High Court Voids $565,000 Defamation Award

The state Supreme Court on Monday overturned a $565,000 jury award to an airline worker who claimed that he had been falsely accused in front of his 10-year-old son of stealing cargo from his employer.

The justices concluded unanimously that federal law barred the claims in state court for defamation and intentional infliction of emotional distress brought against Pan American World Airways by John DeTomaso, a cargo delivery man at Los Angeles International Airport.

The court said an airline investigator’s statements implicating DeTomaso in the presence of his son had been made during a legitimate inquiry mandated by a collective-bargaining agreement between the firm and the employee’s union.

“The parties to such an agreement must be allowed to perform their duties without judicial interference in all but the most outrageous of cases,” Justice Edward A. Panelli wrote for the court. “We do not find that the acts complained of establish such an outrageous case.”

3 Join in Opinion

Panelli’s opinion was joined by Chief Justice Malcolm M. Lucas and Justices Stanley Mosk and Allen E. Broussard, the four members of the court who remained on the bench after the voter defeat last fall of Chief Justice Rose Elizabeth Bird and Justices Cruz Reynoso and Joseph R. Grodin.

The new court members who took office last week as their successors--Justices John A. Arguelles, David N. Eagleson and Marcus M. Kaufman--did not participate because they had not heard arguments in the dispute.

The DeTomaso case represented a significant test of the ability of airline employees and other transportation workers to go beyond federally mandated grievance and arbitration proceedings to challenge what they see as unjust actions by employers. State court actions can result in damage awards that cannot be obtained in such grievance proceedings.

Narrower Claim

The justices did allow DeTomaso to go to trial again but only on another and narrower claim he made to the fair market value of the cargo he said that he had legally bought from the airline. DeTomaso’s attorney, Robert N. Cleaves of Los Angeles, denounced the decision, saying that barring the unlikely event of a rehearing before the justices, he would appeal the ruling to the U.S. Supreme Court.

“In essence, this decision deprives an employee of a chance to get fair compensation for what’s been done to him,” Cleaves said.

Attorneys for the airline were not immediately available for comment.

The case arose in 1978 when DeTomaso paid $300 to Pan Am for about 13,000 watch and computer batteries and other cargo that he and a supervisor believed had been abandoned at the airport. The company’s policy at that time allowed employees to make such purchases and sell the goods as salvage.

Not Delivered

But when he contacted an electronics firm about buying the batteries, he was told that a shipment of similar batteries had been ordered but not delivered to the firm. He testified later that before that call, he had been unaware of any such shipment.

Later, Pan Am’s director of security and an FBI agent contacted DeTomaso and he offered to show them the cargo he had purchased and stored at his garage.

DeTomaso’s son, Sean, was present and testified later that the company investigator had accused his father of theft. The investigator testified that the father had asked if he was “in trouble,” to which the investigator had replied: “I don’t know if you’re in trouble, but somebody’s in trouble because this . . . shipment should not have been here.”

The airline subsequently discharged DeTomaso for his alleged involvement in the alleged theft of batteries, but in a grievance proceeding, DeTomaso won reinstatement with back pay and the allegations were purged from his company record.

Family Relationships

He then brought suit against Pan Am, alleging that because of the airline’s actions, he had been unjustly humiliated in front of his son, shunned by fellow employees and suffered physically and in his family, social and church relationships.

In 1983, an award of $265,000 general damages and $300,000 punitive damages was returned in DeTomaso’s favor by a Los Angeles Superior Court jury. Two years later, the verdict was upheld by a state Court of Appeal panel.

But the justices Monday found that under the federal Railway Labor Act, which has applied to airline workers since 1936, DeTomaso’s claims were “inextricably intertwined” with the collective-bargaining agreement under which he worked and that he was entitled to challenge the airline’s alleged abuses only through grievance and arbitration proceedings.

Union Contract

Even if the purchase was made separate from his job, the subsequent investigation was covered by his union contract and thus protected from a defamation or emotional distress claim in state court, the justices said.

The court, overturning the verdict upheld by the appeal court, sent the case back for retrial to see whether DeTomaso is entitled to an award for the value of the batteries he claimed were legally his as the result of the purchase from Pan Am.

Cleaves said that DeTomaso, in a retrial, would seek about $10 per battery, plus interest.