Weller v. American Broadcasting Companies, Inc.

• Decision Date: 18 July 1991
• Docket Number: No. A046379,A046379
• Citation: 283 Cal.Rptr. 644,232 Cal.App.3d 991
• Court: California Court of Appeals Court of Appeals
• Parties: , 19 Media L. Rep. 1161 Michael J. WELLER et al., Plaintiffs and Respondents, v. AMERICAN BROADCASTING COMPANIES, INC., et al., Defendants and Appellants.

Page 644

283 Cal.Rptr. 644

232 Cal.App.3d 991, 19 Media L. Rep. 1161

Michael J. WELLER et al., Plaintiffs and Respondents, v. AMERICAN BROADCASTING COMPANIES, INC., et al., Defendants and Appellants.

No. A046379.

Court of Appeal, First District, Division 1, California.

July 18, 1991.

Charles O. Morgan, Jr., Paul Kleven, Law Office of Charles O. Morgan, Jr., San Francisco, for plaintiffs and respondents.

Linda E. Shostak, Paul Flum, Mia Ettinger, Judith M. Schelly, Morrison & Foerster, San Francisco, for defendants and appellants.

STEIN, Associate Justice.

American Broadcasting Companies, Inc., KGO-TV, and Carol Ivy (appellants) appeal from a judgment entered against them in a defamation action brought by Michael J. Weller (Weller), Edgar W. Morse, and Argentum Antiques Ltd., Inc. (Argentum). The jury found that a series of broadcasts in February and March of 1984 concerning the origin and value of certain antique silver candelabra that Weller sold to the De Young Museum were defamatory and awarded damages totalling $2.3 million.

FACTS

In 1982, Weller learned that a wealthy woman, from a well-established Texas family, wished to dispose of two rare candelabra made by the renowned silversmith, Paul Storr. Weller entered into a standard consignment agreement with the owner, agreeing to pay the owner $45,000 upon the sale of the candelabra. The owner asked that her identity be kept confidential, a request that was not uncommon in the antique silver industry.

Weller had a silversmith perform some repairs on the candelabra, which included filling-in and touching-up holes which had been drilled when the candelabra had once been electrified. Weller valued the candelabra at between $60,000 and $100,000.

For approximately nine months Weller unsuccessfully marketed the candelabra at an asking price of $90,000. In January of 1983, the de Young Museum purchased the candelabra for $65,000. At the time of purchase, Weller advised the museum of the prior electrification and of other defects in the candelabra. Weller did not disclose the name of the former owner, but did provide the museum with a letter stating that the candelabra had been in private ownership in this country for "at least forty years."

Approximately one year later, KGO-TV's Assistant News Director, Andrew Shinnick, received a telephone call from a confidential source about the candelabra. The caller suggested that the museum might have paid too much for the candelabra, particularly in light of the electrification and repairs. The caller also stated that Barbara Herbert, a well-known San Francisco sculptress who had died some years earlier, might have owned a pair of candelabra similar to the ones at the museum.

Appellants aired a series of broadcasts that respondents contend implied the following defamatory facts: "that [respondents] sold stolen candelabra to the Museum; sold the candelabra at a grossly inflated price; misrepresented the maker, condition, origin and provenance of the candelabra to the Museum; were associates of Jerry Durham, a man recently convicted of insurance fraud involving silver who was suspected of having stolen the candelabra; inadequately repaired the candelabra; refused to cooperate with [appellants] in establishing the background of the candelabra; and generally defrauded the Museum." ¹

The jury returned a general verdict that appellants were liable to Weller and awarded general damages in the amount of $1 million for mental suffering, $500,000 for proven injury to reputation and $500,000 for presumed damages to reputation. It awarded no punitive damages.

In answers to special interrogatories, the jury specifically found that the average viewer would have understood the broadcasts to make one or more defamatory statements of fact about Weller and that the implied statements were substantially false. The jury also found that the retraction was not legally sufficient or effective. The jury further found that Ivy, ABC and KGO-TV were negligent in making those broadcasts. Although the jury agreed with the defense that the defamatory statements were privileged under Civil Code section 47, subdivision (3), ² the jury found that the defendants acted out of the kind of malice necessary to defeat this privilege. The jury also found that Weller had proved by clear and convincing evidence that defendant Ivy made one or more of the defamatory statements "with knowledge that such statement was false or with a reckless disregard for the truth," but that they had not acted with the kind of malice warranting imposition of punitive damages. The jury also awarded Argentum Antiques $300,000 for proven injury to reputation and made similar findings in its answers to special interrogatories.

ANALYSIS

I. CONSTITUTIONAL PRIVILEGE

Appellants initially contended that the trial court erred in denying their motion in limine to have evidence of 25 specific statements excluded because they constituted "opinion" and were therefore privileged as a matter of federal constitutional law. Their argument was based on the distinction between fact and opinion that both the lower federal courts (see, e.g., Ollman v. Evans (1984 D.C.Cir.) 750 F.2d 970 (en banc)) and the California courts (see, e.g., Baker v. Los Angeles Herald Examiner (1986) 42 Cal.3d 254, 259-260, 228 Cal.Rptr. 206, 721 P.2d 87) have attempted to define, with widely divergent results. (See, FACT AND OPINION IN DEFAMATION: RECOGNIZING THE FORMATIVE POWER OF CONTEXT (1990) 58 Fordham L.Rev. 761, 769-770, fn. 52.) However, the United States Supreme Court has recently rejected the contention that a separate constitutional privilege exists to protect statements of opinion. (Milkovich v. Lorain Journal Co. (1990) 497 U.S. 1, 110 S.Ct. 2695, 111 L.Ed.2d 1.) ³ The court pointed out that expressions of "opinion" "may often imply an assertion of objective fact." For example, "[i]f 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. Even if the speaker states the facts upon which he bases his opinion, if those facts are either incorrect or incomplete, or if his assessment of them is erroneous, the statement may still imply a false assertion of fact." (Id. 110 S.Ct. at pp. 2705-2706.)

The precise impact of the Milkovich decision on the viability of prior law distinguishing between fact and opinion remains to be seen. (Compare Unelko Corp. v. Rooney (9th Cir.1990) 912 F.2d 1049, 1053 [pre-Milkovich decisions developing the distinction between fact and opinion "have all been effectively overruled" by Milkovich ] with The Supreme Court--Leading Cases, 1989 term, (1990) 104 Harvard L.Rev. 129, 219 ["Because the criteria used by lower courts ... to distinguish fact from opinion are consistent with Milkovich 's limitations, the law of defamation will remain essentially the same."].) We have observed a tendency in the post-Milkovich decisions more often to find that allegedly defamatory statements fall outside the scope of constitutional protection. (See, e.g., Unelko Corp. v. Rooney, supra, 912 F.2d at p. 1053; White v. Fraternal Order of Police (D.C.Cir.1990) 909 F.2d 512, 522-523; Scheidler v. National Organization for Women, Inc. (N.D.Ill., E.D.1990) 751 F.Supp. 743.) Nonetheless, as sanctioned by Milkovich, the courts are still willing to protect statements that are clearly satirical, hyperbolic, imaginative or rhetorical. (See, e.g., Moyer v. Amador Valley J. Union High School Dist. (1990) 225 Cal.App.3d 720, 275 Cal.Rptr. 494.) Statements of fact that are not provably false also continue to be protected. (See Don King Productions, Inc. v. Douglas (S.D.N.Y., 1990) 742 F.Supp. 778, 782.)

Although Milkovich disposes of appellants' argument that the broadcasts were absolutely privileged as statements of opinion, our analysis does not end here. (See, e.g., Moyer v. Amador Valley J. Union High School Dist., supra, 225 Cal.App.3d at p. 724, 275 Cal.Rptr. 494; Gill v. Hughes (1991) 227 Cal.App.3d 1299, 1309, 278 Cal.Rptr. 306.) The Milkovich court explained that even without such a privilege, "the breathing space which freedoms of expression require in order to survive ... is adequately secured by existing constitutional doctrine...." (Milkovich v. Lorain Journal Co., supra, --- U.S. at p. ----, 110 S.Ct. at p. 2706, citations and internal quotation marks omitted.) First, and "foremost," the court noted that its decision in Philadelphia Newspapers, Inc. v. Hepps (1986) 475 U.S. 767, 106 S.Ct. 1558, 89 L.Ed.2d 783 requires that "a statement on matters of public concern must be provable as false." ( Milkovich, supra, 110 S.Ct. at p. 2706.) Thus, a "statement of opinion relating to matters of public concern which does not contain a provably false factual connotation will receive full constitutional protection." ( Milkovich, supra, at p. 2706, emphasis added.) Second, "the Bresler ⁴-Letter Carriers ⁵-

Falwell ⁶ line of cases provide protection for statements that cannot 'reasonably [be] interpreted as stating actual facts' about an individual," (id.) because it is expressed in loose figurative or hyperbolic language, and/or the context and tenor of the statements negates the impression that the author seriously is maintaining an assertion of actual fact. In addition to the foregoing protections, the court emphasized that if the alleged defamatory statements are submitted to a jury, the culpability requirements imposed under New York Times Co. v. Sullivan (1964) 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686, Gertz v. Robert Welch, Inc. (1974) 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789, and Curtis Publishing Co. v. Butts (1967) 388 U.S. 130, 87 S.Ct. 1975, 18 L.Ed.2d 1094, provided additional protection for the exercise of First Amendment rights. (Milkovich, supra, 110 S.Ct. at pp. 2706-2707.)

Thus, even after Milkovich, under existing federal constitutional law, we must determine whether the statements that form...