Rebozo v. Washington Post Co., 78-3403

• Decision Date: 19 February 1981
• Docket Number: No. 78-3403,78-3403
• Parties: 6 Media L. Rep. 2505 Charles G. REBOZO, Plaintiff-Appellant-Cross Appellee, v. The WASHINGTON POST COMPANY, Defendant-Appellee-Cross Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 375

637 F.2d 375

6 Media L. Rep. 2505

Charles G. REBOZO, Plaintiff-Appellant-Cross Appellee, v. The WASHINGTON POST COMPANY, Defendant-Appellee-Cross Appellant.

No. 78-3403.

United States Court of Appeals Fifth Circuit.

Feb. 19, 1981.

Sherryll Martens Dunaj, William S. Frates, Alan G. Greer, Miami, Fla., for plaintiff-appellant-cross appellee.

Steel, Hector & Davis, Patricia A. Seitz, Talbot D'Alemberte, Miami, Fla., Williams & Connolly, Kevin T. Baine, John B. Kuhns, Edward Bennett Williams, Washington, D.C., for defendant-appellee-cross appellant.

Appeal from the United States District Court for the Southern District of Florida.

Before WISDOM, RONEY and HATCHETT, Circuit Judges.

RONEY, Circuit Judge:

This is an appeal from a summary judgment entered for the defendant newspaper in a defamation suit. The district court found that plaintiff was a public figure and that no genuine issue of material fact existed as to whether defendant acted with actual malice. We affirm the court's finding that plaintiff is a public figure. We reverse, however, as to the decision that there was no genuine issue of material fact on the question of whether defendant acted with actual malice in publishing the newspaper article that forms the basis of this suit, and remand for further proceedings.

I. FACTS

Because the case was decided on defendant's motion for summary judgment, we must construe the record most favorably to plaintiff. Wolston v. Reader's Digest Association, Inc., 443 U.S. 157, 162 n.5, 99 S.Ct. 2701, 2705 n.5, 61 L.Ed.2d 450 (1979); Time, Inc. v. Ragano, 427 F.2d 219, 221 (5th Cir. 1970).

In June 1973 Ronald Kessler, a reporter with substantial financial and reporting experience for defendant's newspaper, The Washington Post, was assigned by his editor to prepare a series of articles on the finances of then-President Richard M. Nixon. As part of his preparation Kessler became interested in plaintiff Charles G. Rebozo because of his relationship with the former President. Rebozo had been, and continues to be, a close friend and financial adviser of the former President, and serves as chairman of the board and president of the Key Biscayne Bank in Miami.

Newsday, a Long Island, New York, newspaper in 1971 had published a series of articles about Rebozo, one of which described a Miami lawsuit involving allegations that the Key Biscayne Bank had converted 900 shares of stock belonging to E.F. Hutton & Co. Some of the stock had apparently been pledged as collateral for a loan at the Key Biscayne Bank, and was later sold when the loan was called. During the course of his investigation, Kessler reviewed the file in the case, which by that time was pending in this Court on appeal, in order to determine whether it contained any subsequent unreported developments. See Fidelity & Casualty Co. v. Key Biscayne Bank, No. 70-619-Civ-JLK (S.D.Fla. Jan. 24, 1972) (order granting defendant's motion for directed verdict), vacated and remanded, 483 F.2d 438 (5th Cir. 1973), dismissed (S.D.Fla.1973), aff'd, 501 F.2d 1322 (5th Cir. 1974).

Among other things Kessler studied the deposition of George H. Riley, Jr., who had been retained to investigate a claim filed by E.F. Hutton with its surety, the Fidelity and Casualty Company of New York. In his deposition, Riley described a meeting he had with Rebozo in October 1968 as follows:

Q Did you tell Mr. Rebozo at that time that the stock had been stolen or was missing from E. F. Hutton & Co.?

A Yes, sir.

Q Can you recall exactly what you told him?

A As I previously stated, I advised Mr. Rebozo that I was investigating the theft of nine 100-share certificates from the vaults of E. F. Hutton & Co. in New York.

Q Did you advise him of the numbers of the certificates that you were investigating?

A Yes. And the numbers corresponded to the numbers he gave me.

It is undisputed that 300 shares of the stock were sold on November 13, 1968, although the parties differ on whether the stock was sold by the Key Biscayne Bank itself, or on Rebozo's personal account.

After Kessler read the court file in Miami and New Orleans, he called Riley on the telephone because, as Kessler described, "I wanted, somehow to get a feeling from him, at least as to whether he understood the possible significance of his testimony." Kessler recounted a portion of his telephone conversation with Riley as follows on deposition:

Q Did you specifically ask him whether his statement in the deposition concerning his conversation with Mr. Rebozo was accurate?

A No.

Q Why not?

A I attach great significance to testimony given under oath and most newspaper articles, of course, are based on statements that are not made under oath. So, when a reporter obtains statements that are made under oath, it is certainly of more significance than otherwise.

Q It would have been significant, wouldn't it Mr. Kessler, if Mr. Riley told you he had made an error or a misstatement in his sworn testimony?

A Yes.

Q You didn't think it important to find out whether he would say whether he was right or wrong in that statement?

A No.

Q You didn't want to know what he wanted to say on that issue?

(Objection omitted)

Kessler also contacted Rebozo's attorney, who told him Rebozo "flatly denies" that Riley told Rebozo during their October 1968 meeting that the stock was stolen. The attorney followed up the conversation with a letter, repeating that Riley's testimony was false in that respect.

The question whether Rebozo personally, or the Bank, had cashed the stock was the subject of an October 6 internal memorandum from Kessler to his Post editor, Harry Rosenfeld, prompted by the telephone conversation between Kessler and Rebozo's attorney. A portion of that memorandum states:

So who cashed the stock? Neither Rebozo nor other witnesses were asked this question in the depositions. There are no other legal papers in the court file to answer the question.

But there are copies of the bills, receipts, and checks covering the sale transaction. As is clear from the attached, they all bear Rebozo's name.

The fact that Rebozo's name appears on them, and that the transactions were executed on his personal account, appear to me to be more than sufficient evidence for the purposes of an accurate and fair newspaper account of what appears in the court file that Rebozo technically and substantively cashed the stock.

Kessler and Rosenfeld discussed the content of an article Kessler had prepared on the stock transaction, and reviewed the sources of the information contained in the article.

On October 25, 1973, The Washington Post published a front-page article containing the headline, "Bebe Rebozo Said to Cash Stolen Stock," accompanying a photograph of plaintiff, and the following four paragraphs:

Charles G. (Bebe) Rebozo, President Nixon's close friend, cashed $91,500 in stolen stocks in 1968 after he was told by an insurance investigator it was stolen, the investigator's sworn statement and other records in a Miami court file indicate.

A lawyer for Rebozo conceded the investigator visited Rebozo but said Rebozo "flatly denies" the investigator told him the stock was stolen.

The $91,500 in securities represented 300 of the 900 shares of International Business Machines Corp. stock that federal prosecutors say was stolen by the Mafia in 1968 from the vaults of E. F. Hutton & Co., a New York stock brokerage firm.

The stock came into Rebozo's possession when it was offered as collateral for a loan from Rebozo's bank, Key Biscayne Bank in Florida.

The story continued for a total of 126 paragraphs, with the balance of the article appearing on pages A14 and A15 of defendant's newspaper. The "main point" of the story, according to Kessler, was contained in the "lead," or first paragraph. Farther along in paragraph number 99, the Post article quoted the passage from investigator Riley's deposition, in which Riley was questioned about whether the stock "had been stolen or was missing." (emphasis added).

Rebozo's complaint contends the article's lead sentence is false in two respects: (1) the investigator did not tell him the stocks were stolen; and (2) the stocks were cashed by the bank, not by him. The question of the article's falsity, however, is not an issue in this appeal.

II. WAS REBOZO A PUBLIC FIGURE ?

In New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964), the Supreme Court held that a public official cannot recover damages for defamation relating to official conduct absent a showing of " 'actual malice' that is, with knowledge that it was false or with reckless disregard of whether it was false or not." 376 U.S. at 279-80, 84 S.Ct. at 725-26. Three years later the Court held in Curtis Publishing Co. v. Butts, 388 U.S. 130, 87 S.Ct. 1975, 18 L.Ed.2d 1094 (1967), that the New York Times standard is applicable to "public figures" as well. See also Associated Press v. Walker, 388 U.S. 130, 87 S.Ct. 1975, 18 L.Ed.2d 1094 (1967). The Court elucidated the applicability of New York Times to public figures, but refused to expand the protection afforded by that standard to actions brought by private persons, in Gertz v. Robert Welch, Inc., 418 U.S. 323, 344-47, 94 S.Ct. 2997, 3009-10, 41 L.Ed.2d 789 (1974).

Application of the New York Times rule to public figures, the Court observed, is supported by two factors. First, public figures, because they "enjoy significantly greater access to the channels of effective communication and hence have a more realistic opportunity to counteract false statements than private individuals normally enjoy," are less vulnerable to injury from defamatory statements. Gertz v. Robert Welch, Inc., 418 U.S. at 344, 94 S.Ct. at 3009; see Wolston v. Reader's Digest Association, Inc., 443 U.S. at 164, 99 S.Ct. at 2706. A second consideration, and one that has been given greater weight by the Court, is that public figures, the news media may assume, "have voluntarily exposed...