ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA. (Dist. Ct. No. 02-CV-01628). District Court Judge: Hon. Cynthia M. Rufe.
The opinion of the court was delivered by: Alito, Circuit Judge
Before: ALITO, SMITH, and FISHER, Circuit Judges
Karen Overall is a faculty member at the University of Pennsylvania ("Penn") Veterinary School. She and her husband brought this action against Penn, alleging defamation and fraudulent misrepresentation, among other things. The District Court granted summary judgment for Penn on all counts, and Overall appealed. Because the District Court incorrectly held that statements made in a private internal University grievance proceeding were "quasi-judicial" and therefore entitled to an absolute privilege against defamation under Pennsylvania law, we reverse and remand with respect to Dr. Overall's defamation claim. We affirm on all other counts.
This case stems from the Veterinary School's failure to hire Dr. Overall for a newly created faculty position. Dr. Overall worked for Penn in various capacities since 1987. In early 1999, she was serving a single-year appointment as a "Lecturer" in the School's Department of Clinical Studies-Philadelphia ("DCS"), where her responsibilities included running a behavioral medicine clinic, teaching, and conducting research. Dr. Gail Smith, a male professor who had taught at Penn since the early 1980s, became chair of DCS in March 1999. Until Dr. Smith became Chair, Drs. Smith and Overall rarely interacted.
Once Dr. Smith became chair of DCS, he and Dr. Overall developed an amicable relationship. See Joint Appendix ("App.") at 368 (Overall admits during a deposition that "[w]e were friends"); id. at 428 (Overall writes Dr. Smith in June 1999: "We are making incredible progress, but that's all your doing, none of mine."); id. at 433 (Overall writes Dr. Smith in July 1999: "[Y]ou are actually doing a HEROIC job -- everyone thinks so. Many, many thanks."). Dr. Overall approached Dr. Smith to discuss her desire to obtain a tenured faculty position, her problems with her residents and staff, and other administrative concerns. This friendship prompted several University insiders to suggest that Dr. Smith was Dr. Overall's personal champion within DCS.
In April 1999, Dr. Smith announced that the Veterinary School would create five new "Clinical Educator" positions on the Penn faculty. One of these would be in Dr. Overall's field of expertise, behavioral veterinary medicine.*fn1 Although Clinical Educators are not eligible for tenure, they are typically awarded longer term contracts than Lecturers like Dr. Overall, and the positions are considered more prestigious. Based on Dr. Smith's friendship with Dr. Overall and her apparent interest in the job, many within the Department surmised that Dr. Smith created the position specifically for Dr. Overall. See App. at 490-91.
Despite these rumors, Dr. Smith followed protocol and set up a Faculty Search Committee with five members, three of whom had experience with behavioral veterinary medicine. See App. at 447-49. Dr. Smith charged the Committee with the task of picking the best qualified candidate from all the applicants. App. at 386, 483 (Dr. Smith told the Committee that he wanted a "real" search versus a "sham" search that simply gave the job to Dr. Overall).
The Committee had the authority to make recommendations, but Dr. Smith retained the power to ignore or veto any recommendation, with or without cause. See App. at 244, 385-86. Nevertheless, it is common practice at Penn for department chairs to follow the recommendations of their hiring committees. In fact, in some departments, it is apparently considered a "sort of administrative suicide" for a chair not to follow the faculty's advice in hiring. See App. at 244, 496-97. Dr. Overall's husband, a Penn faculty member for more than 20 years, stated in a deposition that "in our department, the chair never would override the decision [of the faculty]." App. at 502. Dr. Overall produced no evidence that any chair has ever overruled a hiring committee in the Veterinary Medicine Department.
Upon learning of the new Clinical Educator position, Dr. Overall applied and asked Dr. Smith to "put odds" on her application. He responded: "I'll work it out." App. at 129-30. At the time of this discussion, Dr. Overall was not aware that Dr. Smith technically had the authority to overrule the Search Committee's decision.*fn2
The Search Committee did not share Dr. Smith's confidence in Dr. Overall. It unanimously rejected her candidacy twice, first in a May 22, 2000, interim report, and then again in a September 15, 2000, final report. Both times, the Committee provided non-discriminatory reasons for its decision not to recommend Dr. Overall. It acknowledged her strengths but also cited serious reservations about her "history of unsuccessful interpersonal interaction," her "questioned integrity," and "a ...