Cases by Issue - Defamation

Tory v. Cochran - Oral Argument

Fri, 09 Jan 2009 14:49:02 +0000

Case:

Tory v. Cochran

Media File:

03-1488_20050322-argument.mp3

Related Transcript:

transcript.xml

Transcript:

Argument of Erwin Chemerinsky

Chief Justice Rehnquist: We'll hear argument now in No. 03-1488, Ulysses Tory v. Johnnie L. Cochran.

Mr. Chemerinsky.

Mr. Chemerinsky: Good morning.

Mr. Chief Justice, and may it please the Court:

The injunction in this case violates the most basic principles of the First Amendment.

It's a prior restraint.

It's a content-based restriction on speech.

It's vastly overbroad.

It even restricts the speech of those who are not a party to the lawsuit, such as Petitioner Ruth Craft.

The injunction in this case is inconsistent with this country's unique and profound commitment that speech by public officials and public figures be open, robust, and uninhibited.

One way in which the injunction is clearly unconstitutional is in restricting the speech of those who are not a party to the lawsuit.

For example, Ruth Craft is expressly restrained from ever speaking again about Johnnie Cochran even though she was never named as a party to the lawsuit.

And, in fact, Cochran's attorney admitted at the beginning of trial, she wasn't a part of the lawsuit.

Justice Souter: How about you?

You're in trouble too, aren't you?

[Laughter]

Mr. Chemerinsky: Yes, I am, Your Honor.

This injunction is so broad that if I talk about Johnnie Cochran or this case on the sidewalk in front of this Court or pass out copies of the brief or speak to any reporter, I am violating the terms of the injunction and I could be held in contempt of court.

Justice Ginsburg: Mr. Chemerinsky, you speak about the injunction, and the injunction has three parts.

I thought that you were not challenging... at least the question presented doesn't suggest you're challenging... the first one that concerns distance, the 300 yard from Cochran or his place of business, and the third one, which is an anti-harassment provision.

Do I understand correctly that it is only the second one that you're challenging?

Mr. Chemerinsky: No, Your Honor.

The question presented is that the injunction is unconstitutional.

One of the reasons why the injunction is unconstitutional is that it's based on speech that's protected by the First Amendment.

All of the statements that were uttered by Mr. Tory are opinion protected by the First Amendment.

There is not the requisite actual malice.

And so it's our position that the injunction itself is unconstitutional.

Justice Ginsburg: But your question is preventing all future speech about an admitted public figure, and the first and third provisions of this injunction do not prohibit all future speech.

Mr. Chemerinsky: Yes, Your Honor, that's correct.

It's our position, though, that the injunction is based on speech that's protected by the First Amendment, and we believe that the question presented is that the injunction is impermissible in its restriction of speech.

Justice O'Connor: But that isn't what you've said in the question presented.

Why shouldn't we be limited to answering the question presented?

And that would leave the other parts there.

Mr. Chemerinsky: Well, of course, you're limited to the question presented.

Our position, though, is that the injunction in its restriction of speech is unconstitutional.

And one of the reasons why the injunction is unconstitutional is that all of the speech that occurred in this case is speech that's protected by the First Amendment.

Justice O'Connor: Yes, but you understand Justice Ginsburg's question surely, and I would imagine that even if you prevail, nothing we would order would affect the first and third parts.

Mr. Chemerinsky: Well, Your Honor, certainly we believe that the injunction is most clearly unconstitutional in its overbreadth.

We believe also and separately the injunction is unconstitutional because injunctions are not a permissible remedy in a defamation case, especially concerning public officials and public figures.

But it's also our position that the injunction is based on speech that's protected by the First Amendment, and thus, the injunction violates the First Amendment.

Justice Scalia: Well, but that doesn't--

Justice O'Connor: Mr. Chemerinsky, is it true that your client intends to go on defaming Mr. Cochran?

Mr. Chemerinsky: No, Your Honor.

We don't believe our client has ever defamed Mr. Cochran.

We believe that all of his speech is just opinion.

Justice O'Connor: Does he intend to continue making the same comments that he made before?

Mr. Chemerinsky: His exact words were that perhaps he would continue to express his view that Mr. Cochran owes him money.

Justice O'Connor: All right.

Now, let me ask you this.

Under your theory, if... if the defendant is judgment-proof, does respondent have any remedy at all if the statements are defamatory?

Mr. Chemerinsky: Yes, Your Honor.

Justice O'Connor: What is it?

Mr. Chemerinsky: There is, of course, a remedy.

Since we're dealing here with a public figure, there is the remedy of expressing views which this Court has said in Gertz v. Welch is available to a public figure.

There is a damage judgment that's available.

Certainly, Your Honor, there can't be a different rule--

Justice O'Connor: But if... if the defendant is judgment-proof, what good does that do?

Mr. Chemerinsky: --Your Honor, there is a damage judgment that forever would be available against the person.

And it cannot be, Your Honor, that those who are poor will have injunctions--

Justice Kennedy: Well... well, your... your answer should be to Justice O'Connor there is no effective legal remedy under your theory of the case.

Mr. Chemerinsky: --No, Your Honor, I would disagree with that.

Justice Kennedy: I mean, you... you say he has the remedy of... of counter-speech.

We're talking... that's really that doesn't answer the question.

The question is, is there anything he can get from the courts other than a damage remedy, and your answer I think is no.

Mr. Chemerinsky: That's correct, Your Honor.

From the courts, he can get a damage remedy but I don't accept that a damage remedy is inadequate just because a person may be poor.

The damage remedy will be that they'd be collected for the person who gets assets in the future.

Also, as I was saying to Justice O'Connor, it can't be--

Justice Kennedy: Well, it... it seems to me that that really avoids the problem... the problem.

So suppose we disagree with you about that.

Then it's true that there is no... there is no legal remedy that he can get.

Mr. Chemerinsky: --But then, Justice Kennedy, it can't be the rule that poor people have their speech enjoined, but those with assets can continue to speak in the future.

Justice Scalia: --Well, it also can't be the rule that poor people can defame ad libitum and... and people who have money cannot.

I mean, that's... that's not a fair rule either.

Mr. Chemerinsky: No, Your Honor, but that's why there would be, of course, the ability of a court to issue a damage judgment.

There are many instances in which damage judgments can't be collected.

Justice Scalia: It's worthless against a... against a person who has no assets.

Mr. Chemerinsky: But that's true everywhere in the legal system, Your Honor.

And I would also argue here that none of Mr. Tory's statements were defamatory.

I would point--

Justice Ginsburg: That's another one that is in your brief.

You say that these were statements of opinion not fact.

But that surely is not presented in your question.

You... you don't... there were findings made that these statements were defamatory, and your question presented does not seem to me to encompass at all the question whether these statements were defamatory.

Mr. Chemerinsky: --I would disagree, Your Honor.

The question presented is whether this injunction, the forever stops speech, violates the First Amendment.

One reason why--

Justice Scalia: Not... not this injunction.

The question presented is whether a permanent injunction as a remedy in a defamation... in a defamation action, preventing all future speech about an admitted public figure, violates the First Amendment.

There's no suggestion in that wording that you claim that in this particular case there was no defamation.

I... I just don't think it's fairly included within the question.

Mr. Chemerinsky: --Your Honor, what I am saying is that the question presented does ask whether this injunction, which permanently restricts speech--

Justice Scalia: No, it doesn't.

It says whether a permanent injunction as a remedy in a defamation action preventing all future speech about an admitted public figure violates the First Amendment.

Mr. Chemerinsky: --We would argue--

Justice Scalia: There's nothing about this particular injunction which is based upon speech that is not defamation.

There's nothing in there about that.

Mr. Chemerinsky: --Your Honor, our position is that question asks whether an injunction violates the First Amendment, and certainly it is about this case.

And our position is that all of the speech that was expressed in this case is opinion.

And it's important--

Justice Breyer: All right.

Mr. Chemerinsky: Now, if that's so--

Justice Kennedy: Well... well, there really... there are findings against you, and to say that a lawyer is a crook, a liar, and a thief and you're trying to tell us that that's not defamatory, I mean, I... I think we should just proceed on... on some other basis for this argument.

We have other questions to discuss.

Mr. Chemerinsky: --Sure.

But, Your Honor, I want to just respond to that.

The exact statement there was... and I'll quote it for you and it is on page 54 of the joint appendix.

Johnnie is a crook, a liar, and a thief.

Can a lawyer go to heaven?

Luke 11:46.

Your Honor, this Court has said, for example, in Greenbelt Cooperative that charging somebody with blackmail is expressing opinion.

In Letter Carriers v. Austin this Court said calling somebody a traitor is opinion.

Justice Breyer: --All right.

That... that... what you've quoted many... much of this I wouldn't repeat in polite company.

You've reported one of the most mild, and in fact there are two findings.

One, this is not just defamation.

It was an action for defamation, as well as a tort of invasion of privacy.

And there is a finding, first, that this was done intentionally to create a negatively charged and ominous environment, and this is not a matter of speech-related issues.

It is simply the use of false and defamatory and privacy-invading communications, or worse, or attempt to improperly coerce payment of money in tribute for... for desisting from that type of activity.

All right.

Now, those are the findings against you.

So suppose I agreed with you hypothetically that that, with all these findings, is nonetheless protected by the First Amendment.

All right?

Now, suppose, in other words, you convince me of that.

Now, I want to know how to write my opinion on that assumption to protect what I was worried about yesterday, that a woman who has a boyfriend or a husband is being continuously harassed in... with methods similar to this one.

It's easy to transpose those two cases which are both on my mind.

And I want to know if in your opinion that these restraining orders, which try to prevent this kind of thing, among others, are unconstitutional, if there's a way of distinguishing them, if you could possibly win on what theory.

And what I'm trying to get you to do is to say is it absolute.

Are there limits?

If so, what?

Mr. Chemerinsky: I would suggest three different ways in which you could write the opinion that distinguished the case.

The first is that this injunction is vastly overbroad, that even if there can be an injunction to say that Ulysses Tory and Ruth Craft can never again say anything about Johnnie Cochran in any public forum, that I can never speak about Johnnie Cochran would violate the First Amendment.

A second way of distinguishing is that defamation is different, that when the First Amendment was adopted, the clear history was that above all it was to prevent prior restraints, and that injunctions were not permitted in defamation actions.

That's quite different than a harassment action.

And third, as I've argued, what makes this different is the basis for this injunction is speech protected by the First Amendment.

With regard to the findings that you referred to, you mentioned two.

The first is invasion of privacy.

Your Honor, the only privacy claim in this case was false light invasion of privacy.

California law is clear.

When there is a defamation action and a false light claim, the false light claim is automatically dismissed as duplicative when it's based on the same fact.

The second basis you pointed--

Chief Justice Rehnquist: Mr. Chemerinsky, this case comes up to us from a California appellate court.

Surely they know California law better than we do.

Mr. Chemerinsky: --Yes, Your Honor, but they did not base their decision on the privacy claim because California law is clear that when it's false light invasion of privacy brought together with a defamation action, the false light claim is dismissed.

That's a California case, Couch v. San Jose Unified School District.

Chief Justice Rehnquist: Well, we're not going to debate among ourselves over what California law is.

Mr. Chemerinsky: No, Your Honor.

All I'm saying is it's important to be clear about what the privacy claim is.

As I was saying to Justice Breyer, there may be privacy claims that give rise to injunctions.

Harassment claims may give rise to injunctions, but not the privacy claim in this case which was just about false light, which even the California Court of Appeal admitted is treated together with defamation.

Justice Kennedy: Suppose this picketing had taken place in front of his house, every day in front of his house.

Mr. Chemerinsky: Your Honor, under Frisby v. Schultz, that would be a different situation.

Under Frisby v. Schultz, this Court said--

Justice Kennedy: All right.

Well... well, then this... this argument you're making, oh, never, never, the sky is falling and so forth, I... I think we have to be more precise here.

I think if it were in front of his house, it would be different.

If he had alleged $10 worth of monetary damages, it would be disparaging the quality of his services, which would be a trade libel, and the Restatement at least... I don't know California law... says that you... would you agree that you can enjoin a trade libel--

Mr. Chemerinsky: --Well, Your Honor--

Justice Kennedy: --that disparages quality of goods to the serious injury of a... of a business?

Mr. Chemerinsky: --Actually, Your Honor, the vast majority of cases have held that you cannot have an injunction for product defamation.

And so I think while that's a different and more difficult question, most courts have said no even there.

And Your Honor, I'm not saying there can never be injunctions.

But I am saying that this Court has said there's a very strong and heavy presumption against injunctions, and that never, not once in the 214-year history of the First Amendment, has this Court ever upheld an injunction as a remedy in a defamation action.

And, Your Honor--

Justice Ginsburg: Well, if... if this under... the underlying claim seems to be that Mr. Cochran is essentially being blackmailed; that is, this... this... your client wants tribute to go away.

And you say, yes, but it's defamation.

It's a defamation action.

Therefore, damages is the only remedy.

Is there nothing that one can do to stop another from engaging in blackmail?

Mr. Chemerinsky: --Yes, Your Honor, there is.

If this was blackmail or extortion, Johnnie Cochran could have filed a criminal complaint with the police.

He could have civilly sued for blackmail or extortion.

But, Your Honor, this wasn't extortion.

Justice Kennedy: What kind of a jurisprudence is it that a person can go to jail but that he's freed from an injunction?

I mean, why... why do we do this?

Mr. Chemerinsky: Well, Your Honor, that's because this Court has said that injunctions of speech are even worse than criminal penalties.

I would refer this Court--

Justice Kennedy: But... but why... is that true in every case?

I mean, take the timid person who's not sure... I know the law doesn't protect the timid person in the first area, but let's... let's assume the timid person is not sure.

So he wants... he wants to get an equitable ruling first, declaratory judgment.

He... and he would take an injunction.

That's certainly much easier than going to jail.

Mr. Chemerinsky: --But, Your Honor, I'd remind you of this Court's language in the Vance v. Universal Amusement where the Court said presumption against prior restraints is heavier and the degree of protection broader than against limits on criminal penalties.

Justice Kennedy: I know, but I'm asking you why that... why that should be.

If... if you asked a person not familiar with our jurisprudence, which is worse, having an injunction that you can argue about or going to jail, I... I think they would say that going to jail is worse.

Mr. Chemerinsky: But, Your Honor, in terms of the First Amendment, there are reasons why an injunction has always been regarded as worse.

Justice Breyer: Always?

Do you want to apply that to an harassment action too against a woman who has the restraining order?

No restraining orders in divorce cases in case they're against speech because even if violence is threatened, even if... et cetera.

I mean, how... how far do you want to push that principle?

Mr. Chemerinsky: Your Honor, I don't want to push the principle at all to harassment.

I believe that injunctions are completely appropriate in harassment actions.

I think it is quite important to note that the California harassment statute expressly excludes speech which is protected by the First Amendment as being a basis for harassment.

The history of the First Amendment is different.

To go back to Justice Kennedy's question, it's always been thought that an injunction strikes at the very heart of the First Amendment because, as Justice Scalia pointed out--

Justice Scalia: Why can't we say that speech that is... is being used for extortion is different, just as speech which is being used for harassment is different?

And just as you can get an injunction for the latter, you ought to be able to get an injunction for the former.

Not all speech, but only when speech is being used to... to extort money.

Mr. Chemerinsky: --Yes, Your Honor, there can be an injunction for extortion, but this was not extortion.

There was never the criminal complaint.

There was never the civil action.

And it didn't meet the requirements for extortion.

Your Honor, California law, Penal Code section 518, defines extortion as, quote, the obtaining of property from another with his consent induced by a wrongful use of force or fear.

There wasn't the wrongful use of force or fear.

Now, it may be that Ulysses Tory was speaking--

Justice Scalia: Here I think there was... why isn't there a use of fear when, you know, you're afraid of this person destroying your business by calling you a liar and a cheat?

Wasn't Mr. Cochran afraid of that... of that happening?

Mr. Chemerinsky: --Your Honor, this Court is required to do an independent review of the record under Bose v. Consumers Union.

There's no indication that Mr. Cochran suffered that fear from Mr. Tory being outside.

It's true that Mr. Tory may have believed that he was owed money by Johnnie Cochran and was also trying to encourage Mr. Cochran to pay.

But this Court has said in cases like NAACP v. Claiborne Hardware speech does not lose its protective character simply because it may embarrass others or coerce them into action.

Justice Ginsburg: Mr. Chemerinsky, the district... I mean, the trial court made certain findings and I'm looking at page 42 of the joint appendix.

The first is that these statements were actually made for the purpose of inducing Cochran to pay Tory amounts of money which Tory was not entitled.

That's one finding.

And then finding 24, despite repeated requests, Tory has refused to cease picketing unless he was paid money... a monetary settlement by Cochran.

And then 27 that says this is simply use of false and privacy-invading communications to coerce or attempt to improperly coerce payment of money in tribute for desisting from that type of activity.

And those sound like findings.

It's true that the label of extortion has been put on it, but it certainly does sound like the... that the purpose of the speech was to extract money not owed.

Mr. Chemerinsky: But, Your Honor, since this is a defamation action, not an extortion action, the rules under the First Amendment for defamation have to apply.

Under the rules of the First Amendment for defamation, injunctions are not available to public officials or public figures.

Justice Kennedy: Well, so this finding... the court shouldn't have made these findings?

It was irrelevant?

Mr. Chemerinsky: Well, Your Honor, I believe that the--

Justice Kennedy: Was there an objection to the testimony that established this?

Mr. Chemerinsky: --Yes, Your Honor.

Mr. Tory, who was appearing pro se in the trial court, from the very outset objected that he was being held liable for speech protected by the First Amendment.

Justice Souter: No, but it seems to me... and I think what bothers me is... is what bothers Justice Kennedy.

It seems to me that the argument you just made is an argument that given the pleadings in this case, the findings that Justice Ginsburg just quoted really were irrelevant findings, that they should not have gotten... that the court should not have gotten into extortion and so on and should not have provided a remedy for extortion, quite apart from the fact of whether it's an appropriate remedy, constitutional or otherwise.

And that, it seems to me, is... is something that we... we are not here to touch.

That's a question of California law.

What we are here to touch is, number one, whether the injunction is overbroad with respect to pure speech, and maybe we are here... that we have a question about the... the breadth of the case we took.

But maybe we are here to determine whether there can be an injunction against blackmail or harassing activities.

But I... I think we're not here to decide whether California could have gotten to the question of blackmail, harassment, and injunction for that.

Do you agree with that?

Mr. Chemerinsky: No, Your Honor.

I certainly agree with the first point.

One issue before this Court is whether this injunction is overbroad, and it clearly is in terms of the breadth of speech that's regulated and whose regulated.

But as to the second point that you make, this is a defamation action, and thus the issue before this Court, clearly presented in the question presented, is whether a permanent injunction can be issued in a defamation case remedy when the plaintiff is a public figure.

Justice Souter: Well, it can certainly... the... the issue is certainly before us as to whether such an injunction can be issued with respect to defamation pure and simple.

But the findings that Justice Ginsburg has... has read and part of the order in question here seems to go beyond pure defamation.

It goes to the kind of demonstrative activity which plausibly is found to have been in aid of extortion.

And that, it seems to me, is an entirely different question.

We may... I'm not saying we will, but we may agree with you that it's overbroad.

We may agree with you that as to pure speech, you can't enjoin it.

But that doesn't necessarily mean that every part of this injunction is wrong, and it seems to me it is irrelevant as to whether the... the State of... the courts of California should have reached extortion.

Mr. Chemerinsky: I would disagree in this way, Your Honor.

Bose v. Consumers Union makes clear that when it is a defamation action, this Court and every appellate court has to do an independent review of the record.

Justice Souter: With respect to the defamation, pure and simple.

I agree with you.

We... there is a heightened standard of review, but I don't think that addresses one way or the other what the standard should be when an action in the State courts has been treated as an action both for defamation and for extortion or harassment.

Mr. Chemerinsky: But, Your Honor, it was not treated here as an action for extortion or harassment--

Justice Scalia: Mr. Chemerinsky, let me put the question this way.

Suppose a State does not have a civil action for extortion.

It provides criminal remedies but no civil action for extortion.

Why does the Constitution not permit us to treat, in that State at least, a civil action for defamation which has within it elements of distortion differently from pure defamation?

Mr. Chemerinsky: --Your Honor, I would say the history of the First Amendment is different.

A State can create a civil action then for extortion at the urging of this Court, but if you open the door to injunctions in defamation cases, then there's the possibility that in any defamation case, somebody might plead something about extortion, and injunctions will not be rare but will be the norm.

Justice Stevens: May I ask this... may I ask this question?

Supposing the only thing he did was to carry a sign that said Johnnie is a crook, a liar, and a thief, and the trial judge finds that is false, and he's carrying it in a sign, could the trial judge enjoin him from carrying that sign in front of Johnnie Cochran's office?

Mr. Chemerinsky: No, Your Honor, because the law is clear that injunctions are not a permissible remedy in defamation cases.

Justice Stevens: What's the best authority you have for that proposition?

Mr. Chemerinsky: Near v. Minnesota would be the best authority where this Court said clearly that injunctive relief should not be awarded in a defamation case.

Justice Kennedy: Add to Justice Stevens'... add to Justice Stevens' hypothetical that he shows that he's losing some clients.

Mr. Chemerinsky: But, Your Honor, even... yes, Your Honor.

But I don't think that changes the hypothetical in terms of enjoining the defamatory speech.

Chief Justice Rehnquist: Would you add too that he's judgment-proof?

Mr. Chemerinsky: Well, again, as I said to Justice O'Connor, I don't think it can matter whether he's judgment-proof because we can't have a different rule that we allow poor people's speech to enjoin and not wealthy people.

Justice Kennedy: You're saying... you're saying that a State cannot constitutionally prohibit someone from making false statements in front of the business that causes the business to lose money.

Mr. Chemerinsky: Well, Your Honor, there are other causes of action that may allow that.

If it could be--

Justice Kennedy: So I'm... my question is, is this constitutional to prohibit this conduct?

Mr. Chemerinsky: --Not in a defamation action, Your Honor.

Justice Kennedy: That's--

Justice Ginsburg: I--

Justice Kennedy: --that's not the question.

Justice Stevens: But what is your authority for that proposition?

Mr. Chemerinsky: Well, I would say that the authority comes from the fact that never in 214 years has this Court ever upheld an injunction in a defamation case.

Justice Stevens: Have we ever set aside an injunction that did that?

Mr. Chemerinsky: Well, not under those facts.

Justice Stevens: Have we done it either way?

Mr. Chemerinsky: No.

That's correct, Your Honor.

Justice Kennedy: Have we ever... have we ever considered a case where there's a strong element of extortion involved?

Mr. Chemerinsky: I would say yes, extortion for Austin v. Keith.

There was speech to pressure, and yet this Court said even though the speech was to pressure, it's still protected by the First Amendment.

I'd like to save the rest of the time for rebuttal, if that's permissible.

Chief Justice Rehnquist: Very well, Mr. Chemerinsky.

Mr. Chemerinsky: Thank you.

Argument of Jonathan B. Cole

Chief Justice Rehnquist: Mr. Cole, we'll hear from you.

Mr. Cole: Mr. Chief Justice Rehnquist, and may it please the Court:

For years, Mr. Tory has relentlessly targeted Johnnie Cochran with a pattern of defamatory speech in a public forum for purpose of causing Mr. Cochran to pay Mr. Tory money in tribute for ceasing from this unprotected activity.

He admitted at trial he intended to engage in this conduct.

He was doing it just so he could be paid money, and when asked if he would continue to do so, he stated he would.

Justice Souter: Well, do you... do you defend the injunction in its entirety?

Mr. Cole: Yes--

Justice Souter: In other words, the... the... Mr. Chemerinsky didn't have too much chance to... to get very far into it, but one of his points was that there was... quite apart from any injunction against picketing, harassment, et cetera, there was an injunction simply against speech on a given subject directed to a lot of people with no limit of time.

With respect to that last aspect, do you defend the injunction?

Mr. Cole: --Yes.

First of all, I don't believe it was directed to a lot of people.

As this--

Justice Souter: Well, it was directed, number one, to a named person who was not a party to the case, and it was directed to agents and employees of... of the named party.

So, I... I assume that Mr. Cochran probably has a fair number of agents and employees, so it does seem like a large number of people.

Mr. Cole: --I believe this Court said in Madsen that that would raise an abstract controversy that Mr. Tory doesn't have standing to attack the injunction for other persons who are not before the court.

No aider or abetter has ever been served with this injunction.

Ms. Craft has never been served with this injunction.

Only Mr. Tory.

So I don't believe--

Justice Souter: Well, let me ask you a law school question.

In... given the injunction on its face, with that breadth, is that injunction defensible with respect not to picketing, not to harassment, simply to speech in a public place?

Mr. Cole: --I defend the injunction, and respondent defends the injunction on the ground that it is conduct that was being enjoined--

Justice Souter: I... I asked you--

Mr. Cole: --from the use of unprotected speech.

Justice Souter: --to exclude the... the issue of conduct.

I said forget the injunction for a moment with respect to picketing, with respect to harassment, and we'll say with respect to blackmail, since that has come up.

Forget that.

Simply take the portion of the injunction that enjoins speech by these people, associates, agents, et cetera.

On the subject matter of the injunction for all time, do you defend that injunction?

Mr. Cole: Yes, we defend the injunction.

Justice Ginsburg: Let's take specifically the words of the injunction.

It's against orally uttering statements about Cochran, just orally uttering statements about Cochran.

Mr. Cole: Yes.

Justice Ginsburg: You say that someone can be enjoined--

Mr. Cole: Based upon the unique facts of this case, Justice Ginsburg, I say somebody can be enjoined.

I don't say that in the abstract.

Justice O'Connor: Well, you can't square that with the Near case at all.

I... I mean, the... the injunction on its face in part 2 has the appearance of being overly broad.

Mr. Cole: But in Near, they set forth certain factors, and those factors included that it was not a private redress of private wrongs.

The information was of legitimate public concern.

Neither of those elements are present in this action.

Justice Scalia: You don't know that.

Justice O'Connor: You don't--

Justice Scalia: You don't know what future speech is going to be.

His future thing may be, you know, Johnnie Cochran shouldn't be elected mayor of San Francisco.

That would be a... a question of public concern.

Mr. Cole: But, Justice Scalia, what I'm relying on is the fact that he has engaged in 3 years in a pattern of continuing, repetitive conduct.

Justice Kennedy: Well, what... what you're saying is that an... an injunction can be overbroad based on past wrongful conduct.

And there is simply no authority for that proposition.

Mr. Cole: I'm not suggesting that this injunction is necessarily overbroad based upon that proposition because I believe there are--

Justice Kennedy: But we have just pointed out that it... that it... it prohibits lawful, harmless, truthful speech.

Mr. Cole: --I disagree with that, Justice Kennedy.

Justice O'Connor: --Well, it does on its face.

I mean, it is clearly overbroad.

Now, what should we do about that?

Mr. Cole: Well, if you're asking me, based upon the breadth of the injunction, what I... if... if there was... are you asking me what I would do to modify the injunction?

You could merely strike... you could leave intact paragraph 2 and you could strike simply subsections (ii) and (iii) as being unconstitutionally overbroad.

Justice Kennedy: Now, let... let me ask you about that.

Let's... let's assume, for the moment, that a majority of the Court would find that some of these provisions are overly broad.

Is there any authority that tells us what to do next?

This is not like a statute where we have to save the statute.

Do we have any obligation to save the injunction?

Send it back and let it be done.

Let it be done all over again.

I mean, why... why should we rewrite it up here?

Do you have any authority that requires us or permits us to do that?

Mr. Cole: Yes.

In... in Madsen, Justice Kennedy, you struck... the Court struck certain provisions as being unconstitutionally overbroad and left certain intact.

So there's no reason why you can't look at this injunction, which clearly does not attack paragraph 1.

The... they do not attack paragraph 1.

They do not attack paragraph 3.

They only level their attack at paragraph 2, and paragraph 2, by striking subsections (ii) and (iii), would then be limited to the exact conduct in issue, which is picketing.

Justice Breyer: So... so if... before leaving that point, what the injunction prohibits is that Tory and those acting in concert, cooperation, or participation with him from, in a public forum, orally uttering statements about Cochran.

All right.

That's what it says.

Now, do you think that if Tory or someone acting in cooperation with him says, I've had a change of heart, Johnnie Cochran is a marvelous person, and he says that on television... do you think that individual at that time has violated this injunction?

Mr. Cole: Absolutely not.

Justice Breyer: Absolutely not.

Because?

Mr. Cole: First of all, that's why--

Justice Breyer: It said the words.

They violated the words.

It was a statement, but he has not violated the injunction because?

Mr. Cole: --Because I don't believe that's a public forum.

Justice Breyer: Oh, no, no.

He does it in a public forum.

In fact, he hires Disney Hall.

[Laughter]

And moreover, he gets on stage and announces it.

Okay?

There's no problem about a public forum.

So, now, why doesn't it violate the injunction?

Mr. Cole: Your... Your Honor, I believe there are alternative channels of communication here.

Justice Breyer: No.

I thought what you were going to say... but you're not.

So I'm very interested in that, and I'm glad I asked.

I thought you were going to say when it says uttering statements, it means statements of the kind or identical to those we have identified earlier in this opinion.

Mr. Cole: Well, I was--

Justice Breyer: But, now, you haven't said that.

I said it, and I think it's too late for you to say it.

[Laughter]

Mr. Cole: --I think I said it when I said there was a continuing pattern of repetitive conduct under Pittsburgh Press, over 3 years that that was the conduct that he has engaged in.

And that was clearly the purpose of this injunction, Justice Breyer.

We know that.

And the purpose of the injunction is to enjoin conduct that's designed to extort money from Mr. Cochran.

Chief Justice Rehnquist: In more than one case, we've said that an injunction has to be precise and clear and not leaving things to the imagination.

Mr. Cole: Well, I think this is precise and clear.

Based upon the breadth of the injunction, it's very clear.

Based upon this man's prior repetitive conduct of defaming Mr. Cochran with unprotected speech for the purpose of attempting to extort money from him--

Justice Scalia: Well, it's... it's--

Justice Stevens: But nothing in the injunction refers to prior conduct.

Justice Scalia: --That's right.

It's--

Justice Stevens: The injunction just speaks for itself.

It doesn't say what... doing what you used to do or anything like that.

Mr. Cole: --The injunction--

Justice Stevens: You cannot picket Cochran or Cochran's law firm.

Period.

Mr. Cole: --If we restricted the injunction to specific words used such as you cannot picket Johnnie Cochran's law firm and say he's a crook, liar, and thief, the response will be that he'll come up with five new words to defame Mr. Cochran for purposes of extorting--

Justice Stevens: Well, maybe there are different grades of specificity.

Maybe it doesn't meet precisely the same words, but I think there are other ways to draft it that say no picketing.

Period.

Mr. Cole: --Well, there could be no picketing for purposes of... no... which contains defamatory speech for purposes of extorting Mr. Cochran.

But--

Justice Stevens: All I'm suggesting is just draft it... just excising (ii) and (iii) from paragraph 2 would not necessarily solve the problem completely.

Just subparagraph (i) says picketing Cochran or Cochran's law firm, which is a pretty broad prohibition.

Mr. Cole: --Well, I would disagree based upon the prior... continuing course of... of repetitive conduct and the fact that this... over a period 3 years, once a week, this man spent 3 to 4 hours a day of his time defaming Mr. Cochran at his law office.

When we enjoined him from doing so at his law office, he moved it to the Los Angeles Superior Court.

And I think the fact that Mr. Cochran is a public figure actually favors the breadth of this injunction.

If this was not a public figure, then the public forum issue would not be as effective.

But because Mr. Cochran is a public figure, the only way he gets protection is in the public forum because this gentleman could move his picketing down to west L.A., Santa Monica Boulevard, nowhere near a courthouse, and to a public figure he can inflict the same damage to reputation.

And that is the problem we were contending with in attempting to draft an injunction that was not overbroad and yet could control Mr. Tory--

Justice Ginsburg: --You... you did draft this injunction.

It wasn't the... an inspiration from the judge unaided by your advocacy.

Is that so?

Mr. Cole: --It--

Justice Ginsburg: This... the terms of this injunction.

Mr. Cole: --Were aided... were aided by my advocacy, Your Honor.

Chief Justice Rehnquist: Aided and--

Mr. Cole: Well said, Chief Justice Rehnquist.

What I'm suggesting here is Mr. Cochran would have been faced with... he has no remedy.

Injunctive relief is the only remedy.

And he would be faced with a multiplicity of actions--

Justice Scalia: --Why?

Why couldn't he just be enjoined from... from similar defamation?

I mean, this... this enjoins him from... from true speech.

At least he could... he could have been enjoined from in the future defaming Cochran in the same manner.

And if he did that, then... then he could be punished.

Mr. Cole: --I think we would be... that injunction then would be attacked on being vague or ambiguous, that Mr. Tory wouldn't have sufficient notice as to what he was allowed to say and not allowed to say.

I guarantee you that was--

Justice Kennedy: Well, if... if that's so, then maybe Mr. Chemerinsky is right.

We... we shouldn't have injunctions.

If you're saying that injunctions can't be narrowly tailored, it seems to me that you're playing right into the argument that the petitioner is making.

Mr. Cole: --No.

I think they can be tailored.

I just don't think they can be that narrowly tailored.

And I don't think in this case, which I believe that the test we should be applying if we're going to balance, is this... there's no need for this injunction to be drafted in the least restrictive means.

I also continue to advance the argument that this... the facts of this case are unique.

It's the use of speech to engage in unprotected conduct.

This... this conduct is not protected by the First Amendment.

The conduct of attempting to extort money from Mr. Cochran is not protected.

If that is not protected, then I believe we can craft--

Chief Justice Rehnquist: --You can... you can certainly have, you know, some unprotected speech in connection with extortion, like give me $5 million or I'll shoot you.

But that... this was a far cry from that.

In other words, it isn't just addressing the victim and saying give me something.

It's denouncing the victim, which gets into free speech here.

Mr. Cole: --It certainly does, Justice Rehnquist.

But what I am suggesting is there was no remedy for Mr. Cochran that would have avoided a multiplicity of actions other than to draft the injunction in a form that would preclude Mr. Tory from engaging in the same conduct without regard to whether it was... and to let him know clearly... give him a safe harbor as to what he could and could not say.

Chief Justice Rehnquist: But the injunction isn't limited to the same conduct.

Mr. Cole: But I don't think it needs to be because of the pattern and practice that this man has engaged in over 3 years.

And if we take the example, which is so he has a change of heart and suddenly he now wants to praise Mr. Cochran and that's become his... and he's going to promote him as mayor of San francisco, he can certainly go into the court and modify the injunction.

Chief Justice Rehnquist: I thought he lived in L.A.--

[Laughter]

Justice Scalia: I think he'd like to get him up to San Francisco.

[Laughter]

Mr. Cole: He can certainly seek to modify the injunction, and that, as I pointed out in a subsequent letter brief, there's... California doesn't adopt the collateral bar rule.

And therefore, he has a check and balance in this case.

Under People v. Gonzales, 12 Cal. 4th 805, the collateral bar rule has no application in the State of California.

So in the unlikely event that Mr. Tory was engaged in speech praising Mr. Cochran, one, and two, in the... in the more unlikely event that someone was going to attempt to cite him for contempt for engaging in protected speech, he could contest, under First Amendment grounds, the enforcement of this injunction in the State of California because the collateral bar rule has no impact.

Justice Kennedy: Well, I'm... I'm baffled by that.

What you're saying is that the injunction... we're just all wasting our time?

The injunction doesn't mean anything?

Mr. Cole: No, no, no, no.

Justice Kennedy, all I'm saying is--

Justice Kennedy: I... I fell off the track here.

Mr. Cole: --All I'm... all I'm saying is that if the collateral bar rule was in effect, you would waive your right to contest.

You don't have a right to contest the constitutionality of the injunction on First Amendment grounds or constitutional grounds when it's seek to be enforced against you.

That's not a defense in a contempt proceeding.

California does not adopt that rule.

Therefore, Mr. Tory can always... if he is engaged in protected speech, he can easily contend--

Justice Kennedy: Oh, yes, but he's different from other citizens because he's at... he's at risk of a contempt citation.

Mr. Cole: --I don't dispute that.

Justice Kennedy: I mean, his speech is being chilled with... with respect to protected speech.

Mr. Cole: But there's nothing unusual--

Justice Kennedy: So the collateral bar rule doesn't help you at all because he's subject to a contempt citation.

Mr. Cole: --He's subject to it, but there's a check and balance there in terms of when you balance, the potential remedy for Mr. Cochran... what... what is going to give Mr. Cochran the remedy he needs?

And if we balance that against the... the breadth of this injunction, I think we have to look at... one of the biggest concerns about prior restraints, when analyzed in terms of injunctions, is the collateral bar rule.

Justice Breyer: But it would be so easy.

I mean, it's virtually no burden.

I take it what you're saying is that this injunction in paragraph 2 at its heart is aimed at in public forums, keeping insults suggesting he was a crook against Johnnie Cochran unless you pay me $10,000.

Then I'll stop.

Okay?

Now, at its heart, that's what it's aimed at.

Mr. Cole: That's exactly--

Justice Breyer: And you are saying if in fact it's ever enforced outside that heartland, you can have a defense.

It would violate the First Amendment.

But since it's so easy just to write those words we just said right in paragraph 2, why shouldn't the judge have to do it?

It's so easy.

Say this is aimed at the heartland just as I said it and you said it, and it doesn't apply outside of it.

Mr. Cole: --And I have no dispute with that, Justice Breyer.

I agree that was the whole purpose for the injunction.

That's the basis of the injunction.

And you could always remand for further proceedings, consistent with any opinion you would write, that the injunction has to be tailored to... to deal with defamatory conduct, which is designed to extort or with the intent to extort.

And I--

Justice Scalia: That's what he's arguing.

You're... you're conceding that it's overbroad.

Mr. Cole: --I'm saying if this Court... well, I'm gleaning the impression that this Court thinks it's overbroad.

Justice Scalia: Ah, you're very perceptive.

[Laughter]

Mr. Cole: And having gleaned that perception, I'm trying to suggest that, number one, there was no attack on paragraphs 1 and 3, and now we're focused on paragraph 2.

And paragraph 2 can be tailored, as you have indicated, Justice Scalia, I think consistent with First Amendment issues.

And I think it's important to point out that if we take away injunctive relief in a defamation action in this day... modern age--

Justice Stevens: You're sort of saying the opposite of what your opponent said.

If we take it away, has it ever been there?

Mr. Cole: --It's never been there.

Justice Stevens: What are we taking away?

Mr. Cole: I... I agree it's never... you've never found it there and you've never said it can't be there.

Justice Breyer: How does California work in that respect?

Because what I've been thinking of in my mind is that maybe we shouldn't decide this in terms of State law boxes, that California seems to have an action.

Let's call it a buzz action to get away from words.

And what that action is it's a defamation but a certain kind.

It's defamation accompanied by extortion.

And when you have defamation accompanied by extortion... call it whatever you want... an injunction is proper in these circumstances.

Now, can we decide it in such a way that we're not talking about all defamation actions?

We are talking about this beast in California which uses the word defamation but also finds injunction and therefore issues... also finds extortion and therefore issues an injunction.

Mr. Cole: Yes, I think that you could limit the injunction to defamatory speech of a similar nature designed to extort.

Justice Scalia: Would... would that make Mr. Cochran happy?

What... what's the big deal about extortion?

I mean, suppose this same conduct occurs in the future, but he doesn't say I'll stop if you give me a lot of money.

He just pickets every day and says Cochran is a shyster, don't do any business with Cochran.

Do you think Mr. Cochran would be any... any happier simply because the guy says I'll... hasn't said I'll stop if you pay me $10,000?

Mr. Cole: No, and I think that would be subject to the same injunctive relief.

I think this case is unique with the extortion element, but I don't disagree, Justice Scalia, that that is why any decision that says injunctions in defamation actions would be improper.

I think people would start defaming with impunity.

Justice Scalia: You've got to give us some line.

I mean, the only reason we're grabbing onto extortion is that... that there's reluctance to say you can issue injunctions in all defamation actions.

Now, what... what limitation do you want to place upon the ability to issue an injunction if it is not defamation combined with extortion?

Mr. Cole: I don't think you need to place a limitation other than you can enjoin the defamation conduct.

Take, for example, the Internet.

A posting goes on of a... of a business that... a startup company.

It can't... damages of... for a startup company... they're very difficult to prove.

Justice Breyer: But then you run into the public figure.

I mean, that's a much more dangerous kind of rule of law, isn't it?

I mean, a pure defamation action against a public figure, which they want to say this is.

You can write all kinds of things about public figures.

People can and do, for better or for worse.

Do... is there any authority for issuing in a pure defamation action an injunction?

Mr. Cole: There's no authority, but there's no authority that says you can't do it.

But what I am suggesting is in... is in a pure defamation action that's not tied to any specific wrongful conduct, there's no reason why you couldn't enjoin.

For example, if you found that a specific item was defamatory on its face, such as a posting on the Internet, the only way to get that posting off the Internet would be to enjoin it because damages aren't going to solve the problem.

And if it's... even if it's purely defamatory, you could restrict it to that purely defamatory posting, similar to... to the obscenity cases where you've reviewed a film, you found it to be obscene, and then you preclude it.

There are procedural safeguards and you preclude it in the future.

Justice Ginsburg: But you've just said something that I think that's inconsistent with your earlier presentation.

You said you could enjoin that posting.

Here you said it wouldn't be effective just to enjoin the particular placards that were used, the particular words because then there would be other words.

So the same question could come up with an Internet posting if you had an injunction not simply on what was posted but anything about this particular individual that might be posted in the future.

Mr. Cole: Well, Justice Ginsburg, I think where that leaves us is you'd have to engage in some sort of balancing about the... how narrowly tailored the injunction is and does it provide a sufficient remedy and, you know... and... and in this... and what test we would analyze it under, strict scrutiny, intermediate scrutiny, or the Ward test.

And... and I think that in applying those tests, you'd have to come to a balance, and if the balance is that you're going to limit it to a specific type of speech or... then that... that would be a... a reasonable limit, and if it creates a multiplicity of actions, well, so be it.

But at least there's a remedy for that posting or postings of a similar nature.

So--

Justice Ginsburg: Now, you... you... to the extent that you're complaining about extortion-like conduct, something else that you drafted... I'm looking at the complaint on page 7 of the joint appendix.

You have identified all defamatory, including with the false light invasion of privacy, but you don't have any claim that looks like blackmail.

Mr. Cole: --If you'd... if I could direct you, Justice Ginsburg, to page 12 of the joint appendix at paragraphs (j) and (k) of the verified complaint, you will see that we alleged in a verified complaint that he'd engaged in three previous efforts of this same type of conduct, one.

And two, paragraph (k), that Tory is in the business of professionally extorting monies from innocent persons and business--

Justice Kennedy: I... I was going to ask you about that.

Were there findings to substantiate the allegations?

Mr. Cole: --Findings to substantiate--

Justice Kennedy: Specifically about the extorting money from the bank and the oil company.

Mr. Cole: --No, Justice Kennedy, there were not.

Justice Kennedy: No findings.

Mr. Cole: There was some testimony only on one of those issues, which was the oil company.

There was no findings on this issue.

But then I would refer you to paragraph (k) which specifically refers to extorting of monies.

And also in my opening statement, as is reflected in the trial's transcript, the... the first thing I said is this is speech designed for an improper purpose.

It's unprotected speech designed to extort money from Mr. Cochran.

That was the whole theme--

Justice Ginsburg: But what... what I mean is could you have... without using the label defamation, have stated a claim for extortion or blackmail?

I'm not looking at your particular allegations but how you described on page 1 of the complaint what you were suing for: libel, libel per se, slander, slander per se, and invasion of privacy.

Mr. Cole: --I think we could have pled extortion had we chose to.

We could have pled inference with advantageous business relations.

We probably could have pled California's--

Justice Kennedy: Does California law require you to label the type of the cause of action or is it notice pleading based on facts?

Mr. Cole: --Notice pleading based on facts, but we do label the causes of action.

The... the point I'm trying to make is whether every cause of action was pled, if the conduct is extortion, which is what the judge implicitly found by findings 20 and 27, that conduct is not protected.

And whether we named the cause of action correct in the complaint or we sued for that specified cause of action, doesn't change what it is that we were seeking relief for, which is stopping this man from defaming Mr. Cochran until he was paid money.

We attempted to achieve that.

We thought we did a fair job in paragraphs 1 and 3, which they don't attack and I agree is not fairly included within the question which has been certified here, nor is an attack on the underlying finding.

But we attempted in paragraph 2, broadly I agree, to avoid a multiplicity of actions and to give Mr. Tory other channels of communication other than the public forum where he is engaged in a continuing course of repetitive conduct to defame Mr. Cochran.

He... and... and this is... one point that I want to stress.

We don't view this injunction as being violated if he went on TV, he went on the radio, he went in the newspapers.

We don't view those as public forums under the definition that this Court has provided.

Those are not public forums.

We are not concerned about that.

We do not believe that those events will occur.

We did not seek to protect them.

So we have given Mr. Tory an unlimited venue to speak, but we said you can't do this in the public forum because of your continuing course of repetitive conduct, 3 years, once a week, 52 times a year, over 150 times, 4 hours a day.

And with that, I would submit that while the injunction is broad, I don't believe it's a unconstitutional prior restraint, and to the extent this Court believes it is overbroad, I believe striking subparagraphs (ii) and (iii) of paragraph 2 would solve the problem, or alternatively, that in conjunction with a suggestion that it needs to be narrowed to deal with the speech and conduct in issue.

Thank you.

Rebuttal of Erwin Chemerinsky

Chief Justice Rehnquist: Thank you, Mr. Cole.

Mr. Chemerinsky, you have 4 minutes remaining.

Mr. Chemerinsky: Thank you.

Justice Breyer kindly invited my thoughts about how an opinion might be written, and there are three different ways not mutually exclusive.

One is that this injunction is vastly overbroad for all the reasons that have been identified.

Mr. Cole said a couple of things.

One, he said that Mr. Tory can go to court and ask for modification of the injunction, but that's what makes this a prior restraint, that Mr. Tory can only speak again if he goes to court and gets permission.

Also, he said at the end that Mr. Tory can go before the media.

However, under California law, under Damon v. Ocean Hill, the media is defined as a public forum.

A second way the opinion could be written is that this for speech protected by the First Amendment.

Justice Ginsburg, you asked me at the outset whether that's in the scope of the question presented.

Well, it is directly relevant to what Mr. Cole was saying.

Because it's all opinion, all hyperbole it is protected by the First Amendment and can't be the basis for an extortion claim.

Justice Ginsburg: Yes, but you're asking us now to... the... the trial court found there was defamation, and now you want to argue, no, it wasn't defamation.

It was mere opinion.

I really don't see how that's included in the question presented.

Mr. Chemerinsky: I think it is because it goes to the question whether the injunction is permissible.

But I go on to the third way that the opinion could be written, and that's that injunctions are not permissible as a remedy in a defamation case.

We agree that if there is a cause of action for extortion, it can have an injunction as a remedy.

We agree if the cause of action is for harassment, there can be an injunction as a remedy.

But those have specific elements that have to be met.

Those elements weren't met in this case.

History is clear that injunctions aren't allowed in defamation cases, and also, Your Honor, it's quite important that Mr. Cole even said you can't craft a narrow injunction in a defamation case.

Any injunction is either too narrow or too broad.

In Near v. Minnesota, this Court said that it was telling that in 150 years of the history of the First Amendment, there had never been an injunction approved by this Court in a defamation case.

We're now 70 years later than that.

To approve an injunction in a case like this, even though it's called defamation plus extortion, will open the door to injunctions as a routine matter in defamation cases across the country.

No--

Justice Ginsburg: There have been... there have been injunctions against harassing conduct, threatening, stalking.

Mr. Chemerinsky: --Yes, Your Honor, and we have no objection to injunctions of that sort.

What we object to is an injunction as a remedy in a defamation case and an injunction that is directed at speech.

That's what the First Amendment prohibits.

Thank you.

Chief Justice Rehnquist: Thank you, Mr. Chemerinsky.

The case is submitted.

Attribution:

The Oyez Project

Featured:

Masson v. New Yorker Magazine, Inc. - Oral Argument

Fri, 09 Jan 2009 14:49:43 +0000

Case:

Masson v. New Yorker Magazine, Inc.

Media File:

89-1799_19910114-argument.mp3

Related Transcript:

transcript.xml

Transcript:

Argument of Charles Morgan, Jr.

Chief Justice Rehnquist: We'll hear argument next in No. 89-1799, Jeffrey M. Masson against New Yorker Magazine, Alfred Knopf, and Janet Malcolm.

Mr. Morgan: Mr. Chief Justice, if it please the Court:

This is an action by Jeffrey Masson in which he has claimed he has been defamed by publishing of defamatory quotations purportedly said by him, but never said by him.

Both the district court and the court of appeal assumed that the fact that the quotations were fabricated.

I am assuming that this Court will accept the same assumption, however, I am prepared to discuss the various factors that we introduced in addition to the fact that the words were not on the tape.

The Ninth Circuit, in making its decision, stated, one, that a fabricated quote that is wholly fabricated creates an inference of actual malice.

But it went on to say then that fictionalized quotes will not create an inference of malice if the fictionalized quote is a rational interpretation of what the speaker said, or if it does not alter the substantive content of what the speaker said.

Then they went a step further and they said, as an example of the latter, that a fictionalized quote created no inference of malice because it was consistent with the speaker's lifestyle and his idea of fun.

It went further and said that it came within the same concept and did not create an inference of actual malice if it was substantially the same as his own self-appraisal of himself.

Unknown Speaker: Well, Mr. Morgan, do you take the position that every misquote gives rise to an inference of actual malice?

Mr. Morgan: I take the position that every misquote that is defamatory and is not just a very minor misquote--

Unknown Speaker: Well, what is defamatory is typically defined under State law, right?

Mr. Morgan: --That's correct, Your Honor.

Unknown Speaker: Not Federal law.

Mr. Morgan: That's correct, Your Honor.

Unknown Speaker: So we're not concerned with that here.

Mr. Morgan: That's correct, Your Honor.

So what we deal with here... and California is interesting, because in California if a statement exposes a person... that's all it is, it doesn't have to say that he does it or he is it, or whatever, it merely says if it exposes him to contempt, ridicule, obloquy, or if it has a tendency to harm him in his profession.

And so therefore any statement of that form that is not what the speaker said, in our opinion creates an inference of actual malice.

And I'm not basing that on whole cloth.

We are basing that on this Court's statement in St. Amant v. Thompson when this Court said that professions of good faith will be unlikely to prove persuasive, for example, where a story is fabricated by the defendant or is the product of his imagination.

Unknown Speaker: Do you think the injury to reputation is different when the injury occurs by virtue of a misquote than when it occurs by virtue of a characterization?

Mr. Morgan: Absolutely, Your Honor.

And I think that all of the amici briefs and their documents they put in point out to you that the impact when it's coming from the individual, as opposed to coming from the writer's perception of the individual, has a greater impact.

Unknown Speaker: I suppose the law has always recognized that when it admits an admission by a party but excludes hearsay.

I suppose it's almost the same principle.

Mr. Morgan: That's correct, Your Honor.

And so obviously it has a far greater impact.

Unknown Speaker: Mr. Morgan, what if... what if I'm in an interview with someone and I make some statements that are very racist.

I say that I think a particular ethnic group is little more intelligent than dogs, that they really can't cope in our society, something like that.

And the next day there appears in the paper the quote, Scalia says this group is subhuman.

Mr. Morgan: Yes.

Unknown Speaker: Now, that's an inaccurate quote.

Mr. Morgan: That's right.

Unknown Speaker: Is there liability for that?

I mean, if they had, if they had quoted it accurately it would have been just as defamatory.

Mr. Morgan: Well, not necessarily, Your Honor.

We start with this.

The person that made that statement, of course, he also has the right of the freedom of speech and the public has the right to hear exactly what he said.

Now, what you are doing is you are substituting your conclusion for what he said, and yet the very words may not necessarily be the same.

Unknown Speaker: Well, that's right.

But I'm not going to the question of malice.

I'm accepting your position that all you need for malice is intentionally altering a quote.

I intentionally... this is intentionally altered.

There is no doubt I didn't say that and the writer knows I didn't say that.

But having overcome the question of malice, you still have the question of what's defamatory.

And it's your position that that is an actual... an actionable defamation even though an accurate quote would have harmed my reputation just as much?

Mr. Morgan: If I devine what I think you're saying, and what I think you're posing, you're really dealing with the concept of incremental harm.

Unknown Speaker: Yes.

Mr. Morgan: Because you use the term defamatory.

The minute you say something that will subject me or expose me to obloquy--

Unknown Speaker: Right.

Mr. Morgan: --it's defamatory.

But now the next question is am I harmed by it?

Am I damaged by it because I said something that at least in your perception is similar to what they are writing?

If I understand the concept, and my own feeling is that there isn't such a concept as incremental harm and we really haven't seen it anywhere yet, nevertheless I am still entitled to have a trier of fact decide whether this particular one, this statement, is any different than this statement.

As long as I have met all the rest of the requirements, then it seems that the trier of fact makes the decision well, there's no harm because he said exactly the same thing.

That's not this case though, Your Honor, and I think that's important to point out.

Unknown Speaker: Mr. Morgan, in any event, wouldn't any issue of incremental harm be a matter of State defamation law--

Mr. Morgan: I believe so.

Unknown Speaker: --rather than of First Amendment law?

Mr. Morgan: Absolutely.

I don't think it's an issue here.

I don't think that the Ninth Circuit was right in even raising it in this case.

Unknown Speaker: Could I change Justice Scalia's hypothetical just a little?

Supposing it's perfectly clear that the actual quote is much more insulting and harmful and defamatory, but yet the... what is actually said is also defamatory.

Have you proved malice just by that, by the fact it's inaccurate?

Mr. Morgan: Have I proved malice?

Yes, because... and I know we're talking about the Hotchner case, and I think it's a mistake to equate that case here.

But have I proved malice?

Yes.

I have proved you fabricated a quote.

I proved it was defamatory.

Now the only question is am I entitled to any damages.

Who knows?

Maybe I'm only entitled to $1 damages, but maybe I'm entitled to X dollars punitive damages because of the manner in which the writer brought about this situation.

Who knows on that?

At least that's for the trier of fact to decide.

Unknown Speaker: Well, whether what... whether these quotes, whether they were fabricated or not and defamatory isn't involved in this case, is it?

Isn't it... doesn't this case turn on malice?

Mr. Morgan: Well, but malice requires defamation, Your Honor.

I mean, in other words--

Unknown Speaker: I think a lot of people can defame people and not be liable because they didn't do it maliciously.

Mr. Morgan: --Well, but maliciously is the wrong word, and I say this most respectfully to this Court, from a man who has tried a number of--

Unknown Speaker: What is the issue here?

Is it whether these... this is defamatory?

Are we supposed to decide whether what was said was defamatory?

Mr. Morgan: --No, Your Honor.

The issue is did we prove enough in the district court that the articles were written either knowing they were false or with a reckless disregard of the truth or falsity.

Unknown Speaker: Whether malice was involved.

That's what the case turns on.

Mr. Morgan: That's correct, Your Honor.

Unknown Speaker: Well, that's what I asked you and you said no.

Mr. Morgan: Well then I misunderstood you, and my apologies, Your Honor.

Unknown Speaker: Well, you don't like the term malice because for many people it excludes reckless disregard.

So you like to talk about reckless disregard.

Mr. Morgan: Your Honor, all I can tell you, and I have seen it occasionally from the courts, say that it was a poor choice of words, and I say this most respectfully, it's an abomination.

Because I've had situations--

Unknown Speaker: But it's our words.

[Laughter]

Mr. Morgan: --But it's a bad word, and it's time to change it.

Because I've had jurors say to me afterwards, well, I didn't see any malice--

Unknown Speaker: Well, in any event we're probably getting off the point.

I'm not sure what interest is protected by saying that there is reckless disregard for the truth by altering the quotation in a way that makes it no more defamatory than, or perhaps even less in Justice Stevens' hypothetical, than the original statement.

What are we protecting there?

Why--

Mr. Morgan: --Well, two things.

First, you know, the concern I have here is these words weren't as defamatory or the... as what he said.

They're not equivalent.

And I'll take a moment to show you one.

But the answer is what interests are we protecting?

We're protecting the right of the speaker.

And as you have said before, and it's Virginia Power or something like that that we have quoted in our brief, that the First Amendment protects the communication, the speaker, and the public.

And certainly when we're dealing with quotations, and we're now talking about public figures and public officials, that certainly he has a right under the First Amendment to expect that he will not have a fabricated defamatory quote.

And that's our position.

Unknown Speaker: --Well, I'm not sure that's a good way to put it, to say he has a right under the First Amendment.

The First Amendment applies to the Government.

A politician as opposed... relating to the New Yorker, you're talking about the liability there is based on State libel law.

Mr. Morgan: Except that we are confronted with the First Amendment--

Unknown Speaker: The First Amendment used as a shield.

Mr. Morgan: --That's right, because he's a public figure.

And so therefore, as at least he is labeled as a public figure, and so therefore he has a right under the First Amendment to be quoted as he spoke.

Unknown Speaker: No.

He has no right as against the New Yorker magazine under the First Amendment.

What you mean to say, I think, is that the First Amendment should not prohibit State libel law from giving him that right.

Mr. Morgan: I will accept that, Your Honor.

[Laughter]

Let me now--

Unknown Speaker: Under your rule, aren't you going to create serious disincentives to use direct quotes or even to have a tape recorder?

Mr. Morgan: --No.

No, Your Honor.

Direct quotes have been going on as long as we know they've been going on, and if you read all the material, they all tell you exactly the same thing.

Quote what was said exactly, and if you can't, then don't quote that, paraphrase it.

Quote the part that you are satisfied with.

Now please keep in mind, Your Honor, we're not talking about the mistake.

We're not talking about the poor reporter who has to get a quote in a hurry and then is putting it into the hot news.

We're talking about a situation where--

Unknown Speaker: Well, but you are, because you're arguing that every misquote gives rise to an inference of actual malice.

And so the reporter who's in a hurry, or whose tape gets garbled and who relies on memory is then at risk if the person quoted says that isn't exactly what I said.

Mr. Morgan: --At risk, but not liable.

Certainly anytime anybody writes... because again we have still got the reputation to consider.

This is the other side of this tension.

And every time a reporter writes something that is defamatory, certainly there has got to be some at risk so that the reputation is protected.

Unknown Speaker: Excuse me, you wouldn't get by a motion for summary judgment unless, I take it, there was clear and convincing evidence that there was an intentional misquote.

Mr. Morgan: That's right.

Unknown Speaker: Not just clear and convincing evidence of a misquote, but clear and convincing evidence that the misquote was intentional.

You're not--

Mr. Morgan: Absolutely, Your Honor.

If the reporter said look, I did it in a hurry, I thought what I had was right, and I have no other evidence, I lose.

And the chances are I won't bring the lawsuit.

Now, what I would like to talk about is a couple of the quotes so I can dispel any concept that they are the same.

And I want to start first with intellectual gigolo.

And I think it's important to understand now, these... what the writer did was take two different conversations, and if you look in the appendix you will see that one conversation is tape 7, and one conversation is tape 12.

In tape 7 he talks about his affair with a graduate student, and what he says is that you're great... she tells him you're great in the bedroom, but you're a total embarrassment outside.

Now that doesn't fit any definition of intellectual gigolo, nor of any gigolo.

All it shows is a young college kid who is a total embarrassment outside of his bedroom.

Then sometime later there's another conversation in which Mr. Masson is talking about trying to get patients as a psychoanalyst, and he is complaining that, well, nobody will help him.

Nobody will get patients for him.

And he says I was a private asset and a public liability because in their room they enjoyed talking to me, but because I was so junior they would have nothing to do with me outside the room.

That's not a gigolo, and it's not an intellectual gigolo.

Unknown Speaker: --He didn't... he didn't say... he was not quoted to say "I am an intellectual gigolo".

If he was quoted to say "I am an intellectual gigolo", I can understand how that is defamatory.

He was quoted as saying they treated me like an intellectual gigolo.

How--

Mr. Morgan: But it was his words, Your Honor.

Unknown Speaker: --But how is that defamatory?

I guess you argue that defamation is not an issue here?

Mr. Morgan: No--

Unknown Speaker: Can I think it's not defamatory and still find for you in this case?

Because I don't think it's defamatory.

Mr. Morgan: --Of course not, of course not.

No.

Unknown Speaker: I can't?

Mr. Morgan: It has to be defamatory.

Unknown Speaker: Oh.

Mr. Morgan: Otherwise there is no basis for a lawsuit.

But the point is--

Unknown Speaker: How is it defamatory of me that somebody else treated me like an intellectual gigolo?

I don't understand that.

Mr. Morgan: --But it's you who in this fabricated quote is saying,

"I was like an intellectual gigolo. "

and it never occurred.

Unknown Speaker: In context it didn't mean I was like one.

To them I was like an intellectual gigolo.

That is how they treated me.

Yes, I was going to ask you the same question.

It seems to me that a reasonable interpretation of that quote is that Eissler and Anna Freud thought of him as an intellectual gigolo, and he is reporting that.

I mean, that's... that's the sense in which... the fair sense, I think, in which to read that.

And I wanted to ask you, number one, whether I am entitled or we must parse that meaning or whether this is a question for the jury?

Mr. Morgan: That's a question for the jury.

And in California, as you know--

Unknown Speaker: The reasonable interpretation--

Mr. Morgan: --Well, as Your Honor knows, if there are two reasonable interpretations, one defamatory and the other not defamatory, the court will assume it's defamatory.

So we are certainly entitled to that.

But I go the step further that even the fact of Mr. Masson purportedly saying, two of the highest people in the... psychoanalytic world regarded me as an intellectual gigolo, is defamatory, because it is going to expose him to ridicule, humiliation, and obloquy, and it will certainly tend to harm him in his business.

I'd like to take two more, just if I could, and quickly.

The one about I put it on at the end, or I tacked it on at the end.

The only point I want to bring out about that one is the point... the question that supposedly he side-stepped and didn't answer, was never asked of him.

And Ms. Malcolm concedes that.

She said no, I never really did ask him.

That was just my state of mind.

And yet she fabricates a whole conversation.

And yet the court says well, there has been no alteration of the substantive content.

It was a total fabrication.

Now this is when we get back to the Carson case, where in the Carson case they talk about that the writer invented this whole discussion between Mr. Carson and the NBC officials.

This is really no different.

She invented a conversation that never took place.

Now, the Ninth Circuit has said the rule is that it has to be wholly fabricated, and I don't know of any case that really supports a wholly fabricated.

What is the difference whether you fabricate one line of questioning based upon a conversation or based upon something you read in a magazine or a newspaper, as in Carson?

Then I would all--

Unknown Speaker: --Every new... every new decision is for the first time, and every new decision doesn't have any precedent.

So your... but you... so you have to say the court of appeals is just wrong.

Mr. Morgan: --I do.

I've said that.

Unknown Speaker: I know you do, but it won't be because there isn't any precedent.

Mr. Morgan: This is one time I have no hesitation in saying that absolutely, Your Honor.

I would like to also talk about the greatest analyst who ever lived, and again, the Ninth Circuit says this is supported because he made other boastful statements.

He never said, and you can go through all the tapes there, he never once said that the analyst will ever think he is great.

In fact he said just the opposite.

And she knew all of this, and yet she fabricated this quote.

Now, the Ninth Circuit says, well, that's okay, because after all, at another point he said analysis is going to stand or fall with me.

But he points out it's not me, it's the letters I found, the letters that question what Dr. Freud had said or done.

That's the type of statements he made, and he said... there's no question he thought his book was going to do well.

He thought his book was going to be harmful to the profession.

But he said not one analyst will stand up and speak for me.

And yet the quote says they'll say I'm the greatest analyst after Freud, I'm the greatest analyst that ever lived.

And yet not one thing to support it, but the Ninth Circuit says, well, he had boasted on other occasions.

I think the Court can see the great harm that can befall that.

Unknown Speaker: Suppose... suppose what he had said was there is no greater analyst than I other than Freud, and she quotes him as saying I am the greatest analyst ever other than Freud?

Mr. Morgan: Oh, I think there's no problem with that, Your Honor.

Unknown Speaker: Why is there no problem with that?

Mr. Morgan: Because all that has happened--

Unknown Speaker: It's a misquote, right?

Mr. Morgan: --Of course it's a misquote.

Unknown Speaker: And she... let's say she intentionally misquotes it because it takes up less space that way.

Mr. Morgan: Well, I don't think it'll take up less space--

Unknown Speaker: Whatever.

[Laughter]

Mr. Morgan: --but all that has happened is--

Unknown Speaker: But she knows, she knows it's a misquote.

Okay?

Mr. Morgan: --That's right.

But all that's happened is she has changed the words, but they are the same words.

Unknown Speaker: She has changed the words, but they are the same words?

Mr. Morgan: That's right.

She has moved the sequence of them.

Unknown Speaker: That's nice.

She has misquoted him.

Mr. Morgan: That's right.

That's right.

There's no question she has misquoted him.

Unknown Speaker: Now, that has to go to the jury, right?

And you say if under State law there is some incremental doctrine, maybe they won't recover, but a court has to let that go to the jury.

Mr. Morgan: No.

And I'm not saying that, Your Honor.

Unknown Speaker: Well then, why?

Why doesn't it go to the jury?

It is clearly a misquote.

Mr. Morgan: As we put in our brief, and I think it's the same thing.

Supposing he had said I am the greatest analyst, and she wrote he said I am the greatest therapist.

Unknown Speaker: Um-hum.

Mr. Morgan: They're basically the same thing.

No change.

As I understood the question you posed to me--

Unknown Speaker: Is it defamatory in isolation?

Yes.

Right?

Is it a misquote?

Yes.

Why doesn't it go to the jury then?

Mr. Morgan: --Because the words are the same, except for the one change.

Unknown Speaker: So built into your doctrine then there is some comparative, if indeed her quotation is a fair summary of what he has said then, it shouldn't go to the jury.

Mr. Morgan: Yes.

But it's not--

Unknown Speaker: Right?

Mr. Morgan: --It's not because of incremental damage or incremental harm.

Unknown Speaker: Why?

Mr. Morgan: It's because of the substantial truth doctrine.

Now, you see, we take the position that a quote is no different than a statement of fact.

Let me give you an example, and forgive me for being from California and doing this.

But I can say that the reporter says I saw Nose Tackle Carter run 60 yards for a touchdown.

Or... and then it quotes Nose Tackle Carter as saying well, I lumbered for 61 yards for a touchdown.

That's a substantial truth.

There's nothing really changed there.

That's so different.

Unknown Speaker: Especially if he weighs 315 pounds.

Mr. Morgan: That's right.

[Laughter]

That's why I couldn't resist it, Your Honor.

There's no difference.

But then... let me give you one that was in the amicus brief that I think is important.

I make the statement my mother and father never got married.

You write that I make the statement I am a bastard.

Now there's, there's the difference.

And--

Unknown Speaker: What if it's just reversed?

What you said was I am a bastard and he wrote my mother and father never got married?

What do you do with that case?

Mr. Morgan: --Well, that's the Hotchner case.

Unknown Speaker: Well, I don't know the Hotchner case.

What do you do with the case yourself?

[Laughter]

Mr. Morgan: Well, I really don't think that you can show any damage there.

And I'm hard pressed with that one, there's no question about it.

Unknown Speaker: It seems to me it was easy when we asked you at the beginning of the argument.

You said it was clearly... would create an inference of malice.

That's exactly the hypothetical I gave you.

Mr. Morgan: That's right.

The inference is still there.

I'm not going to win it.

Unknown Speaker: So it goes to the jury, or does it not go to the jury?

Mr. Morgan: I have a feeling in that one that the court would grant summary judgment, and I don't think any appellate court would--

Unknown Speaker: Well, what if we thought each of these was just like that?

That the real facts, if you read the whole book, are even worse than the intellectual gigolo.

Mr. Morgan: --Your Honor, if--

Unknown Speaker: If we thought that.

I mean--

Mr. Morgan: --I understand.

Unknown Speaker: --what if we read it carefully and we come to that conclusion?

Mr. Morgan: If you thought that the two statements I related were equivalent to Mr. Masson saying I'm an intellectual gigolo, I'll pack my bags and leave now, you know, because--

Unknown Speaker: Well, but it's a question of your theory.

It seems to me you're giving away your theory.

I had thought that the fact that it is reported someone says something about himself is indicative of hypocrisy, and it's an altogether different formulation than if someone makes that same statement as a third person.

But you seem to be giving that away.

Mr. Morgan: --Well, if I am, I'm getting weary then, because I don't intend to give that away.

But certainly in that situation that Justice Stevens propounded, I have difficulty with ultimately winning it, is what I'm trying to say.

I still say we're entitled to the inference of malice.

Unknown Speaker: Aren't you saying two things?

Aren't you saying, number one, that a misquotation or the fact of misquotation, in and of itself, is competent evidence of malice?

Whether the question of malice goes to the jury depends on what else there is in addition to the evidence of the misquotation.

Mr. Morgan: Absolutely, Your Honor.

Unknown Speaker: If the misquotation in fact, as you said a moment ago to Justice Stevens, could not give rise to and... could not be a predicate for damage, then in fact you're really saying on that particular misquotation in the context of the actual misquote no reasonable juror could infer malice from it.

Isn't that all you're saying?

Mr. Morgan: Absolutely, Your Honor.

And I want to sit down now, because I want to save a few minutes.

Thank you.

Unknown Speaker: Thank you, Mr. Morgan.

Mr. Farr, we'll hear from you.

Argument of H. Bartow Farr, III

Mr. Farr: Mr. Chief Justice, and may it please the Court:

In briefly setting out our position at the outset, I'd like to begin with what I think is an obvious point: that libel law is not concerned with misquotation for its own sake or with setting journalistic standards.

What libel law is concerned with is misrepresentations of substance with a defamatory gist of things.

Unknown Speaker: Are you talking about the 50... the laws... the libel laws of the different States now?

Mr. Farr: In general, that's correct.

All the libel laws.

Unknown Speaker: You feel you can make that sort of generalization?

Mr. Farr: Yes.

I think all libel laws at bottom are concerned with misrepresentations of substance.

Under the balance struck by New York Times v. Sullivan and later cases, the First Amendment gives way only when a writer knows or reasonably suspects or recklessly disregards that the defamatory gist is false.

That's the same rule for all libel cases, whether they involve quotations or not, and that's simply the point we're trying to make here.

The First Amendment protects a writer accused of misquotation unless the plaintiff can show that the writer strongly suspected that he was misrepresenting the gist of what was said.

Unknown Speaker: So if I'm running in an election campaign and I... and my opponent accuses me of being a racist on the basis of some substantive positions I take, and it's arguable.

I mean, it's a reasonable thing to say those positions could be based upon somebody's being a racist.

It is perfectly okay and not actionable if a reporter who happens to buy into that theory quotes me as saying yes, I am a racist?

There's no... there's no action available for that?

Mr. Farr: If I understand the hypothetical, Justice Scalia, I don't think--

Unknown Speaker: A reasonable person could think, on the basis of my actions and on the basis of my other statements, that I am a racist.

And that's what the political debate would be about.

I deny it; they say it's true.

This reporter believes it, and therefore this reporter is permitted to write about me, Scalia said

"Yes, I am a racist. "

Mr. Farr: --Justice Scalia, I think, as I say, if I understand the hypothetical, that that reflects an exaggeration of the position that I am trying to make.

I think, quite frankly, the same exaggeration that Judge Kozinski made below.

What... the point that I am making--

Unknown Speaker: It's my hypothetical.

What is--

[Laughter]

Mr. Farr: --Well, let me explain that point that I am trying to make, if I may.

Unknown Speaker: All right.

Mr. Farr: The point that I am trying to make is that the inquiry is into whether the writer is knowingly misrepresenting something that was said, the substance of something that was said.

Not somebody's character in general, not their views on other issues that they were not talking about, but a... the particular subject matter that was talked about and the views expressed by the speaker on that subject matter.

If there is no knowing misrepresentation, thus limited, then it seems to me that no more than there would be if there was a direct paraphrase do you have any situation where the writer is knowingly misrepresenting the defamatory gist of what is being said.

Unknown Speaker: So you say that a false statement by a reporter in an article, such as Mr. Masson said this when he in fact did not say it, is... cannot form any basis for inferring malice?

Mr. Farr: No, Mr. Chief Justice, I don't mean to say that.

What I am saying is that simply showing that there may be knowledge of different words is not itself all you need to prove malice.

Unknown Speaker: Well, it may... but could it go to the jury as evidence of malice?

Mr. Farr: It would depend on the particular circumstance.

There may be circumstances in which a reporter accused of misquotation, where the form of the accusation and the materials about what was actually said would support an inference of knowing--

Unknown Speaker: What about Justice Scalia's hypothetical?

Mr. Farr: --If I understand his hypothetical--

Unknown Speaker: Yes, I am a racist is the false quote.

Mr. Farr: --I do not understand... I do not understand that there is something particular that has been said in that case that is being represented by the reporter.

Unknown Speaker: Well, I would suggest that the very, that the very circumstance that someone makes an admission of that sort, allegedly, is itself a fact that is being highly misrepresented.

It's false.

Mr. Farr: If he has made an admission, if... again, maybe I'm not clear on the hypothetical.

What I am understanding you to say is that somebody is drawing an inference about character and simply inventing a quote based on that idea of character.

If you say things... for example, if you say I have a strong prejudice against a particular racial group, and someone, and you are quoted as saying that you are a racist with regard to that particular group, then it seems to me the question is not, well, does that settle the malice inquiry just because the words are different and you can make an accusation that the reporter knew the words were different.

The malice inquiry then turns to the question is there sufficient evidence from that alone, or even combined with other evidence, as Justice Souter suggests, that the writer was knowingly misrepresenting the substance of what you said.

Unknown Speaker: Mr. Farr, why should it be that way?

Why should... why should an intentional alteration of my words be at my risk?

Why shouldn't the rule be if you want to... knowingly.

You have to know that you are changing them.

If it's a good-faith mistake, that's something different.

But you know that you are not using my real words.

Why should... why should I be at risk?

It seems to me you should be at risk, if in fact, if in fact it misrepresents me, even if you don't think it does.

That's your tough luck.

You should have quoted me exactly.

Then you would have been sure not to be liable.

But if in fact, though you think it doesn't misrepresent me, it does misrepresent me, why shouldn't you bear that burden?

Mr. Farr: Well, first of all I think that there are two parts to the answer.

The first part, which is the sort of legal analysis, is that I think that creates a separate malice rule for quotations as opposed to other ways of describing what somebody says, such as paraphrases, which focuses on one particular kind of falsity and not the same falsity that is the gist of the--

Unknown Speaker: I don't think so.

If, for misquotation, as for everything else, you must know that what you wrote is not true.

Mr. Farr: --The question, though, is what exactly is the gist of the action?

What is the core of the action?

The falsity you were talking about is simply a falsity of words.

You cannot win a libel action, you cannot bring an action, you cannot base an action for defamation on simply saying the words are different.

Unknown Speaker: But the--

Mr. Farr: The falsity you must show is something different.

Unknown Speaker: --But this falsity of the gist is something that you have urged, but I don't know that our cases support it.

Mr. Farr: Mr. Chief Justice, I believe they do.

That certainly California law, in order to bring an action, and I'm talking about now the interest that they are pursuing--

Unknown Speaker: But we don't have any question of California law before us.

Mr. Farr: --Well, it is the California law that is intersecting with the First Amendment in this case, so there... that's correct, you don't have to decide California law, but that is what the California law represents.

But if I could return to the second point I was going to make to Justice Scalia, what I suggest you're doing in saying any time you knowingly change words to the press, now you are assuming the risk.

You essentially at this point have strict liability for anything that you do if it turns out to change the meaning--

Unknown Speaker: Well, I think the question is a little different.

If the writer entirely fabricates the language, it's not a misquote, it's an entire fabrication to say that Mr. X said I am a racist.

That isn't what Mr. X said at all.

Mr. Farr: --Well, Justice O'Connor--

Unknown Speaker: And a quote is fabricated to that effect, which under State law would be regarded as defamatory.

Now, is that fact of the fabrication of the quote something that raises an inference of actual malice?

Mr. Farr: --The accusation by itself, I think, does not.

Let me suggest that the difference between--

Unknown Speaker: The quote.

The intentional writing of that quoted language, knowing that it was not said.

Mr. Farr: --I think it does not by itself raise the inference of malice as I believe it is correctly interpreted.

And let me give you an example of what I mean from this case.

In his complaint, and this is at page 260, this was the original complaint, petitioner alleged that he had been quoted as saying analysis stands or falls with me now.

This is at page... at the bottom of page 260.

And he says in truth Masson never said such.

So he is accusing Janet Malcolm of a total fabrication with this quote.

Now, fortunately, it turned out that we had absolute evidence of this quote because this quote was on the tape, that he said exactly these same words.

But let us assume for a minute that we were in the posture we are with several of the quotes that are still at issue here, that all that we had was notes representing the substance of this quote.

He would be saying right now that he is entitled to go to the jury, simply based on his denial of those words, even though in fact we have undisputed evidence that on that particular subject about his place in psychoanalysis he said not only analysis stands or falls with me now, but we also have evidence that he said substantially equivalent things.

I suggest that looking at that evidence, which we would not be able to look at under petitioner's rule, negates any inference that the writer could have knowingly been trying to misrepresent the substance of his views on that particular subject.

Unknown Speaker: Why don't you get to look at the evidence on the question of damage?

Mr. Farr: It is... well--

Unknown Speaker: The evidence would come in on the subject of damage.

Mr. Farr: --It might.

But I'm saying on the subject of malice, I believe it ought to come in on the subject of malice.

Because what... the balance I believe struck by New York Times v. Sullivan between State libel law and the First Amendment is one that looks at knowingly misrepresenting substance, not simply knowingly misrepresenting words.

And his rule essentially would take that case that I just used, based on an accusation of misquotation, and move that case to the jury.

Unknown Speaker: You have no... I mean, I don't see this distinction between knowingly misrepresenting substance and knowingly misrepresenting words.

It is knowingly misrepresenting substance to say that I said something which you know I did not say.

The substance is did I say it.

I did not say it.

Mr. Farr: It is knowingly... I mean, in that hypothetical case where the writer in fact is proved to have known of the misrepresentation it, arguably I suppose, could be said to be substance, but not defamatory substance.

That's what I'm saying.

That is what the actual malice test in every other circumstance focuses on.

If I can use an example of a paraphrase, let's say that instead... take the particular quotes here, anyone you want.

Sex, women, fun, perhaps.

Let's say that the sentence read exactly the same way it reads now, except instead of using... putting quotation marks around the word sex, women, fun, it was a paraphrase that said Jeffrey Masson said that if he lived in the Freud house in London he would turn it into a place of sex, women, fun.

Period.

No quotation marks.

The standard for evaluating actual malice in that case, with the paraphrase, would be did the writer knowingly change the defamatory substance of that statement.

And given other statements on exactly the same subject, not things showing his character generally, but on exactly that same subject, what would he do if he lived at the Freud house in London, it's clear there would be no misrepresentation--

Unknown Speaker: No, I don't think your point... your point of view makes enough allowance for the fact that putting words in someone's mouth as having said it themselves can hit a lot harder than having some third person describe what they think the person said.

Mr. Farr: --Justice Rehnquist, I think that is true, but perhaps less true than it seems at first blush.

I think that usually the most potent effect out of attributing something to a speaker is that you are attributing the content of what he says to the speaker, that he says something derogatory about someone else.

It's not normally the particular choice of words.

Unknown Speaker: No, what makes the difference, Mr. Farr, is that you, as the writer, you take yourself out of the picture.

When I read a statement he said that, and it's under, it's over your byline, I say well, that's Farr's interpretation of it.

But when you said he said, quote, then I say, gee, that's... he said that.

That's not... Farr is out of the picture now.

This is what the individual said.

That is a big difference.

I no longer make allowances for your erroneous judgment.

You are asking me to eliminate any possibility of your erroneous judgment.

You're saying this is what he said, quote.

Mr. Farr: But the question, as I understood the Chief Justice to ask it, isn't the fact that words are attributed to somebody much more powerful.

That is the idea of a quote.

I think there are two different circumstances that have to be compared and kept in mind.

First of all, the words are attributed to him, but other words could be attributed to him, let's say undisputedly, that would have the same power.

So, for example let's say, instead of saying sex, women, fun with regard to how he would conduct himself at the Freud house, he was quoted as saying myself and another psychoanalyst would pass women around to each other and we would have a wonderful time and we would... we would open it up--

Unknown Speaker: It would show he didn't know how to use the word "myself".

[Laughter]

Mr. Farr: --Well, I can't lay that on him.

I think it shows I don't know how to use it.

[Laughter]

But in any event, I think the power of the sentence would be from the content of the sentence in that particular case, and the fact that he holds those views, that's what in fact he would do if he went into something that is now a place of scholarship.

The particular choice of words in that particular situation wouldn't make any difference.

There may be situations where a paraphrase would be different from a quote, because depending on the nature of the paraphrase it would put a filter in there.

And there may... excuse me--

Unknown Speaker: Mr. Farr, you said... suppose the writer, as you've just suggested, would write and say he said wine, women, and song.

And he got sued for it.

Now, the plaintiff's burden of proving falsity would go no farther than proving that he didn't say that.

Mr. Farr: --His... under the plaintiff's theory here--

Unknown Speaker: Yeah.

He says I'm suing you because you said I said something that I did not.

I don't care whether it's in quotation marks or not.

I didn't say that, and I'm going to... and his burden... he's suing because you misrepresented what he said.

And his burden or proving falsity will go only to proving that he didn't say it.

Mr. Farr: --His burden--

Unknown Speaker: He wouldn't have to prove the falsity of the content.

Mr. Farr: --Justice White, I believe he would.

If I understand your question--

Unknown Speaker: You mean he would... he really wouldn't... he really wouldn't, if he had that house, do what he was... what the reporter said he would?

Mr. Farr: --I'm sorry.

He would have the burden of proving both that he would not do that, and that the reporter knew that he would not do that.

Unknown Speaker: You think he would have to prove that?

But he is only suing because he has... he has been misquoted.

He's going to claim that that's--

Mr. Farr: I'm sorry.

Excuse me, I've misunderstood.

I don't think he has to prove what his conduct actually would be in the Freud house.

Unknown Speaker: --Exactly.

Mr. Farr: I'm sorry, if that's what you're saying.

Unknown Speaker: Exactly.

Mr. Farr: But what he would have to do if he sued... let's say under my... under the hypothetical I was using, if he did sue and say this misrepresents what I said about what I would do, he would have to show that he did not in substance say that.

That's what he would have to do.

And he would... his malice inquiry would turn on that substance, not simply on whether there was a difference in the words.

Unknown Speaker: But Mr. Farr, we have here self valuative statements or alleged statements, greatest analyst, honorable man, intellectual gigolo.

Now, these are quotations of a markedly different character if they are attributed to one's self.

It's far different if someone says I am a racist than for a third person to say he is a racist.

That's far different.

Mr. Farr: That's correct, and I don't dispute that.

We are not suggesting, Justice Kennedy, that in determining whether there has been a knowing misrepresentation of the substance of what someone has said, that you could use words said by somebody else about him as part of the question as to whether there was a knowing misrepresentation of substance.

What I am suggesting... perhaps it would be helpful at least if I indicated what I think the proper way to go about the inquiry is, because I think it will show that we're not, for example, talking about as broad a theory as I think were attributed to us.

The... it seems to me that when someone accuses a reporter of misquotation, that the proper malice inquiry is to look at the substance of all of the things that the person has said, particularly to that reporter, on the subject.

Then you would take the disputed parts, because I'm assuming we're at the summary judgment stage, the disputed parts and the undisputed parts, and make a comparison between them.

If, based on that comparison, one could draw a conclusion that the addition of the disputed words will carry an inference that there is a knowing change in the overall substance of what he said, then it seems to me that you could draw an inference of actual malice.

Unknown Speaker: To put it differently, if a reasonable person could have given the words that interpretation, even though another reasonable person might not have given them that interpretation, putting it in quotation marks is okay, right?

All it has to do is be a... a reasonable interpretation of the words, right?

And there would be no liability then, so long as it's one of many reasonable interpretations, to put it in quotes?

Mr. Farr: I don't mean to be ironical, but I don't think that's a reasonable interpretation of what I said.

Unknown Speaker: I thought that that's what... but I thought that's what the test is.

Wouldn't you have to show that... to show malice don't you have to have knowing distortion?

Mr. Farr: You do have to have knowing distortion, but I don't understand why the mere rational interpretation test would necessarily protect you from that.

It might in some cases.

Unknown Speaker: How could I show knowing distortion if that is one of several reasonable interpretations of the words?

I... how could I possibly prove knowing distortion?

It's not the only interpretation, but it is one of several reasonable ones.

Mr. Farr: Well, I mean, I suppose I guess it depends on the other issues.

I mean, it seems to me that the basic test, as I say, is whether there is a, sufficient evidence of a knowing misrepresentation of substance.

I think that's what the proper inquiry should be.

Unknown Speaker: Could a... in the eyes of a reasonable juror?

Mr. Farr: Pardon me?

Unknown Speaker: In the eyes of a reasonable juror?

Mr. Farr: That's correct, if we're talking about the summary judgment stage, that's correct.

Unknown Speaker: Mr. Farr, in this case if we take your test to take all of the substance of what was actually said and compare it to all of the substance of what was quoted, are the use of quote... is the use of quote marks one of the factors that we may take into consideration?

Mr. Farr: Again, if I understand the question, I think it would be.

I would think... let me take an example so that at least what I am thinking of may become clearer.

If... there are cases, I believe, where a choice of words would be so out of character for the plaintiff or would reflect so differently on his character than the content of what was being said, that there may be an additional defamatory gist out of that word, that choice of word itself, the type of sort of trivial example, I guess, that occurs to me is a parson swearing.

Unknown Speaker: But Mr. Farr, you're giving us an example of what would constitute clear and convincing evidence of malice.

It seems to me there are two separate questions.

One is whether every misquote is competent evidence of malice, as Justice... Souter points out.

And it would seem to me that the mere fact that there is a misquote and they knew it, that's some evidence.

Maybe it's not strong enough to go to the jury or clear and convincing.

But then the second case is whether, is it strong enough to constitute clear and convincing evidence.

I think you're arguing that it's no evidence at all.

Mr. Farr: Justice Stevens, I don't mean that to be the argument.

What... perhaps I can be clearer by saying I agree with both parts of what you say.

What I am emphasizing, I suppose, with regard to the first part is that it is important, I think, to understand what the inquiry is, what it is that we are looking at the words for.

And that is all I'm saying.

I think that the purpose of looking at the words is to determine whether there is a knowing misrepresentation of what I keep calling the gist.

The fact that there is a difference in words by itself, if you don't connect it to that other inquiry, I think means nothing.

I think once you connect it to that other inquiry, then I think it is relevant.

Unknown Speaker: Well, you can't say it means nothing if it's admissible competent evidence.

It's just not sufficient.

I don't think you can correctly say it means nothing.

The very fact of misquotation means something.

Your opponent concedes that there are lots of misquotations that are not sufficient to go to the jury.

So I don't... I'm not sure you don't... couldn't really agree on that and not decide this case.

That it certainly is competent evidence, I would think, to show that the quote was different from what was actually said.

But that's very different from the example of saying I am a racist, and he never said anything.

Mr. Farr: All right.

Perhaps I stand corrected.

I think I see a distinction there, but I don't feel that I need to defend that distinction to answer the point you're making.

Unknown Speaker: May I... I'm sorry, I didn't mean to interrupt you.

Mr. Farr: Of course, Justice.

Unknown Speaker: May I try the distinction?

It seems to me in your argument you have posited three different kinds of situations, or we all have, I guess.

Number one, you got a third person quote and a misquote attributed to a third person.

You got a first person quote and a misquote attributed to the first person.

And the third example is you've got a third person quote, or at least third person evidence, and you misattribute that by means of a first person quote.

If I understand you, you're saying that when we've got simply the misquotation as between two third parties, the mere fact of the misquotation may be, as I was trying to say, competent evidence of malice, but it is not sufficient in and of itself as an abstract matter to rise to the level of clear and convincing evidence of malice.

Is that a fair statement?

Mr. Farr: Depending perhaps on the amount of difference, but generally that is correct.

Unknown Speaker: Right.

Okay.

Likewise, you have been arguing, I think, that when there are, when we're talking about differences between two first person quotes, you're saying, I think you're conceding again yes, a misquotation can be some evidence of malice, but it is not enough to go to a jury because unless it is just an absolutely egregious example that totally changes the substance it could not rise to the level of clear and convincing.

Mr. Farr: That is correct.

Unknown Speaker: Justice Scalia's example is the third person quote, or we'll say just the non-first person evidence, which is suddenly placed by means of a misquotation into a... into a statement in quotes attributed to the first person.

His argument was when that statement, misattributed to the first person, is defamatory, isn't that enough in and of itself to constitute sufficient evidence for a clear and convincing finding?

What is your answer to that?

Mr. Farr: Um, I guess I'm not--

Unknown Speaker: And take his example.

I am a racist, when he never said he was a racist.

Isn't that sufficient to go to the jury in and of itself as clear and convincing?

Mr. Farr: --I may be having more difficulty than I should in keeping the categories apart.

At least what I'm thinking of as I understand that, Justice Scalia's quotation... I mean hypothetical... is more the second situation.

I mean, at least that's what I think we are dealing with in this case, is the situation of first person quotations.

I don't see in this case a situation where the person being quoted has not addressed the subject of any of the quotes we're talking about here.

He clearly discussed what he would do at the Freud house.

He clearly discussed how Anna Freud and Dr. Eissler viewed him.

He clearly discussed the other things that are being presented.

So it does not seem to me here that you have a situation where you are reaching out to something and saying I am going to bring in substance from somewhere else and attribute it to this person.

What it seems to me this case involves is the case where the reporter says I am dealing with the views of Jeffrey Masson on this subject, here is what I represent him as having said.

Jeffrey Masson, like many plaintiffs, claims he was misquoted.

And I believe the right inquiry is, on the actual malice standard in that case, is there clear and convincing evidence that by representing what he said on this subject or these subjects the writer was knowingly trying to misrepresent what he in fact said.

And all I am saying is that--

Unknown Speaker: And it's your position that if not, if the writer knowingly misquoted but thought that in the writer's opinion that was a fair representation of what the person said, there's no remedy on the part of the person who is putting quotation marks?

Mr. Farr: --But libel law does not provide that remedy, Your Honor.

I am saying that that is the balance struck in New York Times v. Sullivan between knowing misrepresentation of substance and the law of libel of the various States.

Unknown Speaker: New York Times v. Sullivan had absent a knowing... one knowing lie, namely the lie that the person actually said that.

That is a lie.

What New York Times said is if you did not have any knowing lie at all, you thought everything you said was the truth, then there cannot be a remedy under the First Amendment.

But here you do have one unquestionable lie.

You know that that quote was not uttered.

Mr. Farr: Well, let me back up a step.

But New York Times v. Sullivan also said, of course, that threat of sanctions in many cases is almost as chilling as the sanctions themselves.

Here you have the threat of that coming out of any accusation of misquotation, the issue of whether it's deliberate or not simply is part of the accusation.

Unknown Speaker: Thank you, Mr. Farr.

Mr. Morgan, do you have rebuttal?

You have 2 minutes remaining.

Rebuttal of Charles Morgan, Jr.

Mr. Morgan: All I need is a minute, Your Honor.

Following up on that subject, the knowing lie creates the inference of malice.

The question of the substance--

Unknown Speaker: Does it create clear and convincing evidence of malice in every case?

Mr. Morgan: --Yes, sir.

Unknown Speaker: Will you--

Mr. Morgan: I don't want to go through that because I haven't got that much time.

But what I wanted to add was the next step is the element of damage.

The substance argument comes only into the element of damage.

Now again, the knowing lie that's defamatory--

Unknown Speaker: --But even in your 80-yard run case it's clear and convincing evidence of malice?

Mr. Morgan: --No, that's right.

Unknown Speaker: All right, then you don't mean what you said.

Mr. Morgan: Right.

Thank you, Your Honor.

Chief Justice Rehnquist: Thank you, Mr. Morgan.

The case is submitted.

Unknown Speaker: The honorable Court is now adjourned until tomorrow at 10 o'clock.

Attribution:

The OYEZ Project

Featured:

Milkovich v. Lorain Journal - Oral Argument

Fri, 09 Jan 2009 14:49:22 +0000

Case:

Milkovich v. Lorain Journal

Media File:

89-645_19900424-argument.mp3

Related Transcript:

1989_89_645_argument.xml

Transcript:

Argument of Brent Lawson English

Chief Justice Rehnquist: We'll hear argument next in No. 89-645, Michael Milkovich v. the Lorain Journal Company.

Mr. English, you may proceed whenever you're ready.

Mr. English: Mr. Chief Justice, and may it please the Court:

The sole question before the Court this morning with respect to this case is whether false and defamatory statements published about the petitioner by the respondents are entitled to constitutional protection under the First Amendment.

This Court has repeatedly stated that there is no constitutional value in false statements of fact.

Yet the Ohio courts below have afforded exactly that protection in this case.

This Court has the opportunity to correct that error and to delineate finally how the opinion/fact distinction should be made in the context of defamation law.

Unknown Speaker: Mr. English, do you think that this case involves a matter of public concern?

Mr. English: Your Honor, not a general matter of public concern, but certainly a matter of public concern as to the local communities involved.

Unknown Speaker: Does it fall under the rubric of the Hepps case?

Mr. English: Your Honor, I believe it does fall under the rubric of the Hepps case, and had the Hepps case been properly followed by the trial court, clearly this case would have been actionable as opposed to absolutely privileged.

Unknown Speaker: And if it's... if Hepps applies, then the plaintiff below would have the burden of proving falsity?

Mr. English: Without a doubt, Your Honor, that is absolutely the case.

Unknown Speaker: And are these statements capable of being proven false?

Mr. English: Your Honor, these statements are quite capable of being proven false.

There are actually four statements unequivocally that could be proven false.

As the Supreme Court of Ohio in the Milkovich decision in late 1984 held, the primary impact of this article is to accuse the petitioner of committing the crime of perjury.

The proceeding at which the alleged perjury occurred was of records, stenographically recorded, and clearly the testimony at that proceeding could easily be compared with the statements that Mr. Milkovich had made previously as to the same question.

And thus, a reasonable jury could determine whether or not the statements in fact were false or whether they were true.

Unknown Speaker: If that's true, it doesn't much matter whether you label it fact or opinion, does it?

Mr. English: Your Honor, I would agree with you.

Unknown Speaker: The question is whether you can prove that it's false.

Mr. English: Clearly this Court in the Hepps case has indicated, at least with reference to private individuals on matters of public concern involving newspapers... which is exactly the situation that we have here... that it is the Plaintiff's burden to establish without resort to presumptions that a particular statement is false.

We believe that that can be demonstrated in this instance without difficulty and, therefore, the action should have been allowed to proceed and unquestionably it should not have been protected by the First Amendment.

Unknown Speaker: So... so you would... would accept as a definition of opinion is something that cannot be proven true or false?

Mr. English: Your Honor, I would say that that is a fundamental aspect of the question of opinion.

If something cannot be proved true or false, I would suggest to the Court that it could be properly labeled as opinion.

However, as Justice O'Connor has just mentioned, it may not be necessary in this area of the law to even adopt any kind of opinion privilege if we require a defamation plaintiff to affirmatively prove falsity.

But in this case, the allegation is that Mr. Milkovich lied under oath in a judicial proceeding.

That is quintessentially an assertion of fact which, if false, should be actionable under the state law of defamation.

However, certain statements, which are very rhetorical or hyperbolic or polemical, which cannot be proved true or false, could easily be characterized as opinion.

However, it is the petitioner's judgement that this Court need not reach that question in this case, since based on the Hepps case, Mr. Milkovich can demonstrate his entitlement to at least a jury determination on the question of whether or not this... these statements were true or false, and unquestionably they were defamatory.

Your Honors, as I have pointed out in my brief, there are many instances in the past twenty years, after this Court's decision in Gertz v. Robert Welch, were courts have presumed that there is a broad First Amendment based privilege in the law of defamation.

As a result of that presumption, and this Court has never so held, there have been many courts that have developed a series of different formulations as to how that distinction should be made, whether something is an assertion of fact or whether something is a expression of opinion.

Most courts have relied first on the question of whether or not a statement is objectively verifiable.

And as I have pointed out in this instance, this statement is unequivocally objectively verifiable.

This is not a situation like, for example, the case Buckley v. Littell decided by the Second Circuit where there was a statement that William F. Buckley was a, quote, "fellow fascist traveler".

In that case, the Second Circuit looked at that language and said there is no way that that statement can be in fact verifiable.

It is loosely defined words.

It is polemical, it is political in nature.

And as a result, that statement is not defamatory, or even if defamatory, is not actionable.

However, in the same case, Mr. Buckley was also accused to having committed plagiarism.

And the Second Circuit analyzed that question and said that, very much like perjury or an allegation of perjury, is definitely empirically provable, clearly is defamatory, and therefore should be actionable.

So the Second Circuit has certainly recognized that there is an opinion privilege, but that opinion privilege only applies in the area where there is very polemical language, hyperbolae being utilized, and where in context the statement cannot be objectively verified.

In this case, Your Honors, the respondents have contended that this Court has no jurisdiction to decide this case on the grounds that the Ohio Supreme Court has determined that there is an opinion privilege under the Ohio constitution.

They cite the case of Michigan v. Long, decided by this Court in 1983, for that proposition.

I would like to address that question directly because I think it's important in the context.

The procedural history of this case is somewhat unique.

It has had 15 years of litigation in Ohio's courts.

There have been three attempts to bring this case to the attention of the United States Supreme Court, the latest and presumably only successful one, being the one sought be the petitioner.

In Michigan v. Long this Court held that where a state court has unequivocally determined an issue on separate adequate and independent state grounds, this Court does not have jurisdiction to decide the question.

However, in this case, the decision from which the appeal is taken is from the Ohio Court of Appeals for the Eleventh Appellate District, and not from the Ohio Supreme Court.

And the decision of the Ohio Court of Appeals from the Eleventh Appellate District relies nearly exclusively on Federal precedent and also relies on the decision of the Ohio Supreme Court in the accompanying Scott case.

As the Court is aware, the Ohio Supreme Court in... in a period of yet... just 15 months has determined, on one hand, that the statements in question in this case are constitutionally protected as opinion under the First Amendment, and then 15 months later determined that the very same statements under the very same facts, but with a different plaintiff, are in fact constitutionally protected or immunized by the First Amendment.

The Ohio Supreme Court did in fact mention on two occasions in its... in its decision that it was relying in part on the Ohio constitution.

However, any fair reading of the Scott case clearly indicates that the Ohio Supreme Court was primarily relying on this Court's decision on Gertz against Robert Welch, decided in 1974, and the veritable flood of cases that have been decided since, presuming that there is this broad First Amendment-based privilege.

Therefore--

Unknown Speaker: Is there... are there any indication on the Ohio cases that state law and First Amendment Federal constitutional law are one and the same so far as the definition of opinion?

Mr. English: --Yes, Your Honor.

There are a number of old cases that hold that.

However, there are no cases that hold that the--

Unknown Speaker: I mean, how... not... not, pre-New York Times v. Sullivan, I assume?

Mr. English: --They are... they are pre-New York Times v. Sullivan, basically standing for the proposition that the Ohio constitution means essentially the same thing as the First Amendment with respect to freedom of the press.

The two provisions are roughly the same, alchough, ironically enough, the Ohio constitution expressly recognizes that there shall be free speech subject to the right of protection of your reputational interest if you are defamed.

Whereas, obviously, the First Amendment says nothing about the state law of defamation.

The Ohio Supreme Court in this case... in the Scott case, merely relied in part on the Ohio constitution, saying that it was a separate source of authority but quite clearly under the analysis provided in Michigan v. Long, which is frankly a very analogous to this one, this Court has jurisdiction to decide the question.

There are no Ohio cases known to the petitioner that specifically hold that the first... that the section of the Ohio constitution, Article I, Section 11, provides more protection for freedom of the press than does the First Amendment to the Constitution.

Unknown Speaker: Is the... is the only language that the Ohio Supreme Court used in Long that... that justifies the assertion of independent state grounds the phrase that the ideals of the First Amendment are independently reinforced in Section 11, Article I of the Ohio... is there--

Mr. English: There is... I'm... I'm sorry, Your Honor.

That is a statement, and then there is a statement in Justice Locher's opinion for the court that says that the Court is relying on the Ohio constitution as well as the Federal Constitution.

There is no question that the Federal constitutional provision is very much interwoven with the Ohio constitutional provision.

And thus, it's certainly Petitioner's view that this Court has jurisdiction to decide the scope of, or even the applicability of a First Amendment-based privilege.

Your Honors, if this Court adopts a First Amendment-based opinion privilege, the Petitioner would ask the Court to establish that privilege in a very narrow manner and look to two primary objective factors, as opposed to subjective factors on which the Ohio Supreme Court relied in--

Unknown Speaker: --Is this... is this is... is this your primary submission, Mr. English, or is your primary submission that there really is no... no need for a separate First Amendment privilege for opinion?

Mr. English: --Your Honor, I would say that under the Hepps case, after the... after the Hepps was decided there is no need for a First Amendment-based privilege, period.

However, if the Court acknowledges that a First Amendment-based privilege is necessary in this area, primarily because of the breathing space requirement that the Court has recognized ever since New York Times v. Sullivan, then that privilege should be very narrowly drawn, and it should be objective factors.

Certainly one objective factor is whether or not the statement is objectively verifiable, as Justice O'Connor has pointed out, and certainly which is now a requirement, constitutional requirement, based on the Hepps case.

I would suggest--

Unknown Speaker: Yeah, but Hepps... in Hepps you still have to... before you give the jury... before you... before a plaintiff can undertake to prove something is false it has to be provable, I guess.

Mr. English: --That's correct, Your Honor.

Unknown Speaker: So... so you really don't solve much.

You still have to figure out whether something is verifiable.

Mr. English: That's correct, Your Honor.

That's a fact question.

And, obviously, if something is not verifiable... if the plaintiff cannot prove what the statement is, the plaintiff, as I read the Hepps case, cannot recover, period.

And that's a requirement of the First Amendment--

Unknown Speaker: Well, then--

Mr. English: --on speech of public concern.

Unknown Speaker: --Well, then, if it isn't verifiable, it's opinion.

So you get... so you end up with the same--

Mr. English: Your Honor--

Unknown Speaker: --the same result.

Mr. English: --Your Honor, that... that is the position that I have advanced in the brief, and I believe that that would adequately protect the competing interest at stake.

This Court has long recognized that there's a... there's certainly need for a vigorous robust free press.

But, however, there is also a need for an individual to be able to recover for reputational damage.

And in this case, Mr. Milkovich has been attempting to do so for 15 years and has virtually every constitutional impediment put in his way, and now we have the Supreme Court of Ohio making a decision that on the basis that... of essentially misconstruing this Article and the specific allocations in it, that this is somehow constitutionally protected opinion.

You need only look at the article to determine what in fact they alleged.

The headline is Maple Beat the Law with the "Big Lie".

On the inside Diadiun says, "Maple told a lie".

Specifically, and I quote,

"Anyone who attended the meet, whether he be from Maple Heights, Mentor, or impartial observer. "

those are the schools involved,

"knows in his heart that Milkovich and Scott lied at the hearing after each having given his solemn oath to tell the truth. "

This is, Your Honors, quintessentially an assertion of fact which, if false, is the proper subject for a defamation claim.

Unknown Speaker: May I ask you on that point, Mr. English, you say it's quintessentially a question of fact, but isn't it obvious that the author of the statement could not possibly know as a matter of fact what everyone who attended the meet knew in his heart?

I mean, isn't this like saying that I was at the meet, and I talked to a lot of people and it's my opinion that everyone at the meet must have had the same view that I had?

Mr. English: Your Honor, that's a very different statement than what was said in here.

Unknown Speaker: You think he saying as a matter of fact he knows that everyone there knew in his heart that he... he--

Mr. English: No, I'm saying--

Unknown Speaker: --that's verifiable.

Mr. English: --No, I'm not saying that.

I think that would be a misconstruction of the article.

What Mr. Diadiun has said is that everyone knows in his heart... he's making this very fundamental thing... everybody knows that this man lied under oath, and he's specifically asserting that.

If you get yourself in a difficult--

Unknown Speaker: Well, there are two different things I'm suggesting.

One is the difference between saying the man lied under oath, and the second statement is that the third party who was at the meet knows he lied under oath.

Mr. English: --I agree.

I agree.

Except--

Unknown Speaker: As to... that's... the latter half, was that fact or opinion?

Mr. English: --I would say that it depends on how the article is written.

But it could potentially be opinion.

Unknown Speaker: Well, I don't understand why you say it depends on how... it was written in English, I guess.

[Laughter]

Mr. English: Well, I... I'm not suggesting it was written in Japanese, Your Honor, but--

Unknown Speaker: xxx says that everyone knows in his heart, that includes the speaker.

Mr. English: --Yes, sir.

Unknown Speaker: That includes the person.

Mr. English: No... no question about that.

Unknown Speaker: So that... that general statement subsumes a statement that I think he lied.

Mr. English: And that's exactly the gist or the sting of the statement, that Mr. Milkovich lied under oath.

You can't read the headlines in this article and the specific allegations--

Unknown Speaker: So the statement that you're relying on is... is the portion of it which in substance says, I, the author, know he lied.

Mr. English: --That's correct.

Unknown Speaker: And you... you can disregard the fact that everyone else thought he lied.

Mr. English: That's correct.

What we really have is sort of a mixed assertion of fact and commentary.

Part of the article is commentary, no question.

Unknown Speaker: Would it be libelous if he'd said, I believe he lied?

Mr. English: I don't believe so, Your Honor, Justice... Judge Friendly in Second Circuit noted in a case that I call the Court's attention to... it's Cianci v. New Times Publishing... a very capable analysis of how it is that someone might be able to avoid this opinion/fact distinction by saying, I think, I believe, it's my constitutionally protected opinion that someone lied under oath.

Unknown Speaker: Wait.

I'm sorry.

You said--

--And you'd agreed with that?

--it would be libelous or it wouldn't be libelous if he said I believe he lied?

Mr. English: It would be clearly libelous if he said that.

That would just be a ruse.

It's just an attempt to avoid what is quite obvious.

Unknown Speaker: But you can't avoid it by saying in my opinion he is a liar?

I mean, that's the same thing as saying he is a liar.

Mr. English: I think that is correct, Your Honor.

Unknown Speaker: Oh, I... I thought you said the opposite.

I think you did say the opposite.

Yeah, you had me going there.

Mr. English: I certainly didn't mean to do so.

[Laughter]

Unknown Speaker: Supposing he said this, I attended the meeting and I saw these facts and I saw... then somebody else told me these facts; on the basis of these facts, I think he lied?

Mr. English: Your Honor, that's a much closer call.

That would... that would raise the opinion/fact formulation at the restatement of tort second as to what--

Unknown Speaker: Well, what... what do you do with that case?

He sets out all the facts on which he bases the opinion and then he expresses... he says, I think he lied deliberately and committed perjury, which is a felony in Ohio, and my reason for saying that is A, B, C and D, which are all... A, B, C and D are all accurate.

Actionable or not?

Mr. English: --Actionable.

I believe it would be actionable.

And obviously truth is a defense.

If in fact he relied on these individuals, and in fact Mr. Milkovich lied under oath, then he obviously has nothing to worry about.

But if he didn't--

Unknown Speaker: You don't agree with the restatement second?

Mr. English: --I do not agree with the restatement second.

I think it's way too narrow, and way too--

Unknown Speaker: You have to right not only about the facts, but also about the assessment of the facts--

Mr. English: --That's correct.

Unknown Speaker: --unless you can... and the burden's on you.

But if you can prove to a jury that that assessment of the facts is... is not correct, it's libel.

Mr. English: That's correct.

That is exactly correct.

Your Honors, unless the Court has further questions, I would like to reserve the remainder of my time for rebuttal.

Unknown Speaker: Very well, Mr. English.

Mr. Panza, we'll hear now from you.

Argument of Richard D. Panza

Mr. Panza: Mr. Chief Justice, and may it please the Court:

I'd like to direct the Court's attention to what Respondents initially believe to be an improvident grant of the writ of certiorari.

It is hard to imagine a... absent a verbatim recitation of the language of Michigan v. Long a clearer, more precise statement of independent state law than set forth by the Ohio Supreme Court in the Scott case.

Unknown Speaker: In which opinion, Mr. Panza?

Mr. Panza: Scott case, 1986, Your Honor.

Unknown Speaker: No.

Which of the opinion of the Supreme Court of Ohio?

Mr. Panza: There are only... Your Honor, the Scott case reversed the Milkovich case.

Pursuant to Ohio law, the Milkovich case, as a result of that reversal, has a result of having never having existed.

It has no legal effect whatsoever.

Unknown Speaker: But as I recall reading the Scott case [inaudible], there wasn't just one opinion, there were a number of different opinions by the justices of the Supreme Court of Ohio.

Mr. Panza: Majority opinion, Your Honor.

Unknown Speaker: The majority opinion?

Mr. Panza: Written by Judge Locher, who was speaking for the majority.

Unknown Speaker: But that's not the case we have before us.

Mr. Panza: I beg your pardon?

Unknown Speaker: That isn't... that isn't the opinion that is... that is on appeal here.

Mr. Panza: That's absolutely correct, Your Honor.

But what was done by the Scott court, is to find an independent adequate state remedy for--

Unknown Speaker: Well, we... we don't make an independent inquiry into state law whenever we're reviewing the judgment of a state court to determine whether even though this state judge didn't rely on state law, he could have--

Mr. Panza: --Your Honor--

Unknown Speaker: --because, in fact, it is a matter of state law.

And that's what you're... isn't that what you're arguing about?

Mr. Panza: --Not at all, Your Honor.

The motion for summary judgment... the third motion for summary judgment cited Scott for the proposition that there was a state constitutional protection.

And the Court--

Unknown Speaker: I don't care what the motion for summary judgment cited.

I care what the opinion of the court--

Mr. Panza: --The court of appeals said the very same thing, Your Honor.

Unknown Speaker: --What did the court of appeal say?

It cited Federal cases--

Mr. Panza: The court of... the court of appeals, in citing the Scott case, cited the proposition that there is a... a constitutional protection for... for this exact column pursuant to Article I, Section 11 of the Ohio constitution.

Unknown Speaker: --It cited Federal cases and Scott.

Is that right?

It cited both Federal cases and Scott.

And while Scott also relied on a state ground, Scott also relied on a Federal ground, didn't it?

Mr. Panza: Your Honor, I believe exactly that there was a separate paragraph that the court of appeals made citing Article I, Section 11, and then the next paragraph on cited the Gertz case.

Unknown Speaker: Well, there might be a constitutional rule in the state protecting this sort of thing, but if the state just follows the Federal rule in applying... in construing its own constitution, I'm not sure that that is an adequate independent state ground.

Mr. Panza: Well, I agree with you.

It is not.

But that's not what was done in the Scott case.

In the Scott case, Your Honor, in the initial summary conclusion of the Scott case where the... the... the critical opinion is set forth by the Ohio Supreme Court, it holds quite clearly, without reference to the First Amendment, that there is a constitutional protection for opinion under Article I, Section 11.

It then goes three paragraphs down and finds that the ideals of free press and free speech are at the core values of Article I, Section 11.

And then it uses the word "independently of" or independently of the First Amendment of the United States.

Unknown Speaker: Is there any case precedent in the State of Ohio which undertakes to analyze defamation issues separately under state law and reject contrary to result to what the Federal Law reaches?

Mr. Panza: Not since the Scott case, Your Honor, but I might point out to you that the Ohio Supreme Court one year later in the case of Lansdown once again reiterated that the... there was a constitutional protection, a state constitutional protection, for opinion independent of the Federal Constitution.

One year later.

Unknown Speaker: Mr. Panza--

Mr. Panza: Yes, Your Honor.

Unknown Speaker: --Mr. Panza, would you help me on one matter.

I can't find it right now, there's so darned many opinions in these two volumes here, I can't find it.

But the Scott Supreme Opinion... maybe you'll give me the page of it if it's handy... but the syllabus of the Scott opinion, as I remember it, does not differentiate between the Federal and the state constitution.

Mr. Panza: Doesn't say it either.

Unknown Speaker: And isn't it the syllabus that's the law in Ohio, rather than the opinion?

Mr. Panza: That's absolutely correct.

Unknown Speaker: So if the syllabus does not contain an independent adequate statement they're relying on a state ground rather than Federal, isn't that the end of the ball game?

Mr. Panza: Well, I don't believe so, Your Honor, because the syllabus doesn't say... doesn't cite to the Federal Constitution, nor does it cite to the Ohio--

Unknown Speaker: Right.

Mr. Panza: --Supreme Court.

So you must go into the heart of opinion to try to make a determination as to... as to whether or not there's independent adequate state grounds.

Actually, you must go into the opinion to try and determine what the Ohio Supreme Court meant by making that citation.

Unknown Speaker: There is--

Mr. Panza: But there is no reference, one way or another.

You're quite correct.

Unknown Speaker: --All right.

Could... could you tell me which is the opinion of the court of appeals that we're reviewing here in your appendix?

In the joint appendix?

Just give me a page.

Mr. Panza: Page 108.

Unknown Speaker: 108.

Thank you.

Mr. Panza: I'd like to address myself now to Justice O'Connor's comments concerning why Respondent believes that Hepps in no way is sufficient to protect opinion if the purpose of the protected speech is to advance public debate.

And I believe what Mr. English has been talking about for 15 minutes is... is a test known as the verifiability test.

The problem with the verifiability test and because, of course, we know Hepps doesn't direct us to any test whatsoever... I'm not sure it was intended to do that... but implicitly, by shifting the burden to the plaintiff, it necessitates the verifiability test.

The problem with the verifiability test is that it protects only speech which is figurative and so hyperbolic that it is absolutely false.

This is speech which does very little to advance public debate.

The problem with the verifiability test is that it tends to eliminate as... it tends to eliminate the vast body of opinion that may be based on certain facts, which may or may not be... be proven true.

It is that... that debate, it is that opinion, such as the opinion in this case, that advances public debate.

By allowing Hepps to stand without any other constitutional protection you are in effect excluding a substantial amount of opinion.

Unknown Speaker: Well, supposing in this case Mr. Diadiun had said, in my opinion Milkovich perjured himself.

Do you think that should be actionable if it can be proved false?

Mr. Panza: I don't think Mr. Diadiun's intentions have... are relevant.

Unknown Speaker: Well, can you answer my question?

Mr. Panza: Yes, I can.

Unknown Speaker: Why don't you?

Mr. Panza: I will.

If... if the article can be perceived as the opinion of the speaker... in this case the opinion--

Unknown Speaker: Well, I'm... I'm asking you hypothetical question, Mr. Panza, that doesn't necessarily depend on the article.

Do you want me to repeat my question?

Mr. Panza: --I think what you're asking me, Your Honor, if I'm... if... is if Mr. Diadiun merely said, I think, and then referred to a certain set of factual scenarios.

Unknown Speaker: If he said, in my opinion Milkovich committed perjury, is that... should that be... should there be no action because the First Amendment... even if... even if Milkovich cannot prove he did not commit perjury?

Mr. Panza: If it is opinion, and if it concerns--

Unknown Speaker: Well, answer... can you answer my question yes or no?

Mr. Panza: --Yes, it should be protected, Your Honor.

Unknown Speaker: That should be protected?

Mr. Panza: Absolutely, Your Honor.

Unknown Speaker: And suppose that the words, "in my opinion", were left out?

He just says, Mr. Milkovich lied under oath?

Mr. Panza: No, then that would sound like a... an objective factual dissertation of the legal effect of Mr. Milkovich's testimony.

Unknown Speaker: And that would be actionable in your view?

Mr. Panza: If it was perceived as an objectionable... or, excuse me, an objective recitation of the facts, yes.

Unknown Speaker: Do you... do you then--

Mr. Panza: That's not the case here.

Unknown Speaker: --Is it... is it good reporting, therefore, to... in your view... under your view of the case, to preface statements of fact with the words "in my opinion" in order to immunize yourself--

Mr. Panza: Absolutely not.

Unknown Speaker: --from responsibility?

Mr. Panza: Absolutely not, and that's not what was done here.

Absolutely... and that is not good reporting.

Unknown Speaker: So that would be bad reporting?

Mr. Panza: I would absolutely say so.

Unknown Speaker: Well, but that... that's a very handy device.

I assume that all book publishers can just put on the first page everything contained in this book is, of course, the opinion of the writer.

And then you can go on and say anything you like.

Mr. Panza: Justice Scalia--

Unknown Speaker: And there's no liability for libel at all.

And all newspapers can have on their masthead, everything here is the opinion of the people who write it.

Mr. Panza: --Justice Scalia--

Unknown Speaker: And there's no such thing as libel.

Mr. Panza: --I'm not... I'm not a proponent of that.

Unknown Speaker: I thought you were.

Mr. Panza: Not at all.

Unknown Speaker: In your response to the--

Mr. Panza: Not at all.

Unknown Speaker: --to the Chief--

Mr. Panza: Not at all.

Not at all.

I believe what is or is not opinion has to be analyzed by the context of what was said, not by two or three or maybe four facts in the statement upon which the context is based.

By the entire context.

I think the restatement of tort second solves the problem of saying I think, and then going through a recitation of facts.

And I don't... and I am not up here asking the Court to... to agree that merely by putting some mystical words "I think" and then reciting objective fact you can protect all that fact.

Absolutely not.

Unknown Speaker: --Well, then, you're qualifying the answer you gave to the Chief Justice earlier?

Mr. Panza: No, I'm not qualifying at all.

I had to be--

Unknown Speaker: I mean, it's not clear--

Mr. Panza: --I couldn't explain--

Unknown Speaker: --to me what your position is.

So suppose that's all the statement.

It's just the one sentence in the big headline, in my view, in my opinion, Milkovich committed perjury.

That's all.

Mr. Panza: --If the reader perceives that as opinion, then... then that is protected.

And to the extent that it... that it is engaged in public debate, it is protected.

That is... that is the answer to the Chief Justice.

Or in... in--

Unknown Speaker: Well, shouldn't that be a jury question?

Mr. Panza: --Absolutely not.

Unknown Speaker: When you say... when you say if the reader perceives it as opinion, is that a question that a... that a court decides without... as a matter of law?

Mr. Panza: Yes, it is.

I'm sorry.

Unknown Speaker: Why?

Mr. Panza: Why?

Unknown Speaker: I mean, why shouldn't it be a question of fact if you're talking about the perception of a reader?

Mr. Panza: If you will... I'm... thank you, Your Honor.

If you allow a jury to decide that question, you will be promoting self-censorship and not public debate.

If, in fact, newspapers will be left to the uncertainty of jury conclusions in regards to an analysis of whether or not their opinion may contain certain facts which can or cannot be proven true or false out of context, they won't write the opinion.

And, as a result, public debate will suffer.

Unknown Speaker: So... so the question of how this... how the statement is perceived is not a question of fact, but it's a question of law that's decided by the court?

Mr. Panza: Yes, Your Honor.

Unknown Speaker: And how... how does the court go about deciding that?

Mr. Panza: Well, it has to use a test and it has to adopt a test.

And there are many tests that we set forth in our brief.

The one we are a proponent of is pretty much the test used in the Scott Court in 1986.

And that is, the Ollman test, as modified by the Seventh Circuit in the Potomac Valve case.

It takes into consideration the meaning of the words, it takes into consideration whether or not the particular factual assertion is verifiable, if it is a factual assertion.

It takes into consideration the internal and external context of the entire opinion.

And the entire opinion is important here, Your Honor, because the speaker, Diadiun, never said Mike Milkovich committed perjury.

It had nothing to do with his opinion.

It is a statement totally taken out of context which... the point I'm trying to make in regards to verifiability... doesn't do justice to his opinion.

Unknown Speaker: Well, it... it's one thing to say he never said it, and it's another thing to say... to say that he said it, that was taken out of context.

Do you mean literally he never said it?

Mr. Panza: He never said he committed perjury.

What he said was, I think, is what Mr. English read to you.

And, that is, everyone who was in attendance at the meet, be he a partial or impartial observer, knows in his heart that Mr. Milkovich lied after having given his solemn oath to tell the truth.

Unknown Speaker: That's not saying he committed perjury.

Mr. Panza: I think... I think... I think if you isolate that and if you have a lawyer look at it, he will conclude it constitutes perjury.

I think if you review that statement in the entire context of the article, you will understand that it has very little to do with an accusation of perjury.

Your Honor, I submit to you, if Ted Diadiun wanted to accuse Michael Milkovich of perjury, he would have published this article after the OHSAA hearing because, if you'll remember, in the article he said he believed that Mr. Milkovich misrepresented the facts in that hearing.

If he wanted to accuse him of perjury, Your Honor, I submit he would have published an article on November 9th, 1974 after he had his conversation with Harold Meyer because it was at that time that he believed Milkovich had lied under oath.

The reason why he waited two months later, Your Honor, is because the point... the very point that Mr. Diadiun is making in the article, and that is, educators, motivators of youth who refuse to accept responsibility for their action, that's what constitutes a lie.

And if they get away with it, that sets a poor example for the students they teach.

That is what Ted Diadiun is saying, Your Honor.

Unknown Speaker: Mr. Panza, let me... let me understand your position.

It is perfectly all right, I take it, if I say, in my opinion so and so is a child abuser; I don't have a whole lot of facts to go on but that's my opinion.

I can say that and that is not libelous?

Mr. Panza: Well, I can imagine that there are scurrilous forms of opinion that this Court may not choose to extend constitutional protection to.

And that's not my case.

And I... I can understand that.

Unknown Speaker: Oh, the difference is between calling someone a... a child abuser and a perjurer?

Is that... we're going to--

Mr. Panza: No, no.

Unknown Speaker: --different classifications of... of libel?

Mr. Panza: No.

It still may be opinion, Your Honor.

It still may be opinion, but whether or not you want to extend constitutional protection for that particular form of opinion--

Unknown Speaker: You're... you're... you're suggesting to us that we have different categories of subjects, some of which are protected and some of which are not?

That's the position of your newspaper?

Mr. Panza: --No.

What I'm... what I am proposing to you, Justice Kennedy, is that since the New York Times case you have chosen to protect certain forms of speech which... which promote public debate.

This should be no exception to that rule.

That's what I'm proposing.

Unknown Speaker: Are... are you seeking to distinguish between an acquisition that someone is a perjurer and someone is a child abuser?

Mr. Panza: Gee, I don't think so, Your Honor.

I'm... I'm... I'm telling you... the way I'm answering the question is that I could imagine, with facts unrelated to my own, that there may be certain forms of private opinion submitted in situations that do not concern social controversy that this Court may choose not to protect.

Not because--

Unknown Speaker: Well, this....

Mr. Panza: --Not because--

Unknown Speaker: This man... this man was an educator.

I... I would think that Justice Scalia's hypothetical... if a statement like that had been made by an educator, I can hear some newspaper arguing that this is very, very relevant for social purposes.

Mr. Panza: --Oh, and it absolutely is, if that's the scenario.

Unknown Speaker: It... it would be all right?

I mean, that was just... that was just a lead in.

Mr. Panza: If a man--

Unknown Speaker: I thought you were going to say for sure yes to that.

Mr. Panza: --If a man is an educator--

Unknown Speaker: That wasn't a real question.

[Laughter]

I'm getting to the real question.

I assume if you can say that, you can also say... if you can prove it to be true... 90 percent of the people in his office think that he's a child abuser.

So long as you can prove that it is indeed the fact that is the opinion of 90 percent of the people in his office that he's a child abuser, I assume that you could say that as well.

Mr. Panza: --Well, if it goes to his qualifications--

Unknown Speaker: Doesn't it trouble you that people's reputations without any ability to defend it can be destroyed this way?

Mr. Panza: --Well, of course, it does.

Of course it does.

Unknown Speaker: Well, what's your solution?

Mr. Panza: Well, first, I think you have to analyze what is being said.

I think that's the first thing you have to do.

And... and if it is... if what is being said is opinion, then the... then you next must determine whether or not it is in a public or social controversy.

If it concerns a teacher who teaches children, then I think it may be relevant.

And if it is truly opinion, yes, it may be protected.

If it is an educator who teaches children how to wrestle and his qualifications are called into question because the... the people that he coached beat other people, then I think, yes, his qualifications may be in question.

Unknown Speaker: Your answer to my question is, yes, you could publish in your paper 90 percent of the teachers in so and so school think that he's a child abuser and that is not libelous?

Mr. Panza: With the qualifications as I've answered the Court's question.

Unknown Speaker: Mr. Panza, do you agree with the petitioner that this case is governed... falls within the Hepps' holding?

That it's speech about a matter of public concern?

Mr. Panza: Oh, without question.

I do agree with that.

Unknown Speaker: All right.

And why is it that you think that the allegation that someone lied under oath isn't something that the plaintiff could try to prove is false?

It would seem to me that's... that's a statement that can be proven true or false.

Mr. Panza: Absolutely right, it can be proven true or false.

But--

Unknown Speaker: And why shouldn't we let that go to the jury and let them have their chance?

Mr. Panza: --Well, if you're dealing with this article, that's not what Mr. Diadiun said.

That isn't his opinion.

The point I'm trying to make is that--

Unknown Speaker: What if the conclusion of the jury is that the reasonable average reader would have understood this article as saying the plaintiff lied under oath?

Mr. Panza: --Well, if the Court has ruled that it... it has to go to the jury, but I'm not a proponent of submitting it to the jury for the reasons I've... I've outlined to the Court.

And I'm certainly--

First of all, this case is impossible to submit to a jury.

There is no transcript of the Ohio High School Athletic Association.

You would probably literally be required to call virtually every witness who attended it in order to... to give his or her opinion as to whether or not Milkovich lied under oath.

Unknown Speaker: Well, the plaintiff says they're not interested in the statement about what other people think.

They're only interested in the allegation that the plaintiff lied under oath.

Mr. Panza: Well, I think... I think the Plaintiff is very interested in... in... in fostering onto the Court that that is the opinion of Mr. Diadiun when he wrote the article.

But it isn't.

It may be a fact upon which he relied.

I mean, there is absolutely... there is absolutely no doubt that... that statement is in the article, but--

Unknown Speaker: Shouldn't it turn on what the average reasonable reader of the article would think was being said?

Mr. Panza: --Absolutely, yes.

Unknown Speaker: Yes.

Mr. Panza: Absolutely, yes.

Unknown Speaker: Okay.

May I give you a hard hypothetical?

Supposing in this case the fact of the matter was that Mr. Milkovich never even testified at the hearing and that the author of the article knew that and nevertheless wrote the same article?

Mr. Panza: I would submit to you, Justice Stevens, that, as I pointed out before, I do not see that the speaker's intention is in any way relevant.

Unknown Speaker: Well, just under--

Mr. Panza: What is relevant--

Unknown Speaker: --under the actual malice standard he knew the statement was false when he made it.

That's all.

Mr. Panza: --Well--

Unknown Speaker: But... but that would be irrelevant?

But it... it's so clearly provable that he... that he did make... you'd still say that protected in my hypothetical, in other words?

Mr. Panza: --Yes, sir.

Unknown Speaker: Yeah.

Could I ask you another--

Mr. Panza: Sure.

Unknown Speaker: --Your response earlier to Justice Kennedy and me said that... the... suggested that the fact/opinion dichotomy only applies if it's a matter of... of public concern.

I... I hadn't understood your position to be that.

I thought that the... and the courts that have applied that reasoning, I thought they apply it to all... all defamation actions, not just those that relate to matters of public concern.

Is that right or wrong?

Mr. Panza: First of all, you're absolutely correct.

The... the lower courts that... that apply this principle generally apply that it applies to individuals engaged in private situations or--

Unknown Speaker: Right.

So if I said somebody was... in my opinion he's a lousy carpenter, that... that would also be immune because he--

Mr. Panza: --Under that... under that principle.

But that's not the principle that I'm... that I'm requesting from the Court.

Those aren't the facts of my case.

My case concerns a... a public controversy, a social controversy.

These are real communities.

Mentor, a neighboring community 23 miles away, had four of its wrestlers beaten up.

They were concerned about the safety of their children.

They went demanding an answer to the OHSAA.

These... these things that Mr. Diadiun discusses were of major concern to that local community.

There was tremendous disagreement after the OHSAA resolution and the imposition of a severe censorship.

When--

Unknown Speaker: --Let's see what this proves.

It proves that you want to get to the truth.

And the issue is whether you're likely to get to the truth in a society when you allow the most outrageous version of things to be published so long as it's somebody's opinion.

Do you really think that it's going to help the search for truth to allow the most false things to be said so long as they're said as opinions without any recourse?

Mr. Panza: --Well, I guess there's the problem.

The most false things probably, if they can be proven false in their factual assertions... and I know it's a difficult concept because... because what I think you first must do is analyze whether or not under the proper test is fact or opinion.

Not just simply with are there some facts in it which I can prove true or false but what is the speaker saying?

Is it... and does the reader perceive it as the speakers attitudes?

And if he does, and if it concerns a matter of public controversy, then it should be protected.

Why?

Because it promotes social and public debate.

Will you inevitably, as a result of that rule, protect some speech that shouldn't be protected?

Quite probably.

Unknown Speaker: If the speaker goes on, or the writer goes on for 10 or 12 column inches, isn't it conceivable he may be saying several different things?

Mr. Panza: Sure, it is.

Unknown Speaker: And might not one of them in this case be that Mr. Milkovich perjured himself?

Mr. Panza: Well, it might be, but I don't believe that in this case you can separate that particular statement from the rest of what Mr. Diadiun is saying.

Unknown Speaker: Why can't you?

Mr. Panza: Well, because it is part and parcel of... of the general opinion that failing to take responsibility is in fact a lie.

There's no doubt he... Mr. Diadiun said Mr. Milkovich was lying.

But he never meant to say that... he never meant to make a legal commentary on the... or objective analysis of the legal effect of Michael Milkovich's testimony in his sports column.

Unknown Speaker: So in a sports column, unless you really mean to say that someone perjured themselves, it... it's okay?

Mr. Panza: No.

No.

In a sports column people read... when people read sports columns, they read it understanding that they're going in many instances to read opinion.

That is different--

Unknown Speaker: I gave up reading the sport column because it had nothing but legal news, antitrust, contract breach--

[Laughter]

Mr. Panza: --Sports columnists tend to be very opinionated, Justice Kennedy, and when you read them, you read them... when you read what they say, you read what they say with the understanding that they are opinionated.

That's all I mean to say.

Respondent believes that this article is constitutionally protected opinion.

If this Court concludes that it is fact, I would ask you to note that three separate trial courts have found Mr. Milkovich to be a public figure, and/or a public official.

No court has ever found any clear and convincing evidence of actual malice.

I would ask you, then, to put an end to 15 years of litigation and affirm.

Thank you.

Unknown Speaker: Thank you, Mr. Panza.

Mr. English, you have 12 minutes remaining.

Rebuttal of Brent Lawson English

Mr. English: Thank you, Your Honor.

I'd like to address the last point that Mr. Panza just made because I think it is a complete misstatement of the facts and the law in this case.

The Ohio Supreme Court on December 31, 1984 made a determination in this case that Mike Milkovich was not a public figure and not a public official and that this statement was not constitutionally protected as opinion.

That is the law of this case.

There has not been a determination by any other court since that time that Mike Milkovich is not a public figure and not a public official.

The respondents would have this Court believe that somehow the Ohio Supreme Court, by deciding the Scott case, has somehow sub silentio overruled it's prior decision with respect to Mr. Milkovich.

Mr. Milkovich's status--

Unknown Speaker: But it did... it did come out a different way in Scott on some issues than it did in the Milkovich case, didn't it?

Mr. English: --Without a doubt.

With respect to the opinion question, there has been a complete flip-flop.

The decision was four to three in the Milkovich case in favor of making the article actionable, i.e., an assertion of fact, and it was four to three in the Scott case just 15 months later after two judges on the Ohio Supreme Court left the Court and two new judges joined the Court.

There have been now new judges elected to the Ohio Supreme Court, and it's unclear, certainly, as to what might happen with this question unless this Court definitively decides that this article is not constitutionally protected as opinion.

Unknown Speaker: We couldn't decide it for the... under the... we couldn't decide what the Ohio Constitution requires or not.

Mr. English: That is correct, Your Honor, you could not.

However, going to that question with the Michigan v. Long analysis of separate adequate independent state grounds, as Justice Scalia pointed out, the decision from which the appeal is being taken is from the Ohio Court of Appeals, and there is a specific determination there that the court is relying on Federal precedent.

Clearly, the Ohio Supreme Court, again, as Justice Stevens pointed out, depends on the syllabus in the opinion, and the syllabus no way mentions that the case is grounded either in whole or in part on the Ohio constitution.

Every justice of the Ohio Supreme Court wrote on the Scott case, and all but one of the concurring judges in the majority cited the Federal Constitution as being the source for the opinion privilege.

Unknown Speaker: Mr. English, unless there are further questions from the Court on that point, I think... I think you can consider that we... we have it.

Mr. English: Fine.

Thank you, Your Honor.

I have one last question, or one last point on rebuttal.

Mr. Panza has continued to note here that the issue is not what Mr. Diadiun intended but, rather, what the average reasonable newspaper reader perceived.

And I would agree with that point.

However, in his next breath he says Mr. Diadiun really didn't intend to say that Mike Milkovich committed the crime of perjury.

The relevant constitutional inquiry should be how is an average reader perceiving the article, as Justice O'Connor pointed out.

And on that score, a reasonable construction of the article in this case can lead to but no other reasonable conclusion than that Mr. Milkovich was accused of a crime under Ohio law.

Unknown Speaker: But do you think that's the test rather than verifiability?

Mr. English: No, Your Honor.

I think that verifiability obviously will... will get us past that problem.

But if, for instance, there is a reasonable dispute as to whether verifiability is in question... in other words, we have a mixed question of opinion and fact... then the relevant inquiry should be how does the average reader perceive the question.

Unknown Speaker: Is that an issue that's submitted to the jury, the perception of the average reader?

Or is that for the court--

Mr. English: Your Honor, I believe it is a question reasonably left to the jury.

There is no reasonable justification for making it a legal question.

It's not like the determination of whether an individuals a public figure or public official.

But, rather, it goes to how did a reasonable reader perceive this.

And what better group to make that decision then a jury.

And I would submit to the Court that, in this, case since there was a jury demand, the jury could easily make that determination and decide whether or not Mr. Diadiun's intent or the average perception of the newspaper... or the newspaper audience, was whether he accused Mr. Milkovich of perjury or merely was stating this as his alleged opinion.

For all of the reasons I've mentioned, Petitioner respectfully requests that the Court reverse the decision of the Ohio Court of Appeals and return this case for trial.

Thank you.

Chief Justice Rehnquist: Thank you, Mr. English.

The case is submitted.

Unknown Speaker: The honorable court is now adjourned until tomorrow at ten o'clock.

Attribution:

The OYEZ Project

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Harte-Hanks Communications v. Connaughton - Oral Argument

Sun, 06 Feb 2011 03:46:44 +0000

Case:

Harte-Hanks Communications v. Connaughton

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ORAL ARGUMENT OF LEE LEVINE ON BEHALF OF PETITIONER

Chief Justice William H. Rehnquist: We'll hear argument next in No. 88-10, Harte-Hanks Communications v. Connaughton.

Mr. Levine, you may proceed whenever you're ready.

Mr. Levine: Mr. Chief Justice, and may it please the Court:

Twenty-five years ago this month in New York Times v. Sullivan this Court articulated the central meaning of the First Amendment.

It held that if freedom of speech and freedom of the press mean anything in a democracy, it is that criticism of public officials and candidates for public office must be free.

In this case, a $200,000 judgment has been entered against a newspaper because it published statements critical of a candidate for public office in the midst of a hotly-contested election campaign.

We submit that this judgment, that the court of appeals decision affirming a jury's finding that this speech is unworthy of constitutional protection can be affirmed only ignoring the three fundamental safeguards of political speech articulated in New York Times.

First, that only expression published with actual malice... that is, despite a high degree of awareness of its probable falsity... is beyond the scope of Constitutional protection.

Unidentified Justice: Did the Sixth Circuit here say there was actual malice?

Mr. Levine: It held that a jury could have found actual malice.

Unidentified Justice: And you disagree with that?

Mr. Levine: We disagree with both the contention that its standard of review was limited to what the jury could have found and with the conclusion that the evidence revealed... that the evidence in the record reveals actual malice.

The second requirement of New York Times is the proof--

Unidentified Justice: Excuse me.

Didn't they go further than just saying the jury could have found actual malice?

I thought they found that the jury could have found certain facts, and if the jury found those facts, then there was actual malice.

Didn't they make that judgment themselves, that if these facts existed, there was in their own view actual malice?

Mr. Levine: --Justice Scalia, they added--

Unidentified Justice: That's how I understood it, anyway.

Mr. Levine: --Justice Scalia, they added another step in there.

After they found the facts, they drew all conceivable inferences--

Unidentified Justice: Right.

Mr. Levine: --from those facts--

Unidentified Justice: Right.

Mr. Levine: --in favor of the jury's verdict.

Unidentified Justice: But then taking all those facts and the favorable inferences, they made their own judgment, given those facts and inferences, that there was actual malice didn't they?

Mr. Levine: That is correct.

And that is... that is in fact the guts of this case, the third point, the third safeguard of free expression identified in New York Times.

That is the obligation of appellate courts to undertake a review of the entire record, not simply the evidence favoring the defendant... or, the plaintiff, and make an independent judgment, drawing its own inferences from the record evidence.

Unidentified Justice: Mr. Levine, the problem I have in applying this standard is what should the Court do where credibility of witnesses is crucial?

Mr. Levine: Justice--

Unidentified Justice: What standard of appellate review should be applied to subsidiary facts when credibility is crucial?

Mr. Levine: --Justice O'Connor, as this Court held in Bose, the standard of independent review requires that courts give due regard to the ability of factfinders, be they juries or trial judges, to observe demeanor and make credibility assessments.

In this case specifically--

Unidentified Justice: Well, what does that mean?

Does it mean that you... if it rests on credibility, there is no review by the appellate court.

Mr. Levine: --With respect to purely--

Unidentified Justice: Right?

Mr. Levine: --With respect to purely factual findings, Justice White.

If there is disputed evidence in the record on an issue of material fact, we would say that in the typical case you are required to defer to the jury's credibility findings.

Let me summarize--

Unidentified Justice: Was it error to let this go to the jury?

Mr. Levine: --Your Honor, I am unfamiliar with the record as it stood at the time that... you're talking about... at a directed verdict stage?

Unidentified Justice: Well, after the close of all the evidence, should the judge have let this go to the jury?

Mr. Levine: I do not think the judge should have let this go to the jury.

I think--

Unidentified Justice: That has to be your position.

Mr. Levine: --I think that's right.

I think a directed verdict should have been granted in this case.

The material facts can be summarized as follows.

The Respondent Daniel Connaughton was a candidate for the elected office of Municipal Court Judge in the November 1983 elections in--

Unidentified Justice: I take it you think, then, the district judge in trying the case should... should independently review the evidence rather than let the appellate court have that duty?

Mr. Levine: --If at the directed verdict stage, as Justice Kennedy was pointing out, the district court looks at the evidence and decides that--

Unidentified Justice: Should not... should not, in a case like this, draw the inferences in favoring the Plaintiff?

Mr. Levine: --It should resolved disputed issues of material fact in favor of the Plaintiff.

But taking those... those purely factual findings, it should make its own independent determination concerning whether or not there is actual malice.

Unidentified Justice: Which... which... but that means... but that means making its... drawing its own inferences from the historical facts.

Mr. Levine: From the historical facts.

Yes, that is correct.

Unidentified Justice: Even though the jury might... even though there might be arguments about what the right inferences are?

Mr. Levine: That's correct because, as this Court recognized in the Bose decision and in New York Times before it, in some cases where the very drawing of those inferences lead to make up the process of judgment through which the ultimate finding is made, you can't defer it to the findings and inferences that the jury could have drawn.

You have to draw your own or else you're eliminating the process of judgment entirely.

Unidentified Justice: So, in order to work the system that you're urging upon us, we have to... and every district judge would have to... determine where fact leaves off and inference begins.

That's crucial because you accept... you accept what the jury might find on fact.

You give all the benefit of the doubt to the plaintiff on fact.

But on inference you make your own judgment.

Mr. Levine: That's correct.

Unidentified Justice: So, that's the crucial distinction, the difference between fact and inference.

Mr. Levine: That's where I would draw the line, Your Honor.

I--

Unidentified Justice: Do you think that's a clear line?

Mr. Levine: --I do not think it's a clear line in--

Unidentified Justice: I don't either.

Mr. Levine: --all cases and it's--

Unidentified Justice: What's the basis for any sort of line there?

Mr. Levine: --Because at some point in the process, from the ultimate conclusion of actual malice at the one end, to the pure historical facts... did a meeting take place at a certain date... at the other end, somewhere along that line robbing an appellate court or a reviewing court of the ability to draw its own inferences necessarily predetermines the result.

Unidentified Justice: Okay.

What's the difference... under your test, the difference between an inference and a factual deduction?

Mr. Levine: I think that it's hard because you're dealing with labels.

And what I might call a factual deduction someone else might call an inference.

Unidentified Justice: Well, then, what's the use of your test?

Mr. Levine: Because it seems to me that in the basic case, and virtually all cases, where a historical fact... a what-happened kind of fact... is susceptible to an inference that is reasonable and apparent, the reviewing court, whether it... whether the mental process it goes through is, "I'am exercising my own judgment" or

"I'm deferring to the jury's finding. "

is in 99 percent of the cases going to come up with the exact same decision.

But if you... if you start going down the Line where you defer to the jury findings or what the jury could have found on inferences, you're going to eliminate the process of judgment.

Unidentified Justice: I take it you then think that essentially in this kind of a case, malice or not, it can never be a question of fact.

It should be treated as a question of law and never presented to the jury.

Mr. Levine: No, I don't believe that's right, Your Honor, for two reasons.

First of all, factual issues do go into the determination of the actual malice question.

Unidentified Justice: Yeah, I know.

But I would just want to maybe have a... just present to the jury a set of instructions as to why we're having to just deal with historical facts.

Mr. Levine: It may in fact be cleaner and easier to do it that way.

Unidentified Justice: Well, why don't you [inaudible] that judge then [inaudible].

Mr. Levine: But there is... there is another issue.

And that is in many cases the jury will serve as a safeguard for free expression.

We don't want to give unfettered authority to either the jury or the judge to decide that expression maybe penalized.

Unidentified Justice: Well okay.

Then so the Constitution requires that a jury give an independent review of a judge's decision.

We'll resume at 1:00.

You may proceed, Mr. Levine.

Mr. Levine: Mr. Chief Justice, may it please the Court:

The central difficulty with the court of appeals decision in this case is that it eviscerates both the clear and convincing evidence standard and the rule of independent review set forth in New York Times.

It does so by requiring reviewing courts to defer to all conceivable inferences supporting the jury's verdict.

Under the court of appeals analysis, a reviewing court is required to do that even it other inferences, in its own view, are more reasonable or more justified.

The court of appeals has, therefore, erected a presumption of actual malice in every case.

It has mandated to finding the cumulated inferences that a reviewing court is required to find will add up to clear and convincing evidence.

And it has rendered the Constitutional obligation of independent review a mirage.

Independent review is not independent if a reviewing court is required to defer to all findings of fact a jury could have made and then draw all conceivable inferences from those findings in favor of the jury's verdict.

Independent review does not encompass the entire record if, as the court of appeals held, a reviewing court is required to ignore all evidence favoring the defendant, even undisputed evidence.

An independent review is not review at all, not in any meaningful sense, if a reviewing court is required to defer to an array of hypothetical subsidiary facts that a jury could have found.

So viewed, the very process of judgment the Rule of Independent Review presupposes disappears.

In fact, it predetermines the result and it eliminates the process of judgment entirely.

Unidentified Justice: How does one go about separating out the facts that the jury has found from the inferences?

I mean, a particular proposition may be established as a fact or it... from a fact which a jury rejected... it might have been an inference from that fact.

Or, it might have been independently found as a fact rather than as an inference from another fact.

How is... How is the reviewing court to tell?

I mean, you say he has to accept all the findings of fact that the jury made.

How do you know which findings of fact they made?

All you know is a verdict.

Mr. Levine: I'm coming to the view, Justice Scalia, that our language doesn't give us the proper labels to put on these things so that we can know which is which.

And, as the Court has pointed out on several occasions, I think we sometime put the label on after the fact to decide... to justify the result that we've arrived at.

But I think that in this case what we're talking about in the words of the Bose decision are the purely factual findings.

The testimony in the record, what the documents say.

If there is a dispute about those facts, did a meeting take place?

As in this case, for instance.

There is testimony from the mother of the young woman who was the source of the article at issue, saying that the morning after this all-night interview she came home with her sister and she and her sister talked about how they had been promised jobs and trips and vacations.

The other sister, Patsy Stephens, got on the stand at the trial and denied that that ever happened.

What I'm submitting is that that's the kind of fact, where there is disputed testimony on both sides, where the reviewing court is required to in most cases assume that the jury found that those statements were never made to the mother.

Unidentified Justice: [inaudible]

Mr. Levine: I think it's not so much the Seventh Amendment, Your Honor, as it is the fact that the jury has the ability in this case to observe the witnesses, to observe their demeanor.

Unidentified Justice: The Seventh Amendment has no bearing on the issues?

Mr. Levine: In this case I think it does not.

In the typical civil case, yes, it does.

But here where you're talking about essentially an issue of Constitutional law--

Unidentified Justice: Well, in libel cases Seventh Amendment is put aside?

Mr. Levine: --Only with respect to the issue of actual malice, Your Honor.

Unidentified Justice: You're talking about two Constitutional provisions.

One is the First Amendment and the other is the Seventh Amendment.

Mr. Levine: Your Honor, this Court has twice expressly been presented with that argument, both in New York Times and in Bose, and has twice expressly rejected it.

And I think that that's quite right.

First of all, you have to keep in mind that we're only talking about facts found by a jury that are relevant to the actual malice inquiry.

Not to the array of other facts that are relevant in libel cases.

Was it defamatory?

Was it published?

Was it capable of a defamatory meaning?

Were there damages?

We're not suggesting at all the the Seventh Amendment doesn't apply to those issues.

Unidentified Justice: [inaudible]

Mr. Levine: This Court has never reached that issue, Justice White, and it's a tough issue.

There is an argument to be made and one that I would support, that the issues of truth and falsity and actual malice are so intertwined that you can't decide one without the other.

But that issue has never been here before.

The issue of actual malice, which is the issue in this case, has been here before twice, and the Court has held that the Seventh Amendment does not bar a reviewing court from undertaking independent review.

Unidentified Justice: Well, New York Times wouldn't have involved the Seventh Amendment, would it?

Because I thought that came from a state court.

Mr. Levine: Your Honor, the decisions of this Court are clear that--

Unidentified Justice: Well... just a minute.

I thought you said just a moment ago that in two cases, this Court had confronted a conflict between the Seventh Amendment and the First Amendment, one of those cases being New York Times and the other being Bose.

And in both cases they'd ruled in favor of the First Amendment.

Was that your statement?

Mr. Levine: --Yes, sir.

Unidentified Justice: And was that... was that true?

Did that come... did New York Times come from a federal court?

Mr. Levine: Your Honor, it came from a state court.

Unidentified Justice: Then how could the Seventh Amendment been involved?

Mr. Levine: There is a case in this Court's jurisprudence called Chicago B&O Railroad v. Chicago... City of Chicago... in which this Court expressly held that, with respect to the second clause of the Seventh Amendment, the one that's at issue here, that cases coming up from state courts for purposes of review are governed by the Seventh Amendment.

And, in fact, that oral argument in the New York Times Justice Goldberg asked counsel for the respondent when he raised that very issue with the Seventh Amendment... how could apply here... and was cited to that case.

Unidentified Justice: So we've held the Seventh Amendment does apply to state courts in some situations?

Mr. Levine: Yes, we have... you have, Your Honor.

[Laughter]

And... And, indeed, in the footnote in New York Times in which that proposition was rejected... the proposition that the Seventh Amendment posed any conflict with the First Amendment in actual malice determinations... the Court acknowledged that the Seventh Amendment did apply to that case.

Now, there is another unwarranted by-product to the court of appeals' decision.

And that is that it necessarily credits as determinative evidence of actual malice, evidence of little, if any, probative value on the issue of actual malice.

Such as evidence that a newspaper competes for circulation with other media.

That it editorially--

Unidentified Justice: Did the court... did the court define actual malice for the jury to include reckless disregard?

Mr. Levine: --The trial court gave the definition of actual malice to the jury in its charge that included reckless disregard.

Yes, Justice Kennedy.

Unidentified Justice: So we're talking about really reckless disregard?

Mr. Levine: In this case I believe my opponent has suggested that there is direct evidence of an admission of knowledge of falsehood, but I think in fairness this case is really about whether the circumstantial evidence in the record adds up to reckless disregard for the truth.

We think that under any standard of review, even a clearly erroneous standard, the evidence in this record is insufficient, as Judge Guy held in his dissent from the court of appeals' opinion, to justify a finding of actual malice.

Unidentified Justice: But, Mr. Levine, can I come back to your precise example of what's a finding of fact?

About the meeting that occurred the next morning and what occurred at that meeting... you said that would have been a finding of fact.

What about other statements that Thompson made that are not contradicted?

There... there is no evidence contradicting them.

But the jury, knowing that Thompson lied about this other one... about whether the meeting occurred... and about another number of other things on which there was conflicting testimony, the jury says,

"We don't believe Thompson at all, and we reject everything that Thompson said. "

Now, how does the court of appeals handle that?

Is that a... Is that an inference from the other findings of facts?

Since she lied five times, we assume she lied seven times.

I suppose that's an inference.

Mr. Levine: Your Honor, the answer to that question depends on who has the burden of proof in the case.

In this case, the Plaintiff has the burden of proof.

It not only has the burden of proof, but by clear and convincing evidence.

If the Plaintiff put on evidence and had witnesses or the possibility of witnesses within its subpoena power or control that it could have put on to contradict what Thompson had to say, I would grant you that in reviewing--

Unidentified Justice: Well, no, but it didn't.

There is no contradictory evidence.

I cannot... I cannot, as an appellate judge, look at the fact that she was contradicted five times in what she said.

She said two other things that weren't contradicted, but I can't assume, well, you know, the jury thought she was lying five times, they must have though that she couldn't be relied on at all and therefore they didn't believe her the other two.

I can't do that.

Mr. Levine: --In this case what we're suggesting is that a reviewing court is not automatically required to discount that testimony on the basis that it is required to defer to a jury finding that she wasn't believed.

We say, though, an independent review encompasses the entire record.

It gives the reviewing court the right to look at that evidence, assuming that the other party had the burden of proof of proving those facts and proving the ultimate issue of actual malice.

The evidence that the court of appeals credited in this case, competing with other media, endorsing editorially the Plaintiff's opponent, and failing to investigate as thoroughly as the Plaintiff might have preferred prior to publication... that evidence, this Court has repeatedly held, is of tenuous if any probative value with respect to a motive to falsify.

Yet, the court of appeals' decision effectively requires a reviewing court to draw an inference of actual malice from such testimony in every case in which a jury is found in favor of a political candidate and against a newspaper.

In such cases, the newspaper literally starts out with three strikes against it because it will always compete with some other media, it will virtually always endorse candidates for public office, and it will always be subject to second-guessing when the scope of its investigation... not whether it investigated at all... judged by 20/20 hindsight.

But the issue in this case is not the abstract relevance of these categories of circumstantial evidence to the actual malice inquiry.

It is, rather, whether the court of appeals analysis which requires that this evidence be credited in every single case is consistent with the Rule of Independent Review.

It most surely is not.

The independent review contemplated by New York Times and by Bose is in this Court's own words de novo review.

It calls on courts to make a uniquely constitutional judgment, a judgment about whether expression is protected by the First Amendment.

To do that, a court must review the entire record, including undisputed evidence favoring the defendant.

To do that, a reviewing court must draw its own inferences from the record evidence and not defer to an array of hypothetical subsidiary facts that a jury could have found.

This Court has been making such determinations and exercising such independent review in First Amendment cases since at least its 1927 decision in Fiske v. Kansas.

Such review is not only within the legitimate power of appellate courts, it is a constitutional obligation placed upon appellate courts by the First Amendment itself.

Unidentified Justice: Mr. Levine, you place a great deal of confidence in the Bose case, don't you?

Mr. Levine: Yes, I do, Your Honor.

Unidentified Justice: I must confess I'm a little puzzled as to why you need it, from your point of view.

And maybe you do.

Do you concede that the article was false?

Mr. Levine: Your Honor, for purposes of this proceeding be concede that it is susceptible to a defamatory interpretation which is false.

Yes.

Unidentified Justice: It was?

Mr. Levine: We're conceding it for this purpose.

There was an issue submitted to the jury and they found that.

But, Your Honor, I agree with you emphatically.

That even under a clearly erroneous standard of review, as Judge Guy held in dissent from the court of appeals' opinion, this judgment can't stand.

Unidentified Justice: Suppose the Bose case were not on the books, not decided, what would you be arguing?

Mr. Levine: I would have no trouble arguing that New York Times itself very clearly and expressly says that appellate courts have a constitutional obligation to undertake just the kind of independent review that Bose talks about.

In my view and in the Court's own view in... all Bose does is reaffirm New York Times.

It doesn't extend it.

It doesn't grant the press any more rights that they had under New York Times v. Sullivan.

And that's because New York Times teaches that the actual malice standard by itself doesn't provide sufficient protection against jury verdicts erroneously punishing protected expression.

The Rule of Independent review and the actual malice standard are inextricably intertwined.

Unidentified Justice: I guess what I'm saying is I think you have stronger case without Bose and you don't have to rely on Bose.

But, go ahead, do it your own way.

Mr. Levine: Your Honor, New York Times teaches us that the line separating protected from unprotected expression, which is what New York Times talks about, is a more difficult, a more sensitive line to draw than that that's in the typical civil case separating protected from... permissible from culpable conduct.

We regularly assign to juries the task of distinguishing, for example, negligent from responsible driving.

But the First Amendment withholds from the civil jury final authority to hold the political speeches not worthy of protection by the First Amendment.

That task is assigned to appellate courts through the process of independent appellate review.

Most seriously litigated libel cases like this one don't involve readily ascertainable matters of truth or falsity.

They deal, instead, with the quite debatable implications of conflicting versions of controverted events.

It is because of this reality that New York Times places upon the Plaintiff the affirmative burden of proving by clear and convincing evidence that expression is unworthy of First Amendment protection.

The burden--

Unidentified Justice: Mr. Levine, why... why is it so insubstantial a protection to accept jury facts and inferences and then apply that New York Times rule?

For example, on the malice issue, if I applied that rule to the facts and inferences here, I wouldn't find malice just... just from the fact that this was a competing newspaper and it favored the other political candidate.

I wouldn't say that the facts and inferences that are derivable from this record would show, in my judgment, clearly and convincingly that this newspaper really went out to tell a lie.

On the other question, that is, whether they were careless enough to be reckless about whether it was true or false, that's a much closer question.

But don't you exaggerate it by saying that it's no protection whatever?

Especially since the New York Times standard is clear and convincing evidence of malice?

Even if you took all the facts and all the inferences from the jury here, would you acknowledge that there was clear and convincing evidence that your client, in order to gain a competitive advantage over another newspaper, in order to hurt a political candidate they didn't like, intentionally lied?

Mr. Levine: --In this case, Your Honor, no.

Unidentified Justice: Well, I think so, too.

Mr. Levine: But... But we're lucky here, Your Honor, for the following reason.

We've got a tape recording.

We've got a tape recording of an interview with the Plaintiff in which the Plaintiff concedes that these subjects were discussed, that these conversations took place, that what our primary source said had the ring of truth.

When you put that tape recording into the mix, all the inferences that would need to be drawn to get the clear and convincing proof of actual malice get cut off.

And I agree with you, that no jury could have found clear and convincing evidence of actual malice on this record.

In the typical case, I'm not so sure that other defendants are going to be that lucky.

And if you don't have that evidence which a... which a court can reach out and touch, you're not going to have the ability, without drawing your own inferences, to protect speech that ought to be protected by the First Amendment.

If I could reserve the rest of my time.

Unidentified Justice: Very well, Mr. Levine.

Mr. Lloyd.

ORAL ARGUMENT OF JOHN A. LLOYD ON BEHALF OF RESPONDENT

Mr. Lloyd: Mr. Chief Justice, and may it please the Court:

Let me speak first to the issue of whether it was proper for any court, the jury, the trial court, or this Court, to consider whether the motive of a newspaper is one of the kinds of circumstantial evidence that bear upon the question of actual malice.

That's all we've said.

And this Court indicated that in Butts and the panel majority in Tavoulareas also reemphasized it.

All we say about the motive to compete against the Enquirer and to protect the incumbent judge, that it is a kind of circumstantial evidence which, combined with all the circumstantial evidence in the record and the direct evidence of actual malice, adds up to... enough to constitute clear and... excuse me... clear and convincing evidence of actual malice.

Now, let me next talk about that line of cases that my colleague believes justifies a kind of independent review that he would have appellate courts engage in in public figure libel cases.

The cases, beginning with Fiske--

Unidentified Justice: Including the trial judge?

Mr. Lloyd: --Including the trial judge.

The line of cases, beginning with Fiske, involving whether there was a clear and present danger, whether material appeals of prurient interest.

I'll give you another... whether the evidence shows there is jury segregation.

All of those cases involve objective questions.

Whereas in here, in this case, the question is... the question is what was in the mind of the publisher of the matter when he decided to put it in circulation.

A purely subjective question.

Beyond that, those questions, those cases that he would invoke in support of his position, involve only the ultimate question, not... in none of those cases did the Court say that exhaustive independent review by appellate courts of the record was justified.

And so that we're dealing with different kind of animals.

Indeed, Chief Justice Rehnquist in his dissenting opinion in Bose under which we made reference in the brief, noted the vast distinction between that line of cases and this kind of case where the subjective question is much more difficult to answer than an objective question where a clear and present danger exists.

Now, I think the record in this case--

Unidentified Justice: Mr. Lloyd--

Mr. Lloyd: --disposes of--

Unidentified Justice: --May I ask you just one question--

Mr. Lloyd: --Yes, Justice Stephens.

Unidentified Justice: --on this subjective point.

You're clearly... I think you're clearly correct when you're asking whether there was actual knowledge of falsity.

That would be purely a subjective inquiry.

But if you're asking whether... given what the record shows the newspaper knew at the time, whether that constitutes reckless disregard, that's certain... it's arguably an objective inquiry, isn't it?

Mr. Lloyd: Well, there always is in this sense, and as Justice White taught us in St. Amant, where someone claims that he acted in good faith and didn't know that something was true and published a harmful article, his professions of good faith are not likely to be very persuasive where their statement is so inherently improbable that only a reckless man would put it in circulation.

So that there is a relationship between an objective standard, which is applicable if the record permits it, and the kind of subjective determination which the jury had to make in order to make a finding of actual malice under... under the court.

Now, the test that this court has laid down... it is stated various ways, but always comes out... one way it's stated is subjective belief in probable falsity.

It is what the state of mind of a publisher is.

That's why... That's why the attack--

Unidentified Justice: But you--

Mr. Lloyd: --which the petitioner's make upon this record is so inherently flawed.

They would... they're asking... they're asking the appellate court to do something which--

Unidentified Justice: --Do you view the jury verdict here as having found that the newspaper actually knew the story was false or that it acted in reckless disregard and didn't--

Mr. Lloyd: --I view it as in the alternative.

I think on this set of facts anyone who was at that trial would have believed that Jim Blount and Pam Long and those people who decided to publish this article knew it was false.

Only a reckless could have... could have believed otherwise.

And I'll tell you why.

The argument has been made here that, after all, negligence is not enough to allow a public figure to prevail under the New York Times.

And I don't... I don't dispute that.

What we're talking about is the kind of evidence we adduced at this trial, that after being told by all six people who were interviewed at this late night conference, that no, Dan Connaughton didn't make any such statements.

And after... after having known that Alice Thompson was a lady with a psychiatric history, a criminal record, a motive to lie, and other... and other basis to believe she was undesirable, the decisionmakers consciously avoided talking to Patsy Stephens, who could have corroborated what this lady said, the consciously avoided listening to the tapes of that meeting that was held at Connaughton's house which brought along, asked for... which Connaughton said,

"Here they are. "

"Listen to the tapes. "

"Make up your mind. "

That is not negligence.

That is perverse, premeditated ignorance.

I'm going to stick my head in the sand so nobody can prove I knew it because if I ask one more question, I'm going to find out something that's going to keep me from running the article I'm determined to run in order to ruin Dan Connaughton.

That's not negligence, if this Court please.

That's what distinguishes this from New York Times and from St. Amant, because by any test or under any standard I would have brought this case... and I believe that a properly instructed jury hearing this evidence would have found that actual malice was proved by clear and convincing evidence.

Then we have all these admissions.

The author of the article, Pam Long said,

"I made no decision as to whether what she said was true when I ran the article. "

Jim Blount said,

"We didn't determine whether what she said was true. "

And then... and then the newspaper's lawyer said it at the pre-publication conference, he was told it was all a matter of misinterpretation.

That's not negligence.

That is the most egregious kind of--

Unidentified Justice: --You're defending the judgment below in Topra, I guess.

Mr. Lloyd: --I'm defending the judgment below in Topra and the opinion of the court of appeals.

I was not oblivious to what I thought the requirements of Bose were when this case went to the court of appeals, was briefed and argued.

And I was... I was overwhelmed at the exhaustive treatment... scrutiny of that record which the Sixth Circuit gave it.

And it seemed to me that... that the Sixth Circuit went beyond what this court requires in Bose.

It certainly was entirely faithful--

Unidentified Justice: What about the standard that [inaudible]... how about its definition of malice?

How do you think it defined the actual malice?

Mr. Lloyd: --I think it defined the actual malice as reckless... knowledge of probable falsity or reckless disregard for the truth.

The Sixth Circuit has been attacked on the ground that it used a prurience... its prurience standard that the plurality in Curtis Publishing laid down.

That is nonsense.

But I don't--

Unidentified Justice: Well, saying those words and [inaudible] used reckless disregard.

Mr. Lloyd: --But that is said... that demonstrates reckless disregard for the truth.

In other words, a massive quantum of circumstantial evidence... and, by the way, all circumstantial evidence is evidence on which inferences are drawn.

As an old time trial lawyer, I have as much trouble as Justice Scalia does deciding the difference between a fact and an inference.

But this massive record of circumstantial evidence of I want to put my head in the sand because I don't want to know why I can't run this article, certainly adds up.

That is... is an extreme departure from journalistic practice.

No question.

And it does demonstrate actual malice.

I would think... I would not be afraid to ask this Court to say... to affirm this judgment if the standard were beyond a reasonable doubt, as Justice Scalia said, that he thought it might well be in fact in Liberty Lobby.

There has never been in any case, including Saturday Evening Post or Curtis... Curtis Publishing, rather, v. Butts, as massive a record of knowledge of falsity and then reckless disregard for the truth as we showed, as we presented, as the court of appeals looked at, and as is before this Court.

And I've never argued here before, but I never thought I'd be here arguing the weight of the evidence.

This is unique to a public figure libel case, and I'm not complaining about it.

My colleague has said a lot of things that I frankly don't understand.

I think I understand Bose.

I agree with Chief Justice about Bose.

But that doesn't matter.

I could win this case under New York Times alone.

That's... or St. Amant or... all the case law combined distill it out that Dan Connaughton make the requisite showing necessary to get a verdict to sustain... said he made admissions and confessions.

That's absolute nonsense.

Dan Connaughton was brought into a meeting where he was told the endorsement of the newspaper might be on the line.

And he was asked, first of all,

"Did you say this? "

"Did you say that? "

"Did you say you were going to blackmail a judge? "

No.

Absolutely not.

The denials were flat, unequivocable, absolute.

Then he was asked to speculate as why this lady may have said these things.

Now, a more seasoned politician would have said,

"No, I'm not going to play that game. "

He didn't.

In good faith he tried to figure out why she might have said it.

And that's all there was to it.

But in no case can what this man said be equated to admissions of anything.

And I frankly submit respectfully that Judge Guy got disoriented when he wrote the dissenting opinion and based it on those statements and said... and said that they were admissions.

They weren't admissions of anything.

Asked the man to speculate and the man speculated.

And that's all there is to that.

So, coming down finally, the esoteric considerations are interesting, and I will say frankly I quite got lost in some of the colloquy between the court and my colleague on some of these abstractions.

I'm an old fashioned trial lawyer.

I know what evidence is.

I know what interests is.

I know what you argue to a jury.

I tried this case.

A motion was made rather timidly for a directed verdict but Judge Rubin said--

Unidentified Justice: Mr. Lloyd, could I interrupt you for just a moment?

Mr. Lloyd: --Well, I'm not going to listen to that; I will overrule it.

Unidentified Justice: How do you deal with the fact that the dissenting opinion below discussed the interview with your client at great length and the majority virtually ignored it?

And, really, on almost each point that tends to look unfavorably toward your client there is at least some factual basis on each of those isolated points.

Mr. Lloyd: Well, Justice Stephens I can't tell you why Judge Guy didn't agree with Judge Krupansky and Judge Keith.

All I can tell you is that I think Krupansky saw Judge Guy's characterization as a mischaracterization and... and he identified it as just a way of locking at evidence in the wrong way.

My answer to you, I guess, is that... that version of the evidence, that contention that my client admitted all of this was argued to the jury, and they didn't buy it.

They didn't believe that that's what happened based upon their--

Unidentified Justice: No, but the issue--

Mr. Lloyd: --review of the all the evidence.

Unidentified Justice: --The issue isn't whether it happened, but whether those statements made by your client and transcribed provided the newspaper with a sufficient basis for... for running the story.

Mr. Lloyd: Well, and Judge Guy thought they did.

Unidentified Justice: Yeah.

Mr. Lloyd: And the majority thought they didn't.

And I think that the majority was right and the... to say the judge was wrong, respectfully.

Unidentified Justice: I mean, some... the promise of the Florida trip, and he admits they talked about going down to Hilton Head or Florida, and the promise of a job.

And admits that it was a deli shop or a gourmet or an ice cream shop.

I mean, you're right if you got the verdict before the jury, but--

Mr. Lloyd: You see, what... where Judge Guy missed the point.

And I admire him and I like him, but I must say respectfully he missed the point, and I told him this privately.

He... He didn't understand that the gravamen of the charge were published.

The statements made by the Thompson woman were that Dan Connaughton got these two women at his home, he had his tape recorders, and he turned them off and he made a lot of promises and offers to induce them to testify.

He turned the tape back on and he got their statements.

Now, that all this was done as an inducement to get testimony.

Then he said, I'm going to blackmail a judge, and then he got mad, when that didn't work... and made these charges.

Now, that's an enormously--

Unidentified Justice: --Yes, but he--

Mr. Lloyd: --hurtful thing to say.

Now, his admissions, if Your Honor please, did not go to any of those things.

All he said was that, One time when I came to the house my wife was talking to these ladies about something and somebody may have interpreted something.

As to whether--

Unidentified Justice: --Yes, but isn't it... it is true, is it note, that the interview lasted much longer than the tape?

Mr. Lloyd: --That I don't know.

Unidentified Justice: That's the impression I got that... and that the stuff that was in dispute is what happened on the tape... was not turned on.

Mr. Lloyd: Well, but you see, my client said to the Journal News people at that interview,

"See for yourself. "

"Play the tapes. "

"You'll hear. "

And the head-in-the-sand took over.

They didn't want to play the tapes.

Now, the jury heard the tapes and they heard Dan Connaughton's voice on the tapes.

They also heard all the people who were at that meeting, including a lady who herself worked for the Journal News and her husband, the deputy fire chief, say, we were there the whole time and the man never said anything like that.

At that point I think, in my humble opinion, when the Journal News received that report from those people, that should have been the end of the inquiry.

A responsible newspaper would have said, Okay, call this one off.

And I think... far beyond that... that's when he got into reckless regard and that's why the jury brought in a verdict for the plaintiff, and it was upheld by the Sixth Circuit.

Now, I've said a lot of things in my brief.

Aside from affirming the judgment, the Petitioner really asks you enact a rule of absolute immunity for... for the press against... against litigation by public figures.

And if you reverse this judgment, I think the signal that goes out will be, look, public figures can't win libel cases; give up; there's no way to win.

The rule exists, but it exists as honored in a breach 25 years after New York Times was announced.

I urge this Court to give it some vitality, make it mean something.

Here is a Plaintiff that won a case against... if I may use the term from desegregation litigation... against a loaded game board.

He climbed over all these obstacles and prevailed because his evidence was massive and his cause was just.

And the court of appeals affirmed.

That's all any court of appeals could ever be asked to do, is what the Sixth Circuit has done in this case.

It has been my very great pleasure to argue to this Court.

Thank you very much.

Unidentified Justice: Thank you, Mr. Lloyd.

Mr. Levine, you have five minutes remaining.

REBUTTAL ARGUMENT OF LEE LEVINE ON BEHALF OF PETITIONERS

Mr. Levine: I'd like just to address a couple of points.

First, in response to Justice Stephens' question of Mr. Lloyd, it is indisputably true and one of those undisputed facts in this record that a reviewing court should credit that this... the tape recordings of which Mr. Lloyd refers run two hours and 20 minutes.

By the shortest estimate of any of the participants in that all-night meeting, that meeting lasted four hours.

That means that there is, by my count, an hour and 40 minutes that is unaccounted for.

So, listening to the tapes, in my view, is an incredible red herring in this case.

The tape that ought to be listened to, Your Honors, is the tape of the interview that the Journal News conducted with Dan Connaughton, the one that Justice Stevens was talking about.

There is a complete transcript of that tape-recorded interview in the Joint Appendix.

We understand that the tape recording itself remains in the custody of the district court but is a alliable to this Court upon request.

Unidentified Justice: What about talking to Ms. Stephens?

That's... That's what I really can't understand?

Why not talk to the sister before you go to the story?

Mr. Levine: Your Honor, it is undisputed we did not talk to her and it would have been a better story if we had.

But when you take that one fact and all the others that Mr. Lloyd... pure facts--

Unidentified Justice: It would have been a non-story if you had, not a better story, because she contradicted everything her sister said.

Mr. Levine: --Your Honor, with all due respect I think that if you read Patsy Stephens' testimony in the trial of this case, which is the best indication we have of what she would have said had she been interviewed, she does not deny.

She says, in fact, that it's all a matter of how you interpret it.

It's how a person feels within.

When someone gives you something out of their heart, that's not... I don't view that as a promise or an offer.

Unidentified Justice: That... that isn't a denial that there was an offer by--

Mr. Levine: It is... it is a denial that she interpreted it as an offer.

Unidentified Justice: --As not?

Yes.

It's a denial that she did.

Mr. Levine: But it... but it doesn't bear at all on the question of whether or not those statements were made--

Unidentified Justice: Well, what did... what do we do with that testimony?

Is that a fact or an inference?

Do I... do I take to be a denial that it occurred or not a denial that it occurred?

Is that something I give the jury the benefit of the doubt on or do I decided that for myself?

Mr. Levine: --Justice Scalia, on this record you take the position that Patsy Stephens testified at trial that she did not believe she was promised anything--

Unidentified Justice: Yeah.

Mr. Levine: --at that time.

And that is a fact that you weigh in the balance.

But, even given that, and that is concededly the most harmful piece of evidence in this record... although I would point the Court to statements in cases from St. Amant v. Thompson that failure to investigate does not constitute actual malice... that an independent review of this record can leave no doubt that the expression at issue here is protected by the First Amendment.

The article at issue, not the most defamatory interpretations of it that Mr. Lloyd would have you believe... the article itself is a fair and accurate account both of Alice Thompson's statements and of Mr. and Mrs. Connaughton's responses to them.

The article references conversations that Mr. Connaughton concedes took place and subjects that he concedes were discussed.

The article was disseminated in the midst of a hotly-contested election campaign.

Unidentified Justice: Well, then where is the falsity?

Mr. Levine: Your Honor, I see no falsity in this story.

And it seems to me that if you look at this article, the article that was actually written, it contains nothing that I would call a material false statement.

But this jury found falsity, and we sought independent review only of the actual malice inquiry.

So I'm here on the question of actual malice, not falsity.

What happened here was that this newspaper neutrally but before the voters both the charges made by Alice Thompson and the responses of the Connaughtons to them.

It did it unvarnished, without taking sides, without crediting one interpretation or the other.

That's not--

Unidentified Justice: Can you do that?

Can you put forward charges that you know are irresponsible?

That you... suppose... suppose they knew the charges were false, that wouldn't be a defense, would it, that you put forward the false charges and you also put forward his denial?

You can't do that, can you?

Mr. Levine: --If there was... If there was evidence like in the Cantrell case that this newspaper knew it was false?

Unidentified Justice: Right.

That's no good.

Mr. Levine: Under the actual malice--

Mr. Lloyd: Okay.

Mr. Levine: --standard that's no good.

Unidentified Justice: Okay.

What if you have reason to suspect very gravely that it's false but you don't bother to check up.

Does the situation change?

You can say, Well, you know, I really think it's a pack of lies but I don't know for sure and I'm not going to check.

Can you do that so long as you put in the other side?

Mr. Levine: I missed the first part of... of your--

Unidentified Justice: Well, you're--

Mr. Levine: --what you were--

Unidentified Justice: --not sure it's false but you suspect it's false.

But you say, I'm not going to check any further.

Mr. Levine: --Your Honor, in Garrison v. Louisiana, a jury instruction that said effectively that was held to be unconstitutional... that you had to have a firm enough reason to believe that it was true.

And that, this Court held, was not enough, you have to have a high degree of awareness of probable falsity.

That's the definition of actual malice.

Chief Justice William H. Rehnquist: Thank you, Mr. Levine.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

Hustler Magazine v. Falwell - Oral Argument

Wed, 13 Apr 2011 19:22:10 +0000

Case:

Hustler Magazine v. Falwell

Media File:

86-1278_19871202-argument.mp3

Related Transcript:

86-1278_19871202-argument.xml

Clips:

Clip 001

Mr. Isaacman, you puzzled me...

And in summing up...

Well, even accepting what the jury found%u2026

What is the Interest?

Transcript:

Argument of Alan L. Isaacman

Chief Justice William H. Rehnquist: We'll hear argument first this morning in No. 86-1278, Hustler Magazine and Larry C. Flynt versus Jerry Falwell.

Mr. Isaacman, you may proceed whenever you're ready.

Mr. Isaacman: Mr. Chief Justice and may it please the Court:

The First Amendment protects all speech except for certain narrowly drawn categories.

For example, the First Amendment does protect false statements of fact made with requisite fault.

The First Amendment doesn't protect obscene speech.

The First Amendment doesn't protect fighting words made in the presence of the person to whom the words are addressed and likely to incite violence.

This cases raises as a general question the question of whether the Court should expand the areas left unprotected by the First Amendment, and create another exception to protected speech.

And in this situation, the new area that is sought to be protected is satiric or critical commentary of a public figure which does not contain any assertions of fact.

Chief Justice William H. Rehnquist: Are you suggesting that would be a change in our constitutional jurisprudence to protect that?

Mr. Isaacman: Yes, sir, I am.

I am suggesting that.

In a specific way, the question becomes: is rhetorical hyperbole, satire, parody, or opinion protected by the First Amendment when it doesn't contain assertions of fact and when the subject of the rhetorical hyperbole is a public figure.

Another way of putting this case is, can the First Amendment limitations which have been set out in New York Times versus Sullivan and its progeny be evaded by a public figure who instead of alleging libel or instead of alleging invasion of privacy, seeks recovery for an allegedly injurious falsehood by labeling his cause of action intentional infliction of emotional distress.

In judging the publication that's at issue here, I think it's important to look at the context in which it appeared.

The speaker of course was Hustler Magazine, and Hustler Magazine is known by its readers as a magazine that contains sexually explicit pictures, and contains irreverent humor.

As an editorial policy, it takes on the sacred cows and the sanctimonious in our society.

It focuses on three subject areas primarily.

It focuses on sex, it focuses on politics and it focuses on religion.

Hustler Magazine has been the target of attacks and critical commentary by Jerry Falwell for years and for years prior to this ad publication.

Hustler Magazine is at the other end of the political spectrum from Jerry Falwell.

On the other hand, Jerry Falwell filling out the context of this speech, is the quintessential public figure.

It's hard to imagine a person in this country who doesn't hold political office who can has more publicity associated with his name than Jerry Falwell.

Jerry Falwell is the head of the moral majority.

The moral majority, he testified at the trial, numbers some six million people.

It's a political organization, he indicates.

It was set up to advance certain political views.

One of the foremost views is to attack what he considers to be pornography, and to attack kings of porn, in his words.

And foremost among those kings of porn in his mind is Larry Flynt.

He includes in that group others as well, such as Bob Guccioni of Penthouse and such as Hugh Hefner of Playboy.

The moral majority and Jerry Falwell also attack sexual conduct that they don't consider appropriate.

He has spoken on the subject of extramarital and premarital sex.

He doesn't approve of heterosexuals living together outside of wedlock.

He also doesn't approve and condemns homosexuality.

Now, these aren't private views he has kept to himself or just shared with his family.

These are views that he's gone on the political stump and tried to convince other people about.

He has been known in his words, as he testified, by the Good Housekeeping magazine which did a survey as the second-most admired man in the United States, next to the President.

Justice Sandra Day O'connor: Well, Mr. Isaacman, is the fact that you claim Mr. Falwell is a public figure in dispute in this case?

Mr. Isaacman: It isn't in dispute at all.

Justice Sandra Day O'connor: Well, then, I guess we could move on to the arguments, because apparently your remarks are for the purpose of demonstrating he's a public figure.

Is that right?

Mr. Isaacman: Justice O'Connor, it's to really to fill out the political context and the fact that what we have here are people who are at opposite ends of the political spectrum, engaging in the uninhibited robust and wide open debate in New York Times v. Sullivan.

Justice Sandra Day O'connor: Does the State have an interest in protecting its citizens from emotional distress, do you suppose?

Mr. Isaacman: Clearly, the State has an interest in protecting its citizens from emotional distress.

Justice Sandra Day O'connor: And perhaps that's an even greater interest than protecting reputation.

Mr. Isaacman: I would submit that it is not a greater interest than protecting reputation, because in the area of reputational injury, libel as we know it, for example, when it's in written form, emotional distress is an element of recovery as well as damage to reputation, and reputation affects what other people think of you.

It affects what goes on in the minds of other people as well, and not just the minds of one citizen.

So reputation in a sense covers a lot more territory than emotional distress does.

And the point of what I'm trying to make is that we really have people who are engaging in political debate in a way that involves vehement caustic and sometimes unpleasantly sharp language, as the New York Times v. Sullivan used.

Now, this speech is protected as rhetorical hyperbole, it's protected as satire and parody and as the expression of opinion.

Justice Sandra Day O'connor: Would this be a different case if the jury had found that the allegations could be considered factual?

Mr. Isaacman: It certainly would be a different case.

It certainly would be a different case.

We think that even in that situation, this Court should find that these allegations could in no way be perceived as factual as a matter of law, and in exercising its obligation under Bose, I think the Court would have to do an independent review of the record to determine that constitutional fact, that is to say, that there was no actual malice in this case because this can't be perceived.

Just as in Letter Carriers v. Austin, calling the plaintiffs there a traitor to their God, their country, their family, saying they have a corkscrew soul, saying that instead of a heart they have tortured principles, was considered by this Court to be rhetorical hyperbole, and not to be taken literally.

Similarly, there's nothing in this ad parody that can be taken as a statement of fact.

And we're in an unusual situation where the jury has made that determination for us.

So we now know that even this jury, which should never have been allowed to consider this.

Justice Sandra Day O'connor: Well, do you think that finding by the jury has opened for this Court to consider again de novo?

Mr. Isaacman: No, we don't think it is.

We don't think it is because--

Justice Sandra Day O'connor: I thought you were suggesting that in the First Amendment context, we'd have to consider those issues again.

Mr. Isaacman: --Justice O'Connor, I suggest that in the First Amendment context, when a determination is made by a jury that's adverse to speech, and when a jury finds that the speaker made statements that could be construed as statements of fact and were knowingly false, then it is incumbent upon the Court to take that review for the purpose of protecting the speaker.

And that's what the First Amendment says, that you have to protect the speaker.

Chief Justice William H. Rehnquist: You think Bose is a one-way street, then?

Mr. Isaacman: Your Honor, I do think it's a one-way street.

Bose is intended to protect the speaker, it's not intended to protect the emotionally distressed interest that the State is seeking to protect in the area of intentional infliction of emotional stress or in the area of libel.

And not only that, but we have a situation where there hasn't been an appeal from the determination in the jury, so that's res judicata yet.

Chief Justice William H. Rehnquist: This is all matter that isn't really directly involved in your case.

I mean, you have a favorable determination from the jury.

Mr. Isaacman: Yes, sir, that's correct.

Now, going on, we not only have the example of Letter Carriers, but we have the example of Greenbelt v. Bresler where the plaintiff in that case was accused of being engaged in blackmail.

And the Court said that that can't be taken literally because that was just intended to describe his negotiating position, and that is hyperbole.

And we have ample lower court precedents on the subject, such as the Pring case, which was a Penthouse article about a Miss Wyoming which attributed certain sexual activities on her part, and she sued for libel, intentional infliction of emotional stress, and other causes of action.

And the Tenth Circuit, after an adverse jury determination to Penthouse, the Tenth Circuit reversed and dismissed that case, saying that that's rhetorical hyperbole.

That article couldn't be perceived as describing actual facts about the plaintiff in that case, or actual events in which she participated.

Same finding that the jury made in this case.

And the Court then went on to say that since it's rhetorical hyperbole and protected by the First Amendment against a libel claim, it's also protected against an intentional infliction of emotional distress claim which there was called outrage under Wyoming law because the same constitutional defenses apply.

And earlier this year in the First Circuit in the L.L. Bean v. Drake Publishers, the Court there said that parody is protected speech, and even though the plaintiff in that case complained about the sexual parody that occurred of L.L. Bean's Catalog, that was protected speech and the case was found in favor of the speaker in that situation.

Beyond that, Jerry Falwell as a public figure should not be permitted to evade the First Amendment limitations that have been set forth in New York Times v. Sullivan, and many many other cases with respect to his claim for an allegedly injurious falsehood.

The California Supreme Court recently, through Justice Mosc, determined in Blatty v. New York Times, that where the gravamen of a complaint is allegedly injurious falsehood, it doesn't matter what you call your claim, because the First Amendment covers that area.

Justice Antonin Scalia: Mr. Isaacman, what the New York Times rule provides is not an absolute protection, but what a knowing element, an element of specific intent to create a falsehood.

It doesn't give an absolute privilege to state falsehood.

It just says the falsehood is okay unless there's an intent.

Now, here we have a State Tort that is specifically an intentional Tort.

There must be an intent to create the emotional distress, so it really is not quite the same category of opening up that you're making it out to be.

It's just the issue is whether the intent element is enough to provide a major exception from New York Times is also enough to make a major exception for purposes of this tort action.

Isn't that right?

Mr. Isaacman: Justice Scalia, we have a lot of cases including New York Times v. Sullivan, including Garrison v. Louisiana, and say it's not the intent to cause harm.

It's not the hatred, it's not the ill will, it's not the spite that the First Amendment is directed at.

It's intent to cause harm through knowing falsehood or reckless falsehood.

Garrison v. Louisiana is a perfect example.

Justice Antonin Scalia: I understand you can draw the line there.

But all New York Times says is if you state falsehood with knowledge of the falsehood intent to be false, the First Amendment does prevent it.

All I'm asking you is why can't that principle be extended to say you can cause emotional harm to your heart's content, just as you can state falsity to your heart's content, but where you intend to create that emotional harm, we have a different situation.

Isn't that a possible line?

Mr. Isaacman: I don't think that any reasonable reader of any of the speech that has occurred in the cases including New York Times v. Sullivan, Garrison and all the other cases that have come down, Letter Carriers I gave as an example, could ever say that the speaker did not intend to cause harm.

When you say something that somebody has a corkscrew soul and has tortured principles for a heart and is a traitor, who can believe that person doesn't intend to cause harm.

People intend the natural consequences of their actions.

And they intend when they say something critical, they intend that that's going to cause some harm or some distress.

And that speech has to be protected, or all we're going to have is a bland, milquetoast kind of speech in this country.

Justice Antonin Scalia: That may well be.

My only point is New York Times, it seems to me, doesn't speak to it.

New York Times says intent is okay, is enough to get you out of it.

What you're saying is, this kind of intent shouldn't be enough, intent to cause harm shouldn't be.

Mr. Isaacman: That's correct.

Knowing falsity may be enough.

Justice John Paul Stevens: But even in the New York Times sense, if what the asserted facts here were known to be untrue, I mean, one who knew nothing about Mr. Falwell or anything about the background could read this and think there might be some individual that this was a factually correct statement about.

So that these are statements that were knowingly false, so they really satisfied the New York Times standard in that sense.

Mr. Isaacman: Justice Stevens, the response to that is really that there were no facts asserted.

Justice John Paul Stevens: Well, I understand what your argument is, but to the extent that there are factual statements, they satisfy the New York Times standard because everybody knows they're false, including the speaker.

Mr. Isaacman: If you change what this article means, and you say this article's capable of being interpreted as an assertion of fact, then you've kind of set the stage differently from what it is, and from what the jury determined.

If you say that in Letter Carriers, that the person who made that comment was really saying--

Justice John Paul Stevens: Really, all I'm suggesting is pretty much the same thing Justice Scalia is.

I'm not sure New York Times speaks to the problem we have before us in this case.

Mr. Isaacman: --It speaks in a sense that a knowing falsity, a reckless falsity is required.

And that requires that there be a false statement of fact.

And the cases indicate that.

Garrison indicates that.

Letter Carriers indicates that.

Before there can be a false statement of fact, there has to be a false statement, and without a false statement, there can be no false statement of fact.

Justice Sandra Day O'connor: Well, that gets us back to Bose and whether we have to reexamine this statement for ourselves to determine whether it's a factual statement.

Mr. Isaacman: Well, that brings me back to my response, Justice O'Connor, that if there were an adverse determination to the speaker, this Court would have an independent obligation to examine.

Justice Sandra Day O'connor: I don't think Bose spelled it out that way.

I don't read that necessarily into Bose.

So you may be asking us to move on to another step beyond that case.

Mr. Isaacman: Well, the only thing I would say is the only case I saw that dealt with that is Brown v. KNB Corporation, a Connecticut Supreme Court case decided August 18, 1987.

And my reading of that case is that the independent review goes one way and it goes to review the adverse determination against the speaker.

It doesn't go to review a finding that there was--

Justice Sandra Day O'connor: I suppose that Connecticut case isn't binding on us.

Mr. Isaacman: --That's correct.

That's correct.

Justice Byron R. White: Well, even accepting what the jury found, that there was no reputational injury here because there was no believable fact asserted, for you to win, you have to say that opinion or parody is never actionable, even though it's done intentionally for the purpose of inflicting emotional distress.

That's your proposition, isn't it?

Mr. Isaacman: Well, Justice White, my proposition is--

Justice Byron R. White: Isn't it, or not?

Mr. Isaacman: --No, no.

As you stated, Your Honor, no, it isn't.

Justice Byron R. White: What is it, then?

Mr. Isaacman: Because what that leaves out is opinion or parody that does not contain anything that can be reasonably understood as a statement of fact.

Justice Byron R. White: All right.

I agree with that, because that's what the jury found.

Mr. Isaacman: The second thing that your hypothetical left out, your proposition left out was that this is a public figure who is bringing this action, somebody whose supposed to have a thick skin.

Justice Byron R. White: All right.

Include that, and then you say, parody or opinion about a public figure is never actionable even though it's done intentionally for the purpose of causing emotional distress, that's your proposition.

Mr. Isaacman: And even though it contains nothing that can be understood as a false statement of fact.

Justice Byron R. White: Sure, sure.

Mr. Isaacman: Including that, I agree, yes.

That's my proposition.

Justice Byron R. White: That's your proposition.

Mr. Isaacman: You cross the line when you say something that can be understood as a false statement of fact.

Otherwise, you're not going to have the uninhibited robust--

Justice Byron R. White: Well, I take it certainly it's arguable that we must judge this case on the basis that there was no fact involved.

You say the jury said there wasn't.

Mr. Isaacman: --The jury said there was nothing that could be perceived, could be understood as a fact.

Justice Byron R. White: If we judge the case on that basis, then your proposition is there can't be any liability here at all,--

Mr. Isaacman: That's correct.

Justice Byron R. White: --if there's a public figure involved.

Would you say if there wasn't a public figure involved, that we could sustain this judgment?

Let's assume it was not a public figure.

No believable or nothing that was said that could be interpreted as a fact, and so there would be no libel, no reputational injury.

If there was not a public figure involved, you would say the judgment would stand, or not?

Mr. Isaacman: Fortunately, that's not my case.

But I will answer that.

We don't have to deal with that case in resolving this one.

Justice Byron R. White: Well, you haven't mentioned it, yet.

Mr. Isaacman: I would say that if it does not contain a false statement of fact, or something that can be perceived as a false statement of fact, then even it's a private figure, it's protected speech.

Justice Sandra Day O'connor: At common law, I suppose the exception was just for fair comment, wasn't it?

Mr. Isaacman: Common law in the?

Justice Sandra Day O'connor: In this tort of emotional distress, that there was leeway for some kind of fair comment?

Mr. Isaacman: Well, this tort of emotional distress is really such a new tort that there is, to my knowledge, not a lot of decisions on point.

And in Virginia... and I don't mean to evade your question and I'll try to answer it... but in Virginia, itself, we found no case that allows intentional infliction of emotional distress cause of action in this arena, and we pointed that out in our brief.

And the only case we did find was this Mitchell v. Dameron case, that indicated that you cannot sue for intentional infliction of emotional stress when you're suing on what is considered to be an allegedly injurious falsehood that gives rise to a claimed libel action.

Because that would make that tort duplicative and would give the opportunity for plaintiff to get around the First Amendment limitations.

Justice John Paul Stevens: Mr. Isaacman, you puzzled me with your answer to Justice White, and assuming there's no public figure involved, and you've admitted there's a public interest in protecting the citizenry from emotional distress, what's the public interest in protecting speech that does nothing else?

Mr. Isaacman: There is a public interest in allowing every citizen of this country to express his views.

That's one of the most cherished interests that we have as a nation.

Justice John Paul Stevens: Well, what view was expressed by this?

Mr. Isaacman: By this ad parody, or your example?

Justice John Paul Stevens: Well, either one, other than something that just upsets the target of the comment?

Mr. Isaacman: What view is expressed by the ad parody is really a couple fold view, two views or more.

In the first place, we have to understand that we're talking about one page out of 150 pages in the magazine.

Justice John Paul Stevens: I understand--

Mr. Isaacman: So it's not a treatise or a novel that's gone into a long development.

It is a parody of a Compari ad, number one, if it does that.

Unknown Speaker: --I understand.

Mr. Isaacman: And that's a legitimate view for it to express.

And we all can understand how it parodied the ad.

It is also a satire of Jerry Falwell, and he is in many respects the perfect candidate to put in this Compari ad because he's such a ridiculous figure to be in this ad.

Somebody who has campaigned against alcohol, campaigned against sex and that kind of thing.

Justice John Paul Stevens: Well, is the public interest that you're describing, you're building up here that there's some interest in making him look ludicrous or is it just there's public interest in doing something that people might think is funny?

What is the public interest?

Mr. Isaacman: There are two public interests.

With respect to Jerry Falwell alone, there are two public interests.

One is there is a public interest in having Hustler express its view that what Jerry Falwell says as the rhetorical question at the end of the ad parody indicates is B.S. And Hustler has every right to say that somebody who's out there campaigning against it saying don't read our magazine and we're poison on the minds of America and don't engage in sex outside of wedlock and don't drink alcohol.

Hustler has every right to say that man is full of B.S. And that's what this ad parody says.

And the first part of the ad parody does, it puts him in a ridiculous setting.

Instead of Jerry Falwell speaking from the television with a beatific look on his face and the warmth that comes out of him, and the sincerity in his voice, and he's a terrific communicator, and he's standing on a pulpit, and he may have a bible in his hand, instead of that situation, Hustler is saying, let's deflate this stuffed shirt, let's bring him down to our level, or at least to the level where you will listen to what we have to say.

[Laughter]

I was told not to joke in the Supreme Court.

I really didn't mean to do that.

Justice John Paul Stevens: That's the answer to the first half of my question.

What's the public interest in the case involving a private figure?

Mr. Isaacman: In the case of a private figure, the public interest is admittedly less.

Justice John Paul Stevens: Less?

What is it?

Mr. Isaacman: There is still interest in expressing your views, there's still an interest in people being able to express their views, apart from the fact that the public may not have any great interest in hearing those views.

Justice Antonin Scalia: Mr. Isaacman, to contradict Vince Lombardi, the First Amendment is not everything.

It's a very important value, but it's not the only value in our society, certainly.

You're giving us no help in trying to balance it, it seems to me, against another value which is that good people should be able to enter public life and public service.

The rule you give us says that if you stand for public office, or become a public figure in any way, you cannot protect yourself, or indeed, your mother, against a parody of your committing incest with your mother in an outhouse.

Now, is that not a value that ought to be protected?

Do you think George Washington would have stood for public office if that was the consequence?

And there's no way to protect the values of the First Amendment and yet attract people into public service?

Can't you give us some line that would balance the two?

Mr. Isaacman: Well, one of the lines was suggested by a question earlier, and that is in the private figure of public figure area, if the Court really wants to balance.

But somebody whose going into public life, George Washington as an example, there's a cartoon in I think it's the cartoonist's society brief, that has George Washington being led on a donkey and underneath there's a caption that, so and so whose leading the donkey is leading this ass, or something to that effect.

Justice Antonin Scalia: I can handle that.

I think George could handle that.

But that's a far cry from committing incest with your mother in an outhouse.

I mean, there's no line between the two?

We can't protect that kind of parody and not protect this?

Mr. Isaacman: There's no line in terms of the meaning because Hustler wasn't saying that he was committing incest with his mother.

Nobody could understand it to be saying that as a matter of fact.

And what you're talking about, Justice Scalia, is a matter of taste.

And as Justice Scalia, you said in Pope v. Illinois, just as it's useless to argue about taste, it's useless to litigate it, litigate about it.

And what we're talking about here is, well, is this tasteful or not tasteful.

That's really what you're talking about because nobody believed that Jerry Falwell was being accused of committing incest.

The question is is this in good taste to put him in this, draw this image, paint a picture.

If you charge a man with a crime, Your Honor, and it's an assertion that he committed a crime,--

Justice Thurgood Marshall: If it's against a public figure, it's okay.

Mr. Isaacman: --No.

Justice Thurgood Marshall: No?

Mr. Isaacman: If it's a knowing false statement of fact, if you're charging him with a crime and it's perceived that you're charging him with a crime, and you're doing it with knowledge that that's false, it's not okay against a public figure.

Justice Thurgood Marshall: Well, isn't that this case?

Mr. Isaacman: No, it isn't this case.

Justice Thurgood Marshall: You say they didn't charge him with incest?

Mr. Isaacman: Justice Marshall, they did not charge him with incest, and a jury determined--

Justice Thurgood Marshall: Why did they have him and his mother together?

Mr. Isaacman: --They had him and his mother together to what's called in literary forum, travesty, to put somebody in a ridiculous unbelievable setting for purposes of effect.

They put him in this situation knowing nobody would really perceive that that's what he's actually doing.

But to say we're going to deflate this man who is so self-righteous in the area of sex and telling everybody else what to do, as well as telling them what to read.

Justice Thurgood Marshall: And what public purpose does that serve?

Mr. Isaacman: It serves the same public purpose in a sense of having Trudeau in Doonesbury call George Bush a wimp.

What public purpose does that have?

It makes people look at that and maybe think of George Bush a little bit differently.

And somebody who is out there telling other people how to live and being very serious and sober about it and acting as though he has more knowledge than they do about how they live their lives, Hustler has a right to make comments about it and make him look ridiculous as long as they don't state false statements of fact knowingly or recklessly.

Justice Thurgood Marshall: Well, it was a false statement of fact that he was in the outhouse with his mother.

That was a false statement of fact.

Mr. Isaacman: It was not a statement of fact, Your Honor, and the jury so found.

Justice Thurgood Marshall: Well, what was it?

Mr. Isaacman: What was it?

It was hyperbole.

Justice Thurgood Marshall: Hyperbole?

Mr. Isaacman: Just as calling somebody a blackmailer was not saying he's a blackmailer.

It was saying that he was engaged in--

Justice Thurgood Marshall: If you charge somebody with say, if you don't pay me money, I'll report you, that's blackmail.

Mr. Isaacman: --That's correct.

Justice Thurgood Marshall: Well, that's the same as this was.

Mr. Isaacman: That's correct.

But in Greenbelt, saying that somebody was a blackmailer--

Justice Thurgood Marshall: Oh, you mean, they had to say that he was guilty of incest, in quotes?

Is that right?

Mr. Isaacman: --No, it is not right, Your Honor.

Justice Thurgood Marshall: How close would they have to get to that?

Mr. Isaacman: They would have to say it in a way that a reasonable reader would perceive that that's what Hustler was saying, that he is guilty of incest.

And this jury that was certainly not a jury that came from Hustler's background in any way, said that no reasonable reader could perceive this as a statement of fact.

And in summing up, what I would like to do is say this is not just a dispute between Hustler and Jerry Falwell, and a rule that's applied in this case is not just that Hustler Magazine can no longer perform what it does for its readers, and that is produce this type of irreverent humor or other types of irreverent humor.

It affects everything that goes on in our national life.

And we have a long tradition, as Judge Wilkinson said, of satiric commentary and you can't pick up a newspaper in this country without seeing cartoons or editorials that have critical comments about people.

And if Jerry Falwell can sue because he suffered emotional distress, anybody else whose in public life should be able to sue because they suffered emotional distress.

And the standard that was used in this case, does it offend generally accepted standards of decency and morality is no standard at all.

All it does is allow the punishment of unpopular speech.

Justice Antonin Scalia: How often do you think you're going to be able to get a jury to find that it was done with the intent of creating emotional distress.

I mean, there is that finding here.

Mr. Isaacman: Every time Almost every time that something critical is said about somebody, because how can any speaker come in and say I didn't intend to cause any emotional distress, and be believed.

If you say something critical about another person, and if it's very critical, it's going to cause emotional distress.

We all know that.

That's just common sense.

So it's going to be an easy thing to show, intend to harm.

That's why that's a meaningless standard.

Incidentally, it was a negligence standard in this case.

Chief Justice William H. Rehnquist: Thank you, Mr. Isaacman.

We'll hear now from you, Mr. Grutman.

Argument of Norman Roy Grutman

Mr. Grutman: Mr. Chief Justice, may it please the Court.

Deliberate, malicious character assassination is not protected by the First Amendment to the Constitution.

Deliberate, malicious character assassination is what was proven in this case.

By the defendant's own explicit admission, the publication before this Court was the product of a deliberate plan to assassinate, to upset the character and integrity of the plaintiff, and to cause him severe emotional disturbance with total indifference then and now to the severity of the injury caused.

When the publication was protested by the bringing of this lawsuit, the unregenerate defendant published it again.

Justice Scalia, I'd like to answer a question that you raised with my adversary.

How often are you going to be able to get proof like this.

I dare say, very infrequently, and I dare say that the kind of behavior with which the Court is confronted is aberrational.

This is not the responsible publisher.

This is the wanton, reckless, deliberately malicious publisher who sets out for the sheer perverse joy of simply causing injury to abuse the power that he has as a publisher.

Justice Sandra Day O'connor: Mr. Grutman, I guess there are those who think that the conduct of certain newspapers in pursuing Mr. Hart recently was of the same unwarranted character.

Should that result in some kind of liability?

Mr. Grutman: I don't think so in that case because what was being done by the newspapers in that case was reporting the truth, the truth about a public figure who was a candidate for public office.

The context in which the publications about Gary Hart appeared cannot really be compared favorably with what was done here.

Justice Sandra Day O'connor: So you would limit the recovery for the tort of emotional distress to recovery for a falsehood?

Mr. Grutman: No.

Justice Sandra Day O'connor: No?

Mr. Grutman: Under the theory of the intentional infliction of emotional distress, even the truth can be used in such a way if it is used in some outrageous way, it must be something which is so repellent--

Justice Sandra Day O'connor: And what if the jury were to determine that what the newspapers did with regard to Mr. Hart fell in that category?

Is that recoverable?

Mr. Grutman: --If the jury were able to find from the evidence, Justice O'Connor, that the publication was outrageous... I would doubt that they would find that because it is not that kind of conduct... reporting the truth.

Justice Sandra Day O'connor: But you would say it's open to a jury determination?

Mr. Grutman: Only in a highly theoretical sense, if the animating purpose behind the publisher was simply to inflict intense and severe emotional distress upon Gary Hart.

But I think that's really not the issue.

The focus in this Court, which is not the Court of libel, the focus is on the harm which is inflicted on the victim.

Justice Sandra Day O'connor: Well, do you think a vicious cartoon should subject the drawer of that cartoon to potential liability?

Mr. Grutman: Only in the event that the cartoon constitutes that kind of depiction which would be regarded by the average member of the community as so intolerable that no civilized person should have to bear it.

That's the definition of the Court.

Justice Byron R. White: Well, Mr. Grutman, you're certainly posing a much broader proposition than is necessary for you to win this case.

Mr. Grutman: Indeed, but I was answering the question of Justice O'Connor.

Justice Byron R. White: Well, the way you put it from the very outset, you put it the same way.

We're judging this case on the basis that the jury found that no one could reasonably have believed that this was a statement of fact.

That's the way we judge this case.

Mr. Grutman: No.

I'd like to address that point, Justice White, because I think a kind of semantic conundrum has been presented here when counsel says that there was no statement of fact.

There was a statement of fact.

Just as we argued in our brief, you could state gravity causes things to fly upward.

That is a statement of fact.

It's just a false statement of fact.

And if one consults the record--

Justice Byron R. White: What do you make out of the special verdict the jury returned?

Mr. Grutman: --I make out of it the fact that the jury said that this was not describing actual facts about the plaintiff or actual events in which the plaintiff participated.

That is a finding that what the statement was in the publication was false.

Perhaps we should have appealed that.

That's a finding of falsity which is all that we needed to prove to sustain libel.

But we did not appeal that, and that question is not before the Court.

But in answer to your question, I find that the meaning of the answer to that question only goes to the issue of whether the jury thought that Reverend Falwell--

Justice Byron R. White: I don't know why you insist on this because if there's anything factual about this statement, you certainly have to contend with New York Times.

And if there's nothing factual about it, you don't have to contend with it at all.

All you have to say or all you have to win, which is plenty, that using opinion or parody to inflict emotional distress is not protected by the First Amendment, which is a considerably different proposition than what you've been pushing.

Mr. Grutman: --I agree that parody or so-called satire, whatever it calls itself, is not necessarily protected speech when the purpose of the publisher is to inflict severe emotional distress.

And while the contention is made in the argument that you've heard this morning that this was a parody, I think that the jury could properly examine this and recognize it for what it is.

A fig leaf isn't going to protect this kind of a publication from being recognized as the kind of behavior with which the tort of the intentional infliction of emotional distress is intended to deal.

Justice Sandra Day O'connor: But you would subject, thought, the range of political cartoonists, for example, to that kind of jury inquiry, whether it was vicious enough to warrant recovery.

Mr. Grutman: No.

Two things must conjoin.

What you have to have is an irresponsible intention on the part of the defendant to inflict injury.

That's only one half of it.

The other is that what the cartoonist, the writer or the speaker does, constitutes in the mind of the community, an utterance of such enormity, such a heinous kind of utterance, usually false, that nobody should have to bear that if the purpose was to inflict severe emotional injury, and severe emotional injury results.

Chief Justice William H. Rehnquist: What about a cartoonist who sits down at his easel, or whatever cartoonists sit down at, and thinks to himself, a candidate acts for the presidency as just a big windbag, a pompous turkey and I'm going to draw this cartoon showing him as such.

You know, part of his intent, he enjoys cartooning and just likes to make people look less than they are, to show up the dark side of people.

But he knows perfectly well that's going to create emotional distress in this particular person.

Now, does that meet your test?

Mr. Grutman: No.

It does not, unless what he depicts is something like showing the man committing incest with his mother when that's not true, or molesting children or running a bordello or selling narcotics.

Chief Justice William H. Rehnquist: What about the state of mind required from the defendant?

Mr. Grutman: Well, the state of mind is precisely what we're concerned with.

Chief Justice William H. Rehnquist: What about the state of mind I've hypothesized to you.

Does that satisfy your test for the constitutional, or not?

Mr. Grutman: No, it would not.

If the man sets out with the purpose of simply making a legitimate aesthetic, political or some other kind of comment about the person about whom he was writing or drawing, and that is not an outrageous comment, then there's no liability.

Chief Justice William H. Rehnquist: Even though he knows it will inflict emotional distress?

Mr. Grutman: It has to be... correct, because you cannot have emotional distress for mere slights, for the kinds of things which people in an imperfect world have got to put up with, calling somebody some of the epithets that were mentioned in the opposing argument, blackmailer, or some other conclusory and highly pejorative terms, an epithet, but when you say not that you are some foul conclusory term, but when you depict someone in the way in which Jerry Falwell was depicted with all of the hallmarks of reality including the pirated copyright and the pirated trademark so that the casual reader looking at it could think this is for real, that rises to the level of--

Justice John Paul Stevens: That's a different argument.

Yeah, that doesn't go to the question of intent.

What about a case in which another magazine publisher today decided I think I could sell a lot of magazines by reprinting this very parody here because it's gotten so much publicity and some people may think it's funny and so forth, I don't care if it hurts Mr. Falwell, but it will cause precisely the same harm as this one.

Is there recovery in that case or not?

Mr. Grutman: --I do not think so, or it's a much harder case.

Justice John Paul Stevens: So it's free game now.

Anybody can publish this other than Mr. Flint?

Mr. Grutman: Justice Stevens, Mr. Flint republished it for a third time after the jury verdict.

Justice John Paul Stevens: I understand.

But what you're telling me under your test, anybody else may publish it without incurring liability.

Mr. Grutman: Liability requires an intent.

Justice John Paul Stevens: But you do agree with what I said?

Mr. Grutman: I do, I do Mr. Justice Stevens.

I agree that intent... this is why this is such a rare tort.

This is, as I've suggested, an intersticial tort.

Justice Antonin Scalia: Mr. Grutman, you're given us a lot of words to describe this: outrageous, heinous,--

Mr. Grutman: Repulsive and loathsome.

Justice Antonin Scalia: --Repulsive and loathsome.

I don't know, maybe you haven't looked at the same political cartoons that I have, but some of them, and a long tradition of this, not just ion this country but back into English history, I mean, politicians depicted as horrible looking beasts, and you talk about portraying someone as committing some immoral act.

I would be very surprised if there were not a number of cartoons depicting one or another political figure as at least the piano player in a bordello.

Mr. Grutman: Justice Scalia, we don't shoot the piano player.

I understand that.

Justice Antonin Scalia: But can you give us something that the cartoonist or the political figure can adhere to, other than such general words as heinous and what not.

I mean, does it depend on how ugly the beast is, or what?

Mr. Grutman: No, it's not the amount of hair the beast has or how long his claws may be.

I believe that this is a matter of an evolving social sensibility.

Between the 1700s and today, I would suggest, that people have become more acclimatized to the use of the kinds of language or the kinds of things that had they been depicted at an earlier age would have been regarded as socially unacceptable.

And while that evolutionary change is taking place, and it's a salutary thing, there are certain kinds of things.

It's difficult to describe them.

This Court struggled for years to put a legal definition on obscenity, and Justice Stewart could say no more than, I know what it is when I see it.

Well, this kind of rare aberrational and anomalous behavior, whatever it is, whatever the verbal formulation that the nine of you may come upon, clearly it can be condensed in the form of words that I used, which are not mine... they belong to the oracles of the restatement... who have tried to say that it is for the jury to decide whether or not what is being depicted is done is so an offensive, so awful and so horrible a way, that it constitutes the kind of behavior that nobody should have to put up with.

Justice Sandra Day O'connor: Well, Mr. Grutman, in today's world, people don't want to have to take these things to a jury.

They want to have some kind of a rule to follow so that when they utter it or write it or draw it in the first place, they're comfortable in the knowledge that it isn't going to subject them to a suit.

Mr. Grutman: I frankly think that it isn't too much to expect, Justice O'Connor, that a responsible author, artist, or anyone would understand that attempting to falsely depict as a representational fact that someone is committing incest with his mother in an outhouse and saying that she's a whore, and that when the person involved is an abstemious Baptist Minister, that he always gets drunk before he goes into the pulpit, it isn't too much to say that anybody who would do that ought to take the consequences for casting that into the stream.

Justice Byron R. White: Well, the say you put it, we don't need any new law for that.

That's just... New York Times wouldn't insulate any statement of fact like that.

Mr. Grutman: Justice White, I don't think this case is governed by the New York Times rule.

When I tried this case, we were living in the heyday of Gertz and we had not yet had this Court's decision in Dunn & Bradstreet or in Philadelphia Newspaper v. Hepps.

I would suggest to this Court that we are covered by your decisions in those cases.

This is not speech that matters.

This is not the kind of speech that is to be protected.

The New York Times rule is not a universal nostrum.

It is a rule that you formulated to meet a constitutional crisis in which truth, which is irrelevant here.

Justice Byron R. White: Well, if these were factual statements like you mentioned, you could win under New York Times any time.

Mr. Grutman: Yes, we could win under New York Times, but I'm suggesting that as a jurist prudential matter, the New York Times formulation of actual malice is inappropriate and irrelevant for this tort for the reason that when you're dealing with the tort of libel, the focus of inquiry, the gravamen is on the issue of true or falsity in which facts become the measure of what is true or false, or something which has been dealt with recklessly.

The gravamen of this, as I say, intersticial tort is on the harm that was inflicted on the victim, and the constitutional measure here is intentionality.

It's what this Court said in the dissent of Chief Justice Rehnquist, we're really dealing with whether you call it, scienter or mens rea.

Justice Sandra Day O'connor: Well, Mr. Grutman, there's plenty of malice here all right.

I mean, I don't think that's your problem.

But the jury said this can't be reasonable viewed as making a factual allegation.

Mr. Grutman: I disagree, Justice O'Connor, and if you'll give me a moment... that is the easy way of looking at it, but that's not what they said.

The question answered is, can this be understood as describing actual... meaning truth... actual facts about plaintiff or actual events in which plaintiff participated.

And they said, no.

That to me means that they said this is not a true statement of fact, but it's nonetheless a statement of fact for the purposes of New York Times or for the purposes of this case.

Justice Antonin Scalia: Give me a statement that isn't a statement of fact.

Mr. Grutman: Pardon?

Justice Antonin Scalia: Give me a statement that isn't a statement of fact in your interpretation of what statement of fact means.

I mean, when you say, statement of fact, it means true fact, or it means nothing at all.

Mr. Grutman: No.

That is the aristotelian interpretation of a statement of fact as propounded by Professors Wexler and Michael in their famous monograph, but in the common parlance in which we speak, a statement of fact is an utterance about either an event or a thing or a person which can be proven either true or false.

If it's true, then it's a true fact, but if it's false, like gravity causes things to float upward... that's a statement of fact, but it's manifestly false.

Justice Antonin Scalia: So there's no statement that is not a statement of fact is what you're saying.

Mr. Grutman: That's correct.

However, there may be statements... that's an interesting philosophical question that we could explore endlessly, but--

Chief Justice William H. Rehnquist: Mr. Grutman, that's not the way the Fourth Circuit interpreted the finding in this case.

They interpreted it, as I read their opinion, the majority, to mean that the jury understood it was not a statement of factual statement about him.

They didn't admit that they thought the statement was false.

So you're urging on us, a meaning that's not been accepted by any of the Courts that have had the case so far.

Mr. Grutman: --Candidly, I must say that I do not think that the Fourth Circuit made the point which I first tried to make to Justice O'Connor, and which I am making to you: in retrospect, I believe we could have appealed this as a proper basis for libel with that finding.

Chief Justice William H. Rehnquist: You could, but you didn't.

Mr. Grutman: But I didn't and that's therefore it wasn't before the Fourth Circuit, and it's not before you now.

Justice John Paul Stevens: Not only that, but the purpose in the jury instruction was to ask that question as a predicate to the second question which related to malice which wouldn't have had any purpose to it unless it's interpreted the way--

Mr. Grutman: That is the way it looks in the cold light in the Supreme Court today.

I remember that at the time that those jury instructions were being fought over in the pit of the trial, it really had to do with a certain contention the Judge Turc was flirting with about the meaning of Pring as to whether or not what was done in Pring constituted some basis--

Justice John Paul Stevens: --Yes, but your second question all goes to whether the New York Times malice standard, and that just isn't even implicated unless it's a false statement of fact.

Mr. Grutman: --Justice Stevens I agree that maybe I should have done something different, but I thought at the time that the damages we were seeking to recover were equally recoverable under the intentional infliction of emotional stress.

Justice John Paul Stevens: May I ask a different question that just troubles me a little bit about the case.

Your tort is one, I gather, that's founded on Virginia law.

This is a diversity case, is it not?

Mr. Grutman: This is a Virginia Tort.

Justice John Paul Stevens: And so the contours of this tort presumably we would find in some Virginia decisions?

Mr. Grutman: Yes.

Justice John Paul Stevens: And the latest decision that's cited in your opponent's reply brief is a lower court decision which seems to say there's no tort of this kind at all.

You didn't comment on that.

Mr. Grutman: That case which I saw when I received their brief I believe yesterday, I noticed was a Court of inferior jurisdiction.

Justice John Paul Stevens: Right.

Mr. Grutman: I do not think that it is controlling on this Court.

I do not think that it is good law.

Justice John Paul Stevens: Well, if it correctly describes Virginia law, it is controlling.

In terms of what the Virginia law is, we don't decide that.

Mr. Grutman: I understand that but I believe that there are other cases in Virginia, which have been cited in our brief, which support the validity of the preposition that we are asserting that Virginia recognizes this as a separate and independent tort.

Now, that's a lower court case and it may be appealed or it may not, but there are higher authorities within the State of Virginia which support the position that we're advancing here.

Justice John Paul Stevens: Which are cited in your brief?

Mr. Grutman: Yes, they are, Justice Stevens.

Now, Hustler contends that the actual malice test of libel law preempts the field and must be applied universally and literally to all dignitary torts involving speech.

And I suggest that the Dunn & Bradstreet decision and the Hepps decision reject that.

This Court has not treated that as a universal nostrum.

This Court has recognized differences in speech and has granted less First Amendment protection, and sometimes no First Amendment protection.

In this case, subjective awareness of falsity or reckless disregard of truth are an appropriate way of examining actual malice when the gravamen of the tort is falsity as in libel.

However, here with the intentional infliction of emotional distress which has also been described as outrageous conduct,--

Justice Thurgood Marshall: Mr. Grutman, is libel, per se, recognized in Virginia when you charge somebody with a crime?

Mr. Grutman: --I believe so.

Justice Thurgood Marshall: Well, nobody pays any attention to that at all.

Mr. Grutman: No one pays it?

Justice Thurgood Marshall: Any attention to that fact.

Mr. Grutman: In this case?

Justice Thurgood Marshall: Yes.

Mr. Grutman: In retrospect, I understand what you're saying about that, Justice Marshall, but I was fighting in that case, the suggestion that this was hyperbole or the expression of an opinion, and Judge Turc would not accept the view that the accusation of incest is a crime which constitutes libel per se, and so I was unable to try the case in that posture.

As I was pointing out to the Court, the harm done to the individual is the focus of this tort.

It's not a new tort.

It's been in existence for a hundred years.

Chief Justice William H. Rehnquist: It's certainly a new tort when applied to the press.

Mr. Grutman: No, it is not a new tort, because there have been cases that have been decided in a number of States in which the press has been held libel for this tort, not only for the intentional infliction--

Chief Justice William H. Rehnquist: Yes, but how recent are cases?

Mr. Grutman: --Well, the Florida case that I speak of is a 1984 case.

Chief Justice William H. Rehnquist: What I said was it's only recently, isn't it, that the courts have been bringing activities of the press within this expanding tort of intentional infliction of emotional distress?

Mr. Grutman: To that extent, I agree with you, Mr. Chief Justice.

This is for this Court a tabula rasa, not exactly, however, terra incognita because in this connection, you are guided by the principles that the Court has developed in constitutional interpretations certainly over the last 23 years when what has been described as the federalization of the law of libel first began in a commendable context, and has now spread to the point where I believe you are considering either dismantling or discarding Gertz.

And the reason for that is that the press, the press that clamors here for a universal exemption so that they should have license to do what these people have done, and that it should be condoned and considered just a trivial or trifling incident of being a public figure.

In Mr. Justice Powell's decision in Gertz, he talked about protecting speech that mattered.

Unknown Speaker: Wasn't that before--

Mr. Grutman: Yes, it was.

But in the opinion that Mr. Justice Powell wrote for the Court--

Justice Harry A. Blackmun: --Lawyers always personalize these opinions, and they are Court opinions.

Mr. Grutman: --I apologize to the other members of the Court whom I meant no slight, but it's an opinion I'm sure--

Justice Byron R. White: Of course, I was in dissent.

Mr. Grutman: --In my view, Mr. Justice White, that dissent either is or may become, or should become the law of the land.

Justice Byron R. White: I doubt it.

Mr. Grutman: Because well, I don't know any place else to suggest that it ought to be.

But I do think that what experience has shown us has been the unworkability of that rule.

For example, in Time v. Hill, which was twenty years ago, footnote 7, Justice Brennan quoting a Second Circuit case, I think it's called the Sidis case, said speaking about even true revelations may be so intimate and so unwarranted in view of the victim's position as to outrage the community's notion of decency.

So this is a problem that was foreseen more than twenty years ago, and now the problem is with us.

Justice Antonin Scalia: Mr. Grutman, I think it would be a different... you know, if there were a Virginia statute saying, you know, it's tortious to depict someone as committing incest, then you know, the cartoonist knows that he's up against.

But just to say heinous and just leave it to the jury.

You think, for example, it isn't only the incest that offends you, you think that portraying a Baptist minister as having taken a shot or two before he went on to the pulpit, that that would quality in your notion as heinous?

Mr. Grutman: I think particularly it would satisfy.

Justice Antonin Scalia: You don't think that's debatable?

Mr. Grutman: All these questions are debatable.

That's why they go to juries for determination.

But I think it is highly unrealistic that a legislature should sit down and write a deck log or a catalogue of prohibitions to constitute guidelines for people exercising free speech.

As a judge said in another case, the common law has been sufficient not to muzzle the press, and the common law is already--

Justice Antonin Scalia: The common law hasn't had this tort.

Mr. Grutman: --This is a common law tort.

Downton v. Wilkinson was a common law tort.

Justice Antonin Scalia: Since 1984 as applied to this field do you tell us?

Mr. Grutman: No.

I said in 1984 when I started to quote these cases to Mr. Chief Justice Rehnquist, there was a Florida case in 1984, there was a Missouri case in 1982, there was a case in Wisconsin in 1970, another in 1982, and there have been cases in New Hampshire, Ohio and the District of Columbia, including one in 1929, which is Perry v. Capital Traction Corporation, in which this Court denied cert.--

Justice Antonin Scalia: This isn't Blackstone.

I mean, this is pretty new, all of it, isn't it?

Mr. Grutman: --The memory of man runneth contrary perhaps to a time when this was a tort.

I think the tort originated in the early 1900s.

It originated in England.

It's present here.

It has been a subject of the Restatement First.

And a subject of the Restatement Second.

Perhaps it's something that becomes more prevalent in our society because of the irresponsibility of certain aberrant publishers.

This is an established tort under the law of Virginia and under most of the States.

And I believe as a constitutional rule, the protection of the individual's interest in his own sense of worth and dignity and to be free from this kind of gratuitous onslaught and damage to his feelings is something that ought properly to be left to the States.

Hustler and Judge Wilkinson argued that there is some new kind of category that this Court ought to establish called the political public figure.

That is a figure unknown in any other decision and certainly not in this Court, and I would surely argue against it.

Because this Court has said that by becoming a public figure, a person does not abdicate his rights as a human being.

And if libel will not protect someone who is subjected to this utterly not dubious but worthless kind of verbal assault, then the tort of the intentional infliction of emotional distress which Virginia recognizes is a tort which deserves support and endorsement in this case and in this Court.

This case is no threat to the media.

It will be the rare case indeed where this kind of behavior will ever be replicated, but where it occurs, it deserves the condemnation which the jury gave it, which the Fourth Circuit found, and which I respectfully submit this Court should affirm.

Thank you.

Chief Justice William H. Rehnquist: Thank you, Mr. Grutman.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

Anderson v. Liberty Lobby, Inc. - Oral Argument

Fri, 09 Jan 2009 14:48:33 +0000

Case:

Anderson v. Liberty Lobby, Inc.

Media File:

84-1602_19851203-argument.mp3

Related Transcript:

1985_84_1602_argument.xml

Transcript:

ORAL ARGUMENT OF DAVID J. BRANSON, ESQ. ON BEHALF OF THE PETITIONERS

Chief Justice Burger: We will arguments first this morning in Anderson v. Liberty Lobby.

Mr. Branson, you may proceed whenever you're ready.

Mr. Branson: Mr. Chief Justice, and may it please the Court:

This case requires the Court to again consider the proper applications of the standards enunciated 21 years ago in New York Times v. Sullivan.

In that case this Courtl held that a jury verdict could not be sustained because that libeled plaintiff did not produce clear and convincing evidence of actual malice.

In Time, Inc. v. Pape, this Court applied the clear and convincing standard in reviewing a defendant's motion for a directed verdict under Rule 50 of th Federal Rules of Civil Procedure, and in Bose v. Consumers Union, this Court applied the clear and convincing standard in reviewing... in a de novo review of a district court determination under Rule 52 of the Federal Rules of Civil Procedure.

The question today is whether the trial courts must apply the clear and convincing standard in public figure libel cases on a defendant's motion for summary judgment under Rule 56 of the Federal Rules of Civil Procedure.

The Petitioners urge this Court to hold that indeed the trial courts are required to apply the clear and convincing standard on a defendant's motion for summary judgment under Rule 56, and therefore we urge this Court to reverse the decision of the Court of Appeals below.

The purpose of Rule 56 has been often stated.

it is to pierce the pleadings and to assess the proof in order to determine whether there is a genuine need for trial.

The commentators are in agreement that the evidentiary standard for both motions is the same.

They agree that there is no genuine need for a trial if it is clear in summary judgment that the trial court would have to grant a directed verdict applying the proper evidentiary standard.

The Court of Appeals in this case disagreed, and the Court of Appeals here set a rule that permits a public figure libel plaintiff to proceed to trial and indeed to complete its case at trial even though it cannot on summary judgment produce clear and convincing evidence of actual malice.

And the Court of Appeals gave three reasons for setting this rule, and I would like to discuss each one seriatim.

The first reason given by the Court of Appeals was that a trial court should not engage in a weighing of the evidence on a motion for summary judgment.

The answer to that reason is that a trial court need not do that on a motion for summary judgment, and indeed, the trial court performs no different function on that motion than the trial court performs in evaluating the evidence on a motion for a directed verdict, and since it is clear that the trial court must apply the clear and convincing standard on a motion for a directed verdict, there is no reason that it can't equally apply it on a motion for summary judgment.

Unidentified Justice: But when a motion for a directed verdict is made, the evidence is all in the record, is it not?

Mr. Branson: The evidence is all in the record that the plaintiff wishes to put before the court at that time, that is correct, Your Honor.

And that leads to the second reason--

Unidentified Justice: The plaintiff will have inevitably put his evidence all in at that stage.

Mr. Branson: --That is correct.

And that is the reason the Court of Appeals identified as its second reason for not applying the clear and convincing standard on summary judgment.

The Court of Appeals said that this motion is really at a threshold in the litigation.

It's the beginning, so to speak.

The Court of Appeals said that it would be unfair to make a plaintiff marshal all of its evidence at that state of the litigation, and indeed would turn, the Court of Appeals said, a motion for summary judgment into a time consuming and expensive process if plaintiffs had to marshal all of their evidence at that stage.

But an examination of the facts in this record demonstrates that's not the case.

This case was filed in September 1981.

At the first status conference the trial judge set a date in August 1982 as the cutoff for discovery.

The plaintiffs, Respondents here, took their first deposition in October 1981.

The defendants did not file the motion for summary judgment until August of 1982, almost a year after the first deposition was taken.

In the interim, the Respondents had served document demands and interrogatory requests which were duly responded to.

On filing the motion for summary judgment by the defendants, the plaintiffs moved the district court for additional time to respond.

They asked until October 15, 1982 to take additional discovery, and the district court granted that motion and gave the Respondent until October 15 to complete discovery, and indeed, the last deposition was taken by the Respondents on October 14, 1982.

Therefore, we were not at a threshold stage of litigation.

Disocvery had closed.

The Respondents had fully utilized the Federal Rules of Discovery.

They had made the record then that they wished to make.

There was never a complaint to the district court or to the Court of Appeals that the Respondents had in any way been denied an opportunity to develop the record further--

Far from being a threshold, we had completed the preparation of the record, and indeed, it would have ben within the discretion of the district court had it denied our motion for summary judgment, to have ordered the parties to trial immediately without any further discovery.

So it cannot be sound policy to take a case like this, or indeed, any case, and tell a libel plaintiff or any plaintiff that they are entitled to go cast a motion for summary judgment on the notion that we are just at a midpoint in the litigation and that after that point is past, they will develop new and additional evidence that might support their case.

And that is the justification, the principal justification utilized by the Court of Appeals to support its rule, and we believe it's fundamentally wrong, both on this record and as a matter of general application.

The third reason offered by the Court of Appeals to support its view was that it recited the dicta of this Court that state of mind does not readily lend itself to summary disposition in any kind of a case.

Our response to that is threefold.

First, this Court has never accepted from Rule 56 any class of case.

Second, whether or not state of mind or any other evidentiary issue might present itself in a given case does not determine the standard of proof that any plaintiff must meet at any stage of the litigation.

Whether the standard is preponderance, both at the summary judgment stage or at the directed verdict stage, the burden of the plaintiff is to produce that sufficient evidence to go beyond that motion, and it does not do to say that, well, there is a type of evidence here that excuses me from my burden, whatever it is, in this kind of a case.

And that's what the Court of Appeals has essentially said, that because state of mind is at issue in public figure libel cases, we must lower the standard that the plaintiff is required to meet on a directed verdict and not require that standard to be met at summary judgment, but that by definition simply ensures that cases will go to trial on which the district court must grant a directed verdict when the plaintiff has completed his case, and that is wasteful use of judicial resources.

Unidentified Justice: What about credibility questions where there's just a straight conflict between two sets of affidavits on a question of fact?

Mr. Branson: Your Honor, when that happens, whether it happens at summary judgment or whether a credibility question arises at trial, in the plaintiff's case, the duty of the district court is to draw the inferences in favor of the person opposing the motion, and therefore that result ought to be the same on either motion.

Unidentified Justice: Which means it goes to trial.

Mr. Branson: Absolutely, if there is a specific fact in dispute at either state of the proceeding, then the plaintiff is entitled to go past those motions and submit the case to the jury for a resolution of that fact.

Unidentified Justice: Well, can the libel plaintiff just rely on his complaint to establish a... he asserts a... some... he attacks the particular statements and says they are false.

Mr. Branson: Your Honor, the--

Unidentified Justice: The defendant comes back and says they are true.

Or he says I thought they were true.

Mr. Branson: --I understand, Your Honor.

That question was addressed in the advisory committee notes to the amendment to Rule 56 in 1963.

Unidentified Justice: Yes.

Mr. Branson: The advisory committee noted that the Third Circuit had adopted that rule.

Unidentified Justice: Mm-hmm.

Mr. Branson: The Third Circuit had allowed plaintiffs to pass a motion for summary judgment on some evidence and good faith pleadings, and the advisor said we want to change that rule.

We want to require the plaintiffs to produce specific facts on which an inference can be drawn that they'd prevail, and therefore they would be entitled to proceed.

Unidentified Justice: Well--

Mr. Branson: So a libel plaintiff should not he permitted, as any other plaintiff should not be permitted to proceed past summary judgment when a statement--

Unidentified Justice: --Is that another error... is that another way you say that the Court of Appeals erred in this case?

Mr. Branson: --The Court of Appeals did not say that.

Unidentified Justice: What did it say?

Mr. Branson: The Court of Appeals said that because libel... excuse me, because summary judgement is a threshold issue, it's unfair to make plaintiffs marshal all of their evidence at the summary judgment stage--

Unidentified Justice: I agree.

Mr. Branson: --And secondly, it said that because state of mind is at issue, it's inappropriate to apply the clear and convincing standard because otherwise we would have summary judgment granted, is the inference that you draw from the Court of Appeals' reasoning there.

Unidentified Justice: You don't think there are any... any of the statements that the Court of Appeals said should go to trial, that any of them involved real credibility questions?

Mr. Branson: No, I don't.

Your Honor, and for example, if we take the issue of Mr. Eringer, and I think it is appropriate to deal with that question--

Unidentified Justice: That's Allegation 11?

Mr. Branson: --There are six allegations of the nine remaining that are attributable to Mr. Eringer as the source, one of which is 11.

The Court of Appeals dealt with Mr. Eringer on two different issues.

One of them relates to the procedural question that I've already addressed, the threshold issue, and the other dealt with the substantive question of actual malice and the evidence in the record of actual malice.

The Court of Appeals said that Mr. Eringer is not in the United States and therefore is not available for deposition, and since the Court of Appeals said that this is a threshold inquiry, we should give the plaintiff an additional opportunity to somehow deal with Mr. Eringer.

Now, of course, we believe that that's fundamentally in error.

The Federal Rules of Discovery do not stop at the borders of the United States.

If the plaintiffs had wanted to depose Mr. Eringer, there was a procedure to do it, notwithstanding the fact that he is resident in the United Kingdom, and they never suggested to the district court they had any desire to depose Mr. Eringer.

So the threshold reason for using Mr Eringer as a reason for denying summary judgment here we don't believe is sufficient.

On the merits, the Court of Appeals used language that makes it clear that their analysis of the Bermant who was the author of this article, and Eringer, who was the source for these six articles, is an analysis based on negligence.

Indeed, the Court of Appeals uses the words "standard of care", and that is the language or negligence.

The Court of Appeals says that Mr. Bermant did not lock Mr. Eringer in the eye.

He couldn't therefore have reliably, reasonably assessed his credibility.

That's the language of negligence.

And finally, the Court of Appeals said Mr. Bermant did not check Mr. Eringer's sources himself, and a failure to investigate, we have been told time and again by this Court and others, is the language of negligence.

So the Court of Appeals has said that this issue must go to a jury because the plaintiffs have put in facts, specific facts, Mr. Bermant did not check his sources, Mr. Eringer's sources, that give raise to an inference only of negligence, and that's constitutionally insufficient to sustain the jury's verdict.

But it is admissible evidence on the question of actual malice.

And so by adopting the rationale of the Court of Appeals and diminishing the standard that the plaintiff has to meet on summary judgment, the plaintiff now has some evidence that is admissible on the question of actual malice.

It's not sufficient, and this court would have to find on a Bose review, if a judgment was entered on this evidence, that it was not constitutionally sufficient, and therefore reverse the judgment, but this plaintiff gets to go to trial because they have evidence of mere negligence.

Unidentified Justice: Mr. Branson, in fraud actions brought in state courts, frequently the burden of proof is said to be by clear and convincing evidence, actions to set aside a will, that sort of thing.

Have there been state court decisions as to what standard applies for summary judgment in these cases?

Mr. Branson: Yes, Your Honor, there have, and we readily admit that there are state court decisions from the state supreme courts that disagree with the rule we are stating.

There are indeed federal court decisions, one that I know in a libel case, in the Westmoreland v. CBS where the trial court in New York stated a different rule than we are arguing here today.

It is a question of policy.

Unidentified Justice: Are there any, are there any holdings, any holdings supporting your position?

Mr. Branson: Yes, there are, Your Honor.

The Court of Appeals notes that its view is not the view of the Second Circuit, and so there is a conflict on this question, and we don't suggest that this Court has ruled on it either.

What we are saying is that a matter of sound judicial policy and correct application of Rule 56, it is right to say that libel plaintiffs must produce the same quantum of evidence at a motion for summary judgment that they need produced to get to a jury.

Unidentified Justice: You say also, don't you, that the Court ought to consider the statement and the Chief Justice's opinion in Hutchinson v. Proxmire in the light of the Bose case?

Mr. Branson: We have suggested in our brief, Your Honor, this.

If the footnote in Hutchinson, which of course has been repeated by this Court in Calder, suggests that there is a rule against summary judgment in public figure libel cases then that ought to be reconsidered in the Bose, light of the Bose determination.

However, we believe that the proper reading of the rule... not of the rule, of the dicta announced in the Hutchinson footnote is that it calls for a neutral application of the summary rules, and indeed, they should be neutral.

And we can make that point in two ways.

First, when this Court first enunciated that dicta in Poller and stated that state of mind does not readily lend itself to summary judgment, many of the lower courts began to state that there was a rule against summary judgment in antitrust cases where state of mind was at issue.

And therefore this Court in National... First National Bank of Arizona versus Cities Service, set the record clear and said there is no such rule.

The facts of each particular case, the Court said, in Cities Service, must be examined so that we can determine whether a trial is needed, and the Court there upheld a grant of summary judgment in an antitrust conspiracy case, making the point to the lower courts that there is no rule against granting summary judgment in the right case.

Now, before the Hutchinson footnote, lower courts had been saying there is a rule favoring summary judgment in public figure libel cases, and we believe that the Chief Justice in the footnote in Hutchinson simply corrected that view by stating there is no rule, and we believe that what the Court said in Cities Service applies to this kind of a case as well.

Each case must be dealt with on its own facts, and where a libel plaintiff in response to a motion for summary judgment can produce specific facts on which an inference can be properly drawn that there is clear and convincing evidence of actual malice, they are entitled to go past the motion and to get to the--

Unidentified Justice: So in libel cases, neither a judge nor a jury is really entitled to just disbelieve a witness if there's no contrary evidence:

Mr. Branson: --He's not entitled to disbelieve a witness if there's no... well, in the Bose case, Court--

Unidentified Justice: --Well, is that right or not?

I mean, the other side is, I take it, you say the other side has to come up with some concrete evidence--

Mr. Branson: --It's not... it is--

Unidentified Justice: --before the witness may be disbelieved.

Is that right?

Mr. Branson: --What the Court is permitted... what the Court is permitted to do under Bose is to accept a trial court determination that a witness is not credible and yet notwithstanding that admission, assess the record and determine whether there is competent evidence by a clear and convincing standard of actual malice because the author in the Bose case was deemed by that trial court not to have been credible.

And this Court in Bose said we understand that, and we take that point, but notwithstanding that finding, there's still in that record--

Unidentified Justice: The defendant gets on the stand, or say it's a reporter gets on the stand and says I just didn't know that that was false, I had no reason to believe... and the judge says I... writes an opinion and says I just don't believe him, or the jury says I just don't believe him, and yet the other side didn't come up with any concrete evidence.

Mr. Branson: --That case would have to be reviewed under Bose by an assessment of the totality of the evidence to determine whether there were sufficient grounds to find that that reporter in fact entertained--

Unidentified Justice: But you wouldn't... but you would... wouldn't you have to take the judge's or the jury's judgment that this fellow was just incredible?

Mr. Branson: --Well, you might have go take--

Unidentified Justice: And you just put his testimony aside, right?

Mr. Branson: --We may put his testimony aside, but what the Court said in Bose was that that doesn't provide a basis for the plaintiff to prevail.

The plaintiff must have evidence, its own evidence, that there is sufficient grounds to find actual malice by the clear and convincing standard, and I submit in this case, for example, what the plaintiff is saying, the Respondent here is saying to you, is that it may be that Charles Bermant, if he takes the witness stand, will be disbelieved, but that's not enough on which one can get past the motion for summary judgment--

Unidentified Justice: But that's not enough under any standard.

Mr. Branson: --Absolutely.

Unidentified Justice: I mean, you don't have to go to a clear and convincing standard to say that failure... disbelief of a party upon whom the burden of proof is isn't enough to support the burden of proof of the other side.

Mr. Branson: That's precisely our point.

We agree with that entirely.

What we say is that on this record there is no specific fact on which a reasonable juror could draw an inference that there was actual malice by the clear and convincing standard.

Unidentified Justice: But the Court of Appeals does... well, but your... if you're relying on the point you just made, you should be able to make your case without the clear and convincing standard on review of summary judgment.

Mr. Branson: Why is that?

Unidentified Justice: Well, if the whole thing turns on whether or not the disbelief of a... of your reporter would support an inference, an affirmative inference for them, that fails under the normal summary judgment standard as well as the clear and convincing standard.

Mr. Branson: I agree.

I misspoke.

I thought I was responding to a question, and I must have confused the two.

We believe that the Court of Appeals has discussed evidence, we accept that it has discussed evidence, the relationship of Bermant to Eringer, which is evidence in the record from which someone could draw a reasonable inference of negligence, and what the Court of Appeals is saying, that that evidence is sufficient to get the plaintiff to a jury in the hopes that somehow at trial they will somehow add to that evidence and provide clear and convincing evidence of actual malice.

So I don't mean to say that the only thing at issue here is the credibility of the reporter.

The Court of Appeals has identified some evidence which would be admissible on the question of actual malice.

The question for the trial court in these cases, when that happens, is whether in assessing that evidence it believes that it reaches the clear and convincing standard of constitutional malice, not simply negligence that we have here.

Unidentified Justice: Well, do you agree that in this case, do you agree with the Court of Appeals that there was enough under the normal standard of summary judgment to support its ruling?

Mr. Branson: No, I don't because the Court of Appeals uses the language that a reasonable jury could find actual malice on the following facts, and then it discusses Eringer in the manner that we have discussed him.

They have not, the Court of Appeals has not said that it is applying the standard we argue for, the clear and convincing standard.

Had he done that, we believe that he would have had to... the Court of Appeals would have had to have concluded that there is not sufficient evidence to--

Unidentified Justice: But how... what if you're wrong?

What about on a preponderance?

I thought--

--Yes, the... what--

Mr. Branson: --Well, on a... well, on a preponderance, the plaintiff would fail as well because even on a preponderance, evidence of negligence is not evidence of actual malice, plain and simple.

Unidentified Justice: --The fact that the Court of Appeals, in your view, relied on negligence, is insufficient regardless of what summary judgment standard you apply.

Mr. Branson: It should be, unless you adopt the view that if the plaintiff puts some evidence in the record that is admissible on the case, he puts some fact in dispute.

Unidentified Justice: But that--

Mr. Branson: That's the, that's the holding of the Court of Appeals.

Unidentified Justice: --Well, but that isn't correct even under summary judgment rules in a number of other areas of the law that don't have anything to do with clear and convincing.

You can't say that the plaintiff hasn't produced enough yet to go to the jury but he might by the time we come to trial.

Mr. Branson: Well, but the Court of Appeals has said that this evidence of negligence could give a jury grounds for finding actual malice.

I disagree with that assessment of the evidence, but that is what the Court of Appeals said.

I disagree because I believe that that is evidence of mere negligence, and under no standard is evidence of mere negligence ever sufficient to find constitutional malice.

But it is admissible evidence, and there may be some case, the courts have told us, when the evidence of negligence is so overwhelming that it somehow transcends into the subjective standard of constitutional malice.

So the Court of Appeals, I believe, is suggesting that there's enough evidence of negligence in this case to make that transcendance, and I disagree with that assessment, but it doesn't mean the Court of Appeals has been inconsistent in that regard.

Unidentified Justice: Which of the nine allegations that the circuit court said should go to trial do you think would have been prohibited or would have been resolved by summary judgment under a clear and convincing standard?

Mr. Branson: Well, Your Honor, we believe all of them would, and that's the holding of the district court.

We believe the district court made the proper assessment of the entire record, the totality of the evidence, and concluded that on the clear and convincing standard this case should not go to trial.

Unidentified Justice: You take the position that the summary judgment standard should be the same as that applied on a motion for directed verdict?

Mr. Branson: That is correct.

Your Honor.

Unidentified Justice: Is it clear from decisions of this Court that on a motion for directed verdict that the clear and convincing standard would be applied?

Mr. Branson: In an actual malice libel case?

Your Honor, the Court applied the clear and convincing standard in Time, Inc. v. Pape, which came to this Court from a directed verdict granted on the defendant's motion by the trial court, a reversal by the Seventh Circuit, and this Court in turn reversed saying that the plaintiff in that case had not met its burden of producing clear and convincing evidence.

That is the only case that I know of where the Court has dealt with a directed verdict case in a public figure libel case.

Unidentified Justice: What case were you referring to?

Mr. Branson: Time, Inc. v. Pape.

Unidentified Justice: Well, I take it the Court of Appeals agrees with you, that at the directed verdict stage the clear and convincing standard applies.

Mr. Branson: That is correct, Your Honor.

The Court of Appeals does not say that that is not the rule.

Unidentified Justice: It says it is.

Mr. Branson: I'm sorry, I said... I made a double negative.

Excuse me.

Yes, the Court of Appeals agrees that at the directed verdict stage, clear and convincing evidence has to be produced.

It is only at the summary judgment stage, because of the reasons we've articulated, that the Court of Appeals believed that the plaintiff should be freed of that burden.

Mr. Chief Justice, I am going to reserve some of my time for rebuttal.

I would like then to conclude if there are no further questions.

Chief Justice Burger: Very well.

Mr. Branson: We believe Rule 56 has a clear purpose, and the purpose is to end litigation that should not proceed to trial.

It is a valuable tool of judicial management, and it is intended to prevent the wastage of a court's time and of the litigants' time.

And this case illustrate's the validity of that purpose.

Our motion to summary judgment before the district court was based on a record that is before you in this volume of the appendix.

We briefed the question between the parties in less than 50 pages.

The counsel for the parties appeared before the district court for less than one hour in this case.

We therefore consumed less than one hour in the entire proceeding of the court's public time.

And the court granted a motion for summary judgment which gave effect to Rule 1, a speedy, just and inexpensive termination of this case.

But if we have to try this case it will take four to eight weeks because we will not only have to examine the questions of actual malice that have been developed before the district court to date, we will have to deal with the question of truth and falsity.

We will have to deal with the question of defamation itself.

We will have to deal with the question of damages, and indeed, we have been sued for $22 million.

Four to eight weeks of trial time, of the district court's time and of our time on a case that to date the Court of Appeals and the district court are in agreement, the trial judge will have to grant a directed verdict.

That does not give effect to Rule 56.

Thank you.

Chief Justice Burger: Mr. Lane?

ORAL ARGUMENT OF MARK LANE, ESQ. ON BEHALF OF THE RESPONDENTS

Mr. Lane: Mr. Chief Justice, and may it please the Court,--

A reading of the Petitioner's brief and reply brief asserts in essence that the Respondents called for the abolition of all summary judgment in public figure libel cases because of considerations mandated by New York Times, that is, the question of the mental processes of the author and the defendant.

That does not represent our position.

We support the position here taken by the Court of Appeals which did grant... did agree with the district court that in 21 of the allegations of defamation it was appropriate to grant summary judgment.

We agree with that conclusion.

We also agree with the Court of Appeals that in the nine where they did... where the Court of Appeals did not agree with the district court, that the Court of Appeals was correct.

All summary judgment cases and libel cases... summary judgment motions in libel cases need not be denied because of questions of credibility.

For example, the court held in this case, the district court held, and the Court of Appeals agreed, that there were some allegations which were basically opinion, which is, of course, protected.

They held that there were reliable sources.

They held that some material had been previously published in a responsible and reputable publication.

We do not quarrel with any of those findings.

But when we come to that which is left, we get to the question of weighing the evidence and determining the credibility of witnesses.

For example, Mr. Branson has discussed many of the reasons given by the Court of Appeals for holding that Mr. Eringer is not a source who can be considered reliable on a motion for summary judgment, except Mr. Branson left out what I consider to be the single most important argument offered by the Court of Appeals, and that is Mr. Anderson, the publisher of the defendant, testified at the deposition, when asked if Mr. Eringer was reliable, I don't know.

I don't care.

It doesn't matter whether he's reliable or not; he's not a source.

But he turned out to be the sole and exclusive source for five of the defamatory statements.

So that it seems to us that the standard mandated by New York Times, talking thereafter, in its progeny, about reckless disregard, are spelled out by the defendant stating I don't care; I don't... it makes no difference to me whether he's reliable, and then relying upon him.

This Court in St. Amant talked about the apocryphal telephone call.

The Court of Appeals has said in this case this is something like the apocryphal telephone call coming into being.

But the other matters are even stronger in terms, I believe, in terms of a need for a trial, the matters which Mr. Branson did not discuss, for example--

Unidentified Justice: Are you arguing that no matter what standard that you apply here on summary judgment, that you should win?

Is that your argument now?

Mr. Lane: --That is true, but also we would go further and say that the clear and convincing standard should not be applied here at this level, and the difference, if I may say, Your Honor, between a directed verdict and summary judgment, it's not the amount of time the plaintiff has to conduct discovery, it is the difference between cross examination in the presence of the person or the trier of the fact.

That is crucial.

As Wigmore has said, and as this Court has quoted with approval, the greatest engine ever discovered for the determination of truth is cross examination, and that does not contemplate cross examination in a desert, but cross examination before the trier of the facts, or at least before the court to make the decision.

As the Court has said in Bose, which is a case cited by the Petitioners in this case, the Court has said in Bose it is true there can be a determination, but this Court said in Bose that is because the entire record is there, no discovery, not affidavits, the record is there, and the demeanor of the witnesses, the crucial witnesses, was observed by the Court, and that is what is lacking here, no matter how long the discovery period is.

Unidentified Justice: But if there's an actual conflict in the evidence, you don't resolve it at either summary judgment or--

Mr. Lane: Or directed verdict.

Unidentified Justice: --Yes.

Mr. Lane: Yes, that is our position.

Unidentified Justice: But I suppose you could just disregard a defendant's witness that you didn't believe, and if you believed him, you might hold for the defendant, if you didn't you wouldn't.

Mr. Lane: That is correct, but in order to believe or not believe, you must hear, you must see him.

Unidentified Justice: But you couldn't do that on summary judgment.

Mr. Lane: That is correct, Your Honor.

The other two areas where the Court said there is defamation, possible defamation which should be determined by the jury, was one where the editor of the publication himself testified that he said this is a... he said to Mr. Anderson, the defendant, this is a terrible article.

This is a ridiculous article.

This article should not be published, and about one of the acts of defamation, the editor of the defendant publication said this could be libelous.

Unidentified Justice: Well, Mr. Lane, let me go back a minute to where you responded to Justice White's question.

Mr. Lane: Yes, Your Honor.

Unidentified Justice: If the presence of the judge's ability to judge credibility by seeing the witness personally is so important in the clear and convincing test, how can an appellate court ever say that there was not clear and convincing evidence here if a trial court has found otherwise.

Mr. Lane: This is the independent review mandated by New York Times v. Sullivan, and that is it is an independent review based upon the entire record, the determination by the jury, the determination by the court.

The entire record is there including the determination of the trial court.

Unidentified Justice: But the witnesses aren't.

Mr. Lane: That is correct, but at least the appellate court has the advantage of the view of the jury or/and the view of the trial court in reaching its conclusion, something totally absent here.

We have heard that this is a two-stage, a two-trial procedure.

First we... plaintiffs must try the case before the judge, convince the court, but what do we have to convince the court on?

We have to convince the court, according to this theory, as not only what is in the mind of the witness, the publisher, the author of the defamation, and whether, how his mind was affected by malice or lack of malice.

But according to this standard, the court must then guess as to what the jury, not yet chosen, would guess as to what the witness who has never been seen, but more than that is that the whole process... it is not a two-trial system, it is a no-trial system once that motion for summary judgment is granted, because no one who has made a determination has seen a record, and no one has seen the witness.

One other area where the Court of Appeals acted and said the matter should be tried was in reference to... and this is slightly complicated but I think extremely important... a man named Mr. Spear and a man named Mr. Trento, while working for Jack Anderson wrote, and it was published in True Magazine, a totally defamatory article about the plaintiff in this case.

The plaintiff filed a lawsuit against True Magazine and its publisher, Fawcett, named Spear and Trento as well, but did not serve them.

The True Magazine, Fawcett Publishers, then settled that case according to the demands of the plaintiff, paying them a substantial sum of money, and publishing an entirely compensatory article.

Subsequent to that, Mr. Spear became an editor of the defendant publication, The Investigator, took and utilized that in assisting the person who wrote the article, Mr. Bermant, gave him the exact information which had been published previously.

Mr. Bermant then secured a copy of True Magazine which contained such defamation that True itself had settled the case to the favor of the plaintiff, and republished the same defamation yet again in The Investigator, and some of those allegations of defamation, previously published defamatory material, survived.

And those are some of the matters the Court of Appeals said should be tried.

This is in essence, I believe, a classic case.

Of course, it is possible to conjure up with a fertile imagination a case, if this one is to be dismissed on summary judgment, it is possible to conjure up a case, I'm sure, which would be stronger than this one.

But the elements here are very, very strong.

This Court had the apocryphal telephone call in St. Amant.

Here we have the real person, Mr. Eringer, never even seen by the author of the article, about whom the defendant Mr. Anderson said we don't care about his reliability, it makes no difference at all, and Mr. Eringer was never asked what's the basis for anything that you said.

He was never asked that question.

That is the record.

In addition to that, we have the testimony of the editor--

Unidentified Justice: Mr. Lane, am I correct in, as I listen to your argument, and listening to your opponent, you are in effect saying that the evidence already in the record is adequate to meet the clear and convincing standard.

Mr. Lane: --I am saying that that is true, but that is not--

Unidentified Justice: He is saying the evidence in the record is insufficient to meet the preponderance standard.

Mr. Lane: --Yes, that's correct.

Unidentified Justice: So both of you seem to say it really doesn't make much difference what standard we apply if we look at the correct part of the record.

Mr. Lane: I think it is very important not just in this case but for other cases that the standard that be applied is not clear and convincing at this stage, at the summary judgment stage.

One can go--

Unidentified Justice: But you are primarily interested in this case, I assume.

Mr. Lane: --Yes.

Unidentified Justice: Not a lot of other cases.

Mr. Lane: Yes, yes.

We are concerned with this one.

Unidentified Justice: Well, the Court of Appeals seemed to... the Court of Appeals seemed to think it was important because it carefully applied only the non-clear and convincing standard in reviewing the record.

Mr. Lane: That is correct, but the Court did not distinguish and did not say what it would have done if there was clear and convincing.

It said that was not the proper standard.

Unidentified Justice: If we disagree, if we disagree with you, perhaps we ought to find out what the Court of Appeals would think.

Mr. Lane: Well, I think it's clear what the Court said.

I think it's clear that the Court said that the clear and convincing standard should not be applied.

Unidentified Justice: Oh, yes.

So what if we hold it was wrong on that?

We shouldn't, we shouldn't review these nine allegations, should we, under the clear and convincing?

Mr. Lane: No.

Unidentified Justice: Wouldn't we ask the Court of Appeals?

Mr. Lane: I think that the clear and convincing standard should not be the standard.

Unidentified Justice: Oh, I know, but suppose we disagree with you?

Mr. Lane: Well--

Unidentified Justice: Then we remand, don't we?

We don't--

Mr. Lane: --That's correct--

The reason I, if I may say, that I believe the clear and convincing standard should not be applied at this level is one can make the analogy which the Court of Appeals did to a criminal case where the standard of probable cause is sufficient to have a person arrested, have him deprived of liberty for days, many days on occasion, and yet at the trial level it is there that the standard of beyond a reasonable doubt comes into play.

And so here, at the... at this threshold level, absent a full record, absent an opportunity for the plaintiff witnesses to testify and for the trier of fact to judge credibility by seeing the demeanor of the witnesses, prior to that the standard cannot be clear and convincing.

Unidentified Justice: --I must confess I have some, some difficulty understanding that argument because I think, as Justice Rehnquist pointed out earlier, do we not assume for purposes of... or doesn't the trial judge in evaluating the motion assume that all of your witnesses are telling the truth and draw all inferences favorable to your side of the case in evaluating the testimony?

Mr. Lane: The trial court should.

Unidentified Justice: So how can credibility held you any?

You assume they are totally credible.

Mr. Lane: The trial court should but did not in this case, Your Honor.

The trial court did not--

Unidentified Justice: But that doesn't go to the standard of proof.

Mr. Lane: --I beg your pardon?

Unidentified Justice: That doesn't go to the question of standard of proof.

Mr. Lane: No, but the trial court did not do that in this case, and the reason the trial court did not do that is because of Mr. Bermant, on behalf of the defendants, came in with a massive self-serving statement which we have seen in libel cases, and that is the allegation of I am pure, I am pure of heart.

There was no malice at all in my heart, and here is this long document which had many citations from reputable sources and never mentioned, for example, in the affidavit, never mentioned Spear or True as a source, never mentioned it, but the appendix which was attached thereto, when analyzed, reveals that True was the exclusive source for a number of the libels.

I believe the Court read this long affidavit.

There were citations about what the New York Times and what the Washington Post and others had said, and had not made an analysis as to the delineated analysis which the Court of Appeals made as to each question.

Unidentified Justice: Well, that's what Hutchinson v. Proxmire was talking about in that statement, wasn't it, that--

Mr. Lane: Yes.

Unidentified Justice: --a defendant can't just come in with a long, self-serving statement about how great he is and how truthful he is and expect that to stand up on summary judgment if there is contrary evidence.

Mr. Lane: That is correct, Your Honor, and I think that Bose takes that further when Bose says that this can be reviewed, but it must be reviewed after the record has been established, after the record, which is a record of cross examination.

Those of us who have tried cases, all of us know that there is a substantial difference between testimony given during a deposition in a lawyer's office, cups of coffee, people smoking cigarettes, the witness being flanked by his attorneys, objections made, instructions not to answer questions, and the crucible of cross examination in front of the trier of fact.

That is where the record is made.

One year of discovery, ten years of discovery are not equal to 15 minutes in the witness chair before the trier of fact.

That is what Wigmore teaches us.

That is what this Court has said on numerous occasions.

And what, may I ask, is--

Unidentified Justice: Yes, but let me ask you again, do you contend that the cross examination will do something other than prove that the witness is totally a complete liar?

Say in summary judgment you just say, well, assume that that witness is a liar, what more can cross examination bring out?

Are you saying that you will bring out affirmative evidence through cross examination?

Mr. Lane: --In this particular case, Your Honor, I think that the standard, any standard applied would have prevented the Court from having dismissed on those kind of questions.

Unidentified Justice: My question is directed at the argument that there's something special about credibility of witnesses--

Mr. Lane: Yes.

Unidentified Justice: --as a reason for having a different standard of proof on summary judgment, to which an answer is made, well, what difference does it make?

You assume that the lawyer... all the witnesses on one side are telling the truth and all the others are lying--

Mr. Lane: But the Court should--

Unidentified Justice: --You then say what's left, is that enough to raise an issue, and I don't understand the cross examination argument.

Mr. Lane: --If the Court is asking are all the inferences to be taken to favor the nonmoving party, yes, of course, but they were not taken in this case, as I have stated.

Unidentified Justice: Right, but you have argued, well, you didn't have an opportunity to cross examine in front of the trier of fact, and I'm saying, well, if you did have that opportunity you could perhaps prove that the witness is a total liar, but don't you assume that on summary judgment?

So what is the point of your argument--

Mr. Lane: Yes.

Unidentified Justice: --about needing to cross examine.

That's what I--

Mr. Lane: Well, we are drawing the distinction, for example, between summary judgment and a judgment notwithstanding the verdict which follows, or in the case of Bose, for example, which follows an entire record being made.

We say, as you said, Your Honor, that on summary judgment the test should be that all inferences favoring the nonmoving party should be taken.

They were not taken in this case.

On the other side, if I might say, we hear raised the question of the chilling effect upon the news media if they are forced to go to trial.

I must say that I have seen enough of the gigantic conglomerates which are in the business of publishing information about sports, entertainment and some news, enough to see of them that they are not easily chilled, they are often clothed so strongly in their own arrogance that they could, I believe, go through the ice age without having their body temperature lowered.

But if one is concerned about that and the chilling effect hat one is concerned about is the massive verdicts, yet, on the other hand, is the First Amendment right of the plaintiff to speak out and the chilling effect upon an unpopular dissenting plaintiff who wishes to speak out and who wishes, if malice is utilized in attacking and destroying his reputation, to at least avail himself of his First Amendment and Second Amendment right to have this question adjudicated before a jury.

Now--

Question: What is the plaintiff's First Amendment right to have this issue adjudicated before a jury?

No, the First Amendment right is to speak out, offer a dissenting view.

Unidentified Justice: --I thought you said there was a First Amendment right to have it tried and decided by a jury.

Mr. Lane: If so, I misspoke, Your Honor.

what I meant was the First Amendment right to speak out and the Seventh Amendment right to have the case tried, and the chilling effect upon dissenters, in this case the plaintiff, Respondent, is in fact a newspaper, which is an unusual circumstance perhaps, but the chilling effect upon this plaintiff as a publisher or upon any plaintiff is a matter which should also to be of concern, and the way to handle that, I believe--

Unidentified Justice: Well, after reading this record, one might truthfully say a chill on both your houses.

Mr. Lane: --I believe that the... all of the concerns, the legitimate concerns of the news media having a great deal of room within which to make error, even without adequate investigation, all of those concerns have been addressed by New York Times and all the progeny, including Hutchinson and the most recent case Bose, but I think that those concerns can be addressed by... not by abrogating the ordinary rules regarding summary judgment, but by after trial, after the full record has been made, after the plaintiff has had an opportunity to vindicate himself... money is important to many plaintiffs when they bring actions, but to many of us, to many of those who are not plaintiffs, and even to some plaintiffs, the right to vindicate one's position is of great consequence, in some cases of greater consequence.

If the plaintiff can have his position vindicated, if the concern of the chilling effect upon the news media can then be addressed, I suggest by a judgment notwithstanding the verdict, where something can be done about any damages, excessive or otherwise, which have been awarded by the jury; in that fashion the chilling effect can be addressed, if there is one, although I have never seen this apocryphal chilling effect documented over the years, but if it exists, it can be dealt with certainly by that independent review, and at the same time, the First Amendment rights of the plaintiff may be protected by permitting him to speak out and his Seventh Amendment rights protected by permitting him to have a trial before the jury.

The case, in conclusions, the case here rests upon the allegation by the petitioners that my client is not entitled to try, to go to a jury, to try a case where part of the case is based exclusively upon allegations which were previously published and found to be defamatory, and then republished.

Part of the case which exists is based upon the allegation by the editor of the defendant publication that this publication, this caricature, this cartoon, could be libelous and should not be published, and they published it.

And part of it is based upon the look-alike of the St. Amant apocryphal figure come to life with the defendant having stated about him, we don't know if he's reliable, we don't care if he's reliable, it does not matter.

That is reckless disregard.

And I say it is possible to conjure up another case where a plaintiff in a public figure libel matter can have a case tried if this one is not, but it does require, I believe, a fertile imagination.

Thank you.

Chief Justice Burger: Mr. Branson, you have three minutes remaining.

ORAL ARGUMENT OF DAVID J. BRANSON, ESQ. ON BEHALF OF THE PETITIONERS -- Rebuttal

Mr. Branson: Mr. Chief Justice, and may it please the Court:

I would like in my time to respond to two questions, one from Mr. Justice Stevens.

He asked, does it make a difference what standard we apply at summary judgment?

And the answer is twofold.

As the Court said in that Addington v. Texas, we are not engaged in a semantic application of words we are engaged in setting values, First Amendment values and the values of Rule 56.

And with regard to this case, we particularly take the Court of Appeals at its word.

Had they applied the clear and convincing standard, we believe the Court of Appeals would have found for the defendants and have sustained the judgment of the district court.

And therefore I respond next to Mr. Justice White's question who suggested that the proper course, should you apply the clear and convincing standard, is to remand to the circuit court for its determination of the record.

I suggest to you that the jurisprudence of this Court demonstrates that you have yourself made those determinations in these cases, with one exception, and that exception was Firestone, and that case was remanded for this reason.

The Firestone case had been tried in the courts in Florida on a strict liability theory, and this court held that the negligence theory announced in Gertz had to be applied to that case.

Therefore, the plaintiffs had made no record in the trial court on negligence, and it would have been impossible for this Court to assess the record in that case.

But in all the other cases where the record has been complete, this Court has made the assessment, and while you could remand it--

Unidentified Justice: Yes, but we have normally had a judgment of a court on the right standard, haven't we?

Mr. Branson: --You normally, Your Honor, have had a record made according to the right standard--

Unidentified Justice: Yes, yes.

Mr. Branson: --With the exception of New York Times, where that case was tried on the strict liability theory, and you applied the clear and convincing standard, the actual malice standard, and you made the assessment and did not send that case back to Alabama for a trial in the Alabama courts.

Unidentified Justice: Well, what you say has some virtue, I suppose, to say a particular standard should be applied for one court and tell another court to apply it can be a pretty abstract proposition.

It may be better to have the court which is deciding which standard to apply to say what it means by applying the standard to the facts of that case.

Mr. Branson: If you apply the clear and convincing standard to summary judgment, I will agree with that, Your Honor.

We rest.

Thank you.

Chief Justice Burger: Thank you, gentlemen.

The case is submitted.

We will hear arguments next in Philadelphia Newspapers v. Hepps.

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Philadelphia Newspapers Inc. v. Hepps - Oral Argument

Fri, 09 Jan 2009 14:48:31 +0000

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Philadelphia Newspapers Inc. v. Hepps

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84-1491_19851203-argument.mp3

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1985_84_1491_argument.xml

Transcript:

ORAL ARGUMENT OF DAVID H. MARION, ESQ., ON BEHALF OF THE APPELLANTS

Chief Justice Burger: Mr. Marion, I think you may proceed whenever you are ready.

Mr. Marion: Mr. Chief Justice, and may it please the Court:

Good morning.

Unlike the preceding case, this is a private individual's libel case, and also unlike the preceding case, there has been a full trial and a jury verdict in the court below.

When I say that this is a private individual's libel case, I hasten to add that it also involves matters of public concern.

The jury verdict was for the defendants below.

It was reversed by the Pennsylvania Supreme Court because the trial judge, in attempting to apply this Court's judgment in Gertz v. Welch instructed the jury that the burden of proving falsity was on the plaintiff, and the plaintiff had to prove both falsity and negligence in failing to discover the truth.

The Supreme Court of Pennsylvania reversed, applying instead a Pennsylvania statutory provision which the court below held codified common law, which puts on the defendant the burden to prove truth It is our position, if it please the Court, that the Pennsylvania statutory scheme constitutes a conscious determination by the state to err on the side of punishing truthful speech on public matters, or speech that may be true, rather than allowing speech that may be false but was not proven false to go unpunished.

In other words, we have to look at what the burden of proof does in a case.

The burden of proof decides the close case, and most libel cases that are fully litigated, as was this one, are the close cases on issues of falsity.

The burden of proof says if you have a case where the evidence of truth or falsity is exactly equal, or if you have a case where there is no evidence on either side on the issue of truth or falsity, if the defendant has the burden, the speech of the defendant will be punished even though it may very well have been true and has not been proven false.

It is this rule which we contend turns First Amendment law upside down.

Now, why do I say it turns First Amendment law upside down?

Simply because in Pennsylvania the rule is instead of protecting some false speech in order to be sure we are protecting true speech that counts, that matters, Pennsylvania is willing to punish some true speech that matters in order to punish some false speech.

In Garrison and Sullivan, this Court clearly held 21 years ago that truthful discussion of public affairs cannot be the subject of criminal or civil sanctions.

And the courts... this Court since those holdings have been wrestling with the problem that the protection of truthful speech about public affairs is so important that we must also protect some false speech.

That's why we have the rule for a public figure that even if the speech was false, we protect it unless it was knowingly false or recklessly false.

And Gertz says for a private figure case, even if the speech was false, we protect that speech unless it was at least negligently false.

Unidentified Justice: Mr. Marion, here we have a private figure case, and as I understand it, the defamatory statement was couched in very broad, general terms, something to the effect that federal investigators have found connections between Thrifty and underworld figures, something about that broad.

Mr. Marion: That--

Unidentified Justice: Now, Pennsylvania has a shield law, as I understand it, so that the plaintiff, the private figure plaintiff here would be unable to in the course of deposition and discovery find out the source of those broad allegations.

That makes it a pretty tough proposition in a case like this, doesn't it?

Mr. Marion: --Well, I must respectfully take issue with Your Honor on both premises of your question.

In the first place, this was not a generalized statement that was libelous.

The statements were very specific.

The defendant said that the plaintiff companies had used organized crime influences to approach a named state senator and get him to influence the legislature and the governor.

Unidentified Justice: Well, what if the allegation were as broad as I read to you, and in a jurisdiction where there is a shield law?

Now, how is the plaintiff going to disprove?

Mr. Marion: Very simple, Your Honor.

Even assuming that the allegation was broad, let's say the allegation was so broad as simply to say the plaintiff had connections with organized crime, and we're not gong to tell you how we know, it seems to me, Your Honor, that in that case, just as in this case, in the court below, the plaintiff always knows whether or not there are connections with organized crime.

The plaintiff can take the stand and testify, as this plaintiff did, I had no connection with organized crime.

A good plaintiff's lawyer can ask him a series of questions, how did you conduct your business, did you conduct it lawfully, and so forth.

Just by taking the stand and asserting his honest conduct of business, his lack of any connections with organized crime, as a practical matter, that plaintiff shifts the burden of production of evidence to the defendant because if the defendant sits silent after the plaintiff comes and says what the facts are, the defendant runs a very real risk if not of defaulting on the case, of losing on the case, and no defendant will do it, and this defendant didn't do it.

This defendant came up with item after item of specific information of what the connections were.

If you look in the record, in the Joint Appendix at page A-59, you will see a chart which shows all of the connections to organized crime by the name of the person and what his connection was.

He was an employee, he was getting consulting funds and so forth.

All of these things were specifically revealed--

Unidentified Justice: Mr. Marion, may I interrupt you for a moment, Mr. Marion?

Mr. Marion: --Certainly--

Unidentified Justice: It seems to me this cuts in the other direction because if the allegedly defamatory statement is that Thrifty has connections with organized crime, and the issue is whether... say there is no doubt about the persons with whom Thrifty had connections.

It had connections with Mr. A, Mr. B, and Mr. C, and the issue is whether Mr. A, B, and C are members of organized crime or not, and you have indicated that the newspaper has all sorts of proof on that issue, but conceivably the Plaintiff might not know.

We might say yes, I know Mr. A, B, and C very well, but as far as I know they don't have anything to do with organized crime.

Now, how can you say he's better able to prove that issue?

Mr. Marion: --If Your Honor please, in this case as in every case, the plaintiff has broad discovery rights.

There was discovery in which, even though there was a shield law, all 15 sources were identified, the key sources were identified, and the basis on which the newspaper reporter said there were connections with organized crime was all laid out.

It was laid out in the articles--

Unidentified Justice: Well, that goes to whether they were negligent or not.

The question that we are talking about, though, was whether in fact A, B, and C were members of organized crime, and who has more information on that subject?

Mr. Marion: --Well--

Unidentified Justice: I mean, you... everybody admits he has these connections, but are they the kind that justified that comment?

Mr. Marion: --Well, in this case there was a Pennsylvania Crime Commission in existence which spends its entire existence studying organized crime and issues a report every year.

That report... and by the way, this wasn't disputed at all below--

Unidentified Justice: No, but I'm suggesting that that kind of information is more apt to be available to the newspaper than it is to the individual who may or may not read all this stuff.

Mr. Marion: --Well, with discovery... with discovery it is equally available to both sides, and it was in this case, and the plaintiff, by the plaintiff saying I know of no connections, you know, I dealt with A, B, and C, they're honest people, they're good people.

I know of no connections to organized crime, that shifts the burden of production to the defendant, and in this case the defendant did come forward and say precisely what the connections were; it's all in the record; and why they were said to have the connections.

Unidentified Justice: But all that seems to be persuasive to me of the point that you're perfectly able to discharge this burden of proof if it's placed on you.

I don't see how that goes to the question of how the burden of proof shall be allocated.

Mr. Marion: Because in a general matter, this case has to set a rule for all cases, and generally--

Unidentified Justice: Everybody wants us to decide some other case.

We have to decide this case.

Mr. Marion: --Well, if Your Honor please, in this case, looking only at this case, if you say to the jury the plaintiff said I know of no connections with organized crime, the defendant comes forward and says here are the connections, boom, boom, boom, one after another, the jury says I'm perplexed.

He says I have no connections, the defendant says these were connections; what do I do?

That's where the burden--

Unidentified Justice: Well, that's what juries do every day.

Mr. Marion: --Exactly, sir, and every day in every tort that I know of, whether by common law or statute, the plaintiff has to prove the elements of his case every day.

Unidentified Justice: Well, that's not... that's not true.

Well, to say that the plaintiff has to prove the elements of his case is a truism.

The question is what are the elements of the plaintiff's case, and if you take res ipsa loquitur from tort law, there the law has allotted the burden to the defendant because the defendant is in possession of the information in a way the plaintiff isn't, and it seems to me that's pretty much what your Supreme Court held here.

Mr. Marion: I don't think so.

Res ipsa loquitur has a rational connection between you have to establish certain facts, that the defendant was in control of the situation, and therefore it's more likely, there's some rational connection between the facts established and the fact presumed.

Here there's no rational connection at all.

Unidentified Justice: Well, isn't there a rational... wouldn't it be rational for the law to say that the person who makes the accusation should have the burden of proving it's true rather than the person against whom the accusation is made should have the burden of proving its falsity?

Mr. Marion: Well, it depends what accusation we are talking about.

In every libel suit, as in this one, the plaintiff is the one that drives the defendant into court and accuses the defendant of lying.

You liked about me.

That's what the plaintiff's counsel said to the jury in this case.

I will prove that what the defendant said about the plaintiffs was dastardly false.

They lied.

Unidentified Justice: Well, perhaps that's in the opening statement, but that doesn't mean that that's how the burden of proof is allocated.

Mr. Marion: The burden of proof, Your Honor, must be allocated to protect truthful speech about public affairs.

That is the essence of the First Amendment, and if you say that if the evidence is balanced we're going to err on the side of punishing speech that may be true, you are depriving both the defendant and the public of the flow of truthful information about public affairs.

Unidentified Justice: Well, but certainly this Court hasn't ruled thus far on the point you're making here.

Mr. Marion: The Court... no, this... the Court has not ruled.

The Court has made many statements which I would regard as dictum, including Justice White's statements in Herbert v. Lando, where he said in the old days the plaintiff had a presumption of falsity and the defendant had to prove truth, but now-a-days, with Gertz and with Sullivan and with Butts, the plaintiff must prove falsity and a standard of care with respect to that falsity that was breached.

Unidentified Justice: Well, that's a... that is the plaintiff's burden in some states, isn't it?

Mr. Marion: Oh, yes.

I think--

Unidentified Justice: But it isn't in Pennsylvania?

Mr. Marion: --That is correct.

Unidentified Justice: And so normally it may be that the state rules are that way, but it may not be that they are required by constitution, by the Constitution.

Mr. Marion: Well, I submit to Your Honor--

Unidentified Justice: That's the issue.

Mr. Marion: --that is the issue.

Normally there are many procedures which we would not say rise to constitutional level, but here for two reasons, both under the First Amendment and the Fourteenth Amendment, the burden of proof on falsity does rise to the constitutional level for this reason: number one, falsity is the line that divides protected speech from unprotected speech, and this Court has always held that--

Unidentified Justice: Of course, that wasn't a rule of common law, I take it.

Mr. Marion: --The common law had no regard for truth or falsity.

Unidentified Justice: Exactly.

It just said that there was a libelous publication, and that was it, if it was--

Mr. Marion: That was it.

Unidentified Justice: --And if you say to me are you asking us to abrogate the common law in another respect--

--Well--

Mr. Marion: Indeed I am.

Unidentified Justice: --Well, it's already been done.

That's already been done.

Mr. Marion: I think it has.

Unidentified Justice: As far as truth being a defense.

Mr. Marion: And I would say let us not grieve for the common law of libel.

Unidentified Justice: No, I am... however that may be, but we've never said that not only is truth a complete defense, but that the plaintiff must prove falsity.

We haven't said that.

Mr. Marion: Well, I submit my reading of Your Honor's statement in Herbert v. Lando--

Unidentified Justice: That was a Court statement, counsel.

Mr. Marion: --Court's... was that that was the rationale for saying we must give the plaintiff discovery, and indeed, the plaintiff does have broad discovery.

So there's a due... Speiser v. Landall, normally it's all right to place the burden of proof on a taxpayer to prove that he doesn't owe the tax, but in that case the burden of proof was penalizing speech, and that was the difference, and this Court held there that when you're determining whether certain speech falls within the protected zone or the unprotected zone, you cannot put the burden on the speaker.

The rule of the Pennsylvania court thus violates that Fourteenth Amendment rule as well as the First Amendment rule that we must protect speech that was true or that may be true, and we have to have a margin of error.

We have to have some breathing space.

So we have to protect some falsity.

Now, the... I've made two arguments--

Unidentified Justice: Well, you have certainly by... if there's a... if there's a malice requirement... is there a malice requirement here or not?

Mr. Marion: --No, sir.

This is Gertz case--

Unidentified Justice: Because the negligence.

Mr. Marion: --The lowest level--

Unidentified Justice: There's the negligence--

Mr. Marion: --of fault, negligence.

Unidentified Justice: --So you can negligently lie and still not be liable.

Now, that's certainly cushion, isn't it?

Mr. Marion: Well, I think, Your Honor, there's a--

Unidentified Justice: You want more than that.

Mr. Marion: --We could negligently lie--

Unidentified Justice: And be... and get off.

Mr. Marion: --That's true.

That's true.

Unidentified Justice: That's part of the elbow room that you're talking about?

Mr. Marion: Exactly, exactly.

I think in my opponent Mr. Surkin's brief there's a beautiful hypothetical which I think illustrates the issue in the case.

He says suppose with absolutely no supporting information a reporter writes that a private citizen bribed a state official... this is on page 20 of the appellate... Appellees brief, in Footnote 9.

I think this is the hypothetical that's bothering the court.

Suppose with no basis a reporter says the plaintiff bribed a state official to get a zoning variance.

How did the reporter come up with it?

Divine inspiration, a hunch, I have a feeling something's fishy, but in complete irresponsibility publishes it with no basis.

And Mr. Surkin also hypothesizes it happens that that's true.

He says the reporter was negligent but lucky.

Now, how should that case be decided?

That is the crux of this case.

And I say to you that case should be decided for the defendant, and I'd like to explain why.

The reason I say that is this: what interests are we trying to protect?

We don't care about that reporter because he was worse than negligent, he was malicious.

He was completely irresponsible.

But he reported the truth.

There was a bribe of a public official.

We don't care particularly about the interests of the plaintiff in that case because he was a briber.

Why should he get a windfall libel recovery simply because the defendant can't prove the truth.

Let us assume in that hypo that just as the reporter had no basis for his story when he wrote it, he has no basis to prove the truth of it at trial.

Therefore, there is no proof that it was true.

Unidentified Justice: But if he isn't lucky what do you say?

Mr. Marion: Well, even if he is lucky, Your Honor--

Unidentified Justice: Well, what if he is not lucky and it's not true?

Mr. Marion: --If it's not true, I say the plaintiff who wants to recover the damages should prove that it's not true.

If it is true and he was lucky, I say that public interest, forgetting the parties, the public interest is that the truthful information about governmental corruption should get out to the people.

That's what the First Amendment is designed to protect.

Even though we don't want to--

Unidentified Justice: Mr. Marion, you are... it seems to me you are changing your hypothetical.

You are assuming it's true.

It seems to me the assumption has to be--

Mr. Marion: --That's his hypothetical.

Unidentified Justice: --I know, but the assumption for your argument has to be we really can't tell whether it's true or not.

Mr. Marion: Exactly.

Unidentified Justice: It may be true and it may be false.

The reporter was totally irresponsible in publishing it.

And you're saying that when the scales are equally balanced as to whether it's true or false, you know it's going to libel somebody seriously, you should go ahead and publish.

That's your point.

Mr. Marion: I'm not saying he should go ahead and publish.

Unidentified Justice: Oh, that's exactly what you said.

Mr. Marion: No, I'm saying--

Unidentified Justice: He comes to you as a client and says do I or do I not publish it, and you say, well, if you've got a 50-50 chance of proving it's true you should publish.

Mr. Marion: --If he comes to me as a client, I tell him not to publish unless he has some basis.

But that's not the hypothetical.

He's already published.

Unidentified Justice: He's got a 50-50 basis.

Mr. Marion: No.

He's got to have some basis, Your Honor.

I don't know what 50-50 means.

Unidentified Justice: Well, that's a pretty good basis, there.

You've got a 50-50 chance, and the public is surely entitled to this information you said.

Mr. Marion: The public is entitled to it.

What I'm saying is you can't penalize it if it may be true.

It's got to be proven false, and the final argument I would make on that issue is I'd like to discuss the relationship between falsity and fault, which is raised by the Gertz case, falsity and fault.

We recognize that it's possible to isolate falsity and speak about it separately from fault.

But the question we ask the Court, does that make sense, is it rational?

And the way to decide whether it makes sense is to say what is the purpose of the fault requirement to begin with?

Now, Justice Powell, concurring in Cox Broadcasting, after the Gertz opinion had been written, said that our... that the Court's opinions dealing with the First Amendment limitations on state defamation actions have undertaken to identify a standard of care with respect to the truth of the published facts that will afford the required breathing space for First Amendment values.

And let me repeat that.

What we are doing, what this Court has been doing is establishing a standard of care with respect to the truth.

We are not interested in a standard of care and fault in a vacuum.

It's fault in failing to ascertain the truth that is the issue before the Court in every libel case, and that's why the trial judge's charge to the jury, which is in the Joint Appendix in this case, was the rational way for the jury to consider these issues, not to say that in such an intertwined issue as truth as fault, care in ascertaining truth, to say on the care part of that the plaintiff has the burden, but on the ascertaining the truth or the truth, the defendant has the burden.

That makes no sense, it's irrational, it puts too great a burden on the jury.

First the jury should find whether the plaintiff proved falsity.

If it's not false, it doesn't matter how careless or reckless the defendant was in the abstract; the fault we are interested in is fault in failing to discovery the falsity.

And that is why I believe Justice White said what I think is obvious in Herbert v. Lando that the plaintiff, that he's got to establish fault.

If that's the floor, the threshold for liability to protect First Amendment rights, then he must also establish falsity.

Falsity is the essential element of a libel case.

It's the dividing line between protecting speech and not protecting speech, and what this case comes down to, I respectfully suggest, is what is it more important to protect?

If you put the burden of proof on the plaintiff, some defendants will go unpunished, even though they made false statements that the plaintiff can't prove to be false.

That is unfortunate, but that is not unconstitutional.

If on the other hand you put the burden on the defendants will be punished for making truthful statements that they are unable to prove are true, and that is not only unfortunate but unconstitutional as a violation of both the First and Fourteenth Amendments.

Therefore, we urge this Court to invalidate the Pennsylvania statute that puts the burden on the defendant and reinstate the jury verdict for the defendant below.

Chief Justice Burger: Mr. Surkin?

ORAL ARGUMENT OF RONALD H. SURKIN, ESQ., ON BEHALF OF THE APPELLEES

Mr. Surkin: Mr. Chief Justice, and may it please the Court:

The Philadelphia Inquirer argues that every private figure libel plaintiff in every case to which the rules of Gertz v. Robert Welch applies must have the burden of proving falsity as a matter of federal constitutional law, and that a 140 year old Pennsylvania rule codified by statute which places the burden of proving truth on the defendant is therefore unconstitutional.

Its contention is not supported by history or precedent or policy.

The issue of truth or falsity is very different from the issue of fault.

The two are not intertwined.

The proper balance between the fundamental societal interests in free press and protection of private reputation will not be achieved if in addition to proving fault the private figure libel plaintiff is required to prove that the defamatory statements publicly made about him are untrue.

Since 1790 the Pennsylvania constitution has explicitly provided that the rights of acquiring, possessing and protecting reputation are inherent and indefeasible rights, just as are those of enjoying and protecting life, liberty and property.

The constitution also provides, and I quote,

"every man for an injury done him in his lands, goods, person or reputation shall have remedy by due course of law. "

Based upon these important Pennsylvania constitutional provisions, the Pennsylvania Superior Court in 1898 in the case of Commonwealth v. Swallow, held that the rights of the publisher and of the person defamed, and again I quote,

"rest on the same constitutional ground and demand an exact balance of the scales of justice. "

The balance of rights which had existed in Pennsylvania, that is, between free press and protection of private reputation which is required by the Pennsylvania constitution, was seriously upset by the ruling of the trial court in this case declaring that the Pennsylvania statute placing the burden of proving truth on the defendant was unconstitutional.

It was unnecessary for the trial court to have done that because--

Unidentified Justice: Mr. Surkin, you referred to a decision of a Pennsylvania superior court.

Mr. Surkin: --Yes, sir.

Unidentified Justice: Is the decision of the Pennsylvania Supreme Court in this case the first time it has ever so ruled--

Mr. Surkin: No, sir.

The Pennsylvania Supreme Court I believe in an earlier case, in 1885... it didn't say it in exactly the same language, but it was a case called Meese v. Jackson, which is 185 Pennsylvania 12, an 1898 case also, said that reputation is in the same class of rights with life, liberty and property.

Now, the... that--

Unidentified Justice: --But it took a long time for the Supreme Court to make the flat statement, didn't it?

Mr. Surkin: --Yes, sir, it hadn't come up, quite frankly.

The issue had never arisen since then.

The Pennsylvania Supreme Court in... during the 1970s in two other cases has relied upon this Pennsylvania constitutional provision for certain explicit reasons.

One is in a case called Moyer v. Phillips, a 1975 case, the Pennsylvania Supreme Court rules that the right of defamation, to claim a cause of action of defamation, must survive the death of either the plaintiff or the defendant because the cause of action of defamation is protected by the Pennsylvania Constitution and stands on the same basis with other causes of action.

There was another case in 1978 where the Pennsylvania Supreme Court was ruling on an issue where somebody was illegally committed to a mental institution, and when that person was found that the commitment was illegal, and then that person petitioned to have the records of his commitment destroyed, and the court held that because the right of reputation is so important, the court would order destruction of those records.

Those to my knowledge are the only times that this specific provision has been construed by the Pennsylvania Supreme Court.

So the question I think that we have to face here is whether the rule of Gertz, which says that the states may not impose liability without fault, also means that the private plaintiff must, in addition to proving fault, prove falsity, and I think the answer to that is an unequivocal no.

Falsity can be proved without resort to proof of fault, and fault can be proved without resort to evidence of falsity.

The two are not intertwined.

Mr. Marion gave the example that I have in my brief of what I call the lucky reporter, and I think that's an important example to keep in mind.

It shows how the two issues are very separate from each other, and I think going beyond that point, we have a question of whether the Court wants to create rules that might encourage the reporter to act like this lucky reporter.

We could very well have a situation where a reporter does what the reporter did in my case, and the reporter happens to be working for the New York Times or the Philadelphia Inquirer, the two most important newspapers in their respective cities, each of which have a substantial amount of credibility within their communities.

In Pennsylvania we have an extremely broad shield law, as has been indicated.

If it turns out that the private... that that report is untrue, the private plaintiff gets on the witness stand and he says I didn't pay that bribe, or perhaps the public official gets up and he says I never accepted the bribe, that would be the only evidence that we could put forth in that type of case.

The reporter gets on the stand and says I have a confidential source, an extremely reliable confidential source in city government who I have relied upon dozens of times in the past, and he told me that the bribe had been paid and he saw the money change hands.

I can't tell you who it is because it's a confidential source, but I can tell you that he's extremely reliable.

In that type of a case, when the jury retires, they have Mr. Nobody literally, on one side, a private person saying I didn't pay the bribe, although he did get the variance, the fact is he got the variance, and the reporter, backed by the credibility of his newspaper on the other side--

Unidentified Justice: It is said, however, that the shield law is not particularly important because you are concerned here with information, not source.

What comment do you have about that argument?

Mr. Surkin: --The Pennsylvania shield law, Your Honor, has been construed to apply to any information or any source which the reporter has chosen not to publish.

It is an extremely broad construction of our shield law by our Pennsylvania Supreme Court.

If the reporter has information which he chooses not to publish, he cannot be compelled to disclose the nature of that information, nor can he be compelled to disclose the identity of any sources, nor can he be compelled to disclose the existence of any documents he might have.

And by the way, it doesn't matter if those sources are considered to be confidential in Pennsylvania.

In other words, the reporter did not have to promise his source that you will give me this information on a confidential basis.

It is entirely within the reporter's discretion in Pennsylvania, and this is the way our supreme court has interpreted our shield law, and it applies in every type of legal proceeding, whether that be criminal, civil or administrative, and even legislative, it seems.

Unidentified Justice: Well, I can accept all that, but why is the source so important when you are concerned with information, is my question.

Mr. Surkin: Well, it was important in the sense that... of the example that I gave, we have a situation, we are assuming a situation where the reporter had no source, he made it up.

But then he gets on the witness stand and he says he did have a very reliable source, and because of the shield law, there is no way to disprove that.

It can't be challenged.

That's my point.

We can't get beyond that shield law to take additional discovery to find out if he did have a source, and if he did have a source, whether the source really said that.

Unidentified Justice: Mr. Surkin, do you think that the existence of the shield law in Pennsylvania is something that can be factored into the federal constitutional equation in a way that Pennsylvania can allocate the burden of proof the way it has in this case, at least where there's a shield law, even though perhaps some other state that didn't have a shield law might not for First Amendment purposes be able to have the burden of proof that way?

Mr. Surkin: I believe that that's a possible decision, conclusion that this Court could come to in this case, that in those states that do have shield laws, it would be unconstitutional and an improper balance of the rights to put the burden of proving falsity on the plaintiff, but I don't believe that the Court's decision should be based upon that because I believe under Gertz and the other decisions of the Court since Gertz that entire area should be left to the states to balance as they see fit, as long as they do not impose liability without fault.

Now, the proof of fault that I was talking about before, fault focuses on how the reporter developed his story, and how his editors, on reviewing a potentially defamatory story, satisfied themselves that the reporter had a reasonable basis for believing that what he wrote was true.

We are talking here about who and what were the sources.

Were the sources credible?

Why were they credible?

Did the reporter get both sides of the story?

Did the reporter bother to interview the person he was about to defame?

Was it a hot news piece or was it an investigative piece?

Were there confidential sources relied upon, and if so, was their information confirmed or confirmable?

We might have expert testimony from a journalist saying what a reasonable journalist in the community would have done by way of investigation under the circumstances.

None of that evidence involves evidence of falsity.

Evidence of falsity I think is entirely distinct from that.

Essentially, it will come out either by the plaintiff or his witnesses testifying directly and producing documents that can show, depending on the type of defamatory statement involved, that can show directly that the statements were untrue.

Or it might just be the plaintiff and his witnesses taking the stand and denying the allegations in the story, which, as Justice O'Connor pointed out, is essentially what could be... the best that could be done in this case, to deny that one is connected with organized crime.

You can't very well subpoena the membership lists of organized crime--

Unidentified Justice: Mr. Surkin, if this weren't a private plaintiff but a public figure, what about the burden then?

Mr. Surkin: --I think in a public figure case, Your Honor, the burden of proving falsity is on the plaintiff, and I think because in that case the issue of falsity is inextricably intertwined with the issue of actual malice.

You have to prove what the reporter actually knew and that he knew something different than what he published.

Unidentified Justice: But you think you can separate the two in a private case?

Mr. Surkin: I think clearly they can be separated, Your Honor, and I would also say that a jury can separate them because I think if special interrogatories were submitted to a jury and you submitted the issue of falsity to the jury and negligence to the jury, and the jury found falsity but not negligence, or vice versa, I don't believe a court would overturn that as being inconsistent.

I could easily see a situation where a jury found that the plaintiff's witnesses were more credible than the defense witnesses.

Unidentified Justice: So a witness... so the plaintiff and his side of the case is in a sense saying all I have to do is just claim that these were true, and I am favored by a presumption, and so his case goes forward on the basis of the--

Mr. Surkin: The plaintiff claiming that they're true or false, sir?

Unidentified Justice: --That they're false.

Mr. Surkin: Yes.

Unidentified Justice: He says they're false, and I have a presumption that they're false, and he goes forward on the basis, if these statements are false, there was negligence.

Mr. Surkin: That's correct.

He could... a plaintiff could conceivably prove his case in that way in Pennsylvania.

Unidentified Justice: Well, then, if he hasn't got the burden, that's probably the way he does it.

Mr. Surkin: Well, I think as a practical matter, Your Honor, most plaintiffs will try to prove falsity.

Unidentified Justice: On their side.

Mr. Surkin: If they can, on their side of the case, rather than waiting for rebuttal.

Unidentified Justice: Then he will ask for instructions; the instructions are that the defendant has the burden.

Mr. Surkin: That's right, and that makes a big difference, Your Honor.

I think it makes a big difference in a trial, it makes a big difference in the balance of rights in the close cases, as I agree, Mr. Marion points out that it does make a difference, and that's what we are arguing about here, but it makes a difference because of the rights that we are balancing here.

That's the decision that the Court has decided to make.

What Gertz involves is an issue of balancing the rights of free speech and free press with the rights of the individual, private reputation, both of which are considered to be important, and you have to give some breathing space which you do through the fault or the negligence requirement, but at the same time, you have to give the plaintiff a fair chance to prove his case because his rights are important as well.

Now, the fact that the two... the two rules, that there's the burden of proving truth being upon the defendant and the burden of proving fault or negligence being on the plaintiff is not logically inconsistent, as evidenced by Pennsylvania law itself.

We've had those rules in Pennsylvania since 1885.

The... in Pennsylvania, which has a libel law which has not run in the mainstream, it has been the burden of the plaintiff to prove negligence and the burden of the defendant to prove truth, if he defends on truth, and he doesn't have to, but if he does, and those two have coexisted since 1895 without conceptual difficulty.

I think my reading of Gertz, that Gertz, the requirement of fault does not also require falsity, is also supported by the majority opinion of this Court in Cox Broadcasting versus Cohen where the Court one year after Gertz said that the Court has nevertheless carefully left open the question whether the First and Fourteenth Amendments require that truth be recognized as a defense in a defamation action brought by a private person.

Now, if the Court has not decided that issue as of that time, which was after Gertz, it certainly could not have decided that the Plaintiff must have the burden of proving falsity.

Pennsylvania libel law, I believe, represents a textbook example of the proper balance of the fundamental rights that have to be accommodated in a private figure libel case.

It's structure fits comfortably within the substantial latitude which Gertz extended to the states in fashioning their libel laws.

It maintains a permissible balance between equally fundamental rights which are protected equally under the Pennsylvania Constitution, and it is not inconsistent with the federal constitutional requirement that the plaintiff prove fault.

Now, I've mentioned a few aspects of the matrix of Pennsylvania law, and I think it's important just to highlight them again.

We have for a long time had the burden of proving truth on the defendant if it's raised as a defense, and it is only one of many, many defenses that a defendant has.

We've had the burden of proving fault or negligence placed on the plaintiff.

We have the shield law because the plaintiff has to sustain his burden of proving negligence without necessarily being able to require the reporter to divulge any sources that he chooses not to divulge.

And the Inquirer in this case is asking for a rule of general application where in some future case you may be faced with the precise issue that Justice O'Connor raised, where no sources are disclosed, and it's just the bare case of we had good sources, we had reliable sources.

We're not going to tell you who they are, but we'll tell you they're reliable, and we've used them in the past.

And then you go and ask the plaintiff to prove he's not connected with organize crime.

I think the factual context of this case, how this case arose, is also important for the Court to understand.

We go back to Monday, May 5, 1975 when Maurice Hepps opened his copy of the Philadelphia Inquirer, which was one of 800,000 copies distributed that day, and he read on the front page a story, the thrust of which was that he and his chain of beer distributorships, Thrifty Beverage, was tied to or infiltrated by organized crime.

Similar stories repeating, developing, and expanding on that defamatory theme, appeared four more times during the ensuing year.

On September 15, 1975 the Inquirer wrote "Federal authorities", who by the way they have refused to identify to this day,

"Federal authorities have found connections between Thrifty and underworld figures. "

On May 2, 1976 they wrote unequivocally that Thrifty Beverage beer chain had connected itself with organized crime.

The May 2 article was the last article.

This lawsuit was filed two days thereafter.

After each particle was published Mr. Hepps telephoned the reporter.

He denied the allegations were true.

He offered to meet with the reporter.

He offered to open his entire books and records to the reporters for examination.

The denials were never published.

The reporter declined the invitation to examine the books and records.

At trial the reporter, Mr. Ecenbarger in this case, said he saw no need to do so because he knew in his own mind that the articles that he had written were true.

During the questioning, the cross examination of the other reporter, Mr. Lambert, there was this exchange.

"Question: Would you think there is an obligation on the part of a reporter at least to meet and talk with the person about whom an article has been written, which person calls the reporter and says what you wrote about is untrue? "

Mr. Lambert said no.

He went on to explain why.

He said it's like asking a man if he beats his wife.

The answer is an automatic no.

No one would ever admit he was associated with a friend of an organized crime figure.

So, in other words, why should we bother asking?

We know what the answer is going to be already.

So we won't try to get that side of the story.

Unidentified Justice: Is there any evidence in this record negating the suggestion that federal authorities were the source of this, that is, by bringing in the FBI and whoever else is involved and having them state that they gave no such information?

Mr. Surkin: Your Honor, we don't know who gave the information.

The Inquirer reporters would not disclose who that was.

They were sources connected with the federal government, and we don't know if it was FBI, we don't know if it was a grand jury marshal, for example.

Unidentified Justice: Was there anything to prevent you from, or the plaintiff from calling the FBI and the CIA and the United States Marshal and the prosecutor one by one and having them deny they ever gave any such information?

Mr. Surkin: No, but that would have involved having to call an enormous amount of people, Your Honor, because we don't even know who they had spoken to.

Mr. Lambert said he had a source in Washington who told him that.

There was a grand jury investigation going on in Philadelphia.

Mr. Lambert's source, he said, was a source from the Department of Justice in Washington, and that's all we knew about it.

It was a practical impossibility.

Unidentified Justice: I imagine you found a certain reluctance on the part of some of those sources to come and testify.

Mr. Surkin: I'm sure, Your Honor, that were we to subpoena any of those people, we would get objections, motions to quash those subpoenas, invasion of grand jury secrecy, a variety of other things, claims that we were trying to somehow get into the grand jury to use it in our civil case or some other civil case, and I think as a practical matter, given that type of a situation--

Unidentified Justice: It would be one way of proving the man was a liar, wouldn't it be, however cumbersome?

Mr. Surkin: --It would be a way, but it would be enormously cumbersome and I think practically impossible in any given case, Your Honor.

Now, we did know who some of the sources were in this case, and some of those sources came in to testify, but we didn't by any means know all of the sources, and we didn't know who we considered to be crucial sources.

The reporters invoked the shield law 20 times during the course of the trial, 20 separate occasions which the judge supported, and we don't know who that information came from, whether that information even existed, and certainly what it was.

We do know in one case, one time Mr. Ecenbarger testified he wrote in his article that the particular state senator involved, a Senator Frank Mazzei, had no "visible", the word "visible" I believe was in quotes, financial links with Thrifty or financial ties with Thrifty.

We did ask Mr. Ecenbarger what that was based on and he said, well, federal authorities, federal authorities thought he had financial ties with Thrifty but they couldn't find any.

So he wrote they have no visible financial links with Thrifty, and that's how that came out.

But that's the extent of the information that we were able to get from the federal sources, whoever they might have been.

Now, after these articles appeared, the chain stopped growing.

Some stores left the chain, other stores lost business.

There was evidence at trial of damages exceeding $5 million from this defamation.

There was a strike force grand jury investigation.

The Internal Revenue Service audited ten years of Thrifty's records.

No indictment was ever issued after the grand jury investigation.

The IRS concluded its audit by determining that the government owed Thrifty $278.

Even though the Inquirer published the fact of the existence of these investigations, it never published how the investigations terminated.

So when Hepps sued for libel, he of course tried to prove that what was written about him and his chain was untrue.

But he was stymied because of the amorphous nature of the charges and because of the invocation of the shield law.

Now, the Inquirer and its amici in this case suggest that even if the Gertz rule of fault does not include falsity, that the Court should fashion a new constitutional rule to give more protection to the press than the protection that Gertz allows, and we believe that this argument fails for three reasons.

It fails first because it fails to give adequate or sufficient constitutional weight to reputation, which is also entitled to protection.

It fails second because it lacks fundamental fairness.

And it fails third because there is no compelling evidence that the press is not adequately protected under Gertz.

The court has repeatedly reaffirmed the importance of individual private reputations in Gertz, again in Dun & Bradstreet, on numerous other occasions.

The Court has quoted Justice Stewart's statement in Rosenblatt v. Baer that the individual's right to protect his own good name is a concept at the root of any decent system of ordered liberty and a basic of our constitutional system.

In Palko v. Connecticut, Justice Cardozo used substantially identical words, the words implicit in the concept of ordered liberty to describe First Amendment rights.

We believe this is not a coincidence.

The Bill of Rights reflects the concept of the essential dignity and the worth of every individual.

From that concept there flows a variety of rights which this Court has deemed to be essential, and as long as a proper balance is maintained among those various rights, the underlying concept of human dignity will remain viable.

When one right is... no one of these rights should be favored without compelling reason to the virtual exclusion of any of the other rights.

With regard to the issue of fairness, there is much in the briefs on both sides on whether it is more fair to have the plaintiff prove falsity, more fair to have the defendant prove truth.

I don't want to restate those arguments.

What I want to do is add something else into the equation.

The Inquirer is part of a powerful, increasingly consolidated industry which has created a virtual daily newspaper monopoly in substantially every city in the nation.

The significance of that fact in this case is that the preferred means for any individual, especially the private person, to defend himself against a barrage of defamatory statements, that is, by responding to words with words, is essentially unavailable.

Philadelphia although it has two newspapers, is basically a one newspaper town.

Philadelphia Newspapers, Inc. owns both of the newspapers, and that is only one example.

The saying that the press is indeed free to everybody who owns one is not without relevance in this discussion.

It will be recalled that in this case, even though Mr. Hepps called the Inquirer reporters after each of the articles appeared, the reporters refused to talk to him despite his requests, and they never published his denials.

On the issue of self-censorship, I would submit, which is raised by the Inquirer in its brief, I would submit that that's not truly an issue here.

We have to keep in mind that regardless of what the Court decides in this case, on the issue before the Court, a defendant who reasonably believes that what he wrote was true will never have liability.

A defendant who has published truth is, if he has acted in a reasonable manner, will either be able to prove truth or prove that he had a reasonable basis for believing that it was true.

If he can't prove either of those, he is probably in the situation of the reporter who is publishing based on no substantial facts at all, and I don't believe the Court should fashion a rule that would encourage that kind of conduct.

Those statistics that are available would indicate that the press has fared reasonably well under Gertz.

In the summer-fall 1984 issue of the Libel Defense Resource Center Bulletin, it was found that of the few cases that went to trial, 56 percent of private figures were successful versus 55 percent of public figures, and 50 percent of public officials.

The consistency of those statistics would indicate that a negligence standard has not created an open season on the media.

Also, at least as of mid-1974, the last time that I have seen statistics available, there has not been one million dollar judgment yet affirmed in a liable case.

The case before this Court involves a newspaper which defamed a private citizen through guilt by association of connections to the amorphous entity called organized crime, and of illegal and immoral business conduct.

It did so without getting his side of the story in advance, and it refused to print or even to listen to his side afterwards.

Although it was the accuser, its lawyer told the jury, and I quote from Mr. Marion's closing argument to the jury,

"We do not have to put on any evidence. "

"We have no burden on us. "

Now it comes to this Court and it says ignore the history of libel law.

Ignore the Pennsylvania constitution which in Article 1, Section 1 explicitly protects reputation as an inherent and indefeasible right.

Ignore the rights of the states under the Ninth and Tenth Amendments to fashion appropriate remedies for libel.

Ignore all these things and require the private plaintiff to prove that he is not guilty of the charges we have leveled against him.

Ever since Gertz, this Court has consistently resisted efforts to further constitutionalize the law of private figure libel.

It has done so in proper deference to the fundamental value of a private individual's reputation and the freedom which the Constitution grants to the states in our federal system to protect private reputation through the experimental laboratory of its courts and its laws.

Explicit in these rulings is the understanding that the need to protect private reputation and the right to freedom of speech are themselves inextricably intertwined.

They both support and they both give meaning to the concept of individual dignity.

Accordingly, absent a truly compelling showing of necessity for the sweeping new rule which the Inquirer is seeking here, which simply has not been made in this case, the factors of policy, history, basic fairness and interests of federalism all point to the conclusion that the Court should continue to allow Pennsylvania the latitude to allocate the burden of proving truth or falsity in a private figure libel case as it sees fit, keeping in mind that whatever it decides on that issue, it will not be imposing liability without fault.

Thank you.

Chief Justice Burger: Do you have anything further?

ORAL ARGUMENT OF DAVID H. MARION, ESQ. ON BEHALF OF THE APPELLANTS -- REBUTTAL

Mr. Marion: Yes, Your Honor.

I believe I reserved a few moments.

Chief Justice Burger: Yes, you have.

Mr. Marion: I would like to face this issue of the shield law directly.

There are two answers to it.

Number one, in this case and in most cases it is a completely phony issue.

This is proved if you look in the joint appendix at page A-91.

The plaintiff had a point for charge to the jury in which the plaintiff set forth the four assertions it claimed were false.

None of these assertions is amorphous, as Mr. Surkin says.

Each claimed false statement is detailed.

Secondly, none of those four statements has anything to do with confidential sources.

There was no obstacle in proving the falsity of them by the fact that the shield law was involved in this case.

For example, the first one is the Thrifty chain had been banished by order of the Court of Common Pleas of Lancaster County.

That's a matter of court record.

The court records of Lancaster County were put into evidence.

The jury could decide whether it was fair or not fair to say that the Thrifty chain had been banished.

There is no source issue involved.

Unidentified Justice: Mr. Marion, tell me again, how long has Pennsylvania had its shield law?

Mr. Marion: 1937, I believe, and it's been re-enacted--

Unidentified Justice: So it's an old one.

Mr. Marion: --It's an old one.

It has been re-enacted as recently, I believe, as 1978.

And it was re-enacted after the Pennsylvania Supreme Court gave the broadest possible interpretation of it.

But I say to this court, how can we fashion a rule of federal constitutional law based on Pennsylvania shield law?

I don't think we can.

And secondly, the issue of falsity is not dependent on who the sources were.

It is dependent on what the insertions are and can you prove them false.

And if you look on A-91, you will see all of these assertions were provable.

And I ask you another thing.

We have to be practical.

If you were a defense lawyer, would you rather go before the jury and say I got this information from a source; I can't tell you who it is, or would you rather be able to bring in the FBI, the organized crime strike force, the CIA and so forth and have them say yes, I gave this information to this reporter?

No defendant wants to try his case and rely on the shield law if he doesn't have to because it invites the argument which Mr. Rome made vigorously in the trial court.

Maybe they're making it up.

How do we know?

And what's the answer to maybe they're making it up?

It's like any other question of jury credibility, jury determination of witness credibility.

The plaintiff in this case spent 80 transcript pages taking every statement alleged by him to be false and telling what the truth was, 80 pages.

The plaintiff in its case then put Mr. Ecenbarger, the reporter, on the stand for seven trial days under cross examination, about six days on cross, one on redirect, seven trial days the reporter was on the stand, and the jury could determine the credibility of the plaintiff and of the reporter?

Was he making up the sources?

Obviously the jury didn't believe so, and obviously the key contended areas of falsity had nothing to do with confidential sources, as you will see when you read page A-91 of the record.

So the shield law is a phony issue.

Now, the common law issue, I made somewhat of a facetious statement in my argument which I didn't have a chance to follow up about not grieving for the common law of libel, but seriously, the common law of libel we know goes back to the days when we had an environment of absolute government, not democracy.

The common law of libel was used to suppress speech, not to encourage truthful speech on public affairs as our Constitution does.

The common law of libel said all the plaintiff has to do is show that he's insulted, and immediately--

Unidentified Justice: Well, are you talking about the common law of England?

Is that what you're talking about?

Mr. Marion: --The common law of England and carried forward right into America until Sullivan.

Unidentified Justice: When did... how did truth come to be a defense?

Mr. Marion: Truth came to be a defense by common law development because--

Unidentified Justice: Fox's libel law.

Wasn't it Fox's libel law?

Mr. Marion: --Yes, I believe so, and it was a common law decision that a plaintiff--

Unidentified Justice: Had to prove.

Mr. Marion: --No, the defendant had to prove truth because a plaintiff was unworthy to recover if it was true.

Unidentified Justice: But the fact that truth was a defense came about as a common law development.

Mr. Marion: It came late in the common law development.

Originally the saying was the greater the truth, the greater the libel because libel law was used to suppress dissent.

Unidentified Justice: So you don't want that part of the common law to die.

Mr. Marion: To die?

Unidentified Justice: That truth is a defense.

Mr. Marion: I say it's not enough to say that truth is a defense when you're talking about speech, when you're putting the burden on the speaker to prove that he's within the protected zone of constitutional protection, and I say that this Court cannot now march backward to the 18th century to resurrect Pennsylvania common law when it has recognized the constitutional interest in a democracy of free speech on public affairs.

Thank you.

Chief Justice Burger: Thank you, gentlemen.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

Mcdonald v. Smith - Oral Argument

Fri, 31 Aug 2012 18:30:13 +0000

Case:

Mcdonald v. Smith

Media File:

84-476_19850320-argument

Related Transcript:

84-476_19850320-argument

Transcript:

ORAL ARGUMENT OF BRUCE JAMES ENNIS, JR., ESQ. ON BEHALF OF THE PETITIONER

Chief Justice Warren E. Burger: Mr. Ennis, you may proceed whenever you're ready.

Bruce James Ennis Jr: Mr. Chief Justice and may it please the Court, the question is whether the Federal Government's need to obtain information about candidates seeking appointment to federal office, together with the right of a citizen to provide that information in a petition addressed only to appropriate federal officials, requires the same immunity from common law libel actions this Court has already afforded both citizens and governmental officials in a broad range of other circumstances in which providing only qualified immunity would unduly impair the effective functioning of government.

In each of those other circumstances, the fact that immunity would protect not only truthful and useful communications, but also, on occasion, knowingly false and defamatory communications, has been considered a necessary cost of government.

As Justice Harlan wrote for the Court in Barr v. Matteo, affording executive officials immunity from libel actions alleging knowing falsity,

"It has been thought in the end better to leave unredressed the wrongs done by dishonest officers than to subject those who try to do their duty to the constant dread of retaliation. "

Unidentified Justice: Mr. Ennis, do you read any constitutional dimension into Barr v. Matteo?

Bruce James Ennis Jr: No, Your Honor, I do not.

I believe that Barr v. Matteo and other decisions of this Court affording immunity to governmental officials is not based on any specific clause of the Constitution.

None was referred to.

But I do believe they were constitutional decisions in the sense that the Court felt that the very constitutional structure of our government required such immunity.

Unidentified Justice: I never read Barr v.... I don't think there's a word about the Constitution in Barr v. Matteo.

I've always thought it was a District of Columbia doctrine.

Bruce James Ennis Jr: Your Honor, there is not a word about the Constitution in Barr v. Matteo, but the Court nevertheless thought, even though there was no constitutional right of a governmental official at issue, that the effective functioning of the government itself was sufficient to require the rule of immunity.

In this case, we have not only that same governmental interest, but in addition the interest of the citizen critic expressly grounded in the petition clause of the First Amendment.

Unidentified Justice: Well, what's the source of the law we're dealing with here?

Is it all... is it just constitutional law?

The case was tried under North Carolina libel laws, wasn't it?

Bruce James Ennis Jr: The case has not yet been tried, Your Honor.

Unidentified Justice: Would it be tried under North Carolina libel law?

Bruce James Ennis Jr: It would be tried under North Carolina libel law as that law is modified and governed by the federal Constitution and also by the needs of the Federal Government to receive information.

For example, the Court has also ruled, not relying on any specific constitutional provision, that citizens have a right to provide information about criminal offenses to government; they have a right to testify before legislative and judicial bodies; and they have a right to provide petitions to the judicial branch of government, and they would be absolutely immune from libel actions in each of those circumstances.

We seek no more in this case.

In our view, there are two separate but in this case coinciding interests which require immunity.

The first is the interest of the Federal Government in effective functioning and the second is the interest of the citizen critic in providing the information the government needs to function effectively.

The basic facts--

Unidentified Justice: Well, you wouldn't say that it's necessary for the essential function of government to operate on false information.

Bruce James Ennis Jr: --Justice White, I know that you have taken pains to concur in several decisions stressing that the Constitution does not directly protect knowingly false information.

Unidentified Justice: And the Court has already said that, too.

Bruce James Ennis Jr: Yes, the Court has agreed with that, Your Honor.

Unidentified Justice: Yes.

Bruce James Ennis Jr: We do not contend that it does, and we do not need to contend that it does.

Unidentified Justice: But you have to make some other kind of an argument.

You have to make an argument that you have to lie... you have to accept some lies in order to get enough of the truth.

Bruce James Ennis Jr: That's exactly the argument that this Court has already accepted.

Unidentified Justice: But that may be true on one side of your argument, on the government interest, but what about the individual?

Bruce James Ennis Jr: They are--

Unidentified Justice: Does he have to be able knowingly to lie in order to give decent information to the government?

Knowingly lie.

Bruce James Ennis Jr: --Your Honor, we are not seeking protection for the right to knowingly lie.

Unidentified Justice: Well, you are.

You say absolutely immunity.

It doesn't make any difference, you say, whether he's lying or not.

Bruce James Ennis Jr: Your Honor, we're seeking protection for the right to petition the government and to provide information to the government.

Unidentified Justice: And to tell lies in the process.

Bruce James Ennis Jr: Even if there may occasionally be knowing lies in the process.

Unidentified Justice: Well, what about on those occasions when he knowingly lies?

Now, what possible excuse... what basis has he got to claim absolute immunity?

Bruce James Ennis Jr: His basis, Your Honor, is the same basis that the United States itself identified in the case of Webb v. Fury.

We don't have to speculate about the federal interest.

In Webb v. Fury, the United States formally and explicitly took the position that citizens should be absolutely immune from common law libel actions when they provide petitions to federal agencies, even if those petitions are alleged to be knowingly false.

The reason, said the government, was--

Unidentified Justice: Alleged to be.

Bruce James Ennis Jr: --Pardon me, Your Honor?

Unidentified Justice: Alleged to be.

Bruce James Ennis Jr: Alleged to be.

That is all that is true in this case as well, Your Honor.

The reason for that was that any lesser degree of immunity, said the United States, would deprive the government of the information it needs to govern.

Unidentified Justice: Because?

Bruce James Ennis Jr: Because both governmental officials and citizens would be deterred from providing truthful and useful information to the government if they knew that merely upon an allegation that their communications were knowingly false, they would be required to spend literally thousands of dollars in unrecoverable defense costs to defend the truth of their statements.

That would silence both governmental officials and citizen critics from providing the information government needs.

Unidentified Justice: Webb v. Fury, was that a case in the Supreme Court of West Virginia?

Bruce James Ennis Jr: That's correct, Your Honor.

Unidentified Justice: And what?

The government filed an amicus brief?

Bruce James Ennis Jr: The United States went to the extraordinary length of filing both an amicus brief and an amicus reply brief.

Unidentified Justice: Have they filed any brief in this case?

Bruce James Ennis Jr: No, they have not, Your Honor.

I think that the interest of the Federal Government is on its face and, given Webb v. Fury, quite clear.

But if there be any doubt about that, the Court could of course invite the Solicitor General to follow through.

Unidentified Justice: I think the Solicitor General is usually quite aware when he figures the government's interests are involved.

Bruce James Ennis Jr: That's correct, Your Honor.

Unidentified Justice: Mr. Ennis, if a witness testifies in court, even in a matter of grave concern to the government, if the witness testifies falsely, the witness can be tried for perjury, can he not?

Bruce James Ennis Jr: That's correct, Your Honor.

Unidentified Justice: And yet there certainly is as great an interest in those circumstances in obtaining truthful information, both for the government and from the witness's standpoint.

And I take it in those circumstances, the witness isn't deterred from giving the truth, speaking the truth, because... despite the threat of prosecution for perjury.

Isn't that right?

Bruce James Ennis Jr: That is correct, Your Honor, and it raises a very important distinction.

Witnesses who testify in judicial proceedings are not immune from perjury prosecutions, but they are immune from common law libel actions.

We are not seeking immunity from every possible sanction.

For example, the Federal Government has already made it a crime to provide false information to the government, whether it's defamatory of a third party or not.

We are not seeking immunity from that kind of prosecution or from other sanctions.

We are only seeking the same immunity from common law libel actions that witnesses in judicial proceedings already have.

Unidentified Justice: But are not witnesses there, other than by their own free will?

Bruce James Ennis Jr: Some witnesses, Your Honor, are there other than by their free will.

Others are there by their own free will.

But the doctrine--

Unidentified Justice: Once they are there, they are compelled to answer all relevant questions, are they not?

Bruce James Ennis Jr: --That's certainly correct, Your Honor, but the rule applies not only to witnesses; even persons who simply file complaints with the judicial branch are absolutely immune from common law libel actions based on the statements contained in their complaints, and no one has compelled them to file such a complaint.

Unidentified Justice: Mr. Ennis... oh, excuse me.

Finish your answer.

Bruce James Ennis Jr: I see no compelling justification for affording petitions to the judicial branch of government immunity from common law libel actions, and not affording the same immunity for petitions to the legislative and executive branches, particularly when the petition is directly relevant to an important decision then under consideration by the executive and legislative branches.

There is no presumption, if I may say so, Your Honor, that it is more important to protect petitions to the judicial branch than it is to protect petitions the president and to the legislative branch.

Unidentified Justice: That's good background for the question I was going to ask you about the scope of your position.

Supposing you have somebody who's nominated to the cabinet, or district attorney, somebody like this.

Bruce James Ennis Jr: I'm sorry.

I did not hear.

Unidentified Justice: A nominee for some office that requires confirmation of the Senate.

And say a large pressure group like one of the big trade associations or the National Rifle Association have decided to oppose him.

Could they get together and write literally thousands of false letters accusing him of all sorts of personal wrongdoing and all the rest, and misstating his position and all the rest, get a regular campaign going... would all those letters be immune from any kind of libel action?

Bruce James Ennis Jr: Your Honor, so long... under our theory of the case, so long as the letters were addressed to appropriate officials of the Federal Government--

Unidentified Justice: To the chairman of the committee.

Bruce James Ennis Jr: --who were then considering a governmental decision, yes, they would be immune, not from all sanctions, but from common law civil libel actions.

Unidentified Justice: Which is probably the only sanction that's available for deliberate falsehood of that kind.

Bruce James Ennis Jr: Well, as I've indicated, there are already on the books statutes making it a crime to provide false information to the Federal Government, and he certainly could be prosecuted for that.

It is also conceivable, though I do not concede the point, that a state criminal prosecution for criminal libel could be pursued, though I am not willing to concede that such a prosecution would survive constitutional--

Unidentified Justice: What kind of a constitutional immunity is it that just protects you from a civil remedy but not from a criminal remedy?

Bruce James Ennis Jr: --Well, as I say, the federal criminal remedy would be different.

It would not be for the crime of providing defamatory information.

It would be for the crime of providing false information to the government, whether it was defamatory or not.

It is a crime, for example, to provide false information to the FBI.

Unidentified Justice: But if the... I am still a little puzzled.

If the communication is constitutionally privileged, notwithstanding its falsity, how can you be satisfied with a rule that would allow the Federal Government to prosecute the person for sending the same communication?

Bruce James Ennis Jr: Because, Your Honor, I'm making the same distinction I made in response to the question asked by Justice O'Connor, and that is, we are not seeking immunity from every conceivable sanction.

We are only seeking immunity from one particular sanction which is particularly likely to silence critics of--

Unidentified Justice: Where do you find that distinction in the language of the Constitution?

Bruce James Ennis Jr: --I find that distinction in this Court's decisions.

This Court has already ruled that judges, legislators, and executive officials are immune, not from every sanction, but immune from common law libel actions, even if their statements are alleged to be defamatory and knowingly false.

The Court--

Unidentified Justice: Those are... as Justice Rehnquist points out, those are not constitutional decisions.

Bruce James Ennis Jr: --I believe they are constitutional in the sense, Your Honor, that they derive from the very structure of a republican form of government.

They are like the slaughterhouse cases, like In Re Quarles, like all of the foundation cases on which our Constitution and jurisprudence is based.

The Court in every one of those cases said that that kind of immunity, in the circumstances of that case, was necessary in order to ensure the effective functioning of government.

That's the literal language used in those cases.

I see no distinction here.

The government was actively considering an important governmental decision... whether to appoint Respondent to the office of United States Attorney, the chief law enforcement office in the Middle District of North Carolina.

That was obviously an important decision.

It required nomination by the President and the advice and consent of the Senate.

This was not some low level margin decision.

In order to make a responsible and effective decision on that candidacy, the government needed to obtain relevant information.

The letters that my client sent to the President are, on their face, highly relevant to the qualifications of Respondent for that office.

But if my client knew--

Unidentified Justice: Yes, but don't we have to assume that they are also false, and deliberately so, for purposes of deciding the case?

Bruce James Ennis Jr: --Your Honor, I have to concede that the rule I am arguing for would protect not only truthful communications--

Unidentified Justice: No, you have to concede that your client sent deliberately false letters, knowingly... I mean false letters that he knew were false.

That's the allegation which we must accept as true.

Bruce James Ennis Jr: --That's the allegation of the complaint.

It is specifically denied in the answer.

This case does not arise simply on a motion to dismiss.

Unidentified Justice: But for purposes of your appeal, you must assume it's true.

Bruce James Ennis Jr: I don't want to quibble with you, Your Honor.

I do want to make a point, however, that this is not just a motion to dismiss.

It's a motion for judgment on the pleadings, which includes the answer as well as the complaint.

Nevertheless, I would assume for purposes of this case that even if what my client wrote is knowingly false, it should be absolutely protected because it is the right of the Federal Government to decide for itself how to separate the false from the true.

The Federal Government certainly has mechanisms for doing that.

This letter was in fact addressed, one copy, to William Webster, the Director of the FBI who has statutory authority to investigate candidates for appointment to this very federal office.

And the FBI certainly has enormous resources for ferreting out truth and falsity.

Unidentified Justice: Suppose we have a vacancy here in the staff of our Court, the Clerk of the Court or something, and someone applies.

Are you suggesting the same freedom would be accorded if a person wrote to the Court, wrote to me and said this fellow is a scoundrel, he's a Communist, he's a bankrobber, unreliable?

Absolutely immune?

Bruce James Ennis Jr: Yes, Your Honor.

If you were making a decision whether to hire a certain person, for example, as your law clerk and if a citizen had information concerning the qualifications of that person, I would take the position that the citizen would have the right to send you a letter expressing his views and that those views would be immune from a civil libel action, though not from other possible sanctions, whether they are true or false.

Unidentified Justice: So republican form of government.

Bruce James Ennis Jr: Your Honor, both because--

Unidentified Justice: That's the nearest... I've been listening.

I'm quite interested.

That's the nearest you've gotten to point to any provision of the Constitution, and you're miles away from that one.

Bruce James Ennis Jr: --Your Honor, both because of republican form of government... that's the federal interest... and also because of the petition clause of the First Amendment.

The history of the petition clause, I think, is overwhelmingly clear.

In fact, the Respondent does not even deny--

Unidentified Justice: I think it's one of the clearest puddles of mud I've seen in a long time.

Bruce James Ennis Jr: --Well, Your Honor, I don't wish to seem disrespectful, but in our brief we refer to the fact that in a parliamentary resolution of 1669, in Lake v. King in 1680, in the Seven Bishops case of 1688, in the English Bill of Rights of 1689, in a host of other authorities, English law that was known to the framers provided absolute immunity to British subjects when they petitioned either Parliament or the king.

The Respondents do not dispute that history.

They also do not dispute that in Harris v. Huntington, the first American case to consider the common law--

Unidentified Justice: Well, I dispute that as of today, you can write anything you please to any governmental official and have absolute immunity.

Bruce James Ennis Jr: --Well, Your Honor, if I wrote a letter to the government accusing--

Unidentified Justice: Is there anything that you could write to the government that you would not be responsible for?

Bruce James Ennis Jr: --I'm not claiming--

Unidentified Justice: The point is that you write to a government official, period.

Bruce James Ennis Jr: --Right.

Unidentified Justice: That's all you say.

If you write to a government official, you have absolute immunity, period.

That's the end of your constitutional provision.

Bruce James Ennis Jr: No.

That is a broader rule than we are contending for in this case.

Unidentified Justice: How much broader is it?

Bruce James Ennis Jr: Quite a bit broader.

We are only asking the Court to rule in the narrow circumstances of this case, and that involves three important qualifications.

The first is that the petition is from a citizen addressed to appropriate officials of the Federal Government, not just to anyone.

Second--

Unidentified Justice: I said anyone in government.

Bruce James Ennis Jr: --Yes, but we're not... if Mr.... if my client--

Unidentified Justice: I don't think you can be in government unofficially.

Bruce James Ennis Jr: --No, certainly not, Your Honor.

But if my client wrote a letter to some member of the Forestry Department in the State of Wisconsin... who's a government official... which was defamatory--

Unidentified Justice: Also, I wouldn't assume it would apply to somebody who wrote to the third assistant janitor in the Post Office.

Bruce James Ennis Jr: --That's correct, Your Honor.

That's an important qualification.

Unidentified Justice: Don't break anything... bring something that's... if you write to any governmental official--

Bruce James Ennis Jr: Yes.

Unidentified Justice: --Any officer of the United States, you have absolute immunity.

Is that correct?

Bruce James Ennis Jr: That's not the position for which we are--

Unidentified Justice: Are you limiting your position to decisionmaking officials?

Bruce James Ennis Jr: --Your Honor, we are limiting the rule we see to appropriate federal officials.

That could include certainly those officials who are directly involved in making the decision.

For example, as you might be, if you were hiring a law clerk.

But it might also include a few more officials who are not directly involved in making the decision, but whom the petitioner could reasonably believe would be influential in that decisionmaking process.

The citizen critic should not be forced to guess at his peril, whether the governmental recipients of his petition are the right recipients or not.

So long as his decision is not patently unreasonable, as perhaps writing to the third janitor might be, so long as decisions are not patently unreasonable, it should be protected.

Let me continue by saying that--

Unidentified Justice: Mr. Ennis, isn't there a basic difference in the justification for immunity and libel or defamation actions for witnesses in judicial proceedings, simply because they're subject to cross-examination to get at the truth?

Their statements occur in a framework where it's possible to know whether they're speaking the truth or not, at least by our standards.

And you're asking for absolute immunity in a situation where someone just submits a letter and is not open to cross-examination for it.

And it seems to me to have some basic differences.

And I think if you look closely at the common law immunity, you will find that it extended really only to judicial proceedings and witnesses and not as you have described.

Bruce James Ennis Jr: --Well, Your Honor, I must respectfully disagree about the common law history.

But on the other question you asked, that is obviously an important point; that witnesses in judicial proceedings are subject to cross-examination.

The rule, however, of immunity applies not only to witnesses but also to complainants in judicial proceedings.

The complaint itself is immune.

And there may or may not be occasion for testing the truth of allegations in a complaint.

The complaint may never get served, it may not--

Unidentified Justice: Well, they can have the opportunity for a formal response.

It's in a setting where it lends itself to a response.

Bruce James Ennis Jr: --Yes, that's right.

Unidentified Justice: And in the situation you described, the person about whom the letter is written may never know what was written at all.

Bruce James Ennis Jr: Yes.

Let me respond to that, Your Honor.

Unidentified Justice: There's no notice, there's no response.

Bruce James Ennis Jr: Let me respond to that, Your Honor, because that's very similar to one argument raised by the Respondent that this was a secret petition.

In fact, it was not, for four reasons.

First, a secret--

Unidentified Justice: But the rule you pose would cover something just submitted that the person about whom it's written would never know.

Bruce James Ennis Jr: --The rule I propose is no different than the rule this Court has already adopted in both Quarles and Vogel v. Gruz.

This Court has already ruled that the subject of a petition to the Federal Government cannot compel the disclosure of that petition to himself or to anyone else without the "permission or assent" of the Federal Government.

Because the Court recognized that the government has such an important need in receiving that information, that the Federal Government should be free to decide for itself whether to pass on a communication to the subject of the communication.

That's already the rule this Court has adopted.

Third--

Unidentified Justice: You mean in criminal cases.

Is that what you're talking about?

Bruce James Ennis Jr: --Well, Vogel applies not just in criminal cases, nor does... but the rule I'm talking about is a petition to Federal Government.

The fourth point I'd like to make on that secrecy argument is that the Respondent, I think disingenuously suggests in his answering brief, that he did not have an ample opportunity to respond.

In fact, he did.

The record in this case is clear, as the deposition of Congressman Johnston makes clear, that the Respondent promptly received copies of both letters from Congressman Johnston, his friend, and Senator Helms, his friend and sponsor, and that on January 19th and February 27th he in fact wrote to Congressman Johnston with enclosures, providing a detailed response to every one of petitioner's allegations.

So he did in fact have an ample opportunity to respond, and that's in the record of this case.

This was not a secret, however.

A secret requires an agreement by both parties to the communications to keep it confidential between themselves.

My client did not demand or request that the government keep his petition secret.

To the contrary, he offered to testify publicly, where he would have been subject to cross-examination and penalties for perjury; nor did he expect secrecy.

He is alleged to have sent copies of his letters to Senator Helms and Congressman Johnston, both of whom were friends and sponsors of the Respondent.

Unidentified Justice: Mr. Ennis, would your rule cover the anonymous correspondent as well as one who signs his name?

Bruce James Ennis Jr: Your Honor, I think that the Federal Government should be free to decide for itself whether it wants to receive and act upon anonymous petitions as well as--

Unidentified Justice: So your answer is yes, it would.

Bruce James Ennis Jr: --Yes, it would, but I don't think the Court needs to--

Unidentified Justice: Do you think the rule for which you contend would have any tendency to increase the amount of false communication?

Bruce James Ennis Jr: --No more, Your Honor, than the rule this Court adopted in Barr v. Matteo for governmental officials.

Unidentified Justice: That's not my question.

My question is, do you think the rule for which you contend would have any tendency to increase the amount of false communication?

Bruce James Ennis Jr: No, I do not think it would, Your Honor, because the petitioner would still be subject to penalties for providing false information to the government.

On the contrary, though, I think that a rule granting petitioner's immunity from common law libel actions would tend to encourage citizens to provide truthful and useful information to the government because they would no longer have to fear spending $20, $4O, $60, $80,000 in unrecoverable defense costs if their communication was simply alleged to be knowingly false.

Let me respond to one point that has not yet come up, but is... since the Respondent really says virtually nothing at all about our historical argument that was known to the framers and nothing at all about our functional analysis argument, Respondent talks only about the petitions being secret and misdirected.

The argument about misdirected is that petitioner's first letter was misdirected because he sent it to Congressman-Elect Johnston and to President-Elect Reagan before they had been sworn in.

But as the record makes clear, in November of '80 the Respondent had applied for the position to Congressman-Elect Johnson and to Senator Helms requesting their assistance in obtaining the appointment.

If it was appropriate for the Respondent to seek the assistance of Congressman-Elect Johnston in obtaining the appointment, it was no less appropriate for the petitioner to write to the same Congressman-Elect Johnson to oppose the appointment.

It was widely reported in the press that there was a transition team in place, chaired by Ed Meese, that was then actively considering nominations.

In fact, the Respondent alleges that he was an active candidate, and that the President would be making appointments as soon after he was sworn in as possible.

There is no more appropriate occasion for a citizen to communicate with the Federal Government concerning a candidate for Federal office than when the decisionmaking process is actively underway.

Let me conclude... and then I'd like to reserve a few minutes for rebuttal... by simply reminding the Court, as I'm sure it's aware, that the deterrent effect we are talking about here is an extraordinarily severe deterrent effect.

In fact, the Respondent concedes at page 18 of his brief that the potential cost of defending a libel action is great, to use the Respondent's words.

And the relative cost for an ordinary citizen who does not have libel defense insurance is even greater than the cost for a media defendant, such as the New York Times.

Let me pose a hypothetical.

If North Carolina tomorrow enacted a statute imposing a $20,000 tax on all petitions to the Federal Government, can anyone doubt that that would silence all petitions to the Federal Government by everyone but the most wealthy or foolhardy citizen?

But the $20,000 tax, though it's not paid to the State of North Carolina, is the same in this case under the common law rule.

The petitioner must pay that $20,000 to his defense lawyers and to court reporters, not to the State of North Carolina directly, but the cost to him is the same and the deterrent effect on him is the same.

If this Court does not grant absolute immunity, I think it is clear that the message that will go out to the citizens of this country is that they are no longer free to criticize candidates or to criticize wrongdoing by public officials, and that if they do so, they do so at enormous economic cost to themselves.

Unidentified Justice: Of course, the message would always say you certainly are protected, even if you give some false information if you didn't know it was false.

But the message might say if you deliberately sent in false information, you'd better watch your Ps and Qs.

There would always be qualified immunity, wouldn't there?

Bruce James Ennis Jr: It's going to cost my client the same amount of money to prove that his allegations were true, and it doesn't matter that they're simply alleged to be false; he has to incur the same costs.

I believe I have--

Unidentified Justice: Mr. Ennis, what do you think the message was to someone who read White v. Nicholls?

Bruce James Ennis Jr: --Your Honor, I think that White v. Nicholls was, as this Court recognized in Briscoe v. La Hue, an incorrect summary of the common law.

White v. Nicholls totally ignores the pre-revolutionary cases.

It ignores Harris v. Huntington which was cited here.

Unidentified Justice: Do you know of another American case before White v. Nicholls that adopted the Harris Huntington approach?

Can you cite one?

Bruce James Ennis Jr: Your Honor, I don't know because we really stopped our research at the time of the framers--

Unidentified Justice: Well, I haven't been able to find one, so I would be interested if you had one.

I didn't think there were any.

Bruce James Ennis Jr: --I don't know, and if there were, I don't think it would be relevant because we're inclined to see the case law that would have been familiar to the framers of the petition clause.

And cases decided contemporaneously with White v. Nicholls may have been familiar to this Court from White v. Nicholls, but could not possibly have been within the contemplation of the framers.

I meant to reserve a couple of minutes, but I guess my time has expired.

Thank you very much.

Chief Justice Warren E. Burger: Mr. Eagles.

ORAL ARGUMENT OF WILLIAM A. EAGLES, ESQ. ON BEHALF OF THE RESPONDENT

William A. Eagles: Mr. Chief Justice and may it please the Court, over 20 years ago this Court decided New York Times v. Sullivan.

In that case the Court set out the protection the Constitution makes available to citizens who criticize public officials.

The citizens in question in New York Times were not petitioning the government.

They were, however, petitioning the holders of the absolute sovereignty in this country; they were petitioning their fellow citizens.

New York Times, addressing the free speech and press clauses, recognized that actual malice must be shown to be the basis of any recovery from a libel action for criticizing a federal official or government official.

Now Mr. McDonald comes before this Court and seeks absolute immunity for letters alleged to have contained knowing, malicious defamatory falsehoods.

New York Times standard would not protect such intentional lies.

Yet, Mr. McDonald really offers only arguments that were addressed, weighed, balanced, and decided in New York Times.

Unidentified Justice: Has anyone ever succeeded in getting a recovery from The New York Times since Sullivan that you're aware of?

If you don't know, it's--

William A. Eagles: I don't know offhand, Your Honor.

We are here denying that malicious lies are afforded a protection under the petition clause; that the same malicious lies would be denied by the free speech and press clauses.

Yesterday, this Court affirmed the position that's inescapable under the unified analysis of the speech and petition clauses received by this Court already, stating that while the petition and speech clauses are separate they are related and generally subject to the same analysis.

Application of that same analysis is all that we ask, that malicious lies whispered in the ear of a government official receive no greater protection than malicious lies printed in The New York Times.

Counsel for the petitioner has indicated that he does not seek protection from every possible sanction that might result from information contained in the petition.

They do, however, seek protection, absolute immunity from the only sanction available to Mr. Smith.

Mr. Smith is not afforded his day in court that would result from a petition to the judicial branch.

The only opportunity that David Smith will ever have to prove the truth or falsity of allegations made against him is in a libel action.

He's properly alleged the falsity, he's prepared to proceed under the standard providing, we would say, ample and we believe the Court has already said ample protection of The New York Times standard.

The opportunity to respond that counsel for petitioner discussed existed to some extent under the facts of the case before the Court.

It did not, however, exist in a forum that resolution of the conflicting positions and facts presented would ever be reached.

Presumably, had Mr. Smith in fact been appointed, that resolution would have occurred in the minds of the public.

But in the absence of his appointment, for whatever reason, the malicious lies are left and he... and Mr. Smith has no opportunity to address them.

The petitioner's argument, it seems to us, asks this Court to address the question of the petition clause as if there had been no development of constitutional libel law since the drafting of the first amendment.

He appears to present a blank slate, or a blank slate for the last 200 years, to the Court.

But we would submit that this case not only deals with the petition clause, but also the balancing between the effect of immunities granted under the petition clause and the protections granted under the speech clause, because it is as citizens see those protections that they will decide where discussion of matters of public interest will take place.

The First Amendment fundamentally supports the proposition of public, vigorous, wide-open debate of issues important to the public.

This Court has said that many times, and as recently as Monday of this week.

It is our position that providing one who would use malicious lies for political gain with an absolute immunity would not only encourage the false information flowing to the Federal Government, but would encourage the discussion of it to be moved out of any guarantee of rebuttal by those not only who were defamed by it, but by those who disagree with it.

The discussion of the matters of public interest would be moved into the secrets of private letters and whispered petitions to government officials, carefully chosen so that they are the person most... best in a position to do the most harm to the man who's being defamed.

That approach to the questions presented by the petitioner's argument, we believe necessarily draws one back to the protections provided by New York Times and the fundamental precepts of the Constitution supporting and encouraging open... wide-open, robust debate of public issues.

We would submit, further, that while the petitioner discusses in his brief at some length the chilling effect of a potential large libel verdict, that since New York Times there has not been a single libel verdict for more than a half million dollars or as much as a half million dollars affirmed by an appellate court.

Unidentified Justice: --But don't you think a half million dollars would be quite chilling?

[Laughter]

In North Carolina?

William A. Eagles: In Alamass County, North Carolina it would indeed, sir.

I point that out, Your Honor... he talks about the unreasonable inflation of libel verdicts, and that inflation... before New York Time, John Henry Faulk was awarded over half a million dollars, and there hasn't been an award that large since.

So the inflation aspect of it simply doesn't appear from the record of those verdicts which have been affirmed by appellate courts.

He discusses the cost of litigation.

The cost of litigation is great.

And it in fact is something that I guess we all should consider every time we get in an automobile or have an invitee come on our premises.

If we live in the world, we risk the cost of litigation.

And if we tell malicious lies defaming people, we ought to risk that cost and we ought to risk the threat of large libel verdicts, and we ought to be chilled from malicious lies disrupting the decisionmaking process of the Federal Government.

And in New York Times, the chilling prospect was considered, it was weighed, and it was determined that under the speech clause and the press clause, that question was adequately addressed by the malicious falsehood standard: knowingly false, reckless disregard of the truth or falsity thereof.

People should be chilled when they're about to tell lies about people that will, on their face, do those people harm and they are intended to do harm by the focus to the recipient that the speaker chooses.

Unidentified Justice: Do you agree that there should be immunity for a good faith statement not made maliciously?

William A. Eagles: That's the common law position in North Carolina.

It's the position in Ponder v. Cobb which was cited in New York Times, and which the North Carolina general libel law was one of the places looked to by this Court.

Unidentified Justice: And the standard which this action would go to trial would be the equivalent of the standard required under New York Times v. Sullivan as you understand it?

William A. Eagles: As I understand it, Your Honor, that's correct.

The potential for a public figure question rests in the trial court, I suppose, because we have, for the purposes of the motion from which this appeal was taken, that question was yielded.

It has not been yielded for the litigation generally, but except for that question that's exactly the standard.

It's a standard that would be required under... by New York Times, and it's a standard that existed in North Carolina for just this type of... in Ponder v. Cobb, there was a letter to a state official complaining of local election officials.

So it's the same petitioning aspect.

Unidentified Justice: Well, do you tend to agree that anything short of that standard certainly would provide a significant chilling effect on people who otherwise might furnish information to public officials?

William A. Eagles: Well, I believe so, Your Honor.

If people who acted in good faith and on reasonable grounds, the older cases discuss bona fide and probable cause, use that kind of language, then a common law privilege did exist and should, and chilling would take place in the absence of it.

Another point in terms of the cost of litigation that is made by the petitioner in his brief is the comparison between the availability of counsel and the cost of counsel between libel plaintiffs and defendants, pointing out that a contingent fee arrangement is often available to libel plaintiffs.

I would disagree.

I would think it is seldom available to libel plaintiffs.

I would point out to the Court that the use of contingent fee arrangements is one of the strongest deterrents to litigation with no substantial basis because in that situation, a lawyer who is making a decision on the merits of potential cases as presented to him or to her and deciding... before the case is ever filed, there is a tremendous weeding out process that takes place.

And that is a protection against frivolous litigation that is substantial and grows out of the same sorts of concerns about costs of litigation that the counsel for petitioner raises.

Unidentified Justice: Do you think it's desirable that appointed officials for public positions be made aware of even reasonable rumors that are floating around about people that they might be considering for appointment?

Is that desirable?

William A. Eagles: I think it's desirable for government officials who are acting on the basis of some information to the benefit or detriment of a particular individual, to make that individual aware of it and have an opportunity to respond to it in other areas.

Unidentified Justice: Well, that's not the question I asked... what do they do with it.

William A. Eagles: I'm sorry.

Unidentified Justice: I'm asking initially if you think that as a matter of public policy, it's desirable that as much information as possible be funneled into appointing authorities, even if it consists only of rumors.

William A. Eagles: Yes, Your Honor, I think it is in fact a valuable... can potentially be a valuable service for someone to make government officials aware of information of which they cannot themselves be certain.

Mr. McDonald, however, did not couch his defamation in those sorts of terms.

Rather, he presented them as true and he, as the briefs point out and it's clear from the letters, cites page and verse, name, address, telephone numbers of people that the federal official was told could substantiate these things.

And those people are the very witnesses that we intend to call at trial, are the people through whom we intend to prove the falsity and the maliciousness.

But the fact of presenting those names and addresses wins this air that's repeated by citation to those in petitioner's brief of credibility that is very difficult to overcome in a process like this one, where any number of candidates for an office exist, any number of whom have good appropriate qualifications, and as to one of whom this mess is presented, this series of allegations, this possible problem.

And the effect of that is potentially devastating to a candidate who would be considered equally among others, and could do away with any possibility or any perceived need for checking the reliability and the truth or falsity by the federal official who had available to him other qualified reasonable candidates to choose among.

The potential of the FBI doing an investigation that counsel for petitioner discussed clearly existed, except that there is no way to know if the FBI chose to or not, and even if it had, the allegations of that process would not necessarily result in Mr. Smith having an opportunity to present his side of the story.

In fact, that argument, it seems to me, raises the government's investigatory process to a... it puts it on a higher plane than the truth-seeking processes of the courts in which Mr. Smith seeks to have this question determined, to have the fact of the falsity of the information and the malicious nature of its presentation proven.

Unidentified Justice: Mr. Eagles, Mr. Smith was not appointed, was he?

William A. Eagles: That's correct, Your Honor.

He was not appointed.

Unidentified Justice: What is he doing now?

William A. Eagles: He's in private practice of law in Burlington, North Carolina in the community where some copies of these letters were found among the general population and in the community where word of the existence of them reached him from rumor in the streets before opportunity had been... before he had ever seen a copy of it and the other ways he heard about it.

Unidentified Justice: Is that in the record?

William A. Eagles: Well--

Unidentified Justice: Well, is it?

Is it or not?

William A. Eagles: --The only part of that that's in the record, Your Honor, is in depositions that I guess have not yet been filed.

The depositions have been taken and--

Unidentified Justice: What... does the complaint allege any specific damage?

William A. Eagles: --The complaint alleges that he was damaged in his professional reputation in the community, as well as his reputation--

Unidentified Justice: So that alleges that there has been damage in the community.

William A. Eagles: --That's correct.

Unidentified Justice: Which I take it alleges that the people in the community know about it.

William A. Eagles: Oh, yes.

Oh, yes.

They knew about it before any action was brought on Mr. Smith's behalf.

And that raises another question.

And one of the... the Webb case to which counsel for petitioner made some comment... in that case, the court of West Virginia determined that the petition clause provided an absolute immunity and made that available to the defendant, even though he published a newsletter with the same information and spread it generally in the community.

And that is... that would enable someone under that decision to avoid any possible defamation action or discussion of public issues and criticism of public figures, public officials, by simply including whatever he put in the paper or to the public generally, including it also in a petition to the government.

And that would be, we believe, a remarkable way around the longstanding libel laws of all the states and the decision of New York Times and this Court's view of what New York Times stands for.

We believe that an individual's right to protection of his own good name reflects no more than the basic concept of the essential dignity and worth of every human being, and that that concept is at the root of any decent system of ordered liberty.

This Court has so said in Gertz, and we believe that if the interest, if that interest is important, it is no less important because it was left to the protection of the state and that it's necessary to make those people who choose to lie maliciously about people and defame them, to be held to answer for their words.

And if there are no further questions from the Court, we would urge on that basis for the Court to affirm.

Thank you very much.

Chief Justice Warren E. Burger: You have three minutes remaining, Mr. Ennis.

ORAL ARGUMENT OF BRUCE JAMES ENNIS, JR. ESQ. ON BEHALF OF THE PETITIONER -- REBUTTAL

Bruce James Ennis Jr: Thank you, Mr. Chief Justice.

The respondent raised the point about public debate.

First, there is no allegation in the complaint that my client, the petitioner, distributed copies of this letter to any member of the public, only to federal officials.

There was a very good reason why he did not distribute his letter to the public and give an opportunity for public debate.

He was seeking to exercise his right to petition the Federal Government concerning a decision that was about to be made by the Federal Government, and there was no arguable basis to believe that the public would be able to redress that particular grievance.

Second, by limiting his petition to officials of the Federal Government, he obviously limited any damage to the reputational interest that the candidate might have in his local home community.

And while I'm on that point, let me simply state that this Court's decisions in Gertz and Monitor and Hutchinson make clear that although reputation is an important interest, the reputational interest of a candidate for office is greatly diminished because candidates invite scrutiny of their qualifications and reputation.

Second, Justice O'Connor asked whether or not a rule of good faith or qualified immunity would be important and might not be sufficient.

Let me simply refer to the position taken by the United States in Webg v. Fury which is quoted at page 40 of our brief, in which the United States said:

"To allow a plaintiff to simply plead bad faith would create a chilling effect on the exercise of the right to petition. "

The United States continued that the right to petition would

"lose any real meaning because private citizens will be deterred by the threat of litigation from exercising that right which would deprive the Federal Government of the information it needs to govern. "

Let me conclude by simply stating once again that we are not seeking absolute immunity from every possible sanction for every communication that could conceivably be deemed a petition.

We only seek immunity from common law libel actions and only in the three circumstances of this case.

First, the petition was from a citizen to appropriate officials of the Federal Government; second, the petition was relevant to the qualifications of a candidate actively seeking appointment to federal office; and third, the petition was made on an appropriate occasion while the federal decision concerning appointment was still pending.

Thank you very much.

Chief Justice Warren E. Burger: Thank you, gentlemen.

The case is submitted.

Featured:

Dun & Bradstreet, Inc. v. Greenmoss Builders - Oral Reargument

Fri, 31 Aug 2012 18:30:28 +0000

Case:

Dun & Bradstreet, Inc. v. Greenmoss Builders

Media File:

83-18_19841003-reargument

Related Transcript:

83-18_19841003-reargument

Transcript:

ORAL ARGUMENT OF GORDON LEE GARRETT, JR., ESQ., ON BEHALF OF THE PETITIONER

Chief Justice Warren E. Burger: We will hear arguments first this morning in Dun and Bradstreet against Greenmoss Builders.

Mr. Garrett, you may proceed whenever you are ready.

Gordon Lee Garrett Jr: Mr. Chief Justice, and may it please the Court, this is a case about damages for defamation.

The question presented is one that ten years ago this Court in Gertz versus Robert Welch, Inc., sought to answer.

What is the proper accommodation between the law of defamation and the freedoms of speech and press protected by the First Amendment?

The Gertz decision recognized two very important things.

It recognized that the states have a substantial interest in protecting the reputations of its citizens.

Also, it recognized that absent actual malice, the states have no interest in awarding either presumed or punitive damages and that the First Amendment precludes such awards.

In its holding, it accommodated these two competing interests.

It held that a private defamation plaintiff who establishes liability under a less demanding standard, that the New York Times test of actual malice may only recover damages which compensate him for actual injury.

It is these constitutional rules prohibiting awards of proved, presumed, and punitive damages absent calculated falsehood that Petitioner Dun and Bradstreet asks this Court to apply.

We believe that Gertz properly considered the tension between First Amendment freedoms on the one hand and reputational interest on the other.

Neither Greenmoss Builders nor the Vermont Supreme Court advanced any reason why the states have a greater interest in awarding presumed and punitive damages against a non-media defendant who speaks about business matters or matters about the arts than a media speaker.

Unidentified Justice: I wonder if you would tell me your definition of the difference between media and non-media.

I can understand it clearly if a private individual writes a letter and makes the statement.

That person as an individual is probably non-media.

But what is your definition of non-media generally?

Gordon Lee Garrett Jr: Your Honor, I think that is the rub in this case when it comes to deciding constitutional limitations on presumed and punitive damages.

Obviously, the media could be defined as one who uses a medium to communicate information, and Dun and Bradstreet, much like a newspaper, does that.

We hire reporters to obtain information which our subscribers will want.

Unidentified Justice: Now, we have in Washington I don't know how many, but I suppose it must be a great number of letters, like The Kipplinger Letter, that goes out every week or periodically, sometimes on a broad range of subjects, sometimes on a limited subject like labor law.

Is that media or non-media?

Gordon Lee Garrett Jr: It seems to me, Your Honor, while The Kipplinger Letter, like Dun and Bradstreet, may not be considered the traditional media, it is certainly media in that it is an organization that communicates information to its readers which have a reason to know that.

Unidentified Justice: Is that issue before us, counsel?

You didn't bring that issue up here.

Gordon Lee Garrett Jr: The media/non-media issue?

That is the very basis that the Vermont Supreme Court ruled against Dun and Bradstreet in this case.

Unidentified Justice: I know, but they held that you were non-media.

Gordon Lee Garrett Jr: They held... they said--

Unidentified Justice: Did you challenge that in your petition for certiorari?

Gordon Lee Garrett Jr: --Oh, absolutely, Your Honor.

Well, we did not... we have never taken the position, Your Honor, that we were the traditional media.

Unidentified Justice: Are you taking the position that you are media?

Gordon Lee Garrett Jr: We certainly take the position that we are media for the application of the Gertz rules on presumed and punitive damages.

Unidentified Justice: Well, of course, your first question presented in certiorari is, do the First and Fourteenth Amendments to the Constitution permit private plaintiffs to recover presumed compensatory damages or generally for libel against a non-media defendant?

Gordon Lee Garrett Jr: That is correct, Your Honor.

As I said, we have never taken the position that Dun and Bradstreet was part of the traditional media like the New York Times or [= CBS], but we certainly are media in the sense that we communicate information to our subscribers.

Unidentified Justice: Yes, but the way you present the case to us is that... let's assume that this is a non-media defendant, and then does Gertz apply to non-media defendants.

That is the question you put to us.

Gordon Lee Garrett Jr: That is correct--

Unidentified Justice: So we have to get into whether Dun and Bradstreet is or isn't a media defendant?

Gordon Lee Garrett Jr: --Your Honor, I think it is--

Unidentified Justice: You say we don't, really, in this question.

Gordon Lee Garrett Jr: --Well, I think it is quite correct that the constitutional prohibitions against presumed and punitive damages don't depend on the nature of the speaker or the subject matter of his speech.

Unidentified Justice: Right.

I thought you thought in order to win your case you would have to convince us that Gertz applies to non-media defendants generally, and I think that is your whole argument, too, in your brief.

Gordon Lee Garrett Jr: I think certainly that that would win the case for us, Your Honor.

Unidentified Justice: How do we reach that question if we don't know what a non-media defendant is?

Gordon Lee Garrett Jr: Well, I think that is the very problem in the case, Your Honor, that it would force the Court to go back to basically the Rosenbloom ad hoc test to make determinations on who is and who is not the media, and I think the most important thing is that the rationale for the Gertz opinion simply does not depend on those kinds of distinctions.

The states have no interest in awarding presumed and punitive damages absent actual malice.

Unidentified Justice: Against anyone.

Gordon Lee Garrett Jr: Against anyone.

Unidentified Justice: That is your argument, I think.

Gordon Lee Garrett Jr: That is our argument, but I would suggest to the Court that if the Court is concerned that a media/non-media distinction should be made in certain contexts, this is not the one to make it in.

There may be areas where that would be appropriate, but not in connection with the awards of presumed and punitive damages.

Unidentified Justice: But I thought your position was and is that it makes no difference who the defendant may be.

If you sued me for libel, for example, the rule would be the same in your view.

Gordon Lee Garrett Jr: That is correct.

We do not believe that an individual could be awarded presumed damages, because that simply is not proper for the states.

Unidentified Justice: Yes, right, and while we are getting at definitions, how do you define the difference between presumed and punitive damages?

Gordon Lee Garrett Jr: Your Honor, in traditional libel law, presumed damages really took the place of compensatory or actual damages.

Punitive damages on the other hand were more of a punitive punishment measure.

The problem in the cases, however, Your Honor, is that they are both used selectively to punish unpopular speakers.

I think it is very difficult to make a distinction when it comes to the effect of presumed and punitive damages on First Amendment activities.

Unidentified Justice: If you went back to the common law perception of presumed damages as being a substitute for actual damages, would that make a difference in your submission?

Gordon Lee Garrett Jr: No, Your Honor, because the only rule we are asking for is that the jury not be told that damages are presumed.

We are fully prepared to live with the Gertz rule that says a defamation plaintiff may recover all injuries... excuse me, all damages for his actual injury.

Unidentified Justice: Will you sort of itemize what they may be?

Gordon Lee Garrett Jr: Well, for example--

Unidentified Justice: Under the Gertz formula.

Gordon Lee Garrett Jr: --Under the Gertz formula, for individual, it may be humiliation, it may be embarrassment, it may be damage to reputation.

There are a number of intangible things.

For other plaintiffs, such as a corporation, it could be lost profits, it could be an inability to borrow money which affected the business, it could be the business's reputation.

Unidentified Justice: You agree with Gertz that you don't have to prove actual pecuniary loss?

Gordon Lee Garrett Jr: I agree with Gertz that for the private individual, he not prove actual pecuniary loss, and I think the Gertz rule says that you don't have to give a damage figure.

Unidentified Justice: But even with respect to a corporation, it could be a loss of reputation, as in this case.

I say, there could be a loss of a corporation's reputation.

In this case, for example, the problem was a report of bankruptcy, which doesn't do a corporation very much good.

Gordon Lee Garrett Jr: That's correct, Your Honor.

The distinction in this case, rather than proving a quantum of damages, is proving a causal connection between the fact that the report was issued and the individuals to whom it was issued to took any action adverse to Greemoss.

Unidentified Justice: Would you agree that any damages can be proved in this case?

Gordon Lee Garrett Jr: Based on the evidence in the lower court, or could be?

Unidentified Justice: Could be.

Gordon Lee Garrett Jr: Oh, yes, I think damages could be proved, but what the jury could not be told was damages are presumed.

I think that is the single rule that we ask this Court to apply, as well as the prohibition against punitive damages.

Unidentified Justice: Do punitive damages serve the same purpose as presumed damages?

I assume not.

I would like to know what you think.

Your Honor, traditionally punitive damages have been used to deter conduct.

That is the rationale behind them.

I guess technically speaking there is a difference between presumed and punitive damages as far as their effect.

However, I think in the area of libel law, they both have the same effect.

When a jury is told that you may presume damage, we believe that that... by the very nature of that charge you chill First Amendment activity.

A punitive damage award is a private fine.

Do you agree with that?

Gordon Lee Garrett Jr: That's correct, Your Honor.

It's a private fine unfortunately based on various state standards which do not give juries much guidance.

And we think in the area of libel law, the actual malice test focuses on the conduct of the defendant at the time he made the publication, and that is the correct test.

Unidentified Justice: Would your view, and this is the last question I will ask you for a while, I think, would your view of punitive damages apply to a garden variety tort case other than the tort of libel where compensatory damages can be proved?

Gordon Lee Garrett Jr: Well, Your Honor, I think--

Unidentified Justice: That is not the question before you, but I am interested in your perception of the purpose and range of punitive damages.

Gordon Lee Garrett Jr: --Well, Your Honor, I think as the Court indicated in Smith versus Wade, punitive damages are a very troublesome area in the law.

You know, I am reminded of what Justice Rehnquist wrote in that decision from Oliver Wendell Holmes.

You know, a dog can tell the difference between accidentally kicked and being stomped every day.

Well, if you stomp somebody every day, you are going to chill their activity, and the real problem is that punitive damages often chill beneficial conduct, that they are too far ranging, and it is a very difficult problem in the law, separate and apart from the libel area, Your Honor.

Unidentified Justice: You are having private parties impose punitive fines.

Gordon Lee Garrett Jr: That's correct.

Unidentified Justice: Without due process of law?

Gordon Lee Garrett Jr: It is a close question, depending on the standards.

I do not believe that is the case in the First Amendment test of actual malice, but when punitive damages, for example, can be given, as they were in this case, Your Honor, for something called reckless disregard of the interests of the plaintiff, that is a fairly broad ranging--

Unidentified Justice: Isn't that language from New York Times against Sullivan?

Gordon Lee Garrett Jr: --I am sorry, Your Honor?

Unidentified Justice: Isn't the reckless disregard from Sullivan?

Gordon Lee Garrett Jr: No, Your Honor.

The lower court was reckless disregard for the interests of the plaintiff.

Unidentified Justice: That language.

That language is--

Gordon Lee Garrett Jr: Oh, certainly, reckless disregard, but it is for a different interest, reckless disregard for the truth in New York Times versus something called reckless disregard for the interests of the plaintiff.

We believe, Your Honor, that the facts of this case highlight the very concern that the Court recognized in Gertz, presumed and punitive damages awarded by juries to punish an unpopular speaker.

Here we sent a special notice to five people.

It was corrected shortly thereafter.

None of these individuals were a customer of Greenmoss.

As I said, we sent the retraction immediately.

Plaintiff called not one recipient of the notice to the stand to testify.

There was no causal connection between our report and the alleged lost profits of the company.

What occurred was a jury instruction that allowed the jury to award unlimited amounts of presumed and punitive damages.

The jury was instructed that this was a case of libel per se, and that damage and loss were conclusively presumed.

The court instructed the jury that it could award presumed or exemplary damages based on something called actual malice, which was never defined for the jury.

The lower court found that its jury charge was misleading, and granted Dun and Bradstreet a new trial.

The Supreme Court of Vermont reversed, finding that Dun and Bradstreet was a non-media defendant, and that non-media defendants, a state could award presumed and punitive damages.

What the Vermont Supreme Court did was focus on the status of D&E on what it termed as a non-media defendant and the content of its message.

The Vermont Supreme Court fails to identify any state interest which justifies awards of presumed and punitive damages against Dun and Bradstreet any more than against a small newspaper or a local radio station.

The issue in this case, simply put, is this.

If the Burlington Vermont publishes Greenmoss is bankrupt, they are entitled to a constitutional instruction that precludes the awards of presumed and punitive damages, yet if Dun and Bradstreet publishes that same information to its subscribers because they want to know, they are not entitled to that constitutional protection.

Unidentified Justice: --Are you entitled to an instruction that no damages can be awarded even if they are proved unless... without proof of fault?

Gordon Lee Garrett Jr: Yes, we believe that we are entitled to the full standard, and even Sunward, that filed an amicus brief in this case said we are entitled at least to the fault standard.

In this case we do not contest fault.

Unidentified Justice: I suppose if you say that the Gertz rules don't apply against non-media defendants, the fault requirement would disappear too, I suppose.

Gordon Lee Garrett Jr: That's correct.

In other words, if that were the case, Your Honor, a plaintiff could merely prove falsity of the report and go to the jury on damages.

Unidentified Justice: Go back to the old rule.

Gordon Lee Garrett Jr: That's absolutely correct, Your Honor.

Unidentified Justice: Mr. Garrett, you suggest there can't be a difference between your client and a newspaper of general circulation.

Supposing there were a statute that said credit reporting agencies that report of a bankruptcy must in addition state the source of their information.

Would that be constitution?

I don't suppose you could compel a newspaper to do that, but could you compel a credit reporting agency to do that?

Gordon Lee Garrett Jr: Your Honor, I think the Miami Herald case answered it for the newspapers.

Unidentified Justice: Right.

Gordon Lee Garrett Jr: I see differences, Your Honor, in connection with requiring credit reporting agencies, for example, the Fair Credit Reporting Act, from requiring disclosures and from requiring identity of information.

To me that is much different than a warning of presumed or punitive damages, and I think there is arguably a state and federal interest in the former, but not the latter.

Unidentified Justice: I agree.

It is, however, quite clearly it would be a regulation of content, and you would nevertheless say it would be permissible.

Gordon Lee Garrett Jr: I think regulation of content in certain instances like that could be permissible.

I do think there is a distinction, Your Honor, in regulating awards of presumed and punitive damages based on the subject matter of the speech.

In fact--

Unidentified Justice: Supposing I went one step further and my statute said that if you fail to do this, you should be subject to a $100 fine, purely punitive.

Gordon Lee Garrett Jr: --I think the difference in that, Your Honor, is, you are not regulating the speech so much as you are the violation of a federal or state statute, and to me that is different, because in my case you are punishing speech.

And I think to go further with your question, Justice Stevens, the actual malice test of New York Times and said further in Time, Inc., versus Firestone was designed to avoid looking at the subject matter.

You focused on misconduct.

And I believe in Time, Inc., versus Firestone the Court acknowledged that too often when we look at subject matter we skew the balance of the state interest on the one hand and the First Amendment on the other, and that is what the Vermont Supreme Court did in this case.

It skewed the balance between free speech and state interest in reputation.

It allowed the jury to compensate Greenmoss beyond actual injury.

It allowed the jury to punish Dun and Bradstreet, not because of any showing of calculated falsehood, but simply because that special notice turned out to be false.

The First Amendment rests on the assumption of the widest possible dissemination of information from diverse sources.

There is no reason to permit defamed private plaintiffs in a business context or defamed private plaintiffs by a non-media defendant for windfall damages, because the effect is still the same.

It is punishment.

The prospect of discretionary awards has a chilling effect on what is published and when, whether media or non-media.

Unidentified Justice: Are you saying that presumed damages are a punishment?

That certainly wasn't the basis on which the libel law developed.

It was the idea that the kinds of injuries you suffer in libel to reputation are not easily quantified in dollar amounts, isn't it?

Gordon Lee Garrett Jr: That is certainly historical, but Your Honor, in looking at the jury verdicts, the Sunward case that filed an amicus brief, $3.5 million, when a jury is allowed to give damages without any regard to actual injury, that can be punishment, because it can be used to punish an unpopular speaker.

Unidentified Justice: Well, you say without any regard to actual injury.

Gordon Lee Garrett Jr: That's correct.

Unidentified Justice: Are you saying then that damage or ruining a reputation is not actual injury?

Gordon Lee Garrett Jr: Your Honor, that certainly could be actual injury, but in the business context that we are in, it is no different from proving damages for a corporation, for breach of contract or any other thing.

You have to come into court with competent evidence.

Unidentified Justice: But Gertz says you don't have to itemize dollar amounts, like pain and suffering, medicals, and that sort of thing.

So, I mean, if you are going to have damages to reputation, it is going to be a lump sum type of thing that you can't relate to dollar testimony, isn't it?

Gordon Lee Garrett Jr: That's correct, Your Honor, but you still have to prove a causal connection between the publication of defamatory words and the damage.

Unidentified Justice: Surely, but--

Gordon Lee Garrett Jr: And that is what was lacking in this case.

Unidentified Justice: --Well, it may be lacking in this case, but your suggestion that any award of $3.5 million for damages to reputation must be punishment because it couldn't possibly have amounted to that much I would think would depend very much on the facts and circumstances of each case.

Gordon Lee Garrett Jr: Your Honor, I would agree with you if no presumed damage charge is given, but when the jury is told damages are presumed, and then this Court or any court reviewing that has no idea what the jury based it on, and that is the problem with the presumed damage charge.

Unidentified Justice: You mean you think there ought to be proof of some damage?

Gordon Lee Garrett Jr: There ought to be proof of actual injury.

Unidentified Justice: Well, all right.

Let's assume you get one witness come in and say, I think less of Dun and Bradstreet than I did before.

As a matter of fact, I have cancelled my subscription, which ought to injure them.

That is the defendant.

I know, but nevertheless--

0 [Generallaughter.]

--there is proof, there is proof of an injury, and now is that enough for you, or would you have to quantify it?

Gordon Lee Garrett Jr: I think that a plaintiff could come into court with a witness and say, my injury, or my reputation has been injured.

No dollar figure has to be assigned to that, but once an injury is proved, it doesn't mean that you can presume any amount of damages based on that.

You may get damages which naturally flow from the damage to reputation.

Unidentified Justice: Then you really think that you have to do the impossible, prove the amount of the damage?

Gordon Lee Garrett Jr: No, sir.

I did not suggest that, Your Honor.

I merely suggested that the fact that you have one witness that says the plaintiff's reputation has been damaged--

Unidentified Justice: Well, he has proved injury.

He proves an injury.

Gordon Lee Garrett Jr: --That's correct, and he may get all the damages for that actual injury.

Unidentified Justice: Let me put this to you.

Suppose the witness that Justice White has postulated was one of the directors of the bank where Greenmoss did business, and under examination he said that this was discussed for a half hour at a meeting of the bank's board of directors, and that the conclusion was from the president, summing it up, from now on keep a very close eye on Greenmoss Builders, because there is something wrong here.

Now, is that a damage or is it not?

Gordon Lee Garrett Jr: Your Honor, it is very difficult for me to say that that is a damage to a corporation.

Unidentified Justice: That is why perhaps the law has said that certain damages can be presumed.

Gordon Lee Garrett Jr: Your Honor, I don't believe that's what the law said in Gertz.

Certainly before that it did.

Unidentified Justice: I am talking about the law of Delaware.

The common law of the states has been that--

Gordon Lee Garrett Jr: The common law of the states certainly has been a presumption that--

Unidentified Justice: --because this injury is so difficult to measure, there is a presumption that is permitted by the jury.

Gordon Lee Garrett Jr: --That certainly was the common law prior to Gertz, Your Honor.

That's correct.

Unidentified Justice: Well, suppose the president--

--If somebody comes in and says that you... I am a corporation doing business, and you have circulated a statement that I am bankrupt, isn't that damage per se, without more?

Gordon Lee Garrett Jr: No, Your Honor, I don't believe it is.

Unidentified Justice: Well, let me put it this way.

It won't help them.

0 [Generallaughter.]

Gordon Lee Garrett Jr: It may not help them, but it may not hurt them either, Your Honor.

Unidentified Justice: You mean... would you do business with a bankrupt corporation?

Gordon Lee Garrett Jr: If I got a notice that someone was bankrupt, and I knew it was wrong, and it didn't affect my relationship, I don't believe that makes any difference, Your Honor.

Unidentified Justice: Would you buy any stock in that corporation?

Gordon Lee Garrett Jr: If I knew it was incorrect, certainly, Your Honor.

Unidentified Justice: Oh, I didn't say... would you buy stock in a bankrupt corporation?

Gordon Lee Garrett Jr: No, Your Honor.

Unidentified Justice: Well, then, that's an injury, isn't it?

Gordon Lee Garrett Jr: If the fact of the publication resulted in that.

Unidentified Justice: What?

Gordon Lee Garrett Jr: If the fact of the publication resulted in that effect.

Unidentified Justice: Well, I ask you, would you buy stock in a corporation that Dun and Bradstreet said was bankrupt?

Gordon Lee Garrett Jr: No, sir, I would not.

Unidentified Justice: That is sort of an injury, isn't it?

Gordon Lee Garrett Jr: If in fact it was incorrectly reported, and that was a result, yes, that would be a quantifiable injury, Your Honor.

Unidentified Justice: And compensable.

Gordon Lee Garrett Jr: That is correct, if in fact that occurred.

Unidentified Justice: What is this case?

Gordon Lee Garrett Jr: This case is, there was no... the jury was allowed to presume damages, and there was no causal--

Unidentified Justice: Isn't this presuming what I just said?

Gordon Lee Garrett Jr: --No, Your Honor.

They were told damages are presumed, period, and there was no causal connection by evidence between the publication of the report and any action by the people that received it.

No showing that anyone did anything toward Greenmoss as a result of that--

Unidentified Justice: Well, what was the purpose of Dun and Bradstreet's publication?

Gordon Lee Garrett Jr: --To inform its subscribers about an event which it thought was correct.

Unidentified Justice: True.

Gordon Lee Garrett Jr: That is correct.

Unidentified Justice: And it was a lie.

Gordon Lee Garrett Jr: That is correct.

And Your Honor, it is no different than the lie in every libel case.

It is no different than the lie in Gertz versus Welch.

Unidentified Justice: Well, in most of the libel cases I have done, you can get punitive damages.

Gordon Lee Garrett Jr: If you meet a certain standard.

That's correct, Your Honor.

Unidentified Justice: That's right.

Is it the same, really?

Couldn't they pick up the telephone and call the clerk of the court where the bankruptcy was asserted to have been filed and said, is Greenmoss Builders... has Greenmoss Builders filed or has someone sought a bankruptcy on them?

It is very easy to find out the truth, the fact, isn't it?

Gordon Lee Garrett Jr: Your Honor, this is verifiable information, no matter whether it is published in Dun and Bradstreet or a local newspaper.

It is a matter of public record.

Unidentified Justice: Well, it is a lot easier than what a newspaper is frequently confronted with.

Gordon Lee Garrett Jr: I would not think so, Your Honor, when it comes to reporting matters of public record.

Both Dun and Bradstreet and the newspapers can make mistakes.

They are reading the same document.

If I might, I would like to reserve the remainder of my time for rebuttal.

Chief Justice Warren E. Burger: Mr. Heilmann.

ORAL ARGUMENT OF THOMAS F. HEILMANN, ESQ., ON BEHALF OF THE RESPONDENT

Thomas F. Heilmann: Thank you, Your Honor.

Mr. Chief Justice, and may it please the Court, before commencing my argument, I would like to correct what I think is not the evidence before this Court, and I'd like to start by focusing on this correction report.

The correction report, which was a very important part of this case, we say was worse than the actual report of the bankruptcy.

In other words, we were focusing on the conduct of this defendant after the publication.

The corrective report, we said, was more damaging in many respects because it left creditors with ambiguity.

The second point that I want to correct is that Mr. Garrett tells you that there was no showing that anyone did anything at the bank with respect to the Greenmoss Builders.

That is not what the evidence demonstrated.

First, the evidence demonstrated that the specific loan request, and the Vermont Supreme Court found this, the specific loan request was immediately suspended, and we are talking about August in Vermont, when you have to start building.

Secondly, in close temporal proximity to the report of the bankruptcy, a bank that had a perfectly good relationship with this construction company all of a sudden told that construction company not only will we deny that request for a loan, but we would like you to go somewhere else for all of your banking business.

I don't think that it is credible to say that no one showed any injury, no one showed any harm resulting from the bankruptcy.

Unidentified Justice: Mr. Heilmann, doesn't that merely establish the proposition that if you are required to prove actual injury, you will be able to do so?

Thomas F. Heilmann: No, Your Honor.

Unidentified Justice: How does that go to the question whether you need to prove actual injury?

Thomas F. Heilmann: Your Honor, I think it focuses on the conduct of Dun and Bradstreet after the publication, which I think is a separate issue.

Unidentified Justice: Which again, I suggest, just means you can win the case if you have to go back and try it according to their theory.

Thomas F. Heilmann: As far as Dun and Bradstreet's argument, their initial question before the Court, I think there are two different starting points.

To Dun and Bradstreet, the existence of full First Amendment protection for these credit reports is a given proposition, and I don't think that they identify or associate themselves with the recognized First Amendment interest in the area of defamation.

On the contrary, they start with the proposition that the common law of defamation doesn't have legitimacy.

If there is no full First Amendment interest that Dun and Bradstreet can point to in a defamation context, the Court cannot reshape the common law because it feels the common law is imperfect or unwise.

So, in order to vest--

Unidentified Justice: Well, Mr. Heilmann did you really answer Justice Stevens' question?

Could you prove actual damages here if you had to?

Thomas F. Heilmann: --In this case, I think we could prove actual damages.

I think that--

Unidentified Justice: Do you think that most libel plaintiffs can prove actual damages if they have to?

Thomas F. Heilmann: --I think that the presumption is necessary to assist private plaintiffs to bridge several causation gaps.

I think many private plaintiffs may be able to prove some form of actual injury.

I am thinking now about Mr. Gertz, who on retrial testified that he suffered emotional distress.

Unidentified Justice: But you would have real problems with quantifying the... even if you... you could prove an injury, but to prove the extent of it would be extremely difficult, I suppose, without the aid of a presumption.

Thomas F. Heilmann: Well, I think so, Your Honor.

I think that is where the common law has its most beneficial effects, because the intuition of the common law says that harm has occurred, and these presumptions assist the private plaintiff in demonstrating and getting to the jury the kind of harm.

Unidentified Justice: What is the presumption you contend is appropriate?

Does it tell us the amount of damages?

Is there any presumption that concerns the amount of damages?

Or does the presumption really go to the fact of damage?

Thomas F. Heilmann: I think the presumption goes to the fact of damage, and not so much to the amount of the damage, and I really think the presumption--

Unidentified Justice: So that if you are able to prove the fact of damage independently, then you don't need the presumption.

Doesn't it depend--

Thomas F. Heilmann: --Your Honor, we--

Unidentified Justice: --Doesn't it depend, counsel, on a jury's evaluation of in effect punishment, how vicious, how bad was the libel, or how mild and inconsequential was it, and if they think it was very vicious and very bad, they might give a large punitive damage, presumed damage, or if they thought it was casual and inconsequential, they would give one dollar, as sometimes happens.

Thomas F. Heilmann: --That may be so, Your Honor.

That is more in connection with the punitive damage than presumed damage.

Justice Stevens, I would like to finish--

Unidentified Justice: How do you distinguish punitive and presumed?

Thomas F. Heilmann: --Well, I think that in this case, for example, the presumed damages were equated with actual injury within the description utilized by the Court in Gertz.

Punitive damage has, if you will, the white knight aura, the private attorney general.

Unidentified Justice: What do you think this large verdict was, presumed or punitive or both?

Thomas F. Heilmann: Well, this verdict was separated, $50,000 was actual, $300,000 was punitive.

The large part was therefore punitive, the deterrence aspect.

If I may, I would like to get back to the question that you posed.

You talk about the presumption.

Gertz doesn't talk about the presumption.

What Gertz talks about is the presumption of substantial damages.

There are many common law presumptions, and I don't think Gertz focused on all common law presumptions in the defamation context.

The common law presumption that I am focusing on here is the presumption of causation, and I think that is particularly important when a business libel is concerned, because as Mr. Garrett pointed out, there is a federal statute dealing with the Consumer Credit Reporting Act, but there is no federal or state statute dealing with business credit reports.

Therefore, a bank, a creditor does not have to talk with you about the reasons why your credit was rejected.

The bank can simply say, and this was the testimony at the trial, the bank can simply say, we have no obligation to speak with you about it.

Therefore in business libel, it is very difficult to prove these kinds of issues.

But with respect to Gertz, I think that what Dun and Bradstreet is essentially focusing on in the Gertz case is, they are trying to avail themselves of the strategic protection aspect of Gertz.

Now, when I say strategic protection, I mean two things within the context of Gertz.

Number One, Gertz necessarily protects by way of the scope of the ruling all media speech irrespective of whether that speech raises a public issue and irrespective of whether the speech is of a general or public concern.

The second part of the strategic protection of Gertz is that it protects false speech so that true speech can have breathing space.

Therefore it is a broad prophylactic rule.

Here, the type of speech that is involved in this case falls within the strategic protection rule of Gertz.

And on the type of speech, I would, without trying to split hairs, I would like to go back to the facts here a bit and point out that we have talked about "Greenmoss is bankrupt" as being the statement that was made.

The specific statement that was made, without splitting hairs, is that "Greenmoss filed for bankruptcy".

That is, I submit, a purer statement of fact than the statement "Greenmoss is bankrupt".

So, the question before the Court is, what strategic protection is necessary to protect business credit reports?

And will there be ad hoc balancing if the distinction created by the Court here is retained?

I don't think there are valid fears of ad hoc balancing along partisan lines by saying that an admittedly non-media defendant should not receive full First Amendment protection.

Dun and Bradstreet said, well, we circulated information and therefore we are like the media.

In other words, they claim they are closer to the line between media and non-media than perhaps some other non-media defendants.

But in terms of the traditional First Amendment values in defamation cases, they aren't closer to the line.

They are among the farthest away from that line, especially when you look at the rationale behind Gertz and New York Times.

Fostering public debate, robust debate about public issues.

Self-censorship.

I really don't think that self-censorship is a valid and legitimate interest when a company like Dun and Bradstreet is concerned.

In short, D&E would simply have you return the Gertz decision to the constitutional garage, excise all reference in the majority and concurring opinions to the media and the press, and put forth a new, improved 1984 model Gertz with full First Amendment protection for every speaker and every form of speech, regardless of that speaker's need for protection and regardless of the significance or importance of the speech involved.

It is the strategic protection area of Gertz that Dun and Bradstreet's particular speech here falls into, and I think the Court should recognize that aspect of the argument.

When Dun and Bradstreet tells you that it is an unpopular speaker, what it says in its briefs is that it is an unpopular speaker because it is an out-of-state financial reporting company.

This is not the kind of unpopularity that the Court sought to protect in Gertz, even assuming that those features make Dun and Bradstreet unpopular, which I don't think they necessarily do, and the civil rules of procedures have avenues for avoiding that kind of unpopularity, to wit, removal.

The message that they--

Unidentified Justice: Could Dun and Bradstreet have removed this case?

Thomas F. Heilmann: --Yes, they could have, Your Honor.

It was a diversity case, and the ad damnum was sufficient to take the case to federal court.

The message that Dun and Bradstreet conveys is not of necessity unpopular.

Gertz talked about viewpoints and opinions being unpopular.

There is no viewpoint and no opinion here.

Unidentified Justice: Well, Mr. Garrett, what damages did you ask for in your complaint?

Thomas F. Heilmann: When we initially filed the complaint, as I have pointed out in my latest brief, we asked for... there were two plaintiffs.

Mr. Flannagan was also a plaintiff.

We asked for $7,500 compensator, $15,000 punitive.

After discovery was over, we submitted a request to the court to amend that ad damnum to seek $300,000 in damages, and as I have pointed out in the appendix--

Unidentified Justice: Did they grant that or not?

Thomas F. Heilmann: --The court didn't act on it, because under the Vermont procedure, the ad damnum is a totally irrelevant concept other than establishing the jurisdictional predicate.

Unidentified Justice: And the jury gave you $15,000 actual?

Thomas F. Heilmann: No, $50,000.

Unidentified Justice: $50,000.

Thomas F. Heilmann: Yes.

Unidentified Justice: And $300,000?

Thomas F. Heilmann: That's right.

I might point out that on that $300,000, many of the actions that we say were outrageous conduct occurred after the complaint was filed.

The main point that Dun and Bradstreet ignores is that credit reports are fact-oriented, which contain no opinion and no editorialization.

They are not opinions as to creditworthiness.

Their own witnesses admitted this at the trial, and the evidence in this case belies the suggestion that they are opinions as to creditworthiness.

And therefore Dun and Bradstreet--

Unidentified Justice: Give us an example of that.

What did they do or say?

Thomas F. Heilmann: --We asked their witnesses at trial whether this was an opinion as to creditworthiness, and they immediately said, no, we don't analyze creditworthiness.

We analyze these facts.

We have a rating system.

If they fall within the rating system, then we give them the specific categorization.

Unidentified Justice: Hasn't that got something to do with your view of their creditworthiness, what category you put them in?

Thomas F. Heilmann: I don't think it has to do with--

Unidentified Justice: Don't your customers think it does?

Thomas F. Heilmann: --Well, they said that the customers understand what those ratings mean, but it is not so much creditworthiness.

It is things like size of assets to the value of the debt of the corporation, things like that, basic, factually verifiable information.

But using the broad rules of general application as the majority did in Gertz, there is a very basic difference between media defendants and defendants like Dun and Bradstreet.

A media defendant as a basic proposition simply doesn't have the incentive to publish anything that might lead to a libel suit other than with some media defendants a sense of professionalism.

Therefore, when a media defendant is involved, libel is not just a cost of doing business like highway accidents and equipment failures are to a trucking company.

The media can avoid liability without discontinuing its business by ceasing to carry or publish the material that creates the risk.

Much to the contrary, Dun and Bradstreet has a tremendous pecuniary interest in publishing this material, this particular fact-based information.

So, for them it really is a cost of doing business: for the media, it's not.

In fact, on the strategic protection of Gertz aspect, the breathing space to commit error is very effectively rebutted, I think, by one of D&B's own amici.

The association to which this petitioner belongs says,

"The type of information companies like Dun and Bradstreet disseminate. "

and I am quoting,

"depends for its success on a constant striving for accuracy because the specific markets served are highly sensitive to error. "

This suggests Dun and Bradstreet doesn't need breathing space.

It also suggests that the kind of breathing space needed where free debate prevails just doesn't exist here.

Dun and Bradstreet doesn't say that it will stop publishing this information, and it doesn't say it will tone these reports down.

It simply says it will check them more carefully, and then publish them.

This is not, we think, self-censorship under the cases decided by the Court, and given the admitted need for accuracy, even if this is censorship, the needs for accuracy outweigh it.

In summary, I don't think that this is the type of speech that should get full First Amendment protection.

I would like to address Dun and Bradstreet's arguments that the state has no legitimate interest in presumed damages.

The only thing Gertz focused on, as I have alluded to, is the presumption of substantial money damages in a setting where [= Mr.] Gertz offered no evidence of any actual injury at all.

From that limited perspective, which was the only feature of the common law of defamation addressed by the Court in Gertz, Dun and Bradstreet claims the states have no interest at all in presumed damages.

In a business libel setting, that isn't so.

Here, the amount of damages proved were limited to profit and out-of-pocket loss, so we didn't have the broader type of injury permissible under the Gertz rule.

Secondly, the amount of damages that are proved under ordinary trial practice, introduction of evidence, cross examination, contrary witnesses, that is all available to a defendant in a defamation case, and it was available here.

Point Number Three, as I have talked about, the causal link between demonstrated injury and a defendant's acts may be one of the most important aspects of the common law of defamation, and I don't think Gertz addresses that.

Fourth, where business libel is concerned, it is very difficult to locate the person who actually made the decision to withhold business credit, especially where, as I have said, in business credit contexts, the creditor does not have to talk with you.

On punitive damages, D&B's conduct, not its publication, is what caused this punitive award, and the Vermont Supreme Court's decision recognized that.

As D&B's concession at the last oral argument demonstrates, punitive damages do deter.

They do work.

The punitive damages here were focused on the flaws in the information-gathering system that D&B has erected, and the gross and extreme insensitivity and total lack of cooperation by that system with the person it harmed.

For example, Dun and Bradstreet refused for no reason to give Greenmoss the names of the recipients of the reports so it could help itself cure the defamation.

The final reason why Gertz should not be expanded to this non-media defendant is that what automatically flows from Dun and Bradstreet's position is that the Gertz doctrine will apply irrespective of the significance of the speech, so no matter how trivial, unimportant, or meaningless the speech is, it always will be deemed more constitutionally significant than the state's interest and reputation.

That makes the First Amendment apply to the most trivial and meaningless speech imaginable while private reputation is sacrificed.

I think core notions of the First Amendment would be obliterated in defamation cases because they wouldn't have relevance, as would in the long run the positive, normative goals of our society in fostering good reputation, because after all, the rules of defamation are just society's statement about the importance and value of a good reputation.

And finally, the person who subsidizes D&B's expansion of the Constitution is the defamed individual.

If he is unable to obtain redress because of the First Amendment, he subsidizes defamatory speech.

Unidentified Justice: But, Mr. Heilmann, there is no suggestion that he is not entitled to redress.

It is, he is not entitled to punitive damages or to redress unless he proves he has been injured.

So there is no subsidy, is there?

Thomas F. Heilmann: I think so, Your Honor.

If you accept Dun and Bradstreet's proposition that every presumption at common law is defeated by the Gertz case, a business libel plaintiff may have a very difficult time ferreting out the kind of witnesses that will establish the causation.

Unidentified Justice: Well, yes.

Thomas F. Heilmann: That is my point, Your Honor.

Unidentified Justice: But if he does have the witnesses and can prove the fact of damage, then your subsidy argument collapses.

Thomas F. Heilmann: If he can show some kind of witness connection, but it is a difficult proposition.

Unidentified Justice: And does he need punitive damages to avoid a subsidy?

Thomas F. Heilmann: I didn't hear the last part.

Unidentified Justice: Does he need punitive damages to avoid the subsidy?

But aside for a moment the presumed damages.

Punitive damages, you certainly can't say punitive damages... a rule which foreclosed punitive damages without proof of actual malice certainly wouldn't be a subsidy, would it?

Thomas F. Heilmann: There was no presumption at all about punitive damages in this case.

In fact, there was... the Court specifically made that--

Unidentified Justice: No, but the punitive damage issue is whether you may recover punitive damages without proving actual malice, in the New York Times standard.

Of course, you think you can prove actual malice, and therefore you may get your punitive damages, but I just don't follow your subsidy argument.

That's all this is addressed to in this case.

Thomas F. Heilmann: --Let me address the second doctrinal difference between Greenmoss and Dun and Bradstreet's positions.

We say this case should be decided under the Court's commercial speech rules.

Credit reports share the same earmarks and characteristics of the kind of speech the Court has previously categorized as commercial speech.

Now, there is no special or necessary magic in the label "commercial speech".

The label is not important.

It is the underlying characteristics of the speech which is important.

Those characteristics indicate the Gertz rationale doesn't apply here.

Indeed, in Virginia Pharmacy, Justice Blackmun anticipated the attributes that may control the resolution of credit report defamation by comparing New York Times with a credit reporting case, Grove versus Dun and Bradstreet.

A fuller examination indicates those attributes do govern.

Now, our argument starts from the recognition that communications concerning commercial transactions relate to the system of property rights rather than a system of free expression.

They therefore operate in a separate realm of social activity.

In this connection, the reasons that Dun and Bradstreet advances in support of its claim that it should receive full First Amendment protection under the Constitution can be utilized by the Court in deciding whether to give this form of speech First Amendment protection under the commercial speech cases.

What functions do credit reports serve?

The answer is, they inform private economic decisions, just like ads.

Credit reports don't affect public opinion.

Publications which inform and assist private economic decisions have been held by this Court to constitute commercial speech.

Credit reports have basic characteristics that the Court has identified concerning commercial speech.

First of all, because of their factual nature, they are easily verifiable.

Now, as we have heard, there is a critical need for accuracy with credit reports.

That is also true with respect to the commercial speech cases, where it is recognized that such speech only assists the consumer in making proper economic decisions when it is true and not misleading.

Factual data, like the information here, can be tested empirically and corrected to reflect the truth without jeopardizing free dissemination of thought.

D&B has extensive knowledge of the business credit market.

It is well situated to evaluate the accuracy of its data.

Secondly, credit report speech is hardy and it is durable.

Now, in an effort to avoid the application of the commercial speech doctrine, Dun and Bradstreet says, if you are not talking about your own product or service, you can't engage in commercial speech.

That is a futile dividing line, because it runs head-on into comparative advertising theories.

For example, if Ford Motor Company says, our cars handle better than BMW's, I would suggest that Ford Motor Company probably has bought a BMW and has checked that out.

That is comparative advertising, but Ford is speaking about something it doesn't make.

The Bolger Youngs Products case expressly disclaims the suggestion that Dun and Bradstreet has made to the Court here.

I think as a final point Dun and Bradstreet says that you must look at the interest of the speaker, the interest of the audience, and the interest of the target of this speech.

Well, look at the interest of this speaker and ask Dun and Bradstreet why strategic protection should be afforded to this very durable, this very hardy, and this easily verified speech.

Look at the interest of the audience.

False credit reports are disastrous for the audience.

They have no utility at all.

Look at the interest of the target.

Greenmoss is a company that never participated in the Dun and Bradstreet system, and thus two entities in this triangle cannot tolerate falsehoods.

The third entity, D&B, has not shown that its voice will be stilled if First Amendment protection is not extended to it.

Thank you.

Chief Justice Warren E. Burger: Very well.

Do you have anything further, Mr. Garrett?

ORAL ARGUMENT OF GORDON LEE GARRETT, JR., ESQ., ON BEHALF OF THE PETITIONER -- REBUTTAL

Gordon Lee Garrett Jr: If I could respond specifically to several points, Your Honor--

Chief Justice Warren E. Burger: You have five minutes remaining.

Gordon Lee Garrett Jr: --I am sorry?

Chief Justice Warren E. Burger: You have five minutes remaining.

Gordon Lee Garrett Jr: Thank you, Your Honor.

Quantifying damages in this case is no different for a corporation than in quantifying damages in any tort or other contract case.

For example, if a corporation is suing on negligent misrepresentation or fraud, that corporation has to prove actual injury.

Unidentified Justice: Suppose Greenmoss had been a listed security on the New York Stock Exchange, and within three or four days after this report there was a wave of selling, and the stock dropped 25 percent.

Damage to someone.

Gordon Lee Garrett Jr: There may be damage.

The question is, did our report cause that damage.

And if a recipient of the report says, I sold my stock short because of that report, that is clearly damage, Your Honor.

Unidentified Justice: Well, wouldn't a jury be permitted to infer a nexus between the wave of selling and the report if it were shown simply that the stockholders had received the report?

Now, that is damage.

That doesn't damage Greenmoss directly, but it damages Greenmoss's standing in the business community, and with its bank, and with a lot of other people, doesn't it?

Gordon Lee Garrett Jr: It may well, Your Honor, and that evidence can be brought in to show that, and Greenmoss would be entitled to damages for that actual injury, and we have no problem with that.

Unidentified Justice: Can you put a caliper on it and measure it in precise dollars?

Gordon Lee Garrett Jr: No, but you can bring a witness to court that said he acted adversely because of that.

And that is what we think the rule against presumed damages would at least require some causation.

Unidentified Justice: What if he did?

What if he brought that witness?

Then I suppose you would say you still can't award damages without proof of how much.

Gordon Lee Garrett Jr: No, Your Honor.

We would be perfectly satisfied with whatever the state rules are for awarding damages.

Unidentified Justice: Well, just bring in somebody, I have sold my stock because of this report.

Now, usually you have to prove how much, don't you?

Gordon Lee Garrett Jr: Well, Your Honor, in most injuries for a corporation, that is what damage is all about.

They are injured in dollar and cents terms, and it seems to me that that could be proved by having one, an expert testify concerning what the effect was because of that stock--

Unidentified Justice: So you would require proof of how much.

Gordon Lee Garrett Jr: --I am not necessarily saying how much, Your Honor, but there has to be something more so that a jury just doesn't speculate.

Unidentified Justice: Here, Mr. Garrett, the Vermont Supreme Court said that after the Dun and Bradstreet report the bank put off any further... any future consideration of credit to plaintiff until the discrepancy was cleared up.

Now, if that is in evidence, do you still say you need a witness to come in and say that the bank's putting off credit to the plaintiff damaged the plaintiff?

Gordon Lee Garrett Jr: Your Honor, if putting off the credit in fact damaged Greenmoss, we believe that could be shown.

Unidentified Justice: And you don't need to quantify the damage.

Why couldn't a jury simply reasonably conclude from the fact that the bank did put off consideration that Greenmoss was damaged?

Gordon Lee Garrett Jr: Because a jury would not be allowed to speculate as to that amount any more in this context than any other context involving proof of damage, Your Honor.

Unidentified Justice: Speculate as to causation, or speculate as to amount?

Gordon Lee Garrett Jr: I don't believe they can speculate under the state law as to either.

Unidentified Justice: Well, which do you think they would be speculating about here?

Gordon Lee Garrett Jr: In your example, it may well be damages.

Unidentified Justice: Certainly there is causation, isn't there?

Gordon Lee Garrett Jr: No, Your Honor.

I don't believe so.

On that one piece of testimony was that it was from the plaintiff's president--

Unidentified Justice: Well, which the jury is perfectly entitled to believe.

Gordon Lee Garrett Jr: --All right.

That's correct.

And the bank officer, who was the only person that testified at trial, said, and we quote his testimony at length in the reply brief, the day I got the special notice, I didn't believe it, I called in John Flannagan, he told me there's nothing to it, and that is the end of it.

Unidentified Justice: Well, but the jury doesn't have to believe the bank officer.

It can believe the plaintiff.

And the Vermont Supreme Court said the evidence showed that the bank put off any future consideration of credit to plaintiff until the discrepancy was cleared up.

I don't see where there is speculation there.

Gordon Lee Garrett Jr: It seems to me there is speculation as to proof, Your Honor.

If I might make two other quick points, certainly the state doesn't have any more substantial interest in awarding presumed or punitive damages in a defamation case where actual malice is not shown than it does for fraud.

In this case, there were five recipients.

They could have been called to the stand, and none were.

Thank you very much.

Chief Justice Warren E. Burger: Thank you, gentlemen.

The case is submitted.

Featured:

Dun & Bradstreet, Inc. v. Greenmoss Builders - Oral Argument

Thu, 30 Aug 2012 22:15:20 +0000

Case:

Dun & Bradstreet, Inc. v. Greenmoss Builders

Media File:

83-18_19840321-argument

Related Transcript:

83-18_19840321-argument

Transcript:

ORAL ARGUMENT OF GORDON LEE GARRETT, ESQ., ON BEHALF OF PETITIONER

Chief Justice Warren E. Burger: We will hear arguments next in Dun & Bradstreet against Greenmoss Builders, Incorporated.

Mr. Garrett, I think you may proceed when you're ready.

Gordon Lee Garrett: Mr. Chief Justice and may it please the Court:

The issue before you today is whether the First Amendment's limitations on presumed and punitive damages apply to non-media defendants in actions for defamation.

Petitioner Dun & Bradstreet has urged the Court to confirm that the First Amendment protects all speech against the award of presumed and punitive damages, absent actual malice.

Unidentified Justice: Mr. Garrett, would suggest that we would be ratifying what someone else has already said is correct.

Who is that someone else?

Gordon Lee Garrett: Fully recognizing, Your Honor, the footnotes in several opinions dealing with private defamation, we believe that this Court's opinion in Gertz versus Robert Welch leads to the inescapable conclusion that on the one hand the states have no substantial interest in awarding presumed and punitive damages against any speech when balanced against the First Amendment protections.

We believe that's why the word "confirm" is appropriate.

Unidentified Justice: I'm not sure I track what you mean when you say private defamation.

Gordon Lee Garrett: Your Honor, I agree with you.

I think in this Court's opinions "private defamation" has been used to signify the status of the plaintiff, from a public figure, to a public official, to a private figure.

But defamation by definition includes a publication to a third party.

I think Your Honor is correct that there really is no such thing as private defamation.

When I speak of private defamation in this case, I am really referring to a private party, not a public figure or a public official.

We believe a ruling which would--

Unidentified Justice: I thought perhaps you had it the other way around, that there is some concept that a private party does not share all the protections that all other persons share under the First Amendment.

Gordon Lee Garrett: --Absolutely not, Your Honor.

We believe that the decisions of this Court recognize that the First Amendment is a freedom which is enjoyed by all, and that this Court doesn't make distinctions based on the speaker or his message in connection with defamation cases.

We believe that a ruling recognizing that neither presumed nor punitive damages could be allowed, absent actual malice, would do two very important things.

First, it would recognize the very legitimate and important state interest in protecting the reputational interests of citizens by allowing private defamation plaintiffs to recover damages for actual injury.

Unidentified Justice: Well, that isn't the result of any limitation.

That's the result of the basic state general damage award.

Gordon Lee Garrett: I'm sorry, Justice Rehnquist?

Unidentified Justice: I thought you were saying the reasons why we should have this limitation on the states' authority are two, and one is the state ought to do what it isn't limited to do by this limitation.

Gordon Lee Garrett: No, Your Honor.

My point was that if you recognize the rule which we suggest in our case you would do two different things: One, you would recognize that the states have an interest in protecting the reputations of their citizens, and that interest is satisfied by awarding damages for actual injury.

The second point is that it would also recognize that, absent actual malice, the states have no interest in awarding either presumed or punitive damages, and that when balanced against the First Amendment freedoms it precludes such an award.

Let me emphasize that Dun & Bradstreet seeks only the same result that would be required in actions brought against newspapers, television, syndicated columnists.

Whatever the term "media" means, we believe that all citizens are entitled to that freedom under the First Amendment.

As I mentioned earlier, we believe that that ruling would flow naturally from the Court's holding in Gertz versus Robert Welch, which significantly recognized that the states have no interest in securing for defamation plaintiffs gratuitous awards of money damages far in excess of any actual injury.

We believe the highlights of the case before the Court recognize the very concerns which troubled this Court in Gertz: jury awards of presumed and punitive damages in wholly unpredictable amounts, bearing no relationship to the actual harm caused.

Unidentified Justice: Well, why are these damage awards so much different than awards in personal injury cases?

They're all going up nowadays.

Why shouldn't they go up against libel defendants, too?

Gordon Lee Garrett: Some of my colleagues at the libel bar would agree with you, Your Honor, that they are going up.

There is one fundamental difference.

In the case before the Court, where there was libel per se charged, the jury was instructed that damages are presumed.

Other torts do not allow a court to give presumed damages.

I should not say "allow".

States do not give damages for presumed injury.

Unidentified Justice: You have to prove the element of damage?

Gordon Lee Garrett: That's correct.

And in an ordinary negligence case, for example, one of the key elements is injury, and that is why.

Plus... and I tend to forget this, too... we are balancing defamation laws against a corresponding First Amendment right, and in ordinary negligence cases there is not even that corresponding First Amendment right except as due process would require.

Unidentified Justice: Your client isn't exactly in the position of the New York Times in New York Times against Sullivan, where the Court talks about the dangers of self-censorship and that sort of thing.

Really, no great social harm would be done if Dun & Bradstreet did a little self-censorship when it comes to defaming people's business reputations, would it?

Gordon Lee Garrett: I think, Your Honor, that it's important to focus on what chilling effect it would have on Dun & Bradstreet.

I do not mean to suggest to the Court that Dun & Bradstreet is going to go out of business.

In fact, it's been in business for a number of years.

But I think we must look, Your Honor, at two interests, one in the interest of the free flow of information generally, and secondly the interest in the recipients of Dun & Bradstreet reports to get prompt, accurate information.

And let me be specific.

If Dun & Bradstreet or any other non-media speaker, whatever that means, is subject to unlimited awards for presumed and punitive damages, I think two things will happen.

One, rather than publish something that cannot be triple checked and guaranteed, that information simply will not be published.

For example, Dun & Bradstreet will oftentimes include in its reports information about how a creditor thinks a particular corporation or proprietorship pays its bills.

Now, when that person that is the subject of the report calls Dun & Bradstreet and says, I don't agree with you, I was not slow 90 days, and then Dun & Bradstreet calls the creditor to check that information and they say, well, we believe that's correct, but it's in our files, we can't be sure, if Dun & Bradstreet is subject to unlimited awards, they simply won't publish that.

And it's important in the free flow of commercial information that the recipients of those reports know that.

Unidentified Justice: Know what?

Gordon Lee Garrett: Know the fact that someone is slow pay, know the fact--

Unidentified Justice: Even though the creditor wouldn't corroborate?

Gordon Lee Garrett: --What I'm saying is, Your Honor, he may have sent magnetic tapes to Dun & Bradstreet which are no longer in existence.

It may take three or four weeks to corroborate.

And it's important to get that information out.

Unidentified Justice: Well, but is that really more important than making sure someone in the Respondent's position here isn't false accused of having filed bankruptcy?

Gordon Lee Garrett: I agree, Your Honor, that it is very important that we recognize the reputational interest of our citizens.

And I think the Court struck the appropriate balance when in the Gertz case it says private defamation plaintiffs may be compensated for their actual injury.

In this case, plaintiffs defamed are entitled to compensation for actual injury.

Our problem with this case is that the jury was told that damages were presumed, period.

They need not prove actual damages.

And I agree with Your Honor that it's important--

Unidentified Justice: But the jury was also told that they had to find malice or lack of good faith to find any damages at all.

Gordon Lee Garrett: --That was based, Your Honor, on the Vermont qualified privilege, not on a constitutional standard.

Unidentified Justice: What difference does it make?

They were instructed.

That was the instruction.

Gordon Lee Garrett: Well, the instruction was faulty because it did not define actual malice in the sense of New York Times versus Sullivan.

It was faulty there.

Unidentified Justice: Well, that would be lesser.

That's the issue in the case.

Gordon Lee Garrett: I'm sorry, Justice?

Unidentified Justice: Nothing.

Go ahead.

Well, that's part of the issue in the case, is what kind of malice you have to show to justify punitive damages.

Gordon Lee Garrett: And we believe that the decisions of this Court correctly recognize that that is constitutional malice in the sense of reckless disregard for the truth or knowledge of falsity.

Unidentified Justice: Was Dun & Bradstreet requested to make a retraction and did they do anything about it?

Gordon Lee Garrett: Yes, sir.

Your Honor, we believe that--

Unidentified Justice: Did they go the whole way?

Gordon Lee Garrett: --Oh, yes.

We believe the record reflects this: that promptly after the issuance of the special notice which caused... which set forth that Greenmoss Builders had filed a petition in bankruptcy, that when the President of Greenmoss called Dun & Bradstreet, on that very day they issued a correction in the form of a... excuse me, a retraction, in the form of a correction notice.

Unidentified Justice: Did Dun & Bradstreet let them know who were the recipients of the original false information?

Gordon Lee Garrett: At that time, Your Honor, I do not believe that Dun & Bradstreet did.

Unidentified Justice: They declined to give it to them.

Gordon Lee Garrett: That's correct, although they did send that information to the five recipients that did get the original special notice.

That is clear from the record.

Unidentified Justice: Well, do you think it would be improper for a jury to infer malice from their refusal to let Greenmoss know who received the original false report?

Gordon Lee Garrett: I don't believe so under this Court's constitutional standard dealing with focusing on the speaker's mind at the time of the publication.

This would go to something after the publication was done.

As I was indicating--

Unidentified Justice: Mr. Garrett, as long as you're interrupted, may I ask you another question?

Gordon Lee Garrett: --Yes, Your Honor.

Unidentified Justice: There are federal laws in the securities fields, such as Section 10(b)(5), that govern statements that are made in connection with the sale of securities.

Do you think there's a First Amendment right for people who are publishing information about securities that has to be considered every time we have a 10(b)(5) action?

Gordon Lee Garrett: Your Honor, I think that would require a different analysis than we have in the defamation area.

As I understand the question, we would be talking about individuals publishing matters who are subject to the control of the SEC, as being licensed, perhaps.

I think that in restraining those types of publications there is a much different focus.

In those cases, I believe the Court is focusing on the recipient of the report rather than the individual identified in the report in defamation cases.

And I think--

Unidentified Justice: Well, but you're asking us to recognize a First Amendment right here in connection with the Dun & Bradstreet type of publication, and I'm just wondering if that wouldn't lead us to having to recognize First Amendment rights in a 10(b)(5) situation or an ordinary fraud situation, anything?

Gordon Lee Garrett: --I do not believe so, Your Honor, because what we are talking here about is the sole issue of speech in context of defamation, not speech in the context of giving advisor's advice to the SEC.

And as I indicated, I believe a totally different analysis would apply there.

What we are asking the Court to recognize is that the First Amendment protects all speakers against these types of awards, and we do not believe that the state interest varies in securing gratuitous awards of money damages for plaintiffs depending on the speaker or the message.

Unidentified Justice: Mr. Garrett, may I ask you a question right there?

You seem to treat the case as though there are two kinds of speakers, media speakers and non-media speakers.

You're in the non-media category and you get all of that.

But yet, in the instructions to the jury you got a special instruction for the privilege for credit reporting agencies, which kind of suggests maybe you're in a special narrow category.

Up here your opponent argues, yes, you're in a narrow category and you don't get all the benefits of other non-media people.

Would you kind of comment on how much you think you're typical of non-media defendants generally?

You see, they also say this is commercial speech and it's not something distributed at large, that you don't need robust debate on whether somebody went into bankruptcy or not.

It's kind of a different, specialized area.

Gordon Lee Garrett: Your Honor, I must admit that I have a great deal of difficulty in deciding what is "media" and what is non-media.

As we indicate in our reply brief, many of the functions that Dun & Bradstreet does are very analogous to what a newspaper does.

We send reporters out to get information.

The information is edited and sent to clients or prepaid subscribers of Dun & Bradstreet.

The information relates to matters about commerce.

Not much different, we suggest, than what's in the Wall Street Journal every day or the business page of any newspaper.

Moreover, as I was reviewing the transcript of the case last night, I came across something which struck me, which I think directly goes to your question.

One of the recipients of the Dun & Bradstreet report was the manager of a local bank.

He testified that the bankruptcy notice, which was quickly corrected, had nothing to do with the relationship between the bank and Greenmoss.

But he also said: You know, I look at newspapers because I'm concerned about bankruptcies, and I use newspapers to inform me about that just as well as I do Dun & Bradstreet.

And I think that points out that many of the same functions done by Dun & Bradstreet are done by newspapers and vice versa.

And I believe the second aspect of your question dealt with the commercial speech doctrine.

Your Honor, whatever commercial speech is, it is not speech about commerce.

I don't think anyone would seriously contend that the statement Greenmoss is bankrupt, if it appeared on page 17 of the Vermont Daily Free Press, was commercial speech.

We were not advertising anything.

We were not promoting any of our products.

This simply is not commercial speech.

And we suggest blur is nothing more than an attempt to get around what we believe to be the central issue in the case, balancing the First Amendment rights of all speakers on the one hand against the states' limited interest in securing only awards of actual damages for private plaintiffs.

We believe that the facts of this case highlight the very concern the Court recognized in Gertz.

In July 1976 Dun & Bradstreet sent the special notice to five subscribers of Dun & Bradstreet.

None of these subscribers was a customer of Greenmoss, a local building concern.

It did state that Greenmoss had filed a petition in bankruptcy.

As I indicated earlier, a retraction in the form of a correction notice was issued promptly.

The complaint in this case sought damages of $7500 and $15,000 in punitive damages.

Yet, after a two-day trial the jury awarded $50,000 in compensatory damages and $300,000 in punitive damages.

Unidentified Justice: Do you suggest that there was no evidence?

Did you suggest that before you got here, that there was no evidence to support?

Gordon Lee Garrett: Your Honor, we believe that the evidence showed that plaintiff had not called any recipient of the report to prove that there was a causal connection between the issuance of the report, its receipt, and any damage by Greenmoss.

And in fact, there was no evidence introduced at this trial by anyone establishing a causal connection between the publication of the special notice and the company's alleged injury and damage.

What we believe this exorbitant verdict resulted from were jury instructions which gave the jury uncontrolled discretion to assess unlimited amounts of damages without regard to actual injury and without regard to Dun & Bradstreet's state of mind.

The jury was instructed that it was a case of libel per se, damage and loss were conclusively presumed from publication.

The jury, as I indicated previously, was not given the New York Times versus Sullivan actual malice charge and punitive damages in the amount of $300,000 were awarded.

Unidentified Justice: Well, they were told, though, that they had to find malice or absence of good faith, right?

Gordon Lee Garrett: Your Honor, my recollection on the state law privilege was that they were given several alternatives.

I believe we set that forth on pages 18 and 19 of the joint appendix.

It must show malice or lack of good faith on the part of the defendant.

If the defendant acted in bad faith toward the plaintiff in publishing the report, or that the defendant intended to injure the plaintiff in its business, or that it acted in a willful, wanton or reckless disregard to the interests of the plaintiff, the defendant has acted maliciously and the privilege is destroyed.

Unidentified Justice: They never defined "malice" in the New York Times standard or manner?

Gordon Lee Garrett: Let me be clear, Justice White.

They defined "malice" in the state law privilege, and then they also said, but you may award punitive damages if you find actual malice, and the court never defined "actual malice".

Unidentified Justice: In any way?

Gordon Lee Garrett: That is correct, that is correct.

Unidentified Justice: Was there a request for a definition?

Gordon Lee Garrett: I'm sorry?

Unidentified Justice: Was there a special request for a definition instruction?

Gordon Lee Garrett: I do not believe that there was a special request.

Unidentified Justice: Well, a request?

Gordon Lee Garrett: No, sir.

My recollection of what happened at the trial court was that defendant's counsel moved on directed verdict to dismiss all punitive damages because it had not met the actual actual malice standard of New York Times versus Sullivan.

Unidentified Justice: Well, Mr. Garrett, I gather the report was false.

Gordon Lee Garrett: That is correct.

Unidentified Justice: And what you felt you were entitled to was an instruction that your client was not to be liable unless it published the falsehood knowing it was false, right, or with reckless disregard to whether it was true or false?

Gordon Lee Garrett: No, Justice Brennan.

All we asked for was... our position in the case is that it is a private figure case and we should have the same protection as the John Birch Society had in the Gertz case, that you cannot award presumed or punitive damages absent the showing in New York Times.

But the plaintiff consistent--

Unidentified Justice: Well, I still don't understand.

What is the form of New York Times instruction you thought you were entitled to?

Gordon Lee Garrett: --We thought, Your Honor, that if the jury was going to be charged on giving punitive damages that they must be given the actual malice standard.

Unidentified Justice: Only in relation to the punitive damages?

Gordon Lee Garrett: That is correct, and to be awarded presumed damages.

But that the plaintiff, on the fault standard adopted by the courts in Vermont, should be entitled to receive--

Unidentified Justice: Well, on compensatory damages what type of instruction satisfied you?

Gordon Lee Garrett: --Are you talking about damages, Your Honor, or fault?

Unidentified Justice: Damages.

Gordon Lee Garrett: We would be satisfied with traditional state law damage charges proper in a libel case, but which did not allow the jury to award presumed damages.

Unidentified Justice: Well, but you wouldn't... well--

Gordon Lee Garrett: Absent a showing of actual malice.

Unidentified Justice: --Well, I'm still lost.

You said once or twice you thought that there should have been no damage award whatever, except under instructions that the plaintiff had to prove actual damage.

Well, that's Gertz, isn't it?

Gordon Lee Garrett: Yes.

We are arguing, Your Honor, that the Gertz standard for private plaintiffs should have been applied in this case to Dun & Bradstreet, and the jury should not have been allowed to award presumed damages.

Unidentified Justice: And you concede that as the case comes to us, at least you concede liability, you concede falsity and you concede fault?

Gordon Lee Garrett: I concede fault under whatever Vermont standard there is.

Unidentified Justice: Exactly.

And New York Times is not involved in that.

Gordon Lee Garrett: That is correct, Your Honor.

Unidentified Justice: Then it's just the question of damages, that you think you're entitled to the New York Times malice instruction if you're going to presume damages or give punitive damages.

Gordon Lee Garrett: That is absolutely correct.

As I emphasize again--

Unidentified Justice: Which is what Gertz said about media defendants.

At least that's what Gertz said about defendants, and it happens to be that a media was defendant in that case?

Gordon Lee Garrett: --In that case.

I will agree with that, because throughout that opinion we hear the phrase publishers, media.

It may be that the word "speakers" was even used.

Unidentified Justice: Of course, you are a publisher.

Gordon Lee Garrett: We are absolutely a publisher.

Unidentified Justice: And you are a media.

You are a medium.

Gordon Lee Garrett: We are a medium of communication, and like an individual in the street is a medium of communication and like the New York Times is a medium of communication.

Unidentified Justice: Mr. Garrett, in your colloquy with Justice Brennan and Justice White you stated what instructions you thought you were entitled to under your theory, constitutional theory of the case.

Did you request these instructions from the Superior Court in Vermont?

Gordon Lee Garrett: Let me rephrase that, Justice Rehnquist.

Unidentified Justice: Well, I don't want to rephrase my question.

Gordon Lee Garrett: Oh, no, I'm not.

I just want to turn it to I think give the proper answer to you.

I think our position is not what request that we would have requested, but objections to requests permitting presumed damages.

We objected to a presumed damage charge.

Unidentified Justice: Well, doesn't Vermont follow the rule that most other states follow, that if you want a particular instruction on a question you have to submit it to the court?

Gordon Lee Garrett: I don't think this was a case of wanting a presumed damage charge, but not wanting a presumed damage charge.

Our point is we don't think presumed damages should have been charged unless we met the New York Times versus Sullivan actual malice test.

Unidentified Justice: No, but did you submit a request for instruction?

Gordon Lee Garrett: Yes, Your Honor.

Unidentified Justice: And what was it you asked him to instruct?

Gordon Lee Garrett: In the lower... on the subject of New York Times?

Unidentified Justice: At the trial.

Gordon Lee Garrett: At the trial court level, my recollection is that the only charge requested by Dun & Bradstreet going to damages was that, if you're going to charge libel per se, please charge it this way.

There was no charge, Your Honor--

Unidentified Justice: "Please charge it this way"?

What's "this way"?

Gordon Lee Garrett: --The concern was that the trial court--

Unidentified Justice: What was the actual request?

Gordon Lee Garrett: --It is set forth, I believe, in the cert petition.

It is Petitioner's requested charge number three.

And I believe we were in a Hobson's choice.

We knew that the court was going to charge libel per se.

Our concern was, if you're going to charge it, which we did not agree with, that at least charge it this way.

And I believe that was the only charge that was given at the lower court level concerning damages, although prior to that the judge had been handed a copy of the Gertz decision in connection with plaintiff's request that he be allowed to introduce Dun & Bradstreet's financial statements.

Unidentified Justice: Are you challenging the $50,000 of actual damages found by the jury?

Gordon Lee Garrett: Yes, we are, Your Honor.

Unidentified Justice: On what grounds?

Gordon Lee Garrett: Two grounds.

First and foremost, that the jury charge permitted an award of presumed damage, that the plaintiff did not have to prove actual injury.

That we believe alone is sufficient to order a new trial.

In fact, we believe that's what happened in the Gertz case.

Unidentified Justice: Well, you have to go another step: and that they didn't prove damages.

Gordon Lee Garrett: That's correct.

Unidentified Justice: Don't you have to prove that, too?

Gordon Lee Garrett: Well, I don't believe so, because if the jury was allowed to presume damage I think it's very difficult to tell what in fact--

Unidentified Justice: If the evidence showed that the man called up a man and said, I hate this stinker and he just went into bankruptcy, I take it you'd give him damages without a charge?

Gordon Lee Garrett: --Could they give him damages?

Unidentified Justice: Yes.

Gordon Lee Garrett: Yes, I think that is correct, Your Honor.

Unidentified Justice: May I ask--

Gordon Lee Garrett: Yes, Mr. Justice.

Unidentified Justice: --Your brief refers to $50,000 compensatory damages.

That's a curious way to describe presumed damages.

Gordon Lee Garrett: That is because of the way it was described in the jury verdict, Your Honor.

We used that phrase because that's the exact phrase that the jury foreman signed dealing with compensatory and punitive.

Unidentified Justice: The question I'd like to ask you is, all of the New York Times and Gertz formulas all focus on the state of mind of the defendant at the time the defamation occurred, at the time here we know there was a falsehood.

Would you say that there's anything in the New York Times line of cases that would prevent the State of Vermont assessing punitive damages for your conduct after the libel occurred, when you refused to give the names of the five people who received it, which might have enabled him to go out and check it out?

Gordon Lee Garrett: If that action was the result of a totally independent tort and that action would sustain an award of presumed damages having nothing to do with the First Amendment, I would agree with Justice Stevens.

But this case was a case based on the First Amendment, based on defamation, and we don't believe that there is anything in the record which would permit the State of Vermont, consistent with the First Amendment--

Unidentified Justice: Well, their theory, as I understood it, their theory of malice emphasized, their arguments to the jury and the like, emphasized this conduct as a reason for making you pay a heavy damage award.

Gordon Lee Garrett: --That is correct, and we do not believe that the First Amendment would protect that... would allow that.

What we do say--

Unidentified Justice: Well, why wouldn't the First Amendment allow that?

Because I can see how that would be quite important to a businessman, to go around and straighten out his reputation with all these people.

Gordon Lee Garrett: --Because the First Amendment in the defamation area we believe focuses on the defendant's state of mind when the publication was made.

Unidentified Justice: But does that immunize?

If two weeks later he goes out and does a lot of other stuff that's related to it and is very harmful to the plaintiff, is that also immunized by the First Amendment?

Gordon Lee Garrett: Your Honor, my reading of the First Amendment cases simply would not permit that kind of--

Unidentified Justice: You see, I haven't seen a case quite like this before.

Gordon Lee Garrett: --I understand that.

But I don't believe that it is much different than other cases where in fact you don't know who's received it.

I mean, if the New York Times were sued, would it be a good defense at state law to suggest that we don't know the 500,000 people that got the daily copy of the New York Times?

Unidentified Justice: No, but here you did know and it was a handful and it could easily have been given and it would have made a lot of difference, I suppose, to the plaintiff.

Gordon Lee Garrett: And as I understand it, Your Honor, the client has changed his policy in that regard, that in fact it is now given out.

Let me suggest one--

Unidentified Justice: So maybe punitive damages do accomplish something once in a while.

Gordon Lee Garrett: --Your Honor, I would suggest not in this case.

One quick point on what happened in connection with the request.

I believe the record reflects that one request was made for disclosure at the time of the initial contact between plaintiff and defendant's office.

We said we didn't have it at that time and no further request was made.

Unidentified Justice: Do you say that a juror sitting in the box couldn't say to himself and to the other jurors, their attitude after the original defamation, afterward, relates back and shows that the state of mind all the way through was one of malice?

Gordon Lee Garrett: I do not believe, Your Honor, that that would be consistent with this Court's teachings in St. Amant versus Thompson.

You look at the subjective actual malice of the speaker at the time.

Thank you very much.

Chief Justice Warren E. Burger: Mr. Heilmann.

ORAL ARGUMENT OF THOMAS F. HEILMANN, ESQ. ON BEHALF RESPONDENT

Thomas F. Heilmann: Mr. Chief Justice and may it please the Court:

It was not until 2:30 this afternoon that we heard for the first time that Dun & Bradstreet claims that it is a media defendant.

They never suggested that in this case before.

So, in response to your question, this case came to the Court as a non-media defendant case, and they never asserted a media defendant position below.

The questions that you asked about the facts I think raise some serious questions about just what went on here and I think show why the Gertz formula should not be used in this type of litigation.

You asked the question, did they retract the whole way?

Well, that was a major part of the trial in this case.

Contrary to what's been said to you, in this case what happened was, after our client found out about the false report of bankruptcy they asked to find out who the report was submitted to so that they could engage in what Gertz says is the first remedy of a defamed plaintiff, self-help.

And they couldn't get the answers to those very simple questions until the lawsuit was filed and until discovery was submitted.

So Greenmoss found itself in the position of knowing that this information was being disseminated, but not knowing to whom and not knowing the breadth of the dissemination.

And as the trial indicated, as the president of the company testified at length, he had a bizarre problem.

Every customer that he visited with, he would not know whether that customer had heard about the bankruptcy.

So he was forced into the awkward position of saying: Do you know that we're not bankrupt?

That's a very extraordinary position for a businessman to find himself in.

So I think it is a whole course of conduct.

That's the way this case was tried.

And with respect to whether Gertz was raised at the trial court level, we submitted some extensive information to the court in our brief about the fact that Gertz was not properly raised.

In this case, the common law privilege was an open question in Vermont and that appeared to be all that Dun & Bradstreet wanted.

They only suggested Gertz as, in their words, "a second rationale" behind the protection that common law extended.

Unidentified Justice: Didn't the Vermont Supreme Court address this issue?

Thomas F. Heilmann: They addressed it.

We pointed out to the court--

Unidentified Justice: Whether or not it was raised in the trial court?

Thomas F. Heilmann: --That's right.

But it poses one of the difficulties of getting a clean record to really answer the questions here.

Unidentified Justice: Well, I know, but the Vermont court decided it.

Thomas F. Heilmann: I understand that, Your Honor.

Unidentified Justice: They decided the issue and that's what the argument is here, is whether the Vermont court was right or not--

Thomas F. Heilmann: I understand that.

Unidentified Justice: --as to whether Gertz applies.

Thomas F. Heilmann: In this case, we don't think that the issue is properly framed.

What we really think this case is about is credit reports, and we think that these credit reports, which involve only statements of fact, which are made exclusively in the business and financial arena, come within the definition and description of what this Court has called commercial speech.

This case does not present the difficult questions that other commercial speech cases have presented, because we don't have speech, commercial or otherwise, on public issues, and we don't have speech that involves the total suppression in advance of speech.

I think common sense is the first test that you can utilize in looking at credit reports as commercial speech, and common sense has led virtually all of the lower federal courts... in fact, in one opinion written by Mr. Justice Clark... to say that commercial credit reports, in fact the same reports that are in this case and the exact same defendant, are commercial speech.

Unidentified Justice: You're suggesting that this kind of speech can certainly libel, but you think the First Amendment is just irrelevant, that this kind of speech just doesn't deserve First Amendment protection?

Thomas F. Heilmann: I'm saying it's commercial speech and you use--

Unidentified Justice: Yes, but you're saying that the First Amendment doesn't protect it.

Thomas F. Heilmann: --Because under the commercial speech doctrine the first test is truth or falsity or misleading, and then in this case it clearly is false and misleading.

There is no such tort as the tort of outrageous commercial speech.

Commecial speech gets to the Court in various contexts.

In one case it was the suspension of a lawyer to practice law, the Arala case and the Primus case, that raised the commercial speech question.

In the last case that the Court handled, the Bolger case, it was the circulation of family planning information that raised commercial speech.

As I've indicated, Mr. Justice Clark, writing for the Eighth Circuit in the Millstone-O'Hanlan case, a commercial credit reporting case, said this is commercial speech.

In fact, even in the case that Dun & Bradstreet relies upon, Mr. Justice Douglas' dissent from Grove versus Dun & Bradstreet's denial of certiorari, Mr. Justice Douglas says this is commercial speech.

The key here... I think the two qualities that make this commercial speech is that--

Unidentified Justice: Yes, but did he draw a distinction between commercial speech and other speech when he wrote that dissent?

Thomas F. Heilmann: --He wanted to see what level of constitutional protection, if any, commercial speech should receive.

Unidentified Justice: Well, wasn't the gist of his dissent, however, that there should be no distinction?

Thomas F. Heilmann: I think that's what his position was, but he wanted the Court as a group of nine Justices to handle that question.

Unidentified Justice: Was he right?

Thomas F. Heilmann: I don't think so.

I think in this case the qualities that make commercial speech commercial speech are the fact that it's fact-based information combined with information solely about business.

Unidentified Justice: Well, certainly Valentine against Christianson has been eroded substantially, hasn't it?

Thomas F. Heilmann: That's right, Your Honor.

And we don't mean to suggest--

Unidentified Justice: Maybe he was right.

Thomas F. Heilmann: --Well, we don't mean to suggest that just because speech is commercial speech that it does not have any constitutional protection.

In the Bolger case, a substantial degree of constitutional protection is afforded to commercial speech.

But the way to handle issues like this is to call it commercial speech.

Unidentified Justice: Well, did I understand you earlier to say that what this poses is commercial speech, that's all, therefore it has no First Amendment effects?

Thomas F. Heilmann: That's right.

Unidentified Justice: And that's your position, is it?

Thomas F. Heilmann: That's right.

If this isn't commercial speech and the large body of precedent in the lower courts are wrong, then I think the message that will be delivered by the Greenmoss case is that commercial speech doctrine applies only to commercial advertising and activity like that.

Unidentified Justice: Well what's wrong with that?

Thomas F. Heilmann: Well, if that's so I question whether the Government will lose its power to regulate, by content or otherwise, a whole gamut of "commercial speech".

In other words, will a consumer credit agency say that the rules under the Consumer Credit Reporting Act are unenforceable because of the free speech clause?

Will licensing of doctors and lawyers raise full freedom of speech?

I suggest that companies like Dun & Bradstreet will come in in those contexts, Your Honor, and say, all we want... and I'm quoting from the Dun & Bradstreet brief here...

"is the limited protection that you gave people in Gertz. "

Unidentified Justice: Well, in view of the development of the law about commercial speech and the movement toward limiting it to advertising, would it make sense to try to draw a distinction between public speech and private speech instead?

Thomas F. Heilmann: That may be a possibility, Your Honor.

I think in this case the real issue... I think it is commercial speech.

But the real issue when everything is moved away is, do presumed and punitive damages unreasonably chill this type of speech?

Without necessarily getting involved in--

Unidentified Justice: Did you present this argument to the Vermont court?

Thomas F. Heilmann: --Yes, we did.

We argued that this was commercial speech before the Vermont Supreme Court.

Unidentified Justice: Well, I know you argued it was commercial speech.

But did you go on and argue this is commercial speech, it deserves no protection because it's false?

Thomas F. Heilmann: That's right.

That's what we said.

Unidentified Justice: And the way they responded, that isn't the issue they responded to?

Thomas F. Heilmann: No, the court didn't address that issue.

Unidentified Justice: They responded to the argument about the applicability of Gertz.

Thomas F. Heilmann: That's right, Your Honor.

Unidentified Justice: So you're presenting this as an alternate grounds for affirmance?

Thomas F. Heilmann: Yes.

Even apart from the commercial speech question in this case, I think the type of speech that's involved raises a very fundamental reason why the Gertz doctrine is inapplicable.

To me there has always been something hollow about what Dun & Bradstreet is asking the Court to do here, and I think when all the rhetoric is removed what Dun & Bradstreet is asking the Court to do is to apply New York Times and Gertz to protections for concededly false statements of fact, which statements stand totally and exclusively by themselves.

The facts here are not made in support of or associated with any thesis.

They are not made to advance any idea.

This is a different type of situation than the Court had in Gertz.

But in Gertz you said that a false fact without more has absolutely no constitutional protection.

Well, here the entire conceptual structure of these credit reports is only grounded in fact.

Their usefulness is directly and exclusively tied to their accuracy.

Unidentified Justice: Of course, you could say the same thing about the ad in the New York Times case, couldn't you?

Thomas F. Heilmann: No, I don't think you can, Your Honor, because there is a message there.

There is no message here.

The efficacy and the total intrinsic value of this speech depends only on its factual nature.

Unidentified Justice: Well, but Mr. Heilmann, supposing they had a credit rating and said, we now give this company a credit rating of C instead of B, reason, bankruptcy filed.

So that you then have a message and then a false fact in support of it.

Thomas F. Heilmann: Well, I have trouble with--

Unidentified Justice: Some of these things are--

Thomas F. Heilmann: --I have a great deal of trouble determining what, if any, that message would be.

There's really no thesis that a company like Dun & Bradstreet--

Unidentified Justice: --The message would be his credit isn't too good any more.

Thomas F. Heilmann: --But I don't think that that's the thesis we're talking about.

I think there is really no thesis in that type of analysis.

Unidentified Justice: I know in this particular report it's kind of a one-fact special report.

But it seems to me very often these reports have a lot of facts in them, and you might have one of them false and a lot of others that are not false, and the conclusion that's doubtful.

Thomas F. Heilmann: To follow up what you said earlier, this may be a very rare situation.

This may be the only type of case dealing with just credit reports about facts, that you have to analyze what was said in Gertz and the other cases about facts standing alone.

Unidentified Justice: Well, yes, but if you're right about your commercial speech ground you never get to all this other argument.

Thomas F. Heilmann: That's correct, Your Honor.

Unidentified Justice: Because I guess you rely on the first requirement for constitutional protection that the Court suggested in Central Hudson.

Thomas F. Heilmann: We do, and it's never been--

Unidentified Justice: You say that there's no constitutional objection to the suppression of commercial messages that do not accurately inform the public.

Thomas F. Heilmann: --That's right.

Unidentified Justice: And if it's... you say that if it's conceded this report was false, they have conceded themselves out of First Amendment protection.

Thomas F. Heilmann: Yes, because--

Unidentified Justice: Because this is commercial speech.

Thomas F. Heilmann: --Not only because it's commercial speech.

Unidentified Justice: Well, if we agree with that isn't that the end of the case?

Yes.

Thomas F. Heilmann: I think that is the end of the case.

Unidentified Justice: Do you agree with Mr. Garrett that there's no evidence at all about damages?

Thomas F. Heilmann: No, I don't.

My name is Heilmann, Your Honor.

Mr. Garrett argued for Dun & Bradstreet.

I don't agree that there's no evidence of damages at all.

In fact--

Unidentified Justice: Well, what evidence?

Would you mind giving me, not too much, but just--

Thomas F. Heilmann: --I'll give you just a thumbnail sketch of what happened.

What happened in this case, Your Honor, was that the bank that our client had done business with for many years received the bankruptcy report and, in close proximate time thereafter, not only told our client to take a particular loan request that was on the table elsewhere, but to take the entire banking--

Unidentified Justice: --How big was the loan?

Thomas F. Heilmann: --The loan I think was for $20,000.

We had about $96,000 in other loans with that bank.

And that bank received the Dun & Bradstreet report and shortly thereafter asked our client to go elsewhere.

We went elsewhere.

Unidentified Justice: And that was put in evidence?

Thomas F. Heilmann: That was put in evidence, Your Honor.

Additionally, what I'd like to point out about the compensatory damage award here is that I don't think presumed damages have any application at all on what I call the compensatory damage award.

Number one, there were no compensatory damages in fact awarded because what the trial court said was that, assuming there's a high enough level of culpability... that is, using that state common law test for commercial credit reporting agencies, Greenmoss had to prove culpability far higher than negligence to receive any verdict.

If we didn't defeat the privilege, we would not receive anything.

But if we did defeat the privilege... and we did that in this case... the damages under any presumption were, as the trial court said, one dollar.

The trial court said that substantial damages were not permitted unless Greenmoss proved they in fact occurred; and in the very next sentence said compensation had to be specifically related to damages that were actually caused by D&B.

Further, compensatory damages here were only lost profits and and out of pocket losses.

Now, the court allowed the jury to assess pre-judgment interest at Vermont's statutory rates on a per annum basis from the date of injury to the date of verdict.

Dun & Bradstreet in its brief says that the most actual damages we showed was $36,000.

When you calculate the interest on $36,000 at the rates the trial court allowed the jury to do, you come up with a figure of $50,022.30.

I think that is exactly what the compensatory damage award did in this case.

Secondly, Dun & Bradstreet points out that $36,000 is only one year of lost profits, ignoring the evidence at transcript 99 and 104 that an additional $42,000 of lost profits was incurred in the next year thereafter.

Curiously, the aspect of--

Unidentified Justice: Excuse me.

Do you think that Gertz applies at all in this?

Thomas F. Heilmann: --No, I don't.

Unidentified Justice: So that you wouldn't need to prove fault, either?

Thomas F. Heilmann: No, we wouldn't have to prove fault.

Unidentified Justice: You just go under traditional libel law?

Thomas F. Heilmann: That's right.

Unidentified Justice: Once you've proved falsity and the kind of libel that justifies damages, then the jury is free to presume?

Thomas F. Heilmann: That's right.

But I'd like to focus, Your Honor, on the state's interest in presumed damage, and I'd like to move a little bit differently than this Court did in Gertz.

I would submit that presumed damages, especially in cases like this where you have defamation of a corporation, it really doesn't involve the plaintiff proving the quantum of damages that makes presumed damages so necessary to the states for preservation of reputation.

Quite to the contrary, I suggest to the Court that it's making the causal link between demonstrated injury and the defendant's acts that really involves the states' interests.

If a plaintiff comes into court, as did Elmer Gertz, and says, I've been defamed, but says nothing else about suffering damages... Justice Stevens, your opinion in the Court of Appeals case in the Gertz case points that out; there was no evidence of actual damage in Gertz... I would suggest that a jury will not hand out and a judge will not condone a hefty verdict under a charge like the charge in the Greenmoss case.

It's the causality link in the presumption that has the important state function.

It's the tracing and linking between the loss and the wrongful conduct that creates the problem for the defamed person.

Unidentified Justice: Mr. Heilmann, were the instructions given given at your request?

Thomas F. Heilmann: Yes, Your Honor... well, they were Dun & Bradstreet's instructions almost verbatim.

But we did ask the court to charge under traditional common law libel.

The trial court used virtually all of Dun & Bradstreet's requests.

Unidentified Justice: One other point.

The argument was made here about Dun & Bradstreet had a lot of similar points with a newspaper.

Thomas F. Heilmann: I don't think they have a similarity with the newspapers, Your Honor.

Unidentified Justice: Was it argued below?

Thomas F. Heilmann: Yes, it was, in the Vermont Supreme Court.

We never got to the question of whether Gertz should apply at the trial court level.

They just didn't raise it until after the verdict.

But getting back to where the legitimate state function comes in here--

Unidentified Justice: May I ask one other question about the instructions, before we lose it.

The instruction on the qualified privilege of a credit reporting agency that was given, was that given at your opponent's request over your objection?

Thomas F. Heilmann: --Yes.

The court adopted their request verbatim... no, they didn't request it verbatim.

The trial court I believe went to the Vermont Supreme Court law library during the lunch recess and got that charge.

It wasn't really what Dun & Bradstreet had asked for.

Unidentified Justice: But you objected to that charge?

Thomas F. Heilmann: Oh, yes.

Unidentified Justice: Did not Gertz say that included within actual damages could be injury to reputation?

Thomas F. Heilmann: That's right.

Unidentified Justice: Did you ask for an instruction along those lines?

Thomas F. Heilmann: No, we didn't, Your Honor, and the reason we didn't do that is because we're dealing with defamation of a corporation, and I felt as a trial strategy it was a difficult thing to suggest to a jury that a corporation can be humiliated, and so I didn't ask for--

Unidentified Justice: You may lose your reputation with respect to paying your debts.

Thomas F. Heilmann: --You certainly can.

But I thought with a Vermont jury it was better to say to them that you lose your profits and you lose your out of pocket damages.

Unidentified Justice: You mean they're that hard-headed in Vermont?

Thomas F. Heilmann: Well, sometimes they're cheap, Your Honor.

[Laughter]

But the presumption that allows substantial damages without even an offer of evidence of actual injury, which is what you had in Gertz, is one thing.

But here the legitimate state function of presumed damages is that the intuition of common experience as it has found its way in the common law through centuries of defamation precedent counseled that it's certain that the harm proved is causally related to the defamation when those two things coexist in time.

And I think that's really the function that the states have here.

Bear in mind what Dun & Bradstreet is asking this Court to do is to say that the states' interests don't matter, and the effect of this case if Dun & Bradstreet is right will be without question to totally constitutionalize the state law of defamation.

Now, I think there is another role or another state interest that states have in defamation, and that is the interest, as the Vermont Supreme Court pointed out, in the difference between an individual who lives in a world that is increasingly dominated by large commercial entities, may well be less able to bear the burden of the consequences of the falsehood than the business that sells the report.

I think that's another legitimate state interest involved here.

Finally, Vermont, different than Gertz and in fact different than many states, has a specific constitutional provision that protects the reputation of its citizenry.

Our constitution specifically says that the character of our citizens has special protection.

So I think the key to this case here is to say, does a constitutional interest apply?

We say the only way the constitutional interest can apply is if there is a real valid threat of self-censorship.

I don't think there's a valid threat of self-censorship.

Unidentified Justice: May I ask one question.

I think you're getting to your end.

Take your opponent's hypothetical of a newspaper of general circulation that has a column on the back: Recent legal developments, subhead bankruptcies, and they mistakenly say your company went into bankruptcy, the same facts.

What happens with that?

Thomas F. Heilmann: Well, the issue again is self-censorship.

Is the newspaper going to say that they won't publish this fact... and we're not talking about your analysis of Greenmoss' business.

We're talking about this fact, Greenmoss is bankrupt.

If the newspaper is going to say they won't publish the fact because of presumed damages, and if they won't publish that for that reason, for the reason of presumed and punitive damages, then the news will just be pablum, and that's the fear that the Court has, obviously.

Unidentified Justice: Let me be sure I understand your answer.

You're saying a different rule would apply to that case than to this case?

Thomas F. Heilmann: Yes.

I'm getting into the answer that I think is involved here.

The issue is chilling of speech.

I don't think a company like Dun & Bradstreet is going to be chilled, because, for one thing, the news media very rarely simply publishes a fact.

They publish the fact in connection with a thesis.

Unidentified Justice: But in Justice Stevens' question I thought he did give you a hypothetical where the newspaper published a fact somewhat separately from its editorial and news coverage.

And I think his question was what should be the rule in that case as to the newspaper.

Thomas F. Heilmann: Well, I'm not really addressing what should happen in the situation with the newspaper.

I don't think you can take the result--

Unidentified Justice: If you won't answer it for him, will you answer it for me?

Thomas F. Heilmann: --Yes, I will, Your Honor.

[Laughter]

I think under Gertz if there was negligence, which in this case there is obviously negligence, the plaintiff would be entitled to the Gertz... the plaintiff would be limited by the Gertz rule.

But I really think we have a different type of defendant here.

Gertz talks about broad rules of application, and you don't have to look at every particular possible exception.

But I would say one other thing, hopefully to more fully answer your question, Your Honor, and that is in this case if the exact same facts occurred we may have the same result.

If the newspaper did exactly what Dun & Bradstreet did, by sending a 15 year old high school kid with no training up to the federal court in Burlington for $200 a year and never told her what she was supposed to do up there, never edited the information, never followed its own rules that it had on the books for prepublication verification--

Unidentified Justice: Well, you're just arguing you'll win under the actual malice standard, so you can go ahead and retry the case and you'll still win.

That's what you're really saying now, I think.

Thomas F. Heilmann: --Well, I think I'm just saying in those hypotheticals what Dun & Bradstreet is trying to tell you is that the newspaper would not have the same result, and I disagree with that.

Unidentified Justice: Well, the question is really should the same standard apply to the two papers, and I think you say no.

Thomas F. Heilmann: I do say no, Your Honor.

Unidentified Justice: You've answered it.

Do you think you would give a $75,000 punitive damage against a local newspaper?

Thomas F. Heilmann: I don't know what a jury would do, Your Honor.

I think when you're dealing with the type of instructions that we had in this case, the instructions were very carefully drafted to deal with the question of the defamation and the punitive damage award, and they didn't focus on the speech.

They focused on the entire gamut of conduct.

It wasn't really looking at the speaker and saying that speech is bad and we're going to punish it by way of punitive damages.

It really looked at the entire course of conduct under traditional common law rules.

One thing that I'd like to point out finally is that, let's suppose, to follow up on your point, Your Honor, that Dun & Bradstreet got the same protection that Robert Welch, Incorporated, got.

Under this trial what would happen is that constitutional protection for actual damages would apply because of Gertz, and then the constitutional damages for punitive damages under New York Times would apply.

But in addition to that, not only would the plaintiff, but Dun & Bradstreet would look for the common law punitive damage charge just to get to the question of any compensatory damage, and then common law malice to think about and focus upon the other activity that this defendant engaged in.

So you would have four separate things for the jury to handle.

I think that would just hopelessly confuse a jury.

There's been a lot of commentary about the difficulty between actual malice and common law malice and constitutional malice, and essentially what they're asking the Court to do is to have a trial where there are those four instructions.

Unidentified Justice: Of course, the net result if you go back to the Gertz case is you may end up with more money, even after a second trial.

Thomas F. Heilmann: Well, I understand that that is what happened with Mr. Gertz, Your Honor.

But the problem in Mr. Gertz' case is he didn't come in and show any--

Unidentified Justice: It could happen here, too, because there's no North Carolina against Pierce problem, I guess, in this area of the law.

Thomas F. Heilmann: --I think the difficulty that this case presents really shows why Gertz was formulated just to handle media defendants.

This defendant has never claimed until this afternoon that it's a media defendant.

The case proceeded to the Vermont Supreme Court and the certiorari petition was granted solely based on non-media status.

And I think the difficulties here with Gertz show that the decision was very carefully framed in both rationale, philosophy, and language to deal with a specific type of defendant.

My final point is this.

I mentioned earlier that if this case is extended, if Gertz is extended to this type of a defendant, what we will have is the total constitutionalization of the state laws of libel.

And I think we really have to ask ourselves whether that's appropriate policy.

Now, we have made accommodations as a society to the reputation of our citizens for the benefit of strong First Amendment protections.

But if Gertz applies here, I'd suggest to the Court it will mean that reputation is so cheap and so unvalued in our society that it can be destroyed by the local gossip monger or by a huge company that pays an untrained high schooler $200 a year to perform a task she was never trained to do.

If private reputation can be so easily damaged, then we have to ask the other question: What benefit is there to a good reputation?

I think the Court will have to question what such a result will do to the positive normative benefits that reputation contributes to our society, and at the same time consider what it will do to the goal that the framers had in mind for the First Amendment if over-the-fence rumor and idle gossip at the water cooler receives constitutional protection.

Every constitutional... every libel case in the country will have the Gertz standard if Dun & Bradstreet is correct in this case.

I think enough speech has been protected under the New York Times formula where you look at the plaintiff and enough speech has been protected when you look at media defendants.

I don't think there's a need to extend Gertz any further.

Thank you.

Chief Justice Warren E. Burger: Thank you, gentlemen.

The case is submitted.

Unidentified Justice: The Honorable Court is now adjourned until Monday next at 10:00.

Featured:

Keeton v. Hustler Magazine, Inc. - Oral Argument

Thu, 30 Aug 2012 22:14:49 +0000

Case:

Keeton v. Hustler Magazine, Inc.

Media File:

82-485_19831108-argument

Related Transcript:

82-485_19831108-argument

Transcript:

ORAL ARGUMENT BY STEPHEN M. SHAPIRO, ESQ., BY INVITATION OF THE COURT, AS AMICUS CURIAE, IN SUPPORT OF THE JUDGMENT BELOW

Chief Justice Warren E. Burger: We will hear arguments first in Kathy Keeton against Hustler Magazine.

Mr. Grutman, you may proceed whenever you are ready.

Norman Roy Grutman: Mr. Chief Justice, and may it please the Court:

This case presents the question of whether or not the sovereign State of New Hampshire's long-arm statute is to be denied enforcement under the due process clause despite the conduct of Hustler in circulating its magazines in New Hampshire out of which a cause of action for libel arose.

The libel in question was part of a series of unprovoked calumnies and vilifications heaped upon the Plaintiff accusing her of among other things licentious promiscuity and having a venereal disease which in any jurisdiction would be tantamount to libel per se.

The law suit was initially instituted in the state court of Ohio in 1977 where there appeared to be no question about obtaining personal jurisdiction over both Mr. Flynt personally and his magazine.

At the outset of the litigation Ohio specifically applied its own statute of limitations to dismiss the libel claim while upholding the viability of Plaintiff's claim for invasion of privacy.

Relying upon that determination for several years thereafter Plaintiff continued to vigorously prosecute her case in Ohio until on the night before trial was to commence the Ohio trial court reversed itself and applied the New York statute of limitations reparable to the cause of action for invasion of privacy and dismissed the Plaintiff's case entirely out of court.

After the Plaintiff's appeal was affirmed by the Ohio Appellate Court Plaintiff promptly brought a diversity law suit in New Hampshire serving the Defendants under the New Hampshire long-arm statute which the New Hampshire Supreme Court has interpreted as being intended to be extended as far as the Constitution will permit under the due process clause.

The District Court found that while the New Hampshire long-arm statute was satisfied due process forbad entertaining the action and it dismissed it giving two reasons: Plaintiff's lack of connections or contacts with the State of New Hampshire and the alleged lack of New Hampshire's interest in the litigation.

The First Circuit affirmed without disturbing the District Court's evaluation of the Defendant's presence in New Hampshire as regular, systematic and continuous because of the monthly circulation of Hustler seeking to exploit the New Hampshire market place which took place on a continuing basis since 1975.

The reason or the reasoning of the First Circuit in affirming is epitomized in the catchy phrase at the conclusion of its opinion in which it said the New Hampshire tail is too small to wag so large an out of state dog.

The phrase captures what we submit to this Court is the essential misconception of the lower courts in assuming that jurisdiction turns on a little more or a little less of Plaintiff's contacts and damage in the forum overlooking that for 38 years since this Court's opinion in International Shoe the jurisdictional inquiry has always focused on the contacts of the defendant, not the plaintiff.

We submit to the Court that insofar as the assertion that jurisdiction is to be determined there are essentially three levels by which or three tiers by which a determination can be made.

If a defendant by its continuous, systematic process can be said to be doing business then it is dogmatic that general jurisdiction exists in that forum for litigation against that defendant for all kinds of causes of action.

We do not argue in this case that we fall within that rubric.

We submit that synthesizing all of the cases in which this Court has spoken from International Shoe through Mr. Justice White's opinion in World-Wide Volkswagen.

Unidentified Justice: That was the Court's opinion.

Norman Roy Grutman: The Court's opinion written by Mr. Justice White.

Forgive me.

The synthesis of those cases holds that where you have purposeful conduct by a defendant directed at the forum in question and out of which conduct the cause of action arises or is generated that satisfies the formula of those minimum contacts which substantial justice and reasonable fair play make it suitable that a defendant should be hailed into that court and be amenable to suit in that jurisdiction.

Unidentified Justice: I am a little surprised, Mr. Grutman.

You do not make much of the Boxite case which came after International Shoe.

You cited in your reply brief but not in--

Norman Roy Grutman: Yes, we do, Your Honor.

The Boxite case as I interpret it has to do with the failure of the defendant who by its waiver to its failure to comply with orders of the court to demonstrate its nonamenability to suit was found by the Court in that case to have subjected itself to a determination that facts could be found against it so that jurisdiction could be properly assessed against that defendant.

Unidentified Justice: --But it certainly bears on World-Wide Volkswagen.

Norman Roy Grutman: I think it does, but I think that Volkswagen in its facts and in the more expansive treatment in the Court's opinion is a case which I think provides the springboard from which the Court can find in this lawsuit that what you have present in this case and what was lacking in Volkswagen.

In Volkswagen you had purely adventitious or fortuitous circumstances by which jurisdiction was asserted against a little automobile dealer in Mesena, New York whose only business was in Mesena, New York and who had no connection with the State of Oklahoma.

Similarly the tri-state regional dealer albeit under the name World-Wide Volkswagen it unlike Hustler in this case in no way for its economic advantage did business in Oklahoma or sold its products in Oklahoma.

As I read what the Court was saying and what your opinion I think pointed to Mr. Justice Blackmun is that you were looking for in the conduct of the defendant willful, purposeful economic activity.

Now that is clearly present in this case as it relates to Hustler because Huslter in the Court's opinion directly or indirectly was responsible on a systematic basis from 1975 for sending copies of its magazines into New Hampshire out of which the record shows they derived substantial economic benefit running into millions of dollars.

That was not one insurance policy which this Court found sufficient in McGee v. International Insurance.

That was a 1957 case and again tracing the sweep of this Court's opinions on jurisdiction starting with the germinal case of International Shoe and running through World-Wide Volkswagen into the Boxite case I think the Court has acknowledged that we are seeing an expansion of jurisdiction since the second World War in recognition of the changing facts of life in American society.

I say that on the second level of analysis which our reply brief attempted to explicate for the Court we believe that we are squarely within the philosophical underpinnings by which this Court has formulated those circumstances in which jurisdiction can properly be laid, and again I say the focus must be on the conduct of the defendant.

Respondent's briefs tend to castigate us by opprobrious references to so-called forum shopping, which, while it is sort of a pungent phrase, seems to lose sight of the fact that it is not the plaintiff that creates the forum, it is the defendant, by his conduct in the forum.

Unidentified Justice: Of course, a nationwide publisher creates a forum, presumably, in almost any state, and I suppose it has always been libel plaintiff's position that they are perfectly at liberty to shop.

Norman Roy Grutman: They are what?

Unidentified Justice: They are perfectly at liberty to shop in that kind of--

Norman Roy Grutman: I think that is absolutely correct, Mr. Justice Rehnquist, because libel is a peculiar kind of a tort, and when we are dealing with media defendants that are nationwide in the scope of the economic activities that they pursue, seeking the benefits of the marketplace nationwide, they have the unique ability of simultaneously creating the harm which the libel causes in all of the places where the publication is disseminated.

Now, the publications have the benefit of the single publication rule.

That is a rule which I think is uniformly recognized throughout the country in which the plaintiff is required to prove all of her damage or all of his damage in whichever forum the case is properly brought, but if one were to look at that from the standpoint of the publisher, what should the publisher do in the event of concern with statutes of limitations or the special niche which this Court has carved out for media defendants in libel cases?

This Court in its decisions beginning with Sullivan and working through Gertz against Welsh in the evolution of the public figure doctrine, has established that the states, so long as they do not create liability without fault, may establish standards which are different.

State A may say that it is gross negligence.

State B may say that it is simple negligence.

State C may say it is the malice standard.

Now, assuming that we have a publication, of whatever nature, whether it is acceptable or presumably reputable, if a harm occurs nationwide, then conscientious and responsible lawyering would require that a plaintiff take cognizance of where it would be most propitious to bring the lawsuit, and in that, I think there is neither shame nor disgrace.

I think that it is an incident of our federal system under the peculiarity which adheres in defamation law.

The submission, may it please the Court, which we make, is that we are squarely within all of your prior holdings.

We are the case which International Volkswagen contemplated with the telling difference to which I have alluded and the argument that I have just made.

The contention is, however, made by respondents that there must be, in order for jurisdiction to be appropriate against an out of state resident in an action such as this, a so-called state's interest.

Well--

Unidentified Justice: --Do you understand respondent's contention in that regard to mean something more than just the state of New Hampshire was willing to accept this case in a state court?

I suppose it must, because it is obvious that the state of New Hampshire would have accepted this case.

Norman Roy Grutman: --Precisely.

I do.

And--

Unidentified Justice: So it must have a constitutional dimension, the term states--

Norman Roy Grutman: --I think that there is a constitutional dimension, and it could primarily be derived from the fact that an indispensable ingredient of state sovereignty is the right of any state to regulate intentional harm which takes place within the perimeter of its geographical confines, particularly where that harm is not unintentional.

Unidentified Justice: --I meant that I thought the respondent's contention that there must be a state interest had a constitutional dimension to it.

Norman Roy Grutman: Beyond what I have said, I am not prepared to concede that.

Unidentified Justice: Well, no, I don't ask you to; but is that your understanding of respondent's contention?

When they talk about a state's interest, it isn't just a question of what New Hampshire wanted in this situation, but that there are some limits on what New Hampshire can do.

Norman Roy Grutman: I am not really sure that I can agree with that, because I think that takes us into a very murky area, where it would be extremely difficult to predict or to understand what kind of state interest they want.

Perhaps, Mr. Justice Rehnquist, in another kind of a case, in a case in which you have something less than purposeful conduct out of which the cause of action arose, and you were looking to ascertain whether jurisdiction could be affirmed, you would have to find affiliating circumstances with the defendant plus a so-called state interest.

Now, that kind of a state interest, if you look for it in this case, and it is to that to which I address my attention, is demonstrated, as we have set forth in our reply brief, by the fact that New Hampshire in 1971 amended its long arm statute so as to permit the use of that statute for non-residents.

It has interpreted its long arm statute to permit the furthest reach permissible under due process.

In Leaper versus Leaper, which was treated by the First Circuit, New Hampshire said it had an interest in protecting not only its residents but non-residents against just such kinds of harm as are involved in a case like this in libel, and lastly, New Hampshire, expressing as another part of the cluster of its evidences of its interest in this case, has a criminal statute which makes it a misdemeanor if anyone intentionally by falsehood holds someone up to the kind of ridicule, calumny, and obloquy which Mr. Flynt did in this case.

So, if you ask me in this case, because I am not really entirely sure whether the respondents are advocating that there should be a general grab-bag of so-called state interests which are highly amorphous that should be considered at every stage in all cases in the equation of ascertaining if jurisdiction exists or not, that is so far cut of the question, I would prefer for the purposes of the adjudication of this case to confine myself simply to the facts of this case, and to point out that if you are looking for state interest, it is abundantly present in all of the indicia to which I have just alluded.

Unidentified Justice: Well, Mr. Grutman, does that include any actual harm to the plaintiff?

Is that alleged in the state of New Hampshire?

Norman Roy Grutman: Yes.

It is... not only is it alleged, it is conceded by the First Circuit that harm occurred in New Hampshire.

Unidentified Justice: That harm being?

Norman Roy Grutman: The harm occurs in the defamation itself, the negative reputation if she doesn't have a positive reputation.

It is the libel, the accusation, the psychic mayhem, which is what Professor Tribe calls it, of simply disseminating something which is itself a libel.

There is no requirement when you speak of harm, Mr. Justice Brennan, as far as I understand it, that the plaintiff has to demonstrate that she suffered her principal injury or loss in that particular state, so long as some harm occurred there, and the harm by definition under the restatement and under the law of New Hampshire would be the circulation, not necessarily where it was published, but the circulation of something which is libelous.

As I think... forgive me.

Unidentified Justice: It is alleged that this particular issue which involved the petitioner--

Norman Roy Grutman: Yes.

Unidentified Justice: --was circulated?

Norman Roy Grutman: Oh, there is no question about that.

There were a minimum of 10,000 copies that month and every month, and there are five issues which we are concerned with.

You see, this is not an isolated case.

It is a total campaign where this media mogul has simply fastened on Ms. Keeton as an object of his ire, and can decide that he can make money all over the country, but he just doesn't want to be sued in New Hampshire.

Unidentified Justice: Would this apply in Alaska, too?

Norman Roy Grutman: I beg your pardon?

Unidentified Justice: Would it apply in Alaska?

Norman Roy Grutman: It would apply, Mr. Justice Marshall, wherever the magazine was circulated.

It would apply in Honolulu if the publication were circulated there.

It would apply theoretically and, I think, correctly wherever the magazine was circulated, however many copies were circulated.

Unidentified Justice: Just to clarify the point, that would be even if the plaintiff was totally unknown in the jurisdiction before the magazine was circulated?

I think that is correct, Mr. Stevens, so long as Alaska or Hawaii adheres, I believe, to the uniform and universal determination that the tort of libel is perpetrated wherever a defamatory falsehood is circulated.

Wherever a third person reads about it, there is that harm.

What if the publisher had no intention of ever selling any magazines in New Hampshire?

Norman Roy Grutman: A very different case, Mr. Justice White.

Unidentified Justice: I know it is different, but how... what would be--

Norman Roy Grutman: I think that is a case--

Unidentified Justice: --Would the result be different?

Norman Roy Grutman: --It might he different.

It might be different, because in that case you could not say, as you do here, that you have purposeful conduct.

Unidentified Justice: Yes.

Norman Roy Grutman: There you have to look for other... I think your phrase is affiliating circumstances, other connections, judicially cognizable ties--

Unidentified Justice: Is your position that if this case had been brought in the New Hampshire state courts, is it your position that the New Hampshire courts would have been required by the federal Constitution to entertain the suit?

Norman Roy Grutman: --I don't think that is a question that is inherent in the case, but I think that they should have, yes.

Unidentified Justice: And you would say that they would not be entitled just to dismiss the suit?

Norman Roy Grutman: I am not entirely sure of the answer to that question, because that is a state court, and your question postulated a state court.

I believe that because we brought it in federal court, and because of the federal court's unflagging obligation to exercise jurisdiction to its maximum, a federal court could not--

Unidentified Justice: Well, what if you... I suppose you think that the court of appeals held... held that the federal Constitution prohibited New Hampshire from entertaining--

Norman Roy Grutman: --Yes, the federal court would be prohibited.

I am not quite sure of what the answer would be in a state court.

Unidentified Justice: --Well, suppose a state court could have dismissed it without having any problems under the Constitution.

Norman Roy Grutman: Yes--

Unidentified Justice: Could a federal court sitting in that district also dismiss it for the same reason that the--

Norman Roy Grutman: --I do not think so, because the requirements--

Unidentified Justice: --Why not?

Why not?

Norman Roy Grutman: --Because the requirement--

Unidentified Justice: You couldn't say it's a constitutional problem.

Otherwise, the state would have to entertain it.

Norman Roy Grutman: --Mr. Justice White, I am not sure of the answer to this question.

I have pondered the question.

I think there is a difference between what a state and a federal court could do.

Unidentified Justice: Aren't you claiming, though, that the district court was required to entertain it by the Constitution?

Norman Roy Grutman: Yes, I am.

Unidentified Justice: But you don't have to go that far.

Norman Roy Grutman: Perhaps I don't have to, Mr. Justice Rehnquist.

Unidentified Justice: All you have to prove, really, is that New Hampshire would have entertained it, could have under the Constitution, and this was a federal court sitting in diversity.

Norman Roy Grutman: Exactly.

And because of New Hampshire's statement about its intention of what should be done, namely, that New Hampshire would have taken this case, the district court said that the New Hampshire court would have taken this case if it was a New Hampshire resident.

Unidentified Justice: Well, you do have to... you do have to, though, say that... you do have to say that the Constitution would not have forbidden New Hampshire to entertain--

Norman Roy Grutman: No, I don't think you can force jurisdiction on a state, on a state court, and as again I pointed out, I think there is a very big difference between state courts and federal courts and their obligations.

Unidentified Justice: --Yes, but you have to say that... you have to say that the constitutional holding of the court below was wrong.

You do have to do that.

Norman Roy Grutman: Would you repeat that for me, please, Mr. Justice White?

I didn't hear you.

Unidentified Justice: Well, the court below held that the Constitution forbad.

Norman Roy Grutman: Yes.

Unidentified Justice: You have to overturn that.

Norman Roy Grutman: Yes, I do.

Unidentified Justice: You have to win on that issue.

Norman Roy Grutman: I think I do, and the reason I think I do is because the court's perception of which end of the scope to look through was just backwards.

Unidentified Justice: Well, Mr. Grutman, I understood in part of your colloquy with Justice White, that you think our cases support the proposition that a federal court in a situation like that may have an obligation to take jurisdiction even where the state court doesn't.

I am at a loss to know why that would be in a diversity case.

Norman Roy Grutman: Because I think the obligation which the federal rules require is that a federal court cannot substitute an alternate basis of its own determination which runs contrary to what the state has said, and New Hampshire has said it would take this case.

Unidentified Justice: But diversity is not a constitutional principle.

Norman Roy Grutman: I beg--

Unidentified Justice: Is it?

Norman Roy Grutman: --Which is not a--

Unidentified Justice: Diversity is judicial--

Norman Roy Grutman: --That is correct.

Unidentified Justice: --and not constitutional.

Norman Roy Grutman: That is correct.

Unidentified Justice: Well, how does that put a constitutional burden on somebody?

Norman Roy Grutman: Because once you have diversity, and you have a demonstration--

Unidentified Justice: Well, the only diversity here is that this person has never been in New Hampshire.

Norman Roy Grutman: --Nor had Mr. Flynt been there, but the publication was there, the publication--

Unidentified Justice: I am not talking about any case but this one.

Norman Roy Grutman: --All right.

Unidentified Justice: And you say that she could file case in New Hampshire if she were a citizen.

Norman Roy Grutman: That is what the district court said.

Unidentified Justice: Do you agree with that?

Norman Roy Grutman: No.

Do I believe that she should have been able to?

Yes, except the only disagreement--

Unidentified Justice: Except that she wasn't.

Norman Roy Grutman: --My disagreement is--

Unidentified Justice: So what's that got to do with this case?

Norman Roy Grutman: --It has to do with the fact that there's a discrimination that is being practiced upon a non-resident.

They are saying, although the legislature--

Unidentified Justice: Well, doesn't diversity automatically discriminate?

Norman Roy Grutman: --I think diversity makes for jurisdiction in the federal court.

It is the sine qua non for diversity jurisdiction.

But in a state court, which is where I think we were speaking of, if this case had been brought in the state court, the district court said that New Hampshire would undoubtedly have entertained the case.

Now, because Ms. Keeton was not a New Hampshire plaintiff, a discrimination was practiced against her that finds no support in the New Hampshire decision or in the New Hampshire legislation in which she was deprived of her right to that forum, and while the due process argument is raised against her, I think that is an argument that she could raise on her own behalf along with equal protection.

Unidentified Justice: I have one more question.

Norman Roy Grutman: Yes, sir.

Unidentified Justice: Could she have filed 50 lawsuits?

Norman Roy Grutman: No, she could not, because the single publication rule requires that the plaintiff make an election of that jurisdiction in which she intends to make a claim not only for the harm that occurred in the jurisdiction where she properly brings suit, but for the harm that has occurred wherever the libel has been perpetrated.

Unidentified Justice: And her damages would be the damages to her reputation in New Hampshire?

Norman Roy Grutman: No, they would not.

The damages that she would be entitled to prove in New Hampshire would not be restricted simply to those that were sustained in New Hampshire, but would embrace all of the damages that she had suffered wherever it had occurred.

Unidentified Justice: Including Alaska and Hawaii?

Norman Roy Grutman: Including Alaska, Hawaii, Kampchatga and Tobago, wherever.

I think--

Unidentified Justice: Guam?

Norman Roy Grutman: --Pardon, Your Honor?

Unidentified Justice: Why don't you go to Guam while you're at it?

0 [Generallaughter.]

Norman Roy Grutman: Anywhere, Your Honor.

Worldwide.

Wherever they occur, she has to bring that to that forum.

Why did she go to Ne Hampshire is obvious, because it was the only remaining jurisdiction in which suit could have been brought.

It was the only statute of limitations that was still viable.

Unidentified Justice: New Hampshire couldn't give remedy for any injury except that which occurred in Ne Hampshire?

Norman Roy Grutman: I disagree, Mr. Justice White.

I believe--

Unidentified Justice: You just said--

Norman Roy Grutman: --The damages worldwide become--

Unidentified Justice: --In the New Hampshire suit, you could recover.

Norman Roy Grutman: --In the New Hampshire suit, the damages sustained wherever they occur is proof that is to be brought in the New Hampshire action.

Unidentified Justice: Of course, while you say that, you are in effect making an end run around the statute of limitations in all other jurisdictions.

Norman Roy Grutman: That may be a by-product, or that may be a fact, but I do not think because we are a federal system, Mr. Justice Blackmun, I do not think that because we are a federal system, where the statutes of limitations in the 50 states may vary, that as soon as the earliest statute expires, that all of the others simultaneously are extinguished.

Insofar as New Hampshire is--

Unidentified Justice: That isn't what I am asking, but is that one extinguished, the one that has expired?

Is that one extinguished even in New Hampshire?

Norman Roy Grutman: --No, it was not extinguished at the time.

Unidentified Justice: That is your position, and of course I suppose one could take the other position.

Norman Roy Grutman: I think not.

It is unquestionable that at the time this lawsuit was brought, the legislature of New Hampshire had allowed, I believe, a six-year period in which libel actions could be brought before it, and we were within the New Hampshire statute of limitations.

I think it is desirable--

Unidentified Justice: May I ask another question?

Norman Roy Grutman: --Certainly.

Unidentified Justice: The... In the red brief, they take the position that the issue is different as to the corporate publisher and the individual defendant and the parent.

Do you--

Norman Roy Grutman: That is another case for this morning, Mr. Justice Stevens.

But it raises a point which I think bears mention in this case.

Unidentified Justice: --Well, it is this case.

It is this case.

Jurisdiction over Larry Flynt in--

Norman Roy Grutman: Exactly.

The problem there was that because the district court decided that it didn't have jurisdiction over the publication, it never considered whether it had jurisdiction over the corporation or Mr. Flynt personally, and we were deprived of the opportunity of establishing the record, which I submit responsively we could demonstrate that we will be able to do if on remand we can flesh out the record and demonstrate that--

Unidentified Justice: --Well, but in the trial court, was not jurisdiction overall all three parties challenged?

Norman Roy Grutman: --In which--

Unidentified Justice: In the district court.

Didn't they challenge jurisdiction over all three?

Norman Roy Grutman: --They did, but the district court never considered--

Unidentified Justice: Why didn't you--

Norman Roy Grutman: --The district court said, inasmuch as they are making a determination that there is no jurisdiction over the publication, that will lump together Flynt and the corporation, and we don't thin that that is correct, because the jurisdictional equation must be separately applied to each defendant and that wasn't done in the district court.

Unidentified Justice: --But you had an opportunity to make whatever record you need to as to the other two--

Norman Roy Grutman: No, we did not fully.

I will develop that in my rebuttal, since I notice that my time has presently expired.

Chief Justice Warren E. Burger: Mr. Shapiro.

Stephen M. Shapiro: Thank you, Mr. Chief Justice, and may it please the Court.

My submission as amicus curiae is that the court of appeals correctly applied the due process clause to prevent the forum shopping attempted by plaintiff.

Forum shopping in multi-state defamation cases poses a very real danger to the values of our federal system.

It permits a plaintiff who sleeps on her rights to sue in any state which has the longest statute of limitations, effectively making that statute nationwide and scope and overriding the policies of the other states having a paramount interest in the parties and in the litigation.

This case vividly illustrates that danger.

Plaintiff here--

Unidentified Justice: You say the other states, the other states have a paramount interest in the parties?

Stephen M. Shapiro: --In the parties, Mr. Chief Justice.

That would be--

Unidentified Justice: That seems to negate what you started out with.

Stephen M. Shapiro: --The states that have the paramount interest are New York and Ohio, the states of residence, and also those are the states where the damage from the libel principally occurred.

We say these are the states with a paramount interest, and these are the states where the statute of limitations had expired.

Unidentified Justice: Mr. Shapiro, would not the Ne Hampshire court have the authority if it found jurisdiction to apply the statute of limitations of the other states with respect to the recovery?

Stephen M. Shapiro: One would think that the court should do such a thing, and that it would be reasonable to do so, but the law in New Hampshire is that the statute of limitations is procedural in nature, and that the court therefore applies its own local statute of limitations, bringing back to life a tort action that is dead in the other 49 states where 99 percent of the damages actually arose.

Unidentified Justice: Mr. Shapiro, if your concern is with what you feel to be manipulation of statutes of limitations, it seems to me that is not a jurisdictional argument.

That is perhaps an argument over choice of law, maybe constitutionally mandated choice of law.

Stephen M. Shapiro: We submit that the choice of the forum here for the purpose of escaping the statute of limitations in the 49 other states is indeed a jurisdictional matter, because it implicates the interests of the other 49 states, which is one of the very most fundamental concerns of the due process clause, and imposes burdens on the party and the judicial system that are unreasonable burdens, which is the other leg of the due process analysis.

Unidentified Justice: Mr. Shapiro, this argument doesn't dispose of the case, because you still have got New Hampshire left.

Stephen M. Shapiro: The suit in New Hampshire has been dismissed.

There was a--

Unidentified Justice: Well, I know, but your argument would say New Hampshire couldn't give a remedy for injuries that have already barred somewhere else, but how about the injury in New Hampshire?

Stephen M. Shapiro: --Well, that--

Unidentified Justice: You still have to make that argument.

Stephen M. Shapiro: --We don't have to make that argument for this reason.

This suit is not focused on damages in New Hampshire.

It is focused on damages throughout the entire United States.

Unidentified Justice: Well, it may be, but your argument would only say... would only refer to the injuries outside of New Hampshire, the argument that you have made so far.

Stephen M. Shapiro: If this case was filed in New Hampshire just for New Hampshire damages, it would present a very different issue--

Unidentified Justice: How do we know that she will not be able to prove damages in New Hampshire?

You seem to take that as an assumption, that she can't.

Stephen M. Shapiro: --We take that as a finding of the district court, that she had no reputation of any sort in the jurisdiction.

She was a virtual unknown in the jurisdiction.

She had never lived there, never owned any property there, had virtually no ties with the forum.

If she did--

Unidentified Justice: That may be, but suppose there was proof of it.

Your argument would not forbid New Hampshire to give a remedy for that.

Stephen M. Shapiro: --Not necessarily.

I say that is a closer question, because it still has elements of inconvenience.

There still is a question about the palpability of the state's interest.

Unidentified Justice: I know, but the holding that you are seemingly defending is that the Constitution of the United States prevented the district court from entertaining this suit even if, as I understand it, there was damage in New Hampshire.

Stephen M. Shapiro: That's correct, because the purpose of this lawsuit is to recover damages in all 50 states.

Unidentified Justice: You haven't answered that one yet.

Stephen M. Shapiro: If the suit was focused solely on damages in the state of New Hampshire, we say it would be a different case, and it may be--

Unidentified Justice: Well, it may be different, but what would the result be jurisdictionally?

Stephen M. Shapiro: --I say that that is a fence sitter for this reason.

You would not be trampling--

Unidentified Justice: Well, which side are you going to fall off of?

0 [Generallaughter.]

Stephen M. Shapiro: --I would submit in that case that there may well be jurisdiction over that particular limited cause of action, although it is not at all clear, because the lack of state interest and the inconvenience to the parties is present.

Unidentified Justice: Well, I know, but aren't there allegations here of injury in the state of New Hampshire?

Stephen M. Shapiro: There is nothing but a general allegation of $80 million in damages throughout the United States.

Nothing is focused on the state of Ne Hampshire.

Unidentified Justice: Well, I know, but he might prove it whenever he had a chance to prove it.

Stephen M. Shapiro: Well, there were affidavits submitted, Your Honor, in the district court.

Unidentified Justice: I know, but there has been no ruling on it.

That is a... They dismissed the case, dismissed the case for lack of jurisdiction.

Everything has to be resolved against affidavits at this point, because they have never had an opportunity to put in their proof.

Stephen M. Shapiro: It is the plaintiff's burden to show that the state of New Hampshire had an interest in this cause of action that was filed in this jurisdiction, and there is another lack of evidence, affidavits, arguments in the briefs to that effect.

Unidentified Justice: Well, maybe she can prove it if she has her day in court, and if that happens, the federal court might decide, agreeing with you, that the damages could be only the damages suffered in the state of New Hampshire.

Stephen M. Shapiro: I would submit to Your Honor that that would be inconsistent first with the single publication rule, which says that you have to subsume all of your damages in a single piece of litigation.

It is inconsistent with the theory of this complaint, which is seeking $80 million in damages for nationwide injury.

Unidentified Justice: That may be, but the judgment you are defending, the judgment you are defending here is that there is no jurisdiction in the district court because of the federal Constitution to hear even a case about damages in New Hampshire.

Stephen M. Shapiro: We disagree, Your Honor, with that interpretation.

The essence of this holding is that this suit is intended--

Unidentified Justice: Well, what if we don't agree with you.

What if we don't agree with you?

What are we going to do about the district court's constitutional holding that there could not be a suit in New Hampshire for New Hampshire damages?

Stephen M. Shapiro: --I would suggest to you, Your Honor, that that is simply not the holding in this case.

If another pleading were filed that focused in exclusively on injuries in New Hampshire, that question would be presented, but that--

Unidentified Justice: Say it focused on both, clearly both.

Say any fool reading it would know it focused on both.

Stephen M. Shapiro: --Well, in that situation, if the Court were disposed to look at the case as one seeking both 1 percent of the damages in New Hampshire and 90 percent of the damages in other jurisdictions, if the Court were to do that, the correct constitutional result would he that only that 1 percent of the damages in the local jurisdiction could be collected, because collection of the 99 percent from the rest of the jurisdictions would infringe the statute of limitations in those states.

Unidentified Justice: But that is not a reason for dismissing the whole suit.

You say that they are seeking nationwide damages, and perhaps they might recover New Hampshire damages only, but certainly New Hampshire is one of the 50 states, and it is part of the nation, and so that when they seek nationwide damages, it probably includes some small segment that happened in New Hampshire.

Stephen M. Shapiro: Well, I would submit that if the Court wore disposed to redraft the complaint in this manner to make it a New Hampshire damage proceeding, and to remand with the opinion stating that only damages in that jurisdiction are constitutionally collectible, that perhaps would be a constitutionally permissible result, but it would require a reformulation of the complaint, a reformulation of the--

Unidentified Justice: It would also require reversing the district court's jurisdictional holding, and which I take it you would think we should do, if it were just strictly a New Hampshire suit.

Stephen M. Shapiro: --I said initially that I thought that that was a much closer case.

I am not persuaded that even that case is one that is within the constitutional power of the district court.

Unidentified Justice: You are still on the case.

You are still on the case.

Stephen M. Shapiro: In light of the Court's analysis of this question and discussion of the question, it is perhaps worth focusing on a little more.

I am very doubtful about the constitutionality of even that localized proceeding, even though that hasn't been briefed, even though that is not the nature of the complaint, and even though that isn't the argument of my brother, Mr. Grutman.

I am doubtful about it because the parties still have a most indirect and tenuous connection with this forum.

There is a very substantial burden o them.

I don't think that the state of New Hampshire--

Unidentified Justice: Mr. Shapiro, you say the parties have a very indirect and tenuous connection with this forum.

Let's take the defendant.

The defendant, as I understand it, sent to New Hampshire six, eight, 10,000 copies of the magazine each month.

How can you call that an indirect and tenuous connection?

Stephen M. Shapiro: --Those copies, by the way, Mr. Justice, were sent through an independent distributor in Connecticut--

Unidentified Justice: Well, do you think that--

Stephen M. Shapiro: --were sold by independent retailers and wholesalers in the state of Connecticut.

Unidentified Justice: --Don't you think the corporate defendant intended that to happen?

Stephen M. Shapiro: There is no doubt that he did, and that there is some connection with the forum state.

I don't dispute that.

However, both of the courts below correctly characterized it as a tenuous and a spars connection.

Unidentified Justice: Why is that either... why is that correct?

Stephen M. Shapiro: Because it is... there is no presence of property in the jurisdiction.

There is no agent in the jurisdiction.

There is merely selling products in the jurisdiction, like the rest of the 50 states in the United States, and to say that this is a substantial continuous presence is to say, as Mr. Grutman did, that this company is present everywhere, and that the plaintiff can pick and choose among the 50 states and sue in Hawaii or sue in Alaska.

Unidentified Justice: If the corporate defendant chooses to publish hundreds of thousands of copies of a magazine and libel somebody in it, it is present everywhere.

Stephen M. Shapiro: The answer is, Mr. Justice, that we are talking about the selection of a reasonable forum to litigate this particular dispute, and that requires consideration of the location of the parties.

It requires a consideration of the interests of the other states in the federal system, and to permit this lawsuit, which seeks recovery of $80 million for damage throughout the country to proceed, runs roughshod over the policies of the other states in the Union.

Unidentified Justice: Maybe they won't be able to make the proof for the other 49 states, and how does this Court concern itself with that problem at this stage, before there has been any evidence and before there has been any trial?

Stephen M. Shapiro: I think the Court has to take the complaint the way it is drafted as a nationwide libel complaint and not a complaint for damages in the state of New Hampshire.

Unidentified Justice: People don't always get everything that they ask for in a complaint, do they?

Stephen M. Shapiro: Well, as I said, Mr. Chief Justice, I am even doubtful about the constitutional validity of sustaining this merely as a proceeding to collect damages in the state of New Hampshire, in light of the burdens on the parties that would be produced by this sort of forum shopping, by the lack of direct state interest compared to the interests of New York and Ohio, and by the other factors that this Court mentioned in the Volkswagen case, which I would like to enumerate.

Unidentified Justice: Mr. Shapiro, I am afraid we are no giving you much chance to argue your case, but you suggest that the plaintiff has little or no interest because she may not have been known in New Hampshire but let's assume that she was not known at all therefore had no favorable reputation there.

Is it no possible that after these publications, she had a ba reputation in New Hampshire?

Stephen M. Shapiro: Well, I would submit that compared to the interests of the states with predominant, or, I say, paramount interest in the suit the state of domicile of the plaintiff and the state o domicile for the defendants who committed this allege wrong, that any such interest is a very abstract interest.

Unidentified Justice: Doesn't the state have an interest in protecting the name of a person who receives the sort of publicity this individual has received in New Hampshire, even though she was totally unknown before?

Stephen M. Shapiro: We think that that interest, although it is possible to articulate it, is not a sufficiently substantial interest to permit this overriding of the statutes of limitations in the 49 other states, including the state of domicile and the state where the damage occurred.

Now, undoubtedly it is true that a completely unknown person who has unflattering things said about them in the jurisdiction would experience some discomfort about this.

It is something that they don't want to occur.

But if you compare that interest to the interest of the state of New York, where she lived, had her reputation, had her professional relations and ties, that is the state which traditionally under common law principles is perceived as the state that has the paramount interest in a multi-state defamation action.

There is a body of law on this subject.

It is not just a matter of inferences about what the most reasonable forum is.

According to the restatement of conflicts, the states that have a real palpable interest in a multi-state defamation proceeding are the state where the plaintiff lives, the state, if there is another state, where she has a more well established reputation, such as the state where she works, the domicile of the defendant, because the state is responsible for the conduct of local residents, and the principal place of business of the defendant.

These are the logical focuses of a multi-state defamation case, and to say that the plaintiff is privileged to simply sue in Alaska or Hawaii or any other state in the Union without regard to the convenience of the parties, without regard to where the witnesses come from, which is here in New York and Ohio, and without regard to the needs of the judicial system, where a jury and a judge would have to sit through an extensive trial--

Unidentified Justice: Well, Mr. Shapiro, wouldn't you--

Stephen M. Shapiro: --is to invite forum shopping on the grandest scale.

Unidentified Justice: --Wouldn't you normally take care of that under the forum non-convenience doctrine, assuming that it were in a federal court and several jurisdictions were available?

It just simply isn't an option here because the statute of limitations has expired.

Stephen M. Shapiro: That's correct.

Unidentified Justice: But isn't that how you would normally take care of those concerns?

Stephen M. Shapiro: I believe, Justice O'Connor, that this 1401(a), the forum non-convenience statute, has been traditionally held and consistently held not to even come into play unless personal jurisdiction is established in the forum, and here we say the choice of forum is so unreasonable and the burdens are so great and the disregard of the interests of the other states and the convenience of the witnesses is so great that the forum is a constitutionally deficient forum initially, and that you can't simply transfer a case under Section 1404.

It has to be dismissed.

And one of the undesirable consequences of simply permitting a transfer under 1404 would be that it would permit forum shopping with a vengeance.

The plaintiff would file the suit in the state with the longest statute of limitations, and then simply have the case transferred back to her place of residence, and get the benefit of the longer statute of limitations.

Unidentified Justice: Mr. Shapiro, you used the term forum shopping several times, and you speak of it rather opprobriously, as perhaps you have a right to, but there is no general constitutional provision against forum shopping, if you mean by that that the plaintiff chooses the forum in which it can get jurisdiction over the defendant in the most favorable terms to it.

Stephen M. Shapiro: We think the Constitution says something in addition to this, and that is that the forum has to be a reasonable and a fair forum from the point of view of all the parties, and from the point of view of the other states in the federal system.

There are two things that the due process clause guarantees, a fair forum for the parties and the witnesses, and a forum which is reasonable in light of the needs of the other 49 states in the Union.

These are the factors.

Unidentified Justice: Mr. Shapiro, may I interrupt you on that point?

Supposing this suit had been brought promptly after... within six months of the libel, so that the statute of limitations had not run in other states.

Would you still argue that New Hampshire had no constitutional power to entertain the suit?

Stephen M. Shapiro: Again, that is a closer question.

I am not sure I can give the correct answer to you, but it would certainly remove this element of trampling on the statute of limitations of the 49 other states.

That would be gone.

But it would still be an extremely inconvenient forum.

The defendants, the witnesses are all domiciled in other states.

The defendant is an individual paraplegic living in the state of California.

Highly inconvenient for them.

And it is inconvenient, we say, for the federal judiciary, too, to require a local court and a local jury to entertain a case such as this, an extended proceeding in which there is no palpable local concern, and this is a factor that the courts mention.

Unidentified Justice: Well, are you then arguing that the only constitutionally permissible forum was Ohio or New York?

Stephen M. Shapiro: That is essentially correct.

The state of plaintiff's residence is constitutionally permissible.

The state of Ohio, which was the place of business and the domicile of the defendants, would be constitutionally permissible under all circumstances, and the principal place of business, if there was one.

Unidentified Justice: Would you make the same argument even if most of the magazines were circulated in some third state, say, California or Illinois?

Stephen M. Shapiro: Yes, yes, we would.

The restatement... I would refer the Court to th restatement, Section 150, which has a very good discussion of which states really do have a palpable interest in a multi-state defamation case, and the place where the plaintiff lives, not only because that is convenient, but because that is a state that really has an interest in the outcome, and the state where the defendant resides, and the state where the defendant has principal place of business.

There is an additional state occasionally if the plaintiff works in another state and her reputation is better developed in that forum.

That would be a reasonable selection of forum in this instance, too.

Unidentified Justice: Mr. Shapiro, would you help me on one respect?

You referred a while ago to New Hampshire's statute of limitations situation as a procedural matter.

Stephen M. Shapiro: Yes, Your Honor.

Unidentified Justice: There was an action in Ohio in this litigation, and dismissed because the Ohio court applied the New York statute of limitations.

Is that procedural in Ohio or substantive?

Stephen M. Shapiro: The court treated it as substantive because it was a special statutory cause of action, and the statute of limitations was a precondition to the existence of the cause of action.

That is why it was treated as a migratory matter.

Ordinarily--

Unidentified Justice: If it is substantive, could you argue that the case is res judicata?

Stephen M. Shapiro: --It refers, I think, to a different cause of action.

It is the cause of action for privacy, whereas this is a cause of action for libel, and they have been treated as separate and independent causes of action, so I wouldn't press the res judicata argument.

Unidentified Justice: Maybe I missed it, but do you agree that it could have been filed only for the damages in New Hampshire?

Stephen M. Shapiro: I am very doubtful about that, although I say it is a closer question, and this--

Unidentified Justice: My problem is, how can we rule on all the multiple states if they would have jurisdiction there?

The only thing the multiple states would do would go to the damages.

Stephen M. Shapiro: --We--

Unidentified Justice: Am I right?

Stephen M. Shapiro: --Initially, Your Honor, I think if the Court were disposed to look at the case that way, if it were to say in the opinion that damages are restricted to the forum, which has a connection with the parties, that would be a substantial contribution to this body of law, and it would be a significant holding, but if... our position still is that even if it was restricted to damages in the state of New Hampshire, that there are very serious constitutional questions about even that, because it is such an unreasonable choice of forum from the point of view of the parties who live in Ohio and California and New York--

Unidentified Justice: Well, is forum non-convenience a constitutional point?

Stephen M. Shapiro: --When it becomes as egregious as this--

Unidentified Justice: How could it be?

Stephen M. Shapiro: --Well, this Court has said the balance of inconvenience--

Unidentified Justice: Which section of the Constitution does it--

Stephen M. Shapiro: --Due process clause, Fifth Amendment.

That if the balance of inconvenience is sufficiently severe--

Unidentified Justice: --In a civil case?

Stephen M. Shapiro: --Yes.

The International Shoe case.

If the balance of inconvenience and the choice of forum with respect to the interests of all the states is sufficiently unreasonable, it is a due process violation.

Unidentified Justice: But haven't all of our minimum contacts cases come up out of state courts, or have some of them come from federal courts?

Stephen M. Shapiro: Many of these cases... in this Court only from state courts, but the federal court sits as a state court in diversity.

It applies as state law non-statute, and the same constitutional due process provisions apply to the federal court when it sits as a state court in diversity.

Unidentified Justice: Are you as confident of your answer as you sound?

Stephen M. Shapiro: Yes.

0 [Generallaughter.]

I have read--

Unidentified Justice: But no case from this Court supports that proposition.

Stephen M. Shapiro: --Simply because I don't think a diversity case has reached this Court that presents this problem, but I believe it is unanimously accepted in the lower courts that the federal court sits as a state tribunal applying the state long arm statute.

Unidentified Justice: You see, in some... if you are out of the diversity field of... you may have nationwide service of process in some cases--

Stephen M. Shapiro: Oh, yes.

Absolutely.

Unidentified Justice: --that may make it much easier to try a case in federal court than in the corresponding state court.

Stephen M. Shapiro: Absolutely.

When Congress acts... enacts a special jurisdictional statute that expands service in a securities case or an antitrust case, that is a different matter.

In this case the district court sitting in diversity just applies the state long arm statute.

There is no other provision conferring more expansive jurisdiction coming from Congress.

That is the essence of the holdings that I referred Your Honor to.

Unidentified Justice: It would be a waste of time if we spend all our time and decide this case on diversity, and then next year Congress gives up diversity?

Stephen M. Shapiro: That is a possibility, of course, that Congress may--

Unidentified Justice: It sort of shows that it really is a constitutional point.

Stephen M. Shapiro: --I believe it is a constitutional point.

I would like, if I may, to refer to the factors that this Court has said are dispositive in deciding whether personal jurisdiction is appropriate in a case such as this.

Unidentified Justice: Mr. Shapiro, before you do, I may have... perhaps I missed it, but if the suit hadn't been barred in Ohio and had gone forward, but it was barred everywhere else--

Stephen M. Shapiro: Yes.

Unidentified Justice: --have you said, could the recovery be nationwide then?

Stephen M. Shapiro: Yes, it could, and the reason for that, Your Honor, is that that is a state that has a paramount interest in the litigation.

Unidentified Justice: But you wouldn't say then--

Stephen M. Shapiro: It would stop the tail from wagging the dog.

Unidentified Justice: --You wouldn't say then that there was some effort to run around the statute of limitations of all the other states?

Stephen M. Shapiro: We make no such contention.

If a constitutionally reasonable forum is selected, then we have no trouble with the single publication rule, and damages can be awarded for the entire nation.

Unidentified Justice: Thank you.

Stephen M. Shapiro: The factors that this Court has mentioned in its recent decisions are the forum's interest in deciding the dispute, the burden on the defendant, the plaintiff's interest in convenient relief, the judicial system's interest in efficient disposition of suits, and the shared interests of all of the states in efficient application of their own substantive policies.

And we submit that each of these factors weighs very heavily against the choice of forum in this particular case.

The burden here on the defendants is a very substantial one.

The defendants were all domiciled and had their place of business in Ohio.

The individual defendant is a paraplegic, residing in the state of California, and as the uncontradicted affidavits show, all of the evidence for the defense must come from New York, California, and Ohio.

None of it comes from the state of New Hampshire.

And these persons aren't even within the subpoena power of the New Hampshire court.

Unidentified Justice: Are you suggesting the difficulty of traveling to New Hampshire for the trial of the case because of some disability?

Stephen M. Shapiro: This is a factor to be weighed.

Justice Brennan has made the point in a number of his opinions that litigation involves real people with differences, and this man is confined to a wheelchair, and is under continuous medical care, which makes traveling across the country for an extended trial in another jurisdiction a very significant burden.

Unidentified Justice: You distinguish the travel across the country for a trial from the travel to Washington for a similar purpose?

Stephen M. Shapiro: I do indeed.

An extended trial in an $80 million cause of action is a very substantial and grueling ordeal.

The plaintiff is, of course, entitled to seek convenient relief.

The trouble here is that she is seeking inconvenient relief from the point of view of everybody concerned.

It is inconvenient from her point of view.

This isn't her home.

It is inconvenient from the point of view of each of the defendants.

It is inconvenient from the point of view of each of the witnesses.

And it is grossly inconvenient from the point of view of the local court and the local jury that would be required to devote their own scarce time to resolve this stale controversy, in which neither they nor their neighbors have any palpable interest.

And in our view, the state of New Hampshire's interest in this litigation--

Unidentified Justice: Well, let me inquire there.

Just a minute, Mr. Shapiro.

You say, in which they have no interest.

Doesn't everyone of the 200 and some million people in this country have an interest when someone else is damaged and injured, if they can show that they have been?

Stephen M. Shapiro: --We think not, Your Honor.

As this Court--

Unidentified Justice: You mean, all the rest of the people are totally indifferent?

Stephen M. Shapiro: --The states are not keepers of the residents of other states, as this Court held in Mite against Edgar.

The state's interest is in protecting its own residents, and this is the--

Unidentified Justice: Yes, but under that argument, they should not have extended their long arm... the benefits of the long arm statute to non-residents.

Stephen M. Shapiro: --And indeed, we don't think that they have.

If the Court looks at the opinions that Mr. Grutman has cited, the Leeper case and the Roy case, you will see that the New Hampshire court applies the very same analysis that we are talking about here.

There has to be a palpable state interest, and there is a prohibition against forum shopping under this very statute.

They apply the same constitutional principles that we are relying on here.

Unidentified Justice: But the court of appeals and the district court were against you on that point of New Hampshire law.

They said New Hampshire would have entertained this suit.

Stephen M. Shapiro: What they said is that New Hampshire applies the same due process test that this Court has to apply.

They didn't say one way or the other whether the state would fit this within the literal language of the provision, although I... correct that.

They did say that there is some doing business here, but under the statute as interpreted in New Hampshire you have to weigh the palpability of the local state interest and you have to determine whether there is forum shopping going on.

I have very little doubt that the state of New Hampshire would do with this case precisely what the district court did.

That is, to dismiss it.

Plaintiff doesn't get much argument... support for the argument that she is presenting here with the theory that the tort took place in New Hampshire.

This is, of course, the keystone of her submission.

This argument is too abstract to be helpful in a case that involves a defamation in 50 different states.

If the tort took place in New Hampshire, it also took place in Alaska, and in Hawaii, and in every other state.

Unidentified Justice: Well, if I put together a defective locomotive and run it through 50 states and it does harm in each of the 50 states, a tort has occurred in all 50 states.

If someone publishes a libel and circulates it in 50 states, presumably harm has occurred in all 50 states.

That is the choice of the publisher.

Stephen M. Shapiro: Well, this defective product exploded, if you will, in the state of New York.

It didn't explode in 50 different states.

That, we submit, is just a jurisdictional fiction.

Practical questions of federalism don't just disappear by saying the tort took place everywhere and therefore the plaintiff can forum shop throughout the whole country and pick the most inconvenient place in the whole nation, which is a burden on the court and the witnesses and which runs roughshod over the policies of the other 50 states.

It is simply too facile to say that this tort took place everywhere without regard to which states really had the paramount interest in the controversy, which is New York and Ohio and not New Hampshire, and not Alaska, and not Hawaii.

Unidentified Justice: What you are saying is that jurisdiction should not follow injury.

Stephen M. Shapiro: We say that in a multistate defamation case where there is an argument that a little bit of injury occurred throughout the whole country, you have to look beyond that analysis.

Unidentified Justice: Where do we get the statement... what is the support for your statement that a little injury occurred all over the country?

Stephen M. Shapiro: Because my--

Unidentified Justice: Would that be the allegation of the complaint?

Stephen M. Shapiro: --The proof before the district court was that 99 percent of these magazines were circulated in other states, and that the plaintiff had never been in the state of New Hampshire and was not known in the state of New Hampshire.

She worked and lived in New York, and that is where the brunt of this tort fell.

We are not saying, of course, that the due process clause imposes technical or restrictive requirements on plaintiff.

There is no argument here that the plaintiff didn't know that she had been libeled in 1975--

Unidentified Justice: Your position is that the multiple complaint can be filed in only two states, where the defendant is or where the plaintiff is.

Is that your position?

Stephen M. Shapiro: --It may be a bit broader than that.

It's plaintiff's residence, defendant's residence, defendant's principal place of business--

Unidentified Justice: Well, then you don't have a multiple state action, do you?

Stephen M. Shapiro: --And in each of these states you could have a proceeding to collect damages everywhere.

Unidentified Justice: You just want the whole... you want the whole system thrown out, of multiple action.

Stephen M. Shapiro: We are quite content with the single publication rule.

It is just, it has to be applied in a constitutionally reasonable forum, not a forum pulled out of a hat for the purpose of getting the longest statute of limitations in the entire nation.

Unidentified Justice: Well, you can prove damages in any state?

Stephen M. Shapiro: The plaintiff, under the single publication rule, has to prove all of her damages in whatever state she picks.

Unidentified Justice: Right.

Stephen M. Shapiro: And we say that that--

Unidentified Justice: In any.

In all 50 states--

Stephen M. Shapiro: --All 50 states.

That's the rule.

Unidentified Justice: --she can prove damages.

Stephen M. Shapiro: Yes, and that is why it is so important--

Unidentified Justice: But wouldn't that require witnesses?

Stephen M. Shapiro: --If she picks a constitutionally reasonable forum, she can then collect damages for the entire country.

Unidentified Justice: You are just against forum shopping.

Stephen M. Shapiro: You are right, Mr. Justice.

I am against forum shopping.

Unidentified Justice: It is awful late.

It is awful late in the game.

Stephen M. Shapiro: And we read this Court's decisions to prohibit forum shopping when there is not a reasonable selection of forum in light of the burdens to the parties and the interests of the 50 states.

Chief Justice Warren E. Burger: Do you have anything further, Mr. Grutman?

ORAL ARGUMENT OF NORMAN ROY GRUTMAN, ESQ., ON BEHALF OF THE PETITIONER -- REBUTTAL

Norman Roy Grutman: Yes, Mr. Chief Justice.

I would like to begin by responding to a question which you put to my colleague, and pointing to that place in the record, which is to be found at 15-A of the appendix, where the First Circuit said.

"The major factor favoring plaintiff is that she is suing in part for damages suffered in New Hampshire. "

which is an acknowledgement of the fact that she did suffer injury in New Hampshire,

"and although the defendant's contacts with New Hampshire are sparse, they were not random, isolated, or transitory. "

"The general course of conduct in circulating magazines throughout the state was purposefully directed at New Hampshire. "

Counsel has spoken to the Court about that state which has the paramount interest, and although the language was written by Mr. Justice Brennan in his dissent in Volkswagen, I do not think he was expressing anything with which the Court would disagree when he said that,

"A defendant has no constitutional entitlement to the best forum or, for that matter, to any particular forum. "

"Under even the most restrictive view of International Shoe, several states could have jurisdiction over a particular cause of action. "

That is certainly the case in this lawsuit.

I promised that I would allude to something Mr. Justice Stevens raised at the conclusion of my principal remarks, and I would like not to omit what I was saying when I originally concluded, and that was namely that the district court focused on the plaintiff's lack of contacts, and therefore they never reached the minimum contacts of Flynt or of his publication, and they therefore dismissed a fortiori because of plaintiff's lack of contacts, and I submit that on remand we would, and T represent this responsibly, be able to demonstrate that Flynt had those contacts himself, as did the corporation, which would satisfy the International Shoe formula as to them.

The references made by counsel to the restatement were to the restatement of conflict, and I think that what is spoken of in that restatement primarily has to do with choice of law, not with jurisdiction or definition as to what constitutes a tort.

There was a considerable reference to the inconvenience which, Madame Justice O'Connor, I think, is clearly dealt with under Section 1404(a) by which, after jurisdiction has been determined, the federal court has the flexibility by which under forum non-convenience to designate some other forum in which the case could be tried, but it ought to be mentioned that under the Van Dusen case, the corpus juris that would be applied so far as the statute of limitations is concerned is the corpus juris of the forum in which the action was brought, namely, New Hampshire.

Essentially, what this Court has heard this morning is a claim which the respondents argue that other states' statutes of limitations prohibit New Hampshire from exercising a jurisdiction which for itself it has determined at six years.

I would conclude, Mr. Chief Justice and members of this Court, by observing that that is an incident of federalism.

It is a reflection of our diversity.

If you travel around this country and look at the airports in which you land, we are so homogeneous it is almost impossible to know where you are, but I think that it is worthwhile that this Court should preserve the diversity which in no inconsiderable measure has been part of the richness and greatness of this country.

Thank you.

Chief Justice Warren E. Burger: Thank you, gentlemen.

The case is submitted.

Featured:

Calder v. Jones - Oral Argument

Thu, 30 Aug 2012 22:14:22 +0000

Case:

Calder v. Jones

Media File:

82-1401_19831108-argument

Related Transcript:

82-1401_19831108-argument

Transcript:

ORAL ARGUMENT OF JOHN G. KESTER, ESQ. ON BEHALF OF THE APPELLANT

Chief Justice Warren E. Burger: We will hear arguments next in Calder and South versus Jones.

Mr. Kester, I think you may proceed whenever you are ready.

John G. Kester: Thank you.

Mr. Chief Justice, and may it please the Court, this case is quite different from the one you just heard, although both involve personal jurisdiction.

In that case, the central issue, which apparently was the one, the only addressed by the courts below, was jurisdiction over a publishing company.

This case, however, concerns exclusively two individual corporate employees.

It is not an appeal by a publisher.

The corporate publisher here, the National Enquirer, Incorporated, is a Florida corporation.

It consented to the jurisdiction of the California courts.

It is the publisher's employees, who are two residents of Florida, who have brought this appeal to this Court.

The plaintiff below, who is the appellee here, is Shirley Jones, a television actress.

She and her husband complained that they were both libeled by an article in the National Enquirer that said that her husband's behavior was driving her to drink.

Later, her husband dropped his complaint.

Later still, Ms. Jones amended her complaint to say that she complains now only about two sentences in the article, two sentences that said that her drinking had occurred at her place of work and interfered with her work.

Unidentified Justice: Mr. Kester, does the record show why the husband dismissed his--

John G. Kester: That is not in the record, Mr. Justice Blackmun.

The plaintiffs sued the National Inquirer in a Los Angeles state court for $20 million, $10 million compensatory damages and another $10 million punitive damages.

She also sued in the same complaint John South, a National Enquirer employee whose by-line was on the story that the Enquirer published, and Ian Calder, who was the editor and the president of the National Enquirer, the Number Two man in its corporate organization.

As I said, the Enquirer consented to jurisdiction in California.

The case has not yet gone to trial.

Calder and South, who are the appellants here, were served by mailing copies of the complaint to them from Florida addressed to them... from California, however, addressed to them in Florida.

They entered special appearances in California to contest the jurisdiction of the California court.

The Superior Court of Los Angeles County cited this Court's decisions in International Shoe against Washington, Culco against Superior Court of California, and Worldwide Volkswagen against Woodson, along with the First Amendment, and held that it did not have jurisdiction personally over these two Florida individuals, and it commented that really all that they would add to the California suit would be an opportunity for the plaintiff to try to collect additional punitive damage from them personally.

Ms. Jones appealed that ruling.

The California Court of Appeals sustained her position.

It held that these two Florida individuals were required to come defend themselves in the California court.

I will discuss its reasons in more detail in a moment.

The Court of Appeal in California said it made this holding even though it found, and I quote,

"It may not be said that defendants' activities in California are extensive, wide-ranging, substantial, continuous, or systematic. "

The case comes before this Court on appeal rather than certiorari because the two individuals challenged in the lower courts the constitutionality of California's long arm jurisdiction statute as applied to them.

That statute is Section 410.10 of the California Civil Procedure Code, and this Court has jurisdiction under 28 USC 1257.2 and the Dahnke-Walker Milling Company doctrine.

I don't intend to address that aspect of the case further unless the Court wishes.

Now, the question in this case is very simple and straightforward.

It is whether the editor and the writer here, who never entered California in connection with this article, can be sued personally in California nevertheless.

It is whether the Constitution permits California to assert jurisdiction in a libel case not just over--

Unidentified Justice: --Mr. Kester?

John G. Kester: --Yes, sir?

Unidentified Justice: Did you say that the writer never entered California?

John G. Kester: That is correct, Mr. Justice Rehnquist.

Now, where the record stands on that is that there is an uncontradicted affidavit from the writer saying that he never entered California in connection with this story.

He entered California from time to time in connection with other stories.

Unidentified Justice: Well, I didn't understand your statement to have been qualified by the phrase, "in connection with this story".

John G. Kester: I am sorry.

If I didn't say that, I meant to say that.

He did enter California on other occasions, on other stories.

Unidentified Justice: Does the record show how he wrote a story without going to California to get his facts?

John G. Kester: Yes, sir, there is evidence in the record that he made a number of long distance telephone calls to California.

Unidentified Justice: How many?

John G. Kester: How many is... in the record there are four telephone calls to California established.

We would note to the Court that we know of at least one more that was subsequently established.

I don't think the number is important.

It was some number.

Unidentified Justice: Mr. Kester, was the only contact by telephone?

John G. Kester: The only contact in the record was--

Unidentified Justice: No mail communication?

John G. Kester: --No mail communications at all, as far as the record shows, simply the telephone calls, plus the article also could be written from whatever materials were available in Florida, press clippings, what other information there was.

So the question in this case is whether there is jurisdiction not just over the corporate publisher, but over the two Florida employees who never even entered Florida in connection with this story.

Unidentified Justice: I gather your suggestion is... we have no issue here of jurisdiction over the corporate publisher.

John G. Kester: That's correct.

Unidentified Justice: Just over these two individuals.

John G. Kester: Just over the two individuals.

Unidentified Justice: The publisher has submitted to jurisdiction?

John G. Kester: Yes, sir.

No contest by the publisher in that--

Unidentified Justice: But all the publisher did other than what the writer did was to send the magazines into--

John G. Kester: --The publisher circulates its newspaper in California, and--

Unidentified Justice: --Like it does elsewhere?

John G. Kester: --As it does elsewhere, and the circulation in California is approximately proportional to the population of California to the population of the United States.

Unidentified Justice: You haven't contested jurisdiction over the publisher?

John G. Kester: That's correct.

Unidentified Justice: I gather one of your arguments, Mr. Kester, is that the fact of the publisher's submission to jurisdiction ought bear on whether or not there is constitutional jurisdiction over the individuals?

John G. Kester: We think it should, because it makes a great practical difference in this case, and as I understand it, the standard jurisdictional analysis that this Court makes when personal jurisdiction of a state court is challenged, and the analysis that the state courts themselves make, is, first of all, whether the particular defendant had sufficient minimum contacts with the state to make jurisdiction not unreasonable, and then the second step is, as the International Shoe case said, once there are other contacts, you then look at their nature and quality, and see whether in all the circumstances it is reasonable in that situation for that state court to exercise jurisdiction.

Unidentified Justice: And one of those against it, you suggest, is that the publisher has consented to jurisdiction, or submitted, rather?

John G. Kester: Yes, because what we say, Mr. Justice Brennan, is that essentially what is practically at stake in here, as was recognized by the Superior Court of Los Angeles County, is simply whether these two individuals can be held personally liable for additional punitive damages beyond what the plaintiff might be able to recover against the publisher.

There is no question as to the solvency of the publisher here to pay a judgment.

The plaintiff can obtain, to the extent libel provides an opportunity to... a libel action provides an opportunity to vindicate reputation, the plaintiff can fully vindicate her reputation in the suit against the National Enquirer if she is able to, if she is successful.

Unidentified Justice: Well, but that isn't really the whole story, is it, Mr. Kester?

Certainly, at least in my day, it was thought to be advantageous if you were suing the railroad company for a crossing accident, you not only sued the railroad company, you joined the conductor and the engineer, and dismissed them at the close of the plaintiff's case, because you were able to deal with them much differently, in depositions and in handling them on the witness stand as adverse witnesses if they were named parties.

And actually, all you were doing that for was to get a judgment against the corporate defendant.

John G. Kester: There is no question in my mind, Mr. Justice Rehnquist, that the plaintiff brought the suit in Los Angeles County because she thought that was the best forum for her to bring a suit in, and she may very well have concluded that there were advantages to her in naming a whole string of defendants and not just the real tort feasor if a tort occurred here, because in libel the tort is publication, and the only publication there was made by the publisher.

Unidentified Justice: Well, if the defendant is the only tort feasor, presumably the plaintiff's complaint would ultimately be dismissed for failure to state a claim for relief.

I think the plaintiff's hypothesis is that the two individuals are also tort feasors.

John G. Kester: They could be proved to be tort feasors, or they might not, but Mr. Justice Rehnquist, the initial question here is not liability.

We are talking about jurisdiction.

And I don't think there is any question the mind of any member of the bar or any judge that merely having to defend the lawsuit is a substantial burden.

If it were not, and if the Constitution didn't recognize that, we wouldn't have all these cases under the Fourteenth Amendment saying due process is denied when a person is dragged across the county into a foreign court where there are insufficient contacts or it is not--

Unidentified Justice: But of course there is an obverse side to that here, too.

If you prevail and the plaintiff actually wants to obtain punitive damages against these defendants, the plaintiff will go marching off to Florida and have to sue in Florida.

John G. Kester: --That is right.

Unidentified Justice: And she was liable in California, where she lives.

John G. Kester: That is the dilemma which the courts face in any jurisdiction case where the plaintiff wants to be in one court and the defendants want to be in another, and what we are saying, Mr. Justice Rehnquist, is that we think that the collective defendants in this case have gone pretty far already.

The National Enquirer has said, you want to sue us in Los Angeles County.

All right.

Here we are.

Sue us.

We will defend ourselves there.

Unidentified Justice: Well, how much of a concession was that on the part of the National Enquirer?

I mean, it circulates hundreds of thousands of papers in California.

The plaintiff lived there.

You know, all of the arguments that were available to the defendant in the preceding case as to jurisdiction over the corporation seemed to me to be absent here.

John G. Kester: Well, I think that--

Unidentified Justice: I mean, I thought perhaps it could be taken from your remark that as an act of kind of graciousness the National Enquirer consented to be sued in California, whereas it really could have gotten off the hook very easily.

It couldn't have gotten off the hook at all, could it?

John G. Kester: --I would say, sir, that the National Enquirer is not incapable of graciousness on occasion.

0 [Generallaughter.]

I really don't think that that is central to the case anyway.

I suppose that had it appeared that there was a very strong winning argument that that court had no jurisdiction over the National Enquirer, its attorneys might well have urged them to make that argument.

But the point is, there isn't anything really at stake here for the plaintiff against these two individuals except the possibility that they might be held personally liable for punitive damages in addition to whatever all else she sight recover in Los Angeles County.

Unidentified Justice: But shouldn't punitive damages have been recovered in Florida for the damage in California?

John G. Kester: Punitive damages probably could be recovered in Florida.

Unidentified Justice: So the harm inflicted was something the plaintiffs could sue for and recover from these two people.

It's just a question of where?

John G. Kester: Well, it's a little more than just the question of where, Mr. Justice White, because had the suit been brought against them personally in Florida, one thing they would have had would be the advantage of a different standard in Florida law as to what must be shown to collect punitive damages than is the case in California.

Unidentified Justice: Do you think that Florida would apply its own punitive damages--

John G. Kester: I surely would urge them strenuously to do so.

Unidentified Justice: --I know you would urge them, but--

0 [Generallaughter.]

Of course you would, unless they would give more punitive damages than California.

John G. Kester: I would say that the chance of getting Florida to apply its own law in this case would be pretty good, because Florida just two years ago said--

Unidentified Justice: Well, in any event, the major factor is just where, just where the suit has to be.

John G. Kester: --That may be the major factor for the plaintiff, but the major factor for the--

Unidentified Justice: You apparently concede that in one place or another these two people could be sued in connection with the damage to reputation in California.

John G. Kester: --She could file a complaint in Florida that would state a cause of action in Florida.

Yes, sir.

But where they are sued is extremely important to these two individuals, obviously.

Now, the constitutional provisions that bear on this, as I said earlier, are three, the due process clause of the Fourteenth Amendment, the commerce clause, and because these are corporate employees of a publisher, the First Amendment applies as well.

Unidentified Justice: Do you mean First Amendment considerations may argue again or for jurisdiction?

Is that it?

John G. Kester: That is our position as--

Unidentified Justice: Have we ever said that?

John G. Kester: --You have never said it, Mr. Justice Brennan, never--

Unidentified Justice: I guess Justice Stewart has suggested it once or twice.

John G. Kester: --If he said that, I missed it, but if he said it, I commend his perspicacity.

Unidentified Justice: Well, you recall his emphasis on the word "press" in the First Amendment.

John G. Kester: Oh, yes, but when we say the First Amendment is at stake here to some degree, we are not asking really for any special favor for the press, and we are not saying that the institutional press has some rights that other people don't have.

It is not that at all.

What we are saying here is simply that this Court at least since International Shoe and going through Culco against California, many other cases... Worldwide Volkswagen mentioned it in passing... has said policy is something we look at.

After those contacts are found, we weigh it all, we look at the policy, and we have got that scale of justice there with the two pans going up and down, and one of the little brass weights that you put on one side is what is this going to do to the First Amendment, to the system of free trade and ideas, as this Court said in the Red Lion--

Unidentified Justice: But the First Amendment consideration would entirely drop out, I take it, if the suit was brought in Florida?

John G. Kester: --Against these two individuals?

Unidentified Justice: Yes.

John G. Kester: They would be sued at their home residence.

Unidentified Justice: Well, I know, but there would be no First Amendment barrier to suit there?

John G. Kester: I would think that the jurisdiction there would be so clear, Mr. Justice White--

Unidentified Justice: All right.

John G. Kester: --that it wouldn't make a difference.

Unidentified Justice: So the answer is, there is no--

--Well, that is the point, Mr. Kester.

The jurisdiction would be so clear, you suggest.

John G. Kester: Yes, sir.

Unidentified Justice: This is a jurisdictional issue.

John G. Kester: Um-hm.

Unidentified Justice: I don't quite understand why the First Amendment is an inhibitor against jurisdiction if otherwise it is appropriate.

John G. Kester: Because one has to look at the effect on First Amendment activity if jurisdiction is brought on very, very slender reeds against individuals, as I said in this case.

Unidentified Justice: In a defamation case?

John G. Kester: In a defamation case, because what you have to consider is, what does it do to an individual when he or she is impleaded, is brought into the case as a defendant individually, held up, possibly liable, not just for a share of the compensatory damages.

Let's assume that the publisher would pay those.

Unidentified Justice: I take it this would apply not only to the media, this argument, but to any citizen critic, would it--

John G. Kester: This--

Unidentified Justice: --any individual not a member of the media?

John G. Kester: --That's correct, and it would apply further to the doctrine that--

Unidentified Justice: So this isn't a suggestion which you limit to First Amendment press protection then, is it?

John G. Kester: --No, indeed, and in this very case it isn't the institutional media which is the complainer here.

It is individuals.

And what the court--

Unidentified Justice: I know, but they are one a reporter and one an editor.

John G. Kester: --One a reporter, one an editor.

Unidentified Justice: What if you just have an ordinary citizen who had done the same thing?

John G. Kester: An ordinary citizen we would ask be subject to the same jurisdictional standards, and really what we are asking this Court to do is the same thing that Mr. Grutman said in the first argument.

When you are deciding jurisdiction, you look at the contacts of each individual individually, what were his contacts, not what were somebody else's contacts.

In Hanson against Denckla, in Worldwide Volkswagen, a whole string of cases, this Court has always said, look at the contacts of the individual, and I would say that for a person to be sued personally in a case is a very different feeling from knowing that your corporate employer is being sued.

There is a certain detachment about the latter.

Unidentified Justice: Well, what if there were no corporate employer here, but these two people were simply partners in circulating a newsletter, and they circulated in California, and they libeled somebody?

John G. Kester: If they had published in California--

Unidentified Justice: Well, they put the letter out in Florida, and they sent it all over the country, just like--

John G. Kester: --So a publication occurred in California, or it was circulated there.

I would think that had they been in that position, then there probably would be jurisdiction over them, other things being equal, but they are not the publisher.

Unidentified Justice: --You say that the fact that they are employees makes all the difference?

John G. Kester: The fact that they are employees, the fact that--

Unidentified Justice: Of a publisher.

John G. Kester: --that they aren't the publisher.

They aren't the ones who did it.

John South couldn't control where the Enquirer circulates.

Tan Calder, although he is the Number Two in the organization, there is no indication that he could control it, either.

Unidentified Justice: Would there be any particular individual in the publisher that could be sued consistent with your theory?

John G. Kester: I would say consistent with my theory you could have a situation where a company had an individual who was in effect an alter ego.

Unidentified Justice: Well, somebody made the decisions in this company.

John G. Kester: Sure, collectively, a number of people made decisions, and indeed, the way the company works, a number of people work on the story.

Unidentified Justice: Then aren't all of them subject to suit?

John G. Kester: They are all subject to suit, Mr. Chief Justice.

The only question is whether and where they are all subject to jurisdiction.

Unidentified Justice: But, Mr. Kester, your suggestion that these particular individuals couldn't control where the National Inquirer went suggests that that is a highly discriminating inquiry, that perhaps the publisher might think it was suitable to send to California, but not to Washington or Oregon.

I mean, publishers are interested in expanding their circulation.

Isn't that true?

They want to get as many copies sold as they can of a national magazine.

John G. Kester: I would think so.

Yes, sir.

Unidentified Justice: So the idea that these two individuals would somehow have balked at circulating it in California if only they had been asked doesn't make much sense.

John G. Kester: No, I--

Unidentified Justice: Especially when they both certainly knew the story concerned a California resident.

John G. Kester: --Oh, I am sure that they knew that.

Unidentified Justice: And to say they didn't think the Enquirer was circulated in California is a--

John G. Kester: Oh, no, I am not suggesting that at all.

Unidentified Justice: --So they contemplated their story would be circulated in California.

John G. Kester: Well, the auto dealer in Worldwide Volkswagen, Mr. Justice White, the argument was made to this Court, could have contemplated that it would wind up in Oklahoma, but this Court said in that opinion just the fact that he knew it could have wound up in Oklahoma does not suffice in itself--

Unidentified Justice: Yes, but the dealer made no plans to send it to Oklahoma in that case, and here there are intentional plans to circulate it in California, which these two people knew as well as anybody else.

John G. Kester: --No doubt.

There is no question that they knew it.

They were members of the corporation.

They, like anybody else in the corporation, presumably participated in some way... the record doesn't show in what way... in the decision of where to circulate, but the fact that--

Unidentified Justice: Mr. Kester, may I ask you a question?

Would you agree that by reason of the fact that there was jurisdiction over the corporate defendant, that the trial court could compel the presence of the two individuals to testify at the trial?

John G. Kester: --Yes, sir, and in fact--

Unidentified Justice: So they could be compelled to go to California?

John G. Kester: --Of course, of course, and what has been going on in this case is that these two individuals have been deposed at length, and in fact the record contains deposition testimony from them.

There is no impediment to the plaintiff from that situation.

What this Court has to consider is that this is a case involving a publisher, but really, this is a case involving a corporation, and it applies just as much to the Riggs Bank, General Motors, IBM, Texas Instruments.

How much do the acts of the corporation--

Unidentified Justice: But as a practical matter, these two people are going to be sitting in the courtroom throughout the trial, even if they are not parties.

John G. Kester: --I think there probably, as a practical matter, there is a difference in that, Justice Stevens.

I think if they are parties, their attorneys would insist that they be there.

Unidentified Justice: And they may not be liable for punitive damages.

John G. Kester: Right.

Unidentified Justice: But in terms of the burdens of going and testifying and worrying about what happens to their reputations--

John G. Kester: No, I would think that the trial in the instance of John South, he would be a witness, he would be in and out, but if he is a party in that trial, and I am his lawyer, I want him in the courtroom all the time.

I think there is some difference here.

Unidentified Justice: --You don't think you'd want the author of the story in the courtroom all the time?

John G. Kester: I am not sure.

I am not sure.

It would depend on how the issues were framed and how the trial went, but if it is a month-long trial, possibly not.

Possibly not.

Unidentified Justice: Mr. Kester--

John G. Kester: Yes, sir?

Unidentified Justice: --if the corporation had been bankrupt, and judgment proof, would that make any difference with respect to whether the individuals could be sued in California?

John G. Kester: I think that would make a difference, Mr. Justice Powell.

Again, there is--

Unidentified Justice: Why would it, from the viewpoint of jurisdiction of the California court?

John G. Kester: --Because I suggest to you, and I think the opinions of this Court say the same thing, that jurisdiction does depend on practicality as much as anything else.

In the Hatori case, Judge Weinstein makes the very point that you make, and he says in that case there is no question as to the solvency of the corporation, and that if it were an insolvent corporation, or if it were a corporation that was simply a shell for one individual, that would be a different case, but the burden is on the plaintiff to establish jurisdictional facts.

There are no jurisdictional facts of that sort here, and indeed none could be established.

I would like to take one moment to talk about forum non-convenience, which Justice O'Connor and Justice Marshall mentioned in the previous case.

I think there is a case written 20 some years ago by Judge Friendly in which he suggested that the First Amendment certainly has a constitutional role in cases of this sort, but he said, why not turn forum non-convenience into a constitutional doctrine and deal with it at that point.

I would suggest to you that as a practical matter there is a lot wrong with that approach, even though logically it seems fine.

In the first place, forum non-convenience, as the term implies, is an inconvenient forum, and jurisdiction is more than a matter of convenience, as this Court has said many times.

As a practical matter, to assert forum non-convenience, you have to come into the court, you have to submit to the jurisdiction, and then you have to try to convince the local judge that he is not a convenient person to hear the case.

That is not a position a lawyer likes to be in very often.

It is not a persuasion that is very easy to accomplish.

I would say this is something that simply is not as a practical matter a very good solution to the case, particularly because--

Unidentified Justice: Sometimes judges like to get rid of cases.

John G. Kester: --That happens, too, Mr. Justice Blackmun, but not as often as one might like sometimes.

And further, forum non-convenience is... we have talked about murky doctrines and gray areas, but forum non-convenience is probably the murkiest area that exists in the law.

There are no rules practically for it, and it provides no certainty.

As difficult as the jurisdictional cases are to understand, and I don't think they are that difficult, forum non--

Unidentified Justice: I can think of a few other murky areas.

We seem to encounter them every week.

John G. Kester: --Right.

I would suggest there is no reason to create another one.

I will reserve the balance of my time.

Chief Justice Warren E. Burger: Mr Ablon, you may proceed whenever you are ready.

ORAL ARGUMENT OF PAUL S. ABLON, ESQ., ON BEHALF OF THE APPELLEE

Paul S. Ablon: Mr. Chief Justice, and may it please the Court, I think Mr. Kester's presentation is indicative of the briefs that have been filed in terms of the differences in the perception of the facts of this case.

We feel that a more thorough view of the facts are essential to see exactly what Mr. Calder's and Mr. South's contacts with California were.

First, Mr. Kester has referred to Mr. Calder as an employee of the Enquirer.

In fact, not only was he the editor, but he was also the president of the Enquirer and the second person in command.

He in deposition testimony acknowledged that the was in fact the person who oversaw the entire functioning of the Enquirer, including its editorial function.

So, we are not dealing with an individual who was just remotely related or involved in the control of the publication.

Additionally, the evidence that was adduced in the court below makes it clear that he also had significant involvement in this particular article.

So we have combined in Mr. Calder both the elements of a general control of the publication and at the same time specific involvement in this article, and that involvement included awareness of the fact that Mr. Engles on behalf of himself and his wife had denied the truthfulness of the publication prior to publication.

He was also the person who had seen the page proof of the article before publication, the evaluation of the article before publication, and in fact admitted... I am sorry... and in fact had... was the person who could have precluded the story from being published.

Additionally, he was the man who admitted specifically refusing to publish a retraction when a demand for such a retraction was made in this case.

With respect to Mr. South, there is also, I think, a disparate view of the facts between the parties in this case.

The trial court, contrary to the suggestion of Mr. Kester, and this is the trial court that ruled against the appellees in this case, stated,

"In addition, Reporter South visited California at least once for purposes relating to the article. "

Both the trial court and the court of appeals reached that same conclusion, that there was a pretrial visit by Mr. South to California with respect to this particular article, and as Mr. Kester has conceded, I don't view whether in fact there was such a visit or whether there were five telephone calls or 15, and I think we have a dispute in the record with respect to precisely how many investigative calls were made by Mr. South to California, the point being that the thrust of the investigation was aimed at California.

We feel that the fact that Mr. South and Mr. Calder were employees has no bearing on the jurisdictional question in the facts, in the jurisdictionally relevant facts that are presented in this case.

Were this the Keaton case, where it had been indicated had a great deal fewer jurisdictionally relevant contacts, possibly the employee status might have some additional significance.

In this matter, however, it is clear that both Mr. South and Mr. Calder were aware that the state of largest circulation of the Enquirer was California, in excess of or approximately 600,000 copies, and in fact that the Enquirer was a publication which proclaimed itself to be largest circulation of any paper in America, and in fact, as the record before this Court indicates, only 6 percent of the National Enquirer's publication was distributed in the state in which it was published, that is, in Florida.

So, California was the largest state, and that was known to both Mr. South and Calder, and the facts here are even more compelling.

The article dealt with a subject that were known to both Mr. South and Mr. Calder to be residents of California, in an industry that related to California, and clearly injury, if it were to occur, would be focused in California.

Certainly in this case where you are dealing with celebrities of some national reputation, a claim for injury in many, if not all other states might be involved, but that is not before the Court because there was no forum shopping here.

The lawsuit was basically filed in California, where the plaintiffs reside.

With respect to the conduct of the defendants, it is clear that both Mr. South and Mr. Calder are joint tort feasors.

As Mr. Kester has indicated, it is our belief that they could be subject to jurisdiction, and the sole question before this Court is whether or not the appellees who resided in California did nothing to bring this attack upon them in that state and nationally must now go to another jurisdiction, that is, Florida, to sue two of the primary participants in this publication.

We think that the case of Worldwide Volkswagen in fact supports jurisdiction in this case.

There was certainly no... the foreseeability of being sued in California was well known to both Mr. Calder and Mr. South, and in fact Mr. Calder had been sued in other celebrity litigation involving the National Enquirer in California and at that point did not even bother to object to personal jurisdiction.

The intent here on behalf of both Mr. Calder and Mr. South were clearly to inflict wilful and malicious injury to the plaintiff... I am sorry, to the appellee and her husband in the state of California, and we respectfully submit that the restatement, Section 36, restatement of conflicts, the effects doctrine, would certainly be applicable and justified in the context and facts of this case where you have wilful and knowing intentional conduct not only causing injury in California but aimed and intended to cause injury there.

With respect to the difficulty of suit in California, we would submit that the added burden to Mr. South and Mr. Calder to be sued in California is certainly not as great as indicated by the appellants.

They have in fact been deposed in this matter, which would--

Unidentified Justice: Mr. Ablon, what position would a typical California Superior Court of Los Angeles County take so far as who should pay the expenses for a Florida defendant's deposition being taken?

Would the superior court require the plaintiff to go to Florida to take the deposition?

Paul S. Ablon: --It is my understanding, Your Honor, that it would be required for... we cannot compel even a named defendant to come from Florida to California for their deposition.

We would have had to go to Florida, which we did--

Unidentified Justice: At your expense.

Paul S. Ablon: --at our expense.

Now, ultimately those expenses--

Unidentified Justice: Are taxed.

Paul S. Ablon: --might be taxable, but that would be resolved towards... to the conclusion of the case.

In addition, in addition, we feel that the case of Church of Scientology versus Adams is extremely appropriate.

That is the Ninth Circuit's decision, which weighs and balances the minimum contacts and jurisdictional standard in the context of a libel case, and there the court indicated, and again, the court indicated that the contacts would basically turn upon the knowing foreseeability of the defamatory article causing injury in a particular state, namely, the state of California.

It has also been referred by Mr. Kester that suing the individual defendants rather than the corporate entity allows them to have a certain detachment, and it is in fact that detachment that we feel is appropriate to eliminate, as has been suggested by the court, the--

Unidentified Justice: I thought he said... he was stating as a matter of fact that if your corporation which employs you is a party to the suit, but you are not, you have a certain detachment that you lose when you are named a defendant yourself.

I don't think he said that all personal... all persons ought to have a right to that.

I understand, Your Honor, but I think that a malicious and intentional wrongdoer might not be entitled to that detachment, that in fact maybe it is the people at the Enquirer, for the Enquirer as a corporation could not itself do anything but for or through the people who work for it, that in fact those people not be permitted that detachment, that they in fact, their wrongful conduct be on the line, so to speak, that they be answerable for their conduct.

It is in fact Mr. South and Mr. Calder and the other employees of the Enquirer who publish the articles which may and sometimes do lead to libel litigation.

It seems that in terms of, again, considering the practicalities of the situation, that there is very little additional burden with respect to the individual defendants.

They will likely be represented by the same counsel.

It is very frequently the case in libel litigation that there are insurance companies involved in terms of providing counsel and at least a certain degree of... a certain degree of coverage, at least with respect to compensatory damages.

Turning to the First Amendment considerations, we feel that it is inappropriate to add an additional obfuscation to the already somewhat confusing and at least hard to articulate jurisdictional standards.

The First Amendment is amply considered through these courts' prior precedents in New York Times versus Sullivan and its progeny, and the chill which this litigation might cast upon individual employees was also considered.

It seems to me that the proper and primary focus of whether or not these employees should be subjected to any chill if any there be by virtue of being subjected to suit in California is determined by the substantive law of whether or not employees can in fact be sued for libel.

That law... we feel that that has been determined.

The substantive law says they are responsible.

Why should we now engraft upon standard jurisdictional analysis another burden for purposes of evading jurisdiction?

Going back for a moment to the authority stated in the restatement, Section 37, the effects test, we feel that the effects test clearly is being applied if this Court is going to apply it in this case to Mr. Calder, who we have acknowledged had no direct contacts in terms of telephone calls, visits, or anything else with California.

If this Court will apply that principle to him, we feel it is the clearest application of that principle, for of the various situations to which the effects principle could be directed, that is the one which... that is the one which basically has the strongest support with respect to this Court's prior precedents.

There can be no unfairness in subjecting someone to jurisdiction who has intentionally directed his wrongful conduct at a particular state.

With respect to the fiduciary shield doctrine, so to speak, the appellants here are asking this Court to in fact enshrine that principle, a principle which insulates employees from jurisdiction because they are employees and because acts which they have committed in the course of their employment may in fact... excuse me.

Acts which they have accomplished in the course of their employment somehow don't count in terms of having any jurisdictional significance.

Mr. Ablon, on the effects test which you ask us to apply, do you think that there would be jurisdiction over a writer who never entered California at all and made no telephone calls at all based on simply the foreseeability that the article might be published there?

Paul S. Ablon: --Your Honor, I believe that that would be the case.

The only question I have with respect to the way in which the issue were posed was whether the issue might be published there.

It seems to me that where it is known that the article will be published there, or at least there is a reasonable probability that that will occur, I see no reason why someone having no direct contacts in terms of physical contacts, visiting, telephone calls, sending mail, or anything of that nature, should not be subject to the jurisdiction of the court.

I might also add that that response is given considering the facts of this case where the article is aimed at the particular jurisdiction in terms of the subject matter of the article, the residence of the plaintiffs of the article, the knowledge of the extent and breadth of the circulation of that article within the jurisdiction.

Unidentified Justice: I suppose if it has a big article about someone in California, you could expect to sell more copies in California when that... in the issue in which that article appears than you might ordinarily.

Paul S. Ablon: I would think so, Your Honor, and I think that is directed in the Church of Scientology case.

That is that one can reasonably anticipate more injury in the state of residence.

If there can be said to be a state where one's reputation resides, it would certainly be primarily or at least predominantly within the state of residency, and because of California being the state of residency, one could also anticipate that the interest of the readership will be largest in the community in which the plaintiff happens to reside.

We think that there are some severe problems with this Court's finding some type of due process insulation or guarantee or protection for employees of corporations.

The fiduciary shield doctrine which has been advocated by the appellants is one that we feel has very shaky both precedential and logical roots, and in fact one can hardly consider or believe that if Mr. Calder and Mr. South were not employed by the Enquirer but somehow engaged on their own, and could be held responsible for certain acts in California, why should the fact that merely because they are employees of the Enquirer they somehow be mystically insulated from jurisdiction?

Unidentified Justice: As a matter of substantive law, and I suppose this would depend on the law of California, ordinarily an agent is not insulated from personal liability because the principal is liable for his conduct also.

Isn't that correct?

Paul S. Ablon: That's correct as a matter of substantive liability, and here we are not... we may not be talking in terms of agency, because of the element of punitive damages which may be interjected.

That is, the law would be that if in fact Mr. South or Mr. Calder engaged in wrongful conduct not authorized by the Enquirer, it is conceivable that agency principle might not apply, but certainly then the intentional wilful wrongdoing of those individuals would equally subject them to substantive liability.

I would also pose to the Court the problem of in effect utilizing different jurisdictional standards, and that is really what is advocated here by the appellants.

They are advocating a different jurisdictional standard for the media because of First Amendment considerations.

They are advocating a different jurisdictional standard for employees of corporations rather than the corporations themselves.

We feel that the standard jurisdictional analysis should be applied, and when that application is made in the facts of this... in this case, jurisdiction over both Mr. Calder and Mr. South is clear.

The cases for which... which are cited in support of the due process restriction on subjecting employees to jurisdiction for acts they committed in the course of their corporate employment we feel are largely inapposite.

They generally deal with the situation where there is an effort to impute jurisdiction by the corporation... I am sorry, impute jurisdiction from the corporation to the employee where the employee cannot be shown to have in fact had the contact himself, even if it was as an agent of the corporation with the jurisdiction, and under those circumstances, we have no problem with at least suggesting that in fact there may be a more serious due process problem.

Where, however, the jurisdiction is premised upon the acts of the individual, as is presented in the facts of this case, then it seems clear that those acts should be counted for purposes of jurisdiction over that individual.

If that individual is not responsible or liable for whatever the wrongdoing might be, then the substantive law is sufficiently adequate to ensure that they will not be subjected to any substantive liability.

Unidentified Justice: You don't think the printer, for example, would be liable?

Or would be subject to jurisdiction in California?

Paul S. Ablon: Well, Your Honor, we would certainly--

Unidentified Justice: Suppose it was printed in Florida.

Paul S. Ablon: --If it were printed in Florida, and assuming that the printer had no knowledge specifically with respect--

Unidentified Justice: Well, he knew exactly what was in the magazine, what was in the paper.

He read it.

Paul S. Ablon: --I think that is different, because the printer does not have a responsible part in the publication, and certainly in the publication of this particular article.

Furthermore... And I think with that notion of responsibility goes the notion of some element of knowledge of what is going on and what is going into the article.

Certainly--

Unidentified Justice: What about the newsstand man in California?

Paul S. Ablon: --I think, Your Honor, the same would be applicable, and I think that is covered under the substantive law.

I don't know that the newsstand man would be responsible substantively if it could be determined that in fact he had no knowledge of the defamatory contents of the article or anything with respect to this publication which would suggest that articles contained in it are frequently or regularly of a defamatory nature.

Unidentified Justice: Well, what about a newspaper in California that repeated the statements in the Enquirer?

Paul S. Ablon: I think that might be a different situation, Your Honor, and I think the reason for that difference--

Unidentified Justice: Well, it would be, wouldn't it?

Paul S. Ablon: --I think so.

I think if for no other reason that they are in effect republishing the libel, and they are doing so where they at least have an obligation to make sure that what they are republishing meets the standards that are set forth with respect to libel and the constitutional parameters.

That certainly would not be the case with respect to someone who has no knowledge with respect to that.

There has been some reference in the briefs with respect to whether or not the conduct here was intentional, or whether the conduct here was wilful, and that in effect the appellants... I'm sorry, the appellees are stated to have assumed and the court is stated to have assumed that there was intentional wrongful conduct.

We submit that under the facts presented here, the wrongful conduct is made out clearly by the facts, at least as clearly as one could anticipate with the understanding that a publication and its primary employees are unlikely to admit intentional wrongdoing in the libel context, but given that parameter, we have here an article which on its face is at least horrendous and possibly worse.

We have a telephone call made by Mr. South, and we think that this particular call may have more jurisdictional significance than the other investigatory calls which he made.

Prior to publication, Mr. South telephoned the appellee and her husband, spoke with them at their residence, spoke with Mr. Engels at his residence, and in that telephone call read the article to them approximately three weeks prior to publication.

And at least with respect to that call, it is our position that it may well be more jurisdictionally significant insofar as the complaint herein alleges not only libel and invasion of privacy but intentional infliction of emotional distress, and that call may well, like the telephone call in Brown versus Flowers, the case in which this Court denied cert last term, in fact may have constituted the operative conduct with respect to the tort of intentional infliction of emotional distress.

Just as a matter of conclusion, let me just state that we think that the facts of this case do not... it is important to consider what this case does not present.

It does not present a question, as suggested by some of the amicus briefs, of self-employed, small authors of books or local publications being... having their employees subjected to jurisdiction.

It is not concerned with mere employees, that is, insignificant employees being subjected to jurisdiction, but rather a president, an officer of the corporation, and the person who actually wrote the article and investigated the article.

This is not a case dealing with a publication which did not hit home and in which the publication and its employees were not--

Unidentified Justice: Isn't it a case about the author of a book that he gets published, and the publisher circulates it around the country?

How about the author?

Paul S. Ablon: --Your Honor, I think that case would be distinguishable because one would have to look at the competence of the book.

What did that author foreseeably anticipate?

Unidentified Justice: Let's assume a man wrote a... an author wrote a book and had these very allegations in it that are in this case, and he sold it to a publisher, and the publisher sold it wherever he could.

Paul S. Ablon: I think if that author had reason to believe that the publisher would sell it wherever he could, or would sell it specifically to California, and knowing the contents of that book, there would be every reason and certainly no unfairness.

Unidentified Justice: So this case does concern that kind of a person.

Paul S. Ablon: That kind of a person it would, Your Honor.

We don't think it deals with the type of person who could not anticipate that California under Worldwide Volkswagen was an appropriate forum to anticipate being hailed into court.

Unidentified Justice: Do you have anything further, Mr. Kester?

ORAL ARGUMENT BY JOHN G. KESTER, ESQ., ON BEHALF OF THE APPELLEE -- REBUTTAL

John G. Kester: Yes, Mr. Chief Justice.

Unidentified Justice: Mr. Kester, I assume you will address the effects argument.

John G. Kester: Yes, sir, Mr. Justice Powell.

With respect to the effects argument, that was one of the three bases on which the court of appeal relied for its decision in this case.

Causing an effect in a state is a very mushy basis for jurisdiction.

It has been applied in a limited area of cases, mainly product liability cases.

In product liability cases you have a very definite injury.

You know whom it happened to, where it happened, and it is easy to measure, and you have somebody who is essentially setting something forth in interstate commerce who knows that it could cause harm some place or who should be forced to be careful to ensure against--

Unidentified Justice: You are not suggesting that one who knowingly publishes libel doesn't anticipate harm, are you?

John G. Kester: --I am saying that metaphorically we can say that a libelous article is launched and causes harm, but the harm is much more difficult to define, and in products liability cases, Mr. Justice Powell, we have a different standard of liability which matches the different standard for jurisdiction.

We have--

Unidentified Justice: But doesn't that cut the other way?

When you come down to the standard of liability in a First Amendment case, you have New York Times and Gertz that afford very substantial protection that perhaps isn't available in a products liability case.

John G. Kester: --But I would say exactly for the two cases you cite, Mr. Justice Powell, Gertz says that you do not have strict liability in the First Amendment area in libel cases, and yet in products liability cases that is exactly what you have in the law of most states, a very high standard--

Unidentified Justice: But not in all states.

John G. Kester: --In most states, Your Honor, and in the states where those cases have come up, cases which have never been reviewed by this Court, indeed.

It is a very simple matter for plaintiff to allege, as the plaintiffs did here, that this was intentional, this was malicious, this was harmful, but what this Court has always asked for are jurisdictional facts, not broad allegations in a complaint.

Certainly this case applies, as Mr. Justice White mentioned a while ago, to an author.

The decision here would apply to authors who get sued, and I take it Mr. Ablon is saying, well, it doesn't apply to authors who don't get sued, but every author who gets sued is going to be facing a complaint that says he acted maliciously, wilfully, with the intent to harm people, and so on.

If effect is carried to that extreme, then all the limits on jurisdiction for individuals in libel cases are essentially eradicated.

I would mention that this Court from at least the time of International Shoe has also recognized that individuals are not the same thing as corporations when you are dealing with the question of personal jurisdiction.

When you have got a corporation, you are immediately faced with the question, where is it, because nobody can see a corporation.

It is an incorporeal presence.

It is a jurisdictional construct.

An individual, you generally know where he is, what he is doing, and the individual has some rights under the Constitution that corporations don't always enjoy.

Unidentified Justice: When an individual, Mr. Kester, when individuals and a corporation with which they have a relationship are joined in the same posture as defendants, do you think that makes possibly some difference on how the individuals are treated?

John G. Kester: I think that we have to do exactly what Mr. Grutman said and what this Court has said, Mr. Chief Justice.

We have to look, as the Court said in Hanson against Denckla, at the contacts of each defendant individually and say what were his contacts in the case, and in this case these individuals did not have those contacts.

It is not necessary to decide this case even to reach the First Amendment, because this is not a close case.

This case can be decided under the standard jurisdictional principles of the Fourteenth Amendment as they have always been applied, and what we have here are individuals.

I can't improve on the language of Mr. Justice Rehnquist in his dissent in the Beloti case, which I--

Chief Justice Warren E. Burger: Thank you, counsel.

Thank you.

The case is submitted.

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