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WALLACE v. SKADDEN

July 30, 1998

KATHERINE T. WALLACE, APPELLANT,
V.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM, ET AL., APPELLEES.



APPEAL FROM THE SUPERIOR COURT, HENRY H. KENNEDY, JR., AND GEOFFREY M. ALPRIN, JJ. [715 A2d Page 874]

Before Schwelb and Reid, Associate Judges, and Pryor, Senior Judge.

The opinion of the court was delivered by: Schwelb, Associate Judge:

[715 A2d Page 875]

This case presents us with two related and consolidated appeals. The first, No. 96-CV-34, arises from an action for defamation and wrongful discharge which was brought by Katherine T. Wallace, Ph.D., a former associate of the law firm of Skadden, Arps, Slate, Meagher & Flom, against the firm and several of its partners and associates. The plaintiff alleged, inter alia, that her character and professional qualifications had been defamed by the defendants in a number of performance evaluations and other communications, and that she had subsequently been discharged, in part, in retaliation for her adherence to the Rules of Professional Conduct. The first trial judge dismissed the complaint for failure to state a claim on which relief may be granted, holding that the communications in question were not defamatory; that even if the communications were defamatory, they were absolutely privileged because Ms. Wallace had consented to them; that several of the defamation counts were time-barred; and that the wrongful discharge claim was precluded by the "at-will" employment doctrine. On appeal, the plaintiff challenges all of these rulings.

We hold that the communications of which the plaintiff complains were reasonably susceptible of a defamatory meaning. Accepting as true the allegations of the complaint for purposes of the defendants' motion to dismiss, we conclude that the plaintiff did not consent to at least some of the allegedly defamatory communications, and that these communications were protected by a qualified privilege but not by an absolute one. Because the plaintiff has sufficiently alleged malice, we hold that the complaint was erroneously dismissed. We agree with the trial judge that several of the defamation counts are time-barred, and we affirm the dismissal of the wrongful discharge claim.

Appeal No. 96-CV-739 arises from a second action which was filed by the plaintiff shortly after the dismissal of the first. In the second case, Ms. Wallace, a black married woman, alleged that Skadden, Arps had discriminated against her on account of race and marital status with respect to her employment opportunities, in violation of the [715 A2d Page 876]

District of Columbia Human Rights Act, D.C.Code §§ 1-2501 et seq. (1992). The second trial judge dismissed the complaint on grounds of claim preclusion and because, in his view, the individual partners were not amenable to suit. We conclude that the second complaint must be reinstated.

I.

THE FIRST ACTION

A. The trial court proceedings.

According to the allegations of her 303-paragraph complaint, the plaintiff is a 1993 graduate of the Georgetown University Law Center. During the summer following her second year at Georgetown, she served as a summer associate with Skadden, Arps. At the conclusion of that summer, the plaintiff was offered a position as an associate with the firm. She subsequently accepted the offer, and she was employed as an associate from 1993 until her discharge in September 1995.

Ms. Wallace's career with Skadden, Arps was a stormy one. She was initially assigned to the International Trade Group and subsequently transferred to the Communications Group. In each of these assignments, the plaintiff became embattled with a number of partners and senior associates who criticized her performance; she, in turn, accused these lawyers of defaming her. The first action arises from the defendants' negative assessments of the plaintiff's work and attitude and from her ultimate dismissal from the firm under less than cordial circumstances.

The essence of the plaintiff's complaint is that she is a superbly qualified *fn1 and highly ethical attorney, and that the defendants, or some of them, "perceived Plaintiff's extensive credentials and expertise to be a professional threat to them." The plaintiff also claims that during her career at Skadden, Arps, she became aware of various "instances of misfeasance and malfeasance, legal malpractice and [unethical conduct]." She alleges that in accordance with her perceived responsibilities under the Rules of Professional Conduct, she brought these improper activities to the attention of her superiors. The plaintiff claims that she was repeatedly defamed and ultimately discharged in retaliation for her reporting of wrongdoing at Skadden, Arps, and, apparently, because some of her superiors were unable to cope with a person of her qualifications.

The complaint in the first case was filed on November 1, 1995. Most, but not all, of the defamatory statements of Which the plaintiff complains are alleged to have been made more than one year before the suit was filed. The plaintiff asserts that prior to November 1, 1994, the defendants falsely and maliciously stated, inter alia,

1. that the plaintiff "played hookie" and had poor and unreliable work habits;

2. that she frequently failed to meet deadlines;

3. that she produced work of "inferior quality," some of which was "not worth reading";

4. that she was unwilling to work on weekends or to devote sufficient time and energy to her assignments, and that she used her children as an excuse for poor performance;

5. that her billings were low, compared with those of other associates; *fn2

6. that she had an "attitude problem" and behaved in an unruly manner; and [715 A2d Page 877]

7. that, as an excuse for one of her absences from the office, she falsely claimed that the ceiling of her home had fallen.

With respect to the period after November 1, 1994, the complaint alleges that the defendants falsely and maliciously represented that the plaintiff was frequently out of the office during office hours. According to the plaintiff, the defendants further defamed her by stating that one client was so displeased with the poor quality of the plaintiff's work that a representative of the client had asked the plaintiff's superiors not to assign the plaintiff to any more of that client's matters. The plaintiff also claims that she was terminated on or about September 20, 1995, effective immediately, that she was effectively locked out of the firm's offices by the inactivation of her access key, and that by terminating her employment in this manner, the defendants

maliciously published a false and defamatory communication to the effect that Dr. Wallace had performed some unspecified disgraceful, immoral and/or dishonest act, Skadden, Arps having previously terminated attorneys in a similar manner only when such attorneys had been caught stealing, engaging in insider training, or engaging in child molestation.

Finally, the complaint alleges that following the plaintiff's dismissal, Skadden, Arps attorneys were directed to respond to any inquiries by potential employers as to the plaintiff's qualifications by providing only the dates of the plaintiff's employment; according to the plaintiff, an employer reference providing only this information "is a well known code in the legal community for 'do not hire.'"

On November 21, 1995, the defendants filed a motion to dismiss the complaint for failure to state a claim upon which relief may be granted. On December 8, 1995, the first trial judge signed an order dismissing the complaint "for the reasons stated by the defendants in their motion." *fn3 This timely appeal followed.

B. The defamation claim.

(1) The standard of review.

The question whether the first complaint states a claim upon which relief may be granted is one of law, and our review of the trial judge's disposition is therefore de novo. Abdullah v. Roach, 668 A.2d 801, 804 (D.C. 1995) (citation omitted). A pleading "should not be dismissed for failure to state a claim unless it is beyond doubt that the plaintiff can prove no set of facts in support of [her] claim which would entitle [her] to relief." Id. (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). The allegations in the complaint must be taken as true and construed in the light most favorable to the plaintiff and, if these allegations are sufficient, the case must not be dismissed even if the court doubts that the plaintiff will ultimately prevail. Atkins v. Industrial Telecomms. Ass'n, Inc., 660 A.2d 885, 887 (D.C. 1995) (citations omitted).

(2) Defamatory meaning.

The defendants contend that the complaint fails to state a claim upon which relief may be granted because, according to them, the plaintiff has not alleged any representation by the defendants which could, as a matter of law, constitute actionable defamation. We do not agree.

"A statement is 'defamatory' if it tends to injure the plaintiff in [her] trade, profession or community standing, or lower [her] in the estimation of the community." Moss v. Stockard, 580 A.2d 1011, 1023 (D.C. 1990) (citations and internal quotation marks omitted). "If it appears that the statements are at least capable of a defamatory meaning, [then] whether they were defamatory and false are questions of fact to be resolved by the jury." Id. "One who publishes a slander that ascribes to another conduct, characteristics or a condition that would adversely affect [her] fitness for the proper conduct of [her] lawful business, trade or profession . . . is [715 A2d Page 878]

subject to liability without proof of special harm." RESTATEMENT (SECOND) OF TORTS § 573 (1977).

Even if we consider only the representations alleged to have been made by the defendants after November 1, 1994, see p. 877, supra, we are satisfied that these statements are, at least, capable of a defamatory meaning. An allegation that an attorney is often out of the office during normal working hours, although perhaps inconclusive on its face, could reasonably be construed, in context, *fn4 as a reflection on her professional performance. A false representation that a client is sufficiently dissatisfied with an attorney's work to seek the attorney's removal from the client's matters is patently defamatory. The defendants' alleged non-verbal representation (by inactivating the plaintiff's access key and thus effectively locking her out of the office) that she had done something disgraceful cannot fairly be characterized as non-defamatory as a matter of law. *fn4 Finally, the defendants' alleged coup-degrace — a directive to all attorneys to convey to prospective employers the coded message that the plaintiff should not be hired — tends to injure the plaintiff's reputation in her profession.

It may be that, at some subsequent stage of the case, the defendants will be able to present a defense of truth *fn5 or legitimate expression of opinion, *fn5 or that the plaintiff will be unable to make an adequate showing of malice. Such a determination ...


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