Julian Toney v. WCCO Television ( 1996 )

____________________
No. 95-1190
____________________
JULIAN TONEY, *
*
Plaintiff - Appellant *
*
v. * Appeal from the United States
* District Court of Minnesota
*
WCCO TELEVISION, MIDWEST CABLE *
AND SATELLITE, INC. also known *
as WCCO TV, Channel 4, also *
known as IOWCCO TV, *
Channel 411 *
*
Defendant - Appellee. *
____________________
Submitted: October 19, 1995
Filed: June 7, 1996
____________________
Before ARNOLD, Chief Judge, WHITE,* Associate Justice (Ret.), and LOKEN,
Circuit Judge.
WHITE, Associate Justice (Ret.).
I. INTRODUCTION
Plaintiff-Appellant Julian Toney ("Toney") brought this action
against Defendant-Appellee WCCO Television, Midwest Cable and Satellite,
Inc., a/k/a WCCO TV, Channel 4 ("WCCO"), alleging that a report on the sale
of dogs to research institutions defamed him
*
The Honorable Byron R. White, Associate Justice of the
United States Supreme Court, (Ret.), sitting by designation,
pursuant to 28 U.S.C. § 294(a).
and defamed him by implication. The district court granted summary
judgment to WCCO. For the reasons set forth below, we reverse in part and
affirm in part the district court's judgment that WCCO did not defame
Toney, reverse its dismissal of Toney's defamation by implication claim,
and remand this case for further proceedings.
II. BACKGROUND
Toney is a dog dealer who resides in Iowa and does business in Iowa,
Missouri and Minnesota. Toney, who had registered with and was licensed
by the United States Department of Agriculture ("USDA"), sold dogs to the
University of Minnesota. On or about May 20, 1992, WCCO, a television
station headquartered in Minneapolis, Minnesota, broadcast a report about
how certain dog dealers sold stolen dogs to research institutions for use
in medical research. The broadcast included interviews with a
representative from the University of Minnesota laboratories, an official
from the USDA, owners of dogs who believed that their pets may have been
stolen and sold to research laboratories as well as Toney and another USDA
licensed dog dealer.
In pertinent part, WCCO's report stated that:
So these animals that are "retired from service, " or unclaimed
at the pound, or stolen from unsuspecting owners are sold to
middlemen. The USDA licenses these middlemen and calls them Class
B dog dealers. According to the Animal Welfare Act only these Class
B [dog] dealers can sell animals to research institutions. But we
found plenty of holes in this system that may also be protecting
animal thieves.
* * * *
South about 40 miles on the Iowa/Missouri border, we found the
place where Class B dealer Julian Toney buys the dogs he sells to the
University.
* * * *
According to USDA records Mr. Toney supplies about a thousand
dogs a year to the University of Minnesota. He told us the
university is only about a fifth of his business. He said he seldom
gets animals from dog pounds.
2
But when we checked his 1990 records, we found he was telling the
USDA just the opposite.
Last week, the USDA confirmed that Julian Toney himself is under
investigation for falsification of records.
* * * *
No one is accusing major research institutions of seeking out
stolen pets for their experiments. But the system relies on human
honesty and adequate enforcement, and we found shortages of both.
App. at 46-48. Shortly after the broadcast, the USDA charged Toney with
falsifying his records.1
After WCCO refused to retract its statements about Toney, he filed a
two-count complaint alleging that WCCO defamed him directly and also by
implication. Specifically, Toney maintained that the report implied that
he sold stolen animals, was dishonest and a thief, and lied about the
source of his animals. Alleging that this report damaged him personally
as well as professionally, Toney requested compensatory as well as punitive
damages in an amount over $50,000.
WCCO moved to dismiss Toney's amended complaint, or in the
alternative, for judgment as a matter of law. After holding oral argument,
the district court first rejected Toney's defamation claim, ruling that the
statements in the report about Toney were either true or non-defamatory.
The court then held that, because Minnesota did not provide a claim for
relief based on defamation by implication, WCCO was also entitled to
summary judgment on Toney's implied defamation claims. Toney filed this
timely appeal.
1
On appeal, WCCO moved to supplement the record to include
an Administrative Law Judge's opinion finding that Toney
falsified his records. However, as we limit out review to the
district court's ruling in this case, we deny WCCO's motion,
reserving its right to renew this motion before the district
court.
3
III. DISCUSSION
A. APPLICABLE LAW AND STANDARD OF REVIEW
Because this case arises under this court's diversity
jurisdiction, the substantive issues are governed by Minnesota law. B.B.
v. Continental Ins. Co., 8 F.3d 1288, 1291 (8th Cir. 1993). Thus, our task
is to determine and apply Minnesota law. Farr v. Farm Bureau Ins. Co. ,
61 F.3d 677, 679 (8th Cir. 1995). Of course, Minnesota courts must apply
federal constitutional standards that are applicable to cases like this.
In this regard, it is conceded that Toney is not a public figure; rather,
he is a private plaintiff in this defamation case.
We review the district court's interpretation of Minnesota law de
novo. Id. We also review de novo the district court's grant of WCCO's
motion for summary judgment. Continental Ins. Co., 8 F.3d at 1291.
Summary judgment for WCCO is proper "if there is no genuine issue as to any
material fact." Fed. R. Civ. P. 56(c).
B. DEFAMATION AND DEFAMATION BY IMPLICATION
Count 1 of Toney's complaint alleges defamation; Court 2 alleges
defamation by implication. To prevail on either of these claims, Toney
must prove that WCCO's publication about him defamed him by establishing
that WCCO (1) published a statement of fact; (2) of and concerning him; (3)
which was false; and (4) damaged his reputation and lowered his estimation
in the community. See Lewis v. Equitable Life Assurance Soc'y, 389 N.W.2d
876, 886 (Minn. 1986); Foley v. WCCO Television, Inc., 449 N.W.2d 497, 500
(Minn. Ct. App. 1989), cert. denied, 497 U.S. 1038 (1990).
Under Minnesota defamation law, a statement falls into one of three
categories: (1) those that are clearly defamatory on their face; (2) those
that could not possibly have a defamatory meaning;
and (3) those that are reasonably susceptible to a defamatory meaning
as well as an innocent one. Church of Scientologv v. Minnesota State
4
Medical Ass'n Found., 264 N.W.2d 152, 155 (Minn. 1978). In category
(3) are "[w]ords, which taken by themselves have an innocent meaning, [but]
in connection with surrounding circumstances[] may convey a defamatory meaning
to those familiar with such circumstances . . . . [In such cases,] [w]hether
a defamatory meaning is conveyed is dependent upon how ordinary men understand
the language in light of the surrounding circumstances." Gadach v. Benton
County Co-op Ass'n, 53 N.W.2d 230, 231 (Minn. 1952) (citations omitted). "If
the words are capable of the defamatory meaning, it is for the jury to decide
if they were in fact so understood." Utecht v. Shopko Dep't Store, 324 N.W.2d
652, 654 (Minn. 1982) (citing Gadach, 53 N.W.2d 230). Thus, at the summary
judgment stage, the judge must not conclusively interpret a category (3)
statement; rather, the judge should only decide whether a statement is capable
of being interpreted as defamatory.
When an otherwise innocent statement is interpreted to have a defamatory
meaning, it is not unusual to find that meaning referred to as "implied" or
"drawn by implication." See, e.g., Milkovich v. Lorain Journal Co., 497 U.S.
1, 18 (1990) ("If a speaker says, 'In my opinion John Jones is a liar,' he
implies a knowledge of facts which lead to the conclusion that Jones told an
untruth."); id. at 3 (holding actionable article "implying that petitioner
. . . lied under oath in a judicial proceeding"); Phipps v. Clark Oil &
Refining Co., 408 N.W.2d 569, 573 (Minn. 1987); Lewis, 389 N.W.2d at 889;
Janklow v. Newsweek, Inc., 788 F.2d 1300, 1304 (8th Cir.) (en banc), cert.
denied, 479 U.S. 883 (1986). In the instant case, the district judge held
that Minnesota does not recognize "defamation by implication." The district
judge, however, could not have meant to
preclude plaintiffs from challenging statements that are non-defamatory
on their face but capable of having an "implied" defamatory meaning for it
is well accepted that such statements may give rise to a defamation claim
under Minnesota law, and we see nothing in the district court's opinion that
discards such well settled law. For example, in Utecht v. Shopko Dep't
Store, the Minnesota Supreme Court
5
held actionable a department store's placement of a notice at the cash
register stating "Shopper's Charge-Robert Utecht-Do Not Accept."
324 N.W.2d at 653-54.2 In Shopko, the court explained that "[t]he
circumstances in which the notice was seen by the public necessarily prompted
speculation as to why the [" Shopper's Charge "] card was not to be accepted.
Loss or theft are possible explanations but poor credit is an at least
equally likely alternative. "Id. at 654;3 see also Gadach, 53 N.W.2d at
232 ("A jury might well find that this article imputed to plaintiff a
crime."); Phipps, 408 N.W.2d at 573 (statement could imply that gas
attendant refused to service customer because she was handicapped).
What Minnesota law refers to as "defamation by implication" occurs when a
defendant " '[1] juxtaposes a series of facts so as to imply a defamatory
connection between them, or [2] creates a defamatory implication by omitting
facts, [such that] he may be held responsible
for the defamatory implication, unless it qualifies as an opinion, even
though the particular facts are correct.' "Diesen v. Hessburg, 455 N.W.2d
446, 450 (Minn. 1990) (quoting W. Page Keeton, et al.,
PROSSER & KEETON, LAW OF TORTS § 116, at 117 (Supp. 1988)), cert. denied, 498
U.S. 1119 (1991). Thus, the touchstone of implied defamation
2
The classic example of this type of defamation was "Horace
Greeley's well-known words concerning James Fenimore Cooper, 'He
will not bring the action in New York, for we are known there,
nor in Otego, for he is known there' [which] were held to carry
the imputation of bad repute in Otego." W. Page Keeton etal.,
PROSSER & KEATON ON THE LAW OF TORTS § 111, AT 781 (5th ed. 1984)
(quoting Cooper v. Greeley, 1 Denio 347, 348 (1845)).
3
Notably, the interpretation of the challenged statement in
Shopko-i.e., the determination that it was susceptible to a defamatory
meaning-relied on extrinsic circumstances. The Minnesota Supreme
Court acknowledged this fact and explained that such cases are
action- able, terming them cases of "defamatory innuendo." 324 N.W.
2d at 653-54. Employing the term "defamatory innuendo" to describe
such cases can be confusing because in common usage, the terms
"innuendo" and "implication" are often used synonymously (somewhat
like "implica- tion" and "interpretation"); however, in the common
law of defamation, they are "critically different." Robert D. Sack
& Sandra S. Baron, LIBEL, SLANDER, AND RELATED PROBLEMS, 88-89 (2D
ED 1994).
6
claims is an artificial juxtaposition of two true statements or the
material omission of facts that would render the challenged statement(s)
non-defamatory. Under this definition, a defendant does not avoid liability
by simply establishing the truth of the individual statement (s); rather,
the defendant must also defend the juxtaposition of two statements or the
omission of certain facts.
Perhaps the quintessential modern case of defamation by implication is
Memphis Publishing Co. v. Nichols, 569 S.W.2d 412, 419-20 (Tenn. 1978),
where the court held liable a newspaper that truthfully reported that a
woman, upon finding her husband at plaintiff's home, shot the plaintiff.
In that case, the article
neglected to mention that the plaintiff was hosting a social gathering at the
time, thereby implying that the plaintiff and the suspect's husband were
having an affair. Id. at 420. Moreover, the court held that truth of the
challenged statements was irrelevant because" [t]ruth is available as an
absolute defense only when the defamatory meaning conveyed by the words is
true." Id.
C. TONEY'S DEFAMATION CLAIM
The district court identified seven statements that the broadcast
made about Toney: "The Plaintiff is a Class B dealer of dogs; two, the
Plaintiff buys dogs and sells some, and among those sold, sales are made to
the University of Minnesota; three, according to the USDA's records, the
Plaintiff supplies some thousand dogs per year to the University; four, it's
the Plaintiff's estimate that the University is approximately 20 percent of
his business; five, the Plaintiff asserts and states that he seldom gets
animals from dog pounds; six, the Plaintiff's 1990 USDA records show that he
was telling the USDA information contrary to that which he had set forth;
seven, the USDA confirmed that Plaintiff was under investigation for
falsification of his records." App. at 37.
The first five statements, the district court ruled, "are not only true,
but they do not appear in any fashion as a matter of law
7
to be defamatory." Id. at 38. The court also ruled that the sixth statement,
that Toney had told the USDA something contrary to what he had told the
station's reporter, "could be defamatory," as was the case with the seventh
statement that Toney was under investigation for falsification of his records
on file with the USDA. Id. at 39. But these two statements, the district
court concluded," [we]re not actionable . . . . because each is true." Id.
We do not disturb the district court's ruling that none of the first five
statements was defamatory in and of itself. Similarly, we accept the court's
ruling that the first four statements were literally true. We shall deal
below with whether the district court erred by ruling that statement five was
true, but we accept its judgment that statement five was not defamatory on its
face even if false.
The district court also held that statements six and seven "could be
defamatory," meaning, we suppose, that if otherwise actionable, whether the
statements were defamatory would be questions for a jury. Since both
statements could be interpreted as impugning the honesty of Toney's business
dealings, we agree with the district court's
characterization of these statements.4
Even if defamatory, the district court held statements six and seven not
actionable because they were true as a matter of law. We accept this ruling
with respect to the seventh statement, but not with regard to statement
six-i.e., that Toney's 1990 records filed with the USDA showed that Toney was
telling the government something contrary to what Toney had reportedly said
in statement five: that he seldom gets dogs from dog pounds. For the reasons
stated below,
4
In doing so, we note our observation made in Part III B
that the possible defamation involved in the two statements could
not have been deemed by the district court to be defamation by
implication since the court proceeded to hold that there were no
such cause of action under Minnesota law.
8
we doubt that statement six was so plainly true that it could be so
characterized as a matter of law.
First, we question whether the four pages exhibited from the 1990 records
show that for that year Toney could not reasonably assert that he only
"seldom" got dogs from pounds. As Toney argued during the hearing in district
court, he handled some 5,000 dogs in 1990, and even if each of the 20 entries
on the four pages of record relied on by WCCO indicated that he did get dogs
from pounds, that fact would not show that his business with pounds in 1990
occurred more often than "seldom." App. at 27-28. Moreover, we note that,
in a colloquy with counsel, the district judge observed that the "question of
whether or not it's seldom, I guess, becomes kind of an open question." App.
at 27. Toney's counsel responded: "Yeah, which is a fact question. That's
our whole point." Id.
Second, even if the filed records for 1990 could establish that Toney
dealt with pounds more often than seldom, the interview with Toney which
contained statement five was held in 1992, and his reported statement was that
he seldom "gets" dogs from pounds. Thus, it is at least doubtful that what
was true in 1990 was also true in 1992.
Third, in his affidavit opposing summary judgment, Toney swore, and
maintains on appeal, see Brief of Aplt. at 17, that he did not "state to
WCCO-TV that I seldom got my dogs from pounds as alleged or asserted in the
televised report. I explained the source of each and every dog that was
questioned or inquired about by the WCCO reporter. " App. at 49. Laurie
Stern, the producer of the program, filed an opposing affidavit stating that
"Julian Toney told me during the interview that he rarely obtained dogs from
dog pounds." Supp. App. of Aplee. at 11. Aside from the significant use of
the word "rarely" in place of the word "seldom" (the word allegedly used by
Toney in the interview), the two affidavits are in conflict. Of course, if
Toney never made statement five, it could hardly be termed true, as the
district judge held; and, if never made, WCCO's
9
fabrication of the statement only compounds the possible defamation.
On appeal, Toney claims that, at the very least, the conflict between the
two affidavits should be resolved by a jury, not by the district judge's
ruling that, as a matter of law, statement five was in effect made and was
true. In explaining his ruling on this point, the district judge said:
Now, according to the pleadings, many of the above statements were
supplied by the Plaintiff himself in an interview. Whatever the source,
the first five statements do not appear to be in contest. They are in
fact true by all assertions. There is some question exactly whether or
not he made exactly the statements, but there is no substantial dispute
about the actuality. He said he seldom gets animals from dog pounds,
and all the rest of those facts, I think, are clearly agreed to be
stated as they have been stated.
App. at 37-38.
This is hardly a crystal clear basis for the resolution of conflicting
affidavits at the summary judgment stage. Even if the judge had a
satisfactory, but unstated, explanation for holding that Toney uttered
statement five, that explanation would fall considerably short, as indicated
above, of establishing the truth of statement six--i.e., that statement five
is inconsistent with the records filed with the USDA for 1990.
Thus, we cannot affirm the judgment granting WCCO's motion for summary
judgment on the defamation count of the complaint insofar as it deals with
statement six. To that extent, we reverse the district court's judgment on
Toney's defamation claim and remand this case for further proceedings
consistent with this opinion. We otherwise affirm the district court's
disposition of Toney's defamation claim.
10
D. MINNESOTA LAW ON DEFAMATION BY IMPLICATION
As indicated above, the district court held that Minnesota law
does not provide a cause of action for defamation by implication. We have
also pointed out that we do not interpret this ruling as applying to
statements that are not defamatory on their face but could convey a defamatory
meaning. If it did so apply, we indicated that we could not agree. The
court's ruling, however, clearly applies to the category of implied defamation
described by Prosser & Keeton and repeated by the Minnesota Supreme Court in
Diesen, 455 N.W.2d at 450. See p. 6, supra. We conclude that the district
court erred in this respect.
At one point during its oral opinion, the district court said that "the
State of Minnesota in no reported case has ever recognized slander by
implication. " App. at 41. This statement might be read to mean that if the
Minnesota Supreme Court had not expressly provided such a cause of action,
this was the end of the search for Minnesota law. As we recently underscored,
however, the determination that the state supreme court has not decided the
relevant legal question only begins--rather than ends--our inquiry:
If [a State's] Supreme Court has not addressed the issue, we must
determine what that court would probably hold were it to decide the
issue. In making this determination, we may consider relevant state
precedent, analogous decisions, considered dicta, scholarly works and
any other reliable data.
Farr, 61 F.3d at 679 (citing Continental Ins. Co. , 8 F.3d at 1291).
In the end, however, the district court held that in Diesen, supra, the
Minnesota Supreme Court had "rejected a slander by implication claim." App.
at 41. The trial court was also of the view that the Eighth Circuit had twice
before done so, see Price v. Viking Penguin Press, 881 F.2d 1426, 1432 (1989),
cert. denied, 493
11
U.S. 1036 (1990); Janklow, 788 F.2d at 1304, id. , and hence declined "to
recognize the cause of action which has been rejected in this circuit and in
the Minnesota Supreme Court." App. at 42.
We disagree with the district court's reading of Diesen. In that case,
a county attorney (Diesen) claimed that a newspaper published a series of
articles that defamed him by implication through inaccurately portraying his
prosecution of domestic violence. The jury found for Diesen on the ground
that "the implication of the articles published by [the newspaper was]
substantially false. "455 N.W.2d at 449 (internal quotations omitted). The
trial court overturned the jury verdict on a motion for JNOV, finding that the
statements in the article were true as a matter of law and were
constitutionally protected opinion. The Court of Appeals reinstated the jury
verdict, noting that the omission of certain facts created a false and
defamatory implication. Finally, the Minnesota Supreme Court reversed the
Court of Appeals, holding that "an allegedly false implication arising out of
true statements is generally not actionable in defamation to a public
official." Id. at 452. Although there was a judgment to this effect, it
remains arguable whether there was a majority opinion to support it.5 For
5
In the wake of Diesen, the status of defamation by
implication actions brought by public figures remains unclear.
At first blush, Diesen appears to command a majority for Part II
of Chief Justice
Popovich's opinion. That is, two judges joined the entirety of
Chief Justice Popovich's opinion and Justice Simonett, concurring
specially, joined Part II of that opinion. (Justice Coyne concurred
only in the judgment and two other Justices dissented.) Part II set
forth three grounds for reversal: (1) public officials have no cause
of action sounding in defamation by implication (at least as defined
by Prosser & Keaton); (2) the claimed defamation by implication was
constitutionally protected opinion; and (3) the published material
was privileged under state defamation law. Although the first
sentence of Justice Simonett's concurring opinion states that he
concurred in Part II of the Chief Justice's opinion, the remainder
of his concurrence explained that plaintiff's cause of action failed
because he did not establish that the articles omitted certain
"predicate facts" that "would have refuted the implication of
prosecutorial unfitness," id. at 455-a view consistent with the
theory of defamation by implication. Picking up on this
inconsistency, one commentary
12
present purposes, however,
stated that "it questionable whether a majority [of the Diesen
court] actually endorsed" the rule that public figures cannot
maintain an action for defamation by implication. C. Thomas Dienes
& Lee Levine, Implied Libel, Defamatory Meaning, and State of Mind:
The Promise of New York Times v. Sullivan, 78 Iowa L. Rev. 237, 307
n.349 (1993) .
Not surprisingly, Diesen has left courts and commentators
confused over the exact status of public figure defamation by
implication actions. See Conroy v. Kilzer, 789 F. Supp. 1457, 1460
(D. Minn. 1992) ("Given the fragmentation of the Diesen court, it
is difficult to state with certainty Minnesota's rule regarding
libel by implication.") . Some commentators take Diesen at face
value, accepting its repudiation of public figure defamation by
implication actions. See, e.g. , Dienes & Levine, supra, 78 IOWA L.
REV. at 306. Others, possibly in light of Justice Simonett's
concurrence, read Diesen as joining those courts that have limited
public figure defamation by implication claims to those where a
media defendant omits a specific statement that would have refuted
the defamatory implication. See, e.g., Sack & Baron, supra, at 87
n.100. Yet other commentators, noting that Diesen ruled on several
grounds and commented that defamatory implications are generally not
actionable by public officials, highlight that Diesen does not"
foreclose completely the possibility that true statements creating a
false impression [through an artificial juxtaposition or omitted
facts] could fulfill the requirement of falsity." Kathryn S.
Banashek, Comment, Can A Public Figure Win A Libel Suit When The
Media Reported the Truth?-Defamation and False Impressions, 69 WASH.
U. L.Q. 1009, 1019 (1991) . Nonetheless, regardless of what Diesen
portends for defamation by implication actions by public figures, it
does not preclude private persons from advancing such claims.
13
we will assume that the sentence just quoted, taken from Chief Justice
Popovich's opinion, represented the views of a majority of the Minnesota
Supreme Court.
After quoting Prosser and Keeton's definition of implied defamation
claims, the Chief Justice's opinion explained that "this reference is to
common law libel in the absence of constitutional concern for fair comment on
public officials. The United States Supreme Court has established an
important distinction between private and public official plaintiffs for
defamation purposes." 455 N.W.2d at 450. Moreover, in excluding comments
about public officials from the scope of actionable defamation by implication,
Diesen invoked New York Times Co. v. Sullivan, 376 U.S. 259, 270 (1964), and
explained
14
that criticism of public officials "is a necessary and positive element of our
democracy and, as a result, a public official may suffer injury to his or her
professional reputation without recovery under defamation
law because of the paramount free speech and free press rights at stake." Id.
Diesen did not dispute Prosser & Keeton's description of the common law's
acceptance of defamation by implication; rather, it simply held the common law
rule inapplicable to public officials. The Chief Justice's opinion also
relied on the Eighth Circuit's decisions in Price and Janklow, which it viewed
as rejecting actions for defamation by implication brought by public figures,
id. at 451; as we see it, the opinion interpreted those cases as precluding
only those implied defamation actions brought by public officials.
Although a federal district court interpreted Diesen as rejecting
defamation by implication claims for both private and public figures, see
Kortz v. Midwest Communications, Inc., 20 Med. L. Rep. 1860, 1865 (D. Minn.
1992), we read Diesen as in no way questioning whether private persons can
bring implied defamation claims. This was true of the Chief Justice's opinion
as well as the opinions of the concurring and dissenting Justices.
Had the majority opinion in Diesen intended to negate a cause of action
for the kind of implied defamation at issue here (i.e., private plaintiff
cases), it seems odd that it did not mention or comment on Phipps v. Clark Oil
& Refining Corp., 408 N.W.2d 569 (Minn. 1987), decided three years before
Diesen and affirming the judgment of the Minnesota Court of Appeals, 396
N.W.2d 588 (Minn. Ct. App. 1986) . That case, as we read it, involved a
defamatory implication created by omitted facts. The facts of the case, taken
from those recited by the Court of Appeals, are these:
Mark A. Phipps was employed by Clark Oil Refining Corporation
as a cashier at a self-service gas station. On November 17, 1984,
a customer drove into the station and asked him to pump leaded
gasoline into her 1976 Chevrolet-an automobile equipped to receive
only unleaded gasoline. Phipps' manager, respondent Leroy
Chmielewski,
15
told Phipps to comply with the customer's request, but Phipps
refused, believing that dispensing leaded gasoline into the gas
tank was a violation of law. See Clean Air Act, 42 U.S.C. §
7401-7642. Phipps was willing to pump unleaded gas into the
customer's automobile; nevertheless, Chmielewski immediately fired
him.
In response to an inquiry by the Minnesota Pollution Control
Agency, Clark Oil's management stated that Phipps was fired
because he had been rude to customers on several occasions and
"may have refused to provide full service to a handicapped
customer."
Phipps brought this action against his employers (referred to
collectively as Clark Oil), seeking damages for wrongful
termination and defamation. Clark Oil moved for judgment on the
pleadings . . . . The trial court granted Clark Oil's motion,
stating that Minnesota law allowed Phipps, an employee-at-will, to
be terminated for any reason or for no reason. The court found
that the statement explaining Phipps' discharge was not defamatory
as a matter of law because it was not the type of statement which
tended to injure Phipps' reputation in the community. Further,
the court held that Phipps had, by the allegations in his
complaint, admitted the truth of the statement.
396 N.W.2d at 589-590. The Court of Appeals reversed, holding that in these
circumstances public policy required an exception to the right of an employer
to discharge at-will employees and that significant fact issues underlay the
defamation claim so as to foreclose dismissal on the pleadings. Id. at 595.
The Supreme Court of Minnesota unanimously affirmed that judgment. The
court noted Phipps, insistence that the employer's statement implied that he
discriminated against the customer because she was handicapped. 408 N.W.2d at
573. The court ruled that since truth as a defense goes to the underlying
implication of the defendant's statement, judgment for Clark Oil was erroneous
if the statement "may be defamatory if false." Id.
As for being defamatory, the court outlined the principle set
forth earlier that words may be divided into those that cannot possibly have a
defamatory meaning, those that may reasonably have a defamatory
16
meaning as well as an innocent one, and those that are clearly
defamatory on their face. id. (quoting Church of Scientology, 264 N.W.2d at
155) . The Phipps court underscored that the words at issue must be given
their obvious and natural meaning, and held that Clark
Oil's explanation for firing Phipps could be found to have a defamatory
meaning. Id. As for the falsity of the alleged "underlying implication," the
court noted that Phipps asserted that the customer's car was designed for
unleaded fuel only, which he was ready to dispense, but the customer insisted
on leaded gasoline which Phipps refused because it was against federal law.
The court thus concluded that judgment on the pleadings was inappropriate. Id.
It is evident from the Phipps opinion that what made the oil company's
statement arguably defamatory was that it could be taken to imply that Phipps
refused service because the customer was handicapped. Furthermore, what made
the statement reasonably defamatory was the withholding of facts which, if
disclosed along with the statement, would have foreclosed the defamatory
inference; moreover, those facts would also have rendered that inference
false.6 We accordingly conclude that the Minnesota Supreme Court has already
recognized a cause of action for cases where the defamatory implication arises
from omitted facts.
Even if we read Phipps as leaving open whether the Minnesota Supreme
Court would extend a cause of action to a private plaintiff alleging
defamation by implication as described by Prosser & Keeton, we still conclude
that the court would recognize a cause of action for implied defamation where
a defendant omits important facts or
6
Neither party to this appeal cited the Phipps decision in
the Minnesota Supreme Court. However, both parties did reference
the Minnesota Court of Appeals decision. See Brief of Aplee. at
20 n.10; Brief of Alt. at 8. Appellee's cursory remarks about
the case are not altogether accurate, but as a whole they are not
inconsistent with the proposition that the Phipps case fits the
description of implied defamation by omitting material facts.
17
where the defendant juxtaposes a series of facts so as to imply a defamatory
connection between them. Our reasons are these:
1. Importantly, none of the Justices in Diesen questioned that the
Prosser & Keeton statement represented the common law, which is evidenced by
the lack of controlling authority limiting the availability of such a cause
of action to a private plaintiff. Moreover, the common law historically
recognized defamation by implication as it broadly framed the inquiry as
whether the publication contains a defamatory meaning. See PROSSER & KEETON
ON THE LAW OF TORTS, supra, § 111, at 780-781. Thus, " [a] publisher is, in
general, liable for the implications of what he or she has said or written,
not merely the specific, literal statements made. "Robert D. Sack & Sandra
S. Barron, LIBEL, SLANDER AND RELATED PROBLEMS 85 (2d ed. 1994).
2. For its holding that a private plaintiff has no cause of action for
defamation by implication, the district court relied not only on Diesen,
erroneously we think, supra at 12, but also on Price v. Viking Penguin, Inc.,
881 F.2d 1426, 1432 (8th Cir. 1989), cert. denied, 494 U.S. 1036 (1990) , and
Janklow v. Newsweek, Inc. , 788 F.2d 1300, 1304, (8th Cir. 1986) (en banc),
cert. denied, 479 U.S. 883 (1986) . As decisions of this circuit, one of which
was en banc, we certainly give them considerable weight in determining how the
Minnesota Supreme Court would decide the issue we are pursuing. For three
reasons, however, we find the district court's reliance on these two cases
unpersuasive. First, as we have observed, supra at 14, Chief Justice
Popovich's opinion in Diesen cited Price and Janklow only for the proposition
that public figures may not sue for defamation by implication. Second, we do
not read either Price or Janklow as holding that even public figures can never
maintain such a cause of action. Third, even if we are wrong in our reading
of Price and Janklow, those cases would no longer control our analysis in the
wake of Milkovich v. Lorain Journal Co., 497 U.S. 1 (1990).
18
In Janklow, the Governor of South Dakota brought a defamation action
against Newsweek magazine. The district court held that the claimed
defamatory material was protected opinion under the First Amendment. This
court, sitting en banc after a panel reversed the district court, agreed with
the district court that the alleged libel was protected opinion. In arriving
at that conclusion, the court employed a four-factor analysis for determining
whether a statement constitutes fact or protectible opinion. Id. at 1302-03.
As to the first factor of this inquiry, precision and specificity, Janklow
explained that the defamatory meaning attributed to the statement at issue
could only be drawn by "implication," explaining that the
challenged "sentence was not nearly so precise as a direct accusation." Id. at
1304. Because the defamatory meaning was not apparent on the face of
publication, i.e., could only be drawn by implication, Janklow concluded that
the challenged statement's relative imprecision counselled in favor of viewing
the statement as protected opinion. After examining the other three factors,
Janklow ruled that the statement at issue was an opinion protected by the First
Amendment.
In our view, Janklow's discussion of the precision and specificity factor
of its four-part inquiry does not hold that all defamatory implications are
necessarily too imprecise to be considered factual and not opinion. But as
will be seen, Price appears to hold otherwise. However that may be, Janklow
emphasized that the four factors "must be considered together, that no solitary
criterion can be dispositive, and that ultimately the decision whether a
statement is fact or opinion must be based on all the circumstances involved."
Id. at 1304. Thus, had Janklow held that the three other factors besides
precision and specificity indicated that the statement at issue was not a
protected opinion, the discussion of the first factor would have become
irrelevant. The Governor could then have relied on the traditional rule that
plain words, even if seemingly innocent, may carry an actionable defamatory
implication. And, of course, a private plaintiff could similarly rely on this
rule.
19
In Price, FBI agent David Price claimed that a book written about his
conduct at the Pine Ridge Indian Reservation in South Dakota defamed him in
various ways. To determine whether some or all of the allegedly defamatory
statements were protected opinion, the Price court applied Janklow's
four-factor test. In analyzing the first factor, precision and specificity,
the Price court, citing Janklow 788 F.2d at 1304 said, "We do not recognize
defamation by implication. "Although the district court viewed this sentence
as relevant to the instant case, as we see it, this sentence applies only in
the process of applying factor one. It does not apply where the statement at
issue is plainly factual or is held not to be protected opinion. This sentence
does indicate that Janklow held that in applying factor one, no defamatory
implication from the plain words of the statement at issue is ever permissible.
Price's discussion, 881 F.2d at 1439-1440, of the allegedly defamatory
treatment in the book of the testimony of a government witness, Louis Moves
Camp, supports that reading of Janklow. Price, however, did not purport to
depart from Janklow's holding that no one of the four factors is dispositive
in the fact/opinion inquiry. Hence, as we said about Janklow, supra, at 18,
the lack of precision of a statement cannot itself determine whether it is
protected opinion because the other three factors could lead to the conclusion
that the statement is not a protected opinion and is subject to the ordinary
rule in defamation cases--that is, that the plaintiff may support his case by
relying on a reasonable implication from the plain language of a particular
statement or statements.
Finally, even if the Janklow/Price opinion analysis would necessarily bar
all defamation by implication claims (a suggestion we emphatically reject), in
light of Milkovich v. Lorain Journal Co., 497 U.S. 1, 19 (1990), we are no
longer bound to that result. In Milkovich, the Supreme Court rejected "the
number of factors developed by lower courts" used to provide constitutional
protection for opinion. This development was "in mistaken reliance" on the
dictum in Gertz
v. Robert Welch that "under the First Amendment there is no such thing
20
as a false idea." 418 U.S. 323, 339-40 (1979). Milkovich explained that the
existing constitutional doctrines provided for the necessary "breathing space"
for freedom of expression, that a dichotomy between fact and opinion was
artificial, and that "an additional separate constitutional privilege for
'opinion', [was] not required to ensure the freedom of expression guaranteed
by the First Amendment." 497 U.S. at 21. Instead, for a statement to be
actionable, the inquiry
is whether the statement is factual and provable.7 Accordingly, even if Janklow
8
or Price suggested that implications are constitution-
7
The relevant commentary appears to have also reached this
conclusion. For example, Abner Mikva, former chief Judge of the
D.C. Circuit, stated that Milkovich implicitly rejected the four
factor "totality of the circumstances" test in favor of a single
inquiry into whether the alleged defamatory statement is
actionable. Abner J. Mikva, In My Opinion Those Are Not Facts,
11 Ga. St. U. L. Rev. 291, 299 (1995); see also David M. Cohn,
Comment, The Problem of Indirect Defamation: Implication, and
innuendo, 1993 U. Chi. Legal F. 233, 239-40 (1993) ("Milkovich
forecloses [the analysis taken by price]; under Milkovich, the
statements [at issue in Price] would not have qualified as
protected opinion because the charges were provable as false.");
Lisa M. Montpetit, Comment, Changes in Defamation Law for the
Eighth Circuit, 17 Wm. Mitchell L. Rev. 785, 814 (1991) (Janklow
test is "obsolete" and "has been replaced").
Nonetheless, even if the Janklow four-factor test is no
longer dispositive, some courts have bound it instructive in
determine whether a statement is capable for being proved false.
See McGrath v. TCF Bank Savings, FSB, 502 N.W.2d 801, 808 (Minn.
Ct. App.) (four factor test "helpful"), modified on other
grounds, 509 N.W.2d 365 (Minn. 1993); Huyen v. Driscoll, 479
N.W.2d 76, 80 (Minn. Ct. App. 1991) (Milkovich narrowed scope of
opinion privilege, but four factor test "instructive"); Isnel K.
Corp. v. Rooney, 912 F.2d 1049, 1053 (9th Cir. 1990) (even though
Milkovich overruled prior analysis, the four factor test still
"relevant" in discerning whether a statement is provable as
false).
8
Again, we note that Janklow, Price, and Milkovich all used
the concepts of "implication" and "interpretation" interchangeably.
For example, Price explained that "[w]hile Price attaches an
implication to the sequence of events as the book presents them, it
is obvious that more than one interpretation is possible." 881 F.2d
at 1439 (emphasis added); see also id. at 1432 N.4 ("a state may not
21
ally suspect, Milkovich made clear that implications, like plain statements,
may give rise to a defamation claim. Indeed, Milkovich ultimately held that
"a reasonable fact finder could conclude that
the statements [at issue] imply an assertion that petitioner Milkovich perjured
himself . . . . [and that] th[is] connotation is sufficiently factual to be
susceptible of being proved true or false." Id. This holding applies to public
officials as well as to private plaintiffs. See Beverly Hills Foodland, Inc. v.
United Food and Commercial Workers Union, Local 655, 39 F.3d 191, 196 (CA8
1994).9
3. We note also that earlier in the Price opinion, the court said that
"[w]here the plaintiff is not a public figure, a different balance is struck."
881 F.2d at 1430 (citations omitted). That is, where private plaintiffs are
concerned, there are no considerations comparable to those that limit redressing
defamatory implications where public officials or public figures are plaintiffs,
surely none powerful enough to outweigh what most people consider a major factor
in a satisfactory existence-their reputation. We have no reason to think that
impose liability simply because clearer language or the inclusion of
additional reports would rule out an objectionable implication.").
However, while Price clearly viewed accusations "drawn by
implication" to be more readily protectible as opinion, Milkovich
made no such
distinction, explaining that "the statement 'In my opinion, Jones is
a liar' can cause as much damage as the statement 'Jones is a
liar.'" 497 U.S. at 19.
9
After invoking Milkovich, Beverly Hills Foodland, Inc. v.
United Food and Commercial Workers Union, Local 655 recognized
that implications may give rise to a defamation claim insofar as
they were provable as false; that is, Beverly Hills explained:
"Because the statement contained in the handbill was not a false
statement of fact, nor could it reasonably be read as such, the
statement must necessarily be characterized as nondefamatory." 39
F.3d 191, 196 (CA8 1994) (emphasis added).
Furthermore, based on his view that the Supreme Court had
implic- city rejected the fact/opinion dichotomy, Justice Yetka's
Diesen dissent explained that: "Because the 'We do not recognize
defamation by implication' statement in Price, 881 F.2d at 1432, was
made in connection with the Janklow/Ollman opinion analysis, it has
been [implicitly] rejected by the United States Supreme Court and
should, therefore, be rejected by this court." 455 N.W.2d at 462.
22
the Minnesota Supreme Court would feel otherwise.
23
4. One of the two parts of Prosser & Keeton's definition of common law
defamation by implication is the omission of facts; that is, had the facts been
stated, there would have been no defamation. In such a case, as in Phipps, the
challenged statements, or as they reasonably would be understood, defamed the
plaintiff, who claims that they are defamatory and false by virtue of omitted
facts. Especially since it is now the private plaintiff's burden to prove
falsity, at least in cases dealing with a matter of public interest, surely the
plaintiff should and would be permitted to prove a statement false by revealing
the facts omitted by the publisher. To hold otherwise would allow publishers
(i.e., would-be-defamers) to accomplish indirectly what they could not do
directly.
5. The juxtaposition of facts in such as way as to imply a defamatory
connection between them is the other part of the Prosser & Keeton definition of
defamation by implication. As to this part, we are not in position to make a
Phipps-like claim that a Minnesota Supreme Court decision so closely satisfied
the classic description of this type of defamation by implication as to settle
the issue. We must therefore predict how the Minnesota Supreme Court would rule
on the issue. Of course, if the actionability of defamation by omitting facts
has been settled by Phipps, that would perhaps persuade the court also to
approve the other part of Prosser & Keeton's definition of implied defamation.
6. We are also persuaded by a decision in the Minnesota Appeals Court
that was cited by the dissenting opinion in Diesen. That case, Karnes v. Milo
Beauty and Barber Supply Co., 441 N.W.2d 565 (Minn. Ct. App. 1989), closely
tracks the juxtaposition brand of implied defamation. In that case, Milo, a
cash and carry store, began to suspect employee theft. Maddox, the head of
accounting and auditing, ultimately wrote a note to his superior indicating that
store 190 continued to have unsigned void slips whose sales were not rerung.
The memo listed by day the number of voids and the total amount of the voided
sale. The memo concluded:
24
Store # 190 is taking (stealing) money from the cash register drawer.
How much more noncompliance must we tolerate from Nan Karnes?
Id. at 567. The memo was circulated to several people including Karnes'
immediate supervisor, who was instructed to terminate Karnes. This occurred,
and Karnes brought suit, claiming defamation based on the Maddox memo. A jury
returned a special verdict for Karnes. Milo appealed, challenging the verdict
as, inter alia, manifestly contrary to the evidence. The court rejected this
challenge:
In his first statement ("Store # 190 is taking (stealing) money from
the cash drawer"), Maddox does not directly accuse Karnes of theft.
He nevertheless accuses Store # 190, which presumably could be anyone
employed by the store . . . . The next sentence ("How much more
noncompliance must we tolerate from Nan Karnes? ") directly accuses
Karnes of "noncompliance", presumably with store procedures . . '
these statements could be interpreted by a jury as implying that
Karnes was either stealing or allowing stealing to take place.
Id. at 568. Recognizing that Milo's defense of truth did not go to the
underlying implication, the Court of Appeals did not disturb the jury verdict
in this respect.10 441 N.W.2d at 568 (citing Lewis, 389 N.W.2d at 889).
7. Finally, we conclude that Minnesota law would allow for
implied defamation claims based on the artificial juxtaposition of two
statements on the ground that defamation law traditionally has
required a statement to be construed in light of a document as a whole. A basic
rule of defamation law is that courts must construe a statement
in light of its context and surrounding circumstances. See Jadwin
v. Minneapolis Star and Tribune Co., 367 N.W.2d 476, 491 (Minn. 1985) (citing
Restatement (Second) of Torts § 563 comment d (1976)). In
10
Karnes lost the case, however, because Milo had a
privilege which Karnes did not negate by successfully proving
actual malice.
25
Tawney v. Simonson, Whitcomb & Hurley Co. , the Minnesota Supreme Court
set forth this well established principle:
The question is not whether that article can be divided into two
parts, and each of those parts so analyzed separately from each
other that each would appear to be free from defamatory meaning.
The article must be construed as a whole.
124 N.W. 229, 233 (Minn. 1909) In our view, the natural corollary
to this rule is that two artificially juxtaposed statements can give
rise to an actionable implication. Put differently, we cannot conclude
that Minnesota law would distinguish between (1) a private person who was
defamed by a single statement that became defamatory when read in context; and
(2) a single statement that created a defamatory implication when artificially
juxtaposed with another statement.11
IV. CONCLUSION
In sum, we AFFIRM in part and REVERSE in part the district court's judgment
that WCCO deserved judgment as a matter of law on Toney's defamation claim. We
REVERSE the district court's judgment that Minnesota law does not provide
private persons with a claim for defamation by implication. This case is
remanded for further proceedings consistent with this opinion.
It is so ordered.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT
11
Thus, in pursuing on remand the "juxtaposition" brand of
defamation by implication, Toney may rely on parts of the
broadcast other than the seven statements listed by the district
court in passing on his defamation claim and dealt with in Part
IIIC, supra.
26