Toney v. WCCO Television, Midwest Cable and Satellite, Inc.

• Citation: 85 F.3d 383
• Decision Date: 07 June 1996
• Docket Number: No. 95-1190,95-1190
• Parties: 24 Media L. Rep. 1993 Julian TONEY, Plaintiff--Appellant, v. WCCO TELEVISION, MIDWEST CABLE AND SATELLITE, INC., also known as WCCO TV, Channel 4, also known as IOWCCO TV, Channel 411, Defendant--Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 383

85 F.3d 383

24 Media L. Rep. 1993

Julian TONEY, Plaintiff--Appellant, v. WCCO TELEVISION, MIDWEST CABLE AND SATELLITE, INC., also known as WCCO TV, Channel 4, also known as IOWCCO TV, Channel 411, Defendant--Appellee.

No. 95-1190.

United States Court of Appeals Eighth Circuit.

Submitted Oct. 19, 1995.

Decided June 7, 1996.

Curt Krull, Des Moines, Iowa, argued (Jacques D. Schira, on the brief), for appellant.

Paul R. Hannah, St. Paul, Minnesota, argued (Laurie A. Zenner, St. Paul, Minnesota, and Douglas P. Jacobs, New York City, on the brief), for appellee.

Before RICHARD S. ARNOLD, Chief Judge, WHITE, ^* Associate Justice (Ret.), and LOKEN, Circuit Judge.

WHITE, Associate Justice (Ret.).

I. INTRODUCTION

Plaintiff-Appellant Julian Toney ("Toney") brought this action against Defendant-Appellee WCCO Television, Midwest Cable and Satellite, Inc., a/k/a WCCO TV, Channel 4 ("WCCO"), alleging that a report on the sale of dogs to research institutions defamed him and defamed him by implication. The district court granted summary judgment to WCCO. For the reasons set forth below, we reverse in part and affirm in part the district court's judgment that WCCO did not defame Toney, reverse its dismissal of Toney's defamation by implication claim, and remand this case for further proceedings.

II. BACKGROUND

Toney is a dog dealer who resides in Iowa and does business in Iowa, Missouri and Minnesota. Toney, who had registered with and was licensed by the United States Department of Agriculture ("USDA"), sold dogs to the University of Minnesota. On or about May 20, 1992, WCCO, a television station headquartered in Minneapolis, Minnesota, broadcast a report about how certain dog dealers sold stolen dogs to research institutions for use in medical research. The broadcast included interviews with a representative from the University of Minnesota laboratories, an official from the USDA, owners of dogs who believed that their pets may have been stolen and sold to research laboratories as well as Toney and another USDA licensed dog dealer.

In pertinent part, WCCO's report stated that:

So these animals that are "retired from service," or unclaimed at the pound, or stolen from unsuspecting owners are sold to middlemen. The USDA licenses these middlemen and calls them Class B dog dealers. According to the Animal Welfare Act only these Class B[dog] dealers can sell animals to research institutions. But we found plenty of holes in this system that may also be protecting animal thieves.

* * * * * *

South about 40 miles on the Iowa/Missouri border, we found the place where Class B dealer Julian Toney buys the dogs he sells to the University.

* * * * * *

According to USDA records Mr. Toney supplies about a thousand dogs a year to the University of Minnesota. He told us the university is only about a fifth of his business. He said he seldom gets animals from dog pounds. But when we checked his 1990 records, we found he was telling the USDA just the opposite.

Last week, the USDA confirmed that Julian Toney himself is under investigation for falsification of records.

* * * * * *

No one is accusing major research institutions of seeking out stolen pets for their experiments. But the system relies on human honesty and adequate enforcement, and we found shortages of both.

App. at 46-48. Shortly after the broadcast, the USDA charged Toney with falsifying his records. ¹

After WCCO refused to retract its statements about Toney, he filed a two-count complaint alleging that WCCO defamed him directly and also by implication. Specifically, Toney maintained that the report implied that he sold stolen animals, was dishonest and a thief, and lied about the source of his animals. Alleging that this report damaged him personally as well as professionally, Toney requested compensatory as well as punitive damages in an amount over $50,000.

WCCO moved to dismiss Toney's amended complaint, or in the alternative, for judgment as a matter of law. After holding oral argument, the district court first rejected Toney's defamation claim, ruling that the statements in the report about Toney were either true or non-defamatory. The court then held that, because Minnesota did not provide a claim for relief based on defamation by implication, WCCO was also entitled to summary judgment on Toney's implied defamation claims. Toney filed this timely appeal.

III. DISCUSSION

A. APPLICABLE LAW AND STANDARD OF REVIEW

Because this case arises under this court's diversity jurisdiction, the substantive issues are governed by Minnesota law. B.B. v. Continental Ins. Co., 8 F.3d 1288, 1291 (8th Cir.1993). Thus, our task is to determine and apply Minnesota law. Farr v. Farm Bureau Ins. Co., 61 F.3d 677, 679 (8th Cir.1995). Of course, Minnesota courts must apply federal constitutional standards that are applicable to cases like this. In this regard, it is conceded that Toney is not a public figure; rather, he is a private plaintiff in this defamation case.

We review the district court's interpretation of Minnesota law de novo. Id. We also review de novo the district court's grant of WCCO's motion for summary judgment. Continental Ins. Co., 8 F.3d at 1291. Summary judgment for WCCO is proper "if there is no genuine issue as to any material fact." Fed.R.Civ.P. 56(c).

B. DEFAMATION AND DEFAMATION BY IMPLICATION

Count 1 of Toney's complaint alleges defamation; Court 2 alleges defamation by implication. To prevail on either of these claims, Toney must prove that WCCO's publication about him defamed him by establishing that WCCO (1) published a statement of fact; (2) of and concerning him; (3) which was false; and (4) damaged his reputation and lowered his estimation in the community. See Lewis v. Equitable Life Assurance Soc'y, 389 N.W.2d 876, 886 (Minn.1986); Foley v. WCCO Television, Inc., 449 N.W.2d 497, 500 (Minn.Ct.App.1989), cert. denied, 497 U.S. 1038, 110 S.Ct. 3302, 111 L.Ed.2d 811 (1990).

Under Minnesota defamation law, a statement falls into one of three categories: (1) those that are clearly defamatory on their face; (2) those that could not possibly have a defamatory meaning; and (3) those that are reasonably susceptible to a defamatory meaning as well as an innocent one. Church of Scientology v. Minnesota State Medical Ass'n Found., 264 N.W.2d 152, 155 (Minn.1978). In category (3) are "[w]ords, which taken by themselves have an innocent meaning, [but] in connection with surrounding circumstances[ ] may convey a defamatory meaning to those familiar with such circumstances.... [In such cases,] [w]hether a defamatory meaning is conveyed is dependent upon how ordinary men understand the language in light of the surrounding circumstances." Gadach v. Benton County Co-op Ass'n, 236 Minn. 507, 53 N.W.2d 230, 231 (1952) (citations omitted). "If the words are capable of the defamatory meaning, it is for the jury to decide if they were in fact so understood." Utecht v. Shopko Dep't Store, 324 N.W.2d 652, 654 (Minn.1982) (citing Gadach, 53 N.W.2d 230). Thus, at the summary judgment stage, the judge must not conclusively interpret a category (3) statement; rather, the judge should only decide whether a statement is capable of being interpreted as defamatory.

When an otherwise innocent statement is interpreted to have a defamatory meaning, it is not unusual to find that meaning referred to as "implied" or "drawn by implication." See, e.g., Milkovich v. Lorain Journal Co., 497 U.S. 1, 18, 110 S.Ct. 2695, 2705-05, 111 L.Ed.2d 1 (1990) ("If a speaker says, 'In my opinion John Jones is a liar,' he implies a knowledge of facts which lead to the conclusion that Jones told an untruth."); id. at 3, 110 S.Ct. at 2697-98 (holding actionable article "implying that petitioner ... lied under oath in a judicial proceeding"); Phipps v. Clark Oil & Refining Co., 408 N.W.2d 569, 573 (Minn.1987); Lewis, 389 N.W.2d at 889; Janklow v. Newsweek, Inc., 788 F.2d 1300, 1304 (8th Cir.) (en banc), cert. denied, 479 U.S. 883, 107 S.Ct. 272, 93 L.Ed.2d 249 (1986). In the instant case, the district judge held that Minnesota does not recognize "defamation by implication." The district judge, however, could not have meant to preclude plaintiffs from challenging statements that are non-defamatory on their face but capable of having an "implied" defamatory meaning for it is well accepted that such statements may give rise to a defamation claim under Minnesota law, and we see nothing in the district court's opinion that discards such well settled law. For example, in Utecht v. Shopko Dep't Store, the Minnesota Supreme Court held actionable a department store's placement of a notice at the cash register stating "Shopper's Charge-Robert Utecht-Do Not Accept." 324 N.W.2d at 653-54. ² In Shopko, the court explained that "[t]he circumstances in which the notice was seen by the public necessarily prompted speculation as to why the ["Shopper's Charge"] card was not to be accepted. Loss or theft are possible explanations but poor credit is an at least equally likely alternative." Id. at 654; ³ see also Gadach, 53 N.W.2d at 232 ("A jury might well find that this article imputed to plaintiff a crime."); Phipps, 408 N.W.2d at 573 (statement could imply that gas attendant refused to service customer because she was handicapped).

What Minnesota law refers to as "defamation by implication" occurs when a defendant " ' juxtaposes a series of facts so as to imply a defamatory connection between them, or creates a defamatory implication by omitting facts, [such that] he may be held responsible for the defamatory implication, unless it qualifies as an opinion, even though the particular facts are correct.' " Diesen v. Hessburg, 455 N.W.2d 446, 450 (Minn.1990) (quoting W. Page Keeton, et al., PROSSER & KEETON, LAW OF TORTS § 116, at 117 (Supp.1988)), cert. denied, 498 U.S. 1119, 111 S.Ct. 1071, 1072, 112 L.Ed.2d 1177 (1991). Thus, the touchstone of implied defamation claims is an artificial...