By Joy P. Waltemath, J.D.
Because there was no evidence that a CVS pharmacy loss prevention manager acted with actual malice when she aggressively interviewed and yelled at a pharmacy tech concerning the disappearance of bottles of butalbital, or when she told her she faced being fired and threatened to call the police, the tech’s intentional interference with contractual relations claim was properly dismissed. The First Circuit found the tech had waived any argument that the loss prevention manager was not a corporate official acting within her employment responsibilities, and so the actual malice burden to find improper motive applied (Rando v. Leonard
, June 17, 2016, Toruella, J.).
In February 2011 and again in April 2012, the loss prevention manager learned that a certain CVS pharmacy was losing bottles of butalbital, a barbiturate—71 100-pill bottles in 2011 and another 67 bottles in 2012—although the losses had stopped during the interim. In 2011, the loss prevention manager had concluded the disappearing bottle were attributable to an employee who had left the company, but in April 2012 an in-store surveillance video showed the pharmacy tech taking a bottle of butalbital off the shelf, putting it in her pocket, and later leaving the store.
Two days later, the manager interrogated the tech (along with another loss prevention manager), during which time the tech admitted to taking the one bottle and then, after being repeatedly told she would be fired, that the police would be called, and yelled at, the tech signed what she claimed was a coerced confession for stealing all 138 bottles of butalbital and a promissory note to pay about $7500 to the pharmacy. (Although the tech was charged with one count of larceny, the criminal case was dismissed after she successfully completed a pretrial diversion program.)
She later sued the loss prevention manager and CVS in tort; all her claims except for the tort of intentional interference with contractual relations claim against the loss prevention manager were dismissed. After she lost this claim on summary judgment, she appealed, and the First Circuit affirmed, finding, that the tech could not show any alleged interference with the business relationship was "improper in motive or means."
In such cases, Massachusetts courts apply a heightened standard where "corporate officials' acting ‘within the scope of their employment responsibilities," showing that the official acted with "actual malice," or, with "a spiteful, malignant purpose, unrelated to the legitimate corporate interest." The loss prevention manager claimed she was a "corporate official," shifting the burden to the tech to prove either that the manager was not a corporate official or that she did act with actual malice. In this she failed: She waived any argument that the loss prevention manager did not qualify as a "corporate official" and failed to produce evidence that she acted with actual malice.
The full extent of the tech’s argument was a single sentence in her district court opposition that Massachusetts case law did not support the contention that the loss prevention manager qualified as a corporate official and she did "not waive the right to argue that a showing of malice is not required." On appeal, she included only a footnote in which she reiterated that she "does not waive the right to argue that a showing of malice is not required," and claimed, without developed argument, that "[c]orporate officials’ status is reserved for owners and controlling officials of a company." "These perfunctory arguments are insufficient to preserve her argument on appeal," said the First Circuit.
Even if it were not waived, the tech’s corporate official argument was without merit, since the term "corporate official" has been used "expansively" to include "high level corporate officers, as well as directors involved in management." Although the loss prevention manager was not the tech's direct supervisor, she acted in a managerial position serving the corporate purpose of "protection of company assets and reduction of shrinkage."
The tech produced no evidence suggesting that the loss prevention manager acted with actual malice and without a legitimate corporate purpose. Her argument that the manager "knowingly elicited a false confession" from her was strained; the fact the loss prevention manager spoke to her boss before the interview did not establish that she was frustrated or looking for someone to blame. Nor was there no evidence establishing the tech’s involvement in the theft; she worked at the CVS when the thefts began, and she was caught on videotape stealing a bottle of butalbital. That did not necessarily mean she was responsible for the other thefts, but it also did not mean that by investigating the tech’s potential involvement in the larger butalbital problems, the loss prevention manager acted with spite or malice.
The record evidence did not support the tech’s arguments that the loss prevention manager lied to her or harbored any ill will toward her. At worst, her testimony suggested that the manager aggressively questioned her, informed her that she faced termination, threated to call the police, and yelled at her. Although this could have been frightening and upsetting, it simply did not rise to the level of "actual malice." It was the loss prevention manager’s job to determine the source of the butalbital losses, and even if she did so in a hostile manner, that evidence did not support a claim for intentional interference with contractual relations.