Insull v. New York World-Telegram Corporation

• Decision Date: 08 April 1959
• Docket Number: 58 C 151.,58 C 150,No. 58 C 108,58 C 108
• Citation: 172 F. Supp. 615
• Court: U.S. District Court — Northern District of Illinois
• Parties: Samuel INSULL, Plaintiff, v. NEW YORK WORLD-TELEGRAM CORPORATION, a corporation, Roy W. Howard, Memphis Publishing Company, a corporation, Edward J. Meeman, Indianapolis Times Publishing Company, a corporation, Walter Leckrone, E. W. Scripps Company, a corporation, Louis B. Seltzer, Dick Thornburg, Herald-Post Publishing Co., a corporation, Edward M. Pooley, Knoxville News-Sentinel Publishing Company, a corporation, Loye W. Miller, Pittsburgh Press Company, a corporation, Weidman W. Forster, New Mexico State Tribune Company, a corporation, Dan Burroughs, Charles T. Lucey, Arthur M. Schlesinger, Jr., Houghton Mifflin Company, a corporation, Kenneth E. Trombley, and Harper & Brothers, a corporation, Defendants.

172 F. Supp. 615

Samuel INSULL, Plaintiff, v. NEW YORK WORLD-TELEGRAM CORPORATION, a corporation, Roy W. Howard, Memphis Publishing Company, a corporation, Edward J. Meeman, Indianapolis Times Publishing Company, a corporation, Walter Leckrone, E. W. Scripps Company, a corporation, Louis B. Seltzer, Dick Thornburg, Herald-Post Publishing Co., a corporation, Edward M. Pooley, Knoxville News-Sentinel Publishing Company, a corporation, Loye W. Miller, Pittsburgh Press Company, a corporation, Weidman W. Forster, New Mexico State Tribune Company, a corporation, Dan Burroughs, Charles T. Lucey, Arthur M. Schlesinger, Jr., Houghton Mifflin Company, a corporation, Kenneth E. Trombley, and Harper & Brothers, a corporation, Defendants.

Nos. 58 C 108, 58 C 150, 58 C 151.

United States District Court N. D. Illinois, E. D.

April 8, 1959.

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Thompson, Raymond, Mayer, Jenner & Bloomstein, Chicago, Ill., for plaintiff.

Elmer Gertz, Bell, Boyd, Marshall & Lloyd, Kirkland, Ellis, Hodson, Chaffetz & Masters, Chicago, Ill., for defendants.

MINER, District Judge.

These are three actions to recover compensatory and punitive damages for alleged libels published by ten corporate and twelve individual defendants. They were originally filed as one action in the Circuit Court of Cook County on December 30, 1957 (Law No. 57 C 18759), and subsequently removed to this Court by defendants pursuant to 28 U.S.C. (1952 ed.) § 1441.

Plaintiff is an Illinois resident. No defendant is a resident of Illinois. One corporate defendant (Houghton Mifflin Company) is licensed to do business in Illinois, and service was had on its registered agent in accordance with Section 111 of the Illinois Business Corporation Act (Ill.Rev.Stat. (1957), c. 32, § 157.111).¹ All other defendants were served with process at their respective places of residence under Section 16(1, 2) of the Illinois Civil Practice Act (Ill. Rev.Stat. (1957), c. 110, § 16(1, 2)).²

The complaint is in six counts. Counts 1 and 4 complain of an alleged libel promulgated by New York World-Telegram Corporation, a New York corporation and resident, and Roy W. Howard, a New York resident-citizen and editor of "The New York World-Telegram and The Sun" published by said corporation; Memphis Publishing Company, a Delaware corporation operating in Memphis, Tennessee, and Edward J. Meeman, a Tennessee resident-citizen and editor of "The Memphis Press-Scimitar" published by said corporation; Indianapolis Times Publishing Company, an Indiana corporation and resident, and Walter Leckrone, an Indiana resident-citizen and editor of "The Indianapolis Times" published by said corporation; E. W. Scripps Company, an Ohio corporation and resident, Louis B. Seltzer, an Ohio resident-citizen and editor of "The Cleveland Press" published by said corporation, and Dick Thornburg, an Ohio resident-citizen and editor of "The Cincinnati Post" published by said corporation; Herald-Post Publishing Company, a Texas corporation and resident, and Edward M. Pooley, a Texas resident-citizen and editor of "The El Paso Herald-Post" published by said corporation; Knoxville News-Sentinel Company, a Tennessee corporation and resident, and Loye W. Miller, a Tennessee resident-citizen and editor of "The Knoxville News-Sentinel" published by said corporation; Pittsburgh Press Company, a Pennsylvania corporation and resident, and Weidman W. Forster, a Pennsylvania resident-citizen and editor of "The Pittsburgh Press" published by said corporation; New Mexico State Tribune Company, a New Mexico corporation and resident, and Dan Burrows, a New Mexico resident-citizen and editor of "The Albuquerque Tribune" published by said corporation; and Charles T. Lucey, a Maryland resident-citizen employed as a staff writer by the so-called Scripps-Howard Newspaper Alliance of Washington, D. C.³

Both counts refer to an article written by defendant Lucey which appeared in the October 8, 1957, editions of the newspapers published and edited by the Scripps-Howard defendants, the pertinent excerpt being:

"Some of labor's entrenched leaders have been getting away with racketeering practices of a kind that sent the Samuel Insulls and Richard Whitneys to jail when big business tycoons were cut down to size in the 1930's".

Count 1 demands recompense for injury to plaintiff's "good name, reputation, trade, business and occupation". Count 4 deals with defamation of "the memory of plaintiff's father, all to the great damage and injury of plaintiff."

The Scripps-Howard defendants have filed a motion to dismiss the cause as to them for lack of jurisdiction over their persons. In support, they have submitted affidavits by the defendant editors⁴ showing:

(a) the state of incorporation and residence and the principal place of business of each corporate defendant, none being within Illinois;

(b) the place of printing of the newspaper published by each corporate defendant, none being within Illinois;

(c) that any Illinois distribution of newspapers published by each corporate defendant is always subsequent to distribution in the city and state where printed;

(d) the number and destination of, and revenue from, copies of each newspaper mailed or shipped into Illinois each day;

(e) that where copies are destined for newsstands or wholesale distributors within Illinois, neither the corporate defendants nor the newspapers published by them exercise any control or supervision over the proprietors thereof;

(f) that payments from Illinois subscribers, newsstands and wholesale distributors are received by mail at the places of business of the respective corporate defendants;

(g) that no corporate defendant or newspaper published by it is licensed or authorized to do business in Illinois, has a registered agent in Illinois, maintains any office in Illinois or is listed in any Illinois telephone or business directory;

(h) that no corporate defendant or newspaper published by it employs as its agents any reporters, advertising solicitors or other persons who are permanently located within Illinois;

(i) that no corporate defendant or newspaper published by it owns or maintains any assets within Illinois in the nature of realty or personalty and none has a bank account within Illinois;

(j) that no defendant affiant personally owns or operates any business within Illinois, and that on and since December 30, 1957, each defendant affiant has resided in a state other than Illinois.⁵

Affidavits have also been obtained from officers, managers or proprietors of the wholesale distributor and newsstands in Illinois which receive copies of the newspapers published and edited by the Scripps-Howard defendants.⁶ In substance, the showing made by these affidavits is that the said Illinois distributor and newsstands:

(a) are operated in such a manner as their directors, officers, managers or proprietors alone determine;

(b) are not the agents, employees or servants of any of the Scripps-Howard defendants;

(c) purchase from the Scripps-Howard corporate defendants, as independent contractors for their own account, copies of newspapers published by the said defendants;

(d) receive said newspapers by mail or rail from outside Illinois;

(e) make payment for said newspapers by mail to the Scripps-Howard defendants or their agents who are located outside Illinois;

(f) make no newspaper purchases, either directly or indirectly, from any of the Scripps-Howard defendants other than the one or several of said defendants specifically identified in each respective affidavit, or other than through an Illinois distributor;

(g) respectively sell said newspapers to newsstands or to individual purchasers, and do not account to any of the Scripps-Howard defendants for any of the proceeds and avails of said sales.

Said defendants have attached to their supporting brief three tables, each showing by average number of copies, average revenue and percentage of circulation the extent of Illinois distribution of each of the newspapers published by the Scripps-Howard corporate defendants. Table A demonstrates that Illinois subscribers receive daily a minimum of 6 to a maximum of 37 copies of each newspaper, that the daily revenue averages a minimum of 12 cents to a maximum of $4.44, and that the daily Illinois circulation comprises a minimum of .006½% to a maximum of .03% of that for each newspaper. Table B, "Defendants' Newspapers Mailed Daily to Independent Newsdealers in Illinois", and Table C, "Defendants' Newspapers Mailed Daily to an Independent Wholesaler in Illinois", demonstrate that Illinois circulation by these methods is even more minimal.

Counts 2 and 5 demand judgment against Arthur M. Schlesinger, Jr., alleged by the complaint to be a resident of Massachusetts, and Houghton Mifflin Company, of Boston, Massachusetts.⁷ The complaint avers, and Houghton Mifflin Company does not deny, that it is authorized to transact business in Illinois.

Both counts refer to a book, "The Crisis of the Old Order (The Age of Roosevelt)", written by defendant Schlesinger and published by defendant Houghton Mifflin Company in January, 1957. Excerpts which plaintiff deems libelous are:

"Insull's ideas extended far beyond his own utilities system. From his estate in Libertyville, he dominated Chicago, bribing the state utilities commission, affably encouraging the corruptions of local politics, even building an opera house." Chapter 15, page 120.

"If Kreuger, the Match King, was a gigantic thief, what Titan—or even Tycoon—could be trusted in the future? In Chicago, investors were already haunting the offices of Samuel Insull, demanding that he make good on his worthless stock. Protected night and day by thirty-six personal bodyguards, Insull, who believed in his own magic, tried to save his crumbling estate through new loans and new manipulations. But his fantastic improvisation was slowly dematerializing before

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