Gregory v. McDonnell Douglas Corp.

• Decision Date: 23 July 1976
• Citation: 17 Cal.3d 596,131 Cal.Rptr. 641,552 P.2d 425
• Court: California Supreme Court
• Parties: , 552 P.2d 425, 92 L.R.R.M. (BNA) 3638, 79 Lab.Cas. P 53,845 Clarence GREGORY et al., Plaintiffs and Appellants, v. McDONNELL DOUGLAS CORPORATION et al., Defendants and Respondents. L.A. 30609.

Page 641

131 Cal.Rptr. 641

17 Cal.3d 596, 552 P.2d 425, 92 L.R.R.M. (BNA) 3638,

79 Lab.Cas. P 53,845

Clarence GREGORY et al., Plaintiffs and Appellants, v. McDONNELL DOUGLAS CORPORATION et al., Defendants and Respondents.

L.A. 30609.

Supreme Court of California.

July 23, 1976.

Cantrell & Green and Richard J. Cantrell, Long Beach, for plaintiffs and appellants.

Munger, Tolles & Rickershauser, James N. Adler and Jeffrey I. Weinberger, Los Angeles, for defendants and respondents.

RICHARDSON, Justice.

The case concerns a defamation action arising from a labor dispute. We consider whether two written statements issued in connection with the dispute are libelous.

The action was brought by the president and vice president of a union, United Aerospace Workers Local 148 (Local 148), against the employer of the members of this union, McDonnell Douglas Corporation (the company) and other defendants whose capacities were not described in the complaint. Plaintiffs alleged that the communications in question contained defamatory statements and were published by defendants with knowledge of their falsity and with a reckless disregard as to their truth. Defendants demurred on the ground that both federal and state law broadly protect from liability for defamation persons making such statements within the context of a labor dispute. Defendants also asserted that the complaint was defective because it failed to plead innuendo, inducement and special damages. The trial court sustained the demurrer without leave to amend, and judgment was entered in favor of defendants. We will affirm the judgment.

The underlying labor dispute arose after a 17 cents per hour wage increase had been negotiated between the company and its employees, including the members of Local 148. This increase was initially disallowed under the Economic Stabilization Act, but the ruling was subsequently reversed, whereupon the Cost of Living Council issued guidelines to govern the retroactive payment of the pay raise. Disagreements between the employer and employees arose as to the implementation of these guidelines, however, and the company refused to make payments to any employees until all of its unions had entered into agreements concerning the manner of implementation. Before Local 148 reached such an agreement, both the company and the union leadership distributed various written communications to members of Local 148 and their families. The union released information opposing the company's position regarding the retroactive payments. In response, the company issued two statements, a bulletin of March 29, 1974, and a letter of April 23, 1974, which statements are the subjects of the libel action.

The bulletin of March 29, 1974, reads in part: 'The Company has made every effort to reach . . . (an) understanding with officials of UAW Local #148 and we are seriously concerned with their apparent eagerness to prevent eligible employes from receiving their approved payments in a timely fashion. ( ) We believe, and think most of you will agree, that after all of the lengthy legal processes which have preceded authorized payment, it is time to consider the wishes of each employe and not the political position of local union leaders and those who aspire to be leaders. It is difficult to understand why the President and Vice President of UAW Local #148 have consistently opposed the effort to settle this issue and now that a final decision is at hand their absolute refusal to cooperate in expediting payment. ( ) The payment to eligible employes is far more important than the political aspirations and personal ambitions of local union leaders who apparently are willing to sacrifice such payment so as to demonstrate 'union leadership."

The letter of April 23, 1974, states in pertinent part: 'You may be assured that this company was the first company to agree with its major unions, including the UAW, as to how and what would be paid in a General agreement reached in May of 1973. It is, indeed, unfortunate that our employes have had to wait so long because of apparent self-interests of a few leaders within UAW Local 148. Apparently there were some internal politics within Local 148 and other areas of the UAW which certain individuals were using to seek personal gain and political prestige rather than to serve the best interests of the members they were supposed to represent. Hence, the delay in arriving at the final Supplemental Agreement.'

Resolution of the major issue raised by defendants fully disposes of the case before use. This issue concerns the nature and scope of the remedy for allegedly defamatory statements published in the context of a labor controversy.

We note initially that libel actions for publications issued during labor disputes are not totally foreclosed by either state or federal law. Such publications do, however, receive special safeguards. California courts early extended constitutional protection to statements relating to labor disputes so long as they are not made maliciously. (Emde v. San Joaquin etc. Council (1943) 23 Cal.2d 146, 154, 143 P.2d 20; Di Giorgio Fruit Corp. v. AFL--CIO (1963) 215 Cal.App.2d 560, 568, 30 Cal.Rptr. 350.) The United States Supreme Court has acted in a similar vein. In Linn v. Plant Guard Workers (1966) 383 U.S. 53, 86 S.Ct. 657, 15 L.Ed.2d 582, the court applied the standard of New York Times Co v. Sullivan (1964) 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686, formulated to protect statements made regarding public officials, to statements issued during labor controversies. This standard, requiring a determination of whether a statement was made 'with knowledge that it was false or with reckless disregard of whether it was false or not' (New York Times, p. 280, 84 S.Ct. p. 726), was adopted in the labor context not because the court felt the federal Constitution required it, but because of the policy of the Labor Management Relations Act (29 U.S.C. § 141 et seq.) in encouraging free debate on issues dividing labor and management. The court in Linn concluded that this policy could best be accommodated to the state's interest in protecting its citizens from malicious libels by adopting the New York Times standard. (Linn, 383 U.S. p. 65, 86 S.Ct. 657; see Letter Carriers v. Austin (1974) 418 U.S. 264, 270--273, 94 S.Ct. 2770, 41 L.Ed.2d 745.) The complaint before us fully satisfies this standard by properly alleging reckless and knowing falsehood.

An essential element of libel, and it is on this point that the complaint is fatally defective, is that the publication in question must contain a false statement of Fact. As expressed by the United States Supreme Court: 'The Sine qua non of recovery for defamation in a labor dispute under Linn is the existence of falsehood. . . . Before the test of reckless or knowing falsity can be met, there must be a false statement of fact.' (Letter Carriers v. Austin, supra, 418 U.S. 264, at pp. 283--284, 94 S.Ct. at p. 2781, citation omitted.) This requirement, which is by no means limited to the labor dispute context, is constitutionally based. The reason for the rule, well stated by the high court, is that 'Under the First Amendment there is no such thing as a false idea. However pernicious an opinion may seem, we depend for its correction not on the conscience of judges and juries but on the competition of other ideas.' (Gertz v. Robert Welch, Inc. (1974) 418 U.S. 323, 339--340, 94 S.Ct 2997, 3007, 41 L.Ed.2d 789, fn. omitted; see also In re Blaney (1947) 30 Cal.2d 643, 649, 184 P.2d 892.) In this context courts apply the Constitution by carefully distinguishing between statements of opinion and fact, treating the one as constitutionally protected and imposing on the other civil liability for its abuse.

The critical determination of whether the allegedly defamatory statement constitutes fact or opinion is a question of law. (See Letter Carriers, supra; Greenbelt Pub. Assn. v. Bresler (1970) 398 U.S. 6, 90 S.Ct. 1537, 26 L.Ed.2d 6; Emde v. San Joaquin County etc. Council, supra, 23 Cal.2d 146, 143 P.2d 20.) The distinction frequently is a difficult one, and what constitutes a statement of fact in one context may be treated as a statement of opinion in another, in light of the nature and content of the communication taken as a whole. Thus, where potentially defamatory statements are published in a public debate, a heated labor dispute, or in another setting in which the audience may anticipate efforts by the parties to persuade others to their positions by use of epithets, fiery rhetoric or hyperbole, language which generally might be considered as statements of fact may well assume the character of statements of opinion.

Thus, in Greenbelt Pub. Assn. v. Bresler, supra, 398 U.S. 6, 90 S.Ct. 1537, 26 L.Ed.2d 6, for example, the United States Supreme Court acknowledged that use of the word 'blackmail' Could in some circumstances constitute libel; it held, however, that its use as descriptive of plaintiff's negotiating position in the context of the particular circumstances involved in that case was not libelous. (Pp. 13--14, 90 S.Ct. 1537.) Similarly, in Letter Carriers v. Austin, supra, 418 U.S. 264, 94 S.Ct. 2770, 41 L.Ed.2d 745, it was held that the publication of Jack London's definition of 'scab,' containing the phrase "traitor to his God, his country, his family and his class" and other words suggesting that plaintiffs had 'rotten principles' and 'lacked character,' did not constitute libel. 'Such words were obviously used . . . in a loose, figurative sense to demonstrate the union's strong disagreement with the views of those workers who oppose unionization. Expression of such an opinion, even in the most pejorative terms, is protected under federal labor law.' (P. 284, 94 S.Ct. p. 2781.) The high tribunal, reversing a state court injunction of union picketing, stated in Cafeteria Union v. Angelos (1943) 320 U.S. 293, 64 S.Ct. 126, 88 L.Ed. 58, that '....