Argued En Banc October 3, 1985.
Opinion for the court filed by Circuit Judge STARR and Senior Circuit Judge J. SKELLY WRIGHT.
Opinion concurring in the judgment filed by Chief Judge WALD.
Concurring opinion filed by Circuit Judge RUTH BADER GINSBURG.
Dissenting opinion filed by Senior Circuit Judge MacKINNON.
STARR, Circuit Judge and J. SKELLY WRIGHT, Senior Circuit Judge:
William Tavoulareas and his son Peter brought suit for injury to reputation after The Washington Post published a story that said, among other things, that Tavoulareas had used his influence as president of Mobil Corporation to "set up" Peter as a partner in a shipping firm whose business included a multi-million dollar management services contract with Mobil. After a jury trial in the United States District Court for the District of Columbia, Judge Oliver Gasch awarded judgment notwithstanding the verdict to the Post defendants. 567 F.Supp. 651 (D.D.C.1983). A divided panel of this court reinstated the jury's verdict, 759 F.2d 90 (D.C.Cir.1985), but the full court vacated that portion of the panel opinion and set the case for rehearing en banc, 763 F.2d 1472, 1481 (D.C.Cir.1985).
After a careful review of the entire record in the light most favorable to plaintiff, we are convinced that the only reasonable inference to be drawn is that the "set up" allegation was substantially true. We further hold that Tavoulareas is a limited
I. BACKGROUND
At trial, the parties presented conflicting evidence concerning Mobil's and Tavoulareas' involvement with Peter's shipping firm. The following account adopts the undisputed facts and Tavoulareas' version of disputed events.
A. Mobil-Samarco-Atlas
William Tavoulareas was at all relevant times president and chief operating officer of Mobil Corporation, the Nation's second largest oil company and its third largest industrial corporation. In his position at Mobil, Tavoulareas took an active role in the public debate during the 1970's over the manner in which the United States should respond to the rise of OPEC and the ensuing energy crisis. In particular, Tavoulareas vigorously defended the performance of the oil industry against critics who called for sweeping reforms in the structure and management of the industry, and he publicly advocated less governmental regulation of the industry as the solution to the energy shortage. In addition, he was an important proponent of Mobil's "Saudi strategy" of dependence on Arab oil supplies at a time when increasing American energy independence became a significant public policy objective.
In 1973, a group of influential Saudis approached Mobil with a plan for a jointly owned shipping company. The group included the Alirezas, a prominent merchant family in Saudi Arabia that had other business relationships with Mobil.
Under the Samarco arrangement, ships owned by Mobil would be "bareboat-chartered" to Samarco — that is, leased without crews or provisions. Samarco would then "time-charter" the ships back to Mobil with full crews, supplies, and fuel.
Mobil decided that Samarco's ships should be operated by an independent management company, Atlas Maritime Company. Mobil believed that Atlas could operate the ships at less cost than Mobil
Atlas was established by George Comnas in 1974. Comnas met with Tavoulareas in January 1974 and explained that he had just started his own business after leaving his position as managing director of C.M. Lemos & Co., one of the largest Greek shipping concerns. One of Comnas' assistants at Lemos was Tavoluareas' son Peter. Peter, 24 and fresh from business school, was working at his first job in the shipping business as a $14,000 per year employee.
In August 1974, Peter left Lemos to become an equity partner at Atlas. Ares Emmanuel, a more experienced but similarly youthful co-worker from Lemos, had also joined Atlas but was provided with a much smaller equity interest in the firm.
As its inaugural project, Atlas began operating two Mobil-owned ships under contract with Samarco at an annual fee of more than $600,000, with the prospect of additional ships in the future. No other bids were solicited or received for the ship-management contract. By the time the Post published its story, Atlas had received more than $4.5 million in management fees from Samarco.
Shortly after Atlas began operations, Mobil grew disenchanted with Comnas, although there is disagreement among Tavoulareas' witnesses about whether the dissatisfaction arose from Comnas' business performance or some alleged misconduct on his part. What is undisputed is that Tavoulareas participated in a meeting, held in Tavoulareas' office, at which senior Mobil executives decided to seek Comnas' removal from Atlas. It is also undisputed that Tavoulareas and two other Mobil shipping executives flew to London to notify Comnas of this decision. Comnas was offered and accepted a $30,000 a year, three-year consultancy arrangement with Mobil in return for his resignation from Atlas.
When notified by Mobil of Comnas' resignation, the Saudi partners in Samarco, who had never been enthusiastic about using an independent management company, expressed promptly their view that the Samarco-Atlas management contract was terminated. Tavoulareas personally urged the Samarco partners to retain Atlas and successfully resisted the Saudi partners' attempts to take over some of the departed Comnas' equity interest. Most of that equity soon went to Peter.
After Comnas resigned, Atlas was left without an experienced hand at the helm. Harmon Hoffmann, a senior and highly respected Mobil executive, took over management of Atlas for the next six months, assisting Peter and the latter's fellow Lemos alumnus, Ares Emmanuel.
In November 1976, more than two years after Peter joined Atlas and over a year after Peter became its principal owner, Tavoulareas and Warner decided to send a letter to Mobil's quarter-million stockholders informing them that Tavoulareas had not been "actively involved in the planning, negotiation and direction" of Atlas and did "not participate in any decisions regarding the [Samarco-Atlas] relationship because his son, Peter, [was] one of the principals of that marine management firm." RE at 2650. Although Tavoulareas had formally recused himself from such matters, several of Mobil's outside directors raised objections to Peter's involvement in Atlas. Tavoulareas' potential conflict of interest also attracted the attention of the Securities and Exchange Commission, which conducted an investigation into the Mobil-Samarco-Atlas arrangements but took no enforcement action. The House Subcommittee on Energy and Power and several well-known journalists also investigated the matter.
B. The Post
On November 30, 1979, the Post published a frontpage story stating that
The story, which is set forth in full in the Appendix, went on for eighty-five paragraphs to describe the Mobil-Samarco-Atlas arrangements in detail. The article stated, among other things, that Mobil's board of directors had been assured that Tavoulareas "was not involved in his son's venture in any way," but that unidentified sources said that Tavoulareas had nonetheless (1) recruited the shipping executive who set up Atlas; (2) helped negotiate the Samarco-Atlas contract; (3) "personally urged" Comnas to accept Peter as a partner; (4) "played a personal role" in Comnas' resignation; and (5) "dispatched one of his senior shipping executives, Herman [sic] F. Hoffmann, to London to help run Atlas" after Comnas' departure. At key points, the story quoted Tavoulareas' own account of the incidents and included his denials of disputed assertions; in all, more than thirty paragraphs of the article reported Mobil's version of the events in question.
The Post first became aware of the connection between Atlas and Mobil in 1976 when reporter Robert Woodward received an anonymous note describing the Samarco arrangement. Woodward made some preliminary inquiries, but for a variety of reasons put the matter aside. In 1979, during a period of rising fuel prices, gasoline lines, and increased interest in the Nation's energy situation, Woodward, by then metropolitan editor of the Post, revived the Atlas matter. He assigned it to Patrick Tyler, a relatively new reporter on the metropolitan staff who had written a few months earlier about the oil shortage (and in a manner which prompted Mobil's disapprobation).
A short time later, Sandy Golden, a reporter for a suburban newspaper who was ambitious for a job on the Post, telephoned Woodward to offer a lead he hoped to develop into a story about how the president of Mobil set up his son to be an "overnight millionaire." Upon returning
Tyler's research led him to George Comnas, who told the reporter that Tavoulareas recruited him to help establish Samarco and Atlas. Comnas also stated that Tavoulareas requested him to bring Peter into Atlas. Comnas described the Samarco-Atlas arrangements in detail and discussed Tavoulareas' role in persuading the Saudi partners to accept Atlas as Samarco's management company. Tavoulareas, according to Comnas, personally asked him to resign from Atlas. Following his own interviews, Tyler learned that Comnas had related substantially the same account to investigators from the House Subcommittee on Energy and Power, who had questioned Comnas in detail and concluded that his story was accurate.
Tyler also interviewed John Kousi, a New York lawyer who served as Fairfield-Maxwell's representative on the Samarco board of directors. Kousi told Tyler that Peter had limited experience and ability, and that, in Kousi's opinion, Peter's partnership in Atlas was "a nepotistic act" on the part of Tavoulareas. Kousi also said that Tavoulareas personally negotiated on Atlas' behalf to obtain the agreement of Samarco's Saudi partners to the Atlas arrangement. Kousi further stated that Mobil was the moving force in both hiring and firing Comnas.
In preparing the article, Tyler sought repeatedly but unsuccessfully to interview Tavoulareas and other Mobil officials. At trial, Mobil officials explained the company's refusal to cooperate with Tyler on the ground that in his story earlier in 1979 Tyler had misrepresented statements by Mobil executives. Eventually, however, at Woodward's urging, Mobil agreed to answer written questions from Tyler. Those answers confirmed the basic outlines of the Samarco arrangement. The responses further stated that, although Mobil's Board of Directors was told that "Tavoulareas divorced himself from involvement in matters involving business transactions between Mobil and/or SAMARCO with Atlas," he had in fact been involved in hiring Comnas and played what Mobil called "a minor role" in firing him. RE at 2344-45. Moreover, Mobil confirmed that Tavoulareas had participated in setting up Atlas as an independent management firm, but stated that he had not initiated Peter's association with Atlas.
Tyler also obtained a transcript of Tavoulareas' sworn testimony before the SEC's Enforcement Division in 1977. In that testimony, Tavoulareas acknowledged his key role in the creation of Atlas. He admitted that he knew that Comnas and Peter had discussed going into business together when he, Tavoulareas, recruited Comnas. This transcript, together with the interviews of Comnas and Kousi, the report of the Congressional investigators, and the written responses from Mobil, comprised the Post's principal sources for its story of November 30, 1979.
Tyler spent one month working on the story, tracking down leads, confirming information, and writing the final article. The story underwent scrutiny from senior editors, including Woodward and national news editor William Greider. The editors
William and Peter Tavoulareas brought libel actions against the Washington Post Company, Benjamin Bradlee, Robert Woodward, Patrick Tyler, and Sandy Golden.
On July 30, 1982, a jury found that Bradlee and Woodward were not liable to either of the plaintiffs and that the Post, Tyler, and Golden were not liable to William Tavoulareas for the December 1 article and not liable to Peter for either article. The jury did, however, return a general verdict against the Post, Tyler, and Golden for the November 30 article, awarding William Tavoulareas $250,000 in compensatory and $1.8 million in punitive damages. The jury also found Piro liable to both Tavoulareases for slander.
The District Court subsequently entered judgment notwithstanding the verdict (j.n.o.v.) for Piro and for the Post defendants against William Tavoulareas. Appeals were then brought to this court challenging the judgments n.o.v. and attacking the trial court's determination that William Tavoulareas was a limited public figure.
II. PUBLIC FIGURE
In New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964), the Supreme Court first recognized that traditional actions for defamation might interfere with First Amendment rights of free expression. Discerning in the First Amendment a demand that writers and speakers enjoy enough "breathing space" to avoid self-censorship and encourage "debate on public issues [that is] uninhibited, robust, and wide open," id. at 270, 84 S.Ct. at 721, the Court held that a public official could recover damages for libel only by showing that the allegedly defamatory 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." Id. at 279-80, 84 S.Ct. at 726. In Curtis Publishing Co. v. Butts, 388 U.S. 130, 87 S.Ct. 1975, 18 L.Ed.2d 1094 (1967), this constitutional protection was applied to speech concerning "public figures" who were not government officials, but who nonetheless "often play an influential role in ordering society." Id. at 164, 87 S.Ct. at 1996 (Warren, C.J., concurring). But in Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974), the Court declined to extend the actual malice rule to speech about private individuals.
Gertz held that the extent of the constitutional privilege varies with the strength of the government's legitimate interest in protecting individual reputation. This interest is strongest when the state protects private citizens whose actions reflect a decision to shield their lives from public scrutiny. Such persons are typically "more vulnerable to injury than public officials and public figures [and] more deserving of recovery." Id. at 345, 94 S.Ct. at 3010. The state's interest is correspondingly weaker with respect to government officials and others who "assume[] [a] role of especial
The Supreme Court has identified two classes of public figures in addition to government officials: general purpose and limited purpose public figures. "In some instances, an individual may achieve such pervasive fame or notoriety that he becomes a public figure for all purposes and in all contexts. More commonly, an individual voluntarily injects himself or is drawn into a particular public controversy and thereby becomes a public figure for a limited range of issues." Gertz, 418 U.S. at 351, 94 S.Ct. at 3013. The extent of the individual's participation in public affairs and assumption of the risk of adverse publicity determines the weight of the government's interest in protecting his or her reputation.
Whether (and to what extent) a person is a public figure is a matter of law for the court to decide. Rosenblatt v. Baer, 383 U.S. 75, 88, 86 S.Ct. 669, 677, 15 L.Ed.2d 597 (1966); Waldbaum v. Fairchild Publications, Inc., 627 F.2d 1287, 1293 n. 12 (D.C.Cir.), cert. denied, 449 U.S. 898, 101 S.Ct. 266, 66 L.Ed.2d 128 (1980). This is a difficult and sensitive exercise unsusceptible to the application of rigid or mechanical rules. See, e.g., Rosanova v. Playboy Enterprises, Inc., 411 F.Supp. 440, 443 (S.D.Ga.1976) ("Defining public figures is much like trying to nail a jellyfish to the wall."), aff'd, 580 F.2d 859 (5th Cir.1978). In this circuit, our determination is guided by Waldbaum.
A person becomes a general purpose public figure only if he or she is "a well-known `celebrity,' his name a `household word.'" Waldbaum, 627 F.2d at 1294. Such persons have knowingly relinquished their anonymity in return for fame, fortune, or influence. They are frequently so famous that they "may be able to transfer their recognition and influence from one field to another." Id. at 1294 n. 15. Thus, it is reasonable to attribute a public character to all aspects of their lives. William Tavoulareas is a highly prominent individual, especially in business circles, but his celebrity in society at large does not approach that of a well-known athlete or entertainer — apparently the archetypes of the general purpose public figure. See, e.g., [Johnny] Carson v. Allied News Co., 529 F.2d 206 (7th Cir.1976); Chuy v. Philadelphia Eagles Football Club, 431 F.Supp. 254 (D.C.Pa.1977), aff'd, 595 F.2d 1265 (3d Cir.1979) (en banc). The standard as generally applied is a strict one; the Supreme Court has not found anyone to be a general public figure since Butts. In view of the stringent standards applicable to this category of public figure, we have no difficulty in upholding the District Court's conclusion that the plaintiff was not a general purpose public figure.
Although few persons attain the level of notoriety to be public figures in all contexts, many individuals may be public figures for the more limited purpose of certain issues or situations. Waldbaum sets out a three-step inquiry to identify these limited-purpose public figures. First, we isolate the controversy at issue, because the scope of the controversy in which the plaintiff involves himself defines the scope of the public personality. The controversy must be public both in the sense that "persons actually were discussing" it, 627 F.2d at 1297, and that "persons beyond the immediate
The Waldbaum inquiry provides a uniform approach to identifying those individuals whose voluntary participation in public life and whose access to the media have reduced the state's interest in protecting them from the risk of defamation. Waldbaum thus provides us with useful analytic tools; nevertheless, the touchstone remains whether an individual has "assumed [a] role[] of especial prominence in the affairs of society ... [that] invite[s] attention and comment." Gertz, 418 U.S. at 345, 94 S.Ct. at 3009.
Applying these principles to the case at hand, we first consider the possibility that Tavoulareas was a limited public figure for the purpose of the controversy over whether the management and structure of the United States' private oil industry was in need of alteration or reform. Examining the oil shortages of the 1970's, numerous public officials, pundits, and commentators criticized both the performance and integrity of the major, integrated oil companies. Many reform proposals were publicly advanced and considered, including measures to break up or divest the large oil companies, increase their taxes, install government representatives on their boards of directors, and subject them to more intensive federal regulation.
We have held in Waldbaum that "[b]eing an executive within a prominent and influential company does not by itself make one a [limited purpose] public figure." 627 F.2d at 1299. We reaffirm that principle today. But that is not to say that an individual's position as president and chief operating officer of one of the world's largest multinational corporations, with a quarter-million stockholders, is irrelevant to whether that person has "invite[d] attention and comment" with respect to public issues affecting his business dealings. This is especially true when that industry — and the company itself — is at the center of a vigorous public debate touching on a vital national interest.
More specifically, Tavoulareas avowedly attempted to "thrust [Mobil and himself] to the forefront" of the national controversy over the state of the oil industry. In November 1979, for example, Tavoulareas made the following telling observations in a speech:
RE at 302; cf. RE at 470. Even more than Eric Waldbaum (whom this court, speaking through Judge Tamm, found to be a limited public figure with respect to his business dealings), Tavoulareas was not "merely a boardroom president whose vision was limited to the balance sheet. He became an activist, projecting his own image and that of [Mobil] far beyond the dollars and cents aspects of marketing." 627 F.2d at 1300.
Mobil and Tavoulareas played substantial roles in spearheading a public counterattack on the movement for reform of the oil industry. The 500-page "Public Figure Index" — a collection of news clippings and the like, submitted by the Post — attests to the undisputed fact that Tavoulareas was outspoken in defending the oil industry's performance, see, e.g., RE at 455, in blaming the oil crisis on government regulation
Public policy toward the oil industry was clearly a controversial subject that "was being debated publicly and ... had foreseeable and substantial ramifications for non-participants." Id. at 1297. Although only a "few [participants] can have the necessary impact," id. at 1297 n. 27, on such a broadly-defined controversy, Tavoulareas' widely-reported, influential public role in the debate as president of Mobil eminently qualified him as a public figure.
Waldbaum's final requirement, namely germaneness of the publication to the controversy, was also satisfied by the Post article. The story of Mobil's president and his junior-executive son, who achieved great business success early in life, sought to provide the public with "a rare glimpse into corporate behavior at the top of one of the largest publicly held international oil companies." ¶ 12. The alleged nepotism by Tavoulareas was not "wholly unrelated" to a public controversy where the credibility and integrity of representatives of the oil industry had become an issue. 627 F.2d at 1298; see, e.g., RE at 570. In our view, the Waldbaum criteria are abundantly satisfied here.
In addition, Judge Gasch found Tavoulareas to be a public figure for purposes of a more narrowly defined controversy concerning the Mobil-Samarco-Atlas arrangement. Tavoulareas acknowledges that the Post article was germane to that arrangement, but disputes whether it was a "public" controversy within the meaning of Gertz, Waldbaum, and Firestone.
The involvement of Mobil, Tavoulareas, and Peter in the Samarco-Atlas arrangement attracted the attention of journalists and government officials long before the November 30, 1979 article appeared. Mobil publicly announced the Samarco-Atlas deal in 1974, albeit without mentioning Peter's involvement. RE at 629. After consultation with Tavoulareas, Mobil officials subsequently decided to publicize Peter's involvement in the arrangement by releasing the information to a "widely read oil industry periodical." Tr. at 1880-81. Thereafter, a number of journalists, including reporters from The New York Times and Jack Anderson's office, contacted Mobil about Samarco and Atlas. RE at 1420-22; see also RE at 2464; Tr. at 2435.
In light of various inquiries, Tavoulareas, along with Mobil's Chairman Rawleigh Warner, decided to disclose in a letter to Mobil's shareholders that Peter was a principal in Atlas and that, as a result, Tavoulareas had formally recused himself from Samarco-Atlas matters. RE at 2440-42, 2650.
Shortly after the Mobil shareholder letter, the SEC launched an investigation into Tavoulareas' relationship to Samarco and Atlas. Tavoulareas vigorously defended his conduct in sworn testimony before the SEC staff in March of 1977. RE at 2399-2460. Ten days prior to publication of the Post article, Congressman John Dingell, Chairman of the House Subcommittee on Energy and Power, wrote the Chairman of the SEC requesting the Commission to reopen its investigation on the basis of information unearthed by Congressional investigators indicating that "Tavoulareas may have been actively involved in the formation and operation of both Samarco and Atlas, notwithstanding the potential conflict of interest and his denials of participation." RE at 2466.
Not only were "persons actually ... discussing" the extent and propriety of Tavoulareas involvement in Samarco-Atlas matters prior to the Post article, Waldbaum, 627 F.2d at 1297, but "a reasonable person would have expected persons beyond the immediate participants in the dispute to feel the impact of its resolution," id. (footnote omitted). Highly respected outside members of Mobil's board of directors — including Ambassador George McGhee, Fred Borch, chairman of General Electric, and Albert Williams, president of IBM — specifically objected to the arrangements Mobil's management had made with respect to Peter, and had raised their concerns directly with Mr. Warner. Tr. at 3585-86; see also Tr. at 1814-15. Mobil's outside directors were worried that the appearance of a conflict of interest would hurt Mobil's public image and thereby have an adverse impact on Mobil's shareholders. GE's Borch, for example, "urged [Warner] to urge Tavoulareas Sr. to get out of his relationship with his son and put him in a different business. If he wanted to put him in a business, put him in one that does not affect Mobil...." Tr. at 3551. Ambassador McGhee opposed Peter's involvement in Atlas from the outset, expressing the view that the arrangement was "bad policy and precedent for the company" and would "expose [Tavoulareas and his son] to the risks of possible adverse criticism, even investigations by Congressional committees." Tr. at 1795-96 (emphasis added); see also RE at 2670. Having opened these matters for public scrutiny by going forward in the face of considered objections by leading businessmen serving on his own board, and then publicizing the affair to the press and to Mobil's shareholders, Tavoulareas could scarcely expect all ensuing commentary on these arrangements to be favorable.
In sum, we find abundant evidence of the already "public" nature of this subject in the activities of both government and corporate officials. When, in Judge Tamm's words, we "look at the facts, taken as a whole, through the eyes of a reasonable person," Waldbaum, 627 F.2d at 1293, we conclude that Tavoulareas was a public figure for purposes of this publication, and that the Post was therefore "entitled to act on the assumption that [he] voluntarily exposed [himself] to increased risk" of critical comment and publicity. Gertz, 418 U.S. at 345, 94 S.Ct. at 3010.
III. Post DEFENDANTS
It is now well settled that, in the face of the countervailing demands of the First Amendment, a public figure such as Tavoulareas may recover for injury to reputation "only on clear and convincing proof" that the defamatory falsehood was made with "actual malice." Gertz, 418 U.S. at 342, 94 S.Ct. at 3008. It is equally well established that the standard of actual malice requires
On the basis of its careful review of the entire record, the District Court concluded that there was not "sufficient evidence in the record from which a jury could reasonably find, by clear and convincing proof, that the [Post] defendants published the November 30 article with actual malice." 567 F.Supp. at 653-64 (footnote omitted). In reaching this decision, Judge Gasch applied the traditional standard for overturning a jury verdict: "A trial court may grant [j.n.o.v.] only when `the evidence, together with all inferences that can reasonably be drawn therefrom[,] is so one-sided [in favor of the moving party] that reasonable men could not disagree on the verdict.'" Id. at 652 (quoting Vander Zee v. Karabatsos, 589 F.2d 723, 726 (D.C.Cir.1978), cert. denied, 441 U.S. 962, 99 S.Ct. 2407, 60 L.Ed.2d 1066 (1979)).
In reaching this conclusion, we apply a standard of review that all the parties, amici, and the District Court have agreed is correct. Specifically, by virtue of the First Amendment nature of this litigation, the jury verdict must be measured, on the basis of an independent examination, against the heavy burden of proof imposed on a plaintiff who is a public figure:
Supplemental Brief for Appellant at 9; see also Supplemental Brief for Appellees at 6-7; Brief Amicus Curiae of the American Legal Foundation in Support of Appellant at 7; Brief of the Reporters Committee for Freedom of the Press and Radio Television News Directors Association as Amici Curiae in Support of Appellees at 22-23; 567 F.Supp. at 653-54.
The parties, at our instance, have devoted enormous effort to the difficult enterprise of discerning the precise meaning of Bose Corp. v. Consumers Union, 466 U.S. 485, 104 S.Ct. 1949, 80 L.Ed.2d 502 (1984) (mandating independent judicial review of evidence of actual malice, but leaving unresolved the extent of that review). The District Court was, of course, not faced
The somewhat murky dispute that has consumed this litigation in its later phases is whether Bose went further and sanctioned independent review as to findings of underlying facts, evaluations of credibility, and the drawing of inferences. It is this issue — the existence and application of this possible additional aspect of Bose — that we believe, upon reflection, we need not decide. We have concluded that sailing into these uncharted waters is unnecessary to the proper and principled disposition of this case. Bearing in mind the exacting standard of clear and convincing proof of actual malice, we are persuaded that, when we faithfully apply the traditional j.n.o.v. standards in this First Amendment context, Judge Gasch was manifestly correct.
The dissent complains that we have evaded this complex constitutional issue only by "reject[ing] entirely plausible (if not inevitable) interpretations of the article." Dissent at 810. But in determining what defamatory meaning the article is capable of bearing, we perform the quintessential function of the court in defamation actions, as the dissent forthrightly acknowledges. See Dissent at 817 ("It is for the court to determine whether a particular communication is capable of bearing a defamatory meaning.") (emphasis in original).
The dissent vehemently insists that we abandon the role of the court and invade the jury's function in upholding the District Court's grant of j.n.o.v. The dissent accuses us of "discard[ing] those traditional [j.n.o.v.] standards," by "proceed[ing] to make [our] own assessment of witness credibility" and "disregard[ing] controlling reasonable inferences in favor of the verdict." Dissent at 810-11. These accusations are repeated sporadically throughout our dissenting colleague's opinion. But they are ultimately without foundation. We are satisfied that the District Court did not trench on the jury's function, and we have been mindful ourselves to avoid any such usurpation.
The only example that the dissent presents of our alleged "reassessment" of witness credibility is in our determination that the "set up" allegation is substantially true. See infra pp. 783-86. But this allegation fails to recognize that the fact that Tavoulareas "set up" Peter in Atlas — the defamatory sense that we attribute to the article as a matter of law — is clear beyond reasonable dispute. Indeed, as will become evident, we rely on Tavoulareas' own testimony and on facts undisputed by him to make this finding.
The dissent's final grievance — that we disregard reasonable inferences drawn by the jury — is also echoed in Chief Judge Wald's concurrence, which notes that "throughout its opinion [the majority] scrutinizes the inferences to be drawn from evidence of actual malice far more rigorously than [the] ordinary judgment n.o.v. standard would permit." Concurring Opinion at 804. Chief Judge Wald suggests that we tackle the knotty constitutional issue regarding what constitutes independent review under Bose, so we could properly reach the conclusion as to the absence
Accordingly, we have at every turn accepted only undisputed facts or Tavoulareas' version of disputed facts, avoided any evaluations of credibility, and credited all permissible inferences the jury may have drawn favorably to Tavoulareas. Having done so, we nonetheless are constrained to conclude that the evidence is insufficient to constitute clear and convincing evidence of actual malice.
A. Defamation and Falsity
1. Interpretation of the Article
The theme of the November 30, 1979 article was set forth in its headline and lead sentence: that William Tavoulareas "set up" Peter as a partner in a business managing Mobil-owned ships. Peter, the article reported, had in 1974 been a 24-year-old, $14,000 per year shipping clerk with the Lemos firm, but "with the help of Mobil" five years later owned 45 percent of a newly formed shipping management firm, Atlas Maritime Co. "[T]he overall thrust of the article was that William Tavoulareas improperly set up his son in business and made sure the business would prosper." Reply Brief for Appellant at 21-22; see Brief for Appellant at 70; 567 F.Supp. at 660.
Tavoulareas advances several possible defamatory interpretations of this "set up" allegation.
In a libel case, it is the role of the court to determine whether the challenged statement is "capable of bearing a particular meaning" and whether "that meaning is defamatory." Restatement (Second) Of Torts § 614(i), at 311 (1977); see McBride v. Merrell Dow and Pharmaceuticals, Inc., 717 F.2d 1460, 1463 (D.C.Cir.1983). In making this determination, a court is to consider both the words themselves and the entire context in which the statement occurs. See Ollman v. Evans, 750 F.2d 970,
The statement that "a father set up his son in business" would ordinarily mean to a reasonable reader that the father provided the son with the means or opportunity by which the latter could assume a position of responsibility in a business venture or commercial firm. See Webster's Third New International Dictionary 2079 (unabridged ed. 1981). In our view, when the term "set up" is employed in a familial context, it implies that one family member provided an opportunity to another family member on the basis of kinship, not merit. Accordingly, we hold that the article, as a matter of law, can reasonably be interpreted as capable of bearing a defamatory meaning, namely that Tavoulareas, as president of Mobil, made it possible for Peter to become a partner in Atlas and then helped to ensure that the business would prosper because Peter was his son. This, in our view, is the normal, everyday reading of the article. The headline and lead sentence, generally reliable indicators of an article's content, clearly convey this meaning.
As we have observed, Tavoulareas' proffered interpretation is much broader. He (and the dissent) contend that the article is capable of bearing the interpretation that Tavoulareas "set up" the entire Mobil-Sarmarco-Atlas relationship to benefit Peter. Thus, before passing to a consideration of the falsity vel non of the "set up" allegation, we first consider this asserted, much different, broader reading. For the reasons that follow, we reject Tavoulareas' construction and interpret the language according to its common usage. As did Judge Gasch, we hold as a matter of law that the article is incapable of bearing the interpretation Tavoulareas advances.
As the District Court correctly observed, the Post's allegation that Tavoulareas "set up" his son in Atlas is entirely different from the claim that the Post asserted that the creation of the entire Mobil-Samarco-Atlas relationship was a nepotistic act. 567 F.Supp. at 660 & n. 16. The article clearly says the former, not the latter. The article simply will not reasonably bear Tavoulareas' interpretation, as evidenced by his failure to cite anything in the article itself to support this reading. See Brief for Appellant at 25-29; Reply Brief for Appellant at 16.
The dissent ignores the specifics of the article, complaining instead that "[t]he entire discussion of the legitimate business reasons in the Post article is perjorative." Dissent at 821. In our view, the dissent's reliance on the "tone" of the article is entirely misplaced. The article expressly buttressed the credibility of Mobil's stated business reasons for joining Samarco. The story specifically reports that the other non-Saudi partner in Samarco, Fairfield-Maxwell, joined on the basis of the same "anticipated benefits." ¶ 43. Needless to say, Fairfield-Maxwell had no interest in participating in Samarco to benefit Peter. Rather, as the article itself reported, Fairfield-Maxwell was of the view that Peter's involvement in Atlas, although nepotistic, would not preclude the successful and profitable operation of Samarco. ¶ 27. We cannot accept the dissent's tortured attempt to discern some dark, hidden meaning in the article when the plain words of the piece explicitly rebut that meaning.
Tavoulareas relies heavily on internal unpublished Post memoranda to establish the meaning of the article. This will not do. Nothing in law or common sense supports saddling a libel defendant with civil liability for a defamatory implication nowhere to be found in the published article itself.
Tavoulareas, it should be noted, would pretermit entirely our consideration of truth or falsity, maintaining that the court should not consider the question in reviewing the jury verdict in his favor. Brief for Appellant at 17a-17b. We emphatically disagree.
2. The Undisputed Evidence of Truth
The undisputed evidence at trial, including plaintiff's own testimony, precludes any reasonable inference that the central allegation of the challenged article — that Tavoulareas "set up" Peter in
In the spring of 1974, with Tavoulareas fully aware that Comnas was trying to "curry favor" with him by offering Peter a share of Comnas' venture, Tr. at 1516, Tavoulareas flew to London to ask Comnas "if [Comnas] was interested in taking over the management" of Samarco's ships. RE at 2443-46; see also RE at 2344-45, Tr. at 1534 ("I [Tavoulareas] more than anybody else was responsible for bringing [Comnas] into [the management of Samarco's ships] ..."); Tr. at 1289-91, 3423, 3349. But cf. Dissent at 826-27 (recounting evidence that Comnas was recruited by Mobil as a corporate entity, including actions of its chairman, Rawleigh Warner, rather than by Tavoulareas, notwithstanding Tavoulareas' own uncontradicted testimony).
But that is not all. The record abounds with uncontradicted evidence of nepotism in favor of Peter. The record unmistakably reveals that Tavoulareas remained personally involved in the Samarco-Atlas arrangement after Peter left Lemos and took on his partnership position at Atlas. In August 1974, only days after Peter joined Atlas as a partner, Tavoulareas took Peter — without Comnas — to Geneva to meet the Alirezas. Tr. at 1305-06. This father-and-son trip to Geneva commenced after Tavoulareas "sent a memorandum to Paul Wolf[e] to tell him [Tavoulareas] would no longer be involved with anything as to Atlas and Samarco" and thus to bypass him on all Atlas matters beyond Wolfe's authority in favor of Rawleigh Warner, Mobil's chairman. RE at 2440; see RE at 2339; see also Tr. at 1332-33, 1464-65; cf. RE at 2344 (Mobil's pre-publication letter sent to Tyler claiming that "[f]rom the date Peter Tavoulareas joined Atlas, Mr. Tavoulareas divorced himself from involvement in matters involving business transactions between Mobil and/or SAMARCO with Atlas.") At a luncheon gathering in Geneva, Tavoulareas and a Mobil subordinate engaged in substantive discussions with the Alirezas regarding the tentative Samarco-Atlas contract. During that conversation, Tavoulareas and his Mobil colleague argued in favor of Atlas' position that Atlas should be independent of Samarco and that its compensation should include both a minimum fee and an equity interest in the ships it managed. Tr. at 1712. See generally RE at 2587-2590 (Peter's written summary of the meeting). Although the Alirezas were of the view that Samarco should have "clean cut control of the management group[,] ... [t]his course of action was opposed by ... Mobil" and Mobil's pro-Atlas position on this fundamental issue prevailed. RE at 2587.
Thereafter, Tavoulareas' personal involvement in building up Atlas, with Peter then an equity partner in the firm, continued unabated. In November 1974, at a social gathering in Saudi Arabia, Tavoulareas attempted to convince Ahmed Alireza to accept Atlas' position on the final sticking point between Samarco and Atlas over the terms of the latter's compensation. Tr. at 1312-13, 1725-27. Based on his conversation with Alireza, Tavoulareas recommended to Comnas and Peter that they accept Alireza's counter-offer. Tr. at 1312-13, 1725-27. Atlas accepted Tavoulareas' advice, and the Samarco-Atlas deal was subsequently consummated.
Having helped Atlas secure its management agreement with Samarco, Tavoulareas then — by his own testimony — personally participated in the series of events whereby Comnas in short order resigned from Atlas, with Peter becoming its 75 percent owner. According to uncontradicted testimony, the decision to discharge Comnas was made in April 1975
Tr. at 1534.
A few days later, Tavoulareas flew to London from New York with two Mobil subordinates to explain to Comnas that "we weren't satisfied with [his] services." Tr. at 1333. After one of Tavoulareas' subordinates met with Comnas "to find out what terms he would agree to for leaving," Tr. at 1195, Comnas asked to meet with Tavoulareas. Tr. at 1336-37; see also Tr. at 3349. Tavoulareas reviewed a draft agreement of terms for Comnas' departure and then met with Comnas. Tr. at 1336-37. At Mobil's unilateral insistence, made without even notifying or consulting its other partners in Samarco, Comnas left Atlas immediately thereafter. Tr. at 1190.
In addition to the trial testimony of Tavoulareas and his witnesses, Mobil's own answers to Tyler's written questions prior to the article's publication expressly conceded that Tavoulareas personally participated "in the arrangements made when G. Comnas departed from Atlas ... to the extent of assuring a settlement that was fair and equitable." RE at 2345. It is also beyond dispute that as part of the settlement resulting in Comnas' resignation Mobil agreed to put Comnas on its payroll as a consultant.
Tavoulareas also played a pivotal role in helping Atlas not only to survive but to prosper after Comnas left, when Atlas thereby became the firm of Peter and his youthful colleague from Lemos, Ares Emmanuel. Tr. at 1835; see also RE at 2053, 2435. Tavoulareas personally participated in Mobil's internal deliberations that resulted in the decision to make Harmon Hoffmann, a senior and highly respected Mobil executive, available to Atlas as an interim manager. See Tr. at 1193, 2848-49; cf. RE at 2345. Furthermore, Tavoulareas was personally and directly involved in persuading the Alirezas to retain Atlas as Samarco's independent management firm upon Comnas' departure. Tavoulareas flew to Saudi Arabia and personally informed the Alirezas of Mobil's discharge of Comnas, Tr. at 3286-88. Subsequently, the Alirezas took the position that the Samarco-Atlas contract was terminated by virtue of Comnas' departure, Tr. at 3292, and that to continue collaboration, Atlas would have to assign partial control of its stock and management to Samarco. Tr. at 3292-93; see also Tr. at 1867, 2602, 3441. The Alirezas later withdrew these demands antithetical to Atlas (and Peter) only after Tavoulareas and one of his subordinates flew once again to Jeddah and assured Ahmed Alireza that the Samarco-Atlas contract remained valid, Tr. at 3294, 3298-99, 3302, and that Mobil "would support the needs of [Atlas]." Tr. at 3304.
Given this plentiful, undisputed evidence of Tavoulareas' personal involvement in the establishment and operation of Atlas to Peter's manifest benefit, we conclude that no reasonable jury could, on this record, find that the "set up" allegation was false.
Although the central thrust of the story was not proven false at trial, it is still possible that the story contains defamatory falsehoods. Cf. Afro-American Publishing, 366 F.2d at 655 ("[T]he defamer may be [all] the more successful when he baits the hook with truth."). But cf. Restatement (Second) Of Torts § 581A comment f, at 237 ("Slight inaccuracies of expression are immaterial provided that the defamatory charge is true in substance."). We must, in consequence, carefully consider both the veracity and defamatory character of the three challenged statements in the Post article besides the fundamental "set up" charge.
Tavoulareas first seeks to premise liability on statements in the article creating the impression that there was a "direct link between Mobil and Atlas." Brief for Appellant at 25. Given the overwhelming proof at trial of precisely such a link, this argument collapses at the outset. To recap briefly, it is undisputed that Mobil recruited Comnas to form Atlas; that Mobil argued — successfully — in favor of Atlas' position with the other Samarco partners on several critical occasions; that Mobil removed Comnas as head of Atlas without consulting its Samarco partners; and that Mobil made a senior Mobil executive available to Atlas as an interim replacement for Comnas. Furthermore, it is beyond cavil that Mobil provided office space and direct financial assistance to Atlas and that Atlas managed the ships that Mobil bareboat chartered to Samarco. See, e.g., Tr. at 1142-48. Thus, even if the Post article failed to make clear the formal, corporate relationship between Mobil, Samarco, and Atlas, but see ¶¶ 6, 58-59, 74, the defendants cannot in reason and in law be held liable for accurately reporting the direct link that undisputedly did exist between Mobil and Atlas.
Tavoulareas also challenges the allegation at the end of the article that when Comnas left Atlas, Tavoulareas "dispatched one of his senior shipping executives, Herman [sic] F. Hoffmann, to London to help run Atlas." ¶ 82. Tavoulareas does not contest the fact that Mobil indeed sent Hoffmann to London on that very mission. Rather, he contends that the Post published a defamatory falsehood by suggesting that he "personally ordered a Mobil executive to London to bail out his son's company." Reply Brief for Appellant at 14 (emphasis added). As we have seen, Tavoulareas does not and could not dispute the Post's allegation that he played a personal role in arranging Comnas' departure from Atlas. Moreover, the article was also undisputedly correct in reporting that Comnas' removal made it "`natural for Mobil to step forward' ... `to maintain quality management of [Samarco's] operations.'" ¶¶ 83-84 (quoting Kousi as well as Mobil's own statement). Nor is it contested, as noted above, that Tavoulareas personally participated in the Mobil discussions in which it was decided that Hoffmann would replace Comnas. Tr. at 1193. Nevertheless, Tavoulareas asserts that the jury could reasonably have found the "dispatch" allegation to be actionable.
Testimony was presented at trial that Paul Wolfe, Tavoulareas' subordinate at Mobil, actually made the decision to dispatch Hoffmann to Atlas. Tr. at 1098, 1440. Thus, viewing as we do the evidence most favorably to plaintiff, the "dispatch" allegation was false to the extent it overstated Tavoulareas' role in Mobil's sending Hoffmann to replace Comnas. The potentially defamatory inference that could be drawn from this falsehood is that Tavoulareas had not recused himself from
Third, and finally, plaintiff vigorously contests the article's assertion that he "personally urged" Comnas to accept Peter as a partner in Atlas. ¶¶ 23, 52. The jury reasonably could have concluded that this charge, communicated to Tyler by Comnas, was false. See Tr. at 1293-94, 1296-97, 1425, 1433. And, because the "personally urged" allegation goes beyond the general charge that Tavoulareas "set up" his son and suggests that Tavoulareas actively pressured Comnas to hire Peter rather than merely rewarded Comnas for doing Peter a favor, see supra note 17, the jury may reasonably have found that this specific allegation carries with it an independent defamatory implication capable of causing a separate harm to plaintiff's reputation. We thus turn to the issue of actual malice.
B. Actual Malice
In this branch of our inquiry, the issue is whether the Post defendants published the "personally urged" statement with actual malice — that is, with knowledge of falsity or reckless disregard for its truth. This, in particular, calls upon us to determine whether there is clear and convincing evidence "to permit the conclusion that the defendant[s] in fact entertained serious doubt as to the truth of [their] publication." St. Amant, 390 U.S. at 731, 88 S.Ct. at 1325.
1. Legal Standards
It is well established that the "serious doubt" standard requires a showing of subjective doubts by the defendant. It does not turn on whether a reasonably prudent person would have published under the circumstances. Id. at 731, 88 S.Ct. at 1325-26. The rejection of an objective standard of care, however, does not mean that libel defendants can defame with impunity merely by testifying that they published the challenged statements with the belief that they were true. Id. at 732, 88 S.Ct. at 1326. To the contrary, a plaintiff may prove the defendant's subjective state of mind through the cumulation of circumstantial evidence, as well as through direct evidence. See, e.g., Herbert v. Lando, 441 U.S. 153, 160, 99 S.Ct. 1635, 1640-41, 60 L.Ed.2d 115 (1979); Washington Post Co. v. Keogh, 365 F.2d 965, 968 (D.C.Cir.1966), cert. denied, 385 U.S. 1011, 87 S.Ct. 708, 17 L.Ed.2d 548 (1967).
At the same time, actual malice does not automatically become a question for the jury whenever the plaintiff introduces pieces of circumstantial evidence tending to show that the defendant published in bad faith. Such an approach would be inadequate to ensure correct application of both the actual malice standard and the requirement of clear and convincing evidence. Thus, as all parties and amici agree, the Supreme Court has directed us to "exercise particularly careful review," Supplemental Brief for Appellant at 9, and to "make an independent examination of the whole record." Edwards, 372 U.S. at 235, 83 S.Ct. at 683, quoted in Sullivan, 376 U.S. at 285, 84 S.Ct. at 729.
This constitutionally mandated duty of independent review has been applied unflinchingly. The Supreme Court and other courts have more often than not concluded that public figure libel plaintiffs failed to adduce evidence of sufficient clarity to convincingly support a jury finding of actual malice. For example, in the leading case of St. Amant v. Thompson, 390 U.S. 727, 88 S.Ct. 1323, the Supreme Court reversed a jury finding of liability in a public official's defamation action. Because of St. Amant's importance in actual malice analysis, we pause to recall the facts of that case. Briefly stated, Deputy Sheriff Thompson sued St. Amant, a candidate for public office, for repeating in the course of a televised speech the false allegation that Sheriff Thompson had taken bribes from a local Teamsters Union president. The record showed that St. Amant had based his allegation exclusively on information provided by an active member of a dissident faction within the Teamsters. At the time, the dissident faction was locked in a struggle for control against the faction led by the Teamsters' official alleged to have paid bribes to the Sheriff. Although he had no knowledge of the source's reputation for
Before evaluating the specific record before it, the St. Amant Court provided examples of the kind of proof that would likely support a finding of actual malice. The examples fell into three general categories: evidence establishing that the story was (1) "fabricated"; (2) "so inherently improbable that only a reckless man would have put [it] in circulation"; or (3) "based wholly on an unverified anonymous telephone call" or some other source that the defendant had "obvious reasons to doubt." 390 U.S. at 732, 88 S.Ct. at 1326. After setting forth these illustrative examples, the Court held that the evidence before it, by comparison, was clearly inadequate. St. Amant's failure to investigate was deemed not indicative of actual malice, inasmuch as the plaintiff had not proven "a low community assessment of [the source's] trustworthiness or unsatisfactory experience with him by St. Amant." Id. at 733, 88 S.Ct. at 1326. The Court also found support for its decision in evidence tending to show that St. Amant published the charge in good faith, including St. Amant's testimony that he had verified other aspects of his source's information and evidence that the source had sworn to his answers in the presence of newsmen.
2. Application of the Legal Standards
As the District Court correctly observed in the case at hand, the Supreme Court's reasoning and result in St. Amant are instructive for inferior tribunals in attempting faithfully to apply the "serious doubt" test. 567 F.Supp. at 656. The examples provided there of when a jury may reasonably infer actual malice from circumstantial evidence are by no means exhaustive, but, as numerous courts have recognized, constitute useful benchmarks for lower courts to employ in determining whether a record is sufficient to sustain a finding of constitutional malice. See, e.g., Marcone v. Penthouse International Magazine For Men, 754 F.2d 1072, 1089-90 (3d Cir.), cert. denied, ___ U.S. ___, 106 S.Ct. 182, 88 L.Ed.2d 151 (1985); Hunt v. Liberty Lobby, 720 F.2d 631, 643-46 (11th Cir.1983). When the entire record in this case is scrutinized in light of St. Amant and other governing precedents, it is clear beyond cavil that Judge Gasch's decision to grant j.n.o.v. was fully justified.
Tavoulareas seeks to support the jury finding of actual malice on the basis of both evidence generic to the entire article, such as managerial pressure to produce stories, and evidence relating more specifically to various statements in the article. We turn first to the evidence of actual malice relating to the single remaining statement in the article that may be actionable.
a. Personally Urged." It is undisputed that Comnas was the sole source for the Post's allegation that Tavoulareas "personally urged" that Peter be included as an equity partner in Atlas. Plaintiff contends that reliance on Comnas was evidence of the Post defendants' actual malice inasmuch as the record supports the conclusion that Comnas was an obviously unreliable source. Our examination of the record, however, leads us to agree completely with the District Court's contrary conclusion that "reliance upon George Comnas as a primary source does not come close to approaching the level of recklessness required by the Supreme Court." 567 F.Supp. at 656.
As did the District Court, we find it highly significant that "much of Comnas' information was independently verified by other sources whose credibility even the plaintiff does not now challenge." 567 F.Supp. at 656. For instance, Comnas told Tyler that Tavoulareas had participated on Atlas' behalf in key negotiations with the Saudi partners of Samarco after Peter had joined Atlas. Tr. at 3688, 3778-84. Mobil denied this critical contention in its pre-publication letter to the Post, claiming (erroneously, as Tavoulareas conceded at trial, Tr.
But this was by no means all the information in Tyler's hands that buttressed Comnas' statements. Tavoulareas' own testimony before the SEC staff admitted his recruitment of Comnas to head Atlas and his knowledge of Comnas' business relationship with Peter. RE at 2443-46, 2424-25. On behalf of Mobil, Paul Wolfe confirmed Comnas' statement to Tyler that Tavoulareas was personally involved in Comnas' departure from Atlas, RE at 2345, a significant admission in light of the understanding communicated by Mobil to Tyler and outside members of the board of directors that Tavoulareas was not involved in Atlas matters after Peter's entry into the firm. Tr. at 3550, 3588-89; RE at 2344. Moreover, Kousi confirmed Comnas' general charge that Peter obtained his position with Atlas on the basis of kinship, not merit. Tr. at 3079-80 ("[T]he employment of Peter Tavoulareas in Atlas was a nepotistic act."). In sum, the undisputed evidence of record shows conclusively that Tyler corroborated much of the information provided by Comnas. Cf. St. Amant, 390 U.S. at 733, 88 S.Ct. at 1326-27, (verification of part of source's information probative of St. Amant's lack of actual malice in relying on source for other, uncorroborated information).
Besides independent, reliable corroboration of most of Comnas' story, Tyler had other, substantial reasons to believe Comnas. Of these, the most important was Tyler's uncontroverted knowledge that "Comnas provided virtually the same information to Tyler as he gave to investigators for the House Subcommittee," 567 F.Supp. at 656, including the substance of the "personally urged" allegation. RE at 2471; cf. St. Amant, 390 U.S. at 733, 88 S.Ct. at 1326-27 (St. Amant's knowledge that source repeated information to others in manner bespeaking earnestness indicative of good-faith belief in source's credibility). It is undisputed that an experienced House Subcommittee investigator, Peter Stockton, accompanied by a Subcommittee lawyer, traveled from Washington to Comnas' home in Osterville, Massachusetts. Tr. at 2770; RE at 2467. There, they conducted a formal three-hour interview, complete with elaborate notetaking; it is undisputed, moreover, that the two Subcommittee staff members were interviewing Comnas in their official capacities. This was a Congressional investigation, not an idle conversation between a passerby and a disgruntled executive.
After interviewing Comnas, Stockton confirmed Tyler's judgment that Comnas was credible, that he spoke reluctantly and carefully for fear of reprisal, and that his information was consistent with that provided by other sources. Tr. at 2816-17; cf. Tr. at 2792-93. Tyler was justifiably impressed with Comnas' "consistency" as a source, especially since, as Tyler reasonably concluded, Comnas was on "a higher level of notice" that "he better be truthful in his story" when speaking to the Subcommittee staff. Tr. at 3823-24.
Despite the abundant, undisputed evidence in the record supporting Tyler's decision to credit Comnas' story, Tavoulareas nevertheless argues that the jury could reasonably have concluded that "Comnas' patent lack of credibility" was apparent to Tyler. Brief for Appellant at 20. To support this contention, Tavoulareas relies heavily on the undisputed fact that Dr. Piro told Tyler that "Comnas had been caught in some fraud involving Atlas" and that the Tavoulareases had threatened to report Comnas to the tax authorities if Comnas ever started any trouble for Peter and Atlas. Tr. at 2908-09. What Piro related, of course, was his understanding from the Tavoulareases. Tr. at 2958, 2965.
Tyler, as we have seen, tried to talk with both William and Peter Tavoulareas. William refused to talk at all with Tyler, but his sworn SEC testimony indicated that Comnas' withdrawal from Atlas had nothing whatever to do with unethical conduct. RE at 2435. Peter hung up the phone when Tyler called, having chosen, as he was free to do, not to enlighten Tyler as to the reasons for Comnas' departure from Atlas or to correct any misinformation Tyler had concerning Comnas' trustworthiness. Tr. at 2437. Mobil, of course, steadfastly refused Tyler's requests for interviews, as it was likewise free to do. Faced with Mobil's silence, Tyler checked with Kousi, who told him that it was the "dissatisfaction of Mobil," not any of the other parties, that led to Comnas' removal. Tr. at 3082-83; cf. Tr. at 2099-2100 (testimony of Harmon Hoffmann that the sole reason for Comnas' removal was dissatisfaction with his performance, not any ethical considerations). Thus, the undisputed record comports entirely with the District Court's conclusion that "it is not at all clear that Comnas left Atlas under circumstances that should have aroused Tyler's suspicions as to his motivation for speaking unfavorably about the [Tavoulareases]." 567 F.Supp. at 657 (footnote omitted).
We also agree with the District Court that the evidence of personal animus between Comnas and Tavoulareas was not
Finally, we reject the suggestion that the Post's failure to introduce any of Comnas' deposition testimony at trial was probative of actual malice. Even assuming that Tavoulareas can advance this assertion in the first instance,
b. General Evidence of Actual Malice. Last, we consider the more general evidence in the record that, as Tavoulareas sees it, supports a determination that the Post defendants published the November 30 article with actual malice. At the outset, we observe that our examination of this evidence cannot be divorced from our earlier conclusion that the record before us cannot reasonably support a finding that the central theme of the article was false. For example, Tavoulareas argues that the Post's refusal to retract the article or to concede its falsity at trial was evidence of actual malice in view of "the overwhelming proof of the article's falsity at trial." Brief for Appellant at 27. But this broadside cannot stand in light of our earlier analysis and conclusions with respect to the issue of falsity vel non. We therefore need only address briefly to what extent, if any, this evidence could reasonably have supported the jury finding of actual malice.
(i) The Christine Peterson Memorandum. Christine Peterson had the task of performing the final edit on the November 30 article. During Peterson's brief testimony at trial, it was established that her duties included editing the story for "style, punctuation, [and] grammar," confirming facts that could be checked with source material at hand, and writing the headlines. Tr. at 2827. The record is also clear that in editing the article at issue, she performed a "fresh read," that is, she had no knowledge of the sources or research underlying the article beyond what she read in the article itself. See Tr. at 2829; RE at 2486-87; 567 F.Supp. at 655. After editing the copy, and prior to publication, she sent a memorandum to assignment editor Peter Milius. The memorandum stated in part:
RE at 2486.
At trial, Peterson testified that "my point in the memorandum was that I
The Peterson document is subject to two reasonable interpretations when construed against the Post, both of which fail to connect Peterson's disbelief to a false and defamatory meaning present in the article. First, Peterson's memorandum might plausibly be understood to state that she found the story impossible to believe because the story states or suggests that Tavoulareas' primary motivation in establishing the entire Mobil-Samarco-Atlas arrangement was to benefit his son. But we have held as a matter of law that the article cannot bear this interpretation. As we have previously recounted, the article neither stated nor implied that Tavoulareas engineered Mobil's participation in the Samarco venture for the sake of his son's business career. Far from it, the article made it clear that Mobil officials decided to join Samarco in anticipation of Saudi preference shipping requirements and favorable Saudi financing. See supra p. 781. Thus, this possible understanding of Peterson's "impossible to believe" language, while demonstrating malice, has no connection to a defamatory meaning that the article will bear as a matter of law.
Second, the memorandum could be interpreted more narrowly to express disbelief that Tavoulareas "set up" Peter in Atlas. Yet, in light of the overwhelming evidence supporting that very charge in the hands of those at the Post responsible for the article's publication (and undisputed at trial), any such view held by Peterson was obviously wrong. Indeed, we have held that no reasonable jury, on this record, could have found the "set up" charge to be false. See supra p. 786. In this sense, the Peterson memorandum has no connection to any false statement.
The ill-will or bad-motive evidence in this record, however, is lacking in probative value. The contention is that "Tyler's motive to hurt plaintiff flowed from his embarrassment when Mobil exposed his false description of an interview he had had with a Mobil executive earlier in 1979." Supplemental Brief for Appellant at 25. Four statements by Tyler are relied upon to establish his asserted plan to "get" Tavoulareas. We find none to be indicative of a willingness to publish falsehoods.
Toward the beginning of his investigation, Tyler remarked to Golden that "[i]t is not every day you knock off one of the seven sisters,"
The fourth statement — that Tyler asked Piro whether "he knew of a family member who would rifle [Tavoulareas'] safe and [x]erox documents," Tr. at 180 — is obviously beyond the pale, exceeding the bounds of acceptable professional conduct. As Tyler conceded at trial, the statement, even if intended as a joke, was utterly inappropriate. As noted in Judge Wright's dissent to the original panel opinion, however, we do not sit "as some kind of journalism review seminar offering our observations on contemporary journalism and journalists." 759 F.2d at 145.
In a similar vein, plaintiff argues that the jury's finding of actual malice is supported by evidence that "pressure [was] placed upon Post reporter Tyler to create sensationalistic stories." Supplemental Brief for Appellant at 20. Tavoulareas contends that evidence of such pressure is to be found in the testimony of Woodward, who was found not liable by the jury.
In our view, however, managerial pressure to produce such stories cannot, as a matter of law, constitute evidence of actual malice.
We, of course, accept the tautological proposition that evidence of managerial
The remainder of the proffered evidence of actual malice merits little discussion in light of the overwhelming record evidence that the Post defendants published the article in good faith. The contention that the Post engaged in this instance in a pattern of "slanted reporting" indicative of actual malice is utterly without merit. As Judge Gasch observed, Tyler included most of the information furnished by Mobil in the article (with no substantial omissions) and suppressed no information that would have proved the article incorrect. See 567 F.Supp. at 654, 657-59.
IV. PIRO
On appeal, Tavoulareas asserts that Philip Piro
We have already discussed our finding that the "set up" statement is substantially true. We have also concluded that the allegation that Tavoulareas dispatched Hoffmann to Atlas is at worst an exaggeration of Tavoulareas' undisputed role, and adds no further defamatory implication to the substantially true charge that Tavoulareas set Peter up in business. Moreover, there is no evidence that Piro entertained serious doubt as to the truth of the dispatch statement.
As for Peter's initial job with Lemos, Piro told Tyler and Golden that he "had no direct knowledge" but "knew that Lemos was a friend of the family and [was] sure that that assisted in obtaining a job for Peter." Tr. at 331; see also Tr. at 347. The District Court held that this statement was not defamatory. RE at 766 n. 1. Tavoulareas challenges that holding on appeal, arguing that Piro made the remark to the reporters in order to buttress his primary and clearly defamatory accusation that Tavoulareas set up Peter in Atlas. Brief for Appellant at 30. The "set up" allegation, however, was not false, and we thus conclude that Piro's allegation about Peter's employment with Lemos had no false, defamatory implication.
V. CONCLUSION
This case has consumed the attention and energy of a courthouse beseiged by impatient litigants. We have nonetheless examined this record with the care and detail that the Constitution commands. After completing our task, we are firmly persuaded that the decision of the able and distinguished trial judge was correct. This verdict cannot stand.
Affirmed.
APPENDIX
Washington Post, November 30, 1979, Page A-1
MOBILE CHIEF SETS UP SON IN VENTURE
Management Firm Is Used to Operate Oil Company Ships
By Patrick Tyler
Washington Post Staff Writer
Mobil Oil Corp. president William P. Tavoulareas set up his son five years ago as a partner in a London-based shipping management firm that has since done millions
Tavoulareas' son, Peter, was a 24-year-old shipping clerk in 1974, making $14,000 a year. Today, with the help of Mobil, he owns 45 percent of Atlas Maritime Co., which operates 17 ships worldwide.
Mobil, the second largest oil company, provided Atlas with some of these ships — among them Mobil-owned supertankers — under management agreements that allowed Atlas to go into business with a minimal amount of capital.
Mobil also initially provided Atlas with office space in Mobil's corporate offices in London and loaned Atlas a Mobil shipping vice president when Atlas' own top shipping executive resigned in 1975.
Mobil leased back the ships it provided Atlas, thus creating work for Atlas at a time when the shipping industry was severely depressed.
The leasing was handled through an intermediary company, Samarco, of which Mobil owns 45 percent.
According to one source, Peter Tavoulareas put up no investment capital for his initial 25 percent share of Atlas. Moreover, the lucrative Mobil contracts, along with other managerial assistance, provided by Mobil, helped make Atlas an overnight success. Peter Tavoulareas, now 30, maintains a highly affluent life style, including a home in one of London's most fashionable districts, a Rolls Royce and a summer home on Long Island.
The creation of Atlas was a marked departure from Mobil's historical practice of managing its own fleet of crude oil tankers through its shipping and transportation division.
Atlas was created to handle the day-to-day management work for Samarco, a complex shipping partnership that Mobil negotiated in 1974. The other partners included a prominent Saudi Arabian merchant family and a member of the Saudi royal family.
Samarco — Saudi Maritime Co. — was set up as a way to share shipping revenues among the partners, but the company existed largely on paper, according to one of its original directors, John D. Kousi.
The complicated transactions between Mobil and Atlas and Samarco are not especially unusual in the intricate world of international oil — except perhaps for the presence of father and son. That relationship is not illegal, but securities law requires that Mobil officials report it fully to their stockholders. Mobil claims it did, but that is in dispute.
Beyond the legal questions, however, the story of Mobil's president and his son offers a rare glimpse into corporate behavior at the top of one of the largest publicly held international oil companies.
The Mobil board of directors was told from the outset about the Atlas arrangement but was assured that company president Tavoulareas was not involved in his son's venture in any way.
Mobil officials did not tell their stockholders about the son's involvement in Atlas until two years later.
After initial press inquiries in the fall of 1976, Mobil board chairman Rawleigh Warner, Jr., disclosed in a special letter to stockholders that Peter Tavoulareas "is one of the principals" of Atlas.
That disclosure prompted an investigation by the Securities and Exchange Commission (SEC) in early 1977, but the inquiry was dropped after confidential sworn testimony was taken from the elder Tavoulareas.
U.S. securities law requires that corporate officials disclose the details of business transactions between companies and relatives of the companies' executives. The law was designed to protect shareholders from business decisions based on favoritism.
In recent days, the SEC has reopened its investigation into the role Mobil's president played in his son's partnership in Atlas.
Mobil chairman Warner says he assured directors in board meetings that Tavoulareas "does not participate in any decisions" relating to Mobil's business with Atlas.
. Tavoulareas personally recruited two shipping executives, one an outside consultant and the other a Mobil vice president, for Atlas. One of them set up and ran Atlas for more than a year. The other managed it for a time.
. The Mobil president helped negotiate the arrangement whereby the Saudi shipping partnership, Samarco, would turn over all of its management business to Atlas. Mobil officials acknowledged this in a statement last week to The Post.
. As the formation of Atlas was being planned in April 1974, Tavoulareas personally urged that his son be included as an equity partner in Atlas. However, in the Mobil statement, Tavoulareas denies this. "Mr. Tavoulareas asserts that he did not initiate this arrangement," the statement said.
. The elder Tavoulareas played a personal role in forcing the resignation in 1975 of Greek shipping executive George D. Comnas, who had been recruited a year earlier by Tavoulareas to set up Atlas. The resignation followed several personal disputes between Comnas and Tavoulareas' son. Mobil's statement said "Mr. Tavoulareas played a minor role ... in the arrangements made when Comnas departed from Atlas. Since it was on Mobil's recommendation — including Mr. Tavoulareas' ... [that Comnas set up Atlas], it was logical that Mr. Tavoulareas participate."
The elder Tavoulareas was not available for an interview, but through a spokesman acknowledged that the basic idea to set up Atlas was his and that he recommended Comnas set it up. But he denied that he urged that his son be accepted as a partner and stated that he divorced himself from Mobil's business with Atlas after his son joined the company.
Comnas, according to Marquis Who's Who, completed a 30-year career with Exxon in 1968 and was president of Mediterranean and African subsidiaries for Exxon during his last years there. In the five years before he formed Atlas, Comnas, 66, was managing director and chairman of the board of C.M. Lemos & Co. Ltd. of London, reportedly the largest of the Greek shipping firms.
One of Mobil's partners in Samarco said that the involvement of Peter Tavoulareas was accepted without objection because it was assumed that other Atlas managers were competent to run the business.
"Clearly it was a nepotistic act," said Kousi, one of the original directors of Samarco. "At his age [Peter was 24 in 1974] he wasn't a genius, nor was he terribly experienced in shipping. You couldn't expect a lot from someone with that level of experience."
Philip Piro, a Baltimore eye surgeon and former son-in-law to the elder Tavoulareas, who is now estranged from the family, said Tavoulareas expressed his interest at the time as "giving Peter a little nudge to get him along." Tavoulareas, through a spokesman, said he does not recall making the remark.
In 1973, a year before young Tavoulareas became a partner in Atlas, he was making $14,000 a year as a clerk in the London office of Greek shipping magnate Lemos. Sources said that job also was arranged by his father.
Before that, the Mobil president's son was graduated from St. Johns University in New York, where his father sits on the board of trustees, and later received a master's in business administration from Columbia University.
In an early interview, Peter Tavoulareas said that his partnership in Atlas did not represent "overt favoritism" and that his responsibilities in the company revolved around "financing." Peter Tavoulareas said that he was asked by Comnas to join Atlas and was offered an equity interest.
In a later interview, Peter Tavoulareas would not comment further. "I've answered all of the questions you're going to get from me. Atlas has nothing to do with Mobil [in some early editions "Saudis"], it has nothing to do with Samarco and it has
In recent weeks, Mobil has not responded to Washington Post requests for interviews with company officials familiar with Atlas and its operations. The first such request was made Nov. 8. Mobil's vice president for public affairs, Herbert Schmertz, said Nov. 16. "We're not saying no and we're not saying yes." Still later, Schmertz said the request was "under consideration." In a letter to The Post Nov. 12, another Mobil spokesman, John Flint, said, "We understand that you have been advised that this matter has been examined by several reporters for The Washington Post and New York Times, and apparently they found no basis to do a story."
[35] The Post did make a brief inquiry into Atlas in 1976, but received assurances from Mobil executives that Mobil's president had maintained a completely "hands off" attitude toward Atlas. The Post began a new inquiry two months ago, based on new information about Atlas.
Mobil's Schmertz eventually requested that questions be dictated so that Mobil could respond in writing. This was done and Mobil responded to these questions Nov. 20.
Several sources who agreed to discuss the details of this episode if their identities were protected were intimately familiar either with Mobil's shipping operations or with the attempts by Mobil's president to secure a position for his son in the upper strata of the business world.
The story of international finance, shipping and oil politics begins with the 1973 Arab oil embargo.
In the wake of the oil cutoff, Mobil officials learned that a prominent Saudi merchant company, Haji Abdullah Alireza & Co., was interested in extending Saudi influence from the production of oil to its transportation.
[40] Mobil officials believed at the time that a shipping partnership with the Saudis might yield preferential treatment in the loading of crude oil at Saudi ports.
In his 1976 message to stockholders, Mobil's Warner said, "Samarco was formed in anticipation ... of [Saudi] flag preference regulations applicable to exports of petroleum from that country and, also, in anticipation of ... favorable financing from Saudi Arabian sources."
Mobil and its partners in the venture acknowledge now that neither the preference laws nor the financing for ships materialized.
"The business reasons were wrong, they didn't prove out," says Kousi, whose company sold out its interest in Samarco to Mobil two years ago. "We just didn't see the anticipated benefits," he said.
But at the time Samarco was formed, Mobil officials felt "preference shipping was much more a threat," according to the Mobil statement. Samarco, however, in which Mobil initially held a 30 percent interest and now holds a 45 percent interest, existed mostly on paper. The real work of the partnership would be performed by the management company, Atlas.
[45] "There was no staff or offices for Samarco," said Kousi. "It needed no real offices."
The negotiations between Mobil executives and the Saudi partners in Samarco took all of 1974. After the partnership agreement was struck in December, Mobil issued a brief press release saying, "Samarco has engaged the services of Atlas Maritime ... to manage the operation of Samarco's fleet."
In its statement last week, Mobil acknowledged that "Atlas was created in anticipation of managing Samarco's business." Atlas was created in July 1974.
Mobil president Tavoulareas, the statement continues was involved in the "policy aspects of participating in Samarco and the concept of Atlas" during those negotiations.
Mobil's first goal when it entered the talks in January 1974 was to steer the Saudis away from a partnership they had formed with a New York-based shipping concern, Fairfield-Maxwell Ltd. The Saudis had approached Fairfield-Maxwell after
[50] "The initial invitation from the Saudis was turned down ... consistent with our normal policy of providing our own transportation and not permitting preference shipping," Mobil said last week.
But Mobil officials said they subsequently perceived a greater threat from preference shipping. Sources said Mobil then dispatched two negotiators to Jeddah in Saudi Arabia to push Mobil as a partner. One of the negotiators was Mobil's Mideast agent, W. Jack Butler, and the other was the Greek shipping executive, Comnas, who was recruited personally by Tavoulareas to advise Mobil on how to set up an independent shipping concern.
By April, the talks on Samarco had progressed far enough that the management arm of the partnership was being planned by Tavoulareas, who recommended to the partners that Comnas be tapped for the job. Late in April, according to one knowledgable source, Tavoulareas personally urged that his son become a partner in Atlas. Sources said that shortly thereafter, the issue of young Peter's involvement was raised with Mobil chairman Warner, who said he raised the issue with the directors and won their approval.
In its statement, Mobil said, "It was George Comnas who asserted that he would like Peter Tavoulareas and one other associate at Lemos, a major shipping company, to join him in the management of Atlas. Mr. Tavoulareas asserts that he did not initiate this arrangement."
Nevertheless, the other Lemos employe who came to Atlas with young Tavoulareas, an experienced insurance clerk named Ares D. Emmanuel, was given only employe status while Peter Tavoulareas was made a 25 percent partner. Within a year, Tavoulareas would become a 45 percent partner.
[55] After Atlas became fully operable in late 1974, the time came for Samarco to begin acquiring ships for Atlas to manage. However, contrary to Mobil's hopes when it formed the partnership, the Saudis were unwilling to provide any investment funds or financing for ships.
Mobil said in its statement that an unspecified amount of "capital contribution" was made by each partner when Samarco was formed. One of the partners, the son of Crown Prince Fahd, heir to the Saudi throne, apparently had a special arrangement. Said Mobil: "The prince's share was financed by loan, which he must repay before he receives any financial benefits in the company."
As a result, in early 1975, Mobil provided Samarco's first vessel from its own fleet. The ship, a supertanker, had been launched as the Mobil Mariner, but was renamed the Saudi Glory, presumably to reflect the interests of the Saudi partnership.
The Saudi Glory was turned over to Atlas by Mobil under a "bareboat" lease through Samarco, meaning the structure of the tanker, without crew, fuel or stores, was rented to the Saudi partnership and its management arm. However, because Samarco and Atlas had no funds with which to pay such a rental fee, the ship was leased back to Mobil simultaneously.
Under this arrangement, Atlas agreed to operate the vessel for Mobil, hire crews, arrange for fueling and handle small maintenance chores. All major repairs were Mobil's responsibility. Thus Mobil paid Atlas the cost of operating the ship plus an unspecified margin of profit.
[60] Mobil's executive vice president for Mideast transportation, Paul J. Wolfe, said in an early interview that Atlas' basic management fee was $600,000 a year and included an escalation clause. Other sources said the fee would escalate with the cost-of-living index and also after Atlas acquired more than 10 ships.
Peter Tavoulareas said the management fee was $680,000 for 1976, when Atlas was operating six ships.
The firm's income for subsequent years is not known, but one knowledgeable source said that Atlas was structured so that profits would increase dramatically as more ships were acquired, because overhead
Because Mobil operates its own ship management arm within the Mobil organization, it could have managed the Samarco fleet itself, company officials acknowledged.
But Mobil officials claim that there could have been a conflict of interest for any one of the Samarco partners to manage the ships owned by all of the partners. Mobil's statement said:
[65] "Mobil did not want to manage Samarco or to set up a Samarco management company, as there could be a conflict of interest between Mobil and Samarco when chartering ships in or out for either company. Neither of the Saudi partners had experience to qualify them to manage. Fairfield-Maxwell could have had a similar conflict. Accordingly, it was prudent to have an independent third-party managing company."
Mobil officials said a study was done of management fees in the shipping industry as a guide to setting Atlas' fees. But the company acknowledged that there were no bids.
"Ship management arrangements are difficult to assess on a bid basis ... From Mobil's experience, the overriding selection criteria for such operations is the prospect of good, safe performance and access to low-cost dependable crews," the company's statement said.
(Atlas has lost one ship, the Atlas Titan, which exploded and burned last May at Setubal, Portugal, during a tank-cleaning operation, according to Lloyd's of London. The ship was sold for scrap in July.)
According to Mobil's statement, one advantage derived from using Atlas as a management company came from Atlas' "ability to use low-cost Greek crews unavailable to Mobil or to other, similar non-Greek companies."
[70] Kousi, Mobil's partner at the time, reacted to that statement by saying, "Who didn't [have access to low-cost Greek crews]? That's a phony argument." Kousi said that virtually all companies who have international subsidiaries, such as Mobil, have access to low-cost crews of Greek and other nationalities.
It is not clear from maritime records how many ships Mobil supplied to Atlas under the contract arrangement. The records show that in March 1978, Mobil was the registered owner of an oil tanker named the Yanbu that was under Atlas' control. And, last October, Mobil supplied to Atlas another tanker named the Solon, records show.
The second of the ships that were turned over to Atlas in 1975 was also a Mobil ship. The 250,000-ton supertanker, launched as the Mobil Supplier, according to Federal Maritime Commission records, was renamed the Al Haramain.
The third ship, also Mobil's was launched as the Elena and became the Al Rowdah.
Presently, Mobil officials said in their statement that they have chartered "certain tankers" to Samarco "and chartered most of these back from Samarco on a time charter basis."
[75] Of the 17 ships Atlas reportedly operates worldwide, Mobil said seven are run for Samarco and four of those ships are owned by Mobil.
Less than a year after this corporation was set up to manage the fleet assembled by Mobil with the Saudis, Atlas underwent an internal struggle in which Peter Tavoulareas and one of his employees, Emmanuel, took over control of the company.
Comnas, who had been recruited by Mobil to set up Atlas and run it, resigned in mid-1975. Mobil's Wolfe explained the Greek shipping executive's departure by saying that Samarco's directors had grown dissatisfied with his performance.
Kousi, who was on the Samarco board at the time, declined to discuss Comnas' departure in detail. He did say that it was not Samarco's board that was dissatisfied, but rather, "Mobil basically was dissatisfied."
Sources familiar with the situation said that Peter Tavoulareas had several personal disputes with Comnas and shortly thereafter, his father, William Tavoulareas, intervened.
[80] That settlement reportedly included Mobil paying Comnas a substantial retainer as an independent marine consultant for several years.
The relationship between the Mobil president and Atlas also was exemplified by his response when Atlas was left without a seasoned shipping executive in control after Comnas departed.
Almost immediately, according to Piro and other sources, the elder Tavoulareas dispatched one of his senior shipping executives, Herman F. Hoffmann, to London to help run Atlas.
Said Kousi: "Mobil had suggested Comnas so it was natural for Mobil to step forward and to feel an obligation to meet whatever vacuum they thought existed."
Mobil gave this account in its statement: "Since Mobil had originally recommended G. Comnas to Samarco, we felt an obligation to Samarco to maintain quality management of their operations. We made Hoffmann ... available as an interim manager of Atlas."
[85] During this period, Hoffmann was given the opportunity to take over Atlas permanently, but he declined. While he remained at Atlas, Mobil officials said, Hoffmann's salary "was pro-rated in proportion to his time. Atlas reimbursed Mobil for that portion relating to Atlas duties, plus all related expenses."
Special correspondent Sandy Golden contributed to this report.
WALD, Chief Judge, concurring in the judgment:
I concur in the judgment of the majority that the jury verdict for the plaintiffs should be overturned. I write separately, however, because I believe that such a result can be justified only if this court reviews the verdict under the special independent review standard set out in Bose Corp. v. Consumers Union of United States, Inc., 466 U.S. 485, 104 S.Ct. 1949, 80 L.Ed.2d 502 (1984).
Both the majority and dissenting opinions leave the distinct impression that neither opinion adheres to the standard of review it claims to be employing. The majority purports to apply the traditional standard for overturning a jury verdict, i.e., the reviewing court must accept all "permissible" inferences the jury might draw from the objective facts it finds. See maj. op. at 777-78. Nonetheless, throughout its opinion it scrutinizes the inferences to be drawn from evidence of actual malice far more rigorously than that ordinary judgment n.o.v. standard would permit. The dissent, on the other hand, accepts the independent review principle of Bose as applicable, but then proceeds to interpret it as requiring that an appellate court give complete deference not only to the jury's presumed factual findings but also to any reasonable inferences from those findings that might support the verdict. The court's independent review is to be restricted to the "ultimate constitutional issue." See diss. op. at 816-17, 830.
Because I believe that this highly publicized and controversial case should be reviewed according to an articulated standard that comports with what the court actually does, I will set out the standard I think should apply here. I find this necessary not only because I do not think an ordinary judgment n.o.v. standard, or even the pre-Bose independent review standard the majority claims to apply
Were we to follow the dissenting opinion's interpretation of Bose, I fear it would prove impossible in virtually all libel cases for a reviewing court to defer to all permissible inferences the jury may be presumed to have drawn, and then to conduct a truly independent review of the jury's ultimate determination that the defendant acted with actual malice. The human mind is just not that agile, and indeed that is why judgments n.o.v. are so unusual; something must be very wrong before a reviewing court can give the jury the benefit of every reasonable inference and still find evidence lacking for their verdict, even under the preponderance standard. For example, in this case, once the dissent accepts the jury's "reasonable" inferences that the Peterson memorandum "raise[d] in [the defendants'] minds subjective doubts as to the accuracy of the story," that "the defendants knew that Comnas was not trustworthy," that the Post's "extreme pressure for sensationalistic stories [led] to distortion of the truth," and so on through each of the allegations made by the plaintiffs, see diss. op. at 829-39, there is nothing left for an appellate court to review: the conclusion that the defendants acted with actual malice follows inevitably. Independent review of the jury's inferences concerning the existence of actual malice is necessary if we are to fulfill our responsibility to decide "independently ... whether the evidence in the record is sufficient to cross the constitutional threshold that bars the entry of any judgment that is not supported by clear and convincing proof of
The majority, on the other hand, while stating that it need not apply any special post-Bose "independent review" standard to arrive at the determination that the defendants did not act with actual malice, in fact does reexamine and reject "permissible" inferences which the jury might have drawn to support their verdict. For example, the majority acknowledges that the jury could find that copy editor Christine Peterson had conveyed to the defendants that she found "the story's theme impossible to believe," and it recognizes that "the Peterson memorandum is evidence of ... actual malice." Maj. op at 794. Nevertheless, the majority concludes that this evidence will not support an inference of actual malice with respect to the allegation that Tavoulareas "personally urged" Comnas to accept Peter as a partner, the one statement in the article which the majority holds to be both false and defamatory. See id. at 794 n. 44. Similarly, the majority concedes that there was evidence casting doubt on the reliability of Comnas as a source for the article, including "evidence of personal animus between Comnas and Tavoulareas," but rejects the inference that reliance on Comnas could be viewed as indicative of actual malice. See maj. op. at 790-93. I could go on, but suffice it to say my own review of the record convinces me that the majority does in fact subject the evidence of actual malice to independent review of inferences to be drawn from it, as indeed it should under Bose, in order to assure that malice has been proven by "clear and convincing" evidence, and as I believe it must in order to arrive at its ultimate judgment, with which I agree. What I find disturbing, though, is its reluctance to acknowledge what it is doing or to grapple with the articulation of what is a proper application of Bose to the record. For future cases we badly need to clarify the appropriate role of a reviewing court in this volatile area of the law, and in this case, regrettably, we have lost a valuable opportunity to do so.
RUTH BADER GINSBURG, Circuit Judge, concurring:
I concur in the court's opinion holding that the evidence in this case was insufficient to warrant submission to a jury's judgment. That decision, however, is more securely made at a distance from the trial itself. Immediately at the close of a hard-fought trial, the presiding judge, who must rule at once upon a motion for a directed verdict, is in a less advantageous position. He or she may prefer to abide the jury's report and, if necessary, thereafter consider, with some space for reflection, whether to grant a requested judgment n.o.v. Despite our decision today, therefore, hotly contested cases of this genre are likely to reach juries again. With that prospect in view, I write separately to suggest what a trial judge might do to enhance the jurors' capacity to comprehend and impartially apply the governing law.
Keeping the jury on track poses a formidable challenge for the judge in a libel case governed by the "actual malice" standard of New York Times v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964). As Justices Black and Goldberg anticipated, the risk is considerable that jurors will not comprehend the difference between reckless disregard and mere neglect or carelessness, or will confuse or blend the separate issues of falsity and actual malice. See id. at 293, 84 S.Ct. at
Instead, the judge should act to reduce the risk that "the protective benefits of the Sullivan rule [will become] mythical." Lewis, New York Times v. Sullivan Reconsidered: Time to Return to "The Central Meaning of the First Amendment," 83 COLUM.L.REV. 603, 617 (1983). The trial judge can explain, instruct, or clarify continuously, from the commencement of the trial through to the jury's deliberations. The means at hand include: instructing the jury, in plain English, at the opening of the case and at appropriate times during trial,
I.
Experience supports the intuition that jurors have considerable trouble "distinguishing actual malice from mere negligence." Note, Punitive Damages and Libel Law, 85 HARV.L.REV. 847, 860 (1985); see Lewis, supra, at 613-14. As Judge Bork has observed, "[t]he evidence is mounting that juries do not give adequate attention to limits imposed by the first amendment and are much more likely than judges to find for the plaintiff in a defamation case." Ollman v. Evans, 750 F.2d 970, 1006 (D.C.Cir.1984) (concurring opinion); see Kaufman, Libel 1980-85: Promises and Realities, 90 Dickinson L.Rev. 542, 552 (1986) (citing studies by Libel Defense Resource Center documenting jury verdicts against media defendants at rates of between 60 and 90 percent); Franklin, Suing Media for Libel: A Litigation Study, 1981 AM.B.FOUND.RES.J. 797, 804, Table 7, nn. 19, 20 (contrasting decisions for libel plaintiffs in only two of five cases tried without a jury,
In the libel area particularly, it is not a large exaggeration to suggest that jurors "can easily misunderstand more law in a minute than the judge can explain in an hour." Sunderland, Verdicts, General and Special, 29 YALE L.J. 253, 259 (1920); see Charrow & Charrow, Making Legal Language Understandable: A Psycholinguistic Study of Jury Instructions, 79 COLUM.L.REV. 1306, 1316 (1979) (jurors were able to paraphrase correctly only 54% of their instructions); see also Severance & Loftus, Improving the Ability of Jurors to Comprehend and Apply Criminal Jury Instructions, 17 L. & SOC.REV. 153, 179-80, Table 2 (1982) (overall rate of incorrect responses for jurors with standard instructions was 29.6%); Note, Jury Instructions v. Jury Charges, 82 W.VA.L.REV. 555, 558 (1980) (citing O'Mara & von Eckartsberg, Proposed Standard Jury Instructions — Evaluation of Usage and Understanding, 48 PA.B.A.Q. 542, 550 (1977)) (in 1976 Pennsylvania study, only 68% of jurors could demonstrate actual comprehension of some standard instructions).
II.
To arm the jury with the information needed for the intelligent performance of its task, the judge might first endeavor to speak the language of the jurors, and avoid the jargon of the legal profession. Terms familiar to a lay audience, and shorter, less complex, more active sentences, increase the chance that the jurors will understand and recall the judge's instructions. In addition, in lieu of a laundry list of law without discernible structure, a logically-ordered set of directions for consideration and decision of the separate issues should aid the jury to start out and remain on track. See Charrow & Charrow, supra, at 1326-27, 1338-39; Note, Jury Instructions, supra, at 558-59 & n. 17.
Second, instructions should not be reserved exclusively for the trial's finale. Enlightenment from the judge at the outset fosters "intentional" learning; by informing the jurors initially of the inquiries they are ultimately to undertake, early instructions may stimulate or facilitate the mental process involved in connecting up issues and key items of evidence. See Note, Jury Instructions, supra, at 562 & n. 37. Mid-stream instructions may be useful as well. They can serve as definers of difficult-to-grasp law at the moment that law bears on evidence produced. See id. at 565-67. The very repetition of instructions on elusive concepts should lessen the jury's sense of insecurity or discomfort in dealing with those concepts.
In addition, "[t]here is a clear suggestion in the available research that access to written instructions in the jury room improves the quality of deliberations. This may be due in part to the optimal effects of presenting material in both visual and auditory modes." Severance & Loftus, supra, at 155 n. 4 (citing Forston, Sense and Non-Sense: Jury Trial Communication, 1975 B.Y.U.L. REV. 601 (1975)); see Cunningham, Should Instructions Go Into the Jury Room?, 33 CALIF.ST.B.J. 278 (1958); Katz, Reinstructing the Jury by Tape Recording, 41 J.AM.JUD.SOC'Y 148 (1958). Detailed instructions delivered from the bench on the actual malice issue, for example, might accompany the jurors in written form as they proceed to deliberations.
Finally, the special verdict or its cousin, the general verdict accompanied by answers to interrogatories, see Fed.R.Civ.P. 49, may be a particularly useful check against jury misconstruction or misapplication of a standard as uncommon as actual malice.
The modern rule places the form of verdict in the hands of the judge and permits broad discretion in designing special verdicts, or general verdicts with interrogatories. In a case governed by the Sullivan standard, separate questions on the issues of defamatory meaning, falsity, and actual malice would impel the jurors to advert to the framework within which the judge has instructed them to consider the case and could assist them to hold the distinct legal questions in clear and separate view.
New York Times v. Sullivan presents a standard that may slip from the grasp of lay triers unfamiliar with legal concepts and perhaps unsympathetic to publishers who print statements shown to be false. Careful efforts by judges to make the legal rules genuinely accessible to jurors may reduce some of the turbulence in this unsettling area of the law.
MacKINNON, Senior Circuit Judge (dissenting).
Rehearing en banc
The en banc majority opinion, presumably because of Post counsel's admissions at oral argument, refuses to address the important First Amendment issue ordered for briefing in this case — that is, the extent to which judicial deference to jury determinations of contested facts and credibility is called for under New York Times v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964) and Bose Corp. v. Consumers Union of United States, 466 U.S. 485, 104 S.Ct. 1949, 80 L.Ed.2d 502 (1984). See Maj.Op. at 776-77. Reducing the conflict between the parties to a primarily factual dispute, the en banc majority fails to heed the principle that "appellate review serves a dual purpose: the correction of legal error and the establishment of legal rules for future guidance. Only the latter is ordinarily worth the attention of the full court." Church of Scientology of California v. Internal Revenue Service, 792 F.2d 153, 155 n. 1 (D.C.Cir.1986) (en banc). The purpose for holding an en banc hearing — to establish legal rules for future guidance — has been forsaken by the majority in favor of a mere reversal of the panel opinion, in derogation of the rule that "[t]he function of en banc hearings is not to review alleged errors for the benefit of losing litigants." United States v. Rosciano, 499 F.2d 173, 174 (7th Cir.1974) (per curiam).
Rather than addressing the important First Amendment question presented by this case, the majority instead rejects entirely plausible (if not inevitable) interpretations of the article and then, by considering only a small fraction of the defamation charged, holds the jury's verdict was invalid under what are alleged to be traditional judgment n.o.v. standards. In determining whether to grant judgment n.o.v., a reviewing court is "required to draw all inferences favorable to the plaintiff." Carter v. Duncan-Huggins, Ltd., 727 F.2d 1225, 1234 (D.C.Cir.1984) (emphasis in original). "The weighing of conflicting evidence and the evaluation of witness credibility is exclusively within the jury's province." Id. See U.S. Industries v. Blake Construction Co., 671 F.2d 539, 550 (D.C.Cir.1982); Vander Zee v. Karabatsos, 589 F.2d 723, 726 (D.C.Cir.1978), cert. denied, 441 U.S. 962, 99 S.Ct. 2407, 60 L.Ed.2d 1066 (1979). After asserting that its review of the evidence in this case is made under "traditional j.n.o.v. standards," the majority discards those traditional standards and proceeds to make its own assessment of witness credibility and to disregard controlling reasonable inferences in favor of the verdict.
I respectfully dissent because I believe that the majority, in proceeding as above set forth, has denied plaintiff his constitutional right to a jury trial and has improperly failed to conform to the First Amendment
I. COUNTERSTATEMENT OF FACTS
This is an unusual libel case and a unique majority opinion. When The Washington Post article at issue is read as a whole with all its innuendo, as it must be, it charges that William Tavoulareas (hereafter also "William"), as president of Mobil Oil Corporation, violated his fiduciary duty to the shareholders of the corporation by causing Mobil's assets and personnel to be used with intent to benefit his son, Peter, to the detriment of Mobil. The case thus largely turns on whether Tavoulareas established the falsity of that charge. A jury has already determined that William has sustained the burden of proving the falsity of the Post article; and an appellate court under j.n.o.v. standards may only overturn that determination if it finds that no reasonable person could have believed that William proved the falsity of the article. The facts which follow must be read with this principle in mind.
The business relationships that gave rise to this case began in early 1974, when Mobil, after an earlier decision to do so in 1973, bought a 30 percent interest in the Saudi Arabian Maritime Company ("Samarco"), a joint venture that had been formed a short time before by members of a powerful Saudi Arabian family, the Alirezas, and Fairfield-Maxwell Ltd., a Japanese company that managed ships (RE 2470). The Saudis were the majority shareholders in Samarco. After first refusing an offer to join Samarco, Mobil decided to buy a minority interest after strong indications arose that the Saudi government was going to give oil shipping preferences to Saudi-owned ships. It anticipated transferring operation of its fleet of oil tankers to Samarco in order to qualify for the expected shipping preference.
The Samarco partners
In the operating arrangement with the Saudis, Mobil agreed to "bareboat charter" its ships to Samarco (i.e., charter the ships empty and unstaffed), and Samarco would in turn "time charter" them (i.e., charter the vessels complete with crews and provisions) back to Mobil.
Comnas, in setting up Atlas, asked two young coworkers at Lemos, Peter Tavoulareas and Ares Emmanuel, to join him as partners.
Mobil, with the Samarco partners concurring, decided a year later, in 1975, after first giving Comnas an opportunity to improve his performance (Tr. 2266-67, 2325-26), to remove him from Atlas because of self-dealing, fraudulent practices, and dissatisfaction with his competence and performance (RE 1990-94). Emmanuel testified, based on firsthand knowledge, to facts that completely justified the termination of Comnas.
The Mobil-Samarco-Atlas relationship, and the Tavoulareas-Atlas connection particularly, were explained to Mobil shareholders in a 1976 letter. At about the same time, a party or parties sent anonymous letters to a number of newspapers, alleging that the arrangement violated the United States securities laws. One of those letters went to reporter Robert Woodward of The Washington Post. Woodward and reporters for several other newspapers investigated the anonymous charges; none of them apparently found any wrongdoing and no stories were published. The Securities and Exchange Commission, which obtained a copy of one of the letters, conducted an informal investigation and called upon William Tavoulareas to testify in nonpublic proceedings. The SEC also found no impropriety.
Evidence presented by the plaintiffs at trial showed that Mobil did not exert control over Samarco, in which Mobil was a 30% minority shareholder, and that all of the decisions relating to Atlas were approved by the controlling Saudi partners. The arrangement was fully disclosed to Mobil's Conflict of Interest Committee, Mobil's Board of Directors, and the company's shareholders.
The Post article had its genesis five years after the creation of Atlas and three years after disclosure to the shareholders. The article was investigated and written by Patrick Tyler, who had previously written an article on the nation's oil crisis for which he was criticized by Mobil for misstating information given him by Mobil. Shortly after Mobil's criticism of the Post for its earlier story by Tyler, Woodward gave Tyler his old file on Tavoulareas.
In October 1979, Samuel "Sandy" Golden, a reporter for a suburban newspaper, The Montgomery [Maryland] Journal, met Philip Piro, a physician who was married to William Tavoulareas' daughter. Piro was in the midst of a less-than-amicable divorce proceeding. Piro told Golden about the Atlas transactions. Golden testified that Piro told him that Mobil's President William Tavoulareas had set up his son Peter in the business, making Peter an "overnight millionaire" (Tr. 166). Piro mentioned that Woodward had previously investigated the story.
At this point, the two reporters began following separate trails. Golden concentrated on getting more information from Piro and conducted several telephone interviews with him. Although Golden repeatedly assured Piro that he was not recording their telephone conversations, he taped several of them. Golden also began seeking "possible enem[ies]" of Tavoulareas (Tr. 202). In his search, he met Peter Stockton, an investigator for Rep. John Dingell, Chairman of the House of Representatives Subcommittee on Energy and Power. Golden believed that Stockton, who had something of a reputation as a crusader, "hate[d] people with money" (Tr. 223). Golden played the Piro tapes for Stockton, who at some point relayed Golden's information to Congressman Dingell. Stockton later contacted Tyler and passed other information to him. Dingell wrote to the SEC seeking an investigation of Tavoulareas.
Tyler, meanwhile, tracked down Comnas and met with him in New York. Comnas, who initially requested anonymity, allegedly told Tyler about the Atlas arrangements. The Post contends that Comnas was the principal source for its stories. (Despite being listed as a witness by the Post, Comnas did not testify at trial, nor was his deposition introduced. Because Tyler does not use tape recorders, only Tyler's account of these important conversations with Comnas is available — a fact that severely weakens the Post's defense.) Tyler also talked to John Kousi, an executive of Fairfield-Maxwell, one of the Samarco partners. Parts of Kousi's deposition were admitted into evidence. Tyler requested personal interviews with William Tavoulareas and other Mobil executives, but generally was rebuffed because in his earlier story on the oil shortage he had misrepresented statements made to him by Mobil executives. Tavoulareas did, however, give written answers to questions that Tyler submitted in writing (RE 2343-46).
Tyler wrote the story, and the Post submitted it to its editing process. During editing, parts that were favorable to Mobil and Tavoulareas were deleted — chiefly opinions of various persons in and out of Mobil that (1) the Atlas arrangement had benefitted the company, and (2) William Tavoulareas had not been directly involved in Atlas after its formation. The Post copy editor assigned to the story, Christine Peterson, read the Tyler story (as it was ultimately published), considered its implications, and wrote a memorandum to other editors stating in effect that she found it "impossible to believe" that William Tavoulareas had arranged the entire Samarco-Atlas venture in order to benefit his son.
The first article appeared on November 30, 1979.
The article detailed the transactions that led to the creation of Samarco and Atlas and when read as a whole, as it must be, implied that William Tavoulareas misused his corporate position as president and breached his fiduciary duties to Mobil to benefit Peter.
William and Peter Tavoulareas brought two actions: one for libel against The Washington Post Company
After receipt of the verdicts, the district court set aside the jury verdict for William Tavoulareas and granted judgments n.o.v. for the Post defendants and for Piro. The trial judge ruled that Tavoulareas was a limited-purpose public figure and that there was no proof the defendants had acted in reckless disregard of the truth. While recognizing that "[t]he article in question falls far short of being a model of fair, unbiased, investigative journalism" the trial court concluded that "[t]here is no evidence in the record ... to show that it contained knowing lies or statements made in reckless disregard of the truth." 567 F.Supp. at 654. The district court affirmed the jury verdict in favor of Peter Tavoulareas against Piro. On appeal the court reinstated the verdict, 759 F.2d 90 (D.C.Cir.1985), one judge dissenting.
II. THE STANDARD OF REVIEW
The constitutional standard of liability
Under Rule 50(b) of the Federal Rules of Civil Procedure, a motion for judgment n.o.v. is essentially a motion for a directed verdict made after the jury has returned its verdict. Consequently, "the standard for awarding a judgment n.o.v. is the same as that applied when ruling on a motion for a directed verdict." Vander Zee v. Karabatsos, 589 F.2d 723, 726 (D.C.Cir.1978), cert. denied, 441 U.S. 962, 99 S.Ct. 2407, 60 L.Ed.2d 1066 (1979). Thus,
Alden v. Providence Hospital, 382 F.2d 163, 165 (D.C.Cir.1967) (emphasis added) (footnote omitted). In considering a motion for judgment n.o.v., the court ordinarily must abstain from weighing the evidence and assessing the credibility of witnesses. Morelock v. NCR Corp., 586 F.2d 1096, 1104 (6th Cir.1978), cert. denied, 441 U.S. 906, 99 S.Ct. 1995, 60 L.Ed.2d 375 (1979); 5A J. Moore, Moore's Federal Practice ¶ 50.07[2] (2d ed. 1986).
This deferential standard for reviewing jury determinations does not fully apply, however, in First Amendment defamation cases. In addition to the requirement that actual malice be proven with clear and convincing evidence, the Supreme Court held in New York Times that courts reviewing public figure defamation verdicts "must `make an independent examination of the whole record,' ... so as to assure [themselves] that the judgment does not constitute a forbidden intrusion on the field of free expression." 376 U.S. at 285, 84 S.Ct. at 729 (quoting Edwards v. South Carolina, 372 U.S. 229, 235, 83 S.Ct. 680, 683, 9 L.Ed.2d 697 (1963)) (emphasis added); see also Bose Corp. v. Consumers Union of United States, 466 U.S. 485, 511, 104 S.Ct. 1949, 1965, 80 L.Ed.2d 502 (1984). As the original panel opinion noted, it is necessary to reconcile the Supreme Court's instruction to review the evidence in a First Amendment defamation case independently with the well-settled standard, reiterated in Anderson v. Liberty Lobby, ___ U.S. ___, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (a limited-purpose public figure defamation case), that "[c]redibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, whether he is ruling on a motion for summary judgment or for a directed verdict." ___ U.S. at ___, 106 S.Ct. at 2513. Cf. Crane v. Kentucky, 476 U.S. 683, ___-___, 106 S.Ct. 2142, 2145-46, 90 L.Ed.2d 636 (1986). I remain of the view that this reconciliation is to be achieved by limiting appellate courts' independent review to the question of ultimate constitutional fact — i.e., whether, assuming the most favorable facts and "legitimate inferences" that could reasonably have been found by the jury, the constitutional threshold of clear and convincing proof of actual malice was passed. Since, as has already been noted, the en banc majority does not address this legal question, I will not belabor it here, referring the reader to the discussion contained in the panel opinion, Tavoulareas v. Piro, 759 F.2d 90, 106-09 (D.C.Cir.1985).
III. DEFAMATION AND FALSITY
A. Defamatory Meaning
To constitute actionable defamation, a published statement must be shown to be both defamatory and false. As the district court instructed the jury, a communication is considered defamatory if it "tends to injure [the] plaintiff in his trade, profession, or community standing, or lower him in the estimation of the community or subject him to scorn, ridicule, shame, contempt or embarassment" (Tr. 4548). See Afro-American Publishing Co. v. Jaffe, 366 F.2d 649, 654 (D.C.Cir.1966) (en banc). In determining the meaning of an allegedly defamatory communication, the "`publication claimed to be defamatory must be read and construed in the sense in which the readers to whom it is addressed would ordinarily understand it.'" Washington Post Co. v. Chaloner, 250 U.S. 290, 293, 39 S.Ct. 448, 448, 63 L.Ed. 987 (1919) (citation omitted).
The respective roles of judge and jury are as follows: It is for the court to determine whether a particular communication is capable of bearing a defamatory meaning. "`It is only when the court can say that the publication is not reasonably capable of any defamatory meaning, and cannot reasonably be understood in any defamatory sense, that the court can rule as a matter of law, that the publication is not libellous.'" Gariepy v. Pearson, 207 F.2d 15, 16 (D.C.Cir.) (citation omitted) (emphasis added), cert. denied, 346 U.S. 909, 74 S.Ct. 241, 98 L.Ed. 407 (1953); McBride v. Merrell Dow & Pharmaceuticals, 717 F.2d 1460, 1465 (D.C.Cir.1983). It is thus for the jury to decide whether a communication, found capable of a defamatory meaning by the court, was in fact so understood by its recipient. Restatement (Second) of Torts § 614 (1977).
The majority goes about its task of determining whether the Post article is capable of any defamatory meaning by understating and separately considering each of only three allegedly libelous statements taken out of context and by completely ignoring the basic theme of the article. The majority considers the defamatory implication of the "set up" charge in the Post article in an unreasonably narrow fashion, asserting that "[t]he statement that `a father set up his son in business' would ordinarily mean to a reasonable reader that the father provided the son with [a business opportunity]." Maj. Op. at 780. In so defining "set up," the majority ignores the full meaning of those words in the article.
In addressing whether the article is capable of bearing a defamatory meaning, the majority creates an easy task for itself. In analyzing only a few of the defamatory statements and those out of context, the majority escapes confronting the basic defamatory theme of the article — that William Tavoulareas violated his fiduciary duty as president of Mobil and misused Mobil assets, personnel, property, and financing to advance the career of his son Peter.
The headline and lead sentence of the November 30, 1979 Post article charges that William Tavoulareas "set up" his son. The majority admits that the "set up" allegation is defamatory in accusing "Tavoulareas with nepotism — furthering his son's business career." Maj. Op. at 780. By reading narrowly the defamatory character of the "set up" charge and of the article as a whole, the majority finds that the defamatory "set up" allegation is true.
To construe the defamatory accusation as being limited to simple "nepotism" is farcical. The "set up" charge cannot be read in isolation to simply accuse a father of furthering his son's career. The defamation is far more extensive. Read in the context here where the father's ability to "set up" his son stems solely from his position as president of a large corporation, the term "set up" further connotes that the father exercised his powers as president to use corporate assets with intent to benefit his son in breach of his fiduciary duties to the corporation's shareholders.
The majority effectively reads Mobil out of the article, notwithstanding the fact that the article mentions Mobil over one hundred
(Tr. 4550).
By ignoring the article's defamatory implication that Tavoulareas misused Mobil assets and his position as president to advance Peter in Atlas, the majority quickly disposes of the defamatory allegation that Tavoulareas "dispatched one of his senior shipping executives, Herman [sic] F. Hoffmann, to London to help run Atlas" (Paragraph 82). The majority admits that the "dispatch" allegation might be false, but attempts to obviate its defamatory effect by concluding that the statement adds no further defamatory implication to the charge that Tavoulareas set Peter up in Atlas, a charge the majority declares is true. Maj. Op. at 788. The allegation that Tavoulareas "personally dispatched" Hoffmann, however, is defamatory in its implication that Tavoulareas misused corporate personnel to insure the success of Peter's business venture.
It seems to me impossible to reconcile the approach of the en banc majority in this case with McBride. Surely the distance between the simple statement that one expert witness was paid significantly more than other witnesses and the inference that that witness' testimony was for sale is far greater than the distance between the statement that the president of a corporation set his son up in a business with which the corporation then did substantial business and the inference that the president thereby misused corporate assets and breached his fiduciary duties to the corporation's shareholders.
While ignoring the article's defamatory implication that William Tavoulareas abused his position as president and violated his fiduciary duties to Mobil in prodding Peter's fortunes in Atlas, the majority eliminates another aspect of the article's central theme that Tavoulareas abused his corporate position, concluding "as a matter of law" that the article is incapable of bearing the defamatory "interpretation that Tavoulareas `set up' the entire Mobil-Samarco-Atlas relationship to benefit Peter." Maj. Op. at 780.
The entire discussion of the legitimate business reasons in the Post article is pejorative, however, suggesting that although they were asserted by Mobil, these business reasons fail to explain the Mobil-Samarco-Atlas arrangement.
When read in the context of the article as a whole, the "set up" accusation could reasonably be read to suggest that William engineered the entire Mobil-Samarco-Atlas arrangement to benefit Peter. For example, the article comments that Mobil was originally not interested in participating in Samarco, but only later became interested (Paragraphs 50-51). The article then notes that Comnas, one of the negotiators sent by Mobil "to push Mobil as a partner" in Samarco, was also "recruited personally by Tavoulareas to advise Mobil on how to set up an independent shipping concern." (Paragraph 51). The article further states that Tavoulareas recommended to the Samarco partners that Comnas run the management arm of Samarco. Tavoulareas is then said to have "personally urged that his son become a partner in Atlas." (Paragraph 52). These details in the article could reasonably be read to imply that Mobil's entry into Samarco was motivated by Tavoulareas' intention that Comnas, who would negotiate the Saudi deal for Mobil, would later run Samarco's management arm and offer Peter a partnership in the company. The majority, failing to recognize that the decision to enter Samarco was contemporaneous with the decision to establish a separate company to manage Samarco's ships, strips away an integral part of the defamatory meaning surrounding the "set up" allegation.
The majority's cavalier rejection of the article's defamatory meaning that Tavoulareas engineered the entire Mobil-Samarco-Atlas arrangement for Peter's benefit as a "matter of law" is at odds with the McBride rule that a court's power to hold as a matter of law that a statement is not defamatory is limited to those occasions where the "`publication is not reasonably capable of any defamatory meaning and cannot be understood in any defamatory sense.'" 717 F.2d at 1465 (citations omitted). Given evidence that the article was in fact "understood in [the] defamatory sense," McBride, 717 F.2d at 1465, that William Tavoulareas' nepotistic intent prompted Mobil's entry into the Samarco-Atlas arrangement, the majority's conclusion as a matter of law that the article does not, and cannot, bear the defamatory meaning that Tavoulareas "set up" the entire Mobil-Samarco-Atlas relationship to benefit Peter is all the more unjustifiable.
For example, Christine Peterson, a copy editor at the Post, reviewed the article prior to publication. She sent a memorandum to assignment editor Peter Milius, which stated:
(RE 2486) (emphasis added). This indicates that Peterson interpreted the article as a whole to charge that William engineered the entire Mobil-Samarco-Atlas transaction as "a scheme for the sake of [Peter's] business career."
Moreover, Post trial counsel in his closing argument to the jury positively and extensively interpreted the article in a similar manner:
(Tr. 4491-94) (emphasis added). Here Post counsel repeatedly characterizes the article as alleging that William intended, when he "took advantage" of the situation and "set up" Samarco, Atlas, and the Samarco-Atlas contract, to have Peter "set up for the rest of his life."
The majority deems that this evidence of how the article was interpreted is irrelevant to its consideration of the article's defamatory meaning. Maj. Op. at 781. In so concluding, however, the majority ignores the principle that "[t]he meaning of a communication is that which the recipient
In avoiding the article's defamatory implications, the majority charges the dissent with a "tortured attempt to discern some dark, hidden meaning in the `tone' of the article." Maj. Op. at 781. The article's implication that William Tavoulareas' nepotistic intent prompted Mobil's entry into the Samarco-Atlas arrangement is not, as the majority asserts, "hidden." The interpretation of the article offered by the dissent is that which Patrick Tyler himself ascribed to the story. In a telephone conversation prior to publication of the article, Tyler said to Peter Tavoulareas:
(Tr. 4369). Tyler's belief that William Tavoulareas "set up Atlas and Samarco" for Peter's benefit surfaced in his article. See supra at 821-22. Moreover, Tyler interpreted the meaning of the news article in a memorandum to his Post superiors. Responding before publication to Christine Peterson's critical comments, Tyler wrote:
(RE 2488-90) (emphasis added). Thus, in addition to the interpretation of the article by the Post editor Peterson and the Post trial attorney, Tyler himself interpreted his article as attributing Mobil's entry into Samarco to Tavoulareas' nepotistic intent "to benefit his son's business career ... after [that idea] dawned on Mobil's president." Id. The article, Tyler states, answers the basic subjective question " `why' Mobil's president would want to orchestrate [the] diversion [of Mobil's shipping to Samarco]," and the answer the article provides is that William Tavoulareas intended "[to] benefit his son's business career...." Id. The majority refers to the attention devoted in the article to Mobil's legitimate business reasons for creating Samarco, but even Tyler in his memorandum recognizes that the discussion of valid business reasons in the article was meant to disparage: "[O]ur story does show that Mobil's decisions in this case were not made for the traditional business reasons, or for the reasons stated by Mobil" (RE 2489) (emphasis added).
Tyler's contemporaneous interpretation of the article he had written is powerful evidence that the article is best understood as implying that Mobil's entry into the Samarco-Atlas arrangement was prompted by William Tavoulareas' nepotistic intent — it is virtually dispositive evidence that the article
Such a myopic conclusion, however, ignores the principle that "defamatory imputation may be made by innuendo." Restatement (Second) of Torts § 563(c). See McBride, 717 F.2d at 1465; Sellers v. Time, Inc., 423 F.2d 887 (3rd Cir.), cert. denied, 400 U.S. 830, 91 S.Ct. 61, 27 L.Ed.2d 61 (1970); Marcone v. Penthouse International, 533 F.Supp. 353 (E.D.Pa.1982); Mihalik v. Duprey, 11 Mass.App. 602, 417 N.E.2d 1238, 1239 (1981); Thomson v. Cash, 119 N.H. 371, 402 A.2d 651, 654 (1979). Only by blinding itself to the defamatory implications Tyler himself ascribed to the article, and the clear innuendo of the article, can the majority conclude that the article did not charge Tavoulareas with setting up the Mobil-Samarco-Atlas scheme for Peter's benefit.
The defamatory meaning that the en banc majority does recognize is in a narrowly construed "set up" charge. The majority characterizes the "set up" charge as a defamatory accusation "that Tavoulareas made it possible for Peter to become a partner in Atlas and then helped to ensure that the business would prosper because Peter was his son." Maj. Op. at 780.
Consistent with its strategy to interpret the defamatory meaning of the article in an unreasonably narrow manner, the en banc majority insists that the article's false defamatory statement that "Tavoulareas personally urged that his son be included as an equity partner in Atlas"
B. Falsity
To conclude that the "set up" charge is true, the majority claims reliance on "undisputed evidence of Tavoulareas' personal involvement in the establishment and operation of Atlas to Peter's manifest benefit." Maj. Op. at 786. The evidence upon which the majority relies, however, does not establish the truth of the "set up" charge as interpreted by the majority — i.e., that "Tavoulareas made it possible for Peter to become a partner in Atlas and then helped to ensure that the business would prosper because Peter was his son." Maj. Op. at 780. For example, the majority claims that "the undisputed fact that Tavoulareas personally recruited Comnas to manage Samarco's ships ... shortly after learning that Peter had an outstanding offer from Comnas goes far toward justifying the charge that Tavoulareas `set up' his son in Atlas." Maj. Op. at 784 (emphasis in original).
In reaching this conclusion, however, the majority ignores the following crucial evidence:
Given the abundant evidence of Mobil's interest in an independent shipping concern to manage Samarco's ships, and in one headed by Comnas in particular, the fact that Tavoulareas asked Comnas if he was interested in managing Samarco's ships does not establish the truth of the charge that "Tavoulareas made it possible for Peter to become a partner in Atlas." Maj. Op. at 780. To the contrary, the evidence shows that Tavoulareas acted to carry out a decision made by Mobil for its benefit, and with great care to avoid possible conflicts of interest in the event that Peter, against his father's advice, decided to join Comnas. In sum, the evidence is far from undisputed and does not support the accusation that William Tavoulareas "made it possible for Peter to become a partner in Atlas."
The majority further attempts to support the truth of the "set up" allegation by citing evidence for the charge that Tavoulareas "helped to ensure that [Atlas] would prosper because Peter was his son." Maj. Op. at 780. Relying on evidence that Tavoulareas helped Atlas to "secure its management agreement with Samarco," Maj. Op. at 785, and to "survive [and] prosper after Comnas left," Maj. Op. at 786, the majority determines that the "set up" allegation is true. The majority, however, fails to acknowledge that due to Mobil's and Fairfield-Maxwell's possible conflicts of interest and the Saudi's inexperience in ship management, Mobil was soundly committed to having an independent company manage Samarco's ships (Tr. 1515, 1518). Moreover, it was in Mobil's interests for Atlas and Samarco to reach agreement quickly (Tr. 1311). Thus, to the extent Tavoulareas "helped Atlas secure its management agreement with Samarco," he was acting in Mobil's interests to implement a Mobil decision.
Furthermore, the majority mischaracterizes William Tavoulareas' involvement with Atlas. After Peter decided in July 1974 to join Comnas, William formally removed himself from decisionmaking regarding Atlas (Tr. 1521, 1525). Although the majority cites meetings between Tavoulareas and the Alirezas as evidence of the truth of the "set up" allegation, Maj. Op. at 785, these meetings were fully consistent with the decision of the Conflict of Interest Committee and Rawleigh Warner that "Tav could involve himself in activities up to the decision level but he could not make that decision" (Tr. 1521). Of course, as president of Mobil and its longtime expert on Saudi affairs, Tavoulareas' ability to carry out decisions made by the company was not required to be completely lost. He was free to negotiate on Mobil's behalf (Tr. 4159). The jury could reasonably have concluded that Tavoulareas' forthright communication to Mobil's Conflict of Interest Committee immediately after he first acquired knowledge of a possible conflict of interest, his formal removal from decisionmaking months later when Peter joined Comnas, and the absence of any evidence showing that William made any decisions regarding Atlas after formally removing himself, negated the charge that he was acting on Peter's behalf.
Finally, the majority offers Tavoulareas' involvement in the events surrounding Comnas' departure from Atlas as establishing the truth of the "set up" charge. Maj. Op. at 785-86. Again the majority refuses to recognize that Tavoulareas complied with Mobil's conflict of interest guidelines and did not make any decisions concerning Atlas and Samarco after Peter joined Comnas. Paul Wolfe testified that it was he who recommended to Mobil Chairman Rawleigh Warner (in the presence of William Tavoulareas) that Comnas be replaced (Tr. 1069, 1070, 1098, 1186). Warner in turn made the decision that, for justifiable reasons, Comnas should be removed from Atlas (Tr. 1070, 1326, 1531-34). The other Samarco partners were also dissatisfied with Comnas. See supra at 812-13. Moreover, Warner suggested that Tavoulareas meet with Comnas in London
Thus, the majority offers no evidence establishing the truth of the charge that "Tavoulareas made it possible for Peter to become a partner in Atlas and then helped to ensure that the business would prosper because Peter was his son." What the majority does submit is evidence that Mobil officials decided that it was in the best interests of Mobil that an independent company should manage Samarco's ships and that the best candidate for the job was a company headed by George Comnas. That Peter Tavoulareas might incidentally benefit from this arrangement because of his later association with Comnas was understood by Mobil officials but considered acceptable in light of William Tavoulareas' removal from decisionmaking regarding Atlas and Samarco. The majority torturously converts this evidence establishing that Mobil wanted Atlas to independently manage Samarco's ships into evidence proving William Tavoulareas "set up" Peter.
The majority has not explained why, in the face of overwhelming evidence that Mobil officials decided to have Atlas manage Samarco's ships, Tavoulareas' "personal involvement in the establishment and operation of Atlas," Maj. Op. at 786, should be interpreted to be for "Peter's manifest benefit." Id. Given the evidence that William Tavoulareas complied with Mobil's conflict of interest rules by removing himself from decisionmaking regarding Atlas and Samarco; that Mobil officials, independently of Tavoulareas, decided for good business reasons that Atlas should manage Samarco's ships, and continued to do so after Comnas departed; and that the benefit redounding to Peter from this arrangement was incidental and not engineered by William, a reasonable jury could find that the "set up" charge was false.
Because the evidence in the record demonstrates that a jury could reasonably have concluded that the Post article was both defamatory and false,
IV. RECKLESS DISREGARD FOR THE TRUTH — ACTUAL MALICE
As noted in part II above, the duty of an appellate court in reviewing a defamation verdict is to decide, after viewing the evidence and all legitimate inferences in the light most favorable to the verdict, whether the ultimate constitutional conclusion was sufficiently proven at trial — i.e., in this case whether the evidence adduced at trial amounted to "clear and convincing" proof of reckless disregard for the truth. Although the Post argues that evidence may not be cumulated to establish a defendant's reckless disregard for truth or falsity, The Washington Post Petition for Rehearing and Suggestion for Rehearing En Banc at 7, the majority admits that a defendant's reckless disregard for the truth can be proven both through direct evidence and through the cumulation of circumstantial evidence. Maj. Op. at 788-89. See Herbert v. Lando, 441 U.S. 153, 160, 99 S.Ct. 1635, 1640-41, 60 L.Ed.2d 115 (1979); Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 55, 91 S.Ct. 1811, 1825, 29 L.Ed.2d 296 (1971); Bose Corp. v. Consumers Union of United States, 692 F.2d 189, 196 (1st Cir.1982), aff'd 466 U.S. 485, 104 S.Ct. 1949, 80 L.Ed.2d 502 (1984); Goldwater v. Ginzburg, 414 F.2d 324, 342 (2d Cir.1969), cert. denied, 396 U.S. 1049, 90 S.Ct. 701, 24 L.Ed.2d 695 (1970); see also Tavoulareas v. Piro, 763 F.2d 1472, 1477-78 (D.C.Cir.1985) (panel opinion denying rehearing). What follows is a discussion of the evidence of reckless disregard for the truth that was developed at trial, along with the reasonable inferences that could be drawn from it. Based thereon, it is submitted that the evidence adduced at trial constitutes clear and convincing proof that the Post article was published with reckless disregard of its truth or falsity, and that the jury's verdict should be reinstated.
A. The Christine Peterson Memorandum and Tyler's Response
Christine Peterson's memorandum to her superiors at the Post stated that Tyler's article was "impossible to believe." See supra at 822-23. At trial, during which Peterson was still in the Post's employ, Peterson testified that in using the phrase "impossible to believe," she really did not mean what she said, and instead meant that "the focus of the story should have been the formation of Samarco in anticipation of preference shipping" (RE 1837).
In considering all this evidence, our duty as an appellate court reviewing a jury's verdict is to view the legitimate inferences from the evidence in the light most favorable to the verdict. We are "required to draw all inferences favorable to the [verdict]," Carter v. Duncan-Huggins, Ltd., 727 F.2d 1225, 1234 (D.C.Cir.1984) (emphasis in original). The inferences to be credited are not a matter for our judgment except to assure that they are legitimate; only the ultimate constitutional issue may be independently assessed. Thus, as to the Peterson memorandum we are required to assume: (1) The jury considered Peterson's attempt to alter the obvious interpretation of her memorandum to be influenced by self-interest in her position at the Post and understood the memorandum to mean (what it said) that in her opinion the story was "impossible to believe," and (2) the reasonable effect of Peterson's communication of these doubts to those at the Post responsible for the publication was to raise in their minds subjective doubts as to the accuracy of the story. Indeed, the Peterson memorandum suggests that the central theme of the story is inherently improbable, and, as the Supreme Court stated in St. Amant v. Thompson, a jury may find actual malice where "the publisher's allegations are so inherently improbable that only a reckless man would have put them in circulation." 390 U.S. 727, 732, 88 S.Ct. 1323, 1326, 20 L.Ed.2d 262 (1968) (emphasis added). Ultimately, it is for the appellate court to independently decide whether the legitimate inferences from all the evidence constitute clear and convincing proof of recklessness.
The en banc majority rejects the Peterson memorandum as evidence of actual malice, claiming that the plaintiffs did not connect Peterson's "impossible to believe" language to a false defamatory statement in the article.
Even if the majority is correct in rejecting the article's broader defamatory meaning as a matter of law and in holding the "set up" allegation true, its dismissal of the Peterson memorandum remains faulty. Although admitting the memorandum can be read to express Peterson's "disbelief that Tavoulareas `set up' Peter," the majority makes no mention of the effect of the Peterson memorandum on the false defamatory statement that William Tavoulareas
Thus, contrary to the majority's suggestions otherwise, there is no basis to disregard the "serious doubts" raised by the Peterson memorandum. The memorandum and Patrick Tyler's response admitting that "a good editor might say that part of our case against Tavolareas seems tenuous" therefore provide evidence that the Post acted with reckless disregard for truth or falsity in publishing the article.
B. The Reliability of the Sources
The Supreme Court has held that "recklessness may be found where there are obvious reasons to doubt the veracity of the informant or the accuracy of his reports." St. Amant, 390 U.S. at 732, 88 S.Ct. at 1326. Considerable evidence was introduced at trial tending to show that Tyler had reason to doubt the veracity of the two principal sources he relied on for the article — Comnas and Piro.
1. Comnas
Comnas, according to the Post, was the principal source for the story, as the chief source for both the "set up" allegation and the "personally urged" charge and other details recounted in the story. Conflicting evidence was introduced at trial regarding Comnas' reliability. On one hand, Piro testified he told Tyler that "George Comnas had been caught in some fraud involving Atlas, that he was forced to withdraw [from Atlas] and that if Comnas ever gave Peter and Atlas any trouble Comnas would be reported to the tax authorities" (RE 1857-58). See also supra at 812 n. 9. On the other hand, the Post contended that Comnas was reliable due to (1) his "Who's Who" listing, indicating that he was an experienced shipping executive; (2) William's SEC testimony, which "never hinted at any improprieties," and stated "that Mobil `had every confidence in the world' in Comnas;" and (3) some independent corroboration of much of what Comnas told the Post. Again, the evidence suggests that the Post knew of facts suggesting that Comnas was an unreliable source. The Post's failure to call him as a witness or to use his deposition, especially after listing him as a witness for trial, points to the glaring weakness of the Post's defense.
The majority opinion also places entirely too much emphasis on the fact that Tyler corroborated some of the information supplied
2. Piro
The evidence developed at trial regarding the Post's reliance on Piro demonstrated that the Post was aware that Piro was engaged in a less-than-amicable divorce with William's daughter and that Piro was admittedly ignorant of the companies and the complicated business relationships involved in the Mobil-Samarco-Atlas arrangement (Tr. 2899, 2901, 2908, 2910). The latter fact alone would have been sufficient grounds for a reasonable reporter to question Piro's conclusions. Nevertheless, the Post, while denying it now, did rely on Piro for several parts of its story. Piro was solely responsible for two of the statements in the article: (1) that William "[gave] Peter a little nudge to get him along" in the shipping business,
At trial, the defendants testified that they really did not rely on Piro in writing the article, even though he was cited and quoted several times. Under the circumstances,
C. Defendants' State of Mind For Knowing or Reckless Falsehood
Because it provides a motive for knowing or reckless falsehood, evidence that a newspaper or a reporter followed a sensationalistic policy, or possessed ill-will toward the plaintiff, is evidence of actual malice. See, e.g., Curtis Publishing Co. v. Butts, 388 U.S. 130, 169, 87 S.Ct. 1975, 1998-99, 18 L.Ed.2d 1094 (1967) (Warren, C.J., concurring) (defendant had adopted a "program of `sophisticated muckraking,' designed to `provoke people, make them mad'") (footnote omitted); Goldwater v. Ginzburg, 414 F.2d 324, 342 (2d Cir.1969) ("evidence of ... motive and intent" may help establish actual malice), cert. denied, 396 U.S. 1049, 90 S.Ct. 701, 24 L.Ed.2d 695 (1970); Bose Corp. v. Consumers Union of United States, 692 F.2d 189, 196 (1st Cir.1982) (same), aff'd, 466 U.S. 485, 104 S.Ct. 1949, 80 L.Ed.2d 502 (1984); Cochran v. Indianapolis Newspapers, 175 Ind.App. 548, 560, 372 N.E.2d 1211, 1220 (1978) (desire to "get" plaintiff is "relevant and admissible as evidence in the determination of whether defendant possessed a state of mind highly conducive to reckless disregard of falsity") (emphasis in original); R. Sack, supra, at 214 n. 168 ("Although common law actual malice — spite or ill-will — is not equivalent to or sufficient to prove constitutional `actual malice,' evidence as to the former is admissible to prove the latter."). As the Supreme Court of West Virginia explained:
Sprouse v. Clay Communication, 158 W.Va. 427, 211 S.E.2d 674, 688, cert. denied, 423 U.S. 882, 96 S.Ct. 145, 46 L.Ed.2d 107 (1975) (emphasis added). Cf. C. Mollenhoff, Investigative Reporting 358 (Macmillan Pub. Co. 1981).
In this case, there is abundant evidence in the record demonstrating defendants' state of mind for knowing or reckless falsehood.
1. Tyler's Desire to "Knock Off" Mobil and "Build a Case" against Tavoulareas
Immediately after he first heard Piro's story, Tyler seemingly accepted its truth and remarked to Golden: "It's not every day you knock off one of the seven sisters." (RE 789). Taking the evidence in the light most favorable to the plaintiff, this demonstrates an ambition at the very outset to "bring down" Mobil which could cause — and may properly be considered evidence tending to prove — a reckless disregard of the truth. The same antagonistic mind-set is reflected in Tyler's reference, in his memorandum responding to Peterson's criticism, to "our case against Tavoulareas" (RE 2489).
The majority is playing with words when it says that these statements merely reveal that Tyler had adopted "an adversarial stance," which is not indicative of reckless disregard of the truth. Taking an adversarial stance means treating someone like an opponent rather than impartially. While this may not conclusively demonstrate reckless disregard of the truth (any single piece of evidence rarely does), it unquestionably points in that direction. See Cochran v. Indianapolis Newspapers, 175 Ind.App. 548, 560, 372 N.E.2d 1211, 1220 (1978). An opponent is more likely to distort the facts than an impartial or objective reporter. I am surprised by the majority's refusal to acknowledge the probative
2. Tyler's Willingness to Resort to Unlawful Means
Tyler's desire to "bring down" Mobil and "make a case" against Tavoulareas is particularly strong evidence of reckless disregard for truth or falsity when it is combined with evidence of Tyler's willingness to use unethical, and indeed unlawful, means to achieve his ends. Taking the evidence in the light most favorable to plaintiffs, we must assume that Tyler inquired of Piro, with serious intent, whether Piro "knew of a family member who would rifle [Tavoulareas'] safe and [x]erox documents" (Tr. 179). Tyler's willingness to resort to such felonious methods is consistent with a state of mind that would act recklessly in stretching the facts to "make a case."
3. The Post's Pressure On Its Reporters
One of the three issues the en banc court requested the parties to brief was "[w]hether managerial pressure upon reporters to produce sensationalistic stories is a factor that may be considered in the determination of actual malice?" The majority, apparently unconcerned by the fact that counsel for the Post conceded that evidence of such pressure was "relevant," see Transcript of Oral Argument at 28-29 (October 3, 1985), concludes to the contrary. The majority does not dispute that Woodward instructed his reporters to produce "holy shit" stories — presumably stories so startling that they cause the reader to exclaim in this fashion. The majority attempts to discredit this evidence by replying that it does not indicate that the Post was unconcerned with the truth of its stories. Quite so, but totally irrelevant. The issue is not whether the Post subjectively desired false stories but whether extra-heavy pressure to produce sensationalistic stories could motivate reporters to stretch the truth. Of course it could, as any reasonable person, including the Post itself,
388 U.S. at 158, 87 S.Ct. at 1993 (emphasis added). See also id. at 162, 169, 87 S.Ct. at 1995, 1998-99 (Warren, C.J. concurring).
D. Erroneous Recording of Interviewees' Statements
The record reveals that Tyler misstated in his notes and in the article responses by individuals whom he interviewed. For example, Tyler called Everett Checket, a Mobil vice-president, to inquire whether William Tavoulareas told Checket that he had sent Hoffmann to Atlas. Tyler wrote in his notes that Checket said the conversation sounded "somewhat familiar" (RE 2493). Checket testified, however, that he did not tell Tyler that the conversation sounded familiar. Indeed, Checket denied that the conversation ever occurred (Tr. 1844-48). The jury could reasonably have concluded from this evidence that Tyler either carelessly or intentionally misstated the contents of his interview with Checket.
There is also evidence that Tyler failed to record accurately the statements of Peter Tavoulareas. Peter's notes of his conversation with Tyler show that Peter stated "[a]side from our management we have nothing to do with the Arabs or with Mobil" (RE 2550) (emphasis added). Tyler wrote in his notes "nothing to do with Samarco, nothing to do with Mobil" (RE 2518) and quoted Peter in the article as stating "Atlas has nothing to do with Mobil, it has nothing to do with Samarco and it has nothing to do with the Saudis" (Paragraph 33).
Thus, the record supports a conclusion that, at best, Tyler was negligent in erroneously recording the contents of interviews. Although evidence of negligence does not alone support a finding of actual malice, such evidence can be probative of a reckless disregard for truth or falsity. Bose Corp. v. Consumers Union, 692 F.2d 189, 196 (1st Cir.1982), aff'd 466 U.S. 485, 104 S.Ct. 1949, 80 L.Ed.2d 502 (1984); Goldwater v. Ginzburg, 414 F.2d 324, 343 (2d Cir.1969) ("[New York Times v. Sullivan] does not hold that evidence of negligence is inadmissible"), cert. denied, 396 U.S. 1049, 90 S.Ct. 701, 24 L.Ed.2d 695 (1970).
E. Resolution of Inferences Adverse to the Plaintiff
It is well settled that in a situation where the facts are ambiguous, the mere selection
Id. at 290, 91 S.Ct. at 639. This holding makes obvious sense; since the focus of the malice inquiry is subjective, not objective, the mere selection of a single damaging inference is ordinarily not sufficient to prove actual malice.
The defendants argue from Pape that the consistent selection of the inferences most damaging to the Tavoulareases would be irrelevant to the issue of actual malice. Appellee's Brief at 62. This assertion, however, is entirely inconsistent with the subjective nature of the malice inquiry and goes far beyond the holding in Pape. A defendant's single, or even occasional, selection of the most disparaging inference from among a number of possibilities is not evidence that it acted with malice. But a defendant's consistent rejection of favorable inferences in favor of the most damaging inferences — inferences that in fact are false — does suggest a determination to incorrectly describe the plaintiff and place him in the most damaging light, and thus can demonstrate a reckless disregard for the truth.
In this article the Post did not simply resolve a single ambiguity adversely to Tavoulareas. In building its "case against Tavoulareas," it resolved practically all ambiguities against him, consistently accepting the most damaging statements from obviously biased and impeachable sources. It is absurd to suggest, as the majority does, Maj. Op. at 797, that this is not a basis for an inference of reckless disregard for the truth.
F. Suppression of Information Favorable to the Plaintiff
Evidence demonstrating the suppression of information favorable to the plaintiffs is closely related to evidence of the adoption of inferences adverse to the plaintiffs. Clearly, a writer who knowingly and consistently suppresses information favorable to the plaintiffs is more likely to have entertained subjective doubts as to the accuracy of his story. See, e.g., Time, Inc. v. Ragano, 427 F.2d 219, 221 (5th Cir.1970) (failure to include fact that plaintiff was attorney is evidence of actual malice when implication of article would lead people to believe he was organized crime figure); Wasserman v. Time, Inc., 424 F.2d 920, 922 (D.C.Cir.) (same), cert. denied, 398 U.S. 940, 90 S.Ct. 1844, 26 L.Ed.2d 273 (1970); Montandon v. Triangle Publications, Inc., 45 Cal.App.3d 938, 943-44, 120 Cal.Rptr. 186, 189 (omission of key fact in otherwise truthful statement held evidence of reckless disregard of truth), cert. denied, 423 U.S. 893, 96 S.Ct. 193, 46 L.Ed.2d 126 (1975); Indianapolis Newspapers v. Fields, 254 Ind. 219, 259 N.E.2d 651, 662 (time discrepancy known to reporter and witnesses' repudiation of key fact mentioned only once during series of articles held evidence of actual malice), cert. denied, 400 U.S. 930, 91 S.Ct. 187, 27 L.Ed.2d 190 (1970).
Evidence abounds in this record showing that the Post suppressed information favorable to the Tavoulareases. The district court examined several of these pieces of information which were known to Tyler but which were not included in the story:
Early drafts of the story did contain some of this information, but it was eliminated from the final version during the editing process. One early draft, for example, stated:
(RE 2528). The defendants argue that while Lapham's specific words were cut out, the point he made was not. But proof of the point was placed on weaker grounds. As a substitute for Lapham's specific statement that Tavoulareas went so far as to leave the room during board discussions of Atlas, and his assurance that there was "nothing to [the suggestion that Tavoulareas took a personal role in Atlas]," the defendants point to the following passage from the article:
Thus, the article substituted an "assurance" by Warner (an inside director) for a more concrete and expansive statement by Lapham (an outside director) — a substitution that considerably weakens the point, particularly when an underlying theme of the Post article was that Tavoulareas' mere position as president constituted internal corporate influence that implicitly affected the Atlas operation.
Next, in place of Lapham's direct statement that the Mobil board "was completely satisfied" with the Samarco-Atlas relationship, the article stated:
Thus, instead of a direct assertion of an unimpeached outside director that the Board had investigated and was "completely satisfied," the article states merely that the directors were simply "assured" by an unidentified "someone" that there was no impropriety. This grossly understates the force of the information provided by Lapham and operates to the disadvantage of Tavoulareas. Lapham's statements that the Board had "consistently reviewed" the Atlas arrangements and that he was convinced that William Tavoulareas had played no personal role in Atlas were simply ignored and never printed.
The Post article also disregarded other evidence in its possession that tended to describe the arrangement in a light more favorable to the plaintiffs and to Mobil. In evaluating the economic impact of the arrangement, for example, the Post ignored the information supplied by Kousi (whose favorable comments were deleted during the editing process) and even the comment furnished by its principal source, Comnas, that the Atlas arrangement saved Mobil money (RE 2501). The defendants alluded instead to "millions of dollars in business" and "exclusive, no-bid contracts," which strongly implied that Mobil was being
From this evidence, two reasonable conflicting factual inferences could be drawn — i.e., that Mobil was being gouged or that the Samarco-Atlas venture was financially beneficial to Mobil. But we are required to draw the legitimate inferences most favorable to the verdict. This evidence of the suppression of information favorable to the plaintiffs was directly probative of Tyler's reckless disregard for the truth or falsity of the article.
G. Conclusion
The evidence in the record viewed in the light most favorable to the verdict establishes the following:
In my view, this evidence establishes clearly and convincingly that the false statements and implications in the subject article were put forth with reckless disregard for their truth or falsity. The fact that Tyler faced no deadline pressure, and thus had plenty of time to reflect upon the story's implausibility and conduct further investigation, buttresses this conclusion.
The affirmative indications of good faith introduced by the defendants (which, under j.n.o.v. standards must be regarded in the least favorable light) are insubstantial and do not alter the conclusion. Primary among these is the fact that Tyler devoted a considerable amount of research to the story, working on it over a thirty-day period. Extensive efforts to get at the truth can be persuasive of good faith in some circumstances, but not when, as discussed above, the products of those efforts favorable to the plaintiff are systematically disregarded or excluded from the story, and adverse inferences systematically drawn. When such distortion of research appears, protracted investigation evidences only a dogged and thorough attempt to "get" the subject.
The systematic suppression of favorable evidence likewise reduces to insignificance the potential probative effect of the defendants' attempts to interview William Tavoulareas. The defendants were already aware that Tavoulareas had denied the substance of the charges, and there is no reason to believe that his exculpating statements with regard to any of the details would have been treated any more sympathetically than the exculpating statements Tyler received from more impartial sources such as Lapham — which, as we have seen above, were suppressed or altered. The Post did at least record Tavoulareas' denial. The proof of malice would have been even more clear and convincing if the Post had not done so, but that minimal concession
Chief Judge Wald asserts that the foregoing analysis does not constitute an independent review of the evidence of actual malice. Concurring Op. at 805-06. To the contrary, the review employed here conforms with recent Supreme Court pronouncements on actual malice, which stress that "[t]he independent review function is not equivalent to a `de novo' review of the ultimate judgment itself," Bose Corp. v. Consumers Union of the United States, 466 U.S. 485, 514 n. 31, 104 S.Ct. 1949, 1967 n. 31, 80 L.Ed.2d 502 (1984) and that "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge." Anderson v. Liberty Lobby, ___ U.S. ___, ___, 106 S.Ct. 2505, 2513, 91 L.Ed.2d 202 (1986). Judge Wald's proposal that the court "independently review inferences that the jury may be presumed to have drawn," Concurring Op. at 805, contradicts the Supreme Court's recent reaffirmation in Anderson that even when actual malice must be established (with clear and convincing proof), the drawing of legitimate inferences remains the function of the jury. Id. Independent review instead necessitates that the court evaluate the sufficiency of the facts in the record and the legitimacy of the inferences necessarily drawn by the jury from those facts in assessing whether the constitutional requirement of clear and convincing evidence of actual malice has been met. In such manner, the reviewing court respects both the right to jury trial under the Seventh Amendment
The foregoing independent assessment of "those portions of the record which relate to the actual-malice determination," Bose, 466 U.S. at 514 n. 31, 104 S.Ct. at 1967 n. 31, leads to the conclusion that the facts and the reasonable inferences drawn therefrom constitute clear and convincing proof that The Washington Post acted with actual malice when it published the November 30, 1979 article. The jury's verdict should thus stand.
V. PIRO
The plaintiffs sued Dr. Piro for slander and its foreseeable republication with respect to, among other things, his statement that William had "set up" Peter as a partner in Atlas. Complaint, Tavoulareas v. Piro, Civ. No. 80-2387 (D.D.C. Sept. 19, 1980) (RE 89, 90). The jury returned a verdict in favor of both plaintiffs, but the district court granted judgment n.o.v. in favor of Piro against William (although the court affirmed the jury verdict in favor of Peter). From the analysis set forth above, it is clear that a jury in William's case could reasonably have found that this allegation by Piro was false and defamatory. The question then is whether it was uttered with reckless disregard for its truth or falsity.
At trial and in his brief to this court, Piro admitted that he did not comprehend the details of the business arrangements involving Mobil, Samarco and Atlas. See Brief for Appellee Piro at 10; Piro's testimony at Tr. 2899-2928. Indeed, he testified that he had "never heard of Samarco" (Tr. 2899). Since knowledge of those details was obviously crucial to the judgment
VI. CONCLUSION
Great national issues are raised by the methods the majority employs to justify its reversal of the jury verdict in this case. By distorting the standards for applying j.n.o.v., the majority produces an opinion based on truncated facts and incomplete law. The outlandish refusal of the majority to consider the article as a whole surfaces throughout its discussion of defamatory meaning, falsity and actual malice. The majority goes to great lengths to avoid imposition of any liability on the Post — it whittles down the defamatory meaning of the article, stacks selective facts in an attempt to establish the truth of a stripped-down version of the "set up" charge and fails to acknowledge the clear and convincing evidence that the Post published the article with reckless disregard for its truth or falsity. In what it terms an "independent examination of the whole record," the majority ignores very substantial amounts of testimony by credible witnesses, disregards facts contradicting its conclusion and in effect substitutes its own factual determinations for those obviously found by the jury. Such methods greatly exceed a court's proper role in independently reviewing libel judgments under the First Amendment. If the majority's analysis is to be upheld in the name of "independent review," the Seventh Amendment right to a jury trial and reexamination of facts according to the rules of the common law will be obliterated. Is such evasive analysis to be upheld as the standard for the future?
The proper course for a reviewing court is to defer to the jury's factual findings and credibility determinations and reevaluate only the legitimacy of the inferences the jury necessarily drew in finding actual malice. The court then must determine whether the facts and reasonable inferences therefrom amount to clear and convincing evidence of reckless disregard for truth or falsity. This is the independent review required by Bose and the independent review conducted by this opinion. The jury's verdict should be reinstated.
FootNotes
The dissent would go even further and advance a different defamatory meaning, namely that "Tavoulareas misused Mobil assets and his position as president to advance Peter in Atlas." Dissent at 819. To a point, this position seems but a reformulation of Tavoulareas' charge that the article is properly interpreted as suggesting Tavoulareas "set up" the entire arrangement for Peter, a charge necessarily implicating a misuse of corporate assets.
But beyond this, the dissent now appears to be suggesting that the article alleges a breach of fiduciary duty and misuse of corporate assets even accepting that the "set up" charge is limited to setting up Peter in Atlas. See Dissent at 820 n. 27 (characterizing "entire arrangement" as "separately defamatory"). This reading is infected with several fatal problems. For one, this view, which the dissent trumpets as the "central defamatory meaning" of the article, has not been pressed on appeal by Tavoulareas. Rather, as we have noted in text, Tavoulareas urges the "entire arrangement" view. We should have thought it beyond peradventure that an appellate court in a defamation action should refrain from embracing a defamatory interpretation of the underlying article that has not been pursued by the allegedly defamed individual. But even if we address the merits of this argument, we both doubt the plausibility of the new interpretation and, more importantly, quite frankly fail to see what it adds. As to plausibility, we point to the Peterson memorandum, which the dissent champions as a strong, if not definitive, statement of the article's "true" meaning. Peterson, it will be recalled, complained that the story lacked "a dollar-and-cents angle" and asked if "Mobil's shareholders los[t] anything." RE at 2486. Thus, Peterson certainly missed what the dissent views as the article's "central defamatory theme."
Moreover, characterizing Tavoulareas' underlying conduct as misuse of corporate assets, as the dissent would have us do, rather than as nepotism, would seem to change nothing. Both labels refer to the same nucleus of alleged facts, and, as we hold below, those facts are true. Tavoulareas did "set up" Peter in Atlas, and whether one characterizes his activities toward that end as misuse of corporate assets or nepotism is of no consequence. Indeed, the passage of the original panel opinion quoted by the dissent equates misuse of assets with nepotism. See Dissent at 820 n. 27 (quoting 759 F.2d at 111). As far as we can discern, the dissent's real complaint is that Tavoulareas' actions, although nepotistic, were taken with the intent to benefit Mobil and therefore were not an abuse of corporate position. See Dissent at 819 n. 23. But as we have already noted, the Post has the absolute right to express its opinion on the propriety of Tavoulareas' involvement in Atlas' affairs. See supra note 15. Accordingly, because we find no independent substance to the dissent's "central defamatory meaning," we will treat this case as it has been litigated by the parties, see Brief of Appellant at 26; Brief of Appellees at 49-51, namely, that the alleged wrongdoing lay in engineering the entire corporate arrangement for Peter's benefit. Therefore, to the extent that specific items from the record are employed by the dissent to buttress its "central defamatory meaning" theory, we will treat them as if they were employed to support Tavoulareas' theory of the case.
The dissent suggests that we have embraced a "divide and conquer" strategy in this respect, urging in particular that the "personally urged" statement may have been published with actual malice. Dissent at 825-26 & n. 33. For the reasons already stated, we find it impossible under the circumstances here to conclude that, even if false, the statement was published with actual malice where, among other things, Tavoulareas' denial of the charge appeared in the very next sentence. Under the well-settled standards described in the text, see infra pp. 789-90, this statement falls woefully short of the daunting requirements of actual malice.
¶¶ 50-51. Surely the reporting of Mobil's own explanation for its entry into Samarco, along with the names of Mobil's negotiators with the Saudis, provides not the slightest support for an interpretation that the entire Mobil-Samarco-Atlas arrangement was "set up" for Peter.
Moreover, it would twist McBride unconscionably to suggest that it stands for the remarkable proposition that courts must always find a defamatory meaning or, more precisely, embrace the most sweeping defamatory meaning in a challenged statement. Indeed, in accepting the possible defamatory meaning of one of three statements in that case, the court warned that it was "troubled" by such libel suits and did not want its holding to be construed as "license to harass." Id. at 1461. We therefore suggested that the District Court "proceed upon remand in a manner that will minimize, so far as practicable, the burden a possibly meritless claim is capable of imposing upon free and vigorous journalism." Id. at 1461-62. Thus, both the specific holding and the "general tone," as it were, of McBride provide slim support indeed for the dissent's sweeping interpretation of the "set up" charge.
The dissent also points to the trial testimony of a former Commissioner of the Internal Revenue Service. Dissent at 819 n. 25. However, nothing in this testimony suggests that the former Commissioner embraced the view that the entire Mobil-Samarco-Atlas arrangement was "set up" for Peter; indeed, nothing in any way indicates he adopted any particular interpretation of the article. The use of the term "corporate incest" adds nothing. The dissent cannot in good conscience twist such a general descriptive phrase into an endorsement of a particular view.
We note that, because plaintiff's proof of falsity was inadequate to sustain a favorable jury verdict under a preponderance of the evidence standard, we need not decide whether public figures are required to show falsity by clear and convincing proof. Compare Firestone v. Time, Inc., 460 F.2d 712, 722-23 (5th Cir.) (Bell, J., specially concurring) (expressing view that clear and convincing proof standard applies to issue of falsity vel non), cert. denied, 409 U.S. 875, 93 S.Ct. 120, 34 L.Ed.2d 122 (1972) with Goldwater v. Ginzburg, 414 F.2d 324, 341 (2d Cir.1969) (expressing contrary view), cert. denied, 396 U.S. 1049, 90 S.Ct. 701, 24 L.Ed.2d 695 (1970).
In his dissenting opinion in Bose, Justice Rehnquist argued that review of a jury verdict "presented the strongest case for independent fact-finding by this Court:"
466 U.S. at 518 n. 2, 104 S.Ct. at 1953 n. 2 (Rehnquist, J., dissenting).
Monaghan, Constitutional Fact Review, 85 Colum.L.Rev. 229, 242 (1985) (footnote omitted).
An additional technique adopted by Judge Leval in that case may also be useful in reducing jury confusion. The judge put a limit on the total number of hours each side could use to present its case, including both direct examination or introduction of evidence and cross-examination. This approach left the lawyers with complete control over how the time was allocated. See id. at 7-8. The lawyers in the Westmoreland case believed that they had "tried their case better as a result of the time limit, and that [trial time] was shorter by a half than it would have been." Id. at 8. And the jury was spared the burden of attending to and remembering an even greater quantity of evidence put in over a longer period of time.
Objections to special jury findings center on their use in run-of-the-mine cases in which strict application of the rules of law is widely viewed as inconsonant with popular conceptions of "substantial justice." See, e.g., 9 WRIGHT & MILLER, FEDERAL PRACTICE AND PROCEDURE § 2503 (1971); James, Sufficiency of the Evidence and Jury-Control Devices Available Before Verdict, 47 VA.L.REV. 218, 246-48 (1961); cf. 374 U.S. 865, 867-68 (1963) (Justices Black and Douglas oppose Rule 49 because it allows judges "to weaken the constitutional power of juries"). Compare Morris v. Pennsylvania R.R., 187 F.2d 837, 840-41 (2d Cir.1951) (declaring that courts should use special verdicts only with "discrimination and foresight") with id. at 843 (Frank, J., concurring) (advocating frequent use of special verdicts contrary to the wishes of "those who appear to esteem the [jury] system, just because it gives rein to the passional element of our nature") (quoting Skidmore v. Baltimore & O.R.R., 167 F.2d 54 (2d Cir.1948) (Hand, J., concurring)).
Ollman v. Evans, 750 F.2d 970, 978 (D.C.Cir.1984) (en banc), cert. denied, 471 U.S. 1127, 105 S.Ct. 2662, 86 L.Ed.2d 278 (1985).
The majority criticizes the foregoing analysis of the article's defamatory meaning as one not advanced by Tavoulareas. Id. The majority's attack completely ignores that the district court charged the jury to find whether, as "William Tavoulareas, in his complaint contend[ed] ... the articles reasonably imply ... [t]hat he breached his fiduciary duties to Mobil ... wasted and misused assets of Mobil ... [and] wrongfully diverted such assets to Peter for his benefit." (Tr. 4549-50) (emphasis added). Moreover, the district court, in its memorandum accompanying the order of judgment n.o.v., considered Tavoulareas' argument that the article implied that William "put together the Mobil-Atlas-Samarco arrangement solely for the sake of his son," 567 F.Supp. at 660, separately from Tavoulareas' argument that the "article impliedly accused him of misusing Mobil's assets." Id. Finally, in the decision reinstating the jury verdict, the panel wrote:
759 F.2d at 111 (emphasis added). Quite clearly, the defamation analysis employed here is not new.
Also erroneous is the majority's contention that the defamatory implication that William Tavoulareas abused his fiduciary duties and misused corporate assets fails to add anything to the article's charge of nepotism. Even if one accepts, arguendo, the majority's conclusion that William Tavoulareas "made it possible for Peter to become a partner in Atlas and then helped to ensure that the business would prosper because Peter was his son," Maj.Op. at 780, the majority offers no evidence whatsoever that William Tavoulareas wasted Mobil assets, financing or personnel to the detriment of Mobil shareholders.
Rather than conceding that Tavoulareas' actions were nepotistic, it is pointed out infra at 826-29 that the evidence is far from undisputed that William made it possible for Peter to become a partner in Atlas. Even less so is there evidence that William abused his corporate position and wasted Mobil resources in his dealings with Atlas. Not only does the majority fail to give this defamatory implication of the article the consideration it warrants, but the majority also dismisses evidence supporting this interpretation because the evidence does not sustain the separate defamatory implication that Tavoulareas engineered the entire Mobil-Samarco-Atlas venture to benefit Peter. See, e.g., Maj.Op. at 782 n. 24. The majority's odd tactic is, to say the least, unfair.
Moreover, the majority's attempt to excuse the language used by Post counsel as "a single passage," Maj.Op. at 782-83 and uttered in the "heat of closing argument," id. at 782 n. 25, carries little force given the tremendous importance and forethought associated with summation to the jury.
The majority concedes, as it must in viewing the evidence most favorably to Tavoulareas under j.n.o.v. standards, that a jury reasonably could have found the "personally urged" charge to be false. Maj.Op. at 788.
The fact that Tyler published Tavoulareas' denial of the "personally urged" allegation does not in any way vitiate the value of the evidence that Tyler published the charge with reckless disregard for truth or falsity. If the majority's logic were followed, a newspaper that reported a man committed murder, knowing the report to be false or having serious doubts as to its truth, would be absolved from liability if the newspaper had also included the man's denial of the charge. Surely the First Amendment does not prevent a finding of actual malice whenever a defendant publishes false defamatory statements accompanied by denials.
The fact that the Post neither introduced Comnas' deposition nor called Comnas to testify is worthy of note even if reliance on a "missing witness" presumption would be inappropriate. That decision by the Post left its defense and the jury without any direct testimony from the principal source for the Post story. Comnas was the principal source for the story, and in place of Comnas' direct testimony, or his deposition, the jury was left to consider primarily the repetition of his statements by Tyler whose credibility was weakened by obvious self interest, his questionable recording of conversations and other factors. See supra at 813-15, infra at 835.
Moreover, it is far from clear that application of a missing witness instruction with respect to Comnas' deposition testimony would be inappropriate in these circumstances. As we pointed out in United States v. Young, 463 F.2d 934, 942-43 (D.C.Cir.1972), the propriety of applying a missing witness presumption often turns on the missing witness' "relationship to the parties." In this case Comnas must be considered as a witness favorable to the Post defendants. They relied upon him in the article. They listed him as one of their trial witnesses. At trial they relied upon his statements as repeated or allegedly recorded by others. Comnas' statements were the very core of the Post's defense; that defense was tremendously weakened by its unexplained reliance on second-hand evidence which resulted from the failure of the Post to call Comnas after listing him, or to use any part of his deposition. One must search far to find a weaker defense in a libel case. The true rule applicable to the situation presented here was set forth by Learned Hand, J., in United States v. Cotter, 60 F.2d 689, 692 (2d Cir.), cert. denied, 287 U.S. 666, 53 S.Ct. 291, 77 L.Ed. 575 (1932) and takes cognizance of the "relationship of the parties":
(Emphasis added). The jury was perfectly free to come to a similar conclusion and no court should be required to rescue a defendant from such folly.
The Washington Post, Apr. 19, 1981, at A15.
(Tr. 4555).
U.S. Const. Amend. VII.
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