BOSTON -- A U.S. District Court judge has narrowed the scope of a lawsuit brought against Putnam Investments by a former staff attorney.
Edward A.H. Siedle filed suit last year, seeking $40 million in damages. He alleged defamation, breach of contract, interference with contractual and business relations and conversion of Mr. Siedle's property for its own use.
Putnam countersued, alleging abuse of process, breach of fiduciary duty, breach of contract, interference with business relations, defamation and fraudulent inducement.
Judge Joseph Tauro of the U.S. District Court, District of Massachusetts, denied portions of Putnam Investments' motion for dismissal but upheld others.
Mr. Tauro said Mr. Siedle could sue Putnam for saying the firm fired him, but he dismissed a part of Mr. Siedle's defamation charge and another alleging breach of contract.
The trial can proceed as early as May, as a result of the dismissals.
Mr. Siedle sued the money manager after a Putnam official wrote a letter to the editor that appeared in the May 26, 1997, issue of Pensions & Investments. Mitchell Schultz, Putnam's director of compensation, wrote that Mr. Siedle was "fired" nine years ago by the firm, and that he was trying to get more money from a mistake in calculating his 401(k) benefit than was owed him.
The letter to the editor followed a May 12 article in P&I, in which Mr. Siedle said Putnam had shortchanged him in calculating his 401(k) benefit.
In his March 25 ruling, Mr. Tauro said Putnam Investments and Mr. Siedle agreed to tell all future employers that Mr. Siedle left Putnam because "it was mutually agreed that it was in his best interest to."
Mr. Tauro, as a result, denied Putnam's motion for dismissal.
But Mr. Tauro dismissed Mr. Siedle's claim that he was defamed when Putnam said his apparent motive was to get more money.
"Under Massachusetts law, it is well-settled that statements of opinion cannot be defamatory, and that the determination of whether a statement is one of 'fact' or 'opinion' is a question of law which may be resolved by a motion to dismiss," Mr. Tauro wrote in his opinion.
Mr. Tauro also dismissed Mr. Siedle's allegation of breach of contract saying "where a party alleging breach of contract first breached the same contract, his claim must fail."
As part of Mr. Siedle's separation agreement with Putnam, both parties agreed to "refrain from making any adverse public or private comments about the other."
"Plaintiff admits, however, that he did not keep this promise," wrote Mr. Tauro, citing the P&I story submitted as an exhibit by Mr. Siedle.
Mr. Tauro allowed all other complaints to proceed to trial.
Putnam also has countersued Mr. Siedle, alleging he violated the attorney-client relationship, and that he tried to extort money from the company.
Putnam's claims centers on Mr. Siedle's release of internal Putnam documents to the Wall Street Journal about personal trading by senior Putnam investment professionals in the late 1980s.
The mutual fund giant successfully appealed to have the personal trading documents sealed from public view.
In a related matter, Putnam acknowledged to the Department of Labor that it had made more than one error in calculating the 401(k) benefits of employees.
Mr. Schultz, in his letter to the editor, said the mistake calculating Mr. Siedle's benefit was "the only one." The firm acknowledged three others.