Cox Enterprises, Inc. v. Carroll City/County Hospital Authority

• Decision Date: 15 January 1981
• Docket Number: No. 36611,36611
• Parties: , 6 Media L. Rep. 2435 COX ENTERPRISES, INC., d/b/a Atlanta Newspapers v. CARROLL CITY/COUNTY HOSPITAL AUTHORITY, d/b/a Tanner Memorial Hospital.
• Court: Georgia Supreme Court

Page 841

273 S.E.2d 841

247 Ga. 39, 6 Media L. Rep. 2435

COX ENTERPRISES, INC., d/b/a Atlanta Newspapers v. CARROLL CITY/COUNTY HOSPITAL AUTHORITY, d/b/a Tanner Memorial Hospital.

No. 36611.

Supreme Court of Georgia.

Argued July 14, 1980.

Decided Jan. 15, 1981.

Albert G. Norman, Jr., Charles T. Zink, John E. Zamer, Hansell, Post, Brandon & Dorsey, Atlanta, James H. Bone, Carrollton, Douglas Vassey, Prince & Vassey, Carrollton, for appellants.

Thomas E. Greer, David H. Tisinger, Tisinger, Tisinger & Vance, Carrollton, for appellees.

HILL, Presiding Justice.

On April, 29, 1976, Cox Enterprises, Inc., d/b/a Atlanta Newspapers (hereinafter the "Newspaper"), published an article in The Atlanta Journal entitled "Tanner Hospital In Trouble, Critics Say." The article contained charges that mismanagement of Tanner Memorial Hospital had resulted in economic difficulties and in serious deficiencies in the provision of health care for patients; e. g., insufficient number of nurses, inoperative equipment, wasteful expenditures, financial deficits and needs for tax increases. In addition, the article contained phrases such as "fear for the (patients') safety," "doctors are losing faith" and "earmarks of (financial) disaster."

Tanner Memorial Hospital is operated by the Carroll City/County Hospital Authority (the "Authority"). In March, 1977, the Authority filed a complaint alleging libel against the Newspaper in which the Authority charged that the article was "false and malicious defamation" and that it was published "willfully and maliciously and without regard to the true facts" and "in careless disregard of the true facts," and that the Newspaper has refused to retract the article. The Authority sought general damages of $250,000 and punitive damages of $250,000. No individual plaintiffs joined in the complaint. The Newspaper answered, denying the material allegations of the complaint (other than the publication of the article) including those relating to jurisdiction and venue. The Court of Appeals affirmed the grant of summary judgment to the Newspaper on the ground of improper venue; on certiorari this court reversed. Carroll City/County Hospital Authority v. Cox Enterprises, Inc., 147 Ga.App. 863, 250 S.E.2d 550 (1978); reversed, 243 Ga. 760, 256 S.E.2d 443 (1979).

On remand, the trial court considered the remaining portions of the Newspaper's motion for summary judgment, denied the motion and certified its order. The Newspaper then filed an application for interlocutory appeal which was granted by this court. Our jurisdiction is based upon the construction of the freedom of speech and press provisions of the First Amendment to the Constitution of the United States (Code Ann. §§ 1-801).

The Newspaper asserts a number of reasons why its motion for summary judgment should have been granted. First among them is that to allow the Authority, allegedly a governmental entity, to sue for libel would contravene the First Amendment to the United States Constitution.

We note at the outset that we do not deal here with the so-called "clear and present danger doctrine," that is, with the power of government to punish speech that incites violent or illegal conduct. See Brandenburg v. Ohio, 395 U.S. 444, 447, 89 S.Ct. 1827, 1829, 23 L.Ed.2d 430 (1969); State v. Davis, 246 Ga. 761, 272 S.E.2d 721 (1980); Tribe, American Constitutional Law, §§ 12-10, 12-11 (1978). Rather we deal with the power of government, in the absence of such incitement, to obtain damages from its critics, be they individual citizens or the press, and thereby to deter other critics.

We start from the seldom used but well founded rule: Governments and governmental entities cannot maintain an action for libel. "Criticism of government is at the very center of the constitutionally protected area of free discussion." Rosenblatt v. Baer, 383 U.S. 75, 85, 86 S.Ct. 669, 675, 15 L.Ed.2d 597 (1966). No case has been found allowing a government to recover for libel. "For good reason, 'no court of last resort in this country has ever held, or even suggested, that prosecutions for libel on government have any place in the American system of jurisprudence.' " New York Times Co. v. Sullivan, 376 U.S. 254, 291, 84 S.Ct. 710, 732, 11 L.Ed.2d 686 (1964), quoting City of Chicago v. Tribune Co., 307 Ill. 595, 601, 139 N.E. 86, 88 (1923). ¹ In the course of its decision in New York Times Co. v. Sullivan, supra, the Court found unconstitutional the Sedition Act of 1798 (which expired in 1801) which made it a crime for any person to "write, print, utter or publish ... any false, scandalous and malicious writing or writings against the government of the United States ... the Congress ... or the President ... with intent to defame...."

Open discussion of governmental practices and policies requires that untrammelled criticism of government be protected; if critics of government, be they citizens or press, speak only at the risk of being prosecuted for libel or slander, few will criticize government at all. Even where the critic is certain that his defense of truth would carry the day, the expense and inconvenience of defending the litigation could deter all but the most determined gadfly. ² As James Madison succinctly explained, "(t)he censorial power is in the people over the Government, and not in the Government over the people." 4 Annals of Cong. 934 (1794). Thus the rule that government cannot be defamed by its citizens "is now an indisputable axiom," Tribe, supra, § 12-12, p. 632.

Although the Authority does not directly dispute this rule, it does dispute its application to this case. In short, the Authority asserts that it is a "quasi-private" hospital and a "quasi-governmental entity," not purely a governmental entity, and that as such it may sue for libel. It argues that its ability to provide health care services to the needy is dependent upon the confidence of its paying patients in its ability to provide quality medical care and that vindication by damages for libel is necessary to maintain the confidence of its clientele.

It is true that the United States Supreme Court has not addressed this precise issue. In the two cases in which that Court found that the government could not maintain an action for libel, the nature of the governmental entities involved was different in several particulars from that of the Authority. In effect, one issue in the New York Times case, supra, was whether a suit for libel by a police department would lie and the Court ruled that it would not. The plaintiff in the New York Times case was not the police department but the Commissioner of Public Affairs whose duty it was to supervise the police department. The Commissioner, however, was not named in the allegedly defamatory advertisement which referred to police armed with shotguns and tear gas, arrests for petty offenses, and charges of perjury. In determining that the Commissioner could not maintain a personal action for libel, the Court ruled that to allow him to do so given the particular advertisement complained of would be to sidestep the rule prohibiting a governmental entity from suing for libel by transmuting criticism of government into personal criticism. 376 U.S. at 292, 84 S.Ct. at 732.

Subsequently, in Rosenblatt v. Baer, supra, the Court reached a similar result as to the Belknap County Recreation Area in New Hampshire, saying (383 U.S. at 85, 86 S.Ct. at 675): "Criticism of those responsible for governmental operations must be free, lest criticism of government itself be penalized." Belknap was a ski resort operated by the Recreation Area. Baer, the plaintiff in that case, had been employed as manager of the Recreation Area. Rosenblatt, supra, 383 U.S. at 77-78, 86 S.Ct. at 671-672, N.H.Laws 1953, p. 553. The manager was employed by the county commissioners and the Recreation Area itself was not a separate legal entity. N.H.Laws 1953, p. 553; cf. N.H.Laws 1959, p. 553.

Reviewing the few cases on this point in lower federal courts and other jurisdictions, we find none precisely on point. Most involve typical municipal corporations, i. e., cities. City of Philadelphia v. The Washington Post Co., 482 F.Supp. 897 (D.C., E.D.Pa.1979); Johnson City v. Cowles Communication, Inc., 477 S.W.2d 750 (Tenn.1972); Albany v. Meyer, 279 P. 213 (Cal.App.1929); City of Chicago v. Tribune Co., supra. The bar of course also applies to states. State v. Time, Inc., 249 So.2d 328 (La.App.), writ. den. 259 La. 761, 252 So.2d 456 (1971).

A park district with the power to issue bonds was found to be a municipal corporation unable to sue for libel in Progress Development Corp. v. Mitchell, 219 F.Supp. 156 (D.C., D.Ill.1963). See also Board of Education v. Marting, 7 Ohio Misc. 64, 217 N.E.2d 712(9) (1966) (school district cannot sue taxpayer for malicious prosecution).

A New York court has held that an off-track betting corporation is precluded from bringing an action for defamation. Capital District Regional Off-Track Betting Corp. v. Northeastern Harness Horsemen's Asso. 92 Misc.2d 232, 399 N.Y.S.2d 597 (Sup.Ct.1977). A review of the relevant New York legislation shows that, except as to its purpose, this corporation is quite similar to the Hospital Authority insofar as its relationship to its parent is concerned, L.1973, Ch. 346 § 5, McKinney's Session Laws, Sections 170-187. ³ There is, of course, the difference that the purpose of the Off-Track Betting Corp. is to raise revenues for the support of government, id., § 4, Section 116, while the purpose of the Hospital Authority is to provide services to both paying and indigent patients and the Authority is directed not to raise surplus revenues, but rather to fix its rates and charges so as to produce only the revenues necessary to provide the services for which it is established and to meet its obligations. Ga.L.1964, pp. 598, 602; Code Ann. § 88-1806. Thus, resolution of this critical issue requires a close...