Chapin v. Greve

• Decision Date: 17 March 1992
• Docket Number: Civ. No. 91-1020-A.
• Citation: 787 F. Supp. 557
• Court: U.S. District Court — Eastern District of Virginia
• Parties: Roger CHAPIN and Help Hospitalized Veterans, Plaintiffs, v. Frank GREVE, Philadelphia Newspapers, Inc., Knight-Ridder, Inc., and The Philadelphia Inquirer, Defendants.

787 F. Supp. 557

Roger CHAPIN and Help Hospitalized Veterans, Plaintiffs, v. Frank GREVE, Philadelphia Newspapers, Inc., Knight-Ridder, Inc., and The Philadelphia Inquirer, Defendants.

Civ. No. 91-1020-A.

United States District Court, E.D. Virginia, Alexandria Division.

March 17, 1992.

COPYRIGHT MATERIAL OMITTED

Frank M. Northam, Webster, Chamberlain & Bean, Washington, D.C., for plaintiffs.

Dane H. Butswinkas, Williams & Connolly, Washington, D.C., for defendants.

MEMORANDUM OPINION

ELLIS, District Judge.

This is a diversity libel suit. Plaintiffs, an individual fundraiser and one of his nonprofit organizations, sue various media defendants for alleged defamations arising out of a newspaper report about a charitable project to send holiday care packages to American military personnel stationed in the Persian Gulf during Operations Desert Shield and Desert Storm. The central question presented by defendants' motion to dismiss is whether the newspaper report is actionable. For the reasons set forth here, the Court concludes that the article is not actionable, and thus plaintiffs' complaint should be dismissed for failure to state a claim upon which relief can be granted. Rule 12(b)(6), Fed.R.Civ.P.

I.

Plaintiff Roger Chapin is the founder, president, and a member of the board of directors of plaintiff Help Hospitalized Veterans ("HHV"), a California non-profit corporation with offices in San Diego, California, and Falls Church, Virginia. Established in 1971, HHV distributes craft kits (model airplanes, macrame, and the like) to patients and occupational therapy departments in military and veterans hospitals. HHV, which raises funds through direct mail solicitations to individuals throughout the country, has distributed over 11,000,000 of these craft kits, the result of over $75,000,000 in donations. Chapin also founded, in 1989, a non-profit, anti-drug educational and lobbying organization called Citizens for a Drug Free America ("CDFA").

In the fall of 1990, during Operation Desert Shield in the Persian Gulf, Chapin organized the G.I. Christmas Gift Pac project as a special project of HHV. The Gift Pac project solicited donations for the purpose of sending holiday care packages containing candy, cookies, dried fruit, and other snack food items to American soldiers stationed, and later fighting, in the Persian Gulf. Donors were asked to contribute fifteen dollars for one Gift Pac or twenty-five dollars for two. Six additional dollars were assessed for delivery to a specified soldier. Chapin and HHV promoted the Gift Pac project through paid and unpaid television and newspaper advertising, direct mail, newspaper stories, radio and television interviews, and endorsements of radio and television talk show hosts. Well-known personality Art Linkletter served as Gift Pac spokesman. The Gift Pac project used stationary that listed prominent "Friends of Hospitalized Veterans," including, among others, Doris Day, Julius Erving, Whoopi Goldberg, Bob Hope, Arnold Palmer, Major General George Patton, III, General V.H. Krulak, and General William Westmoreland.

Promotional literature generated by the Gift Pac project represented that all money donated to the Gift Pac project would be used exclusively for the project and included a guarantee that a dollar's worth of goods, based on retail value, would be shipped for each dollar donated. According to the promotional materials, HHV paid an average price of $13.60 for each Gift Pac, while the actual retail value was $14.40, excluding handling costs. The promotional materials further claimed that if a donor purchased equivalent Gift Pac contents and shipped them herself, the total cost would be about $19.00. Any contributions remaining after deducting all "fulfillment, donor acquisition and administrative expenses" were, according to the literature, to be used to purchase more Gift Pacs or donated to the U.S.O. for its work in the Persian Gulf. A footnote in the promotional materials stated that "over the first $2,900,000 in donations, administrative salaries have accounted for less than ½ of 1%," suggesting that nearly three million dollars had already been raised and that only a small fraction of that sum had been used for salaries. The Defense Department apparently provided shipping for the Gift Pacs from Port Elizabeth, New Jersey, to the Persian Gulf.

On December 1, 1990, defendant Frank Greve wrote an article about the Gift Pac project (the "Greve article"). The Greve article was published by defendant Philadelphia Newspapers, Inc., in the business section of the Philadelphia Inquirer¹ on December 2, 1990, under Greve's byline (see Appendix I). At the same time, defendant Knight-Ridder, Inc., disseminated a substantially similar version of the Greve article on its wire service (see Appendix II), which was thereafter picked up and used by other media.²

The Greve article begins by stating that the Gift Pac project was charging "hefty mark-ups" for the goods contained in the care packages. It then describes the operational and financial mechanics of the Gift Pac project, including costs to donors, and characterizes the project as "wildly successful," noting that 170,000 Gift Pacs were already en route to the Persian Gulf via military cargo ships. Next, the story states its central interrogatory theme: "But one question is hard to answer: Who will benefit more from the project — GIs or veteran charity entrepreneur Roger Chapin of San Diego and Falls Church, Va., the organizer of the campaign?" Greve then offers evidence supporting his proposition that it is hard to determine whom the Gift Pac project most benefits. The story reports facts (many of which plaintiffs allege are false) and raises questions concerning the financial circumstances of CDFA, the accuracy of statements made to prospective donors by Gift Pac telephone order-takers, the accuracy of the designation of Generals Patton, Westmoreland, and Krulak as sponsors on the Gift Pac letterhead, the wholesale and retail value of Gift Pac contents, a possible accumulation of surplus donations, and the eventual disposition of those possible surpluses. With respect to possible surpluses, the article states that "it is unclear where the rest of the money goes" and recounts allegedly conflicting statements made by Chapin regarding their use. According to these statements, surpluses would either be reinvested in the Gift Pac project to purchase additional care packages or be donated to HHV or the U.S.O. The story also juxtaposes an admonishing remark by Representative Fortney H. "Pete" Stark,³ who had been critical of CDFA, with an endorsement by Gift Pac spokesman Art Linkletter.⁴ Finally, the story ends with three paragraphs about a container of dates included in the Gift Pac, a detail characterized by Greve as "summing up" the issue of the Gift Pac's value. The first of these paragraphs reports the price Chapin paid for the dates (about 87 cents) and the price he assigned as the retail value ($1.99). The second paragraph notes that according to their label, the dates required storage in a cool place, whereas the Defense Department required that shipped food be able to withstand 100 degree heat. In the last paragraph, the article facetiously suggests that in any event sending dates to the Persian Gulf is like sending coals to Newcastle. "It might be easier for GIs to pick dates off a nearby date palm," the article explains, since Saudi Arabia is the world's leading date producer and exporter.

Chapin and HHV, citing a decline in donations to the Gift Pac project and HHV after the article's publication, sued defendants for defamation. Reduced to its essence, plaintiffs' complaint alleges that the Greve article, taken as a whole, is libelous because (i) it directly accuses Chapin and HHV of "dishonesty, profiteering and defrauding the public and preying upon patriotic sentiments to enrich themselves;" and (ii) it insinuates and implies that Chapin and HHV together defrauded the public, operated a "bogus charity," and profiteered from the war, and that Chapin himself was a corrupt businessman who gained personal financial benefit from the Gift Pac project.

Defendants moved to dismiss the complaint under Rule 12(b)(6), Fed.R.Civ.P., on the ground that it fails to state a claim upon which relief can be granted because the Greve article is not actionable. The Court, having heard oral argument on several occasions and having reviewed extensive briefs by both sides, concludes that the Greve article is not actionable and, accordingly, that the motion to dismiss should be granted.

II.

Defamation cases, especially against media defendants reporting on matters of public concern,⁵ compel a careful balancing of vital constitutional and common law rights. On one side of the balance is the First Amendment's fundamental protection of free expression, a free press, and "that `breathing space' essential to their fruitful exercise." Gertz v. Robert Welch, Inc., 418 U.S. 323, 342, 94 S.Ct. 2997, 3008, 41 L.Ed.2d 789 (1974). See also Ollman v. Evans, 750 F.2d 970, 991 (D.C.Cir.1984) (en banc) ("For the contraction of liberty's `breathing space' can only mean inhibition of the scope of public discussion on matters of general interest and concern."), cert. denied, 471 U.S. 1127, 105 S.Ct. 2662, 86 L.Ed.2d 278 (1985). On the other side lies the individual's liberty interest in his reputation, the importance of which was articulated by Justice Stewart: "The right of a man to the protection of his own reputation from unjustified invasion and wrongful hurt reflects no more than our basic concept of the essential dignity and worth of every human being — a concept at the root of any decent system of ordered liberty." Rosenblatt v. Baer, 383 U.S. 75, 92, 86 S.Ct. 669, 679, 15 L.Ed.2d 597 (1966) (Stewart, J., concurring). See generally Milkovich v. Lorain Journal Co., 497 U.S. 1, ___, 110 S.Ct. 2695, 2707-08, 111 L.Ed.2d 1 (1990) (...