This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
IN COURT OF APPEALS
Catherine J. Cook,
Jan Callaway, a Minneapolis Officer, et al.,
Hennepin County District Court
File No. 00013460
Sherman Bergstein, Attorney at Law, 1201 Yale Place, Suite 1005, Minneapolis, MN 55403; and
Maureen Williams, Attorney at Law, P.O. Box 1895, Burnsville, MN 55337 (for appellant)
Jay M. Heffern, Minneapolis City Attorney, Susan L. Trammell, Assistant City Attorney, 300 Metropolitan Centre, 333 South Seventh Street, Minneapolis, MN 55402 (for respondents)
Considered and decided by Willis, Presiding Judge, Toussaint, Chief Judge, and Minge, Judge.
Appellant sued the city of Minneapolis, a police officer, and a license inspector after they informed her employer that she sold narcotics at work. She alleged defamation and tortious interference with contract in connection with her firing and losing her one-percent ownership interest. The district court granted summary judgment. Appellant contends that there were genuine issues of material fact precluding summary judgment and that the court erred in finding the officer and inspector were protected by privilege and official immunity. She also contends that the court erred in refusing to order disclosure of an anonymous, confidential informant under Minn. Stat. § 13.82 (2000) and in failing to recuse itself for bias. Finally, she contends that she was denied due process rights when the normal procedures in the licensing process were disregarded and no hearing was held. Because appellant has not demonstrated that there are any genuine issues of material fact or that the district court erred in its application of the law, we affirm.
In December 1999, Mathew Lamphear purchased Molly Quinn’s Irish Pub (Molly Quinn’s) and in January 2000 filed an application to expand the scope of Molly Quinn’s liquor license. The prospective owners on the application were Lamphear, William Watkins, and appellant Catherine Cook, who worked as the general manager and part-time cook at Molly Quinn’s. In exchange for her agreement to manage the restaurant, Lamphear transferred a one-percent ownership interest to her. Lamphear had also orally agreed to give appellant an additional ten-percent ownership interest each year for five years, not to exceed 48%.
Respondent, Ken Ziegler, a licensed inspector with the License and Consumer Services Division of the city of Minneapolis, was assigned to investigate Lamphear’s application to upgrade his liquor license. At approximately the same time, respondent, officer Janice Callaway, was assigned to investigate possible narcotic sales at Molly Quinn’s in response to two confidential tips. Callaway conducted surveillance of the establishment and, after noting suspicious activity, reported her observations to Ziegler. On March 9, Callaway used an anonymous, confidential informant (CI) to make a controlled buy at Molly Quinn’s. Callaway contends that she observed the CI and appellant make an exchange and that the CI immediately returned with a substance that later tested positive for crack cocaine.
Callaway informed Ziegler of this activity. On March 16, Ziegler and Callaway met with Lamphear to discuss his pending license application. They informed Lamphear of the investigation and the controlled buy from appellant. Although neither suggested firing appellant, Lamphear left the meeting believing that he would not get his liquor-license upgrade if appellant remained on the license application as a manager and shareholder. Later that day, Lamphear fired appellant, removed her as a shareholder, and cancelled their agreement for her increasing ownership interest in Molly Quinn’s. Neither Ziegler nor Callaway knew about this agreement during their investigation.
Maintaining that she did not sell narcotics at any time from Molly Quinn’s, appellant filed a complaint against respondents alleging defamation and tortious interference with contract. Appellant asked respondents for the identity of the CI. After respondents refused to disclose the CI’s identity, the district court conducted an in camera interview of the CI. On April 12, 2001, the court determined that the CI’s name and identity should not be disclosed for safety concerns. In July 2001, appellant moved to have the judge removed, claiming bias as shown by his leading questions during the in camera interview. Both the judge, and later the chief district judge of Hennepin County, denied appellant’s motion finding that there was no evidence of bias, only evidence of a disagreement with the judge’s rulings. Respondents moved for summary judgment and in December 2001, the court granted respondents’ motion finding that (1) respondents’ statements to Lamphear are protected by privilege and official immunity; and (2) respondents did not intentionally interfere with appellant and Lamphear’s contract because they had no knowledge of the contract and were acting within the scope of their duties. This appeal followed.
On appeal from summary judgment, an appellate court asks two questions: (1) whether there are any genuine issues of material fact and (2) whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990) (citation omitted). No genuine issue of material fact exists “[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party.” DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn. 1997) (alteration in the original) (quoting Matsushita Elec. Indus. Co. v. Zenith Radion Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 1356 (1986)). “[T]he party resisting summary judgment must do more than rest on mere averments.” Id. at 71. A “genuine issue” for trial “must be established by substantial evidence.” Id. at 69-70 (quoting Murphy v. Country House, Inc., 307 Minn. 344, 351, 240 N.W.2d 507, 512 (1976)).
Appellant contends that with respect to both her defamation and tortious interference claims there are genuine issues of material fact and that the court erred in finding that respondents’ statements were protected by privilege and official immunity.
For a statement to be defamatory, it must be false, it must be communicated to another, and it must tend to harm the plaintiff’s reputation. Stuempges v. Parke, Davis & Co., 297 N.W.2d 252, 255 (Minn. 1980). Here, it is undisputed that respondents told Lamphear that appellant sold narcotics from Molly Quinn’s. Whether this statement is false remains a question of fact. For purposes of this appeal from a grant of summary judgment, we assume the statement was false and derogatory. Even so, respondents still may not be liable if their statements are privileged.
1. Qualified Privilege
A person who makes a defamatory statement is not liable if a qualified privilege applies and the privilege is not abused. Bol v. Cole, 561 N.W.2d 143, 149 (Minn. 1997). For a defamatory statement to be protected by qualified privilege, the statement must be made in good faith, on a proper occasion, from a proper motive, and based on reasonable or probable cause. Id. If the qualified privilege applies, the plaintiff must prove that the defendant abused the privilege by making the statement with malice. Id. at 150. Malice is “actual ill-will or a design causelessly and wantonly to injure a plaintiff,” and malice cannot be implied from the statement itself or from the fact that the statement was false. Id. (quotation omitted). Generally, malice is a question of fact; but summary judgment is appropriate if the plaintiff fails to raise a genuine issue of material fact regarding malice. Id. at 150.
Here, both Callaway’s and Ziegler’s statements are protected under qualified privilege. The district court found that the statements were made (1) in good faith; (2) to inform Lamphear of the illegal activities on his premises and inform him of the consequences of those activities on his pending liquor-license application; and (3) based on Callaway’s belief that she had observed a controlled buy from appellant. For appellant to defeat respondents’ qualified privilege, she must allege that respondents’ statements were made with malice. Although appellant contends that these were false statements made outside of respondents’ duties, appellant does not allege that they were made out of ill will toward her or with intent to injure her. Therefore, summary judgment was proper here because she failed to raise a genuine issue with respect to malice.
Due to our determination that there is a qualified privilege, we do not need to determine whether an absolute privilege exists in this case. Appellant also argues that respondents wrongfully interfered with her contracts with Lamphear. Because the communication between the respondents and Lamphear was privileged, we do not reach this claim.
Appellant claims that the identity of the confidential informant should have been disclosed. A district court has wide discretion to issue discovery orders and, absent a clear abuse of that discretion, those orders will not be disturbed. Shetka v. Kueepers, Kueppers, Von Feldt & Salmen, 454 N.W.2d 916, 921 (Minn. 1990). “Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action.” Minn. R. Civ. P. 26.02. Confidential informant information is considered private data on individuals. See Minn. Stat. § 13.82, subd. 17(c) (2000) (stating that a law enforcement agency shall withhold public access to data when it would reveal the identity of a paid informant if the agency determines that revealing the informant’s identity would threaten the informant’s personal safety). Even private or nonpublic data, however, may be released pursuant to a court order. Minn. Stat. § 13.03, subd. 4 (2000).
In a civil case when a party moves to compel discovery of private government data that would otherwise be discoverable under the rules of civil procedure, the court should conduct an in camera review to balance the competing interests at stake. Erickson v. MacArthur, 414 N.W.2d 406, 409 (Minn. 1987). The court must decide whether
the benefit to the party seeking access to the data outweighs any harm to the confidentiality interests of the agency maintaining the data, or the person who has provided the data.
Minn. Stat. § 13.03, subd. 6 (2000). The court must carefully weigh the individual’s right to prepare his or her case against the need for effective law enforcement, keeping in mind that there are situations “where the identity of the informant may be absolutely essential to the cause of the party seeking the disclosure” but also that “the wholesale disclosure of the identities of confidential informants would seriously hamper the efforts of law enforcement agencies, particularly in the area of narcotics violations.” Hughes v. Dakota County, 278 N.W.2d 44, 45 (Minn. 1978).
The district court conducted an in camera review of the CI and determined that disclosing the CI’s name and identity “would significantly threaten the personal safety of the informant.” The court could not elaborate on the evidence to support this finding because it is confidential, but there is evidence from the in camera review to support this finding.
In addition, appellant has not established that her need for the CI’s identity outweighs the potential harm to the CI. Appellant contends that the CI is the one person “who would know whether a sale occurred.” But the CI’s own testimony indicates that the CI cannot confirm or deny the purchase of crack cocaine from appellant because the CI admits to being high when the purchase was made and cannot recall the incident. Officer Callaway’s testimony is sufficient to support a finding of a drug purchase without the CI’s testimony because she (1) searched the CI for drugs before the CI went into Molly Quinn’s; (2) observed the CI and appellant make an exchange; and (3) observed the CI come back to her car with crack cocaine.
Therefore, the disclosure of the confidential informant was not critical to the formation of Officer Callaway’s opinion and her privileged communication and is not critical to appellant’s case.
Denial of a recusal motion is within the district court’s discretion and should not be reversed absent a clear abuse of discretion. Carlson v. Carlson, 390 N.W.2d 780, 785 (Minn. App. 1986), review denied (Minn. Aug. 20, 1986). Minnesota law requires an affirmative showing of prejudice to remove a judge. Minn. R. Civ. P. 63.03. Generally, such prejudice must stem from an extrajudicial source that prompted the judge to make a decision based on knowledge acquired outside the judge’s participation in the case. In re Estate of Lange, 398 N.W.2d 569, 573 (Minn. App. 1986). “Pervasive bias,” however, is an exception to the “extrajudicial source” rule and occurs when the bias originates from events at trial that are “so extreme as to display [a] clear inability to render fair judgment.” Liteky v. U.S., 510 U.S. 540, 551, 114 S. Ct. 1147, 1155 (1994) (quotation omitted).
Appellant contends that the judge was biased against her as evidenced by (1) his order refusing to disclose the CI’s identity; (2) his leading questions during the in camera interview “to elicit information from the informant that would be useful to respondents”; and (3) his concealment of an additional potential witness’s name. The court determined that appellant failed to make an affirmative showing of bias and only demonstrated a disagreement with the judge’s rulings. The transcript from the in camera interview does not reveal any bias, rather it demonstrates that the judge was attempting to clarify the exact events of the controlled buy from the CI whose answers were incomplete and disorganized. Furthermore, appellant cites no authority that leading questions in an in camera interview constitute bias. See State v. Modern Recycling, Inc., 558 N.W.2d 770, 772 (Minn. App. 1997) (stating that assignment of error in brief based only on mere assertion and not supported by authority is waived unless prejudicial error is obvious on mere inspection).
Appellant also contends that the court concealed a potential witness by asking the CI not to state a friend’s name on the record. Appellant fails to demonstrate that she requested the name of this witness in the court below, and she fails to explain how she is prejudiced by the concealment of the CI’s friend who used to work at Molly Quinn’s. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (stating that this court will generally only consider those issues that have been presented and considered by the district court); Bloom v. Hydrotherm, Inc., 499 N.W.2d 842, 845 (Minn. App. 1993), review denied (Minn. June 28, 1993) (stating that appellant carried the burden to show that error is prejudicial). Furthermore, appellant does not show that it was improper for the judge to conceal any information that might reveal the CI’s identity, such as the name of a friend. Thus, appellant’s mere dissatisfaction with the court’s ruling and adverse rulings are not a basis for imputing bias to a judge. Olson v. Olson, 392 N.W.2d 338, 341 (Minn. App. 1986).
Appellant argues that she was denied due process “when the normal procedures involved in the licensing process were disregarded and no hearing was held.” Respondents argue that appellant waived this issue by not raising it below. Generally, this court only considers issues the parties raised for the district court’s consideration. Thiele, 425 N.W.2d at 582. Appellant argues that she raised the issue below in her memorandum opposing respondents’ summary judgment motion. Within her tortious interference argument, appellant argued that her due process rights were clearly violated because she had “no hearing, no notice, no right to counsel and no opportunity to cross-examine.” Thus, we find the due process issue is part of the appeal.
Appellant sees herself as the victim of an aggressive investigatory licensing process. We are not insensitive to this claim. For purposes of summary judgment we have assumed that appellant lost her job and an opportunity for partial ownership of the bar where she worked because of representations made by the license inspector and by a police officer whose communications were privileged. We recognize that the activities and report of the CI may also have been important to the investigatory process. Due to the privileges and confidentiality principles that apply to this case, appellant has not had a hearing on the merits regarding the allegedly defamatory material.
Our legal system is built on openness and disclosure and guarantees the right to confront one’s accusers. However, there have always been exceptions. When a property or liberty interest is claimed, such claims must be carefully analyzed to determine whether a protected interest is implicated. Humenansky v. Minn. Bd. of Med. Exam’rs, 525 N.W.2d 559, 566 (Minn. App. 1994), review denied (Minn. Feb. 14, 1995). Appellant argues that her due process rights were violated when respondents Callaway and Ziegler informed her employer about the alleged controlled buy, but she fails to allege what property or liberty interest was implicated by respondents’ actions. If appellant is arguing that she has a property interest in the liquor license, this argument fails because Lamphear, not appellant, was the licensee on the liquor-license application. Furthermore, under Minnesota law, there is no property right in a liquor license. Country Liquors, Inc. v. City Council of Minneapolis, 264 N.W.2d 821, 826 (Minn. 1978). Even if the liquor license was a property interest entitled to due process protections, appellant’s interest is illusive. She is an employee who has only an indirect or derivative interest in the license as a minority shareholder. It appears she is an at-will employee and at-will shareholder. In any event, the license itself was not compromised by the process followed; if anything the informal procedure shielded the license from greater risk of revocation. In short, appellant fails to demonstrate that she has a constitutionally protected interest that is accorded due process protection.
Appellant’s liberty interest is her ownership opportunity and her employment or job future. In such situations relief appears to require all of the following: a clear “liberty” interest entitled to due process protection; a pervasive loss of employment opportunity; and a substantial, almost public stigmatizing of the person claiming injury. See Emillo Jaksetic, Security Clearance Determinations and Due Process, 12 Geo. Mason U.L. Rev. 171 (1990). Arguably, appellant’s ownership and employment opportunities are a liberty interest entitled to protection. However, appellant does not have a specialized occupation, nor has she claimed a pervasive loss of employment opportunity. There are presumably a myriad of jobs available to her. Furthermore, there is no evidence that appellant has be stigmatized. Inevitably a due process claim leads to a balancing of interests. Appellant’s interest is far more elusive and far less dramatic than those who have contested closed or informal action in the national security and other contexts.
One may wonder how, in a progressive city and in a civilized society with a strong emphasis on individual rights; confidential informants, privileged action, and discretion can play such a large role. The law, however, is clear that good faith inquiries and communications by local law enforcement officials are privileged and protected. The city’s effort to proceed informally as a favor to the license holder was not wrongful. Appellant’s remedy is in the political process. She may work to change the laws or practices followed in their administration and enforcement.