Hakim v. O'Donnell

• Decision Date: 25 June 2014
• Docket Number: No. 49,139-CA,No. 49,140-CA,49,139-CA,49,140-CA
• Parties: N. EDWARD HAKIM Plaintiff-Appellant v. DAISY O'DONNELL Defendant-Appellee N. EDWARD HAKIM Plaintiff-Appellant v. NEXSTAR BROADCASTING, INC. D/B/A KTVE NBC 10 Defendant-Appellee
• Court: Court of Appeal of Louisiana — District of US

N. EDWARD HAKIM Plaintiff-Appellant v. DAISY O'DONNELL Defendant-AppelleeN. EDWARD HAKIM Plaintiff-Appellant v. NEXSTAR BROADCASTING, INC. D/B/A KTVE NBC 10 Defendant-Appellee

No. 49,139-CA

No. 49,140-CA

COURT OF APPEAL SECOND CIRCUIT STATE OF LOUISIANA

Dated: June 25, 2014

Judgment rendered June 25, 2014. Application for rehearing may be filed within the delay allowed by art. 2166, La. C.C.P.

Appealed from the

Fourth Judicial District Court for the

Parish of Ouachita, Louisiana

Trial Court Nos. 2012-1348 and 2012-1350

Honorable Daniel J. Ellender, Judge

JOE D. GUERRIERO

Counsel for Appellant

N. Edward Hakim

JONES WALKER LLP

By: A. Justin Ourso III

Counsel for Appellees

Daisy O'Donnell and Nexstar

Broadcasting, Inc. d/b/a KTVE

Before WILLIAMS, CARAWAY and GARRETT, JJ.

GARRETT, J.

Immediately after a federal court proceeding in Monroe, Louisiana, in a highly publicized criminal matter, a television reporter approached one of the defendants in that case and asked the following question:

Eddie Hakim gave testimony to make his IRS investigation go away. Is it enough to acquit you?

Following the broadcast of this exchange, the plaintiff in the present matter, N. Edward Hakim, the key government witness in the criminal trial, brought suit for defamation against the reporter, Daisy O'Donnell, and her employer, Nexstar Broadcasting, Inc., d/b/a KTVE NBC 10 ("Nexstar"). For the reasons given below, we affirm the ruling of the trial court which granted summary judgment in favor of the defendants and dismissed the case.

FACTUAL AND PROCEDURAL BACKGROUND

Hakim is a businessman in Monroe who became involved in the bribery of two Monroe City Council members, Robert E. "Red" Stevens and Arthur Gilmore, Jr. Hakim began paying bribes to the councilmen in 2006. In early 2008, he contacted the FBI. Hakim aided the FBI in obtaining audio and videotape recordings of the transactions from early 2008 until late 2009.

In October 2009, Blake Deshotels, a former employee of Hakim, went to the IRS and alleged that Hakim committed tax fraud by hiding assets from the government and committing criminal tax violations. In November 2009, a criminal IRS investigation of Hakim was opened by the IRS, but Hakim was not notified of the investigation. The investigation was closed in May 2010. Ordinarily, the matter would have been referred for a civil IRS investigation to determine whether to conduct an audit. However, IRSSpecial Agent Darrin Heusel, at the instruction of his supervisor, held the case in abeyance due to Hakim's cooperation in the case against Stevens and Gilmore.

In June 2010, Stevens and Gilmore were indicted for violating the federal Racketeer Influenced and Corrupt Organizations Act ("RICO"), by taking bribes in connection with their positions as city councilmen, and the Hobbs Act, which makes it illegal for public officials to use the power of their offices to extort money. The case was tried in federal court in 2011. Hakim was the main witness for the prosecution. Stevens and Gilmore were convicted by a jury on May 10, 2011.

Near the end of the trial, Deshotels informed counsel for Stevens that he had complained to the IRS regarding Hakim and an investigation was opened, but later closed by the IRS. Defense counsel for Stevens and Gilmore believed that they should have been informed of the IRS investigation in order to question Hakim about it during the trial. In June 2011, various post-trial motions, including motions for new trial, directed verdict, and for acquittal, were filed by Stevens and Gilmore based upon the Deshotels information.

The motions were scheduled for consideration by the federal court on August 15, 2011. Before court convened, the Assistant United States Attorneys and defense counsel met for an extended period of time in chambers with the federal judge who had presided over the defendants' jury trial to discuss evidentiary issues. When the matter was taken up in open court, an ordinary evidentiary hearing was not conducted. Instead, theattorneys for the prosecution and the defendants proceeded to describe a lengthy list of exhibits, affidavits, documents, and stipulations that were being submitted to the federal court for its consideration. The parties also asked to submit additional briefs to the court in connection with the filings.

Counsel for one of the defendants stated that his client wished to stipulate that:

[I]f Agent Heusel were called to testify, that he would testify that his supervisor informed him that they were not going to refer Mr. Hakim's case to the civil section of the IRS for a possible audit since he was a cooperating witness with the government.

The Assistant United States Attorney agreed with the stipulation stating:

If Agent Heusel had been called to testify, that's what he would testify to.

The stipulation concerning Agent Heusel constituted only part of the very complicated matter being submitted to the federal district court.

O'Donnell had covered the trial of Stevens and Gilmore, was present in court on August 15, 2011, and heard the above stipulation. Immediately after court adjourned, she approached Stevens, and was filmed asking him:

Eddie Hakim gave testimony to make his IRS investigation go away. Is it enough to acquit you?

Stevens responded:

It's up to a judge. A judge will make that call.

Later that day, Nexstar broadcast a live report by O'Donnell on its television station, KTVE. The report included the video of O'Donnell's interaction with Stevens.

On September 14, 2011, the federal court issued a 43-page opinion granting a new trial to Stevens and Gilmore. Although this ruling was later reversed by the same judge in January 2012, this sequence of events demonstrates the complex legal issues that were at issue.

In April 2012, Hakim filed separate defamation suits against O'Donnell and Nexstar based upon the statement made in the news broadcast in August 2011. The cases were consolidated by the lower court.

We note that, in his petitions, the plaintiff failed to quote the entire inquiry made by O'Donnell to Stevens which places it in the proper context. Rather, he alleged, "Plaintiff shows that the Defendant reported on the trial of two Monroe City Councilmen, which began in April of 2011, and reported on or about August 15, 2011 by erroneous information about Plaintiff to [its] entire viewing audience on said viewing date, namely by stating, 'Eddie Hakim gave his testimony in exchange for his IRS investigation going away.'" The plaintiff did not set forth in his petition that the statement also included the question by O'Donnell to Stevens, "Is it enough to acquit you?" or Stevens' response, "It's up to a judge. A judge will make that call."

Hakim asserted that he did not know of the IRS investigation at the time he gave his testimony. He claimed that O'Donnell failed to properly investigate the situation to ascertain the truth and, with reckless abandon, made the statement which caused the viewing public to think that there was an arrangement between Hakim and the United States Attorney's office for Hakim to trade his testimony to relieve himself of possible legalconsequences. He alleged that O'Donnell was an agent of Nexstar who was acting in the course and scope of her employment when she made the statement. He claimed that the airing of the false statement constituted defamation and/or slander which damaged his reputation. He sought to recover monetary damages.

The defendants answered, admitting that O'Donnell made the statement, but asserting that the words were taken out of context of the full news report that was broadcast. The defendants denied that the statement was made with any knowledge of its falsity, that it was defamatory, or that Hakim's reputation was harmed by the statement.

As affirmative defenses, the defendants asserted that the statement was not defamatory as a matter of law because it was broadcast as a report on newsworthy accusations or statements made during a criminal proceeding and was not susceptible to defamatory interpretation. They argued that the news report was capable of an innocent construction because the statement complained of by the plaintiff was a reasonable inference drawn by O'Donnell from newsworthy accusations or statements made during a criminal proceeding. The defendants asserted that the statement was conditionally privileged as a fair and substantially accurate news report on a public judicial proceeding and on a public figure. They claimed the statement was not broadcast with any knowledge that it was false or with reckless disregard for its truth or falsity. The defendants maintained that all inferences made were reasonable and Hakim had not been damaged.

In April 2013, the defendants filed a motion for summary judgment. They contended that O'Donnell's statement may have contained a mistaken conclusion based upon the stipulation she had heard in court since Hakim did not know he was being investigated by the IRS. They claimed entitlement to summary judgment because the statement was a reasonable inference and an innocent construction of what was heard in court and it was substantially true. They contended that they were entitled to the conditional privilege which attaches to the fair report of governmental proceedings, and the statement was not made with knowledge of falsity or reckless disregard of any falsity.

A hearing was held on the motion for summary judgment on September 5, 2013. At the conclusion of the hearing, the trial court provided extensive oral reasons for its ruling. The trial court found that a conditional privilege applied in this situation and that the Louisiana Supreme Court case of Kennedy v. Sheriff of East Baton Rouge, 2005-1418 (La. 7/10/06), 935 So. 2d 669, provided the applicable legal analysis. Based upon the stipulation O'Donnell heard in court, the trial court reasoned that a lay person could make the reasonable conclusion that there was some type of quid pro quo for Hakim's testimony. The trial court observed...