Warren v. Fed. Nat'l Mortg. Ass'n
932 F.3d 378
5th Cir.2019Background
- Stephanie Warren, a sales representative for Fannie Mae, was fired in 2013 after an internal investigation concluded she violated company policies by working with an unapproved outside broker and concealing that relationship.
- Warren sued Fannie Mae asserting Title VII and Texas discrimination claims and a Texas defamation claim; the district court granted summary judgment on discrimination and procedurally dismissed defamation but the Fifth Circuit remanded the defamation claim in a prior appeal (Warren I).
- On remand the district court granted summary judgment for Fannie Mae on the defamation claim, finding (a) the investigative report did not accuse Warren of taking kickbacks (it expressly said there was no evidence of gifts), and (b) statements about concealment were protected by Fannie Mae’s qualified privilege because Warren failed to show actual malice or excessive distribution.
- Warren also sought to admit a declaration by Fannie Mae employee Keitha Jefferson describing what others said; the district court excluded it as hearsay and for low probative value, a ruling Warren appeals.
- The Fifth Circuit reviews summary judgment de novo and evidentiary exclusions for abuse of discretion; it affirms the summary judgment and the exclusion of Jefferson’s declaration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether investigative report was defamatory | Warren: report’s gist accused her of taking kickbacks, causing financial loss, and concealing the broker relationship | Fannie Mae: report explicitly found no evidence of kickbacks and said nothing about financial loss | The report could not reasonably be read as accusing her of kickbacks or causing loss; only concealment claim survived prima facie review |
| Whether alleged comments by other employees were published defamatory statements | Warren: employees repeated allegations internally and to industry contacts, harming her reputation and job prospects | Fannie Mae: Warren offers only speculation, no evidence who said what, when, or to whom; no proof of publication or scope of employment | No genuine issue of material fact as to publication or that employees acted within scope; summary judgment affirmed |
| Whether Fannie Mae’s communications were protected by qualified privilege and, if so, whether privilege was overcome | Warren: privilege overcome by actual malice (omissions) and excessive distribution to uninterested parties | Fannie Mae: communications made in legitimate investigation and to those with a valid interest; no clear-and-convincing evidence of actual malice or improper dissemination | Qualified privilege applies; Warren failed to show actual malice (mere omissions/poor investigation insufficient) or excessive distribution; summary judgment proper |
| Admissibility of Keitha Jefferson’s declaration | Warren: statements admissible (not hearsay/non-hearsay; opposing-party admission; impeachment/reputation exceptions) | Fannie Mae: multi-level hearsay, not within scope of employment, and conclusory reputation statements inadmissible under Rule 403 | District court did not abuse discretion: Jefferson’s statements were hearsay within hearsay, not shown to be within scope, and other parts were conclusory with low probative value |
Key Cases Cited
- DeVoss v. Sw. Airlines Co., 903 F.3d 487 (5th Cir. 2018) (standard for de novo review of summary judgment)
- Bedford v. Spassoff, 520 S.W.3d 901 (Tex. 2017) (elements of a prima facie defamation claim)
- Exxon Mobil Corp. v. Rincones, 520 S.W.3d 572 (Tex. 2017) (publication requirement for defamation)
- Turner v. KTRK Television, Inc., 38 S.W.3d 103 (Tex. 2000) ("gist"/false-impression doctrine and omissions as evidence of malice)
- Duffy v. Leading Edge Prods., Inc., 44 F.3d 308 (5th Cir. 1995) (qualified privilege for employer investigative communications)
- Bentley v. Bunton, 94 S.W.3d 561 (Tex. 2002) (actual malice requires serious doubts about truth; negligence insufficient)
- Jackson v. Dallas Cty. Juvenile Dep’t, [citation="288 F. App'x 909"] (5th Cir. 2008) (unpublished) (discussing qualified privilege, actual malice, and distribution)