Lowenschuss v. West Pub. Co.
| Decision Date | 12 October 1976 |
| Docket Number | No. 75-2431,75-2431 |
| Citation | 542 F.2d 180 |
| Parties | Fred LOWENSCHUSS, Appellant, v. WEST PUBLISHING COMPANY. |
| Court | U.S. Court of Appeals — Third Circuit |
Max Meshon, Meshon & Brener, William D. Parry, Philadelphia, Pa., for appellant.
James J. Orlow, Wasserman, Orlow, Kaye & Rubin, Philadelphia, Pa., for appellee.
Before VAN DUSEN, GIBBONS and ROSENN, Circuit Judges.
This case concerns the attempt of a lawyer to secure redress from West Publishing Company ("West"), a publisher of judicial opinions, for an allegedly defamatory footnote contained in a judge's opinion which West published without change. The United States District Court for the Eastern District of Pennsylvania dismissed the complaint. Lowenschuss v. West Publishing Company, 402 F.Supp. 1212 (E.D.Pa.1975). We affirm.
To place the alleged defamation in context, a brief exposition of the facts follows. Plaintiff Fred Lowenschuss is an active attorney at law "bearing an excellent reputation." Lowenschuss v. West Publishing Company, supra, 402 F.Supp. at 1213. As sole trustee of a private pension fund and on its behalf, he purchased shares of the Great Atlantic & Pacific Tea Company ("A&P") after learning of a tender offer for the stock. Shortly after he had placed his order for the stock, Lowenschuss discovered that A&P management intended to oppose the offer. He attempted to cancel the purchase order, but was unsuccessful because the order had already been executed.
Subsequently, the United States District Court for the Southern District of New York issued a preliminary injunction prohibiting consummation of the tender offer. Lowenschuss immediately filed suit in the Eastern District of Pennsylvania on behalf of himself and a class of similarly situated investors charging breach of contract and violations of the securities laws in connection with the aborted tender offer. The case was transferred to the Southern District of New York and assigned to Judge Kevin T. Duffy who was presiding over the case involving the offeror and A&P's management. Judge Duffy dismissed Lowenschuss' complaint in Lowenschuss v. Kane, 367 F.Supp. 911 (S.D.N.Y.1973).
Unfortunately, the judge did not confine himself simply to dismissing the complaint. Rather, while he stated that he was making no finding as to the sequence of events, he intimated that Lowenschuss may have purchased the shares of A&P stock after learning of the opposition to the tender offer solely for the purpose of qualifying to bring the class action and with knowledge that the target company was bringing a legal action to enjoin the tender offer transaction. The controversial footnote 1 of Judge Duffy's opinion, 367 F.Supp. at 913, reads in its entirety:
It should be of some interest to the appropriate body of the Pennsylvania Bar whether the plaintiff, a lawyer, truly purchased these shares as an investment for his pension plan or merely as a vehicle for this litigation in which counsel fees are sought.
After the opinion was filed, counsel for Lowenschuss wrote to Judge Duffy requesting that he withhold dissemination of his opinion until he had considered Lowenschuss' petition for rehearing. The subsequent petition contained affidavits from Lowenschuss and from his securities broker, in addition to the time-stamped stock purchase order, as evidence that the purchase occurred before Lowenschuss had learned of the opposition to the tender offer. Judge Duffy remained adamant, however, and in a statement endorsing his original opinion, characterized the footnote as "merely meant as a suggestion to the appropriate body to make whatever findings and conclusions they may deem necessary." The judge further stated that he was "not condemning the plaintiff here by the footnote in the opinion I merely seek to awaken the Bar to make its own findings." 1
In order to ensure that the Bar was awakened, Judge Duffy forwarded a copy of his opinion to the Disciplinary Board of the Supreme Court of Pennsylvania. Within a short time, the Board informed the judge and Lowenschuss that Lowenschuss had "not been guilty of unprofessional conduct in violation of the Code of Professional Responsibility." Lowenschuss' vindication was more apparent than real. As the offending footnote was not thereupon excised from the opinion, it appeared intact in Commerce Clearing House's Trade Cases and in West's Federal Supplement.
Lowenschuss prevailed upon Commerce Clearing House to insert the following editorial remarks in its report of the case:
Note: In connection with Footnote 1 . . . on November 20, 1973, the Disciplinary Board of the Supreme Court of Pennsylvania, acting pursuant to the request of the Honorable Kevin Thomas Duffy and after full investigation and review reached the final determination that Fred Lowenschuss, Esq. was not guilty of unprofessional conduct in violation of the code of professional responsibility. CCH
Lowenschuss importuned West to include a similar addendum in its bound volumes of 367 Federal Supplement. West consulted Judge Duffy, who was unwilling to delete his footnote notwithstanding the subsequent developments exonerating Lowenschuss. West thereupon felt obliged to publish the opinion as originally written and without editorial comment, as is its unvarying practice. Judge Duffy's refusal to cooperate in clearing Lowenschuss' professional reputation thus resulted in the printing of the offending footnote verbatim and without explanation in volume 367 of the Federal Supplement.
Thereupon Lowenschuss filed this action in the Court of Common Pleas of Philadelphia County against West, seeking a mandatory injunction ordering West to print an explanatory addendum to footnote 1 and cause it to be inserted into volume 367 of the Federal Supplement and an award of "general, compensatory and punitive or exemplary damages." West removed the action to the United States District Court for the Eastern District of Pennsylvania under 28 U.S.C. § 1441(a) (1970). 2
The district judge dismissed Lowenschuss' complaint under Fed.R.Civ.P. 12(b) (6) for failure to state a claim upon which relief could be granted. In a thoughtful and thorough opinion, Judge Fullam began with the premise that Judge Duffy's absolute judicial immunity precluded any action against him for writing or transmitting the opinion to West, as Lowenschuss implicitly conceded by not naming Judge Duffy as a defendant herein. See Garfield v. Palmieri, 297 F.2d 526 (2d Cir. 1962). Judge Fullam then extended an absolute privilege to West as a "semi-official reporting service." Moreover, according to the district judge, compelling West to print editorial commentary whenever an inaccuracy appears in an opinion would implicate the First Amendment and would be "simply unworkable."
The judge expressed the hope that the publication of his opinion, which contained the information that Lowenschuss had been exonerated by the Disciplinary Board, would "have some indirect palliative effect." In addition, before the district court rendered its decision the United States Court of Appeals for the Second Circuit reversed Judge Duffy's dismissal of Lowenschuss' complaint in the original class action suit in Lowenschuss v. Kane, 520 F.2d 255 (2d Cir. 1975). The Court of Appeals set forth, 520 F.2d at 259-60, the proper chronology of Lowenschuss' purchase of the A&P stock before learning of management's opposition to the tender offer and of his subsequent attempt to cancel the purchase order. Although the record has been thus set straight in a number of published opinions, Lowenschuss continues to strive to rebut more effectively Judge Duffy's footnote by eradicating it at its source.
Although good advice offered too late may be worse than none at all, we fear that Lowenschuss is unfortunately in the wrong court at the wrong time. When Judge Duffy refused to alter his opinion even in light of the affidavits and documentary evidence submitted to him by Lowenschuss, a possibly fruitful avenue of redress would have been a petition for an order of expungement filed in the United States Court of Appeals for the Second Circuit. That is not to say that the Court of Appeals would undoubtedly have granted the relief sought. We recognize that a court ordinarily is given broad discretion in the writing and publication of its opinions, but we believe that the facts of this case and the potential damage to Lowenschuss' professional reputation might well have persuaded the Court of Appeals to grant the extraordinary remedy of expungement of the offending footnote. When it appeared necessary, we have stayed a district court order for publication of an opinion pending resolution of possible improper conduct of a lawyer by the disciplinary authorities and subsequently the district court also impounded the opinion of its own volition. See Order of July 11, 1975, In the Matter of Goldchip Funding Co., No. 75-1674 (3d Cir.).
However, courts within the Third Circuit are understandably unwilling to interfere with an opinion of a court in the Second Circuit, even to the extent of ordering a separate addendum to a footnote. While we decide this case on another ground entirely, we are constrained to observe that an order elaborating on an official opinion of a court of another circuit, such as is sought here, is undesirable on policy grounds alone as an unwarranted intrusion on the internal affairs of a co-equal, sister circuit.
West defends this libel action on several theories. First, it argues for an absolute privilege which derives from a judge's absolute privilege to publish defamatory material within the scope of his judicial duties, a theory which the district court appears to have accepted. West would also assert an independent absolute privilege by virtue of its status as a semi-official reporter, an "arm of the Court," which function it analogizes to that...
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