In Re: Ibp Confidential Business Documents Litigation. Hughes A. Bagley v. Iowa Beef Processors, Inc.

BRIGHT, Before FAGG, ARNOLD and Judges. Circuit BRIGHT, Judge. Circuit Hughes brought A. Bagley this action1 Processors, (IBP), Iowa Beef Inc. libel, claiming damages for invasion pri- vacy, and tortious interference with em- ployment,2 resulting all from a letter writ- ten IBP congressional to a subcommit- in which IBP tee in essence called Bagley a jurisdiction liar and thief. Federal rests diversity citizenship. on After twelve trial, days of jury IBP found liable on all three claims and awarded com- pensatory punitive damages of $8.75 million.3 The district court entered final judgment, post-trial as modified after mo- McManus, 1. Before the Honorable Edward J. COMPENSATORY PUNITIVE Judge, United Chief States District Court for the DAMAGES CLAIM_ DAMAGES_ Northern District of Iowa. Libel $1,000,000 $5,000,000 Privacy Invasion of 250,000 addition, Bagley 1,500,000 a suit claimed that IBP Tortious Interference with against him in filed 1977 constituted an abuse Employment 150,000 500,000 process. The district court ruled Tortious Interference with applicable statute of barred this limitations Prospective 100,000 Advantage 250,000 ruling appeal. is not in claim. This issue $1,500,000 $7,250,000 jury 3. The returned a verdict as follows: not), they Bagley pu-

tions,4 appeals. false or could award million. $9.33 nitive as well. interference award for tortious affirm existing employment and reverse the judgment with post-trial In its motion for not interference libel and tortious withstanding alternatively verdict awards trial, IBP employment. argued for a new that the district future instructing jury, erred in so court submitting Bagley’s claim of libel to judgment entered on the claims libel the district court instructed jury, derogation of IBP’s first amendment damages Bagley jurors that to recover contended, rights. among other by preponderance of the evi- prove must things,5 allegedly letter libelous dence: subsequent republicatiоns and the thereof published a letter con- 1. That [IBP] privileged, urging applicability of cerning [Bagley] which was a libel as 1) following: privilege the absolute defined in these instructions. that term is common law afforded statements made 2) legislative proceeding, the course of a published letter That the with 2. [IBP] Noerr-Pennington (Eastern the doctrine knowledge that it was false. Railroad Presidents v. Noerr Conference by read members That the libel was 3. Inc., Freight, Motor U.S. general public. the (1961) 5 L.Ed.2d 464 and United Mine proximate That as a result 4. [IBP’s] Pennington, Workers actions, damages. [Bagley] sustained (1965)), S. Ct. L.Ed.2d 626 which court further instructed the The district protects attempts petition fide bona allegedly defamatory state- jury that the 3) law, government, right, at common congressional in IBP’s letter to the ments appropriate reply in an manner to se, per creating subcommittee were libelous accusations, 4) the “actual malice” legal presumption falsity their thus liability, “a presump standard of than rather shifting proving liability, Bagley’s alleged burden of tive based on sta [IBP] public figure. tus as a limited IBP also presump- of the statements” and “a truth that the contended district court unconsti injury damage if actual tion of even tutionally imposed by liability without fault proved.” pecuniary cannot be As instructing jury presume falsity. In damages, explained the district court addition, argued damage IBP that establishing the elements of his libel awards, having injury no relationship to compensatory dam- entitled claim suffered, actually constitutionally im that, jury if the that IBP ages and found permissible. (with “actual malice” knowl- acted with had false or edge argu- that the statements were with rejected The district court these disregard they reckless whether were ments and therefore denied IBP’s motion Bagley’s again court mil- IBP on $1.75 4. The district vacated district court raises once privacy appeal. invasion of verdict as a double lion recovery. Bagley ruling. appeal does not addition, granted Bagley's the district In court court did 6. The district ruled that IBP’s letter interest, awarding prejudgment him motion protective not fall under umbrella of the $2.33 contests this an additional million. ÍBP legislative privilege common law’s testimonial of interest. award away place because IBP’s actions "took from the legislative proceeding con- in a non-testimonial supporting post-trial memo- IBP’s motion and apply text." The court declined to the Noerr- fifty propositions listed excess of randum claim, Pennington doctrine to con- libel argument, simply by each case followed without cluding application strayed that such an too far and citations record. The dis- to the citations origi- the context from doctrine respond understandably declined to trict court (antitrust) and the contexts to which it is nated Instead, point. considered in to each it in detail ("situations normally related confined otherwise which, view, objections only depth those practices competing enti- between business contro- or those where substantial "have merit ties”). Assuming arguendo that the doctrine did summarizing arguments versy In IBP’s exists.” court, apply, the court nevertheless that IBP’s found we limit ourselves to the district exception because objections specifically actions fell within “sham" addressed those (the Documents).8 notwithstanding the verdict there IBP judgment Bagley, counsel, raises of these trial. IBP each both a new with benefit addition, again appeal. negotiated arguments subsequently and executed a that the district court denied agreement, releasing contends settlement each other allowing it trial the introduction potential liability arising a fair out of from their and irrelevant evidence prejudicial relationship employment and the termina- argument. improper closing by permitting agreement, Bagley tion thereof. In that argues that the tortious interfer- agreed any party not to also assist third they must fall because ence bringing against verdicts a lawsuit IBP.9 portion tainted libel hopelessly early 1977, Bagley late 1976 and met the trial. lawyers several who with were interested agree IBP’s that the with contention potential antitrust ramifications of pass cannot instructions constitutional libel IBP’s Those lawyers activities. were Al- For the reasons discussed at muster. Krieger, attorney, bert a criminal defense below, that IBP is im- length we believe who, exception, with one unrelated had unless can mune from hoped never handled an antitrust case but convincing prove by clear and evidence that so, do based on information he learned defamatory statements were false and Bagley; attorney Minnesota John were made “actual malice.” Hawkins, attorney and Iowa Cochrane Lex representing the Investiga- then Meat Price I. BACKGROUND. (MPIA) Association litiga- tors antitrust companies, IBP, large Bag- meatpacking tion four meatpacker, employed IBP; mid-1975, including ley attorneys as a and who had on from mid-1971 to first represented president and then as vice of occasion consultant Greater New In of development. July Poultry retail York Association Meat sales and Bagley employ,7taking left IBP’s him In meetings, with Dealers. the course of these generated he Bagley files that while he worked disclosed information about IBP’s statements, by genuine weekly profit not motivated a desire to "were IBP's and loss month- sales, legislation, reports ly production presi- but rather desire to influence a on and [Bagley] rejected meeting reports, harm." The court legal cause IBP’s dent’s staff memoranda, confidential right-to-reply concerning law common defense because it data customers and behavior, respond purchasing found that IBP did not and to Finally, their memoranda out- lining charges appropriate goals, marketing strategies, in an IBP’s manner. and Bagley pricing court declined to hold that a limited formulas. figure voluntarily because he "did not addition, In later received some docu- inject controversy,” into the did not himself he production figures containing ments from regular continuing and the me- have access to Overstreet, employee, a Charles former IBP and dia, "primary he and was not the actor” gained generated by access to documents IBP’s controversy. committee, Aarsen, pricing formula Hans which employee, another former IBP took when he rejected argument court The also IBP’s (the Documents). employ left IBP's Aarsen For presumptions in in- embodied the court’s purposes opinion, any of this constitutionally reference to the jury structions to the im- Bagley Documents includes these documents. permissible. The court determined that Gertz Welch, Inc., Robert U.S. agreement pro- Clause 9. 3.2 of the settlement (1974), change 41 L.Ed.2d 789 did not the law of vides, part: involving private plaintiff libel in actions and Thus, heirs, according Bagley, legal represent- a non-media defendant. court, for himself appropriately assigns, the instructions embodied atives and covenants with IBP to for- aiding, abetting any Iowa common law. ever refrain from or in way assisting any person party third not a claimed, trial, and at he 7. then that was agreement any bringing action position took the chose fired. prosecution any or the claim or demand of resign. any whatever kind or nature IBP for matter, fact, circumstance, happening or thing occurring failing materials that he accumu- The files included whatsoever or to occur before, during, beginning day lated as well as his tenure at from of the world to the Among presents. IBP. the documents in the files were the date of these ments, attorneys subpoenaed in late permitted the which were activities and examine, copy, some by questioning Bagley subpoena in some cases to under Bagley also Bagley Documents. January preparation and June of 1979 in Irving Stern and Jess met late 1976with hearings the Subcommittee. before Proston, of the Meat Cutters Un- officials who, ion, anticipating upcoming contract B. The Invitation to Subcommittee’s IBP, Bag- negotiations discussed with IBP. advisability of a strike. ley the 29, 1979, Congressman June Neal On Bagley’s activities IBP learned of Iowa, chairman of thе Smith Subcom- and, on filed spring of 1977 June mittee, spokesperson IBP to invited send a against Bagley in federal district court suit testify during the Subcommittee others, seeking injunctive relief and hearings July. scheduled for late In a let- alleged damages. complaint, Peterson, president, ter to IBP’s Robert fiduciary duty to Bagley breached his wrote, Congressman Smith express terms of his IBP and violated opportunity I wish to take this to offer agreement.10. IBP termination dismissed you any person- other officer who has against Bagley its claim knowledge al of the firm’s activities and injunc- continued to seek June but speak can on who behalf of Iowa Beef compelling Bagley return the relief tive opportunity voluntarily Processors the Bagley Documents and to honor his con- appear testify before the Subcommit- fiduciary obligations.11 tractual and hearing tee. Such would be conducted pursuant to the Rules of the Committee Proceedings. A. Subcommittee’s Business, copy on Small on late Small Subcommittee Essentially, included with this letter. Business Administration and Small Busi- appearing the witness or witnesses Company Authority and ness Investment Beef behalf of Iowa Processors would Small Business Problems of the General opportunity appear have under Representatives United States House present oath and a written statement (the on Small Business Subcom- Committee length made reasonable which would be mittee) began investigating meatpack- part hearing a of the Subcommittee’s ing industry. held a The Subcommittee Following record. of this submission hearings number of between October presenta- statement and an oral writtеn July particular 1977 and of 1979to examine length, the or tion of reasonable witness by packers small and to problems faced appearing witnesses Iowa behalf existing legislation determine en- whether by questioned Beef Processors would be competition continued in the indus- sured members of the Subcommittee. testified try. At least five witnesses who Congressman on to advise Pe- Smith went pro- discussed or Subcommittee expected questions that “the can terson be IBP, information about in some cases vided range topics a and issues to cover broad charging anticompeti- IBP specifically pertinent inquiry[,] to the Subcommittee’s tive conduct. The Subcommittee’s investi- * * * undoubtedly including] matters gathered gator also additional information examining by ‘Bagley IBP the so-called documents’ by about Docu- raised duty Bagley, to IBP. IBP dismissed all claims IBP named as defend- 10. In addition representatives these defendants in June 1982. ants Stern and certain Union, Hawkins, lawyers Krieger, Cutters Meat claimed, Cochrane, and Hans Aarsen. IBP The district heard IBP’s for in- court claim things, among that Aarsen breached his Bagley’s other junctive relief at the same time that duty fiduciary "inten- to IBP and that the others jury. claims were tried to a The court ultimate- maliciously Bag- tionally, willfully and induced" ly rejected ruling subject This this claim. agreement ley his termination appeal, to breach In Busi- of another re IBP Confidential maliciously “intentionally, willfully (8th caused Litigation, ness 754 F.2d Documents Cir. fiduciary 1985), breach of his separate opinion. and assisted” in we resolve in a which * * closing, In Congressman *.” hearing Smith that we will be from IBP in the wrote: days. next or three two know, you greаt As deal of testimo- Bagley’s Testimony. C.

ny received this Subcommittee has regard been Iowa Beef Processors. Only Bagley testified before the Subcom- legislation If or rules are new enacted to July at the hearings. mittee In his by any companies limit dominance in the statement, opening Bagley told the Sub- industry or enough meat to ensure that IBP, committee that while he worked at he competition industry remains question” “found reason to some of IBP’s prevent undesirable economic conse- marketing practices. Bagley further ex- quences, it is clear that Iowa Beef Pro- plained that when he examined the Aarsen companies cessors will be one of the Documents he “could see that most affected. somebody up somehow had to stand and be counted, IBP going up swallow respond Congressman did not all competition.” of its smaller He there- Smith’s invitation before the Subcommittee agreed Krieger fore to meet with and the time, July reconvened on 1979. At that “I lawyers] might others: felt that [the statement, opening in his Congressman starting point my becoming involved explained: Smith trying prevent at least a massive take- In days the next several closely we will over IBP of packing industry.” examine certain areas of conduct in the closing, Bagley stated: industry attempt IBP, in an to learn how I sincerely feel that IBP has been re- largest packing company meat in the sponsible great for some innovations world, present position moved to its industry the meat which have been for largest industry and with fur- good the common segments of all of our expansion planned. Appearing ther un- business; hоwever, I also believe that subpoena Hughes der Bagley, will be company past has in the become ov- president former vice of IBP. We also erly attempts zealous in its to control and introducing will be certain records and monopolize packing industry. documents which strongly we believe testimony corroborates [sic] response questions by Congress- given Mr. has to the committee others, man Smith and identified staff. particular three potentially instances of Congressman “overly First, Smith went on to zealous” observe behavior IBP. that, Bagley explained that joined when he Company in yield understated apparent It is its that much of this testi- (the amount of salable

mony during meat it days the next two will obtained focus carcass) formula, from a beef directly pricing on IBP. We wish to be sure to give everyone this opportunity speak artificially understatement in- to to price this flated the committee in our its boxed search for the beef. To reme- dy Accordingly overpricing truth. on this attracting June I without at- IBP, customers, wrote a tention letter to the President of from its began IBP Peterson, Mr. inviting gradually Robert IBP increase ap- yield. its Despite stated pear gradual rise, before present this committee and yield, according oath, testimony Bagley, presented under after which problem” time still “a IBP IBP questioned by would be Second, members of when he left Bagley told the committee. While I am not criticiz- the Subcommittee that until the fall of ing having so, them for not done IBP has IBP offered its “spe- Cattle-Pak12 at yet responded not my prices” Waldbaum, invitation. The cial a New York su- open chain, invitatiоn is still and I assuming permarket and, am addition, did not registered loins, ribs, 12. Cattle-Pak is IBP's trademark for from a whole beef rounds carcass— product consisting primal its of the four cuts and chucks—sold in boxes as a unit. periodic accountable for in- hold Waldbaum anti-IBP accusations. Accordingly, we Finally, Bagley in service fees. creases ask that part this letter ‍​‌​​​​‌‌‌‌‌‌‌‌​‌​​‌‌‌‌‌‌‌‌‌‌​‌​‌​​​​‌​‌‌‌‌​‌‌​‌​‍be made quantity that IBP dis- claimed instituted official proceedings your Subcommit- program for certain count Cattle-Pak cus- tee. pro- tomers in late 1971 and continued the We realize our that rebuttal will not gram through despite least June impact you have the least your on or on ability serious reservations about its continuing attacks on this Company, but justify the discount on the of its basis hope open-minded we members of assertions, By Bagley appar- costs. these Subcommittee, your media, the cattle ently implied IBP favored certain cus- industry, and beef and the who pricing policies. tomers its may begin read it question will uncritically accept you say- what are Response. D. IBP’s ing. August 1, 1979, In a letter dated IBP Congressman declined Smith’s invitation to letter, thirty-one page its respond- IBP sharply testify. The letter criticized Con- ed charge against to each made it before gressman Smith and his conduct of the the Subcommittee from the fall of 1977 to investigation. Subcommittee’s IBP ac- July of 1979. Approximately fourteen prejudice” cused Smith of “demonstrable pages of the letter dealt charges with the against IBP and “obvious ulterior motives” by Bagley, made whom it characterized as political capital”

—“to make and “to aid a disgruntled “a еmployee” ex-IBP who had political crony,” friend and presumably Lex IBP “stolen documents and misused IBP Hawkins, litigation against antitrust confidential information to defame and Explaining IBP. reject its decision to problems cause for IBP.” (Emphasis add- invitation, IBP Smith’s wrote: ed.) your plain prejudice Because of Beginning your unwillingness Bagley’s charge yield us past process to abide due misrepresentation, and the rule IBP stated law, initially simply we were inclined “[bjecause the formula and the role of the and, reject your invitation appro- when primal yield complex, Bagley was able * * priate, story tell our in the courts or to conceal the truth confusion congressional having committees added.) (Emphasis attempt In an to eluci- jurisdiction industry over the meat where date, explained guaranteed that it its fairly we would your treated. But price per customers a hundred-weight on upon attacks us and the distortions of beef, based, its boxed necessarily because occurring your truth hearings different, all cattle are on an assumed have reached such an extreme that we yield. Although the yield varied, actual persons owe those who deal with us on a buyers were unaffected because made day-to-day basis and whose trust we purchasing their decisions based have years specific earned over the price per hundredweight. In guaranteeing rebuttal of the accusations that have price yield, based on an assumed your hearings been made in publish- took the risk that the yield actual would press. Therefore, ed while we yield, fall short of the assumed reaрed reject your appear your invitation to yield benefits when the actual exceeded hearings, following we submit the state- yield. the assumed IBP also maintained unwillingness ment to that our show to gradual that increase in its stated appear inability results not from an to yields improved production resulted from charges us, refute the made but leaner, techniques better-yielding cat- instead from our firm conviction that we tle, attempt rather than an to correct an provided would not be a fair forum and simply misrepresentation earlier oppor- would be used as another as tunity your part grab by headlines claimed.

Next, responded Bagley’s allega- purchasing any quantity IBP of Cattle-Pak dur- preferential pricing: ing given period].” tion of [a Bagley admitted that he did Although stated, closing, IBP “we have demon- origins or rationale of not know Bagley’s illegal strated that stories about pricing formula to the IBP’s Cattle-Pak questionable conduct IBP are false.” chain, suggest he felt free to say Bagley’s Waldbaum IBP went on to that claim illegal, pricing Krieger below-cost that it was that he met with “to others prevent as a tool to break into the used IBP a massive take-over IBP of the packing industry” market. The facts are other- was New York wise. simply a fabrication to conceal the malice sought up with which he to stir trouble explained finally per- that when it IBP for IBP and to create a defense for IBP’s accept boxed beef suaded Waldbaum breach-of-fiduciary-duty suit. opposition, developed it despite bitter union special packaging suitable for the New * Si! * a markеt, required a new and York Now, you have furthered his vendetta pricing formula. IBP conceded different by providing privileged him awith forum that service fees were lower Waldbaum’s representa- which make his false buyers, York than those of other New but tions and disclose confidential IBP docu- agreement this difference to an attributed ments and information. testi- Waldbaum, IBP and wherein IBP between mony your Subcommittee must be promised that service fees would not in- recognized nothing as but a malicious crease in return for Waldbaum’s commit- attempt to blacken IBP’s name and belat- pioneer in the ment to establishment of edly manufacture a defense to IBP’s on the east coast. Cattle-Pak breach-of-fiduciary duty suit. [sic] Finally, quantity IBP addressed the dis- Response. E. Dissemination of IBP’s described, program count that stat- IBP addressed Congressman its letter to ing “Bagley’s quanti- version of IBP’s copies Smith and sent to seventeen other ty program is absolutely false, discount and, believe, members the Subcommittee. The Sub- perjury constitutes we committee, contrary explicit to IBP’s re- (Emphasis cited.” which he should be add- quest, did not enter the letter into the ed.) offering quantity IBP admitted dis- record; formally nor did it release the let- count, but asserted that it offered the dis- ter to the news media. IBP also refused purchased count to all its customers that initially copies letter, to release of the but addition, requisite quantity. IBP requesting copies referred those to mem- pro- maintained that it discontinued the of the bers Subcommittee who had received gram September pending long- copies organizations or certain that IBP range accounting study identify cost subsequently learned had copies. obtained quantify savings in- those “believed By mid-September of the media had purchases. According herent” volume widely reported response. IBP’s There- IBP, “Bagley intimately involved after, did, upon IBP request, give copies of program and his the termination the letter to certain members the news attempt suggest it that was then media. (Emphasis perjury." terminated is clear added.) say “Bagley IBP on to went In late IBP distributed additional by suggesting again perjured copies response part of its aof bound himself anything had to do rebate containing president document [certain checks] Peter- * * * program] [quantity testimony discount son’s before the Livestock and knows, [emphasis As well Agricul- Grains Subcommittee of the House added]. represented special (Livestock one- Subcommittee). that occasion ture Committee price program time reduction under which IBP sent this document to members per Subcommittee, directors, head to all customers Livestock rebated IBP’s $8

1309 extent, concept representation officers, managers, certain mem- the whole plant officers) agricul- depends upon ability people of various of the to (primarily bers (for example, National repre- associations to their tural make their wishes known Association, As- Central States Cattlemen’s sentatives.” Eastern Railroad Presidents sociation, Associa- Texas Cattle Feeders Inc., Freight, v. Noerr Motor Conference Producers, tion, American National Pork (1961). 127,137, 81 S.Ct. 529 365 U.S. Bureau), professors at several acа- Farm Sharing “preferred place” accorded institutions, approximately fifty demic sys- the first amendment freedoms in our media, and other of the news members government, people’s right tem of to parties. prefaced IBP the docu- interested petition sanctity “has a and a sanction not letter, “Sup- explaining to each ment with permitting dubious intrusions.” v. Thomas Friend or Other Business plier, Customer Collins, 516, 530, 65 323 U.S. S.Ct. IBP,” (1945). 89 L.Ed. 430 legitimate interest in you have a Since representative democracy “For a ceases matter, making this subject we are to exist the moment that the func- your you. to It is for document available by any means tionaries absolved (and/or your use the use of personal responsibility their from their constitu- repub- company), and is intended ents; happens and this whenever the con- general lication or distribution * * * any can restrained in stituent be manner you want to know public. [W]e speaking, writing, publishing or his truth and not be misled false measure, opinions upon any public accusations. upon may the conduct of those who ad- II. DISCUSSION. vise or execute it.” Sullivan, New Times v. York Co. U.S. People’s Right Pe-

A. Libel and the 254, 297, 710, 735, 11 84 S.Ct. L.Ed.2d 686 tition. (1964) J., result) (Goldberg, concurring in guarantees “the The first amendment * * * Tucker, (quoting 1 Blackstone’s Commenta- right people petition of the (1803), (editor’s appendix)). Pre- ries grievances.” for a redress of Government serving people’s right peti- inviolate the consider, requires case us to for the This government imperative tion the is “to the time, first to what extent this constitutional responsive government may end guarantee power limits a court’s to award people changes, of the and that if will predicated for libel an action desired, may by peaceful be obtained communications made nontestimonial security Therein means. lies the government. petitioning the course of Republic, very foundation of constitu- right petition people’s The government.” DeJonge Oregon, tional grievances government for a redress of 353, 365, 255, 260, 299 U.S. 57 S.Ct. “among precious the most of the liberties (1937). L.Ed. 278 Rights.” safe-guarded by the Bill of Unit unquestionably exercised its first America, District 12 ed Mine Workers of right petition govern- amendment Association, 389 U.S. v. Illinois State Bar Congressman ment when it wrote to Smith 217, 222, 88 19 L.Ed.2d 426 copies and sent of that letter to other mem- (1967). “implicit in and fundamental It is nearly bers of the Subcommittee. For two very republican form of to the idea of investigated years, the Subcommittee had Gyp v. United States governance.” Stern meatpacking industry, of which IBP is (7th Cir.), sum, Inc., 547 F.2d prominent During the hear- member. denied, 434 U.S. cert. ings, specifically testified as to (1977) witnesses (citing L.Ed.2d 467 United States intentions, (2 Otto) 542, 552, activities and in some Cruikshank, IBP’s charging specific (1875)). government acts on cases acts L.Ed. 588 mid-1979, and, By very large misconduct. when people “to a behalf of the 1310

testified, seemingly virtually meaningless, particularly had respond the Subcommittee Explicitly recognizing governmen- IBP. where the focused on in a case such as this letter, Congressman body response in Smith invit- to was directed this his tal whom warning it that if the in respond,13 publicize ed not to it. The record this chose IBP.to legislation, investigation publication resulted it shows that IBP’s limited case companies of the “most af- response would be one did not exceed the bounds of fected.” reasonableness. Concluding exercising that IBP was letter, requested which IBP In its right its first amendment petition to record,14 included in the IBP limited its government, we must next examine to directly to the discussion to issues relevant right protects what extent that IBP from investigation. IBP re- Subcommittee’s liability allegedly for the libelous state charges sponded specific to the of miscon- petitioning, ments it made in the course of who testified duct made witnesses be- begin by recognizing that “there is no Subcommittee, explaining fore the its own constitutional value in false statements of poten- position exposing the witnesses’ Welch,Inc., v. Gertz Robert ^ac^> addition, tial and motives. biases 41 L.Ed.2d 323> questioned integrity investiga- of the (1974), if even made the course of charging improper tion Smith with itself— Petitioning government. Factual mis motives, condemning allegedly his biased statements, whether intentional lies or witnesses, criticizing choice of inform; they errors do not con gain practices employed he to access to the f^less fuse and mislead. Bagley Documents. ,, , , , Although worthy not of constitu r tha,t id, 3] We believe IBP also acted protection, tional erroneous statements of scope of its well within first amend- inevitably fact arise in the course of free right petition selectively ment to when it open communication between citizen copies of its letter to those distributed who government. Punishing all such er legitimate had a interest the issues r0rs, liability, whether sanction or civil during raised the course of the Subcommit- would induce a cautious and ex restrictive investigation. right petition tee’s The to ercise constitutionally guaranteed simply right means more than to com- right рetition. Requiring citizens to directly government. municate with the It guarantee accuracy of statements necessarily those includes activities reason- made in the petitioning course of ably normally attendant effective government, at the risk of multimillion dol See,

petitioning. e.g., Eastern Railroad judgments, lar libel would lead to intolera Presidents v. Noerr Motor self-censorship, deterring, only ble falsi Conference Inc., Freight, 142-43, 365 U.S. at ty S.Ct. at truth Supreme but well. As 532; Coastal States Marketing, recognized Welch, Inc. Court Gertz Robert Hunt, Inc., (5th supra, Cir.1983). 694 F.2d First Amendment re “[t]he quires case, protect we some we need not delineate the falsehood in outer protect order speech right. right limits of this respond matters.” 418 U.S. at charges of S.Ct. 3007. misconduct made before con- gressional necessarily subcommittee in- Privilege, Absolute right some cludes to disseminate this re- sponse charges. to those learned ‍​‌​​​​‌‌‌‌‌‌‌‌​‌​​‌‌‌‌‌‌‌‌‌‌​‌​‌​​​​‌​‌‌‌‌​‌‌​‌​‍of the who A actually testifying witness right hold render legislative committee, To otherwise would like a witness testi- determining purposes Congressman For whether IBP 14. That Smith elected not to in- right petition is, believe, its first amendment exercised response elude the in the record we government, we deem it irrelevant that IBP purposes determining also irrelevant letter, sending spokesper- rather than wrote a right whether IBP exercised its first amendment appear Subcommittee as son to before the Con- petition government, requested. gressman Smith had court, immunity spect produce enjoys absolute to a law that would a re- fying for defamation for state Id. monopoly.” straint or a pertinent that are tо the sub ments made concluding, at 528. In so the Court relied inquiry responsive questions or to ject. of that, part light in on its determination of See, e.g., Bio/Basics International asked. constitutionally guaranteed right pe- the to Corp., Pharmaceutical Corp. v. Ortho 545 tition, contrary a conclusion “would raise 1106, (S.D.N.Y.1982) (apply F.Supp. 1115 important questions.” constitutional The York); Jennings ing law of New common “[tjhere recognized, closing, Court that Cronin, 398, v. Pa.Super. 389 A.2d 256 may publicity be situations in which a cam- Markets, Super 1183, (1978); Logan’s 1185 paign, ostensibly directed toward influenc- McCalla, 208 Tenn. 68, Inc. v. 343 S.W.2d action, ing governmental is a mere sham to Hull, 892, (1961); Sherrard v. 894-95 53 nothing actually cover what is more than mem., 553, Md.App. 456 A.2d aff'd attempt directly to interfere with the 189, (relied (1983) Md. 460 A.2d 601 296 competitor relationships business of a privilege on the on the common law but application the of the Sherman Act would See right petition). amendment first Id. at justified.” 81 S.Ct. at 533. generally 53 C.J.S. Libel and Slander Noerr, years Supreme Ten after the § Torts, Law (1948); Prosser, 105 W. explained resting Court the decision as § 114, (4th 1971). The at 781-82 ed. Su squarely constitutionally guaranteed on the Virginia, preme Appeals Court of of West right In Cali- petition government. (W.Va. Fury, S.E.2d 28 Webb 282 Transport Trucking Motor v.Co. 1981), immunity extended this absolute fornia Unlimited, 404 U.S. liability defamation to all communica from (1972), group highway L.Ed.2d 642 one petitioning tions made the course of brought against carriers government, an action another whether or not such communi carriers, group highway alleging cations were made in the confines of an that proceeding. doing, actual In so the West the defendants violated the Sherman Act Virginia court relied on the sо-called Noerr by instituting state and federal administra- Pennington doctrine. judicial proceedings tive and to resist and plaintiffs’ applications acquire, defeat Noerr-Pennington The doctrine finds its transfer, register operating rights. Re- origin Supreme Court’s 1961 decision lying entirely people’s right peti- on the in Eastern Railroad Presidents Confer- association, tion and of the Court reiterated Inc., Freight, supra. ence v. Noerr Motor attempts pas- that mere to influence the There, group trucking companies sage or enforcement of laws do not violate brought their trade association an action 510-11, the Sherman Act. Id. at at S.Ct. railroads, group a railroad 611-12. The Court remanded the case for firm, association and a relations trial, however, because it concluded that alleging that the railroads had violated the allegations in complaint, which the by conducting publicity Act Sherman dismissed, district court on their face fell campaign “designed adoption foster the exception recognized within “sham” and retention of laws and enforcement law Noerr. complaint alleged that defend- practices trucking of the destructive busi- up opposi- ants set a trust fund to finance ness, atmosphere to create an of distaste plaintiffs’ applications tion all “with or among general public, for the truckers probable regardless without cause and impair relationships existing and to be- Id. at the merits.” S.Ct. tween the truckers and their customers.” this, true, The Court held that if constitut- Id. S.Ct. at 525. The ed a violation of the antitrust “A Supreme laws: Court concluded “the Sher- еntrepreneurs combination of prohibit or more to harass and man Act does not two competitors persons associating together having in an deter their from ‘free persuade legislature agencies and unlimited access’ attempt or the courts, massive, particular right by executive to take action with re- to defeat concerted, purposeful government, activities of the they and if petitioning are not ways building up government, group empire one are not entitled to immunity. destroying another.” Id. at at 614. agree Neely with Justice majority Webb overstates the reach Virginia’s Supreme Ap- West Court of Noerr-Pennington doctrine.15 Courts peals Fury, supra, relied on the Webb have indeed extended the beyond doctrine Noerr-Pennington doctrine to issue a writ the antitrust context to a limited extent. prohibition preventing a trial court from example, For certain efforts to influence proceeding with a defamation action. government give do not rise to There, allegedly libelous communica- for tortious interference with business. complaint tions included an administrative See, e.g., NAACP v. Claiborne Hardware lodged Department with the United States Co., 886, 915, 458 U.S. 102 S.Ct. Mining of Interior’s Office of Surface (1982)(economic 73 boycott L.Ed.2d 1215 (OSM) request evidentiary and a for an designed white merchants to secure elected hearing before the United States Environ- compliance officials’ with demands for ra (EPA). Agency mental Protection These equality cial integration); Havoco of charged plaintiff, communications a coal America, Hollobow, 643, Ltd. v. 702 F.2d and, comрany, violating with federal law (7th Cir.1983) (defendant 650 ini investors according plaintiff, to the were made mali- investigation tiated an by the Securities ciously knowledge and with falsity. of their Exchange Commission which forced Virginia The West court concluded that plaintiff postpone planned its public of these communications constituted “classic fering); Suburban Restoration Co. v. AC- examples” petitioning and, activity Corp., 98, (2d MAT Cir.1983) 700 F.2d 102 such, absolutely privileged under the (defendant successfully sought injunc an Noerr-Pen-nington doctrine. The court de- tion city officials preventing the principle scribed the doctrine as “a of consti- award of a competitor); contract to a litigation arising tutional law which bars Missouri v. Organization National for injuries from consequence received as a Women, Inc., 1301, (8th Cir.) 620 F.2d 1315 petitioning first amendment activity, re- (convention boycott against Missouri to en gardless underlying cause of action courage proposed ratification of the equal plaintiffs.” asserted 282 S.E.2d at 37. rights amendment), denied, cert. 449 U.S. rejected plaintiff’s The state court con- 842, 122, 101 (1980); 66 L.Ed.2d 49 tention that the defendant’s activities were First National Marquette Bank v. Na protection not entitled to because fell Bank, 514, tional F.Supp. 482 524-25 within the exception. “sham” Id. at 39. (D.Minn.1979)(defendant successfully lob Neely, Justice dissenting, asserted that legislation bied for restricting plaintiff's majority overstated the reach of the right engage in a bank program), credit card Noerr-Pennington rejected doctrine. He 'd, 195, 636 (8th F.2d 197 Cir. aff the conclusion that the doctrine created 1980), denied, 1042, cert. 450 U.S. 101 S.Ct. L,Ed.2d immunity blanket for all activities that look 1761, (1981); 68 240 Sierra Club v. petitioning, likе relying on the “sham” ex- Butz, 934, 349 F.Supp. (N.D.Cal.1972) ception. exception, according This to the (defendants sought persuade govern dissent, immunity “uncovers from any ment to abandon its permit intention to course peti- of conduct which fact is not logging particular area, a wilderness de tioning activity, despite appearance.” its spite preexisting allowing contract plain putative at 46. petitioners Id. When know tiff to area). harvest timber in that claims, there is no addition, basis for their the dis- courts have extended the Noerr concluded, they sent petitioning are not the Pennington doctrine to immunize defend- 15. past Arrangers, Airlines, Inc., have said in the that “the basis of Inc. v. Western 623 F.2d 1255, all-encompassing (8th Cir.), denied, this doctrine is not an First 1267 n. 14 cert. 449 U.S. 1063, protection." 787, Amendment (1980). International Travel 101 S.Ct. 66 L.Ed.2d 605 unprotected other seeking government ac class of activity ants influence alleged liability conspiracies quali for includes those tion from activities do § fy protection see, for if even undertaken in e.g., under 42 U.S.C. Gorman genuine Towers, attempt governmental to influence Bogoslavsky, Inc. v. 626 F.2d (8th Cir.1980)(defendants policy. The successfully pro first amendment does not petitioned city’s to tect violence. Noerr-Pennington, board directors there prevent fore, particular plaintiffs preclude rezone a site does not tort constructing high apartment from rise business losses caused violence that is § site) complex part legitimate on that and U.S.C. otherwise economic see, e.g., Gypsum, boycott. v. United States Stern See NAACP v. Claiborne Hard (7th Cir.) (defen Inc., Co., 547 F.2d ware 458 U.S. at 102 S.Ct. allegedly false filed an сorporation Similarly, dant at 3428. the first amendment Ser Internal Revenue complaint protection illegal Thus, with no acts. affords agent who plaintiff, charging vice courts have held that Noerr-Pennington misconduct), audit, professional conducted does not immunize a defendant from liabili ty injuries denied resulting t. governmental cer 533, (1977). illegal See, 54 L.Ed.2d action secured means. e.g., Westborough City Mall v. Cape Girar This limited extension the Noerr-Pen- deau, 733, (8th Cir.1982), 693 F.2d cert. nington doctrine support does not con- the denied, 945, 2122, 465 U.S. 103 S.Ct. clusion that one who seeks to influence (1983); L.Ed.2d 1303 Sacramento Coca- governmental escapes action liability for Bottling Cola v. Chauffeurs, Co. Team any injuries and all in inflicted the course Helpers 150, sters and Local No. 440 F.2d genuine petitioning activity. Rather, it 1096, (9th Cir.), denied, cert. 404 U.S. simply establishes that courts may r.ot 826, 92 S.Ct. (1971). L.Ed.2d 54 compensation award for the consequences Moreover, the first amendment does not protected activity. Courts can and do absolutely protect defamatory speech. See award injuries inflicted as a Welch, Inc., Gertz v. supra. Robert result of unprotected activity. Therefore, Noerr-Pennington does not

necessarily absolutely preclude liability damages resulting establish, view, defamatory from our two The cases petition statements made the activity. course of unprotected The first classes of ing government. the Thus come even where fed those activities which constitutes eral are courts have dismissed other exception. These claims on “sham” within the Noerr-Pennington ‍​‌​​​​‌‌‌‌‌‌‌‌​‌​​‌‌‌‌‌‌‌‌‌‌​‌​‌​​​​‌​‌‌‌‌​‌‌​‌​‍grounds, which, they di have de although “ostensibly activities рendent clined to hold influencing governmental state law defamation rected toward precluded by claims action,” nothing Noerr-Pennington. more than actually Noerr, Inc., See attempt Gypsum, to harm another. Stern United States an Towers, 1345; 533. The Fifth Inc. v. 81 S.Ct. at at 365 U.S. at 547 F.2d Gorman Circuit, Exploration & Produc 626 F.2d 615-16. Bogoslavsky, Woods America, 438 Aluminum Co. ing extending Co. believe im absolute Cir.1971), (5th de cert. 1297-98 munity F.2d to all communications made the 701, 30 nied, 92 S.Ct. petitioning government, course the (1972), relied on “sham” L.Ed.2d 736 whether or not such communications were inap Noerr-Pennington exception hold proceed made in the confines an actual communications allegedly false plicable ing, is unwarranted the Noerr-Penning court, That government. ton directed doctrine and also Sound con unwise. dissent, that false reasoned like Webb siderations underlie the common law’s limi an considered cannot be tation of the privilege’s applicabili communications absolute governmental policies ty attempt actually to influence to those who testify. In that genuine petition context, not constitute safeguards thus do exist to ensure ing activity. immunity absolute from defamation liabili- case, (D.C.Cir.1984). pur- Compa- In that a Sun A witness testifies

ty is not abused. and control of in- supervision ny employee allegedly sent an libelous suant to the fine, officer, may reprimand, who presiding concerning tra-office memorandum a fuel as well as strike punish the witness promoted by saving invented and device that exceed statements record plaintiffs employee the Con- addition, a testi- witness proper bounds. gressional previ- Service who had Researсh pros- subject thus is fies under oath ously interest in device. The expressed perjury. ecution for statements, court concluded that the defa- immunity from Extending absolute “unsolicited,” “ab- it characterized as were situations where alterna- 1) mation solutely privileged” provided that prevent not exist to safeguards do tive would not have made the communicator requires a com- reputation upon attacks for an intention to inform statements but by the the value served plete sacrifice legislative body subject properly on a is, Such sacrifice law of defamation. 2) jurisdiction, and the state- within its As view, unacceptable. Justice Stew- our legitimate to the ments had some relation well, right “The of a man to the art said so legislative to which ad- business reputation from un- protection of his own dressed. Id. at 5.17 wrongful hurt re- justified invasion concept of than our basic flects no more protection afforded under these every dignity and worth of essential principles common law Webster concept any being the root human —a applicable court is here because such system liberty.” of ordered Rosen- decent protection republica does not extend Baer, 383 U.S. blatt v. view, right tions. In our constitutional (1966). Accommodat- 15 L.Ed.2d petition, although not entitled to abso degree, legitimate ing, state’s to some protection, must afford a lute citizen under redressing wrongful injury to interest congressional attack committee and essential, inju- reputation even when that the witnesses with committee’s attendant during genuine ry is inflicted the course of publicity qualified privilege а to at least therefore, activity. reject, petitioning respond charges and to to such make rea IBP’s that statements made contention republications sonable thereof. We think the petitioning government the of course protections the amendment af first absolutely privileged.16 against liability press forded the for defa analogous principle mation reflect an to be Qualified Privilege. 2. applied here. importance petition- the Recognizing Beginning in 1964 with New York Times ing Appeals the government, the Court of Sullivan, Supreme supra, v. the Court Co. of Columbia has the District Circuit recovering from prohibited public officials immunity granted a common broad law defamatory falsehood absent liability from for defamation in nontestimo- proof that the statement was made govern- libelous nial directed to the communications is, Co., 1 ment. v. 731 F.2d with “actual malice”—that “with knowl- Sun See Webster pose 16. has been recent or the reasonableness of his or Our attention directed to the motive McDonald, (4th Prosser, p. supra case Cir.1984), 737 F.2d 427 at of Smith her 1311 § conduct. W. de- in which the Fourth Circuit also privilege protects 776. the defendant Such a petition clause con- termined that the does not liability even if from for defamation he or she privilege. Supreme Court fer an absolute purely by per- deliberately motivated lies or is — granted has certiorari in the Smith case. plaintiff. ill state- sonal will toward the ment, Neither U.S.-, (1984). 83 L.Ed.2d 105 394 hand, sanctuary finds under on the other only protects Webster. Webster those state- scope Although purportedly defining the informing purpose of the ments made for the law, privilege D.C. the at common the absolute Thus, privilege legislature. F.2d at 5. the 731 qualified privilege. effect created Circuit in absolute, is not but approved D.C. Circuit the just privilege is that— An definition absolute qualified. absolute, regard pur- to the without defendant's

1315 edge it false in, or with reckless mit the conclusion the defendant disregard of it was or not.” whether false fact, entertained serious doubts as to the 279-80, at S.Ct. at 376 U.S. 725-26. The publication.” St. Amant v. truth of his liability in Court extended this standard of 727, 731, Thompson, 390 U.S. 88 S.Ct. brought by to defamation actions 1323, 1325, (1968). 20 L.Ed.2d 262 Reck- figures,” “public individuals do “who not lessness cannot be from inferred the mere ** * public hold office are neverthe [but] combination falsehood and the defend- intimately less involved resolution of general hostility ant’s plaintiff. toward the public or, important questions by reason of Cooperative Publishing Greenbelt Associ- fame, shape their events areas of con Bresler, ation v. 6, 10, 90 S.Ct. society large.” Curtis Publish cern to 1537, 1539, (1970). 26 L.Ed.2d 6 Butts, ing Co. U.S. Welch, Inc., supra, Gertz v. Robert 1975, 1996, 18 (1967) (Warren, L.Ed.2d majority Supreme Court recast C.J., result). concurring doing, In so rationale behind New York Times and its Court reasoned that progeny, focusing heightened on figures,” officials,” “public “public like interest in unfettered discussion re- play often an ordering influential role in * * * spect public persons, but instead society. citizenry legiti- Our has person status of the Only defamed. and mate substantial interest in the con- way, determined, the Court could persons, of such it strike duct and freedom the an appropriate press engage balance com- between the uninhibited debate peting public their concluding, about involvemеnt issues interests stake. so and events is as crucial is in as it the Court reiterated its conviction that the “public case of officials.” New York Times privilege should be avail- “publishers able to and broadcasters of de- Id. requiring By “public persons” prove famatory concerning public falsehood offi- affording “actual malice” thus a sub- cials public figures.” protection stantial measure of from U.S. at defa- critics, The decisions in New mation S.Ct. at 3008. their the Court insulation for York provided necessary has Times Publishing, Curtis stated, certain the fundamental interests which Court are correct designed pro- first amendment was justi- but we do not holdings find their rights press tect —the solely fied reference interest inform be informed as con- press and broadcast media in immuni- play duct and character those who ty liability. Rather, we believe that ordering society. influential role in the New York Times rule states an ac- We believe that the “actual mal commodation between concern and liability provides ice” standard of the “nec the present limited state interest in the essary insulation” for the first amendment brought context of libel by public actions at interests stake in this as context well. persons. plaintiffs Requiring prove, clear by and Id. convincing evidence, Rosenbloom v. Me Gertz identified two alternative for bases tromedia, Inc., 91 S.Ct. characterizing person a public figure aas 1813, (1971) (plurality L.Ed.2d for purposes of media comment. In some Brennan, J.), opinion by that statements instances, person occupy a may position a petitioning in the course are made of made “of persuasive power such and influence” knowledge they false or in were or pervasive “achieve such fame or notorie- disregard they reckless of whether ty public figure that he becomes a for all protection false or not affords substantial purposes in all Id. at contexts.” petitioners. malice” not “Actual mea at simply by S.Ct. 3012. “More com- surable reference to the conduct rather, monly, reasonably prudent person; voluntarily an individual injects a him- per- particular must be sufficient evidence to public self is drawn into a “[t]here lawyers, shar- thereby public becomes a erated with several antitrust controversy and ing dur- gained with them information he range limited issues.” Id. a figure for case, ing allowing tenure at them at In either his IBP and at He did espe- roles of examine the Documents. have “assumed persons such so, according testimony before society” to his own in the affairs prominence cial Subcommittee, he “could see and comment.” the because attention thus “invite up somebody had to stand somehow Id. counted, going or IBP was to swal- and be characteristics, share two persons Public He competition.” up low all of smaller Court, least theo- according to lawyers thought talking with the private indi- retically distinguish them from starting point a becom- “might be [his] diminishing the purposes viduals for ing trying prevent in at a involved least in for compensating interest them state’s packing IBP of massive takeover First, reputations. injuries public to their addition, although industry.” Bagley, In injury be- persons are less vulnerable subpoena, hardly be as under can described “usually significantly enjоy cause unwilling a recalcitrant witness. greater access to the channels of effective have a more real- communication hence figure suing me- public Like a limited opportunity to istic counteract false state- defamation, Bagley’s dia sta- defendant private normally en- ments than individuals legisla- in participant tus as an active (footnote joy.” at 3009 Id. process tive diminishes the state’s interest omitted). Second, having assumed the risk protecting in him from defamation an- public scrutiny by becoming involved participant, he has participant. other As a affairs, public de- public persons less proven access to the forum which he was serving recovery private than are indi- re- allegedly defamed. He therefore has a viduals. opportunity state- alistic to counteract false ments, minimizing impact the adverse on case, purposes For of this we need addition, reputation. publica- his unlike pub is a limited decide whether media, tion the communications the def- figure meaning of lic within the Gertz fo- amation itself occurs here a limited is, purposes —that of media comment. rum, markedly reducing scope is, view, analogous He in our to a limited Depending injury. nature of figure petitioning context of made, proceeding charges me- A government. public figure, limited case, may, relay dia it in this did resolving by playing an influential role general public. communication to the public controversy, media invites attention however, happens, response When this germane participation his and comment frequently newsworthy. equally will controversy. Similarly, Bagley, by in that partici- All these considerations render a legislative playing influential role in the pant legislative proceedings vulnera- less process, ger invited attention and comment injury ble one who defamation than participation by mane to his others also way is in Thus state’s no involved. process. in that participating protecting participant is re- interest testimony the Subcom- addition, through persons duced. who coop- July mittee in of like his earlier position actions in a to influ- their own preparation hearing, eration in for the legislative process accept the ence the must given pursuant subpoena to a thus scrutiny by participants in the risk of other objectively be as vol- cannot characterized risk, process. Having accepted the time, however, untary. Prior to that he did deserving recovery injury as are less of voluntary ongoing assume a role defamatory a result of falsehood. and, so, controversy to whether if as applicable in For all engaging IBP was anticom- these reasons what extent is previously Bagley, we said As have whose status have petitive conduct. we analogous public figure in me- observed, Bagley voluntarily coop- met and to limited comment, argues we Bagley dia conclude that the “actual that cannot liability applies of here prove malice” standard “actual malice” aas matter of law. appropriate is an accom- and that standard We decline to decide at that issue this time. society’s in interest im- modation between Although it appellate lies well our within liability for munity from defamation those power so, in the first amendment area to do government who communicate with the and see, e.g., Sullivan, New York Times Co. compensating the limited state interest 284-86, 728-29; at at S.Ct. participants for defamation in the other Cooperative Publishing Greenbelt Associ concluded, Having that context.18 so we Bresler, ation v. 398 U.S. at Proving judgment. must reverse the libel we believe that this case that a statement was made with “actual that determination should be left to the is, knowledge that it malice”—that with pre district court on remand. That court disregard of was false or reckless its trial, of days gaining sided over twelve proving falsity necessarily includes — superior vantage point far from which to case, was false. the in- statement view the evidence and determine whether of his initial structions absolved Bagley introduced evidence of “actual mal proving falsity. burden district jury ice” sufficient to merit consideration. jury court instructed that defamato- If the district court decides that did ry in IBP's statements letter were libelous not introduce sufficient evidence of actual This, court, according to per se. creat- consideration, jury malice merit it should legal presumption falsity ed “a of their judgment then enter for defendant on the prov- shifting to the burden thus [IBP] notwithstanding libel claim the verdict. If ing puni- truth statement.” The it he decides that did introduce sufficient instruction, damages required tive subject, evidence on this there should then proof of “actual malice” did not cure or claim, be a new trial the libel with error. render harmless this This instruc- given instructions accordance with damages only, tion related to not to liabili- opinion. our ty, jury’s and became relevant to the delib- only eration after it determined Employ- B. Tortious Interference with pertaining under the instructions to libel. ment. Furthermore, punitive damage instruc- contained error in it tion failed to At the time he testified before the Sub- clearly place proving committee, Dubuque burden actual worked for convincing Packing Company malice clear and (Dubuque), evidence on a company Bagley. competed that both and dealt with IBP.20 Supreme you plaintiff 18. The Court reached a similar conclu- If find that has established the sion, you but based on the common law essential libel instead of elements his claim and if find, amendment, Nicholls, convincing on the clear first in White v. basis of (3 How.) (1845). evidence that the U.S. defendant acted with actual L.Ed. 591 In that case, law, publishing that, writing question, recognized malice in the Court at common you may plaintiff punitive then petitions award the government griev- for redress of damages addition to actual privileged ances were communications. How- assessed. ever, privilege was not absolute. The Court jury The district court further instructed the express any stated: malice in “[P]roof written publication that ice,’ is made “[a] with 'actual mal- publication, petition, proceeding, or addressed charge, is that term used in this if it is legislative body], court or will render [a false, knowledge made with that it is or publication, proceeding, petition, libelous in disregard reckless of whether it false or not.” character, actionable, subject will publisher the author and thereof to all the con- trial, 20. From mid-1974 to at least the time of ** * sequences of libel. and the [Falsehood mutually Dubuque IBP and had a beneficial probable proof absence cause will amount designed arrangement, transportation to avoid of malice.” Id. expeqse supply and to ensure a consistent fabricating plants carcasses for their and a con- punitive damages provides slaugh- 19. The instruction sistent demand for carcasses from their essence, part: tering plants. agreed supply IBP alleged early independent of the defamation. On employed Bagley since Dubuque had occasions, IBP executives manager of one of its two different general 1979 as Stolz, president primarily responsible spoke with fabricating plants, Charles selling Dubuque’s Dubuque, displeasure boxed their marketing and and indicated for 1979, days relationship six after July employment then ex- beef. On about him, testified, Dubuque discharged Dubuque. Bagley isting Bagley and between ninety employees, other along spring president, IBP’s with about Robert Dubuque cut Peterson, intended to explaining that that he and other IBP told Stolz operation. one dealing beef With employees back its boxed “uncomfortable” on Bagley has not been exception,21 ongoing their Bagley six-month dis- with because since, ap- despite several hundred year, just Bagley employed pute. Later inquiries. Subcommittee, plications appear and was to before the the co-chairman of IBP’s board directors trial, maintained that his dis- Bagley At Stolz, manner reminded in a that Stolz Dubuque subsequent and his charge by Dubuque “joking,” as characterized emplоyment result- other inability to obtain paying Bagley while he testified tortious interference with ed from IBP’s this IBP. Because evidence employment existing prospective his and presents entirely independent basis agreed, awarding relationships. jury The which, alleged upon jury libel could $650,000compensatory punitive and IBP reasonably conclude that caused Du- employ- interference with his damages for buque discharge Bagley, we believe that $350,000 compensa- Dubuque ment judgment for tortious interference with tory damages for punitive interference existing employment must stand. employment. appeal, prospective ‍​‌​​​​‌‌‌‌‌‌‌‌​‌​​‌‌‌‌‌‌‌‌‌‌​‌​‌​​​​‌​‌‌‌‌​‌‌​‌​‍with On these must argues that both verdicts “hopelessly tainted fall because C. Fair Trial. portions privacy of the trial.” libel that the district court also contends Although reject argument, allowing we denied it a fair trial the intro- verdict we that the for interfer prejudicial do believe duction of and irrelevant evi- prospective employment improper ence must by permitting closing with dence and only fall. The evidence the record that argument. carefully reviewing the After Bag arguably record, interference with paying particularly constitutes close attention ley’s relationships error, contractual prospective allegations IBP’s specific we publication agree. is IBP’s and circulation of cannot reason, For allegedly libelous letter. The or exclusion of admission evidence inability subsequent to obtain em jury and the counsel in latitude afforded ployment appropriately characteriz is more argument necessarily lie within the sound ed as an element of for libel discretion court. Skogen of the district upon any separate could claim award Co., 375 F.2d Dow Chemical 704-05 If, duplication damages. on well be a (8th Cir.1967). role is re Our limited to remand, IBP’s establishes viewing clear abuse of discretion for a libel, he should be allowed to recover Wilfing Mo district court. General impact on future em the adverse his (8th Corp., F.2d tors Cir. ployability. 1982). great give deference to the judge supporting Bagley’s who saw and heard evidence and evidence Bohr, existing arguments. claim interference United States v. of tortious Cir.), denied, hand, (8th entirely 581 F.2d cert. employment, the other slaughtering president of plant Southwest in Deni-' worked carcasses from its son, Dubuque’s processing Denison Iowa to Beef from June to December when fabricating plant plant buy for Dubuque's carcasses its company plants. closed nearby City in Dakota slaughtering facilities.

1319 958, 361, 58 351 are U.S. 99 S.Ct. L.Ed.2d relevant to the district award court’s court, (1978). judge, prejudgment $650,000 That not this has “the interest on the judg- superior has of the case” and thus “a ment for feel tortious interference with existing vantage point employment.23 from which to oversee the presentation of the case and the factual First, argues IBP any that if Skogen of counsel.” conduct v. Dow Bagley’s damages were sustained after the Co., 375 F.2d at 705-06. Chemical filed, complaint was interest should have reject IBP’s contention that only accrued injury, from the date of de the trial court’s admission evidence de spite language in section 535.3. See trial. prived it of fair We do not believe International, Cory, Sedeо S.A. closing argument presented by that problem F.2d at 1211-12. The this proper attorney so exceeded determining $150,000 case is whether the substantially bounds as to affect the fair compensatory damage award for tortious ness of the trial as a whole. affirm Our existing interference with employment was issue, however, binding ance on this is not damages incurred before after Octo previous remand. The trial and now 4, 1979, complaint ber when the was filed. have, view, appeal crystallized in our this In the absence contrary, of evidence may in this the issues case. It well be that we must that assume the losses for which on retrial the district court will find it Bagley being compensated by was this expedient probative to reconsider the value judgment occurred when he was dis particular pieces of evidence and once 30, charged on July and immediately again determine that is whether value out assumption particu thereafter. Such an weighed danger prejudice. of unfair where, larly case, warranted as in this there separate compensatory was a dam Prejudgment D. Interest. age award for tortious interference with case, diversity governs this Iowa law Thus, employment. reject future we this prejudgment amount of due on interest contention IBP. International, judgment. Sedco S.A. argues prejudgment IBP also that inter- (8th Cir.), Cory, 683 F.2d cert. est on future inappropriate denied, 74 because the district court instructed the (1982). L.Ed.2d 512 Section 535.3 jury present to calculate the Bag- value of provides “[ijnterest Iowa Code shall be ley’s damages. future already For reasons money all judgments allowed оn due on and discussed, assuming $150,- we are that the percent decrees of courts at the rate of ten compensatory damage award was for * * per year *. The interest shall accrue past injury. We therefore need not ad- from the date of the commencement argument. dress the merits this § (West action.” Iowa Code Ann. 535.3 Supp.1984-1985).22 Finally, argues Pursuant the stat IBP prejudg ute, the Bagley pre district court awarded punitive ment interest does not run on dam judgment judgment ages interest on the judgment. entire The district court in the amount of rejected argument, $2.33 million. IBP con this relying on the grounds. tests this award on number of “clear mandate” section 535.3 that inter case, disposition our judgments Because of of this we est on all “shall from the accrue arguments only need address those which date commencement of action.” statute, present arguments amended form on 23. In addition discussed be- low, prejudgment applies judgments March entered on contends interest on judgments impermissibly speech libel chills January and after even if the action was improperly compels retraction and settlement. prior filed to that date. Janda v. Iowa Interna judgment, Because we reverse libel we do Inc., Hydraulics, tional 326 N.W.2d 343-44 arises, not address this issue. If the occasion (Iowa 1982). may raise issue anew before the district any court on retrial. gitimate petitioning that are enti- its face admits of activities statute on Although the awards, damage degree punitive tled to some of first amendment exception for no this construction. agree protection. agree with I also the court that cannot with wе depriva- compensation absolutely for the is not Interest the first amendment does money. Punitive dam- liability use of tion of the for insulate I.B.P.’s actions however, accrue, until ages defamation, do ac- provides rather these but It be ano- judgment. would awarded privilege may that be qualified tions with a plaintiff compensate the malous Further, indeed circumstances. lost under some money to of the use of deprivation for qualified this scope to determine the right. Recently, no claim of he has privilege, court must focus on the sta- held, in of Iowa has Supreme Court defamed; per- if person tus of en- issued before accordance with decisions purpose public is a limited son defamed 535.3 that interest does actment of section prove figure, person that must “actual mal- damages judg- punitive not run on qualified priv- ice” in order to overcome the Corp. v. Management Ste- Midwest ment. ilege and recover. (Iowa 1984). phens, 353 N.W.2d Despite agreement with the court’s basic approach, disagree I with its conclusions. III. CONCLUSION. court, Bagley’s I conclude that Unlike Bagley cannot re- Having concluded stripped him of actions have not his status on the of IBP’s for defamation basis cover Further, private even if as a individual. absent “actual to the Subcommittee letter Bagley purpose public a limited has become malice,” judgment we reverse libel required prove figure and as a result is to the district court. remand that claim malice,” “actual the district court in fact judgment for tortious We also reverse the jury instructed the on the issue of actual If, emрloyment. future interference with jury specifically malice and the found that remand, successfully Bagley establishes on actual malice. find- I.B.P. acted with This libel, for he should be al- IBP’s separate any ing was and distinct from damages for loss of fu- lowed to recover jury, other issue decided and after resulting employability from the defa- ture evidence, independent an review of the Finally, judgment affirm the mation. we Sullivan, York Times New Co. existing em- for tortious interference with 254, 285, 710, 728, 11 L.Ed.2d 686 $650,000, totalling prejudg- ployment with (1964), Bagley presented I conclude that only on the com- ment interest calculated convincing clear and evidence of actual $150,000.24 re- pensatory damages of Corp. malice, Bose v. Consumers Union of judgment, mand for modification — U.S.-, States, the United court, pur- a determination the district (1984). Finally, 80 L.Ed.2d 502 NOV, judgment suant to IBP's motion disagree I with the court’s reversal of the introduced sufficient ev- whether jury’s on inter- award merit idence of actual malice to considera- employment ference future claim. pro- jury, tion and for such further duplicative an be if While such award will ceedings may appropriate light ultimately his succeeds on libel opinion. parties their shall bear claim, Bagley yet has to do so. Conse- appeal. own costs on propriety quently, any decision on the premature. Because of these this award FAGG, dissenting. Judge, Circuit disagreements, respectfully I dissent. basic accept analytic I the basic framework court, is a I The court’s conclusion developed by the court. Like the purpose public figure largely flows constitute le- limited conclude that I.B.P.’s actions court, appeal judgment in federal see The Co. 24. No issue has been raised on concern- Weitz Inc., (8th post-judgment ing applied Carpet, interest the rate F.2d 1382 Cir. Mo-Kan 1983). under the Iowa stat- which has been calculated applicable rate to a ute. For a discussion of the Bagley played controversy. Throughout from its determination this controversy, and “influential” role in the “active” Bagley sought no audience. His legislative process. Ante at 1316. This meetings pri- with other individuals were conclusion, particularly light nonpublicized and, fact, vate and imposes significant burden such decision by Bagley. not initiated congres- Even his misplaced. Bagley’s only in- Bagley, is testimony objectively sional was not volun- legislative process was as volvement since, notes, tary given the as court it witness Smith a before the subcommittee. Further, subpoena. under his after testi- in policy He had no role the subcommittee’s mony, Bagley conscientiously avoided the not, spe- determinations and did outside his and media made no comment. Final- attempt testimony, lobby per- or cific ly, any Bagley may media attention that any partic- the suade subcommittee take following publication have received the Instead, position. Bagley or ular action the Peterson letter cannot transform an single appearance made a before the sub- private otherwise individual a into limited committee, subpoena, provided under public figure. purpose any analysis, Under information relevant that subcommit- simply I cannot conclude that has activity. single ap- Outside this tee’s so “thrust tо the forefront of [himself] “proven pearance, Bagley had neither ac- * * * particular public controversy [this] legislative forum nor a “realis- cess” the * * * relinquished has his inter- [h]e [that] opportunity” tic to counteract false state- protection good est the of his own Ante at 1316. by I.B.P. made ments Welch, Inc., v. Gertz Robert name.” 418 facts, Given these I cannot conclude that 323, 345, 2997, 3009, U.S. 94 S.Ct. 41 an or played either “active” “influ (1974). Consequently, L.Ed.2d 789 unlike legislative process. role in the If he ential” court, I believe retains his sta- did, virtually every appearing then witness private as a tus citizen. congressional a committee will con Although my isit contention that Bagley partici stitute “active” and “influential” private citizen, retains the status of a pant Bagley will and like lose his or her implicated first amendment values I.B. private status as a citizen. A mere witness petitioning P.’s activities are still entitled to be hardly play can said to “an influential protection. constitutional necessary The “resolving” particular role” controver protections constitutional were enumerated sy, especially losing the context of Court Gertz v. Robert Supreme protection private person mantle and Welch, Inc., 323, 2997, 418 U.S. 94 S.Ct. 41 status. court’s conclusion that such Gertz, (1974). Supreme L.Ed.2d 789 “accepted have risk” individuals Court outlined the constitutional limitations deserving recovery” “less is are remark private right on a citizen’s to recover for ably ignores harsh and the valuable role defamation the context of media com- play in legislative pro these individuals our present ment. While the case involves thе discourage result cess. This will citizens right petition, first amendment I believe coming with relevant information from for the constitutional limitations found and, consequence, Congress as a ward will area of equally applica- media comment are likely deprived source of valuable ble to the area of petition- first amendment Simply information. because an individual ing. or becomes “involved in associated with a legislative] matter that attention” attract[s The constitutional limitations outlined mean this should not individual is “au Supreme Gertz Court in essentially tomatically public fig transformed into a First, although three-fold. may a state Digest v. Readers Wolston Associa ure.” define the appropriate of liability standard tion, 157, 167, 2701, 2707, 443 99 U.S. S.Ct. defamation, may impose it (1979). 450 61 L.Ed.2d 347, Id. at without fault. 94 S.Ct. at 3010. Second, prov- I reach similar I unless actual result when examine malice has been en, private may overall involvement in the I.B.P. only citizen recover 1322 349, The district at malice.” damages. 94 S.Ct. actual Id. acted with actual the term actual malice court defined “[a] Third, cannot be punitive * * * knowledge publication made with malice. proof of actual without recovered false, disregard it or with reckless case, 350, at 3012. Id. at These in it is false not.” of whether comply with court’s instructions district consistent with the Gertz structions are pro- consequently limitations the Gertz recovery punitive dam limitation on the interests first amendment I.B.P.’s vide * * define term actu both the properly ages ‘need space’ that ‘breathing “the ” Times, malice, York Inc. Sulli al New Times Co. v. Sul- York New to survive.’ 726, 280, 721, van, 84 254, 272, S.Ct. at S.Ct. 376 U.S. livan, 376 U.S. necessary proof, Rosen (1964) (quoting burden NAACP L.Ed.2d 686 Metromedia,

Button, S.Ct. bloom v. U.S. (1971). (1963)). 29 L.Ed.2d 296 338, L.Ed.2d 405 gratuitous finding that Further, court’s liability, the court issue district On damage contained punitive “the instruction by preponder- prove required Bagley to clearly place error in it failed that “published I.B.P. the evidence that ance of proving by actual clear of malice burden it that knowledge letter with the [Peterson] convincing Bagley,” ante and evidence on instruction meets false.” This was 1317, inappropriate. concedes at is I.B.P. The requirement. fault fact that Gertz instruc in its that district court’s brief jury instructed the that court also district placed proving of this issue tion the burden “perjury” “stole” and such as words addition, Bagley. has not even I.B.P. “presumption per se and create libelous * ** appeal. issue on raised this Bagley relieve of falsity” did not proving Despite fault. this the burden Bagley purpose pub- Even if is a limited Bagley required still presumption, was figure required lic prove and is actual published state- prove that I.B.P. these malice, jury’s I that conclude verdict knowledge were ments with jury should stand. The awarded Falsity separate and and fault are false. punitive damages. This sepa- was award Supreme concepts and the Court distinct compensatory rate the award of dam- argument falsity is rejected has ages specifically and was on the based necessarily an indication fault. See jury’s determination that I.B.P.’s actions 10, Gertz, 418 n. 94 U.S. at 347 S.Ct. by were in- motivated actual malice. This Corp., 104 n. 10. Bose 3010 Cf. dependent determination in of itself is and support compensato- sufficient both ry instructions are also punitive damage The district court’s and awards this by with the second Gеrtz limitation. consistent case. was stated As Chief Justice War- compensatory damages, Butts, issue of ren in Publishing On the 388 Curtis Co. v. court, point 1975, speaking 130, at one district while U.S. 87 S.Ct. 18 L.Ed.2d 1094 injury,” specifically (1967): “presumption “Although of a the ‘actual malice’ in- Bagley’s recovery compensatory limited not also given structions were connec- issue, directly compensatory damage those “which tion with the alleged by the libel.” it is proximately petitioner caused difficult to conceive how limited clearly prejudiced could instruction have been that failure This he compensatory damages to those which in view jury, guided by of the fact that the * * * actually ‘actual could establish. malice’ instructions awarded punitive damages.” Id. at 87 S.Ct. at Finally, respect to the third Gertz (Warren, C.J., concurring). limitation, the jury was instructed Further, in far punitive damages could so as the district court’s recover concerned, presumption falsity only prove if he is could “on basis of clear convincing that the evidence defendant limited presumption was to the issue purposes liability compensatory dam- however, Bagley was fired from Dubuque ages. The instructions on their face show Packing instigation. at I.B.P.’s Additional- presumption carry that this did not over to ly, Bagley effectively “blacklisted” ‍​‌​​​​‌‌‌‌‌‌‌‌​‌​​‌‌‌‌‌‌‌‌‌‌​‌​‌​​​​‌​‌‌‌‌​‌‌​‌​‍punitive liability damages, the issue of industry from the as a whole I.B.P. and independent the determination of which is it was made clear to him that he should from a determination of for com- employment look for industry another damages. Consequently, pensatory any er- because he would never work the meat may ror the district court have committed industry again. The offers of employment nonprejudicial may not be used stopped was unable to obtain disturbing this court as a basis for employment further industry. the meat Jeep Corp., verdict. Brewer v. jury’s 724 I believe that this evidence is sufficient to (8th Cir.1983) (citing Paymas- F.2d support jury’s verdict on the tortious Weston, ter Oil Mill Co. F.2d interference with employment future claim. (8th Cir.1979)). forgot- court has conclusion, contrary court, to the I long way ten that have ... come a “[w]e would affirm the awards for libel and tor- from the time when all trial error was tious interference with employment. future prejudicial presumed reviewing courts ” technicality.’ were considered ‘citadels of McDonough Equipment, Power Inc. v.

Greenwood, 464 U.S. (1984) (quoting Kottea- 78 L.Ed.2d 663 States,

kos United (1946)). 90 L.Ed. 1557 I.B.P. received the fair trial to which it was CODY, William R. Appellant, not, light entitled and this court should jury finding malice, of the clear of actual jury’s reverse the determination. SOLEM, Warden, Herman South Dakota Penitentiary; State Meierhenry, Mark comment, As a final disagree I with the Attorney General, State of South Dako- court’s reversal of the damages awarded ta, Appellees. Bagley on his tortious interference with employment future claim. While an award No. 84-1189. on this claim duplicative would be of a libel United States Court Appeals, recovery, Bagley very simply yet has Eighth Circuit. recover on his libel claim. Until that recov- ery occurs, it is difficult to see how the Submitted Oct. 1984. award of for tortious interference Decided Feb. employment with future can duplicative. Rehearing and En Rehearing Banc reversing award, Rather than 22, 1985. Denied March court should portion remand this action back to the district subject court

the ultimate determination of the libel is-

sue.

I also conclude that there is sufficient

evidence, independent any evidence that

might protected petitioning constitute ac-

tivity, support this claim. Prior I.B.P.’s

actions, Bagley highly regarded industry, good

the meat reputation had a honesty, ability, integrity, and re- employment.

ceived numerous offers of

Following congressional his testimony,

Case Details

Case Name: In Re: Ibp Confidential Business Documents Litigation. Hughes A. Bagley v. Iowa Beef Processors, Inc.

Court Name: Court of Appeals for the Eighth Circuit

Date Published: Feb 13, 1985

Citation: 755 F.2d 1300

Docket Number: 83-1894

Court Abbreviation: 8th Cir.