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Rivera v. Allstate Insurance Co., 2021 IL App (1st) 200735 Appellate Court DANIEL RIVERA; STEPHEN KENSINGER; DEBRA JOY Caption MEACOCK; and REBECCA SCHEUNEMAN, Plaintiffs-Appellants, v. ALLSTATE INSURANCE COMPANY, Defendant-Appellee. District & No. First District, First Division No. 1-20-0735 Filed June 14, 2021 Rehearing denied July 8, 2021 Decision Under Appeal from the Circuit Court of Cook County, No. 19-L-3757; the Review Hon. Patrick J. Sherlock, Judge, presiding. Judgment Affirmed. Counsel on Robert D. Sweeney, John J. Scharkey, Joanne H. Sweeney, and Anna Appeal R. Bugan, of Sweeney, Scharkey & Blanchard, LLC, of Chicago, for appellants. Gerard Pauling, Uma Chandrasekaran, and Katelyn Miller, of Seyfarth Shaw LLP, and Anneliese Wermuth and Jenny R. Goltz, of Cozen & O’Connor, both of Chicago, and Rex Heinke and Jessica M. Weisel, of California Appellate Law Group, of Los Angeles, California, for appellee. Panel JUSTICE PIERCE delivered the judgment of the court, with opinion. Justices Hyman and Coghlan concurred in the judgment and opinion. OPINION ¶1 This is an appeal from the dismissal of defamation per se, defamation per quod, and false light claims. Plaintiffs—Daniel Rivera, Stephen Kensinger, Debra Joy Meacock, and Rebecca Scheuneman—originally filed a complaint in federal court, asserting a federal claim along with state-law defamation claims against defendant, Allstate Insurance Company (Allstate). Plaintiffs’ federal claim and defamation per quod claim were tried before a federal jury, which found in favor of plaintiffs. That verdict—along with a $27 million judgment in plaintiffs’ favor—was vacated on appeal to the Seventh Circuit Court of Appeals because plaintiffs lacked standing to bring their sole federal claim, which in turn destroyed any federal subject- matter jurisdiction over plaintiffs’ state law claims. Plaintiffs refiled their defamation per quod claim, along with defamation per se and false light claims, in the circuit court of Cook County. The circuit court dismissed plaintiffs’ claims with prejudice, finding that plaintiffs’ defamation per quod and false light claims were barred by collateral estoppel and that plaintiffs failed to state a claim for defamation per se. Plaintiffs appeal. For the reasons that follow, we affirm the circuit court’s judgment. ¶2 I. BACKGROUND ¶3 For the purposes of this appeal, we accept as true the factual allegations in plaintiffs’ complaint. The following is a summary of those allegations. ¶4 Between 2006 and 2007, plaintiffs began working with the growth team in Allstate’s Equity Division. The growth team was responsible for researching and investing Allstate’s money in growth stocks. Rivera became the head of the Equity Division in 2007, and he reported to Allstate’s chief investment officer, Judith Greffin. Meacock, Kensinger, and Scheuneman were members of the growth team. Early in 2009, an Allstate employee contacted the compliance officer in Allstate’s Investment Department to report suspected improper trading practices. The employee suspected that portfolio managers in the Equity Division were timing equity trades to manipulate the company’s portfolio performance measurement system—which the plaintiffs dub the “Dietz Method”—to maximize individual bonuses to the detriment of their portfolios. ¶5 The Dietz Method, which Allstate adopted in the 1990s, calculates a portfolio’s performance based on certain assumptions regarding when cash flows occur rather than when the cash flows actually occur. Because of those assumptions, the Dietz Method can result in distortion or error, known as the “Dietz Effect,” which becomes more pronounced in portfolios with large in- and out-flows of cash coupled with high volatility in individual securities and the overall securities market. When Allstate’s trading desk sold stock on a day when the overall equities market was down or purchased stock on days when the market was up, the portfolio— and by extension, the portfolio’s manager—could see an artificially lowered performance, known as a “negative Dietz.” The inverse was also true: selling stock on a day when the market was up at the close or buying stock on a day when the market was down could result in an artificial inflation of the portfolio and the portfolio manager’s performance, known as a

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“positive Dietz.” Under Allstate’s “Pay for Performance Plan,” eligible employees—which included plaintiffs—would receive merit bonuses if their portfolios or managed funds achieved a certain rate of return calculated under the Dietz Method. In other words, portfolio managers could improve their individual bonus by timing trades to achieve a positive Dietz, even if the net effect of the trades on the portfolio was negative. ¶6 Allstate hired the law firm Steptoe & Johnson LLP to conduct an internal investigation into the allegations of timed trades. Steptoe & Johnson retained an IT consultant to review internal e-mails in the Investment Department and retained an economic consulting firm to review trades executed in the Equity Division between 2003 and 2008. The law firm also interviewed employees, including plaintiffs, regarding their understanding of the Dietz Method, their trading practices, and Allstate’s method for calculating bonuses. ¶7 On October 6, 2009, Greffin informed Rivera that Allstate was shutting down the Equity Division, outsourcing the division’s responsibilities, and terminating all the division’s employees. Rivera was not permitted to attend the meeting where Greffin informed the division’s employees of the changes, and he was instead escorted out the building by a human resources representative. Allstate instructed Equity Division employees to attend exit interviews conducted by lawyers for Allstate, Steptoe & Johnson, and other outside law firms at locations away from Allstate’s campus. Employees of the Equity Division were told that they could use their company phones and e-mail accounts to secure new employment, and they could take advantage of Allstate’s offboarding and job placement resources through the end of December 2009. Around October 7, 2009, Rivera returned to Allstate’s campus to retrieve his personal belongings and spoke briefly with Kensinger and Meacock. Subsequently, Rivera, Kensinger, and Meacock were informed that they were being terminated for cause for violating Allstate’s code of ethics. Unlike their coworkers, they would not be paid any severance and would not be permitted to use Allstate’s offboarding or job placement services. Their phones and e-mail accounts were immediately taken offline. ¶8 On February 25, 2010, Allstate filed its annual Form 10-K with the Securities and Exchange Commission, disclosing that it conducted an internal investigation into alleged trading improprieties and that it had paid $91 million into its pension plans to cover any potential adverse impact. The Form 10-K stated, in relevant part: “In 2009, we became aware of allegations that some employees responsible for trading equity securities in certain portfolios of two [Allstate] defined benefit pension plans and certain portfolios of [Allstate] and an [Allstate] subsidiary may have timed the execution of certain trades in order to enhance their individual performance under incentive compensation plans, without regard to whether such timing adversely impacted the actual investment performance of the portfolios. We retained outside counsel, who in turn engaged an independent economic consulting firm to conduct a review and assist us in understanding the facts surrounding, and the potential implications of, the alleged timing of these trades for the period from June 2003 to May 2009. The consulting firm reported that it was unable to determine from our records the precise amounts by which portfolio performance might have been adversely impacted during that period. Accordingly, the economic consultant applied economic modeling techniques and assumptions reasonably designed to estimate the potential adverse impact on the pension plans and the company

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accounts, taking into account, among other things, the distinctions between the pension plans and the company portfolios. Based on their work, the economic consultants estimated that the performance of the pension plans’ portfolios could have been adversely impacted by approximately $91 million (including interest) and that the performance of the company portfolios could have been adversely impacted by approximately $116 million (including interest) in the aggregate over the six-year period under review. We believe that our financial statements and those for the pension plans properly reflected the portfolios’ actual investment performance results during the entire period that was reviewed. In December 2009, based on the economic consultant’s modeled estimates, we paid an aggregate of $91 million into the two defined benefit pension plans. These payments had no material impact on our reported earnings or shareholders’ equity, but reduced our assets, operating cash flows, and unfunded pension liability to the plans. *** At all times during this period, the plans were adequately funded pursuant to applicable regulatory and actuarial requirements. As a result of these additional funds in the plans, our future contributions to the plans, based on actuarial analysis, may be reduced. Using the economic consultant’s calculation of the potential adverse impact on the portfolios, we currently estimate that the additional compensation paid to all the employees working in the affected group was approximately $1.2 million over the six-year period as a result of these activities. In late 2009, we retained an independent investment firm to conduct portfolio management and trading activity for the specific portfolios impacted by these activities.” ¶9 Also on February 25, 2010, Greffin sent a memo to Investment Department employees (Greffin memo). The Greffin memo stated: “Allstate released its annual financial report on Form 10-K today. Within that filing, we disclosed details around allegations regarding trading practices within our equity portfolios that came to light in the past year. We took this matter very seriously and launched an investigation as soon as we became aware of the allegations. Outside counsel was retained to assist us in understanding the facts surrounding, and the potential implications of, these activities. As part of their analysis, an independent economic consulting firm was retained to estimate the potential adverse impact to the performance of our portfolios. The consultant determined that the performance on some of our portfolios, as well as our two pension plan portfolios, could have been adversely impacted by the activities. As a result, Allstate made a contribution to the pension plans during the 4th quarter which is disclosed in the 10-K. We believe that our financial statements and those of the pension plans properly reflected the portfolios’ actual investment performance and the pension plans were adequately funded during this entire period. This matter did not affect the plans’ ability to continue to provide benefits to plan participants. Situations like this can be unsettling and can reflect poorly on our organization. However, I believe organizations are also defined by how they respond to events like this. We were transparent in reporting this matter to the U.S. Department of Labor and

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the S.E.C., and disclosed it to our investors. We’re taking steps to improve our governance, compliance practices and training. We remain committed to the highest levels of ethics and integrity in the stewardship of Allstate’s assets.” ¶ 10 Plaintiffs further alleged that Allstate’s communications with the Securities and Exchange Commission and the Department of Labor “significantly undercut, if not outright refuted, the statements made by Greffin and the [Form] 10-K.” Steptoe & Johnson sent a memo to the Department of Labor that outlined the methodology of its investigation and acknowledged that the estimated potential economic damage of $91 million to Allstate’s pension plans “overstate[d] any actual economic disadvantage suffered by the plans” and identified several reasons why. According to plaintiffs, Allstate’s analyses showed that any Dietz-motivated trading would have had a positive effect of $37 million on the pension plans. The assumptions used in the investigation’s analyses were “unsupportable, if not outlandish.” Furthermore, Allstate never made public that the $1.2 million in allegedly ill-gotten bonuses were distributed among 25 employees and the effect on the bonuses could have—based on the assumptions made in the economic impact analysis—been $0. Allstate limited its investigation to the Equity Division without looking at other divisions responsible for investing substantially more money, even though there was evidence that managers in other divisions explicitly directed their teams to time trades.

¶ 11 A. Federal Litigation ¶ 12 Plaintiffs filed a complaint in federal district court and, relevant here, asserted defamation per se and defamation per quod claims based on Allstate’s statements in the Form 10-K and Greffin memo, and contended that Allstate violated section 1681a(y)(2) of Title 15 of the United States Code, commonly referred to as the Fair Credit Reporting Act (FCRA) (15 U.S.C. § 1681a(y)(2) (2012)) by failing to provide them with a summary of Steptoe & Johnson’s findings after plaintiffs were fired. The parties engaged in lengthy discovery. The district court entered summary judgment in favor of Allstate on plaintiffs’ defamation per se claim, and the case proceeded to a jury trial on plaintiffs’ defamation per quod and FCRA claims. The jury returned a verdict in favor of plaintiffs and, all told, awarded plaintiffs $17 million in compensatory damages on the defamation claim, $10 million in punitive damages on the defamation claim, and $4000 in statutory damages for violating FCRA. The district court tacked on an additional $12,000 in punitive damages for the FCRA violation and awarded plaintiffs’ counsel over $350,000 in statutory attorney fees. ¶ 13 Allstate appealed. The Seventh Circuit Court of Appeals addressed the merits of plaintiffs’ defamation per quod claim and found that plaintiffs had failed to present any evidence of special damages. The Seventh Circuit vacated the jury’s verdict and damages awards on the defamation per quod claim and remanded to the district court with instructions to enter judgment in favor of Allstate. Rivera v. Allstate Insurance Co., 907 F.3d 1031, 1039-41 (7th Cir. 2018) (Rivera I). Furthermore, the court of appeals found that plaintiffs lacked standing to pursue their FCRA claim under Spokeo, Inc. v. Robins, 578 U.S. 330, 136 S. Ct. 1540 (2016), because plaintiffs only alleged a mere procedural injury that did not result in a concrete injury- in-fact. The court of appeals vacated the jury’s verdict and damages awards related to the FCRA claim and remanded with instructions for the district court to dismiss the FCRA claim. Rivera I, 907 F.3d at 1041-46.

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¶ 14 Plaintiffs sought rehearing, arguing that the district court had no supplemental jurisdiction to adjudicate their state law defamation claim if plaintiffs lacked standing to pursue their FCRA claim—their only federal claim—in the district court. The court of appeals withdrew its opinion in Rivera I and issued a modified opinion on denial of rehearing. Rivera v. Allstate Insurance Co., 913 F.3d 603 (7th Cir. 2018) (Rivera II). The court of appeals first addressed plaintiffs’ FCRA claim. A full examination of the statutory provision at issue is available in the Seventh Circuit’s opinion, but for our purposes, the court observed: “The FCRA claim in this case rests on the premise that Allstate was required under subsection (y)(2) to provide a summary of Steptoe’s investigation after firing the plaintiffs but failed to do so. It’s not at all clear, though, that the Steptoe investigation would otherwise qualify as a ‘consumer report’ but for the subsection (d)(2)(D) exclusion. And if the Steptoe investigation isn’t a ‘consumer report’ in the first place, then subsection (y)(2) does not come into play and the FCRA simply does not apply.” Id. at 614. The court of appeals noted that Steptoe & Johnson’s investigation would qualify as a “consumer report” only if Steptoe & Johnson was a consumer reporting agency, and the record was devoid of evidence that Steptoe & Johnson satisfied the statutory definition of a consumer reporting agency, “probably because Allstate never disputed these points, choosing instead to contest the FCRA claim on other grounds.” Id. at 614-15. Turning to the issue of standing, the court of appeals examined its own FCRA case law discussing the difference between a “notice claim,” which is based solely on the failure of a party to give a required notice, and “adverse- action claim,” which is some employer action taken in connection with a procedural violation. Id. at 616. The Seventh Circuit found that plaintiffs’ FCRA claim was akin to a notice claim and, even if a notice were required, a post-decision, brief oral summary of the investigation would suffice. Id. at 617. Plaintiffs did not allege an actual injury to support their FCRA claim; Allstate’s alleged failure to provide a summary of Steptoe & Johnson’s post-investigation findings was a “mere procedural violation unaccompanied by any concrete injury.” Id. The court of appeals completed its standing analysis by stating: “The plaintiffs insist that Allstate’s failure to comply with subsection (y)(2) left them ‘hampered in defending themselves before Allstate or potential employers.’ But subsection (y)(2) doesn’t protect a substantive ‘defense’ interest. At most it serves a minimal notice function. And the plaintiffs have not explained how the modest, post hoc summary required by subsection (y)—again, a brief oral summary suffices—could possibly have informed a ‘defense’ against Allstate after the fact. We note, moreover, that they failed to identify any prospective employer that refused to hire them based on the 10-K or the Greffin memo, so they have not established that they suffered a concrete informational injury. Nor have they identified any other tangible or intangible harm arising from Allstate’s failure to comply.” Id. ¶ 15 Since plaintiffs lacked standing to pursue their FCRA claim, the district court was instructed to dismiss the FCRA claim for lack of standing. Id. With no original federal jurisdiction over any other claim, the district court could not exercise supplemental jurisdiction over plaintiffs’ defamation claim. Id. at 617-18. The court of appeals vacated the jury’s verdict and the damages awards and instructed the district court to dismiss the entire action, including

200740 the defamation claim, for lack of federal subject-matter jurisdiction. Id. at 618. 1

¶ 16 B. The Proceedings Below ¶ 17 Plaintiffs then filed the three-count complaint at issue in this appeal. The allegations in each count are substantially similar. Count I alleged that the statements in Allstate’s Form 10- K and in Greffin’s memo (1) falsely accused plaintiffs of improperly timing trades to increase their individual bonuses, (2) falsely claimed that Allstate’s pension plans suffered $207 million damages because of plaintiffs’ trades, and (3) falsely stated that Allstate estimated the unearned bonuses paid to employees of the Equity Division were $1.2 million. Plaintiffs alleged that Allstate’s statements (1) “impute the commission of a criminal offense to [p]laintiffs,” (2) “impute an inability to perform or want of integrity in the discharge of the duties of [p]laintiffs’ employment,” and (3) “prejudice [p]laintiffs, or impute a lack of ability, in their trade, profession, and business.” Furthermore, plaintiffs alleged that Allstate’s statements “have caused [p]laintiffs damages in their business and profession and made it impossible for them to achieve comparable employment in a highly competitive field” and Allstate’s “statements and actions *** surrounding the investigation, termination and outsourcing of the ‘effected portfolios’ sufficiently describe Plaintiffs as the parties accused of wrongdoing by Allstate to those in their community.” ¶ 18 Count II asserted a claim for defamation per quod, and count III asserted a claim for false light. The allegations in count II are identical to the allegations in count I in all material respects, with only minor changes (which appear to be inadvertent). The same goes for the false light claim in count III, which further alleged that Allstate’s statements were “highly offensive or embarrassing to a reasonable person of ordinary sensibilities in [p]laintiffs’ community” and that Allstate made the statements “with reckless disregard as to their offensiveness and in fact have refuted the statements in [Allstate’s] communications with the U[nited] S[tates] government.” ¶ 19 Allstate filed a combined motion to dismiss pursuant to section 2-619.1 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619.1 (West 2018)). Allstate argued that counts II and III should be dismissed pursuant to section 2-619 of the Code (id. § 2-619) based on collateral estoppel because the issue of whether plaintiffs suffered any special damages to support a defamation per quod claim had been rejected by the court of appeals as part of its standing analysis. Allstate pounced on the Seventh Circuit’s statement that “We note, moreover, that [plaintiffs] failed to identify any prospective employer that refused to hire them based on the 10-K or the Greffin memo, so they have not established that they suffered a concrete informational injury.” (Emphasis added.) See Rivera II, 913 F.3d at 617. ¶ 20 Allstate also moved to dismiss all of plaintiffs’ claims under section 2-615 of the Code (735 ILCS 5/2-615 (West 2018)). Allstate asserted that the defamation per se claim in count I should be dismissed because neither the Form 10-K nor the Greffin memo mentioned plaintiffs by name and at most referred to a group of people to which plaintiffs belonged, the statements contained in those documents were of a general nature, and the statements were capable of an

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innocent construction. Allstate argued that the defamation per quod claim in count II should be dismissed because plaintiffs did not and could not “identif[y] any specific third party or employer who was aware of the alleged defamatory statements, let alone refused to hire them because of the alleged defamation.” Allstate pointed out that the parties had engaged in five years of discovery in the federal litigation, and “[i]f supporting facts existed, [p]laintiffs would have discovered them by now and included them in the instant [c]omplaint.” Finally, Allstate argued that plaintiffs’ false light claim in count III failed because nothing in the allegedly defamatory statements specifically identified plaintiffs. ¶ 21 After briefing, the circuit court entered a written order dismissing count I pursuant to section 2-615 and dismissing counts II and III pursuant to section 2-619. With respect to count I, the circuit court found that the allegedly defamatory statements did not name the plaintiffs in any manner and, therefore, plaintiffs could not plead a claim for defamation per se. With respect to counts II and III, the circuit court found that collateral estoppel barred plaintiffs from pursuing their defamation per quod and false light claims because the Seventh Circuit found that plaintiffs had not established a hampered defense or any other type of injury and plaintiffs needed to establish special damages to plead defamation per quod and false light claims. The circuit court’s order reflects that its dismissal of all the claims was with prejudice. ¶ 22 Plaintiffs filed a timely notice of appeal.

¶ 23 II. ANALYSIS ¶ 24 On appeal, plaintiffs seek reversal of the circuit court’s judgment with respect to each count of their complaint. They contend that count I of their complaint stated a claim for defamation per se. They also contend that counts II and III should not have been dismissed on collateral estoppel grounds because the federal court of appeals did not decide any aspect of plaintiffs’ defamation claim. ¶ 25 The circuit court dismissed count I pursuant to section 2-615 of the Code and dismissed counts II and III pursuant to section 2-619. Our review of the circuit court’s judgment involves familiar principles. A section 2-615 motion tests the legal sufficiency of a claim. Green v. Rogers, 234 Ill. 2d 478, 491 (2009). When reviewing a section 2-615 motion, we must determine whether the allegations in the complaint, viewed in the light most favorable to plaintiff, sufficiently state a cause of action. Id. We accept the well-pleaded factual allegations as true, and a section 2-615 dismissal is only appropriate where it is clear “that no set of facts can be proved that would entitle the plaintiff to recovery.” Id. (citing Marshall v. Burger King Corp., 222 Ill. 2d 422, 429 (2006)). A section 2-619 motion admits the legal sufficiency of a claim but interposes some affirmative matter or defect that defeats the plaintiff’s claim. Solaia Technology, LLC v. Specialty Publishing Co., 221 Ill. 2d 558, 579 (2006). Our review of a dismissal under either section is de novo. Id. We also note that, in the circuit court, Allstate alternatively sought dismissal of counts II and III pursuant to section 2-615. While the circuit court did not rely on section 2-615 to dismiss those claims, we may affirm the circuit court’s judgment on any basis supported by the record, regardless of the circuit court’s specific reasoning. Chang Hyun Moon v. Kang Jun Liu, 2015 IL App (1st) 143606, ¶ 11. ¶ 26 To state a claim for defamation, the plaintiff must allege that the defendant made a false statement about the plaintiff, the defendant made an unprivileged publication of that statement to a third party, and plaintiff was damaged. Solaia, 221 Ill. 2d at 579. Allegedly defamatory statements are actionable either per se or per quod. A statement is defamatory per se if “the

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statements that form the basis of the action *** falsely charge the plaintiff with misconduct or incapacity in words so obviously and naturally harmful that they are actionable without proof of special damages.” Costello v. Capital Cities Communications, Inc., 125 Ill. 2d 402, 414 (1988). Our supreme court recognizes five types of statements that are defamatory per se: “(1) words that impute a person has committed a crime; (2) words that impute a person is infected with a loathsome communicable disease; (3) words that impute a person is unable to perform or lacks integrity in performing her or his employment duties; (4) words that impute a person lacks ability or otherwise prejudices that person in her or his profession; and (5) words that impute a person has engaged in adultery or fornication.” Green, 234 Ill. 2d at 491-92. When a statement falls within one of these categories, a plaintiff does not need to allege or prove actual damages to the plaintiff’s reputation because the “actionable per se categories are thought to be so obviously and materially harmful to the plaintiff that injury to [the plaintiff’s] reputation may be presumed.” Bryson v. News America Publications, Inc., 174 Ill. 2d 77, 87 (1996). ¶ 27 When an allegedly defamatory statement does not fall within a recognized defamatory per se category, a plaintiff may pursue a claim for defamation per quod by pleading facts to show that extrinsic circumstances demonstrate an injurious meaning behind the statement. Id. at 87-88. “If a defamatory statement does not fall within one of the limited categories of statements that are actionable per se, the plaintiff must plead and prove that she sustained actual damage of a pecuniary nature (‘special damages’) to recover.” Id. ¶ 28 Finally, to state a claim for false light, the plaintiff must allege “(1) he was placed in a false light before the public as a result of the defendant’s actions; (2) the false light would be highly offensive to a reasonable person; and (3) the defendant acted with actual malice.” Chang Hyun Moon, 2015 IL App (1st) 143606, ¶ 17 (citing Kurczaba v. Pollock, 318 Ill. App. 3d 686, 696 (2000)). “Additionally, if a false light invasion of privacy claim is based on statements that are not defamatory per se, a plaintiff must allege that he suffered special damages.” Id. (citing Schaffer v. Zekman, 196 Ill. App. 3d 727, 736 (1990)).

¶ 29 A. Plaintiffs’ Defamation Per Se Claim ¶ 30 We first address plaintiffs’ argument that the circuit court erred by dismissing their defamation per se claim in count I of their complaint. The circuit court found that the allegedly defamatory statements in the Form 10-K and the Greffin memo did not name any plaintiffs in any manner, and therefore plaintiffs could not plead a claim for defamation per se. On appeal, plaintiffs argue that statements may be defamatory per se even if they do not specifically name plaintiffs. We find no error in the circuit court’s judgment dismissing count I. ¶ 31 At the outset, we note that Allstate does not dispute that the statements in the Form 10-K and Greffin memo fall within the recognized categories of statements that are actionable per se. Instead, Allstate makes two related arguments as to why plaintiffs failed to and cannot state a defamation per se claim. First, Allstate argues that the statements themselves do not identify any plaintiff by name, and therefore the statements on their face are not injurious to any plaintiff. Second, Allstate contends the statements are capable of an innocent construction because the allegedly defamatory statements, made months after plaintiffs were fired from Allstate, could reasonably be understood to be about other former employees in the Equity

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Division and the statements can be reasonably construed in a way that does not assert illegal or unethical behavior by former employees. ¶ 32 Both of Allstate’s arguments are rooted in the innocent construction rule, which our supreme court clarified in Chapski v. Copley Press, 92 Ill. 2d 344 (1982). Chapski involved defamation claims brought by an attorney against various media outlets based on articles and editorials depicting litigation and disciplinary proceedings in which the plaintiff was involved. Id. at 345-47. The circuit court dismissed the plaintiff’s claims, the appellate court affirmed, and both courts applied the “innocent construction” rule to conclude “that the language itself could be innocently construed or that the articles as a whole could be construed as referring to the legal system rather than the plaintiff.” Id. at 347. The supreme court reversed, finding that the lower courts had not applied the proper interpretation of the innocent construction rule. The court examined the confusing, conflicting, and sometimes strained way the rule had been applied (id. at 347-51), and clarified that “a written or oral statement is to be considered in context, with the words and the implications therefrom given their natural and obvious meaning; if, as so construed, the statement may reasonably be innocently interpreted or reasonably be interpreted as referring to someone other than the plaintiff it cannot be actionable per se. This preliminary determination is properly a question of law to be resolved by the court in the first instance; whether the publication was in fact understood to be defamatory or to refer to the plaintiff is a question for the jury should the initial determination be resolved in favor of the plaintiff.” Id. at 352. ¶ 33 The notion that a statement is not actionable per se if the statement can reasonably be interpreted as referring to someone other than the plaintiff embodies a rule that this court has applied when an allegedly defamatory statement does not name the plaintiff. See, e.g., Barry Harlem Corp. v. Kraff, 273 Ill. App. 3d 388, 390-91 (1995) (“A statement which does not mention the plaintiff by name cannot be injurious to him or her on its face. Extrinsic facts and circumstances must be pled to establish that the publication is defamatory to him.”); Homerin v. Mid-Illinois Newspapers, 245 Ill. App. 3d 402, 405 (1993) (affirming dismissal of defamation per se claim where a published political cartoon “does not identify plaintiff by name. Even if his likeness could be reasonably interpreted as being depicted in the cartoon, his complaint is fatally flawed for failing to allege that the readers of the publication reasonably understood the cartoon to refer to him.”); Schaffer, 196 Ill. App. 3d at 732 (rejecting a defamation per se claim where the allegedly defamatory statement “does not mention [the plaintiff] by name, cannot be injurious to him on its face [citation], and is not defamatory per se as to him [citation]. Extrinsic facts and circumstances must be pleaded to establish that the publication was defamatory as to him (colloquium),[2] and special damages must be alleged with particularity.”); Moore v. Streit, 181 Ill. App. 3d 587, 597-98 (1989) (“One of the