Schatz v. Republican State Leadership Committee , 669 F.3d 50 ( 2012 )

United States Court of Appeals
For the First Circuit
No. 11-1437
JAMES M. SCHATZ,
Plaintiff, Appellant,
v.
REPUBLICAN STATE LEADERSHIP COMMITTEE; REPUBLICAN STATE
LEADERSHIP COMMITTEE-MAINE PAC; CROSSROADS MEDIA LLC; PATTI HECK;
MICHAEL DUBKE; SCOTT S. WARD; BEN CANNATTI; ARENA COMMUNICATIONS
LLC; OHMAN HOLDINGS LLC; VALCARCE HOLDINGS LLC; ARENA HOLDINGS
INC.; THE GRASSY KNOLL LLC; RICHARD J. OHMAN; PETER J. VALCARCE,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. D. Brock Hornby, U.S. District Judge]
Before
Lynch, Chief Judge,
Howard and Thompson, Circuit Judges.
Barry K. Mills, with whom Hale & Hamlin, LLC was on brief, for
appellant.
Timothy F. Brown, with whom Arent Fox LLP, Paul W. Chaiken,
and Rudman & Winchell were on brief, for appellees Republican State
Leadership Committee, Republican State Leadership Committee-Maine
PAC, Scott S. Ward, and Ben Cannatti.
Andrew M. Friedman, with whom Patton Boggs LLP, Anne Birgel
Cunningham, Alexia Pappas, and Verrill Dana, LLP were on brief, for
appellees Crossroads Media LLC, Patti Heck, Michael Dubke, Arena
Communications LLC, Valcarce Holdings LLC, Arena Holdings Inc., The
Grassy Knoll LLC, Richard J. Ohman, and Peter J. Valcarce.
February 10, 2012
THOMPSON, Circuit Judge.
PROLOGUE
Campaigning for public office sometimes has the feel of
a contact sport, with candidates, political organizations, and
others trading rhetorical jabs and sound-bite attacks in hopes of
landing a knockout blow at the polls. It is not for the thin-
skinned or the faint-hearted, to use two apropos clichés. See
Monitor Patriot Co. v. Roy, 401 U.S. 265, 275-76 (1971). And
because political speech is the life-breath of democracy, see Eu v.
S.F. Cnty. Democratic Cent. Comm., 489 U.S. 214, 223 (1989), the
First Amendment – applied to the states via the Fourteenth – bars
public figures from recovering damages under state defamation laws
unless they show that the defamer acted with "actual malice," see
New York Times Co. v. Sullivan, 376 U.S. 254, 279-80 (1964),
legalese that might suggest ill will or evil motive to the
uninitiated but really means knowledge of falsity or reckless
disregard for the truth, see Masson v. New Yorker Magazine, Inc.,
501 U.S. 496, 509-11 (1991).1 Cases define "reckless disregard"
variously as a defamer's having "'serious doubts'" about a
statement's falsity, or "actually" having "a 'high degree of
awareness of . . . probable falsity,'" or suspecting falsity and
purposefully – not just negligently – avoiding the truth. Harte-
1
For a succinct summary of the history behind what is
sometimes called the "New York Times rule," see Lluberes v.
Uncommon Prods., LLC, 663 F.3d 6, 11-14 (1st Cir. 2011).
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Hanks Commc'n, Inc. v. Connaughton, 491 U.S. 657, 688, 692 (1989)
(quoting St. Amant v. Thompson, 390 U.S. 727, 731 (1968), and
Garrison v. Louisiana, 379 U.S. 64, 74 (1964), respectively).
All this makes it quite obvious that defamation law does
not require that combatants for public office act like war-time
neutrals, treating everyone evenhandedly and always taking the high
road. Quite the contrary. Provided that they do not act with
actual malice, they can badmouth their opponents, hammering them
with unfair and one-sided attacks – remember, speaking out on
political issues, especially criticizing public officials and
hopefuls for public office, is a core freedom protected by the
First Amendment and probably presents "the strongest case" for
applying "the New York Times rule." See id. at 666 n.7, 686-87.
And absent actual malice, more speech, not damages, is the right
strike-back against superheated or false rhetoric. See id. at 686-
87.
Today's appeal – targeting speech critical of a
candidate's performance in public office and challenging the
dismissal of his defamation-based complaint for failure to state a
claim – brings these principles into bold relief. Finding no
reversible error in the judge's careful opinion, we affirm. The
story follows.
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HOW IT ALL BEGAN
Having lost his bid for a Maine Senate seat in 2010,
Democratic politician James Schatz brought this diversity suit
(governed, all agree, by Maine law) against a slew of defendants
for defamation libel, intentional infliction of emotional distress,
and publicly placing him in a false light. Our case caption lists
the complete cast of defendants. For simplicity's sake, we follow
the parties' lead and refer to the defendants, collectively, as the
"RSLC," which is short for the Republican State Leadership
Committee.
The gist of Schatz's operative complaint was that the
RSLC opposed his candidacy and supported his opponent's with
flyers, brochures, and radio and TV ads days before the election
that conjured up imaginary wrongs that he had supposedly done as a
selectman for the town of Blue Hill. He attached copies of the
offending circulars to his complaint, and we quote from one of
them, which is representative of the others.2 Emblazoned on the
front are these words:
No Rockets' Red Glare,
No Bursting in Air.
Thanks to JIM SCHATZ . . .
2
The judge reproduced the flyer as Exhibit A to his decision.
See Schatz v. Republican State Leadership Comm., 777 F. Supp. 2d
181, 192 (D. Me. 2011). To save trees, we refer the interested
reader there rather than reproducing a copy here. As for the radio
and TV ads, they basically parroted what the flyers said, Schatz
alleged.
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(Emphases removed.) And on the back:
Jim Schatz voted to cancel the $10,000
fireworks celebration for the Fourth of July –
blaming it on a bad economy.
However, before canceling the show, Schatz and
the Blue Hill Selectmen gave 10,000 taxpayer
dollars to a political organization.
It's wrong for Schatz to give your money to a
political organization, and it was wrong for
Schatz to cancel your 4th of July celebration.
On November 2, Vote against Jim Schatz,
because he's wrong for Maine.
(Emphases removed.)
A fine-print footnote in the flyers references two
newspaper articles as the source for these assertions, and Schatz
appended both items to his complaint too. The first, from the July
2, 2009 edition of the Bangor Daily News, chronicled the financial
difficulties confronting cash-strapped Maine towns in funding
fireworks for the 2009 Independence Day celebration:
There will be no fireworks display in Blue
Hill this Fourth of July due to the poor
economic climate, but business is booming
elsewhere as municipalities and private groups
have worked hard to raise funds to pay for the
fire that lights up the nation's birthday.
It continued:
For the past two years the Hancock County town
has fronted the money for the fireworks
display for the Fourth to Remember celebration
and paid the funds back through donations.
There's about $10,000 in the account, but the
selectmen and the fireworks committee opted
not to spend the funds this year.
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And it noted:
"Given the economy, we felt that in good
conscience we couldn't do it this year," said
Selectman Jim Schatz. "We thought that to
spend that much money on something that will
light things up for a few seconds and then is
gone was not the thing to do. Unless we were
sure we could pay the town back, we didn't
want to pull the trigger on it this year."
The second piece, from the August 9, 2009 edition of the
Kennebec Journal, highlighted how local communities "are being
asked to help roll back school consolidation." It started off:
Starved for cash, the advocates pressing for a
repeal of Maine's school district
consolidation law are taking their fundraising
appeal to the towns directly affected by the
sweeping state mandate.
The Maine Coalition to Save Schools,
which had $140 on hand at the beginning of
July, is seeking campaign contributions from
municipalities that turned down district
mergers or are unhappy with the consolidation
arrangements their voters approved.
It added:
Blue Hill approved a $3,000
contribution to the effort in January 2008 and
$2,000 more in July of last year. James
Schatz, a Blue Hill selectman and a state
representative, said the town recently paid
$5,000 to the coalition as the last
installment of a $10,000 commitment.
And Danforth and Deer Isle residents
each approved taking $3,000 out of town
coffers to boost the effort in January and
October of last year, respectively.
After noting "Monmouth selectmen don't have the power to contribute
town funds to a political cause," it informed:
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While it's legal for municipalities'
legislative bodies to dig into taxpayer funds
to support political causes, the Maine
Municipal Association, the lobbying arm for
Maine cities and towns, advises against it.
"Expressing one's view is one thing,"
association spokesman Michael Starn said.
"Expending town funds to support their view is
much more problematic."
A municipality should generally take a
position of "more fact gathering and factual
dissemination, not advocacy as individual
communities," Starn said.
But municipal officials, he noted, are
free to express their opinions on pending
political matters, and a town's legislative
body can approve resolutions supporting or
opposing particular causes.
"You do have a responsibility as a
government official to approach this whole
advocacy thing in a very responsible way,"
Starn said.
And, finally, it reported:
According to [Dick] Dyer, [a repeal
advocate,] there's no reason that can't
involve committing town funds to advancing a
political cause.
Town officials "make decisions all the
time that are political in nature that involve
spending taxpayers' dollars," he said.
Schatz, the Blue Hill selectman,
acknowledged that questions come up when
municipalities contribute to political causes.
But "a lot of the rural, small schools
have been hurt" by consolidation, he said.
"If (one) were to examine the issue, it would
seem appropriate" to contribute to the repeal
campaign.
Getting back to the complaint, Schatz alleged that the
RSLC had defamed him by falsely accusing him of a crime: having
lobbed words like "wrong" and "misuse" while denouncing him for
working both to give taxpayer money to a "political organization"
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and to squelch the 2009 fireworks display, the RSLC had smeared him
as a stealer of public funds. Eager to set things straight, Schatz
declared in his complaint that town voters had decided in January
2008 to make an up-to $10,000 contribution to the repeal-the-
school-consolidation-law effort, though they apparently gave the
selectmen the discretion to decide how much (if any) of the $10,000
to spend. Consistent with that vote, the selectmen paid the Maine
Coalition to Save Schools ("Coalition," for easy reading) $10,000
in three installments of varying amounts, Schatz said, with the
final payment coming the day before the 2009 Independence-Day
festivities. Speaking of Independence Day 2009, Schatz alleged
that he himself had voted in March 2009 to fund fireworks for that
day but was outvoted by the town's other two selectmen. He also
said that these funding decisions – the first, by the voters in
January 2008 to kick into the repeal kitty; the second, by the
selectmen in March 2009 not to spring for fireworks, after he lost
2-1 on that issue – were totally unrelated.
Schatz then used the words "actual malice" in his
complaint, claiming that the RSLC knew based on the two articles
that its defamatory statements were false or was recklessly
indifferent to whether they were false. And, on top of that, he
accused the RSLC of not bothering to confirm the truth of its
assertions, faulting it for not doing anything to double-check the
articles' accuracy.
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HOW THE CASE GOT HERE
The RSLC promptly moved to dismiss Schatz's complaint for
failure to state a viable claim. See Fed. R. Civ. P. 12(b)(6).
Faced with that filing, Schatz dropped his intentional-infliction-
of-emotional-distress claim and stated at a motion hearing that if
his defamation claim failed so too would his false-light claim.
Also importantly, Schatz agreed that the Coalition is a political
organization, conceded that he was a public official for defamation
purposes, and argued that the judge could identify actual malice by
comparing what the newspapers said against what the flyers said.
After argument, the judge wrote a thoughtful opinion
granting the RSLC's motion. Even assuming that the RSLC's
statements were false and smacked of "'gotcha' politics" of a
"juvenile" sort, the judge still had "serious doubts" about whether
they were defamatory under Maine law – doubts that he did not
resolve because he concluded that Schatz's complaint did not
plausibly allege that the RSLC had acted with actual malice. See
Schatz, 777 F. Supp. 2d at 187-91. Unpersuaded, Schatz appeals.
OUR ANALYSIS
We give de novo review to a Rule 12(b)(6) dismissal,
using the same criteria as the district judge. See, e.g., Ocasio-
Hernández v. Fortuño-Burset, 640 F.3d 1, 7, 11-13 (1st Cir. 2011).
Ocasio-Hernández points the way to the proper handling of a motion
to dismiss. Step one: isolate and ignore statements in the
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complaint that simply offer legal labels and conclusions or merely
rehash cause-of-action elements. Id. at 12 (discussing, among
other cases, Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009), and
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Step two:
take the complaint's well-pled (i.e., non-conclusory, non-
speculative) facts as true, drawing all reasonable inferences in
the pleader's favor, and see if they plausibly narrate a claim for
relief. Id. (again, discussing Iqbal and Twombly, among others);
see also S.E.C. v. Tambone, 597 F.3d 436, 441-42 (1st Cir. 2010)
(en banc). Plausible, of course, means something more than merely
possible, and gauging a pleaded situation's plausibility is a
"context-specific" job that compels us "to draw on" our "judicial
experience and common sense." Iqbal, 129 S. Ct. at 1949, 1950.
And in performing our review, we realize too that we can consider
(a) "implications from documents" attached to or fairly
"incorporated into the complaint,"3 (b) "facts" susceptible to
"judicial notice," and (c) "concessions" in plaintiff's "response
to the motion to dismiss." Arturet-Vélez v. R.J. Reynolds Tobacco
Co., 429 F.3d 10, 13 n.2 (1st Cir. 2005); see also Haley v. City of
Boston, 657 F.3d 39, 44, 46 (1st Cir. 2011).
3
Knowing that the documents may trump the complaint's
allegations if a conflict exists, e.g., where a defendant has
"excis[ed] an isolated statement from a document and import[ed] it
into the complaint," see Clorox Co. P.R. v. Proctor & Gamble
Commercial Co., 228 F.3d 24, 32 (1st Cir. 2000).
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Like the district judge, we skip over whether Schatz's
complaint plausibly alleges defamation and focus on whether it
plausibly alleges actual malice – given that this is the simplest
way to pinpoint Schatz's problem. Not so fast, Schatz says,
suggesting that courts cannot take that tack. Unfortunately for
Schatz, he cites no case for the point, and we are aware of none,
so we need say no more about that. See Rodríguez v. Municipality
of San Juan, 659 F.3d 168, 175-76 (1st Cir. 2011). But before we
tangle with the actual-malice issue, we need to clear away some
underbrush.
Schatz intimates that the RSLC should get less First
Amendment protection than traditional members of the institutional
press. Again, though, he makes the point in passing, with no case
analysis, which does not put the matter in play here. Id. He also
faults the judge for dismissing his complaint without giving him
the chance to fire up the pretrial-discovery process and at least
get to the summary-judgment stage. But to access discovery
mechanisms, a plaintiff must first produce a complaint that passes
the plausibility test – a test that helps keep defendants from
wasting time and money in discovery on "largely groundless" claims.
See Twombly, 550 U.S. at 558 (quoting Dura Pharms., Inc. v. Broudo,
544 U.S. 336, 347 (2005)) (internal quotation marks omitted). And
it does no good to suggest, as Schatz seemingly does, that a judge
can cast aside complaints "just shy of a plausible entitlement to
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relief" on summary judgment: because the high cost of litigation
can scare defendants into settling even a weak case pre-summary
judgment, a claim must have some degree of plausibility before the
parties are put through their discovery paces. See id. at 558-59.
We turn our attention, then, back to whether Schatz's
allegations plausibly support an actual-malice claim. His
complaint used actual-malice buzzwords, contending that the RSLC
had "knowledge" that its statements were "false" or had "serious
doubts" about their truth and a "reckless disregard" for whether
they were false. But these are merely legal conclusions, which
must be backed by well-pled facts. See, e.g., Ocasio-Hernández,
640 F.3d at 12. As for facts, the complaint alleged that the RSLC
had basically branded him a criminal, falsely charging him with
working with his co-selectmen to "wrong[ly]" divert $10,000 in
"taxpayer" funds to a "political organization" and then voting to
kill a $10,000 fireworks celebration. The reality, at least
according to his complaint, is that town residents had voted in
January 2008 to contribute to the Coalition and that he had voted
in March 2009 to fund the fireworks display. From these
allegations Schatz further insists that the RSLC had portrayed him
in a sinister light by connecting the two funding decisions (the
one had nothing to do with the other) and by referring to the
Coalition as a "political organization" rather than by its name
(leaving the impression that maybe his "political organization" had
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gotten the 10 grand). Given what the newspapers had reported,
which, according to the complaint, were the RSLC's sole sources of
information, the RSLC knew the offending statements were false or
made them recklessly without any regard for the truth – or so
Schatz argues. He also points out that his complaint alleged that
the RSLC did not launch "any additional investigation" to determine
whether what it said was true. And, reaching the ultimate
crescendo, he contends that the complaint's allegations plausibly
show that the RSLC acted with actual malice.
We think just the opposite. After comparing what the
RSLC proclaimed with what the newspapers disclosed (as everyone
agrees we should), we conclude that none of Schatz's points,
individually or collectively, can save the day for him.
Let us start with Schatz's beef with the RSLC's labeling
"wrong" a "vote" by him and his selectmen-partners to hand $10,000
to a "political organization":
1. The Kennebec Journal story spotlighted how some
consider funding like that to be inappropriate. Yet it is all
perfectly legal, the article pointed out. Schatz himself
essentially seconded these sentiments. Yes, some people raise
"questions" whenever a town contributes to a political cause, but
"it would seem to be appropriate" to chip in town money to the
repeal-the-school-consolidation-law campaign, he is quoted as
saying. And a commonsense reading of that article suggests that
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words like inappropriate (and "wrong" surely is one) are not
synonyms for criminal.
2. "Blue Hill approved" the contribution, the article
added. But neither that tidbit nor anything else there identified
Blue Hill voters as opposed to Blue Hill officials as the
approvers. Also, Schatz concedes that he and his colleagues had
voter-conferred discretion over whether to contribute any of the
$10,000 in the first place, meaning that they did play a leading
role in handing the Coalition $10,000. Undaunted, Schatz argues
here that because the Kennebec Journal story said that residents in
other towns had voted or needed to vote on the contribution
question, one can infer that Blue Hill residents and not Blue Hill
selectmen had to approve the appropriation too – given that (in the
words of his brief) Maine residents "generally know" and Maine law
generally provides "that selectmen can spend public funds only for
purposes authorized by voters at a town meeting." This is a
nonstarter, however: the article said nothing about whether these
supposed appropriation rules apply uniformly across the state and,
more importantly, to Blue Hill; also, at the risk of sounding like
a broken record, even Schatz admits that he and his selectmen
compatriots had the freedom to decide whether to contribute any
money at all.
3. While we are talking about concessions, Schatz once
again concedes that the Coalition is indeed a "political
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organization." And the inference that he asks us to draw – that
"political organization" was code for a Schatz political
organization that stood to reap the whole benefit from the $10,000
contribution – is simply too much of a stretch for us to credit,
even at the pleading stage. See Gooley v. Mobil Oil Corp., 851
F.2d 513, 514, 515 (1st Cir. 1988) (explaining that while we must
draw all reasonable inferences in the plaintiff's favor, we need
not accept every imaginable inference).
As for his railing against the RSLC for saying he had
voted not to fund the 2009 Fourth of July fireworks display and for
tying the two spending decisions (contributing to the repeal
campaign and cancelling the fireworks) together by their timing:
1. The Bangor Daily News story reported that "the
selectmen and the fireworks committee" had decided not to fund the
fireworks show. (Emphasis added.) And it provided not even the
slightest possible hint of a suggestion that Schatz had bucked his
colleagues and voted yes on the fireworks-funding issue. Actually,
his quoted comments – e.g., that "we" could not "in good
conscience" fund the fireworks "this year," given the poor economic
climate, and that "[w]e thought" that spending $10,000 "on
something that will light" up the sky "for a few seconds . . . was
not the thing to do" – gave the distinct impression that he had
voted no too.
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2. Neither article tied the fireworks funding to the
contribution payments. But the Kennebec Journal story of August 9,
2009 – published hard on the heels of the 2009 July Fourth
celebration that had no fireworks – paraphrased Schatz as saying
that Blue Hill had "recently paid" the Coalition "$5,000 . . . as
the last installment of a $10,000 commitment." (Emphasis added.)
Schatz harps on the judge's comment that the RSLC's juxtaposing the
contribution payments with the fireworks cancellation suggests
"careless[ness]" and smacks of childish "'gotcha' politics" too.
Schatz, 777 F. Supp. 2d at 189, 191. But that does not help
Schatz, because carelessness "is an indication of negligence, not
actual malice." Levesque v. Doocy, 560 F.3d 82, 91 (1st Cir.
2009).
This spells doom for Schatz. By now it is plain that
what the RSLC said synced up with or at least was not out of line
with what the stories said. Most importantly for present purposes,
none of Schatz's allegations – singly or together – plausibly
suggest that, given the articles' reporting, the RSLC either knew
that its statements were false or had serious doubts about their
truth and dove recklessly ahead anyway. That his complaint also
alleged that the RSLC passed on doing "additional" legwork to
verify the truth behind its statements does not change things.
True, "[r]ecklessness amounting to actual malice may be found"
where the defendant "relies on a source" when "there is an obvious
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reason to doubt its veracity . . . or deliberately ignores evidence
that calls into question his published statements." Id. at 90.
But Schatz has not alleged enough to meet that standard. The
bottom line, then, is that he has not "nudged" his actual-malice
claim "across the line from conceivable to plausible," so the judge
rightly dismissed the complaint. See Twombly, 550 U.S. at 570.
As a last-ditch effort to save his case, Schatz suggests
that if we do not reverse the judge we will be setting pleading
standards higher than what Twombly and Iqbal require. Not so.
Sure, malice is not a matter that requires particularity in
pleading — like other states of mind, it "may be alleged
generally." See Fed. R. Civ. P. 9(b). But, to make out a
plausible malice claim, a plaintiff must still lay out enough facts
from which malice might reasonably be inferred – even in a world
with Twombly and Iqbal. See, e.g., Iqbal, 129 S. Ct. at 1954
(noting that "Rule 9 merely excuses a party from pleading [states
of mind] under an elevated pleading standard" – it does not give
him carte blanche "to plead the bare elements of his cause of
action, affix the label 'general allegation,' and expect his
complaint to survive a motion to dismiss"). Having followed
Twombly and Iqbal to a T, we easily reject Schatz's last line of
attack.
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EPILOGUE
Concluding, as we do, that the judge reached a correct
result, we uphold his decision and judgment.
Affirmed with costs to appellees.
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