Brokers' Choice of America, Inc. v. NBC Universal, Inc.

FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS July 9, 2014
Elisabeth A. Shumaker
TENTH CIRCUIT Clerk of Court
BROKERS’ CHOICE OF AMERICA,
INC.; TYRONE M. CLARK,
Plaintiffs – Appellants,
v. No. 11-1042
NBC UNIVERSAL, INC.; GENERAL
ELECTRIC CO.; CHRIS HANSEN;
STEVEN FOX ECKERT; MARIE
THERESA AMOREBIETA,
Defendants – Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
(D.C. No. 1:09-CV-00717-CMA-BNB)
John J. Walsh of Carter Ledyard & Milburn LLP, New York, New York (Thomas E.
Downey, Jr. of Downey & Murray, LLC, Englewood, Colorado, with him on the brief)
for Plaintiffs–Appellants
Thomas B. Kelley of Levine Sullivan Koch & Schulz, LLP., Denver, Colorado (Hilary
Lane of NBC Universal, Inc., New York, New York; Gayle C. Sproul, of Levine Sullivan
Koch & Schulz, LLP, Philadelphia, Pennsylvania, with him on the brief) for Defendants–
Appellees
Before BRISCOE, Chief Circuit Judge, McKAY, and O'BRIEN, Circuit Judges.
O’BRIEN, Circuit Judge.
Tyrone M. Clark and his company, Brokers’ Choice of America, (jointly, BCA)
sued NBC Universal, Inc. (NBC) and some of its employees (collectively Dateline),1
after it aired a Dateline2 segment titled “Tricks of the Trade.” The aired segment featured
snippets of Clark taken from one of his two-day seminars for insurance brokers at
“Annuity University” located on BCA’s property in Colorado. With the assistance of
Alabama officials, the Dateline crew was able to gain access to BCA’s closed seminar.
The crew surreptitiously—and according to BCA, illegally—filmed the seminar. Using a
mere 112 words from the two-day seminar, the aired program depicted Clark as one who
teaches insurance agents how to employ misrepresentations and other questionable tactics
in order to dupe senior citizens into purchasing inappropriate annuity products. BCA
says Clark’s seminars (including the one filmed by Dateline), when considered in their
entirety, teach and encourage ethical conduct by presenting a balanced approach to
saving and investing, and, while touting the advantages of annuities, emphasize that they
are not right for everyone. BCA claims Dateline used its own “tricks of the trade”—
innuendo coupled with very selective editing and commentary—to present Clark’s
statements out of context in order to create a false impression thereby defaming him. In
1
BCA sued NBC, Dateline on-line reporter Chris Hansen, and Dateline producers,
Maria Amorebieta and Steven Eckert. BCA included General Electric as a defendant
because it owns a controlling stake in Dateline. The Alabama officials are not parties to
this action.
2
Dateline is an NBC weekly news program packaged in a made-for-TV magazine
format.
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its 42 U.S.C. § 1983 claim, BCA alleges Dateline violated its constitutional rights while
acting in conjunction with the Alabama officials.
Seemingly, resolution of the defamation claim would not be particularly
complicated. The judge or a properly instructed jury could view the Dateline segment as
aired, compare it to what Clark said over the course of his two-day seminar and decide
whether the aired program gave a false impression of his seminar; in other words,
whether the segment was not substantially true. Sadly, it is not to be.
Dateline moved to dismiss the complaint. It maintained BCA failed to allege
sufficient facts to plausibly establish its aired statements were false. It sought to dismiss
the civil rights claims because BCA’s factual allegations did not demonstrate that the
help received from Alabama officials in the production of the program amounted to joint
conduct. The court granted Dateline’s motion. BCA appealed. It contends the district
court failed to credit its allegations as true and improperly made factual determinations to
reach its conclusions. We affirm in part, reverse in part, and remand for further
proceedings.
BACKGROUND
Dateline decided to produce a program exposing fraud in annuity sales to senior
citizens. To that end, in mid-2007, Dateline producers were assisted by Alabama
officials who were investigating the practices used in the sale of annuities to seniors. The
officials were members of what came to be known as the Alabama Annuities Task Force,
which included representatives from the Alabama Department of Insurance, the Alabama
Securities Commission, and the Alabama Attorney General’s Office.
-2-
Titled “Tricks of the Trade,” Dateline identified Clark and BCA’s “Annuity
University” as a training program teaching “questionable tools of the trade.”
(Appellant’s App’x, Vol. I at 57.) The producers wanted to film the training program
with hidden cameras. Because only licensed insurance agents may attend Annuity
University,3 Alabama officials agreed to provide false insurance licenses to two of the
Dateline producers, Maria Amorebieta and Steven Eckert, and listed their names on the
national register of insurance agents. In turn, the Dateline producers agreed not to sell
insurance products and to return the licenses after the investigation. The producers
attended and filmed at least part of Clark’s two-day October 2007 seminar.
A. The Program
Dateline aired “Tricks of the Trade” in April 2008, using the show’s signature
format. The program opens with Chris Hansen introducing the subject. It proceeds to
alternate between hidden-camera footage and studio interviews. The first interview
subject was Leo Stulen, a senior who had purchased an equity-indexed annuity4 without
3
Located on BCA’s property in Colorado, Annuity University’s seminars are
certified for Continuing Education credits by the Insurance Departments of several states.
The classes are taught by Clark during a two-day course covering “the technical aspects
of annuities and annuity contracts, annuity rules and regulations, and annuities
marketing.” (Appellant’s App’x, Vol. III at 791.) The lecture room has clear postings
prohibiting the recording of any portion of the lectures by attendees.
4
An equity indexed annuity is “[a] special class of annuities that yields returns on
your contributions based on a specified equity-based index . . . . Insurance companies
commonly offer a provision of a guaranteed minimum return with indexed annuities, so
even if the stock index does poorly, the annuitant will have some of his downside risk of
loss limited. However, it also is common for an annuitant’s yields to be somewhat lower
(Continued . . . )
-3-
being told “he would pay stiff surrender penalties” if he needed to withdraw his
investment. (Appellant’s App’x, Vol. I at 51.) Stulen recounted a time when his wife
became ill and they had to withdraw their money. They were required to pay a 15%
surrender fee, which forced them to sell their home and choose between buying food or
pills. Following Stulen’s interview, Hansen states:
Join us for a ground-breaking hidden-camera investigation, as we go behind
the scenes to uncover the techniques they use: inside sales meetings –
where we catch the questionable pitches; inside training sessions – where
we discover agents being taught to scare seniors; and, finally, inside
senior[s’] homes to reveal the tricks some agents use to puff their
credentials to make a sale.
(Id. at 52.)
Next, Dateline shows hidden camera footage of an insurance salesman giving a
free “informational seminar” for invited retirees and people approaching retirement. (Id.)
Hansen is seated in the studio with Joe Borg, the Director of the Alabama Securities
Commission. The two men watch a screen displaying the hidden-camera video. Hansen
(as narrator) states: “The first step: scare tactics.” (Id. at 53.) The salesman asks the
attendees, “Does anybody have a guess what the rating is for FDIC? . . . Even though it’s
backed by the government, it’s still F-minus.” (Id.) Hansen asks Borg, “Is that a scare
tactic?” Borg responds, “Of course it’s a scare tactic.” (Id.)
than expected due to the combination of caps on the maximum amount of interest earned
and fee-related deductions.” (http://www.investopedia.com/terms/indexedannuity (last
visited Sept. 10, 2012)).
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Hansen then says: “The next step: the big promise.” (Id.) Dateline returns to
footage showing the salesman introducing the equity-indexed annuities as a safe
investment. The program goes back to Hansen: “Finally: the clincher.” (Id.) The video
shows the salesman promising the account will never lose value. Hansen says, “That’s
true if you keep your money invested for the length of the annuity, which invariably
means years. But Joe Borg says people can lose big if you have to take your money out
early.” (Id. at 54.)
The program moves to a “sting house” in Alabama where Dateline secretly filmed
local insurance agents attempting to sell annuity products to seniors recruited by
Dateline. The background narration intones: “There’s plenty of talk about what you can
gain, but the key question is: will [the agent] tell us about those big surrender penalties if
you try to get your money out early?” (Id.) After showing footage where the insurance
salesman fails to discuss the penalty, the show returns to the studio where Hansen says:
We’ve seen some of the tactics insurance agents use to sell to seniors. The
agents seem awfully slick. How did they get so good?
You are about to witness something few people have ever seen – a school
where, authorities say, insurance salesmen are being taught questionable
tools of the trade.
These training sessions are only open to licensed insurance agents.
We don’t know whether the salesmen we’ve met so far studied here, but the
state of Alabama agreed to help us investigate by issuing insurance licenses
to two Dateline producers, so we could attend – and bring along our hidden
cameras.
(Id. at 57.)
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Dateline then runs selective footage of Clark’s lecture. It shows Clark stating:
“[A]nnuities are not liquid? That is baloney.” (Id.) The voiceover introduces Clark as
“the self-proclaimed king of annuity sales” who says “annuities are safe and have no risk,
which are selling points especially appealing to seniors.” (Id. at 57-58.) The camera then
shows Clark saying: “What I sell i[s] peace of mind.” (Id. at 58.) Shortly thereafter,
Hansen asks:
But what else is Tyrone Clark teaching?
In 2002, the state of Massachusetts accused Clark and his companies of a
“dishonest scheme to deceive, coerce and frighten the elderly.”
Part of the evidence was the training manual in which Clark tells agents to
sell to seniors by assuming they’re “selling to a 12-year-old” and by hitting
their “fear, anger or greed buttons.”
Clark settled that case without admitting any wrongdoing.
And, now, his company says it’s become “an industry leader” in promoting
ethical conduct.
But watch what our hidden cameras found, and see if you agree.
Remember those scare tactics?
(Id. at 58.) Subsequent clips show Clark stating, “And I’m bringing these things up that
disturb the hell out of them”; “I bring out the stuff that – where they can’t sleep at night”;
“FDIC is insolvent. FDIC only has $1.37 per every $100 on deposit”; and “I help my
clients to protect their life savings from the nursing home and Medicaid seizure of their
assets. See, that’s scary, and it should be scary.” (Id.)
The program suggests that, after alarming seniors, Clark teaches his students to
promise them easy access to their money. A clip shows Clark saying, “There are more
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ways to access your money. There are more options. There are more choices to access
your money from an annuity than any other financial instrument.” (Id. at 59.) Following
this statement, Hansen states Minnesota Attorney General Lori Swanson was asked “to
watch what our hidden cameras had captured.” (Id.) In response, Swanson opines, “I
think that [Clark] is not telling the truth when he tells those agents that an annuity is the
most liquid place a senior citizen can put their money. It is simply not true.” (Id.)
Hansen then returns to footage of Annuity University showing vendors offering
agents the opportunity to place their names as a co-author on a financial advice book,
have their picture on the cover of a magazine, or participate as a guest speaker in a pre-
scripted radio show and receive compact discs (CDs) of the appearance. Swanson
comments: “[Clark] is basically handing them loaded guns so they can walk into the
senior’s home and rip them off.” (Id. at 60.) The remainder of the program is primarily
hidden-camera footage of an Annuity University student allegedly implementing Clark’s
lessons to sell indexed annuities and video of another agent who has been the subject of
“more than a dozen lawsuits” applying the same tactics. (Id. at 64.)
Finally, the program returns to Clark stating, “That’s fear. The presentation
should have that impact.” (Id. at 68.) Toward the end of the program, Dateline returns
to Annuity University. They show film of Clark’s lawyer declining an interview.
Hansen informs the audience, however, that in a series of letters, Clark’s lawyers said the
quotes from the seminar “were not in full context,” and Clark denied Dateline’s
characterization of his methods. (Id.)
-7-
B. The Lawsuit
BCA’s complaint alleged several state-law claims: (1) defamation, (2) trespass,
(3) fraud, and (4) intrusion. It also alleged three violations of 42 U.S.C. § 1983—(1) a
Fourth Amendment illegal search and seizure violation and two Fourteenth Amendment
violations, (2) invasion of privacy and (3) stigmatization. Dateline moved to dismiss for
failure to state a claim. See Fed. R. Civ. P. 12(b)(6). It then moved to stay discovery
pending a ruling on its motion to dismiss. BCA opposed the stay, arguing it needed the
unedited footage to substantiate its claims. Applying Colo. Rev. Stat. §13-90-119(3) (the
Colorado Shield Law), specifically the Colorado’s newsperson’s privilege, the magistrate
judge stayed discovery. The district court later granted the motion to dismiss with leave
to file an amended complaint.
BCA’s amended complaint raised only the defamation claim and the § 1983
claims. Because BCA had not yet received Dateline’s hidden camera footage of the
October 2007 seminar (Exhibit A to the complaint was reserved for this purpose), the
complaint relied on the next best thing, a BCA video recording of Clark’s March 28-29,
2007 Annuity University lectures (March seminar). The purpose of the earlier recording
was to provide “substance [of] the true context of the snippets.”5 (Appellant’s App’x,
Vol. III at 806.) The amended complaint was followed by BCA’s motion to compel
5
The district court did not view the actual tape of the March seminar. It relied
only on the excerpts provided in BCA’s pleadings.
-8-
discovery of one item—the unedited hidden camera footage and transcripts of the
October 25-26, 2007 lectures.
Claiming the material was subject to the newsperson’s privilege established by the
Colorado Shield Law, Dateline objected to the motion to compel. It then filed a motion
to dismiss BCA’s amended complaint. The magistrate again denied discovery. Based on
the federal common law and the Colorado Shield Law, he concluded that BCA failed to
show relevant material was not available from other sources such as the videotape of the
March seminar and an affidavit from Clark. BCA objected to the magistrate’s decision.
It filed an amended brief in opposition to Dateline’s motion to dismiss and attached
Clark’s affidavit.
The district court affirmed the magistrate’s order denying BCA’s motion to
compel. See Brokers’ Choice of America, Inc. v. NBC Universal, Inc., No. 09-CV-00717,
2010 WL 363368 (D. Colo. Jan. 27, 2010) (unpublished). It later dismissed BCA’s
claims with prejudice. See Brokers’ Choice of America, Inc. v. NBC Universal, Inc., No.
09-CV-00717, 2011 WL 97236 (D. Colo. Jan. 11, 2011).
DISCUSSION
BCA claims the district court erred: (1) by failing to accept its well-pleaded
allegations as true; (2) by inappropriately making determinations of fact; (3) by finding
BCA did not sufficiently allege state action to support its §1983 claims; and (4) by
applying Colorado’s newsperson’s privilege after BCA demonstrated the relevance and
need for the hidden-camera video to support its claims.
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A. Dismissal of Claims
“We review de novo the district court’s grant of a Rule 12(b)(6) motion to
dismiss.” Peterson v. Grisham, 594 F.3d 723, 727 (10th Cir. 2010). “‘The court’s
function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties
might present at trial, but to assess whether the plaintiff’s amended complaint alone is
legally sufficient to state a claim for which relief may be granted.’” Id. (quoting Miller v.
Glanz, 1562, 1565 (10th Cir. 1991)). All well-pled factual allegations are accepted as
true and viewed in the light most favorable to the nonmoving party.” Id.“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need
detailed factual allegations, a plaintiff’s obligation to provide the grounds of his
entitlement to relief requires more than labels and conclusions, and a formulaic recitation
of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 550 (2007) (citations, quotation marks, and alterations omitted). “A claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). “Factual allegations must be enough to raise the right to
relief above the speculative level.” Twombly, 550 U.S. at 555. Our review of the district
court’s dismissal “for insufficient pleadings does not turn on the controls placed upon the
discovery process.” Iqbal, 556 U.S. at 684-85.
1. Defamation
BCA alleged its reputation was seriously harmed due to Dateline’s malicious or
reckless mischaracterization of Clark’s statements during his lectures at Annuity
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University. Because this claim arises under diversity jurisdiction, we apply Colorado
substantive law6 which defines defamation as: “(1) a defamatory statement concerning
another; (2) published to a third party; (3) with fault amounting to at least negligence on
the part of the publisher; and (4) either actionability of the statement irrespective of
special damages or the existence of special damages to the plaintiff caused by
publication.” Han Ye Lee v. Colorado Times, Inc., 222 P.3d 957, 961 (Colo. App. 2009).
“A statement may be defamatory if it tends . . . to harm the reputation of another
[so] as to lower him in the estimation of the community or to deter third persons from
associating or dealing with him.” Burns v. McGraw–Hill Broad., Co., 659 P.2d 1351,
1357 (Colo. 1983) (quotation marks omitted). “A finding that the language used was
defamatory must be predicated on the context of the entire story and the common
meaning of the words utilized.” Id. If the plaintiff is a public figure or the statement
involves a matter of public concern, the plaintiff has the ultimate burden in his case-in-
chief of proving the falsity of a challenged statement by “clear and convincing proof.”7
Smiley's Too, Inc. v. Denver Post Corp., 935 P.2d 39, 41 (Colo. App. 1996).
6
“[T]he substantive law of the forum state applies . . . [and] in the absence of
authoritative precedent from the [Colorado] Supreme Court . . . our job is to predict how
that court would rule.” Lamb v. Rizzo, 391 F.3d 1133, 1138 (10th Cir. 2004) (quotation
marks and citations omitted).
7
The district court concluded the Dateline program addressed an issue of public
concern; BCA does not challenge the conclusion in this appeal.
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This heightened evidentiary burden (clear and convincing evidence) requires a
plaintiff to demonstrate that the statements were made with actual malice, that is, with
knowledge of their falsity or with reckless disregard as to their truth or falsity. New York
Times, Co. v. Sullivan, 376 U.S. 254, 285-86 (1964); see also Lockett v. Garrett, 1 P.3d
206, 210 (Colo. App. 1999). Actual malice can be shown if the defendant entertained
serious doubts as to the truth of the statement or acted with a high degree of awareness of
its probable falsity. Lewis v. McGraw-Hill Broad. Co., 832 P.2d 1118, 1123 (Colo. App.
1992).
“A defendant asserting truth as a defense in a libel action is not required to justify
every word of the alleged defamatory matter; it is sufficient if the substance, the gist, the
sting, of the matter is true.” Gomba v. McLaughlin, 504 P.2d 337, 339 (Colo. 1972).
Generally, this is a factual question in which the jury must consider “whether there is a
substantial difference between the allegedly libelous statement and the truth; or stated
differently, whether the statement produces a different effect upon the reader than that
which would be produced by the literal truth of the matter.” Id. A publisher may be
liable “when it takes words out of context and uses them to convey a false
representation of fact.” Dixson v. Newsweek, Inc., 562 F. 2d 626, 631 (10th Cir. 1977).
While statements may appear to be true when viewed in isolation, we consider the entire
context to determine if a false impression is projected, “including the medium through
which it is disseminated and the audience to whom it is directed.” See Burns, 659 P.2d at
1360.
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BCA’s complaint alleged Dateline’s use of a mere 112 words spoken by Clark
during two days of lectures grossly misstated the meaning of his words when considered
in context and, instead, were manipulated to depict Clark teaching insurance salesmen to
prey on seniors. For purposes of this appeal, Dateline concedes the substance of its
statements is defamatory but contends all the statements were substantially true.
(Appellees’ Br. at 30, 32.) The district court examined eleven statements taken from the
Dateline program and statements from Dateline’s preview, aired to market the show.
The court agreed with Dateline.
a) Substantial Truth
The court dismissed BCA’s complaint primarily on its determination the
program’s statements were substantially true. When “underlying facts as to the gist or
sting are undisputed, substantial truth may be determined as a matter of law.” Lundell
Mfg. Co. v. Am. Broad. Cos., Inc., 98 F.3d 351, 360 (8th Cir. 1996); see Gallo Loeks ex
rel. v. Reynolds, 34 Fed. App’x. 644, 645, 646-47 (10th Cir. 2002) (unpublished)
(summary judgment granted when truth of statement conceded). In contrast, BCA
disputes the truthfulness of Dateline’s characterizations with specific references to
portions of its March seminar. The issue, then, is whether BCA’s factual allegations,
accepted as true, are sufficient to state a plausible claim making “substantial truth” a
question of fact for the jury.8
8
Interestingly, Dateline cites no case in which a court dismissed a claim prior to
discovery on the basis of substantial truth when substantial truth was contested; our own
(Continued . . . )
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b) Factual Allegations
The gist of the Dateline presentation was quite simple: Clark teaches insurance
agents to scare and mislead seniors into buying unsuitable insurance products. The court
determined Dateline’s statements were substantially true given Clark’s statements on the
program, including he “disturbs” his potential customers to the point “where they can’t
sleep at night.” (Appellant’s App’x, Vol. III at 1176.) The court further stated, “Clark
also urges his attendees to prey on the concerns seniors may have about losing their
money to nursing homes” and causes seniors to fear about the security of their money
deposited with banks. (Id.)
The district court analyzed each of Clark’s statements aired by Dateline
individually and decided, with respect to each, whether or not it was substantially true.
But in a case where a plaintiff asserts a defendant’s statements gave a false impression by
being presented out of context, a more global approach is required. At trial the aired
statements would necessarily be considered as a whole and in the context of all that was
research has, likewise, produced none. See Karedes v. Ackerley Grp., Inc., 423 F.3d 107,
118 (2d Cir. 2005) (“‘[T]he falsity . . . inquir[y] typically requires discovery.’”) (quoting
Church of Scientology v. Behar, 238 F.3d 168 (2d Cir. 2001)). Under Colorado law, a
disputed issue of substantial truth is an issue of fact best resolved by summary judgment
after discovery or before a jury. See TMJ Implants, Inc. v. Aetna, Inc., 498 F.3d 1175,
1181 (10th Cir. 2007) (“TMJI had no obligation to provide evidentiary support for its
allegations, nor did it have an obligation to request that the court convert the motions into
ones for summary judgment. When Aetna moved to dismiss the complaint under Rule
12( b)(6), it could not contest the truth of the complaint’s factual allegations.”); see also
Wilson v. Meyer, 126 P.3d 276, 283 (Colo. App. 2005) (“‘Because the threat of protracted
litigation could have a chilling effect upon constitutionally protected rights of free
speech, summary judgment is particularly appropriate in defamation actions.’”) (quoting
Lockett v. Garrett, 1 P.3d 206, 210 (Colo. App. 1999)); See Burns, 659 P.2d at 1360
(“The trier of fact must resolve issues of credibility.”).
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said by the narrator and guests in the Dateline segment discussing Clark’s seminar. Then
the aired segment would necessarily be compared to the entirety of Clark’s seminar
presentation. If that comparison were to clearly and convincingly show the aired
statements to have left viewers with a false impression of the gist of Clark’s seminars
(were not substantially true) he has been defamed by Dateline, otherwise he has not. The
totality of the circumstances must be considered. See Burns, 659 P.2d at 1360 (to
determine whether statement is defamatory, “the entire published statement must be
examined in context, not just the objectionable word or phrase”); see also Karedes v.
Ackerly Group, Inc., 423 F.3d 107, 114 (2d Cir. 2005) (“[a]s to falsity, the accuracy of
the report should be assessed on the publication as a whole, not isolated portions of it”)
(applying New York law, quotation marks and alterations omitted). At the pleading
stage, then, we must decide whether BCA alleged sufficient facts, if taken as true, to
show the program to have “produce[d] a different effect upon the [audience] than that
which would be produced by the literal truth of the matter.” Fry v. Lee, --- P.3d ---, 2013
WL 3441546, at *4 (Colo. App. 2013).
Clark cannot, and does not, deny the accuracy of the words attributed to him in the
Dateline segment. In his own words, he brings “out stuff that—where they can’t sleep at
night” and “I help my clients to protect their life savings from the nursing home and
Medicare seizure of their assets. See, that’s scary, and it should be scary.” (Appellant’s
App’x, Vol. I at 58.) Semantic differences between “disturb” and “scare tactics” cannot
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defeat Clark’s unambiguous statement—“That’s fear. The presentation should have that
impact.” (Id. at 68.)
However, the program not only accused Clark of using scare tactics. The “gist” or
“sting” was his calculated use of these tactics to sell inappropriate products to seniors.
While Clark agrees he instructs his attendees to discuss difficult topics with potential
customers, including the prospect of nursing-home care and the security of their savings,
he alleged, if seen in the entire context of the two-day seminar, he teaches salesmen to
approach these issues to determine “the suitability of annuity products for various
potential purchasers and how different annuities products may benefit or adversely effect
[sic] different individual portfolios.” (Id. at 791.)
To support this assertion, BCA alleged:
To aid them with suitability issues, agents . . . are taught a list of twenty
potential negative aspects of annuities, that can be used in determining
whether an annuity is a suitable product for a potential client. Items on the
list, among others, include (1) surrender charges, (2) tax considerations, (3)
absence of FDIC insurance for annuities, (4) fees, loads and charges, and
(5) risks that Medicaid planning may not work. Agents also have to know
how to address criticisms of annuities, often false, used by those who sell
competitive products . . . .
(Id. at 792.)
Clark’s typical presentation about banks and the FDIC compares the
reserve holding requirements of insurance companies to those of banks and
includes the observation that if a bank’s reserve holding were evaluated
based on the same reserve holding requirements as insurance companies,
the bank would likely be considered insolvent. . . . In this vein, Clark also
typically teaches agents to advise clients not to keep more than FDIC
guarantee limits in a single bank and often distributes a USA Today article
explaining the risks of having a single bank hold funds in excess of FDIC
guarantees.
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(Id. at 816-17.) BCA’s complaint also quoted language from the March seminar which
immediately preceded a statement similar to one Clark made on Dateline about the
liquidity of annuities. Clark explained various types of penalty waivers and access to
interest in different types of annuities as prelude to his statement: “take any other
financial instrument, a treasury bill, a mutual fund, you name it, we have more ways to
access the money than any other financial instrument.” (Appellant’s App’x, Vol. III at
822.) Moreover, Clark alleged the March seminar shows him strongly recommending
agents bolster their credibility by writing newspaper articles or starting a late-night show
on a local radio channel discussing financial planning, as opposed to Dateline’s
characterization that he promotes false credentials by way of ghost-written pamphlets.
As to the book referred to on Dateline, Clark alleged this book was not in use at the time
of the October seminar. Instead, the book then and now available at Annuity University
has one personal chapter written by the agent, and the remainder clearly discloses it is
authored by a recognized financial expert. Finally, the complaint states “the lectures
stress [Brokers’ Code of Ethics], a set of guidelines drafted by Clark to underscore the
importance of ethical business and sales practices in the annuities industry.” (Id. at 793.)
In sum, BCA alleged the unedited footage would show Clark teaching the
downside of annuities, urging his students to probe into the customer’s personal situation
to determine the most suitable product, repeatedly telling students annuities are not for
everyone, stressing BCA’s code of ethics which require full disclosure of various
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advantages and disadvantages of annuity products, and promoting personal involvement
in the community to gain credibility.
These specific facts, accepted as true and viewed in the light most favorable to the
nonmoving party, describe a context substantially different than the “gist” of Dateline’s
program. Instead of promoting predatory tactics, BCA’s complaint alleged facts
supporting its position that Annuity University provides a straight-forward discussion of
the pros and cons of annuity products and endorses ethical (although scary) marketing.
In that light, it plausibly alleges Dateline selected bits and pieces of Clark’s statements to
project an undeserved and shocking image to the audience, leaving it with a false
impression of his presentations. Whether these allegations will survive summary
judgment remains to be seen. The factual basis of the complaint, however, is sufficient to
state a plausible defamation claim. We reverse the district court’s dismissal of it.
2. Disclosure of Dateline’s Unedited Film
We now come to the stay of all discovery while Dateline’s motions to
dismiss were pending (despite BCA’s objections and motion to compel). Our
decision reinstating the complaint would normally resolve such a discovery
dispute. However, this case is anything but normal. Dateline claims it need not
disclose its news material merely because BCA plausibly alleged a defamation
claim. Rather it argues, under Colorado’s newsperson’s privilege, Colo. Rev. Stat.
- 18 -
§ 13-90-119(3)(c),9 as interpreted in Gordon v. Boyles, 9 P.3d 1106, 1109 (Colo.
2000), BCA’s complaint must also sufficiently plead facts showing “probable
falsity” before any disclosure is required.10 (Appellant’s App’x, Vol. III at 981.)
Gordon’s “probable falsity” requirement cannot apply here.
In Gordon, the Colorado Supreme Court considered the application of the
statutory newsperson’s privilege in a defamation case. Gordon, a police officer, sued
several parties after a local radio talk show host, Peter Boyles, made allegedly
defamatory comments about Gordon’s participation in the stabbing of a fellow officer.
The issue was whether Boyles was required to disclose the identities of his confidential
sources or whether this information was privileged under § 13-90-119.
The court identified three of the requirements in § 13-90-119 necessary to defeat
the privilege: (1) “the news information [must be] directly relevant to a substantial issue
involved in the proceeding”; (2) “the news information cannot be obtained by any other
9
§ 13-90-119 is reproduced in Appendix A. The statute establishes a
newsperson’s privilege. Generally it prevents a newsperson from being required to
disclose information or sources of information. § 13-90-119(3) establishes the exceptions
to the general rule.
10
The district court also denied discovery based on the federal common law news
privilege adopted in Silkwood v. Kerr-McGee Corp., 563 F.2d 433 (10th Cir. 1977).
Whether news information will be protected depends on a weighing of several factors:
(1) “[w]hether the party seeking information has independently attempted to obtain the
information elsewhere and has been unsuccessful”; (2) “[w]hether the information goes
to the heart of the matter”; (3) “[w]hether the information is of certain relevance”; and (4)
“[t]he type of controversy.” Id. at 438. Dateline does not rely on the federal privilege
except to the extent it also contains an inquiry into the availability of the evidence from
another source.
- 19 -
reasonable means”; and (3) “a strong interest of the party seeking to subpoena the
newsperson outweighs the interests under the first amendment to the United States
constitution of such newsperson . . . and of the general public in receiving news
information.” 9 P.3d at 1118.
It concluded Gordon met the first requirement because “the identities of [Boyle’s
confidential sources] and what they said reflect[ed] directly on the declarant’s state of
mind with respect to the truth or falsity about the information he broadcast.” Id. The
second requirement, whether the material is unavailable, must be considered from the
point of the information’s true relevance to the issue of malice. Id. at 1119. When
evidence of malice may be available other than through the confidential source, the
identity of the source should be protected. Id.
These first two requirements are easily resolved here. The parties do not dispute
the unedited footage taken during the October 2007 seminar is directly relevant to the
ultimate issue in this lawsuit—whether Dateline maliciously or recklessly
mischaracterized the gist of that seminar. And, contrary to Dateline’s argument, BCA’s
video of the March seminar is not an alternative means of acquiring the information
necessary to proceed. While the tape of the earlier seminar may have been sufficient to
support BCA’s complaint, this does not mean it will be sufficient to carry the heavy
burden of proof required at trial. According to BCA, “the March video includes only two
statements similar to two of the six snippets [used in the Dateline program], one
addressing liquidity options in annuities and another addressing ‘peace of mind.’ The
- 20 -
other four October snippets have no counterparts in the March video.” (Appellant’s Br.
at 41.) Therefore, it would be difficult, at best, to compare the totality of the seminar and
the gist of Dateline’s program without the original video. And it is uncontested the
“news information” upon which the complaint is based is solely in Dateline’s possession.
Thus, disclosure of the unedited Dateline film rests on the third statutory
requirement, the balance between the interests of the plaintiff, the newsperson, and the
public. It would appear BCA would prevail on this factor as well under Herbert v.
Lando, 441 U.S. 153 (1979). Herbert involved a defamation suit brought by a retired
Army officer against Columbia Broadcasting System (CBS) and its reporters. He
claimed CBS aired a program that falsely portrayed him “as a liar and a person who had
made war-crimes charges to explain his relief from command.” Id. at 156. The Supreme
Court rejected CBS’s request for “an absolute privilege to the editorial process of a media
defendant in a libel case,” concluding it “is not required, authorized, or presaged by [the
Court’s] prior cases, and would substantially enhance the burden of proving actual
malice, contrary to the expectations of New York Times . . . and similar cases.” Id. at 169.
The Court then balanced the “important interests” of an individual’s interest in his
reputation against the “chilling effect” which may result from the disclosure of the
editorial process. Id. at 171. After determining the potential chilling effect on the press
did not outweigh the individual’s interest under the facts of the case, the Court said:
This is not to say that the editorial discussions or exchanges have no
constitutional protection from casual inquiry. There is no law that subjects
the editorial process to private or official examination merely to satisfy
curiosity or to serve some general end such as the public interest; and if
- 21 -
there were, it would not survive constitutional scrutiny as the First
Amendment is presently construed. No such problem exists here, however,
where there is a specific claim of injury11 arising from a publication that is
alleged to have been knowingly or recklessly false.
Id. at 174.
Although BCA has met the three requirements found in the Colorado statute,
Gordon added an additional, non-statutory, requirement in its analysis. The Colorado
Supreme Court determined that, when considering a request for the identity of a
confidential source or for confidential information, “probable falsity” is required to defeat
the statutory privilege. It said:
In sum, the General Assembly adopted section 13-90-119 in order to
protect the First Amendment interests of newspersons who rely on
confidential sources of information to gather and report news about public
affairs. However, the privilege is qualified, not absolute. A court must
carefully weigh each of the three factors listed in section 13-90-119(3)(a)-
(c) before compelling disclosure. As part of the balancing test required
under section 13-90-119(3)(c) to weigh the First Amendment interests of a
newsperson defendant in resisting compelled disclosure of confidential
sources and the plaintiff’s interest in the information, the trial court must
make a preliminary determination about the probable falsity of the
defendant’s statements. While in some instances disclosure may be the best
option, we emphasize that when deciding whether to compel a newsperson
to disclose confidential information, a trial court should compel disclosure
only as a last resort when necessary to promote the effective administration
of justice.
9 P.3d at 1121 (emphasis added). Based on the Colorado Supreme Court’s decision,
Dateline claims its news information is not subject to disclosure until BCA has shown
11
In a footnote, the Court noted a “prima facie showing [of a specific claim of
injury] could be satisfied by an affidavit or a simple verification of the pleadings.”
Herbert, 441 U.S. at 174 n.23.
- 22 -
“probable falsity.” But it ignores the purpose announced in Gordon’s holding:
protection of confidential information and sources.
Indeed, Gordon expressed concern about “the ability of the press to gather
information by promising to keep the identities of their sources confidential” if it was
required to identify its sources. Id. at 1116. But this is not a case involving confidential
sources or confidential information. In essence, Dateline wants to pitch the baby out with
the bath water. It appears the identity of those who filmed the seminar is well known to
the parties, but if undisclosed others were involved, BCA is not seeking to identify them.
As for the editorial process, BCA is not seeking any information about how or why
Dateline decided what portions of the surreptitiously filmed October seminar it would use
and what it would not. BCA is only asking for a copy of the unedited film and it would
seem to be the only entity with a colorable claim to confidentiality. The application of
Gordon’s “probable falsity” test in this situation strains credulity. Had Boyles’s
confidential source in Gordon come forward and said “I did not tell Boyles what he said
on the radio,” surely the test would be satisfied. Clark, the source of the information,
says Dateline’s statements were false. Why is that not sufficient? What’s more, as
Gordon recognized, “[w]hen the journalist is a party, and successful assertion of the
privilege will effectively shield him from liability, the equities weigh somewhat more
heavily in favor of disclosure.” Id. at 1119 (quoting Zerilli v. Smith, 656 F.2d 705, 714
(D.C.Cir.1981)) (quotation marks omitted). Gordon’s “probable falsity” inquiry has no
place in this analysis.
- 23 -
Without the probable falsity crutch, the equitable balance between “important
interests” and “chilling effect” tip dramatically in favor of BCA. The object of
discovery—the original footage—is the best and perhaps only evidence from which a
fact-finder can determine whether Dateline’s portrayal of the substance of what occurred
at Annuity University cast Clark’s teachings in such a way as to leave a false impression
of them. BCA’s film from the March seminar will not do. It is not the seminar witnessed
by the Dateline producers, nor is it the one on which the allegedly false statements in the
program were based.
BCA would be greatly prejudiced in its ability to prove the defamation claim
without access to the unedited film. Dateline’s First Amendment interests do not involve
the disclosure of confidential information or confidential sources. The fact-finder is
entitled to the best evidence available, particularly in a case like this, which asks whether
the media’s zeal to report and perhaps sensationalize should be tempered by its
responsibility not to defame. For all of those reasons, BCA’s factual allegations are
sufficient to warrant discovery of the unedited film. The Colorado statue is a shield, not a
sword.
3. 42 U.S.C. § 1983 Claim
Section 1983 provides in relevant part:
Every person who, under color of any statute, ordinance, regulation,
custom, or usage, of any State . . . . subjects, or causes to be subjected, any
citizen of the United States or other person within the jurisdiction thereof to
the deprivation of any rights, privileges, or immunities secured by the
Constitution and laws, shall be liable to the party injured in an action at
law, suit in equity, or other proper proceeding for redress . . . .
- 24 -
42 U.S.C. § 1983.
To state a claim for relief in an action brought under § 1983, BCA must establish
not only the deprivation of a right secured by the Constitution or laws of the United
States, but also a deprivation committed under color of state law. Am. Mfrs. Mut. Ins. Co.
v. Sullivan, 526 U.S. 40, 49-50 (1999). “Like the state-action requirement of the
Fourteenth Amendment, the under-color-of-state-law element of § 1983 excludes from its
reach merely private conduct, no matter how discriminatory or wrongful.” Id. at 50
(quotation marks omitted). “[S]tate action may be found if, though only if, there is such a
close nexus between the State and the challenged action that seemingly private behavior
may be fairly treated as that of the State itself.” Brentwood Acad. v. Tenn. Secondary
Sch. Athletic Ass’n., 531 U.S. 288, 295 (2001) (quotation marks and citations omitted).
“The purpose of this requirement is to assure that constitutional standards are invoked
only when it can be said that the State is responsible for the specific conduct of which the
plaintiff complains.” Blum v. Yaretsky, 457 U.S. 991, 1004 (1982).
We begin, as we must, “by identifying ‘the specific conduct of which the plaintiff
complains.’” Am. Mfrs. Mut. Ins. Co., 526 U.S. at 51 (quoting Blum, 457 U.S. at 1004).
BCA asserts three constitutional violations: (1) unlawful search and seizure; (2) invasion
of privacy; and (3) stigmatization. Relying on our decision in Anderson v. Suiters, 499
F.3d 1228, 1234 (10th Cir. 2007),12 the district court dismissed all three claims because
12
In Anderson v. Suiters, the plaintiff appealed from the district court’s dismissal
(Continued . . . )
- 25 -
BCA “failed to allege facts demonstrating that the State of Alabama and Defendants were
joint participants in creating the broadcast Report.” (Appellant’s App’x, Vol. III at
1187.) The court’s approach, however, did not examine each claim separately.
a) State Action
We reiterate: state, not private, action is an irreducible minimum in a §1983
action. But what constitutes state action? “Quite clearly, a search is not private in nature
if it has been ordered or requested by a government official.” 1 Wayne R. LaFave et al.,
Search & Seizure § 1.8(b) (5th ed., 2012 update) (citing cases); see, e.g., United States v.
Hardin, 539 F.3d 404, 420 (6th Cir. 2008) (“[B]ecause the officers urged the apartment
manager to investigate and enter the apartment, and the manager, independent of his
of her § 1983 claim against a television news reporter. Anderson alleged she was raped
by her ex-husband while she was unconscious and did not learn of the incident until she
found a videotape. She brought the videotape to a police officer who assured her the
video would be seen only by the officer, his partner, a judge, and a jury. 499 F.3d at
1231. The officer, however, gave an interview to a television reporter and showed her
the videotape. The officer agreed to allow the reporter to air the videotape’s contents so
long as it was limited to the perpetrator’s face and was “tasteful.” Id. The officer then
phoned Anderson and, despite Anderson’s disinclination to talk to the press, the officer
placed the reporter on the telephone. Several days after the story was aired, Anderson
filed suit. The district court dismissed the complaint for failure to state a claim.
In affirming, we explained that, to satisfy the state action requirement, the
plaintiff must show the private party was a “willful participant in joint action with the
State or its agents,” i.e. conspirators. Id. at 1233 (quotation marks omitted). State
officials and private parties must “have acted in concert in effecting a particular
deprivation of constitutional rights.” Id. (quotation marks omitted). We noted, “[a]t
most, [Anderson’s] complaint alleges that the parties had their own, separate goals: [the
officer] wanted to appear on camera, and the media defendants wanted exclusive access
to the investigation.” Id. Because Anderson had not alleged the reporter knew of
Anderson’s confidentiality agreement with the officer, had not alleged the reporter did
anything but accept and air the video, and had not alleged the officer had any
involvement in the editorial process, she had not shown the reporter and the officer had
acted in concert to violate her right to privacy. Id.- 26 -
interaction with the officers, had no reason or duty to enter the apartment, we hold that
the manager was acting as an agent of the government.”). “A governmental agent may
not avoid constitutional restraints upon his conduct by procuring a private individual to
perform a forbidden act for him.” United States v. Jennings, 653 F.2d 107, 110 (6th Cir.
1998). But that is only part of the equation.
If the evidence was not improperly procured by the government, it would not be
subject to suppression. See United States v. Benoit, 713 F.3d 1, 9 (10th Cir. 2013).
Likewise there would be no state action upon which a § 1983 action might be based. Am.
Mfrs. Mut. Ins. Co., 526 U.S. at 50. However, if the evidence was improperly procured
by an agent of the police, that fact would sufficiently state a Fourth Amendment violation
under § 1983. See United States v. Souza, 223 F.3d 1197, 1202 (10th Cir. 2000) (“[T]he
officers twice, within a span of five minutes, attempted to encourage [the UPS agent] to
open the package and [the agent] testified that she was influenced by the officers’
attempts.”).
A search will also be deemed subject to Fourth Amendment restrictions if it is a
joint endeavor. “[U]nder the ‘joint action’ test, . . . we ask whether state officials and
private parties have acted in concert in effecting a particular deprivation of constitutional
rights.” Wittner v. Banner Health, 720 F.3d 770, 777 (10th Cir. 2013) (quotation marks
omitted). In looking for concerted activity the devil is in the details. Whether the
landlord was acting at the behest of the police, for his own purpose (to get rid of a pesky
- 27 -
tenant or minimize a costly methamphetamine clean-up), or with mixed motives, is a fact
intensive inquiry not unlike many others courts must resolve.
[A] case-by-case approach is hardly unique within our Fourth Amendment
jurisprudence. Numerous police actions are judged based on fact-
intensive, totality of the circumstances analyses rather than according to
categorical rules, including in situations that are more likely to require
police officers to make difficult split-second judgments. See, e.g., Illinois
v. Wardlow, 528 U.S. 119, 123–125, 120 S. Ct. 673, 145 L.Ed.2d 570(2000) (whether an officer has reasonable suspicion to make an
investigative stop and to pat down a suspect for weapons under Terry v.
Ohio, 392 U.S. 1, 88 S. Ct. 1868, 20 L.Ed.2d 889 (1968)); Robinette, 519
U.S., at 39–40, 117 S. Ct. 417 (whether valid consent has been given to
search); Tennessee v. Garner, 471 U.S. 1, 8–9, 20, 105 S. Ct. 1694, 85
L.Ed.2d 1 (1985) (whether force used to effectuate a seizure, including
deadly force, is reasonable).
Missouri v. McNeely, 133 S. Ct. 1552, 1564 (2013) (emphasis added).
In looking at concerted or joint activity, we use a “two-step inquiry to determine
whether a search by a private individual constitutes state action.” Benoit, 713 F.3d at 9.
We ask (1) “whether the government knew of and acquiesced in the private person’s
intrusive conduct,” and (2) “whether the party performing the search intended to assist
law enforcement efforts or to further his own ends.” Id. (quotation marks and alterations
omitted). “Both prongs must be satisfied considering the totality of the circumstances
before the seemingly private search may be deemed a government search.” Id. (quotation
marks omitted). “‘[K]nowledge and acquiescence . . . encompass the requirement that
the government agent must also affirmatively encourage, initiate or instigate the private
action.’” Id. (quoting United States v. Smythe, 84 F. 3d 1240, 1243 (10th Cir. 1996)).
BCA alleged the Dateline producers, acting under color of state law, engaged in
an unreasonable search and seizure when they used the false credentials supplied by
- 28 -
Alabama officials to enter BCA’s property and surreptitiously videotape the seminars.
When considering this claim, we are not concerned whether Alabama officials were
involved in the editorial process leading to the defamation claim. We only examine the
factual basis for the claim that Alabama and Dateline acted jointly to conduct a
warrantless search and seizure of BCA’s seminar. At this stage of the lawsuit, BCA need
only plead sufficient facts to plausibly state joint action between the Alabama officials
and Dateline.
Alabama officials and Dateline were both interested in investigating fraudulent
sales of annuities to seniors. At some point BCA’s Annuity University became a matter
of interest in the concurrent investigations. Dateline wanted to surreptitiously film
BCA’s seminar for its broadcast, but only licensed insurance agents were allowed to
attend. Alabama officials were interested in the investigative potential of filming the
seminar. A deal was struck. Knowing the producers would use hidden cameras to record
the seminar, Alabama officials supplied the Dateline producers with false credentials they
could not otherwise obtain. Dateline agreed to share the information it obtained with the
Alabama officials. Quid pro quo. The Alabama officials entered into a contract in which
Alabama acknowledged each Dateline producer “has received a . . . License from the
State Department of Insurance to be used solely for the purpose of an investigation.”
(Appellant’s App’x, Vol. III at 842-43.) Alabama officials entered the fraudulent
credentials into a national database which would defeat inquiry into the status of the
producers’ credentials. The producers used the Alabama credentials to gain entry for an
- 29 -
investigation with the knowledge and support of the Alabama officials. Finally, Dateline
shared the information with officials, as intended, to further Alabama’s investigation.
The question is whether the marriage of convenience resulted in a constitutional
violation.
b) Fourth Amendment Violation
Dateline says there is no Fourth Amendment violation when officers or their
agents enter a private place under false pretenses. Generally speaking and on these facts,
we agree. For purposes of our analysis we consider Dateline to have been either an agent
of the Alabama officials or sufficiently engaged in concerted activity with them to meet
the joint action test. We look first to the deception enabling Dateline to gain access to the
seminar and then at its surreptitious and prohibited recording of the presentations.
The general rule is that government agents may use deception to gain access to
homes, offices, or other places wherein illegal acts are being perpetrated. The Supreme
Court has long acknowledged the use of trickery or deception to be permissible in the
detection of crime. Lewis v. United States, 385 U.S. 206, 208-09 (1966); Sorrells v.
United States, 287 U.S. 435, 441-42 (1932) (“Artifice and stratagem may be employed to
catch those engaged in criminal enterprises.”). “A ruse by law enforcement officers to
influence behavior is not prohibited unless it is unconstitutional.” United States v. Ojeda-
Ramos, 455 F.3d 1178, 1184-85 (10th Cir. 2006). “Because Dunlap’s actions would not
have been a seizure if he had identified himself as a police officer, the ruse did not violate
- 30 -
Ojeda–Ramos’ constitutional rights.” Id. at 1185. The ruse in Ojeda-Ramos was
undertaken to see if, in response, the suspect would provide inculpatory evidence.13
Ruses take many forms. Sometimes, as in Ojeda-Ramos, to elicit a response from a
suspect. Sometimes to lure a suspect to the door so that he might be arrested. Id. at
1182. But often a ruse is used to gain entry to a place or mislead a suspect as to the
identity or purpose of a police officer or cooperating police operative. There are limits,
of course,14 but misrepresentation of official capacity is not generally one of them. If
total honesty by the police were to be constitutionally required, most undercover work
would be effectively thwarted by a simple question, “Are you in any way affiliated with
the police?” In general, what is revealed to another, even if unwittingly, is not entitled to
constitutional protection. See Lewis, 385 U.S. at 212. And so it is here.
13
The case cites other examples of constitutionally benign ruses by the police,
which cause a suspect to incriminate himself.
14
Notwithstanding the legality of searches conducted by undercover agents, the
“Fourth Amendment can certainly be violated by guileful as well as by forcible intrusions
into a constitutionally protected area.” Hoffa v. United States, 385 U.S. 293, 301 (1966).
In gaining permission to enter a home in order to search, the police may not falsely claim
to have a search warrant. See Bumper v. North Carolina, 391 U.S. 543, 550 (1968). That
particular falsehood essentially coerced the consent to search, making it involuntary.
Likewise, ATF agents may not falsely claim to have a tip that an apartment contains
bombs and drugs which they must investigate. United States v Harrison, 639 F.3d 1273(10th Cir. 2011). That, too, vitiates consent. United States v. McCurdy, 40 F.3d 1111,
1119 (10th Cir. 1994) (“An officer's request for consent to search does not taint an
otherwise consensual encounter ‘as long as the police do not convey a message that
compliance with their request is required.’”) (quoting United States v. Griffin, 7 F.3d
1512, 1517 (10th Cir. 1993)).
- 31 -
Dateline misrepresented its employees as insurance agents, implicitly denying
they were agents of Alabama investigatory agencies. But, there were no coercive acts,
only implicit lies about their actual identity and purpose. We see that as no different
from an undercover police officer misrepresenting himself as a drug dealer. BCA makes
much of the fact that Alabama provided false credentials, enabling the charade. But that
is not unlike any of the myriad steps law enforcement agencies regularly take to
embellish the false identity and credentials of undercover operatives. BCA willingly,
albeit unwisely, admitted the Dateline personnel it encountered to the seminar. That is
sufficient consent whether it involved state actors, agents of state actors, or joint action
among state and private actors.15
We now turn to the scope of BCA’s consent. It claims any consent, improvident
or otherwise, was limited by its prohibition on recording the seminars. That may be true
for a breach of contract or some common variety tort but it does not pass muster under
Fourth Amendment jurisprudence. Several Supreme Court cases and cases from this
circuit have decided no Fourth Amendment violation occurs when a government agent or
informant makes an audio or audiovisual recording of conversations with defendants,
15
In cases where “the police misrepresentation of purpose is so extreme,” a person
is “deprive[d] . . . of the ability to make a fair assessment of the need to surrender his
privacy,” and therefore the resulting “consent should not be considered valid.” Wayne R.
LaFave et al., Criminal Procedure § 3.10(c) (3d ed. 2007). The depths of proscribed
ruses has probably not been fully plumbed, but of this we are sure: it does not include
claims by the police, their agents or confederates to be licensed insurance agents in order
to infiltrate a sales seminar held in a business property.
- 32 -
even when the defendants do not consent to the recording of the conversation (invited
informer doctrine). As the Supreme Court explained in Katz v. United States, 389 U.S.
347, 351 (1967), “the Fourth Amendment protects people, not places. What a person
knowingly exposes to the public, even in his own home or office, is not a subject of
Fourth Amendment protection.” Objects observed or statements uttered in “the ‘plain
view’ of outsiders are not ‘protected’ because no intention to keep them [private] has
been exhibited.” Id. at 361 (Harlan, J., concurring). In Hoffa v. United States, 385 U.S.
293, 302-03 (1966), the Supreme Court held statements knowingly exposed to
government informants are not protected under the Fourth Amendment because “[t]he
risk of being overheard by an eavesdropper or betrayed by an informer or deceived as to
the identity of one with whom one deals is probably inherent in the conditions of human
society. It is the kind of risk we necessarily assume whenever we speak.”
Likewise, the surreptitious recording of statements is not violative of the Fourth
Amendment if the statements were exposed to the public or made in the presence of
outsiders. In Lopez v. United States, 373 U.S. 427, 437-40 (1963), the Supreme Court
decided no Fourth Amendment violation occurred where an Internal Revenue Service
agent “gained access to the [defendant’s] office by misrepresentation” and recorded a
conversation with the defendant. And in United States v. White, 401 U.S. 745 (1971),
government agents were allowed to testify regarding a conversation between a
government informant and the defendant, which the agents overheard by using radio
equipment concealed on the informant. The Supreme Court has said, “[i]f the conduct
- 33 -
and revelations of an agent operating without electronic equipment do not invade the
defendant’s constitutionally justifiable expectations of privacy, neither does a
simultaneous recording of the same conversations made by the agent or by others from
transmissions received from the agent to whom the defendant is talking and whose
trustworthiness the defendant necessarily risks.” Id. at 751. Relying on Hoffa (quoting
Lopez) and White, this Court in United States v. Longoria decided there was no Fourth
Amendment violation when a government informant recorded a conversation with a
defendant who “knowingly made incriminating statements in the informant’s presence.”
177 F.3d 1179, 1183 (10th Cir. 1999).
Lopez, White, and Longoria all hold there is no Fourth Amendment violation when
government agents or informants surreptitiously record conversations. These cases do
not require the defendant’s consent to the recording of conversation. Rather, it is
sufficient if the electronic recording device “was carried in and out by an agent who was
there with the petitioner’s assent, and [the device] neither saw nor heard more than the
agent himself.” Lopez, 373 U.S. at 439. “This principle applies with equal force to
statements knowingly exposed to government informants.” Longoria, 177 F.3d at 1182
(citing Hoffa, 385 U.S. at 302-03).
Application of the invited informer doctrine is less clear when media defendants
are involved. In Wilson v. Layne, 526 U.S. 603, 605-06 (1999), the Supreme Court
- 34 -
decided police officers violated the Fourth Amendment when they invited the media
along to observe and record the execution of an arrest warrant in a private home.16
On the same day the Wilson decision was announced, the Court also addressed a
decision from the Ninth Circuit. In Berger v. Hanlon, 129 F.3d 505 (9th Cir. 1997), the
Ninth Circuit decided federal officers were liable under the Bivens17 doctrine for
permitting media representatives to ride along and document events as a search warrant
was being executed in the Bergers’ home and elsewhere on their ranch. It also decided
the Bergers had stated a § 1983 claim against the media representatives because they
were government actors. It addressed the “invited informer” or “misplaced confidence”
doctrine by holding it did not apply to the media representatives because their
surreptitious video and audio recordings did not further a law enforcement purpose. Id. at
513. The Supreme Court issued a Writ of Certiorari upon the petition of the federal
defendants to address a narrow issue: the liability of federal agents for permitting the
media to document the events for no police purpose. Relying on Wilson, the Supreme
16
The holding was quite explicit: “We hold that it is a violation of the Fourth
Amendment for police to bring members of the media or other third parties into a home
during the execution of a warrant when the presence of the third parties in the home was
not in aid of the execution of the warrant.” Id. at 614. In Wilson, “[T]he reporters did not
engage in the execution of the warrant, and did not assist the police in their task. The
reporters therefore were not present for any reason related to the justification for police
entry into the home—the apprehension of Dominic Wilson.” Id. at 611. The Court
offered no opinion as to whether evidence developed by the media representatives could
be suppressed. Id. at 614 n.2.
17
Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S.
388 (1971).
- 35 -
Court concluded the Bergers’ complaint stated a Fourth Amendment claim against the
federal officers. Hanlon v. Berger, 526 U.S. 808, 809-10 (1999). None of the other
issues decided by the Ninth Circuit were addressed. The Supreme Court has left us with
nothing to suggest the invited informer ought not to be applicable in this case.
In both Wilson and Hanlon, government agents were using the coercive power of
government to gain access to citizens’ homes. In exercising that coercive power, the
government agents invited the press along for no legitimate police purpose. Nothing
comparable occurred here. No government actors were present and the Dateline
operatives neither represented themselves to be government officers nor demanded entry
on behalf of the government. At worst, it is a classic case of government agents sending
willing and available operatives to obtain information freely revealed to those operatives.
The fake insurance agent credentials supplied by Alabama officials fit easily into the
types of deception courts have generally found permissible because it involved no
coercion, express or implied. It is, instead, the classic ruse of misrepresented identity.
Moreover, according to BCA’s allegations and the available facts of record, the Alabama
officials facilitated the ruse for a legitimate investigative purpose. Dateline may have
violated state tort law, but no actionable Fourth Amendment violation occurred.
c) Substantive Due Process–Right to Privacy
BCA also alleged Dateline violated its right to privacy, under color of state law,
when the producers entered BCA’s premises and secretly recorded the lectures.
However, “the federal constitution . . . protects against public disclosure [of] only highly
personal matters representing the most intimate aspects of human affairs.” Nunez v.
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Pachman, 578 F.3d 228, 231-32 (10th Cir. 2009) (quotation marks omitted). BCA did
not allege disclosure of information which could be deemed “personal.” Thus, the
district court correctly dismissed this claim.
d) Procedural Due Process–Stigmatization
“‘Where a person’s good name, reputation, honor, or integrity is at stake because
of what the government is doing to him, a protectible liberty interest may be implicated
that requires procedural due process in the form of a hearing to clear his name.’” Gwinn
v. Awmiller, 354 F.3d 1211, 1216 (10th Cir. 2004) (quoting Wisconsin v. Constantineau,
400 U.S. 433, 437 (1971)). “Damage to one’s reputation alone, however, is not enough
to implicate due process protections.” Id. The plaintiff must demonstrate:
(1) the government made a statement about him or her that is
sufficiently derogatory to injure his or her reputation, that is capable of
being proved false, and that he or she asserts is false, and (2) the
plaintiff experienced some governmentally imposed burden that
significantly altered [his or] her status as a matter of state law.
Id. (quotation marks omitted).
Since government action is critical to a due process claim, BCA was required to
allege how the Alabama officials took joint action with Dateline, not only in planning the
search and seizure of BCA’s seminar, but also in the editorial process leading to the
statements aired on the program. The only facts alleged in its complaint on this point
were (1) the presence of Joseph Borg, Director of Alabama’s Security Commission, as a
commentator on the show, and (2) Borg’s personal friend made an appearance as a
potential “victim” at the sting house. We agree with the district court: these facts are not
sufficient to infer editorial participation in the allegedly defamatory content.
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CONCLUSION
We AFFIRM the district court’s dismissal of BCA’s Fourth Amendment claim as
well as its § 1983 privacy and stigmatization claims. We REVERSE the dismissal of the
defamation claim and REMAND for further proceedings consistent with this judgment.
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Appendix A
CRS 13-90-119. Privilege for newsperson
(1) As used in this section, unless the context otherwise requires:
(a) "Mass medium" means any publisher of a newspaper or periodical; wire
service; radio or television station or network; news or feature syndicate; or cable
television system.
(b) "News information" means any knowledge, observation, notes, documents,
photographs, films, recordings, videotapes, audiotapes, and reports, and the
contents and sources thereof, obtained by a newsperson while engaged as such,
regardless of whether such items have been provided to or obtained by such
newsperson in confidence.
(c) "Newsperson" means any member of the mass media and any employee or
independent contractor of a member of the mass media who is engaged to gather,
receive, observe, process, prepare, write, or edit news information for
dissemination to the public through the mass media.
(d) "Press conference" means any meeting or event called for the purpose of
issuing a public statement to members of the mass media, and to which members
of the mass media are invited in advance.
(e) "Proceeding" means any civil or criminal investigation, discovery procedure,
hearing, trial, or other process for obtaining information conducted by, before, or
under the authority of any judicial body of the state of Colorado. Such term shall
not include any investigation, hearing, or other process for obtaining information
conducted by, before, or under the authority of the general assembly.
(f) "Source" means any person from whom or any means by or through which
news information is received or procured by a newsperson, while engaged as such,
regardless of whether such newsperson was requested to hold confidential the
identity of such person or means.
(2) Notwithstanding any other provision of law to the contrary and except as provided in
subsection (3) of this section, no newsperson shall, without such newsperson's express
consent, be compelled to disclose, be examined concerning refusal to disclose, be
subjected to any legal presumption of any kind, or be cited, held in contempt, punished,
or subjected to any sanction in any judicial proceedings for refusal to disclose any news
information received, observed, procured, processed, prepared, written, or edited by a
newsperson, while acting in the capacity of a newsperson; except that the privilege of
nondisclosure shall not apply to the following:
(a) News information received at a press conference;
(b) News information which has actually been published or broadcast through a
medium of mass communication;
(c) News information based on a newsperson's personal observation of the
commission of a crime if substantially similar news information cannot reasonably
be obtained by any other means;
(d) News information based on a newsperson's personal observation of the
commission of a class 1, 2, or 3 felony.
(3) Notwithstanding the privilege of nondisclosure granted in subsection (2) of this
section, any party to a proceeding who is otherwise authorized by law to issue or obtain
subpoenas may subpoena a newsperson in order to obtain news information by
establishing by a preponderance of the evidence, in opposition to a newsperson's motion
to quash such subpoena:
(a) That the news information is directly relevant to a substantial issue involved in
the proceeding;
(b) That the news information cannot be obtained by any other reasonable means;
and
(c) That a strong interest of the party seeking to subpoena the newsperson
outweighs the interests under the first amendment to the United States constitution
of such newsperson in not responding to a subpoena and of the general public in
receiving news information.
(4) The privilege of nondisclosure established by subsection (2) of this section may be
waived only by the voluntary testimony or disclosure of a newsperson that directly
addresses the news information or identifies the source of such news information sought.
A publication or broadcast of a news report through the mass media concerning the
subject area of the news information sought, but which does not directly address the
specific news information sought, shall not be deemed a waiver of the privilege of
nondisclosure as to such specific news information.
(5) In any trial to a jury in an action in which a newsperson is a party as a result of such
person's activities as a newsperson and in which the newsperson has invoked the
privilege created by subsection (2) of this section, the jury shall be neither informed nor
allowed to learn that such newsperson invoked such privilege or has thereby declined to
disclose any news information.
(6) Nothing in this section shall preclude the issuance of a search warrant in compliance
with the federal "Privacy Protection Act of 1980", 42 U.S.C. sec. 2000aa.
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