21 F. Supp. 3d 620
W.D. Va.2014Background
- Plaintiffs Philip Charles and David Ellinger were members of the Front Royal Volunteer Fire & Rescue Department (a Virginia non-stock corporation and state actor); Charles was Secretary and Ellinger was Treasurer (paid $300/year).
- Plaintiffs publicly raised concerns about the Department’s Cost-Recovery Program and resource allocation; Charles resigned as Secretary and was later removed as a member; Ellinger resigned as Treasurer, was suspended from membership for 60 days, and alleges the suspension was continued indefinitely without votes required by governing documents.
- Ellinger alleges President Santmyers sent a letter to Ellinger’s employer accusing him of obtaining free paint by submitting a false document (and other accusations about oil grade), which Ellinger contends are false and defamatory.
- Plaintiffs asserted: (Count I) First Amendment and 14th Amendment (procedural due process) violations; (Count II) ultra vires corporate acts by the Fire Department; (Count III) defamation by Santmyers (Ellinger).
- Defendants moved to dismiss portions of the complaint; court granted in part and denied in part: dismissed due process claims generally but gave Ellinger leave to amend limited due process claim re: a protected property interest; dismissed Charles’ Count II ultra vires claim; denied dismissal of Ellinger’s Count II and Count III.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Procedural due process re: resignation as Treasurer (compensation) | Ellinger: resignation was forced by Board actions, so deprivation without process | Defendants: resignation was voluntary; no deprivation; no procedural due process claim | Court: dismissal — resignation insufficiently pled as involuntary; no procedural due process for Treasurer position (may amend limited claim) |
| Procedural due process re: membership suspension | Ellinger: indefinite suspension without hearing deprived him of protected property interest in membership | Defendants: membership benefits are de minimis; no hearing required | Court: dismissal for now — membership alleged benefits are de minimis as pled, but granted leave to amend to plead particulars of tax exemption and monetary value |
| Ultra vires claim standing and remedy (Count II) | Charles and Ellinger: corporate acts violated bylaws; seek relief | Defendants: Charles is no longer a member so lacks standing under Va. Code §13.1-828(B); Ellinger limited to injunctive relief (statutory remedy) | Court: dismissed Charles’ Count II for lack of membership; denied dismissal as to Ellinger’s Count II (may be limited to equitable relief, but improper to decide on 12(b)(6)) |
| Defamation and qualified privilege (Count III) | Ellinger: Santmyers published false statements (paint false-document accusation) amounting to defamation per se and seeks punitive damages | Defendants: statements privileged (qualified privilege); punitive damages inappropriate now | Court: denied dismissal — pleaded a plausible per se defamation claim alleging Santmyers knew statement was false so may overcome qualified privilege; punitive damages claim not dismissible at 12(b)(6) stage |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (standards for pleading plausible claims)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (complaint must state plausible claim beyond speculation)
- Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532 (procedural due process rights for public employees)
- Sandin v. Conner, 515 U.S. 472 (de minimis interests and due process analysis)
- Stone v. Univ. of Md. Med. Sys. Corp., 855 F.2d 167 (4th Cir.) (involuntary resignation doctrine factors)
- Zepp v. Rehrmann, 79 F.3d 381 (4th Cir.) (circumstances rendering resignation involuntary)
- Versarge v. Township of Clinton, 984 F.2d 1359 (3d Cir.) (volunteer firefighter benefits held de minimis)
- Cashion v. Smith, 286 Va. 327 (Va.) (qualified privilege lost where defendant knew statements false)
- Raytheon Technical Servs. Co. v. Hyland, 273 Va. 292 (Va.) (knowledge of falsity relevant to malice and privilege)