L. Cohen & Co., Inc. v. Dun & Bradstreet, Inc.

• Decision Date: 24 February 1986
• Docket Number: Civ. No. H-85-686(JAC).
• Citation: 629 F. Supp. 1425
• Court: U.S. District Court — District of Connecticut
• Parties: L. COHEN & COMPANY, INC. v. DUN & BRADSTREET, INC.

629 F. Supp. 1425

L. COHEN & COMPANY, INC. v. DUN & BRADSTREET, INC.

Civ. No. H-85-686(JAC).

United States District Court, D. Connecticut.

February 24, 1986.

John Andrew Kissel, Enfield, Conn., for plaintiff.

Eric Luckingbeal, Hartford, Conn., for defendant.

RULING ON MOTIONS TO DISMISS AND FOR SUMMARY JUDGMENT

JOSÉ A. CABRANES, District Judge:

This action for damages resulting from the dissemination of an allegedly inaccurate credit report is before the court on the defendant's motions to dismiss and for summary judgment.

L. Cohen & Company ("the plaintiff") contends that Dun & Bradstreet, Inc. ("the defendant") prepared and distributed a credit report that erroneously indicated that the plaintiff was "slow" in meeting its financial obligations. The plaintiff asserts that the defendant thereby violated the Connecticut common law of defamation and invasion of privacy; the Connecticut Product Liability Act, C.G.S. § 52-572m et seq.; and the Connecticut Unfair Trade Practices Act, C.G.S. § 42-110a et seq. The defendant counters that the plaintiff cannot prevail under any of these causes of action. The court shall consider each of the defendant's arguments seriatim.

I.

The defendant contends that count one of the complaint is time-barred under C.G.S. § 52-597, the statute of limitations applicable to defamation actions, because the plaintiff did not commence this suit "within two years from the date of the act complained of." The plaintiff responds that this suit is timely because it was brought within two years of a "publication" of the credit report by the defendant to one or more of its employees and because the two-year statute of limitations of C.G.S. § 52-597 began to run only when the plaintiff discovered or reasonably should have discovered the allegedly defamatory publication. The plaintiff also contends that count one is timely because it states a cause of action for invasion of privacy as well as for defamation.

A.

It is apparently undisputed that the last dissemination of the credit report to somebody other than an employee of the plaintiff or the defendant occurred on May 26, 1983. See Affidavit of James M. Lenegan (filed Dec. 5, 1985) at ¶¶ 10, 11. This action was not commenced until July 12, 1985. Accordingly, if the court were to apply the general rule that the statute of limitations begins to run at the time that the allegedly defamatory material is published, see Fouts v. Fawcett Publications, 116 F.Supp. 535 (D.Conn.1953), the action would be untimely unless the dissemination of the material by a corporate defendant to its employees constitutes a "publication."¹

The question of whether such a communication of allegedly defamatory material constitutes a "publication" has not been addressed by any Connecticut court or by any federal court applying Connecticut law. However, the question was answered in the negative by the Court of Appeals in Halsell v. Kimberly-Clark Corporation, 683 F.2d 285 (8th Cir.1982), cert. denied, 459 U.S. 1205, 103 S.Ct. 1194, 75 L.Ed.2d 438 (1983), which upheld the district court's decision that the transmission of an allegedly defamatory memorandum from one employee of the defendant to another amounted to nothing more than "the corporation, through its agents, talking to itself." Id. at 288, quoting Halsell v. Kimberly-Clark Corporation, 518 F.Supp. 694 (D.Ark.1981) (applying Wisconsin law). Accordingly, the Court of Appeals affirmed that "until the defamatory statement is communicated outside the corporate sphere or internal organization, it has not been published." Id. at 288-289.

It is true that a contrary rule with respect to communications between employees of a corporate defendant has been adopted by some courts. See, e.g., Kennedy v. James Butler, Inc., 245 N.Y. 204, 156 N.E. 666 (1927). But see Mims v. Metropolitan Life Insurance Company, 200 F.2d 800, 802 (5th Cir.1952) (distinguishing Kennedy v. James Butler, Inc., supra, and holding that publication occurs under New York law only where the allegedly libelous material was communicated to an employee whose duties were "unconnected with the process by which the material was produced"). However, the only cases offered by the plaintiff in support of this rule long antedate the revision of the common law of defamation that began with the decision of the Supreme Court in New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964).

A rule that a communication between employees of a corporate defendant constitutes a "publication" could result in an unwarranted increase in the number of defamation suits filed in our courts. For example, a newspaper might become subject to a suit for defamation merely because its reporters disseminated among themselves arguably defamatory materials; the newspaper would be required to bear the initial costs of defending such a suit even if its employees' communications were ultimately found to have been privileged. In addition, the rule urged by the plaintiff might in some circumstances actually discourage the correction of inaccurate information; for example, communications among employees of a newspaper with respect to whether an allegedly defamatory news article ought to be corrected or retracted might constitute additional "publications" of the offending portions of the article. Indeed, the "publication" that the plaintiff relies upon in its attempt to bring this action within the limitations period apparently occurred when the defendant made the allegedly defamatory credit report available to an employee who was responsible for verifying the contents of the report with the plaintiff.

Accordingly, the court holds that the dissemination of an allegedly defamatory material among employees of a corporate defendant does not constitute a separate "publication" of that material under Connecticut law.

B.

The plaintiff next asks the court to hold as a matter of first impression that the two-year limitations period provided by C.G.S. § 52-597 begins to run only when the plaintiff discovered or reasonably should have discovered the allegedly defamatory publication. This suit would be timely if the court were to accept the plaintiff's position, because the parties agree, at least for purposes of the pending motions, that the plaintiff learned of the allegedly inaccurate credit report less than two years before this action was filed.²

The "discovery" rule urged by the plaintiff is inconsistent with the express language of C.G.S. § 52-597, which requires that actions for libel or slander be brought "within two years from the date of the act complained of." It cannot be disputed that "the act complained of" in this suit is the defendant's distribution of the allegedly defamatory credit report to other businesses and not the plaintiff's discovery of that report.

Moreover, C.G.S. § 52-597 is distinguishable by its terms from those statutes of limitations that require defamation suits to be brought within a given period after the plaintiff's cause of action "accrued." See, e.g., Ill.Rev.Stat. ch. 83, § 14 ("actions for slander and libel ... shall be commenced within one year next after the cause of action accrued"); Or.Rev.Stat. § 12.010 ("actions shall only be commenced within the periods prescribed in this chapter, after the cause of action shall have accrued"); Wash.Rev.Code § 4.16.010 ("actions can only be commenced within the periods herein prescribed after the cause of action shall have accrued"). It appears that courts have adopted a "discovery" rule for defamation actions only in those states with an "accrual" statute of limitations. See, e.g., Tom Olesker's Exciting World of Fashion v. Dun & Bradstreet, Inc., 61 Ill.2d 129, 334 N.E.2d 160 (1975); White v. Gurnsey, 48 Or.App. 931, 618 P.2d 975 (1980); Kittinger v. The Boeing Company, 21 Wash.App. 484, 585 P.2d 812 (Wash.Ct. App.1978).

There is no precedent in Connecticut law for the interpretation of C.G.S. § 52-597 that is urged by the plaintiff. In addition, the statutory language and judicial interpretations of C.G.S. § 52-584,³ which provides the limitations period for actions sounding in negligence, reckless or wanton misconduct and medical malpractice, further militate against the application of a "discovery" rule in the case at bar.

A plaintiff must satisfy a two-pronged test if his claim is to be deemed timely under C.G.S. § 52-584: First, he must commence his suit "within two years from the date when the injury is first sustained or discovered or in the exercise of reasonable care should have been discovered." Second, he must also bring the action within "three years from the date of the act or omission complained of."

The first prong of C.G.S. § 52-584 demonstrates that the state legislature knew how to write a "discovery" rule when it wished to do so. Furthermore, the Supreme Court of Connecticut has recognized that the second prong of C.G.S. § 52-584, which is substantially similar in language to C.G.S. § 52-597, begins to run on the day of the tortious act or omission rather than on the day of its discovery and may "on occasion bar an action even before the cause of action accrues." Vilcinskas v. Sears, Roebuck & Company, 144 Conn. 170, 175, 127 A.2d 814 (1956).

In McDonald v. Haynes Medical Laboratory, 192 Conn. 327, 471 A.2d 646 (1984), Connecticut's Supreme Court held that the second prong of C.G.S. § 52-584 barred the plaintiff's medical malpractice claim against a doctor who had incorrectly diagnosed her RH blood factor even though the plaintiff had not discovered, and could not reasonably have discovered, the nature of her condition within three years of the negligent act of which she complained. The court, in refusing to except "instances where the injury is inherently undiscoverable" from the second prong of C.G.S. § 52-584 and the identically phrased statute of limitations for wrongful death actions, observed:

The statutes in question are clear on their face and the

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