RICHARDSON, Presiding Judge.
Plaintiffs in this libel action are Bank of Oregon and its president, Wadsworth. They allege that they were defamed by an article written by defendants Buel and Meeker and published in defendant Independent News, Inc.'s weekly newspaper Willamette Week. The article was based in the main on information furnished defendants by Richard Cross, a customer of the bank. A foreclosure action by the bank was pending against Cross at the time he gave the information to defendants. Defendants' article was to the general effect that plaintiffs had engaged in a series of wrongful acts to divert Cross's money and credit to another bank customer. Plaintiffs contend that defendants did not take adequate care to ascertain the truth or falsehood of Cross's charges before publishing them.
The trial court granted defendants' motion for summary judgment, and plaintiffs appeal from the resulting judgment. The principal issue is what level of culpability a plaintiff who is a "private individual" must prove against a "media defendant" to recover for libel.
The common law rule in Oregon and virtually all other jurisdictions is that defamations ascribing "to the defamed party characteristics or conduct that would adversely affect his fitness for his occupation or profession" are actionable per se. Benassi v. Georgia-Pacific, 62 Or.App. 698, 705, 662 P.2d 760, modified 63 Or.App. 672, 667 P.2d 532 (1983); see also Cook v. Safeway Stores, Inc., 266 Or. 77, 511 P.2d 375 (1973); Murphy v. Harty, 238 Or. 228, 393 P.2d 206 (1964). Accordingly, a presumption of malice and of general damage to reputation arises from the making of the defamation alone, and direct proof of culpability on the part of the defendant is unnecessary. Woolley v. Hiner, 164 Or. 161, 165, 100 P.2d 608 (1940); Peck v. Coos Bay Times Pub. Co. et al., 122 Or. 408, 259 P. 307 (1927); see Gertz v. Robert Welch, Inc., 418 U.S. 323, 346-47, 349, 94 S.Ct. 2997, 3010, 3011, 41 L.Ed.2d 789 (1974).
However, a series of United States Supreme Court decisions, beginning with New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964), hold that the First Amendment requires more of a showing of culpability than the common law does to support a judgment for libel against a media defendant (e.g., a publisher or broadcaster). The Court held in New York Times that a public official cannot recover
Although it is not wholly clear from the New York Times opinion, later statements by the Supreme Court indicate that the "reckless disregard" part of the actual malice test is a subjective rather than an objective standard. See St. Amant v. Thompson, 390 U.S. 727, 731, 88 S.Ct. 1323, 1325, 20 L.Ed.2d 262 (1968) (statement must be made with "high degree of awareness * * * of probable falsity," and defendant must have "entertained serious doubts as to the truth of his publication").
The principal rationale for New York Times is that, in the context of political debate and communication about public officials, the First Amendment requires that erroneous statements "must be protected if the freedoms of expression are to have the `breathing space' that they `need ... to survive.'" 376 U.S. at 271-72, 84 S.Ct. at 721 (citing N.A.A.C.P. v. Button, 371 U.S. 415, 433, 83 S.Ct. 328, 338, 9 L.Ed.2d 405 (1963)). That premise has been adhered to in the Supreme Court's later cases. The Court said in Gertz that "[t]he First Amendment requires that we protect some falsehood in order to protect speech that matters." 418 U.S. at 341, 94 S.Ct. at 3007. However, the Court concluded in Gertz that the appropriate balance between First Amendment protection of the media and the right of redress for libel differs when those defamed are private individuals rather than public officials or public figures. The Court explained:
Before we turn to the principal issue, two preliminary matters must be addressed. First, defendants argue that plaintiffs are public figures and are therefore subject to the actual malice standard, regardless of whether that standard applies in libel actions by private individuals.
In Wheeler v. Green, 286 Or. 99, 111-17, 593 P.2d 777 (1979), the Oregon Supreme Court traced the development of the public figure doctrine from Curtis Publishing Co. v. Butts, supra, through Time, Inc. v. Firestone, 424 U.S. 448, 96 S.Ct. 958, 47 L.Ed.2d 154 (1976), and demonstrated that the United States Supreme Court had narrowed the public figure category substantially in the later cases. It is unnecessary to repeat that demonstration here, but we do note that the narrowing trend described in Wheeler has continued in the United States Supreme Court's and most other courts' decisions subsequent to Wheeler.
Defendants argue that the bank "has been drawn into a controversy about its operations" and that
Whatever distinction the Court may have intended between an "individual voluntarily inject[ing] himself" into a controversy and his being "drawn into" one, the Court's ultimate explanation for holding that Gertz was not a public figure makes no reference to involuntary involvement in public controversies. It said:
In any event, it is clear that a defamatory statement in itself cannot make the defamed person a public figure by reason of the controversy the defamation engenders. See Hutchinson v. Proxmire, 443 U.S. 111, 135, 99 S.Ct. 2675, 2688, 61 L.Ed.2d 411 (1979); Bruno & Stillman, Inc. v. Globe Newspaper Co., 633 F.2d 583 (1st Cir.1980). We find nothing in the record to suggest that the bank has been drawn into any controversy except the one created by defendants' publication.
Defendants also argue that the bank is a public figure because it is a "large publically held banking corporation" that is subject to extensive federal and state regulation. We conclude that the bank, like the corporate plaintiff in Bruno & Stillman, Inc. v. Globe Newspaper Co., supra, is a "paradigm middle echelon, successful" business, 633 F.2d at 592, and is not a public figure by reason of engaging in that business, being subject to the routine or usual regulation of that business or being incorporated. See Bruno & Stillman, Inc. v. Globe Newspaper Co., supra, 633 F.2d at 586-92; Vegod Corp. v. American Broadcasting Company, Inc., 25 Cal.3d 763, 160 Cal.Rptr. 97, 603 P.2d 14 (1979), cert. den. 449 U.S. 886, 101 S.Ct. 242, 66 L.Ed.2d 113 (1980).
Defendants' final basis for contending that the bank is a public figure is that its size and concomitant ability "to respond to accusations against it" make it one. Defendants' argument is based on language in Gertz:
Defendants' argument simply postulates that the bank has "access to * * * channels of effective communication" of the kind public figures enjoy. We find and defendants point to nothing in the record that convinces us the bank has any exceptional capacity to excite or procure the attention of any media outlet other than defendants' newspaper. The "access to * * * channels of * * * communication" discussion in Gertz describes a consequence of being a public figure. There can be cases where the plaintiff's extraordinary access to the media is a factor to weigh in determining whether the plaintiff is a public figure, see Hutchinson v. Proxmire, supra, 443 U.S. at 136, 99 S.Ct. at 2688, but this is not such a case, because there is nothing to weigh.
Defendants' arguments for finding the bank to be a public figure are not persuasive, individually or collectively. Their independent arguments that Wadsworth is a public figure are patently unmeritorious. Both plaintiffs are "private individuals."
The second preliminary matter is whether plaintiffs are entitled to argue here that negligence is the appropriate standard of culpability, given the facts that they alleged only actual malice and that the trial court denied their motion for leave to
The trial court's written order denying the motion was clearly predicated only on the substantive issue. It states that
It is not as certain from the court's colloquy in argument with counsel that the substantive issue was the sole basis for the ruling. Early in that colloquy, the judge indicated that he would deny the motion because he regarded it as untimely. Plaintiffs' attorney then spoke at length, urging the court to change the ruling. The following exchange then took place between the court and counsel for the parties:
Defendants now argue, inter alia, that we should uphold the trial court's denial of the motion to amend because the ruling properly could have been based on the untimeliness of the motion and it would not have been an abuse of the judge's discretion to deny the motion on that ground. Defendants
In Baker, however, the Supreme Court concluded that the denial of the motion to amend was in fact based on its untimeliness, as well as on the putative insufficiency of the tendered answer, and that the scope of appellate review was therefore confined to whether the trial judge abused his discretion by denying the motion on grounds of untimeliness. See 230 Or. at 386-88, 370 P.2d 235. Here, we conclude that the sole basis for the denial of the motion was the trial court's conclusion that the amended complaint would not state a claim because a higher standard of liability than negligence had to be pleaded and proved.
It is true that, early in his discussion with counsel, the trial judge expressed the view that the motion to amend should be denied on the ground of untimeliness. However, it is clear that the court completely abandoned that basis for denying the motion during the course of the colloquy. As the quoted portion of the record shows, the court ultimately accepted the suggestion of defendants' attorney to decide the motion in such a way that the substantive issue would be preserved and plaintiffs "could go up on an appeal" and argue that negligence is the proper standard of liability. The fact that the later written order sets forth only the substantive reason for denying the motion demonstrates further that the court intended to base its ruling wholly on the ground that the negligence theory of the proffered amendment was insufficient to state a claim. See State v. Swain/Goldsmith, 267 Or. 527, 517 P.2d 684 (1974). Accordingly, whether the court erred by denying the motion to amend and whether the applicable standard of culpability is negligence or something higher are overlapping questions. We turn to the second.
Both parties contend that existing Oregon law requires the adoption of the respective standards of liability they advocate. Defendants argue that Post v. Oregonian Publishing Co., 268 Or. 214, 519 P.2d 1258 (1974), is controlling. In that case, the plaintiff was wrongly identified as a drug smuggler in a news story published by the defendant. Post was decided three months before the United States Supreme Court decided Gertz. After noting that the defendant did not contend that the news story in question was not "about a subject of public or general interest," 268 Or. at 220, 519 P.2d 1258, and addressing certain other issues not relevant here, the court in Post held that the actual malice standard was applicable, as Rosenbloom v. Metromedia, Inc., supra, then required. In our view, Post was simply an application of then-controlling United States Supreme Court authority. It is not dispositive here independently of that authority, and Rosenbloom is of course no longer authoritative.
Plaintiffs argue that the negligence standard is compelled by existing law. They reason that the Oregon decisions permit libel to be proved without direct evidence of culpability; that, in the light of Gertz, the First Amendment requires only proof of negligence for a private individual to recover against a media defendant; that the Oregon Constitution does not require proof of greater culpability; and, therefore, that libel may be proved under these circumstances by establishing the common law elements plus negligence. However, whether the Oregon Constitution requires more than the minimum Gertz standard is an open question and one about which the parties and the amici disagree.
Section 10 provides:
Plaintiffs contend that those provisions, with the guarantee in one of a remedy for injury to reputation and the caveat in the other that everyone is responsible for abuse of communicative rights, afford more of a right of redress and less insulation for defamatory speech than does the First Amendment. Plaintiffs also note that, unlike the First Amendment, the Oregon speech provision "does not mention separately the `freedom of the press' and so does not provide support for any distinction between private individuals and members of the media." See Wheeler v. Green, supra, 286 Or. at 117-18, 593 P.2d 777. Defendants argue that Article I, section 8 has been construed to provide "a larger measure of protection to free expression" than the First Amendment, citing Deras v. Myers, 272 Or. 47, 64, n. 17, 535 P.2d 541 (1975). Defendants also point to language of comparable import in State v. Robertson, 293 Or. 402, 649 P.2d 569 (1982) (relating to criminalization of certain speech by the coercion statute, ORS 163.275), and to the fact that the Oregon Supreme Court has interpreted the state constitution as precluding punitive damages for defamation and other speech-related torts. Wheeler v. Green, supra; Hall v. The May Dept. Stores, 292 Or. 131, 637 P.2d 126 (1981). Defendants conclude:
Deras v. Myers, supra, and State v. Robertson, supra, dealt with the constitutionality of statutes prohibiting or criminalizing communicative activity. In Robertson, the court differentiated between the prohibition of speech and the provision of a remedy for injuries caused by speech. It noted:
Neither does Wheeler v. Green, supra, or Hall v. The May Dept. Stores, supra. In Wheeler, the court held that Article I, section 10 does not require the availability of punitive damages in defamation cases, and that their recoverability would violate Article I, section 8 because they
However, Wheeler also holds that the remedy of compensatory damages for injury to reputation is not proscribed by Article I, section 8 and is protected by Article I, section 10. 286 Or. at 118, 593 P.2d 777. The court later explained in May:
In Davidson v. Rogers, 281 Or. 219, 574 P.2d 624 (1978), the court held that the retraction statute, ORS 30.160,
Judge Lent, joined by one other judge, dissented in Davidson. Judge Linde, also joined by one other judge, concurred. He disagreed with the conclusion of the lead opinion that the retraction statute provided a "substitute legal remedy." 281 Or. at 224, 574 P.2d 624. He stated, however:
See also Gertz v. Robert Welch, Inc., supra, 418 U.S. at 348-50, 94 S.Ct. at 3011-12 (holding that, under the First Amendment, where there is no proof of actual malice, damages are limited to "actual injury," which excludes punitive damages but "is not limited to out-of-pocket loss").
Wheeler and Davidson relate specifically to kinds of damages in defamation cases which, respectively, cannot constitutionally be imposed and may constitutionally be limited. However, the opinions in those cases illustrate generally the tension between the two Oregon constitutional provisions and the balancing efforts the Oregon Supreme Court has undertaken in applying the provisions to defamation actions.
No previous Oregon appellate decision deals specifically with whether Article I, section 8 requires that a particular level of culpability be shown in libel cases, or whether Article I, section 10 precludes such a requirement. We agree with plaintiffs that the language of the two sections does not support defendants' view that the Oregon Constitution requires a showing of greater culpability against a media defamation defendant than does the First Amendment. Article I, section 8 expressly provides that every person is responsible for abuses of communicative rights; the First Amendment does not. Article I, section 10 expressly provides for a "remedy by due course of law for injury done * * * [to] reputation"; the United States Constitution does not do so — at least expressly. Unlike the First Amendment, Article I, section 8 provides no basis for distinguishing between the communicative rights of the media and those of everyone else; it contains no "freedom of the press" language. Wheeler v. Green, supra, 286 Or. at 117-18, 593 P.2d 777.
We find no basis for interpreting the language of Article I, sections 8 and 10, as embodying a general requirement that a plaintiff can recover for injury to reputation only if he proves culpability greater than negligence on the defendant's part. We also find no basis in their language for concluding that the Oregon provisions are more restrictive than the First Amendment of recovery by private individuals for defamation by the media. As illustrated above,
The parties make policy arguments in addition to their arguments based on constitutional language and case authority. Defendants' arguments are to the basic effect that a standard of culpability as low as negligence will have a "chilling effect" on the press, will lead to self-censorship and will thereby deprive the public of its right to receive information. In essence, those arguments are the same ones the Supreme Court considered in its First Amendment decisions culminating in Gertz. For the reasons earlier stated, we do not interpret the language of Article I, section 8 to require more insulation of the media from liability for defamation than the First Amendment does. We also conclude that a higher standard of media liability than the First Amendment requires is unnecessary to give effect to the purposes of Article I, section 8 and that it would unduly restrict the right assured by Article I, section 10.
It is true that negligence is the minimum level of culpability which Gertz allows the states to establish as a basis for liability in defamation actions by private individuals against media defendants. It does not follow that that minimum level is not adequately protective of the media. Indeed, the task that the Court set for itself in Gertz was to find the appropriate accommodation between the "state interest in compensating injury to the reputation of private individuals," 418 U.S. at 343, 94 S.Ct. at 3008-09, on the one hand, and protection of the functions and constitutional freedoms of the media, on the other. The accommodation at which the Court arrived provides the media with greater constitutional insulation from recovery by defamed private individuals than it previously enjoyed under any previous opinion of the Supreme Court, except the plurality opinion in Rosenbloom, which was rejected in Gertz because it unduly restricted the ability of such individuals to recover damages for injury to reputation. The standard mandated by Gertz is not "minimal" in the sense that it is insufficient or marginally sufficient to protect the media; it is "minimal" only in the sense that the states are left free, as a matter of federalism, to devise standards which differ from the requirements of the United States Constitution so long as their standards satisfy those requirements.
Defendants offer no empirical data and no convincing theoretical basis for concluding that a negligence standard in defamation actions by private individuals will impair the liberties or hamper the functions of the media. That standard provides a significant additional component of proof to what a plaintiff was required to establish against any libel defendant at common law and to what a private plaintiff must only prove still to recover against a nonmedia defendant. See Wheeler v. Green, supra, 286 Or. at 107-111, 593 P.2d 777.
Moreover, the negligence standard is not the only protection available to media defamation defendants in Oregon. As noted earlier, see n. 3, supra, punitive damages for libel are proscribed by Article I, section 8, even if the defendant acts with actual malice. In addition, media defendants are insulated by the retraction statute. Under ORS 30.160, see n 7, supra, a publisher or broadcaster of an unintentional defamation is subject only to special damages unless a retraction is demanded and is not published or broadcast at the end of a two-week investigatory period following demand. See ORS 30.165(2). Thus, in a very real sense, the negligence standard leaves a media defendant immune from general damages unless it is negligent twice — first, in making a defamatory false statement and, second, in failing to retract the statement after a demand and investigation.
The remaining question is whether the evidence before the court in the summary judgment proceeding created a genuine issue of material fact as to whether defendants were negligent in failing to ascertain whether the defamatory statements were true or false. Defendants' only basis for arguing that there was not sufficient evidence is that they offered expert evidence to define and show that they met the standard of care of reasonable members of their profession in their community; that "[p]laintiffs submitted no counter-affidavit or other [expert] evidence either establishing the applicable standard of care journalists observe in similar situations or demonstrating that Defendants breached that specific standard"; that expert evidence is "necessary to prove or disprove charges of negligence against professional persons"; and that "[a]lthough Oregon has not yet expressly ruled that journalists are professionals for purposes of determining the applicable standard of care in negligence actions, many courts since Gertz, as well as the Restatement (Second) of Torts, have adopted this rule." Plaintiffs argue that
We agree generally with defendants that, when negligence is alleged against a media defendant, there should be a professional standard of care. Comment g to Restatement (Second) Torts, § 580B (1977), states in part:
We conclude that the proper standard of care is that of a reasonably prudent, careful and skillful practitioner of the particular journalistic or other communicative school of which the defendant is a member. See Creasey v. Hogan, 292 Or. 154, 163, 637 P.2d 114 (1981).
We do not adopt a "locality" rule as part of the standard of care, i.e., a rule requiring proof that the defendant's conduct is deficient compared to that of practitioners in the defendant's community or
We agree with the following statements in comments g and h to section 580B of the Restatement as general guidelines for the application of the standard of care we adopt:
Whether expert testimony is relevant or necessary in a given situation must be determined in the light of relevant Oregon decisions, e.g., Hall v. State, 290 Or. 19, 619 P.2d 256 (1980); Getchell v. Mansfield, 260 Or. 174, 489 P.2d 953 (1971), as well as the standards of the Restatement.
Assuming that, to establish liability in this case, plaintiffs must adduce expert evidence of defendants' breach of the applicable standard of care, it does not follow that defendants were entitled to summary judgment because plaintiffs did not produce evidence of that kind in opposing defendants' motion. The party moving for summary judgment has the burden of showing the absence of genuine material factual questions "even as to those issues upon which the opposing party would have the trial burden." Seeborg v. General Motors Corporation, 284 Or. 695, 699, 588 P.2d 1100 (1978). The court stated in W.R. Chamberlin & Co. v. Northwestern Agencies, 289 Or. 201, 611 P.2d 652 (1980):
It follows that plaintiffs were not required to controvert defendants' expert evidence to resist the motion for summary judgment. The correctness of that uncontradicted evidence is itself a genuine issue of material fact, and the evidence therefore did not satisfy defendants' burden of establishing as a matter of law that they were not negligent. See Felske v. Worland, 63 Or.App. 442, 445, n 2, 664 P.2d 427 (1983).
We hold that the trial court erred by granting summary judgment for defendants and by denying plaintiffs' motion to amend their complaint.
Reversed and remanded.
That argument may or may not be intended as a separate one from the argument discussed in the text. In either event, Bruno & Stillman, Inc. v. Globe Newspaper Co., supra, is contrary to the suggestion that engaging in and advertising a business are enough to make a person a public figure for purposes of a "controversy" about his business activities which is generated by the defamation itself.