Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_03-cv-02344/USCOURTS-azd-2_03-cv-02344-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 42:1983 Civil Rights (Employment Discrimination)

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Matthew Shaffer, 

Plaintiff, 

vs.

State of Arizona Citizens Clean Election

Commission, et al., 

Defendants. 

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No. 03-CV-2344-PHX-FJM

ORDER

I.

Following the jury trial, judgment was entered for plaintiff on his defamation claim

and his Fourteenth Amendment liberty interest claim, and for defendants on plaintiff's First

Amendment claim, intentional interference with contractual relations claim, and wrongful

termination claim (doc. 137). The court has before it defendants' Motion to Alter or Amend

the Judgment (doc. 143), plaintiff's Response (doc. 150), and defendants' Reply (doc. 151);

and defendants' Motion for Entry of Judgment as a Matter of Law on the Defamation Claim

and Motion for Remittitur, or Alternatively for a New Trial on Damages (doc. 145),

plaintiff's Response (doc. 149), and defendants' Reply (doc. 152). Pursuant to our Order

dated November 10, 2005 (doc. 153), we do not now consider plaintiff's Motion for Award

of Attorneys' Fees and Expenses (doc. 142).

Case 2:03-cv-02344-FJM Document 155 Filed 01/20/06 Page 1 of 8
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II.

Defendants move for judgment as a matter of law on the defamation claim arguing

that plaintiff failed to prove that defendants acted with actual malice. A party may move

for judgment as a matter of law "at any time before submission of the case to the jury,"

but to preserve the right to renew the motion after the return of the verdict, the party must

move "at the close of all the evidence." Fed. R. Civ. P. 50. Therefore, a motion for

judgment as a matter of law at the close of the plaintiff's case, but not at the close of all

evidence, is insufficient to preserve the right to later renew the motion. Farley Transp.

Co., Inc. v. Santa Fe Trail Transp. Co., 786 F.2d 1342, 1345-46 (9th Cir. 1985); Patel v.

Penman, 103 F.3d 868, 878 (9th Cir. 1996). This "serves the important purpose of

alerting the opposing party to the alleged insufficiency of the evidence at a point in the

trial where that party may still cure the defect by presenting further evidence." Farley

Transp. Co., Inc., 103 F.3d at 1346. This rule is strictly applied, thereby avoiding the

need to engage in the difficult and subjective determination of whether the failure to

timely raise the motion prejudiced the opposing party. Id. Here, defendants moved for

judgment as a matter of law at the close of the plaintiff's case, but failed to move again at

the close of all the evidence. Accordingly, defendants are barred from renewing their

motion for judgment as a matter of law.

Defendants argue, based on Bose Corp. v. Consumers Union of United States, Inc.,

466 U.S. 485, 104 S. Ct. 1949 (1984), that regardless of their failure to timely move, we

have an independent constitutional obligation to consider whether plaintiff proved that

defendants acted with actual malice. Reply at 2. In Bose Corp., the Supreme Court

concluded that in order to ensure that a defamation defendant's First Amendment rights

are protected, an appellate court is not bound by the trier of facts' finding of actual malice,

and must review the record to determine whether that finding is supported by clear and

convincing evidence. Bose Corp., 466 U.S. at 509-11, 104 S. Ct. at 1964-65. Bose Corp.

does not, however, require a court to disregard federal procedural rules to consider the

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1

 Plaintiff argues that defendants are barred from raising this claim because they failed

to move for judgment as a matter of law at the close of all the evidence. Response to Motion

for New Trial at 5. Defendants have, however, moved for a new trial, or in the alternative

for remittitur of damages, not for judgment as a matter of law, and therefore need not comply

with the requirements of Rule 50, Fed. R. Civ. P. Freund v. Nycomed Amersham, 347 F.3d

752, 765 (9th Cir. 2003); Fed. R. Civ. P. 59(b).

2

 Plaintiff argues that the defendants' failure to object at trial to the verdict forms

precludes them from arguing that the various claims can remedy different harms. Response

to Motion for New Trial at 2 n.1. The jury was instructed to enter the damage award for each

claim on its respective verdict form, and then, to avoid duplicative damage awards, plaintiff

would be awarded the highest damage award. Plaintiff, however, argued that two claims may

relate to different harms and therefore simply picking the highest award may not fully

compensate the plaintiff. That is, there may be X reputation harm from the wrongful

termination and Y reputation harm from the defamation, which are not duplicative and should

be totaled. Trial Transcript at 1120:17-1124:24. In contrast, defendants argue here that the

wrongful termination may have caused plaintiff harms A and B, but the defamation only

caused plaintiff harm B. This argument is not inconsistent with the verdict forms because

we contemplated that the jury may award different damages for different claims.

Accordingly, defendants are not barred from raising their argument.

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actual malice issue. Defendants' motion for judgment as a matter of law is untimely

raised, and accordingly, is denied (doc. 145).

III.

Defendants move for a new trial on the defamation claim damages, or remittitur of

the damages,1

 arguing that the award was excessive because most if not all of the

damages awarded are attributable to Shaffer's lawful termination, not to defendant

Colleen Connor's defamatory statement.2

 Motion for Remittitur or Alternatively for a

New Trial at 10-12. Defendants also argue that regardless of the causation, the damage

award of $1.1 million is excessive. Id. at 8-10.

The federal rule for determining excessiveness is furnished by state law because

defamation is a state law claim. Gasperini v. Center for Humanities, Inc., 518 U.S. 415,

426-39, 116 S. Ct. 2211, 2219-25 (1996); 12 James Wm. Moore et al., Moore's Federal

Practice § 59.13[2][g][iii][C]. Pursuant to Arizona law, a court may order a new trial

conditioned on the prevailing party's refusal to accept a remittitur if the verdict was "the

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result of passion or prejudice." Starkins v. Bateman, 150 Ariz. 537, 548, 724 P.2d 1206,

1217 (1986). A verdict is the result of passion or prejudice if the "damages awarded [are] 

so unreasonable and outrageous as to shock the conscience of the court." Id. at 549, 724

P.2d at 1218. However, given the First Amendment considerations in a defamation case,

we must also vigilantly guard against excessive and impermissibly punitive jury verdicts. 

See Gertz v. Robert Welch, Inc., 418 U.S. 323, 349-50, 94 S. Ct. 2997, 3011-12 (1974);

Curtis Pub. Co. v. Butts, 388 U.S. 130, 160, 87 S. Ct. 1975, 1994 (1967).

Shaffer produced the following evidence with regard to his damages and their

cause: Shaffer worked in the public service where reputation is important, Trial

Transcript at 419:17-19, 545:16-546:1; he had a good reputation prior to the incidents

underlying this litigation, Trial Transcript at 756:7-18; the defamatory statement that

Shaffer violated A.R.S. § 13-2311, a felony fraud provision, was available to all

prospective employers, Trial Transcript at 317:14-18; the defamatory statement was

released to the media following a public information request and was included in a

newspaper article, Trial Transcript at 302:25-303:18; Shaffer's post-dismissal job search

took approximately one year whereas previous job searches have taken him no more than

two months, Trial Transcript at 322:3-7; Shaffer actively searched for a job by making

contacts in the state employee community, posting his resume on numerous electronic

databases, and sending out three to five applications a week, and regardless, Shaffer was

still unable to find a government position, Trial Transcript at 319:17-321:22; the

economic harm from taking a lower-paying job was $441,646, and could be substantially

higher, Trial Transcript at 316:8-317:2; Shaffer suffered significant emotional distress,

Trial Transcript at 303:25-304:3, 322:8-323:8, 418:1-19; and Shaffer first heard of the

defamatory statement through a newspaper article, which caused him emotional distress,

Trial Transcript at 299:11-304:3. Moreover, the jury was instructed that upon a finding of

defamation, damages to plaintiff's professional reputation may be presumed, Jury

Instruction No. 14 (doc. 121), an issued not raised by defendants in these briefings.

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Shaffer, however, failed to produce any evidence that prospective employers

considered the defamatory statement in rejecting Shaffer's employment applications. 

Moreover, it is equally plausible that Shaffer's difficulty in finding employment following

his termination arose substantially from the fact that he was dismissed from his prior

position. Similarly, his emotional and reputation difficulties logically arose in part from

his termination. Regardless, Shaffer produced substantial evidence from which a jury

could conclude, without mere speculation, that the defamatory statement alone caused

Shaffer substantial economic, reputation, and emotional harm.

We believe, however, that the award of $1.1 million on the defamation action is

manifestly unreasonable and therefore shocks the judicial conscience. Shaffer requested

damages "easily exceed[ing] $1 million," which included damages for Shaffer's wrongful

termination. Trial Transcript at 1273:23-24. Shaffer's termination caused him substantial

economic, reputation, and emotional damages, all of which are unavailable since Shaffer

failed to succeed on his wrongful termination claim. We believe that although the jury

found against Shaffer on the wrongful termination claim, they nonetheless compensated

him for damages arising out of his termination. We therefore reduce the damage award 

by 40%, to $660,000, a reasonable measure of the damages that arose only from the

defamation. Accordingly, we grant defendants' motion for a new trial on defamation

damages, conditioned on Shaffer's refusal to accept a remittitur to $660,000 (doc. 145).

IV.

Defendants also move for a new trial on the Fourteenth Amendment liberty interest

damages, or remittitur of the damages, arguing that the damages awarded were not caused

by defendants' failure to comply with the Fourteenth Amendment, and even if they were,

they are excessive. Motion for Remittitur or Alternatively for a New Trial at 13-16. The

federal rule for determining excessiveness is furnished by the federal "shocks the judicial

conscience" test because this is a federal claim. See Gasperini v. Center for Humanities,

Inc., 518 U.S. 415, 426-39, 116 S. Ct. 2211, 2219-25 (1996); 12 James Wm. Moore et al.,

Moore's Federal Practice § 59.13[2][g][iii][B].

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Defendants confuse the Fourteenth Amendment protection from a state's

deprivation of a person's property without due process, with the Fourteenth Amendment

protection from a state's deprivation of a person's liberty without due process. In a

property interest claim in the government employment context, an employee that is

entitled to his government employment–his property interest–cannot be dismissed from

that employment without proper procedure. Board of Regents v. Roth, 408 U.S. 564,

577, 92 S. Ct. 2701, 2709 (1972). A court may award damages "which directly resulted

from the failure to give the proper procedure." Brady v. Gebbie, 859 F.2d 1543, 1551

(9th Cir. 1988). However, where a plaintiff is denied the proper procedure, but his

dismissal is ultimately found to be justified, he is only entitled to nominal damages for the

denial of procedure, and emotional damages caused by the denial of the procedure, but is

not entitled to any compensatory damages arising out of the termination of employment. 

Carey v. Piphus, 435 U.S. 247, 263-67, 98 S. Ct. 1042, 1052-54 (1978). Defendants

mistakenly apply the Carey rule to the liberty interest context. See Motion for Remittitur

or Alternatively for a New Trial at 13-16.

If dismissing a government employee will foreclose the possibility of subsequent

employment, such as if the government's accusations against the employee impair the

employee's reputation for honesty or morality, the dismissal will constitute a deprivation

of liberty and require a fair hearing. See Codd v. Velger, 429 U.S. 624, 626-27, 97 S. Ct.

882, 883-84 (1977); Brady, 859 F.2d at 1552. Here, the jury found that Colleen Connor's

statement that accused Shaffer of felonious fraud, which was made in the course of

terminating Shaffer, undermined Shaffer's opportunity to obtain future employment and

was therefore a deprivation of his liberty and required a notice and a meaningful name

clearing hearing. Jury Instruction No. 20 (doc. 121). The jury also found that Shaffer

never received those required procedures. Id.

As with a property interest claim, a court may award damages "which directly

resulted from the failure to give the proper procedure." Brady, 859 F.2d at 1551. 

However, unlike with a property interest claim, the issue of concern in a liberty interest

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claim is whether the statements made will foreclose the former employee's ability to

garner future employment, not whether the employee was properly dismissed. Therefore,

the fact that the jury found that Shaffer was justifiably dismissed is irrelevant to the

damages analysis under the liberty interest claim. The defendants are liable for all

damages that flow from the deprivation of liberty without due process–which includes all

the damages caused by the defamation because the purpose of the name clearing hearing

is to rectify any untruth–and any emotional harm Shaffer suffered for being denied the

due process. The defamation award and the liberty interest award are identical, which

merely shows that Shaffer did not prove any additional emotional harm arising strictly

from his denial of procedural due process.

As with the defamation award and for the same reasons, we believe that the liberty

interest award of $1.1 million is manifestly unreasonable and therefore shocks the judicial

conscience. Accordingly, we grant defendants' motion for a new trial on the liberty

interest damages, conditioned on Shaffer's refusal to accept a remittitur to $660,000 (doc.

145). As the defamation award and the liberty interest award represent the same

damages, the remittitur would reduce the total damage award to $660,000.

V.

Accordingly, IT IS ORDERED denying as moot defendants' Motion to Alter or

Amend the Judgment (doc. 143).

IT IS FURTHER ORDERED denying defendants' Motion for Entry of Judgment

as a Matter of Law on the Defamation Claim (doc. 145).

IT IS FURTHER ORDERED granting defendants' Motion for Remittitur, or

Alternatively for a New Trial on Damages (doc. 145).

Plaintiff shall inform the court of his decision with regard to the remittitur within

15 days of the docketing of this order.

If plaintiff accepts the remittitur, the briefing schedule for the Motion for

Attorneys' Fees identified in our Order dated November 10, 2005 shall proceed on the

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acceptance date (doc. 153). If plaintiff rejects the remittitur, we will set a scheduling

hearing to schedule a trial on damages.

DATED this 19th day of January, 2006.

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