Lauderback v. American Broadcasting Companies, Inc., 83-2381

• Decision Date: 21 August 1984
• Docket Number: No. 83-2381,83-2381
• Citation: Lauderback v. American Broadcasting Companies, Inc., 741 F.2d 193 (8th Cir. 1984)
• Parties: 10 Media L. Rep. 2241 Garo LAUDERBACK, Appellee, v. AMERICAN BROADCASTING COMPANIES, INC., Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 193

741 F.2d 193

10 Media L. Rep. 2241

Garo LAUDERBACK, Appellee, v.AMERICAN BROADCASTING COMPANIES, INC., Appellant.

No. 83-2381.

United States Court of Appeals Eighth Circuit.

Submitted Feb. 17, 1984.

Decided Aug. 21, 1984.

Stephen F. Avery of Cornwall, Avery, Bjornstad & Scott, Spencer, Iowa, David J. Stein, Milford, Iowa, for appellee.

Don H. Reuben, William J. Campbell, Jr., Mark Sableman, Reuben & Proctor, Chicago, Ill., Iris E. Muchmore, Charles M. Peters, Simmons, Perrine, Albright & Ellwood, Cedar Rapids, Iowa, for appellantAmerican Broadcasting Companies, Inc.

Before LAY, Chief Judge, and HEANEY and BOWMAN, Circuit Judges.

LAY, Chief Judge.

The American Broadcasting Companies, Inc.(ABC), appeals from the denial of its summary judgment motion in a libel action brought by Garo Lauderback.The district court¹ found that material factual issues remained to be resolved and that the record did not support ABC's assertion that the allegedly libelous telecasts were privileged communications.The court certified its order to this court under 28 U.S.C. Sec. 1292(b).Because we conclude that any inferences relating to Lauderback were protected expressions of opinion, we reverse and remand to the district court with directions to grant ABC's motion for summary judgment.

Facts

In 1980, after receiving complaints from senior citizens in Emmet County, Iowa, John Martens, the county attorney, decided to conduct an investigation into fraud in the sale of medical and hospital policies of insurance to senior citizens.Martens wanted to videotape the sales presentations of some insurance agents, allegedly for preservation of evidence to be used in any subsequent proceedings.Martens solicited the aid of ABC and CBS.Charles Thompson, one of the producers of ABC's 20/20 program, eventually agreed to help.Martens also solicited the assistance of a Des Moines television station, WHO-TV, and of Iowa Insurance Commissioner Bruce Foudree who at that time was working on a similar undercover insurance investigation.

Martens and his staff recruited senior citizens to act as "decoys" and to request information from insurance agencies.Martens chose the agencies to be contacted ² and sent letters out in the names of his recruits.One of these letters was sent to Michael Crawford, a general agent who at that time employed Garo Lauderback.³

Crawford sent Lauderback to discuss insurance with Carl and Dagney Matheson, two of Martens's recruits.Martens had arranged for this meeting to be videotaped by ABC's crew.During the course of the presentation, Lauderback made several statements about his insurance policies, some of which were made without knowledge of the subject matter and some of which were admittedly false.

Several weeks before the date on which ABC was to air the videotape on its 20/20 program, Thompson contacted Lauderback to get a statement.This was the first time Lauderback was informed about the videotaping.Thompson later received a phone call from Mrs. Lauderback commenting on her husband's actions subsequent to the videotaping.No further calls were exchanged between Thompson and the Lauderbacks.

ABC aired a portion of the videotape of Lauderback on its May 14, 1981, broadcast of the show 20/20.On June 19, 1981, Lauderback filed suit against ABC alleging that the May 14 broadcast of the show and the next week's show (which also had a report on insurance fraud but did not mention or show Lauderback) libeled him.⁴

During discovery, 12 depositions were taken.On January 12, 1983, ABC filed its motion for summary judgment basing its request on two theories: (1) all the statements of fact made about Lauderback were true and other statements were protected as opinion, and (2) the broadcast was privileged as a report of an official government investigation.The district court denied ABC's motion.The court found that genuine issues of material fact needed to be resolved and that the official report privilege extended only to official actions that have been made a matter of public record.Upon application, the matter was then certified for an interlocutory appeal under Sec. 1292(b) and this court granted the motion.⁵

The relevant portion of the broadcast began with a picture of a newspaper headline which read "Emmet Grand Jury Indicts Two Iowa Insurance Agents."While the headline was on the screen, a voice-over stated: "The fact that most policies do not cover extended nursing home care has received some publicity."The next picture shown was that of Lauderback during which showing the announcer stated: "So the agents just say, 'Oh, it's the other guys who are doing the stealing.' "Following this statement, a portion of the tape made of Lauderback at the Matheson's house was shown.On this tape, Lauderback states that a director of a local nursing home had on another occasion verified that Lauderback's insurance policy would pay for care at the facility.The next segment shows a brief interview with the nursing home director during which he denies ever having spoken to Lauderback.The final reference to Lauderback is a statement by the announcer toward the end of the segment that "Mr. Lauderback is currently under a formal investigation."

The broadcast at several points shows criminal proceedings against other Iowa insurance agents.During the broadcast epithets such as "rotten,""unethical," and "sometimes illegal" are used to describe the practices of agents who sell worthless policies to senior citizens.The agents themselves are referred to as "crooks" and "liars."

On appeal, Lauderback contends that the 20/20 broadcast, on the whole, characterized him as a crook and a liar.Lauderback argues that these characterizations, although untrue, were presented as facts or, alternatively, that they were represented as opinions which appeared to be based on undisclosed facts.Because we conclude that statements made by ABC which related to Lauderback are protected opinion, we reverse the district court's denial of ABC's motion for summary judgment.

Discussion

The traditionally state-regulated area of defamation has in the past 20 years become increasingly dominated by the federal Constitution.With New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686(1964)andGertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789(1974), the United States Supreme Court has declared that First Amendment safeguards are available to media defendants in defamation actions.It is true that not all statements by the media are insulated from attack as defamatory, see, e.g., Time, Inc. v. Firestone, 424 U.S. 448, 96 S.Ct. 958, 47 L.Ed.2d 154(1976); however, the publication of truthful, non-private facts and of pure opinion is protected by the First Amendment.Cf.Gertz v. Robert Welch, Inc., 418 U.S. 323, 339, 94 S.Ct. 2997, 3006, 41 L.Ed.2d 789(1975);Cox Broadcasting Corp. v. Cohn, 420 U.S. 469, 489-90, 94 S.Ct. 2997, 3006, 41 L.Ed.2d 789(1974).

A difficult question is presented when one statement may be interpreted as either fact or opinion.While the right of free speech provides absolute protection to statements which are purely opinions, Gertz v. Welch, 418 U.S. at 339-40, 94 S.Ct. at 3006-07, it is conceded that statements clothed as opinion which imply that they are based on undisclosed, defamatory facts are not protected.This stricture on publication of opinion rests on the assumption that, given all the facts of a situation, the public can independently evaluate the merits of even the most outrageous opinion and discredit those that are unfounded.On the other hand, when an opinion held out for belief is stated so that the average listener would infer that the speaker had an undisclosed factual basis for holding the opinion, the listener does not have the tools necessary to independently evaluate the opinion and may rely on unfounded opinion that defames an individual.Thus, the Constitution contains safeguards which protect both the right to publish opinions and the right of a private individual to be protected from unfounded statements clothed as fact.

Lauderback first contends that ABC's broadcast stated as a fact that he was a criminal or had been indicted on criminal charges.Lauderback apparently asserts that the successive showing of the newspaper headline regarding the indictment of two Iowa insurance agents and then the picture of Lauderback gave rise to the inference that Lauderback himself was one of the indicted agents.However, this purportedly misleading juxtaposition was quickly clarified when the two agents who actually were indicted were named and discussed.Also, at the end of the broadcast, the program's announcer stated that Lauderback was "currently under a formal investigation."We find that the average viewer would conclude from this that Lauderback had not yet been indicted or convicted of a crime.

Lauderback next argues that the "gist" or "sting" of the broadcast was that he was a crook or liar.We agree that, given the broadcast as a whole, Lauderback was portrayed as a less than honest or scrupulous insurance agent.However, we conclude that this portrayal indicated ABC's opinion of Lauderback's dealings and not a bald accusation of criminal activity.⁶

In Lewis v. Time Inc., 710 F.2d 549(9th Cir.1983), the Ninth Circuit was presented with a similar situation.Lewis was a practicing attorney who found himself the subject of a segment of a Time Magazine article.The article, entitled "Those #*Sec.!!!Lawyers," stated in relevant part:

If the legal profession has been reluctant to discipline its shadier practitioners, it has been swift to crack down on anyone threatening to cut fees or reduce business.

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Under these circumstances, it is hardly surprising that some Americans have grown cynical about lawyers--and the law.What is more, every day's newspaper offers up fresh horror stories....Thanks to painfully...