Source: http://mi.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20190614_0002053.EMI.htm/qx
Timestamp: 2019-10-22 05:56:26
Document Index: 34921007

Matched Legal Cases: ['§ 750', '§ 750', '§ 750', '§ 750', '§ 750', '§ 750']

FindACase™ | AFT Michigan v. Project Veritas
PROJECT VERITAS, and MARISA L. JORGE, Defendants.
AMENDED [1] OPINION AND ORDER (1) GRANTING, IN PART, AND DENYING, IN PART, DEFENDANTS' MOTION TO DISMISS (ECF NO. 74), AND (2) GRANTING, IN PART, AND DENYING, IN PART DEFENDANTS' EMERGENCY MOTION REQUESTING AUTHORIZATION FOR AN INTERLOCUTORY APPEAL (ECF NO. 95)
This action involves allegations of political espionage and an important, unresolved question of Michigan law concerning the protections afforded participants in a private conversation under the Michigan Eavesdropping statute (Mich. Comp. Laws § 750.539a et seq.). Plaintiff AFT Michigan (“AFT Michigan” or “AFT”) seeks injunctive relief, compensatory damages, and punitive damages against Defendants Project Veritas and Marisa L. Jorge (respectively, “PV” and “Jorge”) for their alleged acts of fraud, trespass, eavesdropping, misappropriation of trade secrets, and other violations of Michigan law. (See Sec. Am. Compl., ECF No. 72, PageID 2034.) Presently before the Court is Defendants' Motion to Dismiss Plaintiff's Second Amended Complaint pursuant to Federal Rule of Procedure 12(b)(6), Mot. Dismiss, ECF No. 74, PageID 2071, and Defendants' Emergency Motion Requesting Authorization for an Interlocutory Appeal, ECF No. 95. The matters being fully briefed, (ECF Nos. 74, 77, 80, 95, 98 & 99), the Court is dispensing with oral arguments pursuant to Local Rule 7.1(f)(2).
Plaintiff, the Michigan affiliate of the American Federation of Teachers, is a labor organization that, along with its affiliates, represents more than 35, 000 public school employees. (See Sec. Am. Compl. ¶ 1, ECF No. 72 at 2, PageID 2036.) AFT Michigan alleges that Defendant Project Veritas implanted Defendant Jorge in its organization to covertly record its staff members' conversations, distort and manipulate them, then release them to the public for the purpose of disparaging AFT. (See Id. at 2-3.)
AFT Michigan alleges that Defendant Jorge sought an internship with AFT, see Id. at 4, and at the outset, Jorge misrepresented herself as, Marisa Perez, a student at the University of Michigan with the desire to teach in public schools. (See Id. at 5.) AFT accepted Jorge and assigned her to projects related to her expressed interest in charter schools. (See id.) Over the course of three months, however, Jorge regularly sought information beyond her assignment: seeking “detailed information regarding grievances relating to employee discipline”, attending “bargaining sessions”, accessing without permission Plaintiff's staff members' offices, computers, files, and records, and accessing without authorization Plaintiff's private and confidential databases, documents, and information. (Id. at 5-6, 8-9, 13.)
Furthermore, AFT alleges that Jorge “employed a hidden camera [in a private office] to covertly record a private conversation with an AFT Michigan staff representative” during which they discussed the resolution of a matter related to teacher discipline with the goal of teaching Jorge how staff members provide assistance in those matters. (Sec. Am. Comp. ¶¶ 28-29, 32, ECF No. 72 at 7, PageID 2041.) Defendant Project Veritas later published portions of the recorded conversation (along with some of AFT's confidential documents) on YouTube, editing the conversation allegedly to provide a false narrative as to AFT's staff member's role for the specific purpose of disparaging AFT Michigan. (See Id. at 7- 8.) Finally, Plaintiff's staff members noticed Jorge carrying her cellular phone wherever she went and believed she recorded AFT staff members' conversations and AFT's meetings without permission. (See Id. at 11, 13, 17; see also Dobbie Aff. ¶ 10, ECF No. 1-1 at 3, PageID 38.)
AFT Michigan initiated this lawsuit, believing Defendants to be in possession of its proprietary and confidential information, in the Third Circuit Court for the County of Wayne, Michigan (No. 17-014348-CZ). (See Not. Removal, ECF No. 1, PageID 1.) Defendants removed the lawsuit to the Eastern District of Michigan based upon diversity jurisdiction. (See id.) Presently before the Court is Defendants' Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), Mot. Dismiss, ECF No. 74, PageID 2071, and Defendants' Emergency Motion Requesting Authorization for an Interlocutory Appeal, ECF No. 95. The matters being fully briefed, (ECF Nos. 74, 77, 80, 95, 98 & 99), the Court is dispensing with oral arguments pursuant to Local Rule 7.1(f)(2).
Defendants' Motion to Dismiss does little to refute the alleged conduct against them but repudiates Plaintiff's claims as “no more than conclusory labels”. (Mot. Dismiss 1, ECF No. 74 at 1, PageID 2083.)
II. Michigan's Eavesdropping Statute
Defendants contend that they are not liable under Michigan's eavesdropping statute because Jorge was a participant to the private conversations she allegedly recorded. Defendants note that two past Michigan Court of Appeals decisions- Sullivan v. Gray, 117 Mich.App. 476, 324 N.W.2d 58 (1982) (2-1 decision) (per curiam) and Lewis v. LeGrow, 258 Mich.App. 175, 670 N.W.2d 675, 683-84 (2003) (citing Sullivan's holding that “a participant in a private conversation may record it without ‘eavesdropping' ” but also noting “that eavesdropping is not at issue in this case.”)-provide some support to their claim that a participant in a private conversation who records it absent the consent of all other participants is not liable under Michigan's eavesdropping statute (Mich. Comp. Laws § 750.539a et seq.).
Given that the Court's subject matter jurisdiction over this action is based on diversity, see 28 U.S.C. 1332(a)(1), the Court must apply Michigan law as determined by the Michigan Supreme Court. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938) (“[T]he law of the state shall be declared by its Legislature in a statute or by its highest court in a decision”). That court, however, has not specifically addressed the question presented here[2]. Accordingly, the Court “must predict how the [Michigan Supreme Court] would rule by looking to all the available data.” Stryker Corp. v. XL Ins. Am., 735 F.3d 349, 360 (6th Cir. 2012) (quoting Allstate Ins. Co. v. Thrifty Rent-A-Car Sys., Inc., 249 F.3d 450, 454 (6th Cir. 2001)) (emphasis added). The court may be guided by analogous decisions or dicta of the Michigan Supreme Court, decisions and dicta of other Michigan courts, restatements of law, law commentaries, and decisions from other jurisdictions. See, e.g., Bailey v. V & O Press Co., Inc., 770 F.2d 601, 604 (6th Cir. 1985). In the absence of a decision by Michigan's Supreme Court, the Michigan Court of Appeals decisions, although the starting point, are not controlling and may be disregarded by the Court if convinced that the Michigan Supreme Court would decide otherwise. See Grantham & Mann, Inc. v. Am. Safety Prod., Inc., 831 F.2d 596, 608-09 (6th Cir. 1987) (citations omitted); see also West v. AT&T, 311 U.S. 223, 237 (1940) (holding federal courts may disregard state appellate court decisions if convinced highest state court would decide otherwise). Therefore, Sullivan and Lewis, although instructive, are neither binding on the Court nor dispositive of the issue presented here.
Michigan Comp. Laws (“MCL”) § 750.539c provides:
Any person who is present or who is not present during a private conversation and who willfully uses any device to eavesdrop upon the conversation without the consent of all parties thereto, or who knowingly aids, employs or procures another person to do the same in violation of this section, is guilty of a felony punishable by imprisonment in a state prison for not more than 2 years or by a fine of not more than $2, 000.00, or both.
MCL § 750.539a(2) defines “eavesdropping” as meaning “to overhear, record, amplify or transmit any part of the private discourse of others without the permission of all persons engaged in the discourse.”
The only three instances in which the Michigan Supreme Court has addressed the application of Michigan's eavesdropping statute-Dickerson v. Raphael, 461 Mich. 851, 601 N.W.2d 108 (1999) (unpublished table decision); People v. Stone, 463 Mich. 558, 563, 621 N.W.2d 702');">621 N.W.2d 702 (2001); Bowens v. Ary, Inc., 489 Mich. 851, 794 N.W.2d 842');">794 N.W.2d 842, 843 (2011) (memorandum)-merely reinforce that the statutory prohibition against eavesdropping extends to “private conversations” in which “a person reasonably expects to be free from casual or hostile intrusion or surveillance.”[3] Significantly, only one of the cases-Stone-is a published decision with any precedential value. Still, none have construed the portions of the statute that the Michigan Court of Appeals held as removing participants in a private conversation from the ambit of the statute's eavesdropping prohibitions. Each, in applying the statute to the particular circumstances of its case, focused exclusively on the factual issue of whether the conversation had an expectation of privacy. See Dickerson, 601 N.W.2d at 108; Stone, 621 N.W.2d at 704-06; Bowens, 794 N.W.2d at 843-44. With this foundation, the Court considers how the Michigan Supreme Court would construe the eavesdropping statute.
When interpreting a statute, the Michigan Supreme Court's primary goal is to give effect to the Michigan's Legislature's intent, which is primarily ascertained through the statute's plain language. See Stone, 621 N.W.2d at 704 (citing People v. Money, 461 Mich. 325, 330, 603 N.W.2d 250 (1999)). “When that language is unambiguous, no further judicial construction is required or permitted, because the Legislature is presumed to have intended the meaning it plainly expressed.” Id. (emphasis added); see also Renown Stove Co. v. Unemployment Compensation Comm., 328 Mich. 436, 44 N.W.2d 1, 3 (1950) (holding referring to resources outside of the text, like dictionaries, is unnecessary when the Legislature's intent can be determined from reading the statute itself). In construing the definition of “private conversation”, the Michigan Supreme Court recognized the Legislature's intent, gleaned from the plain meaning of the defined terms in MCL § 750.539a, to protect “private” places and conversations, i.e., a place or conversation “reasonably expect[ed] to be free from casual or hostile intrusion or surveillance.” Stone, 621 N.W.2d at 704-05.
The majority in Sullivan, the Michigan appellate court that first construed the reach of the state's prohibition against eavesdropping, believed that “the statutory language, on its face, unambiguously exclude[d] participant recording from the definition of eavesdropping by limiting the subject conversation to ‘the private discourse of others' ”. 324 N.W.2d at 60. This Court is convinced, however, that Sullivan's construction contravenes the Legislature's intent made clear by the plain, unambiguous language of the statute.
This Court is also convinced that the Michigan Supreme Court would decide in the same manner and apply the same construction advanced by Judge Brennan in his dissenting opinion in Sullivan. This Court unequivocally concurs with Judge Brennan's dissenting opinion and adopts its rationale, which reasoned:
On its face, the statute does not state that a person who is a party to the conversation cannot violate the statute. Rather, if the Legislature had intended that the statute not apply to participants, I think that it would have stated that intention in clear language. As a matter of fact, the very first phrase of the statute indicates that participants to the conversation can violate the statute: ‘Any person who is present . . .' (emphasis added). If the Legislature intended to exclude participants, I think that it would have stated any person not a party to the conversation. Moreover, the statute also states that all participants in the conversation must consent to the overhearing, recording, amplifying or transmitting of the conversation. (emphasis added). To me, this plainly prohibits participants, as well as third parties, from the activities designated in the statute without disclosure to the other persons to the conversation that the conversation is being overheard, recorded, amplified or transmitted.
Moreover, I think the fact that the Legislature even defined the word “eavesdropping” is significant. . . . [T]he Legislature did define eavesdropping, using the disjunctive “or”, as not only overhearing but also recording, amplifying or transmitting the conversation. Thus, to violate the statute, one needs only to overhear or record or transmit or amplify. This clearly indicates to me that the Legislature specifically prohibits conduct beyond the ordinary meaning of the word eavesdropping, by prohibiting conduct that not only could be accomplished by a third party but also by a participant. Further, the majority seems to focus on the phrase “private discourse of others”, contained in the definition, as supporting their conclusion that the statute does not apply to participants. By reading the phrase in context, with the definition substituted for the word eavesdrop in the statute, the majority's interpretation is not supported . . . .
Moreover, the phrase is followed by the words “without the permission of all persons engaged in the discourse” (emphasis added), indicating that the unilateral recording of a conversation, unbeknownst to the others involved, is not permitted. Thus, reading the statute as a whole, I would find that a participant is prohibited from recording the private discourse of any other person involved in the conversation unless all persons consent. (emphasis added).
Sullivan, 324 N.W.2d at 61-62 (Brennan, J., dissenting).
Therefore, the “available data” leads this Court to conclude that the Michigan Supreme Court would not permit a participant or “any person present” or not present during a conversation, to which a participant has a reasonable expectation of privacy, to willfully use any device to overhear, record, transmit or amplify that conversation without the consent of “all parties thereto”. MCL §§ 750.539a, 750.539c (emphasis added). Accordingly, the Court will examine AFT's eavesdropping claim in accordance with this opinion and conclusion.
A motion to dismiss, pursuant to Federal Rule of Civil Procedure 12(b)(6), tests the legal sufficiency of the complaint. See RMI Titanium Co. v. Westinghouse Elec. Corp., 78 F.3d 1125, 1134 (6th Cir. 1996). Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief”. To survive a motion to dismiss, a complaint need not contain “detailed factual allegations, ” but it must contain more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action . . . .” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint does not “suffice if it tenders ‘naked assertions' devoid of ‘further factual enhancement.' ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557).
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As the Supreme Court provided in Iqbal and Twombly, &ldquo;[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to &lsquo;state a claim to relief that is plausible on its face.&#39; &rdquo; Id. (quoting Twombly, 550 U.S. at 570). &ldquo;A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.&rdquo; Id. (citing Twombly, 550 U.S. at 556). The plausibility standard “does not impose a probability requirement at the pleading ...