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Horvitz & Levy persuaded the trial court to set aside a $34 million jury verdict for defamation that arose out of the plaintiff’s termination of employment.
Jesus Fonseca, a former Walmart truck driver, was injured on the job and collected workers’ compensation while on leave. A Walmart investigation revealed that Fonseca violated several of his medical restrictions, including by driving. The investigation concluded that these actions constituted an integrity violation under Walmart’s internal personnel policies, and Fonseca was terminated. Fonseca sued Walmart, asserting several employment-related claims, and later added a claim for defamation. All his claims save for the defamation claim were dismissed at summary judgment. At trial, Fonseca’s defamation theory identified statements that Walmart employees made to each other during their investigation. Specifically, Fonseca argued that the determination that he had committed an integrity violation was defamatory. None of these statements were made to anyone outside Walmart. The jury found Walmart liable for defamation, awarding $1.2 million in economic damages, $8.5 million in noneconomic damages, and $25 million in punitive damages.
Walmart retained Horvitz & Levy to draft motions for a new trial and judgment notwithstanding the verdict (JNOV). The courtgranted Walmart’s JNOV motion under the Court of Appeal’s recent decision in Hearn v. PG&E. Hearn held that defamation claims by terminated employees are nonactionable when they are based on the same conduct that gave rise to the termination or when the plaintiff exclusively seeks damages resulting from the termination itself. Because Fonseca’s defamation claim did both, he was not entitled to any recovery. The court did not reach the other arguments Walmart raised in its posttrial motions.
