Flotech, Inc. v. E.I. Du Pont de Nemours & Co., 86-1146

• Citation: 814 F.2d 775
• Decision Date: 18 March 1987
• Docket Number: No. 86-1146,86-1146
• Parties: 14 Media L. Rep. 1135 FLOTECH, INC., and Fluoramics, Inc., Plaintiffs, Appellants, v. E.I. DU PONT de NEMOURS & COMPANY, Defendant, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

Page 775

814 F.2d 775

14 Media L. Rep. 1135

FLOTECH, INC., and Fluoramics, Inc., Plaintiffs, Appellants, v. E.I. DU PONT de NEMOURS & COMPANY, Defendant, Appellee.

No. 86-1146.

United States Court of Appeals First Circuit.

Argued Sept. 9, 1986.

Decided March 18, 1987.

David P. Rosenblatt with whom Lawrence G. Cetrulo, Constance M. McGrane and Burns & Levinson, Boston, Mass., were on brief, for plaintiffs, appellants.

George H. Lewald with whom Pierce O. Cray, Raymond W. Henney, Paul J. O'Donnell and Ropes & Gray, Boston, Mass., were on brief, for defendant, appellee.

Before COFFIN, Circuit Judge, WISDOM ^*, Senior Circuit Judge, and BREYER, Circuit Judge.

COFFIN, Circuit Judge.

Plaintiffs Fluoramics, Inc., and Flotech, Inc., the manufacturer and former principal distributor, respectively, of Tufoil, sued E.I. Du Pont de Nemours & Company for product disparagement and for deceptive trade practices in violation of Mass.Gen.Law Ann. ch. 93A. Following extensive pretrial discovery, the district court granted summary judgment for defendant. 627 F.Supp. 358. We affirm.

I.

Plaintiffs' product Tufoil is a motor oil additive containing polytetrafluoroethylene (PTFE). Defendant sells PTFE under its tradename "Teflon" and as untrademarked PTFE micropowder. During a period preceding February 1980 Fluoramics purchased PTFE from Du Pont and another company, ICI Americas, and it referred to both Teflon and Du Pont on the Tufoil label.

On February 1, 1980, Du Pont issued the following press release:

Wilmington, Del., Feb. 1--The Du Pont Company today announced it will immediately discontinue supplying its "TEFLON" fluorocarbon resins or untrademarked fluorocarbon micropowder for use as ingredients in oil additives or oils for lubricating internal combustion engines.

The decision was reached after a review of data available within the Company and from outside sources showed, in Du Pont's opinion, that these resins are not useful in such products.

During the past several years, numerous oil additives or engine treatment products have been introduced in the United States and abroad. Promotion for some of these products claims improved engine performance, increased fuel economy and reduced emissions, citing Du Pont's "TEFLON" fluorocarbon resin as the active agent.

As the number of oil additives products has increased, so have the inquiries Du Pont has received as to the utility of "TEFLON" resins in such applications. The Company gathered data from within the Company and outside sources to assess the claims regarding "TEFLON" fluorocarbon resins.

"TEFLON" is Du Pont's trademark for its polytetrafluoroethylene (PTFE) products.

Plaintiffs filed this action on November 1, 1983. They claim that Du Pont severely injured them in their reputation and sales by allegedly impugning Tufoil through the press release. In granting summary judgment for defendant, the district court ruled that plaintiffs' claims based on the initial February 1, 1980 press release were barred by the Massachusetts three-year statute of limitations for tort actions. It also found as a matter of law that subsequent republications of the press release were nondefamatory "opinion" and in any event not "of or concerning" the plaintiffs' product, and thus not actionable. The court further held that the Chapter 93A claims were barred by the then existing "interstate commerce exemption" to Chapter 93A, see Mass.Gen.Laws Ann. ch. 93A Sec. 3(1)(b) (West Supp.1983-84), and that the provision's repeal was not to be given retroactive effect.

II.

Plaintiffs raise a number of points on appeal, including whether plaintiffs were public figures--an issue raised to, but not reached by, the district court--and whether the statute of limitations bars certain of plaintiffs' claims. We shall discuss only those issues necessary to our conclusion that the press release did not contain actionable defamatory statements. ¹

The district court determined that the press release was not defamatory because its contents constituted opinion rather than fact. See Gertz v. Robert Welch, Inc., 418 U.S. 323, 339-40, 94 S.Ct. 2997, 3006-07, 41 L.Ed.2d 789 (1974); Bose Corp. v. Consumers Union, 692 F.2d 189, 193-94 (1st Cir.1982), aff'd, 466 U.S. 485, 104 S.Ct. 1949, 80 L.Ed.2d 502 (1984); Aldoupolis v. Globe Newspaper Co., 398 Mass. 731, 733, 500 N.E.2d 794 (1986); Cole v. Westinghouse Broadcasting Co., 386 Mass. 303, 308-10, 435 N.E.2d 1021 (1982). We think this a close and difficult question which, as we shall explain below, we need not answer. Under Massachusetts law, ² a court attempting to distinguish between fact and opinion examines " 'the statement in its totality in the context in which it was uttered or published.' " Cole, 386 Mass. at 309, 435 N.E.2d 1021 (quoting Information Control Corp. v. Genesis One Computer Corp., 611 F.2d 781, 784 (9th Cir.1980)). As part of this scrutiny,

"The court must consider all the words used, not merely a particular phrase or sentence. In addition, the court must give weight to cautionary terms used by the person publishing the statement. Finally, the court must consider all of the circumstances surrounding the statement, including the medium by which the statement is disseminated and the audience to which it is published."

Id. Application of this test to the Du Pont press release produces an inconclusive result. See Bose Corp. at 194 ("The determination of whether a statement is one of opinion or fact, however, is difficult to make and perhaps unreliable as a basis for decision.") On the one hand, certain of the phraseology employed in the press release strongly--or explicitly--suggests opinion. The reference in the release to Du Pont's review of "data available within the Company and from outside sources" indicates that Du Pont was not releasing conclusive studies, but was basing its comments on possibly limited data. We think such a restrained description of the support for the conclusion expressed in the press release is more consistent with a statement of opinion than with a statement of fact. Indeed, the cautionary phrasing in that part of the sentence is underscored by the express statement that the data showed--"in Du Pont's opinion "--that the resins are not useful in oil additive products like Tufoil. See Information Control, 611 F.2d at 784 ("Where the language of the statement is 'cautiously phrased in terms of apparency' ..., the statement is less likely to be understood as a statement of fact rather than as a statement of opinion.")

On the other hand, however, the restrained tone of the press release could be viewed as giving the impression of a detached statement of facts. Although the efficacy of Teflon-based oil additives was an issue of public interest, we think the context here was not one " 'in which the audience may anticipate efforts by the parties to persuade others to their positions by use of epithets, fiery rhetoric or hyperbole, [so that] language which generally might be considered as statements of fact may well assume the character of statements of opinion.' " Cole, 386 Mass. at 310, 435 N.E.2d 1021 (quoting Gregory v. McDonnell Douglas Corp., 17 Cal.3d 596, 601, 131 Cal.Rptr. 641, 552 P.2d 425 (1976)). In fact, since Du Pont's decision to stop selling Teflon for oil additives could be viewed as against its economic interest, the specific disclaimer that the press release represents opinion probably carries less weight than it would in other contexts.

Even if more reasonably construed as opinion than as fact, the language of the release could be viewed as within the scope of Restatement (Second) of Torts Sec. 566 (1977), which states,

A defamatory communication may consist of a statement in the form of an opinion, but a statement of this nature is actionable only if it implies the allegation of undisclosed defamatory facts as the basis for the opinion.

See Aldoupolis, 398 Mass. at 735, 500 N.E.2d 794; Pritsker v. Brudnoy, 389 Mass. 776, 778-79, 452 N.E.2d 227 (1983). The rationale of this rule is that when an opinion is based on unstated or unassumed facts, the audience can only presume that the publisher of the statement is asserting the facts to support the opinion as well. Thus, the effect is the same as if the publisher had stated the facts, and the publisher may be liable if those facts are defamatory. In this case, a logical reading of Du Pont's statement about available data is that the company has test results showing that Teflon does not work in oil additive products and, on the basis of those undisclosed statistics, it is Du Pont's opinion "that these resins are not useful in such products." The actionable element of this statement, then, would be the undisclosed specific "data" that Du Pont claimed to possess showing the ineffectiveness of the oil additives like Tufoil. If, in fact, Du Pont had no such data, or the test results actually favored the oil additives, Du Pont might, under this analysis, be found liable for defaming Tufoil.

In some circumstances, the inconclusive nature of the press release would require that a jury be assigned the task of determining whether the challenged statements amount to fact or opinion. The issue is

a question of law if the statement unambiguously constitutes either fact or opinion.... However, if a statement is susceptible of being read by a reasonable person as either a factual statement or an opinion, it is for the jury to determine.

Aldoupolis, 398 Mass. at 733, 500 N.E.2d 794 (citation omitted). See also Lyons v. New Mass Media, Inc., 390 Mass. 51, 59, 453 N.E.2d 451 (1983); Myers v. Boston Magazine Co., 380 Mass. 336, 339-40, 403 N.E.2d 376 (1980). Summary judgment cannot be set aside on this ground, however, because even if Du Pont's press release were viewed as containing statements of fact regarding plaintiffs' product, we conclude that its communication was conditionally privileged. ³

Under Restatement (Second) of Torts Sec. 594 (1977), an otherwise...