Lewis v. Time Inc.

• Decision Date: 12 July 1983
• Docket Number: No. 82-4026,82-4026
• Citation: 710 F.2d 549
• Parties: 9 Media L. Rep. 1984 Jerome R. LEWIS, Plaintiff-Appellant, v. TIME INCORPORATED, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 549

710 F.2d 549

9 Media L. Rep. 1984

Jerome R. LEWIS, Plaintiff-Appellant, v. TIME INCORPORATED, Defendant-Appellee.

No. 82-4026.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Feb. 15, 1983.

Decided July 12, 1983.

Charlotte E. Hemker-Smith, Bolling, Walter & Gawthrop, Sacramento, Cal., for plaintiff-appellant.

James T. Freeman, Charity Kenyon, Diepenbrock, Wulff, Plant & Hannegan, Sacramento, Cal., for defendant-appellee.

Appeal from the United States District Court for the Eastern District of California.

Before DUNIWAY, CHOY and ALARCON, Circuit Judges.

DUNIWAY, Circuit Judge:

Lawyer Jerome Lewis appeals from a judgment against him in his action against TIME Inc. for defamation. We affirm.

I. Facts.

The cover story of TIME magazine's April 10, 1978 issue was a 10-page article entitled "Those #*XSec.!!! Lawyers." This case is about one subsection of that article, titled "Ethics Enforcement." In relevant part, it stated:

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.

* * *

* * *

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 slow bar discipline, a northern California lawyer named Jerome Lewis is still practicing law despite a $100,000 malpractice judgment against him in 1970 and a $60,000 judgment including punitive damages in 1974 for defrauding clients of money....

Lewis, the only lawyer criticized by name in this section of the article, sued in California state court on March 2, 1979. He alleged libel, slander, invasion of privacy, and intentional infliction of emotional distress, and named as defendants TIME Inc., Mid-Cal Periodical Distribution, and Does I through XV. Mid-Cal was dismissed from the case before it was served, but Lucky Stores, Inc., a seller of the magazine, was served as defendant Doe I on April 12, 1979.

A month after TIME was served on April 30, it removed the case to the United States District Court for the Eastern District of California. It alleged diversity between Lewis, a citizen of California, and defendants TIME and Mid-Cal, both non-California corporations. Lewis moved to remand the case to state court, arguing that Lucky, which had been served as a Doe, was a California corporation whose presence destroyed the diversity alleged by TIME. The district court denied Lewis's motion, citing first amendment concerns and what it called the "near certainty" that Lucky was joined fraudulently. Lewis v. TIME Inc., E.D.Cal., 1979, 83 F.R.D. 455, 466.

The district court then entered summary judgment in favor of Lucky; that finding is not at issue here. The court also granted a partial summary judgment in favor of TIME. First, it found that Lewis's libel, slander, invasion of privacy, and intentional infliction of emotional distress claims were all bound up into one claim for relief for defamation. Lewis does not contest the finding.

Second, the district court took judicial notice of two state court judgments entered against Lewis. In one of the cases, a jury had awarded damages of $100,000 to a client who had sued Lewis for malpractice. Smith v. Lewis, 1975, 13 Cal.3d 349, 118 Cal.Rptr. 621, 530 P.2d 589, overruled in part on other grounds, In re Marriage of Brown, 1976, 15 Cal.3d 838, 126 Cal.Rptr. 633, 544 P.2d 561. In the other case, another client had won $60,000, including punitive damages, on a counterclaim against Lewis for fraud. The district court held that TIME's statements about the money judgments against Lewis were protected because they were truthful statements of matters of public record. With respect therefore to any of the article's clearly factual statements about Lewis, the court found that the only remaining question of fact was whether the assertion that Lewis defrauded "clients," when the fraud judgment against him was in favor of only a single client, was a material variance from the truth, and therefore a basis for liability for defamation as a derogatory falsehood.

Lewis's claims were not based solely on the specifically factual statements in the TIME article. He also alleged that the article as a whole, particularly the phrases "shadier practitioners" and "painfully slow bar discipline," imparted a "gist" or "sting" that defamed him by inference. The district court ruled that the Constitution protected all of the article's negative inferences because they were statements of opinion.

After the grant of partial summary judgment, the only remaining issue to be tried was the significance of the plural "clients." The district court granted Lewis's motion for relief from his untimely demand for a jury trial, but then on its own motion reconsidered and denied the motion. After trial to the court, the district judge found that the addition of the "s" in "clients" was not a material variance from the truth. Judgment for TIME was entered on December 15, 1981.

II. Refusal to Remand.

We consider first the district court's denial of Lewis's motion to remand the case to state court because of the presence of Lucky Stores and the unserved Does as defendants. The district court found a "near certainty" that joinder was fraudulent. It held that that possibility, plus general first amendment concerns, demanded that it retain jurisdiction. It left open the possibility of remand "if plaintiff can demonstrate at any time prior to trial that a bona fide claim has been stated against Lucky, or that facts exist which raise a real possibility of liability." 83 F.R.D. at 466. Lewis never made such a showing, and did not serve any other defendant "Does." He did not seek interlocutory appeal of the denial of his motion to remand.

Lewis cites numerous cases to the effect that federal courts should remand to state court when there is the merest showing of a claim stated against a non-diverse defendant. His appeal fails, however, because after removal, when there is no appeal of a denial of a remand motion and the case is tried on the merits, the issue on appeal is whether the federal court would have had jurisdiction had the case been filed in federal court in the posture it had at the time of the entry of the final judgment. Grubbs v. General Electric Credit Corp., 1972, 405 U.S. 699, 702, 92 S.Ct. 1344, 1347, 31 L.Ed.2d 612; Sheeran v. General Electric Co., 9 Cir., 1979, 593 F.2d 93, 97-98. See Libhart v. Santa Monica Dairy Co., 9 Cir., 1979, 592 F.2d 1062, 1066 (dictum); J. Moore, B. Ringle & J. Wicker, 1A Moore's Federal Practice p 0.157 [11.-3] (1983 ed.). Here, when the final judgment was entered, only TIME, a non-California corporation, remained as a defendant. Thus, diversity jurisdiction existed at that time.

III. Constitutionally Protected Opinion.

Lewis's main argument on appeal is that the district court erred when it held on summary judgment that the Constitution protected the article's general "negative inferences" because they were statements of opinion, not fact. We affirm the trial judge's grant of partial summary judgment because the inferences were protected expressions of opinion based on true statements of fact.

A. Inferences Arising from the Article.

Lewis claims that readers would draw inferences critical of him from the article as a whole, but he particularly identifies as offensive the phrase "shadier practitioners" and the statement that "[t]hanks to painfully slow bar discipline, ... Lewis is still practicing law...."

At the outset we must determine what inferences are reasonable from the article. The district court held protected as opinion the inference that "plaintiff is an unethical and dishonest lawyer who should be disbarred." Dist.Ct.Op. at 17. Lewis attacks that characterization of the inference as too mild; he asserts that the more reasonable inference arising from the article is that because he commits malpractice and defrauds clients, he will be disbarred. (In fact, after the article was published, the California State Bar did not seek to disbar Lewis, but admonished him.) Lewis argues that his reading of the article, that disbarment was a foregone conclusion, is more natural than the inference that the Bar should disbar him. We do not read the article that way. The inference that Lewis "will" be disbarred is but an outsider's prediction of the uncertain outcome of a future adjudication. Thus, it makes no difference to our analysis whether the inference is that Lewis "will" be disbarred, or that he "should" or "ought to" be disbarred.

Lewis also contends that the district court erred by considering each offending phrase of the article separately, thereby overlooking the greater "gist" or "sting" of the article taken overall. However, when we examine the article as a whole, we find true factual statements that support any opinion of Lewis that the article expresses. TIME's use of the word "clients" rather than "client" does not change our inference analysis, particularly in view of the fact that there was more than one civil judgment against him.

B. Fact or Opinion.

The constitutional privilege for expressions of opinion was identified in Gertz v. Robert Welch, Inc., 1974, 418 U.S. 323, 339- 340, 94 S.Ct. 2997, 3007, 41 L.Ed.2d 789. The Court said there:

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.

(footnote omitted). See also, Greenbelt Cooperative Publishing Ass'n, Inc. v. Bresler, 1970, 398 U.S. 6, 14, 90 S.Ct. 1537, 1542, 26 L.Ed.2d 6; and Old Dominion Branch No. 496, National Ass'n of Letter Carriers v. Austin, 1974, 418 U.S. 264, 282-287, 94 S.Ct. 2770, 2780-2782, 41 L.Ed.2d 745.

The constitutional privilege for opinion applies in...