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Redmonds Enterprise, Inc. v. CSX Transportation, Inc.

United States District Court, D. Maryland

May 30, 2017

REDMONDS ENTERPRISE, INC.
v.
CSX TRANSPORTATION, INC.

          MEMORANDUM

          Catherine C. Blake United States District Judge

         Plaintiff Redmonds Enterprise, Inc. (“Redmonds”) filed a state-court action, subsequently removed to this court, alleging that defendant CSX Transportation, Inc. (“CSX”) is liable for defamation, injurious falsehood, and tortious interference with economic advantage or business relationships under Maryland law. Now pending is CSX's motion to dismiss. (Mot. Dismiss, ECF No. 7.) The motion has been fully briefed, and no hearing is necessary to its resolution. See Local Rule 105.6. For the reasons discussed below, the motion will be denied.

         BACKGROUND

         CSX, a subsidiary of transportation supplier CSX Corporation, operates a railroad through which it provides cargo transportation services and runs a transportation office at a railyard in Jessup, Maryland (the “Jessup railyard” or “railyard”). (Compl., ECF No. 16, ¶ 7.) Redmonds is an automobile transportation company that subcontracts with other automobile transportation companies at the railyard. (Id. ¶ 2.) The companies that contract directly with CSX to provide automobile transportation services at the railyard include Moore Transportation, United Road, Hansen & Adkins Auto Transport, Delta Automotive Services, Inc., Virginia Transportation Corporation, and Cassens Transport (the “contractor companies”). (Id. ¶¶ 2, 12.) Since January 2013, Redmonds has done “a substantial amount of business” with Moore Transportation and United Road, “actively pursued business” from Hansen & Adkins Auto Transport and Delta Automotive Services, Inc., and “less actively pursued business” from Virginia Transportation Corporation and Cassens Transport. (Id. ¶¶ 13-15.)

         In or around October 2015, Redmonds experienced a decline in its subcontracting business with Moore Transportation and United Road, its two main customers at the railyard. (See Id. ¶ 20.) This decline occurred shortly after an incident in which two automobiles at the Jessup railyard were vandalized (the “October 2015 incident”). (Id.) The vehicles were physically damaged and “sprayed with profanity-laced messages targeting ‘Rick.'” (Id. ¶¶ 18- 19.) “Rick” is the first name of Rick Orner, the general manager of CSX's transportation office at the Jessup railyard. (Id. ¶ 19.)

         After the October 2015 incident, the CEO of Redmonds, Mr. Redmond, continued to seek subcontracting work from Moore Transportation and United Road, but his requests were rejected.[1] (Id. ¶ 20.) He was informed by agents and employees of those companies that they could not do business with Redmonds due to an e-mail directive they had received from CSX. (Id.) In subsequent discussions, Mr. Redmond learned from agents and employees of the contractor companies (“contractor agents”) that Mr. Orner had sent an e-mail to the six contractor companies that read: “CSX is banning Redmonds Enterprise from this Jessup railyard. Do not dispatch or transact any further business with Redmonds Enterprise until further notice, due to habitually vandalizing cars” (“CSX e-mail”). (Id. ¶¶ 21, 30.) The contractor agents also indicated that a video recording appears to show one of Redmonds' employees in the area of the vandalized automobiles. (Id. ¶ 23.) The employee in question (“accused employee”) has stated that he observed that the vehicles had been vandalized, but he denies having vandalized them. (Id. ¶ 27.) He does not have a personal relationship with Mr. Orner. (Id. ¶ 28.) Although Redmonds has asked CSX on multiple occasions to view the video recording, see a copy of the CSX e-mail, and meet with Mr. Orner and other employees and agents of CSX to discuss the October 2015 incident and the basis for CSX's allegations against Redmonds, CSX has not accommodated these requests. (Id. ¶¶ 24-26.)

         On September 28, 2016, Redmonds filed a lawsuit against CSX in the Circuit Court for Anne Arundel County, Maryland. (See Civil Cover Sheet, ECF No. 2; Compl.) CSX removed the action to this court on December 8, 2016. (Notice of Removal, ECF No. 1.) CSX subsequently filed the pending motion to dismiss.

         LEGAL STANDARD

         When ruling on a motion under Rule 12(b)(6), the court must “accept the well-pled allegations of the complaint as true, ” and “construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff.” Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997). “Even though the requirements for pleading a proper complaint are substantially aimed at assuring that the defendant be given adequate notice of the nature of a claim being made against him, they also provide criteria for defining issues for trial and for early disposition of inappropriate complaints.” Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009). “The mere recital of elements of a cause of action, supported only by conclusory statements, is not sufficient to survive a motion made pursuant to Rule 12(b)(6).” Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). To survive a motion to dismiss, the factual allegations of a complaint “must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted). “To satisfy this standard, a plaintiff need not ‘forecast' evidence sufficient to prove the elements of the claim. However, the complaint must allege sufficient facts to establish those elements.” Walters, 684 F.3d at 439 (citation omitted). “Thus, while a plaintiff does not need to demonstrate in a complaint that the right to relief is ‘probable, ' the complaint must advance the plaintiff's claim ‘across the line from conceivable to plausible.'” Id. (quoting Twombly, 550 U.S. at 570).

         ANALYSIS

         CSX asks this court to dismiss Redmonds' claims of injurious falsehood (Count I), tortious interference with economic advantage or business relationships (Count II), and malicious and negligent defamation (Counts III and IV), under two separate theories.[2] First, it asserts that Redmonds has failed to state a claim as to each count. Second, it contends that the CSX e-mail is protected by the conditional privilege and therefore cannot form the basis for a defamation, injurious falsehood, or tortious interference claim.

         I. Has Redmonds Stated a Claim as to Each Tort?

         A. Defamation

         Redmonds contends that the CSX e-mail constitutes defamation under Maryland law. To recover for defamation, the plaintiff must establish that: “(1) the defendant made a defamatory statement regarding the plaintiff to a third person; (2) the statement was false; (3) the defendant was legally at fault in making the statement; and (4) the plaintiff suffered harm thereby.” S. Volkswagen, Inc. v. Centrix Fin'l, LLC, 357 F.Supp.2d 837, 843 (D. Md. 2005) (quoting Holt v. Camus, 128 F.Supp.2d 812, 815 (D. Md. 1999)).

         First, accepting the allegations in the complaint as true, the CSX e-mail clearly constitutes a defamatory statement. The claim that Redmonds “habitually vandaliz[es] cars” is one that “tend[s] to expose the plaintiff to public scorn, hatred, contempt, or ridicule.” Peroutka v. Streng, 695 A.2d 1287, 1293 (Md. 1997) (defining a ‚Äúdefamatory communication‚ÄĚ). Further, because it disparages Redmonds' business reputation, it falls into ...


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