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Title Overall v. University of Pennsylvania

Date 2005

By Alito

Subject Misc

Contents

Page 1

LEXSEE 412 F3D 492

KAREN OVERALL and ARTHUR DUNHAM, Appellants v. UNIVERSITY OF PENNSYLVANIA; GAIL SMITH

No. 04-1090

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

412 F.3d 492; 2005 U.S. App. LEXIS 12710; 151 Lab. Cas. (CCH) P60,038; 23 I.E.R. Cas.

(BNA) 130

March 31, 2005, Argued

June 27, 2005, Filed

SUBSEQUENT HISTORY: On remand at, Claim dis- missed by Overall v. Univ. of Pa., 2005 U.S. Dist. LEXIS

20923 (E.D. Pa., Sept. 23, 2005)

PRIOR HISTORY: **1 ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA. (Dist. Ct. No. 02-CV--01628). District Court Judge: Hon. Cynthia M. Rufe. Overall v. Univ. of Pa., 2003 U.S. Dist. LEXIS

23892 (E.D. Pa., Dec. 19, 2003)

LexisNexis(R) Headnotes

COUNSEL: For Appellant: Stanley B. Cheiken (argued), Philadelphia, PA.

For Appellees: Michael L. Banks, Michael E. Dash, Jr.

(argued), Morgan, Lewis & Bockius, LLP, Philadelphia, PA.

JUDGES: Before: ALITO, SMITH, and FISHER, Circuit Judges.

OPINIONBY: ALITO

OPINION:

*494 OPINION OF THE COURT

ALITO, Circuit Judge

Karen Overall is a faculty member at the University of Pennsylvania ("Penn") Veterinary School. She and her husband brought this action against Penn, alleg- ing defamation and fraudulent misrepresentation, among other things. The District Court granted summary judg- ment for Penn on all counts, and Overall appealed. Because the District Court incorrectly held that statements made in a private internal University grievance proceed-

ing were "quasi-judicial" and therefore entitled to an ab- solute privilege against defamation under Pennsylvania law, we reverse and remand with respect to Dr. Overall's defamation claim. We affirm on all other counts.

This case stems from the Veterinary School's failure to hire Dr. Overall for a **2 newly created faculty po- sition. Dr. Overall worked for Penn in various capacities since 1987. In early 1999, she was serving a single-year appointment as a "Lecturer" in the School's Department of Clinical Studies-Philadelphia ("DCS"), where her re- sponsibilities included running a behavioral medicine clinic, teaching, and conducting research. Dr. Gail Smith, a male professor who had taught at Penn since the early

1980s, became chair of DCS in March 1999. Until Dr. Smith became Chair, Drs. Smith and Overall rarely inter- acted.

Once Dr. Smith became chair of DCS, he and Dr. Overall developed an amicable relationship. See Joint Appendix ("App.") at 368 (Overall admits during a depo- sition that "we were friends"); id. at 428 (Overall writes Dr. Smith in June 1999: "We are making incredible progress, but that's all your doing, none of mine."); id. at 433 (Overall writes Dr. Smith in July 1999: "You are actually doing a HEROIC job - everyone thinks so. Many, many thanks."). Dr. Overall approached Dr. Smith to discuss her desire to obtain a tenured faculty position, her problems with her residents and staff, and other ad- ministrative concerns. This friendship prompted several University **3 insiders to suggest that Dr. Smith was Dr. Overall's personal champion within DCS.

In April 1999, Dr. Smith announced that the Veterinary School would create five new "Clinical Educator" positions on the Penn faculty. One of these would be in Dr. Overall's field of expertise, behavioral veterinary medicine. n1 Although Clinical Educators are

412 F.3d 492, *494; 2005 U.S. App. LEXIS 12710, **3;

151 Lab. Cas. (CCH) P60,038; 23 I.E.R. Cas. (BNA) 130

Page 2

not eligible for tenure, they are typically awarded longer term contracts than Lecturers like Dr. Overall, and the positions are considered more prestigious. Based on Dr. Smith's friendship with Dr. Overall and her apparent in- terest in the job, many within the Department surmised that Dr. Smith created the position specifically for Dr. Overall. See App. at 490-91.

n1 This relatively new field studies the behavior of dogs, cats, and other domestic animals. It focuses on methods for diagnosing and treating behavioral problems, such as biting and constant scratching.

Despite these rumors, Dr. Smith followed protocol and set up a Faculty Search Committee with five mem- bers, **4 three of whom had experience with behav- ioral veterinary medicine. See App. at 447-49. Dr. Smith charged the Committee with the *495 task of picking the best qualified candidate from all the applicants. App. at 386, 483 (Dr. Smith told the Committee that he wanted a "real" search versus a "sham" search that simply gave the job to Dr. Overall).

The Committee had the authority to make recommen- dations, but Dr. Smith retained the power to ignore or veto any recommendation, with or without cause. See App. at

244, 385-86. Nevertheless, it is common practice at Penn for department chairs to follow the recommendations of their hiring committees. In fact, in some departments, it is apparently considered a "sort of administrative suicide" for a chair not to follow the faculty's advice in hiring. See App. at 244, 496-97. Dr. Overall's husband, a Penn fac- ulty member for more than 20 years, stated in a deposition that "in our department, the chair never would override the decision of the faculty ." App. at 502. Dr. Overall produced no evidence that any chair has ever overruled a hiring committee in the Veterinary Medicine Department. Upon learning of the new Clinical Educator position,

**5 Dr. Overall applied and asked Dr. Smith to "put odds" on her application. He responded: "I'll work it out." App. at 129-30. At the time of this discussion, Dr. Overall was not aware that Dr. Smith technically had the authority to overrule the Search Committee's decision. n2

n2 The District Court credited Dr. Overall's de- position testimony that she "did not know what role the department chair played in the search commit- tee decision." App. at 5-6 n.2, 24 n.14. It chose to disregard portions of a later-submitted affidavit that directly contradicted this statement. See Martin v. Merrell Dow Pharm., Inc., 851 F.2d 703, 706 (3d Cir. 1988) (endorsing the sham affidavit doctrine).

The Search Committee did not share Dr. Smith's con- fidence in Dr. Overall. It unanimously rejected her can- didacy twice, first in a May 22, 2000, interim report, and then again in a September 15, 2000, final report. Both times, the Committee provided non-discriminatory rea- sons for its decision not to recommend Dr. Overall. **6 It acknowledged her strengths but also cited serious reser- vations about her "history of unsuccessful interpersonal interaction," her "questioned integrity," and "a poisoned atmosphere which pits Karen against her staff." App. at 7 n.3. Dr. Smith elected not to overrule these recommenda- tions.

Over the period of one year, the Search Committee considered six candidates, five females and one male. Its final recommendation was in favor of Dr. Ilana Reisner, a woman. Once Penn hired Dr. Reisner for the job that Dr. Overall desired, Dr. Smith revoked Dr. Overall's clinical privileges, based on an agreement that they had allegedly made earlier. n3 When Dr. Overall continued working at the clinic, Dr. Smith confronted her and demanded that she not return. In March 2001, after reports that files were missing from the clinic, padlocks were placed on the clinic door. Dr. Overall says she was not able to return to the clinic, even to gather her personal belongings. She also alleges that her mail was not forwarded. Dr. Smith claims that he knew nothing about this.

n3 The District Court found that Dr. Smith and Dr. Overall agreed that she would have a "termi- nal appointment for the year beginning on July

1, 2000 that would extend only until the Search

Committee had reached a decision." App. at 8.

**7

On November 15, 2000, Dr. Overall instituted a proceeding under the University's Faculty Grievance Procedure, alleging gender discrimination, among other things. Dr. Smith testified in connection with this grievance, giving unsworn testimony that provided the basis for Dr. Overall's subsequent defamation claims. He made three *496 allegedly defamatory state- ments. First, he stated that it was "common knowledge" that Overall was represented in publications as having a Ph.D. years before she actually received one. Second, he claimed that Overall represented numerous articles in her CV as "peer reviewed," even though they were allegedly not peer reviewed, as that term is understood in academia. Finally, Dr. Smith suggested that Dr. Overall misused grant funds earmarked for clinical work. Ultimately, the University and Dr. Smith were found innocent of any wrongdoing.

Unsuccessful in her grievance proceeding, Dr.

412 F.3d 492, *496; 2005 U.S. App. LEXIS 12710, **7;

151 Lab. Cas. (CCH) P60,038; 23 I.E.R. Cas. (BNA) 130

Page 3

Overall filed a claim with the Pennsylvania Human Rights Commission ("PHRC") and cross-filed with the Equal Employment Opportunity Commission. The PHRC elected not to take action in her case, issuing a Right to Sue letter on December 27, 2001. n4 Dr. Overall's federal complaint asserted **8 11 causes of action. The District Court granted summary judgment in favor of Penn on all counts. Overall v. Univ. of Pennsylvania, 2003 U.S. Dist. LEXIS 23892, 2003 WL 23095953 (E.D. Pa. Dec. 19,

2003).

n4 Two months later, Overall filed a com- plaint in state court, alleging six causes of ac- tion. See App. at 149-165. In July 2001, the Court of Common Pleas dismissed her fraudulent mis- representation claim, among others, for failure to state a claim upon which relief can be granted. Dr. Overall then filed a Praecipe to Discontinue the State Action, and brought suit in federal court.

II.

Dr. Overall raises four issues on appeal. She maintains that the District Court erred when it granted summary judgment in Penn's favor on the defamation, fraudulent misrepresentation, retaliation, and employment discrimi- nation claims. We address each in turn.

We turn first to the defamation issue. The District Court found that all of Dr. Smith's allegedly defamatory remarks took place "during Penn's internal grievance pro- ceedings **9 relating to Dr. Overall's discrimination claims." Overall, 2003 U.S. Dist. LEXIS 23892, 2003

WL 23095953 at *9. Quoting Binder v. Triangle Publ'ns,

442 Pa. 319, 275 A.2d 53, 56 (Pa. 1971), the District Court correctly noted that "all communications pertinent to any stage of a judicial proceeding are accorded an ab- solute privilege which cannot be destroyed by abuse." Acknowledging that Penn's internal grievance proceed- ings were not actually judicial, the District Court held that they were "quasi-judicial" and therefore entitled to the same absolute immunity as regular judicial proceed- ings.

In reaching this conclusion, the District Court relied on the Pennsylvania Superior Court's decision in Milliner v. Enck, which states:

The "judicial proceeding" wherein absolute privilege attaches has not been precisely de- fined in our Commonwealth. However, it has been defined to include any hearing before a tribunal which performs a judicial func-

tion, including many administrative officers, boards and commissions, so far as they have the powers of discretion in applying the law to the facts which are regarded as judicial or

"quasi-judicial" in character.

709 A.2d 417, 419 n.1 (Pa. Super. Ct. 1998). **10 The District Court translated this language into a rule that any proceeding that applies facts to law deserves "quasi- judicial" status. It wrote:

In this case, the purpose of the grievance proceedings was to gather the facts and de- termine whether those facts supported Dr. Overall's claim for discrimination and ha- rassment. If the facts had *497 sup- ported Dr. Overall's claims, Dr. Smith would have been disciplined. This application of the facts to Dr. Overall's claims was clearly quasi-judicial in character. Therefore, the statements made by Dr. Smith during the grievance proceedings are absolutely privi- leged.

Overall, 2003 U.S. Dist. LEXIS 23892, 2003 WL

23095953 at *9.

The District Court misapprehended the essence of quasi-judicial proceedings. While "applying law to facts" is undeniably an attribute of such proceedings, our re- search reveals that under Pennsylvania law government involvement is also a necessary condition for according quasi-judicial status to grievance procedures.

We have not found a single Pennsylvania case ac- cording quasi-judicial status to entirely private hearings. Rather, Pennsylvania cases finding quasi-judicial privi- lege consistently involve proceedings **11 before fed- eral, state, or local governmental bodies, or proceed- ings held pursuant to a statute or administrative regu- lation. Milliner is instructive on this point. In a lengthy footnote, the Pennsylvania Superior Court cites - appar- ently with approval - no fewer than 13 cases discussing quasi-judicial entities. Without exception, each involves a grievance proceeding before a government entity or an ostensibly private entity operating pursuant to a state or federal statute. n5

n5 See, e.g., LaPlante v. United Parcel Service, Inc., 810 F. Supp. 19, 21 (D. Me. 1993) (Maine Human Rights Commission); Magnan v. Anaconda Indus., 37 Conn. Supp. 38, 429 A.2d 492, 494-

96 (Conn. Super. Ct. 1980) (Connecticut employ- ment security division); Stiles v. Chrysler Motors

412 F.3d 492, *497; 2005 U.S. App. LEXIS 12710, **11;

151 Lab. Cas. (CCH) P60,038; 23 I.E.R. Cas. (BNA) 130

Page 4

Corp., 89 Ohio App. 3d 256, 624 N.E.2d 238, 242

(Ohio App. 1993) (auto worker's grievance pro- ceeding pursuant to the National Labor Relations Act); Shortz v. Farrell, 327 Pa. 81, 193 A. 20,

21-22, 24 (Pa. 1937) (Workmen's Compensation

Board); Urbano v. Meneses, 288 Pa. Super. 103,

431 A.2d 308, 309 (Pa. Super. Ct. 1981) (Upper Merion Township zoning board); Story v. Shelter Bay Co., 52 Wn. App. 334, 760 P.2d 368, 370-71

(Wash. Ct. App. 1988) (Land Sales Enforcement Division of the Department of Housing and Urban Development).

**12

Secondary sources referenced in Pennsylvania quasi- judicial privilege cases bolster this conclusion. Every case cited in the leading torts treatise involves a government entity of some sort. n6 The Restatement (Second) of Torts explains that quasi-judicial privilege should be extended to

any person acting as a judge of a court, whether of general or limited jurisdiction. It is also applicable to any other official, ju- dicial or otherwise, who performs a judicial function, such, for example, as a master in chancery, a referee in bankruptcy, a mem- ber of a military tribunal or the governor of a State of the United States engaged in an extradition hearing.

Restatement (Second) of Torts § 585. Each example in this passage involves a government actor. The Restatement goes on to discuss other "governmental agencies" that sometimes perform quasi-judicial functions, such as

"public utility commissions and utility boards." Id. It con- cludes that "it is immaterial whether the body of which the judicial officer is a member is created by the constitu- tion or by statute." Id. Implicit in this rule is *498 the assumption that the "judicial officer" **13 must be a public official. n7

n6 See Page Keeton et al., Prosser & Keeton on Torts § 114, at 818-19 (5th ed. 1984) (citing cases discussing proceedings before, e.g., a New York court; civil service boards; industrial boards; tax boards of appeals; state labor commissions; insurance commissions; Civil Aeronautics Board; numerous administrative proceedings to revoke li- censes (e.g., liquor, dairy, insurance); state revenue commissions; insurance commissions; state hous- ing rent commissions; investigating committees of aldermen; departmental hearings before police su-

perintendent; zoning board of appeals; Ohio State

Board of Embalmers).

n7 See also Restatement (Second) of Torts, Reporter's Note to § 585 cmt. b (citing dozens of additional public tribunals deemed quasi-judicial). The only other type of proceeding deemed quasi- judicial is a grievance proceeding arising under a collective bargaining agreement, which is governed by the Fair Labor Standards Act.

Unlike all of the cases cited above, the **14 present case involves an entirely private grievance procedure. No state or federal statute authorized it, and no public offi- cials presided over it. Nor was it the product of a collective bargaining agreement. Furthermore, the defendants could not point to any case, in Pennsylvania or elsewhere, that involved an entirely private proceeding akin to the one at issue here. n8

n8 Defendant argues that Walker v. Gibson,

633 F. Supp. 88, 90 (N.D. Ill. 1985), stands for the proposition that statements before a "grievance committee" are entitled to absolute privilege. But the proceedings in that case "were convened pur- suant to 5 C.F.R. § 771, with Examiner John M. Stewart, of the United States Army Civilian Appellate Review Agency, as the presiding officer." Id. By statute, Examiner Stewart "had the discre- tion to review the evidence and examine the wit- nesses, reach a conclusion, and prepare a report." Id. Since the hearing was conducted pursuant to a federal regulation and involved a public official, it is readily distinguishable from the private grievance procedure at issue in this case.

**15

Sound reasons exist for this public-private distinction. Government hearings typically involve basic procedural safeguards that may be lacking in private proceedings. For example, the Penn grievance procedure at issue here did not require sworn testimony. The volunteer faculty members who presided over the hearing lacked the power to make any binding judgment or enforce any disciplinary measures; they could only make recommendations. And of particular relevance to this case, no one kept a tran- script of what was said during the hearing, so there is no record of exactly what Dr. Smith said when he allegedly defamed Dr. Overall.

Pennsylvania of course is free to set the scope of its quasi-judicial privilege as it wishes, but we have found absolutely no support for the argument advanced in this case by the University of Pennsylvania. We agree with

412 F.3d 492, *498; 2005 U.S. App. LEXIS 12710, **15;

151 Lab. Cas. (CCH) P60,038; 23 I.E.R. Cas. (BNA) 130

Page 5

the Restatement that "the fact that an official or board is required to find facts as a basis for its action does not of itself make the function of the official or board judicial," and hold that the District Court erred in deeming Penn's procedure quasi-judicial. Restatement (Second) of Torts,

§ 585 cmt. **16 b. We therefore reverse the entry of summary judgment in favor of Penn on Dr. Overall's defamation claim and remand for further proceedings.

Dr. Overall next claims that Dr. Smith committed fraudulent misrepresentation when he said "I'll work it out," in response to her request to "put odds" on her ap- plication. We disagree.

Under Pennsylvania law, fraudulent misrepresenta- tion has six elements:

(1) a representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) the resulting injury was proximately caused by the reliance.

Gibbs v. Ernst, 538 Pa. 193, 647 A.2d 882, 889 (Pa. 1994)

(footnote and citations omitted). Dr. Overall cannot meet all six elements.

*499 The District Court properly found that Dr. Overall could not have reasonably relied on Dr. Smith's statement. First, Dr. Overall's question did not invite a promise. A request to "put odds" on a certain event asks that someone weigh the likelihood that the event will oc- cur in **17 the future. Even here, where Dr. Smith had significant control over the final decision, Dr. Overall's re- quest was different in kind from saying "Do you promise to give me this job?" Second, Dr. Smith's response also fell short of a straightforward promise. A more reason- able interpretation of it would be that Dr. Smith would do all he could within reason to help Dr. Overall's candidacy along. This becomes an even more natural interpretation when one considers that Dr. Smith made this remark at a very early stage in the hiring process: the Committee did not release its interim report until almost a full year later. Even if Dr. Smith's representation constituted a promise, Dr. Overall still could not have reasonably re- lied on it. As the District Court noted, when the statement was made, Dr. Overall did not know that Dr. Smith had the authority to overrule the Hiring Committee. Overall,

2003 U.S. Dist. LEXIS 23892, 2003 WL 23095953 at *11.

If, as Dr. Overall claims, she later investigated further and discovered that Dr. Smith had that power, she also would have learned that department chairs often suffer serious political repercussions when they ignore a hiring commit- tee's recommendation. n9 **18 It was thus unreasonable for Dr. Overall to assume that Dr. Smith's representation would remain binding no matter what happened during the hiring process.

n9 She also would have seen that Dr. Smith's license to ignore the Committee's decision does not give him free rein over the hiring process. The record reveals that Dr. Smith's hiring choice had to be approved by an additional five layers of bureau- cracy before it became official. See App. at 245-46. There is some indication - admittedly by Dr. Smith himself - that these layers are not mere "rubber stamps." Id.

Dr. Overall's two remaining claims do not require lengthy discussion. On the retaliation claim, Dr. Overall engaged in protected activity when she filed her grievance with Penn on November 15, 2000. But the main ad- verse employment action on which she relies was the University's decision to revoke her clinical privileges, which occurred on October 23 - three weeks before she filed her University grievance. See App. at 19. Nothing

**19 in the record indicates that Dr. Overall threatened to file her grievance before that date. Since she cannot prove a causal connection between her participation in a protected activity and an adverse employment action, her retaliation claim must fail. See Weston v. Pennsylvania,

251 F.3d 420, 430 (3d Cir. 2001).

On appeal, Dr. Overall argues that "substantial retalia- tion" took place after she filed her grievance. She points to incidents in which Dr. Smith allegedly "berated" her in her office in the presence of witnesses on November 1, 2000; placed a padlock on the clinic door in March 2001; and then defamed her in June 2001. Assuming for the sake of argument that these incidents amount to "adverse employ- ment actions," Robinson v. City of Pittsburgh, 120 F.3d

1286, 1300 (3d Cir. 1997), there is no proof of a causal link between any of these activities and Dr. Overall's fil- ing of a grievance. The November 1 incident occurred the day after Overall's clinical privileges were suspended. The record shows that Smith was "berating" Overall for con- travening the terms of her suspension. The padlock was placed on the clinic because items were *500 missing from it. **20 And, finally, Dr. Smith made allegedly defamatory remarks at the grievance proceeding to ex- plain why he did not override the Search Committee's

412 F.3d 492, *500; 2005 U.S. App. LEXIS 12710, **20;

151 Lab. Cas. (CCH) P60,038; 23 I.E.R. Cas. (BNA) 130

Page 6

decision against recommending Dr. Overall.

Dr. Overall's final claim is gender discrimination. The District Court could not "find any evidence that gender motivated Dr. Smith's decision." App. at 13. In fact, it found that "Dr. Smith appears to have been more support- ive of Dr. Overall than were the members of the search committee." App. 13-14. We agree. The record is devoid of any credible evidence that Dr. Smith chose not to over- ride the Committee's decision because of Dr. Overall's gender. In fact, the record is replete with evidence that

Dr. Overall's candidacy had drawbacks so significant that even her personal champion in the Department felt com- pelled to abide by the Committee's decision.

III.

For the foregoing reasons, we affirm the District Court's entry of summary judgment in favor of Penn on the fraudulent misrepresentation, retaliation, and employ- ment discrimination claims, but we reverse the entry of summary judgment on the defamation claim, and remand for further proceedings on that claim.


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