Court Opinion

ID: 9487480
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:17:22.350443+00
Date Added: 2024-06-11T17:52:17.312084
License: Public Domain

WELLFORD, Circuit Judge,
dissenting:
I would Reverse the judgment of the district court on several grounds; therefore, I respectfully dissent.
I. PERSONAL JURISDICTION OVER CHRISTOPHER
Chief Judge Posner correctly sets out that in Illinois in this diversity case there is no personal jurisdiction “over an individual whose presence and activity in the state ... were solely on behalf of his employer or other principal.” Plaintiff concedes in his brief that “if an individual’s [Christopher’s] only contacts with a. forum are solely the result of acts as a corporate fiduciary, personal jurisdiction over the individual may not be grounded on such contacts.”1
There is no question but that Christopher was in Illinois at all times pertinent to this case as a corporate officer with oversight over plaintiff and that in all respects he purported to act on behalf of Nova. In my view, whether Christopher’s disciplinary actions were “unfounded,” as plaintiff claims! or whether, as a consequence, Nova “lost the services of a long-standing employee with an excellent service record,” Rice was an “at will” employee subject to discharge by his authorized superior. As Judge Posner points out, “[t]he record contains no evidence that Christopher in firing Rice was on a frolic of his own.” It was not alleged or shown that Christopher acted without the scope of his authority. Indeed, if that were the case, it is hard to see how Nova would be responsible for any interference with Rice’s relationship or for defamation or for retaliatory discharge.
Corporate officers are not outsiders in-termeddling maliciously in the business affairs of the corporation. They are privileged to act on behalf of their corporations, using their business judgment and discretion. Loewenthal Securities Co. v. White Paving Co., 351 Ill. 285, 300, 184 N.E. 310, 316 (1932). Since officers hold policy-making positions, “their freedom of action aimed toward corporate benefit should not be curtailed by fear of personal liability....”
George A. Fuller Co. v. Chicago College of Osteopathic Medicine, 719 F.2d 1326, 1333 (7th Cir.1983).
There is neither logic nor demonstrated basis in any assertion that Christopher’s actions were “to further [his] personal goals.” Id. Christopher was not alleged, or shown, to have any substantial financial stake in Nova so as to advance, in some fashion, his financial goals. The jury found that there was no retaliation against Rice by Christopher or by Nova. Such a finding by the jury is inconsistent with any claim of intentional interference with employment against Christopher. It should be noted that the only case cited by plaintiff in his brief to support the proposition that an allegation that a corporate officer acted contrary to the best interest of his employer is sufficient to overcome *919a fiduciary-shield defense is Zeman v. Lotus Heart, Inc., 717 F.Supp. 373 (D.Md.1989). That case turned on the individual officer’s direct financial stake in the corporate employer.
It would violate a sense of fairness to permit the Burrowses to solicit, negotiate, and consummate corporate business in Maryland in which they personally had so direct and substantial an interest and then allow them to avoid responding in Maryland to legal charges addressed to them personally, which arise from those transactions.
Id. at 378. Zeman sets out the following factors to consider in respect to the fiduciary-shield doctrine:
Therefore, when (1) an employee has pursued conduct in a state solely at the direction of the corporation in furtherance of the corporation’s interest; (2) he has not pursued a personal interest in the state that was direct and substantial; and (3) he has not diverted significantly from the corporate purpose and policies while in the state, his contact with the state should not subject him to the jurisdiction of a court in the state....
Id. at 376-77.
The majority opinion, moreover, acknowledges that “Christopher probably was entitled, prima facie at least, to the protection of the fiduciary-shield doctrine because, so far as the record of the trial reveals, he was not in fact in Illinois to serve his personal interests.” Since the doctrine is equitable, I would not only agree with the above language, but I would add that it would be unfair and destructive of such a doctrine to permit a plaintiff to overcome it by simply asserting, without any particularity, that Christopher was acting, in substance, contrary to the best interests of his employer. The law does indeed, moreover, require the plaintiff to prove, not merely assert, that a court has personal jurisdiction over a defendant.
I would hold that the district court erred in not applying the fiduciary shield doctrine and in accepting personal jurisdiction over Christopher. I would not find that Christopher ever waived this defense. But even if personal jurisdiction were deemed appropriate for purposes of tortious interference with Rice’s employment, I would find reversible error with respect to' other district court actions as to defendant Christopher.
II. OTHER ERRORS AS TO DEFENDANT CHRISTOPHER
Although the jury found in favor of Rice on his defamation and intentional interference claims, it awarded him zero damages. Unlike the district court, I would Affirm these jury verdicts. There is no contention by plaintiff but that the jury was properly instructed with respect to his claims of defamation and intentional interference. The majority acknowledges serious doubt that Rice actually suffered “pecuniary injury” or that he was “hurt in any very palpable sense ” by defendants’ actions in terminating him. The jury specifically found no compensatory damages proven against defendant Christopher, and I believe it was justified in reaching this verdict, inconsistent as it may have been, with respect to a finding of punitive damages against either defendant.
Illinois courts have held that “where actual damages are not recoverable, there can be no award for punitive damages.” Shrout v. McDonald’s System, Inc., 90 Ill.App.2d 60, 234 N.E.2d 45 (1967), cert. denied, 393 U.S. 951, 89 S.Ct. 375, 21 L.Ed.2d 363 (1968). This is in conformity with general law on this subject. See 25 C.J.S. Damages, § 118 (1966). “The basic rule in Illinois is that punitive or exemplary damages may not be awarded in the absence of actual damages.... This rule has been followed consistently in Illinois.” Tonchen v. All-Steel Equip., Inc., 13 Ill.App.3d 454, 300 N.E.2d 616, 624 (1973).
Furthermore,
The courts of Illinois have repeatedly stated that punitive or exemplary damages are not a favorite of the law. City of Chicago v. Shayne, 46 Ill.App.2d 33, 196 N.E.2d 521 (1964); Wetmore v. Ladies of Loretto, 73 Ill.App.2d 454, 220 N.E.2d 491 (1966).
Tonchen, 300 N.E.2d at 624. Under Illinois law, then, as weU as under Massachusetts law, there can be no recovery of punitive damages against Christopher even if person*920al jurisdiction over him existed. I would conclude that the magistrate judge was in error in granting plaintiffs motion to amend the judgment to hold Christopher jointly and severally liable for $10,000 in actual damages the jury awarded against Nova only.
I believe that a case cited by plaintiff actually lends support for this conclusion with respect to liability for damages:
Illinois courts [have] determined that a jury verdict which simply found one eode-fendant negligent necessarily exculpated the remaining defendant, for the finding that the second defendant was not liable was “reasonably implicit” in the jury verdict. Sesterhenn v. Saxe, 88 Ill.App.2d 2, 232 N.E.2d 277 (1967).
Musgrave v. Union Carbide Corp., 493 F.2d 224, 232 (7th Cir.1974).
For these reasons, I would conclude that there was lack of personal jurisdiction over Christopher, but if jurisdiction were found somehow appropriate, that plaintiff is entitled to no damages against Christopher under the jury verdicts and Illinois law. I have assumed as to damages that Illinois law applies; if Massachusetts law applies the result would be the same.
III. LIABILITY OF NOVA
The claims against Nova are essentially liability by reason of respondeat superior for the alleged wrongful activity of its agent, Christopher, in retaliating against Rice by. termination because Rice filed workman’s compensation claims. The jury found, however, that there, was no retaliation against Rice. The magistrate judge was correct in at least one respect in this case — denying Rice’s motion for a new trial on the adverse verdict on the retaliatory discharge claim. (“The jury could have found that ... Christopher decided to fire Mr. Rice because of his dislike of him.”) The magistrate judge is also correct in noting the jury’s inconsistent verdict on the intentional interference claim, because “the claims have always been treated as inter-related.” I disagree with the magistrate judge in her conclusion that as to defendant Nova, the verdicts can be reconciled. Nova cannot be held liable for intentional interference with a party (employee Rice) with respect to its own contractual relationship.
There was simply no proof in this ease that Nova defamed Rice, and the defamation claim was also inextricably intertwined with the claim of retaliation, which resulted in a verdict for defendants.
At the very best, Rice may be entitled to a new trial on the defamation claim since it is clear that this verdict is inconsistent with the retaliation verdict and the punitive damage award against Nova cannot stand. I am in agreement with Judge Posner that Layne v. Builders Plumbing Supply Co., 210 Ill.App.3d 966, 155 Ill.Dec. 493, 569 N.E.2d 1104 (1991), would indicate that it is “unlikely” that Illinois would adopt the “doctrine of compelled self-defamation.” Absent such a doctrine, there is no evidence that Nova defamed Rice to any third party. I believe the better result as to Nova “in this poor excuse for a lawsuit,” would be to REVERSE the judgments for damages against Nova under all the circumstances.
Accordingly, I would REVERSE the judgment of the district court as to both defendants.

. _ Plaintiff concedes, with respect to the fiduciary-shield doctrine’s applicability in Illinois, that "it is unfair to exercise personal jurisdiction over an individual whose only forum contacts involve acts in furtherance of corporate, rather than personal, interests."