Embers Supper Club, Inc. v. Scripps-Howard Broadcasting Co.

• Citation: 457 N.E.2d 1164,9 Ohio St.3d 22,9 OBR 115
• Decision Date: 11 January 1984
• Docket Number: No. 83-102,SCRIPPS-HOWARD,83-102
• Parties: , 9 O.B.R. 115, 10 Media L. Rep. 1729 EMBERS SUPPER CLUB, INC., Appellant, v.BROADCASTING COMPANY, Appellee.
• Court: United States State Supreme Court of Ohio

Page 22

9 Ohio St.3d 22

457 N.E.2d 1164, 9 O.B.R. 115, 10 Media L. Rep. 1729

EMBERS SUPPER CLUB, INC., Appellant, v. SCRIPPS-HOWARD BROADCASTING COMPANY, Appellee.

No. 83-102.

Supreme Court of Ohio.

Jan. 11, 1984.

Syllabus by the Court

In cases involving defamation of private persons, where a prima facie showing of defamation is made by the plaintiff, the question which a jury must determine by a preponderance of evidence is whether the defendant acted reasonably in attempting to discover the truth or falsity or defamatory character of the publication.

Plaintiff-appellant, Embers Supper Club, Inc., commenced an action for damages against defendant-appellee, Scripps-Howard Broadcasting Co. (WCPO-TV), for two separate broadcasts aired on WCPO-TV. The first broadcast on July 21, 1972, stated:

"Springdale police raided the Embers Supper Club, on Northland Boulevard, this afternoon, and seized racing forms, betting slips, and other gambling paraphernalia. Police said they acted on a tip, that handbook operators from Elmwood Place had set up operation there. So far, no arrests have been made; the club itself remains open."

Two days later, on July 23, in a televised review of the week's news program, the same subject was covered concerning the plaintiff in this language:

"Business went sour for some of the area's bookies * * * in Elmwood police seized one man doing business on foot, another operating out of a restaurant on Vine Street. And, in Springdale the Embers Club was raided, and police seized betting slips and equipment."

These broadcasts stem from a police raid of the Embers Supper Club based upon a valid search warrant. As indicated by the return on the search warrant the police seized seventeen Daily Racing Forms; a booklet entitled "The Handy Pocket Calculator for Two and Three Horse Parlays and Memo Book," eleven Kentucky Sports Bulletins and six sheets of paper with numbers and combination and betting slips.

Albert J. Schottelkotte, director of news and special events for WCPO-TV, admitted that "gambling in Elmwood Place had been linked to organized crime." The official police report of the Embers raid made no mention of the word "bookies" and no reference to Elmwood Place. The Embers Supper Club was located in the suburb of Springdale, not Elmwood Place. Schottelkotte admitted that the thrust of the news publication was that "handbook operators in Elmwood Place, one or more of them, as an entity, that they had set up operations in the Embers." Plaintiff's expert witness, Jon C. Hughes, an assistant professor in journalism, testified that the July 21, 1972 publication attributed to the Springdale police as a statement of fact that "handbook operators from Elmwood Place had set up operations" at the Embers.

The two broadcasts were therefore false in linking the Embers Supper Club with gambling in Elmwood Place and its organized crime connections.

Plaintiff's chief executive officer and sole shareholder, Daniel S. Comer, testified there was no gambling activity conducted at the Embers, and that no one from WCPO-TV ever contacted him concerning the truth or falsity of the facts contained in the two broadcasts. The seizure by the police of gambling material at the Embers caused a citation for a gambling offense to be issued several days later against an Embers cook named John Watts. The seized gambling materials were presented at the Watts trial. That case was dismissed. No one else affiliated with the Embers was charged with any gambling activity.

At the close of plaintiff's evidence, the trial court granted a directed verdict for the defendant. The court of appeals affirmed.

The cause is now before this court upon the allowance of a motion to certify the record.

Strauss, Troy & Ruehlmann Co., L.P.A., Charles G. Atkins and William R. Jacobs, Cincinnati, for appellant.

Wood, Lamping, Slutz & Reckman, Harry M. Hoffheimer, Baker & Hostetler, Bruce W. Sanford, Lee Levine and Brian S. Harvey, Cleveland, for appellee.

CLIFFORD F. BROWN, Justice.

The directed verdict for defendant requires determining the standard or rule for imposing liability upon a defendant which publishes false statements concerning a plaintiff who is not a public official or public figure. Since plaintiff is not a public official or public figure, the holdings in New York Times Co. v. Sullivan (1964), 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686, and Curtis Publishing Co. v. Butts (1967), 388 U.S. 130, 87 S.Ct. 1975, 18 L.Ed.2d 1094, requiring proof of actual malice by defendant are inapplicable.

In New York Times Co. v. Sullivan, the United States Supreme Court held that a "public official" could not maintain a suit for defamation without showing a clear and convincing evidence that the publisher acted with actual malice. In Curtis Publishing Co. v. Butts, the court extended the actual malice standard to "public figures." This standard was further expanded in 1971 when the Supreme Court decided the case of Rosenbloom v. Metromedia, Inc. (1971), 403 U.S. 29, 91 S.Ct. 1811, 29 L.Ed.2d 296. In Rosenbloom, the court, in a plurality opinion, extended the actual malice standard to private individuals where the matter reported was of concern to the public.

Applying the Rosenbloom standard, the directed verdict granted defendant would have been appropriate since there was an absence of showing of actual malice on the part of WCPO-TV in its news reports. However, the United States Supreme Court in 1974, retreated from its extension of the Sullivan standard to private individuals. The case which expressed this move was Gertz v. Robert Welch, Inc. (1974), 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789. In Gertz, the necessity of proving actual malice in defamation suits by private individuals against media defendants was struck down. The court found that the individual states should be permitted to set the standard of proof in cases where an allegedly defamatory statement is published by a media defendant concerning a private individual. The only limitation on this was that a state would not be permitted to impose "liability without fault, the States may define for themselves the appropriate standard of liability for a publisher or broadcaster of defamatory falsehood injurious to a private individual." Gertz v. Robert Welch, Inc., at 347, 94 S.Ct. at 3010.

This court has not enunciated a standard of review for defamation actions involving private individuals and the media. A majority of other jurisdictions when faced with this responsibility have set an ordinary negligence standard which must be shown by a preponderance of the evidence. See Peagler v. Phoenix Newspapers, Inc. (1977), 114 Ariz. 309, 560 P.2d 1216; Dodrill v. Arkansas Democrat Co. (1979), 265 Ark. 628, 590 S.W.2d 840, certiorari denied (1980), 444 U.S. 1076, 100 S.Ct. 1024, 62 L.Ed.2d 759. ¹

We are persuaded that the negligence standard of review is appropriate in this area. In cases involving defamation of private persons, where a prima facie showing of defamation is made by the plaintiff, the question which a jury must determine by a preponderance of evidence is whether the defendant acted reasonably in attempting to discover the truth or falsity or defamatory character of the publication. See, e.g., Peagler v. Phoenix Newspapers, Inc., supra, 114 Ariz. at 315, 560 P.2d 1216; Thomas H. Maloney & Sons, Inc. v. E.W. Scripps Co. (1974), 43 Ohio App.2d 105, 334 N.E.2d 494 .

This standard is applicable to the factual stance in this case. It was error to direct a verdict for the defendant. We reverse.

Defendant further contends it is not liable as a matter of law, and that a directed verdict for defendant was proper, because defendant was privileged to publish government information without incurring liability by reason of R.C. 2317.05 which in pertinent part reads:

"The publication of a fair and impartial report of * * * the issuing of any warrant, * * * or the filing of any * * * other document in any criminal or civil cause in any court of competent jurisdiction, or of a fair and impartial report of the contents thereof, is privileged * * *." This contention is without merit because the publication in this case was not mere reporting of the information included in a warrant or other document but included references to bookmaking operations and Elmwood Place which were not a part of official records.

Since defendant's publication was not within the protections of R.C. 2317.05 it does not escape the rule imposing liability because of the common-law privilege defined in Restatement of the Law, Torts 2d (1977) 297, Section 611:

"The publication of defamatory matter * * * in a report of an official action or proceeding * * * is privileged if the report is accurate and complete or a fair abridgement of the occurrence reported."

Defendant also contends the directed verdict was proper because plaintiff failed to prove actual injury or damages. This contention is without merit. Plaintiff's chief executive officer testified concerning the business loss of plaintiff resulting from the defamatory publication, thus creating an issue of general and special damages to plaintiff. A corporate plaintiff has a right to recover for its economic injury. Golden North Airways v. Tanana Publishing Co. (C.A. 9, 1954), 218 F.2d 612, 624.

For these reasons the judgment of the court of appeals is reversed, and the cause is remanded to the court of common pleas for a new trial.

Judgment reversed and cause remanded.

FRANK D. CELEBREZZE, C.J., and SWEENEY and JAMES P. CELEBREZZE, JJ., concur.

WILLIAM B. BROWN, LOCHER and HOLMES, JJ., dis...