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April 23, 1985


The opinion of the court was delivered by: GILES


 Dennis Burns was employed as a produce clerk at one of Supermarkets General Corporation's Pathmark stores ("Pathmark"). His duties included surveying the fruit and vegetable displays and reducing the price of produce that was no longer first quality. He was discharged by Pathmark because allegedly he was improperly reducing the price of first quality produce. The produce supervisor, Mr. McGuigan, informed the lead produce clerk, Mr. Reeser, of the discharge, reviewed with him what Burns had or had not done relative to procedures or standards for reducing the price of produce and commented that reducing merchandise improperly "is like stealing." Mr. Burns filed a grievance consistent with the subsisting collective bargaining agreement claiming that his discharge was not for just cause. The grievance was processed in accordance with established procedures under the labor agreement. The company and union worked out a settlement proposal which the union presented to Mr. Burns. He claims that he never accepted it. The other parties contend otherwise.

 Jurisdiction is founded upon diversity of citizenship. 28 U.S.C. § 1332. Plaintiff is a citizen of Pennsylvania. Pathmark is a Delaware corporation, although the Pathmark store in question is located in Philadelphia, Pennsylvania. Mr. Burns brought this action against the company claiming defamation under Pennsylvania law, breach of the collective bargaining agreement and unlawful discrimination under the National Labor Relations Act. He filed no claim against the union. However, Pathmark filed a third party action against the union alleging that if it had any legal responsibility to plaintiff under the labor agreement that the union was liable to it for indemnification or contribution because the union had breached the duty of fair representation owed to plaintiff. The union has joined in Pathmark's motion for summary judgment and has moved for summary judgment on the third party complaint asserting, by affidavit of the union attorney handling the grievance and related settlement negotiations, that the union met its duty of fair representation as a matter of law.

 A. The Defamation Claim

 Pathmark argues that the statement, paraphrased, "Burns was discharged for improperly reducing the price of produce which is like stealing," is incapable of a defamatory meaning. Assuming that the statement is defamatory, Pathmark alternatively contends that the statement was conditionally privileged, having been uttered by one of its agents to a Pathmark employee to whom there was a duty to report the basis for the termination.

  Under Pennsylvania law, a plaintiff has the burden of proving the defamatory character of the communication, its publication by the defendant, its application to the plaintiff, and the understanding by the recipient of its defamatory meaning. 42 Pa. C.S.A. § 8343(a). This court must make a preliminary determination whether the statement in question "is capable of a defamatory meaning." Agriss v. Roadway Express, Inc., 334 Pa. Super. 295, 483 A.2d 456, 461 (1984). Only if the court finds that the statement may be understood as defamatory, is it "for the jury to determine whether it was so understood by the recipient." Id., citing Corabi v. Curtis Publishing Co., 441 Pa. 432, 273 A.2d 899 (1971); Dunlap v. Philadelphia Newspapers, Inc., 301 Pa. Super. 475, 448 A.2d 6 (1982). A communication is defamatory if it tends to harm the reputation of another and "'to lower him in the estimation of the community or to deter third persons from associating or dealing with him.'" Thomas Merton Center v. Rockwell International Corp., 497 Pa. 460, 464, 442 A.2d 213 (1981), cert. denied, 457 U.S. 1134, 73 L. Ed. 2d 1351, 102 S. Ct. 2961 (1982), quoting Birl v. Philadelphia Electric Co., 402 Pa. 297, 303, 167 A.2d 472 (1960). The test for determining whether the communication complained of is capable of a defamatory meaning if the effect that the statement taken as a whole "would fairly produce, or the impression it would naturally engender, 'in the minds of the average persons among whom it is intended to circulate.'" Rybas v. Wapner, 311 Pa. Super. 50, 457 A.2d 108, 110 (1983), quoting, Corabi, supra, 441 Pa. at 447. "The nature of the audience hearing the remark [or statement] is a critical factor in considering whether" the communication is defamatory. Beckman v. Dunn, 276 Pa. Super, 527, 534, 419 A.2d 583 (1980).

 There are two categories of defamatory words, those which are actionable, per se, on their face without need of extrinsic proof, and those which are actionable per quod, that is, words that by surrounding circumstances can be shown to be slanderous. Mumma v. Pomeroy's Inc., 38 D. & C.2d 594, 596-97 (1965). *fn1" In this case, the communication in question is alleged to have accused plaintiff of the crime of stealing. To be actionable the statement must impute directly or indirectly the commission of a criminal offense chargeable by indictment and punishable by imprisonment. See Williams v. Kroger Grocery & Baking Co., 337 Pa. 17, 10 A.2d 8 (1940); Grund v. Bethlehem Globe Pub. Co., 23 D. & C.3d 371, 377 (1982); Mumma, supra, 38 D. & C.2d at 597. Certainly, a statement that one is a thief is actionable per se.

 Here, there was no statement that plaintiff was guilty of stealing produce. Therefore, the issue becomes whether under the circumstances the statement "reducing the price of good produce improperly is like stealing" is reasonably capable of being understood as an imputation of the commission of a crime. It seems rather unreasonable for anyone to interpret a statement that a produce clerk's mistake of judgment in not following established store procedures for merchandise price reduction equates to actual stealing by him from the store. However, plaintiff has produced evidence of at least one person, Mr. Reeser, who claims that he interpreted Mr. McGuigan's statement in just such a manner. Mr. Reeser stated in his deposition that he "understood it as they were saying that he was stealing." (Reeser Dep. N.T. 30). He also answered the question, "did you hear anybody accuse Dennis Burns of stealing?" in the affirmative. Upon further questioning it became clear that Mr. Reeser was referring to the allegedly defamatory remark. Mr. Reeser also testified at his deposition that he told his family and friends that Mr. McGuigan had said that what plaintiff did was just like stealing because "the man [Burns] was fired for stealing, and he wasn't stealing." (Reeser Dep. N.T. 33).

 Nevertheless, under Pennsylvania law, Mr. Reeser's reiteration of Mr. McGuigan's communication is insufficient to establish defamation. Pennsylvania has adopted the relevant sections of the Restatement (Second) of Torts. Redco Corp. v. CBS, Inc., et al., 758 F.2d 970, slip op. at 3 (3d Cir. 1985); see Braig v. Field Communications, 310 Pa. Super, 569, 456 A.2d 1366, 1372-73 (1983). Under Restatement (Second) of Torts § 566 "[a] defamatory communication may consist of a statement in the form of an opinion, but a statement of this nature is actionable only if it implies the allegation of undisclosed facts as the basis for the opinion." As the Third Circuit explained:

Although there may be no such thing as a false opinion, an opinion which is unfounded reveals its lack of merit when the opinion-holder discloses the factual basis for the idea. If the disclosed facts are true and the opinion is defamatory, a listener may choose to accept or reject it on the basis of an independent evaluation of the facts. However, if an opinion is stated in a manner that implies that it draws upon unstated facts for its basis, the listener is unable to make an evaluation of the soundness of the opinion. In such circumstances, if the underlying facts are false, the Constitution does not protect the opinion.

 Redco Corp., supra, 758 F.2d at 972. Here, Mr. Reeser knew that plaintiff was suspended and then terminated for reducing merchandise improperly. (Reeser Dep. N.T. 30). The reason for plaintiff's suspension was made known to Mr. Reeser by Mr. McGuigan, the utterer of the allegedly defamatory statement. (Reeser Dep. N.T. 27). Mr. Reeser also knew that plaintiff had not stolen anything. (Reeser Dep. N.T. 30). Mr. McGuigan, in stating that reducing merchandise improperly is like stealing, was simply expressing his opinion. Mr. Reeser, having been given the underlying facts, was able to draw his own conclusion:

It wasn't just like stealing. Stealing is when you put something in your pocket, and you walk out of the store. Putting merchandise in the bag, and putting a price right on it, and customers are coming in and buying it up -- they consider stealing, as I know the way they were looking at it, was completely wrong. They were just looking at it, because there was good merchandise in the bags, and the company ...

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