Batson v. Shiflett - 325 Md. 684, 602 A.2d 1191 (1992)

Rule:

Under both federal and Maryland law, the principle of collateral estoppel should only be applied where the identical issue sought to be relitigated is actually determined in the earlier proceeding. If anything is left to conjecture as to what is necessarily decided there can be no collateral estoppel. It must appear that the precise issue is raised and resolved in the former proceeding.

Facts:

Shiflett began his employment at the Sparrows Point shipyard of the Bethlehem Steel Corporation, (Bethlehem) in 1967, and shortly thereafter became a member of Local 33, an affiliate of the  Industrial Union of Marine and Shipbuilding Workers of America, IAM, District Lodge 4. After serving in a variety of local union offices, Shiflett was elected President of Local 33 in 1980, and was re-elected in 1983. The National Union and Local 33 together maintained a collective bargaining agreement covering Bethlehem's shipyard at Sparrows Point. That agreement was due to expire on August 19, 1984. In March of 1984, Local 33 and Bethlehem executed a new long-term agreement which substantially reduced wages and benefits at the Sparrows Point shipyard. The National Union denied having any knowledge of the negotiations and denied authorizing Local 33 to negotiate the agreement. Batson and the National Union's General Executive Board immediately repudiated the new agreement and threatened to place Local 33 in trusteeship, which would have resulted in Shiflett's ouster as President. Bethlehem and Local 33 claimed that Batson and the National Union had authorized Local 33 to negotiate the agreement without involving the National Union. Consequently, an intense legal battle erupted. As a result of the National Union's attempts to nullify the agreement, Local 33 and Bethlehem filed identical unfair labor practice charges against the National Union with the National Labor Relations Board (NLRB). Local 33 and Bethlehem alleged that the National Union's repudiation of the new agreement constituted the unfair labor practice of a "refusal to bargain" in violation of § 8(b)(3) of the National Labor Relations Act of 1935 (NLRA), 29 U.S.C. §§ 151-169 (1988). Local 33 also charged that the National Union violated § 8(b)(1)(A) of the NLRA by filing internal union charges against officials of Local 33, including Shiflett, in order to remove them from office. Judge Evans dismissed the charges, resolving the dispute in favor of the National Union and Batson, and ruled that the collective bargaining agreement executed by Bethlehem and Local 33 in March of 1984 was null and void. Following Judge Evans's ruling, both Shiflett and Batson began distributing handbills to the Local 33 membership, each attacking his critics. Batson published a total of six flyers; at issue here are two of those leaflets, Flyer No. 3 and Flyer No. 5.

About this same time, a separate dispute arose concerning Local 33's financial affairs. The National Union, after an examination of the Local's records performed by National Union Vice President/Secretary-Treasurer Robert Pemberton, accused Shiflett and his fellow Local 33 officer, James Harmon, of misuse of Local 33's petty cash, receiving reimbursement for the same expenses twice, personal use of Local 33 monies, and misappropriating food donation funds. Shiflett issued a flyer stating that he could answer the charges but that it would be "a total waste of time." Batson responded with Flyer No. 5, which challenged Shiflett to answer specific charges. At the National Union's convention held in October of 1984, before Judge Evans's decision was filed, Batson announced to the delegates that he would "nail" Shiflett for negotiating the agreement with Bethlehem without authorization. In June of 1985, the National Union and Batson called a special election of all Local 33 officers because of the alleged financial improprieties of Local 33's Executive Secretary, James Harmon. Shiflett ran for re-election but lost. Shiflett claims that his fellow workers refused to accept his campaign literature, calling him a "crook" and a "thief." He attributed his defeat to the election being held in the midst of the proliferation of false accusations against him by Batson and the National Union.

On August 1, 1985, Shiflett filed this action against the National Union, Batson and Pemberton alleging defamation, intentional infliction of emotional distress, and conspiracy. After deliberating for two days, the jury found in favor of Shiflett on each liability issue and awarded him $ 730,000: $ 610,000 in compensatory damages against the National Union and Batson; $ 50,000 in punitive damages against the National Union; and $ 70,000 in punitive damages against Batson.

Issue:

Is the union’s allegation of collateral estoppel available as an affirmative defense?

Answer:

No.

Conclusion:

Significantly, Flyer No. 3 accused Shiflett of having committed "crimes." The NLRB finding of illegal contract ratification was a civil determination and is not conclusive on the issue of whether Shiflett committed criminal acts, which was the substance of the defamatory statement. The elements, proof, and nature of civil liability for illegal contract ratification are not identical to those of the crimes of conspiracy, perjury, or falsification of records. Thus, the issues decided in the prior proceeding are not identical to those in the present action.

Moreover, the relevant issue actually litigated in the NLRB proceeding was whether Local 33 had the authority to negotiate and reach a binding agreement with Bethlehem. The petitioners' statements about Shiflett in Flyer No. 3 were not at issue and therefore, were not evaluated. The issue presented in the subsequent tort action was whether the petitioners' statements defamed Shiflett or whether petitioners' conduct caused Shiflett severe emotional distress. Accordingly, under the second prong of the Exxon test and the applicable principles of collateral estoppel, Shiflett was not prevented from litigating the alleged defamation and intentional infliction of emotional distress resulting from the language employed in Flyer No. 3 in the subsequent tort action.

Lastly, contrary to the petitioners' contentions, the agency never explicitly found Shiflett guilty of any wrongdoing, nor was such a finding necessary to the agency's decision. Rather, the key issue before the NLRB was whether Batson authorized Local 33 to negotiate and execute the agreement with Bethlehem. Finding that Batson had not authorized such negotiations and agreement, the agency merely nullified the contract that Local 33 negotiated with Bethlehem.

Accordingly, the NLRB decision that the National Union did not authorize Local 33 to negotiate a new agreement with Bethlehem did not establish the truth of the allegedly libelous statements in Flyer 3 that Shiflett was guilty of the "crimes of conspiracy, perjury, [and] falsification of records." Consequently, Shiflett was not collaterally estopped from proving the falsity of those statements in the instant case.