AAFCO Heating & Air Conditioning Co. v. Northwest Publications, Inc.

Decision Date30 December 1974
Docket NumberNo. 3--1073A133,3--1073A133
Citation162 Ind.App. 671,321 N.E.2d 580
CourtIndiana Appellate Court

William K. Bennett, Bennett, Boehning & Poynter, Lafayette, David J. Albanese, Albanese, Hoehne & Coffaro, Cincinnati, Ohio, for appellant.

Gerald K. Hrebec, Fred M. Cuppy, Thomas, Burke, Dyerly & Cuppy, Gary, for appellee.

STATON, Judge.

The Gary Post Tribune published a series of ten articles concerning an electrical fire at the home of Mrs. Matilda Collins which caused the death of her two small grandchildren. Aafco Heating and Air Conditioning Company had installed a furnace in the home of Mrs. Collins three weeks before the fire on October 21, 1970. The articles reported that no permit had been obtained by Aafco before making the installation and that one fire official observed that 'a heavy duty blower on the furnace may have caused an overload in the electrical service' which ignited the fire. A formal complaint against Aafco was filed with the Gary Contractors' Licensing Board which resulted in Aafco's suspension.

Aafco filed a libel complaint for $250,000.00 in actual damages and $500,000.00 in punitive damages. Northwest Publications, Inc., publishers of the Gary Post Tribune, filed its answer which relied on the defensive grounds of truth and qualified constitutional privilege. Later, Northwest's motion for summary judgment was sustained by the trial court. Aafco's appeal from this summary judgment presents the following questions for our review:

1. Does the qualified constitutional privilege announced in New York Times v. Sullivan and Rosenbloom v. Metromedia, Inc. apply to an alleged libel of a private individual in Indiana when the published statements relate to an issue of general and public concern?

2. Is there a genuine issue of material fact upon the question of privilege?

Our review examines the development of privilege as a defense and its First Amendment dimensions. Gertz v. Robert Welch, Inc. (1974), 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789, gives the states the option of defining the standards of constitutional privilege for 'private individuals.' Our opinion rejects the simple negligence standard suggested in Gertz v. Robert Welch, Inc., supra. We redefine the Indiana libel standard for the private individual. We conclude that a qualified constitutional privilege does apply to a private individual in Indiana and that there was no genuine issue of material fact upon the question of privilege. We affirm the trial court's summary judgment.

I. Privilege

Until a decade ago, privilege had no First Amendment dimensions. The common law development of defamation had been left to the several states. Times Film Corp. v. City of Chicago (1961), 365 U.S. 43, 81 S.Ct. 391, 5 L.Ed.2d 403; Beauharnais v. Illinois (1952), 343 U.S. 250, 72 S.Ct. 725, 96 L.Ed. 919; Chaplinsky v. New Hampshire (1941), 315 U.S. 568, 62 S.Ct. 766, 86 L.Ed. 1031. For example, a state legislator in Indiana is immune from liability even if he publishes defamatory material with an improper motive and with knowledge of its falsity (absolute privilege). Ind.Const., Art. 4, § 8. A similar absolute privilege attaches to judges, attorneys, parties and witnesses in connection with a judicial proceeding. See, e.g., Griffith v. Slinkard (1896), 146 Ind. 117, 44 N.E. 1001. The dissemination of news by the communications media has traditionally been safeguarded by two qualified or conditional privileges which may be pleaded as affirmative defenses in a libel action:

1. The privilege of 'fair comment' (limited to opinions on public officials and their conduct--not applicable to private individuals or newsworthy events) and

2. The privilege attached to the reporting of public proceedings.

See Henderson v. Evansville Press, Inc. (1957), 127 Ind.App. 592, 142 N.E.2d 920; 18 I.L.E. Libel & Slander § 61, at 474--75. See generally Note, Fair Comment, 62 Harv.L.Rev. 1207 (1949).

In most states, the law of defamation regarding privileged communications follows a similar pattern. Restatement of Torts §§ 585--92 (1938). But, prior to the landmark decision in New York Times Co. v. Sullivan (1964), 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686, qualified privileges for the protection of the mass media were limited by numerous restrictions and were often narrowly construed. While there would appear to be no Indiana authority to explicate the scope of these privileges, the weight of authority traditionally recognized only statements of opinion as privileged; false statements of fact were never privileged. See Post Publishing Co. v. Hallam (6th Cir. 1893), 59 F. 530; Noel, Defamation of Public Officers and Candidates, 49 Colum.L.Rev. 875 (1949). Even in cases where the privilege was applicable, the publisher-defendant could suffer the loss of his defense of privilege if the libeled plaintiff could adduce evidence of either negligence or ill will. Restatement of Torts § 606(c) (1938). Moreover, many courts limited the privilege of fair comment to the discussion of public events or the conduct of public officials; there was no privilege accorded the media to comment on matters merely because they were newsworthy. See, e.g., Broking v. Phoenix Newspapers (1953), 76 Ariz. 334, 264 P.2d 413; W. Prosser, The Law of Torts 814--15 (4th ed. 1971).

The common law of qualified privilege for media expression was transplanted into the realm of emerging First Amendment doctrine in the landmark case of New York Times Co. v. Sullivan, supra. The basic starting point of the New York Times opinion was that the publisher discussing public questions is engaged in an activity protected by the First Amendment. Confined to its narrowest formulation, this decision held that the First and Fourteenth Amendments forbade 'a public official from recovering damages for a defamatory falsehood relating to his official conduct unless he proved that the statement was made with '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--280, 84 S.Ct. at 726. In a subsequent decision, Curtis Publishing Co. v. Butts (1967), 388 U.S. 130, 87 S.Ct. 1975, 18 L.Ed.2d 1094, the Court extended the New York Times privilege to media comments on matters of public interest concerning 'public figures.' While the meaning of the term 'public official' has caused the Court little difficulty, 1 the question of who is or who is not a 'public figure' has not been fully resolved by the Court. In Curtis Publishing Co. v. Butts, supra, Mr. Justice Harln spoke of the 'public figure' as commanding 'a substantial amount of independent public interest' at the time of publication. 388 U.S. at 154, 87 S.Ct. at 1991. Several state court cases interpreting the federal standard have found a wide variety of persons to be 'public figures' within the Butts formulation. 2

The New York Times malice standard has undergone extensive refinement. It was initially determined that 'reckless disregard of the truth' meant false statements made with a high degree of awareness of their probable falsity. Garrison v. Louisiana (1964), 379 U.S. 64, 74, 85 S.Ct. 209, 13 L.Ed.2d 125. Later cases emphasized the distinction between the New York Times test of knowledge of falsity or reckless disregard of the truth and 'actual malice' in the traditional sense of ill will. Beckley Newspapers Corp. v. Hanks (1967), 389 U.S. 81, 88 S.Ct. 197, 19 L.Ed.2d 248; see also Greenbelt Cooperative Publishing Assoc. v. Bresler (1970), 398 U.S. 6, 90 S.Ct. 1537, 26 L.Ed.2d 6. In a later decision, St. Amant v. Thompson (1968), 390 U.S. 727, 88 S.Ct. 1323, 20 L.Ed.2d 262, the Court attempted to resolve any remaining uncertainty as to the proper content of the malice standard. The St. Amant Court held that reckless conduct could not be measured by whether a reasonably prudent man would have published the alleged libel or would have investigated before publishing; 'actual malice' evidence must show 'that the defendant in fact entertained serious doubts as to the truth of his publication.' 390 U.S. at 731, 88 S.Ct. at 1325.

Rosenbloom v. Metromedia, Inc. (1971), 403 U.S. 29, 91 S.Ct. 1811, 29 L.Ed.2d 296, increased the degree of First Amendment protection afforded the media in previous cases by shifting the focus of the New York Times privilege from the person's status to the newsworthiness of the statement published. The Rosenbloom plurality opinion held that when a 'matter of public or general concern' is published, a private individual may recover for injury caused by defamatory falsehood only if he can prove the publication was made with knowledge that it was false or with reckless disregard of whether it was false--a sweeping extension of the New York Times privilege.

Mr. Justice Harlan's Rosenbloom dissent urged that a different standard of constitutional privilege should apply to publisher-defendants in libel actions instituted by private individuals. The Harlan formulation adopted a 'reasonable man' or simple negligence standard as the proper measure of publisher-defendant liability for otherwise libelous communications. Moreover, as a counterbalancing protective device, this approach limited publisher-defendant liability for negligent defamation to provable 'actual damage.' Any recovery by private individuals for 'presumed' or general damage to reputation required proof of 'malice' under the New York Times privilege standard. 403 U.S. 67--76, 91 S.Ct. 1811.

A recent First Amendment decision by the United States Supreme Court, Gertz v. Robert Welch, Inc., supra, has added a new dimension to the accommodation between the First Amendment and common law defamation. A second and more expansive approach is taken to protect the reputation of the private individual, which is similar to the...

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