Taj Mahal Travel, Inc. v. Delta Airlines, Inc.

• Citation: 164 F.3d 186
• Decision Date: 30 December 1998
• Docket Number: No. 97-5652,97-5652
• Parties: TAJ MAHAL TRAVEL, INC., Appellant, v. DELTA AIRLINES INC.; Air Canada; Airlines Reporting Corporation, Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 186

164 F.3d 186

TAJ MAHAL TRAVEL, INC., Appellant, v. DELTA AIRLINES INC.; Air Canada; Airlines Reporting

Corporation, Appellees.

No. 97-5652.

United States Court of Appeals,

Third Circuit.

Argued Sept. 24, 1998.

Decided Dec. 30, 1998.

Gianni Donati (ARGUED), Princeton, New Jersey, for Appellant.

Francis P. Newell (ARGUED), Montgomery, McCracken, Walker & Rhoads, LLP Before: BECKER, Chief Judge, WEIS, and GARTH, Circuit Judges.

Philadelphia, Pennsylvania, Stacy A. Fols, Montgomery, McCracken, Walker & Rhoads, LLP, Cherry Hill, New Jersey, for Appellees.

OPINION OF THE COURT

WEIS, Circuit Judge.

In this appeal, we determine that the defendant airline's form letter advising a number of passengers that their tickets are considered to be stolen may be defamatory to the plaintiff travel agency that sold the tickets. We also conclude that the preemption provision of the Airline Deregulation Act does not apply to this state tort claim. Accordingly, we will reverse the District Court's dismissal of the plaintiff's defamation claims.

Taj Mahal Travel, Inc. was a travel agency in Princeton, New Jersey, specializing in furnishing airline tickets to persons traveling to India. Some of these tickets were purchased from an authorized agent for Delta Airlines by Taj Mahal which, in turn, sold them to its patrons. On a number of occasions in 1996 when these tickets were presented at the airport in India for the return flight to the United States, Delta refused to honor them. The travelers were required to purchase new tickets and were given the following explanatory form letter:

"Dear Delta Customer:

We regretfully must inform you that the ticket presented has been reported as a stolen airline ticket.

It is unfortunate that you have purchased one of these tickets. While we empathize with your predicament, we cannot honor this ticket for transportation because Delta has not yet received the money you paid. To assist you in this difficult situation, we will sell you a new ticket, honoring the fare indicated in you [sic] flight reservation record and waiving any advance purchase requirements.

It is necessary to retain your ticket in order to assist with the ongoing law enforcement investigation; however, this letter will serve as your receipt for ticket number [_____]. If you purchased your ticket from an authorized Delta travel agency, please complete the attached affidavit and forward it to Delta Air Lines, Inc. for a refund. If you purchased the ticket from someone not authorized by Delta to sell its tickets, you should contact the individual from whom you purchased the ticket, as Delta has not received any payment for this ticket.

If this ticket has been issued by a travel agent and you have further questions, you may contact the Agency Audit and Fraud Prevention, Airline Reporting Corporation at (713) 816-8134."

In a complaint against Delta and others filed in New Jersey state court, Taj Mahal alleged that the letter was defamatory, and caused its patrons not only to demand reimbursement, but also to cease doing business with the agency. Because of the injury to its reputation and trade, Taj Mahal sought compensatory and punitive damages in counts asserting defamation and state RICO claims. Defendants removed the case to the United States District Court for the District of New Jersey under diversity jurisdiction. ¹

Holding that the letter could not reasonably be read to have a defamatory meaning, the District Court entered judgment on the pleadings for Delta. Fed.R.Civ.P. 12(c). The Court further held that even if the letter was found to be defamatory, Taj Mahal failed to show that the statements were " 'of and concerning' the plaintiff." According to the Court, "the letter does not mention the plaintiff by name .... and did not specify by name or implication any particular person or entity." Rather, it "refers to any number of travel agents without specific reference to any particular one."

At a later date, relying on the preemption provisions of the Airline Deregulation Act, 49 U.S.C. § 41713(b)(1) (formerly at 49 U.S.C. § 1305(a)(1)), the District Court entered judgment against the plaintiff on a state RICO count.

Plaintiff has appealed the ruling on the defamation counts, contending that a reasonable reader could understand the letters to accuse Taj Mahal of selling tickets for which it had not paid. Moreover, it also asserts that actions for defamation are not preempted by the Airline Deregulation Act.

I.

Our review of the District Court's dismissal of a complaint under Fed.R.Civ.P. 12(c) is plenary. See Hayes v. Community Gen. Osteopathic Hosp., 940 F.2d 54, 56 (3d Cir.1991). We must accept as true the allegations in the complaint, and draw all reasonable factual inferences in Taj Mahal's favor. See Turbe v. Government of the Virgin Islands, 938 F.2d 427, 428 (3d Cir.1991). The District Court's judgment may be affirmed only if no relief can be granted under any set of facts that could be proved. See id.

In this diversity action, the plaintiff's cause of action for defamation is governed by the law of New Jersey. To state a claim, the plaintiff must prove: (1) that the defendant made a defamatory statement of fact; (2) concerning the plaintiff; (3) which was false; (4) which was communicated to persons other than the plaintiff; and (5) fault. See Feggans v. Billington, 291 N.J.Super. 382, 677 A.2d 771, 775 (N.J.Super.Ct.App. Div.1996); see also Restatement (Second) of Torts § 558 (1976). Repeating a defamatory statement is itself defamation, Kotlikoff v. Community News, 89 N.J. 62, 444 A.2d 1086, 1088 n. 1 (N.J.1982), and a printed defamation is libel. See Restatement (Second) of Torts § 568 (1976).

"A defamatory statement is one that is false and injurious to the reputation of another or exposes another person to hatred, contempt or ridicule or subjects another person to a loss of the good will and confidence" of others. Romaine v. Kallinger, 109 N.J. 282, 537 A.2d 284, 287 (N.J.1988) (internal quotation marks removed). A court must look to the "fair and natural meaning which will be given it by reasonable persons of ordinary intelligence" and examine the publication as a whole and in context. Id. at 288. A court may determine as a matter of law whether a statement is defamatory, assuming that it is capable of only one meaning. When the words are capable of either a defamatory or non-defamatory construction, however, the trier of fact must determine their meaning. See id. False written attributions of criminality are defamatory as a matter of law. See id. A theft of over $500 is a crime of the third degree in New Jersey. See N.J.S.A. § 2C:20-2(b)(2)(a).

Not only must the statement be defamatory, it must also be "of and concerning" the plaintiff. A defamatory statement need not explicitly name a plaintiff, so long as it was understood to refer to it by at least one third party: " '[i]f the applicability of the defamatory matter to the plaintiff depends upon extrinsic circumstances, it must appear that some person who saw or read it was familiar with the circumstances and reasonably believed that it referred to the plaintiff.' " Gnapinsky v. Goldyn, 23 N.J. 243, 128 A.2d 697, 703 (N.J.1957) (quoting Restatement of Torts § 564 cmt. b (1938)); see also Dijkstra v. Westerink, 168 N.J.Super. 128, 401 A.2d 1118, 1120 (1979) ("It is enough that there is such reference to him that those who read or hear the libel reasonably understand the plaintiff to be the person intended."); Mick v. American Dental Assoc., 49 N.J.Super. 262, 139 A.2d 570, 582 (1958) ("When defamatory words are directed at a group or class of persons rather than an individual, the plaintiff must show that he is a member of the defamed class and must establish some reasonable application of the words to himself.").

Thus, we analyze Delta's form letter by placing ourselves in the position of the expected reader, a ticket-purchasing patron of Taj Mahal. The letter states that "the ticket presented has been reported as ... stolen," "[i]t is unfortunate that you have purchased one of these tickets," and "Delta has not yet received the money you paid." The letter thus links theft, a criminal offense, to the ticket received from Taj Mahal. The "has been reported" phraseology does not shield Delta because republication of defamatory matter is actionable regardless of the republication's accuracy. See Kotlikoff, 444 A.2d at 1088 n. 1 ("It is a well settled rule of defamation law that one who republishes libelous matter is subject to liability as if he had published it originally, even though he attributes the libelous statements to the original publisher."); Rogers v. Courier Post Co., 2 N.J. 393, 66 A.2d 869, 873 (N.J.1949); see also Restatement (Second) of Torts § 578.

In addition, the letter provides: "[i]t is necessary to retain your ticket in order to assist with the ongoing law enforcement investigation...." Clearly, this emphasizes to the reader that some type of criminal misappropriation is involved. The text, therefore, permits an inference of defamatory meaning.

The question remains whether the letter would lead a reasonable reader to conclude that Taj Mahal is in some way connected with the purported illegality. We believe that it could. To begin with, the patron knows that he paid Taj Mahal. The Delta letter notes the reason for refusal to "honor this ticket for transportation [is] because Delta has not yet received the money you paid." Yet Taj Mahal is the only entity with which the patron had contact.

It is reasonable to infer that if Delta did not receive that money, then Taj Mahal did not transmit the payment. The final sentence of the letter strengthens this assumption: "If this ticket has been issued by a travel agent and you have further questions, you may contact the Agency Audit and Fraud Prevention, Airline Reporting Corporation...." The word "fraud" smacks of criminality.

To defeat the colloquium, Delta...