Pelullo v. Patterson
| Decision Date | 31 March 1992 |
| Docket Number | Civ. A. No. 91-4239. |
| Citation | 788 F. Supp. 234 |
| Parties | Leonard A. PELULLO, Plaintiff, v. Henry S. PATTERSON, II, et al., Defendants. |
| Court | U.S. District Court — District of New Jersey |
Barry Richard, Roberts, Baggett, LaFace & Richard, Tallahassee, Fla., for plaintiff.
Benjamin Clarke, Trenton, N.J., for defendants.
Defendant New Jersey State Commission of Investigation ("SCI"), an agency of the State of New Jersey created by N.J.S.A. § 52:9M-1, has moved to dismiss plaintiff's claims pursuant to Fed.R.Civ.P. 12(b)(6), for failure to state a claim on which relief may be granted and on the ground that the claims are barred by the applicable statute of limitations. For the reasons set forth below, defendants' motion will be denied in part and granted in part. Plaintiff has cross-moved to amend his complaint. That motion will be granted.
On October 3, 1990, plaintiff Leonard A. Pelullo commenced suit in the United States District Court for the Southern District of Florida, seeking relief under 42 U.S.C. § 1983 and state tort law. Defendant moved for transfer of venue to the United States District Court for the District of New Jersey pursuant to 28 U.S.C. § 1404(a). On September 17, 1991, that motion was granted.
Plaintiff has cross-moved to amend his complaint. In the proposed amended complaint, the SCI has been deleted as a party. In its stead, the following persons, all of whom were members of the SCI in December 1985, are named as defendants: Henry S. Patterson, II, William S. Greenberg, James R. Zazzali and Paul Alongi. Because the Court finds that a portion of Pelullo's complaint withstands the motion to dismiss, the motion for leave to amend the complaint will be granted.
The parties have agreed that the sufficiency of plaintiff's claims should be determined on this motion to dismiss based on the allegations in the proposed amended complaint. In his proposed amended complaint, Pelullo alleges the following: On or about December 16, 1985, the defendants caused to be issued a report entitled, "Organized Crime in Boxing-Final Boxing Report of the State of New Jersey Commission on Investigation" ("the Report"). Without his knowledge or opportunity to respond, Pelullo was described in the Report as "a key organized crime associate from Philadelphia, currently based in Florida." Plaintiff claims that this Report was then distributed by the SCI to law enforcement agencies and to news media in various parts of the country, including Florida, where plaintiff resides and conducts business. He states that, due to the allegation of organized crime involvement, his "legal and economic status" has been altered. Plaintiff alleges further that the statement has significantly curtailed his ability to engage in the occupations by which he makes a living, by destroying his "business goodwill."
Pelullo has alleged that the defendants' actions violated his civil rights under 42 U.S.C. § 1983. He has also asserted, based on pendent and diversity jurisdiction, state tort claims arising out of defendants' actions. Specifically, plaintiff claims that defendants' failure to allow him an opportunity to establish the truth or falsity of the statement in the Report before publishing it deprived him of a property right without due process of law.1 Plaintiff also claims that defendants have defamed him under state law by their publication and distribution of the Report, and are vicariously responsible for the injury caused by third party republication of the defamatory matter.
In considering a motion to dismiss for failure to state a claim upon which relief may be granted pursuant to Fed. R.Civ.P. 12(b)(6), the Court must accept as true all allegations in the complaint, and provide plaintiff with the benefit of all inferences which fairly may be drawn from the complaint. Wilson v. Rackmill, 878 F.2d 772, 775 (3d Cir.1989). A complaint cannot be dismissed unless the Court is certain that no set of facts can be proved that would entitle plaintiff to relief. Id.; Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957).
This case was transferred on defendant's motion to this District from the Southern District of Florida. Following a transfer initiated by a defendant pursuant to 28 U.S.C. § 1404(a), the transferee court must apply the choice of law rules that would have been applied by the transferor court. Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964).2 Under Klaxon v. Stentor Electric Mfg. Co., 313 U.S. 487, 498, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941), federal courts exercising diversity jurisdiction must apply the choice of law rules of the forum state. This rule applies as well when a court exercises its pendent jurisdiction. System Operations, Inc. v. Scientific Games Development Corp., 555 F.2d 1131, 1136 (3d Cir.1977) (citing United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966)).
Under Van Dusen, this Court must look to Florida's choice of law rules. To determine which state's law governs, both substantively and procedurally,3 Florida uses the most significant relationships test as set out in the Restatement (Second) of Conflict of Laws and adopted by the Florida Supreme Court. Bishop v. Florida Specialty Paint Co., 389 So.2d 999 (Fla. 1980); accord Celotex Corp. v. Meehan, 523 So.2d 141 (Fla.1988).
The Restatement sets forth the following factors: the place where the injury occurred; the place where the conduct causing the injury occurred; the domicile or residence and place of business of the parties; and the place where the relationship, if any, between the parties is centered. Restatement (Second) of Conflict of Laws § 145-46 (1971). These contacts are to be evaluated in light of their significance to the issue under discussion. Bishop, 389 So.2d at 1001. In Bishop, the court stated that the local law of the state where the injury occurred is determinative under most circumstances unless the place of injury has little actual significance for the cause of action. Id. See also Proprietors Insurance Co. v. Valsecchi, 435 So.2d 290, 294 (Fla.App.1983), review denied, 449 So.2d 265 (Fla.1984).
Plaintiff has alleged in his proposed amended complaint that most of the injury occurred in Florida, where he resides, where the bulk of his business dealings occur and, consequently, where his "business goodwill" was allegedly harmed. Although the allegedly defamatory matter in this case was written and printed in New Jersey by employees of a state agency of New Jersey, any injury to plaintiff occurred in Florida, where the Report was circulated and republished by news media. FirstAmerica Development Corp. v. Daytona Beach News-Journal Corp., 196 So.2d 97 (1966) (); Stepanian v. Addis, 782 F.2d 902 (11th Cir.1986) (); cf. Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 777, 104 S.Ct. 1473, 1479, 79 L.Ed.2d 790 (1984) ().
Because Florida is the place of the alleged injury, is plaintiff's state of residence, and is where plaintiff's business interests are located, Florida has the most significant interest in applying its law to this action. Accordingly, the Court will apply Florida law, and rejects any argument by defendants premised on the application of New Jersey law.
Defendants assert that plaintiff's defamation action is time-barred under Florida's two-year statute of limitations, and "single publication" rule. The Court only partially agrees.
In Florida, a cause of action for libel must be commenced within two years of the date that the cause of action accrues. Fla.Stat.Ann. § 95.11(4)(g). Therefore, any damage arising from a publication more than two years prior to the filing of plaintiff's complaint may not be recovered. Plaintiff argues that, by distributing copies of its Report within the two-year statutory time period, the SCI had "republished" the Report within the applicable statute of limitations period. Under Florida's "single publication rule," Fla.Stat.Ann. § 770.07, however, defendant's own redistribution of the same Report does not re-commence the two-year statute of limitations period.
The purpose behind the single publication rule, as recognized by Florida courts and courts in other states that have adopted a version of the single publication rule, is specifically to avoid the common law rule whereby every publication of a statement by a publisher creates a new and separate cause of action. FirstAmerica, 196 So.2d at 101. The single publication rule is intended to protect publishers who print numerous copies of a libelous document that is distributed over a period of time. Schneider v. United Airlines, Inc., 208 Cal.App.3d 71, 256 Cal.Rptr. 71 (1989) ( the Uniform Single Publication Act); Zuck v. Interstate Publishing Corp., 317 F.2d 727 (2d Cir.1963); see also Kramer v. Monogram Models, 700 F.Supp. 1348, 135 (D.N.J.1989). The effect of the old rule was to extend the statute of limitations for libel and slander causes of actions indefinitely. See 50 Am.Jur.2d, "Libel and Slander" § 153; see also Barres v. Holt, Rinehart & Winston, Inc., 131 N.J.Super. 371, 330 A.2d 38 (Law Div.1974) (citing Prosser, Torts § 113 (4th ed. 1971), aff'd, 141 N.J.Super. 563, 359 A.2d 501 (App.Div. 1976), aff'd, 74 N.J. 461, 378 A.2d 1148 (1977).
Florida's "single publication" rule states that "the cause of action for damages founded upon a single publication ... shall be deemed to have accrued at the time of the first publication or exhibition...
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