Schultz v. Newsweek, Inc.

• Decision Date: 18 January 1982
• Docket Number: No. 80-1090,80-1090
• Citation: 668 F.2d 911
• Court: U.S. Court of Appeals — Sixth Circuit
• Parties: 7 Media L. Rep. 2552 Leonard SCHULTZ, Plaintiff-Appellant, v. NEWSWEEK, INC. and The Evening News Association, Defendants-Appellees.

Page 911

668 F.2d 911

7 Media L. Rep. 2552

Leonard SCHULTZ, Plaintiff-Appellant, v. NEWSWEEK, INC. and The Evening News Association, Defendants-Appellees.

No. 80-1090.

United States Court of Appeals, Sixth Circuit.

Argued Oct. 5, 1981.

Decided Jan. 18, 1982.

Irwin M. Alterman, Hyman, Gurwin, Nachman, Friedman & Winkelman, Roger Leemis, Southfield, Mich., for plaintiff-appellant.

Bodman, Longley & Dahling, James A. Smith, Detroit, Mich., James E. Stewart, R. Rassel, James Smith, James Stewart, Detroit, Mich., for defendants-appellees.

Before LIVELY and ENGEL, Circuit Judges, and WHITE, ^* District judge.

LIVELY, Circuit Judge.

The plaintiff appeals from summary judgment for both defendants in an action in which he sought damages for alleged defamation. The action was filed in a state court and removed to the district court on the basis of diversity of citizenship. All parties agree that the substantive law of Michigan is applicable and the plaintiff also contends that the Michigan rule pertaining to treatment of summary judgment motions should have been applied.

I.

A.

In his complaint the plaintiff charged that he was libeled by a reference to him in the August 18, 1975 issue of Newsweek as a "Detroit underworld figure." The article in which the reference appeared concerned the disappearance of former labor leader James R. Hoffa on July 30, 1975 and was entitled, "Where's Jimmy Hoffa?" The complaint also charged that the plaintiff was libeled by references to him in news articles published by the defendant Evening News Association in the August 13, 1975, August 22, 1975, September 9, 1975 and September 16, 1975 issues of The Detroit News. The first three news articles concerned the Hoffa disappearance and the September 16th article detailed the problems being encountered by the plaintiff's two sons in attempting to obtain a liquor license for a private club which they owned and operated.

In the August 13th article entitled, "Hoffa 'set up' for rendezvous by Giacalone?" plaintiff was referred to as a "long-time underworld figure" and one of "the other two men named by law officials as those with whom Hoffa was to meet." In the August 22nd article, "Jury probe a last hope in Hoffa case," plaintiff was referred to as "a longtime underworld figure ... (and) among those scheduled to meet Hoffa July 30." A September 9th article on the Hoffa case called plaintiff an "underworld figure." The September 16 article concerning the liquor license proceedings stated that plaintiff "has been named a key figure in the investigation into the disappearance of former Teamsters Union President James R. Hoffa." The complaint charged that all of the statements were "untrue, malicious and libelous."

The defendants filed separate answers in which both denied that the statements and characterizations were untrue or were published with malice. Both defendants also relied on a privilege established by Michigan common law to comment on matters of general public interest and on their rights under the First Amendment to the Constitution of the United States. In this regard they asserted that the plaintiff was a "public figure," at least for the purposes of this case.

Both defendants also filed motions for summary judgment supported by affidavits and exhibits. Nearly three years of intensive discovery by all parties preceded the motions for summary judgment. The deposition of the plaintiff Schultz was begun on May 17, 1977 and continued through a number of sessions until it was completed on May 24, 1979. This deposition extends to nearly 800 pages. The reporters who wrote the articles for Newsweek and The Detroit News gave their depositions as well. In addition, interrogatories were served and answered by all parties.

In its motion for summary judgment the defendant Newsweek relied on the privilege of fair comment on matters of public interest afforded by Michigan law and on its lack of actual malice as defined in cases under the Constitution as bases for its contention that the plaintiff had failed to show the existence of any genuine issue as to a material fact. Supporting affidavits of the Newsweek correspondent who filed the copy used in the August 18th article and of the editor who approved the article accompanied the motion. In these affidavits the reporter and editor stated that they believed the statements were true and that they had never had any reason to doubt their truthfulness. The motion of the Evening News was based on the same legal premises as that of Newsweek. In an accompanying brief the Evening News referred extensively to discovery materials in support of its contention that the plaintiff had failed to demonstrate the existence of genuine issues of material fact. The plaintiff filed a response to the motions accompanied by his affidavit in which Schultz denied that he was an underworld figure or that he had any business involvement with members of the underworld or organized crime.

B.

The district court filed an opinion and order granting summary judgment. Schultz v. Newsweek, Inc., 481 F.Supp. 881 (E.D.Mich.1979). The decision was reached on the basis of the Michigan rule of qualified privilege, and the district court did not reach the question of whether the publications were privileged under the Constitution. The district court stated the Michigan rule of qualified privilege as follows:

Under Michigan law, there is a qualified privilege to publish information which is in the public interest, which imposes a burden on plaintiff of proving defendants acted with actual malice. See Orr v. Argus-Press Co., 586 F.2d 1108, 1113 (6th Cir. 1978), cert. denied, 440 U.S. 960, 99 S.Ct. 1502, 59 L.Ed.2d 773; Schultz, supra, 468 F.Supp. (551) at 562; Lawrence, supra, 357 Mich. (134) at 143, 97 N.W.2d 719; Peisner v. Detroit Free Press, Inc., 82 Mich.App. 153, 163, 266 N.W.2d 693 (1978). The publisher of such information has this privilege whether or not the plaintiff is a public official. See Schultz, supra, 468 F.Supp. at 560-62; Peisner, supra, 82 Mich.App. at 161, 266 N.W.2d 693. Whether or not a communication is privileged is for the court to decide. See Nuyen, supra, 372 Mich. (654) at 659, 127 N.W.2d 369; Lawrence, supra, 357 Mich. at 139, 97 N.W.2d 719.

Id. at 884. While noting that the standard of malice to be applied to the Michigan qualified privilege is not totally clear, the district court concluded that "under Michigan's common law plaintiff must establish a disputed issue of fact that the defendants had actual malice as defined by New York Times (New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed. 686 (1964) )-i.e., that defendants had knowledge of the falsity of their statements or acted in reckless disregard to the truth or falsity of their statements." 481 F.Supp. at 885.

The court then proceeded to analyze the evidence with respect to the article in Newsweek. This evidence established that the reporter had characterized the plaintiff as an underworld figure in reliance upon information from reputable sources, that information from the various sources relied upon was consistent and there was no reason for the reporter to doubt its veracity. These sources included discussions with FBI personnel and local and Michigan State Police, other reporters, the New York Times and Detroit dailies. In addition, the reporter had seen the plaintiff's police record, or "rap sheet" which showed four felony convictions between 1944 and 1960. The court also determined that the information relied upon fit the reporter's own definition of "underworld figure" as "someone who has had more than an occasional brush with the forces of law and order," and that there was no evidence that the reporter had reason to believe this definition was false. The court noted that the reporter's copy was checked for accuracy prior to publication of the article. From its review of the entire record the district court came to the following conclusion:

Plaintiff has not pointed to any evidence which would create an issue of fact as to whether or not Newsweek's employees believed their characterization of plaintiff was false, or whether or not they acted recklessly in regard to the truth or falsity of their statement. Thus, there is no evidence of malice on the part of Newsweek.

Id. (footnote omitted).

A similar analysis was undertaken with respect to the claims against the defendant Evening News. The court reviewed the evidence from which the reporters had determined that the plaintiff's name was being linked by law enforcement officers with the disappearance of Hoffa. The court held that the public has an interest in knowing details of a police investigation and that there was no evidence that anyone connected with the published articles believed the information concerning police interest in the plaintiff to be false or that it was published in reckless disregard for its truthfulness. The evidence further established that the reporters who referred to plaintiff as an underworld figure knew of his criminal record and of his continued association with persons publicly identified as underworld figures. The court also noted that one reporter testified that he had seen the plaintiff with a reputed leader of organized crime in Detroit, Anthony Giacalone, one of the other two people Hoffa was supposed to have met on the day of his disappearance. This reporter testified that he overheard Giacalone ask plaintiff whether he was "going to take the Fifth on the finances," and plaintiff did subsequently invoke the Fifth Amendment in refusing to answer questions before a federal grand jury investigating Hoffa's disappearance.

The court also found that the reporters' characterization of plaintiff was consistent with their definitions of "underworld figure": reporter Wendland, "someone with a long history of criminal convictions and associations"; reporter Nehman, "someone who has ties to the underworld in connection with a...