Dixson v. Newsweek, Inc.

• Decision Date: 22 September 1977
• Docket Number: Nos. 76-1350 and 76-1351,s. 76-1350 and 76-1351
• Citation: 562 F.2d 626
• Parties: 3 Media L. Rep. 1123 James C. DIXSON, Plaintiff, Appellee and Cross-Appellant, v. NEWSWEEK, INC., Defendant, Appellant and Cross-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 626

562 F.2d 626

3 Media L. Rep. 1123

James C. DIXSON, Plaintiff, Appellee and Cross-Appellant, v. NEWSWEEK, INC., Defendant, Appellant and Cross-Appellee.

Nos. 76-1350 and 76-1351.

United States Court of Appeals Tenth Circuit.

Argued and Submitted May 20, 1977.

Decided Sept. 22, 1977.

Richard H. Plock, Jr., Denver, Colo. (Clanahan, Tanner, Downing & Knowlton, Denver, Colo., on the briefs), for plaintiff, appellee and cross-appellant Dixson.

Leo P. Larkin, Jr., New York City, and James A. Clark, Denver, Colo. (Stephen Froling of Rogers & Wells, New York City, and Clark, Martin & Pringle, Denver, Colo., on the brief), for defendant, appellant and cross-appellee Newsweek, Inc.

Before SETH, BREITENSTEIN and McWILLIAMS, Circuit Judges.

BREITENSTEIN, Circuit Judge.

This libel action was begun in state court and removed to federal court on diversity grounds. A jury awarded plaintiff $75,000 in damages. The court reduced the amount to $45,000. No. 76-1350 is an appeal by the defendant from the damage award. No. 76-1351 is an appeal by the plaintiff from the reduction of the award. We affirm.

Plaintiff Dixson was a vice-president of Frontier Airlines, a regional air carrier based in Denver, Colorado. Before 1971, Frontier had suffered severe financial losses for several years. New management took control in 1971 and instituted drastic changes. A number of executives, including plaintiff Dixson, were discharged. The subsequent financial recovery of Frontier attracted national interest.

Defendant Newsweek publishes a weekly magazine with nation-wide circulation. The May 15, 1972 issue of Newsweek contained an article written by its reporter, John Dotson, on the rehabilitation of Frontier's finances. The three paragraphs of that article which form the basis of Dixson's complaint read:

"Feldman's other major problem was scheduling, to meld planes with passengers more profitably within the constraints of the CAB charter, and Gordon Linkon got that job. Formerly vice president of administration, he now found himself in direct conflict with James C. Dixson, Frontier's scheduling vice president. 'What the scheduler was doing was to keep the planes on a schedule that suited the maintenance and crew schedules,' Vollbrecht recalls. 'So we said, "We don't give a damn what your problems are; you've got to get planes where people want them. That's the business we're in." '

Dixson was fired last summer, and Linkon went on to make hundreds of schedule changes. In some cases, he discovered, the old schedules were outright fiction, with phony times listed to gain better position in airline guides. 'We felt that was lying,' says Feldman. 'And if the boss says it's okay to lie to the customers, it's okay to lie to the boss.' It's largely due to Linkon's scheduling that Frontier's load factor has risen by 15 per cent this year.

Vollbrecht says he loses sleep over firing people, and the new management has worked to help its former executives find new jobs. 'Our treatment was not to imply that these people were bums,' he says. 'It was just that they were in jobs they couldn't handle.' "

Vollbrecht was Frontier's chairman of the board, and Feldman was its president. The Newsweek circulation of the issue containing the article was over two and one-half million copies.

The original complaint named Frontier, Vollbrecht, and Feldman as defendants along with Newsweek. Frontier and its two officers settled with Dixson and paid him $30,000 in return for a covenant not to sue. The case proceeded against Newsweek as the sole defendant.

Plaintiff Dixson was neither a public official nor a public figure. The subject of the Newsweek article was of some public interest. The extent of the protection which the First and Fourteenth Amendments give the press for libelous publications has been considered by the United States Supreme Court on a number of recent occasions. In New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686, the Court said that damages could not be recovered for defamation of a public official without clear and convincing evidence of actual malice on the part of the publisher. Actual malice requires a showing of knowledge of falsity of the defamatory statement or reckless disregard of its truth or falsity. Ibid. at 279-280, 84 S.Ct. 710.

In Curtis Publishing Co. v. Butts, 388 U.S. 130, 163, 170, 172, 87 S.Ct. 1975, 18 L.Ed.2d 1094, the Court applied the strict New York Times standard to defamation of public figures. In St. Amant v. Thompson, 390 U.S. 727, 731, 88 S.Ct. 1323, 20 L.Ed.2d 262, the Court said that a showing of reckless disregard, as required by New York Times, must be based on evidence that the defendant "entertained serious doubts as to the truth of his publication." The plurality opinion in Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 43, 55-57, 91 S.Ct. 1811, 1826, 29 L.Ed.2d 296, applied the New York Times standard to publications concerning private individuals in matters of public concern. Emphasizing the state interest in compensating private individuals for reputation damage, the Court in Gertz v. Robert Welch, Inc., 418 U.S. 323, 343, 94 S.Ct. 2997, 41 L.Ed.2d 789, modified Rosenbloom and said, Ibid. at 347, 94 S.Ct. at 3010:

"(S)o long as they do not impose liability without fault, the States may define for themselves the appropriate standard of liability for a publisher or broadcaster of defamatory falsehood injurious to a private individual."

In Time, Inc. v. Firestone, 424 U.S. 448, 454, 96 S.Ct. 958, 47 L.Ed.2d 154, the Court characterized the Gertz decision as a repudiation of the Rosenbloom holding that the New York Times standards apply to defamation of private persons whenever the statements concern matters of general public interest. The Court also said, Ibid. at 456, 96 S.Ct. at 966, that in Gertz the Court "sought a more appropriate accommodation between the public's interest in an uninhibited press and its equally compelling need for judicial redress of libelous utterances." The Court further said in Time, Inc., Ibid. at 459, 96 S.Ct. at 968, that the constitutional limitations announced in Gertz are "a prohibition against imposing liability without fault," and "the requirement that compensatory awards 'be supported by competent evidence concerning the injury.' "

Within the stated limitations, a state is free to act. Colorado law controls in this case. In Walker v. Colorado Springs Sun, Inc., Colo., 538 P.2d 450, cert. denied 423 U.S. 1025, 76 S.Ct. 469, 46 L.Ed.2d 399, the Colorado Supreme Court affirmed a judgment against a newspaper publisher for defamation of a private person in an article of some public interest. The Colorado court adopted the New York Times standards as reviewed in Rosenbloom but rejected the St. Amant holding that reckless disregard must be based on evidence that the publisher entertained serious doubts of the truth of his publication. In so doing, it said that the term reckless disregard "has had rather frequent usage in the tort field in this state." Colorado has defined reckless disregard as "an act destitute of heed or concern for consequences, especially foolishly heedless of danger; headlong, rash; without thought or care of consequences." Fanstiel v. Wright, 122 Colo. 451, 222 P.2d 1001, 1003; see also Coffman v. Godsoe, 142 Colo. 575, 351 P.2d 808, 814-815.

The pertinent instruction of the trial court said:

" * * * the plaintiff must establish as I have told you by clear and convincing evidence that the defendant knew the statements to be false or made the statements with reckless disregard for whether they were true or not.

Reckless disregard implies a higher degree of culpability than negligence. Recklessly means wantonly, with indifference to the consequences."

The last quoted paragraph was taken from footnote 2 of the Walker opinion, 538 P.2d at 457. That note begins by citing Cantrell v. Forest City Publishing Co., 419 U.S. 245, 95 S.Ct. 465, 42 L.Ed.2d 419. Newsweek says that the reference to Cantrell is inept because Cantrell was a suit for invasion of privacy, not libel. As we read the footnote, the reference to Cantrell was made to support the conclusion that a less demanding standard than that required by St. Amant was constitutionally permissible. For this purpose Cantrell was significant. The statement relating to "indifference to the consequences" conforms to Colorado tort law. That term is used in the definition of "reckless" and can only refer to the previous portion of the instruction relating to reckless disregard for whether the statements were true or false.

The Colorado law stated in Walker does not impose liability without fault and does not violate the requirement that the damage award be supported by competent evidence. Colorado has no constitutional duty to confine recovery to situations where a defendant had serious doubt of the truth of his publication. Indeed, some states have adopted a mere negligence standard. See Peagler v. Phoenix Newspapers, Inc., 114 Ariz. 309, 560 P.2d 1216, 1221-1222, and cases there cited. The court's instructions accord with the Colorado law as declared in Walker.

The Newsweek article, entitled "Turnaround at Frontier: The Cost of Victory," dealt both with the financial aspects of Frontier's situation and with the necessity for, and effect of, managerial changes. The Newsweek article described plaintiff as Frontier's vice-president in charge of "scheduling." It stated that the schedules favored the maintenance and operation crews and that the schedules were "outright fiction, with phony times listed to gain better position in the airline guides." It quoted Feldman, the new president of Frontier as saying: "We felt that was lying." Vollbrecht, the Frontier chairman of the board, was quoted as saying with regard to the discharged executives, "they were in jobs they couldn't handle."

The parties stipulated that during the pertinent period, proposed schedules "were...