Petition — Cowles Communications, Inc. v. Alioto
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eve Court. U, §,
80-628 *TLED
—_" | wGl. 17 1980
MICHAEL RODAK, JR., CLERK
No.
In THE d
Supreme Court of the United States
Ocrosrer Term, 1980
—ae
2
~—~——-
COWLES COMMUNICATIONS, INC.,
Petitioner,
vs.
JOSEPH L. ALIOTO,
Respondent.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
Don H. Revsen
LAWRENCE GUNNELS
SAMUEL F'IFER
Micnaet A, Kaun
REUBEN & PROCTOR
11 South LaSalle Street
Suite 2001
Chicago, Illinois 60603
(312) 558-5500
Attorneys for Petitioner
Midwest Law Printing Co., Chicago 60601, Financial 6-3988
QUESTIONS PRESENTED
1. Whether the proper constitutional test of truth or
falsity in a public official’s libel action based on a
lengthy magazine article is substantial truth of the
article considered as a whole, or falsity in “one or more
particulars.”
2. Whether the trial court erred in instructing the
jury that it must find petitioner’s article false in one
particular because testimony to that effect was not con-
tradicted by admissible evidence.
3. Whether petitioner was denied its constitutional
rights to a trial and to a trier of fact’s determination of
the factual issue of whether the magazine article was
substantially true.
4. Whether the trial court properly concluded as a
matter of law that petitioner’s article was not sub-
stantially true because an isolated excerpt was held
untrue at a prior trial.
5. Whether the trial court erroneously held petitioner
guilty of actual malice, 7.e., recklessness, by (a) focusing
on one isolated excerpt of the magazine article rather
than considering the article as a whole and (b) making
an objective assessment of the credibility of a source
rather than a subjective analysis of the authors’ state of
mind.
ry
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iii
TABLE OF CONTENTS
PAGE
QUESTIONS PRESENTEL
TABLE OF AUTHORITIES
OPINIONS BELOW
JURISDICTION
STATEMENT OF THE CASE
REASONS FOR GRANTING THE WRIT .................
I.
The Finding Of ‘‘Falsity’’ Below Was Flagrant
Error On Which No Judgment Can Constitution-
ally Rest
A. Substantial Truth Of The Article As A Whole,
Rather Than Falsity In ‘‘One Or More Par-
ticulars,’’ Is The Correct Test
B. The District Court Compounded Its Error By
Directing The Jury To Find Falsity In One
Particular
C. Petitioner Has Not Waived Its Right To Chal-
lenge The Falsity Finding
II
The Substantial Truth, Or ‘‘Gist’’ Or ‘‘Sting,”’’
Holding Below Is Constitutionally Erroneous ........
Tit.
The Actual Malice Holding Was Arrived At
Through A Totally Erroneous Process
CONCLUSION
13
15
18
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iv
APPENDICES:
A—Opinion of the United States Court of Appeals
for the Ninth Cireuit, July 21, 1980 la
B—Opinion of the United States Court of Appeals
for the Ninth Circuit, June 23, 1975 9a
C—Memorandum Opinion of the United States Dis-
trict Court for the Northern District of Califor-
nia, May 3, 1977 l6a
D—September 23, 1969 Look Magazme Article en-
titled ‘‘The Web that Links San Francisco’s
Mayor Alioto and the Mafia: A Loox report on
the private Joseph Alioto and his shcasweaitice
with organized crime’’ 34a
TABLE OF AUTHORITIES
Cases
Aetna Insurance Co. v. Kennedy, 301 U.S. 389 (1937) .. 13
Alioto v. Cowles Communications, Inc., 519 F.2d 777
(9th Cir.), cert. denied, 423 U.S. 930 (1975) ................ 1,2
Alioto v. Cowles Communications, Inc., 430 F.Supp.
1363 (N.D. Cal. 1977)
Alioto v. Cowles Communications, Inc., 623 F.2d 616
(9th Cir. 1980) 1
Baldwin v. Redwood City, 540 F.2d 1360 (9th Cir. 1976) 14
Beckley Newspapers Corp. v. Hanks, 389 U.S. 81 (1967) 13
Brandenburg v. Ohio, 395 U.S. 444 (1969) wu... 10
Calhoun v. Bernard, 359 F.2d 400 (9th Cir. 1966) .......... 15
Casano v. WDSU-TYV, Inc., 464 F.2d 3 (5th Cir. 1972) .. 19
Cervantes v. Time, Inc., 464 F.2d 986 (8th Cir. 1972),
cert. denied, 409 U.S. 1125 (1973) 20
The Conqueror, 166 U.S. 110 (1897) 12
Electrical Fittings Corp. v. Thomas & Betts Co., 307
U.S. 241 (1939) 14
Emde v. San Joaquin County Central Labor Council,
23 Cal.2d 146, 143 P.2d 20 (1943) 8
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Vv
Gantry Construction Company v. American Pipe and
Construction Company, 49 Cal.App.3d 186, 122 Cal.
Rptr. 834 (1975) 9
Garrison v. Louisiana, 379 U.S. 64 (1964) 7
Greenbelt Cooperative Publishing Ass’n v. Bresler, 398
US. 6 (1970) 14
Guam Federation of Teachers, Local 1581 v. Ysrael,
492 F.2d 438 (9th Cir.), cert. denied, 419 U.S. 872
(1974) 5
Handelsman v. San Francisco Chronicle, 11 Cal.App.
3d 381, 90 Cal.Rptr. 188 (1970) 9
Haynes v. United States, 418 F.2d 1380 (Ct. Cl. 1969) . 15
Hearne v. De Young, 119 Cal. 670, 52 P. 150 (1898) ...... 9
Herron v. Rozelle, 480 F.2d 282 (10th Cir. 1973) .......... 14
Hodges v. Easton, 106 U.S. 408 (1882) 13
Hotchner v. Castillo-Puche, 551 F.2d 910 (2d Cir.),
cert. denied, 434 U.S. 834 (1977) 20
Jeffers v. Screen Extras’ Guild, Inc., 162 Cal.App.2d
717, 328 P.2d 1030 (1958) 9
Jenkins v. Georgia, 418 U.S. 153 (1974) 17
Johnson v. Zerbst, 304 U.S. 458 (1938) 13
Krasowski v. Greyhound Lines, Inc., 402 F.2d 445 (6th
Cir. 1968) 12
Kurata v. Los Angeles News Publishing Co., 4 Cal.App.
2d 224, 40 P.2d 520 (1935)
Lindheimer v. Illinois Bell Telephone Co., 292 U.S. 151
(1934) hes ae
Miller v. California, 413 U.S. 15 (1973) 10, 17
Montgomery Ward & Co. v. Duncan, 311 U.S. 243
(1940) 15
Mortensen v. Los Angeles Examiner, 112 Cal.App. 194,
296 P. 927 (1931)
National Association of Letter Carriers v. Austin, 418
U.S. 264 (1974) 14
New York Times Co. v. Sullivan, 376 U.S. 254 ( 1964) ..
7, 9, 10, 11, 14, 18, 19
Oberman v. Dun & Bradstreet, Inc., 507 F.2d 349 (7th
Cir. 1974) 15
Ohio Bell Telephone Co. v. Public Utilities Comm’n.,
301 U.S. 292 (1937) 13
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vi
Orr v. Argus-Press Co., 586 F.2d 1108 (6th Cir. 1978) . 19
Pauling v. Globe-Democrat Publishing Co., 362 F.2d
188 (8th Cir. 1966), cert. denied, 388 U.S. 909 (1967) 19
Powers v. Continental Casualty Co., 301 F.2d 386 (8th
Cir. 1962) 12
Quercia v. United States, 289 U.S. 466 (1933) 12
Regina v. Hicklin [1868] L.R. 3 Q.B. 10
Rhoades, Ine. v. United Air Lines, Inc., 340 F.2d 481
(3d Cir. 1965) 12
Richardson v. Communications Workers of America,
486 F.2d 801 (8th Cir. 1973) 15
Rosanova v. Playboy Enterprises, Inc., 580 F.2d 859
(5th Cir. 1978) 19
Roth v. United States, 354 U.S. 476 (1957) 10
St. Amant v. Thompson, 390 U.S. 727 (1968) ........... .. 19, 20
Sartor v. Arkansas Gas Corp., 321 U.S. 620 (1944) ..... 12
Skrocki v. Stahl, 14 Cal.App. 1, 110 P. 957 (1910) ....... 9
Sonnentheil v. Christian Moerlein Brewing Co., 172
U.S. 401 (1898) 12
Speiser v. Randall, 357 U.S. 513 (1958) 13
Spring Co. v. Edgar, 99 U.S. 645 (1878) 12
Stevens v. Storke, 191 Cal. 329, 216 P. 371 (1923) ..... 9
Time, Ine. v. Hill, 385 U.S. 374 (1967) 10
Time, Ine. v. Pape, 401 U.S. 279 (1971) 14
United States v. Cutting, 538 F.2d 835 (9th Cir. 1976) .. 17
United States v. Fullard-Leo, 156 F.2d 756 (9th Cir.
1946), aff’d, 331 U.S. 256 (1947) 15
Verrilli v. City of Concord, 557 F.2d 664 (9th Cir. 1977) 15
Waskow v. Associated Press, 462 F.2d 1173 (D.C. Cir.
1972) 20
Wasserman v. Time, Inc., 424 F.2d 920 (D.C. Cir.),
cert. denied, 398 U.S. 940 (1970) 5
W. W. Windle Co. v. C.L.R., 550 F.2d 43 (1st Cir. 1977) 14
Zimmerman v. Mathews Trucking Corp., 205 F. 2d 837
(8th Cir. 1953) 15
Statutes
28 U.S.C. §1254(1) 2
In Tue
Supreme Court of the Gnited States
Ocrosrr Tzrm, 1980
COWLES COMMUNICATIONS, INC.,
Petitioner,
Vs.
JOSEPH L. ALIOTO,
Respondent.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
OPINIONS BELOW
The opinion of the Ninth Circuit is reported in Alioto
v. Cowles Communications, Inc., 623 F.2d 616 (9th Cir.
1980), and is reproduced as Appendix A, infra.
A previous opinion of the Ninth Circuit is reported
in Alioto v. Cowles Communications, Inc., 519 F.2d 777
(9th Cir. 1975), and is reproduced as Appendix B, infra.
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pies
The memorandum opinion of the United States District
Court for the Northern District of California is reported
in Alioto v. Cowles Communications, Inc., 430 F.Supp.
1363 (N.D. Cal. 1977), and is reproduced as Appendix C,
infra.
JURISDICTION
The decision of the Ninth Circuit was rendered on
July 21, 1980. The jurisdiction of this Court is invoked
under 28 U.S.C. §1254(1).
pe ee
STATEMENT OF THE CASE
This is a libel suit against petitioner, the former
publisher of LOOK magazine. Plaintiff-respondent, Joseph
L. Alioto, was Mayor of San Francisco when the alleged-
ly libelous article appeared in LOOK in 1969.
The article was entitled “The Web that Links San
Francisco’s Mayor Alioto and the Mafia: A Look report
on the private Joseph Alioto and his relationships with
organized crime.” The first two paragraphs summarized
the theme of the five-page, 5,100-word article:
Mayor Joseph L. Alioto of San Francisco, the rising
politician who came close to the Democratic
nomination for the Vice Presidency in 1968, is
enmeshed in a web of alliances with at least six
leaders of La Cosa Nostra. He has provided them
with bank loans, legal services, business counsel
and opportunities, and the protective mantle of his
respectability. In return, he has earned fees, profits,
political support and campaign contributions.
A lengthy investigation by LooK reveals that some
of these links between Alioto and the underworld go
back almost a quarter of a century. They have not
been broken.
The remaining seventy paragraphs of the article iden-
tify the “six leaders of La Cosa Nostra” (Jimmy Frati-
anno, Angelo Marino, Salvatore Marino, Emilio Gior-
getti, Jimmy Lanza and Frank Bompensiero) and de-
scribe their illegal activities, legitimate business enter-
prises and relationships with each other and Alioto. The
article is reproduced in full in Appendix D, infra.
Four trials have been held in this cause. The first end-
ed in a hung jury. At the second trial the jury was ask-
ed, over petitioner’s objection, to decide the issue of
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truth or falsity of the article by answering the following
special interrogatory (Question No. 1):
Was the article false in one or more
particulars?
Alioto had contended that the article was false in 27
particulars. (R.T. 148-52, 10/25/72.) The trial judge
(Hon. Russell E. Smith) instructed the jury that the arti-
cle was false in one particular, i.e, the “Nut Tree
meetings”:
“There is no evidence in this case from which you
properly could find such [Nut Tree] meetings took
place. ... The only legal evidence in the case on
the issue denied that the meetings occurred and
there is no legal and competent evidence to the con-
trary. So, when you are considering the issue of
whether the published article is false—and that, of
course, is the issue outlined to you in question No. 1
here—and you come to the disputed statements in
the article regarding the Nut Tree meetings, it
should be clear to you that the only competent
evidence in this case on the issue will support only a
finding that the statements are false. (R.T. 158,
10/25/72; emphasis added.)
The jury thus necessarily answered “yes” to Question
No. 1, “Was the article false in one or more particulars?”?
1. These meetings were the subject of four paragraphs on
the second of the article. (App. D at 18, col. 2.) Nut Tree isa
restaurant where, according to the four paragraphs, Alioto
met with Jimmy Fratianno and other underworld figures to
discuss possible business loans to Fratianno from a bank then
being organized by Alioto, the First San Francisco Bank.
It is undisputed that the bank loans were later made and
that Fratianno visited Alioto’s law office in San Francisco
before receiving the loans.
2. The jury was given a second interrogatory asking “Was
the article defamatory?” The jury answered “Yes.”
*>
a
The jury, however, could not reach a verdict on the
issue of actual malice, i.e, whether the article was
published with knowledge of falsity or reckless dis-
regard of truth or falsity. Judge Smith held that a find-
ing of actual malice by both judge and jury was re-
quired in order for Alioto to recover, in accord with
Wasserman v. Time, Inc., 424 F.2d 920, 922-23 (D.C.
Cir.), cert. denied 398 U.S. 940 (1970) (Wright, J., con-
curring). Judge Smith reviewed the evidence and found
that actual malice “was not shown with convincing clari-
ty.” He then granted petitioner’s motion for judgment
n.o.v. and entered final judgment for petitioner.
Alioto appealed. The Ninth Circuit noted that subse-
quent to Judge Smith’s decision, it had “repudiated” the
approach of Judge Wright in Wasserman, supra, that
both judge and jury must find actual malice with con-
vincing clarity, in Guam Federation of Teachers, Local
1581 v. Ysrael, 492 F.2d 438 (9th Cir.), cert. denied 419
U.S. 872 (1974). The Ninth Circuit reversed and
remanded “for a new trial on the sole issue of actual
malice.” (App. 15a.) Alioto v. Cowles Communications,
Inc., 519 F.2d 777 (9th Cir.), cert. denied, 423 U.S. 930
(1975).
A third trial was then held, on the sole issue of actual
malice, and another hung jury resulted.
By agreement, the fourth trial was held before the
Honorable William W. Schwarzer sitting without a jury.
Judge Schwarzer found petitioner guilty of actual
malice, i.e, reckless disregard for truth, and awarded
Alioto $350,000 in general damages plus costs. Alioto’s
demand for punitive damages was refused.
In finding recklessness, Judge Schwarzer confined
his inquiry to the one “particular” in which he believed
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the jury at the second trial had found falsity—the
Nut Tree meetings or “Nut Tree allegations.” He
held that the authors and editor of the article should not
have believed an informant who was the source of the
Nut Tree meetings—one Tommy Lee Thomas, son-in-law
of Jimmy Fratianno—because he said there were “obvious
reasons” to doubt Thomas’ veracity. (App. 28a-29a.)
On appeal, the judgment was affirmed. The Ninth
Circuit held that petitioner had waived its right to claim
prejudicial error in the instructions and special verdict
of falsity at the second trial by not requesting a new
trial on the issue of falsity after the second trial or on
the first appeal. (App. 3a-4a.) The Ninth Circuit then
held that petitioner had not been denied its right to a trial
on the issue of substantial truth, or “gist” or “sting” of
the article as a whole, because “the ‘Nut Tree’ allegations
contained the ‘gist’ or ‘sting’ of the article and the truth
of these allegations was fully tried and determined at
the second trial... .” (App. 6a.)
The Ninth Circuit also rejected petitioner’s claim that
Judge Schwarzer improperly found actual malice by (1)
focusing solely on Nut Tree, and (2) using an objective
test rather than determining defendant’s actual state of
mind.
Petitioner now seeks certiorari.
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=
REASONS FOR GRANTING THE WRIT
The Ninth Circuit’s decision is in total discord with
New York Times Co. v. Sullivan® and the First Amend-
ment. The decision upholds a bizarre three-step process
enabling a public official plaintiff to recover a stagger-
ing judgment from a media critic: (1) proving falsity by
a special interrogatory asking the jury to determine
if the article is false “in one or more particulars”
and at the same time instructing the jury that it must
find the article false in one particular, (2) holding as a
matter of law that the one particular thus “found” false
is the substance, “gist” or “sting” of the article, and (3)
finding “subjective” malice (reckless disregard of truth)
by stating that there were obvious reasons to doubt the
veracity of an informant who supplied the false
particular.
We believe a decision sanctioning even one of these
steps would be a serious blow to free debate and would
clearly warrant certiorari; the decision below embracing
all three cries out for review and correction.
I.
THE FINDING OF “FALSITY” BELOW WAS
FLAGRANT ERROR ON WHICH NO JUDGMENT CAN
CONSTITUTIONALLY REST.
The plaintiff in a New York Times defamation suit has
the First Amendment burden of proving both falsity
and actual malice.‘ The burden of proving falsity is no
3. 376 U.S. 254 (1964).
4. New York Times Co. v. Sullivan, 376 U.S. 254, 279-80
(1964); Garrison v. Louisiana, 379 U.S. 64, 74 (1964).
a ae
less important than that of proving actual malice, and
indeed, must be satisfied before the malice issue can
even be reached. The judgment below cannot con-
stitutionally stand because it is based on a palpably un-
just and erroneous process of finding “falsity” of the
LOOK article, 7.e., asking the jury to determine whether
the article was false “in one or more particulars” and at
the same time directing the jury that the article must be
found false in at least one particular. Contrary to the
Ninth Circuit’s opinion, petitioner is not barred from
raising this claim of error by waiver.
A. Substantial Truth Of The Article As A Whole, Rather
Than Falsity In “One Or More Particulars,” Is The
Correct Test.
The first and most egregious error below was asking
the jury to determine truth or falsity by answering the
question, “Was the article false in one or more par-
ticulars?” The question compelled the jury to divide the
5,100 word article into segments and find “falsity” if any
single segment, or “particular,” was found untrue. This
segmenting approach is not only expressly forbidden un-
der California defamation law applicable in this diversi-
ty action but it clearly violates the First Amendment;
the correct test of truth or falsity is whether the article,
read as a whole, is substantially true.®
The California courts have repeatedly adhered to the
substantial truth test in libel cases. As declared in Emde
v. San Joaquin County Central Labor Council, 23 Cal. 2d
146, 160, 148 P.2d 20 (1948):
5. Petitioner specifically raised this objection at the second
trial on three separate occasions. See R.T. 177, 10/25/72;
R.T. 7, 10/26/72; Defendant’s Trial Memorandum Re Court’s
Proposed Jury Instructions filed 10/17/72.
a
It is not necessary to prove the literal truth of an
allegedly libelous accusation in every detail, so long
as the imputation is substantially true so as to
justify the “gist” or “sting” of the remark.
So also, in Stevens v. Storke, 191 Cal. 329, 334, 216 P.
371 (1923), the test was stated:
In determining whether or not, under [California
law], an article is libelous, it must be considered in
its entirety. It may not be divided into segments
and each portion treated as a separate unit.
Accord: Hearne v. De Young, 119 Cal. 670, 52 P. 150
(1898); Jeffers v. Screen Extras’ Guild, Inc., 162 Cal.
App.2d 717, 729, 328 P.2d 1030 (1958); Handelsman v.
San Francisco Chronicle, 11 Cal.App.3d 381, 386-387, 90
Cal.Rptr. 188 (1970); Gantry Construction Company v.
American Pipe and Construction Company, 49 Cal.App.
3d 186, 195-196, 122 Cal.Rptr. 834 (1975); Kurata v. Los
Angeles News Publishing Company, 4 Cal.App.2d 224,
227, 40 P.2d 520 (1935); Mortensen v. Los Angeles
Examiner, 112 Cal.App. 194, 203 (1931); Skrocki v.
Stahl, 14 Cal.App. 1, 5, 110 P. 957 (1910).
The substantiality test also is clearly woven into the
tapestry of this Court’s First Amendment jurisprudence.
Although the Court in New York Times did not squarely
confront the issue, it implicitly recognized that substan-
tial, rather than literal, truth is the proper test of ac-
tionable libel.* In areas of speech regulation other than
6. Plaintiff Sullivan had shown that there were at least two
false segments in the Times advertisement in question and
that defendant knew one of them was false. 376 U.S. at 257-
59. The Court nonetheless refused to allow recovery, noting
that the —— publication of which the false statements
formed a was “substantially correct” or defendant
wry on ee faith that it was substantially correct. 376
a
(Footnote continued on following page)
libel, substantiality also has been a touchstone for defin-
ing the scope of First Amendment protection.
Thus, in the field of obscenity, the Court in Roth v.
United States, 354 U.S. 476, 482 (1957), rejected the
“isolated excerpt” test of Regina v. Hicklin, [1868] L.R. 3
Q.B., and held that obscenity may be found only if “the
dominant theme of the n. terial taken as a whole appeals
to the prurient interest.” (Emphasis added.) See also
Miller v. California, 413 U.S. 15, 24 (1973). In measur-
ing the scope of First Amendment protection in the field
of “false light” invasion of privacy, the Court in Time,
Inc. v. Hill, 385 U.S. 374, 386 (1967), stressed the sub-
stantiality principle:
[T]he “establishment of minor errors in an
otherwise accurate” report does not prove “fic-
tionalization.” Material and substantial falsification
is the test.
Similarly, the substantiality test has influenced de-
cisions concerning regulation of subversive or violent
advocacy. In Brandenburg v. Ohio, 395 U.S. 444 (1969),
the Court held that isolated segments of the subject
speech—e.g., “Bury the Niggers”—must be evaluated in
the context ofthe entire speech read as a whole.
6. continued
The Court in New York Times also declared, with respect to
the defense of truth:
A rule compelling the critic of official conduct to
guarantee the truth uf a!! his factual assertions—and to do
so on pain of libel judgments virtually unlimited in
amount—leads to a comparable “self-censorship.” Allow-
ance of the defense of truth, with the burden of proving it
on the defendant, does not mean that only false speech will
be deterred. Even courts accepting this defense as an
adequate safeguard have eg pene the difficulties of
adducing legal proofs that the alleged libel was true in all
pe particulars. 376 U.S. at 279-80. (Emphasis
a ;
Free speech cannot coexist with the libel test used
below, allowing a public official to skewer a critic upon
finding falsity “in one or more particulars.” Because
“erroneous statement is inevitable in free debate,” New
York Times Co. v. Sullivan, 376 U.S. at 271, nothing less
than the test of substantial truth is necessary if
“freedoms of expression are to have the ‘breathing space’
that they ‘need .. . to survive’. . .” Jd. at 271-72.
B. The District Court Compounded Its Error By Direct-
ing The Jury To Find Falsity In One Particular.
The patently erroneous test of falsity “in one or more
particulars” was pernicious enough in itself, but the
trial court exacerbated the error by wrongly instructing
the jury that it must find the article false in one
particular, 7.e., the Nut Tree meetings.” The court there-
by compelled the jury to answer “yes” to the question,
“Was the article false in one or more particulars?” We
submit that the court’s Nut Tree instruction (reproduced
on page 4, supra) cannot be read in any other manner.
The prejudicial error in instructing the jury that “the
only competent evidence in this case on the issue will
support only a finding that the [Nut Tree] statements
are false” was two-fold: (a) it directed a verdict for
respondent on a fact issue (falsity) on which he had the
burden of proof; and (b) it compelled the jury to believe
respondent’s testimony denying the truth of the Nut
Tree paragraphs.
While federal trial judges enjoy latitude in com-
menting on the evidence when charging the jury, the
privilege is limited; it clearly may not extend to taking
7. See note 1, supra, and accompanying text.
a
away from the jury an ultimate fact issue that depends
on credibility and directing a verdict on it. F.g., Quercia
v. United States, 289 U.S. 466, 470-72 (1933); Krasowski
v. Greyhound Lines, Inc., 402 F.2d 445, 448 (6th Cir.
1968); Nunley v. Pettway Oil Co., 346 F.2d 95, 99 (6th
Cir. 1965).
Moreover, by instructing the jury to believe the
testimony on Alioto’s side denying the truth of the Nut
Tree paragraphs, the court denied petitioner its right to
have the jury determine the issue of credibility. The jury
is the sole judge of the witnesses’ credibility and is free
to believe or disbelieve as it alone chooses. As this Court
held in Sartor v. Arkansas Gas Corp., 321 U.S. 620, 627-
28 (1944), a trial judge cannot compel a jury to believe
the testimony of a witness—particularly an interested
witness—even if that testimony is uncontradicted:
The rule has been stated “that if the court admits
the testimony, then it is for the jury to decide
whether any, and if any what, weight is to be given
to the testimony.” Spring Co. v. Edgar, 99 U.S. 645,
658. “The jury, even if such testimony be uncon-
tradicted, may exercise their independent judg-
ment.” The Conqueror, 166 U.S. 110, 131. “The mere
fact that the witness is interested in the result of
the suit is deemed sufficient to require the credibili-
ty of his testimony to be submitted to the jury as a
question of fact.” Sonnentheil v. Christian Moerlein
Brewing Co., 172 U.S. 401, 408.
Accord: Rhoades, Inc. v. United Air Lines, Inc., 340 F.2d
481, 485 (3d Cir. 1965); Powers v. Continental Casualty
Co., 301 F.2d 386, 388-89 (8th Cir. 1962).
In sum, the trial judge clearly invaded the jury’s
province, to petitioner’s severe detriment, by directing a
verdict in favor of Alioto on the alleged falsity of the
Nut Tree statements.
a
C. Petitioner Has Not Waived Its Right To Challenge
The Falsity Finding.
The Ninth Circuit entirely avoided the merits of
petitioner’s claimed errors in the special interrogatory
and falsity instructions by a technical holding of waiver.
This holding squarely conflicts with this Court’s deci-
sions. The Court has long held:
“(Cjourts indulge every reasonable presumption
against waiver” of fundamental constitutional
rights and . . . we “do not presume acquiescence in
the loss of fundamental rights.” Johnson v. Zerbst,
304 U.S. 458, 464 (1938).§
This principle applies most forcefully when, as here,
preferred First Amendment rights are at stake, “rights
which we value most highly and which are essential to
the workings of a free society.” Speiser v. Randall, 357
U.S. 518, 521 (1958).
Indeed, this Court has specifically considered and re-
jected a similar “waiver” claim in the New York Times
libel context in Beckley Newspapers Corp. v. Hanks, 389
U.S. 81 (1967). The publishing defendant in Beckley had
(1) failed to object at trial to an improper jury instruc-
tion on actual malice, and (2) proposed its own clearly
erroneous jury instruction on actual malice. Plaintiff
argued that defendant had waived any rights to chal-
lenge the jury instruction on appeal. This Court soundly
rejected the argument:
However, since it is clear that the jury verdict was
rendered upon instructions which misstated the law
8. Quoting Aetna Insurance Co. v. Kennedy, 301 U.S. om 3 ae
1997) 1 (right to gory | trial); ae Bell ~~ aw Co. v.
omm'n., 292, 307 (1s3) right to have
prove erty values PR nll de 4 evidence); parent to
06 U.S. 408, 412 (1882) (right to have jury , lla a ye
issues of ultimate fact).
and since petitioner has properly challenged the
sufficiency of the evidence, we have undertaken an
independent examination of the record as a whole “so
as to assure ourselves that the judgment does not con-
stitute a forbidden intrusion on the field of free ex-
pression.” (Emphasis added.)
389 U.S. at 85, quoting New York Times Co. v. Sullivan,
supra, 376 U.S. at 285. Accord: National Association of
Letter Carriers v. Austin, 418 U.S. 264, 282 (1974);
Time, Inc. v. Pape, 401 U.S. 279, 285 (1971); Greenbelt
Cooperative Publishing Ass’n v. Bresler, 398 U.S. 6, 11
(1970).
Even without special regard for First Amendment
values, petitioner is not barred by waiver from challeng-
ing the falsity instructions and verdict at the second
trial. On the first appeal, petitioner did not take a cross-
appeal to attack the falsity errors at the second trial,
because the final judgment was in petitioner’s favor; as
this Court held in Electrical Fittings Corp. v. Thomas &
Betts Co., 307 U.S. 241, 242 (1939):
A party may not appeal from a judgment or decree
in his favor for the purpose of obtaining a review of
findings he deems erroneous which are not
necessary to support the decree.
Accord: Lindheimer v. Illinois Bell Telephone Co., 292
U.S. 151, 176 (1934); W.W. Windle Co. v. C.ILR., 550
F.2d 43 (1st Cir. 1977). It is also settled that petitioner
could properly challenge the falsity errors on the second
appeal because those errors directly contributed to the
final judgment in favor of respondent. “An appeal from
a final judgment draws into question all rulings produc-
ing the judgment.” Herron v. Rozelle, 480 F.2d 282, 285
(10th Cir. 1973); Baldwin v. Redwood City, 540 F.2d
eS
1360, 1364 (9th Cir. 1976).° In addition, the Ninth Cir-
cuit itself has held in other cases that it has the inherent
power to re-examine decisions and rulings on prior
appeals and to alter or correct them “when justice re-
quires that course.” United States v. Fullard-Leo, 156
F.2d 756, 757 (9th Cir. 1946) aff'd, 331 U.S. 256 (1947);
Verrilli v. City of Concord, 557 F.2d 664 (9th Cir. 1977).
II.
THE SUBSTANTIAL TRUTH, OR “GIST” OR
“STING,” HOLDING BELOW IS CONSTITUTIONALLY
ERRONEOUS.
Part II of the Ninth Circuit’s opinion states that a
defendant
can defeat a libel action by proving that the
allegedly libelous publication, although not literally
true in every detail, is substantially true in its im-
plication, that is, that the “gist” or “sting” of the ar-
ticle, read as a whole, is true. (App. 4a.)
The opinion then holds that the judge at the fourth trial
properly concluded that the “Nut Tree” allegations con-
9. The cases cited by the Ninth Circuit in support of its
technical holding of waiver are inapposite. Three cases involved
multiple appear , the same party. Ha v. United States,
418 F.2d 1 (Ct.Cl. 1969); Calhoun v. rd, 359 F.2d 400
(9th Cir. 1966); Richardson v, Communications Workers of
America, 486 F.2d 801 (8th Cir. 1973) (appellant had cross-
appealed from earlier Judgment). Here petitioner has ap-
paled only once, and the issues raised before the Ninth
Circuit on this appeal contributed directly to the final
judgment appealed. The Ninth Circuit’s other “precedents”
merely hold that if a party moves in the alternative both for
judgment n.o.v. and a new trial, the trial court must dis
of both motions. M Ward & Co. v. Duncan, 311 U.S.
243 ew ; Zimmerman v. Mathews Trucking Corp., 205 F.2d
837 (8th Cir. 1953); Oberman v. Dun & Bradstreet, Inc., 507
F.2d 349 (7th Cir, 1974). These cases have no applicability to
petitioner’s appeal.
iain
tained the “gist” or “sting” of the petitioner’s article, and
since these allegations were held false at the second
trial, petitioner was not denied the right “to a trial and
determination of the issue of the substantial truth of the
gist of the article as a whole.” (App. 6a.) This holding is
rank error and tramples on both the First Amendment
and due process.
Petitioner has never had a “trial and determination” of
the factual issue of substantial truth or “gist” or “sting”
of the article read as a whole. At the second trial the
jury simply answered “yes” to the question, “Was the ar-
ticle false in one or more particulars?” after the judge
instructed that the article must be found false in one
particular—the “Nut Tree” meetings. (Point I, supra.)
The judge at the fourth trial sat as both judge and trier
of fact (the jury having been waived), but was bound by
the Ninth Circuit’s mandate on the first appeal to try
“the sole issue of actual malice.” (App. 15a.) The judge
thus could not and did not try the factual issue of sub-
stantial truth or “gist” or “sting” of the article read as a
whole.!°®
Thus, what the Ninth Circuit clearly meant was that
the judge at the fourth trial concluded sua sponte, as a
matter of law, that the untrue “Nut Tree” statements
comprised the substance, or “gist” or “sting,” of the
article and that the article was therefore substantially
false. This holding plainly violated petitioner’s constitu-
tional rights to a trial, and to a trier of fact’s determina-
tion, of the factual issue of substantial truth or “gist” or
10. Both in his memorandum opinion and throughout the
fourth trial, Judge Schwarzer repeatedly declared that the
sole issue being tried was actual malice, pursuant to the
Ninth Circuit’s mandate. See, e.g., pp. 333, 1007, 1448 of the
trial transcript.
a es
“sting” of the article read as a whole. Under the First
Amendment, substantial truth is just as “essentially” a
question of fact as is the issue of obscenity. See Miller v.
California, 413 U.S. 15, 30 (1973); Jenkins v. Georgia,
418 U.S. 153, 160 (1974)."
Assuming arguendo that the fourth trial judge could
properly try and determine the factual issue of substan-
tial truth, his conclusion was manifestly wrong. The four
“Nut Tree” paragraphs (App. D at 18, col. 2) are an
isolated excerpt and clearly do not “pervade” the article,
anymore than the isolated nudity scenes pervaded the
movie “Carnal Knowledge” held non-obscene by this
Court in Jenkins, supra. The theme, or “gist” or “sting,”
of the article as a whole is summarized in the first two
paragraphs (reproduced on p. 3, supra). Whether or
not Alioto went to nighttime meetings at the Nut Tree
restaurant with Fratianno and his associates could make
no significant difference to anyone reading the 5,100
word article as a whole. If the “Nut Tree” statements
were deleted entirely, only two “Cosa Nostra” figures
would be removed from having contacts with Alioto
(Frank LaPorte and Frank Bompensiero); Alioto’s
lengthy history of ties and relationships with five other
Mafia figures described in the balance of the article
would remain unchanged.”
11. And see United States v. Cutting, 538 F.2d 835, 839 (9th
Cir. 1976), cert. denied 429 U.S. 1052 (1977), where the Ninth
Circuit held, omnes “[T]he issue of obscenity must,
in the first instance, be left to the trier of fact... .”
12. The balance of the article relates numerous contacts,
relationships and dealings over the past 25 years between
Alioto and five well known Mafia crime figures. Thus, the ar-
ticle states that (a) Jimmy Lanza, the Bay Area Mafia Chief,
was both a client and a political supporter of Alioto; af?
Salvatore Marino and Angelo Marino, long considered Mafia
members by law enforcement officers, received both business
(Footnote continued on following page)
nti.
ITI.
THE ACTUAL MALICE HOLDING WAS ARRIVED
AT THROUGH A TOTALLY ERRONEOUS PROCESS.
The holding of actual malice below is constitutionally
erroneous for two reasons: (1) it was reached solely by
focusing on the isolated “Nut Tree” excerpt, and (2) it
was based on an objective consideration and appraisal of
a source, rather than a subjective analysis of the
authors’ actual state of mind.
In New York Times Co. v. Sullivan, 376 U.S. 254
(1964), this Court refused to sanction the first process
used below—focusing on an isolated segment of a
publication to find actual malice. Two specific
statements in the Times advertisement were admittedly
false (376 U.S. at 258-59) and the Secretary of the New
York Times Company admitted knowledge that one
statement was false. (Jd. at 264.) This Court held that
malice could not be based on knowing falsity of an
isolated statement, when the larger publication of which
the statement formed a part was “substantially correct”
or when defendant believed in good faith that it was
substantially correct. (Jd. at 286.)
Here again, as with the issue of truth or falsity dis-
cussed in Point I, supra, it is clear that substantiality is
the benchmark for measuring the protection of the First
—_
12. continued
and legal counsel from Alioto and supported him politically;
(c) Emilio Giorgetti, long po get as “old school” Mafia,
was both a business partner and client of Alioto; and (d) Jim-
my Fratianno, a notorious hoodlum and reputed Mafia “hit
man,” obtained loans totalling $105,000 from the First San
Francisco Bank of which Alioto was founder and chairman of
the board, after Fratianno personally visited Alioto’s law
office and after Alioto gave a favorable recommendation of
Fratianno to the bank.
“—-~
a ea
Amendment. By segmenting the article and focusing
solely on the Nut Tree excerpt in finding actual malice,
the district court clearly used an unconstitutional test;
the correct test is knowledge or reckless disregard of
substantial falsity of the article read as a whole. Orr v.
Argus-Press Co., 586 F.2d 1198, 1112 (6th Cir. 1978),
cert. denied, 440 U.S. 960 (1979); Casano v. WDSU-TV,
Inc., 464 F.2d 3, 4 (5th Cir. 1972); Pauling v. Globe-
Democrat Publishing Co., 362 F.2d 188, 192 (8th Cir.
1966), cert. denied, 388 U.S. 909 (1967).
In finding reckless disregard of truth of the Nut Tree
segrnent, the trial judge used another test clearly con-
trary to New York Times and its progeny, 7.e., an objec-
tive determination of whether an informant should be
believed. Thus, the judge stated there were “obvious
reasons to doubt the veracity of the informant [Tommy
Lee Thomas, son-in-law of Fratianno] [and] the accuracy
of his reports.” (App. 28a-29a.) Declaring that the “ob-
vious reasons” to doubt Thomas’ veracity outweighed the
reasons that petitioner’s editor and authors gave to sup-
port their belief of Thomas (App. 29a-31a), the judge
concluded that the test of recklessness prescribed in St.
Amant v. Thompson, 390 U.S. 727, 731 (1968) had been
met, 7.e., that “the defendant in fact entertained serious
doubts as to the truth of [the] publication.” (App. 20a,
31a.)
This plainly constitutes an objective rather than sub-
jective assessment; it cannot support or justify a finding
of serious doubts actually entertained. If allowed to
stand it will permit St. Amant’s requirement of subjec-
tive serious doubts to be met in future cases by lip ser-
vice only, 2.e, a talismanic statement that there were
“obvious reasons” to doubt the credibility of any given
source.
7%
—20—
This, we submit, clearly conflicts with the basic
rationale of St. Amant, New York Times and other
Circuits’ decisions. E.g., Rosanova v. Playboy Enter-
prises, Inc., 580 F.2d 859 (5th Cir. 1978); Hotchner v.
Castillo-Puche, 551 F.2d 910 (2d Cir.), cert. denied, 434
U.S. 834 (1977); Cervantes v. Time, Inc., 464 F.2d 986
(8th Cir. 1972), cert. denied, 409 U.S. 1125 (1978);
Waskow v. Associated Press, 462 F.2d 1173 (D.C. Cir.
1972).
CONCLUSION
For the reasons set forth above, we submit that the
Petition for a Writ of Certiorari should be granted.
Respectfully submitted;
Don H. Revsen
LAWRENCE GUNNELS
SaMUEL F'1Irer
Micnaet A, Kann
REUBEN & PROCTOR
11 South LaSalle Street
Suite 2001
Chicago, Illinois 60603
(312) 558-5500
Attorneys for Petitioner
Dated: October 16, 1980
—la—
APPENDIX A
Joseph L. ALIOTO, Plaintiff-Appellee,
v.
COWLES COMMUNICATIONS, INC.,
Defendant-Appellant.
No. 77-2999.
United States Court of Appeals,
Ninth Circuit.
July 21, 1980.
Appeal from the United States District Court for the
Northern District of California.
Before BROWNING and TANG, Circuit Judges, and
HOFFMAN,* District Judge.
BROWNING, Circuit Judge:
This is a diversity suit for libel brought by the ex-
mayor of San Francisco against the publisher of Look
Magazine. The suit is based on an article that _
in LooK in September 1969 entitled, “The Web that
Links San Francisco’s Mayor Alioto and the Mafia: A
LOOK report on the private Joseph Alioto and his
relationships with organized crime.” The facts are set
out in our previous opinion, 519 F.2d 777 (9th Cir. 1975),
and in the most recent opinion of the district court, 430
F.Supp. 1363 (N.D.Cal. 1977).
This case has been tried four times. This is the second
appeal. In the first trial the jury was unable to reach a
verdict. In the second, the jury found the article defama-
tory and false in one or more particulars, but was
* Honorable Walter E. Hoffman, Senior United States Dis-
_ Judge, Eastern District of Virginia, sitting by designa-
on.
—2a—
unable to decide whether defendant published the arti-
cle with “actual malice.” The trial judge then weighed
the evidence himself, concluded that plaintiff had not
offered clear and convincing proof of actual malice, and
entered judgment n.o.v. for defendant. Plaintiff
appealed, contending there was sufficient evidence of
malice to preclude judgment n.o.v. We agreed and
“remanded for a new trial on the sole issue of actual
malice.” We did not consider the validity of the jury’s
special finding that the article was defamatory and false
in one or more particulars because that finding was not
challenged on appeal.
In the third trial, after remand, the jury was again
unable to agree on the verdict. The fourth trial was to
the court. The trial court found the “Nut Tree”
allegations! “were made with actual malice, 7.e., with
reckless disregard for their truth,” 430 F.Supp. at 1371,
so awarded plaintiff general damages in the sum of
350,000.
Defendant makes four contentions: (1) the judgment at
the fourth trial was the product of prejudicial error
committed in the second trial; (2) defendant was denied
the right to a determination of the issue of substantial
truth of the article as a whole as required by California
law; (8) the finding of actual malice did not satisfy the
First Amendment; and (4) the trial court erred in ad-
mitting certain evidence regarding damages.
| The “Nut Tree” allegations were that plaintiff had a series
of nighttime meetings at the Nut Tree restaurant with
various Mafia leaders, including Jimmy “The Weasel”
Fratianno; that at one meeting Fratianno said he was “ex-
cited” about future possibilities because “my man [Alioto]”
controlled the board of directors of the First San Francisco
Bank; that at another meeting Fratianno stated the plaintiff
had assured him that he would be able to obtain loans from
- +. and that Fratianno “did not forget the promise.” See
note 2.
—3a—
I
Defendant argues that the jury found the LOOK article
false in one or more particulars in the second trial only
because the trial judge erroneously instructed the jury
that the disputed “Nut Tree” allegations were false.
Defendant asks us to overturn the judgment in the
fourth trial because it rested upon this allegedly defec-
tive special finding of falsity in the second trial.
It is too late for defendant to challenge the second
jury’s finding. The arguments now raised should have
been raised after the jury verdict, and on the first
appeal. When defendant filed its motion for a judgment
n.0.v, it should have moved in the alternative for a new
trial on the ground that the jury should not have been
instructed that the “Nut Tree” allegations were false.
See Fed.R.Civ.P. 50(b). On the first appeal defendant
should have argued that if the judgment n.o.v. were
reversed the case should be remanded for a new trial on
the issue of falsity as well as on the issue of malice
because the instruction that led to the special verdict
was in error. See Montgomery Ward & Co. v. Duncan,
311 U.S. 248, 253-54, 61 S.Ct. 189, 195, 85 L.Ed. 147
(1940); Zimmerman v. Mathews Trucking Corp., 205
F.2d 837, 839 (8th Cir. 1953); cf. Oberman v. Dun &
Bradstreet, Inc., 507 F.2d 349, 353 (7th Cir. 1974).
Defendant not only failed to object to the special ver-
dict in its post-trial motions or on appeal, but on remand
accepted the second jury’s finding without protest.
Defendant submitted proposed jury instructions for the
third trial that assumed the Look article had been
determined to be defamatory and false in one or more
particulars. Similarly, defendant’s pretrial statement for
the fourth trial proceeded on the assumption that the
“Nut Tree” allegations had been found to be false and
that the issue of falsity was not before the court.
By failing to challenge the special verdict on the
earlier appeal and by acquiescing in the special verdict
at the third and fourth trials, defendant waived any
right to question the second jury’s findings on this
—44—
appeal. See, eg., Richardson v. Communications
orkers of America, AFL-CIO, 486 F.2d 801, 803-05
(8th Cir. 1973); Haynes v. United States, 418 F. 2d 1380,
1382 (Ct.Cl. 1969); Calhoun v. Bernard, 359 F.2d 400,
401 (9th Cir. 1966).
Defendant argues that we have discretion to consider
the issue of falsity despite its failure to raise the issue
earlier, citing United States v. Fullard-Leo, 156 F.2d
756, 757 (9th Cir. 1946), and Verrilli v. City of Concord,
557 F.2d 664 (9th Cir. 1977). Even if these decisions
apply, defendant has suggested no reason why we should
exercise our discretion except that “First Amendment
issues are at stake.” Litigants raising First Amendment
issues are not for that reason alone excused from com-
pliance with basic rules of orderly procedure.
The special verdict rendered at the second trial must
stand. The fourth trial judge properly assumed that the
Nut Tree allegations were false and defamatory.
II.
We turn to defendant’s second argument. Under
California law, defendant can ‘defeat a libel action by
proving that the allegedly libelous publication, although
not literally true in every detail, is substantially true in
its implication, that is, that the “gist” or “sting” of the
article read as a whole, is true. See Emde v. San Joaquin
County Central Harbor Council, 23 Cal.2d 146, 160, 143
P.2d 20, 28 (1948); Kurata v. Los Angeles News
Publishing Co., 4 Cal.App.2d 224, 227-28, 40 P.2d 520,
522 (1935). Defendant contends that by relying solely on
the finding in the second trial that the “Nut Tree”
allegations were false the trial court deprived defendant
of its right to prove that the “gist” or “sting” of the arti-
cle as a whole was substantially true.
The trial judge concluded that the theme of the article
was that plaintiff connived with notorious criminals to
obtain loans for a member of the Mafia, and the essence
of this charge was found in the “Nut Tree” allegation:
==,
—5a—
The common thread of the defamatory matter
complained of is represented by the allegations that
plaintiff assisted Fratianno (an alleged Mafia
leader] in obtaining loans from the First San Fran-
cisco Bank with knowledge of Fratianno’s
“criminality.” Their substance is contained in the
following paragraphs which include the so-called
“Nut Tree meetings” allegations:
Alioto was then organizing his First San
Francisco Bank and seeking out future
customers. He had also been thinking of enter-
ing politics for the first time. But despite en-
couragement from fellow Democrats to run for
mayor in 19638, he rejected the opportunity
because of “business obligations.”
Those obligations apparently included a
series of nighttime meetings at the Nut Tree, a
restaurant along the highway between San
Francisco and Sacramento. Among those pres-
ent at one or more of the conferences, in addi-
tion to Alioto, were Fratianno, Bompensiero,
Angelo Marino, LaPorte and one of Jimmy
Hoffa’s top Teamster representatives on the
West Coast. Alioto’s plan to organize a bank
was a subject of intense discussion.
After one meeting, Fratianno said he was
“excited” about the possibilities for the future
because “my man [Alioto]” would control the
bank’s board of directors. Fratianno also ex-
pressed the belief that he would be able to buy
a piece of the bank’s stock. Later, after another
meeting at the Nut Tree, Fratianno said Alioto
was excluding him because of his hoodlum
reputation but had assured him he would be
able to obtain loans from the bank.
The First San Francisco Bank opened its
doors for business in July, 1964. Fratianno, still
hungry for capital, did not forget the promise.
Negotiations in San Francisco were arranged.
—§a—
On the morning of November 5, 1964,
Fratianno and Angelo Marino met with Joseph
Alioto at his 111 Sutter St. law offices to dis-
cuss Fratianno’s finances. Alioto called the
bank to set the loan wheels in motion.?
x** * kek Ke &
As discussed above, the Nut Tree allegations per-
vade the article. They provide the thread with
which Goldman [LOOK’s Managing Editor] and the
authors spin much of “the web of alliances with. . .
the leaders of the Cosa Nostra” in which Alioto was
said to be enmeshed. In this fashion, the article
links Alioto, either directly or inferentially to
various insidious activities of organized crime
figures.
430 F.Supp. at 1867, 1371. We agree with the trial
court’s conclusion. Because the “Nut Tree” allegations
contained the “gist” or “sting” of the article, and the
truth of these allegations was fully tried and determined
at the second trial, defendant has not been denied the
right to a trial and determination of the issue of the sub-
stantial truth of the gist of the article as a whole.
® The court dropped a footnote at this neent reading “The
previous trials established the so-called Nut Tree meeting
allegations to be false and defamatory”. Defendant argues
that the allegation in the final paragraph of the court’s quota-
tion from the Look article regarding a meeting in plaintiffs
office had not been found to be false at the earlier trials. We
are satisfied from the district’s court’s discussion that the
court decided the case on the premise that only the allegations
relating directly to the Nut Tree meetings had been found to
be false; (see 430 F.Supp. at 1369-71), and that court’s inclu-
sion of the final allegation in the quotation was inadvertent.
The Court’s only discussion of the allegation regarding the
meeting in plaintiff's office was not that it had been found to
be false in an earlier trial but rather that it had no eviden-
tiary support and publication in the absence of such support
was relevant to the issue of malice. See note 3 and related text
at 430 F.Supp. 1371.
—7a—
II.
Defendant’s third argument is that the trial court’s
finding of actual malice must be set aside because (1) it
was based on the court’s conclusion as to defendant’s
state of mind with respect to the “Nut Tree” allegations
rather than with respect to the whole article, and (2) it
was based upon an objective test of malice rather than
upon defendant’s actual state of mind. As to the first,
since the “Nut Tree” allegations contained the “sting” of
the article, the district court properly inquired whether
these allegations were published with malice. As to the
second, it is beyond dispute that a trial judge may base
a finding of subjective malice—that is, that the defen-
dant “in fact entertained serious doubts as to the truth
of his publication”—upon evidence that there were “ob-
vious reasons to doubt the veracity of the informant or
the accuracy of his reports.” Herbert v. Lando, 441 U.S.
153, 99 S.Ct. 1635, 1639, 60 L.Ed.2d 115 (1979), quoting
St. Amant v. Thompson, 390 U.S. 727, 731, 88 S.Ct. 1323,
1325, 1826, 20 L.Ed.2d 262 (1968). This is precisely what
the district court did. See 430 F.Supp. at 1370.
IV.
Defendant’s fourth and final argument is that the
damage award was improper because the trial court: (1)
permitted plaintiff to testify regarding statements made
to him by third persons as to the impact of the ar-icle
upon them; (2) _aghon plaintiff to testify that publica-
tion of the article caused members of his family to suffer
severe mental and emotional distress and apprehension;
and (3) based his damage award on the harm caused by
publication of the entire article and not just the false
and defamatory “sting” of the article.
Under California law, evidence as to (1) and (2)
appear to be inadmissible in a jury trial. See Turner v.
earst, 115 Cal. 394, 47 P. 129 (1896); and Stevens v.
Snow, 191 Cal. 58, 214 P. 968 (1923). However, while a
trial judge sitting without a jury must base his verdict
on competent evidence, he has broad discretion to
—SZa—
receive evidence that might be inadmissible in a jury
trial (see Rangen, Inc. v. Sterling Nelson & Sons, Inc.,
351 F.2d 851, 863 (9th Cir. 1965); Collins v. Owen, 310
F.2d 884, 885-86 (8th Cir. 1962)); and there is no indica-
tion that the judge in this case relied upon the improper
evidence in calculating the damage award. As to (3), in
the usual case the “gist” or “sting” of the publication will
be the source of damage, and there is nothing of sub-
stance to suggest the contrary was true in this case. The
trial judge correctly stated the standards for deter-
mining damages in a libel suit, 480 F.Supp. at 1371-
72, and the amount of the award was supported by
properly admitted evidence.
Affirmed.
—9a—
APPENDIX B
United States Court of Appeals for the Ninth Circuit
Filed Jun 23 1975
No. 73-1834
Joseph L. Alioto ;
Plaintiff-Appellant
Vs.
Cowles Communications, Inc.
Defendant-A ppellee
OPINION
Appeal from the United States District Court
for the Northern District of California
Before: WRIGHT and CHoy, Circuit Judges, and EAST,*
District Judge.
Cuoy, Circuit Judge:
The September 23, 1969, issue of LOOK magazine con-
tained an article entitled “The Web That Links San
Francisco’s Mayor Alioto and the Mafia: A LOoK report
on the private Joseph Alioto and his relationships with
organized crime.” The article, written by two young
employees of a San Francisco television station, accused
Alioto of using his position as chairman of the board of a
San Francisco bank to obtain loans for a trucking
company run by James Fratianno, a convicted felon
* The Honorable William G. East, Senior District Judge for
the District of Oregon, sitting by designation.
—10a—
alleged to be a West Coast Mafia operative. The source
of the information upon which this accusation was based
was Fratianno’s son-in-law, Tommy Thomas. Thomas
claimed that Fratianno had told him of a number of
meetings between Alioto and several underworld figures
at the Nut Tree, a Bay Area restaurant. Thomas also
claimed knowledge of connections between the Mafia
and other prominent politicians. FBI and California law
enforcement authorities were unable to corroborate the
alleged meeting or other relationships between Alioto
and the Mafia.
After agreeing to buy the article, Look editors had
the authors interview Alioto. The authors asked Alioto
about his connections with Fratianno, but did not tell
him of their forthcoming Nut Tree accusations. When
Alioto later learned that an article was to be published,
he demanded, in a series of telegrams, a meeting with
Look editors. LOOK officials replied that such a meeting
would serve no useful purpose, since the story had
already been sent to the printers.
Alioto responded by filing a libel suit in federal
district court against LooK’s publisher, Cowles Com-
munications, Inc. The first trial ended in a hung jury.
On retrial, the jury returned a special verdict, finding
that the article was false and that it was defamatory.
The jury was unable to agree whether the article had
been published with the requisite actual malice, how-
ever.
Despite this inconclusive verdict, the district judge
awarded judgment to Cowles. He held that a finding of
actual malice by both judge and jury was required in
order for Alioto to recover, and that he found that actual
malice “was not shown with convincing clarity.” There-
fore, he granted Cowles’ motion for judgment n.o.v.
Furthermore, he found that Alioto was entitled only to
special damages because he had not complied with the
requirements of Cal. Civ. Code § 48a by demanding a
retraction within 20 days of publication; Alioto had
demanded only general and punitive damages, so the
judge granted Cowles’ motion for summary judgment.
—lla—
Alioto appeals. We reverse and remand for a new trial
on the issue of actual malice.
Retraction
California permits a publisher or broadcaster to
escape liability for general damages in a libel suit if he
publishes or broadcasts a retraction upon proper
demand:
1. In any action for damages for the publication of
a libel in a newspaper, or of a slander by radio
broadcast, plaintiff shall recover no more than
special damages unless a correction be demand 1
and be not published or broadcast, as hereinafter
provided. Plaintiff shall serve upon the publisher,
at the place of publication or broadcaster at the
place of broadcast, a written notice specifying the
statements claimed to be libelous and demanding
that the same be corrected. Said notice and demand
must be served within 20 days after knowledge of
the publication or broadcast of the statements
claimed to be libelous.
Cal.Civ.Code § 48a(1).
On its face, section 48a does not apply to magazines.
One division of the California Court of Appeal has held
explicitly that magazines are not covered by either the
letter or the rationale of section 48a. Morris v. National
Federation of the Blind, 192 Cal.App.2d 162, 13 Cal.
Rptr. 336 (1961). Other divisions have applied section
48a to magazines without apparent notice that the
statute specifies libels in newspapers, not all printed
media. Shumate v. Johnson Publishing Co., 139 Cal.App.
2d 121, 293 P.2d 531 (1956); Harris v. Curtis Publishing
Co., 49 Cal.App.2d 340, 121 P.2d 761 (1942).
The California Supreme Court has added to the con-
fusion in an opinion applying section 48a to the Reader’s
Digest. Briscoe v. Reader’s Digest Association, 4 Cal.3d
529, 483 P.2d 34, 93 Cal. Rptr. 866 (1971). In two
sentences near the end of a long opinion, the Briscoe
court stated only that the plaintiff had not complied
—12a—
with the requirements of section 48a, and thus was
limited to recovery of special damages. The court did
not discuss the contrary decision in Morris, nor the fact
that it was construing “newspaper” to include maga-
zines.
In a case decided this year, a division of the Court of
Appeal has refused to acknowledge Briscoe as requiring
extension of 48a to publishers of magazines. Montandon
v. Triangle Publications, Inc., 45 Cal.App.3d 938, 120
Cal. Rptr. 186 (1975). The Montandon court carefully
analyzed the judicial history of the issue, observing that
Morris had been the only reasoned decision to date. The
court observed that section 48a(3) requires that a
retraction be published within three weeks of the
demand. While publication within this time would have
been possible for the weekly magazine involved in the
Montandon litigation, the Montandon court was un-
willing to adopt a construction of the statute which
would require a distinction between weekly and bi-
weekly magazines on the one hand and monthly maga-
zines on the other. The court also emphasized the
validity of the distinction made in Morris between news-
papers and broadcast media, which are under pressure
to disseminate “news while it is new,” and magazines,
which have the advantage of greater leisure in which to
ascertain the truth of accusations before publishing
them. Finally, in examining the legislative history of
section 48a, the Montandon court observed that the
statute originally applied only to newspapers, but had
been amended in 1945 and again in 1949 to extend
coverage to radio and then to television. The legislature
had not seen fit, however, to amend the statute again in
1961 following the Morris decision in order to extend
coverage explicitly to magazines.
We find the reasoning presented by the Montandon
opinion persuasive. The California Supreme Court has
declined to review Montandon. Although this action does
not of itself indicate approval of the Montandon decision,
we conclude that if i. were confronted with the issue it
would decide that, notwithstanding its decision in
—13a—
Briscoe, section 48a’s requirement of a demand for
retraction does not extend to libels appearing in maga-
zines. Therefore, we reverse the district court’s judg-
ment that Alioto’s claim was limited to special damages
and that, having claimed no special damages, he was
entitled to no relief.
Actual Malice
In order to recover damages for publication of libelous
statements relating to official conduct, a public official
must establish that the defendant published the false-
hood with actual malice—“that is, with knowledge that
it was false or with reckless disregard of whether it was
false or not.” New York Times Co. v. Sullevan, 376 U.S.
254, 280, (1964). “Reckless disregard” does not refer to
an objective “reasonable man” standard. The defendant
must be proved to have subjectively “entertained serious
doubts as to the truth of his publication.” St. Amant v.
Thompson, 390 U.S. 727, 731 (1968). To protect first
amendment values, the Court requires a higher stand-
ard of proof than the usual “preponderance of the
evidence”; the recklessness must be demonstrated by
“clear and convincing proof.” See e.g., Rosenbloom v.
Metromedia, Inc., 403 U.S. 29, 30 (1971). Because of the
importance of the interests in freedom of speech and
press which are at stake, a court must review the facts
to determine whether the jury applied the proper stand-
ard; simply ascertaining that the jury was properly in-
structed does not suffice. New York Times, 376 U.S. at
285; Rosenbloom, 403 U.S. at 55.
In his opinion granting Cowles’ motion for judgment
n.o.v., the district judge stated that a jury could justifi-
ably find that the evidence proved with convincing
clarity that the libel was published either with or
without actual malice. He then weighed for himself the
persuasiveness of the evidence and the credibility of
witnesses, took into account that Alioto had twice failed
to convince a jury of Cowles’ actual malice, and decided
that Alioto had failed to establish actual malice.
—l4a—
The court thus implied that a plaintiff in a libel action
must persuade two triers of fact: both judge and jury.
Judge Skelly Wright has stated the proposition:
[T]he trial court, at the close of the plaintiff’s case
must decide whether actual malice has been shown
with ‘convincing clarity.’ In making this judgment
the court will judge the credibility of the witnesses
and draw its own inferences from the evidence. If
the trial is permitted to proceed, the court will be
called upon again to make a judgment on the actual
malice issue at the close of all of the evidence. If the
motion for a directed verdict at this stage of the
trial is denied, the actual malice issue, along with
the other issues, is then submitted to the jury under
the Times instruction without any indication from
the court or counsel that the court has decided that
the evidence shows actual malice with ‘convincing
clarity.’
This two-step procedure in which both the trial
judge and the jury must find actual malice before
there can be judgment for the plaintiff provides the
protection of the First Amendment freedom that
Times sought to make secure in areas of public
concern.”
Wasserman v. Time, Inc., 424 F.2d 920, 922-923 (D.C.
Cir.), cert. denied, 398 U.S. 940 (1970) (Wright, J.,
concurring); see Bon Air Hotel, Inc. v. Time, Inc., 426
F.2d 858 (5th Cir. 1970).
Following the district court’s decision, however, we
repudiated Judge Wright’s two-step approach in Guam
Federation of Teachers, Local 1581 v. Ysrael, 492 F.2d
438 (9th Cir.), cert. denied, 419 U.S. 872 (1974). A dis-
trict judge on motion for judgment n.o.v., or an
appellate judge on review, must examine the evidence to
see whether, if all permissible inferences were drawn in
the plaintiff’s favor and all questions of credibility were
resolved in his behalf, the evidence then would demon-
strate by clear and convincing proof that the libelous
material was published with actual malice. Once this
—1l5a—
question has been resolved in the plaintiff’s favor, the
jury’s findings as to those inferences and as to witness
credibility are determinative.
The district court, while granting Cowles’ motion for
judgment n.o.v., found that:
Judging the whole matter objectively on the whole
record I think that a jury justifiably could find that
the evidence showed with convincing clarity that
the authors (and as of the date of publication their
states of mind could be imputed to defendant) were
ambitious young men, anxious to sell a sensational
story to a national magazine; that the Tommy
Thomas statements as to the Nut Tree meetings
added greatly to the sensational nature and sala-
bility of the article; that the authors must have had
doubts about the veracity of Tommy Thomas (the
sole source of the Nut Tree statements); that they
deliberately failed to cross-check on the validity of
his statements because they did not want to find
them to be untrue, and so published the statements
with a reckless disregard for truth.
Our review of the record convinces us that the district
judge fairly summarized the permissible inferences
which a jury might draw from the evidence. Having
found the evidence that Look’s editors entertained
doubts as to the truth of the Nut Tree allegations to be
sufficiently clear and convincing in nature were the jury
to decide questions of credibility and draw permissible
inferences in Alioto’s favor, the court was without power
to award Cowles judgment notwithstanding the jury’s
failure to arrive at a verdict. The judgment must be
reversed and the case remanded for a new trial on the
sole issue of actual malice.
Reversed and Remanded.
—1l6a—
APPENDIX C
Original Filed
May 3 1977
Clerk, U.S. Dist. Court
San Francisco
United States District Court
Northern District of California
NO. C-52150-WWS
Joseph L. Alioto,
Plawnitf,,
We
Cowles Communications, Inc.,
Defendant.
JUDGMENT
This case having been tried to this Court sitting
without a jury, and the Court having made its findings
of fact and conclusions of law, and good cause appearing
therefore:
IT IS HEREBY ORDERED, ADJUDGED, AND DE-
CREED that plaintiff Joseph L. Alioto recover of
defendant Cowles Communications, Inc., the sum of
$350,000, plus plaintiff’s costs of suit.
DATED: May 3, 1977
WILLIAM W SCHWARZER
United States District Judge
—17a—
Original Filed
May 3 1977
Clerk, U.S. Dist. Court
San Francisco
United States District Court
Northern District of California
NO. C-52150-WWS
Joseph L. Alioto,
Plaintiff,
V.
Cowles Communications, Inc.,
Defendant.
MEMORANDUM OF OPINION, FINDINGS OF FACT
AND CONCLUSIONS OF LAW
This is an action for libel in which plaintiff seeks
damages for defamatory statements contained in an
article published by defendant’s Look Magazine in
September, 1969, while plaintiff served as Mayor of San
: ise, This Court has jurisdiction under 28 U.S.C.
1332(a).
The prior history of this litigation is summarized in
the opinion of the Court of Appeals in Alioto v. Cowles
Communications, Inc., 519 F.2d 777 (C.A. 9, 1975). The
first trial ended in a hung jury. At the second trial the
jury returned a special verdict finding the article false
in one or more particulars and defamatory, but reached
no agreement on the issue of actual malice. The trial
judge granted defendant’s motion for judgment n.o.v.,
but the Court of Appeals reversed and remanded “for a
new trial on the sole issue of actual malice.” The third
—18a—
trial which followed again ended in a hung jury. The
action came on for a fourth trial before this Court
commencing March 21, 1977, both parties having
waived the jury.
The Court, after considering all of the evidence and
the arguments of counsel, finds and concludes, for the
reasons hereafter discussed, that plaintiff has sustained
the burden of proving by clear and convincing evidence
that defendant published the defamatory statements
contained in the article with actual malice, that is, with
reckless disregard for whether they were true or not,
and is entitled to judgment in the sum of $350,000.00,
plus costs.
I.
Inasmuch as plaintiff was a public official when the
article was published, this case is controlled by the rule
of New York Times Co. v. Sullivan, 376 U.S. 254, 280-
281 (1963), which
“prohibits a public official from recovering dam-
ages for a defamatory falsehood relating to his
offical conduct unless he proves that the statement
was made with ‘actual malice’-—that is, with
knowledge that it was false or with reckless
disregard of whether it was false or not.”
In Garrison v. Louisiana, 379 U.S. 64 (1964), the Court
explained that this rule
“protects the paramount public interest in a free
flow of information to the people concerning public
officials, their servants. To this end, anything which
might touch on an official’s fitness for office is
relevant.” (379 U.S. at 77, emphasis added.)
Under the New York Times rule, evidence of malice
must be clear and convincing to satisfy the Constitu-
tional standard under the First Amendment. Evaluation
of evidence under this rule confronts the Court with the
difficult task of resolving in each case the tension
between societys interest in free speech and the
—19a—
individual’s interest in his reputation. See, Gertz v.
Robert Welch, Inc., 418 U.S. 328, 342-343 (1974).
It is settled that failure to investigate or in other
respects to use due care in publishing false statements
about public officials does not meet the test. See, New
York Times Co. v. Sullivan, above, 376 U.S. at 287;
Beckley Newspaper v. Hanks, 389 U.S. 81, 84-85 (1967).
Conversely, proof of actual knowledge of falsity is not
required. In Si. Amant v. Thompson, 390 U.S. 727
(1968), the Supreme Court elaborated on the New York
Times rule and provided guidelines which are disposi-
tive of this case. That was an action for libel brought by
a deputy sheriff whom defendant had charged with
accepting bribes. The Court, in applying the New York
Times malice standard, said:
“‘Reckless disregard,’ it is true, cannot be fully
encompassed in one infallible definition. Inevitably
its outer limits will be worked out through case-by-
case adjudication ... ” (390 U.S. at 730)
The Court explained that
“reckless conduct is not measured by whether a
reasonably prudent man would have published, or
would have investigated before publishing. There
must be sufficient evidence to permit the conclusion
that the defendant in fact entertained serious
doubts as to the truth of his publication. Publishing
with such doubts shows reckless disregard for truth
or falsity and demonstrates actual malice.” (390
U.S. at 731)
The Court’s opinion then elaborated on the application
of this standard to a defamatory publication:
“The defendant in a defamation action brought by
a public official cannot, however, automatically
insure a favorable verdict by testifying that he
published with a belief that the statements were
true. The finder of fact must determine whether the
publication was indeed made in good faith. Profes-
sions of good faith will be unlikely to prove
persuasive, for example, where a story is fabricated
—20a—
by the defendant, is the product of his imagination,
or is based wholly on an unverified anonymous
telephone call. Nor will they be likely to prevail
when the publisher’s allegations are so inherently
improbable that only a reckless man would have
put them in circulation. Likewise, recklessness may
be found where there are obvious reasons to doubt the
veracity of the informant or the accuracy of his
reports.” (390 U.S. at 732, emphasis added.)
With these controlling principles in mind, the Court
now turns to the evidence of malice in this case.
II
Under the title “The Web That Links San Francisco’s
Mayor Alioto and The Mafia”, defendant’s Look Maga-
zine published an article purporting to be a “report on
the private Joseph Alioto and his relationship with
organized crime.” The article was written by Richard
Carlson and Lance Brisson who sold it to Look.
According to defendant, the “sting” or theme of the
article is reflected in its first and last paragraphs which
state:
“Mayor Joseph L. Alioto of San Francisco, the
rising politician who came close to the Democratic
nomination for the Vice Presidency in 1968, is
enmeshed in a web of alliances with at least six
leaders of La Cosa Nostra. He has provided them
with bank loans, legal services, business counsel
and opportunities, and the protective mantle of his
respectability. In return, he has earned fees, profits,
political support and campaign contributions.
“A lengthy investigation by Look reveals that
some of these links between Alioto and the under-
world go back almost a quarter of a century. They
have not been broken.
** *
“Alioto’s law firm, in which he still retains an
interest, continues to represent the Marinos and the
—2la—
California Cheese Co. His brother-in-law, Papale,
remains in frequent friendly contact with Angelo
Marino. The latter talks regularly with Bompensi-
ero, who still sees LaPorte. An so on. Mayor Joseph
Alioto’s channels of communication with the Cosa
Nostra remain open.”
Defendant’s purpose was to raise questions concerning
plaintiffs fitness for public office on the basis of his
alleged relationship to organized crime.
The heart of the article—and the subject which
provided the impetus for the authors’ investigation—
was a series of loans made by the First San Francisco
Bank in 1965 to one James Fratianno. Plaintiff was a
founder and a shareholder of that bank and served as
chairman of its board of directors; plaintiff's law firm
appears also to have performed some legal services for
it. The loans were made in 1965, two years before
plaintiff was first elected mayor. It is alleged in the
article that Fratianno, described as “the chief execu-
tioner for the Mafia on the West Coast”, had been
involved in various crimes, including rape, extortion,
armed robbery, fraud and bookmaking, over a period of
35 years. Much of the article is devoted to the nefarious
activities of Fratianno and his alleged underworld
associates.
The common thread of the defamatory matter com-
plained of is represented by the allegations that plaintiff
assisted Fratianno in obtaining loans from the First San
Francisco Bank with knowledge of Fratianno’s
“criminality”. Their substance is contained in the follow-
ing paragraphs which include the so-called “Nut Tree
meetings” allegations:
“Alioto was then organizing his First San Fran-
cisco Bank and seeking out future customers. He
had also been thinking of entering politics for the
first time. But despite encouragement from fellow
Democrats to run for mayor in 1963, he rejected the
opportunity because of “business obligations.”
—22a—
“Those obligations apparently included a series of
nighttime meetings at the Nut Tree, a restaurant
along the highway between San Francisco and
Sacramento. Among those present at one or more of
the conferences, in addition to Alioto, were Fratian-
no, Bompensiero, Angelo Marino, LaPorte and one
of Jimmy Hoffa’s top Teamster representatives on
the West Coast. Alioto’s plan to organize a bank was
a subject of intense discussion.
“After one meeting, Fratianno said he was ‘ex-
cited’ about the possibilities for the future because
‘my man [Alioto]’ would control the bank’s board of
directors. Fratianno also expressed the belief that
he would be able to buy a piece of the bank’s stock.
Later, after another meeting at the Nut Tree,
Fratianno said Alioto was excluding him because of
his hoodlum reputation but had assured him he
would be able to obtain loans from the bank.
“The First San Francisco Bank opened its doors
for business in July, 1964. Fratianno, still hungry
for capital, did not forget the promise. Negotiations
in San Francisco were arranged.
“On the morning of November 5, 1964, Fratianno
and Angelo Marino met with Joseph Alioto at his
111 Sutter St. law offices to discuss Fratianno’s
finances. Alioto called the bank to set the loan
wheels in motion.”
The theme of these paragraphs recurs in many
variations throughout the text of the article and in the
captions of a full page diagram entitled “The Web of
Relationships” showing plaintiffs picture in the center
of a web connecting him with various persons reputed to
be Mafia figures. Thus the article states, inter alia, that
Alioto “personally arranged for the loans after several
meetings with Fratianno and other Mafia leaders,” that
1 The previous trials established these so-called Nut Tree
meeting allegations tu be false and defamatory.
—23a—
he “had to have known of [Fratianno’s] criminality”, that
Alioto had “vouched for “Fratianno]”, that Alioto
“made ‘at least a dozen’ long-distance calls to Fratian-
no’, and that when Fratianno defaulted, “strangely, un-
like most of Fratianno’s other creditors, Alioto’s bank
never sued for damages or recovery of the debt.”
The general allegation linking plaintiff with the
Fratianno loans derived from information received by
the authors from a law enforcement source responsible
for investigating organized crime in Northern Califor-
nia. That information disclosed that the Fratianno
Trucking Company had obtained a series of five loans
from the First San Francisco Bank to purchase trucks
and related equipment, secured by title to the equip-
ment. Some of the loans were made after a bank officer
had learned that Fratianno had a criminal record. In
this connection, the authors were also told that Angelo
Marino and Fratianno had been observed, shortly before
the first loan was made, entering the office building at
111 Sutter Street, where the Alioto law firm had its of-
fices, and may have visited those offices. The authors
had no information, however, that plaintiff had met with
them. According to their law enforcement source, a
bank officer had stated, concerning plaintiff's role in the
making of the loan, that Fratianno “was brought to the
bank by ‘Joseph Alioto, who is a client of the bank and a
well-known attorney’. [The bank officer] also said that
. . . while Alioto did not vouch personally for Fratian-
no’s credit he did say ‘his credit is considered good by all
with whom he has done business.’”
In an attempt to develop the Fratianno loan story,
Richard Carlson contacted one Tommy Lee Thomas,
who, until 1966, had been Fratianno’s son-in-law and
business associate. Carlson had seen Thomas’ name on
loan documents at the First San Francisco Bank and on
Public Utilities Commission papers relating to the
Trucking Company. Carlson learned that Thomas had
cooperated with the government in a prosecution of
Fratianno for underpaying his truck drivers, and had
been considered truthful by the agent in charge of that
—24a—
case. Carlson also knew that FBI agents in the
Sacramento area had spoken to Thomas from time to
time, but made no inquiries regarding Thomas’ reputa-
tion for reliability. When Carlson met Thomas in
Sacramento around July 2, 1969, Thomas requested
anonymity before consenting to an interview and was
assured that his statements would not be attributed.
In a lengthy interview with Carlson that day, Thomas
related conversations he had had five years earlier with
Fratianno during which Fratianno had told Thomas of
meetings at the Nut Tree restaurant with Alioto and a
group of persons, including Frank Bompensiero, Frank
LaPorte, Angelo Marino and Jack Goldberger. LaPorte,
Bompensiero and Marino are described in the article as
major figures in organized crime. They represent three
of the six crime figures with which plaintiff, according
to the article, is linked in “a web of alliances.” This was
the only information the authors had received linking
Alioto with Bompensiero and LaPorte. Goldberger is an
official of the Teamsters Union. The discussion at the
meetings, according to Thomas, concerned a bank Alioto
was starting which he wanted his friends to help him
control. At a later meeting Alioto was said to have told
Fratianno he would have to be excluded because of his
0 =— but would be able to borrow money from
the bank.
Thomas also claimed to have spoken to Alioto on the
telephone at least a dozen times while he was at the
Trucking Company. And he described contacts which
Fratianno claimed to have had with various political
figures, including an alleged payoff to the Governor of
California.
Immediately after the interview Carlson prepared a
summary, ten single-spaced pages in length. A day or
two later, Martin Goldman, Look’s managing editor who
was responsible for the article, met with the authors in
San Francisco. They discussed the progress of the in-
vestigation and the prospects for producing an article
for publication. At that point, defendant had advanced
some expense money to the authors but had not yet com-
—25a—
mitted itself to purchase the article. It was decided that
Carlson would meet Thomas once more and tape record
the interview. They met a few days later.
The transcript of the tape recording of the second
Thomas interview, and Carlson’s recollection of it,
reflect that Thomas generally adhered to his previous
statements, but with such qualifications as “I’m just
guessing, because it’s so long ago. It’s pretty hard to
remember all that stuff...” Thomas said that he just
guessed at the number of Nut Tree meetings and could
not fix the time when the meetings took place. When
questioned about which persons were present at the
meetings, Thomas replied that he didn’t think “Bump”
(Bompensiero) was at every meeting, “and it would be
hard to say about Alioto, I would assume that Alioto was
at every meeting, because, what the hell, he was the guy
that had something that they wanted.”
Following the second Thomas interview, the authors
prepared a draft of the article including the substance
of the Nut Tree charges and sent it to Goldman near the
end of July. Goldman then met with the authors once
more and agreed to purchase the article. Thereafter, in
frequent consultation with the authors, he made exten-
sive editorial changes, the general effect of which was to
expand and sharpen the tone of the references in the ar-
ticle to Alioto’s connections with persons alleged to be
known to him as criminals.?
The first attempt to corroborate the reports of the Nut
Tree meetings was made in early August when Carlson
contacted an FBI agent charged with local responsibili-
ty for following organized crime activity who had
2 These chrages appear on Exhibit 3a in Goldman’s
handwriting. Goldman testified that they were changes made
by mutual agreement with the writers and that the-fact they
were in his handwriting did not necessarily indicate that he
was their author. Whoever may have been the originator of
any particular change, however, the volume and substance of
the revisions made in his handwriting establish the depth of
i involvement in the preparation of the article for publica-
ion.
—26a—
theretofore been his principal source of information for
the article. This agent advised that he had no informa-
tion of any such meetings. Subsequently Lance Brisson,
the other author, sought corroboration from an employee
of a state law enforcement agency responsible for in-
vestigating organized crime activity who had also been
an important source for the article; he advised that the
report of the meeting was “ridiculous.”
Late in August, the authors had a lengthy interview
with plaintiff. Although they did not ask him directly
about the Nut Tree meetings, they did ask him whether
he knew LaPorte or Bompensiero, which plaintiff
denied. Plaintiff further described the nature of his
relationships with the other alleged underworld figures
mentioned in the article. These relationships involved in-
termittent legal representation of the Marinos, Lanza
and Emilio Georgetti, not all of it by Alioto himself. The
only relationships of Alioto bearing on the subject of the
article, other than through legal representation, were an
interest in the Regal Packing Co., which had a business
relationship with the Marino’s California Cheese Co.,
and participation a number of years ago in the purchase
of the Castlewood Country Club, with which Georgetti
had had a connection. Beyond that, plaintiff had
relationships with some persons, such as his brother-in-
law, who in turn were alleged to have had relationships
with organized crime figures, apparently unrelated to
plaintiff. With respect to the Fratianno loans, plaintiff
explained that he had met Fratianno once when
Goldberger brought him to Alioto’s Rice Growers
Association office and introduced him. Fratianno
wanted help in obtaining a contract for the bulk hauling
of rice and a bank loan. Plaintiff's only responsive action
was to telephone the bank, which was then newly found-
ed and actively looking for borrowers, introduce
Fratianno as a prospective borrower and advise the
bank officer that any loan to him should be made on the
merits.
Following the Alioto interview, Brisson telephoned
Goldberger who denied attending meetings with the per-
—27a—
sons allegedly at the Nut Tree meetings. He indicated
reluctance to discuss the matter over the telephone, but
offered to meet Brisson at his office and answer
questions. Brisson made no attempt to see Goldberger.
The question before the Court is whether the foregoing
evidence, in the light of the record as a whole, es-
tablishes with convincing clarity that defendant publish-
= the article with reckless disregard for its truth or
sity.
ITI.
The Nut Tree allegations, together with the related
allegations contained in the article of which plaintiff
complains, charge plaintiff with having secretly and
knowingly connived with notorious criminals to provide
them with bank loans for business activities controlled
by organized crime.
While Carlson and Brisson prepared the article in
draft form, the final version was the product of joint ef-
forts by the authors and Goldman. There is no dispute
that the authors fully shared their knowledge and infor-
mation with Goldman, that he was informed of the
sources for the material statements in the article, and
that he participated actively and at length in the
preparation of the final text. Defendant does not contend
that the authors withheld facts from Goldman relevant
to the issue of defendant’s malice, or that any gap of in-
formation existed between them and Goldman. Hence, it
is not disputed that the malice issue must be decided on
the basis of whether there is clear and convincing
evidence that Goldman entertained serious doubts as to
the truth of the publication.
Goldman has testified that he believed these
allegations and charges to be true but the Court must
determine from all of the evidence “whether the publica-
tion was indeed made in good faith.” St. Amant v.
Thompson, above, 390 U.S. at 732.
Defendant argues that Goldman had formed a
reasonable and good faith belief in Thomas’ trust-
—28a—
worthiness. But that belief did not arise from any
objective facts known about Thomas’ background, or
from any prior experience with him as an informant.
Goldman testified that he and the authors felt that
Thomas had told the truth because he had no motivation
to lie to Carlson. There were, however, obvious reasons
for him to doubt, if not Thomas’ veracity, certainly the
accuracy of his report, given its hearsay nature, the time
which had passed since the alleged events had taken
place, and the general tenor of the Thomas interviews,
including the farfetched claims of Fratianno and the
vague state of Thomas’ memory.
Thomas’ trustworthiness, in any event, cannot rise
higher than Fratianno’s. Thomas did not claim to have
personal knowledge of the Nut Tree meetings; he simply
repeated what he claimed Fratianno had told him. In
weighing the credibility of the Thomas report, Goldman
had to consider that it was based on statements by
Fratianno whom he regarded as a notorious hoodlum
who could not be trusted, a “liar” and a “name dropper.”
Goldman had also to consider that both federai and state
law enforcement sources told the authors they had no in-
formation of any such meetings. Their inability to cor-
roborate the report was necessarily significant to Gold-
man who knew that these sources were directly involved
in investigations of organized crime, that the activities
of certain of the figures involved in the Nut Tree
meetings were of interest to them, and that Fratianno
was in fact under occasional surveillance by one of the
agencies at the time. In addition, Goldman knew that
Thomas had been in contact with the FBI, yet had ap-
parently never reported the alleged Nut Tree meetings.
Taking into consideration the nature and substance of
the reports, the quality of their source, the passage of
time since the original statements were said to have
been made, and the complete absence of corroboration
from law enforcement agencies who for several reascns
would have been expected to have received some infor-
mation about the meetings, the Court is compelled to
conclude that there were “obvious reasons to doubt the
—29a—
veracity of the informant [and] the accuracy of his
reports.”
Defendant contends that the Thomas information was
credible because it was “self-confirming”, in that it
referred to the formation of the bank and the making of
the loans. Moreover, defendant argues, the Nut Tree
meetings fit into a pattern of information relating to
Alioto’s connection with the Fratianno loans.
Thomas of course had an independent source of infor-
mation about the bank inasmuch as the Fratianno
Trucking Company had received loans from it. The
other information which the authors had received con-
cerning Alioto’s part in the making of the loans did not
provide a basis for any inference of improper activities
or purposes. In particular, the authors had received no
information that Alioto had met with Marino or anyone
else other than Goldberger and Fratianno, on the occa-
sion described above, to talk about the loan. A leap from
this information to the charge of a night-time cabal with
major hoodlums to provide the financial wherewithal for
underworld business activities is too great to be per-
formed without obvious reasons for doubt.’
8 As pointed out above, the authors and Goldman also had in-
formation that shortly before the loans were made, Fratianno
and Marino had been in the offices of the Alioto law firm. But
they had no information to substantiate the statement in the
article that Marino and Fratianno met with Alioto and dis-
cussed Fratianno’s finances. Nor did they have any informa-
tion to warrant the inference raised by the statement in the
article that “Strangely, unlike most of Fratianno’s other
creditors, Alioto’s bank never sued for damages or recovery of
the [Fratianno] debt.” On the pn pe they had information
that the bank was in the process of collecting most of the debt.
They knew, moreover, that before the loans were made
Fratianno had filed a financial statement with the bank show-
ing his net worth to be ,066.99—nonetheless, the article
states: “As for his ‘credit’, Fratianno was a disastrous risk.”
These facts, together with the absence of information reflect-
ing any questionable activities by plaintiff, further under-
mine the claim of “self-confirmation”.
—30a—
Defendant’s argument is also undercut by the fact that
the authors and Goldman chose not to seek corroboration
from the most obvious source, Jack Goldberger whom
the article charges neither with criminal activity nor
with an interest disqualifying him as a reliable source.
Yet he, aside from plaintiff, was the only other available
percipient witness to the alleged meetings. To the extent
he was asked pertinent questions in the telephone call
from Brisson, he denied the author’s assertions. But he
was never asked directly about-the Nut Tree meetings
and his offer to answer questions at his office was not
taken up. While New York Times imposes no liability for
failure to verify the accuracy of reports, the failure to
pursue what appears to have been the most obvious
available source of possible corroboration must, under
all of the circumstances of this case, be regarded as
— = convincing evidence of reckless disregard for
the truth.
As for the authors’ interview with plaintiff, while they
avoided asking him about the Nut Tree meetings, they
did obtain a flat denial of his knowing either LaPorte or
Bompensiero, key participants in these meetings, and
they received explanations of his relations with other
figures mentioned in the article which refuted the in-
ferences and implications of the article. At the trial,
Goldman and the authors took the position that, with
respect to the subject matter of the article, it was their
conclusion that Alioto had lied while Thomas and
Fratianno had told the truth. In light of all of the
evidence discussed above, and Goldman’s admission that,
while Fratianno was a “liar”, Alioto, so far as he knew,
had never been implicated in any criminal activity or
misused his office or position to shield or promote crime,
the Court must conclude that Goldman’s belief could not
have been held in good faith.
As discussed above, the Nut Tree allegations pervade
the article. They provide the thread with which Gold-
man and the authors spin much of “the web of alliances
with . . . the leaders of the Cosa Nostra” in which Alioto
was said to be enmeshed. In this fashion, the article
—3la—
links Alioto, either directly or inferentially to various in-
sidious activities of organized crime figures. These
allegations have heretofore been found to be false and
defamatory. The Court now finds that they were made
ee malice, i.e., with reckless disregard for their
truth.
IV.
Plaintiff has asked for no special damages but seeks to
recover general damages in the sum of $500,000.00 as
well as punitive damages in an amount deemed ap-
propriate by the Court.
General damages include damages for “loss of reputa-
tion, shame, mortification and hurt feelings.” Cal. Civil
Code, § 48a 4.(a). “In actions for libel or slander the
amount of damages recoverable is peculiarly within the
discretion of [the trier of fact], for there can be no fixed
or mathematical rule on the subject.” Behrendt v. Times-
Mirror Co., 30 C.A.2d 77, 90, 85 P.2d 949 (1938) (hear-
ing denied). “The [plaintiff] is not required to prove, and
in the nature of things cannot prove, the extent to which
he has been damaged by this libel . . . [the trier of fact]
may consider as a basis for its award of actual damages
. . . the wide publicity given to the libel, the plaintiff's
prominence in the community where he lives, his
professional standing, his good name and reputation, his
injured feelings and his mental sufferings.” Scott v.
Times-Mirror Co., 181 Cal. 345, 365, 184 P. 672 (1919).
There is no dispute that the charge made in the arti-
cle, impugning plaintiffs fitness for public office or
other positions of trust, is a grave one. Plaintiff has
testified without contradiction to the apprehension and
severe mental and emotional distress it has caused, and
will continue to cause him and his family.
Plaintiff is a prominent member of the San Francisco
community and of the legal profession. His good name
and reputation are unquestioned. He has also gained a
national reputation, both because of his prominence in
the Democratic Party in which he has played a national
—32a—
and statewide role, and his statute as a leading antitrust
lawyer. Thus, the nationwide—and to some extent
worldwide—dissemination of the article, over 8 million
copies of which were published, inevitably caused
widespread harm to his reputation.
Plaintiff was, moreover, particularly vulnerable to the
kinds of aliegations made in the article for two reasons.
First, because of his Italian descent, plaintiff was
susceptible to being associated in the public mind with
what the article liberally refers to as the Costa Nostra
and the Mafia and those of their alleged members who
also bear Italian names. Second, because having
represented persons charged with crimes, some of whom
also had alleged connections with organized crime, he
suffered the lawyer’s vulnerability to that public senti-
ment which often tends to identify the lawyer invidious-
ly with his client. The article in fact invites the reader
to make that very identification.‘
In partial mitigation of damages, consideration must
be given to plaintiff's ready access to the media which
enabled him to have a point-by-point denial of the Look
charges published in the local press concurrently with
the article’s publication. Plaintiff was able to make a
statewide broadcast to deny the charges and the denials
were also carried by national wire services. Although
plaintiff's access to self-help is relevant, it does not undo
4 See the opinion of Chief Justice Burger dissenting (on un-
Sewer aaa in Gertz v. Robert Welch, Inc., 418 U.S. 323,
“The petitioner here was Lay ly ong Poe professional
representative role as an advocate in the highest tradition
of the law, and under that tradition the advocate is not to
be invidiously identified with his client, The important
public policy which underlies this tradition—the right to
counsel—would be gravely jeopardized if every lawyer
who takes an ‘unpopular’ case, civil or criminal, would
automatically become fair. a for irresponsible
reporters and editors who might, for example, describe
the lawyer as a ‘mob mouthpiece’ for representing a client
with a serious prior criminal record . . .”
—33a—
the damage for each denial necessarily involves a
republication of the original libel and merely lets the
reader make his choice. See, Gertz v. Robert Welch, Inc.,
418 U.S. 323, 344 (1974).
Taking into account all of the foregoing factors, and
viewing them in the light of the record as a whole, the
Court determines that plaintiff shall recover general
damages in the sum of $350,000.00.5
Plaintiffs claim for punitive damages is rejected.
While there is abundant evidence of actual malice
within the meaning of New York Times Co. v. Sullivan,
above, there is no substantial evidence that defendant
had a “state of mind arising from hatred or ill will
toward plaintiff’, as required by Civil Code § 48a(d).
See, Cantrell v. Forest City Publishing Co., 419 U.S. 245,
95 S.Ct. 465, 469-470 (1974).
The foregoing shall constitute the Court’s findings of
fact and conclusions of law.
IT Is SO ORDERED.
DATED: May 3, 1977.
WILLIAM W SCHWARZER
United States District Judge
6 In an affidavit filed shortly before the fourth trail, defen-
dant stated that up to that time it had incurred costs of
defense in excess 0 000. This figure gives some indica-
tion of the cost of the litigation to both parties. While the
Court, in fixing the amount of damages awarded plaintiff, has
not taken those costs into account, the reasonableness of that
amount is corroborated by consideration of the expense plain-
tiff has had to incur to achieve the vindication to which he is
entitled and which only a favorable judgment affords.
THE WEB THAT LINKS
A LOOK report on
the private
Joseph Alioto and
his relationships
with
organized crime
BY RICHARD CARLSON
AND LANCE BRISSON
LOOK @ SEPTEMBER 23, 1969 Volume 23, No. 19
SAN FRANCISCO'S
MAHA
Mayor Joseru L. Auioro of San Francisco, the rising
politician who came close to the Democratic nomina-
tion for the Vice Presidency in 1968, is enmeshed in
a web of alliances with at least six leaders of La Cosa
Nostra. He has provided them with bank loans, legal
services, business counsel and opportunities, and the
protective mantle of his respectability. In return, he
has earned fees, profits, political support and cam-
paign contributions.
A lengthy investigation by Loox reveals that
some of these links between Alioto and the under-
world go back almost a quarter of a century. They
have not been broken.
Joseph Lawrence Alioto is a political phenome-
non. A relative unknown when he took office 20 months
ago, he shot to national prominence almost immedi-
ately. Following his powerful speech nominating
Hubert Humphrey at the Democratic convention,
Alioto returned to California as the state’s leading
Democrat. He is now preparing to challenge Repub-
lican Ronald Reagan for the governorship next year.
Bald but still youthfully bull-shouldered, the
53-year-old Alioto is the only son of a Sicilian fish
merchant who immigrated with his family to San
Francisco at the turn of the century. The Mayor, who
made millions as a businessman and noted antitrust
lawyer, proudly recalls his family’s early struggles.
His life-style, however, is radically altered from what
he knew in the years of poverty. He drives a black
Rolls-Royce, prefers expensively tailored dark suits
and lives in a luxurious home in an elegant neigh-
borhood. His language is polished and uttered with
insistent authority. Expressive gestures invariably
emphasize the important points.
But the public Joseph Alioto bears little resem.
blance to the private Joseph Alioto whose name ap-
pears on dozens of pages of law-enforcement intelli.
gence reports in California and Washington. These
reports and Look’s investigation detail a number of
the relationships between Alioto and organized crime.
DURING A TEN-MONTH PERIOD IN 1965, a notorious
Cosa Nostra killer, Jimmy “The Weasel” Fratianno,
received a series of loans totaling $105,000 from the
First San Francisco Bank. The chairman of the board
of directors and one of the founders of the bank was
Joseph Alioto. In fact, it was Joseph Alioto who per-
MAYOR AUOTO
sonally arranged for the loans after several meet-
ings with Fratianno and other Mafia leaders.
The Weasel is not someone usually invited home
for dinner—or into a bank for a loan. Testifying in
1958 before the California State Assembly Rackets
Investigating Subcommittee, Capt. James E. Hamil-
ton, head of the Los Angeles Police Department In-
telligence Unit, said: “He {Fratianno) had long been
. considered by us to’be the chief executioner for the
Mafia on the West Coast. I have heard as high as 16
deaths attributed to Fratianno.” State and Federal
authorities believe now that he has graduated from
the “muscle” role to that of the most influential and
active Mafioso along the Pacific Coast. His avarice
has also involved him in extortion, armed robbery,
fraud and bookmaking. His arrest record, beginning
with a rape charge at the age of 19, extends back 35
years to his hometown of Cleveland, Ohio. To the
California State Assembly Rackets Investigating Sub-
committee, Fratianno was an “important cog in the
organizational wheel” of the Mafia. To Joseph Alioto,
Fratianno was worth recommending to the loan offi-
cer of his bank as a man whose “credit is considered
good by all with whom. he has done business.” Frati-
anno’s “business” experience was almost nonexistent,
and Alioto had to have known of his criminality.
Fratianno had been in prison from 1954 to 1960 on
an extortion charge. He was released from parole only
a few montis before Alioto recommended him. As for
his “credit,” Fratianno was a disastrous risk. He de-
faulted on the loans, leaving Joseph Alioto, who
vouched for him, and the bank in the embarrassing
position of trying to collect a debt from one of the
most disreputable mobsters in the nation. A sizable
part of the debt is still unpaid.
The exact origin of the Alioto-Fratianno rela-
tionship is unknown, but sume of the details of how
that association developed and finally blossomed
have been pieced together by state and Federal inves.
tigators, and Look.
Fratianno has the ability to figure a profitable
angle to just about everything. “If Jimmy meets a
man with a million dollars, he wants half,” a former
close associate told us. “If he runs into a truck driver
with $20, he wants $5.” And it was within the Cali
fornia trucking industry that Fratianno sought to en-
rich himself. He began driving toward that goal—liter-
ally—as soon as he was released from prison in 1960.
With funds provided by two Cosa Nostra pals,
both of whom have been linked to Alioto, Fratianno
soon set up a small trucking company in Sacramento,
His partners were his wife Jewel. his son-in-law.
Tommy Lee Thomas, and:
—Frank “The Bump” Bompensiero, 63, a portly.
cigar-chewing mobster identified by the Fei as a
Mafia leader in San Diego. He was at the time on pa-
role from San Quentin fur bribing a public official. A
Federal Bureau of Narcotics report describes Bom-
pensiero as “a Mafia killer held in great fear by the
underworld.” An acquaintance told us he has “a great
sense of humor, but {is} capable of shooting you in
continued
Loox 9.23.6 17
ALIOTO CONTINUED
the back of the head in a minute.”
—Angelo “Cheese King” Marino, 45, believed to
be a cousin of Bompensiero and co-owner with his
father Salvatore of the San Jose-based California
Cheese Co., wholesale suppliers of ricotta and mozza-
rella cheese to pizzerias and supermarkets. Once heav-
ily involved in the rackets in Pittsburgh, Pa., and
Youngstown, Ohio, the Marinos stili sery* as impor-
tant representatives of the Mafia on !*.. West Coast.
Salvatore Marino has been the subject of a 1964 de-
portation attempt by immigration authorities and was
identified as a top Mafia racketeer in testimony be-
fore the U.S. Senate McClellan Committee. His son
Angelo was prosecuted for income tax evasion in
1967, but the case was dismissed after his attorney
elicited an admission from the Fst that it had been
conducting electronic surveillance of the Marinos.
The lawyer in this case and in all of the Marinos’ im-
portant legal affairs for years was Joseph Alioto.
Among the many services he performed for the
Marinos was assistance in obtaining a $247,000 Small
Business Administration loan for the cheese com-
pany, which, Alioto told us, “saved them from bank-
ruptcy.” After Alioto dispatched a law partner to
Washington, the money for the two Mafia members
was authorized in just 14 days—“Inordinately fast,”
an SBA lawyer told us.
Bompensiero and Marino remained in the back-
ground while Fratianno built up his business. He
specialized in hauling dirt on highway-construction
jobs and squeezing extra profits out of his drivers by
refusing to pay them union scale. By late 1963, the
Fratianno Trucking Co. was a potentially lucrative
operation, and Fratianno—through Bompensiero and
Marino—devised a plan that, as Fratianno put it, “will
make us all rich.”
Trucking in California is a cutthroat business.
For small companies, profit margins are generally
slim. The cost of expanding into a major carrier,
however, is fearsome. Just one tractor-trailer rig costs
around $37,000. Big money is needed to win big
contracts. From his headquarters in Sacramento,
Fratianno looked to Joseph Alioto in the West and
Frank LaPorte in the East for help.
In Chicago, LaPorte, 64, is a top-rank Cosa
Nostra chieftain. A former member of the Al Capone
gang, he controls a variety of rackets and legitimate
enterprises in southern Cook County and Will County
(Illinois), and Lake County (Indiana).
Frank Bompensiero is an old friend of LaPorte
and, according to Federal authorities, contacted the
Chicagoan and informed him of the potential in
California trucking.
At the same time, in the West, Bompensiero was
in communication with Angelo Marino, Joseph Alio-
to's client in San Jose. The content of some of their
conversations, often in Italian, is locked away in Gov-
ernment files. However, it is known that they discussed
Jimmy Fratianno and his quest for expansion capital.
Alioto was then organizing his First San Fran-
cisco Bank and seeking out future customers. He had
also been thinking of entering politics for the first
time. But despite encouragement from fellow Demo-
crats to run for mayor in 1963, he rejected the oppor:
tunity because of “business obligations.”
Those obligations apparently included a series
of nighttime meetings at the Nut Tree, a restaurant
along the highway between San.Francisco and Sacra-
mento. Among those present at one or more of the
conferences, in addition to Alioto, were Fratianno,
Bompensiero, Angelo Marino, LaPorte and one of
Jimmy Hoffa's top Te representatives on the
West Coast. Alioto’s plan to organize a bank was a
subject of intense discussion.
After one meeting, Fratianno said he was “ex-
cited” about the possibilities for the future because
“my man {Alioto}” would control the bank’s board
of directors. Fratianno also expressed the belief that
he would be able to buy a piece of the bank’s stock.
Later, after another meeting at the Nut Tree, Frati-
anno said Alioto was excluding him because of his
hoodlum reputation but had assured him he would be
able to obtain loans from the bank.
The First San Francisco Bank opened its doors
for business in July, 1964. Fratianno, still hungry for
capital, did not forget the promise. Negotiations in
San Francisco were arranged.
On the morning of November 5, 1964, Frati-
anno and Angelo Marino met with Joseph Alioto at
his 111 Sutter St. law offices to discuss Fratianno’s
finances. Alioto called the bank to set the loan wheels
in motion. Later in the day, two intelligence agents
saw the pair of mobsters visiting the Bay Area's
senior Cosa Nostra boss, Jimmy Lanza, at his olive-
vil company’s office. Fratianno and Marino were
either paying a courtesy call on the resident Mob boss
or soliciting his advice or help. Lanza, who was in
the vicinity of the convention of Mafia dons at Apa-
lachin, N.Y., in 1957, has been friendly with members
of the Alioto family for more than 30 years. In fact,
Lanza’s father, a San Francisco Cosa Nostra chieftain
until his death in 1937, was in business with Alioto’s
father in a Fisherman’s Wharf restaurant.
A police stakeout on Lanza, after the Apalachin
trip, revealed numerous instances of Alioto-Lenza
contact. One day in 1958, agents observed Joseph
Alioto and his father meeting with Lanza at the lat-
ter’s office. Joseph Alioto was the first to leave and
was later interrogated by Federal agents. He stated
he was planning to accompany Lanza to Los Angeles
the next day to represent him before a grand jury
investigating the Apalachin affair. Apparently un-
nerved by his encounter with Federal authorities,
Alioto sent another lawyer from his office in his stead.
Two months after the 1964 meetings at the Alioto
and Lanza offices, Fratianno received the first of five
loans from the First San Francisco Bank,
On January 19, 1965, the bank made out a
$28,000 cashier's check in favor of the Fratianno
Trucking Co.; an additional $27,000 was placed in a
checking account; and a $5,510 discount charge was
levied against the loan. The signatures on the loan
agreement were those of Fratianno’s wife Jewell and
their son-in-law, officers of the company. The cashier's
check was given to a San Jose equipment firm, one of
whose owners is a friend of Angelo Marino, as part
payment on 16 dump trailers that Fratianno was buy-
ing from them. The trailers provided the collateral
for this first loan.
Within two weeks of receiving this $55,000 loan,
Fratianno stepped out of the role of under-financed
trucker long enough to funnel $35,000 to a man who
joined in a Mafia bid for a Las Vegas casino.
ATE IN JANUARY, Fratianno was hospitalized in
Los Angeles, where he had a sack of “ping.
pong balls” removed from his chest cavity.
The balls had been installed years before after
a lung removal, While he was in she hospital,
Fratianno whiled away his recup.©ation by
making repeated long-distance calls to Angelo
Marino in San Jose. He was at the same time in the
process of obtaining further loans from Alioto’s San
Francisco bank.
The bank quickly discovered the drawbacks of
dealing with Mafiosi like Fratianno. On April 6, 1965,
4 state investigator assigned to surveillance of or-
ganized crime inquired about the transaction. He was
put in touch with the bank's vice president, Joseph
R. Demers, who, he noted, was obviously upset about
being interviewed on this subject.
Asked whether Fratianno had approached the
bank by himself or had been recommended, Demers
MEN
IN THE
Jimmy Fratianno A Mafa
“executioner” credited with a role in
at least 16 murders ; currently
regarded as most influential active
mobster on Pacific Coast.
18
LOOK 9.23.49
in San Jose, Calif, ; with son
Salvatore Marino £x-Pennsylvania
Mafia racketeer now operating
Angelo, controls California Cheese Co.
Angelo Marino Believed to be cousin
of Bompensiero and leading
Mafioso in his own right ; in contact with
major hoods acioss the nation.
<=>" eee
re,
‘W
¥
‘y
said he was introduced by “Joseph Alioto, who is a
client of the bank and a well-known attorney.” Alioto
had then gone on to make the incredible statement:
“his credit is considered good by all with whom he
has done business.” Demers did not mention that
Alioto was the chairman of the board of the bank.
Inquiries about the loan did not stop the bank
from doing further business with Fratianno. Be-
tween May and October of that year, Alioto’s bank
extended four more loans. The money, $105,000 in
all, helped recapitalize a Mafia-controlled-and-
operated trucking company that cheated its drivers,
cheated insurance companies, stole truck parts from
rivals and, in a little over a year, would have a fatal
collision with the combined legal powers of the U.S.
Government and the State of California.
No one contacted by Loox was willing to accept
responsibility for the loans. The bank refused to dis-
cuss the situation. Alioto admitted to us that he met
with Fratianno in his offices. But, he asserted, he
sent Fratianno to the bank only because Teamster
organizer Jack Goldberger “vouched” for the ex-
convict. Goldberger, in turn, called Alioto’s allega-
tions “a lie.” He, too, admitted meetings with Frati-
anno but adamantly denied any role in the loans.
Fratianno himself denied everything except receipt
of the loans. When we located him in Phoenix, he
told us he had never met Alioto or Goldberger.
Back in Chicago, in 1965, Mafia don Frank La-
Porte also regarded Fratianno as a good credit risk.
At the same time that The Weasel was negotiating
the Alioto-arranged loans in San Francisco, LaPorte
was creating deals of Byzantine complexity designed
to inject 225,000 anonymous dollars into the Frati-
anno Trucking Co.
Involved were two banks, the Mercantile Na-
tional Bank of Chicago and the Exchange National
Bank of Chicago, and several of LaPorte’s relatives
and business fronts.
Six days after Alioto’s bank made its first loan
to Fratianno in San Francisco, a front man for La-
Porte borrowed $75,000 from the Exchange National
Bank. The money was secured with stocks, and the
bank did not question the reason for the loan. A
month later, on February 19, 1965, another LaPorte
front man, his brother-in-law, Jimmy Ross (né James
la DeRosa), received $180,000 from the Mercantile
National Bank. The loan, approved by the bank's
president, Lewis E. Corrington, Jr., turned out to be
grossly unsecured and was later defaulted.
The more than a quarter of « million dollars
from both Chicago banks was brought to California
by LaPorte and Ross. Somewhere along the line,
$30,000 disappeared. Cashier's check #653908 from
Mercantile for $150,000 and cashier’s check #805546
from the Exchange Bank for $75,000 were turned
over to Fratianno for the purchase of trucks and parts.
His newly enlarged truck fleet kept Fratianno
busy, but he remained in touch with LaPorte, Bom-
pensiero, the Marinos in San Jose and other friends
in Chicago and points East. He was also in touch with
Joseph Alioto. Alioto made “at least a dozen” long-
distance calls to Fratianno Trucking. A former em-
ployee of the firm remembers the calls well and told
us: “I was surprised later when I read he was elected
mayor, because he seemed so friendly with Jimmy.”
RATIANNO WAS UNDER heavy surveillance, and
by the fall of 1965, it was obvious that some
new kind of operation wzz jp the works. On
October 18, Los Angeles Police Department
agents watched LaPorte and Bompensiero
check into the fashionable Beverly Wilshire
Hotel. Trailing not far behind was The Weasel.
As the three Cosa Nostra bosses settled into cush-
ioned comfort in the Brown Derby restaurant across
the street, two LAPD undercovermen took the adjoin-
ing booth and heard snatches of conversation about
the forthcoming business deal.
The following month, Fratianno flew to San
Diego where he stayed at Bompensiero’s house. On
November 15, agents saw the two talking in a car
registered to local Mafioso Joe Matranga. One of the
subjects under discussion during Fratianno’s visit
was a plan to sell lard in Mexico in an attempt, with
Bompensiero’s help, to monopolize the market there.
The U.S. officials, who knew what was said, pondered
where the two mobsters would get large quantities of
lard, of all things. The answer came three weeks later.
On December 6, 1965, Frank Bompensiero
boarded Western Airlines Flight 791 in San Diego
and flew to Mexico City. There, he checked into the
plush El Presidente Hotel. Registered in the same
hotel and on hand to meet Bompensiero was Rudolph
Papale, president of the Regal Meat Packing Co., of
San Leandro, a community across the bay from San
Francisco. Bompensiero, we have learned, was there
to “fix” things with the government and wasted no
time. The two men immediately contacted a Mexican
businessman with wide political influence.
According to a U.S. narcotics agent, Bompen-
siero has myriad connections in Mexico and tried to
use them to get Papale a license to ship lard into the
country. The two men’s activities in Mexico City were
of considerable interest to a number of U.S. agencies.
Two questions perplexing them were: Who was Ru-
dolph Papale, and was the lard deal his only connec-
tion with the San Diego Mafia boss?
Rudy Papale is the brother-in-law of Mayor
Joseph Alioto. Alioto personally installed Papale as
president of the Regal Meat Packing Co., which is
partially owned by Alioto. “This kid is the salt of the
earth. Let me tell you, they don’t come any better,”
the Mayor told us. The families of both men are so
close that their wives run the jointly owned A. Genaro
antique shop on Union Street in San Francisco.
The Mayor's brother-in-law admitted to us that
Regal used the services of Frank Bompensiero, the
San Diego Mafia leader, after an introduction by
Alioto’s client, Angelo Marino. He said Regal “picked
up” all of Bompensiero’s Mexican expenses because
he was “doing a favor for us.”
Papale and Bompensiero apparently left Mexico
separately. Chewing on an expensive cigar, Frank
Bompensiero tried to pass through customs in San
Diego. Alerted U.S. Customs agents gave him a thor-
ough shakedown. No contraband was found, but three
phone numbers in Bompensiero’s wallet were. Two
were listed to Frank LaPorte in Chicago and one to
the Alioto-connected Regal Meat Packing Co., of San
Leandro, Calif.
The story behind the Regal Packing Co. leads
to still other direct links between Joseph Alioto and
the underworld.
Back in the 1940's, long before Regal was
founded, three men—Emilio Giorgetti (his spelling),
and Louis and Charles Figone—owned Regal’s fore-
runner, the Holly Meat Packing Co., of Oakland.
“Gam” Giorgetti earned the money he invested in the
$6-million-a-year meat enterprise as proprietor of a
number of conspicuous illegal gambling clubs just
south of San Francisco. His notoriety won him the
title of “Gambling Czar” of San Mateo County.
Illiterate, tough and a millionaire, Giorgetti be-
longed to the old-fashioned Mafia school known as
“Mustache Petes.” The key to his success was his
20-year friendship with the local sheriff, James Mc-
Grath, who provided protection from police raids.
The cost was high, but since Giorgetti often evaded
his income taxes, he could afford it.
As early as 1947, Joseph Alioto was the attorney
for Holly Packing. He also handled most of Giorget-
ti’s nal legal problems and in mu
personal legal pr engaged ined
Frank Bompensiero San Diego
Mafia leader with reputation
as ruthless killer ; an ex-convict,
he was imprisoned most
recently for bribery of public officials.
Emilio Giorgetti Deceased millionaire
Mafia gambler, hoodlum and political
corrupter in San Francisco in Illinois and Indiana;
area in 1940's. Died, natural causes, 1969.
Frank LaPorte A top Chicago Mafia
boss ; controls numerous rackets
has business interests in California.
Jimmy Lanza Aging but influential
resident boss of the San Francisco
Cosa Nostra; was at a hotel
in the vicinity of the 1957
Apalachin meeting of Mafia bosses.
Loox 9.23.00 19
ASS
ALIOTO cowrimven
profitable business with the controversial gangster.
Trouble enveloped Giorgetti in the late 1940's
with devastating effect. First, public disapproval of
San Mateo County vice conditions forced Sheriff
McGrath out of office. Then, state and Federal inves-
tigators, heeding the demand for reform, began prob-
ing Gam's career.
A brief scandal erupted in 1950 when a recently
resigned Treasury agent informed the Kefauver Sen-
ate Rackets Investigating Committee that Giorgetti’s
accountant had told him the gambler's records con-
tained references to massive payoffs of public offi-
cials. Through legal maneuvers, Giorgetti’s tax law-
yer, Joseph Alioto, managed to delay for several
months opening the books to investigators. By the
time they were opened, no references to payoffs were
found and the accountant had died of natural causes.
Alioto was president of the San Francisco Board
of Education at the time. One local newspaper, the
News, deinanded his resignation because of his “con-
duct in representing a notorious gambler.” Alioto
came in for more criticism, this time from some of
the senators of the Kefauver Committee, when he
advised Giorgetti that it would not be necessary for
him to respond to a Committee subpoena to testify in
San Francisco. Thereupon, Kefauver ordered Gior-
getti to appear before a hearing in Washington.
OME OF THE HEAT roasting Gam was by then
getting to Alioto. He announced that he would
not accompany his client to Washington and
said he had advised him to tell the truth. He
denied the contention that the financial rec-
ords contained payoff data and added an as-
tonishing statement: “I would withdraw from
the case if I thought Giorgetti was a racketeer, mixed
up with gangs. I am satisfied he is not.”
At that point, San Mateo “Gambling Czar” Gior-
getti sought refuge in the more tolerant atmosphere
of Las Vegas. There, no one spoke disparagingly of
him or such friends as gangsters Sam Termini and
Benny Binion. Binion, then Giorgetti’s partner in a
Las Vegas casino, was not only a “racketeer” but a
convicted murderer. Once asked about Binion's mo-
dus operandi, a retired police captain replied, “His
MO was always the same. Kill em dead and they
won't give you no more trouble.” Such were the
people Giorgetti was “mixed up with.”
In 1953, Giorgetti, suffering from a throat dis-
ease, was indicted for income tax evasion. Alioto re-
turned to Gam’s side and succeeded in keeping him
out of jail. Giorgetti was convicted, placed on proba-
tion and fined $20,000 after Alioto impressed the
judge with impassioned pleas that his client would
die if imprisoned. Giorgetti paid his fine and had
enough left over to invest $100,000 in a hidden in-
terest in a Lake Tahoe casino. According to a Federal
report, he stole nearly $500,000 of the casino’s profits
during the 1955 season.
That year was crucial for Alioto. He had gone
into partnership with Giorgetti’s Holly Packing part.
ners, Louis and Charles Figone, and two men in a
potentially lucrative land-speculation deal. Their
company, the Castlewood Corp., needed capital. On
January 10, 1955, they turned to Giorgetti. He lent
them $55,000 for six months. Alioto and the others
signed the promissory note.
To this day, Mayor Alioto says he sees no im-
propriety in his many dealings with the powerful
Mafia gangster. “From the time I knew Giorgetti to
the time of his death {1960}, he was engaged in no
illegal activities whatever”—a statement that ignores
the facts.
In 1955, Holly was sold for more than $1 million.
With his share of the proceeds, Giorgetti’s partner,
Louis Figone, founded Regal Packing and picked up
where Holly left off. Alioto was the company attorney,
20 00x 9.23.49
and in 1957 became a stockholder. In 1960, he was
a member of the board of directors. And, that same
year, he hired his brother-in-law Rudy.
It was shortly after Papale’s elevation to the
corporate presidency in 1965 that Regal’s lard deal
with Frank Bompensiero developed and, eventually,
went awry. Jimmy Fratianno told Cosa Nostra pals:
“The deal fell through.” Papale insisted to us that
Fratianno was not a partner in the venture but ad-
mitted reluctantly that he, Papale, too had met several
times with the Mafiuso. Once again, the peripatetic
Angelo Marino had made the original introduction,
this time in San Francisco.
The Mayor’s brother-in-law also revealed to us
that the Alioto-connected meat company has over the
years marketed many of its products in conjunction
with the Marinos’ cheese firm. After some prodding,
Papale said he had “heard” of the Marino connec-
tions with organized crime but nevertheless continues
to “socialize” with Angelo Marino.
N Fepruary, 1966, the Mob, in the form of the
Fratianno Trucking Co., arrived in El Centro,
Calif., to begin work on a $15 million interstate-
highway section. The hot, dusty town had never
seen anything like it before. Slick city boys with
nicknames like “Weasel,” “The Lips” and “Nick
The Greek” descended on the Imperial Valley
community with a roar, dressed in greasy coveralls
and leading, thanks in part to Joseph Alioto’s financ-
ing arrangements, a great vanguard of diesel trucks.
The El Centro project looked financially ripe,
and Fratianno extended invitations to a few close
friends to get in on the action. One of those who re-
ded was a reputed killer, Leo “The Lips” Moceri,
of the Ohio Mafia. Carrying $10,000 in cash with him,
Moceri flew to El Centro from Cleveland and moved
into an apartment with Fratianno. The money was for
“investments” and was immediately loan-sharked to
truck drivers at five percent interest per week, or a
true rate of over 500 percent interest per annum. Over
the years, Moceri the loan shark has been involved in
at least 17 murders in Ohio, Michigan, Illinois and
Florida. A Federal fugitive for 17 years, Moceri was
caught in Hollywood in 1952, “slugging” a pay tele-
phone for a $1.20 toll call. He had $1,800 in cash on
him and a new Cadillac parked at the curb. The car
was registered to the Marino family’s California
Cheese Co. branch in Los Angeles, which Moceri was
using a8 a mail drop, Extradited to Ohio, he ended
up with a five-year jail term.
Sharing the El Centro apartment with Moceri
and Fratianno was Frank Bompensiero, who hated
the heat, the flies and, most of all, the trucks. He was
LaPorte’s man at the construction site, insurance that
Fratianno would refrain from cheating.
Bompensiero and Fratianno were joined regu-
larly in El Centro by other veterans of the restaurant
meetings involving the Alioto bank. Frank LaPorte
and Angelo Marino were in and out of town.
Here was a remarkable gathering of Joseph
Alioto’s underworld contacts. Present in El Centro
was Fratianno, the mobster for whom Alioto had
helped to obtain loans; present were LaPorte and
Bompensiero, the mobsters who participated in the
Nut Tree conferences; present was Angelo Marino,
the mobster to whom Alioto had given advice and
counsel, Furthermore, during this period, telephone
calls were made from Fratianno’s apartment in El
Centro to Regal Packing, whose president, Alioto’s
brother-in-law, consorted with Mafiosi.
Incurable greed brought Fratianno down in El
Centro. He could not resist the chance to cheat his
truck drivers. Because of his Teamsters Union con-
nections, Fratianno seldom paid the legal minimum
wage. When a man complained to the Union that he
was receiving only $2.50 per hour, less than half of
what it should have been, he would be told, “You're
working ain’t you?” Fratianno’s favorite trick in El
Centro was to “sell” a truck to the drivers, thereby
making them “owner-operators” and subject to con-
siderably fewer protective safeguards.
The house came tumbling down when a Fratian-
no henchman and drug addict, Nick “The Greek”
Diacogianis, slugged a complaining driver. The man
went to the Imperial County district attorney's office
and filed assault charges. State and Federal investi-
gators stepped in for a closer look, and found numer-
ous violations of law. Fratianno was arrested. His
earth-hauling contract abruptly ended, he defaulted
on his truck loans. Strangely, unlike most of Frati-
anno’s other creditors, Alioto’s bank never sued for
damages or recovery of the debt.
Fratianno was convicted of conspiring to violate
Federal minimum-wage laws and filing false state-
ments with the Government. The judge surprised
everyone by placing The Weasel on probation for
three years and levying a $10,000 fine. Fratianno
could have received five years in prison.
Besides having to find the money to pay his fine,
Fratianno still worried about his bank debt in San
Francisco. At the El Centro airport one day in No-
vember, 1968, he told a bail bondsman and a state
deputy attorney general his problems. “I still owe
moncy to my friend Joe in San Francisco, and | want
to pay him back,” Fratianno said. When asked who
“Joe” was, he replied, “Joe Alioto. You know, the
Mayor.” The deputy attorney general reported the
incident to the Fat and later told Loox investigators
he had “become jaded about political corruption be-
cause of my job” and was not surprised that a big-
city mayor “would know a bum like that.”
Fratianno was not uhappy with his Federal
sentence, but his luck ran out when he hit state court.
He received a one-to-three-year prison sentence and
a fine of $3,000.
As Fratianno plunged to his downfall, Joseph
Alioto moved suddenly into the ascendant. When
San Francisco's Democratic mayor, John Shelley,
announced he would not run for reelection in 1967,
party moneymen tapped Joseph Alioto as his replace-
ment. Alioto responded eagerly and won handily.
Contributions fueling his expensive campaign came
from many sources, including Teamster friends of
Fratianno. The Cosa Nostra did its part. Alioto’s old
associates, the Marinos, dropped “substantial”
amounts into the election coffers. Salvatore Marino
(“a very fine person,” the Mayor told us), whose place
on the U.S. Attorney General's list of major racketeers
was well known to Alioto, even bought six $100 seats
to the Inaugural Dinner.
Both the brother and wife of Bay Area Mafia
boss Jimmy Lanza, whose rank as a major Mafia
leader was equally well known to Alioto, told a
Look investigator that Jimmy Lanza, too, had at-
tended the same dinner. Later, Mrs. Lanza changed
her mind. She had been mistaken, she said. Her hus-
band stayed home that night.
Now that Alioto is the leading candidate for
California's Democratic gubernatorial nomination,
a professional political manager and a committee are
hard at work raising the wherewithal for the cam-
paign next year. Seen in the files of potential pur-
chasers of tickets to a $100-a-plate fund-raising din-
ner on September 20 were the names of Salvatore
Marino and the California Cheese Co.
Alioto’s law firm, in which he still retains an
interest, continues to represent the Marinos and the
Californig Cheese Co. His brother-in-law, Papale, re-
mains in frequent friendly contact with Angelo Ma-
rino. The latter talks regularly with Bompensiero,
who still sees LaPorte. And so on. Mayor Joseph
Alioto’s channels of communication with the Cosa
Nostra remain open. END
00x 9.3.49 27
Salvatore and Angelo
Marino Legal clients of
Alioto. Angelo met at Nut Tree
Restaurant. Political
contributions to Alioto. CCC
does business with RPC.
Angelo invested in Fratianno
Trucking. Angelo-Papale
telephone calls.
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mld
Frank Bompensiero Met a
Nut Tree Restaurant .
Believed relative of
Marinos. Invested in
Fratianno Trucking Co.
Observed Fratiannc Trucking
Co. operation for LaPorte.
In Mexico City with Papale.
Jimmy Fratianno Met at
Nut Tree Restaurant. Secured
Alioto-arranged loans.
Met with Lanza. Met
several times with Papale.
Sega gggun
Rudolpa Papale
Alioto in-law.
Brought into RPC
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Jimmy Lanza Former client
of Alioto law firm.
Political supporter of Alioto.
saueeeees
sg
sg
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Emilio Giorgetti Client
of Joseph Alioto. Lent
money to Alioto-connected
Castlewood Corporation, 1955.
Frank LaPorte Met
at Nut Tree Restaurant.
Arranged financing
for Fratianno Trucking Co.
|
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.