Adolph Coors Co. v. Movement Against Racism and the Klan

• Decision Date: 12 December 1985
• Docket Number: No. 85-7082,85-7082
• Parties: , 3 Fed.R.Serv.3d 573, 12 Media L. Rep. 1514 ADOLPH COORS COMPANY, et al., Plaintiffs-Appellees, v. MOVEMENT AGAINST RACISM AND THE KLAN, et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1538

777 F.2d 1538

54 USLW 2392, 3 Fed.R.Serv.3d 573, 12

Media L. Rep. 1514

ADOLPH COORS COMPANY, et al., Plaintiffs-Appellees, v. MOVEMENT AGAINST RACISM AND THE KLAN, et al., Defendants-Appellants.

No. 85-7082.

United States Court of Appeals Eleventh Circuit.

Dec. 12, 1985.

Mary E. Howell, Howell & Bayer, New Orleans, La., for defendants-appellants.

Charles A. Powell, III, Barry V. Frederick, Birmingham, Ala., Earl K. Madsen, Golden, Colo., for Adolph Coors.

Appeal from the United States District Court for the Northern District of Alabama.

Before GODBOLD, Chief Judge, JOHNSON, Circuit Judge and TUTTLE, Senior Circuit Judge.

JOHNSON, Circuit Judge:

Libel law seeks to protect the private right of the individual against false statements that diminish his standing in the eyes of others. But when expression concerns issues of public consequence, the law of libel "runs squarely into the right to freedom of expression" and poses problems "among the most complex and troublesome in the whole field of First Amendment doctrine." T. Emerson, The System of Freedom of Expression 517 (1970). Courts have long recognized the preeminent position of First Amendment rights in our constitutional firmament. We could not countenance even the slightest diminution of the liberties there enshrined. But our devotion to these principles will not permit us to sanction use of the First Amendment as a shield from the truth-finding function of the courts where rights of expression or association are not fairly implicated. This is such a case.

I. BACKGROUND.

This action arises from the showing of a slide program styled "Unmasking the Ku Klux Klan." The show is accompanied by a tape recorded script. In context, the script discusses the associations of certain wealthy families with "ultra-right wing" causes. At the relevant point, the screen shows a slide of Joseph Coors (who is not a party to this suit) and the script reads: "In Colorado, the Coors family, owners of the multi-million dollar Coors brewery, have [sic] always been identified with the Klan, and through the Coors foundation, they have ties with the Klan and the John Birch Society."

This diversity action was filed on December 18, 1981, by the appellees, the Adolph Coors Co., the Adolph Coors Foundation, William Coors, and Peter Coors, alleging libel by the appellants, the Movement Against Racism and the Klan and three Movement officers--Glenda Jo Orel, Laurie Thrasher, and David Gespass. The appellees sued for libel only as to the statement attributing a Klan connection, seeking nominal damages of one dollar and punitive damages of $10,000. The appellants moved to dismiss inter alia, for lack of the proper amount in controversy required by 28 U.S.C.A Sec. 1332 (1985). The complaint was amended to demand $50,000 compensatory damages for each showing and punitive damages of $100,000. Coors also sought equitable relief.

The appellees have long been the bugbears of social activists due to their strong support of conservative causes. But during the course of this suit, the appellants were forced to concede that, though they claimed to have relied upon reports of Coors' Klan connection published in the New York Times and the Washington Post, they could not verify these allegations. Appellants ultimately issued a retraction. They appear to have made these statements with a good faith belief in their veracity.

During the discovery phase appellees sought access to a number of the Movement's organizational details--identity of members and employees, financial and travel records, and internal papers and correspondence. Appellees specifically sought "the identity of individuals to whom 'Unmasking the Ku Klux Klan' has been sold, rented or exhibited" for the stated reason that it was necessary to make out the amount of damages. Such compelled disclosures would, of course, be constitutionally excessive; appellants refused to release this data, arguing correctly that the First Amendment made such information privileged. They submitted affidavits recounting numerous cases of beatings, bombings, and harassment of their associates by the Klan as evidence of the risks of such disclosure. They also submitted affidavits suggesting that the Adolph Coors Co. participated in organizations that circulated among other employers and law enforcement agencies "blacklists" of activists in the cause of political and civil rights.

On appellees' Motion to Compel, the magistrate ordered production without permitting oral argument and in violation of the district court's briefing schedule. On Motion for Review, the district court vacated the discovery order and remanded the constitutional question.

On September 15, 1982, the trial court granted appellees' partial Motion for Summary Judgment on the issue of liability, although the Movement's discovery requests were unanswered and pending and the discovery cut-off date had not yet arrived. On the remaining issue of damages, the magistrate ordered production of documents identifying dates and places of showing. When appellants' Motion for Review of the magistrate's failure to address the constitutional issue was returned stamped "Overruled," they moved for recusal of the trial judge. He denied that motion, but shortly thereafter recused himself sua sponte.

The case was reassigned to United States District Judge Robert R. Propst, who immediately vacated the Order of Summary Judgment. During the interregnum appellees had also filed a Motion for Sanctions. Judge Propst held a hearing on August 28, 1984, at which appellees were ordered to make a showing of "lack of alternative sources and compelling need." The court denied the Motion for Sanctions because the judge was not satisfied that appellees had made the required showing. The court then ordered the more narrow discovery here at issue. Appellants requested certification of the constitutional question for interlocutory review; this was denied.

Specifically contested is the narrowly tailored discovery that the trial court ordered. It directed appellants to disclose: 1) the number of places in which the show was exhibited; 2) the date on which each exhibition took place and in what state; 3) the approximate number of people who viewed the show; and 4) the substance of any allusions to appellees.

Appellants did agree to divulge the number of showings and rentals and the estimated total size of the audiences that viewed either the show or copies of the script and slides. ¹ They took exception to the second order regarding dates and states because they considered this likely to lead to disclosure of their cohorts and to risk subjecting these people to Klan violence. After several Motions for Sanctions and several refusals to answer, at which Judge Propst exhibited remarkable patience with both sides, the court ordered that if the appellants did not comply within seven days default would be entered; if disclosure was not made within fourteen days, a final judgment would be entered awarding damages of $10,001. The court also gave appellees the option to request a hearing for additional damages. They did not do so. Nor did appellants comply. The final judgment was entered January 2, 1985. This appeal followed.

II. DISCUSSION.

On appeal the Movement raises four arguments: A) that the information sought was privileged under the First Amendment; B) that the sanction of default was unduly harsh under the circumstances; C) that the record is not sufficient to sustain the amount of damages awarded below; and D) that the trial court manufactured its own jurisdiction. The findings of fact leading to the discovery order made by the court below are subject to a clearly erroneous standard of review. Hardin v. Stynchcomb, 691 F.2d 1364, 1372 (11th Cir.1982).

A. The First Amendment Claim.

In NAACP v. Alabama ex rel Patterson, 357 U.S. 449, 78 S.Ct. 1163, 2 L.Ed.2d 1488 (1958), the Supreme Court held that courts could not compel disclosure of membership and affiliation with organizations engaged in political and social advocacy. Exposure entailed great risk of personal and collective attack, abuse, and opprobrium constituting "effective ... restraint on freedom of association." Id. at 462, 78 S.Ct. at 1172. The Court found that "[i]nviolability of privacy in group association may in many circumstances be indispensable to preservation of freedom of association, particularly where a group espouses dissident beliefs." Id. The chilling effect posed by disclosure meant that courts could enter such orders only in the face of "substantial" state interest. Id. at 464, 78 S.Ct. at 1173.

The Court magnified the degree of deference due claims of associational privilege when it held that "the Constitution's protection is not limited to direct interference with fundamental rights." Orders to divulge membership information can impermissibly chill though only an "indirect ... infringement on the members' associational rights." Healy v. James, 408 U.S. 169, 183, 92 S.Ct. 2338, 2347, 33 L.Ed.2d 266 (1972); Buckley v. Valeo, 424 U.S. 1, 74, 96 S.Ct. 612, 661, 46 L.Ed.2d 659 (1976) (per curiam ). "Freedoms such as these are protected not only against heavy-handed frontal attack, but also from being stifled by more subtle governmental interference." Bates v. City of Little Rock, 361 U.S. 516, 523, 80 S.Ct. 412, 416, 4 L.Ed.2d 480 (1960).

The Movement posits that disclosure of documents revealing the date and state of showing "is tantamount to ordering defendants to turn over the names of individuals and organizations who sponsored and attended these showings." They argue that defendants need only make a showing of "reasonable probability" that disclosure would subject them to reprisals or harassment by public or private actors. Buckley, 424 U.S. at 74, 96 S.Ct. at 661. This burden of proof, in some circumstances, may be met by showing a "pattern of threats or specific manifestations of public hostility ...." Id. In all cas...