Media Law Advisory

January 2005

Sixth Circuit Affirms Dismissal of Ventura’s Claims Against Cincinnati Enquirer

Chiquita Litigation Nearing End for Confidential SourceAlmost six years ago, The Cincinnati Enquirer ran a special report critical of banana giant Chiquita and its South American operations. What followed was “a bunch” of litigation that appears finally to be nearing an end. The background facts are now well known: Enquirer reporter Michael Gallagher began investigating Chiquita; George Ventura, former in-house counsel for Chiquita, became a confidential source; Ventura provided Gallagher illegal access to Chiquita’s voicemail system, which system Ventura himself illegally cracked following his unpleasant separation from the company; Gallagher incorporated information from the stolen voicemail into his reporting on Chiquita; within weeks after the May 3, 1998 publication of the Enquirer’s first special report, Chiquita notified law enforcement of the unauthorized use of its voicemail system and demonstrated proof to the Enquirer that its reporter, Gallagher, had invaded the system; the Enquirer fired Gallagher, publicly apologized for Gallagher’s misconduct, and paid Chiquita a $10 million settlement. Criminal and civil litigation ensued. Gallagher struck a deal with prosecutors, which included him offering testimony and releasing his files - which had been placed under seal pursuant to his assertion of the reporter’s privilege - to the grand jury. Ventura, pleading no contest, was convicted of multiple counts of attempted unauthorized access to a computer system. Thereafter, Ventura filed civil litigation, including a federal case against The Cincinnati Enquirer and parent, Gannett Co. asserting claims stemming from his being identified as Gallagher’s confidential source.

After discovery, the trial court dismissed Ventura’s claims on summary judgment. On January 28, 2005, the Sixth Circuit Court of Appeals issued its decision upholding the dismissal on all counts. Ventura v. The Cincinnati Enquirer, Case No. 03-3440. In its opinion, the appellate court systematically dismissed Ventura’s arguments based on Ohio law and the undisputed facts in the record. Ventura’s appeal involved two main issues: (1) whether the Enquirer improperly disclosed his identity as a confidential source and (2) whether the defendants properly refused, based upon Ohio’s Shield Law, to answer deposition questions he posed. “Specifically, Ventura … maintained that reporters should not be protected from discussing sources whose identities are no longer confidential. Thus, Ventura sought answers to questions about himself. Defendants refused to answer those questions that would elicit privileged source information….”

Defendants Did Not Breach Any Confidentiality Owed to VenturaAddressing the first issue, the court held that none of the facts Ventura relied on supported his breach of contract or other claims because “the evidence demonstrates that the Enquirer [sic] did not disclose the identity of any confidential source.” Chiquita confirmed that the Enquirer did not reveal Ventura to it, the Enquirer asserted the Shield Privilege in response to the grand jury subpoenas, and the Special Prosecutor confirmed that no Enquirer employee identified Ventura as a confidential source. Ventura’s argument on appeal that the Enquirer provided the Special Prosecutor with “Ventura-identifying materials” via initials on a Post-it® note or fingerprints on documents was rejected. In fact, going a step further, the court held all of those facts immaterial because Ventura had admitted to speaking to Gallagher before the documents were produced: “Indeed, Ventura himself told Chiquita that he was speaking with Gallagher, in an apparent effort to convince Chiquita that he was not a confidential source.” Further, the fact that his name appeared on a Post-it® revealed nothing other than the fact that Gallagher had his phone number. The court also rejected Ventura’s argument that the Enquirer retained responsibility for Gallagher’s actions after he was fired because of its “special relationship” with Ventura and also rejected his theory that the Enquirer negligently entrusted Gallagher with documents that identified Ventura.

Finally, the court rejected Ventura’s claim that the Enquirer’s breach of confidentiality damaged Ventura by leading to his indictment. On that issue, the court reaffirmed long-standing precedent that an absolute privilege protects those who report the commission of a crime: “The district court properly concluded that ‘[i]t would not promote Ohio public policy to allow plaintiff to hold defendants liable for failure to exercise the ‘privilege under circumstances where asserting the ‘privilege’ could shield the commission of a crime. This court confirms that public policy precludes the plaintiff from enforcing any promise by Gallagher to conceal the plaintiff’s criminal activity.” In a footnote to the above, the court elaborated on the distinction it drew between providing evidence of Ventura’s identity and disclosing him as a confidential source: “Gallagher’s promise not to disclose Ventura’s identity as a confidential source does not mean that he simultaneously guaranteed there would be no evidence of the plaintiff’s identity. When Ventura initially contacted the reporters, he created evidentiary tracks of his crimes, including e-mail records and telephone records.” Further, the court rejected any ability for Ventura to “recover damages for injuries proximately caused by his own independent, criminal acts.”

Court Holds Ohio’s Shield Law Provides Absolute PrivilegeMoving to Ventura’s argument that the Enquirer improperly refused to answer deposition questions about communications with him and his involvement, the court appeals again affirmed the district court, holding that the Enquirer properly invoked Ohio’s Shield Law, Ohio Revised Code § 2739.12.. In reviewing the statute, the court held “Section 2739.12 grants reporters and editors an absolute and unqualified privilege.” Noting that the Ohio Supreme Court has not yet ruled on the question, the court stated: “… the Ohio Shield Law does not restrict the scenario to confidential providers of information….Nor does the statute extend the privilege to the sources of the information: the reporter’s shield laws do not prevent disclosure; rather, they permit nondisclosure.” (Internal citations omitted.) Because Ventura was not the only confidential source for the Chiquita story, the Enquirer did not have to answer Ventura’s questions because “they would inevitably have revealed information about the existence, or absence, of other unidentified confidential sources. Forcing a newspaper to disclose information about a self-proclaimed source like Ventura would result in the impermissible likelihood that other confidential sources would be identified.”

It is unknown whether Ventura will attempt to reach the Supreme Court.

Rapper’s Lyrics Were “Rhetorical Hyperbole,” Not Defamation

Lyrics in a song performed by rap musician George Clinton that described a record producer as a “disgrace to the species” who “got it (killing) comin’” are merely rhetorical hyperbole and are not defamatory, the U.S. Court of Appeals for the Sixth Circuit ruled on January 3. Boladian v. UMG Recordings, Inc., Case No. 03-2148.

Armen Boladian and three recording companies he owns filed the lawsuit, claiming that the lyrics in “Speed Dreamin’” defamed him, invaded his privacy, caused him emotional distress and unjustly enriched the defendants, which included a recording company and music distributor.

The lyrics in the fourth verse of the song on an album called “The Return of the Regulator” also referred to the “sorrows and horrors” of Boladian’s abuse. Boladian claimed the lyrics injured his reputation with people in the music industry and would deter others from doing business with him.

A federal trial judge in Michigan dismissed the lawsuit, and a three-judge panel of the Sixth Circuit affirmed.

The lyrics were immune from a defamation claim because they did not state actual, objectively verifiable facts about Boladian or his recording companies, Judge Alan E. Norris wrote for the appellate panel. Instead, the language was rhetorical hyperbole, the type of loose, figurative or hyperbolic language that merits protection.

Norris noted that the context in which the lyrics were made is critical to the analysis. The statement that “Armen” is a “disgrace to the species” is a puerile taunt typical of rap music, the court held. Moreover, the reference to abuse contained no specific allegation, such as an act of child abuse, that could be proven.

Boladian argued that the court should follow the Ninth Circuit’s ruling in Rodriguez v. Panayiotou, in which a defamation action was allowed to proceed against pop star George Michael, who in a song described a sexual encounter with a police officer. That case arose after Michael was charged with disorderly conduct stemming from illicit behavior in a men’s restroom. He released a song parodying the incident and gave an interview in which he stated that the arresting officer enticed him into a sexual encounter. The officer sued.

Boladian’s lawsuit differs significantly from Michael’s case because Michael’s statements described a specific, actual event. “In our case, the statements do not relate to a specific time period or locale and are therefore not susceptible to being proven objectively false,” the Sixth Circuit panel held.

In his lawsuit filed in Michigan state court on November 2, 2002, Boladian named as defendants UMG Recordings, Inc.; Universal Music & Video Distribution Corp.; Meijer, Inc.; Warren Griffin III p/k/a Warren G. and d/b/a My Kids Music. The defendants removed the case to federal court, which Boladian challenged. The Sixth Circuit ruled that the case was properly before the federal courts.

School Board Appeals District Court Decision Finding Placement of Stickers in Student Textbooks Violates Establishment Clause of The First Amendment

For almost a century, Americans have turned to the judiciary seeking help in winning the debate between those who believe in evolution and those who believe in religious theories of origin. This year begins no differently.

In Cobb County, Georgia, the School Board approved placing a sticker with the following language in the front of science textbooks: This textbook contains material on evolution. Evolution is a theory, not a fact, regarding the origin of living things. This material should be approached with an open mind, studied carefully, and critically considered. To the untrained eye, this sticker seems relatively harmless. An informed, reasonable observer, however, knows that “the Sticker communicates to those who endorse evolution that they are political outsiders, while the Sticker communicates to the Christian fundamentalists and creationists who pushed for a disclaimer that they are political insiders.” Therefore, in Selman v. Cobb County, the court found this sticker unconstitutional because it violates the Establishment Clause of the First Amendment. Selman v. Cobb County Sch. Dist., 2005 U.S. Dist. Lexis 432 (N.D. Ga. January 13, 2005).

The Establishment Clause of the First Amendment requires that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof." Although the Establishment Clause only mentions Congress, the First Amendment applies to states by incorporation through the Fourteenth Amendment. Thus, it applies to the state of Georgia, as well as other state actors, like public school boards.

Until 2001, the Cobb County School Board maintained a policy that took account of a number of its citizens’ beliefs concerning the origin of life and prevented their children from learning about the “origin of the human species.” In addition, a School Board regulation entirely prohibited teaching about the “origin of the human species” in elementary or middle school, restricted teaching this subject to elective courses in high school, and required that curriculum catalogs and course listings for elective courses expressly note if a class would cover that material. Statewide curriculum, however, mandated such teaching. In the fall of 2001, Cobb County began its process of adopting new science textbooks. As part of that process, Cobb County decided to revise its policy to comply with statewide curriculum requirements. Before formally adopting the new textbook and revising the policy, the School Board received formal and informal complaints.

Ms. Rogers, a self-described six-day biblical creationist, offered the most vocal opposition of the new textbooks and revised policy. Ms. Rogers’ foremost concern was that evolution was being taught as a fact, not a theory. Others were concerned that the science textbooks did not include other theories of the origin of species such as intelligent design or creationism. Ms. Rogers submitted a petition signed by approximately 2,300 Cobb County residents demanding that the School Board “clearly identify presumptions and theories and distinguish them from fact." Among other relief, the petition requested that a prominent statement be placed at the beginning of textbooks warning students that evolution material was a theory, not a fact.

In response to this public outcry, the School Board consulted its attorney to determine whether it could draft a statement to satisfy these concerns without violating the separation of church and state. This consultation resulted in the sticker quoted above. The School Board unanimously adopted the sticker and revised its policy and regulation on teaching “theories of origin.” No other topics were singled-out for such a disclaimer and no other similar stickers appeared in any other textbook.

During the more than two years since the sticker was used, there were no complaints of religious theories of origin being taught in science class, but other associated problems arose. One Cobb County science teacher noted that the sticker created confusion because it misused the word “theory” and diminished the reality that in science, evolution is the dominant theory of the origin of species. The sticker created the image for some students that evolution is “just” a theory or that evolution is not real. A number of parents were concerned that this sticker reflected an attempt by religiously-motivated individuals to devalue evolution by “promoting the religious view of origin and questioning the science in the textbooks.” One plaintiff testified that “alarm bells went off” when she saw the sticker and another noted that by singling out evolution, the sticker was obviously religiously motivated. Plaintiffs, Cobb County residents, sued Cobb County School District requesting that the court enter a declaratory judgment finding that the sticker violated the Establishment Clause and injunctive relief requiring the sticker be removed from the textbooks.

To determine whether Cobb County violated the Establishment Clause, the court applied the applicable three-part test. (Lemon v. Kurtzman, 403 U.S. 602, 91 S.Ct. 2105, 29 L. Ed. 2d 745 (1971).) The School Board’s approval of the sticker violates the Establishment clause if: (1) it has no secular purpose, (2) its primary effect advances or inhibits religion, or (3) it creates an excessive entanglement of the government with religion. If Cobb County failed any of these three parts of the test, its action would be unconstitutional. Selman found that Cobb County failed the second and third prongs of the Lemon test.

The court found that the first prong, the “purpose prong,” of the Lemon test was met, finding two secular purposes. One secular purpose was to foster critical thinking. The other secular purpose was “to reduce offense to those students and parents whose personal beliefs might conflict with teaching on evolution.” The Selman court reasoned that the sticker passed the purpose prong of the Lemon test because “the testimony of the School Board members and the documents in the record all indicate that the School Board relied on counsel to draft language for the sticker that would pass constitutional muster.” Under the second prong, the “effects prong,” the court found that an informed, reasonable observer would know that the religiously-motivated citizens of Cobb County were concerned that the effects of mandatory evolution curriculum in science class would conflict with the religious beliefs taught at home. In other words, the court found that because people would know why the sticker made it into the books, the effect was an unconstitutional endorsement of religion under Lemon.

Finally, the court summarily acknowledged that the sticker violated the third prong, the excessive entanglement prong. By approving a sticker prompted by the concerns of religiously-motivated citizens, the “School Board has effectively improperly entangled itself with religion by appearing to take a position.” Because the court found that the sticker did not satisfy the second and third prongs of the Lemon test, it found the sticker unconstitutional and required it be removed from the textbooks.

On January 17, 2005, four days after the Selman opinion, the Cobb County School Board voted 5-2 to appeal the decision, noting they were “surprised” by the ruling “[b]ased on the language contained in the judge’s opinion . . .” The School Board believes that Selman is an “unnecessary judicial intrusion into control of public schools.”

The U.S. Court of Appeals for the Eleventh Circuit will next address the issues.

Review & Recap – 2004

This year-in-review edition of the Media Law Advisory provides reports and updates on recent developments, as well as a review and recap of some of the most noteworthy media law developments during the year 2004.

As always, your comments and suggestions are welcomed.

Defamation & Invasion of Privacy

Georgia Court Holds “Single Publication Rule” Applies To Internet Postings

Defamation Claim Barred by Statute of LimitationsOn January 8, 2004, the Georgia Court of Appeals held that the single publication rule applies to internet postings. As a result, a defamation claim brought against the Atlanta Journal Constitution, which was filed more than one year after the allegedly defamatory materials were first published on the newspaper’s web site, was barred by the statute of limitations. McCandliss v. Cox Enterprises, Inc., GA Ct. App. No. A04A0361.

In this case, plaintiff Scott McCandliss filed a complaint asserting several claims resulting from the publication of allegedly libelous material on the web site of the Atlanta Journal Constitution. McCandliss was the founder of Hipsters, a social club whose main function was “to provide social gatherings that included size positive spectacles for persons of size and those who support them in the form of an atmosphere conducive to interaction and camaraderie, usually including a bar, music and dancing.” At the first such Hipsters spectacle, a lingerie show with plus sized models was held. Pictures of one of the models, along with an article about Hipsters written by McCandliss under a pseudonym, was later published without the model’s knowledge or permission in an adult magazine. As a result, the model sued McCandliss and the magazine for the unauthorized publication of her pictures and the Atlanta Journal Constitution covered that story. In an article published on September 7, 2000, the Journal Constitution wrote, “The Hipster party in metro Atlanta was noted on the cover of [certain magazine]: Five Thousand Pounds of Sex-Starved Fatties.” A similar statement was published in a follow-up article on November 7, 2000. Shortly after each article was published in the Atlanta Journal Constitution, it was placed in the articles archive in the newspaper’s internet web site. Approximately two years later, on November 7, 2002, McCandliss filed suit against the Atlanta Journal Constitution arguing that the newspaper improperly attributed the caption from the cover of the magazine to Hipsters. McCandliss claimed in his suit that the newspaper libeled him, placed him in a false light, and negligently published the statement about Hipsters without verifying the underlying facts.

The Atlanta Journal Constitution filed a motion to dismiss the lawsuit, arguing that it was barred by the one year statute of limitations applicable to claims of defamation. The trial court agreed and dismissed McCandliss’ lawsuit. McCandliss appealed, contending the trial court erred by applying the single publication rule to the newspaper’s internet postings. The Georgia Court of Appeals disagreed.

In its ruling affirming the dismissal, the court of appeals held that the purpose of the single publication rule is to protect newspaper defendants and the courts from a multiplicity of suits and an almost endless tolling of the statute of limitations. Its goals can be accomplished by requiring a plaintiff to collect all of his damages in one action, and establish that the statute of limitations is to run from the date of initial publication. McCandliss argued, nevertheless, that the single publication rule should not be applied to copies of the articles about Hipsters which were placed in the archive section of the newspaper’s internet web site. McCandliss argued that each “hit” or viewing of the article should be considered a new publication that re-triggered the statute of limitations. The court of appeals found that this argument lacked merit. The court went on to find that communications accessible over a public web site resemble those contained in a traditional mass media, only on a far grander scale. Communications posted on web sites may be viewed by thousands, if not millions, over an expansive geographic area for an indefinite period of time. Thus, according to the court, a multiple publication rule would implicate an even greater potential for endless re-triggering of the statute of limitations, multiplicity of suits, and harassment of media defendants. Inevitably, there would be a serious inhibitory affect on the open, pervasive dissemination of information and ideas over the internet. Thus, the court held that the single publication rule applied and affirmed the dismissal of the complaint.

Ohio Court Of Appeals Dismisses Defamation Claim

“Common Interest” Privilege Applied to Publisher and Its Subscribers

The “common interest” qualified privilege applicable to defamation actions received a boost in Ohio during 2004. On January 29, 2004, Ohio’s Third Appellate District Court upheld the summary judgment dismissal of a defamation action filed by a telemarketer against a publisher that warned its readers that the telemarketer was conducting a “scam.” American Readers Services Corp. v. Amos Press, Inc., No. 17-03-06. Following the trial court’s dismissal of the telemarketer’s claims on summary judgment, the appellate court upheld that ruling, holding that Amos’ published statements were protected by the qualified privilege and that the telemarketer failed to prove constitutional actual malice.

Amos Press is a publisher located in Sidney, Ohio, which publishes a number of hobby magazines and newspapers, including Coin World, a weekly newspaper for coin collectors. American Readers Services Corp. (“ARSC”) is an independent magazine subscription sales company which employs telemarketing as its exclusive means for selling magazines. ARSC sells a number of different magazines, though it has no direct relationship with any publishers. Instead, ARSC “clears” its magazine sales through a company called Publications Unlimited, which in turn is an agent for another company called National Community Services (“NCS”). NCS is the company that had a direct relationship with Amos Press.

NCS had direct authority to act as an agent to make Coin Weekly sales for Amos. NCS was permitted to hire subagents (such as Publications Unlimited), but was required to report the names of all such agents to Amos on a regular basis. Further, Amos authorized its agents to sell only new subscriptions to Coin World. Its agents were not permitted to sell renewals of existing subscriptions. In addition, Amos authorized new subscriptions of Coin World to be sold only by direct mail solicitation – not by telemarketing calls. Finally, Amos provided its agents with the authorized terms and price for selling Coin World.

ARSC was offering subscriptions to Coin World unbeknownst to Amos Press. Moreover, ARSC was offering Coin World for sale via telemarketing, which was not a method of sale authorized by Amos Press. ARSC was also selling subscriptions for greater than one year, even though ARSC knew that Amos Press had not authorized any agent to sell a subscription for greater than one year. Finally, ARSC was offering Coin World at prices not authorized by Amos Press.

In late 2000 and 2001, Amos Press received a number of complaints from Coin World subscribers regarding sales agents who “hounded” them to buy renewals even though their subscriptions were not yet expired. Based upon complaints from its subscribers, its past history with unauthorized agents, and its own subscription and agency records, Amos Press was able to determine that Coin World was being improperly sold by at least two different companies, including ARSC.

On April 23, 2001, Amos published an article in Coin World, informing readers that ARSC was improperly selling Coin World subscriptions by telephone, including renewals, at unauthorized prices, and for unauthorized terms. On April 30, 2001, the article was posted on Coin World’s web site. On January 8, 2002, ARSC filed a lawsuit asserting four causes of action based upon its allegation that Amos did not act “reasonably” in attempting to discover the truth of the statements published in its article. After discovery, Amos Press filed a motion for summary judgment seeking dismissal of all the claims asserted by ARSC.

In upholding the summary judgment dismissal, the appellate court rejected ARSC’s arguments that Amos’ published statements exceeded the scope of the common interest privilege, holding:

“ . . . we find that [Amos’] publication of the article was covered by the affirmative defense of qualified privilege. First, the article appears to have been published in good faith, and [Amos] had legitimate interest to uphold . . . Based on the information that [Amos] had at the time, the article was published to protect the subscribers of Coin World from fraud. The record is absolutely void of any evidence that [Amos] had anything but their subscribers’ best interests in mind. The article was published with no ill intent, and the sole purpose of the publication was to protect Coin World’’s subscribers.

Second, the article was also limited in scope to the interest of protecting the Coin World subscribers. The article provided information about the complaints Coin World had been receiving about unauthorized agents, its investigation into those agents, as well as stated the authorized prices and terms for subscription. While there were references to ARSC, [Amos] believed that the above information was necessary to protect the subscribers of Coin World . . .

Third, the article was published on the proper occasion, in the proper manner, and to the proper parties. [Amos] published the article in the Coin World magazine and also placed the article of the Coin World web site. Because the sole purpose of the article was to protect the Coin World subscribers, it was reasonable that the article be published to that audience . . .”

In response to ARSC’s specific arguments that Amos had exceeded the common interest privilege by using language beyond that necessary to protect Coin World subscribers, the court reasoned: “While in isolation these statements may seem to do more than merely warn, these statements must be reviewed within the context in which the were presented. When viewed in the context of the article, these statements were used to help warn Coin World subscribers of the possible danger. Reading the article in its entirety and based on the understanding of the situation that [Amos] then had, we are unable to find a statement that exceeded the scope of [Amos’] privileged, considering the interest [Amos] had in protecting the Coin World subscribers.”

The court of appeals then determined that ARSC failed to establish sufficient evidence of actual malice to defeat the privilege. ARSC had argued that Amos did not take sufficient steps to verify ARSC’s identity before identifying it as a “scam.” Rejecting that argument as well, the court concluded that all of the Amos employees involved in the publication of the article legitimately believed that ARSC was an unauthorized agent in the context of the previous unauthorized agent problems Amos had experienced. “While ARSC argues that [Amos] could have done substantially more investigation into the issue prior to publishing the article, there is no evidence that [Amos] either believed that ARSC was an authorized agent or entertained a serious doubt that it was not.” Thus, the court concluded that Amos’ failure to investigate more thoroughly before publication did not amount to actual malice.

Cuyahoga County, Ohio Court of Appeals Finds That False Statement That Mayor Was “Convicted Felon” Protected Opinion

In Grabow v. King Media Enterprises, 156 Ohio App. 3d 443 (2004), Court Examines Context of Editorial Article and Finds That Every Statement Made Was Opinion — Even Statements of Verifiable Fact

In the late summer of 1997, Raymond Grabow, the former Mayor of Warrensville Heights, Ohio, was indicted on multiple counts of theft. He eventually pled guilty to two misdemeanors of soliciting and receiving improper compensation in office, first degree misdemeanors. He resigned shortly thereafter.

In September 2000, the Call and Post, a general circulation weekly news publication in Cleveland, Cincinnati, and Columbus, wrote an editorial concerning the new mayor of Warrensville Heights. The article stated that former Mayor Grabow “was a convicted felon who stole city assets.”

Mr. Grabow took offense to this assertion, because he was, in fact, not a convicted felon. He therefore sued the Call and Post, asserting the statement that he was “a convicted felon who stole city assets” was false and defamatory.

The paper subsequently printed a retraction, pointing out that Mr. Grabow was only convicted of two misdemeanors, and not a felony. Despite the retraction, Mr. Grabow pressed on with his lawsuit.

The trial court eventually granted the Call and Post judgment as a matter of law. The court first noted that Mr. Grabow was a public figure. It then reasoned that Mr. Grabow could not produce clear and convincing evidence of actual malice to prevail on his claim of defamation against a public figure.

Mr. Grabow appealed. He argued that he had presented evidence that the writer of the editorial had researched whether Mr. Grabow was a convicted felon. Accordingly, he argued, he had enough evidence to show that the writer could have known the statement was false yet published it anyway.

The court of appeals rejected Mr. Grabow’s argument. It noted that under the Ohio Constitution, expressions of opinion are a valid exercise of the freedom of the press. It then explained that in determining whether a statement was protected opinion, one must consider the totality of the circumstances. This requires examining four factors:

(1) the specific language at issue;

(2) whether the statement is verifiable;

(3) the general context of the statement, and

(4) the broader context in which the statement appeared.

The court noted that application of this test was fluid, and the weight given to any one factor varied depending on the circumstances.

The court noted that allegations of criminal conduct, in written form, are generally libel per se if the criminal allegations are not true. The court then focused the inquiry on the statement “convicted felon,” because it could be argued that Mr. Grabow did steal city assets.

Regarding the first two factors, the court held that the statement that Mr. Grabow was “a convicted felon” was factual in nature, as opposed to mere hype or opinion. Accordingly, this factor leaned toward a potential finding of liability. The court then held that the assertion that Mr. Grabow was a convicted felon was verifiable, because it could be proven as true or untrue. Accordingly, that factor too made the statement seem like actionable fact versus protected opinion.

Regarding the third factor—the immediate context of the statement—the court found that it unlikely that an average reader would believe the statement that Mr. Grabow was “a convicted felon” to be factual. The court noted that the words “OUR OPINION” began the editorial, in large bold font. To the court, this meant that the statements contained in the article would be merely opinion. The court explained: “[C]onsidering the defamatory statement in the context of the entire editorial, we conclude that an average reader would be unlikely to infer that the statement [that Mr. Grabow was a convicted felon] was meant to be factual.” The court noted that the editorial was meant to outrage the reader, and was designed to be persuasive, not factual. Accordingly, the third factor weighed against actionability.

Finally, the fourth factor considered the broader context of the statement. The court noted that the general tone of the editorial was sarcastic, which was more typical of persuasive speech than factual reporting. Also, the writer was an opinionated columnist, which added further context. Finally, the writer made race-based analogies and inferences, which the court felt would make any reader believe that everything contained in the article was opinion: “[A] reasonable reader would interpret that statements made in the entire editorial as being opinion rather than fact.”

The court of appeals therefore found the assertion that Mr. Grabow “was a convicted felon” to be constitutionally protected opinion. Mr. Grabow, convicted felon or not, could not recover as a matter of law.

Texas Supreme Court Protects Satire In A Libel Suit Context

In one of the more interesting First Amendment cases in the last several years, the Texas Supreme Court unanimously ruled that satire is a protected form of free speech, even if it is not clearly labeled or attributes false quotes to real public officials. The September 3, 2004 decision in New Times, Inc. d/b/a Dallas Observer, et al. v. Bruce Isaacks and Darlene Whitten puts an end to a libel suit filed five years ago by two Denton County, Texas elected officials against the Dallas Observer, a weekly alternative newspaper. New Times owns the Dallas Observer.

The Texas Supreme Court recently ruled that a fictional newspaper article was satire and did not libel two county officials. In November 1999, a seventh grader in Ponder, Texas was arrested and detained by two county officials after authorities deemed that the Halloween story he wrote as a school assignment contained terrorist threats. Subsequently, the Dallas Observer published a satirical article ridiculing the officials involved in the incident. The fictitious article entitled “Stop the Madness” described the arrest and detention of a six year old girl who wrote about cannibalism, fanaticism, and disorderly conduct in her book report on Maurice Sendak’s classic children’s book, Where the Wild Things Are. The piece included multiple false factual assertions and quotes and attributed fabricated words and conduct to District Attorney Bruce Isaacks and Judge Darlene Whitten.

Isaacks and Whitten filed a complaint against the owners, publishers, writers, and editors of the Dallas Observer claiming that they were libeled by the article. One of the defendants moved for summary judgment, arguing that the average reader would understand the article as a parody rather than statements of fact about the plaintiffs. The trial court denied the summary judgment motion, holding that there was a fact question as to how the reasonable reader would understand the article. The court of appeals affirmed. The Texas Supreme Court granted the defendants’ petition for review to address the First Amendment issues.

The court limited its analysis to the First Amendment of the U.S. Constitution, stating that its concerns were congruent with those of the Texas Constitution. The court then considered how to best balance the First Amendment protection for satirical communications with potential defamation liability. The court concluded that an objective test evaluating whether the publication could be reasonably understood as describing actual facts provided the appropriate balance. The test does not inquire whether some readers were misled or whether readers actually understood the satire, but rather asks whether a reasonable reader would conclude that the piece conveys statements of fact.

Accordingly, the court analyzed whether a reader of ordinary intelligence would interpret the “Stop the Madness” article taken as a whole in light of the surrounding circumstances as stating actual facts. The article contained clues that involved exaggeration or distortion, which collectively suggested it was a satire. For example, a photo of a small child holding a stuffed animal captioned “Do they make handcuffs this small? Be afraid of this little girl” was placed next to the article. Further, the article included a fabricated quote attributed to then-Governor George W. Bush stating that the children’s book clearly had “deviant, violent, sexual overtones” and referenced a freedom opposing religious group with the acronym, “‘GOOF.’” In addition, the reference in the article to the actual incident involving the seventh grader provided a signal to the reader that the article was a commentary on that controversy.

The fact that the article was printed in the news section did not necessarily imply that the piece contained true statements. The Dallas Observer was an alternative weekly newspaper that reported “‘the news in context with perspective and sometimes with an individual’s voice” and had published other satirical pieces. Thus, the reasonable reader would not presume that an article in the news section the Observer was an actual news story.

Lastly, the court asserted that even if the article were reasonably understood as stating actual facts, the respondents were still required to prove actual malice to prevail on their claims. The proper inquiry was whether the publisher either knew or had reckless disregard for whether the article could reasonably be interpreted as stating actual facts. The defendants provided detailed credible affidavits stating that there was no intent that “Stop the Madness” be taken as stating actual historical fact. These affidavits not only denied actual malice, but further provided an explanation of the steps taken to ensure that the article was to be taken as fiction. The court therefore held that the defendants adequately established lack of actual malice. For these reasons, the article contained speech protected by the First Amendment and did not libel the county officials.

The Texas Supreme Court’s full opinion on New Times, Inc. d/b/a Dallas Observer v. Isaacks et al. can be found at www.supreme.courts.state.tx.us, Case No. 03-0019.

Satire and Parody in the Broadcast Context

The decision of the Texas Supreme Court in the New Times, Inc. case is consistent with other cases that have analyzed the parody and satire issue in the broadcast context.

Broadcasts that are parodies or satires also may invite a defamation lawsuit. In one case, a public figure sued a radio station for defamation for broadcasting a song poking fun at his financial and legal troubles. In dismissing the lawsuit, the court noted, “In cases involving comedic expressions, courts must examine the challenged statement in light of its content, its effect on its audience, and the context of its delivery.” The court found that the parody of Check Berry’s “Roll Over, Beethoven” was “intended to amuse, rather than to injure” and that its nonsensical lyrics would alert even the most careless listener to the comedic intent. The song was broadcast during the radio station’s morning comedy program, a context that would alert listeners that the song was a parody. Considering all these factors, the court found that “a reasonable listener could not have helped but find the song humorous.”

Access / Public Records

Ohio Probate Court Treats Court Records Posted on Internet the Same as “Public Records”

In early 2004, in the Probate Court of Hamilton County, an estate filed for an order prohibiting the court from scanning for display on the internet all records in the case and to remove all records of the case previously displayed on the internet because said records contain sensitive financial information. The probate court declined. See In re Estate of Engelhardt, Ham. Cty. Probate Court, February 2004.

In its motion, the Estate of Robert J. Engelhardt, Sr. acknowledged that the documents filed in the case were public records within the meaning of Ohio’s Public Records Act, and that such records were generally available for public inspection. The estate, however, requested that the court fulfill its obligation to provide public access to the court’s public records by making these records available only at the court or upon specific request, but not on the court’s web site. The estate further suggested that the court should only make the docket available on the web site rather than providing full internet access to all court records which the public currently enjoyed on that web site.

In analyzing the request, the probate court explained that the existing process of the court was to maintain and make available its records in one or all three of the following possible media: paper, microfiche, and/or electronic. The court further explained that when a document is filed with the court, it is scanned as a part of the court’s management system. Once scanned, this filing is simultaneously made available on the internet. These documents are then available for public review 24 hours a day on the internet.

Pursuant to the Ohio Public Records Act, all public records shall be made available for inspection to any person at all reasonable times during regular business hours. As well-established in Ohio, court records are subject to disclosure under the Public Records Act. Here, the Estate acknowledged that the documents filed in the case were public records and did not fit any exceptions set forth to the Act. Public offices further have the discretion and authority to provide access to their public records on their internet web sites. Accordingly, in this situation, given that the court exercised its discretion to provide public access to its public records via its internet web site, the issue becomes whether the court may remove those records from the internet upon request. Several legal authorities have previously suggested that once a court chooses to provide access to its public records through the internet, it should treat the removal of those records from the internet in the same manner that it would treat removal or sealing of those records from public access at the court. Sealing court records involves balancing the requirements of open court records under the First Amendment and the Ohio Public Records Act against an individual’s right to privacy.

In analyzing these issues, the Probate Court of Hamilton County found that, because the internet is a “medium” under the Ohio Public Records Act, the court is obligated to make public records available on the internet because it communicates those records to the public through the internet. Under this analysis then, the court found that it must treat the public records its posts on the internet in the same manner as it treats public records maintained at the court. Therefore, the probate court felt that it had no discretion to remove from the internet any public records that it continues to make available publicly at the court.

Texas Open-Records Law Prevails Over HIPAA

Federal medical-privacy rules that took effect during 2003 do not prevent Texas police officers and other state agencies from releasing patient information under the state’s open-records law, Texas Attorney General Greg Abbott ruled on February 13, 2004. (Open Records Decision No. 681)

The decision is possibly the first in the country to resolve the potential conflict between the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, and a state’s open-records law.

The federal law, which took effect in April 2003, forbids “covered entities” such as health care providers from releasing an individual’s health information without that person’s permission.

In Texas, a governmental agency that is a “covered entity” must evaluate open-records requests for health information by applying the state’s Public Information Act, not the more restrictive federal law, Abbott wrote.

Abbott was responding to questions from state Sen. Robert Duncan, who asked whether the Lubbock Fire Department and city emergency medical workers could disclose medical information they either observed firsthand or received from a hospital.

Duncan also asked whether the Lubbock Police Department could disclose to the public medical information it received from a hospital regarding accident victims, crime victims or criminal suspects.

Abbott noted that HIPAA allows disclosure of protected health information if such disclosure is required by law. Because the Texas Public Information Act imposes a legal obligation on governmental bodies to release requested health information, state agencies must evaluate such requests under the state law and not HIPAA, Abbott wrote.

However, medical information could still be withheld from disclosure if an exemption to the Public Information Act applied. Other provisions of state law that protect the privacy of health information could also prevent disclosure.

Importantly, Abbott stated that a police officer is not a “covered entity” under HIPAA and is not forbidden by that law from disclosing health information the officer observed firsthand or obtained from a covered entity, such as a hospital.

More significantly, the federal Office for Civil Rights has advised that the federal Freedom of Information Act prevails over HIPAA when federal agencies receive open-records requests for protected health information, Abbott wrote.

Abbott’s opinion applies only to requests made under the Texas Public Information Act. HIPAA would apply to all other requests for protected health information from government agencies that are covered entities.

Fourth Circuit Affirms Unsealing Of Police Investigation Records

The public has a First Amendment right to police records filed under seal in a civil rights lawsuit brought by a man who was convicted of murder but later pardoned, the U.S. Court of Appeals for the Fourth Circuit ruled on October 1, 2004. Virginia Department of State Police v. Washington Post, No. 04-1375.

The Virginia Department of State Police argued that the investigative documents should remain sealed because they contained information about a suspect in the murder for which Earl Washington Jr. was convicted. However, because information about the suspect, including his name, had already been publicized, the appellate court agreed with the trial judge that the police department failed to present a compelling interest in keeping the records sealed.

Ultimately, the court affirmed the trial judge’s decision to unseal most of the documents. With regard to four of the sealed documents, the three-judge appellate panel remanded the issue with orders to the trial judge to give specific reasons why the documents should or should not be unsealed under the First Amendment and common law.

The case springs from Washington’s conviction for the 1982 rape and murder of Rebecca Lynn Williams. Washington’s death sentence was eventually commuted to life in prison. He was pardoned in 2000 when DNA tests cleared him of the crime.

Washington filed a civil rights lawsuit against the Virginia state police in 2002 and demanded all police investigatory documents related to the murder. The police department initially refused to release documents that it asserted were part of the ongoing criminal investigation file. Eventually, the police department provided all of the documents to Washington under a protective order that restricted access to the documents to the parties, their attorneys and expert witnesses.

Later, Washington moved to lift the protective order, and The Washington Post and other media organizations intervened to gain access to the documents. The police department filed a “statement of compelling reasons” arguing that some documents could be unsealed in redacted form, but that other documents (labeled Exhibits A through T) should remain sealed because they concerned a “certain suspect” and forensic testing relating to the suspect. The district court agreed to unseal some documents after redaction, to keep other documents sealed, and to unseal all of the other documents.

Based on the unsealed records, newspapers reported the name of the suspect and that the suspect’s DNA matched samples at the crime scene. The district court then ordered the unsealing of all documents except one, which the media parties did not seek to unseal. The court reasoned that there was no compelling interest in keeping those documents sealed when the suspect’s identity had been publicly disclosed and widely reported.

The police department filed a motion to stay the order pending an appeal. The district court granted the stay and denied Washington’s motion to lift the protective orders.

On appeal, the Fourth Circuit noted that the common law presumes a right of the public to inspect and copy all judicial records and documents. The presumption can be overcome upon a showing of some significant interest that outweighs the right of access.

In contrast, the First Amendment right of access is stronger, the appellate court wrote. While it has been applied only to particular judicial documents, the First Amendment right can be defeated only on the basis of a compelling governmental interest and only if denial of the right is narrowly tailored to serve that interest.

In addition, a court faced with a request to seal records must follow certain procedures.

A court must give the public notice of the request to seal and must give the public a reasonable opportunity to challenge the request. It must consider less drastic alternatives to sealing. Finally, if a court decides to seal records, it must state the reasons for its decision and the reasons for rejecting alternatives.

The Fourth Circuit panel noted that the right of access applies to documents in civil as well as criminal cases. Discovery materials, such as some of the documents at issue in this case, are subject to the right of access once those materials become attached to a dispositive motion, the court noted.

The appellate panel agreed that “a compelling governmental interest exists in protecting the integrity of an ongoing law enforcement investigation. However, not every release of information contained in an ongoing criminal investigation file will necessarily affect the integrity of the investigation.”

Unsealing police documents that have become public knowledge would not endanger an ongoing investigation, the panel decided.

The court held that Exhibit T, a portion of a hearing transcript concerning discovery matters, should be unsealed. The police department failed to offer any reason why the transcript should remain sealed.

As for four remaining documents, the trial judge assumed that the public had a right of access to them. “We are not at all convinced that this is a correct assumption,” the appellate panel wrote. The court ordered the trial judge to re-examine those documents.

FCC / FTC

CAUTION: Congress and FCC Crack Down on Indecency

After Janet Jackson bared her breast on CBS’s broadcast of the 2004 Super Bowl half-time show, both Congress and the Federal Communications Commission got busy churning out anti-indecency legislation, administrative rulings and fines with bullish momentum.

The House of Representatives voted overwhelmingly, 391-22, to approve legislation that would not only hike the cap on fines for an indecent broadcast from $27,500 to $500,000, but would also make the individual performers personally liable for fines up to $500,000. The House vote closely followed a unanimous vote in the Senate Commerce Committee on a separate bill that would allow the FCC to double the $500,000 penalty in egregious cases. Both bills would place a broadcaster’s license in jeopardy and some legislators have attempted to broaden the legislation to regulate cable television in an area heretofore not subject to FCC regulation.

Meanwhile, the FCC issued fines against broadcast media stations with unprecedented ferocity. Clear Channel paid a record $755,000 fine primarily for the antics of Florida-based DJ “Bubba the Love Sponge.” Clear Channel terminated Bubba the Love Sponge and adopted the broadcasting industry’s toughest “zero tolerance” policy against indecent material. Clear Channel also dropped the Howard Stern Show from all of its stations based upon material it views as indecent.

Thereafter, the FCC reversed its previous ruling that rock star Bono’s utterance of the F-word during the 2003 Golden Globe Awards on NBC did not violate FCC regulations. Under FCC rules, broadcasters may not air material that is “patently offensive” and contains references to sexual or excretory functions between 6 a.m. and 10 p.m. The previous ruling of the FCC Enforcement Bureau essentially found that Bono’s use of the F- word did not fall within the definition of indecency because it was used “as an intensifier” and did not depict sexual activity. The new ruling held that any use of the F-word is both patently offensive and indecent.

While the new “zero tolerance” policy for the use of the F-word does provide some clarification regarding FCC rules, Congress’ proposed legislation, coupled with the plethora of fines being issued, is clear evidence that many ambiguities and First Amendment issues still remain.

For the time being, the best advice to any who are wary of your wallet is to be cautious of any off-color material. The FCC’s actions during 2004 make it clear that the use of the F-word and other similar words on the air may be speech, but, in the current climate, is anything but free.

REMINDER: FTC CRACKDOWN ON BOGUS WEIGHT LOSS ADS

FTC Launches Bogus Website to Educate About Weight Loss Claims

In 2004, the Federal Trade Commission notified at least nine magazines that they were running ads which contained fraudulent weight loss claims. Rather than taking enforcement action against the publications, the FTC is attempting to work cooperatively with the magazines to educate them about false advertising. In this regard, to assist publishers with advertising review, the FTC issued a list of inaccurate claims being used by companies that produce weight loss products. Publishers are advised to avoid publishing ads with the objectionable claims. Additionally, the FTC launched a bogus weight loss site to educate publishers and the public about fraudulent weight loss claims.

REMINDER: FCC RULES REGARDING RECORDING & BROADCASTING TELEPHONE CONVERSATIONS

As a general rule, no legal problems arise when all parties to a telephone conversation are aware that the conversation will be recorded and consent to that recording in advance.

For non-broadcast purposes, the recording of a telephone conversation is generally permitted under federal law if a beep tone is used, all parties consent, or one party announces to the other at the beginning of the call that it is being recorded. (Note: Since several states have enacted statutes controlling non-broadcast recording, one should check any applicable state law in jurisdictions in which they do business.)

With respect to the over-the-air broadcasting of telephone conversations, FCC rules require a broadcast station to notify parties of the intention to broadcast telephone conversations prior to recording and/or broadcasting any conversation. The notification requirement applies whether the conversation is being recorded or broadcast live. The only time prior express notification is not required is when the party “is aware or may be presumed to be aware from the circumstances of the conversation, that it is being or likely will be broadcast.” This notification must be given before any portion of the conversation is broadcast live or recorded for later broadcast.

For more information, see Broadcast of Telephone Conversations, 47 C.F.R. § 73.1206 or visit http://www.fcc.gov/eb/broadcast/telphon.html.

First Amendment

Ninth Circuit Affirms Former Baseball Star Steve Garvey Not Liable In FTC Action Over Infomercial Endorsement

On September 1, 2004, the Ninth Circuit held Steven Patrick Garvey, a retired first baseman for the Los Angeles Dodgers, not liable for statements he made while appearing in infomercials for weight loss supplements. Enforma Natural Products (“Enforma”) marketed two dietary supplements, “Fat Trapper” and “Exercise in a Bottle.” Together, these two products constitute the “Enforma System.”

Garvey made a number of statements regarding the Enforma System, including the following:

“Forget all those complicated, expensive diets that deprive you. With all natural Fat Trapper and Exercise in a Bottle – the Enforma System – you simply take Exercise in a Bottle twice a day and Fat Trapper before any meal that contains fat. Then go ahead and enjoy the foods that you love without the fear of fat. It’s that easy.”

After filming two infomercials, Garvey made several radio and television appearances to promote the Enforma System. From December 1998 to December 2000, Enforma’s sales exceeded $100 million.

The lawsuit against Garvey came after the FTC had pursued similar claims against Enforma. Indeed, the FTC settled claims against Enforma and related entities, which required Enforma and others to pay $10 million to the FTC, as well as prohibited Enforma from undertaking specific conduct in the future. Despite this settlement, the FTC filed an action against the Garvey defendants – as well as the video production company and other individuals – alleging that the defendants, in marketing the Enforma System, violated sections 5(a) and 12 of the Federal Trade Commission Act (“FTCA”).

The Ninth Circuit affirmed the district court, and rejected the FTC’s claims that Garvey should be held liable as a “direct participant” in the making of false advertising claims or under the principles of “endorser” liability.

Commenting that the trial judge’s findings of fact are reviewed for clear error, the appellate court found that Garvey had sufficient substantiation to avoid participant liability. Specifically, the court noted that: 1) Garvey himself used the system and lost approximately eight pounds during a 3-4 week period; 2) Garvey’s wife lost approximately 27 pounds on the Enforma System; 3) Garvey received and reviewed two booklets containing substantiation materials for the system; and 4) Garvey met and spoke with several individuals who had experienced “positive results” using the Enforma System.

Noting these facts, the Ninth Circuit found that the FTC failed to show that Garvey was recklessly indifferent to the truth of his statements or was aware that fraud was highly probable and avoided the truth. Indeed, the FTC did not present any evidence that Garvey was aware that the statements he made were false.

Similarly, the court also rejected the FTC’s argument that Garvey was liable under the FTC’s “endorser” theory of liability on the basis of the FTC Guides Concerning Use of Endorsements and Testimonials in Advertising (“the Guides”). According to the Guides, an “endorsement” is “any advertising message . . . which message consumers are likely to believe reflects the opinions, beliefs, findings, or experience of a party other than the sponsoring advertiser.” Referencing the highly deferential “clearly erroneous” standard of review for findings of fact, and that there was competing expert testimony on the issue, the Ninth Circuit held that Garvey was also not liable as an “endorser” under the FTC’s Guides.

The decision is the highest ruling to date addressing the FTC’s policies on celebrity endorsements. The decision does make clear, however, that celebrity endorsers may be held liable – particularly in the hot bed of weight loss products which has been the focus of the FTC for years – for merely accepting endorsement fees and reading a script.