Dale System v. General Teleradio

• Decision Date: 25 June 1952
• Citation: 105 F. Supp. 745
• Parties: DALE SYSTEM, Inc. v. GENERAL TELERADIO, Inc. et al.
• Court: U.S. District Court — Southern District of New York

105 F. Supp. 745

DALE SYSTEM, Inc. v. GENERAL TELERADIO, Inc. et al.

United States District Court, S. D. New York.

June 25, 1952.

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Louis Fieldman, New York City (Fleming James, Jr., Harry P. Lander, New Haven, Conn., of counsel), for plaintiff.

Cravath, Swaine & Moore, New York City (Harold R. Medina, Jr., New York City, of counsel), for defendants General Teleradio, Inc., Sitroux, Inc., Richard Kollmar, Dorothy Kilgallen, the Bon Ami Company, the Waffle Corp. of America, Bosco, Incorporated, Lewin, Williams and Saylor, Inc., Metropolitan Life Ins. Co., and Francis H. Leggett & Co.

MURPHY, District Judge.

This is a motion by ten of the defendants named herein, to dismiss the complaint for failure to state a claim upon which relief can be granted. The action for $50,000 damages and injunction arises from a broadcast on May 18, 1951 over Station WOR (General Teleradio, Inc.) by defendants Richard Kollmar and Dorothy Kilgallen on their program "Dorothy and Dick". The remaining defendants, other than the Reader's Digest Association, Incorporated, are alleged to have been sponsors of that program.

During that broadcast certain statements were read from the then current issue of Life magazine from an article concerning the Willmark Services System, Inc., a company engaged in checking efficiency and honesty of employees of retail establishlishments by shopping at such establishments and ascertaining the manner in which sales were conducted. Plaintiff complains of two statements read from Life, namely:

(1) "Willmark * * * is the only company of its kind"; and

(2) "They paid a great compliment to Willmark during the war. The Government gave Willmark — furnished their shoppers with ration stamps so that test purchases could continue right through the war."

Plaintiff states that it is a competitor of Willmark's, doing business in certain eastern States, and that it has been injured by these statements because their meaning is "that there was no such concern as plaintiff, that plaintiff was not in the same line of business, that plaintiff was incompetent, inconsequential and not worthy of mention and that the United States Government had recognized Willmark's essentiality during the war, but had not recognized plaintiff's and had complimented Willmark but had not so complimented the plaintiff."

The basis for relief against defendants is that they "should in the exercise of reasonable care have known that the defamatory statements set forth in * * * this complaint were false and untrue." There is no allegation in the complaint of special damage to plaintiff resulting from the broadcast. In addition to damages and injunction plaintiff asks that copies of the broadcast in question be impounded and destroyed as well as costs, counsel fees and other relief as may be equitable.

The first question, that of choice of governing law, is posed by plaintiff's allegation that the broadcast was "heard by listeners to station WOR and affiliated stations from Maine to North Carolina and as far west as Harrisburg, Pennsylvania and elsewhere, including the territory in which plaintiff and Willmark are in competition." It is true that a tort controversy does not present a choice of law problem unless both (1) it is significantly related to more than one jurisdiction; and (2) its determination on the merits varies according to which related jurisdiction supplies the governing internal substantive law. Concededly the first requirement is met by the instant case but the second, whether internal law of related jurisdictions is significantly different, must remain conjectural unless thorough canvass is made of the internal rules of all states within broadcast range. We think that part of the office of conflict-of-laws is to obviate such investigation by making available rules for choice of governing law in controversies with important contacts overflowing the boundaries of a single state. The problem at the outset then is to select the appropriate choice of law rule — a troublesome question so far as torts involving publication are concerned.

Professor Ludwig has thus evaluated several possible rules in multi-state publication situations, "Peace of Mind" in 48 Pieces v. Uniform Right of Privacy, 32 Minn.L.Rev. 734, 760-62 (1948):

"Consideration of several proposed solutions indicates why courts and counsel have happily ignored the problem in almost all of the cases:

"(1) Substantive law of forum. Since the court in which the action is brought can more easily determine its own substantive law than it can ascertain that of another jurisdiction, it might appear convenient for the forum always to provide the governing law in multi-state cases. But the forum is not invariably the jurisdiction most significantly connected with the controversy, and to make the outcome vary with the forum violates this basic tenet of conflicts. Since jurisdiction over defendants responsible for nationwide communications may be had in almost any state, the plaintiff could `shop around' for the most favorable substantive rule and most liberal damages.

"(2) Place of last event. At least one case has applied the Restatement choice-of-law rule that the governing law is to be supplied by the place where the `last event' takes place which is `necessary to make an actor liable.' In privacy and libel and slander situations, this is the place where publication occurs. In radio and television, transmission is both simultaneous and multi-jurisdictional, and determination of the place of first impact would require the atomic accuracy of the physicist.

"(3) Point of origination. The place of the act has often been suggested as the state to provide the governing law. This would give publishing and broadcasting defendants opportunity to select a favorable jurisdiction for operations. What is the point of origin for periodicals which are edited in one state and printed in another, or those printed and shipped from two states?

"(4) State of principal circulation. Some have suggested that governing law should be provided by the state of principal circulation. This rule would amount, in effect, to the adoption of the New York substantive law. * * *

"(5) Domicil of the plaintiff. The domicil of the plaintiff might offer suitable governing law. Disturbance to a person's peace of mind probably has its most significant contact there. However, the rule breaks down for individuals with multiple domicils. Plaintiffs of national prominence might suffer more * * * elsewhere than at home. For publishers and broadcasters this rule would spell chaos and no predictable standard of conduct would be provided.

"These proposals for a choice of law principle, all pointing to substantive rules of a single state, are inadequate. A conflicts principle designating the rules of the plurality of states in which circulation occurred would only add to confusion. * * *"

Since jurisdiction in this case rests upon diverse citizenship, this Court must resolve the problem of choice of law in accordance with the conflict-of-law principles of the State in which it sits. Erie Ry. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188; Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477. New York courts have applied the Restatement choice of law rule to torts generally and accordingly have selected as governing law that of "the state where the last event necessary to make an actor liable" took place. Restatement, Conflict of Laws § 377 (1934); cases collected in Mattox v. News Syndicate Co., 2 Cir., 176 F.2d 897, footnote 1 at page 900, 12 A. L.R.2d 988. But as to libel communicated in several jurisdictions, while the Restatement, Conflict of Laws § 377(5) suggests "the place of communication" as supplying governing law, the New York decisions have not authoritatively indicated which state is the place of communication. See Mattox v. News Syndicate Co., supra, 176 F.2d at page 900. The Mattox case explicitly left this question unanswered since it appeared in that case that the plaintiff suffered damage in but a single state. Id. Under the particular circumstances of this case and only so far as resolution of the question whether the complaint states a claim upon which relief can be granted requires choice of the internal law of one state, we think that New York should supply that governing law. A grouping of the dominant contacts in this case points to the internal law of New York. Of the five suggested solutions mentioned by Professor Ludwig supra, three unequivocally suggest this result in this case: New York is not only the state of the forum but also the point of origination of the broadcast and state of principal circulation. To a considerable extent the other two points of reference also indicate New York: it is not at all improbable that the broadcast was first heard in that state and while the technical domicil of the corporate plaintiff is alleged to be in Connecticut, it is also alleged that the corporation is doing business in New York.

The second question is whether the complaint states a claim upon which relief can be granted on any conceivable basis. We shall consider the possible grounds in the following order:

(1) Intentional Infliction of Harm. In New York, the prima facie theory of tort liability has been recognized to make actionable an omission on a radio broadcast made with intent to injure. Advance Music Corp. v. American Tobacco Co., 296 N.Y. 79, 70 N.E.2d 401, 402. In that case a complaint was held sufficient to state a cause of action when it alleged that defendant's radio program boasted that its "hit parade" consisted of a number of the most popular songs of the week "`based upon an extensive and accurate survey conducted throughout the nation'" but omitted popular songs published by plaintiff "`with intent to injure the plaintiff.'" While this complaint states "defendants falsely and maliciously published of and...