A review of the LeDuc letter itself establishes that the references to LeDuc's lawsuit against Kentucky Central constituted only two paragraphs of the three page, single spaced letter. The letter also discussed Kentucky Central's ratings decline, other alleged financial problems, and other lawsuits against Kentucky Central. It did not ask for evidence for LeDuc's suit, but appeared only to inform the agents of the alleged decline of Kentucky Central. Thus, Cayley is inapposite.
The privilege does not appear on the face of the complaint, but is rather a factual issue which should not be disposed of on a motion to dismiss.
2. Interested Persons and Matter of Public Concern privileges
California Civil Code § 47(3) provides that a privileged publication is one made:
In a communication, without malice to a person interested therein, 1) by one who is also interested, or 2) by one who stands in such relation to the person interested as to afford a reasonable ground for supposing the motive for the communication innocent, Or 3) who was requested by the person interested to give the information.
Cal. Civ. Code § 47(3) (West's Supp. 1992). Speech within the public interest is also subject to a qualified privilege. Everett v. California Teachers Assn., 208 Cal. App. 2d 291, 25 Cal. Rptr. 120 (1962). Plaintiff must plead malice where an action concerns a matter of public interest. Everett, 25 Cal. Rptr. at 122.
Defendants argue that plaintiff has failed to plead malice in its complaint and that the statements in the LeDuc letter are statements falling within the interested persons or matter of public interest privileges. Assuming for purposes of this motion that the statements could fall within the interested persons or matter of public interest privileges, the real issue is whether plaintiffs have adequately alleged malice (knowledge of falsity or reckless disregard of falsity).
The only direct reference to "malice" in the complaint is found in reference to plaintiff's claims for punitive damages. Thus, plaintiff alleges in several paragraphs that the conduct of the defendant was "fraudulent, oppressive, and malicious." Complaint, paras. 38, 44, 72. Malice in the punitive damages claim is thus used in a different context than it is used in a defamation claim. However, Kentucky Central does allege that the defendant has engaged in "intentional or negligent misrepresentations, derogatory, unfair, false, and misleading statements regarding Kentucky Central." Complaint, para. 18. Thus, by alleging intentional misrepresentations, plaintiff indirectly alleges malice. As the reference does not appear clearly, plaintiffs will be given leave to amend the complaint to clearly state allegations of malice.
Defendants' motion to dismiss plaintiff's second (intentional interference with prospective economic relations), third (intentional interference with contractual relations), fifth (breach of contract), sixth (declaratory judgment re renewal commissions), seventh (Bus. & Prof. Code § 17200), and eighth (Bus. & Prof. Code § 17200) claims is hereby DENIED. As for the first and fourth claims (Ins. Code §§ 781 & 790.03(a)), plaintiff is hereby given leave to amend the complaint to allege misrepresentation with particularity as required by Federal Rule of Civil Procedure 9(b). As for the ninth claim (defamation), plaintiff is hereby given leave to amend the complaint to more clearly allege that defendant LeDuc acted with malice in publishing the alleged defamatory letter.
IT IS SO ORDERED.
Dated: October 28, 1992
Robert F. Peckham
UNITED STATES DISTRICT JUDGE