General Products Co., Inc. v. Meredith Corp., Civ. A. No. 81-0246-R.

• Decision Date: 17 November 1981
• Docket Number: Civ. A. No. 81-0246-R.
• Court: U.S. District Court — Eastern District of Virginia
• Parties: GENERAL PRODUCTS COMPANY, INC., Plaintiff, v. MEREDITH CORP., Defendant.

526 F. Supp. 546

GENERAL PRODUCTS COMPANY, INC., Plaintiff, v. MEREDITH CORP., Defendant.

Civ. A. No. 81-0246-R.

United States District Court, E. D. Virginia, Richmond Division.

November 17, 1981.

COPYRIGHT MATERIAL OMITTED

William M. Sokol, Fredericksburg, Va., for plaintiff.

Alexander Wellford, Richmond, Va., for defendant.

MEMORANDUM

MERHIGE, District Judge.

This is an action by a Virginia corporation against a corporation existing under the laws of Iowa seeking damages for defendant's publication of statements which allegedly defamed the plaintiff and disparaged its products. Jurisdiction is founded on 28 U.S.C. § 1332, diversity of citizenship.

The matter is before the Court on defendant's motion for summary judgment.

Plaintiff is in the business of manufacturing, distributing and selling a type of chimney known as a triple-wall chimney.

Defendant is the publisher of Better Homes and Gardens Magazine and several special interest publications of that magazine, including the Better Homes and Gardens Home Plan Ideas Magazine ("Ideas Magazine").

This suit is bottomed on an article written by Douglas M. Lidster, an employee of the defendant, which appeared in the Summer 1980 issue of Ideas Magazine. The article dealt with the use of wood stoves for heat, and discussed the types of chimneys used in connection with such stoves.

Plaintiff objects to these statements ("subject statements") in the article, printed under a section labeled "SAFETY":

DON'T CONSIDER THE TRIPLEWALL chimneys with air spaces between the sheet metal layers. These are intended for use with prefabricated fireplaces. The chimney you want has two layers consisting of inner and outer walls with mineral wool insulation sandwiched between. And by all means, don't think you can get by with stovepipe on the exterior of the house.

What's all the fuss? We're trying to minimize the potential buildup of creosote. As mentioned earlier, all of the volatile substances produced by combustion are not consumed in a fire. Some of these substances exit with the smoke, but condense into a liquid form when the temperature drops to a certain level. After a time, this liquid hardens into a semisolid mass lining the chimney.

A COLD CHIMNEY, SUCH AS A SINGLE-WALLED stovepipe outside, contributes to a tremendous accumulation of creosote. The same is true of the triple-wall chimneys intended for prefabricated fireplaces. (These chimneys, however, are perfectly safe for fireplaces because a hearth fire generally is hotter than a stove fire, and most of the volatiles that could condense into creosote are consumed.)

Even a sound masonry chimney isn't ideal. Its total mass allows for a lot of cooling before the smoke exits. And, because inner flue generally is oversized for the stove, the smoke lingers on its way up, allowing even more condensation to take place.

The mineral-wool-packed units, however, work well because they are hot chimneys. The same insulation that keeps the outer walls safely cool allows the inner surfaces to stay quite hot, minimizing condensation. These factory-built units are called all-fuel chimneys. The more commonly used brands are Heatilator, Metalbestos, Pro-Jet, and Selkirk.

Ideas Magazine at 88.

A chimney with a "hot" inner surface reduces the dangerous accumulation of cresote on the interior of the chimney, while "cold" chimneys allow this build-up. The article went on to describe vividly the risk of chimney fires posed by creosote accumulation.

Plaintiff argues that the import of the subject statements was that triple-wall chimneys are safe for use only for prefabricated fireplaces and not for stoves, because they allow the accumulation of cresote when used with stoves, presenting a fire hazard. Plaintiff alleges that these statements were false, and were intended to and did disparage its products and defame its name, causing it injury in the loss of good will, reputation and sales of all its products.

Defendant admits that the original Lidster article was inaccurate, in that it did not distinguish between the two types of triple-wall chimneys, the Thermosyphon type and the air-insulated type. In the Thermosyphon chimney, states the defendant, air flows through open passages and cools both in the inner and outer surfaces, presenting the creosote build-up danger. But in the air-insulated type, which plaintiff manufactures, the passages are partially blocked, allowing the air to act as an insulator to keep the inner surface hot while the outer stays cool, thus minimizing creosote accumulation. Mr. Lidster states by affidavit that he did not become aware of the distinction until after the article in Ideas Magazine was published, and discussed the difference in two subsequent rewrites of the article.¹ Defendant contends that the subject statements did not refer specifically to the plaintiff or its product, they were not published with known falsity or reckless disregard for the truth, and that they are not capable of the alleged defamatory construction.

The Court views the issues to be:

(1) the Virginia standard of liability for defamation of character or reputation;

(2) the Virginia standard of liability for product disparagement; and

(3) whether these statements are capable of any defamatory meaning.

1. Defamation of Character or Reputation:

The tort of defamation concerns an invasion of the interest in reputation and good name, and provides protection for this "relational" interest. False statements which tend to injure reputation, "diminish the esteem, respect, goodwill or confidence in which the plaintiff is held, or to excite adverse, derogatory or unpleasant feelings or opinions against him" are seen as defamatory. Prosser, Law of Torts, § 111 (4th ed. 1971) ("Prosser").

A corporation may be defamed by statements which cast aspersion on its honesty, credit, efficiency or its prestige or standing in its field of business. Prosser, § 111; Restatement (Second) of Torts, §§ 561, 573 (1976). Cf. Arctic Company, Ltd. v. Loudoun Times Mirror, 624 F.2d 518 (4th Cir. 1980), cert. den. 449 U.S. 1102, 101 S.Ct. 897, 66 L.Ed.2d 827 (1981) (company as plaintiff). Thus, plaintiff's allegation that the subject statements defamed its name presents a cognizable defamation claim.

Of course, the plaintiff may not bring a defamation action unless the subject statements refer to it, i. e. unless they were "of and concerning" the plaintiff. Ewell v. Boutwell, 138 Va. 402, 121 S.E. 912 (1924). The Ewell court set up the following rules:

If the class or group involved is a very large one, and there is little or nothing which applies to the particular person who brings the action, his right of recovery will generally be denied.... On the other hand, if the language employed is directed towards a comparatively small or restricted group of persons, then any member thereof may sue.

121 S.E. at 914.

Plaintiff has claimed that the group adversely affected by defendant's statements, those who make and sell air-insulated triple-wall chimneys, is a comparatively small group, entitling it to sue as a member of that group. The record, regrettably, does not reflect the size of this class of manufacturers. It suffices for the purpose of this motion that the group appears to be a relatively small one. Determination of the exact size of the class must await the development of further evidence.

Under Virginia common law, defamatory words which prejudiced a person in his or her profession or trade were actionable per se, raising a prima facie implication of malice on the part of the author, as well as a conclusive presumption of damage to the plaintiff, from the mere fact of publication. No further proof of malice or injury was required beyond proof of the publication itself. Shupe v. Rose's Stores, Inc., 213 Va. 374, 192 S.E.2d 766 (1972); Story v. Norfolk-Portsmouth Newspaper, Inc., 202 Va. 588, 118 S.E.2d 668 (1961). Under this strict liability standard, "malice" was merely a fictional element of the plaintiff's cause of action. Prosser, supra, §§ 112, 113. The plaintiff was required to plead the falsity of the statements, but not to prove it. Once the fact of the publication of defamatory statements was shown, the plaintiff was entitled to a verdict, unless the defendant enjoyed a privilege or immunity, or was able to establish an affirmative defense, such as truth. See Story, supra; Eldredge, The Law of Defamation, § 6 (1978); Eaton, The American Law of Defamation Through Gertz v. Robert Welch, Inc. and Beyond: An Analytical Primer, 61 Va.L.Rev. 1349, 1353 (1975).

The Supreme Court of the United States has played a role, however, in the development of the elements of a defamation action since its decision in New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964), in order to define the effect on these state laws of the First Amendment's protection of free speech and press.

New York Times established the rule that a public official may not recover damages for a defamatory falsehood relating to his official conduct unless he proves, by clear and convincing evidence, that the statement was made with "actual malice," i. e., with knowledge that it was false or with reckless disregard of whether or not it was false. This constitutional privilege was extended to defamatory criticism of public figures in Curtis Publishing Co. v. Butts, 388 U.S. 130, 87 S.Ct. 1975, 18 L.Ed.2d 1094 (1967).

In Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974), the Court refused to extend the privilege to criticism of issues of "general or public interest." Where the defamatory falsehoods, held the Court, injured a private individual, not a public official or figure, the states are free to define for themselves the appropriate standard of liability, so long as they do not impose liability without fault. After this wholesale rejection of common law rules of strict liability, the Court ruled that a state may not...