Kellie Pierce v. Zoetis, Inc. , 818 F.3d 274 ( 2016 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 15-1900
KELLIE PIERCE,
Plaintiff-Appellant,
v.
ZOETIS, INC. and LOIS HEUCHERT,
Defendants-Appellees.
Appeal from the United States District Court for the
Northern District of Indiana, Fort Wayne Division.
No. 1:14 CV 00084 — Theresa L. Springmann, Judge.
ARGUED NOVEMBER 9, 2015 — DECIDED MARCH 15, 2016
Before WOOD, Chief Judge, ROVNER, Circuit Judge, and SHAH,
District Judge.*
ROVNER, Circuit Judge. Kellie Pierce sued her former
employer Zoetis, Incorporated and her former supervisor Lois
Heuchert, alleging causes of action under Indiana state law.
The district court dismissed Pierce’s amended complaint for
*
Of the Northern District of Illinois, sitting by designation.
2 No. 15-1900
failure to state a claim upon which relief could be granted. See
Fed. R. Civ. P. 12(b)(6). Pierce appeals, arguing that she has
stated a claim for tortious interference with a business relation-
ship against her former supervisor Heuchert. Because the
allegations in Pierce’s complaint fail to state a claim for tortious
interference under Indiana law, we affirm.
I.
In February 2012, Pierce began working for Zoetis, Inc. as
a sales representative for animal medicines. According to her
amended complaint, which we accept as true at this stage of
the proceedings, Pierce had a series of unpleasant encounters
with Heuchert and others during her employ before she was
ultimately terminated. For example, an instructor at Pierce’s
training classes told her that she needed to “sex it up” when
making her sales presentations. When Pierce told Heuchert
about the comment, Heuchert said that the instructor was an
“arrogant dickhead” and that Pierce should “just hang in
there” and finish the training.
Heuchert also did a number of things that made working
for her difficult. She told Pierce to “stroke” the ego of her male
“counterpart” (presumably Pierce’s sales partner, although
that is not clear from her complaint). Heuchert also “took over”
sales calls and conversations while on supervisory ride-alongs
with Pierce. Pierce alleges that Heuchert’s interference on these
occasions jeopardized Pierce’s relationship with the clients.
And at lunch on another occasion when Heuchert was accom-
panying Pierce on sales calls, Heuchert yelled at Pierce in a
restaurant. Specifically, after Heuchert directed Pierce to role
play, Heuchert interrupted Pierce’s sales pitch by “slam[ming]
No. 15-1900 3
her fists down on the table” and yelling, “What the FUCK!
Why are you talking about puppies?????”
Finally, Heuchert publicly humiliated Pierce again at a
National Sales Meeting in Dallas, Texas in February 2013.
When Pierce and her male associate Kerry Hab entered a room
full of people at an awards banquet, Heuchert said, “What are
you two sleeping together in the same room? You are always
together!”
Pierce complained about Heuchert’s behavior to Human
Resources, which she alleges prompted Heuchert to retaliate
against her. Zoetis’ human resources director eventually
connected Pierce with someone to investigate her complaint
against Heuchert. Some time after the investigation, all sales
representatives received an e-mail informing them that their
sales quotas were going to be adjusted. Pierce alleges that her
quotas were adjusted upward more substantially than the
other employees’. She claims that the substantial increase in
her sales quotas was a result of her complaint against
Heuchert. Pierce also attributes an increased difficulty in
receiving expense reimbursements around that time to
retaliation by Heuchert.
In mid-July of 2013, Pierce took time off work for foot
surgery. Around that same time, Evelyn Ortiz, who worked in
Human Resources, informed Pierce that the investigation had
concluded. She told Pierce that Heuchert had behaved inap-
propriately and that she would be disciplined. Pierce returned
to work at the beginning of November, but was fired approxi-
mately three weeks later for poor performance related to her
inability to meet the increased sales goals.
4 No. 15-1900
In March 2014, Pierce filed this diversity suit against Zoetis
and Heuchert in federal district court, alleging Indiana state-
law claims of wrongful termination against both Zoetis and
Heuchert, and a claim of tortious interference with a business
relationship against Heuchert. The district court concluded that
Pierce had failed to state a claim upon which relief could be
granted, see Fed. R. Civ. P. 12(b)(6), for either state-law claim.
Pierce’s wrongful termination claims were not viable because
she failed to allege any recognized exception to Indiana’s
employment at will doctrine, which permits employers and
employees to terminate employment at any time for “‘good
reason, bad reason, or no reason at all.’” Meyers v. Meyers, 861
N.E.2d 704, 706 (Ind. 2007). The district court also rejected
Pierce’s argument that her claim fell within Indiana’s narrow
exception to the at will doctrine, which applies only in those
cases where an employee is terminated for exercising a
statutory right. See Frampton v. Cent. Ind. Gas Co., 297 N.E.2d
425 (Ind. 1973). Because Pierce had failed to follow the prereq-
uisites for bringing suit under the Indiana Civil Rights Law,
Ind. Code §§ 22-9-1-1 through 22-9-1-18, she was also barred
from seeking relief under that statute.
Finally, the court concluded that Pierce had failed to state
a claim for tortious interference with a business relationship
against Heuchert. Most of the behavior Pierce identified in her
complaint was taken within the scope of Heuchert’s duties as
Pierce’s manager, and as such, could not form the basis of a
tortious interference claim. The court also concluded that
Pierce had failed to allege any illegal action on Heuchert’s part,
as required to state a claim for tortious interference under
Indiana law. Pierce appeals.
No. 15-1900 5
II.
We note as an initial matter that there is no reason to doubt
our subject-matter jurisdiction in this diversity action under
28 U.S.C. § 1332. See Carroll v. Stryker Corp., 658 F.3d 675, 680
(7th Cir. 2011) (“[W]e have an independent obligation to satisfy
ourselves that jurisdiction is secure before proceeding to the
merits.”) Pierce is domiciled in Indiana, Heuchert is domiciled
in Michigan, and Zoetis, Inc. is incorporated in Delaware and
has its principal place of business in New Jersey. 28 U.S.C.
§ 1332(c)(1) (corporation is citizen of both its state of incorpora-
tion and state in which it has principal place of business);
Hukic v. Aurora Loan Servs., 588 F.3d 420, 430 (7th Cir. 2009).
Pierce also alleges over $75,000 in damages based on her lost
salary of $80,000 annually plus bonuses as well as damages for
alleged emotional stress she has endured. See 28 U.S.C.
§ 1332(a)(1).
We review de novo the district court’s grant of a motion to
dismiss under Rule 12(b)(6). E.g., Bonte v. U.S. Bank, N.A.,
624 F.3d 461, 463 (7th Cir. 2010). We accept as true all well-
pleaded facts in the complaint, and draw all reasonable
inferences in Pierce’s favor. Id. The complaint need only
contain a short and plain statement of the claim demonstrating
entitlement to relief. Fed. R. Civ. P. 8(a)(2). Although detailed
factual allegations are unnecessary, the complaint must have
“enough facts to state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); Bonte,
624 F.3d at 463.
On appeal, Pierce challenges only the district court’s
conclusion that she failed to state a claim for tortious interfer-
6 No. 15-1900
ence with a business relationship against Heuchert. The
elements of tortious interference with a business relationship
under Indiana law are “‘(1) the existence of a valid relation-
ship; (2) the defendant’s knowledge of the existence of the
relationship; (3) the defendant’s intentional interference with
that relationship; (4) the absence of justification; and
(5) damages resulting from defendant’s wrongful interference
with the relationship.’” Rice v. Hulsey, 829 N.E.2d 87, 91 (Ind.
App. 2005) (quoting Felsher v. Univ. of Evansville, 755 N.E.2d
589, 598 n.21 (Ind. 2001)). Additionally, the plaintiff must prove
that the defendant committed an illegal act to achieve her end.
Brazauskus v. Fort Wayne-South Bend Diocese, Inc., 796 N.E.2d
286, 291 (Ind. 2003) (noting that plaintiff would “not have a
claim for tortious interference, because in Indiana this tort
requires some independent illegal action”); Watson v. Rural
Water Co., Inc. v. Ind. Cities Water Corp., 540 N.E.2d 131, 139
(Ind. App.1989) (“In the State of Indiana, an element necessary
to prove [tortious interference with a business relationship] is
that a defendant acted illegally in achieving his end.”).
Initially Pierce alleged that Heuchert tortiously interfered
with her relationship with Zoetis by setting impossibly high
sales quotas for Pierce and creating an environment that
“allowed for” her termination. As the district court recognized,
this theory goes nowhere because Heuchert’s actions within
the scope of her duties as Pierce’s manager cannot provide the
basis for a tortious interference claim, which is intended
primarily to prevent unjustified interference by third parties.
See Kiyose v. Trs. of Ind. Univ., 333 N.E.2d 886, 891 (Ind. App.
1975) (affirming dismissal of former professor’s claim against
university trustees for tortious interference with prospective
No. 15-1900 7
advantage because “liability does not accrue for the perfor-
mance of acts lying within the scope of the agent’s duties”).
On appeal, Pierce presumably concedes that acts within the
scope of Heuchert’s duties as her supervisor cannot provide
the basis for relief. Instead, she focuses on Heuchert’s comment
at the sales conference in Dallas questioning whether Pierce
was sleeping with her coworker. Although the statement
would presumably fall outside of the scope of Heuchert’s
employment relationship with Pierce, she must still demon-
strate that Heuchert committed an illegal act to achieve her
end. In Levee v. Beeching, the Court of Appeals of Indiana
reaffirmed that illegal conduct is an essential element in a
claim for tortious interference with a business relationship,
729 N.E.2d 215, 222 (Ind. App. 2000). Although the court noted
that there was no “definition or test” for demonstrating the
required “‘illegal conduct,’” it concluded that defamation did
not satisfy the illegal conduct element. Id. at 222–23. Although
Pierce criticizes Levee for failing to cite cases in support of its
conclusion, she offers no reason to believe Levee is not good
law or that the Indiana Supreme Court would deviate from the
appellate court’s conclusion that defamation cannot satisfy the
illegal conduct element of a tortious interference claim. See, e.g.,
Golden v. State Farm Mut. Aut. Ins. Co., 745 F.3d 252, 255
(7th Cir. 2014) (noting that our task when sitting in diversity is
to ascertain substantive content of state law as decided by the
highest state court or as that court would decide the facts of the
case before us). Thus, even if we assume that Heuchert’s
comment at the banquet was defamatory towards Pierce and
that it interfered with some valid business relationship of
8 No. 15-1900
Pierce’s (a big assumption), her claim would still fail because
Heuchert committed no illegal act.
Alternatively, Pierce argues that Heuchert committed the
tort of injurious falsehood, which she claims could establish the
requisite illegal act. Given the refusal of Indiana courts to
recognize defamation as the underlying illegal act in a claim
for tortious interference with a business relationship, we
question whether injurious falsehood would fare any better in
satisfying the illegal action requirement. Ultimately, however,
that question is irrelevant because Pierce’s complaint does not
state a claim for injurious falsehood.
Pierce argues that Heuchert’s statements amounted to
injurious falsehood as defined in the Restatement of Torts,
which explains that one who publishes a false statement
harmful to the interests of another is “subject to liability for
pecuniary loss resulting to the other if (a) he intends for
publication of the statement to result in harm to interests of the
other having a pecuniary value, or either recognizes or should
recognize that it is likely to do so, and (b) he knows that the
statement is false or acts in reckless disregard of its truth or
falsity.” Restatement (Second) of Torts § 623A: Liability for
Tort of Injurious Falsehood—General Principle (1977). Al-
though Pierce fails to identify any Indiana cases applying the
tort of injurious falsehood, in Raybestos Prod. Co. v. Younger,
54 F.3d 1234, 1236–37 (7th Cir. 1995), we noted without
elaboration that a jury had awarded the plaintiff damages on
injurious falsehood claims in a diversity suit applying Indiana
law. Citing Raybestos, a district court applying Indiana law
noted that, “it appears that there is at least some limited
recognition” of such a cause of action in Indiana. See Sanderson
No. 15-1900 9
v. Ind. Soft Water Servs. Inc., No. IP 00-0459-CHK, 2004 WL
1784755, at *7 (S.D. Ind. July 23, 2004) (citing Raybestos, 54 F.3d
at 1236).
Despite the limited discussion of injurious falsehood under
Indiana law specifically, it is clear more generally that injurious
falsehood is distinct from defamation in that it is intended to
protect economic as opposed to reputational interests. See, e.g.,
State ex rel. BP Prod. N. Am. Inc. v. Ross, 163 S.W.3d 922, 924
(Mo. 2005) (“Injurious falsehood protects pecuniary loss
whereas defamation protects reputational injury.”); Restate-
ment (Second) of Torts § 623A cmt. g (1977) (“The action for
defamation is to protect the personal reputation of the injured
party … . The action for injurious falsehood is to protect
economic interests of the injured party against pecuniary
loss[.]”). As such, the tort of injurious falsehood is designed to
rectify pecuniary harm arising from such actions as disparage-
ment of property (slander of title), disparagement of quality
(trade libel), and disparaging statements of opinion as to a
plaintiff’s products. See Restatement §§ 623A, 624, 626.
Examining Heuchert’s alleged statements about Pierce in
this light makes clear that Pierce’s complaint fails to state a
claim for injurious falsehood.
On appeal, Pierce states conclusorily that her complaint
properly alleged that Heuchert made “loud, false, and injuri-
ous statements” at the sales conference that damaged Pierce’s
“current and prospective business relationships with everyone
there.” But calling Heuchert’s statements “injurious” and
stating that they damaged her business relationships does not
make it so. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
10 No. 15-1900
(“Threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice.”)
Pierce’s complaint must contain “enough fact to raise a
reasonable expectation that discovery will reveal evidence” to
support her claim. Twombly, 550 U.S. at 556; see also Adams v.
City of Indianapolis, 742 F.3d 720, 729 (7th Cir. 2014). But
nothing in Pierce’s complaint raises a reasonable expectation
that discovery would yield evidence that she suffered pecuni-
ary loss as a result of Heuchert’s comment. The comment itself
is unrelated to Pierce’s products, her sales, or anything that
would bear on her business success selling animal medicines.
Cf. Heritage Mut. Ins. Co. v. Advanced Polymer Tech., Inc.,
97 F. Supp. 2d 913, 932 (S.D. Ind. 2000) (“The insured’s lack of
any direct reference to a competitor’s goods or products
repeatedly has compelled courts to find that the underlying
plaintiff has not alleged an advertising injury under this
[product] disparagement offense.”) (collecting cases). Indeed,
Pierce’s complaint fails to identify any pecuniary harm
resulting from Heuchert’s comment. Instead, Pierce alleges that
all of her “team members were looking and laughing,” and
that she told Heuchert she was “inappropriate.” But certainly
Heuchert’s team members were not the sort of business
relationships whose diminished view of her would result in
pecuniary harm. After all, she did not need to sell animal
medicines to them.
The failure to identify pecuniary harm is not surprising
given that originally, Pierce based her tortious interference
claim on the theory that Heuchert interfered with Pierce’s
business relationship with Zoetis by unjustifiably increasing
Pierce’s sales quotas. Unfortunately for Pierce, her new theory
No. 15-1900 11
fares no better. There is simply nothing in the complaint that
would support an inference that Pierce was financially harmed
by Heuchert’s statements or that her comment was intended to
inflict pecuniary harm on Pierce.
More fundamentally, the comment at the sales conference
had no bearing on the ultimate decision to fire Pierce. There is
thus no logical connection between the comment and any
pecuniary harm Pierce did suffer. Without allegations from
which one could plausibly infer that Heuchert’s comment was
intended to and did cause Pierce pecuniary harm, Pierce
cannot state a claim for injurious falsehood. Thus, even if we
give Pierce the benefit of the doubt as to the unlikely possibil-
ity that Indiana courts would allow injurious falsehood to
supply the required illegal act for a tortious interference claim,
her claim would still fail.
In short, none of the allegations in Pierce’s complaint could
plausibly support a claim for tortious interference with a
business relationship. The majority of the allegations in
Pierce’s complaint pertain to acts taken within the scope of
Heuchert’s supervisory duties, and thus cannot form the basis
of her claim. Pierce is left only with the comments at the sales
conference. As bizarre or inappropriate as Heuchert’s state-
ments may have been, they are insufficient to supply the illegal
act required for a tortious interference claim, and Pierce’s
complaint was therefore properly dismissed.
III.
For the foregoing reasons, we AFFIRM the district court’s
decision dismissing Pierce’s complaint under Rule 12(b)(6).