Locricchio v. Evening News Ass'n

Citation476 N.W.2d 112,438 Mich. 84
Decision Date17 October 1991
Docket NumberDocket No. 86351
Parties, 20 Media L. Rep. 1065 Joseph Judeas LOCRICCHIO and Gary Francell, Plaintiffs-Appellees, v. EVENING NEWS ASSOCIATION, Michael Wendland and Jean Gadomski, Defendants-Appellants, and Pete Waldmeir and Bill Giles, Defendants.
CourtSupreme Court of Michigan

BRICKLEY, Justice.

Two competing legal regimes collide in libel cases implicating First Amendment concerns. Libel law enforces society's "pervasive and strong interest in preventing and redressing attacks upon reputation" caused by false and defamatory statements, 1 while constitutional law safeguards the free flow of ideas and opinions on matters of public interest that lie at "the heart of the First Amendment's protection." 2 The inherent analytical tension between these regimes requires a court both to protect reputational interests, and to accord "breathing space" to principles of freedom of press and speech. It remains a precarious task to balance these interests in cases, such as this one, that pit private-figure plaintiffs against a report by a media defendant on a matter of public interest. 3 This case tosses into the balance the tortuous issue of libel by implication, in contrast to specific allegations of defamatory false statements of fact.

For our purposes, the controversy began in 1979, 4 when the Detroit News published a four-part series of articles entitled "The Pine Knob Story." In response, the owners and developers of Pine Knob, plaintiffs Joseph Locricchio and Gary Francell, sued the Evening News Association (hereinafter the Detroit News) and its reporters for libel in 1980. 5 The plaintiffs alleged that the entire tenor of the Pine Knob series falsely implied that plaintiffs were members or associates of organized crime, but did not identify any specific false statements in the articles.

The Detroit News attacked the plaintiffs' failure to identify any specifically false factual statements, and moved for summary judgment. Both the trial court and the Court of Appeals denied the summary judgment motion. The case went to trial.

A jury trial of prodigious length ultimately produced a three million dollar verdict for plaintiff Francell. 6 However, the trial court ruled that the evidence regarding falsity did not support the jury's verdict, and directed a verdict for the Detroit News. The plaintiffs appealed the posttrial directed verdict, and prevailed. The Court of Appeals, citing its previous opinion on summary judgment, applied the law of the case doctrine to reverse the trial court, and reinstated the jury award.

This appeal can be said to involve essentially two issues. First, did the Court of Appeals err in reversing the trial court's directed verdict and reinstating the jury verdict in favor of the plaintiffs? Second, can a private-figure plaintiff recover damages in a media-defendant/public-interest subject matter libel action where the plaintiff alleges defamatory implication but fails to identify or prove any materially false factual statements or implications or omissions? 7 We answer the first question affirmatively, and hold at the outset that the Court of Appeals erred in relying on the law of the case doctrine to reverse the trial court's directed verdict, instead of independently reviewing the record in a libel case of First Amendment import. We find it unnecessary under the facts presented to answer the second question as posed because of a lack of proven falsity in either the underlying facts or in their implication, and hold simply that the plaintiffs failed to carry their burden of proving either false and defamatory factual statements or false implications. Accordingly, the Court of Appeals erred in reinstating the jury verdict in favor of plaintiffs.

I. Factual Background

The facts presented show that editorial superiors at the Detroit News asked veteran reporters Michael Wendland and Jean Gadomski to investigate rumors of organized crime involvement in the plaintiffs' Pine Knob entertainment complex in 1978. Reporters Wendland and Gadomski conducted an intensive two-month investigation of the Pine Knob facility in 1979. Their investigation reached its apex with an audiotaped interview conducted with the plaintiffs (in the presence of their attorney) in April of 1979.

The interview with the plaintiffs, and the independent research of the Wendland-Gadomski team, sowed the seeds for the four-part "Pine Knob Story" series of articles that ran in the Detroit News from April 22 to 25, 1979. The centrality of the Pine Knob series to this lawsuit leads us to detail the content of the four articles below.

A. The first article: "The Pine Knob Story: How 2 friends and hustle created a big resort, millions in debts and a question: 'Is it Mafia?' "

The first article appeared under the rather sensational headline above. Its opening paragraph described the plaintiffs as "land gamblers ... [p]ower brokers with the right connections--widely suspected to be 'Mafia.' " The article quoted plaintiff Locricchio as conceding "the feeling 'Pine Knob is Mafia' is so widespread that 'even my mother sometimes has her doubts.' " The article noted that although the plaintiffs "vehemently deny mob involvement, they admit that they are on 'all the computer lists' as organized crime figures."

The first article further noted that plaintiffs agreed to talk to the Detroit News, in their words, to "clear the air." It provided provocative details of the plaintiffs' backgrounds, informing readers, for example, that the plaintiffs "wear silk shirts, drive expensive [cars] and fly about the country in their own twin-engine airplane."

The report asserted that "[Locricchio] is proud of his Sicilian heritage and protective of his large family. He is outgoing and talkative." It described Francell in contrast as "quiet, almost shy," and noted that "Francell is of French and German heritage." The report stated that although the plaintiffs felt "[a]ngered by what they claim is harassment from the FBI, the Internal Revenue Service and state and local law enforcers, they nevertheless say they can see why 'people think we're mob.' "

The report then detailed four key incidents, which essentially comprise the gravamen of plaintiffs' defamation by implication claims, in what the authors described as "the confusing, often incredible story" of how the plaintiffs created Pine Knob. The article summarized these four incidents as consisting of:

1) Two unsolved murders with links to people who figured in Pine Knob's development.

2) A so-called money wash designed to hide the source of a $200,000 loan to Pine Knob 3) "A $4 million cost overrun" by the plaintiffs in the building of a Las Vegas Hotel theatre.

4) Several investors associated with organized crime who either lent or helped [the plaintiffs] raise large sums of money.

The article sketched the history of Pine Knob from the original ownership in the 1950s to the plaintiffs' acquisition in 1971, asserting that "[t]he stories of mob involvement in Pine Knob began with [the acquisition of Pine Knob by reputed organized crime-associated investors in 1962]." The plaintiffs purchased Pine Knob from these investors in 1971.

The authors reported that the plaintiffs confronted financial troubles virtually from the moment they acquired Pine Knob: troubles so severe that by 1972 the partners "needed a tremendous cash flow [but] didn't have it." The report asserted that the plaintiffs' financial condition had so dramatically deteriorated that

[by] the summer of 1972, [the plaintiffs] were in the worst financial bind of their careers. They needed $200,000--"desperately," says Locricchio--to stave off foreclosures on outstanding notes. The partners would get the money. But in doing so, they would become involved in an incredible financial intrigue to be investigated by three federal grand juries. More than anything else, it was that loan that put Locricchio and Francell on the organized crime lists.

The first article ended with a trailer in bold letters that proclaimed: "Tomorrow: A money wash and two murders."

B. The second article: "The Pine Knob Story: How [a] Loan Got Washed."

As promised, the second article appeared under the above headline on Monday, April 23, 1979. It focused mainly on two incidents: the unsolved 1972 and 1974 murders of Agnes Brush and Harvey Leach, and a $200,000 loan the plaintiffs obtained to finance the Pine Knob complex in 1972.

Page one of the article displayed a photograph of an automobile with its trunk open. The caption under this photograph announced, "Harvey Leach's car was found with his body in the trunk." The authors pointed out that "Locricchio and Francell say they know nothing about either [the Leach or Brush] killing.... A score of police agencies have investigated the murders and have not proved otherwise."

The second article also asserted that "[the plaintiffs] agree that their business connections, when diagramed on a blackboard, make them appear to be 'organized crime figures,' " and paraphrased Locricchio as asserting "that...

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