Dickinson Frozen Foods, Inc. v. J.R. Simplot Co.
164 Idaho 669
| Idaho | 2019Background
- Simplot sued Tiegs and Tiegs-owned companies in Washington federal court (a "business divorce"); Dickinson Frozen Foods (DFF) — also controlled by Tiegs — was not a party but was discussed in Simplot's complaint and an attached confidential audit report.
- Simplot (and its Food Group President McKellar) and Simplot's counsel (Yarmuth and Thompson) copied the Washington complaint (with the audit) to Northwest Farm Credit Services (NFCS).
- DFF sued in Idaho state court for defamation per se against Simplot and McKellar and against the two out-of-state law firms, and also alleged Simplot breached a nondisclosure agreement (NDA) by disclosing the audit.
- The Idaho district court dismissed DFF's defamation claims as barred by the absolute litigation privilege, declined to decide personal jurisdiction for the out-of-state firms, and granted summary judgment for Simplot on the NDA claim.
- On appeal the Idaho Supreme Court: held it lacked personal jurisdiction over the two out-of-state law firms; affirmed dismissal of the defamation claims under the litigation privilege; affirmed summary judgment on the NDA; affirmed denial of leave to amend; and reversed the fee award insofar as fees were awarded for the defamation claim, remanding for apportionment (fees allowed for the NDA defense only).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over Yarmuth and Thompson | DFF argued effects of alleged tort were felt in Idaho, supporting jurisdiction | Firms argued all relevant acts (filing, sending complaint) occurred in Washington/Missouri and no Idaho long-arm basis exists | No personal jurisdiction; long-arm not satisfied because no tort committed in Idaho; claims against firms dismissed |
| Applicability of litigation privilege to statements in Washington complaint | DFF: statements were not reasonably related to the Washington litigation and privilege was waived by sending complaint to NFCS | Defendants: statements made in judicial proceedings and bore reasonable relation to the "business divorce" claims; sending to NFCS was within scope of representation | Privilege applies: statements were reasonably related to the Washington litigation; privilege not waived by disclosure to NFCS |
| Denial of leave to amend complaint | DFF: new/amplified facts would cure defects and defeat privilege | Defendants: proposed amendments would be futile and would not overcome the privilege | No abuse of discretion: amendments would not state valid claims that survive privilege |
| Breach of NDA claim (summary judgment) | DFF: disclosure of audit/report violated NDA's confidentiality and three-year protection | Simplot: NDA covered information disclosed "in connection with a proposed business relationship"; parties had an actual business deal by the time of disclosure so NDA did not apply | Affirmed: NDA unambiguous and did not cover the later disclosure; summary judgment for Simplot affirmed |
| Award of attorney fees under I.C. § 12-120(3) | DFF: fees improper because defamation claim is not grounded in a commercial transaction; sought reversal and reapportionment | Defendants: the disputes grew from commercial/business relationship warranting fees | Reversed in part: fees inappropriate for defamation claim (not grounded in commercial transaction); fees allowed for successful defense of the NDA claim only; remand for apportionment and recalculation |
Key Cases Cited
- Richeson v. Kessler, 73 Idaho 548 (defamatory statements in judicial proceedings having reasonable relation to the cause are absolutely privileged)
- Weitz v. Green, 148 Idaho 851 (litigation privilege requires statements be made in course of proceeding and reasonably related to it)
- Taylor v. McNichols, 149 Idaho 826 (litigation privilege is absolute when attorney acts within scope of representation)
- Gailey v. Whiting, 157 Idaho 727 (long-arm requires the tortious act to fall within Idaho's statute; "effects" test relates to due process prong)
- Bridge Tower Dental, P.A. v. Meridian Computer Ctr., Inc., 152 Idaho 569 (example where tort arose from a commercial transaction supporting fee award)
- Stevens v. Eyer, 161 Idaho 407 (gravamen must be a commercial transaction for I.C. § 12-120(3) fees)
- Savage v. Scandit Inc., 163 Idaho 637 (standards on motions to dismiss and summary judgment)