North Dakota Supreme Court hears appeal over dismissal of slander suit against attorney

The North Dakota Supreme Court heard oral argument on appeal file number 2024290, in which appellants who managed the Maple Valley Oil Association cooperative asked the court to reverse a district courtorder that dismissed their slander and intentional-infliction-of-emotional-distress claims with prejudice.

The appeal centers on whether the district court erred by treating factual issues as resolved at the Rule 12 stage and whether qualified privileges bar the defamation claim. Zane Aubert, counsel for the appellants, told the court: "This is textbook slander." Aubert argued the lower court had improperly construed the complaint against the plaintiffs and reached factual findings rather than accepting the allegations as true for purposes of a motion to dismiss.

Aubert emphasized statutory definitions, saying North Dakota Century Code 14-02-04 provides multiple categories of slander and that three of those categories apply to the allegations here. He told the court the complaint alleges defendant attorney Kip Koehler called the appellants "crooks" and "thieves" at cooperative meetings and instructed attendees not to do business with them, allegations the appellants say damaged their businesses in a small community of about 500 people.

Counsel for Koehler, Justin Harkins, argued the alleged statements occurred during corporate business meetings and therefore fall within statutory and common-law qualified privileges. "These are business meetings," Harkins said, urging the justices to treat the context as a legal bar that can be addressed on a motion to dismiss. Harkins cited North Dakota Century Code 14-02-05(3) (quoted in argument) and told the court the complaint itself contains factual allegations (including the cooperative's financial distress) that, if accepted, support the privilege defense.

A core procedural dispute during argument was whether privilege and limited-purpose public-figure defenses are necessarily fact-intensive and therefore inappropriate for resolution under Rule 12(b)(6), or whether the complaint's allegations make the legal bar plain enough to dismiss without further factual development. Appellants' counsel repeatedly characterized the privilege questions as proper for summary judgment after discovery; appelleecounsel countered that under the complaint's own allegations some privileges apply as a matter of law.

Both sides also debated the limited-purpose public-figure doctrine (the parties cited cases they said were analogous) and the role of malice. Appellee argued the plaintiffs are limited-purpose public figures with respect to the controversy and that, if the privileges apply, plaintiffs must plausibly allege malice. Appellants argued that malice and privilege are fact questions that cannot be resolved at the motion-to-dismiss stage and that their complaint pleaded malice to the extent the rules allow.

The appellants additionally pressed an intentional-infliction-of-emotional-distress claim, saying the allegations of knowingly false statements by an attorney before community members could meet the high standard for that tort in the right factual record. Appellee responded that North Dakota precedent applies a "strenuously high standard" to that tort and that the complaint does not present sufficiently outrageous conduct simply by repeated insults or allegations alone.

Counsel also disputed whether the appellants had properly sought leave to amend after dismissal; appellants said they asked for leave to amend in their response and orally, while appellee said no formal motion to amend was filed. Several justices asked questions probing whether Rule 12 standards in North Dakota follow federal Iqbal/Twombly precedent and whether particular affirmative defenses (like statute of limitations or privilege) can ever be disposed of at the pleading stage.

After argument, the court announced it would take the matter under advisement. "This case will be taken under advisement as all cases are," the court said before adjourning the session to the next scheduled sitting. The court did not issue an immediate ruling; a written opinion will follow.

The hearing tested the court's approach to the boundary between pleadings and defenses in defamation law, particularly when allegations concern statements made by a lawyer in corporate meetings and when reputational harm is asserted in a small community. The court's forthcoming written decision will resolve whether the district court should have dismissed the complaint at the Rule 12 stage or whether the case must proceed for factual development.