentally necessary to secure relief.” Pilchesky, 12 A.3d at 444-45 (emphasis added). KGL asserts that it submitted an affidavit of good cause as required by Pilchesky. KGL argues that it has exhausted all other means to obtain the identity of Scott Wilson, and that his identity is necessary in order to prove fault, a “critical element” of defamation to support a claim for punitive damages. Agility counters that while KGL has satisfied the technical requirements of submitting an affidavit, the information is, in fact, not sought in good faith, is available through other means, does not relate to the claim, and is not fundamentally necessary to secure relief. We agree with KGL that it has satisfied the technical requirements of Pilchesky 3 by submitting an affidavit alleging good faith, has made substantial efforts to uncover the identity of Scott Wilson without success, and that the information sought relates to the claim. However, the affidavit notwithstanding, we do not agree that the information sought is fundamentally necessary to secure relief. In the present case, Agility admits that it is responsible for Scott Wilson’s statements under the theory of respondeat 2 Because we need only consider whether KGL has presented sufficient evidence to satisfy its prima facie case, we will not directly address Agility’s defenses concerning the judicial proceedings privilege or the truth of the Wilson Letters. 3 We are mindful of the defendants’ argument that Wilson’s identity is sought in bad faith in part because there is an interest on the part of the plaintiff, and perhaps the United States government, in prosecuting him civilly or criminally. We are satisfied, provided the disclosure of his identity relates to the claim, that other reasons for seeking disclosure of his identity do not, in and of themselves, demonstrate bad faith. 7 superior. Moreover, Agility has offered to produce a corporate designee pursuant to Pennsylvania Rule of Civil Procedure 4007.1(e). Pa. R.C.P. No. 4007.1(e) (stating that a corporation may respond to a subpoena by appointing a representative, who “shall testify as to matters known or reasonably available to the organization”). KGL’s concerns that a corporate designee will “likely invoke Pilchesky in an overly-broad fashion” to protect Wilson’s identity are purely speculative and can be addressed by this court if such an issue arises. KGL Motion to Apply Pilchesky, ¶153. Consequently, KGL may seek recovery against Agility without knowing the identity of Wilson, and as a result, KGL has not satisfied the third prong of Pilchesky. Finally, we must balance Scott Wilson’s rights under the First Amendment against the strength of KGL’s prima facie case. The Pilchesky court instructed that “the reviewing court should examine the defamatory nature of the comments, the quantity and quality of evidence presented, and whether the comments were privileged.” Pilchesky, 12 A.3d at 445. The court also should consider the forum where the comments arose. Id. Comments on “matters of public importance or those which criticize public officials” are entitled to higher protection. KGL argues that the equities weigh strongly in favor of disclosing Wilson’s identity. Specifically, KGL contends that it has established a strong prima facie case, defendants have already partially revealed Wilson’s identity by admitting that he was acting within the scope of his employment, Wilson’s malicious intent undermines his right to anonymity, Wilson’s speech was commercially motivated, he was not a legitimate whistleblower, and Wilson as a foreign speaker is not entitled to First Amendment protection. Despite these various arguments, we agree with the 8 defendants that the case put forward by the plaintiffs does not outweigh Wilson’s First Amendment rights. The question of Wilson’s First Amendment rights has been laid to rest by the Superior Court. We have been instructed, in no uncertain terms, that “given the political nature of the Wilson Letters, they are entitled to the highest level of protection…under the First Amendment.” We agree with the defendants that the attempts of the plaintiffs to downplay Wilson’s strong First Amendment rights amount to nothing more than an attempt to re-litigate issues which were foreclosed by the Superior Court’s decision. These include the plaintiffs’ assertions that Wilson was speaking in a commercial forum, that he has no standing to raise free speech rights, and that the United States Constitution may not apply because Wilson may not be a United States citizen. Of controlling importance is that the strength of the plaintiffs’ evidence simply does not outweigh the necessity for First Amendment protections in this case. While they have advanced a prima facie case for defamation, it is not, in our view, a strong one. Without prejudging the issue, we readily understand the defendants’ arguments that a defamatory effect can be derived from the Wilson Letters only by misconstruing them. We also agree with the defendants that there is little evidence of harm in this case. Notwithstanding allegations of adverse media coverage and inquiries from government officials, there is no direct evidence that the plaintiffs’ reputation has been damaged in the eye of a specific third party or that KGL suffered a loss of its business. Allegations with respect to expenditures for attorneys and lobbyists are, at best, imprecise. We note, also, Pennsylvania law which provides a defamation plaintiff must prove actual impairment of reputation in the community and that it is not enough that the 9 plaintiff be merely embarrassed or annoyed. Joseph v. Scranton Times L.P., 215 Pa. LEXIS 2683. In sum, we believe that the quantity and quality of the evidence of defamation presented in this case does not outweigh the right of pseudonymous speech in this case. Consequently, the motion to apply Pilchesky and compel disclosure of John Does’ identities will be denied. Agility has also submitted a Joint Motion for Summary Judgment. In its motion, the defendants raise many of the same arguments and issues discussed above. KGL counters that summary judgment is premature in this case because, in part, discovery is not complete. The requirements for summary judgment, as stated by Pennsylvania Rule of Civil Procedure 1035.2, are: After the relevant pleadings are closed, but within such time as not to unreasonably delay trial, any party may move for summary judgment in whole or in part as a matter of law (1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional expert report, or (2) if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury. Pa. R.C.P. No. 1035.2. The crux of the defendants’ argument that discovery is “complete” in this case is that the matter has been pending for three years. The plaintiffs counter that, notwithstanding the passage of time, they intend to engage in additional discovery. 10 There are proper procedures to cut this Gordian knot. Guess work on the part of the trial court is not one of them. Either party has the option to list this matter for trial on a good faith belief that discovery is completed. Either party may petition the court for a discovery conference for the purpose of setting discovery deadlines and an eventual trial date. Neither of those things have happened in this case. In the meantime, we cannot conclude, with any certainty, that discovery is, in fact, at an end. Therefore, the 4 Joint Motion for Summary Judgment will be denied. ORDER AND NOW, this _____ day of December, 2015, it is hereby ordered that KGL’s Motion to Apply Pilchesky and Compel Disclosure of John Does’ Identities, and U.S. and Kuwaiti Defendants’ Joint Motion for Summary Judgment are hereby DENIED. BY THE COURT, _____________________ Kevin A. Hess, P.J. 4 Even if discovery were complete, we doubt that summary judgment would be appropriate in this case, one way or the other. The ultimate truth or falsity of the Wilson Letters and the harm, if any, which ensued therefrom, are classic jury questions, at least in Pennsylvania juris prudence. 11 KUWAIT & GULF LINK TRANSPORT : IN THE COURT OF COMMON PLEAS OF COMPANY et al., : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiffs, : : v. : No. 2012-1820 CIVIL : JOHN DOE et al., : Defendants. : IN RE: PLAINTIFFS’ MOTION TO APPLY AND COMPEL DISCLOSURE PILCHESKY OF JOHN DOES’ IDENTITIES IN RE: DEFENDANTS’ JOINT MOTION FOR SUMMARY JUDGMENT BEFORE HESS, P.J. ORDER AND NOW, this _____ day of December, 2015, it is hereby ordered that KGL’s Motion to Apply Pilchesky and Compel Disclosure of John Does’ Identities, and U.S. and Kuwaiti Defendants’ Joint Motion for Summary Judgment are hereby DENIED. BY THE COURT, _____________________ Kevin A. Hess, P.J. Robert J. Tribeck, Esquire Timothy J. Nieman, Esquire RHOADS & SINON LLP One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 David C. Hammond, Esquire Clifford J. Zatz, Esquire CROWELL & MORING LLP 1001 Pennsylvania Avenue, NW Washington, DC 20004 George B. Faller, Jr., Esquire 10 East High Street Carlisle, PA 17013 Alan M. Freeman, Esquire BLANK ROME, LLP Watergate 600 New Hampshire Ave., N.W. Washington, DC 20037 Jeffrey B. Rettig, Esquire JOHNSON, DUFFIE, STEWART & WEIDNER 301 Market Street P. O. Box 109 Lemoyne, PA 17043 Margaret E. Krawiec, Esquire SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP 1440 New York Avenue, NW Washington, DC 20005