Marcone v. Penthouse Intern., Ltd.

• Decision Date: 22 February 1982
• Docket Number: Civ. A. No. 78-3733.
• Parties: Frank MARCONE v. PENTHOUSE INTERNATIONAL, LTD. and Edward Rasen.
• Court: U.S. District Court — Eastern District of Pennsylvania

533 F. Supp. 353

Frank MARCONE v. PENTHOUSE INTERNATIONAL, LTD. and Edward Rasen.

Civ. A. No. 78-3733.

United States District Court, E. D. Pennsylvania.

February 22, 1982.

COPYRIGHT MATERIAL OMITTED

John A. Luchsinger, Media, Pa., for plaintiff.

Gregory S. Rubin, Philadelphia, Pa., for Penthouse Intern.

Grutman, Schafrann & Miller, New York City, for defendant.

MEMORANDUM

BRODERICK, District Judge.

This defamation action is currently before the Court on the motion of defendant, Penthouse International, Ltd. for summary judgment. For reasons set forth herein, defendants' motion is denied.

I. Undisputed Facts

In 1976, plaintiff Frank Marcone, an attorney maintaining an office in Media, Pennsylvania, was arrested by Federal Drug Enforcement Agents pursuant to an indictment issued by a Federal Grand Jury for the Eastern District of Michigan, Southern Division (Detroit). A superseding indictment charged, inter alia, that Frank Marcone, Frederick Frey and other named defendants willfully, knowingly and unlawfully did combine, conspire, confederate, and agree together and with each other, and with divers other persons to unlawfully possess with intent to distribute, and to distribute marijuana, 21 U.S.C. §§ 841(a)(1) and 846. More specifically, the indictment charged as follows:

It was further a part of said conspiracy that defendant and co-conspirator FRANK MARCONE, during the period of this conspiracy, would supply sums of United States currency to defendant and co-conspirator FREDERICK R. FREY in Philadelphia, Pennsylvania for the purpose of investing said monies in the distribution of marijuana by FREDERICK R. FREY for a profit.

* * * * * *

During May, 1974, FRANK MARCONE gave $25,000 in United States currency to FREDERICK R. FREY in Philadelphia, Pennsylvania, for the purpose of purchasing multi-hundred pound quantities of marijuana in California.

In May 1976, the indictment against Mr. Marcone was dismissed. The Assistant United States Attorney was quoted in newspaper accounts submitted by Penthouse, as stating that charges were dismissed without prejudice because of a legal technicality in tying Marcone to the larger conspiracy involving individuals from San Diego to Montreal. Mr. Marcone has not been re-indicted.

In October 1978, defendant, Penthouse International, Ltd. (Penthouse) published and distributed for sale the November 1978 issue of "Penthouse, The International Magazine for Men" which included an article entitled "The Stoning of America," authored by defendant Edward Rasen, who has not been served in this action. Beneath the title of the article appeared a descriptive subtitle which stated, "Marijuana is now big agribusiness — a $12 billion a year corporate growth crop." The article, reproduced in part below, contains the following reference to Mr. Marcone:

"Today there is no meaningful deterrent to narcotics trafficking," says U.S. Sen. Sam Nunn. "Sophisticated narcotics dealers, with their vast financial resources, could reasonably determine that crime does, in fact, pay." The hippy dope dealers of the 1960s counterculture have been replaced by "hip" businessmen who sport short hair, three-piece suits, and college degrees and have transformed a cottage industry into a multi-national corporate agribusiness, in which guns and murder enforce executive-suite investment decisions. The new breed of traffickers are young, intelligent and upper middle class. They operate outside traditional crime families and ghetto areas, though, by any standard, large-scale marijuana smuggling can be considered organized crime. However, the names of known criminals or members of Mafia families seldom appear in the investigations or court records of busted major syndicates.

Instead, the typical new dope businessman is an attorney. We have criminal attorneys, and attorney criminals, says Fred Rody, Miami DEA regional director. "There is such a thing as criminal consort. We know that some of the large smuggling operations have lawyers who are providing them with all the advice they need to operate."

However, even after DEA agents spent more than two years building an airtight case against a Mexican-American syndicate involved in the multi-million-dollar, nationwide wholesaling of marijuana, federal judges did not sentence any of the attorney criminals to prison.

Examples: Richard J. Litner, a practicing attorney in Boston, financed sales in New England and set up "cover" corporations, yet was offered the opportunity by federal judge Charles W. Joiner, without the consent of the prosecutor, to plead guilty to reduced charges. He was then placed on one-year probation so that he would not be disbarred and deprived of his livelihood. Attorney John K. Lowe, of Denver and Kansas City, made a hand-to-hand sale of 400 pounds of marijuana to an undercover agent for $40,000. He received two years' probation and a $1,000 fine. As a law student, George Weingarten, now a practicing attorney in San Diego, once received a gold Rolex wristwatch as a sales reward for distributing 10,000 pounds of marijuana in one week. He became a DEA informant in exchange for a reduced sentence of one-year probation. Maria Blanca-Vargas Reid, executive director of the San Diego Mental Health Association, handled a $35,000 drug payment. Charges were dismissed in the interest of justice after she cooperated with federal authorities and revealed the whereabouts of her son, Robert Craig Chipman, and his criminal associates. Frank Marcone, an attorney from the Philadelphia area, contributed down payments of up to $25,000 on grass transactions. Charges against him were dismissed because he cooperated with further investigations. Charles Sargent Hewett, a law student from Corona Del Mar, Calif., wholesaled up to $750,000 of marijuana per week. Charges were dismissed at the request of the U.S. attorney's office for his cooperation in identifying all the people he sold to, even though he was involved in the murder of his former distributor in Boston and the attempted murder of one of his associates from San Francisco. And so on. (emphasis added)

II. Applicable Law

Mr. Marcone complains in this action that the article has defamed him in that it declares that he was actually guilty of the offense and that the charges were dismissed because he cooperated with the police by providing information. Mr. Marcone contends that these statements are not true and that they have caused him harm and ridicule among his neighbors, business acquaintances and other citizens. Mr. Marcone also asserts that the use of the phrase "attorney criminals" is also defamatory and that the mention of his name in the context of the article is defamatory in that it implies that he participated or was involved in the type of illegal activities discussed in the article. Penthouse presents several grounds in support of its motion for summary judgment. In essence, they are: (1) the statements are not capable of defamatory meaning; (2) even if defamatory, the statements are privileged under Pennsylvania law as a substantially fair and accurate report of a judicial proceeding; (3) plaintiff is a public figure and cannot make the showing of actual malice required of public figures by the First Amendment; (4) the article involved matters of public concern and under Pennsylvania law, in cases where the alleged defamatory publication involved matters of "public or general concern," the defendant must prove actual malice, and plaintiff cannot make such a showing in this case; (5) the statements are true, and (6) the plaintiff cannot prove special damages.

The parties agree that Pennsylvania law governs the substantive issues in this case and inasmuch as Pennsylvania has an interest in the outcome of this litigation — plaintiff is a citizen of Pennsylvania and the alleged injury to plaintiff's reputation and business apparently occurred in Pennsylvania, the locus of his legal practice — there is no cause for this Court, sua sponte, to challenge the parties' consensual choice of law. See Steaks Unlimited, Inc. v. Deaner, 623 F.2d 264, 270 (3d Cir. 1980) and cases cited therein at p. 270 n.13. Accordingly, this Court shall look to the law of Pennsylvania and, insofar as applicable, to the First Amendment of the Constitution of the United States in disposing of this summary judgment motion.

A. The Defamatory Character of the Statements

In an action for defamation in Pennsylvania, the plaintiff bears the burden of proving both the defamatory character of the communication and the understanding by the recipient of it as intended to be applied to the plaintiff. 42 Pa.Cons. Stat.Ann. Tit. § 8343 (1979). It is the function of the court to determine, in the first instance, whether the communication complained of is capable of a defamatory meaning. Franklin Music Co. v. American Broadcasting Co., 616 F.2d 528, 540 (3d Cir. 1979); Hanish v. Westinghouse Broadcasting Company, 487 F.Supp. 397 (E.D.Pa. 1980); Corabi v. Curtis Publishing Co., 441 Pa. 432, 442, 273 A.2d 899, 904 (1971). A statement is defamatory where it tends so to harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him. Steaks Unlimited, Inc. v. Deaner, 623 F.2d 264, 267 (3rd Cir. 1980); Corabi v. Curtis Publishing Co., 441 Pa. at 442, 273 A.2d at 904.

Penthouse has attempted to break down the alleged defamatory statements into a series of phrases and to argue that each phrase, i.e., "charges against him were dismissed" "because he cooperated with further investigations," is not capable of defamatory meaning. However, in determining the meaning of an allegedly libelous communication, it must be read in the context of the entire communication. Corabi v. Curtis Publishing Company, 441 Pa. at 444, 273 A.2d at 906; Restatement (Second) of Torts, § 563, comment d (1977).

The article refers to "attorney criminals" and lists Mr. Marcone as an...