IN THE SUPREME COURT OF IOWA No. 07–0330
Filed February 20, 2009
IOWA BETA CHAPTER OF PHI DELTA THETA FRATERNITY,
Appellee,
vs.
STATE OF IOWA, UNIVERSITY OF IOWA, and PHILLIP E. JONES,
Appellants.
Appeal from the Iowa District Court for Johnson County,
Mitchell E. Turner, Judge.
The defendants appeal a decision finding them liable for damages
under Iowa Code section 808B.8 (2001). AFFIRMED IN PART,
REVERSED IN PART, AND REMANDED WITH DIRECTIONS.
Thomas J. Miller, Attorney General, and George A. Carroll, Assistant Attorney General, for appellants.
John M. Maher of Maher & Dolan Law Firm, P.L.C., Cedar Rapids,
and James W. Affeldt of Elderkin & Pirnie, P.L.C., Cedar Rapids, for
appellee. 2
WIGGINS, Justice.
The district court entered judgment in favor of the Iowa Beta
Chapter of Phi Delta Theta Fraternity against the State of Iowa, the
University of Iowa, and one of its employees, Phillip E. Jones, the vice
president for student services and the dean of students. The fraternity
based its claim on the defendants’ use of an intercepted electronic
communication in violation of Iowa Code section 808B.8 (2001). Because
the fraternity is the real party in interest, has standing to bring this
action, and substantial evidence supports the district court’s finding of
liability, we affirm the court’s finding of liability. However, because we
disagree with the court’s findings on punitive and actual damages, we
remand the case to the district court to enter judgment in this matter
consistent with this opinion.
I. Background Facts and Proceedings.
When viewed in a light most favorable to the fraternity, the record
supports the following facts. In the fall of 2000, Elmer Vejar became a
pledged prospective member of the fraternity. However, because Vejar
was unable to obtain the minimum grade point average set by the
fraternity, the fraternity did not accept him as a member. The fraternity
rented rooms in the fraternity house to nonmembers during the summer
for income. The renters did not have access to the chapter meeting
rooms, but did have access to other common areas of the house such as
the kitchen, dining room, living room, and television room. All renters
had to move out of the house prior to “work week,” which is the week
before rush activities commenced. Vejar rented a room as a nonmember
in the summer of 2001.
The fraternity’s meetings were confidential and held in a
subbasement meeting room of the fraternity house. The fraternity 3
stationed wardens at the meeting room door to exclude nonmembers
from entering or disturbing fraternity meetings. Because Vejar was no
longer a pledge or a member, the fraternity did not allow him to attend
meetings or other fraternity events, and he could not enter the private
meeting rooms of the fraternity house.
In early October of 2001, Vejar made an oral complaint to Jones
alleging the fraternity violated hazing and alcohol policies. Jones
explained to Vejar he would not investigate until Vejar filed a formal,
signed complaint and provided evidence to support the charges. Six or
seven weeks later, Vejar filed a formal complaint and submitted a six-
page statement and a two-and-a-half hour tape recording of an alleged
hazing session. Vejar obtained the recording by concealing an audio-
recording device in the chapter’s meeting room located in the
subbasement of the fraternity house. Later, he retrieved the recording
device.
The recording consisted of a digital tape recording of an alleged
hazing incident that occurred on August 11, 2001. The alleged hazing
incident took place in the subbasement of the fraternity house. The
alleged hazing consisted of a military-style lineup in which active
members were addressed as “hell masters” and pledges were being
trained. The associate dean of students, Thomas Baker, confirmed the
communication was recorded at the fraternity house and members of the
fraternity were doing the alleged hazing.
On November 19 Jones sent a letter to Steven Snyder, a fraternity
chapter advisor, notifying him of the formal complaint against the
fraternity, the impending investigation of the complaint, and requesting a
meeting between the two of them. The letter alleged the fraternity
violated the university’s hazing and alcohol policies. On December 4 4
Mark Dagitz, the local fraternity province president and representative of
the national fraternity organization of Phi Delta Theta, sent a letter to the
current chapter president, placing the fraternity on “province probation”
because it had violated the national fraternity’s “risk management and
alcohol-free housing policies.” On December 12 Jones sent a letter to
Dagitz explaining he reviewed a copy of the letter Dagitz sent to the
chapter president and believed it to be an acknowledgement that a
hazing and alcohol violation took place in the fraternity. Jones
recommended settling the matter by the university giving Phi Delta Theta
a one-year suspension of university recognition with the possibility of
reinstatement after the year if the fraternity met several conditions as set
forth by the university. The vice president also informed Dagitz that the
fraternity could appeal his decision to the president of the university.
After correspondence between Dagitz and Jones, on January 11, 2002,
Jones sent a letter to Dagitz revoking the fraternity’s recognition by the
university for a period of at least one year, effective immediately. Jones
cited the tape recording as evidence of the hazing.
The fraternity acknowledged the alcohol violations, but contested
the hazing violation. In February counsel for the fraternity sent a letter
to Jones informing him of the fraternity’s intent to appeal his decision
and request an evidentiary hearing. By August no hearing had been set.
Negotiations between the fraternity and the university commenced, but
ended when the fraternity refused to admit it engaged in hazing. A
formal hearing was then scheduled.
An administrative hearing officer presided over a hearing on
August 27, 2003. At the hearing, the president of the fraternity entered
a plea of guilty to the charge that the fraternity served alcoholic
beverages to the pledges at the chapter house in September of 2001, but 5
a plea of not guilty to the hazing charge. The tape recording was
submitted as evidence by the university. Baker testified to the contents
of the tape recording and stated that he believed the contents of the tape
recording were authentic. Baker also testified he thought the activities
heard in the recording were within the definition of hazing set forth in
both the internal policies of the fraternity and the Interfraternity Council
of the University of Iowa Constitution. Baker further testified he found
the contents of the tape recording to be compelling evidence that hazing
occurred, and that he initiated an investigation as a result of the tape’s
contents. When asked on cross-examination what he thought about
Vejar’s credibility, Baker testified it was irrelevant because he relied on
the contents of the tape recording and not the statements of Vejar.
Jones also testified Vejar’s credibility was irrelevant because he believed
the tape recording was authentic and stood on its own.
The hearing officer issued his decision on September 11. He found
the tape recording to be authentic, and found Vejar’s credibility
irrelevant. The officer noted he based his decision on the evidence
presented, and not on the allegations of Vejar. The officer continued the
university’s de-recognition of the fraternity.
On September 12, an attorney for the fraternity sent a fax to the
hearing officer containing a copy of Iowa Code section 808B.7 regarding
the interception and use of a recorded communication as evidence. He
also sent a copy to an attorney for the university.
On November 21, Jones sent a letter to the fraternity informing
them the university was dropping the hazing charges and imposing
sanctions only for the alcohol violation admitted by the fraternity. The
sanction imposed for the alcohol violation was a continued revocation of
the fraternity’s university recognition of its charter for an indefinite 6
period to be reinstated at the university’s discretion. This revocation
continued the temporary revocation that had been imposed pending the
outcome of the administrative proceedings.
The fraternity appealed the sanction for the alcohol violation, and
David Skorton, the president of the university, heard the appeal. The
president issued an opinion on June 29, 2004, finding the passage of
time during which the case was pending in the appeal process had been
of sufficient duration for an appropriate sanction. The president
reiterated and explained the conditions originally set by the vice
president that the fraternity needed to meet before it would be re-
recognized by the university.
On February 4, 2005, the Phi Delta Theta House Association and
the fraternity filed suit against the State, the university, Jones, Baker,
Maria Lukas, and David Bergeon. The fraternity alleged the defendants
used the audiotape provided by Vejar in violation of Iowa Code section
808B. Baker, Lukas, and Bergeon were later dismissed as defendants on
a motion for summary judgment.
After a bench trial, the district court dismissed the house
association’s claims. It found in favor of the fraternity and against the
State, the university, and Jones. The court held the State, the
university, and Jones violated chapter 808B. It further held that they
used the unauthorized tape within the meaning of the statute
continuously from November 19, 2001, until July 29, 2004, when
Skorton issued his decision. The court utilized the liquidated damages
provision of Iowa Code section 808B.8(2) and awarded the fraternity
$100 per day from November 19, 2001, to July 29, 2004, (983 days) for a
total of $98,300 against the defendants jointly and severally. The court
also awarded punitive damages against Jones individually in the 7
amount of $5000. The court granted attorney fees to the fraternity
against the defendants, jointly and severally, for $24,444.18. These fees
represented the fees the fraternity incurred during the administrative
hearing proceeding. The court granted the fraternity an additional
amount for attorney fees of $37,216.25 against the defendants jointly
and severally. These fees were for the fraternity’s prosecution of the case
in the district court. The State, the university, and Jones appeal. We
will set out additional facts as they relate to the issues raised in this
appeal.
II. Issues.
All three of the defendants raise the following issues on appeal:
(1) whether the fraternity had standing to bring the action; (2) whether
the fraternity was a protected party under section 808B.8; (3) whether
substantial evidence supported the finding that the intercepted
communication was an “oral communication” protected by the statute;
(4) whether substantial evidence supported a finding that defendants’
conduct was willful as that term is used in the statute; (5) whether the
defendants used the intercepted communication in violation of the
statute; and (6) whether the district court properly calculated the
compensatory damages and attorney fees.
In addition, Jones raises the following two issues on appeal:
(1) whether he can be held personally liable for his actions; and
(2) whether the fraternity is entitled to punitive damages for his actions.
III. Scope of Review.
Because the case was tried at law, our review is for correction of
errors at law. Iowa R. App. P. 6.4. We review the district court’s decision
to dismiss a case based on lack of standing for errors at law. Godfrey v.
State, 752 N.W.2d 413, 417 (Iowa 2008). The district court findings have 8
the effect of a special verdict. Iowa R. App. P. 6.4. The district court’s
findings of fact are binding on us if supported by substantial evidence.
Iowa R. App. P. 6.14(6)(a).
When a party challenges a district court’s ruling claiming
substantial evidence does not support the decision, we must view the
evidence in the light most favorable to support the judgment and liberally
construe the court’s findings to uphold, rather than defeat, the result
reached. State v. Dohlman, 725 N.W.2d 428, 430 (Iowa 2006). We will
not find the evidence insubstantial merely because we may draw a
different conclusion from it. Raper v. State, 688 N.W.2d 29, 36 (Iowa
2004). The ultimate question is whether the evidence supports the
court’s finding, not whether the evidence would support a different
finding. Id. On the other hand, the district court’s conclusions of law
and its application of its legal conclusions are not binding on appeal. Id.
IV. Applicable Statutes.
Our resolution of the issues is controlled by the following statutes.
Section 808B.8 of the Iowa Code provides in relevant part: 1. A person whose wire, oral, or electronic communication is intercepted, disclosed, or used in violation of this chapter shall:
a. Have a civil cause of action against any person who intercepts, discloses, or uses or procures any other person to intercept, disclose, or use such communications.
b. Be entitled to recover from any such person all of the following:
(1) Actual damages, but not less than liquidated damages computed at the rate of one hundred dollars a day for each day of violation, or one thousand dollars, whichever is higher.
(2) Punitive damages upon a finding of a willful, malicious, or reckless violation of this chapter. 9 (3) A reasonable attorney’s fee and other litigation costs reasonably incurred.
Iowa Code § 808B.8(1).
An “ ‘[o]ral communication’ means an oral communication uttered
by a person exhibiting an expectation that the communication is not
subject to interception, under circumstances justifying that expectation.”
Id. § 808B.1(8).
The legislature put the unlawful acts of chapter 808B in section
808B.2. The legislature made these acts class “D” felonies. Id.
§ 808B.2(1). A person violates chapter 808B when that person
[w]illfully uses, or endeavors to use, the contents of a wire, oral, or electronic communication, knowing or having reason to know that the information was obtained through the interception of a wire, oral, or electronic communication in violation of this subsection.
Id. § 808B.2(1)(d).
V. Analysis. A. Whether the Fraternity Had Standing to Bring This Action.
In order to have standing, the plaintiff must have a specific personal or
legal interest and must be injured in fact. Godfrey, 752 N.W.2d at 418–
19. The defendants claim the fraternity did not have standing to bring this action because the Iowa Beta Chapter of the fraternity was not in
existence at the time of trial.
The defendants are not making a standing argument, but rather a
real-party-in-interest argument. We recently explained the difference
between standing and the real party in interest. Pillsbury Co. v. Wells
Dairy, Inc., 752 N.W.2d 430, 434–35 (Iowa 2008). Standing requires that
a party have a legal interest in the litigation and be injuriously affected.
Id. 10
The real party in interest is the true owner of the right sought to be
enforced. Id. at 435. The defendants’ claim that the fraternity was not in
existence at the time of litigation is analogous to a natural person dying
before the conclusion of the lawsuit. When a person dies before the
conclusion of the litigation, the person’s estate is the real party in
interest. In re Estate of Voss, 553 N.W.2d 878, 881–82 (Iowa 1996).
The district court found, and we agree, the fraternity was still in
existence at the time of the litigation. Iowa Code section 4.1(20) defines
“person” as an “association.” Unincorporated associations can maintain
an action in the name of the association. Keller & Bennett v. Tracy, 11
Iowa 530, 531 (1861). An association is “a collection of persons who
have united or joined together for some special purpose or business, and
who are called, for convenience, by a common name.” 7 C.J.S.
Associations § 1, at 25 (2004). Courts can consider a fraternity as an
association for purposes of litigation. See, e.g., Garofalo v. Lamda Chi
Alpha Fraternity, 616 N.W.2d 647, 657–58 (Iowa 2000) (Lavorato, J.,
concurring in part) (stating a fraternity is an association for purposes of
the action). An association can sue in its own name, or on behalf of its
members. Carson v. Pierce, 719 F.2d 931, 933 (8th Cir. 1983). The
question raised by the defendants is whether the fraternity was an active
association during the litigation.
On February 4, 2005, the fraternity brought this suit in the name
of the association, not in the name of any of its members. On
February 2, 2006, the national headquarters informed the fraternity that
its charter was suspended. The national organization expressed its
regrets for taking such a serious action, but explained that it “felt the
best way to ensure a bright future on the University of Iowa campus is to
suspend operations until a time can be determined to return.” 11
(Emphasis added.) Immediately prior to losing its charter the fraternity
still had between thirteen and seventeen members living in the house,
and approximately ten to fifteen members who did not live in the house.
As of September 6, 2006, the date of the trial, the Iowa Beta Chapter did
not have any student members. The fraternity continues to maintain a
checking account, however, and files its tax returns every year.
Even though the national headquarters suspended the Iowa Beta
Chapter’s charter during the pendency of the litigation, there were still
members of the association at the time the suit was concluded. Once a
member graduates from the university, that person is an alumni
member. Thus, that person’s membership extends beyond the years of
undergraduate education and that person remains part of the
association known as the Iowa Beta Chapter of Phi Delta Theta.
Moreover, both the national headquarters in its letter to the chapter, and
the housing association representative, Steve Snyder, indicate an effort
on behalf of the fraternity to regain its charter at the University of Iowa,
creating the potential for the association to return to active status. While
there were no student members at the time, there were certainly alumni
members of the fraternity, including students who were members when
the chapter lost its charter in the middle of their active membership.
Thus, the fraternity is the real party in interest to bring this action.
B. Whether the Fraternity Is a Protected Party Under Section
808B.8. The defendants argue the fraternity is not a protected party
under section 808B.8; therefore, it did not have standing under chapter
808B to maintain this action. The defendants rely on Smoot v. United
Transportation Union, 246 F.3d 633 (6th Cir. 2001), claiming the
fraternity did not have standing because the intercepted communications
belonged to unidentifiable individuals, not to the fraternity. 12
To find standing under the federal act, the Smoot court looked for
evidence in the record that the intercepted communication related to the
organization’s business. Smoot, 246 F.3d at 640. If the intercepted
communication related to the organization’s business, the organization
had an identifiable injury giving it standing to maintain the action. Id.
The gist of the defendants’ argument is that there was no evidence the
intercepted conversation related to fraternity business.
The University of Iowa Policies & Regulations affecting Students
2001–2002 states in section III, paragraph 8 that the vice president . . . may revoke a student organization’s recognition . . . if . . . (b) a member of the organization violates University regulations at an event sponsored by the organization or in the course of the organization’s affairs and the organization failed to exercise reasonable preventive measures. The defendants relied on this provision to discipline the fraternity for
hazing by indefinitely revoking the university’s recognition of the
fraternity.
The defendants used the intercepted communication as though it
belonged to the fraternity. The associate dean identified the speakers as
members of the fraternity and the defendants disciplined the entire
fraternity because of the communication. Because the defendants held
the entire fraternity responsible for the actions of the individuals whose
communications they heard on the tape, it is clear the defendants
treated the entire fraternity as though it had an ownership interest in the
intercepted communication and was responsible for the events recorded
on the tape. Therefore, under the test in Smoot, the intercepted
conversation related to fraternity business, and the fraternity did have an
identifiable injury under the statute. 13
C. Whether Substantial Evidence Supports the Finding That
the Intercepted Communication Was an “Oral Communication”
Protected by the Statute. The Iowa statute defines an oral
communication as “an oral communication uttered by a person
exhibiting an expectation that the communication is not subject to
interception, under circumstances justifying that expectation.” Iowa
Code § 808B.1(8). To decide whether the recording was an oral
communication under chapter 808B, we must construe section
808B.1(8).
The purpose of statutory construction is to determine legislative
intent. Auen v. Alcoholic Beverages Div., 679 N.W.2d 586, 590 (Iowa
2004). Legislative intent is determined from the words chosen by the
legislature, not by what it should or might have said. State v. Wiederien,
709 N.W.2d 538, 541 (Iowa 2006). Absent a statutory definition or an
established meaning in the law, we give words their ordinary and
common meaning by considering the context within which they are used.
City of Des Moines v. Employment Appeal Bd., 722 N.W.2d 183, 196 (Iowa
2006). When construing a statute, we are required to assess a statute in
its entirety, not just isolated words or phrases. Schadendorf v. Snap-On
Tools Corp., 757 N.W.2d 330, 337 (Iowa 2008). When construing a
statute, we avoid a construction that makes part of a statute redundant
or irrelevant. Id. We try to give a statute a reasonable construction that
best achieves the statute’s purpose and avoids absurd results. Id.
Chapter 808B contains language similar to the language used by
Congress to create a claim for civil damages for an intercepted oral
communication in the Omnibus Crime Control and Safe Streets Act of
1968. Omnibus Crime Control and Safe Streets Act of 1968 § 801, 82
Stat. 211, 211–225 (1968) (current version at 18 U.S.C. §§ 2510–2522). 14
In 1986, Congress amended the Omnibus Crime Control and Safe Streets
Act of 1968 by enacting the Electronic Communications Privacy Act.
Electronic Communications Privacy Act, 18 U.S.C. §§ 2510–2522. The
Electronic Communications Privacy Act changed the elements required to
be proven by a person seeking civil damages. See Romano v. Terdik, 939
F. Supp. 144, 145–46 (D. Conn. 1996) (explaining the difference between
the elements to be proven in a civil action under the Omnibus Crime
Control and Safe Streets Act of 1968 and the Electronic Communications
Privacy Act). Because Iowa’s act for civil damages is similar to the
Omnibus Crime Control and Safe Streets Act of 1968, we are allowed to
look to the federal law interpreting the 1968 Act before Congress
amended it for guidance in interpreting chapter 808B. See Pecenka v.
Fareway Stores, Inc., 672 N.W.2d 800, 803 (Iowa 2003) (stating when a
state law is modeled after a federal law, we can look to the federal law for
guidance in interpreting the state law). We are not bound, however, by
the federal law interpretation. Id.
Congress used the same language in defining an “oral
communication” in the Omnibus Crime Control and Safe Streets Act of
1968 as the Iowa legislature used in section 808B.1(8). Compare
Omnibus Crime Control and Safe Streets Act of 1968 § 802, 82 Stat. at
212 (current version at 18 U.S.C. § 2510(2)), with Iowa Code § 808B.1(8).
The legislative history concerning section 2510 and the language defining
an “oral communication” indicate the definition is intended to reflect
existing law on a person’s expectation of privacy as discussed in Katz v.
United States, 389 U.S. 347, 88 S. Ct. 507, 19 L. Ed. 2d 576 (1967).
S. Comm. on Judiciary, Omnibus Crime Control and Safe Streets Act of
1968, S. Rep. No. 90–1097 (1968), reprinted in 1968 U.S.C.C.A.N. 2112,
2178 (1968). The expectation of privacy test set forth in Katz normally 15
consists of two questions: “first . . . whether the individual, by his
conduct, has ‘exhibited an actual (subjective) expectation of privacy’ ”;
and second, “whether the individual’s subjective expectation of privacy is
‘one that society is prepared to recognize as “reasonable.” ’ ” Smith v.
Maryland, 442 U.S. 735, 740, 99 S. Ct. 2577, 2580, 61 L. Ed. 2d 220,
227 (1979) (quoting Katz, 389 U.S. at 361, 88 S. Ct. at 516, 19 L. Ed. 2d
at 588 (Harlan, J., concurring)). We believe this expectation of privacy
test is applicable to section 808B.1(8).
Therefore, to determine whether a communication meets this
definition, the fraternity, through the individuals uttering the
communication, must have exhibited a subjective expectation of privacy
and that expectation must be one that society is prepared to recognize as
reasonable. The district court made the factual finding that the
intercepted communication met the statute’s definition of an oral
communication. If substantial evidence supports this finding, we must
affirm the district court’s finding.
Substantial evidence supports the fraternity exhibited a subjective
expectation of privacy in the conversations that Vejar intercepted. First,
the fraternity’s meetings were confidential and held in a subbasement
meeting room of the fraternity house. Second, the fraternity rented
rooms in the fraternity house during the summer for income but the
renters did not have access to the chapter meeting rooms, while they did
have access to other common areas of the house such as the kitchen,
dining room, living room, and television room. Third, the fraternity
stationed wardens at the meeting room door to exclude nonmembers
from hearing what the members discussed in the room. Finally, the only
way Vejar could hear a conversation held in the meeting room was for
Vejar to record it clandestinely. 16
We also believe substantial evidence supports the fraternity’s
expectation of privacy is one that society is prepared to recognize as
reasonable. This standard is an objective standard and not a subjective
standard. Id. at 740–41, 99 S. Ct. at 2580, 61 L. Ed. 2d at 226–27. To
determine whether society is prepared to recognize an expectation of
privacy as reasonable, it is necessary to “reference to concepts of real or
personal property law or to understandings that are recognized and
permitted by society.” Rakas v. Illinois, 439 U.S. 128, 143 n.12, 99 S. Ct.
421, 430–31 n.12, 58 L. Ed. 2d 387, 401–02 n.12 (1978).
The fraternity is a private, for-members-only association. The
fraternity house is the place where the members live. The room in the
fraternity where Vejar intercepted the oral statements is the place where
the fraternity conducted its private business. Society respects the right
of a private organization to conduct its business in private. See United
States v. Bunkers, 521 F.2d 1217, 1219 (9th Cir. 1975), cert. denied, 423
U.S. 989, 96 S. Ct. 400, 46 L. Ed. 2d 307 (1975); cf. Mancusi v. DeForte,
392 U.S. 364, 368–69, 88 S. Ct. 2120, 2123–24, 20 L. Ed. 2d 1154,
1159–60 (1968) (union official, even though he shared office, was entitled
to expect that records would not be taken from his office without his
permission). Therefore, these facts provide substantial evidence that the
fraternity had an objective expectation of privacy in the communication
that society is prepared to recognize and protect as reasonable.
Accordingly, we affirm the district court finding that the
intercepted communication was an “oral communication” as defined in
section 808B.1(8).
D. Whether Substantial Evidence Supports That the
Defendants’ Conduct Was Willful as Used in the Statute. A civil
action exists when a person uses an oral communication in violation of 17
chapter 808B. Iowa Code § 808B.8(1)(a). A violation of chapter 808B
occurs when a person willfully uses or endeavors to use, the contents of
the oral communication, and the defendant knew or had reason to know
the information was obtained through the unlawful interception of the
oral communication. Id. § 808B.2(1)(d). An unlawful interception of the
communication occurs when a person willfully intercepts an oral
communication. Id. § 808B.2(1)(a).
The defendants claim for an act to be done willfully, as used in
section 808B.2, the defendants and Vejar must have intentionally
violated or recklessly disregarded a known legal right of the fraternity. At
trial, the district court rejected the defendants’ claim that a willfully done
act means an act done by a person who intentionally violated or
recklessly disregarded a known legal right. The court only required that
the defendants and Vejar acted purposefully. We agree with the district
court’s conclusion that the word “willfully” as used in section 808B.2
means purposefully. We base our conclusion on our construction of
sections 808B.2 and 808B.8.
Courts, including our court, have long struggled to come up with
an all-encompassing definition for the word “willful” when the legislature
uses it in a criminal statute. State v. Azneer, 526 N.W.2d 298, 299 (Iowa
1995). The explanation for this struggle is that no generic term can
accommodate all the various crimes in which the legislature included the
person’s will as an element of the crime. Id.
When Congress adopted the willful standard in the Omnibus Crime
Control and Safe Streets Act of 1968, the legislative history cited to the
case of United States v. Murdock, 290 U.S 389, 54 S. Ct. 223, 78 L. Ed.
381 (1933) for the proposition a violation of the act must be willful to be
criminal. S. Comm. on Judiciary, Omnibus Crime Control and Safe 18
Streets Act of 1968, S. Rep. No. 90–1097, reprinted in 1968 U.S.C.C.A.N.
at 2181. Murdock is not very helpful to us in determining what the Iowa
legislature meant by willfully in section 808B.2(1)(d). Murdock states one
possible meaning for “willfully” is to denote “an act which is intentional,
or knowing, or voluntary, as distinguished from accidental.” 290 U.S. at
394, 54 S. Ct. at 225, 78 L. Ed. at 385. Another possible meaning of the
term when used in a criminal statute is an act done with a bad purpose; without justifiable excuse; stubbornly, obstinately, perversely. The word is also employed to characterize a thing done without ground for believing it is lawful, or conduct marked by careless disregard whether or not one has the right so to act. Id. at 394–95, 54 S. Ct. at 225, 78 L. Ed. at 385 (citations omitted). The
Supreme Court then stated, to determine the proper meaning the court
must look to the context in which the word is used. Id. at 395, 54 S. Ct.
at 226, 78 L. Ed. at 385.
In 1986, the Electronic Communications Privacy Act amended the
Omnibus Crime Control and Safe Streets Act of 1968, deleting the word
“willfully” from the statute, and requiring that a person had to
intentionally use or endeavor to use the oral communication in order to
violate the Act. 18 U.S.C. § 2511(1)(d). Before this change in the law
became effective, two circuits of the United States Court of Appeals
required the word “willfully” in a civil action under the Omnibus Crime
Control and Safe Streets Act of 1968 “to denote at least a voluntary,
intentional violation of, and perhaps also a reckless disregard of, a
known legal duty,” rather than an act which is intentional, or knowing,
or voluntary, as distinguished from accidental. Citron v. Citron, 722 F.2d
14, 16 (2d Cir. 1983); see Malouche v. JH Mgmt. Co., 839 F.2d 1024,
1026 (4th Cir. 1988). 19
On the other hand, state courts, using the willful standard in their
interception-of-communications statutes, have reached the opposite
conclusion. Deibler v. State, 776 A.2d 657, 665 (Md. 2001); State v.
O’Brien, 774 A.2d 89, 104 (R.I. 2001). After reviewing the context in
which the legislature used the word “willfully” in their statutes, both
courts determined the proper definition of willfully was only to require
purposeful conduct without a bad motive or a knowing unlawful
component. Deibler, 776 A.2d at 665; O’Brien, 774 A.2d at 104.
In Iowa, our court has said our interpretation of the word
“willfully” as used by the legislature is influenced by its statutory
context. State v. Osborn, 368 N.W.2d 68, 70 (Iowa 1985). Upon our
review of chapter 808B, we are convinced that the legislature meant for
the word “willfully” in section 808B.2 to only require purposeful conduct
without a bad motive or a knowing unlawful component. We base our
conclusion on the legislature’s use of the word “willful” in section
808B.8(1)(b)(2).
Before Congress amended the 1968 Act, a person violated the
federal statute by willfully using, or endeavoring to use the contents of a
wire, oral, or electronic communication. Omnibus Crime Control and
Safe Streets Act of 1968 § 802, 82 Stat. at 213 (current version at 18
U.S.C. § 2511(d)); see Iowa Code § 808B.2. If a violation of the statute
occurred, an aggrieved person was entitled to receive punitive damages
without any further showing. Omnibus Crime Control and Safe Streets
Act of 1968 § 802, 82 Stat. at 223 (current version at 18 U.S.C.
§ 2520(b)(2)). Thus, it made sense that the federal courts would interpret
willfully to require the act to be done with a voluntary, intentional
violation of a known legal duty, because punitive damages are not 20
normally awarded for a purposeful act done without a bad motive or
knowing unlawful component.
Under the Iowa statute, a mere violation of the statute will not
entitle an aggrieved person to receive punitive damages. In order for a
person to receive punitive damages under the Iowa statute, the finder of
fact must make “a finding of a willful, malicious, or reckless violation of
this chapter.” Iowa Code § 808B.8(1)(b)(2). If we define “willfully” in
section 808B.2 as requiring a bad motive or knowing, unlawful
component, every violation would entitle a person to punitive damages.
Additionally, the “malicious,” or “reckless” language in section
808B.8(1)(b)(2) would be surplus language, because all violations of
section 808B.2 would give rise to punitive damages under the willful
requirement of section 808B.8(1)(b)(2). Therefore, we conclude, in the
context of the statute as passed by the legislature, the word “willfully” in
section 808B.2 only requires purposeful conduct without a bad motive or
knowing, unlawful component.
The requirement that the defendants knew or had reason to know
the information was obtained through the unlawful interception of the
oral communication is derived from section 808B.2(1)(d). The language
of the federal statute before and after the amendment to the 1968 Act is
the same. 18 U.S.C. § 2511(d). The federal courts have consistently
construed this section to require the aggrieved person to prove that the
user of the oral communication had “ ‘sufficient facts concerning the
circumstances of the interception such that the defendant could, with
presumed knowledge of the law, determine that the interception was
prohibited [by the statute].’ ” Williams v. Poulos, 11 F.3d 271, 284 (1st
Cir. 1993) (quoting Thompson v. Dulaney, 970 F.2d 744, 749 (10th Cir.
1992)). We agree with the federal courts’ construction because it is 21
consistent with our law that persons ordinarily should not escape the
legal consequences of failing to observe statutory requirements by
asserting ignorance of the law. Diehl v. Diehl, 421 N.W.2d 884, 888 (Iowa
1988).
Baker, the associate dean of students, testified the defendants
knew Vejar placed the recording device clandestinely in order to obtain
the recording. Baker also was aware of the fact that the taping of the
oral communications was illegal. Baker and Jones both acknowledged
that they did not care about the legal implications surrounding the use of
the tape as evidence and purposefully used the tape to support the
university’s revocation of the fraternity’s status.
Accordingly, substantial evidence supports that Vejar willfully
intercepted the communication and that the defendants’ conduct was
willful.
E. Whether the Defendants Used the Intercepted
Communication in Violation of the Statute. To be civilly liable under
the Iowa statute a person must use the intercepted oral communication.
Id. § 808B.8(1). The federal act has this same requirement. 18 U.S.C.
§ 2520(a). Neither the state statute nor the federal act defines the word
“use.” When a statute does not define a word and in the absence of an
established meaning in law, courts generally presume the legislature
used words contained in a statute in their ordinary and usual sense with
the meaning commonly attributed to them. Office of Consumer Advocate
v. Iowa Utils. Bd., 744 N.W.2d 640, 643 (Iowa 2008). The dictionary
defines “use” to mean, “to put into action.” Webster’s Third New
International Dictionary 2523 (unabr. ed. 2002). Most federal courts have
used this dictionary definition to require an active rather than a passive
use of the intercepted communication for civil liability to attach under 22
the federal act. See Peavy v. WFFA-TV, Inc., 221 F.3d 158, 174–75 (5th
Cir. 2000) (finding the use of an intercepted communication as a basis
for initiating an investigative report was a use within the act); Dorris v.
Absher, 179 F.3d 420, 426 (6th Cir. 1999) (deciding that listening to the
communications intercepted by her husband and typing out the
termination notices dictated by him was not a use); Reynolds v. Spears,
93 F.3d 428, 432–33 (8th Cir. 1996) (overhearing a recording made by
another is not a use); Leach v. Bryam, 68 F. Supp. 2d 1072, 1075 (D.
Minn. 1999) (holding a letter from attorney sent to another attorney
containing a veiled threat to use secretly taped phone conversations to
effectuate a settlement of a dispute was a use); Fields v. Atchison,
Topeka, & Santa Fe Ry., 985 F. Supp. 1308, 1313–14 (D. Kan. 1997),
withdrawn in part by Fields v. Atchison, Topeka & Santa Fe Ry., 5 F.
Supp. 2d 1160 (D. Kan. 1998) (concluding that the conduct of listening
did not fall within the definition of use). But see Thompson v. Dulaney,
838 F. Supp. 1535, 1547–48 (D. Utah 1993) (holding mere listening to an
intercepted communication was a use).
We believe mere listening to the intercepted communication is not
a use under the Iowa statute. Rather, a person must actively use the
intercepted communication for civil liability to attach. The district court
required an active use of the tape for liability to attach under the Iowa
statute. Therefore, if substantial evidence supports its finding, we must
affirm on this issue.
The evidence shows the defendants actively used the intercepted
communication to do their investigation, to notify the fraternity of the
charges against them, to attempt to force the fraternity to settle the
dispute by admitting to the charge of hazing, to file a formal complaint
against the fraternity, and to prove the charge of hazing. See Peavy, 221 23
F.3d at 174–75 (using an intercepted communication as a basis for
initiating an investigative report was a use within the act); Leach, 68 F.
Supp. 2d at 1075 (holding a letter from attorney sent to another attorney
containing a veiled threat to use secretly taped phone conversations to
effectuate a settlement of a dispute was a use). It was only after the
defendants became aware that using the tape in the manner in which
they did violated section 808B.7 that the defendants withdrew the hazing
charge. The finder of fact can infer the withdrawal to be an attempt by
the defendants to discontinue their use under section 808B.7.
Accordingly, substantial evidence supports the district court’s
finding that the defendants used the tape in violation of section 808B.8.
F. Whether Jones Can Be Held Personally Liable for His
Actions. The trial of this matter ended on September 7, 2006. At the
conclusion of the trial, the parties decided not to orally argue the case to
the court. Instead, the parties agreed they would submit written post-
trial briefs and arguments. The court agreed and required the parties to
simultaneously submit their briefs and arguments by the close of
business on September 18. The court also held the record open for
submission of the attorney fee issue.
For the first time in his post-trial brief and argument, Jones raised
the issue that he had no personal liability under section 669.5. The
relevant part of this statute provides: Upon certification by the attorney general that a defendant in a suit was an employee of the state acting within the scope of the employee’s office or employment at the time of the incident upon which the claim is based, the suit commenced upon the claim shall be deemed to be an action against the state under the provisions of this chapter, and if the state is not already a defendant, the state shall be substituted as the defendant in place of the employee. 24
Iowa Code § 669.5(2)(a).1 The legislature added this section to the Code
during the 2006 legislative session, effective July 1, 2006. 2006 Iowa
Acts ch. 1185, § 107. Phi Delta Theta filed its petition against Jones in
February 2005, prior to the enactment of this section. Prior to the
amendment, the statute allowed an employee to be held personally liable.
Iowa Code § 669.21. In the brief where Jones raised this issue, his
counsel, an assistant attorney general, stated “[t]he Attorney General
certifies Defendant Philip Jones was an employee of the state acting with
the scope of his office and employment at the time of the incidents upon
which the Plaintiffs’ claims are based.”
In its ruling on the merits of this matter the court noted
defendants in their post-trial brief argued for the first time that an
amendment to section 669.5 relieved Jones of personal liability and that
he should be dismissed from the case. There were no responsive
pleadings filed by the fraternity regarding this claim.
The district court addressed this issue and found it could hold
Jones personally liable because the amendment to section 669.5
operated only prospectively, and Jones acknowledged in a previous brief
filed with the court in April of 2006 that the fraternity complied with all
the procedures of chapter 669, the Iowa Tort Claims Act, in pursuing its
claim against Jones. We agree with the district court and find section
669.5, as amended, does not apply retrospectively to this case.2
1This new section was first codified in the 2007 Code of Iowa.
2Jones did not introduce the evidence of the attorney general certification during trial. Instead he introduced the evidence in his final argument. See State v. Phillips, 226 N.W.2d 16, 19 (Iowa 1975) (holding counsel cannot introduce evidence in a final argument). Phi Delta Theta did not challenge the manner in which the certification was submitted to the trial court, and therefore, we consider this evidence on appeal. 25
Legislative intent determines if a court will apply a statute
retrospectively or prospectively. Emmet County State Bank v. Reutter,
439 N.W.2d 651, 653 (Iowa 1989). Generally, a newly enacted statute is
presumed to apply prospectively, unless expressly made retrospective.
See City of Waterloo v. Bainbridge, 749 N.W.2d 245, 249 (Iowa 2008); see
also Iowa Code § 4.5. However, when the statute relates solely to remedy
or procedure, a court can apply the statute both prospectively and
retrospectively. Bainbridge, 749 N.W.2d at 249. A statute that relates to
a substantive right is ordinarily applied prospectively only. Baldwin v.
City of Waterloo, 372 N.W.2d 486, 491 (Iowa 1985).
The first step in determining if a statute applies retrospectively,
prospectively, or both is to determine whether the legislature expressly
stated its intention. The legislature did not expressly state that Iowa
Code section 669.5 applies retrospectively.
In the absence of a legislative declaration that the statute applies
retrospectively, the second step of the analysis is to determine whether
the statute is procedural, remedial, or substantive. A substantive statute
“creates, defines and regulates rights” whereas a procedural law “ ‘is the
practice, method, procedure, or legal machinery by which the
substantive law is enforced or made effective.’ ” Id. (citations omitted). A
remedial statute intends to correct “existing law or redress an existing
grievance.” Id.
In Moose v. Rich, our court considered the retrospective application
of a statute passed by the legislature immunizing co-employees from
liability for their negligent acts. 253 N.W.2d 565, 571–72 (Iowa 1977).
In Moose, the jury returned a verdict finding that a co-employee’s
negligence caused the plaintiff’s injuries. Id. at 567–68. The negligent
act of the co-employee occurred in 1971. Id. at 567. In 1974, the 26
legislature passed a new statute immunizing an employee from liability
to co-employees for his or her negligent acts. 1974 Iowa Acts ch. 1111, §
1 (now codified at Iowa Code section 85.20). The new statute, section
85.20, only allowed co-employee liability upon a showing of gross
negligence. Iowa Code § 85.20. The defendant contended the jury could
not find him liable for the plaintiff’s injuries because section 85.20
applied retrospectively. Moose, 253 N.W.2d at 571. We rejected the
defendant’s claim that the court should apply section 85.20
retrospectively. Id. at 572. In doing so, we determined the law was
substantive because it involved the limitations on a right of an employee
to receive compensation from a co-employee. Id. We also held the law
was not remedial because the law did not redress a wrong, but made a
policy decision to limit the redress available to the plaintiff. Id.
Although, we do allow a statute to apply retrospectively when the
statute provides an additional remedy to an already existing remedy or
provides a remedy for an already existing loss, we have refused to apply a
statute retrospectively when the statute eliminates or limits a remedy.
Groesbeck v. Napier, 275 N.W.2d 388, 390–91 (Iowa 1979) (citing Moose,
253 N.W.2d at 572). In the latter situation, we have found the statute to
be substantive rather than procedural or remedial. Id. at 391.
Similarly, in this case, the amendment to section 669.5(2)(a)
limited the right of a person to seek compensation from a state employee
by relieving a state employee from personal liability when the employee is
acting within the scope of his or her employment. At the time of the
commission of the tort, Jones could be held personally liable for his acts.
After the amendment, only the State could be held liable for Jones’ acts.
Thus, this law is a substantive law that “creates, defines and regulates
rights” rather than merely being the practice or method of enforcing 27
rights or addressing an existing grievance. Therefore, the district court
was correct in holding Jones personally liable for his actions.
G. Whether the Fraternity is Entitled to an Award of Punitive
Damages Against Jones. The district court awarded the fraternity
punitive damages against Jones in the sum of $5000. Jones claims his
conduct does not entitle the fraternity to recover punitive damages
against him.
Section 808B.8(1)(b)(2) allows a court to award “[p]unitive damages
upon a finding of a willful, malicious, or reckless violation of this
chapter.” (Emphasis added.) As previously stated in division V(D) of this
opinion, for civil liability to attach, a person’s conduct only needs to be
purposeful conduct without a bad motive or knowingly unlawful
component. It follows from our discussion in division V(D) that the
legislature intended more than a purposeful violation of the statute
before a court could award punitive damages. Accordingly, to recover
punitive damages under section 808B.8(1)(b)(2), a person must prove “at
least a voluntary, intentional violation of, and perhaps also a reckless
disregard of, a known legal duty.” Citron, 722 F.2d at 16; see Malouche,
839 F.2d at 1026.
The only testimony at the hearing from Jones regarding his
conduct in using the tape is as follows:
Q. Were you aware that the tape that he presented may have been made illegally? A. I don’t know.
Q. Were you concerned about that? A. No, I wasn’t.
Q. Why were you not? A. Because it was -- I did not have to consider it within the context of its legality, for admissible or inadmissible.
Q. Why was that? A. Because I was not in a criminal court situation. 28
Although the testimony establishes he used the tape purposefully,
nothing in this exchange establishes or infers that Jones voluntarily,
intentionally, or recklessly violated a known legal duty. Under this
standard, an award of punitive damages is only allowed if the person
knew of the requirements of the act and acted willfully, maliciously, or
reckless in violating the act. The evidence does not establish Jones knew
his use of the tape violated the act.
Up until the time the fraternity made Jones aware of chapter 808B,
the evidence only supports that Jones knew that a clandestinely taped
conversation might not be admissible in a court of law. The fraternity
never established that Jones knew using a clandestinely taped
conversation violated chapter 808B. In fact, when the fraternity
informed Jones that the mere use of the tape violated chapter 808B, the
university dropped the hazing charges and abandoned the use of the
tape.
Consequently as a matter of law, the evidence was insufficient to
award punitive damages and the judgment for punitive damages against
Jones is reversed.
H. Whether the District Court Properly Calculated the
Compensatory Damages and Attorney Fees. Section 808B.8(1)(b)(1)
allows for an award of “[a]ctual damages, but not less than liquidated
damages computed at the rate of one hundred dollars a day for each day
of violation, or one thousand dollars, whichever is higher.” The district
court did not award the fraternity actual damages. It did award the
fraternity liquidated damages in the sum of $100 per day for 983 days for
the period from November 19, 2001, to July 29, 2004. The total
liquidated damage award amounted to $98,300. On appeal, the only
claim the defendants make is that liquidated damages should have 29
stopped on November 21, 2003, the day the hazing charges were
dismissed.3 The defendants contend November 21 is the day they
stopped using the intercepted communication. The fraternity does not
respond to this argument in its brief.
The defendants dismissed the hazing charge on November 21. We
agree with the defendants that when the hazing charges were dismissed,
the defendants were no longer using the intercepted communication.
Accordingly, the computation of liquidated damages should have stopped
on November 21. Consequently, the district court should have only
awarded liquidated damages for 732 days, for a total amount of $73,200.
The next issue the defendants raise concerns the attorney fees the
court awarded the fraternity for the fees and costs the fraternity had to
expend to fight the administrative action the university instituted to
discipline it for the alleged hazing and alcohol violations. These fees
amounted to $24,444.18.
We have repeatedly stated that, as a general rule in Iowa, the court
cannot award attorney fees in the absence of a statute or contract
authorizing an award of attorney fees. Suss v. Schammel, 375 N.W.2d
252, 256 (Iowa 1985); Harris v. Short, 253 Iowa 1206, 1208–10, 115
N.W.2d 865, 866–67 (1962). Section 808B.8(1)(b)(3) does allow for an
award of a “reasonable attorney’s fee and other litigation costs
reasonably incurred.” This section only allows the fraternity to be
awarded its attorney fees and costs incurred in prosecuting its claim
under section 808B.8 for the defendants’ use of the intercepted
communication. Section 808B.8(1)(b)(3) does not allow for the recovery
of attorney fees incurred in an administrative process, where the issue is
3The defendants have not argued that section 808B.8(1)(b)(1) places a one-
thousand-dollar cap on liquidated damages, so we do not address this issue. 30
whether the fraternity should be disciplined. At best, the attorney fees
incurred in the administrative process may be recoverable as actual
damages.
Although the fraternity argues these attorney fees are recoverable
as actual damages, the fraternity cannot recover both actual and
liquidated compensatory damages under section 808B.8(1)(b)(1). Section
808B.8(1)(b)(1) only allows for the recovery of the higher of the two
damages. The district court awarded the fraternity liquidated damages
in the sum of $98,300. We upheld the liquidated damage award, but
reduced the award to $73,200. The liquidated damages awarded to the
fraternity are greater than the attorney fees incurred by the fraternity in
the administrative process. Thus, the district court should not have also
awarded the fraternity its actual damages for the attorney fees incurred
in the administrative process. Consequently, we reverse the judgment
for attorney fees and costs for $24,444.18 entered against the
defendants.
Finally, the defendants claim we should reverse the award of
attorney fees and costs incurred by the fraternity in prosecution of this
case in the district court because we should reverse the underlying
judgment. We are only modifying, not reversing the underlying
judgment; therefore, we affirm the award of attorney fees and costs
incurred by the fraternity to prosecute the district court case in the sum
of $37,216.25.
VI. Disposition.
For the reasons stated in this opinion, we reverse the $5000
punitive damage award against Jones and the $24,444.18 award for
attorney fees and costs against all the defendants. We also reduce the
liquidated damage award to $73,200. We otherwise affirm the judgment 31
of the district court. We remand the case to the district court to enter
judgment in this matter consistent with this opinion.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED
WITH DIRECTIONS.
All justices concur except Baker, J., who takes no part.