Steaks Unlimited, Inc. v. Deaner

• Decision Date: 11 April 1979
• Docket Number: Civ. A. No. 77-803.
• Citation: 468 F. Supp. 779
• Parties: STEAKS UNLIMITED, INC., Plaintiff, v. Donna DEANER and WTAE-TV 4 and Hearst Corporation, Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

468 F. Supp. 779

STEAKS UNLIMITED, INC., Plaintiff, v. Donna DEANER and WTAE-TV 4 and Hearst Corporation, Defendants.

Civ. A. No. 77-803.

United States District Court, W. D. Pennsylvania.

April 11, 1979.

Robert N. Gluck, Gluck & Miller, Wooster, Ohio, Wm. S. Schweers, Harrington & Schweers, Pittsburgh, Pa., for plaintiff.

Baker, Hostetler & Patterson, Cleveland, Ohio, John P. McComb, Jr., Moorhead & Knox, Pittsburgh, Pa., for defendants.

OPINION

COHILL, District Judge.

This is a defamation action that was filed in the United States District Court for the Northern District of Ohio and transferred here on defendants' motion for a change of venue. All defendants have moved for summary judgment pursuant to Fed.R. Civ.P. 56(b).

I. Facts

On August 23, 1976, defendant, WTAE-TV, broadcast a consumer affairs story on its 6:00 p. m. news concerning a steak sale being conducted by the plaintiff, Steaks Unlimited, Inc., at several Pittsburgh area Zayre department stores. Defendant, Donna Deaner, was the newscaster and reporter who appeared on the broadcast in her position as a consumer affairs editor and newscaster for defendant, WTAE-TV. The broadcast concerned Steaks Unlimited's use of certain sales tactics and certain alleged misrepresentations about the quality of its product, which was United States Department of Agriculture ("USDA") inspected, ungraded, frozen, tenderized, boxed beef, approximately equivalent to USDA "commercial" grade. The broadcast included a taped interview with one Aubrey Mills who was selling the steaks. A transcript of the broadcast is attached hereto as Appendix A.

Steaks Unlimited, an Ohio based firm, sold beef directly to the consuming public. Its method of sale in the Pittsburgh area involved holding a three or four day sale in front of, or inside, Zayre stores. At the end of the sale, Steaks Unlimited would place its unsold product back into tractor-drawn freezer trailers and move on to its next sale located somewhere outside the Pittsburgh area.

To promote its sales, Steaks Unlimited expended significant funds in advertising its product over local radio stations, through local newspapers, by large signs displayed at the sales locations and by handbills given to persons walking near Steaks Unlimited sales locations at the various Zayre stores.

As consumer affairs editor and newscaster for WTAE-TV, Deaner frequently received leads for stories through telephone complaints that Pittsburgh area consumers made to her. From Friday, August 20, 1976, through the morning of August 23, 1976, Deaner and WTAE-TV received numerous telephone complaints from Pittsburgh area consumers, complaining about the poor quality of Steaks Unlimited's beef as well as asserted misrepresentations as to the quality and type of beef being sold. Deaner also read Steaks Unlimited's advertisements in the August 19, 1976 edition of The Pittsburgh Press, noting that the advertisement did not make any statements of the USDA grade of the beef, or its equivalent, or the price per pound for the beef — all contrary to what she considered to be normally accepted practice in the Pittsburgh area for the sale of beef to the public.

Prior to the broadcast in question, Deaner had made over 700 consumer news broadcasts while employed at WTAE-TV, including investigatory reports on meat and meat sales, and she was generally knowledgeable about the USDA inspection and grading systems and the type of beef being sold by Pittsburgh-area supermarkets. According to her affidavit, she believed that all major Pittsburgh-area supermarkets advertised and claimed to be selling only USDA grades "choice" or "good" beef or its ungraded equivalent. Deaner also believed, from living in the Pittsburgh area, and from observing Pittsburgh supermarket ads, that beef was virtually always advertised at a price per pound.

Accordingly, the telephone complaints from consumers, in addition to the unusual features of plaintiff's advertisement, indicated to Deaner and her assistant, Ruth Lando, that further investigation was merited to determine whether to advise the consuming public in the Pittsburgh area about what then appeared to them to be the use of deceptive sales tactics.

On the morning of August 23, 1976, Deaner and Lando each telephoned Jean Ann Fox, then administrator of the Allegheny County Bureau of Consumer Affairs, to determine whether that government agency had investigated Steaks Unlimited. Citing a lack of sufficient manpower, Fox said she thought Steaks Unlimited's advertisement in the August 19, 1976 edition of The Pittsburgh Press might be in violation of state laws as deceptive and misleading, and she suggested that Deaner investigate the matter.

On the morning of August 23, 1976, Lando contacted Murphy's Meats — East Hills, Inc., a meat store located in the East Hills Shopping Center, the same Center where the Steaks Unlimited sale was being conducted. Lando discussed the sale by telephone with a representative of Murphy's Meats. Deaner and Lando then went to the East Hills Shopping Center but did not take a cameraman with them since at that time they had not yet decided whether to do a story concerning the steak sale. The steak sale was scheduled to conclude at the end of the next day.

When they arrived at East Hills Shopping Center, Deaner and Lando first visited Murphy's Meats, with whom Deaner had had prior experience; she believed its personnel to be reliable, accurate sources of information who were knowledgeable about meat quality, although Murphy's Meats was a competitor of Steaks Unlimited in this setting. The representative from Murphy's Meats indicated that he had bought a box of T-bone steaks from the sale and found them to be of very poor quality, in his opinion possibly the equivalent of USDA grades of "canner," "cutter," or "utility," which were grades of meat inferior to "commercial" grade.

Deciding in light of the advertisements, customer complaints, and information from Murphy's Meats, that Steaks Unlimited's operations merited closer scrutiny, Deaner and Lando then walked to the front of the East Hills Zayre store. Lando observed a Steaks Unlimited salesman and heard him make what she considered a misrepresentation of the price of the beef as well as represent to consumers that the steaks were equivalent to the beef sold in Pittsburgh supermarkets.

Lando then reported her observations to Deaner, who decided to enter the store and observe the sale first hand, still without a cameraman. Deaner observed one of Steaks Unlimited's salesmen, Aubrey Mills, attempting (in her opinion) to avoid giving an accurate price per pound, stating false prices per pound, and falsely saying that the beef sold by local Pittsburgh supermarkets was the same quality as that sold by Steaks Unlimited.

After Deaner requested a WTAE cameraman to film the story, Deaner and Lando returned to the East Hills Zayre store and Deaner conducted an interview with the salesman, Aubrey Mills, a portion of which interview was televised on the broadcast. In the interview, Mills made what the defendants assert are misrepresentations about the quality of the beef being sold by Steaks Unlimited. See Appendix A.

Early that afternoon, Deaner and Lando returned to the station and began preparing for the 6:00 p. m. newscast. Deaner telephoned the head of consumer affairs for Zayre Corporation, Stanley Berkovitz, to learn more about Zayre's involvement in the sale and to discuss her findings with Berkovitz. Berkovitz told Deaner that Zayre's agreement with Steaks Unlimited called for Steaks Unlimited to sell "commercial" grade beef at lower than supermarket prices.

In preparing the script for the broadcast, Deaner did the drafting and editing. She was supervised by William Church, the assistant news director at WTAE, who was the acting news director at that time. Church observed much of the film material as it was being edited, including the interview, and discussed the story with Deaner and Lando in the process of overseeing the preparation of the broadcast. Based on the investigation made, Deaner's history of accurate reporting, and the content of the filmed material, Church says he was convinced that the facts would be presented by the broadcast in a true and accurate manner.

John Conomikes, WTAE-TV's vice-president and general manager, contends that he received a telephone call later in the afternoon of August 23, 1976, from a person identifying himself as Darl Harkleroad, Steaks Unlimited's owner, threatening a lawsuit if the broadcast was aired. Conomikes responded that he would check out the story before it went on the air and called Church to discuss the accuracy of the proposed broadcast. Church reviewed the script with Conomikes and informed Conomikes that he believed the material contained in the broadcast was accurate. Shortly before air time, Conomikes also talked directly with Deaner, discussing the proposed broadcast and her investigation of the sale, and he says he was convinced that the broadcast would be truthful and accurate.

Late in the afternoon of August 23, 1976, Harkleroad also telephoned the WTAE newsroom and spoke with Lando, Deaner's assistant. Harkleroad wanted to talk to Deaner, but at that time she was unavailable. In his conversation with Lando, Harkleroad asked about the substance of the broadcast and attempted to persuade Lando that the meat Steaks Unlimited was selling was "quality" meat.

The broadcast went on the air as scheduled, with an introduction that Deaner had a "warning tonight." Deaner said that when she first looked at Steaks Unlimited's ad, she "had a feeling something was wrong." No mention in the ad of USDA quality grade was "a tipoff that something is being hidden," she said. What she found out at the Zayre store in East Hills was "totally deceptive and misleading." In the broadcast of the Aubrey Mills interview, Deaner said, "The truth of the matter is that they do everything possible to...