Martin Marietta Corp. v. Evening Star Newspaper Co.

• Decision Date: 26 July 1976
• Docket Number: Civ. A. No. 75-1827.
• Parties: MARTIN MARIETTA CORPORATION, Plaintiff, v. The EVENING STAR NEWSPAPER COMPANY et al., Defendants.
• Court: U.S. District Court — District of Columbia

417 F. Supp. 947

MARTIN MARIETTA CORPORATION, Plaintiff, v. The EVENING STAR NEWSPAPER COMPANY et al., Defendants.

Civ. A. No. 75-1827.

United States District Court, District of Columbia.

July 26, 1976.

COPYRIGHT MATERIAL OMITTED

Gerald M. Stern, Rogovin, Stern & Huge, Washington, D. C., for plaintiff.

Stuart F. Pierson, Verner, Liipfert, Bernhard, McPherson & Alexander, Washington, D. C., for defendant Star.

MEMORANDUM

FLANNERY, District Judge.

This libel action arises from an article written by defendant Peter Gruenstein, copyrighted and distributed by defendant Capitol Hill News Service (CHNS), and published by defendant Evening Star Newspaper Company (Star) in the Washington Star. The article appeared in all four editions of the Star printed on October 31, 1975. Plaintiff Martin Marietta Corporation filed a complaint on November 4, 1975, requesting $5,000,000 in compensatory damages, $10,000,000 in punitive damages, and an injunction requiring the Star to print a retraction admitting the falsity of the article. The matter is now before the court on defendant Star's motion for summary judgment. The court, finding no genuine issue to exist as to any material fact, and finding that defendant is entitled to judgment as a matter of law, will grant the motion. Further, the court has determined that there is no just reason for delay in the entry of this judgment, and, consequently, will order the clerk to place it on the docket forthwith. The entry of the judgment will render moot the Star's pending motion for a protective order and plaintiff's pending request for a hearing to schedule discovery.

I Facts

The article giving rise to this action, which is attached as Appendix A to this memorandum, appeared on the front page of the Star under the headline, "A Contractor's Stag Party for Boys at the Pentagon." The story, copyrighted by CHNS and attributed to Peter Gruenstein, stated that a weekend party for a soon to be married "top Air Force official" was held in January 1968 at a Wye Island, Maryland hunting lodge leased by plaintiff. Approximately one third of the 40 to 50 guests at the lodge were "Defense Department personnel," according to the article. The article also stated that two prostitutes attended the party and that one was paid $3,000 for her services "by a Martin Marietta representative." One of the prostitutes "reportedly swung naked from the antlers of an animal head mounted on one of the lodge's walls."

In addition to the above allegations, variously attributed to "sources" and "guests", the article included a disclaimer attributed to Martin Marietta Vice-President for Public Relations Roy Calvin. According to the story,

A Martin Marietta spokesman said: "We don't find any record that any Martin employees were present or involved in the arrangement.

"My impression was it (the party) was at least two years after we had any connection" with the lodge. . . .

The story also alluded to a statement by then Defense Secretary James R. Schlesinger that activities such as those described were commonplace in the defense industry and to statements by a McDonnell Douglas employee that the industry has, in some cases, procured prostitutes for military officials. Finally, the article mentions that similar allegations have been made about other defense contractors and that Capitol Hill News Service had, in previous articles reported that Northrop Corporation, Rockwell, and Raytheon Company, all defense contractors, had entertained Pentagon officials with hunting trips in Maryland. The Star paid CHNS $200 for the story.

Entertainment of military officials by defense contractors, including Martin Marietta, has been a topic of public debate for several years. The problem was considered quite serious by President Johnson, who, on May 11, 1965, signed Executive Order 11222, forbidding government employees from accepting entertainment or other similar benefits from persons seeking to establish financial relationships with the government. The Order is implemented by Department of Defense Directive 5500.7, 32 C.F.R. § 40.5 (1975). The entertainment activities of the Martin Company, which consolidated with the American Marietta Company in 1961, were the subject of hearings held in 1959 by the Subcommittee for Special Investigations of the House of Representatives Committee on Armed Services.

In the weeks immediately preceding publication of the article, plaintiff's name began to appear with increasing frequency in connection with disclosures concerning entertainment of military officials by Northrop Corporation. The disclosures about Northrop prompted Representative Wright Patman to announce on October 14, 1975, that the Joint Committee on Defense Production would investigate recent reports that defense officials had accepted favors and gratuities from defense contractors, who subsequently charged some of those costs to overhead on their government contracts, the Washington Post to report on October 16, 1975 that FBI agents and the Justice Department had commenced investigations of Northrop's conduct, Senator Proxmire to issue a press release on October 16, 1975, criticizing the Defense Department's investigation of Northrop as a "whitewash," and the New York Times to report on October 18, 1975 that Defense Secretary Schlesinger had ordered an inquiry into the entertainment of Defense Department officials by defense contractors.

On October 22, 1975, the Star published an article written by Peter Gruenstein and distributed by CHNS entitled "3 Other Firms Entertained VIP's." The article stated that Rockwell International Corporation, Raytheon, and Martin Marietta used hunting facilities in Maryland to entertain Defense Department officials and members of Congress. Between October 22 and October 27 at least thirteen newspapers across the country carried versions of this story, attributed to CHNS, and each version mentioned Martin Marietta. The October 22 article was the twelfth in a series on defense contractor entertainment activities written by Gruenstein, distributed by CHNS, and printed by the Star. The first article in the series, which focused primarily on Northrop Corporation, appeared on May 8, 1975.

An article by William H. Jones on the congressional investigation of the relationship between defense contractors and the Pentagon was published in the Washington Post on October 23, 1975. According to the article, congressional investigators related that at least five of the largest defense contractors maintain hunting and fishing lodges for use by Defense Department officials or arrange hunting vacations for these officials. Further, the investigators were said to have named Martin Marietta as one of the firms known to have entertained military officials at an Eastern Shore hunting lodge. Numerous papers across the country printed versions of the Jones article, all mentioning Martin Marietta, on October 22, 23, and 24.

On October 23, 1975, an article by Robert Lenzner in the Boston Globe, entitled "Raytheon Co. admits `trips' for US officials," detailed congressional staff allegations against Raytheon and the company's response. In addition, the article mentioned Martin Marietta as one of the companies under investigation for similar conduct.

Clark Mollenhoff wrote an article for the October 24 Des Moines Register entitled "GAO to Probe Defense Firm Hospitality." The story reported that Senator Proxmire had requested the General Accounting Office to investigate the entertainment practices of several defense contractors, specifically including Martin Marietta. On October 25, 1975, many newspapers carried stories about the Proxmire request and made references to plaintiff. An Associated Press story appearing on October 26 and 27 also referred to Proxmire's request that Martin Marietta be investigated, although the focus of the story was a report that Admiral Harold E. Shear used Northrop hunting lodge facilities.

The Washington Post of October 28, 1975, published an article entitled "Goose Guide Shrugs at Northrop `Fuss'," by Karen De Young. The article described the reaction of a goose guide and Eastern Shore residents to news reports of defense contractor entertaining at hunting lodges in the area and mentioned Martin Marietta as one of the companies reported to have sponsored hunting trips for government officials. Between October 28 and October 30 various versions of the article appeared in numerous papers.

Martin Marietta's business status as of October 1975 reinforced its association with the topic of entertainment in the defense industry. The corporation was the 20th largest defense contractor in fiscal year 1975, receiving $320.3 million in public funds from defense contracts. In furtherance of its business interests, Martin Marietta regularly provided uniformed officers and Defense Department officials with free transportation on company aircraft and free access to the hunting facilities at Wye Island. In addition, the company regularly participated in advisory panels, technical exchange programs, and private defense and aerospace related organizations.

Against this backdrop, preparation of the October 31 article began. Undisputed portions of the record amassed in the instant case reveal that the following Star employees, and only the following Star employees, played a direct role in the publication of the article: Editor James Bellows, Managing Editor Sidney Epstein, National Editor Barbara Cohen,¹ and Ross Evans, a National Desk Editor. Author Gruenstein was not employed by the Star, but by CHNS at the time he prepared the article. CHNS, a nonprofit corporation chartered in 1974, operated as an independent news service, supplying its regular subscribers with daily stories concerning activities in Washington, D.C. In addition, CHNS regularly contacted the Washington offices of the Star, the Detroit News, the Saint Louis Post Dispatch, the Los Angeles Times, and the Des Moines...