Petition — Economy Carpets Manufacturers & Distributors, Inc. v. Better Business Bureau of Baton Rouge Area, Inc.

Supreme Court brief1979

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IN THE DEC 21 1978

SUPREME COURT OF THE UNITED

| MCHRESRopaK, Jr. CLERK

October Term, 1978-

NO. 28-1009

ECONOMY CARPETS MANUFACTURERS § DISTRIBU-

TORS, INC.,

Petitioner,

VS.

BETTER BUSINESS BUREAU OF BATON ROUGE

AREA, INC. and ST. PAUL FIRE AND MARINE

INSURANCE CO.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

COURT OF APPEAL OF LOUISIANA, FIRST CIRCUIT

D. BERT GARRAWAY

1851 Plank Road

Baton Rouge, La. 70803

504/387-0358

BART EATON

911 N. Lobdell Blvd.

Suite C

Baton Rouge, La. 70806

504/927-8708

DAVID W. ROBERTSON

2500 Red River

Austin, Texas 78705

§12/471-5151

November, 1978

TABLE OF CONTENTS

Page

og us Se ee ee 2

Bo eee a 3

QUESTIONS PRESENTED ....... 3

STATEMENT OF THE CASE ...... 5

How Federal Question is

T(t kin a se 6 @ 2 « «| ORD

REASONS FOR GRANTING THE WRIT:

The Gertz and New York Times

Co. Decisions do not Support

a First Amendment Privilege

for Defamatory "Opinion"

a ee ee ee ee

The Defamatory Statements

Made of Plaintiff were State-

ments of Fact, Not Expres-

a ee) |

Egs.

The Court of Appeal Misun-

derstood and Misapplied the

Federal Constitutional

“Malice” Standard ....... 40

ii iii

Page

IV. |

Page APPENDIX "B-3" - Written Reasons

The Times-Gertz Privileges are for Judgment ... 136

confined to Defendants Who are

Members of the Press or Other APPENDIX "B-4" - Judgment ew Se bow 158

News Media. The Promulgation

of a Pamphlet Does not Qualify APPENDIX "'C'' - Louisiana Supreme

the Better Business Bureau as Court Order Refusing

a Member of the Press... . 47 ROVIOW . «+ 6 +e 6 «© 160

APPENDIX "D" - Certificate of Court

of Appeal That Case

Was Decided on Basis

of a Federal Ques-

CR Ge et Bie an ee

The Louisiana Courts’ misappli-

cation of Requirements of the

Times-Gertz Series of Deci-

sions, Mirroring Similar

Confusion Elsewhere, Signals

Serious Difficulties in the

Lower Courts as to the Approp-

riate Scope of the First

Amendment Strictures on

Defamation Law ...-+ ee. 54

VI.

Plaintiff was denied Consti-

tutional Rights to Due

Process Through the Misappli-

cation of this Court's

Defamation Decisions .... 58

CONCLUSION . . 1. «© © © © © w ow oo 62

APPENDIX "A" - Opinion of the Court

Or MOOG. . 1 tk e's 65

APPENDIX "B-1" - Trial Judge's Jury

Cee 5 st ee 105

APPENDIX "B-2" - Judgment in Jury

iy) | ee 133

TABLE OF AUTHORITIES

Cases

Bates v. State Bar of Arizona,

im , 7 Bt.

2691 (1977) . ss

Cosgrove Studio and Camera Shop,

Inc. v. Pane, 408 Pa. 314,

182 A.2d 751 (1962)

Forrest v. Lynch, 347 So.2d 1255

(La.App.lst Cir.), writ refused

351 So.2d 168 (La. —gp tig cert.

denied 98 S.Ct. 1612 (U.S T1978).

Francis v. Lake Charles American

Press, 262 La. 875, 265 So.2d

206 (1972), appeal dism.,

410 U.S. 901 (1975)

Gertz v. Robert Welch, Inc., 418

U.8. S23 (iG7e). shy Baby Boe Bee

Page

3. 26. 21. 26, 285 Sh, 205 se

36,41, 47, $8, 34, 83, 6, 57, 38:

Guitar v. Westinghouse Electric

Corp., 396 F.Supp. 1042

(SsD.N.¥. 1975) .

In Re Testing Systems, Inc. v.

Magnaflux Corp., 251 F. ——

286 (E.D. Pa. 1966) °

Madison v. Bolton, 234 La. 997,

102 So.2d 433 (1958). . «+ « « 54, GB

Mashburn v. Collin, 355 So.2d

S79 (ie. 1977). «26, 364 27, 38;

19, 22, 26, 23, 26, 20, 3Gy Sx

41, 46, 54, ° 355, 60 re ee

Mayfair Farms, Inc. v. Socony

Mobil Oil Co., 68 N.J. Super,

188, 172 A.2d 26 (1961)

Montgomery v..Dennison, 363 Pa.

255, 69 A.2d 520 (1949)

Naihaus v. Louisiana Weekly

Publishing Co., 176 La. 239,

145 So. 527 (1932). ,

New York Times Co. v. Sullivan,

5376 U.S. 254 (1964) . 12, 14, 15,

os, oe, Oe, ae, 28, 34, 40, 41,

42, 47, 54, 55, 60 Beir yes

Peagler v. Phoenix Newspapers,

Inc., 114 Ariz. 309, 560

Pum BeeOEe@ETe, « ss. . 35, 36,

Phoenix Newspapers, Inc. v.

Church, 103 Ariz. 582,

447 P. 2d 840 (1968), cert,

denied 394 U.S. 959 (1969).

Rosenblatt v. sett 383 U.S.

75 (1965) .. “oar

Rosenbloom v. Metromedia, Inc.

403 U.S. 29 (1971). 13, 25, 26,

wee RO OO 6 se tl tl lt

Virginia State Board of Pharmacy

v. Virginia Citizens Consumer

Council, Inc., 425 U.S. 748

(1976). . a . . . eo . e . . . o

Miscellaneous

50 Am. Jur. 2d, Libel and Siander,

Sec. 13 (1970)> ae + «6

Comment, "Translating Sympathy

For Deceived Consumers Into

Effective Programs for Pro-

tection," 114 U. Pennsylvania

LL. Rev. 395 (i966) . ws 2 6 48

Developments in the Law, ''Decep-

tive Advertising," 80 Harvard

LRev. 10035 (1967) . « 6 « + 48

T. Emerson, The System of Free-

dom of Expression 414 (1970). 50

A. Hanson, Libel and Related

Torts, Sec. 26. C290n7) »« « + » 34

Keeton, "Defamation and Free-

dom of the Press," 54 Texas

L. Rev. 2222 (1976) «26 « « » 30

Note, ''Fair Comment," 62 Har-

vard L.Rev. 1207 (1949) ... 37

Note, "First Amendment Pro-

tection Against Libel

Actions: Distinguishing

Media and Non-media Defen-

dants,"' 47 So. Calif. L.

Rev, BOS (i9TS) a. ew 2 te ee 49

Restatement (2d) of Torts

DOG « BFS. a a 8 Re ee 37

Robertson, "Defamation and the

First Amendment: In Praise

of Gertz v. Robert Welch, Inc."

S4 Texas L.Rev. 199 (1976). . 40

Stewart, "The Free Press: The

Great American Risk," Barr-

ister, Spring 1975, p. 1? 52

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, i978

NO.

ECONOMY CARPETS MANUFACTURERS § DISTRIBU-

TORS, INC.,

Petitioner,

VS.

BETTER BUSINESS BUREAU OF BATON ROUGE

AREA, INC. and ST. PAUL FIRE AND MARINE

INSURANCE CO.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

COURT OF APPEAL OF LOUISIANA, FIRST CIRCUIT

The petitioner, Economy Carpets Man-

ufacturers § Distributors, Inc., plaintiff

below, respectfully prays that a writ of

certiorari issue to review the judgment

and opinion of the Court of Appeal of

Louisiana, First Circuit, reversing the

decision of the trial court, 19th

Judicial District of Louisiana, which had

entered judgment on a jury verdict for

plaintiff. The court of appeal decision

should be reversed on the issue of lia-

bility and the cause remanded to that

court to consider petitioner's argument

that the trial judge, while correctly

determining that defendant was liable to

plaintiff, erred in reducing the jury's

award from One Million Dollars

($1,000,000.00) to Thirty Thousand Dollars

($30,000.00) on his review of the record

alone.

OPINIONS BELOW

The opinion of the Court of Appeal

for the First Circuit of Louisiana,

reported at 361 So.2d 234 (La.App.I1st Cir.

1978), appears as Appendix "A" to this

petition. The district judge's charge to

the jury, his judgment on the jury ver-

dict, and his subsequent opinion on the

issue of quantum--none of which are

reported--appear as Appendix "B" to this

petition. The Louisiana Supreme Court's

order denying review, as yet unreported,

appears as Appendix "'C" to this petition.

The certificate of the Court of Appeal for

the First Circuit of Louisiana, that its

decision herein was based on a federal

question appears as Appendix "D" to this

petition.

JURISDICTION

The judgment of the Court of Appeal

of Louisiana, First Circuit, was entered

on July 10, 1978. A timely petition for

writs of certiorari or review was denied

by the Supreme Court of Louisiana on

September 29, 1978, and this petition for

certiorari was filed within 90 days of

that date. This Court's jurisdiction

rests on 28 U.S.C. 1257(3).

QUESTIONS PRESENTED

1. Whether the decisions of this

Court in New York Times Co. v. Sullivan

and Gertz v. Robert Welch, Inc. require

that the author of a defamatory statement

of opinion about a private person involved

in a public matter be protected from lia-

bility unless the statement was made with

knowledge that it was false or with reck-

less disregard of whether it was false or

not.

2. Whether a finding that defendant

made a statement with knowledge that it

was false or with reckless disregard. of

whether it was false is precluded by a

finding that defendant lacked common-law

"malice".

3. Whether the federal constitu-

tional privileges against defamation lia-

bility created by Gertz v. Robert Welch,

Inc. protect a defendant who is not a

member of the press or other news nedis.

4, Whether reversal of a jury ver-

dict in petitioner's favor premised on

misapplication of the standards announced

in New York Times Co. v. Sullivan and Gertz

v. Robert Welch, Inc. deprived petitioner

of constitutional rights to the protection

of reputation and of due process of law.

STATEMENT OF THE CASE

In 1969, Jesse Jarreau started a

retail carpet business in Baton Rouge,

Louisiana. This concern became a member

of the Better Business Bureau of the Baton

Rouge Area, Inc. (BBB). In 1973, it was

destroyed by fire, lost its entire stock,

and went into bankruptcy. Thereafter,

Jarreau and his sister, Joyce Langlois,

formed a new retail carpet business, Car-

pet Distributors, Inc. Mrs. Langlois was

the sole owner. This concern did not

become a BBB member. Disputes soon arose

between Jarréau and BBB over BBB's pub-

licizing that Carpet Distributors’

predecessor business had gone bankrupt,

Through its attorneys, Carpet Distribu-

tors requested BBB to cease promulgating

such information.

Meanwhile, Carpet Distributors bought

and installed a carpet-making loom, and

became Economy Carpets Manufacturers and

Distributors, Inc. (Economy) (petitioner

herein). Neither Carpet Distributors,

Inc., nor Economy was a BBB member.

During the early months of 1974, BBB

began questioning Economy's advertising.

BBB wrote several inquisitorial letters

to Economy, expressing doubt about some

of Economy's advertising claims and re-

questing verification in the form of

business records. The atmosphere between

Economy and BBB was by this time one of

mutual truculence. Economy did not

respond to BBB's letters. In November,

1974, BBB complained to the state con-

sumer protection agency and at the same

time published a "Special Bulletin" about

Economy. This "Bulletin", a two-page

leaflet, is appended to the Louisiana

Court of Appeal opinion in Appendix "A" to

this petition. It contained the following

false and defamatory statements of and con-

cerning plaintiff:

"BBB QUESTIONS ECONOMY CARPETS' ADS

Bureau visits to Economy

Carpets' . . . location thus

far have revealed the presence

of only one carpet Loom in the

warehouse at the rear of the

premises. In addition, BBB

shoppings conducted at the com-

pany's place of business. . ,

seem to indicate that the firm's

salesmen showed little, if any,

interest in selling carpeting

which the company claimed to

be manufacturing at that time.

These facts combined raise ser-

ious questions concerning not

only the accuracy of the com-

pany's advertising but also

the overall impression it cre-

ates... that is... locally

made, mass-produced, low-priced

carpets."

x k

"A BBB staff member visited

‘the company's place of business

at approximately 9:30 a.m. on

Monday, October 21, 1974 and was

advised that all three of the

[advertised] low-cost specials

had been sold out between 8:30

and 9:30 a.m., the first day the

sale began!!"

"CHILDISH

Do you remember the little

boy who used to brag that his

father was so strong he could

beat up all the other fathers

in the neighborhood?

Apparently, this little boy

has grown to manhood and is now

writing advertising claims that

he undersells all other stores.

Nobody has prices lower than his,

whether it be for drugs, groc-

eries, tires, carpeting or stereo

equipment.

Childish? Yes. And it's

regrettable that we have to see

and hear so much advertising

that has been condemned not only

by all Better Business Bureaus

but also by the Federal Trade

Commission."

The Special Bulletin was widely dissemi-

nated, About 13,500 copies were distri-

buted. While no copies were released to

the media, the bulletin was widely circu-

lated in the Baton Rouge area. Copies

turned up in Dalton, Georgia, a carpet-

making center.

‘

In May, 1975, Economy filed suit

against BBB and its insurer, St. Paul Fire

and Marine Insurance Co., alleging con-

spiracy to restrain trade and defamation.

The case and the underlying disputes

between Economy and BBB became a Cause

celebre in the community. (See Economy

Carpets Manufacturers and Distributors,

Inc. v. Better Business Bureau, 319 So.2d

783 (La. 1976), setting aside trial

judge's order restraining all parties

from engaging in pre-trial publicity

because the order was issued without

notice or opportunity for hearing. See

Economy Carpets Manufacturers and Distri-

butors, Inc. v. Better Business Bureau,

330 So.2d 301 (La. 1976), setting aside

trial judge's later order against pre-

trial publicity on First Amendment

grounds. See Economy Carpets Manufact-

urers and Distributors, Inc. v. Better

Business Bureau, 333 So.2d 765

(La. App. Ist Cir.), writs refused

334 So.2d 428 (La. 1976), reversing trial

judge's order dismissing as a party defen-

dant a Baton Rouge law firm that had

worked with BBB.

At the conclusion of the five-day

trial, the jury found against plaintiff

on the restraint of trade count and

awarded One Million Dollars ($1,000,000)

in defamation damages. On the defamation

count, the jury were properly instructed

5b» the trial judge according to the

requirements laid down for defamation

suits hy private plaintiffs in Gertz v.

Robert welch, Inc.. 418 U.S. 323 (1974);

the crial judge told the jury that plain-

tiff must prove defamatory content, pub-

lication, falsity, fault, and actual

injury. (Jury Charge at pp. 7, 9-10,

Appendix "B"' to this petition. )

On February 4, 1977, the trial judge

entered judgment on tne verdict for

plaintiff. Thereafter, he granted defen-

dants' motions for a new trial on the issue

of damages. By stipulation, the trial

judge considered this matter on the record

alone. Without specifying in what partic-

ulars the jury might have misunderstood

the instructions given at the first trial,

and without finding that the jury award

was supported by no evidence or was

against the great weight of the evidence,

the trial judge reduced the award to

Thirty Thousand Dollars ($30,000.00). The

trial judge's opinion on the damages issue

(Appendix "B'' to this petition) apparen-

tly held plaintiff to the "special dam-

ages'' requirements that had sometimes

been required of plaintiffs in slander

cases, rather than to the "actual injury"

standard laid down in Gertz.

All parties appealed to the Louisi-

ana Court of Appeal for the First Cir-

cuit. Plaintiff urged that the trial

12a

judge had erred in granting a new trial on

the issue of damages, the jury having been

properly instructed under the Gertz

requirements, and that the award of One

Million Dollars ($1,000,000.00) should be

reinstated as having been proved under

Louisiana law as modified by Gertz. With-

out reaching that point, the court of

appeal reversed and rendered judgment for

defendants.

The court of appeal's sole basis for

rendering judgment for defendants was an

interpretation of the decisions of this

Court in New York Times Co. v. Sullivan,

376 U.S. 254 (1964), and Gertz v. Robert

Welch, Inc., 418 U.S. 323 (1974). Under

that interpretation of the Times and

Gertz cases, plaintiff could not recover

for defamation without proving that

defendant's statements were made with

knowledge of falsity or reckless dis-

regard of their truth or falsity. This

requirement was not imposed on the view

that plaintiff was a "public official" or

"public figure''. Nor was it imposed on

the view that Louisiana courts adhere to

the pre-Gertz standard announced in Rosen-

bloom v. Metromedia, Inc., 403 U.S. 29

(1971), whereby any plaintiff defamed in

a media statement on a matter of public or

general concern was required to prove

knowledge of falsity or reckless disregard

of truth or falsity. Instead, the crucia]

interpretation of Times and Gertz was

that

"la] defendant in a defamation

suit, who is expressing an

opinion as opposed to making a

statement of fact, is entitled

to a 'fair comment privilege.

* * * 'We conclude . .. that

the First Amendment freedoms as

defined by the New York Times-

Gertz series of decisions

afford[s] [sic], at the very least,

a defense against defamation

actions for expressions of

Opinion about matters of public

concern made without knowing or

reckless falsity.'" (361 So.2d

at 239-240). Emphasis added,

Appendix "A" to this petition.)

The court of appeal took its view of

the Times and Gertz decisions from the

Louisiana Supreme Court. In Mashburn v.

Collin, 355 So.2d 879 (La. 1977), that

court has held privileged under the First

(Fourteenth) Amendment a food critic's

newspaper column criticizing a particular

restaurant, on the view that

"the New York Times-Gertz series

of decisions affords, at the very

least, a defense against defama-

tion actions for expression of

opinion about matters of public

concern made without knowing or

reckless falsity. * * * The

contours of the New York Times-

Gertz privilege regarding

expressions of opinion are uncer-

tain but we think that it clearly

protects at least (1) mere ex-

pressions of opinion; (2) by mem-

bers of the press or the news

media; (3) concerning matters of

public interest or concern,

(4) when made without knowing or

reckless falsity." 355 So.2d at

885.

The Louisiana Supreme Court made clear

that it was reaching this decision sole-

ly on the basis of federal First Amend-

ment law, and not state law.

"(I]t is desirable that we state

clearly some of the issues which

have not been decided. * * %

Because an expression of opinion

without knowing or reckless

falsity about a matter of public

concern by the press is fully

protected under the First Amend-

ment aegis, we did not consider

to what extent our state consti-

tution, jurisprudence, and stat-

utes also protect expressions of

such opinions, Nor did we attempt

to define the ambit of Louisi-

ana's safeguard for defamatory

misstatements of fact."

355 So.2d at 891.

The Louisiana Court of Appeal for the

First Circuit in the instant case

relied only on Mashburn, and hence only

on federal law, in support of its

decision;

"Mashburn requires the follow-

ing inquiries: (1) Does the

Special Bulletin constitute

opinion; (2) Does it contain

any misstatement of fact;

(3) Was any expression of

opinion in the bulletin made

with knowing falsity or reck-

less disregard of the truth

or falsity thereof; and (4)

[s the subject matter of the

bulletin a matter of public

concern."' 361 So.2d at 239-

40. Appendix "A" to this

petition,

x *

"Mashburn establishes the

following test to determine

the difference between state-

ments of fa.t and opinion:

[whether ordinary persons

would understand the utter-

ance, taken as a whole, as

fact or opinion, } Emp loy-

ing the foregoing guidelines

we find that much of the tex

of the Special Bulletin, as

well as the impressions and

implications which may be drawn

therefrom, constitutes opinion,"

Id, at 240,

a ®

"Applying the principles of

Mashburn to the case at hand,

we find the Special Bulletin

in question privileged as 'fair

comment’ and that Economy's

claim for damages for defama-

tion must be rejected," Id.

at 242,

Having concluded that the BBB

"Special Bulletin" consisted of state-

ments of opinion, rather than fact, the

court of appeal determined that plain-

tiffs could not prove knowledge of

falsity or reckless disregard of the

truth, The court did not in fact

address that issue at all, but, as

explained more fully in Point III of

this petition, instead ventured only a

cursory inquiry into the presence of

common-law "malice".

Petitioner timely sought writs of

certiorari from the Louisiana Supreme

Court, urging that the court of appeal

had erred in construing the Special Buil-

etin as statements of opinion, rather

than fact; that the court of appeal had

erroneously overlooked the Mashburn

requirement (for the invocation of the

"opinion" privilege) that defendant be a

member of the press or other news media;

and that the court of appeal had wholly

misunderstood and misapplied the ''know-

ing or reckless falsity" requirement.

Writs were refused with the notation

"ftjhe result is correct." (Appendix

"cry

How Federal Question is Presented

The original judgment in plaintiff's

favor was entered on a verdict rendered

by a jury correctly instructed under the

requirements laid down for defamation

actions brought by private plaintiffs in

Gertz v. Robert Welch, Inc., 418 U.S. 323

(1974). Thereafter, the trial judge

granted a new trial on the issue of dam-

ages and reduced them radically, apparen-

tly going on a misapplication of the

Gertz actual injury requirement. With-

out reaching petitioner's argument on

that point, the Court of Appeal for the

First Circuit of Louisiana rendered

judgment for defendants on the basis of

an "opinion privilege gleaned from

decisions of this Court rendered under

the First Amendment to the United States

Constitution, Petitioner sought a writ

of review from the Louisiana Supreme

Court, which was denied,

Thus, this defamation case turned

solely on federal issues at each stage

in the state courts. The trial judge

first applied, then misapplied Gertz. The

court of appeal] misinterpreted and mis-

applied an "opinion privilege" gleaned

from New York Times and Gertz, and wholly

misunderstood the Times-Gertz ''knowledge

of falsity or reckless disregard of truth

or falsity" standard.

REASONS FOR GRANTING THE WRIT

THE GERTZ AND NEW YORK TIMES CO. DECIS-

IONS DO NOT SUPPORT A FIRST AMENDMENT

PRIVILEGE FOR DEFAMATORY "'OPINION"

STATEMENTS.

The court of appeal in the instant

case relied solely on Mashburn v. Collin,

355 So.2d 879 (La. 1977), in which the

Louisiana Supreme Court had read Gertz

and New York .Times to create a federal-

law First (Fourteenth) Amendment privi-

lege for statements of opinion by mem-

bers of the press or news media on

matters of public concern. The

decisions of this Court do not support

such a privilege. The Louisiana Supreme

Court relied upon language in New York

Times Co. v. Sullivan, 376 U.S. 254, 292

n. 30 (1964) to this effect:

"Since the Fourteenth Amend-

ment [making the First appli-

cable to the states] requires

recognition of the conditio-

nal privilege for honest mis-

Statements of fact, it

follows that a defense of

fair comment must be afforded

for honest expression of

opinion based upon privile-

ged, as well as true, state-

ments of fact." (Quoted at

355 So.2d at 884.)

The Louisiana Supreme Court read this

expression to mean that all honest

statements of opinion about matters of

public concern are privileged. But the

quoted language was not intended to con-

vey that meaning, and will not bear it.

The very next sentence of the Times opin-

ion, not quoted or referred to by the

Louisiana Supreme Court, stated:

"Both defenses are of course

defeasible if the public offi-

cial proves actual malice, as

was not done here." 376 U.S.

at 292, n. 30.

What the Times Court meant was plain:

Neither statements of fact nor state-

ments of opinion about public officials

are actionable unless the fact stated or

taken as the basis of the opinion stated

was held with "actual malice," i.e.,

"with knowledge that it was false or

with reckless disregard of whether it‘

was false or not." (376 U.S. at 279-80)

In the instant context, by hypothesis

nothing in the federal constitution

would protect statements of fact made by

the BBB about plaintiff, a private busi-

ness; therefore, there is nothing in New

York Times that would protect a BBB

statement of opinion about that business

either.

The Mashburn decision also relied

upon language from Gertz v. Robert

Welch, Inc., 418 U.S.323, 339-40 (1974):

"We begin with the common

ground. Under the First

Amendment there is no such

thing as a false idea. How-

ever pernicious an opinion

may seem we depend for its

correction not on the con-

science of judges and juries

but on the competition of

other ideas. But there is

no constitutional value in

false statements of fact."

(Quoted at 355 So.2d at 884)

The Louisiana Supreme Court took the

quoted language to mean that "mere comment

or pinion on public matters, even though

defamatory" is not actionable, at least

when uttered by members of the press or

news media, unless stated with "knowing

or reckless falsity". (355 So.2d at 884,

885). That interpretation has the Gertz

majority clinging to the rule of Rosen-

bloom v. Metromedia, Inc., 403 U.S. 29

(1971), as the test for defamation lia-

bility for statements of opinion. The

entire thrust of the Gertz decision, of

course, was precisely to the contrary:

Gertz repudiated the Rosenbloom "matter

of public or general concern" test as an

unworkable constitutional standard.

Under Gertz, public official and public

figure defamation plaintiffs are required

to prove "knowing or reckless falsity",

but private plaintiffs--at stake in

Mashburn, as i» the instant Case--are

not. The Gertz Court could not have

meant to cling to Rosenbloom as the test

for defamation actions brought by pri-

vate persons defamed by statements of

Opinion about public matters. Gertz

aimed at reducing the number of unwork-

able distinctions, not increasing that

number,

The Louisiana Supreme Court in Mash-

burn could, if it chose, have decided to

adhere to the Rosenbloom test, as some

state courts have done. It could even,

though this would have contributed to

the already troublesome proliferation of

difficult distinctions, have decided to

adhere to a limited version of Rosen-

bloom, confined to opinion statements

about private persons involved in mat-

ters of public concern. But the Louisi-

ana Supreme Court emphatically did not

mean to do either of those things:

"[I]t is desirable that we

State clearly some of the

issues which have not been deci-

ded [in this case]. ne ® Be-

cause an expression of opinion

without knowing or reckless

falsity about a matter of pub-

lic concern by the press is

fully protected under the First

Amendment aegis, we did not

consider to what extent our

state constitution, jurispru-

dence and statutes also pro-

tect expression of such opi-

nion. Nor did we attempt to

define the ambit of Louisi-

ana's safeguard for defamatory

misstatements of fact. Since

. . . Gertz many states have

applied its negligence stand-

ard . . . while some have

followed the Rosenbloom ratio-

nale .. . It is clear that a

state is free to adopt any

reasonable standard, so long

as it affords the minimum pro-

tection required by the New

York Times-Gertz cases. In

the instant case it was not

necessary for us to define

such a standard for Louisi-

ena..." 355 So.2d at 891-

92.

When the Louisiana Supreme Court

mistakenly concludes that New York Times

and Gertz impose a federal requirement

that a private plaintiff, defamed by an

opinion statement concerning a matter of

public interest, prove knowledge of fal-

sity or reckless disregard of the truth,

it has not taken the constitutionally

defensible step of determining to follow

or to continue to follow a truncated ver-

$ion of Rosenbloom. Instead, it has

adopted a mistaken notion of what the

decisions of this Court mean, and in so

doing, has promoted a standard that is

even more unworkable and impossible of

even-handed application than Rosenbloom

had proved to be. Neither New York Times

nor Gertz affords the slightest support

for the "opinion privilege" concocted as

a matter of federal First Amendment law

by the Mashburn court and applied by the

court of appeal in the instant Case as

the basis for denying plaintiff's recov-

ery. No discernible basis for disting-

uishing fact from opinion emerged in

either the Mashburn case or the court of

appeal decision in the instant case. Nor

does the distinction seem capable of

elucidation or application. Quite aside

from the difficulties of distinguishing

fact from opinion, another awesome array

of difficulties are conjured up by the

question, how can an opinion, as opposed

to a statement of fact, be shown to be

false, much less to be known by the

utterer to be false? See Keeton, "Defa-

mation and Freedom of the Press",

54 Texas L.Rev. 1222, 1233-35, 1241-45,

1249-51, 1254 (1976). That both these

questions defied analysis in the instant

case is shown by the fact that the court

of appeal, though it was able correctly

to paraphrase the Mashburn test as

whether "any expression of opinion in

the bulletin [was] with knowing falsity

or reckless-disregard of the truth or

falsity thereof", (361 So.2d at 240,

Appendix "A'') was evidently unable to

conceive of applying it; the court

stated the issue in the instant case to

be:

"Whether the bulletin contained

misstatements of fact and wheth-

er such misstatements were made

with knowing falsity or with

reckless disregard as to the

truth or falsity thereof ..."

31 32

(Id.; emphasis added,) that he undersells all other

Il. stores. * * *

THE DEFAMATORY STATEMENTS MADE OF PLAIN- Childish? Yes. And it's

SIONS OF OPINION. eo os aa al regrettable that we have to see

The most damaging BBB statements and hear so much advertising

about plaintiff were the following; that has been condemned not

"(There are] serious questions only by all Better Business

concerning not only the accuracy Bureaus but also by the Fed-

of [plaintiff's] advertising but | eral Trade Commission." (BBB

also the overall impression it "Special Bulletin", appended

creates ... thatis... to court of appeal opinion,

locally made, mass-produced, low- Appendix "A'' to this peti-

priced carpets. tion.)

ke It is difficult to understand how any

"CHILDISH. Do you remember the analysis could characterize those state-

little boy who used to brag | ments as expressions of the writer's

that his father was so strong Opinion, as opposed to purported state-

he could beat up all the other ments of fact. The only intelligible

fathers in the neighborhood? reason* ventured by the court of appeal

Apparently, this little | *liie other reasons advanced by the court

of appeal for the "opinion" characterization

boy has grown to manhood and is | were evident makeweights. The court stated

that the Special Bulletin must have been a

now writing advertising claims statement of opinion because it said the

for characterizing the statements as

"opinion" was:

"(T]he publication states:

'These facts combined raise

serious questions . . .' The

language is labeled as opinion

in that it is said to be the

subject of some 'question' or

doubt by the BBB." (361 So.2d

at 241-42. Appendix "A" to

this petition.)

Plainly the court of.appeal looked only

to form and not at all to substance,

The jurisprudence and commentary on the

fact/opinion distinction--most of it

concerned with the common-law "fair

comment'' privilege that was a precursor

matters charged had been referred to the state's

consumer protection agency for investigation,

and that the BBB's purpose is always to "pro-

vide information, express an opinion on the

information developed, advise the public as to

protective measures," and then let the public

make up its own mind, 361 So.2d at 241;

Appendix "A" hereto.

to the New York Times decision--shows

mostly that the distinction is wholly un-

workable. But it does emerge with com-

plete clarity that formal equivocation

is unimportant:

"A defamatory idea communicated

indirectly is still actionable.

Putting the statement in the

form of a question or prefac-

ing it with 'I think' or other

expressions of opinion...

does not prevent a defamatory

statement from being action-

able."' A. Hanson, Libel and

Related Torts, Sec. 28 (1969).

(To precisely the same effect

see, e.g., Madison v. Bolton,

234 La, 997, 102 So.2d 433,

437-38 (1958); Phoenix News-

papers, Inc. v. Church,

103 Ariz. 582, 447 P.2d 840,

846, (1968), cert. denied

394 U.S. 959 (1969); 50 Am.

Jur. 2d Libel and Slander,

Sec. 13 (1970).)

A number of decisions in Louisiana

and elsewhere have imposed defamation lia-

bility for oblique or indirect criticism

of businesses without pausing at all over

the fact that the criticism may have been

couched in opinion form, (See, e.g.,

Naihaus v. Louisiana Weekly Publishing

Co., 176 La. 239, 145 So. 527 (1932);

Cosgrove Studio and Camera Shop, Inc. v.

Pane, 408 Pa. 314, 182 A.2d 751 (1962).)

One such recent decisionis on all fours

with the instant case. In Peagler v.

Phoenix Newspapers, Inc., 114 Ariz. 309,

560 P.2d 1216, 1218-19 (1977), defendant

newspaper libelled plaintiff by repeat-

ing Better Business Bureau claims that

plaintiff was "charged" with "highly

questionable sales methods" and was

guilty of "frequent apparent

transgressions;" that the BBB was "plan-

ning to bear down" on plaintiff; that

"[a]though [we] can't prove it, [plain-

tiff's advertising] appears to be based

on bait and switch."' In form, all these

charges were couched as equivocation, and

the instant court of appeal would pre-

sumably have characterized them as

statements of opinion. Yet the "opinion"

or "fair comment" point did not even come

up in Peagler. The Arizona Supreme

Court held that liability could be im-

posed on a finding of negligence under

the requirements set forth for defama-

tion suits by private plaintiffs in

Gertz, stating that "[t]he article im-

peached [plaintiff's] integrity and

reputation... by referring to the

'firm's frequent apparent transgress-

ions' and 'business firms which engaged

in highly questionable sales methods.'

* * * This article was clearly libelous

per se." 560 P.2d at 1223. The BBB's

charges against plaintiff were virtually

identical to those labelled libel per se

in Peagler. They are charges of the sort

made slander per se by the blackletter

law. (Restatement (2d) of Torts Sec.

573.) The formal equivocation, if any

indeed actually appears in the BBB

"Special Bulletin," is wholly irrele-

vant. Mashburn's characterization of a

food critic's newspaper column evaluat-

ing the quality of a restaurant's food

and service as opinion, while plausible,

has nothing to do with the instant case.

thee: supporting characterizing the

statements of food and literary critics

and the like as opinion, Mayfair Farms,

Inc. v. Socony Mobil Oil Co., 68 N.J.

Super. 188, 172 A.2d 26, 28 (1961);

Guitar v. Westinghouse Electric Corp.,

396 F.Supp. 1042, 1048 (S.D.N.Y. 1975);

Note, ''Fair Comment", 62 Harvard L.Rev.

1207, 1213 (1949).) The BBB was not stat-

ing a subjective evaluation of plaintiff's

business practices. It was not ventur-

ing its own opinion, ‘offering it as such

for whatever it might have been worth.

Instead, with the weight and authority

of great prestige and reputation for ob-

jectivity, the BBB charged plaintiff with

deceptive and fraudulent advertising

practices, of the sort that have "been

condemned not only by all Better Business

Bureaus but also by the Federal Trade

Commission", Courts have often recog-

nized that, in assessing whether defam-

atory matter is actionable, the alleged

impartiality and objectivity with which

defendant has purported to promulgate

his views is a crucial consideration.

See, e.g., In Re Testing Systems, Inc.

v. Magnaflux Corp., 251 F.Supp.286, 289

(E.D. Pa. 1966). In another case of

actionable libel by the Better Business

Bureau, one court stated:

"That the defendant ... is

engaged in the commendable busi-

ness of protecting the public

gives him no immunity to

recklessly stigmatize unoffend-

ing citizens .. . That [the BBB

official] was apparently acting

in behalf of the Better Business

Bureau... . does not lessen

[the] offense. Rather, it aggra-

vates it. [It] added weight to

the publication of the accusa-

tion. * * * Any individual's

reputation for integrity is his

greatest asset. He who attempts

to destroy that reputation is

doing something which meets with

the condemnation of the law and

of all persons who believe in

fair dealing between man and

man.'' Montgomery v. Dennison,

563 Pa. 255, 69 A.2d 526, 527-28 (1949).

Til.

THE COURT OF APPEAL MISUNDERSTOOD: AND MIS-

APPLIED THE FEDERAL CONSTITUTIONAL "MAL -

ICE" STANDARD.

In New York Times Co. v. Sullivan,

376 U.S. 254, 279-80 (1964), this Court

stated that a statement is made with

"actual malice'' when it is made "with

knowledge that it was false or with reck-

less disregard of whether it was false or

not.'"' The "actual malice" shorthand has

caused serious difficulties in the low-

er courts because it invites confusion

with common-law "malice", an entirely

different concept. See Robertson,

"Defamation and the First Amendment: In

Praise of Gertz v. Robert Welch, Inc.,"

54 Texas L.Rev. 199, 235-36 (1976). The

more recent decisions of this Court have

tended to a full articulation of the

"with knowledge that it was false or

with reckless disregard of whether it

was false or not" standard, rather than

to the "actual malice" shorthand. The

Louisiana Supreme Court in Mashburn used

the formulation "knowing or reckless

falsity".

Nevertheless, the court of appeal in

the instant case was confused by the mal-

ice’ term. The court of appeal correctly

paraphrased the Mashburn "opinion privi-

lege'' (gleaned from Times and Gertz) as

requiring inquiry whether the defamatory

statements were "malicious, meaning were

they knowingly false or made with reck-

less disregard as to their truth or fal-

sity". (361 So.2d at 241. Appendix "A"

to this petition.) But the court made

no attempt to apply that standard. In-

stead, the only issue discussed was

whether "the bulletin was not published

to question or challenge Economy's busi-

ness practices, but was intended to

drive Economy out of business because

Economy was not a BBB member."" Id. The

issue thus addressed was, of course, not

New York Times "malice", but common-law

"malice".

Had the court seriously confronted

the question whether the BBB utterances

were made with "knowing or reckless fal-

sity", rather than contenting itself with

a cursory look at the possibility of

common-law "malice", the following mat-

ters would have supported a conclusion

that plaintiffs met that standard. As

shown in plaintiff's brief to the court

of appeal: |

(1) Whereas the BBB Special Bulletin

indicated plaintiff lacked the capacity

to manufacture a significant amount of

Carpeting, the testimony of BBB offici-

als revealed that they had seen raw

material for carpeting on plaintiff's

premises and had observed plaintiff's

Carpet loom in operation. (Tr. pp. 428,

876%.) These BBB officials had also been

told by a state official and by a letter

from another that plaintiff did in fact

manufacture carpet. (V. I of II, p. 115;

V. II of II, p. 306.) One witness testi~

fied that the loom had a 2000-square-yard-

per-day capacity. (Tr. p. 166.)

(2) Whereas the BBB Special Bulletin

stressed in an insinuating manner that

plaintiff had been the "subject of a num-

ber of consumer complaints", the evidence

showed that a BBB official had suggested

to certain individuals that they file com-

plaints against plaintiff; and there was

testimony on behalf of the BBB that,

while there were five complaints on file

against plaintiff, a company might have

as many as thirty complaints a year and

*The transcript page references are

based on the separate work of two court report-

ers. D. L. Martin reported two volumes, pp. l-

327. These volumes are referred to herein as

"V, I of II, V. II of II." Joyce Edwards repor-

ted six volumes, pp. 1-1027. These volumes are

referred to herein as "Tr."

still have a "good file" with the BBB. (V.

Il of II, pp. 249-54; Tr. pp. 783, 290.)

(3) Whereas the Special Bulletin stated

that a BBB staff member had visited plain-

tiff's premises on the day of an adver-

tised sale and "was advised that all three

of the low-cost specials had been sold out

between 8:30 and 9:30 a.m., the first day

the sale began!!"--thus in wording and

punctuation implying that plaintiff's

salesmen were diverting customers from the

advertised goods toward other goods and

that the advertised special had been a

lie--the record showed that the staff mem-

ber did not consult any of plaintiff's

salesmen on the occasion in question, but

only a customer already known to him, and

the BBB officer acknowledged the items

might well have been gone by that time.

This was the same staff member who co-

authored the Special Bulletin. (Tr. pp.

646, 649-50, 445.)

45 ”

The following additional facts were

adduced at trial:

(4) Of the thirty-one (31) carpet dealers

in Baton Rouge, only plaintiff and one

other firm were not members of the BBB.

(Tr. @. 3855)

(S) Plaintiff's advertising was "substan-

tially similar" to that of BBB members.

(Tr. op. 226, $423.)

(6) The BBB had never before published a

"Special Bulletin" directed at only one

firm. (Tr. p. 299.)

(7) The BBB received a complaint from one

of plaintiff's competitors who was a

BBB member. (Tr. p. 215.)

(8) Other than requesting information in

the form of business records from plain-

tiff, the BBB took no steps to learn about

carpet manufacturing. (Tr. pp. 429, 430,

444, 448-49.)

(9) One staff member of the BBB actively

attempted to recruit complaints. (V. II

of II, pp. 249, 252-54.)

(10) The "Special Bulletin" was prominen-

tly displayed by BBB members who were

direct competitors of plaintiff. (V. I

of Ii, ». 20.)

(11) The "Special Bulletin" was published

after the BBB had been warned by its own

attorney of the consequences of its fal-

sity. (Tr. pp. 285, 260, 901.)

Even under the test articulated by

the Louisiana Supreme Court in Mashburn,

plaintiff is entitled to a recovery on a

showing of "knowing or reckless falsity."

At the least, petitioners are entitled to

careful consideration of the application

of the "knowing or reckless falsity"

standard to the BBB Special Bulletin.

The court of appeal here made no inquiry

whatsoever into whether the elements of

that standard were met by plaintiff's

proof, confining itself to a cursory

inquiry into the presence of ''common- law

malice", i.e., ill will, spite, or illegit-

imate motive.

IV.

THE TIMES-GERTZ PRIVILEGES ARE CONFINED TO

DEFENDANTS WHO ARE MEMBERS OF THE PRESS OR

OTHER NEWS MEDIA. THE PROMULGATION OF A

PAMPHLET DOES NOT QUALIFY THE BETTER BUSI-

NESS BUREAU AS A MEMBER OF THE PRESS.

Acknowledging the continuing contro-

versy over whether the Gertz decision was

intended to be restricted to defamation

by the press and broadcast media, the

Louisiana Supreme Court in Mashburn limi-

ted its application of the "New York Times-

Gertz [opinion] privilege [to] mere °x-

pressions of opinion by members of the

press or the news media."' (355 So.2d at

885.) the court of appeal in the instant

case wholly ignored that limitation.

Perhaps the court of appeal was in-

fluenced by its laudatory view of the BBB,

which is described in the opinion in

flattering terms that largely paraphrase

the BBB charter. (361 So.2d at 236-37);

Appendix "A" hereto.) But the publica-

tion of "bulletins" and a self-projected

image as “essentially a consumer informa-

tion service" do not make the BBB a member

of the press or news media. The Better

Business Bureau was founded as "an indepen-

dent agency of Business", designed as a

"vigilance committee" with the dual pur-

poses of "forestall[ing] the future

intrusion of government in [business's]

affairs" and of generating public confi-

dence in business by emphasizing that "the

poor ethics of the few do not represent

the policies and practices of all adver-

tisers". (Developments in the Law,

"Deceptive Advertising", 80 Harvard L.

Rev. 1005, 1157 (1967); Comment, "'Trans-

lating Sympathy for Deceived Consumers

into Effective Programs for Protection",

114 U. Pennsylvania L.kKev. 395, 404

(1966).) Its publications are more

analogous to pamphlets, handbills, or

trade publications than to news. Factors

supporting treating such vob Tattee tans diff-

erently from media utterance include;

(1) their reliance on internal, rather

than market, funding, which means there is

no market pressure to encourage reliabil-

ity; (2) their infrequent or one-time

appearance, which means there is no motive

to be reliable in order to secure the med-

ium's continued existence, and no ready

medium of reply; (3) in the case of trade

publications, ''their commercial relation-

ship to the subject matter of publica-

tion, [which] may be such that the common-

law standards better reconcile the needs

of reputation and speech" than First

Amendment privileges. (See Note, "First

Amendment Protection Against Libel Ac-

tions: Distinguishing Media and Non-media

Defendants", 47 So. Calif. L.Rev. 902,

937-38, nn. 191, 1935 (1974).)

Discussing the cognate matter of

"commercial speech", Professor Emerson

wrote: "Roughly, . .. the ‘commercial sec-

tor' embraces the production and exchange

of goods and services for profit, as dis-

tinguished from the production or exchange

of ideas on political, religious, artistic

and similar matters". (T. Emerson, The

System of Freedom of Expression, 414-15

(1970).) Under recent decisions of this

Court, "commercial speech" is no longer

wholly outside the protection of the First

Amendment, but enjoys "second class First

Amendment rights". (Rehnquist, J., Dis-

senting in Virginia State Board of Phar-

macy v. Virginia Citizens Consumer Council,

Inc., 425 U.S. 748, 786 (1976).) But

false commercial speech is not protected

by the First Amendment because:

"[T]he public and private bene-

fits from commercial speech

derive from confidence in its

accuracy and reliability. Thus,

the leeway for untruthful or

misleading expression that has

been allowed in other contexts

has little force in the commer-

Cial arena."" Bates v. State Bar

of Arizona, U.S. 5

97 S.Ct. 2691, 2709 (1977).

It is not necessary to classify the

BBB utterance at stake in the instant case

as "commercial speech" in order to

answer the question whether the BBB should

enjoy a privilege intended to be confined

to members of the press or news media.

According to views published by Mr. Jus-

tice Stewart several months after the deci-

sion in Gertz, this Court's defamation

decisions are best explained on the premise

that the First Amendment's freedom of the

press guarantee is broader than the guar-

antee of freedom of expression.

"[T]he free press guarantee is

. . . @ structural provision of

the Constitution. * * * The pri-

mary purpose of the constitu-

tional] guarantee of a free press

was . . . to create a tourth

institution outside the govern-

ment as an additional check on

the other three branches. * * *

[The press guarantee ordains]

the Fourth Estate. * * * [The

Court's privilege against lia-

bility for libel] aims to in-

sure bold and vigorous prose-

cution of the public's busi-

ness. * * * By contrast, the

Court has never suggested

that the constitutional right

of free speech gives an indi-

vidual any immunity from lia-

bility for either libel or

slander." P. Stewart, "The

Free Press: The Great

American risk", Yale Law School

Sesquicentennial Convocation,

Nov. 2, 1974, reprinted in

Barrister, Spring 1975, at 17,

18, and excerpted as "Or Of the

Press", 26 Hastings L.J. 631

(1975).

In the instant case the jury were

charged that plaintiff had the burden of

proving fault, defined as negligence,

falsity, and actual injury. (Jury charge

at 7, 8, 9, Appendix "B" to this peti-

tion.) The jury found that plaintiff

had proved that the Bulletin was false,

that the BBB was negligent in uttering

it, and that plaintiff suffered actual

injury from the defamation. In the con-

text of defamation of a private plain-

tiff, even by a media defendant, and even

on a matter of public concern, that is

all the Gertz decision mandates. . When

it is considered that the BBB is not a

member of the press or news media, and

that the utterance involved here was,

broadly speaking, of the "commercial

sector", what justification can be found

in the purposes of the First Amendment

or elsewhere for affording defendant

more protection than Gertz (or even Mash-

burn) requires?

THE LOUISIANA COURTS' MISAPPLICATION OF

REQUIREMENTS OF THE TIMES-GERTZ SERIES

OF DECISIONS, MIRRORING SIMILAR CONFU-

SION ELSEWHERE, SIGNALS SERIOUS DIFFI-

CULTIES IN THE LOWER COURTS AS TO THE

APPROPRIATE SCOPE OF THE FIRST AMEND-

MENT STRICTURES ON DEFAMATION LAW.

The Louisiana Supreme Court in Mash-

burn found an "opinion privilege" in the

Times and Gertz decisions that is in fact

not to be found in those cases. The

Louisiana court read Gertz as having

reiterated and clung to Rosenbloom for

the limited matter of opinion statements

by media of private plaintiffs, whereas

the plain intention of Gertz was to

repudiate the Rosenbloom standard as un-

workable. While state courts are free to

cling to all or part of Rosenbloom if

they wish to do so as a matter of inter-

preting their own view of the appropri-

ate protection for freedom of the press,

the Louisiana Supreme Court expressly

stated that was not its intention. Hence

the Louisiana Court has simply misunder-

stood and misapplied the Gertz case.

The privilege found in Gertz and

Times by the Mashburn court was, however,

expressly limited by the Mashburn court

to defamatory statements by members of

the press or other news media. This

limitation, in and of itself, is consis-

tent with the letter and spirit of Gertz.

The Court of appeal in the instant case,

however, paid no attention at all to

that requirement.

The Mashburn court stated that

plaintiff could recover for a defamatory

opinion utterance by a member of the

media on proving "knowing or reckless

falsity". The court of appeal in the in-

stant case made no effort to discern

whether the record would support the ele-

ments of that standard, instead confining

itself to a cursory inquiry into the

presence of common law "malice".

All of these mistakes are serious

ones. It would be one thing for the

state courts to work out their own (al-

beit somewhat baroque) scheme for defa-

mation liability. It is quite another

when those courts mistakenly assume they

are carrying out the dictates of the

First (Fourteenth) Amendment as authori-

tatively laid down by this Court.

Courts all over the country have had

difficuity understanding Gertz. Ref-

erence has already been made to the

split over whether Gertz requires its

standards be applied to defamation by

defendants other than members of the press

or news media. Similar splits in the

jurisprudence and literature have emerged

on such questions as whether Gertz "nar-

rows" or "broadens" the public figure

category; the meaning of the "fault"

standard for private plaintiffs; and the

force of the "actual injury'' requirement.

The instant case involves serious con-

fusion on the part of the Louisiana

courts as to the requirements of the

First Amendment decisions of this Court.

These questions need answers:

(1) Does Gertz mandate protecting media

statements of opinion on public matters

unless "knowing or reckless falsity" is

shown? If so, is a statement of the

form, "There is serious question whether

(we believe that) X is guilty of corrupt

(immoral, illegal) practices," an

expression of opinion?

(2) Is Gertz confined to defamation by

members of the press and broadcasting

media?

(3) Is a statement made with "knowing

or reckless falsity" when the utterer is

fully aware of his ignorance respecting

its accuracy?

VI.

PLAINTIFF WAS DENIED CONSTITUTIONAL

RIGHTS TO DUE PROCESS THROUGH THE MIS-

APPLICATION OF THIS COURT'S DEFAMATION

DECISIONS.

"It is a fallacy . .. to assume

that the First Amendment is the only

guidepost in the area of state defama-

tion laws. It is not. * * * [1I]mportant

social values . . . underlie the law of

defamation. * * * The right of a man to

the protection of his own reputation

from unjustified invasion and wrongful

hurt reflects no more than our basic

concept of the @ sential dignity and

worth of every human being--a concept

at the root of any decent system of or-

dered liberty. The protection of private

personality, like the protection of life

itself, is left primarily to the individ-

ual states under the Ninth and Tenth

Amendments. But this does not mean that

the right is entitled to any less recog-

nition by this Court as a basic of our

constitutional system". (Stewart, J.,

concurring in Rosenblatt v. Baer, 383

U.S. 75, 92 (1965).)

"The need to avoid self-censorship

by the news media is . . not the only

societal value at issue. If it were,

this Court would have embraced long ago

the view that publishers and broadcast-

ers enjoy an unconditional and indefeas-

ible immunity from liability for defa-

mation. * * * The legitimate state

interest underlying the law of libel is

the compensation of individuals for the

harm inflicted on them by defamatory

falsehood. We would not lightly require

the State to abandon this purpose..."

(Gertz v. Robert Welch, Inc., 418 U.S.

323, 341 (1974).)

Under the defamation law of Louisiana

that was in force before the New York

Times series of decisions by this Court,

plaintiff would have recovered. See

Madison v. Bolton, 234 La. 997, 102 So.

2d 433 (1958). Under the pre-Mashburn

Louisiana jurisprudence interpreting

this Court's decisions in the Times

series, plaintiff would have recovered.

See Forrest v. Lynch, 347 So.2d 1255

(La.App. Ist Cir.), writ refused 351

to ee ee

98 S.Ct. 1612 (U.S. 1978); Francis v.

Lake Charles American Press, 262 La.

875, 265 So.2d 206 (1972), appeal dis-

missed 410 U.S. 901 (1973). Even under

the Mashburn misinterpretation of the

Gertz case, plaintiff should have

recovered, because: (1) the statements

made about plaintiff were statements

of fact, not expressions of opinion;

(2) defendant was not a member of the

press or other news media; (3) plain-

tiff could show "knowing or reckless

falsity" Yet the court of appeal, on

a mistaken view of the meaning of this

Court's decisions in Times and Gertz,

and on a mistaken view of the meaning

of the Louisiana Supreme Court's inter-

pretation of those cases in Mashburn,

reversed a jury verdict in plaintiff's

favor and rendered judgment for defen-

dants Under those circumstances,

plaintiff has been deprived of consti-

tutional rights to due process of law

under the Fourteenth Amendment, as well

as of the constitutionally-based right

of personality and reputation referred

to in the quoted portions of Rosen-

blatt and Gertz, supra.

CONCLUSION

This case presents issues of great

public importance. A victory for plain-

tiff would buttress the important social

values of private reputation and human

dignity, while signalling that organiza-

tions such as defendant, repositories of

great public confidence and concomitant

power, must function in accordance with

the dictates of fundamental tort law. The

human issue involved is whether a highly

respected organ of established business

can with impunity act to expunge a legit-

imate competitor from the list of compe-

tition, The aims of the First Amendment

are not well served by permitting irres-

ponsible and damaging accusations to be

circulated in the guise of quasi-official

"opinion",

For these reasons, a writ of certio-

rari should issue to review the judgment

and opinion of the Louisiana Court of

Appeal, First Circuit.

November, 1978

Respectfully submitted,

D. Bert Garraway

1851 Plank Road

Baton Rouge, La. 70803

(504) 387-0358

Bart Eaton

911 N. Lobdell Blvd.

Suite C

Baton Rouge, La. 70806

(504) 927-8700

David W. Robertson

2500 Red River

Austin, Texas 78705

(512) 471-5151

I, BART EATON, one of the attorneys

for Respondent herein, and a member of

the Bar of the Supreme Court of the

United States, hereby certify that on

the 22. day of December, 1978, I ser-

ved three copies of the petition for a

writ of certiorari on respondents by mail-

ing the same, through the United States

mail, to counsel of record for St. Paul

Fire §& Marine Insurance Company, Anthony

Clessi, Esq., 435 Louisiana Avenue,

Baton Rouge, Louisiana 70802, and to

counsel of record for Better Business B

Bureau of Baton Rouge Area, Inc., Donald

Phelps, Esq., 8225 Florida Boulevard,

Third Floor, Baton Rouge, La. 70815,

first class, postage pre-paid. I fur-

ther certify that all parties required to

be served have been served.

December _ ye » 1978.

40 me

7) i ae

BART CATON

APPENDIX "A"

ECONOMY CARPETS MANUFACTURERS §& DISTRIBU-

TORS, INC.

VS.

BETTER BUSINESS BUREAU OF BATON ROUGE

AREA, INC., AND ST. PAUL FIRE AND MARINE

INSURANCE COMPANY

Number 11,748

First Circuit Court of Appeal

State of Louisiana

APPEAL FROM THE NINETEENTH JUDICIAL DIS-

TRICT COURT, EAST BATON ROUGE PARISH,

HONORABLE MELVIN A. SHORTESS, JUDGE,

PRESIDING.

Before Landry, Sartain and Ellis, JJ

LANDRY, Judge

Defendants, Better Business Bureau

of Baton Rouge Area, Inc. (BBB) and its

insurer, St. Paul Fire and Marine Insur-

ance Company (St. Paul), (Appellants),

appeal from judgment dismissing their

exceptions of no cause of action to the

defamation suit filed against them by

Economy Carpets Manufacturers § Distri-

butors, Inc. (Economy), (Appellee), and

from judgment in favor of Economy for dam-

ages awarded pursuant to jury verdict find-

ing BBB guilty of defamation. Economy has

appealed, seeking an increase in the award

for defamation and also for damages for

alleged conspiracy by BBB to restrain

trade, which latter claim was rejected by

the jury. We affirm the judgment deny-

ing Economy damages for alleged restraint

of trade. We reverse the judgment in fav-

or of Economy for damages for defamation

and dismiss Economy's claim in toto.

By original petition filed May 9,

1975, and five supplemental and amending

petitions, Economy sued BBB, St. Paul and

numerous other defendants, including the

State of Louisiana, Through the Gover-

nor's Office of“Consumer Protection, seek-

ing damages for defamation resulting from

a BBB Special BullJetin published in

October, 1974, and alleged conspiracy

by defendants to restrain trade in

violation of La. R.S. 51:122. After num-

erous legal maneuvers, Economy dismissed

its action as to all defendants except

BBB and St. Paul, which parties filed per-

emptory exceptions of no cause of action.

The exceptions are based on the conten-

tion that the bulletin in question con-

tained no language capable of having a

defamatory meaning and that the bulletin

was privileged under the First Amendment

to the United States Constitution. The

trial judge dismissed the exceptions of

no cause of action, and the matter went

to trial on the merits against BBB and

St. Paul on the issues of defamation and

restraint of trade. The jury rendered a

verdict in favor of Economy for

$1,000,000.00 on the defamation charge,

but rejected Economy's claims for dam-

ages for alleged restraint of trade.

Economy appealed. BPB and St. Paul

timely applied for a new trial.

Following applications by BBB and St. Paul

for writs, this court instructed the trial

judge that he could entertain the appli-

cations for new trial despite the prior

appeal by Economy. A new trial was

granted BPB and St. Paul. restricted to the

issue of damages for defamation. The

trial judge reduced damages to $30,000.00

from which judgment Appellants appealed.

BBB and St. Paul allege error as

follows: (1) the jury was manifestly

wrong in finding that the Special Bulle-

tin was defamatory; that the statements

therein were not true; and, that the pub-

lication was not privileged; (2) the

trial judge was wrong in refusing to ad-

mit in evidence the record of a suit

brought against Economy by the Attorney

General, State of Louisiana, which record

includes, inter alia, an injunction pro-

hibiting Economy from engaging in cer-

tain specific advertising practices,

| 70

despite the trial judge having allowed

| defamation to the October, 1974 Special

Economy to introduce in evidence an

Bulletin; and, (4) the trial judge's refus-

Assurance of Voluntary Compliance (AVC)

al to instruct the jury that improper mo-

signed by Economy as a result of the

tive or evil intent is not necessary to

Attorney General's suit; and (3) the trial

; : constitute a violation of La. R.S.

judge erred in instructing the jury on

91:122.

negligence and fault and refusing to in-

: BACKGROUND INFORMATION

struct that malice, actual or implied, is

BBB is a voluntary non-profit corp-

an essential element of defamation.

Oration with a membership of merchants,

Economy urges as error: (1) the

business men, professionals, tradesmen,

trial judge's reduction of the jury award

industries and individuals and concerns

from $1,000,000.00 to $30,000.00; (2) the

ner: furnishing personal services to the pub-

trial judge erred in instructing the jury

lic. It is essentially a consumer infor-

that for BBB to be guilty of conspiracy,

mation service. Although there are such

conspiracy must be shown between BBB and

; bureaus in cities throughout the nation,

other parties and refusing to instruct

each such bureau is a separate entity

the jury that a corporation and its own

; chartered by local business interests.

officers may be guilty of conspiracy

; i , BBB has a membership of approximately

without the participation of others;

1300 individuals and concerns. It ope-

(3) the trial judge erred in giving

rates on an annual budge of approximately

instructions which in effect limited

$160,000.00 provided by fees ranging from

jury consideration of the issue of

an annual minimum of $100.V0 for

individuals and small concerns to a grad-

uated maximum of several times that

amount for corporations, depending upon

the number of corporate employees. It

has a President, Vice President and an

office staff of five employees consisting

of secretaries, stenographers and file

clerks. The objectives of BBB are to:

(1) promote and assist in maintaining

truth, honesty and accuracy in business

selling practices and increase and justi-

fy public confidence in the printed and

spoken word of business; (2) advocate

and assist in mair.taining fair competi-

tion in business; (3) inform and educate

the public to the difference between

honest and legitimate advertising and

selling and that which is dishonest and

improper, and by all proper means prevent

the public from being misled and taken

advantage of by unfair advertising prac-

tices; (4) cooperate with other such

organizations having the same objectives;

(5) cooperate with and assist duly con-

stituted authorities in matters involved

in accomplishing the above objectives; and

(6) do all necessary to carry out the pur-

poses of the organization.

To accomplish these objectives, BBB

maintains a file on each of its members

and such non-member businesses in the

community as it can with the staff and

funds available. Because of its finan-

cial limitation, it is to some degree

selective in keeping files on non-member

businesses. It endeavors, however, to

keep as many files as possible, but

addresses itself to those situations

which in its judgment are most important.

It is especially interested in and gath-

ers information about new businesses. It

addresses inquiries and makes sugges-

tions and recommendations concerning ad-

vertising and business practices to

73 74

members and non-member concerns alike when of the alleged misconduct. Such requests

its attention is directed to some alleged are often made in writing and sometimes

improper advertising or business practice, by telephone or personal contact. A pre-

whether by consumer complaint or its own cise record is kept of each complaint,

continuous monitoring of newspaper, tele- the action taken thereon, and the response

vision commercials, radio and other media thereto. In most instances, a single

forms of advertising. letter or contact pointing out the nat-

BBB receives requests for informa- ure of the complaint and suggesting which

tion from similar organizations in other corrective measures should be taken re-

communities throughout the nation. It sults in cessation of the conduct or

also receives from members and non-members practice involved. BBB has no regula-

alike, hundres of requests for informa- tory or enforcement authority. When per-

tion concerning businesses in the Baton suasion and suggestion fail to terminate

Rouge trade area. In addition, it re- a practice deemed detrimental to the con-

ceives innumerable complaints, written sumer public, BBB refers the matter to

and oral, from members and non-members, such regulatory agency as it deems best

of alleged misleading advertising and suited to handle the particular problem.

questionable business practices by mem- The alleged offender is notified of the

ber and non-member businesses in Baton referral, which is usually to some agen-

Rouge. An attempt is made to investigate cy such as the Federal Trade Commission,

each complaint by contacting the alleged the Governor's Office of Consumer Pro-

offender and requesting an explanation tection or the Attorney General of

Louisiana. The referral agency is given

a report of the problem and requested to

investigate and invoke its regulatory and

enforcement authority, if warranted.

As a further service, BBB issues

approximately eight bulletins each year. 2

These publications inform that a particu-

larly troublesome problem exists with a

given business, agency or industry which

has failed to correct the subject matter

of complaints or practices which the BBB

has found questionable. The bulletins

alert members and consumers to the prob-

lem, the efforts of BBB to halt the im-

propriety, and the response or lack

thereof on the part of the business in-

volved. In addition to these regular

bulletins, BBB issues two or three

Special Bulletins each year, dealing

with matters it considers of grave con-

cern and regarding which it has been

unable to obtain satisfactory explanation

or solution.

In January, 1969, Jesse Jarreau be-

gan operation of a retail carpet estab-

lishment under the name of Economy Car+

pets, Inc., which concern became a BBB

member. Jarreau ran the business until

1973, when his establishment was destroyed

by fire and he lost his entire stock.

Jarreau's sister, Mrs. Joyce Langlois,

was an employee of Economy Carpets, Inc.

After the fire, the business went into

bankruptcy. Thereafter, Jarreau and his

Sister renewed retail carpet selling as

Carpet Distributors, Inc. (Distributors).

In late 1973, or early 1974, Jarreau pur-

chased a carpet making loom and had it

installed in Distributor's warehouse.

Subsequently, Distributors became Econ-

omy Carpets Manufacturers and Distribu-

tors, Inc., a corporation wholly owned

by Mrs. Langlois. Although Jarreau

stoutly disclaims any interest or

ownership in Economy (claiming to be only

an employee), Jarreau has run and has had

complete control of both Distributors and

Economy, the same as he had with the

predecessor firm, Economy Carpets, Inc.

Neither Distributors nor Economy have

ever been BBB members.

With the advent of Distributors,

disputes arose between Jarreau and BBB

concerning information given by BBB to

inquiries concerning Distributors. BBB

responded to such inquiries by advising

that Distributors was owned by Mrs.

Langlois, who had previously worked for

Economy Carpets, Inc.,: which concern had

gone bankrupt. Through its attorneys,

Distributors requested BBB to cease in-

forming inquirers that Distributors was

the successor to [Economy Carpets, Inc.,

and that Economy Carpets, Inc, had gone

into bankruptcy.

On January 7, 1974, Charles Dale

———

Ramirez, Vice President of BBB, wrote Mrs.

Langlois an inquisitorial letter concern-

ing comparison price advertising by Dis-

tributors, in which advertisement articles

were offered for reportedly reduced

prices, using a former price comparison.

Such an ad would be improper unless the

basic comparison price quoted was the

actual price for which the article sold

formerly. Ramirez wrote the letter on

his own initiative after reading an ad in

a Sunday newspaper. On March 6, 1974,

Ramirez wrote concerning an ad by Distri-

butors offering to carpet any room --

regardless of size -- for $149.00 and

customer complaints that Distributors

could not or would not make good on the

offer. The letter contained the names

and addresses of the complainants. On

April 9, 1974, Ramirez wrote in refer-

ence to a customer complaint received

April 8, from a prospective purchaser

who attempted to buy a remnant offered in

an ad published April 7. The customer

reported inability to buy the remnant ad-

vertised despite having gone to the store

early on the morning of the 8th. This

letter also noted that Economy was now

claiming to be a carpet manufacturer from

whom carpet could be purchased directly

as from a mill, with no intervening middle-

man, By letter dated May 9, 1974, Rami-

rez expressed concern over an Economy ad

of May S indicating a sale of remnants of

carpeting made by Economy in its own

mill. On August 29, 1974, Ramirez took

issue with a television commercial in

which Jarreau appeared and indicated that

Economy was making thousands and thou-

sands of yards of carpet in its Baton

Rouge warehouse, and which ad showed a

carpet loom operating in the background.

This letter also questioned a newspaper

ad in which Economy offered $7.50 per

yard carpet for $1.88 per yard; $5.00 per

yard carpet for $1.00 per yard; and $6.00

per yard carpet for $1.50 per yard. Rami-

rez expressed doubt that Economy was mak-

ing thousands and thousands of yards of

carpet as Claimed, and requested verifi-

cation in the form of the names of the

companies which applied secondary backing

to the raw carpet made by Economy, in-

voices for materials purchased to make

Carpeting, and sales slips showing the

sale of carpeting made by Economy. In

addition to the television commercial and

newspaper ad, Ramirez' last inquiry was

prompted by visits which he and other BBB

employees made to Economy's premises

where a single carpet loom was observed

in the warehouse, but was never found to

be in operation. BBB received no re-

sponse to any of its five letters of

inquiry.

Based on the unanswered

correspondence, verbal and written com-

plaints from customers, and shopping

episodes by decoy shoppers sent out by him-

self, Ramirez became convinced that Jarreau

would not cease what Ramirez considered to

be deceptive and misleading advertisement,

bait and switch business practices and

false claims of being a carpet manufact-

urer. Ramirez published a BBB Special

Bulletin dated November, 1974, and

entitled: "BBB Questions Economy Carpets

Ads", which bulletin is reproduced in

full and attached hereto.

Approximately 13,500 copies of the

bulletin were distributed by BBB through

its regular channels, namely, to BBB mem-

bers and other interested persons and

organizations, including the Governor's

Office of Consumer Protection and the

Attorney General, State of Louisiana.

No copies of the bulletin were released

by BBB to any news media. The bulletin

gained widespread circulation in the Baton

Rouge area. There is some evidence of the

bulletin being found in Georgia, which the

record shows to be the carpet making cen-

ter of the nation.

On November 5, 1974, Ramirez wrote a

letter to Charles W. Tapp, Director,

Governor's Office of Consumer Protection,

requesting an investigation of suspected

bait and switch advertising by Economy,

based on consumer complaints and Mrs.

Langlois' failure torespond to any of

Ramirez' written inquiries, In turn,

Tapp referred the matter to the Attorney

General. Negotiations between Tapp, the

Attorney General's Office and Jarreau

resulted in an Assurance of Voluntary

Compliance being signed by Jarreau on

February 11, 1975, as the solution of an

action brought by the Attorney General's

Office against Economy. [In the AVC.

Jarreau, on behalf of Economy, agreed to

changes in the advertisement concerning

comparative prices and claims of never

being undersold. On February 12, 1975,

Tapp received a letter from Ramirez ques-

tioning Economy's claim of manufacturing

"thousands and thousands of yards of

carpeting" in Economy's Baton Rouge mill.

Ramirez also suggested that Tapp obtain

another AVC from Jarreau concerning the

claim that Economy was a manufacturer of

carpeting. The manufacturing claim was

negotiated for some time between Tapp and

Jarreau with little or no cooperation

from Jarreau insofar as concerned the

supply of information requested by Tapp

to substantiate the claim that Economy

manufactured a large part of the carpet-

ing it solid. Ultimately, the issue was

resolved by Tapp agreeing to an AVC

signed by Jarreau on January 7, 1976,

which stated in effect that Economy could

advertise production of 15% of the carpet

it sold, and that said figure was sub-

ject to change. Tapp testified he was nev-

er shown production figures requested of

Jarreau but that he agreed to the second

AVC merely to settle the issue. Sub-

sequently, an injunction was sought and

issued against Economy in the suit

brought by the Attorney General. The in-

junction prohibited Economy from adver-

tising that it was making a substantial

amount of the carpet it sold. The trial

court prohibited Appellants from intro-

ducing in evidence the proceedings

against Economy and the action taken

therein despite having allowed Economy to

introduce the AVC in evidence. Appell-

ants proffered the record. We find that

the trial judge erred in refusing to ad-

mit the record and that the record

should be considered.

THE EXCEPTIONS OF NO CAUSE OF ACTION

BBB's exception asserts that the

85 ,

petition herein fails to allege facts

sufficient to support a finding of con-

spiracy pursuant to La. R.S. 51:122. The

basis of St. Paul's exception is that the

language in the Special Bulletin of Qcto-

ber, 1974 is neither defamatory nor cap-

able of defamatory interpretation.

Although the facts alleged as con-

stituting conspiracy in restraint of

trade are vague, the exception of BBB

must be denied because an interpretation

of the allegations most favorable to

Economy does support a cause of action

‘pursuant to La. R.S. 5§1:122.

St. Paul's exception presents a more

complex issue. When this matter was

tried, our Supreme Court had not ren-

dered its decision in Mashburn v. Collin,

So.2d » (La. 1977). Mash-

burn held that a defendant in a defama-

tion suit, who is expressing an opinion

as opposed to making a statement of fact,

is entitled to a "fair comment privilege".

Interpreting the United States Supreme

Court decisions in New York Times Co. v.

Sullivan, 376 U.S. 254, 84 S.Ct. 710,

ll L.: Ed. 2d 686 (1964) and Gertz v.

Robert Welch, Inc., 418 U.S. 323, 94 8S.

Ct. 2997, 41 L. Ed 2d 789 (1974), our

Supreme Court stated in Mashburn: "In

the Gertz decision it is strongly indi-

cated that the Court, in relaxing the

stringent test of the New York Times rule

in cases brought by private individuals,

was speaking in terms only of libelous

misstatements of fact, and that mere

comment or opinion on public matters,

even though defamatory, enjoys the un-

qualified protection of the First Amend-

ment.'' See also Letter Carriers v.

Austin, 418 U.S. 264, 94 S.Ct. 2770,

41 L. Ed. 2d 745 (1974). Mashburn also

noted: "We conclude, therefore, that

the First Amendment freedoms as defined

by the New York Times-Gertz series of de-

cisions affords, at the very least, a

defense against defamation actions for

expressions of opinion about matters of

public concern made without knowing or

reckless falsity". So.2d *

Mashburn requires the follow-

— - ee

ing inquiries: (1) Does the Special

Bulletin constitute opinion; (2) Does it

contain any misstatement of fact; (3)

Was any expression of opinion in the

bulletin made with knowing falsity or

reckless disregard of the truth or fal-

sity thereof; and, (4) Is the subject

matter of the bulletin a matter of pub-

lic concern. Pretermitting considera-

tion of all other inquiries, it is evi-

dent that whether the bulletin contained

misstatements of fact and whether such

misstatements were made with knowing

falsity or with reckless disregard as to

the truth or falsity thereof, are issues

which cannot be decided on the fact of the

pleadings. For this reason alone, St.

Paul's exception must be denied.

THE MERITS OF THE DEFAMATION ISSUE

Economy contends it was defamed by

numerous telephone messages by BBB in

response to consumer complaints; by the

letters Ramirez wrote to Economy; by

correspondence by Ramirez to the Gover-

nor's Office of Consumer Protection; and

by communications to the Attorney Gen-

eral, State of Louisiana. We find that

only the Special Bulletin of October,

1974 warrants consideration in this re-

gard,

Mashburn establishes the following

test to determine the difference between

Statement of fact and opinion: "the

crucial difference ... depends upon

whether ordinary persons hearing or read-

ing the matter complained of would be

likely to understand it as an expression

of the speaker or writer's opinion, or a

statement of fact. The opinion may be

ostensibly in the form of a factual state-

ment if it is clear from the context that

the maker did not intend to assert anoth-

er objective fact, but only his personal

comment on the facts which he had

stated. An expression of opinion occurs

when the maker of the ‘comment states the

facts on which his opinion of the plain-

tiff is based and then expresses a com-

ment as to the plaintiff's conduct,

qualifiaction or character; or when both

parties to the communication know the

facts or assume their existence, and the

comment is clearly based on the known or

assumed facts in order to justify the

comment." So. 2d : .

Employing the foregoing guidelines,

we find that much of the text of the

Special Bulletin, as well as the im-

pressions and implications which may be

drawn therefrom, constitutes opinion.

After stating objective facts, including

the use of BBB shoppers, reproducing the

questioned newspaper ad, and mentioning

results of findings based on visits to

Economy's establishment, the publication

States: "These facts combined raise

serious questions concerning not only

the accuracy of the company's advertis-

ing, but also the overall impression it

creates...that is... locally made, mass-

produced, low-priced carpets." The lan-

guage is labeled as opinion in that it

is said to be the subject of some "ques-

tion" or doubt by the BBB. We also find

that the summary of the publication makes

clear the nature of the comments by stat-

ing that the questions posed have been

referred to the Governor's Office of Con-

sumer Protection with the request that an

investigation be made to "obtain proof of

accuracy" or "demand corrective changes"

in the questioned conduct. The purpose

of the circular affords further support

for the finding that the bulletin ex-

presses opinion. Having no enforcement

authority, BBB can only provide informa-

tion, express an opinion on the informa-

tion developed, advise the public as to

protective measures when dealing with a

particular establishment, then let the

public make its own decision and draw its

own conclusions.

Does the Special Bulletin contain

misstatement of fact? Dale Ramirez,

Vice President of BBB and James Kolter,

President of BBB, substantiated the ver-

acity of each factual statement in the

bulletin. Both witnesses considered

each sentence of the article individ-

ually and on the basis of their own

knowledge and actions, and the testi-

mony of other witnesses proved the truth

of each separate statement standing

alone. The more difficult question is

whether the factual statements imply or

insinuate illegal or immoral conduct on

the part of Economy, which insinuations

Or implications were not true. We do not

find this to be the case.

Economy produced innumerable wit-

nesses who testified in effect that the

bulletin was incorrect in its assessment

of the amount of carpet produced by the

single loom in Economy's warehouse. The

bulletin does not attempt to assess or

estimate the amount of carpet the loom

could make. The bulletin merely points

out the observations of BBB personnel

who visited the warehouse and requested

verification of the capacity of the loom.

The bulletin does not imply that the

loom cannot produce carpet as claimed by

Economy, but that Economy failed to re-

spond to BBB's numerous request for

verification of loom capacity or

capability to manufacture "thousands and

thousands of yards of carpet", and that

in BBB's opinion, Economy should prove

its claim. The title of the bulletin and

remarks contained therein indicate clear-

ly that BBB is addressing questions to

Economy and that the questions should be

answered in the interest of fair adver-

tising and honest business practices.

We find that the impression the article

is fairly calculated to produce, and the

impression it would naturally engender

in the mind of an average person is that

BBB has raised questions concerning the

accuracy of Economy's advertising that

Economy manufactures a considerable

amount of the carpet it sells, and that

the claim should be investigated. Were

the expressions in the bulletin mali-

cious, meaning were they knowingly false

or made with reckless disregard as to

their truth or falsity? The burden of

Senge teage a

proof rests upon Economy in this regard.

Admittedly, the burden is onerous.

Essentially, Economy attempted to estab-

lish that the bulletin was not published

to question or challenge Economy's bus-

iness practices, but was intended to

drive Economy out of business because

Economy was not a BBB member. We find

the record totally devoid of evidence to

substantiate this contention. On the

contrary, the proof preponderates over-

whelmingly in favor of the conclusion

that the bulletin was issued solely to

make available to BBB members and con-

sumers the information which BBB had

developed concerning Economy in order to

promote knowledgeable dealing with Econ-

omy by prospective purchases of carpet-

ing. This finding of fact does not re-

quire our finding manifest jury error

herein. In instructing the jury, the

trial judge did not have the benefit of

Mashburn, and the jury was not instructed

in the light of Mashburn's interpretation

of the "fair comment" privilege afforded

by the First Amendment of the United

States Constitution. On the contrary,

the interrogatories presented the jury

included one that requested a finding of

whether or not BBB was at "fault".

Is the subject matter of the bulle-

tin a matter of public concern? The

information was provided with regard to

a merchant who engaged in extensive ad-

vertising in the news media with the ob-

ject of attracting prospective pur-

chasers and customers to his establish-

ment and thereby increasing his sales

and profit. We find a business enter-

prise so conducted is a matter of pub-

lic concern and interest. . Applying the

principles of Mashburn to the case at

hand, we find the Special Bulletin in

question was privileged as "fair

—_—_——_

comment" and that Economy's claim for

damages for defamation must be rejected.

RESTRAINT OF TRADE

In essence, Economy maintains that

the action of BBB in publishing the Spec-

ial Bulletin, giving alleged adverse,

Critical and defamatory information in

response to consumer inquiries, referral

of the matter to the Attorney General's

office for investigation and sending BBB

shoppers to Economy's establishment, taken

as a whole, constitute a calculated in-

tent, scheme and effort to run Economy

out of business and therefore amounts to

a violation of La. R.S. 51:122.

The alleged conspirators are the

subject of some confusion inasmuch as

defendants alleged to have been co-

conspirators have been voluntarily dis-

missed from this action, leaving BBB as

the sole alleged conspirator. This con-

fusion was somewhat enhanced by the trial

judge's refusal to grant Economy's reques-

ted charge that a conspiracy could result

from the action of BBB employees con-

spiring among themselves, and that to

prove conspiracy, it was not necessary

that Economy establish that BBB employ-

ees had conspired with corporations or

persons other than BBB employees. The

jury found that BBB did not "conspire

with anyone, named or unnamed ... to re-

strain trade and/or commerce as it might

affect the plaintiff.'' Economy contends

that the instruction given improperly

limited recovery on the restraint of

trade issue beCause BBB could have con-

spired with its own employees and the

instruction given did not allow such a

finding. Appellants argue that the in-

struction was proper because Economy's

contention necessitates a finding that

BBB as a corporate entity can conspire

with individuals. Realistically, a

corporation acts through, not with, its

officers and employees.

La. R.S. 51:122 provides that;

"Every contract, combination

in the form of trust or other-

wise, or conspiracy in re-

straint of trade or commerce

in this state is illegal."

Economy argues that the statute does

not require proof of evil motive or speci-

fic intent to restrain trade if such re-

straint is a necessary consequence of the

questioned acts. The statute and juris-

prudence, however, indicate clearly that

the purpose of the acts must have been to

restrain trade. See Tooke § Reynolds v.

Bastrop Ice 4 Storage Co., Inc., 172 La.

781, 135 So. 239 (La. 1931).

We find it was error for the trial

judge to refuse Economy's requested in-

struction concerning conspiracy. We

also find, however, that the error was

harmless in view of the proof offered by

Economy to establish the conspiracy char-

ge. We find as a fact that Economy has

failed utterly to establish conspiracy

on the part of BBB employees, either

among themselves or in consort with oth-

ers. Had the requested instruction been

given, there is no credible evidence of

record on which the jury could have found

conspiracy in this instance,

To establish the alleged conspir-

acy, Economy relies upon testimony re-

garding: (1) alleged solicitation of

complaints by Ramirez; (2) alleged

attempts by BBB Board member Richard

Lipsey to compel an advertising agency to

drop Economy's account; (3) complaints to

BBB from a BBB member concerning Econo-

my's advertising practices; (4) alleged

erroneous information imparted to con-

sumer inquires when such information was

based on only one consumer telephone

complaint; and (5S) publication of the

100

October, 1974 bulletin.

Economy claims complaints were so-

licited from Joe Alcocer and Mrs. Jo Ann

Monte. Mr. Alcocer's testimony is dis-

puted by Ramirez. Mr. Alcocer, a tailor,

was a former tenant of Ramirez. Alcocer

testified that Ramirez requested him to

pretend to shop at Economy and then file

a complaint with BBB regardless of the

results of the visit. Ramirez testified

that on an occasion when he spoke with

Alcocer concerning rent money that

Alcocer owed him, Alcocer solicited in-

formation from Ramirez about carpet firms

because Alcocer intended to purchase

some Carpeting.

By coincidence, Mrs. Monte was

shopping at Economy on one of Ramirez'

Visits to that concern. Ramirez over-

heard Mrs. Monte's verbal complaint to a

clerk to the effect that she was unable

to purchase an advertised article.

101

Ramirez suggested that Mrs. Monte write a

complaint to BBB. Although Ramirez appro-

ached Mrs. Monte and inquired what the

clerk had told Mrs. Monte about the ad-

vertised article, there is no evidence

that Ramirez solicited or importuned Mrs,

Monte to make a complaint.

Richard Lipsey, a BBB Board member,

criticised one of the partners of an ad-

vertising firm for handling Economy's

advertising. Mr. Lipsey is not a competi-

tor of Economy; he is engaged in an

entirely different line of endeavor. As

an individual, or even a member of the

BBB Board, Mr. Lipsey was free to make

such criticism, if he chose. No ulter-

ior motive on the part of Mr. Lipsey was

shown. More importantly, the record is

barren of proof that any other officer

cr any employee of BBB was aware of

Lipsey's action, or conspired with Lip-

sey in any fashion whatsoever.

102

As additional evidence of alleged

conspiracy, Economy showed that Sam

Lacour, a BBB member and one of Economy's

major competitors, complained to BBB

about Economy's advertising. Economy

also established that BBB reported to in-

quirers that Economy required payment in

full for carpeting before installation,

which information was based on one con-

sumer telephone call. Such incidents

provide no substantiation for the charge

that they were intended or had as their

purpose the restraint of trade.

The testimony of Dale Ramirez

and James H. Kolter (President of BBB

from January 1, 1966 to September 15,

1975), is that the letter inquiries to

Economy, the BBB shopping at Economy's

store, and publication of the Special

Bulletin were merely additional efforts

to discharge BBB's function of inform-

ing the public. They explained that

103

the referral to the Governor's Office of

Consumer Protection and the State Attor-

ney General were warranted because of

Economy's persistent refusal to respond

to the written inquiries and furnish

satisfactory proof of the claim that

Economy was a large manufacturer of

carpeting and could therefore undersell

its competitors. They also testified

that had Economy answered the questions

posed and furnished the information de-

sired, the Special Bulletin would not

have been published and that the Attor-

ney General would not have been requested

to investigate Economy. We conclude that

the record fails to establish the alleged

conspiracy.

The judgment awarding Economy

$30,000.00 in damages for defamation is

reversed and set aside and judgment is

rendered herein in favor of BBB and St.

Paul, dismissing said claim, with

104

prejudice. The judgment rejecting Econ-

omy's claim for alleged restraint of

trade is affirmed and judgment is ren-

dered herein rejecting Economy's claim

in toto, all costs of these proceedings

to be paid by Economy.

Affirmed in part, reversed in

part and rendered,

104a

BBB

PUBLIC PHONE -— 344-8551

MEMBERS’ PHONE — 344-1518

200 LAUREL STREET .

= Za litiy

BETTER BUSINESS BUREAU OF BATON ROUGE AREA, INC.

James H. Kottea, Panswwent

BATON ROUGE, LOUISIANA

Volume XXV, Number 4

October, 1974

BBB Questions Economy Carpets’ Ads

During the past year, the Baton Rouge Area BBB,

on five different occasions, has questioned the adver-

tising claims made by ECONOMY CARPETS MAN-

UFACTURERS AND DISTRIBUTORS, INC., 7871

Greenwell Springs Road.

As noted in the copy of an August 29th letter,

which we hoe reproduced below, the Bureau wrote

to the firm's president, Mrs. Joyce Langlois and re-

quested verification of claims being made in television

commercials which the company was running at that

time, The advertising in question dealt mainly with

the company’s claim that “Thousands and Thousands

of Yards of Carpeting are being Manufactured at our

Mill”... (To date, the Better Business Bureau has

received no reply from the company nor any substan-

tiation of ad claims as requested in the BBB’s letter

of August 29th). (Continued on back page)

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104b

BBB Questions Economy Carpets’ Ads...

(Continued from front page)

Bureau visits to Economy Carpets’ Greenwell

Springs Road location thus far have revealed the pres-

ence of only one carpet loom in the warehouse at the

rear of the premises. In addition, BBB shoppings con-

ducted at the company’s place of business during early

September seem to indicate that the firm’s salesmen

showed little, if any, interest in selling carpeting which

the company claimed to be manufacturing at that time.

These facts combined raise serious questions concern-

ing not only the accuracy of the company’s advertising

but also the overall impression it creates... that is

. . locally made, mass-produced, low-priced carpets.

In addition to the questions which have been raised

concerning the company’s ability to manufacture

thousands and thousands of yards of carpeting the

BBB also has questioned advertisements such as the

newspaper ad which ran in the Sunday Advocate, Oc-

tober 20, 1974 (reproduced, front page). The claims in

question were those which offered $7.50 carpeting for

$1.88 per square yard; $5.00 carpeting for $1.00 per

square yard; and $6.00 carpeting for $1.50 per square

yard,

A BBB staff member visited the company's place

of business at approximately 9:30 A.M, on Monday,

October 21, 1974 and was advised that all three of

the low-cost specials had been gold out between 8:30

and 9:30 A.M., the first day the sale began! !

The company, which began operations locally during

October, 1973 has been the subject of a number of

consumer complaints, And, about one-half of the com-

plaints which the Bureau has received to date have

alleged non-availability of advertised bargains,

CHILDISH

Do you remember the little boy who used to brag

that his father was so strong he could beat up all the

other fathers in the neighborhood?

Apparently, this little boy has grown to manhood

and is now writing advertising claims that he under-

sells all other stores, Nobody has prices lower than his,

whether it be for drugs, groceries, tires, carpeting or

stereo equipment.

Childish? Yes. And it’s regrettable that we have to

see and hear sv much advertising that has been con-

demned not only by all Better Business Bureaus but

also by the Federal Trade Commission. It is impossible

for any advertiser to have complete and accurate

knowledge of all prices in all other stores at all times.

In the Baton Rouge Area, the BBB finds that com-

petitors generally meet and beat all such advertised

“lowest prices in town”,

The Better Business Bureau urges you not to be

fooled by “Never Undersold” claims, Look around

You are very likely to find equal or better bargains

and better service elsewhere.

As has been the Bureau's policy in the past, when

voluntary self-regulation by business has failed, the

problem is then referred to the appropriate govern-

metal agency with a request that an investigation be

made, Therefore, the problems which the Bureau has

been unable to get resolved on a voluntary basis with

ECONOMY CARPETS MANUFACTURERS AND

DISTRIBUTORS, INC. are now being referred to Mr.

Charles Tapp, Director of the Governor's Office of

Consumer Protection, We are hopeful that he, along

with legal assistance from the Attorney General's Of-

fice will be able ‘o obtain proof of accuracy of adver-

tised claims... or... demand corrective changes if

and where required.

wrOD FOR MeMaEerns

AND THlIty

ve ; Hy

VETER BESISNESS BEREAT

of Daten Mouge Area, Ine,

KROL TER, Par stor

P.O. Box 288

Baton touge, Louisiana 70821

105

"APPENDIX B-1"

BBB v. Economy Carpets

February, 1977

JURY CHARGE

Ladies and gentlemen, you have

heard the testimony and argument of

counsel. It now becomes my duty to char-

ge you as to the law in this case. It is

your duty to take the law as I charge it

to you.

You are the exclusive judges of the

evidence and the credibility of the wit-

nesses. I am not permitted to comment

upon what has or has not been proven or

upon which witnesses you should believe

or should not believe. In judging the

credibility of any witnesses, you should

take into consideration his or her bear-

ing on the witness tand, his or her

capacity or opportunity for making

accurate observations and any interest

he or she may have in the outcome of

106

the case.

In criminal cases the State must

overcome the presumption of innocence and

prove the accused guilty beyond a reason-

able doubt. In a civil case, such as this

one, the rule is different. There are

no presumptions, but the burden is on the

plaintiff to prove his case and every

essential element thereof to your

reasonable satisfaction by a clear pre-

ponderance of the evidence.

A preponderance of the evidence does

not mean that the plaintiff must have a

greater number of witnesses, for it is

within your power to believe one witness

and disbelieve all of the rest. It is

sufficient, if after you have analyzed

all of the evidence offered by both

sides, giving due consideration to the

physical facts in the case, you find

that the weight of it is in favor of

107

the plaintiff. The preponderance of the

evidence is that evidence which carries

the greatest weight with you. It is the

evidence that accords with the best

reasoning and probability. laintiff is

not required to prove his case beyond a

reasonable doubt. He merely has to

establish by all of the evidence that he

presents that his version of the facts

is more probable and more reasonable.

Take an imaginary scale. Weigh

the evidence in accordance with the rule

that I give you, and if the evidence pre-

ponderates ever so slightly that the

plaintiff has made out his case by a

preponderance of the evidence, then

judgment will be in his favor because he

has discharged the duty placed upon him

by law. Conversely, if he has not, and

the scale goes the other way or remains

evenly balanced, he has failed and his

ee ee ee eee

108

Suit against this defendant should be

dismissed. The decision must be based

solely and exclusively on the evidence in

this case, evidence you have heard this

week from this witness stand together

with any documents that were received

into evidence.

You have heard the testimony of ex-

perts. Experts are persons who are

learned in a particular science, and they

are permitted to express their opinion

upon scientific matters at issue. A per-

son may become an expert through years

of training and experience and endeavor

in a particular line or field of work.

Those who are learned in a particular

field are permitted to express their

Opinions on the questions involved, but

they are not called into court for the

purpose of deciding the case. You, the

jurors, are the ones who in law must

109

bear the responsibility of deciding the

case. Experts are merely witnesses, and

you have the right to either accept or

reject their testimony and opinions in

the same manner and for the same reasons

for which you accept or reject the testi-

mony of other witnesses in the case. In

giving their opinions, experts should

state the facts upon which their opinions

are based and the value of an opinion of

an expert witness is dependent on the

existence of facts upon which it is pred-

icated. No material weight or credit

may be given such testimony without

proper foundation and facts to support

that testimony. The weight and credi-

bility you apply to the expert witness

is solely within your province and is

governed by your decision which you may

properly base upon the stated qualifica-

tions and opportunity for knowledge in

ee —

110

the particular field of the expert testi-

fying.

There are two kinds of evidence:

Direct evidence and circumstantial evi-

dence. Direct evidence is evidence

given by witnesses of facts they have

actually seen, heard or experienced

directly proving a fact in dispute. Cir-

cumstantial evidence is evidence of facts

or circumstances from which the jury con-

cludes that certain other facts are true

which prove a fact in dispute,

To illustrate the difference, I will

use the following example:

Suppose the fact in dispute is

whether or not a person entered a cer-

tain house. As an example of circum-

stantial evidence, a witness may testify

that he heard a door slam and saw a light

in the house go on. From the fact that

the door was heard to slam and the lights

went on, the jury might conclude that

111

sc xeone entered the house.

‘Dieéer evidence of such an occurrence

would be a witness testifying that he

actually had seen someone enter the

house. Note the difference. With cir-

cumstantial evidence the conclusion that

someone entered the house is reached from

the circumstances of a witness having

heard the door slam and having seen the

lights go on. With direct evidence the

jury might conclude that someone entered

the house because a witness actually saw

the person enter the house.

In arriving at a verdict, you are to

consider only the evidence which has been

presented to you during the trial of this

case, You have no right to consider any

fact relating to this case which may have

come to your knowledge through any other

means.

In presenting their arguments to the

jury, the attorneys who are participating

SS eee

in the trial may discuss the facts as

well as the law, and in discussing the

evidence, it is proper for them to state

to you the conclusions which they have

reached as to what facts have been proved

and what facts have not been proved, A

statement made by a lawyer during the

course of his argument relating to the

facts in this case does not constitute

evidence or proof of those facts, and it

is not to be considered by you as evi-

dence, It is simply the lawyers'

interpretation of what the evidence es-

tablishes. You, of course, should care-

fully consider all of the arguments pre-

sented by counsel, and then with equal

care you should analyze the evidence pre-

sented during the trial upon which those

arguments are based,

Counsel also may argue to the jury

their interpretation of the laws

113

applicable to the case. If the law, as

interpreted by counsel in their arguments,

however, differs from the law as I give

it to you, you must accept the law as

given :o you by me as being the correct

law applicable to the case,

In giving these instructions, it is

not my purpose to place special emphasis

on any one principle of law You are not

to single out any particular sentence or

any specific instruction and ignore the

others, but you are to consider all of

these instructions as a whole and to re-

gard each in the light of all of the

others.

You cannot be governed by passion,

prejudice, sympathy or any motive what-

ever except a fair and impartial con-

sideration of the evidence. You must

not, under any circumstances, allow any

sympathy which you may have or entertain

for the plaintiff or defendant to

114

influence you to any degree whatsoever in

arriving at your verdict.

You must remember that all corpora-

tions are entitled to the same fair test

in your hands as a private individual be-

cause the law is no respector of persons,

All persons, including corporations and

insurance companies, stand equal before

the law and are to be dealt with as equals

in a court of justice.

Plaintiff in this case has alleged

two different actions: (1) a conspiracy

by defendant in restraint of trade and,

(2) defamation by defendant in its publi-

cation of P-1, the special bulletin of

October, 1974,

The court will charge you relative

to conspiracy, as follows:

Every contract, combination in the

form of trust or otherwise, or conspiracy,

in restraint of trade or commerce in this

state is illegal,

115

No person shall monopolize, or at-

tempt to monopolize, or combine, or con-

spire with any other person to monopo-

lize any part of the trade or commerce

within this state.

Ail combinations and arrangements

for the purpose of unlawful stifling or

restriction of competition, or which may

probably have that effect, are against

public policy and unlawful.

The essential elements of a civil

conspiracy are (l) two or more persons,

(2) an object to be accomplished, (3) a

meeting of the minds on the object or

course of action, (4) one or more unlaw-

ful or overt acts, and (S) damages proxi-

mately resulting therefrom. In order to

find the Better Business Bureau of

Baton Rouge Area, Inc., conspired again-

st plaintiff, you must, therefore, find

that there was a meeting of the minds

between Better Business Bureau of Baton

Rees a OB aE

116

Rouge Area, Inc., and these other persons

on the object or course of action, that

there was an unlawful or overt act and

that plaintiff sustained damages result-

ing therefrom.

It is not necessary to show that the

members a conspiracy expressly bound them-

selves each with the other to estab-

lish and maintain a monopoly, but it is

sufficient if it is shown that they acted

together in pursuance of a common object;

in other words, an agreement or contract

in a technical sense need not be shown.

An "overt act’ as the term is used

in civil conspiracy proceedings, is

something apart from a conspiracy, and

is an act which must accompany or follow

the agreement and must be done in fur-

therance of, in design to carry out, the

purpose or object of the conspiracy.

A combination or agreement which

results in restraint of trade is illegal

117

whether the result is accomplished by

the acts of each individual, acting on

his own account, in doing as he has agreed

to do, or by the joint action of all par-

ties to the combination.

The size and power of a combination

or corporation does not of itself render

it an unlawful trust or combination,

However, the utilization of group power

to eliminate a competitor who is equipped

to compete has been said to defeat or

thwart the purpose of the anti-trust

.aws to secure equality of opportunity.

A combination illegally to restrain

competition is not justified or relieved

from invalidity and illegality because

it also seeks to eliminate fraud or

other undesirable practices.

A conspiracy, like any other fact,

must be established by a preponderance

of the evidence. That requirement has

= SS res se ee +

—

ea. ee a

Be Sa he ST

118

heretofore been explained to you.

119

DEFAMATION

I will now charge you on the law of

defamation. Defamation is the publica-

tion of any false and unprivileged writing

which tends to expose a person to con-

tempt, hatred, ridicule or obloquy; or

which causes a person to be shunned or

avoided; or which has a tendency to de-

prive him of the benefits of public con-

fidence or injure him in his occupation,

and includes almost any language which

upon its face has a natural tendency to

injure the person's reputation, either

generally or with respect to his occupa-

tion. The intent and meaning of an

alleged defamatory statement must be

gathered not only from the words singl-

ed out as libelous but from the: context

as well, and the true meaning must be

ascertained from a consideration of all

parts of the statement as weil as the

circumstances of its publication. The

ne RO

120

test is the effect the article is fairly

calculated to produce and the impression

it would naturally engender in the minds

of the average persons among whom it is

intended to circulate.

A mere insinuation is as actionable

as a positive assertion, if the meaning is

plain; and if the words used, when taken

in their ordinary acceptation convey a

degrading imputation, no matter how indir-

ectly, they are libelous -- it matters not

how artfully their meaning is concealed

or disguised.

The essential elements of a defama-

tion action are as follows:

1. defamatory words;

Be publication, that is, commun-

1cation to some person other

than the one defamed;

os £ebsity:

S. ‘taakts

5. resulting damages.

Before returning a verdict for

121

Economy Carpets, you must find that all of

the above elements have been proven.

Truth is an absolute defense to an

action for defamation; therefore, if you

find the material contained in the Special

Bulletin of October, 1974, is true, you

must return a verdict for the defendant,

Better Business Bureau of Baton Rouge

Area, Inc.

In any civil suit for slander,

defamation, or for a libel, instituted

in any court of this state, it is lawful

for the defendant to plead in justifica-

tion the truth of the slanderous, defama-

tory or libelous words or matter, for the

uttering or publishing of which he may

be sued; and in the trial of the issue in

such suit, to maintain and prove his plea

by all legal evidence.

Fault is defined as the failure to

do something whic. would be the legal

duty of a prudent and reasonable person

122

co do, or the doing of something that

would be the legal duty of a prudent and

reasonable person not to do.

The final portion of this charge is

concerned with the question of damages.

Of course the fact that I instruct you on

damages does not indicate that damages

are due. I charge you on the entire case

on the question of liability and on the

question of damages. If you find no lia-

bility, of course you need not concern

yourself with damages, but if you do find

liability you will then proceed to the

question of damages. Now, under Louisi-

ana law it is stated, "Every act whatever

of man that causes damage to another ob-

ligates him by whose fault it happened to

repair it." This article contemplates

simple reparation, a just and adequate

compensation for injuries. It suggests

no idea of revenge or punishment. In

123

estimating damages in cases of this kind

you must take into consideration the

following elements: loss of business--

past, present and future, loss of good

will, loss of business, reputation. The

burden of proof is upon the plaintiff

claiming damages to prove each element of

damages by a preponderance of the evi-

dence, which you will recall has already

been defined as being such evidence as

when considered and compared with that

opposed to it has more convincing effect

and produces in your mind the belief that

what is sought to be proved is more likely

true than not true. Bear in mind that

damages must be reasonable. In the

event that your verdict is for the plain-

tiff in this case you must award him only

such damages as will fairly and reasonably

compensate him for the damages which you

find. You are not permitted to award

speculative damages. This means that you

124

are not to include in any verdict compen-

sation for prospective loss which, al-

though possible, is wholely remote or

conjectural; however, damages are not

speculative merely because they cannot be

computed with mathematical exactness if

under the evidence they are capable of a

reasonable approximation. You will be

the judge of the value of these damages.

It is difficult to translate damages to

dollars and cents, but under our system

of law that is the only way to compen-

sate a person. Consequently, it is your

function to translate damages awarded in-

to dollars and cents. Argument of counsel

is not to be considered as evidence as to

damages. You must not include in what

would be an otherwise just award any-

thing for punishment or anything for the

payment of court costs and attorney's

fees insofar as the defamation is con-

cerned. These are not elements of

125

damage. Regarding the conspiracy, the law

provides that any person who is injured

in his business or property may sue in

any court of competent jurisdiction and

shall recover threefold the damages sus-

tained by him, the cost of suit, and a

reasonable attorney's fee.

If you should find that Economy Car-

pets Manufacturers and Distributors, Inc.,

has proved all of the elements of defama-

tion, you may award only those damages

which plaintiff has proved, and which are

sufficient to compensate him for actual

injury. Actual injury includes, but is

not limited to out-of-pocket loss. The

customary types of actual loss inflicted

by defamatory falsehood include impair-

ment of reputations and standing in the

community, personal humiliation, and men-

tal anguish and suffering.

In no case can you award damages

designed to punish the Better Business

Sitio

oe .

126

Bureau, if you should find its actions

defamatory. All damage awards must be

supported by competent evidence concern-

ing the injury.

Now, there are twelve of your num-

ber. It requires nine to find a ver-

dict. Heretofore you have been instruc-

ted that you could not discuss the case

even among yourselves. It will be your

duty, each of you, to listen to the dis-

cussion and the opinions of your fellow

jurors. If there are differences of opin-

ion in the appraisement of the evidence

or in any other phase submitted to you

for consideration you should make every

reasonable effort to reconcile the

differences if you can conscientiously

do so. It is your duty to find and to

return a verdict and when nine of your

number are of the same opinion about

this case, that ends your deliberation

and what that opinion is will be the

127

verdict.

I will leave with you the special

verdict form, which provides

ns ee ee

128

February, 1977

CONSPIRACY

1. Did the Better Business Bureau of

Baton Rouge Area, Inc., conspire with any-

one, named or unnamed, according to the

law as I have previously recited, to re-

strain trade and/or commerce as it might

affect the plaintiff?

YES NO

2. If your answer to question one

is yes, determine the damages to plaintiff

resulting from any conspiracy, according

to the following test: threefold the

damage and cost of suit and a reasonable

attorney's fee.

DEFAMATION

1. Was the "Special Bulletin, dated

October, 1974, published by the Better

Business Bureau, defamatory as regards

the plaintiff?

YES NO

129

2. If your answer to question one is

yes, was the publication true?

YES NO

3. If your answer to question one

is yes and question two is no, was the

Better Business Bureau at fault in publis

ing said "Special Bulletin"?

YES. NO

4. If your answer to question one

is yes, question two is no, and question

three is yes, then was the plaintiff dam-

aged .s a result of said publication?

YES NO

5. Determine the amount of damages

plaintiff sustained if your answer to

question 4 is yes.

FOREMAN

130

When you begin to deliberate, it will

be your duty, each of you, to discuss the

issues of this case among yourselves. It

will be your duty, each of you, to listen

to the discussion and the opinions of your

fellow jurors. If there is a difference

of opinion in the appraisement of the evi-

dence or in any other phase submitted to

you for consideration, you should make

every conscientious effort to reconcile

any differences, if you can conscientiou-

sly do so. It is your duty to find and

to return a verdict, and when nine of

your number are of the same opinion as to

your verdict or the answer to a particul-

ar interrogatory that ends your delibera-

tion as to the verdict or as to the ans-

wer to that particular quescion, and you

should pass on to the next one,

Article 1794 of the Code of Civil

Procedure provides as follows:

131

"In reaching a verdict, the jurors

must rely upon their memories, and

when they retire to the jury room

to deliberate, they shall not be

allowed access to any written evi-

dence or any notes of the testimony

of any witness, but may take with

them any object or document received

in evidence which requires a physi-

cal examination to enable them to

arrive at a just conclusion."

Again, let me use this illustration.

Take an imaginary scale and weigh the

evidence in accordance with the rule I

have given you. If the evidence prepon-

derates ever so slightly so that the

plaintiffs have made out their case by a

preponderance of the evidence, then judg-

ment should be in their favor because

they have discharged the duty placed upon

them by law. Conversely, if they have

not, and the scale goes the other way or

remains evenly balanced, then they have

failed and their suit against these defen-

dants should be dismissed.

The first thing you do when you re-

tire to deliberate is to select from your

132

number a foreman. This is a term we have

used for years, and 1 do not mean to imply

that the foreman has to be a male. Any-

body on the jury can be the foreman to

represent you in returning the verdict and

signing the verdict form.

133

"APPENDIX B-2"

ECONOMY CARPETS MAN- NO. 181,734, DIV. D

UFACTURERS AND DIS-

TRIBUTORS, INC. 19TH JUDICIAL DIS-

TRICT COURT

VS.

PARISH OF EAST BA-

BETTER BUSINESS BUR- TON ROUGE

EAU OF BATON ROUGE

AREA, INC., ET AL

kt ok k oo

STATE OF LOUISIANA

* ee ak ee ay ae

* *

JUDGMENT IN JURY TRIAL

This cause having been duly tried

before and submitted to the jury and the

jury having returned a verdict, on Febru-

ary 4, 1977, in words and figures as

follows:

"February 4, 1977.

CONSPIRACY

1. Did the Better Business Bureau

of Baton Rouge Area, Inc., conspire

with anyone, named or unnamed, accor-

ding to the law as I have previously

recited, to restrain trade and/or

commerce as it might affect the

plaintiff?

YES NO x

2. If your answer to question one

is yes, determine the damages to

plaintiff resulting from any con-

Spiracy, according to the rollowing

134

tests: threefold the damage and cost

of suit and a reasonable attorney's

fee.

DEFAMATION

1. Was the 'Special Bulletin, dated

October, 1974, published by the Better

Business Bureau, defamatory as re-

gards the plaintiff?

YES x NO

2. if your answer to question one is

yes, was the publication true?

YES NO x

3. If your answer to question one

is yes and question two is no, was

the Better Business Bureau at fault

in publishing said 'Special Bulletin'?

YES x NO

4. If your answer to question one

is yes, question two is no, and

question three is yes, then was the

plaintiff damaged as a result of said

publication?

YES Xx NO

5. Determine the amount of damages

plaintiff sustained if your answer

to question 4 is yes.

$1,000 ,000.00

s/ eo ae P, Loupe"

135

IT IS ORDERED, ADJUDGED AND DECREED

that the said verdict be and it is hereby

made the judgment of this court and accord-

ingly the defendant, Better Business Bur-

eau of Baton Rouge Area, Inc. is hereby

condemned to pay to the plaintiff, Econ-

omy Carpets Manufacturers and Distri-

butors, Inc, the sum of One Million and

No/100 ($1,000,000.00) Dollars, with

interest at the rate of seven (7%) per

cent per annum from the 9th day of May,

1975, and all costs of these proceedings.

JUDGMENT READ AND SIGNED, at Baton

Rouge, Louisiana, on this 7th day of

February, 1977.

s/Melvin A. Shortess

DISTRICT COURT

we a ee SE et

136

"APPENDIX B- 3"

ECONOMY CARPETS AND NO. 181,734, DIV. D

MANUFACTUERS, INC,

19TH JUDICIAL DIS-

VS. TRICT COURT

BETTER BUSINESS PARISH OF EAST BAT-

BUREAU OF BATON ON ROUGE

ROUGE AREA,

INC. STATE OF LOUISIANA

WRITTEN REASONS FOR JUDGMENT

This is a defamation case. The pla-

intiff brought the action to recover for

alleged defamatory statements contained

in a special bulletin issued by the defen-

dant in October of 1974. The statements

in question were essentially allegations

that advertising claims made by the pla-

intiff corporation concerning its status

as a manufacturer of large amounts of

Carpet were false and misleading. At

trial of the matter beginning January 31,

1977, a jury returned a verdict of

$1,000,000.00 in favor of the plaintiff,

The plaintiff applied for and timely

perfected an appeal from this verdict.

137

After the plaintiff's appeal was perfec-

ted, but within the delays allowed by law,

the defendant applied for a new trial.

This court ruled chat under the govern-

ing articles of the Code of Civil Proce-

dure, it had lost jurisdiction of the case

when the plaintiff's appeal was perfec-

ted. The First Circuit, Court of Appeal,

on application of the defendant, granted

alternative writs ordering this court to

hear the motion for new trial or show

cause why it should not. The motion was

heard and this court granted the new tri-

al as to the issue of damages only. The

parties have stipulated that the issue

be tried to the court on the record,

without a jury.

For purposes of this proceeding,

the court is bound by the findings of

the trial judge as to liability.*

¥(Liability was decided prior to

138

Therefore, the court assumes that a defa-

mation occurred. The only issue is quan-

tum. The court is not bound by the find-

ings of the jury as to which particular

damages, if any, were caused by the defa-

mation, nor as to the extent of such

damages. The court is also not sitting

in review of the jury's award, but is

assessing damages as if no award had

been made. This proceeding is in the

nature of a new trial as to quantum, not

an appeal.

Two types of damages are pertinent

in a defamation case: general and

special. Special damages are those whi-

ch are unique to the plaintiff and

which are specifically linked to the

defamation. General damages are those

the recent pronouncement of the Louisi-

ana Supreme Court in Mashburn vy. Collin,

So.2d (La. 1977), wherein First

endment fair Comment guidelines were

articulated for Louisiana Courts.)

139

which are gauged simply on the basis that

a defamation has occurred, Such damages

are not the same as punitive damages

which can only be awarded under the author-

ity of Article 2315.1 of the Civil Code.

This article was enacted in 1976, well

after the defamation herein took place,

and the court feels that it should not be

given retroactive effect. Therefore,

punitive damages are not at issue.

Another category of defamation dam-

ages pertinent to this case was set forth

by the U. S. Supreme Court in Gertz v.

Robert Welch, Inc., 418 U.S. 323 (1974).

One holding of that case is that where a

court is dealing with public speech that

comes within the reach of the First Amend-

ment to the U.S. Constitution, unless the

plaintiff proves, "malice" under the New

York Times v. Sullivan, 376 U.S. 254

————= = ©

(1964) test, he cannot recover punitive

damages or presumed damages. A plaintiff

a ee

140

who Cannot prove the defamatory statement

were made with knowledge of their falsity

or with reckless disregard for their

truth or falsity must show "actual inju-

ry,'' which is not the same thing as spec-

ial damages, but which does require some

showing of actual harm.

In considering defamation damages

generally, the court notes at the outset

that the plaintiff's burden of proof,

though still based on a preponderance of

evidence standard, is heavier than in

ordinary civil cases. Ward v. Sears

— - - ’

Roebuck Company, 339 So.2d 1255 (La.App.

Ist Cir. 1976). The plaintiff must meet

this burden in proving each element of

Claimed damages. Recovery is limited to

an award that will fairly and reasonably

compensate it for proven injury. Remote,

conjectural or speculative damages are

not compensable,

SPECTAL DAMAGES

141

The plaintiff has alleged three items

of special damages:

1. Lost profits from a contract

with Scotty Wood;

2. Lost profits from business not

done with the State of Louisiana; and

3. Lost profits from business gen-

crally.

Plaintiff's proof of the alleged

special damages consists of the testimony

of Jesse J. Jarreuu, John W. Chisholm,

Scotty Wood, and Paul A. Hayes, Jr.,

together with copies of pages from and

extracts of business ledgers, income tax

returns,and sales tax returns. Other

evidence relevent to the damages issue

that wus not produced by the plaintiff

but which was under its control included:

the alleged written contract with Scotty

Wood; any written evidence of $100,000

to $125,000 in contracts with the State

of Louisiana in 19743; any testimony from

———

. Ee. - -

142

the President of the plaintiff corpora

tion, Joyce Langlois; the complete set

of ledgers for the business detailing cash

receipts, costs of materials, labor, ad-

vertising and other expenses; the com-

plete 1975 income tax returns; and fin-

ally, any evidence of sales made in

interstate commerce. Failre of the

plaintiff to produce evidence wholly

within its control creates a presumption

that the probative value of the evidence

would be adverse to plaintiff's position.

Loewer v. Vanderhider, 336 So.2d 1011

(La.App. 3rd Cir. 1976); Tillman v. Canal

Insurance Company, 305 So.2d 603 (La.App.

ist Cir. 1974).

I. The Contract with Scotty Wood

The plaintiff's proof as to its con-

tract with Scotty Wood consists of: (1)

testimony by Wood to the effect that he

and Economy Carpets had a contract for

143

$360,000; that plaintiff's profit would

have been between $72,000 and $90,000;

that the contract was written on one of

Economy Carpet's bills of lading; that

because of the allegations contained in

the defendant's "Special Bulletin," Wood

wanted to get out of the contract; that

he contacted Jesse Jarreau for that pur-

pose; and that after ''some words" were

exchanged over it, Jarreau agreed to let

Wood out of the contract; (2) testimony

by Jarreau basically confirming what

Wood had said about the contract.

Mitigating against plaintiff's re-

covery on this item is the fact that the

alleged contract was never produced by

cither Wood or Economy Carpets.

This testimony at its best indicates

that the parties had a valid contract

but that Economy Carpets agreed to can-

cel it on Wood's request. The plain-

tiff's failure to product the written

Lae

ee - oe

144

document creates a presumption adverse to

its position. Taken cumulatively and

considered in light of the heavier bur-

den imposed on the plaintiff in this case,

the proof adduced is insufficient to

Clearly establish that the plaintiff and

Scotty Wood had a contract, what was the

exact nature of any such contract, and

that the contract was breached because

of the defamatory actions of the defen-

dant.

The defense was that Jarreau volun-

tarily cancelled the contract with Wood

and has not sought to enforce the con-

tract by legal action or otherwise.

This is a causation argument to the

effect that the cause of the breach of

the contract wus not the defamation, but

Jarreau's own decision. The counter

argument is that but for the defamation,

Jarreau would never have been placed in

the position of having to choose between

145

rescission of the contract and legal act-

ion to enforce it. The defamation may

qualify as a cause in fact of the cancel-

lation. However, plaintiff's proof leaves

too many other questions unanswered and

too many allegations unverified for such

proof to form the basis of an award of

special damages. What was the exact na-

ture of the contract? What was its gross

value? What was Economy Carpets' exact

profit to be? It is the plaintiff's bur-

den to answer such questions. The burden

has not been carried in this instance.

II. State Business

The plaintiff's proof as to this

claim consists of testimony by Jesse

Jarreau and Paul A. Hayes, Jr., Assis-

tant Commissioner of Administration of

the State of Louisiana.

Jarreau testified that he had done

$100,000 to $125,000 worth of business

with the State during 1974, and that in

146

October of that year he was told not to

apply to be on the State Bidders Mailing

List by Hayes, because of the "turmoil"

surrounding the BBB's Special Bulletin.

Hayes said that he discouraged Jar-

reau from applying to be on the Mailing

List because he did not want to get into

a lawsuit; that he did not know if Econ-

omy Carpets had ever applied to be on the

Bidders Mailing List prior to October of

1974; and that Economy Carpets did not

fill out an application until August 12,

1976.

This claim fails for several reasons:

1. Jarreau's claim of prior State

business is not supported by any evidence,

such as written contracts, bank deposits,

ledgers, or cancelled checks, and is in

fact refuted by State sales tax returns

for 1974, 1975, and for the months of

January through May, 1976, which contains

absolutely no evidence of sales to the

147

State, which sales would have been exempt

from sales tax.

2. Even it it were assumed that

Jarreau's testimony about prior State bus-

iness is correct, it indicates that not

being on the Bidders Mailing List does not

prevent a party from doing State business

since the evidence is that Economy Car-

pets was not on the Mailing List prior to

August of 1976.

3. The evidence is not that Economy

Carpets was prohibited from being on the

Mailing List or bidding on State jobs,

but that Jarreau was discouraged from

applying by Hayes.

4. Neither being discouraged from

applying to be on the List nor being pro-

hibited from applying to be on the list

prevents a party from learning of State

jobs through newspaper or official jour-

nal notices and bidding on such jobs.

5. Even assuming that the plaintiff

148

had shown that it had done business with

the State prior to 1974, and had been more

or less prevented from being on the Bid-

ders Mailing List because of the influence

of the Special Bulletin, the plaintiff has

made no proof that had it not been so

prevented, it would have submitted bids

on State jobs, would have been the low-

est responsible bidder on such specific

jobs, and finally, would have secured any

specific job which generated a profit.

iii, Loss of Profits

The proof of this claim consists of

testimony by Dr. John Chisholm, plain-

tiff's economic expert. Dr. Chisholm

stated that after examining the plain-

tiff's records, he concluded that sales

for 1974 were $354,000; sales for 1975

were down to $147,000; and sales for 1976

were down to $142,000. He projected on

the basis of this date that the plaintiff

would need sales of $3,664,000 to recover

149

from this three-year loss in business.

The profits on such sales would range be-

tween $732,800 and $916,000, based on a

profit margin of between 20% and 25%, he

said.

Dr. Chisholm's testimony is sharply

contradicted by the testimony of the

defendant's expert in the field of certi-

fied public accounting, James M. Harris.

Harris said that his analysis of the

plaintiff's records showed nothing to

substantiate Dr. Chisholm's projection.

lie further said that based on the finan-

cial history of Economy Carpets, it

would be incorrect to project a growth

trend in the business. He said a "down-

ward trend'' would be a more correct

projection.

Dr. Chisholm's testimony is of dub-

ious value as proof of special damages.

He testified that his projections and

conclusions were only as accurate as the

150

data furnished to him. His original tes-

timony at trial was based on a recapitu-

lation of sales prepared by some other

party. After objections were made and

sustained, the witness was excused to

allow him time to examine the plaintiff's

records himself. He testified the next

day that he had examined the ledger of

Economy Carpets and verified the figures

in it for 1975 and 1976 sales by compar-

ing those figures to the sales tax

returns for the same years. He said he

was not furnished the sales tax returns

for 1974. On cross examination it was

shown that the 1974 sales tax return in-

dicated sales of $191,024.85, while the

ledger indicates sales of $354,683.71.

Dr. Chisholm said he had relied on the

ledger entry in making his projection

and that his analysis would have been

dramatically different if he had had the

figures from the 1974 sales tax returns.

151

Dr. Chisholm also said that his pro-

jections as to the amount of business it

would be necessary for Economy Carpets to

do in the years subsequent to 1976 for

the corporation to reach its 1974 level

of business (which level is apparently

based on questionable information) was

based on his assumption that the corpora-

tion's business would increase at a rate

of 5% per year. When questioned as to

how he could make such an assumption in

the fact of 1974 income tax records

showing a business loss for the corpora-

tion, he answered that his assumption of

5% annual growth was based on the possi-

bility that such growth would occur. He

also admitted that it was equally possi-

ble that plaintiff would go out of busi-

ness during that time.

At best, Dr. Chisholm's projection

of lost profits is based on inaccurate

and unreliable data. At its worst, his”

testimony deals in possibilities, where

the court must deal

opinion is directly contradicted by an

expert of at least equal credibility.

The law applicable to recovery of

in probabilities.

damages for lost profits is clear:

"Any loss of earnings or profits

from plaintiff's business occas-

ioned by his personal injuries

resulting from the accident may

of course be recovered from the

tort feasor or her insurer, if

proved with sufficient certain-

i."

However,

"An uncorroborated general esti-

mate by a plaintiff as to his

loss of earnings or profits is

not sufficient proof of such loss,

where corroborative evidence is

shown to be available and is not

produced."

Jenkins v. Audubon Insurance Co

TT0 So.20 221

Ot oS

la. \pp vet Cir

His

153

profits, if any, is speculative. The

proof therefore jacks the sufficient cer-

tainty required,

GENERAL DAMAGES

General damages are all those which

may be awarded in a defamation case other

than special, pecuniary damages. All such

damages are compensatory. No punitive

damages are pertinent in this case. As

noted above, this court feels that Civil

Code Article 2315.1 should not be given

retroactive effect because this amendment

worked a substantive rather than proced-

ural or remedial change in the law.

Proper elements of general damages

are mental anguish, humiliation, embarr-

assment and loss of reputation. Such

damages are compensable even when there

is no showing of special damages. Sas

Jaworsky v. Padfield, 211 So.2d 122 (La.

App.3rd Cir. 1968), Kennedy v. Item

154

Company, 34 So.2d 886 (La. 1948). The

jurisprudence indicates the general no-

tion that any slur to the reputation of

the victim that would significantly

injure him in the eyes of the community

in any fashion is actionable.

An initial question is whether or

not a corporation, like the plaintiff in

this case, can suffer secerat damages,

and if so, what type of such damages may

it suffer. The courts of this State have

apparently not made any distinction be-

tween a corporate plaintiff and a pri-

vate plaintiff in this regard. Even

though the question has never been square-

ly posed, it has also not been raised by

a court in cases where the plaintiff was

a corporation. The jurisprudence has

been framed in terms of damage recover-

ies possible to a "victim" of defama-

tion. Since a corporation may be a vic-

tim of defamation, it may recover all

155

damages necessary to compensate it for

its loss as could any other victim. Htow-

ever, since a corporation is an artifi-

cial person, it cannot suffer mental

anguish, humiliation, or embarrassment.

It can suffer loss of reputation, but

such loss should logically be limited to

its business reputation.

Such a limitation on an award of

general damages comports with the Gertz

v. Robert Welch, Inc., requirement of

"actual injury" in First Amendment cases

where New York Times "malice" has not

been shown. The BBB "Special Bulletin"

comes within the guidelines of protected

free speech under the First Amendment.

It is not clear whether or not the jury

found New York Times "malic«c."' The

court's charge was to the effect that a

finding of defamation as a result of

"ftuult" was a sufficient basis of lia-

bility, and the jury may or may not have

— <_<

156

found "malice."’ However, for purposes of

an award of general damages, it makes no

difference whether the jury found malice

or not. The evidence is sufficient to

support a finding of "actual injury,"

since that term is defined in Geitz to

include, "impairment of reputation and

standing in the community," with the only

other requirement being that such impair-

ment of reputation or standing cannot be

presumed in the absence of proof.

(Restatement of Torts 2d, Sec. 621b).

The evidence for general damages

comes from the testimony of Jesse Jarr-

eau, Scotty Wood, and Paul A. Hayes, Jr.

While not sufficiently specific to sup-

port an award of special damages, the

testimony indicated a growing lack of

confidence in the ability and integrity

of the plaintiff corporation and its

personnel which can be linked directly

to the "Special Bulletin."

157

The final question is the amount to

be awarded. ‘The general law, as set for-

th in Sas Jaworsky v. Padfield, supra.,

and Kennedy v. Item Company, supra., is

that:

"The amount of damages to be

awarded in such a case is left

largely to the discretion of

the courts, taking into considera-

‘tion the severity of the char-

ges, the motives of the defamer,

the position of influence enjoyed

by the defendant, and the extent

of publicity which was given to

the defamatory statement."

In fixing the award, the court has

reviewed prior awards, but is guided

mainly by the unique facts of this case

in setting an award which is believed to

be fair and reasonable. Damages are

fixed at Thirty Thousand Dollars.

Judgment will be signed accordin-

gly.

BATON ROUGE, LOUISIANA, this 3lst

day of January, 1978.

s/ Melvin A. Shortess

JUDGE

158

"APPENDIX B-4"

ECONOMY CARPETS * NO. 181.734. D

MANUFACTURERS AND npn i i

DISTRIBUTORS, INC,

* 19TH JUDICIAL

VERSUS DISTRICT COURT

BETTER BUSINESS " PARISH OF EAST

BUREAU OF BATON BATON ROUGE

ale AREA, INC.,

IT AL ® STATE OF

JUDGMENT

This matter came before the Court

on the partial New Trial granted Defen-

dants on the issue of quantum only. The

parties stipulated that the quantum iss-

ue be tried by the Court on the record,

without a jury. The Court, after con-

sidering the pleadings, the evidence,

the argument of counsel, for Written

Reasons assigned on the 3lst day of

January, 1978,

IT IS ORDERED, ADJUDGED AND DECREED

that there be judgment herein in favor

of Plaintiff, Economy Carpets Manu-

facturers and Distriburors, Inc., and

— ee ce

160

159 APPENDIX "'C"

against the Defendants, Better Business SUPREME COURT OF LOUISIANA

Bureau of Baton Rouge Area, Inc. and St. New Orleans, 70112

LO NR

Paul Fire and Marine Insurance Company,

in the full and ECONOMY CARPETS MANU- September 29, 1978

jointly, and in solido, in FACTURERS §& DISTRIBU-

TORS, INC.

true sum of THIRTY THOUSAND AND NO/100 :

5 Vs.

DOLLARS ($30,000.00), with legal interest

BETTER BUSINESS BUREAU

thereon, from date of judicial demand, OF BATON ROUGE AREA,

INC., AND ST. PAUL FIRE

AND MARINE INSURANCE

COMPANY NO. 62,824

until paid, and for all costs of these

proceedings.

JUDGMENT RENDERED On January 31,

i In re: Economy Carpets Manufacturers and

1978. | Distributors, Inc., applying for

D SIGNED on this Certiorari, or writ of review, ‘

JUDGMENT READ AN to the court of Appeal First Cir

Suit Parish of East Baton Rouge,

8th day of Februqry, 1978,at Baton

Rouge, Louisiana.

/ Melvin A. Shortess Writ denied. The result is correct,

S rae >.

mai | JWS

DISTRICT COURT | vee

JAD

PFC

WEM

SUMMERS, J., would grant the writ.

DENNIS, J., is of the Opinion the writ

should be granted.

161

APPENDIX "D"

ECONOMY CARPETS MAN- STATE OF LOUISIANA

UFACTURERS §& DIS-

TRIBUTORS, INC. COURT OF APPEAL

VS.

BETTER BUSINESS BUR-

EAU OF BATON ROUGE

AREA, INC., AND ST. FIRST CIRCUIT

PAUL FIRE AND MARINE

INSURANCE COMPANY

NUMBER 11,748

x x x ba n x x ® ® &

CERTIFICATE OF LOUISIANA STATE COURT OF

APPEAL, FIRST CIRCUIT, AS TO EXISTENCE

OF A FEDERAL QUESTION

This Court hereby certifies that in

this appeal, it rendered judgment for

defendants on the basis of an opinion

privilege gleaned from decisions of the

Supreme Court of the United States and

the Supreme Court of the State of Louisi-

ana rendered under the First Amendment

to the United States Constitution. This

Court further certifies that writs of

certiorari were taken in this matter to

the Louisiana Supreme Court and that

said writs were denied and, therefore,

this Court is the highest Court in the

162

State of Louisiana which rendered a

decision and opinion in this case.

Respectfully submitted

on behalf of the Loui-

Siana Court of Appeal,

First Circuit:

Presiding Judge, a

Court of Appeal, First

Circuit, 222 St. Louis

Street, Baton Rouge,

Louisiana 70801

Phone: (504) 342-6920

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.