Clark County School District v. Virtual Education Software, Inc.

213 P.3d 496, 125 Nev. 374, 125 Nev. Adv. Rep. 31, 2009 Nev. LEXIS 38
CourtNevada Supreme Court
DecidedAugust 6, 2009
Docket50313
StatusPublished
Cited by54 cases

This text of 213 P.3d 496 (Clark County School District v. Virtual Education Software, Inc.) is published on Counsel Stack Legal Research, covering Nevada Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Clark County School District v. Virtual Education Software, Inc., 213 P.3d 496, 125 Nev. 374, 125 Nev. Adv. Rep. 31, 2009 Nev. LEXIS 38 (Neb. 2009).

Opinion

*378 OPINION

By the Court,

Hardesty, C.J.:

In this appeal, we consider two issues of first impression in a business defamation action. First, we consider whether the absolute privilege applies to defamatory communications made by a non-lawyer in anticipation of a judicial proceeding. Second, we consider whether allegedly defamatory statements made about a business’s product provide a basis for defamation per se or for business disparagement.

We conclude that the absolute privilege affords parties to litigation the same protection from liability that exists for an attorney for defamatory statements made during, or in anticipation of, judicial proceedings. Additionally, we conclude that when allegedly defamatory statements concern a business’s product and the plaintiff seeks to redress injury to economic interest, the claim is one for business disparagement, not defamation per se.

FACTS AND PROCEDURAL HISTORY

Appellant Clark County School District (CCSD) and Clark County Education Association (CCEA), the local teachers’ union, are parties to a collective bargaining agreement, which sets the terms and conditions of employment for CCSD teachers. The agreement includes a provision for teachers to enhance their salaries by obtaining additional degrees, taking either upper-division, graduate-level courses or completing professional development courses offered by CCSD. However, educational courses that are not credit bearing toward a degree may be excluded from the courses eligible for salary enhancement. In addition, CCSD may deny credit for courses that it deems are of a “frivolous nature.”

Respondent Virtual Education Software, Inc. (VESI), is a Nevada corporation that markets and sells computer-based instruction for educators and business professionals. VESI markets its distance-learning classes to various colleges and universities.

Until the fall of 2002, Chapman University (Chapman) and Southern Utah University (SUU) offered and administered VESI courses to CCSD teachers for salary enhancement. At that time, VESI had institutional agreements with Chapman and SUU, but VESI did not have a contractual relationship with CCSD.

Dr. George Aim Rice, the associate superintendent of CCSD’s human resources department in 2002, had the responsibility for making the final determination as to whether a course complied with the collective bargaining agreement. Because of concerns regarding the academic rigor of VESI courses and their compliance with the *379 collective bargaining agreement, Dr. Rice asked her administrative assistant to research and evaluate the VESI courses.

As a result, several teachers informed VESI’s president that CCSD was researching VESI courses for eligibility for salary enhancement. Concerned about the evaluation, VESI attempted to contact CCSD and Dr. Rice and provided two VESI courses to CCSD. After reviewing VESI’s courses, Dr. Rice’s assistant noted several concerns with the academic quality of the courses. In addition, Dr. Rice’s assistant was unable to confirm that VESI’s courses were offered at the graduate level by either Chapman or SUU, or that the courses were credit bearing towards a degree. As a result, Dr. Rice determined that the courses did not comply with the requirements of the collective bargaining agreement between CCSD and CCEA for salary enhancement.

In October 2002, VESI learned that CCSD was denying salary enhancement for its courses. VESI wrote several e-mails to CCSD, essentially demanding that CCSD accept the courses “before legal means need to be pursued.” On November 6, 2002, Dr. Rice sent a letter to VESI’s president, with copies to other school administrators and CCSD counsel, explaining CCSD’s decision to deny salary advancement credit for VESI courses. Dr. Rice stated, in pertinent part:

I have researched the VESI courses that you offer for graduate credit from the following universities: Chapman, University of Phoenix, and Southern Utah University. These courses are not credit bearing toward any degree offered by these universities. In addition, some of the courses can be completed in three to five hours and the tests can be successfully passed without reading the material, as evidenced by at least two of my employees. There is no safeguard to determine that the candidate is the one who actually takes the tests. The tests are largely consistent of factual information that can be memorized or copied as notes from the slides and do not require the analysis, synthesis and application levels usually required for graduate coursework.

VESI did not respond to Dr. Rice’s letter. When teachers inquired about the status of VESI courses, CCSD explained that it would not accept VESI courses for salary enhancement.

Procedural history

VESI filed a complaint with the district court, alleging five causes of action against CCSD, including defamation. The district court dismissed all but VESI’s defamation claims. 1 VESI based its claims *380 for defamation on Dr. Rice’s November 6, 2002, letter to VESI’s president, and at least 12 communications to CCSD teachers, including e-mails sent by CCSD administrative staff.

CCSD filed two motions for summary judgment seeking to dismiss the defamation claims. In its first motion, CCSD argued, in part, that VESI could not prove the elements of defamation and also asserted that the alleged defamatory statements constituted business disparagement, not defamation per se. Although VESI opposed the motion, it did not specifically respond to CCSD’s argument regarding business disparagement. The district court summarily denied the first motion, without addressing business disparagement. In its second motion for summary judgment, CCSD argued that VESI could not prove defamation as a matter of law because the statements were either not defamatory or were privileged. On the second motion, the district court found that none of CCSD’s statements were privileged as a matter of law but limited VESI’s defamation claims to the November 6, 2002, letter and five e-mail communications.

At trial, VESI presented its case-in-chief, offering evidence that it had suffered an economic downturn, but only tenuously indicated that any economic damages were proximately caused by CCSD’s statements. Although CCSD cross-examined VESI’s witnesses, CCSD rested without presenting additional witnesses, documents, or other evidence. The jury returned a special verdict form, finding that four of the six communications constituted defamation by CCSD. Specifically, the jury found that, in addition to Dr. Rice’s November 6, 2002, letter, three e-mail communications to individual CCSD teachers were defamatory. All three e-mails were written by Dr. Rice’s assistant to individual teachers. The first e-mail provided, in part:

This is not a new policy. The contract states that courses must be credit bearing towards a degree and courses such as those offered by VESI have only recently come to our attention as violating contract. Be wary of these 3rd party entities. If the university offering credit will not include them even as an elective in their program, there is something remiss with the course.

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213 P.3d 496, 125 Nev. 374, 125 Nev. Adv. Rep. 31, 2009 Nev. LEXIS 38, Counsel Stack Legal Research, https://law.counselstack.com/opinion/clark-county-school-district-v-virtual-education-software-inc-nev-2009.