United States District Court, D. South Dakota, Southern Division
ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY
E. SCHREIER UNITED STATES DISTRICT JUDGE
Ken Tracy and the city of Mitchell, move jointly for summary
judgment. Plaintiff, Steven Koch, resists the motion. For the
following reasons, the court grants the motion for summary
facts, viewed in the light most favorable to Koch, the
non-moving party, are as follows:
city of Mitchell is a municipality in Davison County, South
Dakota. Koch is a resident of Mitchell. Tracy is a resident
of Mitchell, and he served as the mayor of Mitchell during
the time relevant here.
is home to what is commonly advertised as "The
World's Only Corn Palace." The Corn Palace is a
venue that hosts a variety of concerts, sporting events, and
other exhibits. It is also a popular tourist destination.
Administration of the Corn Palace is overseen by the Corn
Corn Palace director is an appointed position within
Mitchell's government. It is also a highly visible
position within the community. In 2014, Mitchell's
then-current Corn Palace director resigned after a state
audit revealed that he mishandled the Corn Palace's
finances. His resignation and the circumstances surrounding
it generated negative publicity toward Mitchell. Koch applied
for the position in June 2014 after Mitchell began
advertising to fill the vacancy. He filled out Mitchell's
standard job application form. Koch was interviewed on
October 3, 2014.
interview went well for Koch, and he received a phone call
from Tracy on October 9. Tracy asked if Koch was still
interested in the Corn Palace director position. Koch stated
that he was. Koch and Tracy arranged a time to meet in person
to discuss details about the position. They met a week later
on October 15. Koch and Tracy discussed various aspects of
the job, such as the salary, benefits, a potential start
date, and whether Koch got along with other Mitchell
employees. Regarding a start date, Koch informed Tracy that
the earliest he could start was on October 31 because Koch
needed to give his current employer two weeks' notice.
Koch and Tracy did not establish a firm start date at the
meeting, but Tracy wanted to fill the position as soon as
possible. Tracy verbally offered the position to Koch, and
Koch accepted it. According to Koch's recollection, Tracy
also informed him that "the City council vote would be a
formality" with respect to Koch's approval for the
position. Docket 21-1 at 20.
turned in his two weeks' notice the following day. Koch
testified that at the time he turned in his two weeks'
notice that he understood that his employment as Corn Palace
director was conditioned on a background check, a drug
screening, and a physical examination. Docket 21-1 at 24. He
submitted the applicable paperwork for those procedures. Koch
then spoke with Mitchell personnel on October 17 and
confirmed that his first day would be October 31.
spoke with Tracy again on October 20. Tracy informed Koch
that some issues had arisen related to Koch's background
check. Tracy asked if he could meet with Koch. Koch and Tracy
arranged a meeting for later that week in Tracy's office.
Tracy said that he was concerned about a 2002 misdemeanor
conviction for petty theft that was on Koch's record.
Tracy asked if Koch could explain what happened. Koch
explained that the offense arose during his employment with
his father's company called Upper Midwest Ag Products.
The business was having money problems, and it could not
secure a loan. Koch said that he agreed to co-sign a loan for
his father, but the business ended up in bankruptcy. Koch
explained that he was caught up in a criminal investigation
because of the bankruptcy and due to his signature on the
loan. Although Koch was originally charged with four
felonies, he pleaded guilty to one count of misdemeanor petty
theft. Koch and his father were ordered to pay restitution to
four victims. In response, Tracy thanked Koch for his candor
and said that he would still recommend Koch for the Corn
Palace director position. Tracy then gave Koch a tour of the
Mitchell offices and introduced him as the next Corn Palace
director to some of the Mitchell personnel. Docket 21-1 at
received another phone call from Mitchell personnel on
October 29. He was informed that a reporter from the Mitchell
Daily Republic-the local newspaper-wanted to interview him
about the Corn Palace director position. Koch spoke briefly
with the reporter. Tracy was also interviewed. An article
appeared in the Daily Republic the following morning
discussing the interviews and the Corn Palace director
October 31, Koch reported for his first day of work. Koch was
informed approximately twenty minutes after he arrived that
Tracy would like to meet with him. Tracy stated that he
recently became aware of additional facts surrounding
Koch's misdemeanor conviction. For example, Tracy learned
from others that Koch and his father used down payments that
they had received from customers to pay outstanding bills.
Tracy also asked Koch if there were alleged to be fourteen
victims rather than four. Koch disputed that number. He
believed that there were only four victims due to the number
of charges originally brought against him. Tracy told Koch
that he needed to trust his personnel and that he had lost
confidence in Koch. Koch asked for an opportunity to prove
himself through a probationary or trial period. Tracy refused
and told Koch that "he wasn't going to recommend
[him]" for the Corn Palace director position. Docket
21-1 at 36. Tracy also told Koch that it would be in his own
best interest to withdraw his name from consideration for the
position so that Koch could control the public's
perception of what occurred.
issued a press release later that day. The press release
states in its entirety that "Mayor Ken Tracy has
announced that Steve Koch has withdrawn his name for
consideration as the Corn Palace Director. The search for a
new Corn Palace director will begin immediately." Docket
21-1 at 89. An email was sent from Tracy's office to the
Mitchell city council also announcing that Koch had withdrawn
his name. Tracy stated during a radio interview that same day
that Koch had withdrawn his name from consideration for the
position. Tracy said that he was unsure why Koch made his
decision. The Daily Republic and several other South Dakota
news outlets reported on Koch's purported withdrawal.
called Tracy on November 1. Koch asked if he could appear at
the next city council meeting. Tracy declined. Koch called
Jeff Smith, a council member, the next day. Koch asked Smith
about appearing on the council's agenda. Smith responded
that Koch's request could only be facilitated by Tracy
and that Tracy had not placed Koch on the agenda.
filed suit in this court on May 29, 2015. Docket 1. He
alleged five claims for relief: (1) a § 1983 claim
against Mitchell; (2) a breach of contract claim against
Mitchell and Tracy; (3) an intentional interference with
contractual relations claim against Tracy in his individual
capacity; (4) a defamation claim against Mitchell and Tracy;
and (5) an intentional infliction of emotional distress claim
against Tracy. Tracy and Mitchell move for summary judgment
on all of Koch's claims.
judgment on all or part of a claim is appropriate when the
movant "shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law." Fed.R.Civ.P. 56(a); see also In re
Craig, 144 F.3d 593, 595 (8th Cir. 1998). The moving
party can meet its burden by presenting evidence that there
is no dispute of material fact or that the nonmoving party
has not presented evidence to support an element of its case
on which it bears the ultimate burden of proof. Celotex
Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Once the
moving party has met this burden, "[t]he nonmoving party
may not ‘rest on mere allegations or denials, but must
demonstrate on the record the existence of specific facts
which create a genuine issue for trial.' "
Mosley v. City of Northwoods, Mo., 415 F.3d 908, 910
(8th Cir. 2005) (quoting Krenik v. Cty. of Le Sueur,
47 F.3d 953, 957 (8th Cir. 1995)). "Further, ‘the
mere existence of some alleged factual dispute between the
parties is not sufficient by itself to deny summary judgment.
. . . Instead, the dispute must be outcome determinative
under prevailing law.' " Id. (quoting
Get Away Club, Inc. v. Coleman, 969 F.2d 664, 666
(8th Cir. 1992)). The facts, and inferences drawn from those
facts, are "viewed in the light most favorable to the
party opposing the motion" for summary judgment.
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986) (quoting United
States v. Diebold, Inc., 369 U.S. 654, 655 (1962)).
is administered as an aldermanic form of government.
Mitchell, S.D., Code § 1-5-1. Its governing body consists
of an elected mayor and a common city council. Id. A
Mitchell ordinance designates several government offices as
"Appointive Officers And Positions." Mitchell,
S.D., Code § 1-6-1(A). The "director of the Corn
Palace" is among the appointed positions listed.
See id. South Dakota law provides that
Such officers as needed and provided for by ordinance shall
be appointed. Each appointive officer of a municipality
governed by a mayor and common council shall be appointed by
the mayor with the approval of the council . . . Such
officers shall be appointed annually or at intervals
determined by the governing body.
SDCL 9-14-3; see also Mitchell, S.D., Code §
1-6-1(B)(2) ("Each appointive officer shall be appointed
by the mayor with the approval of the city council[.]").
Mitchell ordinance also provides that "[e]ach appointive
officer shall be appointed by the mayor with the approval of
the city council for a term of office of one year[, ]"
but "[a]ny appointive officer may be removed from office
and employment with the city as provided by the laws of the
state." Mitchell, S.D., Code § 1-6-1(B)(2).
Mitchell's employee policy manual likewise explains that
"the City shall have the ability to terminate appointed
employees pursuant to applicable state statutory law."
Docket 21-1 at 85. South Dakota law prescribes the removal
process as follows:
In an aldermanic-governed municipality, the mayor, except as
otherwise provided, may remove from office any officer
appointed by the mayor, if the mayor believes that the
interests of the municipality demand such removal.
§ 9-14-13. This statute vests the mayor with
considerable discretion to remove appointed officials. The
South Dakota Supreme Court has held that
The statute before us lacks both [a showing of cause for
removal and an opportunity to be heard]. No opportunity to be
heard is given, and it is enough if the mayor thinks there is
sufficient cause. It may or may not exist, except in his
imagination, but his conclusion is final.
State ex rel. Dickson v. Williams, 60 N.W. 410, 413
(S.D. 1894); see also Kierstead v. City of Rapid
City, 248 N.W.2d 363, 366 (S.D. 1976). More directly,
the Court has explained that appointed officials in
aldermanic municipalities are at will employees. Finck v.
City of Tea, 443 N.W.2d 632, 634 (S.D. 1989) (citing
SDCL § 9-14-13 and noting that "[t]he Legislature
has not seen fit to depart from [at will] status"
regarding appointive officials).
argues that Tracy issued several defamatory communications in
print and by spoken word to the press and Mitchell city
council. Those statements represented that Koch
chose to withdraw his name from consideration for the Corn
Palace director position and that Tracy was unsure why Koch
did so. Tracy and Mitchell argue that the
statements were either privileged or, if not privileged, that
no defamatory statement was made.
is either libel or slander. SDCL 20-11-2; see also
SDCL 20-11-3 (defining libel) and SDCL 20-11-4 (defining
slander). Libel and slander are each defined as
"unprivileged" communications. Pawlovich v.
Linke, 688 N.W.2d 218, 221 (S.D. 2004). "Therefore,
a defamation action may not survive if the alleged defamatory
communication was privileged." Id. (citing
Peterson v. City of Mitchell, 499 N.W.2d 911, 915
(S.D. 1993)). South Dakota law defines several
"communications which are considered
‘privileged' and therefore outside the scope of the
definitions of libel or slander." Peterson, 499
N.W.2d at 915. The statute provides:
privileged communication is one made:
(1) In the proper discharge of an official duty;
(2) In any legislative or judicial proceeding, or in any
other official proceeding authorized by law;
(3) In a communication, without malice, to a person
interested therein, by one who is also interested, or by one
who stands in such relation to the person interested as to
afford a reasonable ground for supposing the motive for the
communication innocent, or who ...