Capuano v. Outlet Co.

• Decision Date: 16 August 1990
• Docket Number: No. 89-22-A,89-22-A
• Parties: 18 Media L. Rep. 1030 Jack CAPUANO et al. v. The OUTLET COMPANY. ppeal.
• Court: Rhode Island Supreme Court

Page 469

579 A.2d 469

18 Media L. Rep. 1030

Jack CAPUANO et al. v. The OUTLET COMPANY.

No. 89-22-Appeal.

Supreme Court of Rhode Island.

Aug. 16, 1990.

C. Russell Bengtson, Carroll, Kelly & Murphy, Providence, for plaintiff.

Charles J. McGovern, McGovern, Falk, Pannone, Procaccini & O'Leary, Providence, for defendant.

OPINION

WEISBERGER, Justice.

This case is before us on the plaintiffs' appeal from summary judgment entered in favor of the defendant by a justice of the Superior Court. In this suit for defamation, the trial justice found that the plaintiffs are limited public figures and that as such, they failed to establish "actual malice" on the part of the defendant as required under New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964). We vacate the judgment and remand the case to the Superior Court. The facts insofar as pertinent to this appeal are as follows.

The defendant Outlet Company owns and operates WJAR Channel 10, a television station broadcasting from Providence, Rhode Island. In September 1982, defendant broadcast a news report over Channel 10 concerning an interstate waste-hauling scheme. In substance, the report described how out-of-state waste was being transported to and dumped in the State of Rhode Island and asserted that these activities were carried out under the direction of members of the organized-crime communities from New York, New Jersey and Rhode Island. The plaintiffs allege that during the broadcast, the Channel 10 reporter James Taricani asserted that plaintiffs not only were participants in the alleged waste-hauling scheme, but were also connected with or members of the organized-crime community.

The plaintiffs Jack Capuano, Daniel Capuano and Anthony Capuano ¹ owned and operated A. Capuano Bros., Inc. and United Sanitation, Inc., waste collection and disposal companies, as well as Sanitary Landfill, Inc., all of which are located in Rhode Island. The plaintiffs have verified their participation in the collection and disposal of out-of-state waste in Rhode Island, but they maintain that their operations were legal under Rhode Island law at that time. The Providence Journal, a newspaper of general circulation in this state, has also done extensive reporting on this controversy and has often referred to and quoted plaintiffs in the numerous newspaper articles relating to this matter. The plaintiffs have also, from time to time, granted interviews and made statements to the media in connection with the waste-hauling controversy. Moreover, plaintiffs are involved in the ongoing litigation brought in Federal District Court by the State of Rhode Island relating to the allegedly illegal disposal of toxic waste in this jurisdiction.

Although plaintiffs have openly admitted that their business operations have involved the hauling and disposal of out-of-state waste in Rhode Island, they vehemently deny having connections with organized crime. Consequently on October 18, 1982, plaintiffs filed this defamation suit in Providence County Superior Court against defendant Outlet Company, alleging, inter alia, defamation and tortious interference with their business relations due to defendant's September 1982 broadcast. The Channel 10 news reporter James Taricani was not named as a defendant by plaintiffs. In response to plaintiffs' complaint defendant raises the defense of good-faith reliance.

During pretrial discovery, plaintiffs propounded interrogatories to defendant, several of which requested that defendant identify the sources of information supporting Taricani's allegations that plaintiffs are associated with the organized-crime community. The defendant objected to these and other interrogatories, asserting a privilege under the First Amendment to the United State Constitution and a statutory privilege under Rhode Island law. Faced with defendant's refusal, plaintiffs filed a motion to compel answers to their interrogatories, and defendant simultaneously moved for a protective order against disclosing this information. The Superior Court justice hearing the matter granted plaintiffs' motion to compel answers to certain interrogatories but issued a protective order with respect to the interrogatories requesting that defendant identify its confidential sources and related information. A qualified First Amendment privilege against disclosure was identified by the Superior Court justice as the basis for the protective order.

When plaintiffs deposed the Channel 10 reporter James Taricani, he also refused to reveal his confidential sources, though he did disclose the groups, described as law enforcement officials and waste-hauling truck drivers, from which he derived these sources. Accordingly, a second motion to compel answers to interrogatories was brought by plaintiffs. This second motion was denied on the basis of the statute then in effect, G.L.1956 (1969 Reenactment) §§ 9-19.1-1 through 9-19.1-3, now codified in substantially the same form in G.L.1956 (1985 Reenactment) §§ 9-19.1-1 through 9-19.1-3, the Newsman's Privilege Act. The statute provides news reporters with a limited privilege against disclosure of confidential sources, and the Superior Court justice found that plaintiffs did not come within any exception to the exercise of this privilege.

Thereafter defendant moved for summary judgment, alleging that plaintiffs were public figures and as such had failed to prove "actual malice" ² as required under the Supreme Court's holding in New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964). The plaintiffs also moved for summary judgment, but only in regard to the issue of their status as public figures. The plaintiffs responded that they are not public figures and therefore should only be held to the negligence standard of proof required of private litigants under Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974). The trial justice granted defendant's motion for summary judgment and denied plaintiffs' motion. On appeal to this court plaintiffs raise three issues, each of which is addressed separately below.

I DID THE TRIAL JUSTICE ERR IN FINDING PLAINTIFFS WERE PUBLIC FIGURES?

In order for a public figure to recover in a suit for defamation, there must be proof by clear and convincing evidence of "actual malice" on the part of the defendant as required under New York Times Co. v. Sullivan, 376 U.S. at 279-280, 84 S.Ct. at 726, 11 L.Ed.2d at 706. See Herbert v. Lando, 441 U.S. 153, 156, 99 S.Ct. 1635, 1638, 60 L.Ed.2d 115, 121 (1979); Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974). "Actual malice" on the part of the defendant may be proven by demonstrating either actual knowledge that the published statement was false or a reckless disregard for whether or not it was false. New York Times Co., 376 U.S. at 279-80, 84 S.Ct. at 726, 11 L.Ed.2d at 706; accord DeCarvalho v. daSilva, 414 A.2d 806, 812 (R.I.1980). In contrast to the high standard of proof of "actual malice" required of a public figure, the private individual suing for defamation is only held to the ordinary standard of negligence under both federal and Rhode Island law. Gertz v. Robert Welch, Inc., supra; DeCarvalho, 414 A.2d at 812-13. As an initial matter, this court must first determine whether this case is to be governed by the standard announced in New York Times.

The plaintiffs contend that they were not public figures and should therefore be held to the lesser standard of ordinary negligence. It was the trial justice's duty initially to decide whether plaintiffs were public figures, see Rosenblatt v. Baer, 383 U.S. 75, 88, 86 S.Ct. 669, 677, 15 L.Ed.2d 597, 606 (1966), and Major v. Drapeau, 507 A.2d 938, 941 (R.I.1986), and he found "that the plaintiffs are 'public figures' for the limited purpose of [the] commentary concerning the waste hauling and disposal business." We have made an independent examination of the record in accordance with New York Times Co., 376 U.S. at 285, 84 S.Ct. at 728-29, 11 L.Ed.2d at 709, and having reviewed the decisions of the Supreme Court of the United States pertinent to this issue, we hold that the trial justice was correct in his determination that plaintiffs are public figures for the purposes of this litigation.

The trial justice relied on the Supreme Court's decision in Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974), in his determination that plaintiffs are public figures for the limited purposes of this waste disposal controversy. In Gertz, 418 U.S. at 345, 94 S.Ct. at 3009, 41 L.Ed.2d at 808, the Supreme Court recognized that an individual may qualify as a public figure for all purposes or only for limited purposes:

"For the most part those who attain this status [of public figure] have assumed roles of especial prominence in the affairs of society. Some occupy positions of such persuasive power and influence that they are deemed public figures for all purposes. More commonly, those classed as public figures have thrust themselves to the forefront of particular public controversies in order to influence the resolution of issues involved."

In the case at bar, the record shows that plaintiffs have verified their involvement in the alleged interstate waste-collection and disposal scheme reported by defendant. The plaintiffs have denied, however, that their activities were illegal or that they had connections with organized crime. We note that this controversy has been the subject of dozens of newspaper articles. Moreover, plaintiffs have acknowledged the fact that they have been prominently referenced in these newspaper articles. On occasion, one or more of plaintiffs have consented to be interviewed or made statements to members of the media about their businesses as they relate to this controversy. In this sense, we find that plaintiffs have, by virtue of their business operations and efforts to resolve...