2021 IL App (1st) 200735
Ill. App. Ct.2021Background
- Four Allstate Equity Division portfolio managers (Rivera, Kensinger, Meacock, Scheuneman) were investigated for allegedly timing trades to manipulate bonus calculations under the Dietz Method; Allstate terminated some employees for cause in 2009.
- Allstate’s 2010 Form 10-K and an internal memo from CIO Judith Greffin disclosed an internal investigation, estimated potential adverse pension impact, and described contributions to pension plans; neither document named the plaintiffs.
- Plaintiffs sued in federal court asserting an FCRA claim (failure to provide a summary of the investigation) and state defamation claims; a jury found for plaintiffs and awarded substantial damages.
- The Seventh Circuit vacated the verdicts: it held plaintiffs lacked standing on their FCRA claim and found no evidence of special damages on the defamation per quod claim; the federal action was dismissed for lack of subject-matter jurisdiction.
- Plaintiffs refiled in Illinois state court asserting defamation per se, defamation per quod, and false light. The circuit court dismissed defamation per se under section 2-615 (innocent construction / not about plaintiffs on the face) and dismissed per quod and false light under section 2-619 (collateral estoppel). Plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Form 10-K and Greffin memo state actionable defamation per se despite not naming plaintiffs | Unnamed-group statements can be per se if extrinsic facts show they refer to plaintiffs | Statements did not name plaintiffs and are reasonably susceptible to innocent construction as referring to a group | Dismissal affirmed: statements do not on their face identify plaintiffs so cannot support defamation per se |
| Whether the Seventh Circuit’s prior rulings collaterally estop plaintiffs from litigating defamation per quod and false light | Prior federal ruling addressed standing on FCRA, not the merits of defamation; collateral estoppel does not apply | Seventh Circuit’s observation that plaintiffs produced no evidence of prospective employers refusing to hire them is binding and precludes proof of special damages | Reversed circuit court on collateral estoppel: collateral estoppel does not bar the claims because the standing decision did not necessarily decide special-damages issue |
| Whether plaintiffs pleaded special damages with particularity for defamation per quod and false light | Plaintiffs alleged they suffered business/professional damages and could not obtain comparable employment | Defendant: allegations are conclusory/general; Illinois law requires particularized, pecuniary special-damage allegations | Affirmed dismissal on alternative grounds: plaintiffs failed to plead special damages with the requisite particularity |
| Whether plaintiffs should be permitted to replead if special damages were deficient | Plaintiffs sought leave to replead at oral argument (late) and rely on trial testimony and industry practice | Defendant opposed further amendment after eight years of litigation and prior discovery/trials | Court declined to allow repleading: forfeiture and undue delay; dismissal with prejudice affirmed |
Key Cases Cited
- Chapski v. Copley Press, 92 Ill.2d 344 (Ill. 1982) (innocent-construction rule: court resolves whether statement can reasonably be innocently construed before jury)
- Bryson v. News Am. Publ’g, 174 Ill.2d 77 (Ill. 1996) (where plaintiff is named, contextual similarities may permit inference that publication referred to plaintiff)
- Solaia Tech., LLC v. Specialty Publ’g Co., 221 Ill.2d 558 (Ill. 2006) (distinguishes section 2-615/2-619 standards and defamation pleading principles)
- Green v. Rogers, 234 Ill.2d 478 (Ill. 2009) (enumerates categories of defamation per se)
- Rivera v. Allstate Ins. Co., 913 F.3d 603 (7th Cir. 2018) (Rivera II) (explains standing analysis for FCRA claim and instructs dismissal for lack of federal subject-matter jurisdiction)
- Spokeo, Inc. v. Robins, 578 U.S. 330 (U.S. 2016) (clarifies standing requires a concrete injury-in-fact)