Woods v. Evansville Press Co., Inc.

• Decision Date: 27 June 1986
• Docket Number: No. 85-1740,85-1740
• Citation: 791 F.2d 480
• Parties: 12 Media L. Rep. 2179 Charles WOODS, Plaintiff-Appellant, v. EVANSVILLE PRESS COMPANY, INC., the E.W. Scripps Company, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 480

791 F.2d 480

12 Media L. Rep. 2179

Charles WOODS, Plaintiff-Appellant, v. EVANSVILLE PRESS COMPANY, INC., the E.W. Scripps Company,

Defendants-Appellees.

No. 85-1740.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 27, 1985.

Decided May 16, 1986.

Rehearing and Rehearing En Banc Denied June 27, 1986.

Jim Corbett, Lantz, Shaw & Corbett, P.C., Evansville, Ind., for plaintiff-appellant.

Lee Levine, Baker & Hostetler, Washington, D.C., for defendants-appellees.

Before BAUER, COFFEY, Circuit Judges, and GORDON, District Judge. ^*

MYRON L. GORDON, Senior District Judge.

The plaintiff, Charles Woods, brought this diversity action alleging that he was libeled by a newspaper article which appeared in The Evansville Press (Press ) on June 22, 1981. The newspaper is owned and operated by defendant Evansville Press Company, Inc. (Press Company). Defendant The E.W. Scripps Company (Scripps) is the parent corporation of the Press Company. The district court granted Scripps' motion to dismiss for lack of personal jurisdiction and also granted the motion of the Press Company for summary judgment. We affirm.

I. FACTUAL BACKGROUND

In December 1980, Indiana Partners, Ltd., agreed to purchase television station WTVW, Channel 7, in Evansville, Indiana, for $21.5 million. Indiana Partners is a limited partnership comprised of the general partner, WTVW, Inc., of which the plaintiff owns 80%, and the limited partner, WTVY, Inc., wholly owned by the plaintiff. Mr. Woods is the president and treasurer of Indiana Partners, Ltd.

Channel 7, an American Broadcasting Company affiliate, is one of three Evansville television stations but is the only VHF station. Following the partnership's acquisition of Channel 7, Mr. Woods actively participated in the station's day-to-day operations, serving as general manager.

The sale of and subsequent changes at Channel 7 provoked a considerable amount of local media attention. Numerous articles concerning personnel and programming changes at the station, and about the plaintiff himself, appeared in the two major Evansville newspapers, the Press and The Evansville Courier (Courier ).

From January 1980 through August 1981, Kenneth Wayne McManus, the author of the contested article, wrote a regularly published column on radio and television for the Press. From December 1980 through June 22, 1981, Mr. McManus devoted part or all of some 23 columns to matters concerning Channel 7, including the financing of the station purchase, advertising sales practices, station programming and ratings, and personnel changes. For example, shortly after the transfer of the station to Indiana Partners was completed, Mr. McManus published an interview with Mr. Woods in which the plaintiff discussed his plans for the station, his programming philosophy, and his strong religious convictions.

On June 1, 1981, the Courier published an article in which Mr. Woods discussed, inter alia, his past business practices and his vigorous religious convictions. In the Courier article, Mr. Woods discussed how he built up his Alabama construction business following World War II:

"I'd get a house half-built and go to the bank and tell them I needed money to finish it. Then I'd take that money, pay off the building supply man, the loans on the car and the truck, sell the house and start it over again."

Mr. Woods further commented:

"You can only earn so much money with your own two hands, regardless of what you do. So you have to do it with other people's money. If I had $1 million in the bank, and could buy one apartment building outright, I'd buy 10, putting 10 percent down on each."

Mr. McManus read the Courier article prior to publishing his June 22 column in the Press.

In gathering information for his column, Mr. McManus periodically met with employees of several Evansville television and radio stations, including William E. FitzGerald III, the local news anchorman on Channel 7 from August 1978 to June 1981. Upon learning of Mr. FitzGerald's plans to leave Channel 7, Mr. McManus asked him if he would agree to an interview. Mr. FitzGerald had become disgruntled about changes in station policies and programming following the change in station ownership. Mr. FitzGerald eventually agreed to be interviewed on June 17, 1981.

Based upon this interview, Mr. McManus wrote the column at issue which appeared in the Press on June 22, 1981. The column, entitled "Departing anchorman FitzGerald predicts changes at Channel 7," consists almost in whole of statements made by Mr. FitzGerald regarding the plaintiff's ownership and operation of Channel 7 and Mr. FitzGerald's predictions of future changes at the station. In particular, the column reported Mr. FitzGerald's "possible scenario" for an ownership change at the station:

FitzGerald says he believes Woods will not be the owner and general manager of Channel 7 within two years. "Here's a possible scenario, based on what I know, and remember I'm not an economic expert," he said. "He owes a consortium of insurance companies $22 million," he explained. "And he has to make biannual interest payments on that money. He's going to make the one due at the end of this month, but after that, I'm not so sure.

"He's almost giving away commercials. Eventually, the whole market of television sales will become depressed because local businesses will tell the other two stations, 'Well, I can get a low cost-per-thousand (homes reached) on commercial time at Channel 7. Why should I pay your price? A question of quality? Not really.'

"So if he has trouble making the interest payments at the end of the year and the middle of next year, he'll devise a list of excuses that will sound good, the consortium will give him the money to keep the station afloat by buying a bigger piece of it and eventually push him out. The insurance companies may eventually own the station as he needs more money to keep it afloat."

Mr. McManus went on to report Mr. FitzGerald's view of Mr. Woods' religious programming:

Even in programming decisions, FitzGerald is convinced Woods is involved in "misdirection--the old shell game, where they have you looking in one place while something is going on someplace else."

"The public needs to know some things about religious programs, for example," FitzGerald said. "I was always brought up that you must be Christian in word and deed. He keeps talking about giving Billy Graham and James Robison all the time they want on his station. It's not for religion sake. Religious organizations pay for the air time, whatever the going price is, and they pay it up front."

Woods has gone in front of the camera to do a Channel 7 contest promotion soliciting reasons people should go to church. Entries must be submitted in 75 words or less, the winning entry will be converted to a public service announcement, the author will receive $250, and another $250 will be donated to the church of the author's choice. At that, FitzGerald shook his head and said, "I seriously question that kind of commercialization. I really don't think God really needs a contest to get his message across."

It is uncontested that prior to publication, Mr. McManus checked with Mr. FitzGerald to verify that the column correctly reported Mr. FitzGerald's statements.

Mr. Woods filed the present action against the defendants on December 30, 1981. The plaintiff contends that the June 22 column defames him by falsely implying that he is a dishonest person with financial problems and by misrepresenting his religious beliefs. On April 17, 1985, the district court granted Scripps' motion to dismiss the complaint against it for lack of personal jurisdiction and also granted the Press Company's motion for summary judgment. The plaintiff appeals the district court's decision as to each motion.

II. DISCUSSION

In the landmark case of New York Times Co. v. Sullivan, 376 U.S. 254, 279-280, 84 S.Ct. 710, 725-726, 11 L.Ed.2d 686 (1964), the Supreme Court held that the Constitution "prohibits a public official from recovering damages for a defamatory falsehood relative to his official conduct unless he proves that the statement was made with 'actual malice'--that is, with knowledge that it was false or with reckless disregard of whether it was false or not." Ten years later, in Gertz v. Robert Welch, Inc., 418 U.S. 323, 347-48, 94 S.Ct. 2997, 3010-11, 41 L.Ed.2d 789 (1974), the Court held that individual states are not required by the Constitution to apply the qualified privilege set forth in the New York Times case to actions brought by private individuals which concern matters of public interest. The Court concluded that it is the prerogative of the states to define the appropriate liability standard for actions involving defamation against a private person provided liability is not imposed without fault. Id. at 323, 94 S.Ct. at 2997.

Following the Gertz decision, the Indiana Court of Appeals adopted the holding of the plurality in Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 91 S.Ct. 1811, 29 L.Ed.2d 296 (1971), that the New York Times privilege applies to libel actions brought by a private individual which concern matters of general or public interest. Aafco Heating & Air Conditioning Co. v. Northwest Publications, Inc., 162 Ind.App. 671, 321 N.E.2d 580, 586 (1974), cert. denied, 424 U.S. 913, 96 S.Ct. 1112, 47 L.Ed.2d 318 (1976). Thus, under Indiana law, applicable in this diversity action:

"the private individual who brings a libel action involving an event of general or public interest [must] prove that the defamatory falsehood was published with knowledge of its falsity or with reckless disregard of whether it was false."

Aafco, supra, 321 N.E.2d at 586; see also Cochran v. Indianapolis Newspapers, Inc., 175 Ind.App. 548, 372 N.E.2d 1211, 1218 n. 3 (1978). It follows that Mr. Woods is obliged to prove "actual malice" as that term is defined in the landmark New York Times case. 376 U.S. at 279-80, 84 S.Ct....