United States District Court, D. Oregon, Medford Division
JAMES L. WENZEL, Plaintiff,
KLAMATH COUNTY FIRE DISTRICT NO. 1; BOARD OF DIRECTORS OF KLAMATH COUNTY FIRE DISTRICT NO. 1; STEPHEN ROBERT HEDLUND; and JIM TODDY, Defendants.
OPINION AND ORDER
AIKEN, UNITED STATES DISTRICT JUDGE
employment action, plaintiff James Wenzel asserts that
defendants-Klamath County Fire District No. 1 and its Board
of Directors (collectively, "KCFD1"), Stephen
Hedlund, and Jim Toddy-violated his rights under the United
States Constitution, breached his employment agreement, and
committed various torts against him under Oregon law. On
August 29, 2017, Magistrate Judge Clarke filed a Report and
Recommendation ("R&R") recommending this Court
grant in part and deny in part defendants' motions for
summary judgment. Three days later, Judge Clarke issued a
minute order ruling on defendants' motions to strike. The
R&R and minute order are now before me pursuant to 28
U.S.C. § 636(b) and Federal Rule of Civil Procedure 72.
All parties filed objections to the R&R, and KCFD1 filed
an objection to the minute order, For the reasons set forth
below, I decline to modify or set aside the minute order and
adopt the R&R in full.
Magistrates Act establishes procedures for district judges to
review orders issued by magistrate judges. Depending on the
nature of the order, review may be de novo or for
clear error. As relevant here, the minute order-which
contains an evidentiary ruling regarding the scope of the
summary judgment record-is reviewed for clear error. 28
U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a). By contrast,
for the R&R, I must review “de novo .
. . those portions ... to which objection is made."
28 U.S.C. § 636(b)(1)(C); accord Fed. R. Civ.
P. 72(b)(3); Holder v. Holder, 392 F.3d 1009, 1022
(9th Cir. 2004).
no error, much less clear error, in Judge Clarke's ruling
on the motion to strike. In the Ninth Circuit, a court ruling
on a motion for summary judgment "[does] not focus on
the admissibility of the evidence's form, " but
instead concerns itself with the admissibility of its
contents. Fraser v. Goodale, 342 F.3d 1032, 1036
(9th Cir. 2003); see also Norse v. City of Santa
Cruz, 629 F.3d 966, 973 (9th Cir. 2010) ("[T]he
evidence presented at the summary judgment stage does not yet
need to be in a form that would be admissible at
trial[.]") As Judge Clarke noted, at trial, the standard
changes, and the recording itself would be the only
acceptable proof of the recording's content. See
Fed. R. Evid. 1002. But on a motion for summary judgment,
plaintiffs amateur transcript suffices, particularly in the
absence of any substantive challenge to the transcript's
reviewed the objected-to portions of the R&R de
novo and find no error. With respect to the claim of
intentional interference with economic relations, Hedlund and
Toddy advance alternative interpretations of the evidence,
but the theory of the case advanced by plaintiff remains
plausible; a factfinder could conclude, based on the evidence
in the summary judgment record, that Hedlund had a personal
vendetta against plaintiff and pursued it through the
investigation, that Toddy shared Hedlund's wrongful
motivation, and that their actions harmed his employment
relationship with KCFD1. Regarding the
"stigma-plus" liberty interest claim, I agree with
Judge Clarke that the stigmatizing allegations against
plaintiff were published. Under Cox v. Roskelley,
359 F.3d 1105, 1112 (9th Cir. 2004), placement of
stigmatizing information in an individual's personnel
file constitutes publication if the information could be
accessed via a public records request. KCFD1's position
in this litigation has been that the report is subject to
disclosure under the state public records law. That means
third parties could have gained access to the information
through such a request, which is sufficient under
Cox. I also agree that on the facts of this case,
Toddy's interviews of KCFD1 employees and others
constituted publication. It is plain based on Toddy's
testimony that the fifteen individuals he interviewed were
made aware of the nature of the allegations against
plaintiff, and Toddy testified he took no action whatsoever
to prevent those interviewed from disclosing those
allegations to third parties. I reject defendants'
contention that such a ruling will be "disastrous"
for employers; only a narrow range of misconduct qualifies as
stigmatizing for due process purposes, and it is not unfair
to expect employers who conduct a freewheeling inquiry
without putting any disclosure safeguards in place to provide
a name-clearing hearing.
to plaintiffs objections, the economic loss rule continues to
bar all negligence claims. Plaintiff has identified a sole
purported injury to person or property: his interest in
continued employment. But for the reasons set out in the
R&R, plaintiff did not have a property interest in the
renewal of his contract. Accordingly, he has alleged only
economic losses, and his negligence claims cannot proceed
unless defendants owed him a special duty of care. See
Onita Toe. Corp. v. Trustees of Bronson, 843 P.2d 890,
896 n.6 (Or. 1992). The special duty requirement is fatal to
plaintiffs negligence claims because he has not established
that any of the defendants owed such a duty to him.
He contends he was a third-party beneficiary of Hedlund's
agreement to represent KCFD1 and of Toddy's contract to
perform the investigation, but that assertion is belied by
the record, Plaintiff, as the subject of a fraud
investigation, was not an intended beneficiary of that
investigation. And although he may have been Hedlund's
client or an intended beneficiary of Hedlund's agreement
to represent KCFD1 with regard to other matters, he was not
an intended third-party beneficiary of that agreement
vis-a-vis the investigation of his own purported misconduct.
Hedlund and Toddy certainly owed duties of honesty and
competency to KCFD1, but those duties did not extend to
Judge Clarke's R&R (doc. 159). Defendants'
motions for summary judgment (docs. 115, 118, & 120) are
granted in part and denied in part as set forth in detail in
the R&R. The parties are directed to contact Courtroom
Deputy Cathy Kramer, Cathy_Kramer@ord.uscourts.gov
or (541) 431-4102, ...