Jeffrey Sherman v. Rinchem Company, Inc., 687 F.3d 996

Sherman appeals after district court granted Rinchem summary judgment on his defamation claim.
Sherman was hired by Rinchem to provide shipping services for ATMI and was terminated in April 2008 after Rinchem's investigation.
Investigation focused on Sherman’s interactions with coworker Thill and on Sherman’s discussions about restraining orders and alleged stalking.
An April 21, 2008 termination memo accused Sherman of lying to HR about restraining orders; Sherman appealed, and Rinchem later revised the memo to state termination due to corporate direction.
Sherman claimed Rinchem failed to preserve interview notes from Inman’s April 18, 2008 meeting, seeking sanctions for spoliation; the court denied sanctions without prejudice.
On appeal, Sherman challenges spoliation sanctions and the defamation ruling, arguing issues of fact exist and that qualified privilege did not bar the claim.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Spoliation sanctions governing	Sherman: Minnesota negligence standard applies; sanctions available for negligent spoliation.	Rinchem: federal law governs spoliation sanctions in diversity; requires bad faith for summary judgment or adverse inference.	Federal law applies; no bad faith shown; no sanctions awarded.
Defamation privilege and malice	Sherman: statements were not protected; alleged malice and lack of privilege raise triable issues.	Rinchem: statements were qualifiedly privileged; no malice shown; no compelled publication evidence.	Qualified privilege applies; no genuine malice; summary judgment upheld.

Adkins v. Wolever, 554 F.3d 650 (6th Cir. 2009) (federal law governs spoliation sanctions in diversity actions)
Silvestri v. Gen. Motors Corp., 271 F.3d 583 (4th Cir. 2001) (spoliation sanctions arise from court's inherent power; evidentiary matter)
Reilly v. Natwest Mkts. Grp. Inc., 181 F.3d 253 (2d Cir. 1999) (federal evidentiary rules apply to spoliation sanctions)
Glover v. BIC Corp., 6 F.3d 1318 (9th Cir. 1993) (spoliation sanctions authority rests in inherent power; evidentiary nature)
Keenan v. Computer Assocs. Int'l, Inc., 13 F.3d 1266 (8th Cir. 1994) (qualified privilege framework for employer communications)
McBride v. Sears, Roebuck & Co., 235 N.W.2d 371 (Minn. 1975) (employer disclaimers and privilege in disciplinary communications)
Lewis v. Equitable Life Assurance Soc'y of the U.S., 389 N.W.2d 876 (Minn. 1986) (employer to prospective employee communications may be privileged)
Bol v. Cole, 561 N.W.2d 143 (Minn. 1997) (qualified privilege analysis for defamation)
Frankson v. Design Space Int'l, 394 N.W.2d 140 (Minn. 1986) (malice may be shown by intrinsic or extrinsic evidence)
Chambers v. Travelers Cos., 668 F.3d 559 (8th Cir. 2012) (defamation privileged communications in employment context)