Pegasus v. Reno Newspapers, Inc.

• Decision Date: 07 November 2002
• Docket Number: No. 37291.,37291.
• Citation: 57 P.3d 82,118 Nev. 706
• Parties: David PEGASUS and Beverly Pegasus, Individuals, D/B/A Salsa Dave's, Appellants, v. RENO NEWSPAPERS, INC., D/B/A Reno Gazette-Journal, Respondent.
• Court: Nevada Supreme Court

57 P.3d 82

118 Nev. 706

David PEGASUS and Beverly Pegasus, Individuals, D/B/A Salsa Dave's, Appellants, v. RENO NEWSPAPERS, INC., D/B/A Reno Gazette-Journal, Respondent.

No. 37291.

Supreme Court of Nevada.

November 7, 2002.

Law Office of Mark Wray, Reno, for Appellants.

Burton, Bartlett & Glogovac, Reno, for Respondent.

BEFORE SHEARING, ROSE and BECKER, JJ.

OPINION

BECKER, J.

Appellants, David and Beverly Pegasus, owned and operated Salsa Dave's, a Mexican-American eatery in Sparks, Nevada. Stacy Ferrante, a freelance journalist, wrote a negative review of Salsa Dave's, which was published in the Reno Gazette-Journal (RGJ). The review contained allegedly false factual allegations. The Pegasuses filed a complaint against the RGJ, asserting that Ferrante's review constituted defamation. Following depositions, the RGJ moved for summary judgment. The district court granted the RGJ's motion, concluding that the review contained only a statement of opinion and was not actionable. In addition, the district court found that Salsa Dave's was a public figure for the limited purpose of a food review. Thus, the district court concluded that the Pegasuses had the burden of proving actual malice and that no facts existed to suggest actual malice on the part of the RGJ.

For the reasons set forth below, we conclude that the allegedly false statements were expressions of opinion. We further conclude that restaurant owners, operating a place of public accommodation, have injected themselves into the public arena for purposes of a food review. They are therefore limited-purpose public figures and, when defamation is alleged, must overcome the heightened actual malice standard of the First Amendment. We affirm the order of the district court.

FACTS

In September 1998 and April 1999, the RGJ published favorable restaurant reviews of Salsa Dave's. Thereafter, Ted Thomaidis, editor for the RGJ food section, wrote reviews or articles generally criticizing the use of canned beans or packaged ingredients in many Mexican-American restaurants. Thomaidis gave tips on identifying an authentic Mexican restaurant.

Subsequent to Thomaidis' articles, the RGJ published a third food review of Salsa Dave's. Stacey Ferrante authored the third review. Thomaidis was Ferrante's direct supervisor. The Ferrante review criticized the freshness of Salsa Dave's food and indicated that Ferrante saw a can of processed pinto beans in the kitchen while paying for her meal.

The Pegasuses wrote a letter to the RGJ in response to the review, requesting a retraction and publication of their letter. Included with the letter, they enclosed copies of invoices demonstrating that they purchased dry rather than canned pinto beans. The cover letter sought a conspicuous, appropriate correction in a timely manner. Jim Sloan, assistant managing editor of the RGJ, sent a letter to the Pegasuses indicating that, after careful consideration, the RGJ would not print a correction but would print the Pegasuses' letter to the editor. The letter to the editor was subsequently published.

On November 30, 1999, the Pegasuses filed a complaint against the RGJ, asserting that Ferrante's review contained the following defamatory statements:

1. I scooped out guacamole with my fork and dug in. One taste told me what I had feared: this pale green stuff was definitely not the real deal.

2. At this point my spouse pointed out what I was beginning to realize: "All this came out of some sort of package."

3. The cost cutting measure applied to the ornamentation had spilled into the kitchen. The can of name-brand beans we spy while paying our check confirms this.

The Pegasuses asserted that these are defamatory false factual statements and not protected opinion.

In its answer, the RGJ denied the Pegasuses' claims and asserted that the statements made by Ferrante were true and included matters of opinion that were privileged or were fair comment on matters of public interest. Further, the RGJ asserted that the Pegasuses were public figures for purposes of the food review and therefore subject to an actual malice standard.

During discovery, testimony was presented concerning the use of packaged ingredients in Salsa Dave's food. Beverly Pegasus stated that, at the time the Ferrante review was written, the Pegasuses had one can of beans on the premises. Beverly also asserted that canned beans were only available for emergency use.

David Pegasus stated that he used some pre-packaged foods, including frozen avocado pulp, during periods when avocado was out of season, and that he kept several cans of commercially prepared pinto beans on the premises, but that the beans were not visible from the cashier booth. David asserted that it was not possible that Ferrante had canned beans in her lunch because he only kept the beans on the premises for emergency purposes; specifically, if he ran out late in the evening as a result of high dinner traffic. He also stated that he purchased four or five cans of beans for such purposes and that the can(s) were kept on a bottom shelf not visible from the customer service area. Finally, David stated that he might have been using frozen avocado pulp in his guacamole when Ferrante visited his restaurant.

Ferrante stated that she saw a can of canned beans in the kitchen through a louvered door while she was paying for her food. Ferrante stated that her husband, who had lunched with her, saw the can of beans first and then pointed it out to her.

Thomaidis stated that he verified with Ferrante every statement in her review, particularly regarding her witnessing the can of beans on Salsa Dave's premises, and that he had no reason to doubt Ferrante's statement. He indicated he knew Ferrante and believed her to be an honest individual with no reason to fabricate a negative review of Salsa Dave's. He believed, based upon his past association with Ferrante, that her review was an honest expression of her opinion regarding Salsa Dave's food.

The Pegasuses presented no evidence that Ferrante, Thomaidis or anyone associated or employed with RGJ had bad feelings or a prior dispute with the Pegasuses or Salsa Dave's.

Relevant procedural history

Following depositions, the RGJ filed a motion for summary judgment. The RGJ asserted that the review regarding Salsa Dave's restaurant was only partially critical. The RGJ asserted that only two statements served as the basis for the lawsuit: (1) "All of this came out of some sort of package"; and (2) "The cost cutting measure applied to the ornamentation had spilled into the kitchen. The can of name-brand beans we spy while paying our check confirms this."

In its defense, the RGJ first asserted that the review, when taken as a whole, was an expression of Ferrante's opinion that the food tasted like it was pre-cooked or packaged. The RGJ argued that the statements, taken in context, were akin to hyperbole that could not have reasonably been interpreted by the reader as a statement of fact. As such, the RGJ asserted the review was absolutely protected speech under the First Amendment.

In addition, the RGJ contended that even if the statements could be considered as expressions of fact, the Pegasuses had failed to establish a prima facie case of defamation because they could not prove that the RGJ had acted with actual malice, or that the allegedly defamatory statements made by the RGJ were false. The RGJ asserted that Salsa Dave's was a public figure for the limited purpose of a food review and that, therefore, an actual malice standard applied.

In their opposition, the Pegasuses stipulated that only these two statements were at issue. However, they asserted the statements were facts, not opinion. They also contested that they were public figures and that an actual malice standard applied to their claims. Finally, they argued that even if actual malice applies, they set forth sufficient facts to support a prima facie case of actual malice.

Relying on Nevada Independent Broadcasting v. Allen,¹ the Pegasuses claimed that they had sufficient evidence that the RGJ had acted with reckless disregard, including: (1) it published Ferrante's statement without attempting to verify the presence of canned beans with the Pegasuses; (2) Ferrante did not actually observe canned beans or other packaged ingredients being used in the preparation of her food; (3) Ferrante could not state for certain what brand of canned beans she saw on the premises; (4) Thomaidis asked Ferrante if she was sure beyond a reasonable doubt that she had seen the canned beans; (5) Ferrante did not make a second visit to Salsa Dave's as was Thomaidis' habit when he wrote a negative review; (6) Ferrante spent only an hour at Salsa Dave's; and (7) Salsa Dave's had received a positive review in the RGJ a month before Ferrante's visit.

In its reply, the RGJ contended that Salsa Dave's was a public figure for the limited purpose of a food review because it actively advertised and sought commercial patronage. The RGJ asserted that the facts set forth in the opposition did not, as a matter of law, support a finding of actual malice and, therefore, summary judgment was appropriate.

The district court granted summary judgment in favor of the RGJ. The district court concluded that the statements were not factual assertions when made in the context of a restaurant review and constituted protected opinion. The district court also concluded that Salsa Dave's was a public figure for the limited purpose of a food review and that the Pegasuses therefore had the burden of proving that the RGJ acted with actual malice. The district court then determined that there were no facts demonstrating by clear and convincing evidence that the RGJ acted with actual malice.

DISCUSSION

This appeal presents two issues of first impression in Nevada. First, whether all comments published in a food review are constitutionally protected statements of opinion. Second, what constitutes...