United Medical Laboratories v. Columbia Broadcasting Sys.

• Decision Date: 24 March 1969
• Docket Number: No. 21446.,21446.
• Citation: 404 F.2d 706
• Parties: UNITED MEDICAL LABORATORIES, INC., Appellant, v. COLUMBIA BROADCASTING SYSTEM, INC., et al., Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

404 F.2d 706 (1968)

UNITED MEDICAL LABORATORIES, INC., Appellant, v. COLUMBIA BROADCASTING SYSTEM, INC., et al., Appellees.

No. 21446.

United States Court of Appeals Ninth Circuit.

November 18, 1968.

Certiorari Denied March 24, 1969.

Roland Banks, Jr., of Mautz, Souther, Spaulding, Kinsey & Williamson, Portland, Or., for appellant.

Cleveland C. Cory, of Davies, Biggs, Strayer, Stoel & Boley, Portland, Or., for Columbia Broadcasting System, Inc.

Before CHAMBERS, Chief Judge, and JOHNSEN^* and KOELSCH, Circuit Judges.

Certiorari Denied March 24, 1969. See 89 S.Ct. 1197.

JOHNSEN, Circuit Judge.

The District Court dismissed on summary judgment, 258 F.Supp. 735, an action in diversity jurisdiction for a claim of libel under Oregon law. We affirm the judgment, but upon another ground than those on which the court predicated its decision.

As involved here, the defamation claim was one asserted by United Medical Laboratories, Inc., (herein United Labs), a mail order clinical testing laboratory, of Portland, Oregon, against Columbia Broadcasting System, Inc., Walter Cronkite, one of its featured newscasters and commentators, and Jay McMullen, one of its producers, (herein collectively CBS).

The basis of the claim was a series of national television broadcasts, radio broadcasts and press releases engaged in by CBS — each three in number — primarily reporting on the inaccuracies in the results of some tests of clinical specimens which CBS had had made, through some cooperating physicians, by 22 mail order laboratories throughout the country, and commenting on the significance of the inaccuracies as questions of risk to personal health and lack of public regulation.¹

The publications gave individual identification to only one of the laboratories by which the tests had been performed, but a map was used on one of the telecasts to indicate the various states in which the laboratories involved were located. This map showed that none of those making the tests was located in Oregon.

United Labs claimed, however, to have been libeled by the publications in that, allegedly, the reports and comments had conveyed and were meant to convey the implication and understanding that the testing inaccuracies which had occurred were typical of all mail order laboratories — a fact which United Labs asserted was not true and was specifically false as to it. It further contended that in view of its prominence as one of the largest mail-order laboratories in the United States (with "more than 4,000 doctors, numerous medical schools, and a number of national drug companies" as clients, and making "in excess of 500,000 tests per month"), the broadcasts had been professionally regarded, both locally and nationally, as having particular application to it.

In addition, United Labs charged that the publications were intendedly aimed at it; that because of the position which it occupied in the field, CBS had meant and had caused it to be personally subjected "to public scorn, contempt and hatred as an incompetent, inaccurate and cut-rate business which was and is endangering the health and lives of people throughout the United States"; and that in engaging in such untrue defamation against it, in permitting the libel to operate to greatly injure its business and reputation, and in not making any retraction on request, CBS had acted with malice toward it.

Recovery was sought of $5,000,000 in general damages, $100,000 in special damages and $5,000,000 in punitive damages.

The District Court held that the defamation was without any such reference to United Labs, either class or special, as would enable it to maintain a libel action under Oregon law. In substance, the basis of the court's decision was that the publications were on their face so "clearly limited" as to be incapable of having any general reach or reference and as only to cover individually the particular mail-order laboratories which had performed the tests; that they thus were without room for any contention of reference having been intended or of application being reasonably able to attach to other mail order laboratories on a class basis; that United Labs, however, "might still have an action, if it could show special reference to itself; that is, other than as a member of a class"; but that as to this aspect its showing in resistance to the motion for summary judgment set out facts and circumstances which were only "very scanty" — such as not to be able in the court's opinion to support any inference of special reference. 258 F.Supp. at 740, 741, 742 and 743.

On our reading of the Oregon cases, we believe that these conclusions accorded too narrow a scope to Oregon libel law, in their views that no such reach legally could exist on the text of the publications as to make it possible for any class reference to be involved against United Labs; and that further no such possible special reference (either by attachment from United Labs' prominence in the field or from any other circumstances in the situation) appeared to be establishable, as could make the injury sustained to United Labs' business and reputation, from application of the publications having in fact been made to it, give rise to a defamation claim.

Under the Oregon decisions, as well as generally, the question of reference in defamation, whether alleged to exist on a class or a special basis, can sufficiently be a matter of what application actually has been given to the publication by reasonable understanding and belief. See e. g. Marr v. Putnam, 196 Or. 1, 246 P.2d 509, 515, and 213 Or. 17, 321 P.2d 1061, 1065 (second appeal). Also see Restatement, Torts, § 564; Restatement, Torts, Second, Tentative Draft No. 11, § 564A.

Corollarily, it would follow that such an extent of actual application may occur as to provide substantial probativeness on the reasonableness of the understanding and belief engaged in, and in these circumstances to cause the question of reference generally to become one of fact on all the evidentiary elements involved. In such a situation the question of reference would not, except in special circumstances, be subject to resolution as a matter of law or to disposition on a summary basis.

As to class defamation, however, the courts have engaged in a limitation or exception to this — which has not had and perhaps cannot be given any definitiveness — of cutting off all possible application to a class or group upon the basis that the size thereof, when considered in relation to the nature or circumstances of the defamation, is such as to create legal uncertainty or remoteness, and so to entitle the publication to be held incapable as a matter of law of being reasonably understood and believed to have reference or attachability to each member of the class or group. See Prosser, Law of Torts, 3rd ed., § 106, pp. 767-769; Restatement, Torts, Second, Tentative Draft No. 11, § 564A, supra. But cf. Fawcett Publications, Inc. v. Morris, Okl., 377 P.2d 42, 51.

We need not, however, consider that question further. The District Court did not dispose of the case upon this basis, and upon the record we would not feel warranted in using that possible aspect here as a means of affirming the judgment, which CBS urges us to do. While there is general showing that large numbers of testing laboratories (apparently thousands) exist throughout the country, the affidavits do not enable it to be said how many, even of those set out in partial general list, are "mail order clinical laboratories" in the sense that the characterizing term "mail order" can be argued to have had aim and been given application from the publications. Thus, numerous community laboratories appear to be included in the partial list, which may permit some mailing of specimens to them in local incident or convenience, but which we are not willing to brand abstractly, in attempted basis to uphold the summary judgment here, as being engaged in the "mail order laboratory business", within the arguable thrust of the publications.

Furthermore, even if the matter of class reference, as a question under Oregon law, had been thus subject to summary disposition, there would still remain the matter of the court's similar disposition of the question of special reference. The showing contained in United Labs' affidavits as to the extent of the application which had in fact occurred against it — clients' and other professional expressions which had been made; $100,000 drop in business volume; lapse of pending business-contract negotiations; etc. — provided such substantial probativeness on the reasonableness of the understanding and belief which had occurred as in our opinion to require that the question of special reference under Oregon law be at least carried beyond the point of summary judgment.

While we indicated at the start that we were affirming the judgment upon another ground (here a federal one), we have engaged in discussing the District Court's disposition, because we would have chosen to let the termination of this diversity libel litigation stand upon the state basis attempted by the District Court, had we deemed it possible to do so.

The federal question to which we here are resorting for affirmance is one which was considered and discussed by the District Court, 258 F.Supp. at 743-744, as follows:

"Defendants also urge that a forthright discussion of subjects pertaining to `public health\' should be granted the same partial immunity as that granted to a discussion of `public officials\'. Rosenblatt v. Baer, 383 U.S. 75, 86 S.Ct. 669, 15 L.Ed.2d 597 (1966); New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686, 95 A.L.R.2d 1412 (1964); Garrison v. State of Louisiana, 379 U.S. 64, 85 S.Ct. 209, 13 L. Ed.2d 125 (1964). While the doctrine of partial immunity, as taught in those cases, may eventually find its way into the field of public health, I can find no supporting authority for application at this time.

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