SCHIAVONE CONST. CO. v. TIME INC.

• Decision Date: 13 August 1983
• Docket Number: Civ. A. No. 83-932.
• Citation: 569 F. Supp. 614
• Parties: SCHIAVONE CONSTRUCTION CO. and Ronald A. Schiavone, Plaintiffs, v. TIME INCORPORATED, Defendant.
• Court: U.S. District Court — District of New Jersey

569 F. Supp. 614

SCHIAVONE CONSTRUCTION CO. and Ronald A. Schiavone, Plaintiffs, v. TIME INCORPORATED, Defendant.

Civ. A. No. 83-932.

United States District Court, D. New Jersey.

August 13, 1983.

Connell, Foley & Geiser, Theodore W. Geiser, and Thomas S. Cosma, Newark, N.J., for plaintiffs.

Winne, Banta & Rizzi by Donald A. Klein, Hackensack, N.J., for defendant.

OPINION

STERN, District Judge.

Plaintiffs Schiavone Construction Co. and Ronald A. Schiavone bring this action pursuant to 28 U.S.C. § 1332, contending that defendant Time, Inc. published a defamatory statement about them in the August 23, 1982 issue of Time magazine. Since we find that publication of the statement is privileged as a fair and accurate report of an official action or proceeding, the complaint will be dismissed.

FACTS

Plaintiff Ronald A. Schiavone is an officer and principal shareholder of plaintiff Schiavone Construction Co. Prior to his appointment as United States Secretary of Labor, Raymond J. Donovan was also affiliated with the plaintiff company. In late 1981, in response to numerous allegations linking Donovan to members of organized crime, a special prosecutor was appointed to investigate the asserted ties. On June 26, 1982, the special prosecutor, Leon A. Silverman, filed a report in which he concluded that there was insufficient credible evidence to support a prosecution of Donovan for the alleged wrongdoing. Additional allegations surfaced after the filing of this report, however, leading Silverman to reopen the investigation. On August 23, 1982, under the headline "Jury Still Out/Donovan probe is reopened", Time magazine reported on the reopening of the investigation. The final paragraph of the four paragraph story reads as follows:

The FBI faces some tough questioning of its own. The Senate Labor Committee is investigating the bureau's handling of Donovan's confirmation probe 18 months ago. The personal files of FBI Director William Webster, forwarded to the committee last month, reveal that the name of Schiavone appeared several times in the bureau's reports on the 1975 disappearance of former Teamster Boss Jimmy Hoffa. That detail would surely have intrigued both the Senate committee that approved Donovan's nomination in February 1981, and the special prosecutor this year. But neither learned about it until last month.

Complaint, Ex. A.

On September 10, 1982, Silverman issued a supplemental report which concluded, as had the original report, that there was insufficient credible evidence to support a prosecution of Donovan. The supplemental report stated that among the documents provided to Silverman by Webster after the release of Silverman's first report was a memorandum from Webster to the Executive Assistant Director of the FBI, dated December 15, 1980. Defendant states that this memorandum formed the basis for its report that the name of Schiavone appeared in the FBI's files on the Hoffa disappearance. As related in the supplemental report, the memorandum states, in pertinent part:

Mr. Edwin Meese called during my absence at 10:15 a.m. 12/12/80, and said that he would return the call upon my return. He was tied up with President-elect Reagan and asked Mr. Pen James to return the call, Mr. James asked whether we had reached any conclusion as a result of our inquiry into Pat sic Donovan. I checked with Mr. Revell and based on information which he supplied, as well as my recollection of conversation with Mr. Mullen while I was in New York on December 10th, that we had reviewed all our indices and had checked with all field offices and nothing negative had been disclosed. I advised that a company Chivone (PH), in which he apparently had a very substantial interest, had appeared a number of times in reports in our HOFEX sic: Hoffex case, but that none of these suggested any criminality or organized crime associations.

Supplemental Report of the Special Prosecutor, Ex. to Br. in Opp. to Defendant's Motion to Dismiss (Plaintiffs' Br.) at 38-39. The supplemental report states that Silverman interviewed Webster about the matter on August 13, 1982. The special prosecutor summarized the conversation with Webster about the December 15, 1980 memo as follows:

With respect to the December 15, 1980, memorandum, Director Webster stated that the Hoffex reference is incorrect — that, at the time of the December 12, 1980, communications, the Hoffex files had not been checked. Moreover, the Director stated that files had recently been checked and it was determined that there were no references to SCC therein.

The Director attributed that erroneous Hoffex reference to information which he received from certain subordinates. He was uncertain as to which of the subordinates provided it. He stated that he did not know where he would independently come up with the Hoffex reference since he was not particularly familiar with the details of that file.

Id. at 41.

On November 12, 1982, plaintiff Ronald Schiavone wrote a letter to the defendant stating that Schiavone Construction Co. and its employees had been "severely damaged" by the defamatory allegations concerning the company which had been "made by others" and published by the defendant. Complaint, Ex. B.¹ The letter went on to state:

Given the torrent of slander issuing from protected sources over many months against which we were virtually helpless, the inference of guilt at least to some extent is understandable. The media, through its publishing and republishing of the allegations understandably (indeed in most cases, forgivably) but alas unfortunately, exacerbated our problem. What we now fail to understand, in light of the Silverman reports, is that none of the major media have seen fit to publicly ponder the possibility of an organized effort to "get Donovan," even though a careful reading of the Special Prosecutor's reports grants ample opportunity for such conjecture.

We have no doubt that the accusations made by individuals or leaked from government sources (which subsequently proved to be false) were accurately reported by you. Comprehending the difficulties you must encounter in sorting truth from fiction in such matters of public interest we do not hold you at fault even though the law in New Jersey has stricter standards. Though innocent, you have been used and we have been thereby abused in the political jeremiad against Ray Donovan, the Secretary of Labor of the United States.

After reviewing some of the allegations involved, discussing the Silverman reports, and stating the company's determination to clear its name by exposing and bringing to justice those who had falsely accused it, the letter concluded:

If you will be good enough to give this letter (excepting this last paragraph if you choose) reasonable prominence in your publication at least once, prior to December 10, 1982, we will be entirely satisfied that such publication would meet any legal requirement under "retraction" and would indeed be as much as we could fairly expect from you under the circumstances.

Id.

Defendant, through counsel, responded to this letter by stating that it felt that it had responsibly reported on the Donovan matter and that any suggestion of a retraction was inappropriate. It also indicated that it printed only letters "of suitable length and of general interest" and that Schiavone's letter did not meet these criteria. (Schiavone's single-spaced, typewritten letter exceeded three pages in length). Responding in turn, Schiavone took issue with Time's suggestion that Time had acted responsibly, referring to six articles published by the magazine and stating that "no objective reader could regard those stories as other than defamatory." Complaint, Ex. D.² Schiavone went on to state that "it is not `responsible' reportage to accurately report false and misleading information, and where the medium itself actively participates in the solicitation of such information, its conduct should be condemned." Id. Schiavone argued that "in some cases TIME accurately but incompletely reported false information," and quoted the fourth paragraph of Time's August 23, 1982 article, Webster's December 15, 1980 memorandum, and the relevant section of the special prosecutor's supplemental report. Id. (emphasis in original). The letter concluded by stating that "a truly responsible journal would welcome the opportunity to redress injustice in which it had participated and consequently we request appropriate retraction." Id. Defendant, again through counsel, responded that its "best information was that the statement published by TIME regarding the Hoffex reference is totally accurate" and stated that it disagreed with Schiavone's thoughts on what constitutes responsible journalism. Complaint Ex. E.

Soon after receiving this second response from defendant, plaintiffs filed this action, contending that the fourth paragraph of the August 23, 1982 story was defamatory and false and that the "conscious, deliberate, willful, malicious and negligent conduct" of defendant had damaged plaintiffs' reputations and had caused plaintiff Ronald Schiavone mental anguish.³ Defendant filed this motion to dismiss the complaint for failure to state a claim on the ground that the statement asserted to be defamatory is privileged as an accurate report of an official record or proceeding. Defendant notes that plaintiffs "do not challenge the accuracy of the report." Br. in Support of Defendant's Motion to Dismiss at 2. In their responding papers, plaintiffs do not contradict defendant's assertion that they concede that the statement at issue is accurate. Rather, they argue that discovery is required before the applicability of the privilege can be determined, and assert that the privilege can be defeated in this case if it is shown that Time did not rely on the December 15, 1980 memo in making the allegedly defamatory statement or that Time printed the statement for the sole purpose of harming plaintiffs....