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

• Decision Date: 11 July 1994
• Docket Number: No. 93SC214,KCNC-TV,93SC214
• Citation: 879 P.2d 6
• Parties: 23 Media L. Rep. 1417 NBC SUBSIDIARY (), INC. and Suzanne McCarroll, Petitioners, v. The LIVING WILL CENTER, a limited liability company, and Merrill G. Hastings, Jr., Respondents.
• Court: Colorado Supreme Court

Page 6

879 P.2d 6

23 Media L. Rep. 1417

NBC SUBSIDIARY (KCNC-TV), INC. and Suzanne McCarroll, Petitioners, v. The LIVING WILL CENTER, a limited liability company, and Merrill G. Hastings, Jr., Respondents.

No. 93SC214.

Supreme Court of Colorado En Banc.

July 11, 1994.

Rehearing Denied Sept. 6, 1994.

Gibson, Dunn & Crutcher, George B. Curtis, Laura M. Hill, Denver, National Broadcasting Company, Inc., Anne H. Egerton Marjorie Nieset Neufeld, Burbank, CA, for petitioners.

Edward Dale Parrish, P.C., Dale Parrish, Denver, for respondents.

Davis, Graham & Stubbs, Andrew M. Low, Denver, for amicus curiae Colorado Broadcasters Ass'n.

Cooper & Kelley, P.C., Thomas B. Kelley, John R. Mann, Denver for amicus curiae Colorado Press Ass'n.

Baker & Hostetler, Kathryn A. Elzi, Denver, Bruce W. Sanford, Henry S. Hoberman, Robert D. Lystad, Washington, DC, for amicus curiae Society of Professional Journalists.

Chief Justice ROVIRA delivered the Opinion of the Court.

In Living Will Center v. NBC Subsidiary (KCNC-TV), Inc., 857 P.2d 514 (Colo.App.1993), the court of appeals held that a television station and one of its reporter's ¹ broadcasts concerning a product marketed by the Living Will Center (LWC) implied material assertions of fact capable of verification and thus, the telecast was not constitutionally privileged speech in an action for defamation. We granted certiorari to determine: (1) whether that holding is in accord with the applicable precedent of the United States Supreme Court and this court; and (2) whether the court of appeals erred in failing to review the trial court's determination that the substance and gist of the broadcasts was true and if so, if that determination was correct. ² We reverse and remand with directions.

I

LWC markets a packet of information, forms, and services intended to provide its customers with a comprehensive, up-to-date source for drafting and implementing a living will. The packet is sold for $29.95 and 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 various medical conditions; 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 its services, LWC keeps a registry of its customers' names and addresses so they may be apprised of changes in law or medical technology affecting their living wills. Customers also receive a quarterly newsletter that contains information about changes in the law and other developments regarding living wills.

LWC brought this action as a result of two reports about its product which were televised on successive days on KCNC's 4:00 p.m. news broadcast. ³ The first broadcast was introduced as follows:

Living wills have become a popular and legal way of maintaining some control over your dying days. They allow you to make difficult life and death decisions. Do you want to be kept alive on life support systems? Artificially fed? Hospitals and libraries throughout the metro area offer living will forms free of charge. And now, a new Denver company is capitalizing on the living will trend, charging $29.95. Is it worth it? News 4's Suzanne McCarroll is here with more on the story.

NBC then reported that some medical ethicists say that this is "really exploiting people's fear of death." After noting that the University of Colorado Health Sciences Center had sent out 10,000 living will forms free of charge, the broadcast included an interview with the president of LWC who stated the form in the packet was "done on a stronger piece of paper." The broadcast went on to state that the president admitted his form was the same as that supplied free of charge by hospitals and libraries, but that he claimed that LWC's print was bigger, came with a quarterly newsletter, a wallet identification card "so people know you have a living will," and a durable power of attorney form. The broadcast then noted that the same form for a durable power of attorney was available free of charge at a local hospital. The broadcast additionally reported that the packet includes a medical directive form which was characterized by LWC's president as a "road map for the patient," but not a legal document.

The broadcast continued with a brief commentary by Dr. Frank Marsh, an employee of the University of Colorado School of Medicine who was represented as a "medical ethicist." His first statement was, "I think it's a scam." The report then summarized his view as follows: "He says the medical directive and power of attorney forms are unnecessary, certainly not worth paying for." Marsh then stated: "[T]hey will send in $29.95 and what they get back is they've been taken--is what it amounts to--totally taken."

The broadcast then stated that many in the medical ethics community say the forms provided free of charge "are really all you need" to implement an effective living will. The broadcast concluded by noting that LWC's president was neither a doctor nor a lawyer, but an "entrepreneur."

The president of LWC challenged the content of the first broadcast claiming, among other things, that some of the forms were not available at the locations identified by NBC. In response, NBC broadcast another story on living wills and LWC. The second broadcast included a short summary of the first report and stated that, "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 second broadcast included Marsh's statement that the medical directive form was unnecessary. The broadcast continued with more information regarding other institutions which provided forms similar or identical to LWC's at little or no cost.

LWC brought this action asserting numerous claims including that NBC's broadcast was libelous. It claimed that virtually the entire broadcasts were defamatory and not constitutionally privileged. ⁴ NBC filed a motion to dismiss which was converted to a motion for summary judgment and granted by the trial court. The trial court held that NBC's broadcast characterizing LWC's packet as "a scam" and to its customers as being "taken" were constitutionally privileged and thus, not actionable in a suit for defamation. It also concluded that the substance and gist of the broadcasts was true and thus, not actionable in a defamation suit. ⁵

The court of appeals reversed, concluding that the terms "scam" and "totally taken," when considered in the context of the broadcast as a whole, implied material assertions of fact susceptible to being proved false. Living Will Center, 857 P.2d at 518-19. ⁶ It additionally concluded that the gist of each of the broadcasts implied a material assertion of fact capable of being proved false. "Thus," the court of appeals held, "the telecast does not fall within the protection of the First Amendment for statements containing no provable false factual connotation." Id. at 519. It did not reach the trial court's second conclusion that the substance and gist of the broadcasts was true and not actionable.

II

In order to decide the issues presented we must first identify the appropriate standard for evaluating when defamatory statements are constitutionally protected under the First Amendment to the United States Constitution and article II, section 10 of the Colorado Constitution and thus are not actionable.

In Gertz v. Robert Welch, Inc., 418 U.S. 323, 339-40, 94 S.Ct. 2997, 3006-07, 41 L.Ed.2d 789 (1974), the United States Supreme Court stated:

Under the First Amendment there is no such thing as a false idea. However pernicious an opinion may seem, we depend for its correction not on the conscience of judges and juries but on the competition of other ideas. But there is no constitutional value in false statements of fact.

These words were widely regarded as establishing the principle that statements of "pure" opinion are constitutionally privileged and thus, not actionable in a defamation case. See, e.g., Potomac Valve & Fitting Inc. v. Crawford Fitting Co., 829 F.2d 1280 (4th Cir.1987); Janklow v. Newsweek, Inc., 788 F.2d 1300 (8th Cir.), cert. denied, 479 U.S. 883, 107 S.Ct. 272, 93 L.Ed.2d 249 (1986); Burns v. McGraw-Hill Broadcasting Co., 659 P.2d 1351 (Colo.1983). See also Ollman v. Evans, 750 F.2d 970, 974 n. 6 (D.C.Cir.1984) (citing federal cases recognizing an opinion privilege), cert. denied, 471 U.S. 1127, 105 S.Ct. 2662, 86 L.Ed.2d 278 (1985); Jeffrey E. Thomas, Comment, Statements of Fact, Statements of Opinion, and the First Amendment, 74 Calif.L.Rev. 1001, 1009 n. 52 (1984) (listing state cases recognizing an opinion privilege).

In applying the principle of Gertz, this court like many others adopted a contextual test in order to determine whether a statement was one of fact or opinion. In Burns, we considered: first, whether the statement is cautiously phrased in terms of apparency; second, the entire published statement in context, not just the objectionable word or phrase; and third, all the circumstances surrounding the statement, including the medium through which it is disseminated and the audience to whom it is directed. Burns, 659 P.2d at 1360 (quoting from Information Control Corp. v. Genesis One Computer Corp., 611 F.2d 781 (9th Cir.1980)). We also noted, however, that not all statements of opinion are constitutionally privileged. Rather, we held that "opinions which imply the existence of an undisclosed defamatory factual predicate may support a cause of action in defamation.... when 'the average reader or listener or viewer perceive[s] the comment as essentially an assertion of fact....' " Id. (quoting Alfred Hill,...