Living Will Center v. NBC Subsidiary (KCNC-TV), Inc.

• Decision Date: 11 February 1993
• Docket Number: KCNC-TV,No. 92CA0139,92CA0139
• Citation: 857 P.2d 514
• Parties: 21 Media L. Rep. 1209 The LIVING WILL CENTER, a Limited Liability Company, Plaintiff-Appellant, v. NBC SUBSIDIARY (), INC. and Suzanne E. McCarroll, Defendants-Appellees. . III
• Court: Colorado Court of Appeals

Page 514

857 P.2d 514

21 Media L. Rep. 1209

The LIVING WILL CENTER, a Limited Liability Company Plaintiff-Appellant, v. NBC SUBSIDIARY (KCNC-TV), INC. and Suzanne E. McCarroll Defendants-Appellees.

No. 92CA0139.

Colorado Court of Appeals, Div. III.

Feb. 11, 1993.

As Modified on Denial of Rehearing

March 11, 1993.

Certiorari Granted Sept. 13, 1993.

Bloom Murr & Accomazzo, P.C., Eric P. Accomazzo, Edward Dale Parrish, P.C., Dale Parrish, Denver, for plaintiff-appellant.

Holme Roberts & Owen, Kevin Michael Shea, Jon Bernhardt, Denver, Anne H. Egerton, Marjorie Nieset Neufeld, Burbank, CA, for defendants-appellees.

Opinion by Judge BRIGGS.

Plaintiff, The Living Will Center, appeals the summary judgment dismissing its complaint against defendants, NBC Subsidiary (KCNC-TV), Inc., and one of its reporters--Suzanne McCarroll. Plaintiff's complaint included claims of libel, violation of the Colorado Consumer Protection Act, disparagement of plaintiff's business products and services, and tortious interference with a prospective economic advantage and business opportunity. Plaintiff contends the trial court erred in dismissing the complaint on the basis that statements in two television broadcasts referring to the sale of plaintiff's products as a "scam" and to its customers as being "taken" were mere hyperbole and that the broadcasts were constitutionally protected. We reverse and remand for further proceedings.

Plaintiff is a Colorado company in the business of selling products and services relating to advance decisions and directions for health care. Plaintiff asserts it provides customers with a thoroughly comprehensive, up-to-date, single source of information, forms, and services to enable individuals to make decisions and give directions in advance on choices for medical treatment in the event the individual becomes unable to do so.

Plaintiff began its business operations in 1991 with $200,000 in capital. In April of that year, its employees began a $60,000 television advertising campaign. Plaintiff's products and services were marketed as a package for $29.95.

The package consists of a current Colorado living will form; a durable power of attorney for health care form; a medical directive form which gives directions to a treating physician regarding specific medical treatment for differing medical conditions; and a personal identification card which contains a reduced copy of the living will, the location of the owner's living will, the name and address of the person's doctor, and information regarding the holder of the durable power of attorney, for use in the event of an emergency.

As part of the package, plaintiff includes the customer's name and address in a central registry by which people with living wills and related documents can be apprised of any changes in laws or medical technology affecting their living wills. In addition, the customer receives a subscription to a quarterly newsletter with information about any changes in the law and other developments relating to living wills and the legal right to make decisions about dying. The package includes information about the forms and services.

The subject of plaintiff's action are two different news reports about its product which were televised on successive days on KCNC's 4:00 p.m. news program. The full transcripts of the newscasts are included in the Appendix.

In the first newscast the newscaster introduced the segment by describing plaintiff as a company "capitalizing" on the living will trend. The reporter, defendant McCarroll, stated that some in the business of medical ethics say this is "really exploiting people's fear of death." After noting that the staff at the University of Colorado Health Sciences Center had sent out 10,000 living will forms free of charge, there was a clip from a videotaped interview with plaintiff's president in which he stated his form was "done on a stronger piece of paper."

Following this, the reporter stated that plaintiff's president had admitted his form was the same as one supplied free by hospitals and libraries, but that he claimed his print was bigger and that it came with a quarterly newsletter, a wallet identification card "so people know you have a living will," and a form for appointing a durable power of attorney. She then reported that the same form for a durable power of attorney was available free of charge at the C.U. Health Sciences Center. This segment concluded with the reporter noting that the packet includes a medical directive form, then cutting to a clip of plaintiff's president explaining this form was not a legal document, but a "road map for the patient."

Defendants juxtaposed this portion of the telecast with the brief commentary of a Denver doctor employed at the University of Colorado School of Medicine, who was represented on the broadcast as a "medical ethicist." His first statement on the telecast was, "I think it's a scam." The reporter then summarized the doctor's opinion: "He says the medical directive and power of attorney forms are unnecessary, certainly not worth paying for." Then the doctor stated, "[a]nd they will send in $29.95 and what they get back is they've been taken--is what it amounts to--totally taken."

The reporter later stated, "[T]hose in the medical ethics community say the living will forms offered free of charge are really all you need. If there's anything else you wish to add, simply add it." After listing other sources for the living will forms, the broadcast concluded by pointing out plaintiff's president was not a doctor or lawyer, but rather an "entrepreneur."

The telecast the next day included a brief summary of portions of the first report. Defendant McCarroll stated that the day before "we showed you one company in town that charged $29.95 for a living will kit. Now that kit includes a living will, a durable power of attorney, and a medical directive form."

The reporter represented that the doctor interviewed in the prior report had stated that the medical directive form was unnecessary. She did not mention that the doctor had also described the durable power of attorney form as unnecessary. She did report that "as of today" University Hospital was no longer providing the form for a durable power of attorney.

The remainder of the telecast consisted of more information regarding other entities which allegedly provided forms supposedly like plaintiff's, but again at little or no cost. Those entities included Porter Memorial Hospital, Denver Public Library, Harvard Medical School, Journal of American Medical Association, University Hospital, and Colorado Health Science Center.

Plaintiff claims on appeal that within 24 hours after the telecasts its dollar sales volume plummeted 65% and has never recovered.

After plaintiff filed its complaint, the court granted defendants' request for a stay of discovery pending a ruling on their motion for a protective order. Defendants then filed a motion to dismiss on the basis that the facts asserted in the broadcasts were substantially true and the opinions expressed were constitutionally protected.

In dismissing the complaint the trial court determined that, as a matter of law, the telecasts related to a matter of public interest and that, as a result, the requirements of falsity and actual malice or reckless disregard of the truth applicable to the claim for defamation were applicable to all of plaintiff's claims. Plaintiff has not challenged these determinations on appeal. The court then concluded that the substance or gist of the telecasts was true and that the statements that plaintiff's business was a "scam" and that people were being "taken" were constitutionally protected opinion supported by disclosed facts.

I.

Plaintiff contends the trial court erred in concluding that the substance or gist of the telecasts neither contain nor imply any provably false factual connotation. We agree.

We note at the outset that the issue of falsity is separate from the issue of whether the broadcasts were defamatory. For example, while falsity is typically an issue in both claims for defamation and trade disparagement, because the claims differ in other respects, compare Burns v. McGraw-Hill Broadcasting Co., 659 P.2d 1351 (Colo.1983) with Teilhaber Manufacturing v. Unarco Materials Storage, 791 P.2d 1164 (Colo.App.1989), a false statement may provide the basis for a claim of trade disparagement but be insufficient to state a claim of defamation. See Restatement (Second) Torts § 623A comment g (1976) ("Although it might be possible to imply some accusation of personal incompetence or inefficiency in nearly every imputation directed against a business or a product, the courts have insisted that something more direct than this is required for defamation.")

The trial court dismissed plaintiff's complaint based solely on its conclusion that the broadcasts did not imply any statement of material fact susceptible of being proved false. This is the only issue the parties have addressed on appeal, and our review will be limited to that issue.

A.

The United States Supreme Court in Milkovich v. Lorain Journal Co., 497 U.S. 1, 110 S.Ct. 2695, 111 L.Ed.2d 1 (1990) rejected the creation of an artificial dichotomy between "opinion" and fact. It concluded that, regardless of characterization as opinion or fact, a statement on matters of public concern must be provable as false before there can be liability under state defamation law, at least when a media defendant is involved. Loose, figurative, or hyperbolic language is entitled to full constitutional protection if, when considered in context, it would not be understood in its literal sense and does not contain a provably false factual connotation.

Our supreme court had earlier reached a similar conclusion in determining that a statement can support a claim for defamation only if the statement can be interpreted as a statement of fact susceptible to proof or...