Reply Brief — Lake Charles American Press v. McHale

No. 80-1790

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In THE «JUN 2 186

Supreme Court of the United Stated’?

Octoper Term, 1980

LAKE CHARLES AMERICAN PRESS AND

WILLIAM HUGH SHEARMAN

v.

Ropert M. MCHALE

Petitioner’s Brief in Reply to

Brief of Respondent in Opposition

To Petition For Certiorari

ArTHUR B. HANSON

HANSON, O'BRIEN, BinNEY & BUTLER

888 Seventeenth Street, NW

Suite 1000

Washington, DC 20006

WILLIAM M. NOLEN

JONES, TETE, NOLEN, HANCHEY,

Swirt & SPEARS

P.O. Box 910

‘Lake Charles, LA 70821

Of Counsel:

Frank M. NoraTHAM

MitcHeit W. DaLe

Artuur D. McCKEy

HANSON, O’Brien, Binney & BUTLER

888 Seventeenth Street, NW

Suite 1000

Washingto., DC

Frank W. MIDDLETON, Jr.

TayLor, Porter, Baooxs & PHILLips

P.O. Box 2476

Baton Rouge, LA 70821

Petitioners

Respondent

TABLE OF CONTENTS

Ne ios sssssiessanencnsbnsondenines

C. “Good Faith Belief” of Shearman

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TABLE OF CITATIONS

Garrison v. Louisiana, 379 U.S. 64 (1964) .........0000+

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

Greenbelt Pub. Association v. Bressler, 398 U.S. 6

“2 ESR Aaa Ce

New York Times Co. v. Sullivan, 376 U.S. 254 (1964)

ay enero Douglas Corp. 112 Cal. Rptr. 609

OTHER AUTHORITIES

Sack, Libel, Slander and Related Problems (Prac-

ticing Law Institute, 1980). ...........ssssssereessereeeees

McCormick On Evidence (2nd ed. 1972) .........s000s000e8

Prosser on Torts (3rd €d. 1964).........ccseccsesssseecsesseeees

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IN THE

Supreme Court of the United States

OCTOBER TERM, 1980

LAKE CHARLES AMERICAN PRESS AND

WILLIAM HUGH SHEARMAN

Petitioners

Vv.

ROBERT M. MCHALE

Respondent

Petitioners’ Brief In Reply To

Brief Of Respondent In Opposition

To Petition For Certiorari

COME NOW PETITIONERS, pursuant to Rule 24( 4) of

the Supreme Court Rules, to address arguments first raised in

the Brief Of Respondent In Opposition To Petition For Certior-

ari received by Counsel for Petitioners on May 22, 1981.

ARGUMENT

A. This Court's Scope of Review

Respondent argues that the trial court’s determination that

the statement at issue was not opinion, and was made with

actual malice, is a factual conclusion foreclosed from review by

this Court. Yet because the actual malice standard, and the

protection accorded “opinion” under Gertz v. Welch, 418 U.S.

323 (1974), Greenbelt Pub. Association v. Bressler 399 U.S. 6

(1970), and other decisions, are matters of constitutional law,

there is no doubt that this Court may make an independent

examination of the record “so as to assure . . . that the judgment

does not constitute a forbidden intrusion on the field of free

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expression.” New York Times Co. v. Sullivan, 376 U.S. 256,

285 (1964).

Moreover, it is respectfully submitted that inasmuch as

only statements which do not express pure opinion and which

are therefore capable of being false may be defamatory, it is the

plaintiffs burden to establish that an allegedly defamatory

statement is factual, a burden which in this Court’s examination

of the record must be shown to have been met with “convincing

clarity”. See generally, Sack, Libel, Slander and Related

Problems (P.L.1., 1980) 180.

B. Opinion Versus Fact

In his Brief in Opposition, Respondent implies that Peti-

tioners’ request that this Court accord constitutional protection

to the publication at issue as being a statement of opinion is

somehow at odds with the testimony of Petitioner Shearman

and/or the legal defenses asserted at trial. Brief in Opposition,

at 15, 19. (hereinafter, “Br. Opp.”). In response to this, it must

first be noted that on September 22, 1978, Petitioners moved

for Summary Judgment on the ground, inter alia, that the

statement “No bond buyer would buy a nickel’s worth of |

securities on McHale’s opinion” constituted a non-defamatory

expression of opinion. This constitutional defense was also

raised before the Third Circuit Court of Appeals for the State of

Louisiana.

As yet, Petitioners have not requested that the record of

proceedings below be certified and transferred to the Clerk of

this Court. Yet, the record will show that at trial, Charles King,

a Judge of the Fourteenth Judicial District Court of Louisiana

who was called to testify on Defendants’ behalf, recognized the

challenged statement for what it is—an opinion as to future

events.

“Q: You were aware of the fact, I take it, that Mr. McHale

had issued many opinions in the sale of securities, that is,

paving and sewerage certificates, and other types of secu-

rities, for the City of Lake Charles, were you not?

A: Yes, I was.

3

Q: Would you, then, contradict the statement that ‘No

bond buyer would buy a nickel’s worth of securities on

McHale’s opinion” Would that be inaccurate if, in fact,

this City has sold many securities under his opinion?

A: I don’t know that I would contradict it, but I don’t

know that it would be accurate, either. It would be a

conclusion or an opinion.

Q: All right, sir.

A: I don’t know if a prospective bond buyer would or

would not.” Tr. at 814.

In short, Petitioners’ published statement could not possi-

bly have expressed “a thing that has [or has not] actually

happened, ... is [or is not] true.” Br. Opp. at 13.!

Moreover, there was no persuasive evidence introduced at

trial which would suggest that Petitioner Shearman—rather

than making a poor choice of words to say what he in-

tended—deliberately phrased his statement as he did merely to

avoid potential liability for falsely stating that even securities

issued with McHale serving as co-counsel on the approving

legal opinion have not been sold.

Respondent argues that Publisher Shearman acknowl-

edged that his statement was “a fact.” Tr. at 14. Yet just as, for

purposes of determining defamation liability, the statement

“No bond buyer would buy...” cannot properly be isolated

from its context within the editorial as a whole, Greenbelt Pub.

Ass'n. v. Bressler, 398 U.S. 6, 13-14 (1970), Scott v. McDonnell

Douglas Corp., 112 Cal. Rptr. 609, 618, n. 11 (1974), so too is it

inappropriate to divorce two answers given by Shearman under

cross-examination from the essential thrust of his testimony.

On numerous occasions at trial, Shearman and editors for

the American Press testified that the challenged statement was

intended to refer to general obligation bonds, and to suggest

that those bonds could not be sold on McHale’s legal opinion

‘ Similarly, the fact that one’s opinion of future events may later

prove to be inaccurate does not then transform that opinion into a

misstatement of fact.

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alone. Tr. at 873-74, 878-79, 992, 1031, 1041. The basis for

believing this was that McHale rarely if ever prepared approv-

ing legal opinions on certificates of indebtedness without

serving as co-counsel to other attorneys who specialized in bond

work.2 Tr. at 182, 233, 640-42, 741-43. Moreover, as McHale

himself testified at trial, he had never been the sole attorney to

issue an approving legal opinion on general obligation or

revenue bonds. Tr. at 641-42, 644, 668-69.

Thus, it is respectfully submitted that Publisher Shear-

man’s testimony that the intended meaning of the statement ia

question is a “fact,” was simply his assertion at trial of the

continuing accuracy and validity of his opinion, and does not

constitute an admission that the opinion, if derogatory, is

therefore defamatory.

C. “Good Faith Belief” of Shearman

Respondent argues that due to various “inconsistencies,”

“flagrant discrepancies and out and out lies of Mr. Shearman”

at trial, Br. Opp. at 17, 19, the trial court was entitled to

discount Mr. Shearman’s testimony as to his honest belief in the

correctness of his editorial, and as to his inadvertent failure to

accurately express himself. One of these “inconsistencies” is

Shearman’s testimony at trial, contrary to his deposition testi-

mony, that he did not in fact read paving certificate advertise-

ments published in the American Press referring to approving

legal opinions issued by McHale. This trial testimony was

volunteered by Mr. Shearman, who explained that at the

deposition, “I was being a smart aleck and I anticipated the

question and I answered it wrong and I told you this before and

I'll tell it to you again.” Tr. at 1017.

Respondent offers this “inconsistency” as just further proof

that Petitioner Shearman intended in 1977 to inflict harm on

2 One of these attorneys testified that simply because an attorney

has issued the sole legal opinion approving what ultimately becomes a

successful sale of paving or sewerage certificates does not mean that

that attorney is sufficiently competent or reputable to generate the

buyer confidence in his bond opinions necessary to successfully

market general obligation bonds. Tr. at 178, 182.

5

Mr. McHale through falsehood, as he allegedly did in Petition-

ers’ series of articles on the Sears Lease in 1974, articles which,

incidentally, the trial court below found to be “First Amend-

ment protected.” Petition for Writ of Certiorari at 1 la.

Another alleged inconsistency or lie is said to be found in

Shearman’s deposition testimony that he did not participate in

the purchase by the Gulf National Bank Discount Committee of

$350,000.00 in certificates of indebtedness issued on McHale’s

opinion. Respondent notes that the minutes of the relevant

Committee meeting which were introduced into evidence at

trial show that Shearman was in attendance when the Com-

mittee agreed that the bank should purchase said certificates.

Further review of the trial transcript, however, makes it clear

that when the suggestion was made to the Committee that the

bank purchase those certificates, the Committee may not even

have been told who the approving attorney was.

Respondent also hastens to point out that,

“Faced with the truth at trial, Shearman never

denied that he was aware that these certificates of

indebtedness were purchased by his bank on Mr.

McHale’s -pinion.” Br. Opp. at 8.

Yet undersigned counsel’s review of the trial transcript

does not show that Shearman was ever asked to admit or deny

his awareness of that fact.

Another purported inconsistency is alleged to exist between

Shearman’s August, 1977 deposition testimony and his 1979

trial testimony, pertaining to whether in 1974 he possessed

three appraisals of the Sears lease entered into by McHale and

various business associates. At deposition, Shearman said:

“A: No I don’t have three of them [viz., appraisals].

Q: Did you have two?

A: No, sir.

Q: Just had one?

A: I don’t even know where that is.” Tr. at 1003-04.

6

At ti.al, Shearman said that in 1974 he “had” (received?;

retained?) the three appraisals. Tr. at 1004. Of course,

Shearman at trial went on to say “At that time I couldn’t tell

you where they were. ****I don’t know that I had one, two or

three at the time.**** As far as Mr. Pease’s [ appraisal ] is, that

could have been thrown away the day I got it.” Tr. at 1005.

In any event, an impartial review of the trial transcript—

including the deposition testimony introduced as evidence of

prior inconsistent statements—does not reveal what Respon-

dent alleges are “complete reversals of important aspects of

sworn testimony”, Br. Opp. at 17, which render inherently

improbable Publisher Shearman’s testimony that he did not

publish with actual malice.

Of course, the central issue in this case is not discontinuities

in trial testimony. Nor is the central issue one of seman-

tics—i.e., fine linguistic distinctions between fact and opinion.®

The fundamental issue is how far will the rights of free speech

and of a free press in Louisiana extend in protecting harshly

worded criticisms of public officials. Will those freedoms

protect an editorial that acknowledges a public official’s past

performance of certain official functions, but goes on to express

a qualitative viewpoint as to the merits thereof by stating that

not one of a figurative group of citizens would value that

Official’s performance.‘

The fitness of Robert McHale for reappointment as City

Attorney and, more specifically, whether the use of tax revenues

3 Dean Prosser once wrote that this distinction between fact and

opinion “has proved to be a most unsatisfactory and unreliable one,

difficult to draw in practice.” PROSSER ON TORTS ( 3rd. ed. 1964)

814. Professor McCormick has said that the assumption that fact and

opinion are readily distinguishable “is an illusion.” McCORMICK

ON EVIDENCE §11 at 23 (2nd ed. 1972).

4 Obviously the fact that criticism of this sort may also disparage

an Official’s private reputation, and thereby injure his or her private

economic interests, does not strip the “citizen-critic of goverament” of

his protection under N.Y. Times v. Sullivan, 376 U.S. 254 (1964) and

Greenbelt Pub. Ass'n v. Bressler, 398 U.S. 6 (1970). See generally,

Garrison v. Louisiana, 379 U.S. 64, 77 (1964).

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to retain McHale for Lake Charles’ municipal securities work,

which almost without exception has required the collaborative

efforts of other attorneys, are matters which obviously pertain to

local self-government and go to the heart of protected political

discourse.

Respondent also objects to what he describes as Petition-

ers’ “general attack on the Louisiana Judiciary” and “slurs of

‘local prejudice’.” Br. Opp. at 19, 20. Petitioners wish to assure

this Court that they do not wish to slur or vilify the Louisiana

Judiciary generally or the trial court below. Petitioners merely

wish to present for the record their alarm at the increasing

frequency with which newspapers seeking to perform their

constitutional role as best they know how are suffering judg-

ments of enormous sums which would seem not to reflect a trial

court’s or jury’s realistic assessment of culpability and reputa-

tional injury, but rather retaliation for unpopular viewpoints

and aggressive reporting.

And query, might the verdict below also be characterized

as punitive, giving insufficient latitude to dissident critics of the

local political establishment in Lake Charles?

Will this verdict dampen political debate in Lake Charles

and elsewhere by compelling newspapers, public speakers, and

other commentators in Louisiana to now evaluate a public

Official’s performance or capabilities only in declarative and not

emotional terms?

Are editors and publishers safe in permitting the publica-

tion of disparaging prose which purports to express the senti-

ments of other citizens, or just that which would express the

attitudes of some other citizens, but not all or none? Is the

colloquial use in “op-ed” commentaries of phrases such as “No

one would... ” now libelous if not literally accurate? Will the

decision below permit “uninhibited, robust, and wide-open”

“‘debate on public issues,” N.Y. Times, supra, at 270, or merely

allow pale, tame, qualified expressions of political preference?

Petitioners respectfully submit that the decision below

shows an unrealistic lack of confidence in the ability of our

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citizenry to recognize editorial opinion and, through exposure to

conflicting ideas and the true facts concerning a public servant’s

performance, to draw their own conclusions. The decision

below reflects a narrow and crabbed view of First Amendment

freedoms, and should be reversed.

Respectfully submitted,

Arthur B. Hanson

ARTHUR B. HANSON

HANSON, O’BRIEN, BIRNEY & BUTLER

888 Seventeenth Street, NW

Suite 1000

Washington, DC 20006

WILLIAM M. NOLEN

JONES, TETE, NOLEN, HANCHEY,

Swirt & SPEARS

P.O. Box 910

Lake Charles, LA 70821

Of Counsel:

FRANK M. NORTHAM

MITCHELL W. DALE

ARTHUR D. MCKEY

HANSON, O’BRIEN, BIRNEY & BUTLER

888 Seventeenth Street, NW

Suite 1000

Washington, DC 20006

FRANK W. MIDDLETON, Jr.

TAYLOR, PorTER, BROOKS & PHILLIPS

P. O. Box 2476

Baton Rouge, LA 70821