Texas Beef Group v. Winfrey ( 2000 )

REVISED, MARCH 28, 2000
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 98-10391
TEXAS BEEF GROUP, ET AL,
Plaintiffs,
CACTUS GROWERS INC.,
Plaintiff-Appellant,
v.
OPRAH WINFREY, HARPO PRODUCTIONS INCORPORATED, HOWARD LYMAN
KING WORLD PRODUCTIONS, INCORPORATED,
Defendants-Appellees.
----------------------------------------------------
PAUL F. ENGLER, CACTUS FEEDERS, INC.,
Plaintiffs-Appellants,
v.
OPRAH WINFREY, ET AL,
Defendants,
OPRAH WINFREY, HARPO PRODUCTIONS INCORPORATED, HOWARD LYMAN,
KING WORLD PRODUCTIONS, INCORPORATED,
Defendants-Appellees.
Appeal from the United States District Court for the
Northern District of Texas
February 9, 2000
Before JONES, STEWART, and DENNIS, Circuit Judges.
PER CURIAM:
At issue in this case is whether The Oprah Winfrey Show
and one of its guests knowingly and falsely depicted American beef
as unsafe in the wake of the British panic over “Mad Cow Disease.”
The district court doubted that fed cattle are protected by Texas’s
equivalent of a “Veggie Libel Law,” See Tex. Civ. Prac. & Rem.
§ 96.01 et seq. The court alternately held that no knowingly false
statements were made by the appellees. We affirm on the latter
ground only and affirm the court’s other rulings.
I. INTRODUCTION
In early 1996, a new variant of Creutzfeldt-Jakob Disease
(“CJD”) was diagnosed in Britain. CJD, a form of Transmissible
Spongiform Encephalopathy, is a fatal disease that affects the
human brain. On March 20, 1996, the British Ministry of Health
announced that scientists had linked the consumption of beef
infected with Bovine Spongiform Encephalopathy (“BSE”) with this
new CJD variant. BSE, or “Mad Cow Disease,” had been detected in
British cattle as early as 1986.1 Also a form of Transmissible
Spongiform Encephalopathy, BSE triggers a deadly, degenerative
brain condition in cattle. BSE is most likely to arise when cattle
are fed contaminated ruminant-derived protein supplements, which
are made from rendered cattle and sheep.
The postulated link between the consumption of beef and
CJD caused panic in Britain. News media in the United States ran
numerous stories on the subject. Articles appeared in, inter alia,
the New York Times, The Wall Street Journal, and Newsweek.
Dateline, a popular, “prime time” television news program,
broadcast a report on the subject. See Texas Beef Group v.
Winfrey, 11 F. Supp. 2d 858, 861 (N.D. Tex. 1998). Another report,
and the subject of this suit, was aired on the “Dangerous Food”
broadcast of the Oprah Winfrey Show.
Asserting that the beef market suffered substantial
losses following the broadcast, several Texas cattle ranchers sued
1
Subsequently, BSE has been identified in Irish, Canadian, and other
European cattle.
2
Oprah Winfrey, the producers and distributors of the Oprah Winfrey
Show, and Howard Lyman, a guest on the show, in Texas state court.
The cattlemen alleged violations of the Texas False Disparagement
of Perishable Food Products Act, Tex. Civ. Prac. & Rem. §§ 96.001-
.004 (“the Act”), and damages arising from the common-law torts of
business disparagement, defamation, negligence, and negligence per
se. The cattlemen’s suit was removed to federal court. At the
close of the cattlemen’s case-in-chief, the district court culled
the majority of the pending claims, saving only the business
disparagement cause of action. This claim was rejected by the
jury, and the cattlemen have appealed. Although we differ with the
district court’s reasoning on certain issues, we affirm.
II. FACTUAL BACKGROUND
A. The “Dangerous Food” Show
As the British public panicked over the human victims in
their country and over the announcement of a possible link between
BSE and new-variant CJD, employees of the Oprah Winfrey Show2 laid
the groundwork for an episode covering the hidden dangers in food.
Alice McGee, a senior supervising producer for the Oprah Winfrey
Show, and James Kelley, an editor, held a brainstorming session and
decided that “dangerous food” would be a good topic for a show.
The two approached Diane Hudson, the Oprah Winfrey Show’s executive
producer, regarding the topic, and she approved, so long as BSE was
2
The Oprah Winfrey Show is a talk show hosted by Oprah Winfrey,
produced by Harpo Productions, Inc. (“Harpo Productions”), and distributed by
King World Productions, Inc. (“King World”). Winfrey is the sole shareholder and
Chief Executive Officer of Harpo Productions. The appellees are not pursuing an
appeal of the summary judgment in favor of King World.
3
not the only issue discussed. Kelley began preparing for the show
and assigned members of his production team to research the “Mad
Cow Disease” topic. Three weeks before the taping of the
“Dangerous Food” show, Andrea Wishom, a researcher for the Oprah
Winfrey Show, conducted research and interviewed individuals who
were knowledgeable about CJD and “Mad Cow Disease.” During her
research, Wishom discovered that the Center for Disease Control,
the U.S. Department of Agriculture, and several professors and
researchers felt that “Mad Cow Disease” could not occur in the
United States. In telephone conversations, however, Wishom learned
that Lyman believed “Mad Cow Disease” could produce an epidemic in
this country worse than AIDS. Wishom spoke with each potential
guest on the telephone, discussed her research with Kelley and
summarized research for Winfrey’s use during preparation and taping
of the show.
On April 11, 1996, the “Dangerous Food” episode of the
Oprah Winfrey Show was taped in Chicago, Illinois. Guests on the
show included Lyman,3 Dr. Gary Weber,4 Dr. Will Hueston,5 Linda
Marler, Dr. James Miller,6 and Beryl Rimmer. During the taping,
3
Lyman is a former cattle rancher turned vegetarian and an activist
for the Humane Society.
4
Dr. Weber holds a Ph.D. in Animal Science. Dr. Weber represents the
National Cattlemen’s Beef Association.
5
Dr. Hueston, representing the U.S. Department of Agriculture, is a
leading expert on “BSE.”
6
Dr. Miller is a physician with experience treating individuals
afflicted with CJD. He was the treating physician for Linda Marler’s mother-in-
law. Marler was also a guest on the “Dangerous Food” show.
4
Winfrey discussed several topics with her guests, including the
discovery of new-variant CJD in Britain, the gruesome symptoms of
the disease, the impact of the disease on the families of those
stricken, the threat of the disease in the United States, and the
steps being taken by cattlemen and the U.S. Department of
Agriculture to prevent an outbreak of BSE in this country. Over
the course of the taping, Lyman made several statements regarding
the threat of BSE in the United States that Drs. Weber and Hueston
found misleading. The experts responded to these statements with
facts designed to show the cautious response that the United States
had taken to the threat of BSE. They explained the extensive
animal testing and oversight used to discover and prevent the
spread of BSE in United States cattle. They noted that these
procedures had been in place for nearly a decade and that no case
of BSE had ever been reported in the United States. They also
pointed out that cattlemen voluntarily banned on ruminant-to-
ruminant feeding while the Department of Agriculture considered a
mandatory ban on the practice.
After the taping, Kelley edited extensively to pare down
the “Mad Cow Disease” segment for broadcast.7 From approximately
eight minutes of Dr. Hueston’s statements recorded during the
taping, only 37 seconds remained in the broadcast. As instructed
by Winfrey and McGee, Kelley cut out “the redundancies” in Dr.
7
The “Mad Cow Disease” segment formed only a part of the day’s show.
Other segments, not challenged here, involved the dangers from meat (including
hamburger) infected with E. coli bacteria; food handling tips; a tour of a
Chicago restaurant; and discussions about the hazards of eating oysters, drinking
diet herbal tea, and public water supplies.
5
Weber’s and Dr. Hueston’s interviews. These “redundancies”
included portions of the following: (1) Dr. Weber’s references to
the voluntary ban on ruminant-to-ruminant feeding, (2) Dr. Weber’s
explanation of what ruminant-to-ruminant feeding entailed, (3) Dr.
Weber’s distinctions between Britain’s approach to BSE and the
United States’s more careful approach, (4) Dr. Weber’s response to
an audience member’s question concerning the examination of cattle
before slaughter, and (5) most of Dr. Hueston’s comments, including
a description of the safeguards against slaughter-house processing
of sick cattle. Also edited out was Lyman’s admission that
American beef is safe. None of Dr. Miller’s statements appeared in
the show as broadcast. The edited show was broadcast on April 16,
1996.
B. The Oprah Crash
Following the April 16, 1996, broadcast of the “Dangerous
Food” program, the fed cattle market in the Texas Panhandle dropped
drastically. In the week before the show aired, finished cattle
sold for approximately $61.90 per hundred weight. After the show,
the price of finished cattle dropped as low as the mid-50’s; the
volume of sales also went down. The cattlemen assert that the
depression continued for approximately eleven weeks.
The depression in cattle prices reverberated in national
fed cattle markets as well. W. Winfred Moore, II, a commodities
trader on the floor of the Chicago Mercantile Exchange, reported
the impact that the “Dangerous Food” show had on the live cattle
futures market. He recalled the stir the show created in the
6
trading pit, both before and after broadcast. Moore explained that
the fear inspired by the show caused futures prices to decline by
$1.50 per hundred weight -- the limit-down for the market. The
market reached the limit-down within an hour of the Oprah Winfrey
Show’s 9:00 a.m. broadcast, and the Mercantile Exchange closed the
live cattle market for the day.
Cash fed cattle markets suffered a similar fate. Dr.
Wayne D. Purcell, an expert in agricultural economics and livestock
marketing, concluded that “a significant and rather dramatic shock
impacted the cash fed cattle market during [the week of] April 16,
1996.” Dr. Purcell went on to testify that the aftereffect of this
shock was felt in the cash market through July 1996 and perhaps
into the fall of 1996.
C. “Mad Cow Disease” Revisited
News of the “Oprah Crash” spread quickly, and several
cattlemen complained to the Oprah Winfrey Show. Sensitive to their
accusations of unfairness, Winfrey invited Dr. Weber and a cattle
rancher, but not Lyman, to a show aired one week later to refute
the “Dangerous Food” broadcast. Dr. Weber reexplained the
voluntary ban, and anticipated permit ban, on ruminant-to-ruminant
feeding. He explained the purpose of ruminant-to-ruminant feeding
and the limited extent of its practice. He reiterated that no BSE
had ever been found in this country. Dr. Weber concluded by
reassuring viewers that cattlemen were doing “everything it takes
to protect the health of . . . cattle and . . . consumers.”
7
Thanking Winfrey for airing the new show, the president of the
National Cattlemen’s Beef Association wrote,
On behalf of more than a million U.S. cattle producers,
I want to thank you for allowing us to present the truth
about feeding animal-based protein supplements and the
British cattle disease BSE . . . . It was a service to
consumers and a great relief to many of my fellow
cattlemen.
III. PROCEDURAL HISTORY
On May 28, 1996, Paul F. Engler and Cactus Feeders, Inc.,
filed suit against Winfrey, Harpo Productions, Lyman, and Cannan
Communications, Inc. (“Cannan”), in Texas state court. Three days
later, on May 31, Engler and Cactus Feeders filed a motion to
nonsuit Cannan. On June 5, the plaintiffs filed their first
amended petition, renaming Cannan as a defendant. On June 6,
however, the trial court granted the plaintiffs’ May 31 motion to
nonsuit Cannan.
As Cannan had been the only non-diverse defendant, the
remaining defendants filed a notice of removal on June 21. From
June 6 until the filing of the removal notice, the plaintiffs did
not move to rejoin Cannan as a defendant in state court. In
federal district court, the removing defendants argued that the
June 6 nonsuit operated to dismiss Cannan as a defendant from the
June 5 first amended complaint and, regardless, that Cannan had
been fraudulently joined in the state action to defeat diversity.
On motion to remand, the plaintiffs maintained that their May 31
motion to nonsuit applied only to their original complaint and that
Cannan had not been fraudulently joined. The district court found
that the plaintiffs’ motion to nonsuit was effective only after it
8
had been signed in Texas state court and, thus, that the nonsuit
was effective as to the first amended complaint. Although the
state court nonsuit was voluntary and without prejudice, the
plaintiffs did not attempt to rejoin Cannan in any amended pleading
filed in federal court.
The case moved to trial before a jury.8 At the close of
the plaintiffs’ case-in-chief, the defendants moved for judgment as
a matter of law on all of the pending claims. The district court
granted the motion only with respect to the plaintiffs’ claim under
the False Disparagement of Perishable Food Products Act. See Texas
Beef Group, 11 F. Supp. 2d at 862-63. The district court rested
its decision on several bases. First, the district court
questioned the applicability of the statute to live “fed cattle.”
See id. at 863. Second, the court disputed whether the plaintiffs’
cattle “perished” or “decayed beyond marketability” as required for
statutory protection. See id. Alternatively, the district court
ruled that the case was not cognizable under the Act because
insufficient proof had been offered tending to show the defendants
had knowingly disseminated false information. See id.9
The district court submitted only the plaintiffs’
business disparagement claim to the jury. The jury was charged as
follows:
8
Following removal, this case was consolidated with a pending federal
claim -- Texas Beef Group v. Winfrey, No. 2-96-CV-208-J.
9
The district court also dismissed the plaintiffs’ claims of common
law defamation, statutory libel, negligence, and negligence per se. See Texas
Beef Group, 11 F. Supp. 2d at 862-65. The appellants do not appeal from these
dismissals.
9
To recover on a claim of business disparagement, a
plaintiff must prove the following:
(1) That the Defendant published a false,
disparaging statement;
(2) That the statement was “of and
concerning” a Plaintiff’s specific property;
(3) That the statement was made with
knowledge of the falsity of the disparaging
statement or with reckless disregard
concerning its falsity, or with spite, ill
will, and evil motive, or intending to
interfere in the economic interests of the
Plaintiff in an unprivileged fashion; and
(4) That the disparaging statement played a
substantial and direct part in inducing
specific damage to the business interests of
the Plaintiff in question.
* * * *
For the statement to be “of and concerning” a Plaintiff’s
specific business property, the disparaging words must
refer to an ascertained or ascertainable business, and it
must be the Plaintiff’s. The law does not allow the jury
to connect the allegedly disparaging statements to a
Plaintiff on innuendo or presumption alone. While it is
not necessary that the publication have mentioned a
Plaintiff by name, the facts and circumstances must be
such [that] they point to the Plaintiff as the person
concerning whom the alleged disparaging statements are
made. Every listener does not have to understand the
alleged disparaging statements to refer to the individual
Plaintiff as long as there are some who reasonably do.
The question submitted to the jury asked,
Did a below-named Defendant publish a false, disparaging
statement that was of and concerning the cattle of a
below-named Plaintiff as those terms have been defined
for you?
The plaintiffs objected to “insertion of the ‘of and concerning’
requirement” in the jury charge. The district court overruled the
objection, and the jury returned an answer of “no” to the proffered
10
question. From the district court’s adverse rulings and judgment,
the cattlemen timely appealed to this court.
IV. ANALYSIS
A. Jurisdiction
The cattlemen first urge that the district court had no
diversity jurisdiction to entertain their suit. This court reviews
de novo a district court’s denial of a motion to remand. See
Herron v. Continental Airlines, Inc., 73 F.3d 57, 58 (5th Cir.
1996). A party seeking to remove a suit from state court must
prove subject matter jurisdiction in the district court. See Allen
v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995). When
removal is based on diversity of citizenship, diversity must exist
at the time of removal. 14B. C. Wright, A. Miller & E. Cooper,
Federal Practice & Procedure § 3723, at 574-75 (1998 ed.)
(hereafter Wright, Miller and Cooper). Even though removal may
have been improper due to a lack of diversity jurisdiction at the
time of removal, if the defect is later cured before it is noticed,
the federal court has subject matter jurisdiction to enter
judgment. See Wright, Miller & Cooper, Id. at 588-89; Caterpillar
Inc. v. Lewis, 519 U.S. 61, 75-77, 117 S. Ct. 467, 476-77 (1996).
Such a finding is appropriate -- given considerations of finality,
efficiency, and economy -- when diversity existed at the beginning
of trial and at the rendering of judgment. See id.
Caterpillar is dispositive here. The cattlemen maintain
that their motion to nonsuit Cannan, filed before the first amended
state court complaint but granted after the first amended complaint
11
was filed, dismissed Cannan only from the original complaint and,
thus, that Cannan was a non-diverse party to the amended suit upon
removal. Their argument turns on the interpretation of Texas
procedural law whose application in this case is far from clear.10
But even if the district court erred in holding that Cannan was not
a party defendant at the time of removal, its error falls precisely
under the Caterpillar holding. In Caterpillar, the district court
erroneously denied a motion to remand and the case proceeded in
federal court. See 519 U.S. at 70, 117 S. Ct. at 473. Prior to
trial, the intervening plaintiff and the non-diverse defendant
settled -- and diversity was finally established. See id. at 66-
67, 117 S. Ct. at 471-72. The unanimous Supreme Court held that
“overwhelming” considerations of finality, efficiency, and judicial
economy militated against a remand to state court when the original
jurisdictional defect had not “lingered through judgment.” See id.
at 75-77, 117 S. Ct. 476-77.
The cattlemen’s effort to distinguish Caterpillar is
unpersuasive. Though the cattlemen accurately observe that the
10
Texas case law on this issue is confusing. While the signing of a
motion to nonsuit is indeed viewed by Texas courts as a ministerial act, the
signing does have important implications for appellate timetables. See Farmer
v. Ben E. Keith Co., 907 S.W.2d 495, 496-97 (Tex. 1995); Harris County Appraisal
Dist. v. Wittig, 881 S.W.2d 193, 194 (Tex. App.-Houston [1st Dist.] 1994, orig.
proceeding); Avmanco, Inc. v. City of Grand Prairie, 835 S.W.2d 160, 163 (Tex.
App.-Fort Worth 1992, appeal dism’d as moot). Wittig reminds that no Texas court
has found that a motion to nonsuit is effective immediately upon filing, see 881
S.W.2d at 195, but the Texas Supreme Court’s opinion in Greenberg v. Brookshire,
640 S.W.2d 870, 871-72 (Tex. 1982), gave immediate effect to a motion for nonsuit
filed under circumstances quite similar to this case. Though subsequent cases
such as Farmer, Wittig, and Avmanco have clarified its holding, Greenberg remains
relatively unblemished by the march of Texas law. In fact, in their initial
notice of removal, the appellees cited Greenberg for this very proposition --
their amended notice of removal deleted the citation. Given our reliance upon
Caterpillar, however, it is unnecessary to speculate on this issue any further.
12
non-diverse defendant in Caterpillar was voluntarily withdrawn from
the action, they could have amended their complaint in federal
court to rejoin Cannan, and they could even have moved again to
remand. See Hensgens v. Deere & Co., 833 F.2d 1179, 1182 (5th Cir.
1987). The district court’s ruling on the motion to remand did not
foreclose such an amendment. When they were given the opportunity
to amend at the district court, the cattlemen made no effort to
rejoin Cannan, assuring the district court instead that “[s]tate
court is not the Plaintiffs’ preferred forum.” Cannan is absent
from the litigation because of the cattlemen’s choice. And, as in
Caterpillar, the case went to trial and resulted in a judgment
founded on complete diversity. The ultimate scope of Caterpillar
may be unclear. See, e.g., Lexecon v. Milberg Weiss Bershad Haynes
& Lerach, ___ U.S. ___ 118 S. Ct. 956, 965-66; 14B. Wright, Miller
& Cooper, § 3723, at 588 (describing the “somewhat more contentious
and as yet undefined doctrine” of Caterpillar). Nevertheless, the
instant case falls comfortably within its exact rationale.
B. False Disparagement of Perishable Food Products Act
In 1995, the Texas legislature passed the Act, following
closely on the heels of the Alar apple scare. See generally Auvil
v. CBS “60 Minutes”, 800 F. Supp. 928 (E.D. Wash. 1992), aff’d, 67
F.3d 816 (9th Cir. 1995).
Under the Act, a person may be held liable for damages
sustained by the producer of a perishable food product if that
person knowingly disseminates false information to the public
stating or implying that the producer’s product is not safe for
13
public consumption. See Tex. Civ. Prac. & Rem. § 96.002. A
“perishable food product” is defined by the Act as “a food product
of agriculture or aquaculture that is sold or distributed in a form
that will perish or decay beyond marketability within a limited
period of time.” Tex. Civ. Prac. & Rem. § 96.001. When
considering the falsity of the disseminated information, the trier
of fact is instructed to determine “whether the information was
based on reasonable and reliable scientific inquiry, facts, or
data.” Tex. Civ. Prac. & Rem. § 96.003. This litigation
represents one of the first applications of the Act. At trial, the
parties disputed whether appellants’ live cattle are a “perishable
food product” protected under the Act and whether, in any event,
the appellees knowingly disseminated false information about live
cattle. Although the district court found that, on the facts
before it, the fed cattle did not “decay beyond marketability” and
thus did not fall within the statute’s coverage, we do not reach
that issue here. The court alternatively held that the appellees
did not knowingly disseminate false information about beef. We
turn to that issue.11
When a district court grants a motion for judgment as a
matter of law at the close of evidence, this court reviews the
decision de novo, applying the same legal standard as the district
court. See Price v. Marathon Cheese Corp., 119 F.3d 330, 333 (5th
Cir. 1997). In our review, all evidence is considered in the light
11
The appellees do not raise on appeal any arguments concerning the
constitutionality of the Act.
14
most favorable to the nonmovant. See id. If, after drawing all
inferences in the nonmovant’s favor, “there is no legally
sufficient evidentiary basis for a reasonable jury” to find for the
nonmovant, judgment as a matter of law is appropriate. See id.
(quoting Fed. R. Civ. P. 50(a)).
The critical issue here is whether the appellees
knowingly disseminated false information tending to show that
American beef is not fit for public consumption. Tex. Civ. Prac.
& Rem. § 96.002(a). The requirement of knowledge that the
information is false is the highest standard available in the law.
It is unnecessary to import First Amendment free speech protections
in further embroidery of this already-stringent standard, except to
note that the expression of opinions as well as facts is
constitutionally protected so long as a factual basis underlies the
opinion. Peter Scalamandre & Sons, Inc. v. Kaufman, 113 F.3d 556,
562 (5th Cir. 1997); see also Milkovich v. Lorain Journal Co., 497
U.S. 1, 17-23, 110 S. Ct. 2695, 2705-08 (1990) (discussing
protections afforded “opinions” under First Amendment). There is
little doubt that Howard Lyman and the Winfrey show employees
melodramatized the “Mad Cow Disease” scare and discussion of the
question “Can it happen here?” Perhaps most important, from the
audience’s viewpoint, was not the give-and-take between the glib
Lyman and the dry Drs. Weber and Hueston, but Ms. Winfrey’s
exclamation that she was “stopped cold from eating another burger.”
When Ms. Winfrey speaks, America listens. But her statement is
neither actionable nor claimed to be so. Instead, two false
15
statements by Lyman and misleading editing are relied upon to carry
the cattlemen’s difficult burden. Like the district court, we hold
they have not sustained their burden of articulating a genuine
issue of material fact concerning liability under the Act.
Branding Lyman an extremist, the cattlemen cite two of
his inflammatory statements during the April 16 Oprah Winfrey Show.
First, the cattlemen challenge as patently false Lyman’s assertion
that “Mad Cow Disease” could make AIDS look like the common cold.
Second, they maintain that Lyman falsely accused the United States
of treating BSE as a public relations issue, as Great Britain did,
and failing to take any “substantial” measures to prevent a BSE
outbreak in this country. At the time of the show’s broadcast, the
factual basis for Lyman’s opinions -- the continued existence of
ruminant-to-ruminant feeding in the United States -- was truthful.
The feeding practice continued to a limited extent, despite a
voluntary ban; Dr. Weber admitted as much. Based on this fact,
Lyman held the belief that “Mad Cow Disease” could exist or be
discovered in this country and could endanger the lives of those
eating American beef. His statement comparing Mad Cow Disease to
AIDS was hyperbolic, and Winfrey highlighted the statement as
“extreme” during the show’s broadcast. As this court noted in
Scalamandre, “exaggeration does not equal defamation.” See 113
F.3d at 562. Lyman’s statements comparing the United States’
cattlemen’s and government’s reaction to BSE to that in Great
Britain and bewailing the failure to take any “substantial steps”
to prevent a BSE outbreak in this country were a sincerely held
16
opinion supported by the factual premise that only a mandatory ban
on ruminant-to-ruminant feeding would disperse with the danger.
The FDA imposed such a ban, with the approval of the cattle
industry, only months after the Oprah Winfrey Show. See id.
Lyman’s opinions, though strongly stated, were based on
truthful, established fact, and are not actionable under the First
Amendment. See id. at 564 (“Defamation law should not be used as
a threat of force individuals to muzzle their truthful, reasonable
opinions and beliefs.”). Neither of Lyman’s statements contained
a provably false factual connotation, see Milkovich, 497 U.S. at
20, 110 S. Ct. at 2706, and both were based on factually accurate
premises. Most telling is Dr. Hueston’s public comment about
Howard Lyman, edited out of the final version of the show, which
acknowledged that Lyman’s ability to display his opinions is what
makes America great and “keeps us the best.” On the evidence
presented, no reasonable juror could have held that Lyman’s views
were knowingly false. See Omnitech Int’l, Inc. v. Clorox Co., 11
F.3d 1316, 1323 (5th Cir. 1994).
Likewise, Winfrey and Harpo Productions may not be held
liable for the editing of the “Dangerous Food” show. This court
rejected a similar claim in Scalamandre. See 113 F.3d at 563.
(“It is common knowledge television shows . . . shoot more footage
than necessary and edit the tape they collect down to a brief
piece.”) This broadcast of the Oprah Winfrey Show was no different
from the news report in Scalamandre. While the editor of the
“Dangerous Food” show was instructed to cut out the redundancies in
17
the unedited interviews, he was also required to cut the piece to
fit into a smaller time frame for the ultimate broadcast. Although
the show’s producer undeniably spliced questions and answers, the
editing did not misrepresent Dr. Weber’s responses. Moreover,
through Lyman himself, the show introduced viewers to the voluntary
ban on ruminant-to-ruminant feeding. The editing omitted factual
explanations, such as the precise differences between cattle
feeding and inspection practices in the United States and Great
Britain. On the broadcast, however, Drs. Weber and Hueston
disputed Lyman’s arguments, described the steps the United States
had taken to prevent the influx of BSE, and presented cogent
arguments concerning the relative safety of United States beef.
The cattlemen’s evidence regarding the editing of the
“Dangerous Food” broadcast falls far short of satisfying the Act’s
standard for liability. Stripped to its essentials, the
cattlemen’s complaint is that the “Dangerous Food” show did not
present the Mad Cow issue in the light most favorable to United
States beef. This argument cannot prevail. Compare Scalamandre
Scalamandre, 113 F.3d at 563-64. So long as the factual
underpinnings remained accurate, as they did here, the editing did
not give rise to an inference that knowingly false information was
being disseminated.
C. Business Disparagement
The cattlemen finally challenge the district court’s
business disparagement instruction. Their complaint involves two
alleged errors stemming from the “of and concerning” requirement in
18
the instructions. First, the cattlemen argue that the instruction
unnecessarily required the jury to find that the appellees made a
“false, disparaging statement” regarding their specific cattle.
Second, the cattlemen urge that the instructions improperly
demanded a finding that the “false, disparaging statement” was “of
and concerning the cattle” of the plaintiffs -- as opposed to “of
and concerning beef.” At trial, however, the cattlemen’s objection
to this instruction was insufficiently specific to preserve the
alleged errors.
Under Fed. R. Civ. P. 51, a party must object to a
proposed jury instruction, “stating distinctly the matter objected
to and the grounds of the objection.” See also Wood v. Diamond M
Drilling Co., 691 F.2d 1165, 1169 (5th Cir. 1982). If a party
fails to object with specificity to a proposed instruction, the
right to challenge the instruction on appeal is waived. See Nero
v. Industrial Molding Corp., 167 F.3d 921, 932 (5th Cir. 1999).
Regardless of this waiver, the court may review the instruction for
plain error. In the civil context, a jury instruction is plainly
erroneous when (1) an error occurred, (2) the error was clear or
obvious, (3) substantial rights were affected, and (4) “not
correcting the error would seriously affect the fairness,
integrity, or public reputation of judicial proceedings.” Id.
By failing to object with specificity and offer a
proposed instruction on the business disparagement issue, the
cattlemen failed to preserve the alleged error in the charge. The
cattlemen’s vague objection to the business disparagement
19
instruction was insufficient to preserve their objection. See Fed.
R. Civ. P. 51. Further, the cattlemen wholly failed to submit a
specific alternate instruction on the issue to the district court.
Again, this failure waives any error in the charge. See Eiland v.
Westinghouse Elec. Corp., 58 F.3d 176, 182 (5th Cir. 1995).
Our review of the record also does not permit a finding
of plain error. Failing to correct the charge would not “seriously
affect the fairness, integrity, or public reputation of judicial
proceedings.” See Nero, 167 F.3d at 932. The “of and concerning”
requirement in defamation law, and its parameters, raise questions
too important and uncertain of answer to be posed first in any
depth in this court; appellants should have taken their best shot
at this issue in the trial court.
V. CONCLUSION
The cattlemen’s procedural maneuvering enabled removal by
the appellees and avoided a Texas state court trial. Though we
assume that the district court improperly denied the cattlemen’s
motion to remand, jurisdiction was properly vested in the district
court by the time of trial and judgment. Because a finding that
the district court lacked jurisdiction would result in an
inefficient loss of judicial economy, Caterpillar allows a finding
of jurisdiction regardless of the assumed lack of diversity at the
time of removal. The cattlemen’s failure to rejoin Cannan as a
non-diverse party prior to trial prevented this loss of efficiency
and vested the district court with diversity jurisdiction.
20
The cattlemen’s complaints regarding the “Dangerous Food”
broadcast of the Oprah Winfrey Show presented one of the first
opportunities to interpret a food disparagement statute. The
insufficiency of the cattlemen’s evidence, however, renders
unnecessary a complete inquiry into the Act’s scope. Finally, this
court can find no plain error in the district court’s instructions
regarding the business disparagement claim.
AFFIRMED.
ENDRECORD
21
EDITH H. JONES, Circuit Judge, concurring:
While I acknowledge that our court’s opinion may assume
without deciding the applicability of the False Disparagement of
Perishable Food Products Act, I have become convinced that the
district court’s interpretation of the Act was wrong. Plaintiffs
suing under the Act should not have to prove, as a threshold to
coverage, that their particular products may decay “beyond
marketability” within a limited period of time. The purpose of the
statute’s definition is to distinguish perishable from processed
food products, not to eliminate protection for some of the farmers
and ranchers for whom the statute was intended. The statute
contains several high hurdles to liability; this is not one of
them.
Under the Act, a person may be held liable for damages
sustained by the producer of a perishable food product if that
person knowingly disseminates false information to the public
stating or implying that the producer’s product is not safe for
public consumption. See Tex. Civ. Prac. & Rem. § 96.002. This
litigation represents one of the first applications of the Act. At
trial, the parties disputed whether appellants’ live cattle are a
“perishable food product” protected under the Act. The court held
that they are not.
To support the position that their live cattle
constituted a “perishable food product,” the cattlemen introduced
evidence that cattle fattened in a feed lot must be sold when they
reach their marketable weight.12 After the marketable weight is
reached, the cattle begin to put on extra fat. This extra fat
devalues the cattle, reduces their selling price, and costs the
rancher in excess feed. Although a “maintenance feed” can be used
to maintain cattle weights, this feed reduces marbling in the beef,
toughens the beef, and, again, decreases the cattle’s value.
Cattle remain at their marketable weight for only a brief period of
time. Indeed, the district court found, and the appellees
apparently concede, that cattle begin to diminish in value once
they have passed their marketable weight. See 11 F. Supp. 2d at
863.
While recognizing this diminution in value, the district
court found that live cattle do not decay “beyond marketability”
because they may still be sold for uses other than USDA prime beef
-- e.g., hamburger or dog food. This interpretation, however,
would seem to vitiate the applicability of the statute to food
products that were undoubtedly intended to fall within the
protective reach of the Act. For example, bananas are undoubtedly
a food product that will decay over time. Yet, bananas with brown
spots have uses beyond consumption as fresh bananas -- e.g., when
12
Cattle are placed in feedlots for an average of 120-150 days. During
this time, their weight increases to the optimal range of 1,100 to 1,150 pounds.
Once at this “finish weight,” the cattle must go to market within the next few
days or weeks lest their price decline. By comparison, apples -- clearly
intended to constitute a perishable food product under the Act -- may be stored
between six and 11 months before they decay beyond marketability. See
Agricultural Research Service, U.S. Dep’t of Agric., Agricultural Handbook No.
66, “The Commercial Storage of Fruits, Vegetables, and Florist and Nursery
Stocks” 31 (1986).
23
processed in banana bread and certain non-food uses. The Act,
properly construed, does reach fed cattle.
The appellees’ interpretation that the Act was not
intended to cover live cattle is inconsistent with the statute’s
language and legislative history. A perishable food product is “a
food product of agriculture or aquaculture that is sold or
distributed in a form that will perish or decay beyond
marketability within a limited period of time.” Tex. Civ. Prac. &
Rem. § 96.001. First, the statute places no limit on the term
“agriculture,” which the dictionary defines as “the science or art
of cultivating the soil, harvesting crops, and raising livestock.”
Webster’s Third New International Dict. (1981). Raising cattle, an
agrarian occupation, is within the language of the statute; fed
cattle are “beef on the hoof,” hence, a food product. Moreover,
beef is “a food product of agriculture” and is “distributed in a
form” that is perishable. The district court’s denial of coverage
to live fed cattle overlooks this aspect of the statutory
definition. Reinforcing coverage of fed cattle is the fact that
the statute covers aquaculture, presumably including the
cultivation of oysters, shrimp, or catfish. An act designed to
protect production of aquatic animals for food, a relatively new
Texas industry, could not have meant to exclude cattle-raising,
which is intimately bound with Texas’s history and current economy.
The legislative history supports the cattlemen’s position
that live cattle are covered by the Act. See House Comm. on Agric.
and Livestock, Bill Analysis, Tex. H.B. 722, 74th Leg. (1996)
24
(statute would “help ensure that any claim about the safety of a
perishable . . . meat . . . is based upon facts”); see also id.
(noting necessity for protecting products given “the short amount
of time to harvest and market perishable agricultural . . . food
products” (emphasis added)).
Even if the cattlemen had to show that their cattle would
“decay beyond marketability,” I believe, contrary to the district
court, they did do so. The evidence adduced at trial demonstrates
that live cattle appear to decay steadily in value from their
optimum date of sale (perish beyond marketability) just as an apple
hanging from a tree might rot. That the decay occurs pre-slaughter
does not detract from the protections of the statute. An apple
will rot on the tree as easily as it will rot in the grocer’s
produce section.
The district court’s interpretation overlooks that the
Act was passed to prohibit the dissemination of false information
claiming a food product “is not safe for public consumption.” Tex.
Civ. Prac. & Rem. § 96.002 (emphasis added). Under the district
court’s interpretation, it might be argued that a food product
would never decay beyond marketability so long as some market, even
a non-food or non-human market, existed for the product. Such an
interpretation, however, would directly contradict the
legislature’s intention as it would imperil claims even of Texas
grapefruit or onion growers, if their product had any residual
“marketability” following a trumped-up product scare.
25
The district court’s reasoning mandates that whether an
agricultural or aquaculture product falls within the Act is a
significant threshold factual issue in each case. In other words,
under the district court’s interpretation, a producer or
distributor would be required to prove -- to establish liability --
that his product decayed beyond marketability in a limited period
of time. The appellees seize upon this requirement, citing the
“mere” 11% decrease in market price for fed cattle following the
“Dangerous Food” program and the lack of evidence establishing that
these cattlemen’s products went unsold at market. Their evidence
persuaded the district court that the cattlemen should be barred
from recovery under the Act.
This interpretation of the statute is irreconcilable with
the legislature’s purpose. Food disparagement acts, or “Veggie
Libel Laws,” are designed to prevent false information from
flooding and then destroying the market for a perishable food
product. See Timur Kuran & Cass R. Sunstein, Availability Cascades
and Risk Regulation, 51 Stan. L. Rev. 683, 749-51 (1999).13 Once
a product falls within the definition of a “perishable food
product,” that product is protected. The definition of perishable
foods distinguishes the direct products of agriculture and
13
As defined by Timur and Sunstein, an availability cascade is a “self-
reinforcing process of collective belief formation by which an expressed
perception triggers a chain reaction that gives the perception increasing
plausibility through its rising availability in public discourse.” See
Availability Cascades and Risk Regulation, 51 Stan. L. Rev. at 683. The authors
explicitly define the behavioral bases for food product disparagement laws, see
id. at 705-36, and discuss the impact of the media’s dissemination of false, or
valid, information and the effect of this circulation on the public. See id. at
734-36.
26
aquaculture, broadly speaking, from highly processed foods. The
legislature clearly intended to differentiate between
agribusinesses that produce “fresh” food products from, say, the
makers of biscuit mixes or lasagne as the objects of statutory
protection. Defining the products of agriculture should be easy in
most instances and should put publishers as well as producers on
notice of its scope. The district court’s requirement of a fact-
intensive inquiry into the scope of coverage disadvantages all
parties.
The Act, as I interpret it, shields the market for the
perishable agricultural or aquaculture food product, not an
individual producer’s product. While a producer’s recovery may be
limited or its damages nonexistent, the product itself is protected
from false statements. Thus, the potential inability of the
cattlemen to prove that their cattle decayed beyond marketability
is a question of damages for the trier of fact. On the other hand,
the scope of the Act and whether cattle constitute a “perishable
food product” remain questions of law that the court must determine
pursuant to the rules of statutory construction. In its inquiry,
a court must determine if a product could decay beyond
marketability, as opposed to whether that product did decay. The
former is a question of law concerning the scope of the statute,
the latter a question of fact concerning damages.
I respectfully differ with the excellent district court
judge on this matter.
27
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