Medure v. Vindicator Printing Co.

• Decision Date: 22 November 2002
• Docket Number: No. 98-1914.,98-1914.
• Parties: Angelo MEDURE, Plaintiff, v. THE VINDICATOR PRINTING CO. and Cory Armstrong, Defendants.
• Court: U.S. District Court — Western District of Pennsylvania

273 F.Supp.2d 588

Angelo MEDURE, Plaintiff, v. THE VINDICATOR PRINTING CO. and Cory Armstrong, Defendants.

No. 98-1914.

United States District Court, W.D. Pennsylvania.

November 22, 2002.

Richard DiSalle, Rose, Schmidt, Hasley & Disalle, P.C., Pittsburgh, PA, for Plaintiff.

David L. Marburger, Baker & Hostetler, LLP, Cleveland, OH, Scott E. Henderson, Thorp, Reed & Armstrong, LLP, Pittsburgh, PA, for Defendants.

MEMORANDUM

STANDISH, District Judge.

I

In this civil action, plaintiff, Angelo Medure (Medure), seeks damages for defamation from defendants, The Vindicator Printing Company and Cory Armstrong (Armstrong).¹ Presently, before the court are the parties' objections to the Amended Report and Recommendation of Magistrate Judge Ila Jeanne Sensenich (Magistrate Judge Sensenich) with respect to defendants' motion for summary judgment pursuant to Fed.R.Civ.P. 56. For the reasons set forth below, Magistrate Judge Sensenich's Amended Report and Recommendation will be adopted in part and overruled in part, and judgment will be entered in defendants' favor as a matter of law.

II

Medure owns Gaming World International, Inc. (Gaming World), a company which was engaged in the business of developing and managing casinos on Indian reservations. In early 1992, Gaming World entered into a five-year contract to manage the Shooting Star Casino for the White Earth Band of Chippewa Indians (White Earth Band) in Mahnomen, Minnesota. This defamation action arises out of the November 13, 1997 publication of an article by Armstrong, who was a reporter for The Vindicator, a daily newspaper based in Youngstown, Ohio.² In the article, Armstrong stated that the White Earth Band had terminated its contract with Gaming World in August, 1996, and that Gaming World had been "placed under FBI investigation on allegations of skimming $22 million from the casino."

In Count One of the complaint, Medure and Gaming World alleged that Armstrong's November 13, 1997 article was defamatory because it imputed criminal activity to them. In Count Two, Medure and Gaming World alleged that neither Medure nor Gaming World was a public figure or involved in a public controversy, and that defendants' conduct was malicious, wanton, willful, reckless, intentional and outrageous. Therefore, Medure and Gaming World requested an award of punitive damages.

When the action was removed by defendants from the Court of Common Pleas of Lawrence County, Pennsylvania to this court on November 17, 1998, it was referred to Magistrate Judge Sensenich for pretrial procedures. Based on a stipulation of the parties, all claims asserted against defendants by Gaming World, as well as all claims asserted by Medure for economic injuries, were dismissed on October 19, 1999. Thereafter, on January 31, 2000, defendants filed a motion for summary judgment pursuant to Fed.R.Civ.P. 56.

On August 28, 2000, Magistrate Judge Sensenich filed a Report and Recommendation with respect to defendants' motion for summary judgment, recommending that the motion be denied. In summary, Magistrate Judge Sensenich recommended that the court make the following findings: (1) that Medure should not be deemed a limited purpose public figure for purposes of his defamation claim against defendants;³ (2) that, because Medure is a private figure in this case, defendants have the burden of proving that the statement in Armstrong's November 13, 1997 article regarding an FBI investigation was true,⁴ which cannot be decided by summary judgment; (3) that Pennsylvania law applies to Medure's defamation claim; (4) that defendants failed to demonstrate that the statement in Armstrong's November 13, 1997 article regarding an FBI investigation was substantially true; (5) that, with respect to defendants' argument that the challenged statement in Armstrong's November 13, 1997 article is protected by the "fair report" privilege, plaintiff has demonstrated the existence of a material fact as to whether defendants abused this privilege, precluding summary judgment in defendants' favor on this ground; (6) that the alleged defamatory statement in Armstrong's November 13, 1997 article is not protected by the "wire service" privilege pursuant to which republication of a news article published by a recognizable and reliable source of daily news cannot constitute defamation, unless the story was reproduced in a negligent manner; and (7) that the issue of whether the statement in question was "of and concerning" Medure is a question of fact for the jury.

Defendants filed objections to Magistrate Judge Sensenich's Report and Recommendation, and, after considering the memoranda and exhibits and depositions submitted in support of, and in opposition to, defendants' objections, Magistrate Judge Sensenich filed an Amended Report and Recommendation on December 1, 2000. Again, Magistrate Judge Sensenich recommended that defendants' motion for summary judgment be denied. However, Magistrate Judge Sensenich made several substantial substantive changes to her original Report and Recommendation. Specifically, in the Amended Report and Recommendation, Magistrate Judge Sensenich recommended the court find that (1) although the court was not bound by a decision of the Honorable Maurice B. Cohill, Jr. in a prior defamation case against different defendants that Medure was a limited purpose public figure, Medure should be deemed a public figure for purposes of a public controversy in this case based on, inter alia, the reasoning of Judge Cohill in that case (see Medure v. The New York Times Co., 60 F.Supp.2d 477 (W.D.Pa.1999));⁵ (2) based on Medure's status in this case as a limited purpose public figure, defendants are entitled to the heightened protections described by the United States Supreme Court in New York Times Co. v. Sullivan, 376 U.S. 254, 278-80, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964), i.e., in order to recover damages, Medure has the burden of showing by clear and convincing evidence that defendants acted with actual malice; and (3) Medure has the burden of proving that the challenged statement in Armstrong's November 13, 1997 article was false.

Subsequently, objections to Magistrate Judge Sensenich's Amended Report and Recommendation were filed by Medure and defendants, and the court heard oral argument on the objections. After consideration of the parties' arguments, as well as the materials submitted in support of, and in opposition to, their respective objections, the court adopts Magistrate Judge Sensenich's amended recommendation that Medure be deemed a limited purpose public figure for purposes of this lawsuit based on her thorough analysis of the issue in the Amended Report and Recommendation. However, the court declines to adopt Magistrate Judge Sensenich's recommendation that defendants' motion for summary judgment be denied with respect to their argument that Medure has failed to show actual malice by clear and convincing evidence.

III

For purposes of defendants' motion for summary judgment on the issue of actual malice, the following facts are undisputed:

Medure resides in New Castle, Pennsylvania. In 1991, Medure incorporated Gaming World for the purpose of managing Indian casinos. The first Indian casino managed by Gaming World was the Shooting Star Casino, which opened in Mahnomen, Minnesota in May, 1992. The Shooting Star Casino was owned by the White Earth Band of the Chippewa Indians (the White Earth Band).⁶ (Medure's Depo., pp. 7, 11-13).

In August, 1993, U.S. News & World Report (US News) published an article written by James Popkin (Popkin) titled: "Gambling with the Mob? Wise guys have set their sights on the booming Indian casino business". In this article, Popkin discusses, among other things, Medure's management of the Shooting Star Casino in Mahnomen, Minnesota, indicating that the FBI became suspicious of, and began investigating, Medure when it learned that Medure was leasing a New Castle, Pennsylvania warehouse to a pasta firm that was run in the 1980s by reputed mobsters. The article implied that mobsters, through individuals and entities such as Medure and Gaming World, were attempting to infiltrate the lucrative Indian casino business. (Dfs.' Exh. 91).

Based on the publication of Popkin's article regarding alleged mafia infiltration of Indian-owned casinos and the article's indication that Medure was linked to organized crime, on September 24, 1993, Medure and Gaming World filed a defamation action against Popkin and US News in the Court of Common Pleas of Lawrence County, Pennsylvania (the US News case). The Vindicator's New Castle Bureau covered the US News case from its inception. (Df.'s Exhs. 71, 72, 74, 75, 77, 80-87).

In January, 1994, Armstrong joined the staff of The Vindicator as a reporter. She began her employment with the newspaper in The Vindicator's main office in Youngstown, Ohio. At her request, Armstrong was transferred to The Vindicator's New Castle Bureau in January, 1996. (Armstrong Depo., pp. 12, 18).

On August 12, 1996, a newly constituted White Earth Band tribal council passed a resolution in response to an investigation of the reservation's finances in which Medure and Gaming World and Darrell "Chip" Wadena, Jerry Rawley, Rick Clark, Paul "Poncho" Williams and Tony Wadena, the members of the former tribal council, were accused of "looting [] the casino treasury." The resolution concluded as follows:

* * * * * *

It is ordered that:

*All relationships with Angelo Medure/Gaming World be terminated, and that the White Earth Band is to assume total control of the casino — all of its contracts, employees and properties of every kind;

*Angelo Medure/Gaming World be immediately and summarily removed;

*Any and all funds due him be impounded; and

*He be stripped of all authority in connection with any manner in which he might purport to act on behalf of the White Earth, the White Earth Reservation Tribal Council, and the operation, maintenance, supervision,...