Church of Scientology of California v. Flynn

• Decision Date: 03 October 1984
• Docket Number: No. 83-6494,83-6494
• Citation: 744 F.2d 694
• Parties: CHURCH OF SCIENTOLOGY OF CALIFORNIA, Plaintiff-Appellant, v. Michael J. FLYNN, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 694

744 F.2d 694

CHURCH OF SCIENTOLOGY OF CALIFORNIA, Plaintiff-Appellant, v. Michael J. FLYNN, Defendant-Appellee.

No. 83-6494.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Sept. 7, 1984.

Decided Oct. 3, 1984.

Jonathan Lubell, New York City, c/o Taylor, Roth & Hunt, Los Angeles, cal.

Stephen M. Lang, Lewis, D'Amato, Brisbois & Bisgaard, Los Angeles, Cal., for defendant-appellee.

Appeal from the United States District Court for the Central District of California.

Before TUTTLE, ^* Senior Circuit Judge, NORRIS, and BEEZER, Circuit Judges.

BEEZER, Circuit Judge:

This is an action for defamation brought by the Church of Scientology of California ("CSC") against Michael J. Flynn. The district court dismissed the suit with prejudice for failure to state a claim upon which relief can be granted. We reverse.

I FACTS AND PROCEEDINGS BELOW

Flynn is a Massachusetts attorney who frequently represents former Scientologists against CSC. On June 25, 1983, Flynn allegedly made the following remarks to an audience of eighty persons in Los Angeles:

Among the things that occurred to me in the four years that I have been litigating with an enormous organization that has a few people that control huge amounts of money, to hire armies of lawyers to try to destroy me and my clients and whether you know it or not yet, people like yourself, is what the whole war and game and battle is about.

In October 1979, shortly after I rejected an offer from the Church of Scientology that is to say whoever that is to get a refund for a client which I'm going to explain to you a little bit about, I was flying up to South Bend, Indiana and my airplane engine quit after an hour and a half in the flight, and for those of you who are pilots, you know that any degree of condensation you pick up on a pre flight examination from your fuel tanks. Well I was an hour and a half into the flight and we lost power entirely and we made an emergency landing and my eleven year old son was in the plane, another lawyer and a college classmate of mine, a Vietnam Veteran, and we drained off quarts of water from my fuel tanks. And as I indicated, it was shortly after I rejected an offer that I'm going to talk to you people about.

* * *

And that's when their lawyer showed up and offered me a check for her money plus a little bit. And I told the lawyer what he could do with his check and that took place shortly before the plane incident. Now for a number of years, I dismissed the plane incident as being simply too preposterous to believe that this organization could do it.

CSC brought this action in federal district court, claiming over $10,000 in damages. Flynn filed a motion to dismiss under Fed.R.Civ.P. 12(b)(6). The district court granted the motion with prejudice.

II DISCUSSION

A. The Standard of Review

A dismissal under Fed.R.Civ.P. 12(b)(6) is "freely reviewable as a question of law." Compton v. Ide, 732 F.2d 1429, 1429 (9th Cir.1984). ¹ The conditions that must be We emphasize the procedural setting of this case. We are called upon to decide whether CSC's complaint was sufficient to survive a motion to dismiss, not whether Flynn is liable to CSC for defamation.

                met before a motion may be granted under Fed.R.Civ.P. 12(b)(6) are quite strict.  "[A] complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief."   Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957);  see Rae v. Union Bank, 725 F.2d 478, 479 (9th Cir.1984).  In applying this standard, we must treat all of the plaintiff's allegations as true.   See Hospital Building Co. v. Trustees of Rex Hospital, 425 U.S. 738, 740, 96 S.Ct. 1848, 1850, 48 L.Ed.2d 338 (1976);  Experimental Engineering, Inc. v. United Technologies Corp., 614 F.2d 1244, 1245 (9th Cir.1980)
                

B. The Existence of Defamatory Meaning

Flynn contends that the district court's decision should be upheld because his statements lacked defamatory meaning. The existence of a defamatory meaning is generally a question of fact for the jury. See Maidman v. Jewish Publications, Inc., 54 Cal.2d 643, 355 P.2d 265, 269, 7 Cal.Rptr. 617, 621 (1960); Gallagher v. Chavalas, 48 Cal.App.2d 52, 58, 119 P.2d 408 (1941). This case, however, involves a dismissal on the pleadings. The California Supreme Court recently stated the standard for reviewing a dismissal as follows: ²

In determining the propriety of the trial court's [dismissal], this court's inquiry is not to determine if the communications may have an innocent meaning but rather to determine if the communication reasonably carries with it a defamatory meaning.... Just as the court must refrain from a "hair-splitting analysis" of what is said in an article to find an innocent meaning, so must it refrain from scrutinizing what is not said to find "a defamatory meaning which the article does not convey to a lay reader."

Forsher v. Bugliosi, 26 Cal.3d 792, 803, 608 P.2d 716, 722, 163 Cal.Rptr. 628, 634 (1980) (quoting Mullins v. Thierot, 19 Cal.App.3d 302, 304, 97 Cal.Rptr. 27, 28 (1971)). Thus, the district court's decision cannot be upheld on this ground if "by reasonable implication a defamatory meaning may be found in the communication." Id. 26 Cal.3d at 806, 608 P.2d at 723, 163 Cal.Rptr. at 635.

Although Flynn did not specifically accuse CSC of attempting to cause his death, it would be reasonable to imply a defamatory meaning from his remarks. It is well settled that the "arrangement and phrasing of apparently nonlibelous statements" cannot hide the existence of a defamatory meaning. Kapellas v. Kofman, 1 Cal.3d 20, 33, 459 P.2d 912, 919-20, 81 Cal.Rptr. 360, 367-68 (1969). Indeed, the meaning of a statement is often dependent upon its context. See Mullins v. Brando, 13 Cal.App.3d 409, 414-15, 91 Cal.Rptr. 796, 798-99 (1970), cert. denied, 403 U.S. 923 (1971). It would be entirely reasonable for a jury to conclude that Flynn was accusing CSC of attempting to cause his death, rather than merely describing something that had happened to him. See id.; see also Okun v. Superior Court, 29 Cal.3d 442, 450, 629 P.2d 1369, 1373, 175 Cal.Rptr. 157, 161 ("[A] writing's susceptibility to innocent meaning does not in itself preclude a finding that an ordinary reader would understand it in a libelous sense."), cert. denied, 454 U.S. 1099, 102 S.Ct. 673, 70 L.Ed.2d 641 (1981). We conclude that

CSC's complaint sufficiently alleges the existence of a defamatory meaning. ³

C. Identification of the Plaintiff

Flynn contends that his statements were not defamatory because they did not adequately identify CSC. Flynn argues that the statements referred to Scientology as a whole and are therefore subject to the group libel rule. ⁴ The group libel rule generally bars defamation actions to which it applies. See Barger v. Playboy Enterprises, Inc., 564 F.Supp. 1151, 1153 (N.D.Cal.1983) (applying California law); Restatement (Second) of Torts Sec. 564A(a) (1977). Because "Scientology" refers to over 300 churches, Flynn argues that CSC lacks standing to sue for defamation.

We find, however, that the group libel rule does not apply in this case. The group libel rule applies when a group member brings a defamation suit based on statements made regarding the group. In contrast, CSC has alleged that Flynn's remarks were reasonably understood to refer specifically to CSC, rather than to Scientology as a whole. Flynn's remarks support this theory. Flynn referred to "an enormous organization," "the Church of Scientology," and "this organization." A jury could reasonably find that Flynn was referring to a specific actor, rather than to Scientology as a whole. If that is the case, the group libel rule would not preclude a finding that Flynn's statements were "of and concerning" CSC. ⁵

But even though the group libel rule does not apply, CSC still must establish that the remarks were "of and concerning" CSC. Under California law, "[t]here is no requirement that the person defamed be mentioned by name.... It is sufficient if from the evidence the jury can infer that the defamatory statement applies to the plaintiff ... [or] if the publication points to the plaintiff by description or circumstance tending to identify him." DiGiorgio Fruit Corp. v. AFL-CIO, 215 Cal.App.2d 560, 30 Cal.Rptr. 350, 355 (1963); see also Bindrim v. Mitchell, 92 Cal.App.3d 61, 75-76, 155 Cal.Rptr. 29, 37-38 (upholding a jury finding that the depiction of a fictitious character in a novel defamed the plaintiff even though the description of the character differed from the plaintiff in several respects), cert. denied, 444 U.S. 984, 100 S.Ct. 490, 62 L.Ed.2d 412 (1979).

CSC has pleaded several facts that would establish this element. First, CSC pleaded that Flynn's remarks were "understood by the listening public to be of and concerning Plaintiff." Second, Flynn allegedly referred to the organization "that I have been litigating with." By Flynn's admission, that was CSC. Third, CSC pleaded that Flynn's remarks were made in Los Angeles, which is CSC's principal place of business. Fourth, CSC pleaded that Flynn intended to refer to CSC. ⁶ Finally, CSC

pleaded that the members of the audience requested over $10,000 in refunds and repayments from CSC. We conclude that CSC's pleadings are sufficient to survive a motion to dismiss on this element.

D. Statement of Opinion

Because of first amendment concerns, see Gertz v. Robert Welch, Inc., 418 U.S. 323, 339, 94 S.Ct. 2997, 3006, 41 L.Ed.2d 789 (1974), defamation actions may not be based on statements of opinion. Lewis v. Time Inc., 710 F.2d 549, 553 (9th Cir.1983); Underwood v. CBS, Inc., 150 Cal.App.3d 460, 198 Cal.Rptr. 48, 51 (1984). Flynn contends that his remarks constitute opinion as a matter of law. See Lewis, 710 F.2d at 553; cf. Good Government Group, Inc. v. Superior Court, 22 Cal.3d 672, 682, 586...