Richard C. Levine v. Cmp Publications, Inc.

660 Romeros, 1104, v. (1975), 600 F.2d U.S. capac- 622 Harvester, in his individual but ee of denied, Cir.1979), cert. (5th 444 U.S. govern- 1105 concern.

ity as a domestic 1025, (1980), 1077, 62 L.Ed.2d 759 that McLean was 100 S.Ct. contend does not ment Cir.1975), (5th Ragano, v. contrary, it 520 F.2d 1191 U.S. To “renegade employee”. denied, 905, rt. only on behalf of 427 96 S.Ct. acted U.S. McLean concedes ce Thus, (1976). employer, 3192, Har- a con 49 L.Ed.2d 1199 for the benefit and statutory satis spiracy canon to commit does not It is basic a violation vester. not be fy requirement “a statute should of the Act. the clear construction way as to render cer- construed insignifi- superfluous or provisions tain Ill & v. Marine Cooks cent.” Woodfork to convict We hold that order Union, 966, (5th F.2d 970-71 642

Stewards under the for acts com employee an FCPA Cir.1981). employer, the mitted for the benefit of his statutory under We conclude employ government must first convict the scheme, employ- acted as where McLean government failed to con er. Because the prosecuted issuer he must be ee of an agree plea and under the vict Harvester Otherwise, the Eckhardt capacity. and unable to indict Harvester ment will be entirely eviscerated. Amendment would be McLean, Act McLean’s try it bars with government’s position, the adopt If we prosecution.10 prosecute employees of government could AFFIRMED. aiding abetting CEI Harvester with aid- employees of CEI prosecute indict- abetting Harvester without ing and “end- or This

ing either Harvester CEI. around the Eckhardt maneuver run” meaningless render Amendment would reject government’s we therefore argument. LEVINE, Plaintiff-Appellee, Richard C. (C) v. argues also government PUBLICATIONS, INC., guilty conspiracy plea Harvester’s Defendant-Appellant. Act’s re satisfies the violate the FCPA predicate violation quirement of a No. 83-1362. requires disagree. The Act employer. We Appeals, Court of United States section employer “violate[d] Fifth Circuit. dd-1(a)” the Act. It is well-set 78 an offense conspiracy to commit tled that a 13, Aug. of a substantive of and the commission separate and distinct crimes. fense are States, 420 770, v.

Iannelli United 616, 777, 1284, 1288, 43 L.Ed.2d 95 S.Ct. addition, a denial of a motion to every before us. federal crime. included as an offense 408, Ruffin, ordinarily F.2d 421 is not a final See United States v. 613 an indictment dismiss (2d Cir.1979) (1976) (Wyatt, dissenting); J. United purposes § of 28 U.S.C. 1291 decision 1076, (3d Standefer, 1081 States v. 610 F.2d unappealable. See United is therefore 1999, 10, Cir.1980), Cir.1979), aff'd., 64 447 U.S. 100 S.Ct. Sisk, (6th 629 F.2d 1180 States L.Ed.2d 689 denied, rt. 449 U.S. ce U.S., (1981); Abney v. 431 U.S. 66 L.Ed 2d 809 equitable urges us to invoke “our 10. McLean 2034, 2041-42, 651, 662-63, 52 L.Ed.2d conspiracy powers” count still and dismiss the (5th (1977); Rey, U.S. v. 641 F.2d pending against McLean has not him. Since Cir.1981). properly cross-appeal, filed a this issue is not publication of its the first of the arti- two cles.

I. controversy generated this liti-

gation began 1970s, early when Rich- ard Levine worked Diecomp, Jersey company New he co-founded. Le- vine was accused some members Diecomp’s board of directors incompe- tence and conflict of interests. In 1972 Diecomp Levine and executed a settlement agreement agreed which Levine to re- sign Diecomp agreed purchase some Diecomp of Levine’s stock. Levine later Diecomp judgment sued and obtained a against perform it for failure obliga- to its agreement. tions under the settlement Boone, Templin, Haynes Donald C. & Diecomp purchased The assets of were in Westbrook, Dallas, Tex., Townley Daniel E. by Manufacturing Technologies, Inc. Updike, Hughes, Andrew L. New York & (MTI), company a which was formed for City, for CMP. purpose. pur- Some time after Phalen, McQuality, Joseph Chumlea & G. chase, Levine and MTI in became involved Dallas, Tex., Chumlea, McQuality, Mark S. ownership dispute over the of some com- Austin, Tex., Bragg, plaintiff-ap- David puter tapes apparently software which con- pellee. developed programs tained Levine for claimed, claims, Diecomp. Levine and still tapes doorstep he on the found attempted Jersey his New home. Levine tapes sold at a foreclosure sale in have TATE, DAVIS, JOLLY and Cir- Before satisfy judgment he had order to which Judges. cuit previously against Diecomp and secured paid in Diecomp

which had not full. MTI JOLLY, Judge: injunction against E. Circuit was able to obtain an GRADY sale, signed and Levine a con- foreclosure Publications, appeals the judg- Inc. CMP agreed he to return judgment sent against it after a trial ment entered MTI. tapes argues that the two this libel action. CMP MTI that Levine allegedly privileged later discovered libelous articles tapes Diecomp copies that made of some of the reports judicial proceedings copies to third had offered to sell the there was insufficient evidence of either Levine, alleging con- MTI sued negligence support parties.2 or actual malice to competition and $267,501 tapes, unfair damages in actual version of the judgment of $125,000 employment contract punitive damages.1 We violation of Levine’s Diecomp. Levine counterclaimed for damages with award of actual affirm agreement. CMP, settlement part of the 1972 but reverse award breach suit, as MTI which we will refer to we find no This punitive damages because Levine, Judge Harold part was tried before of actual malice CMP’s copies in claimed that he made the jury originally verdicts 2. Levine returned 1. The $763,000, accidentally. totalling originals trial court or- and the case the were erased dered a remittitur. prohibiting dissemination of infor- vine Ackerman, Jersey state court.3 in a New relating Diecomp program, mation to the found Levine liable Judge Ackerman action, saying, rejected that course of but Diecomp tapes, of the conversion MTI for fact, Dr. Levine will rejecting, just I don’t believe that pos- believe, innocently into obey he had come this Court’s order. I don’t claim that tapes. intelligence, Ackerman also found all of his he admit will session program tapes. still has some computer embodied that he Diec- tapes was a trade secret of software later, MTI, and that Levine

omp, and covenants, made restrictive had violated thought very about careful- I have Diecomp employment agreement with way one ly. There to deal with agree- in the 1972 settlement and affirmed I referring like this: am this matter man ment, making copies computer Prosecutor of the Pleas Union Judge offering them for sale.4 tapes and determine, County to for him to deter- Ackerman said: mine whether there has been a violation the de- has established that

Plaintiff of the criminal statute. Certainly, a fendant was a converter. appealed of MTI v. trade secrets in New misappropriator of Jersey Supreme the New Levine to Court. Jersey may enjoined be and assessed required Jersey under New He was law punitive only compensatory but supersedeas rights bond to secure the file may prosecuted damages, and he also be pending appeal. totalling MTI Bonds grand jury sees fit its wis- ... if the $38,000, approximately the difference be- to indict him. dom of the MTI and tween the amount award to MTI has suf- Judge Ackerman found that counterclaim, were the amount of Levine’s $31,000 by virtue actual of fered by and of Levine. posted friends relatives tapes, of Levine’s conversion of Jersey New to Texas in Levine moved from marketability pro- diminished the of MTI’s August shortly ap- after he lost his $20,000 in gram.5 He also awarded MTI peal, joba with Texas Instruments. to take punitive damages. Levine was awarded MTI, judgment to enforce its unable $12,213, personally, began proceed- the amount of his counterclaim against Levine agreement. supersedeas under the settlement ings levy to on the bonds it. order to collect amounts owed to Judge Ackerman con- stated that he was backdrop, possessed copies Against vinced that Levine still of this the actors of this began In computer program.6 He lawsuit to assemble. late MTI’s considered Patton, reporter publi- for a issuing permanent injunction against Le- Carole Judge important 5. MTI's witnesses testified that an 3. Ackerman is now a United States Dis- Judge. attempted aspect program’s potential trict Levine to block Acker- of the value to its through appointment position man’s campaign to uniqueness. this was its customers writing letter the Attor- of directed to ney General of the United States. Judge Ackerman Levine: said of knavery He is a consummate liar. His knows 4. After the consent in the first suit petty, vindictive. Levine, no bounds. He is he is His against MTI in which Levine admitted imagination thwarting processes jus- ownership tapes, MTI's wrote let- court, amazing frustrating companies attempt tice is and to ters to several to sell in an said, copies. pleased letter his report One "We are this Court who has been forced to no less legal proceedings against us day day initiated listen to him after in what can best be were with- ... dismissed the court [MTI] fairy relating tales described as a multitude of hearing copy prejudice. out a and without One motives, acquisition, preservation, dis- to his semination, given computer programs was and [MTI] technology giving up and of a copy retained us.” Levine later as- another program upon which millions have been attorney had entered into the serted that his spent. agreement knowledge and consent without his legal right that he was unaware that he had no copies. to sell the Systems News differences accordance with the terms called cation Information Gutman, presi- Agreement____ this chance (ISN), bymet John MTI, meeting. told a trade She at dent addition, respect alleged with ISN, reporter was a that she Gutman kickbacks, agreement pro- the settlement her tell about Gutman offered to and vided: Pat- MTI and Levine. controversy between represents 6. DIECOMP and war- interview later three-hour ton conducted rants that its Board of Directors has his during gave which Gutman of Gutman approved ratified and sharing the time departure facts of Levine’s version service contract between and DIECOMP litigation. Diecomp and the MTI Gut- from dated COMSERV March and that in 1971 Levine told Patton man LEVINE’S and INFORMATION’S roles kickback scheme engaged illegal in an been knowledge therein full with thereof and which constituted a breach with a vendor approved ratified has further and LE- Diecomp. responsibilities to fiduciary his performance responsibil- VINE’S of his posses- to Levine’s later Gutman referred ities as and duties Vice President for Diecomp “a case tapes as classic sion of Development, it being Research and un- computer told Patton crime.” Gutman ap- such ratification derstood that and working an assistant dis- he was proval respon- is limited the area of Jersey in investi- attorney in New trict professional judgment sible and conduct interview, affair. After gation expressly intended and ex- cold, ire feet Gutman cooled his ratification, approval cludes or release of request specific for more refused Patton’s any wrongdoing, misrepresentation, or regarding MTI’s case information represents fraud. DIECOMP further Levine. corporate minutes warrants its court Patton next obtained access wrongdoing do not contain accusations of for MTI v. Levine. These records records incompetence or LEVINE. chancery division the Union that, judg- Patton testified trial her County Patton knew that the Courthouse. ment, citing clause accusa- “whereas” equity chancery disputes handled division against Levine stated “the tions substance had no criminal division. separation” or reason for the and that file, Diecomp warranty not to chancery In the court Patton found was relevant agreement. case substance of the indicating letter that the had been the of economic crime section referred to the file, an Also the court Patton found general’s Jersey attorney New office. In affida- affidavit made Gutman. that the 1972 settle- copy also found of She vit, response by Le- allegations to made agreement Levine Diec- ment between and vine, said: Gutman omp, preamble included the to which ex-employ- [alleges] that Levine ... Mr. following statements: there fact that ees have referred to the WHEREAS, development of around,” “floating many copies, were System progressed has as an- PDDC not fact no from the that which resulted ticipated; and for the were exercised effective controls WHEREAS, accusations have been material was whatever protection of against wrongdoing made LEVINE of tapes. This is erro- on the fact contained profits taking supplying secret and stringent controls neous. There misleading information to false and no would at one made all times so others, which, and accusa- stockholders also tapes computer have access to against have made LEVINE represented tions been previously, Ias indicated incompetence; $4,000,000 technical approximately investment After Mr. Levine WHEREAS, persons. hereto have various parties his No- original accusation in respective made this agreed that it is in their now im- deposition, we made existing to their vember interests resolve best reopen on his motion to April the accura- court in to determine checks mediate date, Patton claim, judgment we MTI v. Levine. as of this his cy of hearing, this at which Levine’s ex-employee attended to find no able have been denied, reported and she on it copies that had motion was any other who knows April edition of tapes that are “float- ISN. {See these made of been around.”____ “B”.) article, Appendix The second like the very It is difficult to ing first, litigation as a “five- possession has referred anyone if believe computer theft case.” In the arti- through year-old lack of tapes, it came about tapes reported cle Patton the denial Levine’s came security. there are If motion; then, (Empha- background, stated: outright through about theft. added.) case, originally by Judge sis heard MTI’s Ackerman, hinged A. on the Harold research, Patton inter- this In addition to charge that Levine had stolen valuable posted people who had viewed some computer tapes. information housed on She on Levine’s behalf. supersedeas bonds stealing was convicted of Levine lawyer, and she contact- Levine’s contacted tapes in 1977 and lost several earlier Levine told her ed Levine Texas. case, originally launched appeals in the money pay judgment more he had no by MTI in 1974. lawyer that a Texas against him and remaining him that his assets could told Following appearance of the first by MTI. Patton received be reached ISN, supervisors article Levine in his about quite will- impression that Levine was investigate began Instruments at Texas ing litigation have the between himself Jersey the New lawsuit. the facts behind publicized. and MTI suspended immediately without Levine pay eventually resign forced to on her interviews and her research Based position Texas Instruments. Levine, of MTI v. Patton in the court files ap- an article about the case which wrote September Levine filed suit 25, 1980, February on under peared ISN CMP, against MTI in federal Gutman and Tapes “Tale of and Woe Con- the headline court, invoking diversity jurisdic- district (This repro- article is tinues to Grow.” tion. MTI was dismissed from the case Appendix opinion.) “A” duced as trial, four-day After a before trial. MTI v. Levine as a The article described damages awarded Levine actual “five-year old theft case” and re- software $1,003,500: $490,000 against was assessed ported “allegedly stole mil- $4 damages stemming publi- from the CMP as Jersey lion of software in New ... 1974.- article, $23,500 the first was as- cation of ” “disap- The article focused because of the second sessed pearance” Jersey from New and the fact $490,000 jury assessed article. The enforcing that MTI was its Gutman, liability whose against people posted the bonds who republication from the of the de- resulted repeatedly on Levine’s behalf. It also de- famatory statements about Levine which alleged scribed' Levine’s conduct as theft. The made to Patton. award- Gutman affidavit, Referring $200,000 to Gutman’s the article punitive damages of ed Levine said, $50,000 “And accused Levine of publication Gutman 'out- and for CMP’s ” stated, articles, right The article also respectively. theft.’ It first and second $250,000 only charged punitive “MTI not Levine with theft of also awarded tapes, against the but with theft of trade secrets as Gutman.

well.” trial, ordered a new or in The trial court alternative, article, remittitur. Actual dam-

Following appearance of this the the Patton, telephone ages call awarded CMP were reduced Levine made a to $12,500, $255,001 appear him to and for the first and protesting that the article made articles, respectively. Actual dam- Patton to second to be a criminal. He invited re- Jersey ages against Gutman hearing attend a scheduled in a New awarded were 667 $255,001. Challoner, punitive Each"'of the to duced (1975); halved.

damages awarded was L.Ed.2d 3 Klaxon Co. v. Stentor Co., Manufacturing Electric 313 U.S. ultimately en- appeals the CMP 85 L.Ed. 1477 Texas $267,501 dam- in actual against it for tered adopted most-significant-relation- has the damages. $125,000 punitive ages and ship determining test for which state’s law with and case settled the Gutman applies to a tort action. v. Gutierrez Col- has appeal. Levine his has withdrawn lins, (Tex.1979). 583 S.W.2d In that cross-appeal attacking the withdrawn case, Supreme the Texas Court announced court’s remittitur validity of the district its adherence to general the set forth rules order. (Second) in the Restatement Conflicts, §§ 6 and 145. 583 S.W.2d at 318. II. court, noting district that defamation Texas issues this are several before There designed is primarily protect law the First, challenges district court. CMP preserving interest of individuals in their holding applicable Texas law that court’s reputations, held that Texas would also ad- however, ar- Primarily, CMP to this case. here to the Restatement rule which states: privileged as a gues articles person claims “When natural that he has statuto- matter of constitutional Texas aggregate been defamed communica- sup- the evidence does not ry law that tion, significant the state of most relation- contrary. to the port verdicts ship usually will be the state where the jury’s finding that contends CMP time, person was domiciled at the if the negligently defamed Levine the articles complained published in matter of was evidence, it chal- supported by the not (Second) state.” Restatement Con- lenges punitive damages on award § 150(2). The district relied supported flicts, not court ground that it was Finally, argues heavily injury on the that most of malice. CMP fact separate awards of actual dam- in Texas. suffered Levine occurred However, and Gutman constitute ages it factors also considered the recovery. double mentioned section 6 of Restatement7 balance, that, deciding on Texas is the

III. significant that has the most relation- state par- conduct and the ship with tortious court in a written district agree litigation. this We with ties to rejected ar opinion considered CMP’s analysis under court’s of this case district ap York law gument that New should be do principles, choice-of-law and we Texas It adhered this view plied to this case. necessary repeat analy- think jury, reflect in its instructions that, here. It is clear to us based sis begins law. review Texas Our pro- strong of interest expression Texas’ dis proposition that a federal well-known defamation, Texas tecting its citizens from must sitting diversity court in a case trict apply New York law would not apply principles law courts choice of Zimmermann, case.8 Day forum state. Inc. & uniformity (f) certainty, predictability and factors

7. These include: result, and (a) the needs of the interstate and interna- application (g) determination and ease systems, tional applied. the law to be forum, (b) policies of the the relevant 6(2). (Second) § Restatement of Conflicts (c) policies of interested the relevant other interests of those noted, states the relative has New York As the district court 8. particular of the states in the determination con- adopted which reflects a defamation statute issue, rights siderably the of defama- less concern for (d) justified protection expectations, Chapa- the plaintiffs Texas law. See than does tion (e) underlying particu- policies the Observer-Dispatch, the basic N.Y.2d 38 v. Utica deau law, (N.Y.1975). lar field N.E.2d 379 N.Y.S.2d 341 569 668 publication ambiguous, used in the

IV. is not question privilege one of law ... [is] judgment reverse the urges us to ....” 460 Ray at 884. See also S.W.2d ac- the articles were it because Co., Inc., Doubleday mer v. & 615 F.2d proceed- public other judicial or counts (5th Cir.1980) (“[T]he jury must by Texas statute9 and the ings privileged decide publication ‘what effect would the course, Of neither federal Constitution. upon have ordinary the mind of the read protects the Texas law nor the Constitution ”). er?’ public proceed- publication of accounts of reflect, do not at least ings if the accounts presented evidence in this case proceed- substantially, the truth of those questions raised fact as to whether the two inter- jury, special ings. Because fair, articles were impartial, and substan to be rogatories, found both of the articles tially true accounts litigation of the be untrue,” CMP, in “substantially false and tween cursory MTI and Levine. Even effect, urges that hold that the articles we. comparison of the articles with the court privileged a matter of law. We relied, documents on which Patton privilege examined CMP’s claims and have which were jury submitted to the as evi grounds reversing find for ver- no dence, reveals published inaccuracies in the dicts. reports. example, article, For in the first A. repeated are allegations there references to Levine, although of theft in none of statutory privilege The Texas for reported proceedings did MTI ever “fair, impartial” pub true and accounts of produce any fact regarding how proceedings interpreted by lic has been possession tapes. Levine came into Supreme Texas Court in Denton Publish testimony Gutman’s affidavit does not di (Tex.1970), ing Boyd, Co. S.W.2d rectly having accuse Levine of stolen the give protection reports all tapes. A jury reasonably could find that public proceedings which are at least sub sentence, “And Gutman accused Levine Moreover, stantially privi accurate. ” theft,’ ‘outright was not a substantial lege is limited to statements which are ly proceedings accurate account of the reports identifiable the reader as the lawsuit. The substantial record, truth of the public what was said on the statement in the article that the does not “New Jer extend to statements which the sey attorney general’s office ordinary interpret considering reader would as back action, ground legal information or further but wonders whether statements of fact. ques 460 S.W.2d at 883. its reach extends to Texas” also is a Where the evidence presents jury: a conflict tion for the pub about whether the Patton testified that the person lished statement substantially Jersey is a true ac she contacted in the New count public pro attorney general’s of what was said in office seemed uninter ceeding ordinary or whether reader ested in the case and did not know that would construe an Levine the statement as such Texas until Patton revealed account, information; furthermore, then the must resolve these it is no issues. Only report means clear S.W.2d at 884-85. when that this statement is a language public proceeding “the facts are undisputed meaning and the of a within the justice 9. CMP invokes art demand TEX.REV.CIV.STAT.ANN. that the same should not be provides part: orders, published and the court so or publication proceedings following other official authorized law matters any newspaper periodical or shall be deemed in the administration of the law. privileged and shall not be made basis any action for libel. reasonable fair A comment or criti- fair, impartial 1. A true and account of public cism of the acts of officials and official proceedings justice, in a court of unless published of other matters of concern prohibits publication court of same when general information. of the court the ends of

669 fully the statement also Finally, the substantial lends itself to the the statute. had, jury interpretation fact, the individuals that Levine that of the statement truth “may a criminal bonds for been convicted of offense a posted appeal who law, disappearance” Again, criminal court. under Texas pay to be forced [his] read easily It could be con- issue. must resolve whether articles open an that Le- suggesting taining ordinary ambiguous reader as statements are an appearance bond op- “substantially had violated true.” CMP had a fair vine Also, reason- a fleeing the law. portunity argue interpretation, from to for its was Levine’s not find that it was jury could persuade jury. able and it did not On re- levy on the to caused MTI view, persuaded relocation we are reverse. pay bonds, failure to rather his appeal but him.

the civil B. misstatements these various Whether We must consider also whether fed- create fact would interpretations of special pro- eral Constitution affords some a substan- ordinary reader mind of the question tection to the articles pro- judicial impression of tially false independent they reports that are basis say We cannot ceedings jury question. is a judicial proceedings. argues that it law, unam- that, the article as a matter of does, relying on cases which we find to be truth reported the substantial biguously inapposite. these circum- Under about MTI v. Levine. CMP, Time, In cited stances, not err in the first case court did the district application submitting Pape,10 issue of the substantial Inc. v. the issue was the nor, on jury; to the truth of the first article rule of New York Times Co. v. jury, can we presented Sullivan,11 prohibits public the evidence official finding that the first jury’s say defamatory recovering from for a unsup- substantially untrue is article the statement was made falsehood unless ported. 284, 401 91 with actual malice. U.S. rule been S.Ct. at 636. This has since 25, noted, February we have after the As involving fig “public to cases extended 1980, carried a published, article was ISN 12 ures,” public neither a offi but Levine is 21, April in its article on the case second figure.13 Supreme cial nor a 1980, issue. We also decline to reverse Maga that the failure of Time Court held the second article was jury’s “alleged” report in its to use the word zine substantially Although reported untrue. summarizing rights commission’s re a civil reopen the denial of Levine’s motion police chief did port charges Levine, judgment of MTI v. the second sup evidence sufficient to not constitute summary contained a of the infor- article of actual malice. port verdict first, previously reported. Like the mation sum, Time, Pape very was a fact- Inc. v. the second article contained references interpreta involved the specific case that More- alleged conduct as “theft.” reports applied tion of “actual malice” over, “Le- it contained the statement nothing find public figure. We about stealing the vine was convicted of suggests that arti that case which CMP’s argues that Although CMP tapes____” constitutionally privi are cles about Levine Judge reasonably reflects this statement conduct, leged. evaluation of Levine’s Ackerman’s 130, Butts, 45, 279, 633, Publishing U.S. 12. Curtis Co. v. 388

10. 401 U.S. L.Ed.2d 91 S.Ct. 28 1975, (1967); 1015, 1248, denied, L.Ed.2d 1094 rehearing 87 S.Ct. 18 Gertz U.S. 91 S.Ct. 401 Welch, (1971). U.S. 418 Robert L.Ed.2d 552 (1974). 41 L.Ed.2d 789 11. 11 L.Ed.2d V.A., part See infra. Cohn,14 Corp. heightened liability also standard of Broadcasting a case Cox CMP, right involving report judicial proceeding: of a of a by concerned cited broadcast the name of television station to Presumptively erecting the New York subjecting itself to rape without victim plaintiffs Times barrier all seek- privacy. Its liability invasion of facts for ing injuries to recover for from defama- of this case differ from those tory published falsehoods in what are completely accurate: publication was alleged reports judicial proceed- to be reported ap was name of the victim ings deprecia- would effect substantial for peared available on documents protec- tion of the individual’s interest in Supreme held that inspection. The Court harm, tion from such without con- not girl’s father could recover vincing assurance that such a sacrifice is privacy his as a result of for invasion of required under the First Amendment. name, daughter’s say the broadcast of 456, 424 U.S. at 96 S.Ct. at 966. impose ing, may not sanctions “the States publication on the of truthful information V. open to contained in official court records Having publish- decided that the articles 495, public inspection.” 420 U.S. at ed special CMP are not entitled to the published by at 1046. If the articles S.Ct. protection afforded Texas law for re- publication of truthful in CMP constituted ports public proceedings, they and that records, in court formation contained any special do not fall within constitutional they course could not be the basis of a libel privilege, we must decide whether the However, go action. the facts of this case properly upheld verdict for Levine can be beyond Broadcasting, far those Cox under constitutional and state law stan- which, reality, establishes rule even governing dards defamation actions. This less broad than that embodied the Texas inquiry steps: first, deciding involves two statutory privilege. whether the statements in the articles were so, second, defamatory, if deciding sum, suggestion we find no pub- whether CMP can be held liable for precedents cited CMP that the Con lishing them. protects liability stitution it from for the statements, publication untrue simply A. purport because those statements fair be reports proceedings, judicial assuming, Much supports of the evidence which course, liability imposed is not jury’s finding with that the two articles were Welch, out privileged supports fault.15 v. Robert Gertz also its conclusion 346-47, 418 U.S. at defamatory. 3010. that the two articles were Le- argument CMP’s pointed the articles should be vine has ato number of statements privileged regardless which, they argues, of whether are in the articles he cumula- substantially expressly rejected tively true was create in ordinary the mind of the Time, Supreme Court in impression Inc. v. reader the false that his con- Firestone,16 when it argued declined to establish a duct was criminal. CMP has impartial” part 14. 420 U.S. 95 S.Ct. 43 L.Ed.2d 328 terms IV.A “fair (1975). opinion. apply Those terms to the Texas statutory privilege and do not serve as the basis dissenting opinion holding publica- our that the articles are not constitu- states that "a protected by tionally privileged. tion First Amendment freedom of expression required to be fair and im- [not] agreement with We also note our the dissent’s partial, long expression so as the is truthful." opin- are statement that there no false ideas or agree “impartiality" prerequi- We is not a However, under ions our Constitution. protection. holding site to constitutional Our regarding false case involves statements of fact specially protected by that the articles are not opinions and not Levine's conduct or ideas. the first amendment is based on our that the articles are untruthful. The dissent 16. 424 U.S. 47 L.Ed.2d 154 misapprehension reflects a of our use of the course, was response respect that each statements Of to the sec Therefore, article, by the supported facts. ond the evidence of defamation is entirely dif- presented with two stronger. even We need look no further evidence be- interpretations of the ferent than to the statement that “Levine was ____” must affirm if the version it. We fore convicted of stealing tapes the by sub- jury supported the is accepted uphold jury the argues verdict. CMP Air Trane stantial evidence. us, as it did to the jury, Comfort that the use of the Co., F.2d Conditioning v. Trane 592 word “convicted” appropriate, lay- was Cir.1979). (5th description man’s Judge Ackerman’s findings in MTI jury Levine. found article, In the first there are several otherwise, and we say cannot that this find- which, of fact when considered statements ing contrary presented, is to the evidence together, the of def support jury’s contrary is it nor to the common-sense me- (We need whether amation. not consider aning of the wording used in the second standing alone any of these statements one article. First, finding.) ar supports the Levine statement, gued “Gut- to the that the ” theft,’ ‘outright Levine of man accused B. affidavit, supported by not the Gutman turn, then, We question to the which Patton testified was the source publishing whether CMP’s conduct Instead, testi that information. Gutman defamatory two articles is actionable. was fied that the affidavit before princi established Gertz the constitutional argued, no accusation. CMP ple publisher may that a held strictly not be a fair inter contrary, that statement is publication defamatory liable for of a Second,

pretation arti of the affidavit. falsehood. 418 at U.S. at “disappeared,” cle that Levine had states publication If the victim 3007. of such a though Patton Levine even had located prove public figure, then the victim must much effort the first without even before publisher that actual published. article was Levine testified acted with malice “disappeared,” he evi had not and offered in order to recover. 418 U.S. at Third, support that public dence to statement. If is not a S.Ct. at 3008. the victim Jersey comment that New authori prove figure, he must some fault considering action ties were further publisher, but the states are part by Pat Levine was contradicted define the of fault which will free to level testimony ton’s own that the individual she give recovery rise to within this constitu to seemed in the case. talked uninterested 346-47, limit. 418 94 S.Ct. at tional fact, no testimony there is in the record first supports statement in the argues liability may that its be CMP Jersey attorney gener article that the New upon negligence predicated mere because its “wondering al’s office was whether purpose public fig- was a “limited Levine course, to Texas.” all of reach extends Of Alternatively, that it contends ure.” must be in the these remarks considered in this not establish that case did they published: context in which negligently. it acted is, repeated references to theft which, relies on facts it CMP several computer Examining crime. the evidence First, figure. it says, public made Levine whole, jury’s as a we conclude that controversy cites Levine’s conduct Le finding that the first article defamed tapes. computer possession over supported the record. It seems vine is suggests the fact that Levine could to us that a reasonable reader clear lawsuit, “begin- Jersey the first New filed article an untrue and dam infer from the regard- is, ning public the volumes record aging impression of Levine: that articles ing the claims ...” absconding thief and described Levine was an Second, public figure. him a re- MTI had been criminal. makes conduct toward campaign against Judge inquiries fers to Levine’s Patton’s or invited her to the judge. nomination as a federal Jersey hearing Ackerman’s attempt New in an “in- Finally, that Levine filed a it cites facts any public fluence the resolution” of con- reopen Jersey litigation the New motion to troversy. and that he invited Patton to attend the None of the facts of this case indicates hearing argues that on this motion. CMP that Levine figure within the actions, of these “Le- the combination meaning was, therefore, Gertz. public controversy vine was drawn into this entitled to recover defam- public figure for this limited and became atory falsehoods contained in the arti- ISN purpose.” upon showing cles a lesser of fault than argument is founded in CMP’s “actual malice.” part assumption on the that MTI v. Levine “public controversy” merely was a because C. forum, i.e., public in a was resolved law, Gertz, Texas in accordance with Jersey.17 state courts of New We disa de gree. speaks public figures private fines the level of fault a Gertz as defamation people plaintiff prove who have “thrust themselves to the must in order to recover particular public publisher forefront controversies negligence, meaning from a in order to influence the resolution of the publisher that knew or should have 345, issues involved.” 418 atU.S. 94 S.Ct. known that the article was false and that at 3009. This statement assumes the exist the content of the article would warn a public ence of some over debate matters prudent reasonably editor of its defamato legitimately public. concern the In ry potential. Newspa Foster v. Laredo Time, Supreme Inc. v. Firestone the Court (Tex.1976), pers, 541 S.W.2d 809 cert. held that the fact that an individual resort denied, 1160, 429 U.S. 97 S.Ct. 51 judicial processes ed to did not make her a (1977). L.Ed.2d 573 public figure, nor did the fact that she held In our review of the evidence “press during proceed conferences the ... presented, we find ings attempt support substantial for satisfy inquiring re porters....” jury’s 424 negligent U.S. at 454 and n. 96 CMP was Firestone, at and n. publishing S.Ct. 3. As in each the two articles about there is no indication that responded Levine testimony Levine.19 Patton’s own estab- reject altogether suggestion priate 17. We years ago CMP’s here. Ten the Su- Gertz opposition Judge preme recognized impor- Ackerman’s nomi- Court that there are public figure tant, purpose nation made him a salutary for the constitutionally rea- founded articles, of these which did not even mention maintaining sons for distinctions between defa- position the sy. Levine had taken in that controver- brought by private mation actions individuals brought by public figures and those and for allowing regulate the states to the former within argue 18. CMP does not that the district court much less restrictive bounds than those im- submitting question erred in whether Levine posed by the federal courts in the latter. Until public figure See, was a jury. e.g., Brewer it, Supreme Court overrules this court must Co., Memphis Publishing (5th 626 F.2d 1238 state, by applying principles abide byoGertz Cir.), denied, cert. 452 U.S. 101 S.Ct. federal, brought by law to defamation suits L.Ed.2d We need not address private persons. question this because we find no error law, Under Texas the truthfulness of an al- jury's conclusion that Levine was not a legedly defamatory publication jury ques- is a figure. language tion unless the used therein is unam- biguous. certainly jury ques- Truthfulness is opinion 19. Our fundamental difference of from when, case, conflicting expressed tion as in this evidence views in the dissent arises because reported rigorous we are convinced that about the facts of the event creates a the more stan- credibility Corp. dard of mandated need for the finder of fact to make review Bose v. Con- - States, Inc., sumers Union -, United choices based demeanor of witnesses. of 1949, (1984), recognized impor- 80 L.Ed.2d 502 Even the Bose court that it reviewing respect awards of actual in defamation suits tant for the court to brought by public-figure plaintiffs, inappro- choices made the finder of fact. 104 supported by was a verdict is further this evi- MTI v. Levine knew that she lished negligence publishing conviction dence of CMP’s its no criminal and that civil case face, Patton Levine. the affidavit. its version of On rendered had been trials criminal any partic- had covered affidavit did not accuse that she Gutman stated difference Moreover, person was aware ular of theft. Patton had before Despite civil trials. criminal and between read the entire trial record of MTI v. Le- two articles knowledge, Patton wrote vine, and she knew that MTI had been could reason- of which Levine both about produce any unable ordinary by an reader interpreted ably be tapes. that Levine had stolen the showed Re- to Levine. impute criminal conduct Patton also knew that Levine denied hav- record, evi- find substantial viewing the we possession tapes into in a ing come could a reasonable from which dence this, wrongful Knowing manner. all Pat- Levine negligently defamed find that CMP negligent could be said to have been ton the articles. by publishing statement, “And ac- publishing Gutman ” ‘outright Levine of theft.’ article, cused wrote that Patton In the first though even she “disappeared,” summary, jury’s finding negli- Levine before had contacted herself part publishing gence on the though she published and even article was amply supported by article is the evi- first (Levine difficulty. done so with little had may strong- dence. One factor which have professional in job was listed at new jury influenced the was Patton’s testimo- ly index.) easily could have found jury The the time she first met Gutman ny that at statement, coupled with the when that this computer in” crime she was “interested article to theft and references other story computer that a on crime and felt publish- crime, negligently written and was The would be of interest to her readers. gave impression the false ed because impression gives article as a whole to Texas order Levine had moved that that Patton Levine that is false and should finding negli- jury The “flee the law.” false based on the evi- known was have knowl- clearly supported given the gence is her. dence before time she possessed at edge Patton article, Pat- respect to the second With Similarly, a reasonable article. wrote the In it she stated negligence ton’s is clear. false statements jury could find Patton’s theft. Patton convicted of that Levine was investiga- Jersey criminal the New about “convict- the word testified that she used negli- of her have the result tion to been Judge that on her conclusion ed” based told that Gutman gence. Patton testified guilty of a Ackerman believed Jersey cooperating with New her he was however, fact, Judge Ackerman crime. In investigation of ongoing in an authorities authority he had no that specifically stated However, impression any false Levine. crime, and he guilty of adjudge Levine from Gutman was correct- Patton received prosecu- the state matter to referred the Jersey telephoned the New ed when she crime whether a investigation of tors for little attorney general’s office and found these Patton knew committed. been in the case. With evidence of interest addition, trial Levine testified at facts. In damaging respect to the most comment after the first Patton telephoned that he article, the “accusation” made the first the second and before published article was Gutman, she Patton testified that what he told Patton said press. Levine went to was, view, an accurate inter- in her wrote appear him be made first article that the the Gutman affidavit. Gut- pretation criminal, to understand she seemed man, trial, that the words of his denied evidence, the this Based on objection. in his meant to be construed affidavit were that certainly to believe entitled jury was We believe such fashion. conclusion reached case from the argument presented dis- ed in this in the However, prevents jury. this court substantially truthful Gertz article is sent that the first jury’s. substituting our for present- from of the evidence a different view reflects 674 falsity punitive not convinced award fully understood Patton damages, respect first article the second article. with to the published in she words supported by convincing clear and negli- Patton’s to evidence In addition proof acted “actual malice.” that CMP with showed that CMP at trial gence, evidence is, proof Gertz, This under a constitutional the arti- negligent publishing was also prerequisite punitive dam- award testimony showed Levine. about cles ages private plaintiff. to a defamation See closely worked editor at ISN Patton’s Systems Golden Bear Distribution v. of the articles. preparation in the her Revel, Inc., (5th 708 F.2d Chase sufficient evidence There was Cir.1983). reviewing jury’s finding aware well that he was

to believe malice,” that CMP acted with “actual we they were based. information by our standards of are not bound usual Furthermore, he was evidence that there deference, required extreme but are articles, changes though suggested sup- record judge by ourselves whether the have tended to changes which would ports convincing with clear and defamatory. less make them proof. Corp. v. Consumers Union Bose expert testified that witness — -, States, United of the two articles language used each 1949, 80 L.Ed.2d 502 S.Ct. reasonably prudent “I alert a editor: would if this is a civil automatically wonder would malice, context, Actual a criminal case ... case or [because of] knowledge defamatory means theft such as or stolen use of those terms disregard false or statement was reckless ____ clarify reporter to I would want the false, of whether it was a definition derived information____” expert own CMP’s Times, Sullivan, from New York Inc. language admitted that the used witness 279-80, at 726. The U.S. at potentially articles was libelous. the two presented in this case which evidence, Having all the we de- finding reviewed had such support would a that CMP jury’s finding that to overrule the knowledge disregard cline or reekless for the negligent publishing the arti- was malice is CMP truth as to constitute actual the provided many Patton, was indica- cles. CMP to that she testimony of the effect tions, the and both the text of articles knew civil and crim the difference between of through investigations summarized, Patton’s the MTI part, inal proceedings, record, may the articles not article, Levine that though, v. above. In the first Patton fairly truthfully and reflected that have as did not characterize the a publishing In the litigation. articles the testimony reflects “conviction.” Patton’s did, it CMP knew or should have very impression form negative the fact that her subjecting po- that it itself by Judge known was to of was created Levine’s conduct liability, affirm the of Having tential and we award read remarks. these Ackerman’s damages against captured actual rendered it.20 remarks, of is the tone which reproduced quotations partially in the brief

VI. herein, sympathetic claim are to CMP’s we sug as Despite strength person of a could read them lay the evi that negligently, Levine’s was a gesting that CMP acted we are that conduct dence support argues finding there was no evidence to 20. CMP that the awards of actual dam- that jury against was not ages duplicative, award it and Gutman CMP’s construction erroneous, is, uphold we jury apportion clearly and must under that that failed to 52(a). damages Fed.R.Civ.P. between the two defendants but actual assessed the entire amount each rather Similarly, decline to we overturn amount agree We with the district court that it of them. damages award. The district of the actual jury equally plausible that the decided on is May granting CMP's court’s order damages and as- accepted amount suffered Levine trial Levine motion for new remittitur, unless sessed one-half that amount each an actual reflects award of event, not, any opinion, defendant. In the district court’s which in our excessive. publish- (We publication that first from the Dacey note criminal character. however, that, impression, may, testimony as Levine’s the time the ing such found, negligence written, be a basis second article was had Patton been malice.) opposed put on her notice that characterization of MTI v. Levine as a criminal case was false. Bar, Inc., 427 Dacey In v. Florida noted, As we have Patton was aware of the (5th Cir.1970), court held F.2d differences between criminal and civil summary judgment should have been that cases, including the fact a civil court plaintiff, public figure, granted against a a cannot render a criminal conviction. Le reportedly convicted who had been that, publication vine testified after fact, practice of law. unauthorized article, first he called protested Patton and engaging from plaintiff enjoined had been article “made appear to be a [him] of law. Not practice the unauthorized fugitive criminal, justice, from a or some reporter in withstanding the fact type of thief.” sneak he Asked whether lawyer, plain a held that Dacey was we explained to Patton that MTI v. Levine was not shown actual malice: “There is tiff had case, “Yes, a criminal Levine replied, reporter] any evidence the no [the she seemed Not understand....” suspicion falsity knowledge or only did Patton fail to correct her mischar him, any made nor is there statement MTI acterizations of in the sec Levine proof he had him indication before article, strengthened ond she them stat incorrect.” 427 that his conclusions were case, ing that had been “convicted of As in that there is no F.2d at 1295. stealing.” supports This fact further our convincing evidence that Patton clear and finding accuracy that the evidence malice or editor of her of actual her doubted support at the that the first article was sufficient to verdict reporting time compels relating us re published. Dacey to the second article. punitive damage verse the award with re evidence, In the light of this we decline spect to the first article.21 There was no punitive damages reverse the award presented convincing clear The alle- returned for the second article. support would that CMP’s which gation individual convict- that an has been respect article conduct with to that consti very one—one ed of crime is serious from the departure tuted “an extreme stan publication no would responsible investigation reporting dards of ordi printed lightly. make Evidence publish narily by responsible adhered to told having after been statement Butts, quoting 427 F.2d at ers.” that it untrue warrants submission 155, 87 S.Ct. at 1991. jury question whether CMP act- However, independent our review falsity of disregard ed with reckless for that the judg of the record convinces us second article.22 the content of the $25,000 punitive damages ment respect CMP with to the second VII. satisfactorily supported by article judgment of first, summary, In affirm the we evidence. Unlike the the second arti respects except for in all actually court states that Levine was “con district cle $100,000 stealing.” damages of punitive The evidence the award victed of respect The dis- distinguishes the article the first article. second from the with Sullivan, $200,000 $50,- Times, jury v. is not well New Inc. The awarded Levine and York punitive damages the first and malice for second instruction on actual 000 founded. The judge respectively. Corp. trial reduced comports articles law. See A.H. Belo with Texas $25,000 $100,000 on awards to remit- (Tex.Civ.App. these Rayzor, S.W.2d 84-85 titur. 1982), (reciting York n.r.e. the New writ ref’d Times, in a test for malice Inc. v. Sullivan actual requires argument law that Texas 22. CMP’s figure). brought by suit defamation malice, defined instruction common-law malice, will,” well as defined as "ill as actual to enter man-years is instructed million $4.2 trict court research — opinion. programming. with this accordance PART; IN Throughout hearings, AFFIRMED IN REVERSED Levine—who PART; ENTRY trying tapes AND REMANDED FOR had been to sell the —main- they JUDGMENT. tained had been “left” on OF his front

porch around Christmastime. Gutman, tapes, “A” APPENDIX contain work said computer-aided-de- toward a new kind of Monday, Systems News— Information sign, computer-aided-manufacturing February (CAD/CAM) concept computerized —a Tapes And Tale Of Woe Continues progressive method for design of dies. To Grow In computeriz- conceived of Richard C. Levine alive and well ing process, molds, the entire Inc., Dallas, working at Texas Instruments dies, stamping dies, forming through Texas. whatever number of stations in- volved, product. to the finished nothing wrong Normally there’d be" that rather sedate state of affairs. But Dr. Levine, Gutman, according to had ration- causing Levine’s new location is lots of new process design, alized the company and a already bizarre, complications in an five- formed, Levine and two others Diecomp year-old software-theft case. Inc., began creating systems architec- ture, the data

Levine, coding carry base and out see, you allegedly stole million $4 process. Jersey of software New back in 1974. Despite explanation a novel of how he But Diecomp Levine left in 1972 at the posession came into of the three reels [sic] request of the board of directors. In a computer tapes says he found them —he agreement, Diecomp’s settlement board Plainfield, porch on the of his South N.J. charged incompetence” him with “technical

home—he lost two civil lawsuits and one “taking profits and with supply- secret appeal. ing misleading false and information to stockholders.” Board chairman triple loss, Gutman

As result of the court he taking claimed he had been “kickbacks tapes, was ordered to return the the nu- gave from get vendors. We him an hour to copies pay merous he had made and to $51,000 out.” damages. owners August paying Diecomp prescribed penalty,

Before closed its however, doors. Levine moved to Gutman and several other investors Texas. The Manufacturing Technologies formed Jersey attorney general’s New office is action, put Diecomp’s up public auction, considering legal assets for further but won- $310,000. bought company ders and then whether its reach extends to Texas. friends, $38,000 posted And Levine’s who Meanwhile, Diecomp part defaulted on personal property help bond to him make the monies owed to Levine in the settle- appeal, may pay ill-fated be forced to following resignation. ment his forced disappearance. for Levine’s Diecomp stopped sending money to Levine The tale of in same tapes began Levine and the December 1974—the month that when Manufacturing Technologies mysterious a Levine received his “Christmas Hartford, present.” company, Conn.-based Le- sued vine twice: once 1975 for return of the judgment against Levine filed for Diec- again tapes

three in 1976 for return of $10,000 omp unpaid July to collect his copies tapes Levine had made. tapes 1975. He turned the over to president Oriscello, MTI County, Ralph John S. Gutman said the sheriff of Union tapes years contain the results of five of be sold at auction.

designing computer programs dies and problems plotting math machines. Technologies disput- Manufacturing But 1974-75 dated tapes, all his claim ed tapes, MTI was awarded left had Levine after years $51,000 —three including copies, plus the 15 and the Levine sued both MTI company. damages. tapes were grounds sheriff Schnitzer, attorney, Morris M. when purchased MTI asset principal appealed Superior Court Diecomp. buying Ackerman, Judge and nine associates of “outright Levine accused And Gutman posted totaling Levine more bonds than $38,000. 19, 1979, April theft.” But on a three- judge panel ruling. sustained Ackerman’s turn agreed Levine In December over to tapes by held the sheriff three ago, Three months Levine moved to Tex- Technologies. But Levine Manufacturing ISN, as. Contacted there he he said had tapes testimony that one of the during said no comment at this time. not, fact, among the three from began extracting judg- Last month MTI porch. It on his tapes mysteriously left posted the nine ments who copy. awas Levine’s bonds. Levine about questioned the court When bonds, posted like that Many of the tapes, he copies of the why he had made Astrin, $1,000. But some were for Carl said, had certi- “I didn’t think the sheriff Na- more substantial amounts. were for magnetic tape storage facilities.” fied Emerson, put up Marple of N.J. than B. Harvey Judge Os- Superior Court While up $10,000; put Plainfield Lou Seidman of tapes held rule that the three borne did Levine, $9,660, of Plain- Mary S. also returned to Gutman’s the sheriff should be $11,340. field, put up firm, copies. rule on the would not Osborne me,” County’s Court “It amazes Union capi- ability to finance or attract new “Our said, could have “that Dr. Levine Clerk prove if can’t is at a standstill we tal putting up that people into all those talked us,” exclusively by tapes are controlled money.” amount complained at the time. Gutman Astrin, college and a girls two with Technologies So, Manufacturing went school, said he will private son in young copies of all the again for return court install- the bond pay $50-a-month off the case was Levine. This time made the court allows. ments—if MTI not complex. more much tapes, with theft of the but charged friend,” Levine said. Astrin good “Levine is as well. The trade secrets theft of he all pay he’ll us back—whenever “I know injunction permanent firm wanted his house.” sells Levine, restraining him from enter- Patton —Carole marketplace. ing the by stating that all the countered Levine Diecomp’s transition to involved

people “B” APPENDIX Technologies really Manufacturing conspired who had to de- people Monday, the same Systems News— Information creditors. and other fraud April Judge Levine Plea New Diecomp had Denies also testified He con- developing progressive die ceased five-year-old com- reopen a A motion to manually producing die de- cept and was Levine, against Richard C. case puter theft designs computer-drawn signs into —and inventor now work- computer expert and product. as a CAD/CAM selling them Inc., has been Texas Instruments ing at Jersey Superior Court by a New claimed, “dumps”— denied tapes, he The judge. manuals on from trade of formulas data

TATE, Judge, dissenting: Circuit hearing lasted less than In a which respect my much to the With views minutes, Kentz Judge Frederick C. Jr. brethren, conscientious I must nevertheless by eight affidavits submitted ruled that majority’s affirmance of dissent from demonstrate failed to Levine “willful publisher the award for the part plaintiff, Manu- fraud” on the 25, 1980, Ap- February article of see first Hartford, facturing Technologies Inc. of “A”, pendix supra, 738 F.2d at 676. Conn., not constitute “new” evi- and did view, my essentially the first article is an

dence. lay proceedings, summary accurate of civil such, himself, identified as in which Levine was Levine, represented who based by judge found the state trial to have con- alleging plea on sworn statements computer tapes misap- and to have verted misrepresented product MTI its propriated trade of his former cor- secrets highly proprietary trade court as a valuable poration. secret. case, originally by Judge heard MTI’s majority jury finding affirms the Ackerman, hinged charge Harold A. on the reporting proceedings of the civil

that Levine had stolen valuable information negligently was done and contained defam- computer tapes. housed on atory falsehoods. In its valiant and com- verdict, stealing uphold Levine was convicted of mendable effort to however, tapes in ap- majority inadvertently 1977 and lost several earlier has peals case, originally critiqued jury-findable the first article for launched negligence eye with the of a MTI in 1974. falsehoods law review note editor. I believe the stan- Among the affidavits submitted to the judicial dard of review of utterance within April court 3 was a statement potential ambit of the First Amendment Lohman, computer-aided design Michael a permit justifying approach not does specialist, which claimed MTI’s software not to verdict order disturb prod- was similar to four other CAD/CAM publisher. years. ucts on the market for ten Levine also submitted sworn statement majority correctly has found Levine top engineer, MTI’s former from the Alfon- private to be a individual rather than a system said MTI’s so Varón. Varón so, public figure. being That the measure designs all never workable and had to be publication of whether the libel award for engineers prevent human “to reworked of this article offends the First Amendment Welch, Inc., nonsense results.” provided by Gertz v. Robert 2997, 41 418 U.S. 94 S.Ct. L.Ed.2d 789 development, MTI’s attor- In a related measure, (1974). By private defama- company charged the has been unable neys plaintiff may (only) tion recover such dam- $52,000Levine was ordered to collect the ages compensate as are sufficient to for attorneys also claimed MTI has pay. The (as here) injury, recovery insofar actual $38,000 any of the unable to collect been law, may allowable under state which con- nine of bonds Levine’s associates personal stitutionally provide recovery for de- during appeal for him posted famatory negligently published. falsehoods Eisenberg Barry counsel called Le- MTI compared measure is to be with the This stalling petition “just latest another vine’s recovery by prohibiting pub- standard libel delay company’s designed to action” public figures, may lic officials and judgment. to collect its attempts constitutionally upheld absent “actu- be publication. hearing, Levine said he would al malice” their New York After the Sullivan, attempts reopen the case Times v. 376 U.S. continue his great injus- generally and called Kentz’s decision “a L.Ed.2d 686 See Nowak, Rotunda, Young, Constitution- tice.” ty, that tapes as to the posses- Levine’s sion, this could have come about Tribe, (1978) American Law, and 780-89 al through “outright Law, theft.” The article also 633-48 Constitutional included facts obtained from re- interviews however, not, the is- address does Gertz lating surrounding litigation. to events appellate review as to the standard sue required appellate the extent of or as to majority’s As the statement of the facts (a) findings that an arti- deference to shows, underlying published article defamatory falsehoods and contained cle 663-666, primarily F.2d at the article (b) jury-found-inaccuracies that these post-1972 litigation concerns in which the accomplished. For reasons negligently state trial court found that Levine had con- view, fully, my developed more be computer tapes corpora- verted from the rubber-stamping majority is error misappropriated tion its and trade se- first article because: jury verdict as to the litigation crets. Prior to the in New Jer- (1) article examination of the sey, corporation Levine had left the upon proceedings and conduct judicial incompetence on accusations of and of a not, would under the it is founded interests; agree- conflict of a settlement review, permit a rea- standard of normal corporation ment between the and Levine jury in a First Amendment sonable-minded took note of the circumstance that “accusa- first article of- conclude that the case to tions have made been Levine of two factual re- fended in either of these taking wrongdoing by prof- of secret (2) the recent United States spects; and its”, supplying false information Corpora and of decision Bose Supreme Court However, incompetence”. United “technical v. Union tion Consumers — U.S. -, States, agreement, corporation settlement rati- (1984) although limited in 80 L.Ed.2d 502 fied a time service contract entered into — jury- holding appellate review specific party and a third and “rati- between Levine in a New York “actual malice” performance found approved fied and bespeaks to ..., Times Sullivan responsibilities being and duties it his context — requires holding that inde me a broader understood that such ratification is limited in defamation pendent appellate review responsible professional to the area of report stripping public cases before judgment and conduct and not intended Amendment proceedings of First ratification, ap- expressly excludes . protection wrongdoing, proval, any or release of mis- fraud.” representation, or (1) fairly has stated the facts. majority view, February article of my out of a litigation arises This Texas-based “A”, opinion) (see majority Appendix (February Ap- an article publication of representation substantially accurate is a “A”) litigation by and relating to pendix Jersey proceedings and of of the New Jersey, in New where he against Levine may not have been It 1972 settlement. Levine was em- formerly employed. sense, lay in a impartial” totally “fair and publica- in Texas at the time ployed notes, ar- of its majority because Jersey litigation concerned tion. The New indicia of emphasis on rangement and alleged computer of some his conversion However, represents wrongdoing. article de- tapes corporation. from a facts that is not unrea- point of view Le- litigation and characterized scribed sonable, contain sub- it does not primarily as re- underlying conduct vine’s that a I do not believe stantial falsehoods. including a refer- litigation, flected by First Amendment publication protected in an affidavit therein a statement ence to required to fair expression is be Gutman,1 par- freedom of opposing of an an official suit, Gutman, defamatory him to statements made other in this was as- a codefendant award, $255,- sessed, settled after reporter). Gutman’s case was upon remittitur of findings regarding appeal, these damages punitive so issue no compensatory 000 in $125,000 (for before us. these statements “impartial”,

was nevertheless not “fair” or long substantially so as it is accurate. expression impartial, long as is so truthful. “impartial” depends “fair” or What is jurisprudence that the in the Statements subjective the evalu- upon the evaluation of must be “fair and published description may my ator. While I think a dissent to requirement with a equated true” are opinion rehearing or a motion for as to it is description be substan- published jurisprudence impartial, uses the not fair and the dissen- tially truthful. The doubtless “fair”, phrase in the context of the term rehearing-movant equally sin- ter or the is accurate”, in the sense of a “fair” “fair and belief, any, my opinion cere in the if event or representation of observed impartial. By fair or reason of our utterance, “fair” the sense rather than in guarantees, the fundamental constitutional or unbiased account of an of a balanced publication in free values freedom of opin- the author’s own by event uncolored (2) (see expression point infra) of of view (I authority that ion. am cited to no holds simply by exposure to cannot be inhibited otherwise.) Thus, may an editorial contain expression liability for that when is sub- accurate) (i.e., representation of “fair” jectively by particular jury deemed or a discussed, asserting a bi- the facts while particular appellate panel to be unfair and partial perspective ased and as to those partial. Similarly, an article that is sub- facts, departing protec- from the without stantively judged light accurate— tion of the First Amendment. objective sought depicted— facts to be action claims harm es- This defamation deprived cannot be of First Amendment report sentially published of the because protection by a factual that it is litigation public and of particulars substantively simply in accurate because Congruently governing records. with the may some trier of fact find the selection principles apply in favor of the that here emphasis upon objective facts to be it, publication’s defense the Su- held, preme denying offensively unfair and Court has an inva- biased. privacy by private

sion of individu- action Gertz, supra, exempted from First aggrieved by public particu- al broadcast protection only “defamatory Amendment litigation proceedings: very “At the lars of 332, falsehoods”, 418 at least, U.S. 94 S.Ct. at the First and Fourteenth Amend- 3003, exposing press private persons, ments if negligently will not allow liability truthfully publishing informa- made. “Under the First Amendment there public tion released to the official court thing nois as a false idea. However Broadcasting Corporation records.” Cox seem, pernicious opinion may depend we Cohn, 469, 496, 420 U.S. 95 S.Ct. for its correction not on the conscience of 43 L.Ed.2d 328 “Public judges juries competition or but on the by very records their nature are of interest Id., 339-40, other ideas.” 418 U.S. at to those the administration concerned with at 3007. It is thus immaterial for government, per public and a benefit is libel-liability purposes that the im- overall reporting formed of the true con pression conveyed of the article the writ- tents of the records the media. The opinion, er’s here shared the state trial press publish freedom of the that infor judge expressed who so himself the state appears impor mation to us to be of critical proceedings, that Levine had converted and Id., type government....” tance to our property misappropriated the of another at 1046. I do not engaged shady and had otherwise con- permitting read decision as that free objective duct. standard constitution- press print is in dom what —to that, ally imposed liability for libel to lie litigation records of be subverted be —to instance, expression must be not particular cause some trier of fact or some false, only substantially also that such but particular appellate tribunal deems that the publication’s substantially report falsity negligence. accurate resulted from intent or (emphasis

at 668-669 added the writ- er). For the reasons stated article, impression my overall of the in theft Le- ences to of allegations opinion, substantially constitute a untrue vine, reported pro- in none of the although by omitting statement “facts ... which in ceedings corporation] ever fact did [the impression partially refute the false of the regarding Le- produce how “by partial part statement” or omission of tapes”;2 of the possession came into vine (2) “directly does not Gutman’s affidavit of the facts.” Distributing Golden Bear theft,” jury could accuse Levine of Revel, Inc., “[a] Systems v. Chase F.2d sentence, reasonably find that the ‘And (5th decision, Cir.1983). cited In the a “outright of accused Levine Gutman upheld award libel when untruthful ’, substantially accurate theft” was not a facts were mixed with truthful in facts a lawsuit”;3 in the proceedings account of way imported wrongdoing that to the libel (3) the “The truth of statement substantial plaintiff in fact by that was committed Jersey attorney New in the article that ‘the impression entity, another with the overall considering general’s legal further office is being plaintiff that had the libel itself com- action, its reach ex- but wonders whether Here, wrongful mitted these acts. how- question for the tends to Texas’ also is ever, wrongful in acts were fact committed (4) jury”;4 and the “substantial truth by present plaintiff, the as expressly libel the the individuals who statement judge proceed- held the trial state ‘may for Levine posted appeal bonds be ings allegedly defamatory described in the disappearance’ an pay forced to [his] lay reader, article. Evaluated in terms of a open easily issue. It could be read an technician, legal of a no inaccuracies ordinary suggesting as that Levine reader (and inaccuracies) certainly negligent no appearance had an bond and was violated law”5, fleeing Majority, published summary from were stated in the de- the 738 F.2d fact, previously supra, couj-t, As in note 2. The found that Levine 3. noted Gutman’s state trial tapes which, statement in was to the effect had "converted” the circumstances, under the fact — tapes”, the in fact that he had removed "stole and it is the most meant attempt- interpretation reasonable of what he intended to them their lawful owners had from say. wrongfully keep possession of them. ed lay parlance, "allegations of theft” were in fact company made Gutman’s affidavit majority’s accuracy the 4. conclusion —and was, fact, in the state court record jury question, my presents a the statement tapes possession falsity effect in Levine's the opinion, the of the fails to demonstrate outright through theft” —from "came about negligence so statement or the article in could, negligence, reporter without Attorney rea- stating. Jersey did The New General sonably that the affidavit accused Levine open investigation infer of Levine’s actions in fact an 245-49, specifically 265-66), (R.V., theft. these pp. The article identifies in this incident allegations arising in "two civil I as lawsuits”. judge in fact refer Levine’s the state trial did negligent do not think it to be either or inaccu- county prosecutor. conduct to the misappropriation rate to refer to Levine’s tapes alleged as instead of as a "con- "theft” majority’s issue accu- factual may latter term be more version” of them—the racy some readers "could” on the basis of what legal proceedings, technically accurate for but that in substance article is infer overlooks unintelligible completely be to non-law- would appeal persons signed the bonds true. The who Moreover, reporter yer them, used reader. pay might indeed and that be forced law-dictionary explana- a full "conversion” with doing so for their was that the technical reason term, reputation tion of the would have judgment, pay instead of that Levine did not lay damaged as shorthand been much paying disappeared without he it, the scene from actually express concept. term used to defamatory. appear to be does not on its face First Amendment-ex- in the latter. sue thus, a matter of negligence, is as empting techni- long and somewhat scription of the subject judicial law more constitutional litigation. cal left to limits and less to its outer control as however, my concern, as was that My discretion of unfettered majority, cen- brothers conscientious than factual negligence from behavior infer appellate extent that these upon ters of the law. areas in other non-constitutional conclusion to the factual views can override jury. properly instructed contrary of a (2) Supreme infra, suggest As I differing appreciation judicial This Corpora- decision Bose Court’s recent scope of review of verdicts First tion, recently indicated that supra, has Amendment cases is the crux of the differ- required independent appellate review my ences between esteemed brethren of awards, pro- Amendment where First libel note, majority myself. however, I issue, expression is at whether tection of although judicial of jury review find- private persons public fig- or of favor of ings may in First Amendment cases be ures. cases, simply broader than other this is a matter of because as law the ambit of Nevertheless, if I am in error in this negligence inaccuracy and is narrowed expression regard, Supreme the Court’s upon constitutional limits the cause of ac- imports, therein because of the fundamen- however, Generically, tion. issue, such First constitutional values at a broader tal Amendment review is no less a traditional appellate of a reasonable- review what powers judge jury exercise of over factual jury could conclude as to minded trial personal injury discretion than when a published a statement is action- ver- whether because, ably negligently according dict is set aside after false and was made. That is, range jury credibility and factual permissible the of inference inferences most fa- negligence vorably jury's finding, of in a non-constitutional area to the the factual (such suit) personal injury may proved not, as a be far conduct so nevertheless does as law, greater than as to utterance within the a matter of fall the within ambit of protection, negligent ambit of the First Amendment conduct that constitutes action- negligence.6 because of the constitutional values at is- able concepts original responsibility making findings 6. These are not with the writ- for evaluative instance, Keeton, Continuity er. For Creative judge jury, is divided between or other Torts, factfinder, in the Law of 74 Harv.L.Rev. 500-01 but on a different basis from that (1962), Professor Keeton observes: applying negligence. to the issue of are These system supervision application A (1) of of of a examples: finding The evaluative un- of relatively general doctrinal formulation to enjoy- reasonable interference with use and particular cases involves another kind of ment of land that constitutes nuisance is making choice also —whether the function of jury, practice left sometimes to a but in there findings application evaluative essential to the considerably judicial supervi- has been more of the doctrinal formulation is to be treated as negligence. sion in this area than in that of factfinder, question usually jury, a for the the (2) characterizing a communi- function of question judicial or instead as a for decision. defamatory judge cation as is divided between plain finding It is that evaluative the that jury, being a common that formulation negligent characterizes conduct as or not is to judge the determines whether the communica- factfinder, certainly the be made with no capable defamatory meaning tion is of perhaps judicial more and somewhat less su- defamatory the determines whether a me- pervision findings physical than that over of (3) aning conveyed. was The function of law, In fact. some other areas of tort how- making finding particular an evaluative that ever, appears it to be the settled law that the publication give circumstances of rise to finding entirely judi- function of evaluative is court, privilege assigned conditional is to the (1) cial. These are illustrations: the charac- making but the function of an evaluative find- terization of conduct as ultrahazardous or as ing privilege of abuse of the conditional is falling principle Rylands within the v. assigned jury, judicial supervision. to the with principle recognized; Fletcher where that areas, responsi- (2) the still other allocation of prosecution in the law of malicious bility yet quite grounds instigating nebulous. These are exam- characterization for (1) amounting ples: proceedings proba- that an criminal to interference law, ble cause or not. In other areas of tort one’s interests amounts to an actionable inva-

ject possible to constitutional review all way through appellate process. Thus, dimen- reflecting the constitutional requirement to the sion in 1974 added Supreme As the stated Court another private persons by liability to defamation (actual malice) present, than the context Welch, supra, Gertz v. Robert non-chilling fundamental Amendment First 2d, Torts Section 580B Restatement of alleged apply li- considerations “where (1977) (pertinently present to provides misrepresenta- consists in claimed bel facts) subject liability “is publisher gist lengthy governmental tion of of a if, if, knows the state- but he ... reported by publication document” now ment defames the oth- is false and Time, Incorporated sued for libel. failing negligently er” or to ascer- “acts 279, 291, Pape, 401 Reporter’s also tain” these matters.7 See 28 L.Ed.2d “Where docu- (k) (c). Reporter’s Comment As Comment reported ambiguous as this ment is so one (“Appellate neg- review determination was, imagine it is a test of hard to ‘truth’ reflects, ligence”) constitutional di- Gertz’s publisher at put would private defamation action mension added discretion of mercy unguided degree of re- imports judge also an added jury.” equally Id. These considerations liability view .of determinations context, believe, I apply in the instances, present upon founded constitutional jury’s judicial oversight over a trial unwar- rule: falsity factual ranted determinations of whether a defend- determination perceives court negligence in what the ant negligent applica- involves the substantially truthful overall a account (what be tion the standard reasonable lengthy litiga- technical do) and somewhat person would facts that are particular tion. case. found to exist frequently question This is called a fact remittitur, One final comment: On normally issue and it is submitted to the publication defendant held liable was

jury. But the rule that cannot liability $255,000 damages, in compensatory defamatory imposed publication be for a majority, arising award affirmed out negligent the defendant was or unless publication February 25, of of the article of a seriously imposed at fault is rule more 1980, May suggest that, I Appendix “A”. application The of the Constitution. printed had the free even article been of therefore, standard, necessarily in- quibbles accuracy of which the as to right, constitutional as in the volves a plaintiff complains, damages to his rep- case the determination of whether the of employment opportuni- utation and to his disregard acted in reckless of defendant great? ties would These falsity have been the truth or of a communication in pub- from the by public primarily resulted a action a official or defamation § 580A, (See report factual circumstances public figure. g). Comment lished and the case, Jersey, litigation reflected in New As in that the determination is sub- (2) Person privacy; § conduct 580B. Defamation of Private sion of inducing person publishes defamatory a third of the defendant One who a false and plaintiff with in concerning private person, break a contract tortious communication quality. public fig- concerning public or or official added.) (Emphasis purely private matter not ure in relation to a emphasized quotation refers to a tradi- The conduct, affecting fitness or role his his judge-jury responsibility in division of tional if, liability, capacity, subject but cases, prior additional consti- defamation if, he liability for defamation tutional restrictions (a) is false and Knows the statement imposed private persons v. Robert Gertz other, defames 323, 2997, Welch, U.S. 41 matters, (b) disregard of these acts reckless succeeding para- See next L.Ed.2d 789 or graphs in text. (c) failing negligently to ascertain acts Torts, (1977) pro- Section 580B 7. Restatement them. vides, in full: knowledge falsity. of its In conclud ing expression constitutionally was charges report Le- the truthful protected, noted, incidentally Court litigation. underly- in that vine levied us, with relevance to issues before thus, damages, was ing cause of “adoption language chosen was ‘one Jersey, wrongful conduct New possible of a interpreta number rational reporting report- it when the words used event,” tions’ of an and that choice that, ques- as is not publication “[t]he ed in the language, though of such reflecting a mis tioned, constitutionally protected if conception, place speech does not be truthfully reporting the conduct. yond the outer limits of the First Amend (2) — protective ment’s broad umbrella.” 1984, April Corporation in Bose On at -, U.S. 104 S.Ct. at 1966. States, v. Union the United Consumers —Inc., -, U.S. justified The Court the exercise of inde- Supreme L.Ed.2d Court clarified pendent appellate partly review on the appellate standard review where ground expres- that the issue of whether First Amendment values are at issue. Ad- fell sion outside the First Amendment’s mittedly, the issue there before the Court protection question was a mixed of law and — “public concerned a libel award fact, at-, 104 S.Ct. at figure” entity, where New York Times partly because this determination applies, constitutionally Sullivan so as presented a constitutional issue of whether prohibit imposition of such awards unless protected, not, the Constitution or did convincing proves clear and “actu- expression question: Bose, al malice”. the district court requirement independent appel- bench trial had held that this standard was late review is a ... rule of federal consti- appeals met. The court of reversed. The emerged tutional law. It from the exi- issue before the court was whether the gency deciding cases; concrete it is clearly-erroneous standard of Fed.R.Civ.P. purest law in its form under our common 52(a) appellate inhibited review of the cen- heritage. It deeply law reflects a held determination, i.e., tral factual that actual judges particularly conviction that —and proved malice was because the writer had members of this Court—must exercise knowledge actual falsity. of the trier-found preserve pre- in order to review The Court indepen- affirmed the exercise of cious liberties established and ordained dent appeals, review the court of question the Constitution. The in resulted reversal of the judg- libel whether the evidence in the record in a ment. convincing defamation case is of the clar- In holding independent appellate re ity required strip to the utterance of constitutionally required view was insofar protection First Amendment is not mere- as the trier's conclusion was not founded ly question for the trier of fact. evaluation, credibility mere on the Court Constitution, Judges, expositors of the raising stated “that cases First Amend independently must decide whether the repeatedly ment issues we have held that evidence in the record is sufficient appellate an obligation court has an cross constitutional threshold that independent ‘make an examination of the entry any judgment bars the of that is whole record’ in order to make sure ‘that supported by convincing not clear and does not constitute a forbid proof of “actual malice.” expres den intrusion on the field of free — at -, U.S. S.Ct. at 1965. ” — at -, sion.’ U.S. at S.Ct. Corporation, indepen In Although expression Bose Court of the Court dently testimony specific reviewed the holding only appel- of wit and its relate ness and reached “factual” conclusion late review of “actual malice” awards contrary cases, to that of the district court as to First Amendment it seems to me whether the falsely appel- statement was made that the Court’s rationale extends to

When the governing standard the deci- in which instances particular other sion of a of case provided by review is late sought to be protection Constitution, Amendment First this Court’s role in or inter- of view expression public denied marking out the limits of the standard an al- events, it be whether of pretation through process case-by-case adju- of here) per- private (as leged libel special dication is of importance. This figure. or a son process vitally important has been “categories imposes special responsibility judges ‘unprotect- few within one of the classes particular whenever it is claimed that a id., independently speech,” we must ed’ is unprotected. gen communication See determine, affording weight to all after erally, Chicago, v. Terminiello U.S. by the trier of credibility determinations 894, 895, 1, 4 S.Ct. 93 L.Ed. 1131] (a) [69 fact, present expression whether made, (b) negligently was false and — -, (c) require- at 1961-62. these factual well as both proved by preponderance ments were discussion, Immediately preceding this Exercising duty imposed the evidence. the fundamental rea- the Court had stated Constitution, I find—for upon byme duty for the sons Constitution-based (1) fully supra stated in the reasons more determine whether con- appellate court to in all three re- the trial erred —that expression was of- protection stitutional question: spects. fended the liberal award

Conclusion

Therefore, respect the utmost my majority, the view of brethren I respectfully must dissent. America, STATES UNITED Plaintiff-Appellant, CHARLES, Jr. Steven Santos McAninch, Defendants-Appellees.

No. 83-2550. Appeals, United States Court Fifth Circuit. Aug. notes finds that majority through supra, I would find that none of questions as substantial raised fact it, reports. actionably As I these see circumstances are published inaccu- truth opinion, majority their quoting from rate. issues as to the arti- jury-triable finds presented are accuracy cle’s substantive Nor, stated, for the reasons so does the (1) “repeated refer- following respects:

Notes

notes of communi The Court involving cases restrictions on the free- special utterances to cation and certain dom speech protected of by the First majestic protection of the First which the Amendment, particularly those cases extend,” including Amendment does not in which it is contended that the commu- — speech.” U.S. among them “[l]ibelous nication in issue is within one of the few at -, It then states: 104 S.Ct. at 1961. “unprotected” speech. classes of areas, of these the limits of the each The First Amendment presupposes unprotected category, as well as the un speak that the freedom to one’s mind is particular of commu protected character aspect an liberty— individual nications, by the have been determined good and thus a unto itself—but also is special facts that judicial evaluation essential to the quest common for truth deemed to have constitutional have been vitality and the society as a whole. cases, significance. In such the Court — at -, regularly independent an S.Ct. at 1961. has conducted review of the record both to be sure that Corporation, In Bose the Court held speech question actually falls with duty imposed that this constitutional on all unprotected category and to con that, review, judges required appel- any unprotected perimeters fine the independently late court must assess trier- category acceptably limits within narrow determinations, found whether of trial protected in an ensure that ex effort to (a) judge jury, or of the burden of Providing pression will not be inhibited. case) proof (convincing clarity in that description general of fact with a triers expression met to show that the was both type of communication whose con (b) (c) not, knowingly false and so made within unworthy protection has tent is itself, meaning to eliminate the dan As I and of served Constitution. read may triers of fact ger that decisions opinion,.it the Court’s reached a different expression protected ideas. inhibit as to each of these determina- conclusion neutrality principle viewpoint by the trier. tions itself, Amendment see underlies the First duty to exer- In our similar constitutional Department Chicago v. Mos Police independent review to determine cise ley, 408 U.S. 95-96 [92 (1972), 2289-2290, 33 L.Ed.2d also “the communication issue whether 212]

Case Details

Case Name: Richard C. Levine v. Cmp Publications, Inc.

Court Name: Court of Appeals for the Fifth Circuit

Date Published: Aug 13, 1984

Citation: 738 F.2d 660

Docket Number: 83-1362

Court Abbreviation: 5th Cir.