Lead Opinion
The issue on review is the standard of culpability that these plaintiffs must prove in order for a court or jury to hold media defendants liable for defamation.
Plaintiffs Bank of Oregon and Wadsworth, its president, brought this libel action against defendants Independent News, Inc., publisher of the “Willamette Week,” and Buel and Meeker, two reporters for the newspaper. Plaintiffs pleaded that defendants wrote and published an article which was false and defamatory with knowledge of its falsity or reckless disregard of its truth or falsity and with an actual intent to defame plaintiffs. Plaintiffs alleged damages total-ling $7,400,000 as a result of the defamation. Plaintiffs requested defendants to publish a retraction of the defamatory statements in the article and defendants refused to do so.
The article was entitled “A Lot Off the Top” and dealt at some length with banking transactions involving plaintiffs and Richard Cross, the primary source of information for the article. The article as a whole indicated that plaintiffs had engaged in numerous wrongful acts to divert Cross’ money and credit to another bank customer.
Plaintiffs filed a complaint on August 3, 1979. After extensive discovery, defendants moved for summary judgment on October 21, 1981. Plaintiffs moved to amend their complaint on January 29, 1982, to include an allegation that defendants had negligently published the article; that is, published it without due care to ascertain whether the articlе was' true. The trial judge denied the motion to amend on the stated ground that negligence was not a proper standard in this case for proof of defendants’ culpability in publishing the article.
The trial judge entered summary judgment for defendants, reading into the record his belief that the plaintiffs must prove gross negligence on the part of defendants to prevail, and that plaintiffs had not demonstrated sufficient facts to prove that defendants, judged by an objective standard, had engaged in reckless conduct.
Although thе issue raised in this case will ultimately require analysis of the Oregon and United States Constitutions, we shall first examine the Oregon common law on libel. Once the standard of liability required under Oregon caselaw is determined, we will ascertain whether that standard is consistent with the Oregon Constitution. If so, we will decide whether that standard is consistent with the federal constitution as interpreted by the Supreme Court of the United States.
The action of defamation is brought by a person who has been libelled or slandered by the utterance of another. To be actionable, the utterance must defame the person bringing the action. Three categories of affirmative defenses are available: (1) the utterance was true; (2) the utterance was absolutely privileged; or (3) the occasion of the utterance was qualifiedly privileged. The latter defense, unlike the others, does not bar the action, but requires plaintiff to prove that the defendant acted with actual malice.
At Oregon common law, lack of culpability could establish a defense to a libel action in certain circumstances. Where the qualified privilege of “fair comment and criticism” was applicable, the defendants would not be liable if the publication was made in good faith and without malice. Peck v. Coos Bay Times Pub. Co.,
Kilgore v. Koen,
The facts in Marr v. Putnam,
These three cases required proof of actual malice only where the defamatory statements are qualifiedly privileged. The qualified privileges discussed do not encompass the
Defendants argue that Article I, sectiоn 8 of the Oregon Constitution precludes the imposition of liability without fault for a defamatory publication. Plaintiffs disagree and allege that Article I, section 10 of the Oregon Constitution requires that a remedy be provided for injury to reputation. Article I, section 8 provides:
“No law shall be passed restraining the free expression of opinion, or restricting the right to speak, write, or print freely on any subject whatever; but every person shall be responsible for the abuse of this right.”
Article I, section 10 provides:
“No court shall be secret, but justice shall be administered, openly and without purchase, completely and without delay, and every man shall have remedy by due course of law for injury done him in his person, property, or reputation.”
A tension exists within Article I, section 8 between the right to communicate on any subject whatever and the abuse of this right. There is no basis under the Oregon Constitution to provide more protection to certain non-abusive communication based upon the content of the communication. Speech related to political issues or matters of
Article I, section 8 does not provide the media with any protection not available to other citizens. It is settled Oregon law “that in the absence of a statute, newspapers as such have no peculiar privilege but are liable for what they publish in the same manner as the rest of the community.”
No Oregon Supreme Court case interprets the standard of liability under the Oregon Constitution in a defamation action.
Two recent cases have held that the common law standard of liability applies where the plaintiff is not a “public figure” and the defendant is not part of the media. Wheeler v. Green, supra; Harley-Davidson v. Markley,
Defendants also argue that the First Amendment to the United States Constitution
We must first determine whether plaintiffs are “public figures” under federal caselaw interpreting the first amendment in defamation cases. The Supreme Court of the United States first addressed this concern in the consolidated cases of Curtis Publishing Co. v. Butts,
“Butts may have attained that status by position alone and Walker by his purposeful activity amounting to a thrusting of his personality into the ‘vortex’ of an important public controversy, but both commanded sufficient continuing public interest and had sufficient access to the means of counterargument argument to be able ‘to expose through discussion the falsehood and fallacies’ of the defamatory statements.”
Gertz v. Robert Welch, Inc., supra, determined that an attorney who represented the family of a boy slain by a police officer was not a public figure. The Court reiterated its two-pronged standard for public figures and stated:
“Absent clear evidence of general fame or notoriety in the community, and pervasive involvement in the affairs of society, an individual should not be deemed a public personality*443 for all aspects of his life. It is preferable to reduce the public-figure question to a more meaningful context by looking to the nature and extent of an individual’s participation in the particular controversy giving rise to the defamation.”
In Hutchinson v. Proxmire,
Defendants concede that no such pre-existing public controversy was present in the instant case. Those cases cited by defendants and amici which hold a business entity to be a public figure based on analysis of a thrusting into the vortex of a public controversy are inapposite. See National Foundation for Cancer Research v. Council of BBB, 705 F2d 98 (4th Cir), cert. denied
Defendants argue that the Bank of Oregon is an all purpose “public figure.” Three cases, supported by entirely different rationales, support this argument. Martin Marieta Corp. v. Evening Star Newspaper,
Defendants also argue that Wadsworth is an all purpose public figure. We agree with the Court of Appeals that this argument is “patently unmeritorious,” especially in light of the recent emphasis on the limited purpose public figure analysis by the Supreme Court of the United States. Cases cited by defendants and amici in support of this argument are not helpful or persuasive. See Ryan v. Brooks, 634 F2d 726 (4th Cir 1980) (dicta); Miller v. Transamerican Press, Inc., 621 F2d 721 (5th Cir 1980) (no analysis), cert. denied
Because neither plaintiff is a “public figure,” the New York Times actual malice standard, knowledge of falsity or reckless disregard for truth, is not applicable in the instant case.
Therefore, we reach the other portion of Gertz v. Robert Welch, Inc., supra, which established that a state could not impose liability without fault on a media defendant, even where the plaintiff was a “private individual.” There is no question that each of the defendants in the instant case is a media defendant, entitled without doubt to the protection provided in Gertz. In order to protect the first amendment rights of the instant defendants, plaintiffs must prove that the false and defamatory statements were made negligently, i.e., without due care to ascertain whether they were true. In addition, Gertz mandates that “[i]t is necessary to restrict defamation plaintiffs who do not prove knowledge of falsity or reckless disregard for the truth to compensation for actual injury.”
The standard of care for those allegedly defamatory statements that require proof of negligence should be ordinary negligence, neither gross negligence as suggested by the trial judge nor the care of a reasonably prudent, careful and skillful journalist as held by the Court of Appeals. We agree with the Court of Appeals, however, that comparison оf defendant’s
Because plaintiffs need to prove that defendants were negligent in publishing the article, the trial court’s denial of plaintiffs’ motion to amend the complaint on the ground that negligence was not the proper standard was incorrect. Although the motion was also challenged on the basis that it was untimely, in determining the extent of a trial judge’s ruling, we look to the order issued to disposebf the motion. See State v. Swain/Goldsmith,
Summary judgment is proper only where there is no “genuine issue as to any material fact for trial.” ORCP 47D. Summary judgment for defendant should only be granted where the trial court is convinced that defendant’s conduct meets the applicable standard of liability. Uihlein v. Albertson’s, Inc.,
The decision of the Court of Appeals is affirmed and the case is remanded to the circuit court.
Notes
The trial judge equated gross negligence with reckless conduct. We are not certain that the two are equivalent in a defamation case but do not need to decide this issue to resolve this case.
Kilgore v. Koen,
As this review is of summary judgment for defendant, we assume the statements were false and defamatory. If any one of the 46 statements alleged by plaintiffs to be libelous was not privileged, undеr the common law summary judgment for defendant should not have been entered. Defendants claim that two distinct privileges obtain with respect to certain of the statements. They claim that certain statements were comments on judicial proceedings and thus privileged. Peck dictates that if such a claim is correct as a matter of law, the jury should be instructed accordingly.
Oregon statutes do distinguish between media defendants and others. See, e.g., ORS 30.150 to 30.175. These statutes provide that a defamation plaintiff may not recover general damages against a media defendant unless a correction or retraction of the publication is demanded but not published or the defamation was intentional. This statutory requirement does not violate Article I, section 10 of the Oregon Constitution. Davidson v. Rogers,
Wheeler v. Green,
The correctness of these decisions as a matter of federal constitutional law soon may be decided. The Supreme Court of the United States granted certiorari to review Greenmoss Builders, Inc. v. Dun & Bradstreet, Inc., 143 Vt 66,
This amendment provides in part:
“Congress shall make no law * * * abridging the freedom of speech, or of the press * * *.”
It is applicable to the states through the fourteenth amendment.
Baker v. Brookmead Dairy, Inc.,
Concurrence Opinion
concurring in part, dissenting in part.
I concur with the majority’s analysis under the state constitution that Article I, section 8 provides no greater protection to media defendants as compared to other defendants. I also agree that Wadsworth is not a “public figure” for purposes of the federal constitutional analysis. I dissent, however, with regard to the Bank of Oregon. The bank meets the requirements of a “public figure” as that term has developed in federal dafamation jurisprudence.
The United States Supreme Court has held that media defendants enjoy a conditional constitutional immunity from liability for publication of defamatory falsehoods. New York Times Co. v. Sullivan,
In Coronada Credit Union v. KOAT Television,
“It seems clear * * * that any publicly held corporation is a*448 ‘public figure’ for purposes of commentary about its corporate affairs. When a corporation ‘goes public’ by publicly offering its securities, it has taken a specific, voluntary action, the known result of which will be mandatory increased public scrutiny. The necessary consequence is publicity.
“It is consistent with both First Amendment policy and the aims of federal and state securities laws for commentary about such corporations to be encouraged and protected. Corporations subject to regulation by state or federal authorities are similarly ‘public,’ again inviting public scrutiny by voluntarily entering such businesses. And corporations that have the requisite level of dealings with government agencies may be ‘public figures’ for that reason alone. (Emphasis in original.) (Footnotes omitted.)
American Ben. Life Ins. Co. v. McIntyre, 375 So 2d 239 (Ala 1979) (per curiam), held an insurance company to be a public figure with the following analyis:
“We hold that аn insurance company such as American Benefit is for purposes of our libel laws a ‘public figure.’ It cannot be successfully argued that a corporation whose dealings are subject to close regulation by our state government, and, indeed, whose very existence as an entity is owing to that government, does not invite attention and comment from the news media. The insurance business has long been held to be clothed with the public interest, * * * and the power and influence of such a business over society cannot be ignored.” 375 So 2d at 242. (Citation omitted.)
A commentator has examined the question of where corporations fit in the public vs private plaintiff analysis. She advocates the position that
“the corporate defamation plaintiff more nearly resembles the public figure than its private counterpart. A corporation is inherently less vulnerable to reputational injury than an individual and can utilize political and commercial speech to build its image and discredit its detractors. In addition, a corporation has voluntarily assumed the unique trappings of the corporate business form and, through the more public and formalized character of its inception and operation, has assumed the risks of free debate.” Fetzer, The Corporate Defamation Plaintiff as First Amendment “Public Figure”: Nailing the Jellyfish, 68 Iowa L Rev 35, 49 (1982). (Footnotes omitted.)
This author examined a 1908 Kansas decision, the
Not surprisingly, a large insurance company with stocks traded on the New York Stock Exchange was held to be a public figure. Reliance Insurance Co. v. Barron’s,
Martin Marietta Corp. v. Evening Star Newspaper,
Rosenbloom’s shift in focus from the public character of the plaintiff to the public character of the issue was cut short in Gertz v. Robert Welch, Inc., supra. Gertz involved a private plaintiff. The media defendant attempted to apply the Rosenbloom analysis to bring itself within the conditional constitutional privilege for matters of public interest. Gertz rejected this approach, reasoning that the reputation of private individuals requires a greater degree of protection than
“Hypothetically, it may be possible for someone to become a public figure through no purposeful action of his own, but the instances of truly involuntary public figures must be exceedingly rare. For the most part those who attain this status have assumed roles of especial prominence in the affairs of society. Some occupy positions of such persuasive power and influence that they are deemed public figures for all purposes. More commonly, those classed as public figures have thrust themselves to the forefront of particular public controversies in order to influence the resolution of the issues involved. In either event, they invite attention and comment.”418 US at 345 .
It should be noted that the majority uses Gertz’s reference to the rarity of “involuntary” public figures in support for its argument that the Bank of Oregon is not a public figure. Under my analysis, a corporation is considered a public figure because of its voluntarily assumed corporate activity.
The Gertz court fоund that the assumptions attributed to public figures are not justified with regard to private individuals.
“[The private individual] has not accepted public office or assumed an ‘influential role in ordering society.’ * * * He has relinquished no part of his interest in the protection of his own good name, and consequently he has a more compelling call on the courts for redress of injury inflicted by defamatory falsehood. Thus, private individuals are not only more vulnerable to injury than public officials and public figures; they are also more deserving of recovery.”418 US at 345 . (Citation omitted.)
Martin Marietta concluded that Gertz did not apply to corporations and Rosenbloom was still controlling. The inquiry then became whether the falsehoods concerned a matter of public interest. The court found that thеy did and applied the malice standard.
In some respects, the Martin Marietta analysis is
“[T]he ‘public figure’ standards set out in Gertz are designed to ascertain whether a person, through his activities, has lost claim to his private life. It makes no sense to apply these standards to a corporation, which, regardless of its activities, never has a private life to lose.”417 F Supp at 955 .
There are certain characteristics of corporаtions which provide an objective standard by which to categorize the public or private nature of the enterprise. The degree of government regulation imposed on a corporation is perhaps the single most important determinant. As government regulation increases, so does the corporation’s overall exposure to public scrutiny. Exposure comes in the form of disclosure and reporting requirements, administrative inspections and audits, and compliance with rules and regulations of public record for conducting business. Often, extensively regulated corporations deal in such essential commodities as transportation, financе and insurance. Their efficient management cannot be a matter solely of private institutional concern.
Not all corporations would fit this “public figure” model. Corporations subject only to the regulations established by state law for corporate existence would not become public figures by virtue of such minimum regulation alone.
The resolution of more difficult cases lying between these two extremes may await further refinement and need not be considered here. Banking is a pervasively regulated business in which public scrutiny is the norm. Defendants’ article questioned the integrity of certain financial transactions of plaintiff bank, a topic of which public review is anticipated. I would hold the Bank of Oregon to the requirement to prove malicious defamation, and, with regard to this plaintiff, affirm the trial court.