Schultz v. Newsweek, Inc.

• Decision Date: 21 December 1979
• Docket Number: Civ. No. 76-70372.
• Citation: 481 F. Supp. 881
• Parties: Leonard SCHULTZ, Plaintiff, v. NEWSWEEK, INC., a New York Corporation, and the Evening News Association, a Michigan Corporation, Defendants.
• Court: U.S. District Court — Western District of Michigan

481 F. Supp. 881

Leonard SCHULTZ, Plaintiff, v. NEWSWEEK, INC., a New York Corporation, and the Evening News Association, a Michigan Corporation, Defendants.

Civ. No. 76-70372.

United States District Court, E. D. Michigan, S. D.

December 21, 1979.

Neal Bush, Mogill, Bush, Posner & Weiss, Detroit, Mich., for plaintiff.

James A. Smith, Bodman, Longley & Dahling, James E. Stewart, Butzel, Long, Gust, Klein & Van Zile, Detroit, Mich., for defendants; Rogers & Wells, New York City, of counsel.

OPINION AND ORDER GRANTING DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT

CORNELIA G. KENNEDY, District Judge.

Plaintiff brought this action for libel against defendants in Wayne County Circuit Court and defendants removed to this court. Defendants now move for summary judgment.

The alleged libels occurred in one issue of Newsweek (Count I) and four newspaper stories in the Detroit News (Count II). Plaintiff alleges defendant Newsweek, Inc. (hereinafter Newsweek) libeled plaintiff in an article from its August 18, 1975 issue of Newsweek entitled "Where's Jimmy Hoffa?" by referring to plaintiff as a "Detroit Underworld figure". Plaintiff alleges defendant Evening News Assn. (hereinafter, Evening News) libeled plaintiff (a) in an article from the August 13, 1975 issue of the Detroit News, page 1-A, entitled "Hoffa `Set Up' for a Rendezvous by Giacalone?" by referring to plaintiff as a "long-time underworld figure" and one of "the other two men named by law officials as those with whom Hoffa was to meet"; (b) in an article from the August 22, 1975 issue, page 4-A, entitled "Jury Probe a Last Hope in Hoffa Case" by referring to plaintiff as "a longtime underworld figure . . . (and) among those scheduled to meet Hoffa July 30"; (c) in the September 9, 1975 issue, page 3-A, by referring to plaintiff as an "underworld figure"; and (d) in the September 16, 1975 issue, page 3-B, by referring to plaintiff as a person who "has been named a key figure in the investigation into the disappearance of former Teamsters Union President James R. Hoffa."

Newsweek argues that its statement is privileged by the common law of Michigan and by the First Amendment. Since the story was of public concern, it argues plaintiff may only recover damages under Michigan law if he proves actual malice. It contends plaintiff is a public figure and must prove malice as a matter of constitutional law before he may recover for libel. Newsweek asserts that after exhaustive discovery of all evidence available on this issue no evidence of malice can be shown under either Michigan or federal constitutional law standards. The deposition of Mr. Schultz was taken over a long period of time. The depositions of Evening News reporters Wendland and Nehman were taken twice. Thus, there is no disputed fact and summary judgment should be granted.

Evening News also contends its statements are protected by the common law of Michigan and federal constitutional law. Further, it contends the statements are true and truth is an absolute defense. The allegation regarding the August 22, 1975 issue was misstated; the article said plaintiff was "also reported to have been among those scheduled to meet Hoffa July 30", and as corrected, the Evening News asserts this statement is true.

Plaintiff argues he is not a public figure and defendants are not protected under federal constitutional law by New York Times v. Sullivan¹ standards. He insists the statements are not true and that Evening News cannot insulate itself from liability from publishing a libelous statement merely by saying someone else reported the statement. He argues that he has advanced enough evidence to create an issue of fact on the question of malice and therefore summary judgment should be denied.

Three issues have been raised by the motions: whether or not defendants have a qualified privilege under Michigan law; whether or not plaintiff is a public figure, giving defendants a privilege under federal constitutional law; and whether or not the statements are in fact true. A preliminary issue was also raised by the briefs: whether or not summary judgment is appropriate in a libel case when the issue of malice has been raised. Michigan courts have generally recognized actual malice as a jury question, see Arber v. Stahlin, 382 Mich. 300, 306-09, 170 N.W.2d 45 (1969), cert. denied, 397 U.S. 924, 90 S.Ct. 927, 25 L.Ed.2d 103; Lawrence v. Fox, 357 Mich. 134, 146, 97 N.W.2d 719 (1959), but federal courts applying Fed.R.Civ.Pro. 56 have granted summary judgment in cases involving questions of malice. See Cervantes v. Time, Inc., 464 F.2d 986, 993 (8th Cir. 1972), cert. denied, 409 U.S. 1125, 93 S.Ct. 939, 35 L.Ed.2d 257; Schultz v. Reader's Digest Assn., 468 F.Supp. 551, 564 (E.D.Mich.1979) (Freeman, J.); Rosanova v. Playboy Enterprises, Inc., 580 F.2d 859 (5th Cir. 1978). Moreover, the Michigan Supreme Court will affirm a grant of summary judgment even where malice is alleged if it is appropriate. See Nuyen v. Slater, 372 Mich. 654, 660, 127 N.W.2d 369, 373 (1964). The court said, quoting Konkle v. Haven, 140 Mich. 472, 478, 103 N.W. 850:

The presumption in cases of privileged communications is that the person acts in good faith and from proper motives. If there is anything in the alleged libelous article or in the surrounding circumstances which shows a bad or vindictive spirit or a feeling of hatred or ill will, the question belongs to the jury. If there is not, it belongs to the court, as a question of law.

The court continued, quoting Raymond v. Croll, 233 Mich. 268, 275-276, 206 N.W. 556:

The court should not permit dishonesty of purpose to be lightly inferred from acts which are just as consistent with good faith as with bad faith. If the circumstances relied on as showing malice are as consistent with its nonexistence as with its existence, the plaintiff has not overcome the presumption of good faith, and there is nothing for the jury.

372 Mich. at 660, 127 N.W.2d at 373.

Under Michigan law, there is a qualified privilege to publish information which is in the public interest, which imposes a burden on plaintiff of proving defendants acted with actual malice. See Orr v. Argus-Press Co., 586 F.2d 1108, 1113 (6th Cir. 1978), cert. denied, 440 U.S. 960, 99 S.Ct. 1502, 59 L.Ed.2d 773; Schultz, supra, 468 F.Supp. at 562; Lawrence, supra, 357 Mich. at 143, 97 N.W.2d 719; Peisner v. Detroit Free Press, Inc., 82 Mich.App. 153, 163, 266 N.W.2d 693 (1978). The publisher of such information has this privilege whether or not the plaintiff is a public official. See Schultz, supra, 468 F.Supp. at 560-62; Peisner, supra, 82 Mich.App. at 161, 266 N.W.2d 693. Whether or not a communication is privileged is for the court to decide. See Nuyen, supra, 372 Mich. at 659, 127 N.W.2d 369; Lawrence, supra, 357 Mich. at 139, 97 N.W.2d 719.

The Newsweek article and the August 13, August 22, and September 9 Detroit News articles were primarily concerned with the disappearance of James R. Hoffa, former President of the Teamsters Union and an internationally known labor leader. The articles discussed those he was supposed to meet on the day of his disappearance. Clearly, this was a matter of importance to the public. See Schultz, supra, 468 F.Supp. at 562.

The September 16 Detroit News article was not about Hoffa's disappearance but about plaintiff's sons who had filed a lawsuit against the Southfield Police Department and the state Liquor Control Commission which had refused to give them a liquor license for their Southfield Athletic Club. The license had been denied, according to the report, because the Commission believed plaintiff was a silent partner and that the club was a gathering place for a number of underworld figures. Since the distribution of liquor licenses is a public function, the public has a legitimate interest in who is applying for a liquor license and why such license is denied.

The articles in question, being articles within the public interest, are therefore qualifiedly privileged under Michigan law. Plaintiff, to prevail, must show a genuine issue of fact whether or not defendants acted with actual malice.

As noted in Schultz, supra, the standard of malice to be applied to the Michigan qualified privilege is not entirely clear. Some cases suggest that the standard should be ill will, spite, or intention to injure the plaintiff. See Bufalino v. Maxon Brothers, Inc., 368 Mich. 140, 153-54, 117 N.W.2d 150 (1962); Nuyen v. Slater, 372 Mich. 654, 661, 127 N.W.2d 369 (1964); Timmis v. Bennett, 352 Mich. 355, 367, 89 N.W.2d 748 (1958). However, none of those cases involved a newspaper defending its publication of a newsworthy item. The most recent Michigan Supreme Court decision on the question of malice did involve a newspaper defending its publication and there the court applied the constitutional standard from New York Times Co. v. Sullivan, 376 U.S. 254, 279-80, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964), which held that actual malice meant knowledge that the statement was false or publishing with reckless disregard of whether it was false or not. See Arber, supra, 382 Mich. at 305-06, 170 N.W.2d 45 (1970).²See also Lawrence, supra, 357 Mich. at 142-43, 97 N.W.2d 719 (1959); Peisner, supra. The Michigan Court of Appeals has applied the New York Times standard to one case which did not involve the press as a defendant, see Wynn v. Cole, 91 Mich.App. 517, 284 N.W.2d 144 (1979), but this court need not go so far in the present case. Relying on Arber and Lawrence, this court holds that under Michigan's common law plaintiff must establish a disputed issue of fact that defendants had actual malice as defined by New York Times — i. e., that defendants had knowledge of the falsity of their statements or acted in reckless disregard to the truth or falsity of their statements.

With respect to Newsweek, plaintiff has not alleged nor produced any documents to support an allegation that Newsweek published its statement with...