Johnston v. Cartwright, 17898

CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)
Citation355 F.2d 32
Docket NumberNo. 17898,17913.,17898
PartiesRobert W. JOHNSTON, Appellant, v. H. G. CARTWRIGHT, Appellee. KIOWA CORPORATION, Walter Brown and H. G. Cartwright, Appellants, v. Robert W. JOHNSTON, Appellee.
Decision Date25 January 1966

355 F.2d 32 (1966)

Robert W. JOHNSTON, Appellant,
H. G. CARTWRIGHT, Appellee.

KIOWA CORPORATION, Walter Brown and H. G. Cartwright, Appellants,
Robert W. JOHNSTON, Appellee.

Nos. 17898, 17913.

United States Court of Appeals Eighth Circuit.

January 25, 1966.

355 F.2d 33

Lex Hawkins, Des Moines, Iowa, for Robert W. Johnston.

Harry Druker, Cartwright, Druker, Ryden & Fagg, Marshalltown, Iowa, for appellants Kiowa Corp. and Walter Brown.

Burns H. Davison, II, John Paul Jones and W. C. Hoffmann, Des Moines, Iowa, for appellant H. G. Cartwright.

Before VOGEL, Chief Judge, and BLACKMUN and GIBSON, Circuit Judges.

BLACKMUN, Circuit Judge.

This diversity action for general and punitive damages for malicious defamation was instituted by Robert W. Johnston against Kiowa Corporation, Walter Brown, and H. G. Cartwright. Kiowa is engaged in the die-casting business in Marshalltown, Iowa. Brown is its executive vice-president. Cartwright is Kiowa's attorney. He also represents the Marshalltown Times-Republican, a newspaper of general circulation. The plaintiff Johnston is regional director of the UAW. His region consists of the state of Iowa and other territory. The allegedly

355 F.2d 34
defamatory material appeared in the newspaper's issues of June 9 and June 11, 1964

Kiowa and Brown in due course filed a joint answer to the complaint. Cartwright, however, moved that the action as to him be dismissed. Judge Stephenson granted that motion on September 24, 1964. He did so on the ground of an attorney's absolute privilege. Judgment of dismissal as to Cartwright was entered accordingly.

The plaintiff then moved, evidently pursuant to Rule 41(a) (2), Fed. R. Civ. P., that his complaint against Kiowa and Brown be dismissed without prejudice. This motion was granted at the plaintiff's costs on October 22.

Thereupon, the plaintiff perfected his appeal to this court from the order and judgment of dismissal as to the defendant Cartwright. This is our No. 17,898. Cartwright moved to dismiss that appeal on the ground that, under Rule 54(b), the order and judgment lacked finality. We held otherwise and denied the motion. Johnston v. Cartwright, 344 F.2d 773 (8 Cir. 1965).

Kiowa, Brown and Cartwright, on their part, have appealed from the district court's dismissal of the action as to Kiowa and Brown. This is our No. 17,913.

Although the two appeals have been separately briefed, we deal with both in this opinion.

The plaintiff's appeal

The lawsuit emerged from a UAW campaign to replace another union which had represented Kiowa's employees. The UAW prevailed in a labor board election held June 10, 1964. The day before that election Kiowa placed an advertisement in the Times-Republican in the form of a letter to its employees and over the name of Brown, acting for the corporation. That letter contained the following statement:

"The union has told you that if the union wins, they will get you a `fully funded pension plan\' Guaranteed by the UAW. This means that the UAW will hold the funds and make sure you get it when you retire. In Rockford, Illinois, the regional director of the UAW had a 50¢-a-month special assessment on all UAW members in the area, to be used to build a UAW building. When time came to use the $387,000 to start the building, they found the cupboard empty.
"The U. S. Government in 1962 stepped in and indicted the UAW regional director. In 1963, he was tried, found guilty, and U. S. District Judge Sam Perry put him away for a few years.
"Are these the kind of union officials you can trust to hold money for your retirement in 10, 15, or 20 years?"

The plaintiff Johnston, who was the union's regional director, was not, in fact, the subject of the criminal proceeding before Judge Perry. The defendant there was a different person who, apparently, had been a subregional director of the UAW.

On June 11, the day following the election, an article appeared in the Times-Republican, reading in part as follows:

"Introducing a discordant note, Carl Dahl, subregional director for the UAW, congratulated Kiowa workers on their `wise decision\' and added, `It was unfortunate that the company had to resort to falsehoods and slanders to keep the workers from voting for a union of their choice.\'
"`Accusing the regional director (of the UAW) of embezzling funds\' is `definitely a false statement,\' Dahl said. `The company may be asked to prove this because it is libelous.\'
* * * * * *
"`The story came to us on pretty good authority,\' H. G. Cartwright, attorney for Kiowa, said Thursday morning, `I\'m not at liberty to divulge where it came from.\'"

In a deposition taken by the plaintiff from Cartwright, the latter testified that

355 F.2d 35
he has practiced labor law for over 20 years; that Kiowa is among his labor clients; that he has not appeared in state or federal courts in Iowa on labor matters for these clients; that his work has been before administrative boards and tribunals; that he has represented the newspaper for 39 years; that he has come in contact with the UAW in his work; that, although he has represented Kiowa since the middle 40's, the first time he represented it in any labor matter regarding the UAW was "before June of 1964"; that he saw the advertisement of June 9 before it was given to the paper and knew it was going to be published; that at that time he represented the newspaper; that the paper, however, "did not contact me personally regarding any legal aspects of this particular ad before it was published, as an attorney client relationship"; that he did not make any investigation regarding the factual material in the ad; that the article in question was composed by a public relations director in Chicago; that "we accepted his versions of these matters as true"; that he had not known this man or anything about his background, other than what was told him by Kiowa officials; that prior to the June 9 publication he did not know who the regional director of the UAW was; that on June 10 or 11 a reporter got in touch with him by telephone; that he was accurately quoted in the article of June 11; that at the time he made the quoted statement he was not under the impression "that there was any litigation pending regarding the statements"; that, in fact there was no such litigation then pending; that he had not then talked with either Brown or Kiowa about representing them in any libel suit; that he was representing the newspaper on July 13 when it received a letter from Johnston requesting a retraction; that he then made an independent investigation; that he was relying entirely on the Chicago public relations man at the time he made the statement; that if he had had information as to the criminal proceedings, his "statement would have been stronger"; that the paper published a retraction on the front page of its editions of July 23; and that this was done against his advice

If the subject matter has not been preempted by the Labor Management Relations Act, 1947, 29 U.S.C. § 141, et seq.,* Iowa law, of course, controls the determination of the merits of this diversity case. The Supreme Court of Iowa, in two opinions, has clearly enunciated the State's general law as to privileged communications and presents factual precedent which is helpful in the disposition of the plaintiff's appeal. Robinson v. Home Fire & Marine Ins. Co., 242 Iowa 1120, 49 N.W.2d 521 (1951); Mills v. Denny, 245 Iowa 584, 63 N.W.2d 222, 40 A.L.R.2d 933 (1954). These opinions, singly or together, state that the Iowa law of defamation recognizes the existence of privileged communications; that some communications are absolutely privileged; that is, are beyond civil remedy, despite the existence of even actual malice; that others are qualifiedly or conditionally privileged; that "the occasion and the office afford the test"; that "The doctrine of privileged communication is based upon the principle of good public policy"; and that the questions as to whether privilege exists and, if so, as to whether it is absolute or qualified, are for the court. P. 524 of 49 N.W.2d; pp. 224-225 of 63 N.W.2d. There is language which bears upon the question of absolute privilege in judicial proceedings:

"A matter that is reasonably pertinent to the issues is absolutely
355 F.2d 36
privileged whether contained in pleadings, affidavits, statements made by witnesses to counsel before a trial, or made in open court.
* * * * * *
"The basis for the rule * * * has equal application to a situation where an attorney is conferring with a prospective witness. To hold an attorney or witness liable for statements made in a preliminary conference would discourage him from conferring about proposed

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