The HONORABLE SUSAN WEBBER WRIGHT, United States District

1

Judge for the Eastern District of Arkansas.

___________

No. 95-2987

___________

Jerry Freeman; David White; *

Dale Lile, *

*

Plaintiffs - Appellants, *

* Appeal from the United States

v. * District Court for the

* Eastern District of Arkansas.

Bechtel Construction Company, *

*

Defendant - Appellee. *

___________

 Submitted: February 12, 1996

 Filed: July 8, 1996

___________

Before BOWMAN, BEAM, and LOKEN, Circuit Judges.

___________

LOKEN, Circuit Judge.

In this diversity action, three former employees of Bechtel

Construction Company ("Bechtel") appeal the dismissal of their claims for

the tort of outrage and for defamation that arose out of a disciplinary

episode at their Arkansas workplace. We accept as true the facts alleged

by plaintiffs in their amended complaints for purposes of reviewing the

Rule 12(b)(6) dismissals. See Sharps v. United States Forest Serv., 28

F.3d 851, 853 (8th Cir. 1994). Agreeing with the district court that the 1

complaints fail to state a claim on which relief may be granted, we affirm.
-2-

Plaintiffs are journeymen pipefitters who at the time in question

were working for Bechtel on a project at the Entergy, Inc., Nuclear One

power plant in Russellville, Arkansas. Jerry Freeman was a Mechanical

Superintendent; David White and Dale Lile were Foremen. A female

pipefitter complained to Bechtel that Freeman had made a sexually harassing

remark to her, in the presence of White and Lile. Bechtel investigated and

advised that the matter would be dropped. Dissatisfied, the complainant

raised the issue with Entergy. That prompted Bechtel to investigate

further, which culminated in an arbitration hearing at the job site. After

the hearing, Bechtel determined that Freeman had made a harassing remark

which White and Lile failed to report. It suspended all three for five

days, and demoted Freeman.

Unable to obtain relief under the collective bargaining agreement

between Bechtel and the pipefitters' union, plaintiffs filed these two

consolidated actions. Count One of their parallel complaints alleged the

tort of outrage (intentional infliction of emotional distress). Counts Two

and Three alleged defamation by libel and by slander. Prior to deposition

discovery, Bechtel filed motions to dismiss for failure to state a claim.

The district court granted those motions, and plaintiffs appeal. 

Count One -- Tort of Outrage. The Arkansas Supreme Court takes "a

very narrow view of claims for the tort of outrage." The conduct at issue

must be "so outrageous in character, and so extreme in degree, as to go

beyond all possible bounds of decency, and to be regarded as atrocious, and

utterly intolerable in civilized society." Ross v. Patterson, 817 S.W.2d

418, 420 (Ark. 1991). The trial court must initially determine whether

conduct may reasonably be regarded as so outrageous as to permit recovery.

See Smith v. American Greetings Corp., 804 S.W.2d 683, 686 (Ark. 1991).

Review of outrage claims in employment situations is particularly strict

because "an employer must be given a certain
-3-

amount of latitude in dealing with employees." Sterling v. Upjohn

Healthcare Servs., Inc., 772 S.W.2d 329, 330 (Ark. 1989). 

In this case, plaintiffs allege that Bechtel, after initially finding

plaintiffs innocent of the sexual harassment complaint, then proceeded to

discipline them while "entertain[ing] serious doubts about the truthfulness

of the [complainant's] statement," knowing that "severe emotional distress

would be the result." We agree with the district court that "Arkansas law

is replete with employment cases in which conduct far more objectionable

than that described in this case still was found insufficient to equal the

tort of outrage." See, e.g., Smith, 804 S.W.2d at 685; Sterling, 772

S.W.2d at 330; Puckett v. Cook, 864 F.2d 619, 622 (8th Cir. 1989).

Therefore, plaintiffs failed to state an outrage claim.

Count Two -- Defamation by Libel. In this count, plaintiffs allege

that a "written, permanent report" of the reason for their discipline "will

go into the file kept by [Bechtel]"; that the report contains an "obvious

defamatory statement"; and that the file "is kept in a central location

where anyone has access, not just individuals that [are] deemed necessary

to further any [Bechtel] interest." We agree with the district court that

these allegations are deficient. 

In the first place, the core allegation is speculative -- a permanent

report "will go" into permanent files at Bechtel. Second, no specific

defamatory statement is alleged. It is not "obvious" to us that such a

report would contain a defamatory statement. For example, a report that

simply stated that the female pipefitter complained, that Bechtel

investigated and determined the complaint was well founded, and that

plaintiffs were disciplined based upon that determination, would contain

no statement that is even arguably false, an essential element of

defamation torts. See Mitchell v. Globe Int'l Pub., Inc., 773 F. Supp.

1235, 1238 (W.D. Ark. 1991). 
-4-

Third, plaintiffs failed to allege that the reports have in fact been

published to a nonprivileged third party. Arkansas law recognizes a

qualified privilege for employers and supervisory employees dealing with

matters that affect their business. See Ikani v. Bennett, 682 S.W.2d 747,

749 (Ark. 1985); Dillard Dept. Stores, Inc. v. Felton, 634 S.W.2d 135, 137

(Ark. 1982). The investigation of charges of sexual harassment and the

recording of discipline in an employee's personnel file would fall within

the scope of this privilege. 

In these circumstances, unless the complaints set forth the alleged

defamatory statements and identify the persons to whom they were published,

Bechtel is unable "to form responsive pleadings." Asay v. Hallmark Cards,

Inc. 594 F.2d 692, 699 (8th Cir. 1979). Count Two failed in this regard

and was properly dismissed. 

Count Three -- Defamation by Slander. In Count Three, plaintiffs

allege that defamatory statements were made that each plaintiff made or

condoned a sexually harassing statement and was disciplined, and that these

statements were "orally published around the whole job site and the town

of Russellville." The district court dismissed this count because the

complaints "fail to state how [Bechtel] caused this alleged publication."

We agree.

The complaints allege generally that every statement by a Bechtel

employee is attributable to Bechtel under the law of agency because made

in the ordinary course of business. That is, of course, a gross

exaggeration. Many statements by non-management employees, even statements

made "around the whole job site," are not made in the course of their

employment. And many statements made around the job site would be entitled

to a qualified privilege, for example, statements made in implementing

grievance procedures with the union. Thus, the vague publication

allegations in Count Three suffer from the same deficiencies as those in

Count Two -- they do not identify the defamatory statements with any
-5-

specificity, they do not identify the manner of oral publication, and they

do not allege that Bechtel (that is, a Bechtel agent acting within the

scope of that agency) published the statements to a nonprivileged

recipient.

When a defamation complaint fails to state a claim, it may be error

to dismiss the complaint or strike the deficient allegations without giving

plaintiffs a chance to amend. See Asay, 594 F.2d at 699. But here,

plaintiffs never requested an opportunity to amend. Rather, they requested

an opportunity to take numerous depositions, confirming that their

defamation allegations were made without supporting facts in the hope that

they would be permitted to embark upon a classic fishing expedition. The

district court properly cut short that abuse of the liberal federal

pleading rules by granting Rule 12(b)(6) dismissals. 

The judgment of the district court is affirmed. 

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.