Montgomery Ward & Co. v. McGraw-Hill Pub. Co.

• Citation: 146 F.2d 171
• Decision Date: 22 December 1944
• Docket Number: No. 8560.,8560.
• Parties: MONTGOMERY WARD & CO., Inc., v. McGRAW-HILL PUB. CO., Inc.
• Court: U.S. Court of Appeals — Seventh Circuit

146 F.2d 171 (1944)

MONTGOMERY WARD & CO., Inc., v. McGRAW-HILL PUB. CO., Inc.

No. 8560.

Circuit Court of Appeals, Seventh Circuit.

December 22, 1944.

Stuart S. Ball, Harold A. Smith, and Silas H. Strawn, all of Chicago, Ill. (Winston, Strawn & Shaw, of Chicago, Ill., of counsel), for appellant.

H. Templeton Brown, of Chicago, Ill., J. A. Gerardi, of New York City and Carl Meyer and Raymond J. Friend, both of Chicago, Ill. (Mayer, Meyer, Austrian & Platt, of Chicago, Ill., of counsel), for appellee.

Before EVANS, SPARKS, and MINTON, Circuit Judges.

MINTON, Circuit Judge.

Montgomery Ward & Company, hereafter referred to as the plaintiff, filed suit for libel against McGraw-Hill Publishing Company, hereafter referred to as the defendant, the publisher of Business Week. The plaintiff alleged special damages, but none was proved. At the conclusion of the plaintiff's evidence, the trial court sustained a motion by the defendant for a directed verdict, and entered judgment that the plaintiff take nothing by its action. From this judgment the plaintiff has appealed.

The only question presented on this record is whether the trial court erred in granting the motion for a directed verdict. The suit arose out of the publication of an article, appearing in the May 23, 1942 issue of Business Week. The entire article was admitted in evidence without objection. The particular words alleged to be libelous were as follows:

a. "John Steelman, head of the U. S. Conciliation Service * * * was talking about the Montgomery Ward & Co.'s labor policy, which happens to be anathema to both Steelman and the C.I.O. but which the company believes in so strongly that it refuses even to discuss modifications."

b. "Avery's Attitude — The long-standing Ward policy, generally conceded to have been formulated by Sewell Avery, company president, has been based on a refusal to make any concessions to unions."

c. "Early this year Levy had signed up enough Ward employees to be able to go to the company and announce that U.R. W.E. spoke for a majority."

d. "He told company officials that he expected them to recognize the union and bargain with it. He got himself brushed off with a `nothing doing' said very politely."

e. "The board, aware that a dispute existed over representation, asked Ward to submit to a check of union cards against payroll records in order to determine the union's strength. Again, the company's answer was a polite but firm `No'."

f. "Board Orders Election — An NLRB representative then asked the company to agree to an election among its employees which would decide whether U.R.W.E. had a majority. Again the answer was `No'."

g. "Levy and a committee of Ward workers went back to see the management, armed this time with official status. They presented a list of demands — for a wage increase, a union shop, seniority rights, and a contract which would include a provision for arbitration. The company representatives continued to say `No'."

h. "Union representatives of the bargaining committee reported the conviction that the company negotiators had no power to make decisions."

i. "* * * the fact that Sewell Avery could not be induced to take part in the negotiations * * *"

j. "Conciliation Service found that it was indeed true that Avery had not appeared at any of the conferences and that union requests that he meet with the committee had been turned down."

k. "* * * there was some question as to whether the company representatives were empowered to reach an agreement * * *"

l. "Given the runaround in Chicago, Msgr. Francis J. Haas, Special Commissioner of Conciliation, had no chance to conciliate."

m. "Msgr. Haas's report to Steelman (failure to begin conciliating * * *)."

The defendant admits publishing the article but claims that the words are not libelous per se. If these words were libelous per se, it was error to grant the motion. To determine the propriety of granting such a motion, a court must consider whether reasonable men, reading the words complained of, would ascribe to them a libelous meaning. "It is settled law that, when a published article is incapable of being understood in a libelous sense, a verdict should be directed, * * *." Washington Times v. Murray, 55 App.D.C. 32, 299 F. 903, 905.

The plaintiff alleged that these words meant, were intended to mean, and necessarily were understood by the readers of the publication to mean, that the plaintiff had refused to bargain collectively with the duly chosen representative of its employees, that the plaintiff had failed to give its representatives who met with such employees and their representatives authority to reach an agreement, and that the plaintiff refused to discuss modifications of its labor policy, thus charging the plaintiff with unfair labor practices and with violating the National Labor Relations Act, 29 U.S.C.A. § 151 et seq.

The plaintiff further alleged that these words meant, were intended to mean, and necessarily were understood to mean, that the labor policy of the plaintiff was such that it would not under any circumstances make any concessions to labor unions, that the plaintiff rejected without consideration every request and demand of its employees or their representatives, and that the plaintiff was at all times unfair, unreasonable, harsh, and arbitrary in its relations with its employees and the various agencies of the government.

These allegations, of course, did not make the words libelous per se if they were not such standing alone. Kimball v. Ryan, 283 Ill.App. 456, 466. It is the contention of the plaintiff that these words, having the meaning pleaded in the innuendo, tended to offend organized labor and its friends, who constituted a substantial part of the plaintiff's customers, causing them to discontinue business relations with the plaintiff, thus injuring the plaintiff in its business. If these words are fairly susceptible of carrying this meaning and of having this injurious effect on the plaintiff's business, they were libelous. Willfred Coal Co. v. Sapp, 193 Ill.App. 400, 409.

The first words complained of in the published article are set out in subparagraphs a. and b. of paragraph 8. of the complaint. It is stated that the plaintiff has a labor policy formulated by its president, Sewell Avery, which it believes in so strongly that it refuses even to discuss modifications and that this policy is based on a refusal to make any concessions to unions. Employers can not be condemned for having such a policy. Unions are not entitled in all cases to concessions as a matter of right. Giving these words their ordinary meaning and construction, we cannot gather from them anything libelous.

In subparagraphs c. and d. it is stated in effect that Mr. Levy, a union organizer, made representations to the plaintiff that his union spoke for a majority of its employees and demanded that the plaintiff recognize the union and bargain with it. To this demand the plaintiff "politely" said, "Nothing doing." Levy had a perfect right to make these representations and demands on the plaintiff, and the plaintiff had a perfect right to refuse them. To publish that one refused to do what he is in no way bound to do is ordinarily not libelous. Holloway v. Scripps Publishing Co., 11 Ohio App. 226, 232-233.

In the next two subparagraphs, it is stated that the National Labor Relations Board, aware of a dispute over representation, asked the plaintiff to submit to a check of union cards against its payroll records in order to determine the union's strength, and that upon the plaintiff's "polite" refusal, the Board asked the plaintiff to agree to an election among its employees in order to determine whether the union had a majority, but that again the plaintiff said, "No." We know of no law, rule, regulation, or custom that required the plaintiff to agree to the requests made by the Board. Again we say that to publish that one refused to do what he is not bound to do is ordinarily not libelous.

In subparagraph g. it is stated that Levy returned, "armed this time with official status," and made certain demands upon the plaintiff which were refused. What official status Levy had, and who armed him with it, does not appear. But the company was not bound to accept his demands, whatever status he had acquired. Even if Levy were the duly elected bargaining representative of the employees, the plaintiff had a right to refuse his demands. It was only bound to bargain collectively in good faith with the union representative. There is no statement that the plaintiff refused to do that. Since the plaintiff was within its rights in refusing Levy's demands, the publication of that refusal was not libelous.

In subparagraphs h. and i. it was stated that the union representatives of the bargaining committee reported the conviction that the company negotiators had no power to make decisions, and that Sewell Avery could not be induced to take part in the investigation. We call attention to the fact that part of this statement was only the opinion of the union's representatives. There is no statement that the plaintiff had refused to give its negotiators power to make decisions. It was merely the union committee's conviction that they had no such authority.

It was also stated in subparagraphs j. and k. that the Conciliation Service had found that it was indeed true that Avery had not appeared at any of the conferences and had turned down the union's request that he meet with the committee, and that there was some question as to whether the company representatives were empowered to reach an agreement. In whose mind these questions occurred does not appear. Neither is it stated that the plaintiff provoked the questions. At what particular time the plaintiff's representatives were supposed to have needed the power to reach an agreement does not appear. The negotiators on behalf of the plaintiff were not required to have the authority to reach...