Cantrell v. AM. BROADCASTING COMPANIES, INC.

• Decision Date: 01 October 1981
• Docket Number: No. 80 C 6716.,80 C 6716.
• Citation: 529 F. Supp. 746
• Parties: James R. CANTRELL, Plaintiff, v. AMERICAN BROADCASTING COMPANIES, INC., a New York corporation, Geraldo Rivera and Peter Lance, Defendants.
• Court: U.S. District Court — Northern District of Illinois

529 F. Supp. 746

James R. CANTRELL, Plaintiff, v. AMERICAN BROADCASTING COMPANIES, INC., a New York corporation, Geraldo Rivera and Peter Lance, Defendants.

No. 80 C 6716.

United States District Court, N. D. Illinois, E. D.

October 1, 1981.

COPYRIGHT MATERIAL OMITTED

Thomas J. Walsh, Chicago, Ill., for plaintiff.

Lawrence Gunnels, Mark S. Sableman, Reuben & Proctor, Chicago, Ill., for defendants.

MEMORANDUM OPINION

KOCORAS, District Judge:

The plaintiff, James R. Cantrell, filed this action to recover actual and punitive damages from American Broadcasting Companies, Inc. and from two of ABC's employees, Geraldo Rivera and Peter Lance. The complaint alleges that the plaintiff suffered injury to his reputation because of a nationally televised broadcast on February 7, 1980 of ABC's program entitled "Newsmagazine 20/20." The segment at issue was entitled "Arson and Profit," which was narrated by Mr. Rivera and produced by Mr. Lance. Both Rivera and Lance were investigative reporters who took part in the preparation of the segment. Defendants move to dismiss the complaint pursuant to Rule 12(b)(6), F.R.Civ.P., on the ground that it fails to state a cause of action for libel and for invasion of privacy. This court has reviewed both a transcript and a videotape of the broadcast.

The 20/20 segment on "Arson and Profit" concerned an investigation of an alleged arson-for-profit conspiracy involving a group of real estate owners and their associates who operated in the Uptown neighborhood of Chicago, Illinois. In the first minute of the program, an announcer states that in many cases arson causes some people to get rich while others lose their homes or lives. He then declares that "20/20's hidden camera shows you the tricks of the trade."

After the introduction to the program is given by Mr. Hugh Downs, Geraldo Rivera delivers his opening paragraph:

Because it's so difficult to catch someone in the act of actually trying to set fire to a building, the courts allow circumstantial evidence to prove who committed the crime. Well, in this investigation by 20/20 and Chicago's Better Government Association, we believe we've uncovered some extraordinary circumstantial evidence. Evidence that a small group of Uptown Chicago businessmen are making money as their buildings burn and as their tenants die. This is a report on "Arson and Profit."

Mr. Rivera then reviews a fire in the Uptown community which had apparently been caused by an arsonist seeking revenge on a tenant. (Tr. 3). Immediately afterwards, Rivera states that there is another type of intentional fire caused by arson for profit, which is "what the rest of the report is all about." (Tr. 3).

Four examples of such fires caused by arson for profit are given, and mention is made for the first time of a three alarm blaze on December 29, 1979 that killed seven people. (Tr. 3). It is this fire that primarily concerns the plaintiff. According to Rivera, all of these buildings "were owned or controlled by a tightly-knit group of people" and "all of them were heavily insured at the time of the fire." (Tr. 4). In establishing that the buildings were owned by the same group of people, ABC interviewed Slim Coleman of the Uptown People's Center. According to Coleman, "the title searches showed that even though they tried to cover it up, that they were the same group of men behind all of the buildings." (Tr. 4). According to Barbara Klein, an attorney for the BGA, this same group of men owned at least twenty nine buildings, all of which had serious fires and were heavily insured. (Tr. 5).

Rivera reported that ABC News began to investigate "this group of building owners and their associates" in November of 1979. (Tr. 6). Producer Peter Lance posed as a real estate developer and had "more than ten meetings with these men" over the next two months. Two men, who are shown walking together outdoors, are identified as "the two principal members of the group." (Tr. 6). One of them is "John Schmiegal, owner of several transient hotels"; the other is "Charles Roberts, a notorious Uptown slum lord." (Tr. 6). Shortly after they are shown, Rivera reports:

While Roberts and Schmiegal are the main characters in this story, they haven't acted alone. There is also a supporting cast.

A view of Cedar Realty's office is then shown on the screen.

This is Cedar Realty, a brokerage firm which lists a number of Uptown Chicago properties. The principal broker at Cedar is Albert LaBunski. (Tr. 6).

After other parties are shown, including the agent who allegedly wrote the insurance policies for the Roberts group, Rivera asks the viewing audience to consider "Exhibit A", which is the Ellis Hotel. (Tr. 7). Two people died in a four alarm fire in that building on February 19, 1979. That was the sixth fire in the hotel since the Roberts group had taken control of it in 1968. According to Rivera, a check was issued in the amount of $145,000 for the Ellis Hotel fire to John Schmiegal, his wife, and Charles Roberts "among others." (Tr. 8). That insurance payment was allegedly the twenty eighth received by Schmiegal and associates in the last six years. (Tr. 8).

Having reviewed two other cases of fire in buildings owned by the Roberts group, Rivera discussed the fire on December 29, 1979 which killed seven people in the Malden Park Apartments. (Tr. 9). Specifically, Rivera stated:

According to first reports, the fire was caused by a tenant cooking in his room. But ABC News assembled a special fire investigation team to pinpoint the actual cause of the blaze.

What the fire investigation team uncovered is sharply different from the original police findings. You'll learn what we learned about the fire that left seven people dead, and about the people who may have been responsible when this Special 20/20 Report continues after this: (Tr. 9).

After the commercial break, Rivera described the Malden Park Apartments fire in detail and noted that it was another building owned by "Charles Roberts and his associates." At this point in the program, the plaintiff was mentioned for the first time:

James Cantrell is an employee of Cedar Realty, and he's no stranger to fires in Uptown. He worked at the Ellis Hotel just before it burned last year, and was the manager of the Malden Park Apartments when the fire broke out in December. At the time Cantrell blamed the fire on a resident cooking in his fourth floor room. (Tr. 9).

James Cantrell was then shown on the screen and asked about the cause of the fire. He said that the tenant had three pots on the stove and that the burners were "turned wide open." (Tr. 10). Rivera immediately inquired:

Was it an accidental fire caused by a careless tenant cooking, as James Cantrell, the building manager contends? Or was this a case of arson? (Tr. 10).

Larry Schreiner, a fire inspector, was interviewed and stated that in his opinion the fire started below the fourth floor. Mr. Schreiner was shown inspecting the rear stairwell of the building.

Rivera reported that ABC News had samples of the stair beams tested at Pan-Tecnick Laboratories. The results of the tests indicated that the wood stair beams contained gasoline. At this point, Rivera stated:

Let's review. Our evidence concludes that the fire was started by gasoline in the lower rear stairwell. But building manager Cantrell continues to insist that it was caused by a fourth-floor cooking accident. And as the conversation you're about to witness indicates, James Cantrell apparently views himself as an expert when it comes to apartment building fires.

In fact two weeks before the fatal Malden fire, he plaintiff met with 20/20 Producer Peter Lance, who was continuing in his undercover role as a real estate developer. We filmed their conversation from this van, using one-way glass and a hidden camera. During the course of the conversation Cantrell actually instructed Lance on how to get the most insurance money from an arson fire. He told Lance it was good to have a basement fire because that way you can collect for smoke damage for the entire building. But he went on to say that a fire on the top floor is even better because then you get paid for water damage as well. (Tr. 11).

During the foregoing narration, the plaintiff was shown walking to a car with Lance, getting into the car, and then speaking to Lance inside the car.

As soon as Rivera had described the conversation between Lance and Cantrell, Rivera and Lance were filmed in the following interview with the plaintiff:

On January 9th, we confronted Mr. Cantrell:

RIVERA: See this man right here. referring to Lance.

CANTRELL: Yes sir.

RIVERA: Do you recall any conversation with him concerning how to set fires, deliberately set fires?

CANTRELL: No, I... had talked to him before.

LANCE: (loudly) Didn't you say to me, Now if you set a fire on the top floor, you can collect for water damage below; and if you set a fire in the basement, you can collect smoke damage. (shouting) Didn't you say that?

CANTRELL: Yeah, that we talked about.

LANCE: You did?

CANTRELL: That we talked about. No, no ... not in that ... just same words, but that we talked about.

RIVERA: Why would you talk about that? Why would you talk about committing a crime to deliberately defraud an insurance company?

CANTRELL: I wasn't committin ... talking about ... I wasn't. He was asking me about the buildings here in Chicago, and how the system works here. And I explained the system. Am I right?

LANCE: How did you learn about the system, Jim?

CANTRELL: Because I used to own buildings. Any ... any manager or any owners could tell you...

RIVERA: Did you burn your buildings?

CANTRELL: No siree.

RIVERA: Then how did you know?

CANTRELL: I got out of the system. (Tr. 11-12).

This court notes that Cantrell gave the impression that he was somewhat perplexed during the foregoing exchange, which was the last time that Cantrell was mentioned by name or shown during the program.

After the interview with the...