Di Giorgio Fruit Corp. v. American Federation of Labor and Congress of Indus. Organizations

Decision Date30 April 1963
CourtCalifornia Court of Appeals Court of Appeals
Parties, 53 L.R.R.M. (BNA) 2382, 47 Lab.Cas. P 50,854 DI GIORGIO FRUIT CORPORATION, Plaintiff and Respondent, v. AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS, an unincorporated association, et al., Defendants and Appellants. Civ. 10522.

Charles P. Scully and Victor Van Bourg, San Francisco, for defendants-appellants AFL-CIO and Daniel.

Simonelli & Franzen, Stockton, for defendants-appellants Agricultural Workers Organizing Committee and Smith, Krainock and Tannehill

M. B. Plant of Brobeck, Phleger & Harrison, San Francisco, and Leon E. Warmke, of Warmke & Woodward, Stockton, for respondent.

SCHOTTKY, Justice.

Di Giorgio Fruit Corporation commenced an action against the AFL-CIO, an unincorporated association, Norman Smith, Louis Krainock, DeWitt Tannehill, Franz Daniel and the Agricultural Workers Organizing Committee, an unincorporated association, alleging that the said defendants had published a libelous film entitled 'Poverty in the Valley of Plenty' and praying for compensatory and punitive damages. Issue was joined and the case was tried by the court sitting without a jury. The court found in favor of plaintiff and awarded plaintiff the sum of $100,000 as general damages and $50,000 as punitive damages. Defendants have appealed from the judgment entered in accordance with said findings.

Appellants urge a number of contentions in arguing for a reversal of the judgment, but before discussing these we shall summarize the factual situation as shown by the record. As stated by appellants, 'Although the trial in this matter was a lengthy one the facts presented by the record are substantially not in dispute.'

The Di Giorgio Fruit Corporation (hereinafter referred to as Di Giorgio) is primarily engaged in farming. It owns some 19,000 acres of agricultural land on which it produces various crops. On one specific tract or over 10,000 acres in California a particular combination of crops is raised which provides year-around employment for between 600 and 800 employees, and as many as 2,000 at the harvest season.

The corporation provides living quarters on the ranch for some 120 families and rentals are a maximum of $10 a month. Single men are housed in dormitories some of which are made from old railroad refrigerator cars which have been remodeled. These have hot and cold water with modern bathing and toilet facilities. Board is also furnished the single men and they are charged $2.25 a day for room and board.

There are schools in the vicinity. A medical facility is maintained at which there is a registered nurse and a laboratory technician in full-time attendance. A doctor holds daily office hours at the facility. Recreation facilities are maintained for the use of the employees and their families.

The facilities furnished today are approximately the same as those furnished by the corporation in 1948.

In 1948 the National Farm Labor Union (now the National Agricultural Union) which was affiliated with the AFL endeavored to unionize the agricultural workers employed at the Di Giorgio frams. In support of that effort a sound motion picture film was produced entitled 'Poverty in the Valley of Plenty' which purported to depict conditions at the Di Giorgio farms.

The basis of the libel is the showing of this film. This film apparently shows that the agricultural workers at Di Giorgio farms live in what may be properly described as extremely substandard housing. The charge is made that there is no sanitation, that women have no laundry facilities, and that the workers live in one-room shacks which are frequently overcrowded. It is also charged that no medical facilities are furnished and that men are required to work 12 hours a day while they are paid for only 11 hours. It was also asserted that Di Giorgio employed persons who were smuggled across the border by 'head hunters' employed by large farm interests.

The charges contained in the film were found to be false. The shacks were not pictures of the housing on the Di Giorgio farms but rather were taken of houses in the surrounding countryside. The housing furnished had sanitation with modern kitchen, toilet and bathing facilities. Other charges contained in the film were also apparently false.

In 1949 a bill was introduced in Congress seeking the repeal of the Taft-Hartley Act and the House Committee on Education and Labor held hearings on the matter. The National Farm Labor Union showed the committee 'Poverty in the Valley of Plenty,' and a special subcommittee was appointed to investigate the facts. The subcommittee held hearings at Backersfield and took the testimony of numerous witnesses, including, among others, H. L. Mitchell, President of the National Farm Labor Union; Ernesto Galarza, Educational Director of the National Farm Labor Union; and C. J. Haggerty, Secretary-Treasurer of the State of California for the AFL. In February 1950 the subcommittee rendered its report and concluded that the charges contained in the film, and hereinbefore enumerated, were false. The report was printed in the Congressional Record and a copy reposes in the library of the AFL-CIO Washington headquarters.

In May 1950 a suit which had been filed by Di Giorgio against the union and certain of its officers for libel was settled. As part of the agreement the union confessed judgment and agreed to destroy all copies of the film in its possession and agreed to use its best efforts to induce third parties who had possession of the film to deliver up the film for destruction.

In 1959 the Executive Council of the AFL-CIO decided to make another effort to organize farm workers. After a report from its Department of Organization, of which appellant Deniel was a member, the Executive Council authorized the commencement of such activities. The director of the Department of Organization placed appellant Smith in charge of the program. One Galarza was also appointed to assist Smith (Galarza had been one of the defendants in the prior action).

The film was resurrected in 1960 and was shown at various places in Northern California. These showings were aimed primarily at agricultural workers, though the general public could and did attend.

Appellants Krainock, Tannehill and Smith showed the film. Smith told the audience that the condition of agriculture workers was not much better than it was when the film was made and that it was substantially true. Tannehill had been told previously that conditions at the Di Giorgio farms were better than those shown in the film.

The trial court found in substance:

1. That the representations made in the film were false.

2. That none of the appellants believed the representations to be true or had any reason to believe them to be true; on the contrary, appellants 'were upon notice, and in fact knew, that the said defamatory statements were untrue.'

3. That appellants nevertheless represented all of the statements and representations made by the film to be true, excepting only that since the making of the film the law had been changed to require workmen's compensation insurance and to provide for limited social security benefits.

4. That the film was published with actual malice and for the purpose of injuring respondent in its business and occupation.

5. That the publication tended to injure, and in fact did injure, respondent in its business and occupation.

Appellants' contentions are: (1) That the representations contained in the film related to Joseph Di Giorgio rather than respondent; (2) that the representations were true; (3) that a corporation is without reputation and therefore cannot recover in a libel suit; (4) that the publications were not libelous per se; (5) that they were privileged; (6) that in the case of appellant AFL-CIO the other appellants did not act as its agents in publishing the film; and (7) that punitive damages are not allowable and the damages are excessive.

Before discussing the specific contentions of appellants, we deem it well to state that in a libel action arising out of a labor dispute a court is faced 'with the difficult task of striking a balance between the fundamental social importance of preserving freedom for communication of opposing economic views and the public interest in establishing 'the limits of permissible contest open to industrial combatants.'' (Gilbert, Privileged Publications in Labor Disputes Under California Libel Laws (1956), 30 So.Cal.L.Rev. 36.)

The basic rules governing such cases are well expressed in the leading case of Emde v. San Joaquin County Central Labor Council, 23 Cal.2d 146, at pages 154-155, 143 P.2d 20, at page 25, 150 A.L.R. 916, as follows:

'Although the publicizing of the facts of a labor dispute in a peaceful manner is within the liberty of free discussion guaranteed by the Fourteenth Amendment to the United State Constitution, a party to the controversy has no absolute privilege to discuss such matters so as to avoid civil responsibility for injury to another caused by a malicious and false statement made in the course of the differences between them. See Washer v. Bank of America, 21 Cal.2d 822, 832, 833, 136 P.2d 297 . Because, however, the peaceful settlement of labor contention is a matter of vital public concern, the parties to such a controversy must be accorded the right to make fair comment upon the facts involved, at least so long as the criticism is based upon a true or privileged statement of fact. See Snively v. Record Publishing Co., 185 Cal. 565, 198 P. 1; 3 Rest., Torts, sec. 606; 33 Am.Jur. Libel and Slander, sec. 161, p. 155; for a discussion of the conflict as to whether the right of public discussion is limited to comment or opinion, or whether it in addition extends to false assertions of fact made with an honest belief in their truth, see Prosser on Torts (1941),...

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