Petition for Writ of Certiorari — Unelko Corp. v. Rooney

Supreme Court, U.8,

; ©

90°1325 FILED

FEB 19 199)

No.

I we oa TE Clem

Supreme Court of the United States

OCTOBER TERM, 1990

UNELKO CORP., an Arizona corporation, and

HOWARD G. OHLHAUSEN, an individual,

Petitioners,

V.

ANDY ROONEY, an individual, and CBS, INC.,

a New York Corporation,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

ROBERT P. CUMMINS* JOHN J. BOUMA

BICKEL & BREWER ROBERT H. OBERBILLIG

311 South Wacker Drive SNELL & WILMER

Suite 5600 3100 Valley Bank Center

Chicago, Illinois 60606 Phoenix, Arizona 85073

(312) 986-0900 (602) 257-7370

*Counsel of Record Attorneys for Petitioners

y

Stine omepeanemenes Naa a

i

QUESTIONS PRESENTED

1. Did the Ninth Circuit repudiate this Court’s decision

in Milkovich v. Lorain Journal Co., 110 S. Ct. 2695 (1990),

by sua sponte finding that a broadcast statement implies

only the speaker’s subjective meaning, while ignoring that

the statement implies objective facts which can be proven

false and defamatory?

2. When this Court reverses the law on which a district

court relied in granting summary judgment, does due pro-

cess mandate that the case be remanded to enable the

parties to develop a complete factual record in light of the

intervening change in law?

ii

TABLE OF CONTENTS

QUESTIONS PRESENTED ..........cceecceee

fo Pe an reer rr TT Pree

A.

B.

Introduction—The Ninth Circuit Rejects

OS te Reis

The Initial Broadcast—Rooney And CBS Pro-

claim That The Efficacious Rain-X Product

RE oo

Unelko Files Suit And CBS/Rooney Immedi-

ately Respond With A Further Defamatory

PT re ee oe hrs ee rr

CBS/Rooney Invoke The First Amend-

ment—They File A Motion For Summary

Judgment On The Ground That The Defama-

tory CBS/Rooney Statements Are Immune

From Liability As “Opinion” ...............

Summary Judgment Is Granted Because The

Trial Court Erroneously Concludes That

Rooney’s Statement That “Rain-X Does Not

Work” Is Protected Opinion ................

The Ninth Circuit Specifically Finds That

Rooney’s Statement Implied Assertions Of

oy eee rr

The Ninth Circuit Rejects Milkovich—It Ig-

nores What Rooney’s Statement Implied To

The Trial Court And Viewers, And Instead

“Assume[s]” That The Statement Only Im-

plied That Rain-X Did Not Work For Rooney

iii

REASONS FOR GRANTING THE WRIT....... 8

A. The Ninth Circuit Rejected Milkovich And

Violated Petitioners’ Seventh Amendment

1. Under Milkovich, The Dispositive Inquiry Is

Whether A Statement Implies Defamatory

Facts To A Reasonable Fact Finder....... 8

2. The Ninth Circuit Violated Milkovich By

Ignoring The Objectively Verifiable Facts

That Rooney’s Statement Implied To The

BE 10

3. The Ninth Circuit’s Repudiation Of

Milkovich Resurrected The Blanket

“Opinion” Exemption Rejected By This

a Bag Or eee ll

4. Unelko Is Entitled To Have A Jury

Determine Whether Rooney’s Statements

Implied A Defamatory Meaning .......... 12

B. When This Court Rejects The Precise Theory

On Which A District Court Relied In

Granting Summary Judgment And Renders

The Existing Record Irrelevant, Due Process

Entitles The Parties To Develop A Factual

Record In Light Of The New Controlling Law 13

Ee iia bet nas a 64666006460 0008500 15

APPENDIX (Opinion and Judgment of the United

States Court of Appeals for the Ninth Circuit,

Opinion of the United States District Court of

Arizona, and Order of the Ninth Circuit Denying

Rehearing)

iV

TABLE OF AUTHORITIES

Cases PAGE

Ault v. Hustler Magazine, Inc., 860 F.2d 877 (9th

Cir.), cert. denied, 489 U.S. 1080 (1989) ........ 8

Byrd v. Blue Ridge Rural Elec. Coop., Inc., 356 U.S.

Se eee oe bere eh Suede eu e's ese 14

Dombey v. Phoenix Newspapers, Inc., 150 Ariz. 476,

See ee GIS GPE 6 on ness wcncwncessccs: 15

Don King Prods., Inc. v. Douglas, 742 F. Supp. 778

(S.D.N.Y. 1990) ....... Gs tk een eR aks bs-<

Foretich v. Glamour, Civ. A. No. 89-3099 (D.D.C.

Chat, 5, ESRC ISRO Wah. ZEMIGS) on cccccccccccs: S

Fountain v. Filson, 336 U.S. 681 (1949) ......... 13, 14

Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974) ... 8

Heirs of Fruge v. Blood Servs., 506 F.2d 841 (Sth Cir.

Ste igus a nna hd bth decameinabontasnes 13-14, 15

Lewis v. Time, Inc., 710 F.2d 549 (9th Cir. 1983)... 8

Milkovich v. Lorain Journal Co., 110 S. Ct. 2695

Seat Was wien o cickeiedl abn bens kadae fs passim

Southern Air Transp., Inc. v. American Broadcasting

Cos., 877 F.2d 1016 (D.C. Cir. 1989) ........... 12

Swistock v. Jones, 884 F.2d 755 (3d Cir. 1989) ..... 14

Unelko Corp. v. Rooney, 912 F.2d 1049 (9th Cir.

RES eee rr ry eT Peete passim

United States v. Waleren, 885 F.2d 1417 (9th Cir.

A OSs Sea adanWedecdUh con UlewsecOuas nas 14

West v. Bond Univ. Ltd., Nos. C-89-20674 RFP, C-89-

20673 RFP (N.D. Cal. Nov. 8, 1990) (1990 US.

I , Svca vice cae Wawaea aah bss se 9

White v. Fraternal Order of Police, 909 F.2d 512 (D.C.

a dun ans cddbendkceeacaeues 10, 12

Additional Authorities

Restatement (Second) of Torts § 614 (1977) ....... 12

IN THE

Supreme Court of the United States

OcTOBER TERM, 1990 —

UNELKO CORP., an Arizona corporation, and

HOWARD G. OHLHAUSEN, an individual,

Petitioners,

Vv.

ANDY ROONEY, an individual, and CBS, INC.,

a New York Corporation,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

Petitioners Unelko Corp.' and Howard G. Ohlhausen

respectfully pray that a writ of certiorari issue to review the

judgment and opinion of the United States Court of Appeals

for the Ninth Circuit, entered in the above-entitled proceed-

ings on November 20, 1990.

' Unelko Corp. is a privately owned Arizona corporation which

has no parent or subsidiary company.

2

OPINIONS BELOW

The August 24, 1990, decision of the United States Court

of Appeals for the Ninth Circuit is published at 912 F.2d

1049 (9th Cir. 1990) (Appendix A). The April 25, 1989,

Order of the United States District Court for the District of

Arizona is not published (Appendix B).

JURISDICTION

The decision of the Ninth Circuit was filed on August 24,

1990. A petition for rehearing with a suggestion for rehear-

ing en banc was denied on November 20, 1990 (Appendix

C). This Petition was filed within 90 days of that date. This

Court has jurisdiction over this case pursuant to 28 U.S.C.

§ 1254(1).

CONSTITUTIONAL PROVISIONS

The Seventh Amendment to the United States Constitu-

tion provides: “In Suits at common law, where the value in

controversy shall exceed twenty dollars, the right of trial by

jury shall be preserved, and no fact tried by jury, shall be

otherwise re-examined in any Court of the United States,

than according to the rules of the common law.”

STATEMENT OF THE CASE

A. Introduction—The Ninth Circuit Rejects Milkovich.

This case is about product defamation by CBS and Andy

Rooney on “60 Minutes.” It also concerns a follow-up

broadcast of “60 Minutes” involving additional false asser-

tions and the ridicule of Petitioners’ recourse to the federal

court.

3

The present petition results from the Ninth Circuit’s

decision affirming the District Court’s determination that a

false national television “pronouncement . . . that a product

does not work” is protected “opinion,” in derogation of this

Court’s decision in Milkovich v. Lorain Journal Co. In

rejecting Miikovich, the Ninth Circuit also compromised

Petitioners’ Seventh Amendment right to a jury trial.

B. The Initial Broadcast—Rooney And CBS Proclaim

That The Efficacious Rain-X Product Does Not

Work.

On the April 17, 1988, broadcast of “60 Minutes,” Andy

Rooney did a feature on “junk.” During this “junk” seg-

ment, Rooney displayed Rain-X and stated:

Here’s something for the windshield of your car called

Rain-X. The fellow who makes this sent me a whole

case of it. He’s very proud of it. I actually spent an hour

one Saturday putting it on the windshield of my car. I

suppose he’d like a commercial or a testimonial. You

know how they hold the product up like this? [holding

product up next to his face] Jt didn’t work.

Virtually every aspect of Rooney’s broadcast statement

was admittedly false,* and his assertion that Rain-X does

not work is at the heart of this proceeding. 7

? Pet. App. B-1 (April 25, 1989, Order of Judge Broomfield).

7110 S. Ct. 2695 (1990).

* Rooney admittedly did not spend an hour applying Rain-X to

the windshield of one of his cars, and he changed his testimony

concerning which car he allegedly treated. Finally, Rooney was

also impeached on the critical issue of when he allegedly applied

Rain-X.

4

C. Unelko Files Suit And CBS/Rooney Immediately

Respond With A Further Defamatory Broadcast.

On May 4, 1988, Petitioners filed their Complaint against

Rooney and CBS for defamation, product disparagement,

and tortious interference with business relationships.’ Peti-

tioners alleged that Rooney and CBS maliciously broadcast

false and defamatory statements about Rain-X on April 17

and caused substantial damage to Petitioners’ business and

reputation.

Four days later, during their May 8 broadcast,

CBS/ Rooney compounded the April 17 defamation. Recog-

nizing the defamatory implication of his segment on Rain-X

and the pejorative “junk” label he had used, Rooney

changed his defamatory statement from “It didn’t work” to

“It didn’t work for me.’” The May 8 broadcast also ridiculed

the federal court litigation brought by Petitioners.

D. CBS/Rooney Invoke The First Amendment—They

File A Motion For Summary Judgment On The

Ground That The Defamatory CBS/Rooney State-

ments Are Immune From Liability As “Opinion.”

Rooney and CBS moved for summary judgment on De-

cember 5, 1988. In the memorandum in support of their

* The Complaint was filed in the United States District Court

for the District of Arizona, pursuant to that court’s diversity

jurisdiction under 28 U.S.C. § 1332.

* The May 8 broadcast also contained false statements of fact,

and the context of the broadcast demonstrates that it was inten-

tionally crafted to further ridicule and arrogantly defame Petition-

ers and their legitimate recourse to the legal process.

Accordingly, Petitioners were granted leave to amend their Com-

plaint to assert additional claims for relief stemming from this

further broadcast.

5

motion, CBS and Rooney asserted that Rooney’s false

statements were protected “opinion” and not actionable as a

matter of law. In summarizing their argument, Respondents

stated:

A long line of federal and state cases firmly establishes

that under the First Amendment there can be no

liability for the expression of one’s opinion. These cases

identify the factors that distinguish statements of opin-

ion from statements of fact. As demonstrated below,

those factors are present here; Andy Rooney was ex-

pressing his opinion when he commented on Rain-X.

Accordingly, as a matter of law, no liability can attach

to Rooney’s statements and defendants’ motion for

summary judgment should be granted.’

On February 6, 1989, Petitioners filed their brief in

opposition to Respondents’ motion for summary judgment.

Petitioners disputed the CBS/Rooney thesis that “opinion”

is protected. In so doing, Petitioners argued that there is

simply no justification for extending constitutional protec-

tion to statements falsely condemning a consumer product.

CBS and Rooney filed their Reply on February 27, 1989.

Again, the thesis propounded by CBS/Rooney was that

Rooney’s statement was protected “opinion.”

E. Summary Judgment Is Granted Because The Trial

Court Erroneously Concludes That Rooney’s State-

ment That “Rain-X Does Not Work” Is Protected

Opinion.

Judge Broomfield’s order of April 25, 1989, granted

Respondents’ motion for summary judgment. The trial

” Memorandum In Support Of Defendants’ Motion For Sum-

mary Judgment at 5-6.

6

judge ruled that Rooney had declared that Rain-X does not

work. The dispositive issue was stated by the trial court as

follows:

[ W Jhether a well-known humorist and social commen-

tator’s pronouncement on national television that a

product does not work subjects him and his network to

liability to the product manufacturer for defamation,

product disparagement and tortious interference with

business relationships.*

Judge Broomfield then erroneously granted Respondents’

motion on the basis that Rooney’s statement was protected

“opinion.”

F. The Ninth Circuit Specifically Finds That Rooney’s

Statement Implied Assertions Of Objective Facts.

Ohlhausen and Unelko filed their notice of appeal on

May 24, 1989. In their appellate briefs, the parties continued

to dispute whether Rooney’s statement was protected as

“opinion.” After this Court decided Milkovich, the Ninth

Circuit requested additional briefing. Respondents argued

that notwithstanding Milkovich, Rooney’s statement re-

mained immune from a defamation action as pure opinion.

Petitioners argued that Rooney’s statement was clearly ac-

tionable under Milkovich because it implied false assertions

of objective fact (i.e., the “product does not work”), just as

the trial court had found. Acgordingly, Petitioners re-

quested that the Ninth Circuit remand the action to the

District Court for proceedings consistent with that decision.

Such a remand was mandated because the parties had not

developed the factual record made relevant by Milkovich

(e.g., that Rain-X does work).

* Pet. App. B-1 (April 25, 1989, Order of Judge Broomfield)

(emphasis supplied).

7

On August 24, 1990, the Ninth Circuit affirmed the

District Court’s grant of summary judgment. As a threshold

matter, the Ninth Circuit agreed with Petitioners and found

that a reasonable fact finder could conclude that Rooney’s

statement implied an assertion of objective fact.? The Court

noted that “[{w]hether Rain-X repels rain, facilitates win-

dow cleaning, and increases visibility are all capable of being

proved true or false.”'° Indeed, this is precisely the inquiry

mandated by Milkovich and which the Ninth Circuit should

have allowed Unelko to develop on remand.

G. The Ninth Circuit Rejects Milkovich—It ignores

What Rooney’s Statement Implied To The Trial

Court And Viewers, And Instead “Assume[s]” That

The Statement Only Implied That Rain-X Did Not

Work For Rooney.

Despite the ease of objectively determining that Rain-X

works, the Ninth Circuit sua sponte limited its consideration

to whether Rain-X had worked for Rooney. Thus, the Court

of Appeals rejected the central holding of Milkovich and

focused on Rooney’s after-the-fact and self-serving interpre-

tation, as well as its own assumption of what was meant by

his defamatory statement.'' Despite the mandate of this

Court in Milkovich, the Ninth Circuit determined that

Unelko had failed to prove that “Rain-X worked for

Rooney,” and affirmed the grant of summary judgment.

° Unelko Corp. v. Rooney, 912 F.2d 1049, 1055 (9th Cir.

1990).

af |

'' Id. at 1056.

/

8

Ohlhausen and Unelko’s Petition for Rehearing with a

Suggestion of Rehearing En Banc was denied on November

20, 1990. This Petition for Writ of Certiorari follows:

REASONS FOR GRANTING THE WRIT

A. The Ninth Circuit Rejected Milkovich And Violated

Petitioners’ Seventh Amendment Rights.

1. Under Milkovich, The Dispositive Inquiry Is

Whether A Statement Implies Defamatory Facts

To A Reasonable Fact Finder.

Prior to this Court’s decision in Milkovich,'? many courts

erroneously read into Gertz v. Robert Welch, Inc.,’° a blan-

ket defamation exemption for statements deemed to be

“opinion.”'* In Milkovich, this Court eliminated the “artifi-

cial dichotomy between ‘opinion’ and fact’’'’ because “ex-

pressions of ‘opinion’ may often imply an assertion of

objective fact.”'® This Court reasoned that:

Even if the speaker states the facts upon which he

bases his opinion, if those facts are either incorrect or

incomplete, or if his assessment of them is erroneous,

the statement may stil! imply a false assertion of fact.

Simply couching such statements in terms of opinion

does not dispel these implications; and the statement,

'2 Milkovich v. Lorain Journal Co., 110 S. Ct. 2695 (1990).

'3 418 U.S. 323 (1974).

'* See Ault v. Hustler Magazine, Inc., 860 F.2d 877, 880 (9th

Cir.), cert. denied, 489 U.S. 1080 (1989); Lewis v. Time, Inc.,

710 F.2d 549, $53 (9th Cir. 1983).

'S Milkovich, 110 S. Ct. at 2706.

'6 Td. at 2705.

9

“In my opinion Jones is a liar,” can cause as much

damage to reputation as the statement, “Jones is a

liar.”

The dispositive inquiry in a defamation case must focus

on whether a reasonable fact finder can conclude that the

speaker’s statements imply some defamatory assertion of

fact.'* Under Milkovich, the statement need not expressly

articulate a defamatory fact; rather, the statement need only

imply, connote, or create the impression of a defamatory

fact in the mind of a reasonable juror.'? Other courts

applying Milkovich have correctly examined the reasonable

implications of statements, not the speaker’s self-serving

interpretations.”

7 Id.

'8 Id. Indeed, even the dissenting justices agreed that “[t]he

Operative question remains whether reasonable readers would

have actually interpreted the statement as implying defamatory

facts.” Id. at 2710 n.3 (Brennan, J., dissenting).

'9 Id. at 2704-05 and 2708.

” See Don King Prods., Inc. v. Douglas, 742 F. Supp. 778, 783

(S.D.N.Y. 1990) (must examine whether statement “reasonably

implies factually verifiable content”); Foretich v. Glamour, Civ.

A. No. 89-3099, memorandum at 10 (D.D.C. Oct. 5, 1990)

(1990 WL 213058)(court must investigate whether statement

“implies a false statement of fact which a reasonable fact finder

would perceive”); West v. Bond Univ. Lid., Nos. C-89-20674

RFP, C-89-20673 RFP, op. at 3 (N.D. Cal. Nov. 8, 1990) (1990

U.S. Dist. LEXIS 15186) (“the central inquiry is whether a

reasonable fact finder could conclude that the statements .. .

assert or imply something which could be proved false’).

10

For example, in White v. Fraternal Order of Police,”

defendants were sued for revealing details of a sequence of

events involving plaintiff's drug tests and his promotion

within the police department. The court examined the

aggregate defamatory implication that plaintiff used illegal

drugs and concluded that under Milkovich, it implied objec-

tively verifiable facts.”

Thus, Milkovich stands for the proposition that when a

speaker states that “In my opinion Jones is a liar,” the

proper inquiry is how a reasonable juror would interpret that

statement—i.e., that Jones is a liar. If Jones can demon-

strate that he is not a liar, it is irrelevant that the speaker

may still think that Jones is a liar.”

2. The Ninth Circuit Violated Milkovich By Ignor-

ing The Objectively Verifiable Facts That

Rooney’s Statement Implied To The Reasonable

Viewer.

The Ninth Circuit’s opinion in this case simply rejects the

standard enunciated by this Court in Milkovich. The Ninth

Circuit’s approach repudiates Milkovich by limiting the

potential facts implied by Rooney’s statement to Rooney’s

after-the-fact and self-serving version. However, Milkovich

mandates that a statement is actionable if it implied any

objectively verifiable defamatory fact to a reasonable fact

finder. In direct contravention of Milkovich, the Ninth

Circuit relied on Rooney’s deposition testimony in holding

that Rooney’s statement could imply only that Rain-X did

not work for Rooney. But the average viewer can react only

21909 F.2d 512 (D.C. Cir. 1990).

2 Id. at 522-23.

3 Milkovich, 110 S. Ct. at 2706 n.7. Whether the speaker

thinks Jones is a liar is relevant only to the issue of malice.

|

11

to what Rooney actually said and implied during the broad-

cast. As the trial court found, Rooney’s statement was that

“Rain-X doesn’t work.” Under Milkovich, this clear impli-

cation cannot be ignored as it was by the Ninth Circuit.

Indeed, both the trial court and viewers who wrote to

CBS/Rooney interpreted Rooney’s statement to mean that

Rain-X does not work. Thus, the trial court characterized

Rooney’s statement as a “pronouncement .. . that [ Rain-X]

does not work.”** The numerous letters from viewers who

wrote to “60 Minutes” after the broadcast also vigorously

challenged Rooney’s defamatory conclusion and emphati-

cally told both CBS and Rooney that Rain-X does work.”

3. The Ninth Circuit’s Repudiation Of Milkovich

Resurrected The Blanket “Opinion” Exemption

Rejected By This Court.

The Ninth Circuit’s misapplication of Milkovich imper-

missibly recreates the artificial fact/opinion dichotomy re-

jected by this Court.

In Unelko, the Ninth Circuit limited its analysis of

Rooney’s statement to what the speaker subsequently testi-

fied he intended, rather than analyzing what he actually

stated and implied on the broadcast. This is contrary to this

Court’s teachings in Milkovich. Under Milkovich, the rele-

* Pet. App. B-1 (April 25, 1989, Order of Judge Broomfield). .

51) “I have used Rain-X ever since it was first shown to me

by another user. .. . Let me assure Andy Rooney and all of you It

Works!;” (2) “I do use [Rain-X] regularly and, not only does it

work, I consider it one of the three or four most significant new

products to come on the market in years . . . this product works

miraculously,” (3) “Rain-X works;” (4) “you owe the inventor

an apology;” and (5) “if I were Rain-X I’d sue you.”

12

vant inquiry is whether “Jones is a liar,” whether White is a

drug user, and whether Rain-X does work. Rooney’s after-

the-fact subjective reaction to Rain-X is totally irrelevant to

the inquiry mandated by Milkovich. When the Ninth Cir-

cuit failed to consider what facts would be implied to

reasonable jurors, it eviscerated the very principles sought to

be upheld by Milkovich.

4. Unelko Is Entitled To Have A Jury Determine

Whether Rooney’s Statements Implied A

Defamatory Meaning.

In a defamation action, the court must determine in the

first instance whether a statement is “capable of conveying a

defamatory meaning.” If the court determines that a

statement does contain material capable of defamatory

meaning, “a jury must determine whether such meaning was

attributed in fact.”?’

The District Court judge and reasonable viewers found

that Rooney’s statements implied that Rain-X does not

work. It is indisputable that this meaning, albeit ignored by

the Ninth Circuit, is capable of being understood as defama-

tory by reasonable fact finders. Accordingly, Unelko is

entitled to have a jury determine whether Rooney’s state-

ments were defamatory.

Southern Air Transp., Inc. v. American Broadcasting Cos.,

877 F.2d 1010, 1013-14 (D.C. Cir. 1989).

27White v. Fraternal Order of Police, 909 F.2d 512, 518 (D.C.

Cir. 1990). See also Restatement (Second) of Torts § 614 (1977)

(court determines whether defamatory meaning is possible; jury

determines whether defamatory meaning was understood).

13

B. When This Court Rejects The Precise Theory On

Which A District Court Relied In Granting

Summary Judgment And Renders The Existing

Record Irrelevant, Due Process Entities The Parties

To Develop A Factual Record In Light Of The New

Controlling Law.

It is axiomatic that parties pursue discovery and develop a

factual record predicated on the controlling law. When this

Court reverses the prevailing law, due process requires that

the parties be provided the opportunity to pursue discovery

and develop a factual record in light of the new law.”

For example, in Heirs of Fruge v. Blood Services,” the

trial court granted summary judgment in favor of the defen-

dant solely because charitable institutions were immune

from suit in tort under Louisiana law. While the plaintiff's

appeal was pending, the Louisiana Supreme Court reversed

the existing law and held that charities were not immune

from suit in tort. The defendant, although acknowledging

this change in law, urged the Fifth Circuit to affirm the

summary judgment on the independent ground that no

negligence had been shown.

The Fifth Circuit refused to do so. The court found that

the sole issue presented by the summary judgment motion

was the doctrine of charitable immunity. Accordingly, no

other Rule 56 materials had been submitted. The court

reasoned that:

See Fountain v. Filson, 336 U.S. 681, 683 (1949) (An

appellate court may not extend a summary judgment to an issue

not considered by the trial court when it would deprive the losing

party of an opportunity to “dispute the facts material to [that]

claim.”).

29506 F.2d 841 (Sth Cir. 1975).

14

Where summary judgment is granted on one issue, an

appellate court may not extend that judgment to an-

other issue under the guise of affirming the “result

below” when the effect is to preclude the losing party

from “disput{ing] facts material to that claim.””

Similarly, the District Court’s grant of summary judg-

ment to Rooney and CBS was explicitly premised on the

fact/opinion distinction made obsolete by this Court in

Milkovich. Despite the intervening change in law, the Ninth

Circuit affirmed the District Court’s judgment on indepen-

dent grounds by “assum[ing]” Rooney’s statement could

only imply something entirely different from what it implied

to the District Court and to the many viewers who wrote to

CBS/Reooney. Implicit in the Ninth Circuit’s ruling “is the

holding that the petitioner, although having no occasion to

do so under the District Court’s erroneous construction of

the [law], was not entitled to an opportunity to meet the

respondent’s case under the correct interpretation.”*' This

result is clearly improper.

When the Supreme Court reverses the authority on which

a district court relied, “the underpinnings of the district

court’s decision [is] shaken.”°? Accordingly, it is the district

court which should determine in the first instance if new

evidence is material under a revised legal standard.” As the

Arizona Supreme Court has stated:

Id. at 844 (quoting Fountain v. Filson, 336 U.S. 681, 683

(1949)).

*' Byrd v. Blue Ridge Rural Elec. Coop., Inc., 356 U.S. 525, 531

(1958).

Swistock v. Jones, 884 F.2d 755, 758 (3d Cir. 1989).

United States v. Walgren, 885 F.2d 1417, 1428 (9th Cir.

1989).

15

It is one thing to engage in a constitutionally mandated,

independent review of the evidence to see if it supports

a verdict which otherwise will stand; it is a different

thing, having reversed the verdict for error of law, to

determine whether the evidence is sufficient to permit

the case to go to trial at all. While the difference may

be subtle, the seventh amendment nght to a jury trial in

federal cases is implicated.**

We respectfully submit that the Ninth Circuit should

have remanded this action for further proceedings in the

District Court to afford Petitioners the opportunity to de-

velop a complete factual record in response to a correct

application of the Milkovich holding as — by this

Court.*°

CONCLUSION

The Ninth Circuit’s decision creates a precedent that is

an erroneous and extreme departure from this Court’s hold-

ing in Milkovich. It is also inconsistent with the ruling of

every other court which has applied Mifkovich. In addition,

the Ninth Circuit’s inappropriate refusal to remand this case

to allow Unelko to develop a relevant factual record in light

of the intervening change in the law has compromised

Petitioners’ Seventh Amendment rights, and, we respect-

fully submit, calls for an exercise of this Court’s power of

supervision. Petitioners respectfully submit that this imme-

diate and drastic departure from Mi/kovich should not be

“Dombey v. Phoenix Newspapers, Inc., 150 Ariz. 476, 486, 724

P.2d 562, 572 n.5 (Ariz. 1986).

*SHeirs of Fruge, 506 F.2d at 849 (When a party has been

denied the opportunity to develop a complete factual record in

light of an intervening change in law, “the proper resolution of the

appeal is not affirmance but remand.”).

16

permitted to stand, and that their Petition for Writ of

Certiorari be granted.

RESPECTFULLY SUB

February 1991.

BICKEL & BREWER

311 South Wacker Drive

Suite 5600

Chicago, Illinois 60606

(312) 986-0900

Counsel of Record

JOHN J. BOUMA

ROBERT H. OBERBILLIG

SNELL & WILMER

3100 Valley Bank Center

Phoenix, Arizona 85073

(602) 257-7370

Attorneys for Petitioner

“

No.

Supreme Court of the United States

OCTOBER TERM, 1991

UNELKO CORP., an Arizona corporation, and

HOWARD G. OHLHAUSEN, an individual,

Petitioners,

v.

ANDY ROONEY, an individual, and CBS, INC.,

a New York Corporation,

Respondents.

APPENDIX TO PETITION FOR WRIT OF

CERTIORARI TO THE UNITED STATES COURT

OF APPEALS FOR THE NINTH CIRCUIT

ROBERT P. CUMMINS* JOHN J. BOUMA

BICKEL & BREWER ROBERT H. OBERBILLIG

311 South Wacker Drive SNELL & WILMER

Suite 5600 3100 Valley Bank Center

Chicago, Illinois 60606 Phoenix, Anizona 85073

(312) 986-0900 (602) 257-7370

*Counsel of Record Attorneys for Petitioners

APPENDIX A

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNELKO Corp., an IIlinois :

corporation, and HOWARD G.

OHLHAUSEN, No. 89-15751

Plaintiffs-Appellants, D.C. No.

‘ > CV-88-0705-

hes PHX-RC

ANDY ROONEY, an individual,

and CBS, INC., OPINION

Defendants-Appellees. }

Appeal from the United States District Court

for the District of Arizona

ROBERT C. BROOMFIELD, District Judge, Presiding

Argued and Submitted

July 20, 1990—San Francisco, California

Filed August 24, 1990

Before: ARTHUR L. ALARCON AND CECIL F. POOLE,

Circuit Judges, and TERRY J. HATTER, District Judge*

OPINION BY JUDGE ALARCON

SUMMARY

Torts/Constitutional Law

Affirming the district court’s grant of summary judgment,

the court of appeais held that the threshhold question in

defamation suits is not whether a statement might be

* Honorable Terry J. Hatter, United States District Judge for

the Central District of California, sitting by designation.

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UNELKO CORP V. ROONEY

labeled opinion, but whether a reasonable factfinder could

conclude that the statement implies an assertion of objective

fact.

Appellants Unelko Corporation and Howard G.

Ohlhausen appealed from an order dismissing their defama-

tion claim against appellees Andy Rooney and CBS, Inc.

The suit arose from statements made by Rooney during the

April 17 and May 8, 1988 broadcasts of “60 Minutes,”

among which was the assertion that Unelko’s product

“Rain-X” “didn’t work.” The district court granted sum-

mary judgment in favor of Rooney, finding that Rooney’s

statement that Rain-X “didn’t work” was protected as

opinion and that Unelko had failed to raise a triable issue of

fact as to whether any of Rooney’s statements were false and

defamatory.

[1] Relying on a significant body of Ninth Circuit case

law, the district court found that Rooney’s statement that

Rain-X “didn’t work” was opinion and thus exempt from

liability. However, the cases on which the district court

relied have all been effectively overruled by the Supreme

Court’s recent opinion in Milkovich v. Lorain Journal Co.,

NO. 89-645, slip op. Ss (U.S. June 21, 1990), in which

the Court rejected the view that an additional separate

constitutional privilege for “opinion” is required to ensure

the freedom of expression guaranteed by the first amend-

ment. Thus the threshold question in defamation suits is not

whether a statement might be labeled opinion, but rather

whether a reasonable factfinder could conclude that the

statement implies an assertion of objective fact.

[2] In order to determine whether Rooney’s statement

could be viewed as implying an assertion of fact, the court

analyzed whether Rooney used figurative or hyperbolic

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UNELKO CORP V. ROONEY

language that would negate the impression that he was

seriously maintaining that Rain-X did not perform effec-

tively; whethez the general tenor of Rooney’s segment of “60

Minutes” negated this impression; and whether the assertion

that a product works is susceptible of being proved true or

false. [3] The court found that Rooney’s presentation as a

whole was characterized by hyperbole to some extent, but

his statement was not couched in loose, figurative, or hyper-

bolic language and gave the impression that Rooney was

maintaining that Rain-X failed to perform as guaranteed.

This did not weigh in favor of protecting Rooney from

liability for defamation. [4] The court also found that the

humorous and satirical nature of Rooney’s segment of “60

Minutes” did not negate the impression that Rooney was

making a factual assertion about Rain-X’s performance

when applied to his vehicle. Although part of a humorous

report, Rooney’s statement was presented as fact and under-

stood as such by viewers who wrote to CBS. [5] The court

found further that the statement “it didn’t work” was an

articulation of an objectively verifiable event. [6] This

statement was essentially factual. Although Rooney’s seg-

ment of “60 Minutes” contained some hyperbole and ivad a

humorous tenor, his evaluation of Rain-X was capable of

being understood as an assertion that the product failed to

meet certain objective indicia of effectiveness. Therefore,

the statement “it didn’t work” is not shielded from liability

under the standard established in Milkovich. The propriety

of the district court’s grant of summary judgment thus

depended un whether Unelko created a triable issue of fact

as to the falseness of Rooney’s statements.

[7] The only evidence Unelko offered to defeat Rooney’s

summary judgment motion consisted of a comparison of a

test performed on Rooney’s automobile on June 9, 1988 that

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UNELKO CORP V. ROONEY

revealed no traces of Rain-X and a test performed on a

control vehicle that exhibited traces of Rain-X after six

months of use and exposure; the deposition of Rooney’s wife

Marguerite which stated that the windshield Rooney had

purportedly just treated with Rain-X corresponded in ap-

pearance to a picture of a windshield without Rain-X on the

Rain-X box; and Rooney’s deposition testimony in which he

was unable to identify with precision the amount of time he

spent applying Rain-X to his automobiles or the exact date

on which he used the product. [8] The district court’s

finding that, in spite of this evidence, no reasonable jury

could conclude that Rooney did not use Rain-X on two of

his vehicles during the winter of 1988-89 was persuasive.

Unelko’s evidence was inferential and ambiguous. [9]

Unelko’s evidence did not demonstrate that any of Rooney’s

statements were false in substance and thus was not suffi-

cient to avoid summary judgment.

COUNSEL

Robert P. Cummins, Bickel & Brewer, Chicago, Illinois,

Robert H. Oberbilling, Snell & Wilmer, Phoenix, Arizona,

for the plaintiffs-appellants.

Douglas P. Jacobs, New York, New York, for the

defendants-appellees.

OPINION

ALARCON, Circuit Judge:

Plaintiffs Unelko Corporation and Howard G. Ohlhausen

(Unelko) appeal from an order dismissing their defamation

claim against Andy Rooney and CBS, Inc. (Rooney) on

summary judgment. The suit arises from statements made

tn

ee

A-5

UNELKO CORP V. ROONEY

by Rooney during the April 17 and May 8, 1988 broadcasts

of “60 Minutes,” among which was the assertion that

Unelko’s product “Rain-X” “didn’t work.” The district

court granted summary judgment for Rooney, finding that

Rooney’s statement that Rain-X “didn’t work” was pro-

tected as opinion and that Unelko had failed to raise a

triable issue of fact as to whether any of Rooney’s state-

ments were false and defamatory. We affirm because we

agree that Unelko failed to create a triable issue of fact as to

falsity.

STATEMENT OF THE CASE

On October 1, 1987, The Arizona Republic published a

column by Andy Rooney, entitled “RAIN,” which reflected

on the writer’s associations with rainy days. In response to

Rooney’s comment that cars should have “truck-sized wind-

shield wipers” that would clean the entire windshield,

Unelko’s national sales manager sent Rooney a letter ac-

companied by a small supply of Unelko’s product “Rain-X.”

The letter stated in part:

Andy, you don’t need those truck-size windshield

wipers—all you neec is RAIN-X—“The Invisible

Windshield Wiper”. The one-step, wipe-on automotive

glass coating that repels rain, sleet and snow on contact

and takes up where windshield wipers leave off!

Our President, Howard Ohlhausen, inventor of

RAIN-X (among other chemical products) first real-

ized the same drowbacks that you referred to in your

article as a navigator in the United States Air Force.

With these windshield wiper inadequacies in mind, Mr.

Ohlhausen invented RAIN-X and received a chemical

patent in 1972.

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UNELKO CORP V. ROONEY

Enclosed please find literature outlining the many ben-

efits, applications and properties of this unique

material.

In order that you may personally test and evaluate

RAIN-X performance, we have forwarded a small sup-

ply to you today via U.P.S.

We trust that RAIN-X will increase your affection for

rainy days, while increasing your driving safety, comfort

and visibility.

(Emphasis added).

During the April 17, 1988 broadcast of “60 Minutes,”

Rooney commented on “junk” he had received in the mail.

Rooney’s entire segment consisted of the following:

MIKE WALLACE: You think you get junk mail? How

would you like to be Andy Rooney? Or, even worse,

how would you like to be Andy Rooney’s mailman?

ANDY ROONEY: People send me things. I get an

awful lot of junk that I don’t want that just seems too

interesting to throw away. Some people send me stuff

because they’re friendly. Others, of course, send it

because they’re looking for a plug on the air.

I get a lot of caps, and a lot of cups. This is a cup

from the ship Guam that I spent some time on off

Beirut. Captain Quarterman sent me this; I like it. This

is a musical cup. I don’t like that much.

I get a lot of music sent me. People send me songs

they’ve written on tape, which I don’t listen to. This is a

piece of sheet music. It’s from a prisoner in Florida,

and the song is called “Lady Liberty, Oh How I Love

A-7

UNELKO CORP V. ROONEY

Thee.” He’s in prison for murder, so he’s going to be

there a long time without liberty.

Hamilton Watch sent me this expensive watch. It’s

not really proper for me to keep something like this,

and I should send it back.

I get pictures of myself. Here’s a picture of me at a

party with John Chancellor. You probably didn’t know

I traveled in those circles.

Here’s the sort of thing I get a lot of. I don’t know

why they sent me this. It’s a piece of a door. I guess

they were pushing some new kind of material.

Here’s something for the windshield of your car

called Rain-X. The fellow who makes this sent me a

whole case of it. He’s very proud of it. I actually spent

an hour one Saturday putting it on the windshield of

my car. I suppose he’d like a commercial or a testimo-

nial. You know how they hold the product up like this?

It didn’t work.

And then I get books. Holy mackerel, do I get books.

Mostly from publishers, but I get a lot from authors,

too. They send me their manuscripts. They want me to

read them.

Look at this. Several people have sent me this over

the years. The illustrator ripped off a picture of me. I

suppose I could have sued him, but I was busy that day.

This is the most repulsive thing anyone sent me. It’s

from some anti-cigarette group. It’s an ashtray in the

shape of a human lung.

Someone suggested I could neaten up my office with

these giant paper clips. Sort of a good idea.

A-8

UNELKO CORP V. ROONEY

This is one of the best things I ever got. It’s a orange

peeler. It’s changed my life. Simple enough, made by

some company in Tulon, Illinois. I have an orange

almost every morning of my life, and I love peeling it

this way. It really is magic. You can amaze your friends

with this. Look at that. There. Presto!

People are very nice. But would you do me two little

favors? One, don’t send me anything more. And two,

don’t ask me to send any of this to you.

Several viewers wrote to Rooney after the broadcast, stating

that Rain-X is a good product and that “it works.” Although

the mail Rooney received was unanimous in praising

Rain-X, Unelko had previously received several letters com-

plaining that “[Y]Jour product simply doesn’t work”; “I

found the product did not perform as advertised”; and “This

product did not work for me.”

On May 4, 1988, Unelko filed an action based on the

April 17 “60 Minutes” broadcast for defamation, product

disparagement, and tortious interference with business rela-

tionships. On May 8, 1988, Rooney made the following

statements during his segment of “60 Minutes”:

BRADLEY: You want to talk money? Big money?

Talk to Andy Rooney.

ANDY ROONEY: Tonight I feel like a rich man.

Along with CBS, I’m being sued for $16 million. I hope

they take American Express. You may recall that three

weeks ago I talked about things people have sent me.

One of the items was this product, called Rain-X, made

A-9

UNELKO CORP V. ROONEY

by the Unelko Corporation of Scottsdale, Arizona. The

tag on this three and a half ounce bottle says that it lists

for $6.59, selis for $3.70.

“Dramatically improves wet weather visibility, even

without wipers. Repels rain, sleet and snow. Makes

frost, bugs, mud and grime easy to remove.”

Well, I said I tried it and it didn’t work for me. No

matter what you say on 60 Minutes, you get a reaction.

The clock was still ticking when I got a call from a

fellow at a local boatyard in our town, saying he’d come

right over and show me how to use Rain-X.

Then we got letters saying it was a good product.

David Fryer of Silver Spring, Maryland, says “Granted,

the product is not easy to apply correctly, but once it is

applied, it performs absolutely everything its manu/fac-

turer claims for it.” John Wadsworth of Greensburg,

Pennsylvania, says it works “if you use just water and

not window cleaner in your windshield sprayer.” Robert

DeLay of Ettawa, Tennessee, says, “If I were Rain-X,

I'd sue you.” June Willis of Houston says, “I think you

owe the inventor, Howard Ohlhausen, an apology.”

Well, I'll tell you, June, he’d have a lot easier time

getting an apology out of me than $16 million. Jim

Mills, Automotive News western sales manager, says,

“Your comments about Rain-X were very unfair.”

Several letters said that Rain-X works best when

you're going fast, and maybe that was my trouble. I

called American Airlines trying to find out what they

think of Rain-X, and I called several automobile manu-

facturers, to see what they say about it, but I didn’t get

A-10

UNELKO CORP V. ROONEY

any help here because they don’t use it, and I haven’t

been able to find out what Rain-X is made of.

So that’s my problem tonight, friends. This fellow

sent me this product to evaluate, and [ did. Was I only

expected to comment on it if I loved it? What if he’d

sent me two tickets to a movie he’d made, and I didn’t

like the plot? He must know I don’t do commercials.

But, in spite of all that, to tell you the truth, I feel sort

of bad about the whole thing. Please dun’t send money

unless I ask for it.

Unelko subsequently requested and obtained leave to amend

its complaint to assert additional claims for relief stemming

from the May 8 broadcast.

Rooney moved for summary judgment on December 5,

1988. On April 25, 1989, the district ,ourt granted the

motion. Unelko timely appeals.

DISCUSSION

I. Defamation Claim

Unelko claims that the district court’s grant of summary

judgment on its defamation claim was improper. We review

a grant of summary judgment de novo. Dworkin v. Hustler

Magazine Inc., 867 F.2d 1188, 1192 (9th Cir.), cert. denied,

110 S. Ct. 59 (1989). The district court granted summary

judgment because it determined that none of Rooney’s

words were defamatory statements of fact. The court found

that (1) Rooney’s statement that Rain-X “didn’t work” was

protected opinion, and (2) Unelko failed to create a triable

issue of fact as to the falsity of any of Rooney’s statements

that could be viewed as defamatory.

A-11

UNELKO CORP V. ROONEY

A. The District Court’s Ruling That “It Didn’t Work”

Was “Opinion”

[1] Relying on a significant body of Ninth Circuit case

law, the district court found that Rooney’s statement that

Rain-X “didn’t work” was opinion and thus exempt from

liability. See, e.g. Ault v. Hustler Magazine, 860 F.2d 877,

880 (9th Cir. 1988) (“[I]f a challenged statement is one of

opinion rather than fact, then under the first amendment it

cannot give rise to a defamation claim.”), cert. denied, 109

S. Ct. 1532 (1989); Lewis v. Time, Inc., 710 F.2d 549, 553

(9th Cir. 1983) (“[A]n opinion is simply not actionable

defamation.”).' The cases on which the district court relied,

however, have all been effectively overruled by the Supreme

Court’s recent opinion in Milkovich v. Lorain Journal Co.,

No. 89-645, slip op. _ = (U.S. June 21, 1990). In

Milkovich, the Court rejected the view that “an additional

separate constitutional privilege for ‘opinion’ is required to

ensure the freedom of expression guaranteed by the First

Amendment.” Jd., slip op. at __. +Thus, the threshold

question in defamation suits is not whether a statement

“might be labeled ‘opinion,’” but rather whether a reasona-

' Because the Arizona Supreme Court has based its rule that

opinion is not actionable on the Supreme Court’s analysis of the

first amendment, see MacConnell v. Mitten, 131 Ariz. 22, 638

P.2d 689, 692 (1981) (citing Gertz v. Robert Welch, Inc., 418

U.S. 323, 339-40 (1974)), there is no evidence that Anzona

courts would extend more protection to opinion than is required

by the federal Constitution.

A-12

UNELKO CORP V. ROONEY

ble factfinder could conclude that the statement “imp ies]

an assertion of objective fact.” Jd., slip op. at :

Because the “opinion” test applied by the district court is

now obsolete, the district court’s conclusion that the state-

ment “It didn’t work” enjoys first amendment protection as

opinion is unwarranted. Yet the record is sufficientiy devel-

oped for us to analyze both whether “It didn’t work” implies

an assertion of fact, as required by Milkovich, and whether

Unelko met its burden of making a showing of falsity. Much

of the district court’s analysis is relevant in determining

whether “It didn’t work” is a factual statement. The district

court’s order discusses Unelko’s evidence of falsity at length.

We may base our “ruling on any ground finding support in

the record.” Jackson v. Southern Cal. Gas Co., 881 F.2d

638, 643 (9th Cir. 1989). For this reason and because the

record is fully developed, we apply the analysis required by

Milkovich.

B. “It Didn’t Work” as Assertion of Fact

Rooney argues that his statement “It didn’t work” did not

imply an assertion of fact. He relies on Hustler Magazine,

Inc. v. Falwell, 485 U.S. 46 (1988), for the proposition that

speech is protected when it “could not reasonably have been

It is worthy of note that the Supreme Court’s test leaves

protected the category of speech known as “pure opinion” —that

is, statements that do not imply facts capable of being proved true

or false. Milkovich, slip op. at __—s (Brennan, J. dissenting).

Thus, there remains much truth in the old adage: “You should

not say it is not good. You should say you do not like it, and then,

you know, you’re perfectly safe.” Workman Quote-a-Day Calen-

dar, at June 26, 1996 (quoting James MacNeil Whistler).

A-13

UNELKO CORP V. ROONEY

interpreted as stating actual facts about the [product]

involved.” Jd. at 50.

[2] The Court in Milkovich determined that the state-

ment before it—that a high-school wrestling coach lied at an

athletic association hearing—implied an assertion of fact

because the statement satisfied three conditions:

This is not the sort of loose, figurative or hyperbolic

language which would negate the impression that the

writer was seriously maintaining petitioner committed

the crime of perjury. Nor does the general tenor of the

article negate this impression.

We also think the connotation that petitioner com-

mitted perjury is sufficiently factual to be susceptible of

being proved true or false.

Id., slip op. at__. In order to determine whether Rooney’s

statement that Rain-X “didn’t work” could be viewed as

implying an assertion of fact, we will analyze: (1) whether

Rooney used figurative or hyperbolic language that would

negate the impression that he was seriously maintaining that

Rain-X did not perform effectively; (2) whether the general

tenor of Rooney’s segment of “60 Minutes” negated this

impression; and (3) whether the assertion that a product

works is susceptible of being proved true or false.

1. Figurative or Hyperbolic Language

As this circuit has long recognized, there are certain

“circumstances in which an ‘audience may anticipate efforts

by the parties to persuade others to their positions by use of

epithets, fiery rhetoric or hyperbole ....’” Information

Control Corp. v. Genesis One Computer Corp., 611 F.2d

781, 784 (9th Cir. 1980) (quoting Gregory v. McDonnell

A-14

UNELKO CORP V. ROONEY

Douglas Corp., 17 Cal. 3d 596, 131 Cal. Rptr. 641, 643, 552

P.2d 425, 428 (1976)). In determining whether Rooney’s

statement is actionable, we “examine the statement in its

totality in the context in which it was uttered or

published.” Jd.

[3] As the district court noted, Rooney’s presentation, as

a whole, was characterized by hyperbole to some extent: his

analysis contained such statements as “I suppose I could

have sued him, but I was busy that day,” “This is the most

repulsive thing anyone sent me,” and “This is one of the best

things I ever got.” Given the flavor of Rooney’s comments,

an audience might anticipate rhetoric or hyperbole, rather

than a factual assessment of Rain-X’s capabilities. Never-

theless, Rooney’s statement “It didn’t work” is not couched

in loose, figurative, or hyperbolic language. It produces the

impression that Rooney is maintaining that Rain-X failed to

perform as guaranteed, the context of his broadcast notwith-

standing. For this reason, the first factor considered by the

Supreme Court does not weigh in favor of protecting

Rooney from liability for defamation.

2. The Tenor of Rooney’s Broadcast

[4] To support its finding that Rooney’s statement was

protected opinion, the district court found that the tenor of

Rooney’s broadcast was humorous and satirical. The district

court noted: |

[I]t can hardly be disputed that those who turn in to

watch Andy Rooney on “60 Minutes” understand that

his comments and statements are humorous, satirical,

- full of ridicule and often to be taken with a grain of salt.

His audience realizes that what they get from Rooney

is not a factual summation of the news but rather

A-15

UNELKO CORP V. ROONEY

Rooney’s opinions on a variety of subjects. Thus, they

are less likely to take his comments seriously or as the

absolute truth than they would statements from a

newspaper or newsprogram whose purpose is to report

factual news stories.

The tenor of Rooney’s segment notwithstanding, the state-

ment “It didn’t work” could reasonably be viewed as imply-

ing an assertion of objective fact. The humorous and

satirical nature of Rooney’s segment of “60 Minutes” does

not negate the impression that he was making a factual

assertion about Rain-X’s performance when applied to his

vehicles. Although part of a humorous report, the statement

“It didn’t work” was presented as fact and understood as

such by several viewers who wrote to CBS. The humor in

Rooney’s statement about Rain-X is derived not from hy-

perbole or exaggeration, but from the fact that his report of

the product’s effectiveness was the antithesis of what its

inventor presumably desired. Rooney’s negative evaluation

of Rain-X’s capabilities differs significantly from his per-

sonal assessment of the other items he received in the mail;

thus, it receives no protection based on the overall tenor of

his “60 Minutes” segment.

3. Whether “It Didn’t Work” Is Sufficiently Factual to

Be Susceptible of Being Proved True or False

In determining whether Rooney’s words were opinion, the

district court noted the vagaries of the statement “It didn’t

work” as applied to Rain-X:

As an example, whether or not a lightbulb works is

an objective determination. Either it gives off light or it

doesn’t. Its performance is constant. Consequently

whether it works can be determined solely by one’s own

A-16

UNELKO CORP V. ROONEY

sensory perception; there is no room for differences of

opinion. Other products are incapable of such objective

determination. Whether they work depends upon one’s

subjective evaluation or opinion, which may be influ-

enced by a multitude of differing factors, conditions,

situations and perspectives. Rain-X is in the latter

category as evidenced, in part, by the letters in the

record from consumers expressing both pleasure and

displeasure with the product. Consequently, whether

Rain-X works is a subjective determination capable of

producing divergent opinions among those who try it.

When Rooney stated “it didn’t work,” he was simply

expressing his opinion of the product.

As a result, in this context no defamatory meaning can

be attached to Rooney’s statement.

Although the district court’s analysis under the old “opin-

ion” test may have been correct, whether the facts implied

by Rooney’s “opinion” are susceptible of being proved true

or false is a different matter. Turning to a dictionary, one

finds that “work,” in the sense Rooney used it, means “to

function or operate according to plan or design,” Webster's

New International Dictionary (3d ed. 1986), a standard

capable of objective determination to some extent when

applied to a product designed to improve visibility. But cf.

Lewis, 710 F.2d at 554 (“[W]e think the term ‘shady’ is by

definition ‘cautiously phrased in terms of apparency.’ Ac-

cording to Webster’s New International Dictionary Una-

bridged (2d ed.), it means in this context ‘equivocal as

regards merit or morality; unreliable; disreputable.’ ”’).

Contrary to the district court’s analysis, the functions

Rain-X purports to perform are not entirely dependent on

A-17

UNELKO CORP V. ROONEY

subjective evaluation. The Rain-X bottle Rooney used, and

displayed to the camera, boasted that Rain-X:

Dramatically improves wet weather visibility—extends

& expands your field of vision—lets you see clearly with

and without wipers!

Covers windshields, side and rear windows, mirrors &

lights with an invisible shield that disperses rain, sleet

& snow on contact—shrugs off bugs, frost, salt, mud &

grime, makes cleaning a snap. Whatever the weather,

whatever you drive—use rain-x for increased all-around

visibility, safety & driving comfort.

Although Rooney identified Rain-X only as “something for

the windshield of your car”, the extent to which Rain-X

lived up to its bottle’s claims would be what anyone familiar

with the product would have believed Rooney intended his

words to mean.

[5] Rooney’s statement thus implied that his visibility

was not improved, that Rain-X’s shield was not invisible,

that rain did not disperse on contact, that Rain-X did not

repel bugs and other projectiles, that cleaning was not a

snap, and that Rain-X did not increase Rooney’s all-around

visibility, safety, and driving comfort.’ Although these are

somewhat subjective determinations, they are based on

factual observations to a sufficient extent to imply an asser-

tion of fact. Whether Rain-X repels rain, facilitates window

cleaning, and increases visibility are all capable of being

proved true or false. Each determination rests on “a core of

objective evidence.” Milkovich, slip op. at _. Thus, the

> Rooney noted at his deposition that Rain-X “tended to

smear.”

A-18

UNELKO CORP V. ROONEY

statement “It didn’t work” is “ ‘an articulation of an objec-

tively verifiable event.’ Jd. (quoting Scott v. News-Herald,

25 Ohio St. 3d 243, 252, 496 N.E.2d 699, 707 (1986)).

[6] For these reasons, a factfinder could conclude that

Rooney’s statement that Rain-X “didn’t work” implied an

assertion of objective fact. Unlike the exaggerated and

satirical account of “a drunken incestuous rendezvous [ be-

tween plaintiff and] his mother in an outhouse” at issue in

Falwell, 485 U.S. at 48, the statement “It didn’t work”’ is

essentially factual. Although Rooney’s segment of “60 Min-

utes” contained some hyperbole and had a humorous tenor,

his evaluation of Rain-X was capable of being understood as

an assertion that the product failed to meet certain objective

indicia of effectiveness. Although the district court may

have been correct in characterizing Rooney’s words as

“opinion,” the statement “It didn’t work” is not shielded

from liability under the standard established in Milkovich.

Thus, the propriety of the district court’s grant of summary

judgment depends on whether Unelko created a triable issue

of fact as to the falsity of Rooney’s statements.

C. Unelko’s Showing of Falsity

Even though Rooney’s words are not protected as opinion,

summary judgment was proper if Unelko made no showing

that Rooney’s statements were false or implied false asser-

tions of fact. Unelko argues that summary judgment was

improper because Rooney’s statement that he had used

Rain-X was false, and because the facts implied by the

statement that Rain-X “didn’t work” were also false and

defamatory. For the purposes of analyzing Unelko’s showing

of falsity, we assume that Rooney’s statement “It didn’t

work” implied the following factual assertions about

Rain-X’s performance, which Rooney made at his deposi-

—

A-19

UNELKO CORP V. ROONEY

tion—that it “hazed over when the windshield wiper went

one way and tended to smear,” that it caused his windshield

to be “splotchy,” and that the “windshield did not look like

the picture on [the] box.”

To avoid a grant of summary judgment, Unelko had to

“ ‘set forth specific facts showing that there [was] a genuine

issue for trial.’”” Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 250 (1986) (quoting Fed. R. Civ. P. 56(e)). “[T]he

plain language of Rule 56(c) mandates the entry of sum-

mary judgment, . . . against a party who fails to make a

showing sufficient to establish the existence of an element

essential to that party’s case, and on which that party will

bear the burden of proof at trial.” Celotex Corp. v. Catrett,

477 US. 317, 322 (1986).

As the Supreme Court has noted, in a private individual’s

defamation action involving statements of public concern,

there is “ ‘a constitutional requirement that the plaintiff bear

the burden of showing falsity, as well as fault, before

recovering damages.’” Milkovich, slip op. at__— (quoting

Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767, 776

(1986)). Thus, “a statement on matters of public concern

must be provable as false before there can be liability under

state defamation law, at least in situations, like the present,

where a media defendant is involved.” /d., slip op. at_——__

“*(Whether] . . . speech addresses a matter of public

concern must be determined by [the expression’s] content,

form, and context . . . as revealed by the whole record.’ ”

Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S.

749, 761 (1986) (opinion of Powell, J.) (quoting Connick v.

Myers, 461 U.S. 138, 147-48 (1983)). Rooney’s statement

about Rain-X was of general interest and was made availa-

ble to the generzl public. Cf. id. at 762 (concluding that a

|

A-20

UNELKO CORP V. ROONEY

credit report “concerns no public issue” because “[i]t was

speech solely in the individual interest of the speaker and its

specific business audience” and “was made available to only

five subscribers”). Moreover, protection of statements about

product effectiveness will “ensure that ‘debate on public

issues [will] be uninhibited, robust and wide-open.’” /d.

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

270 (1964)). We are persuaded that Rooney’s statement

addressed a matter of public concern. Cf. Lechuga, Inc. v.

Montgomery, 12 Ariz. App. 32, 467 P.2d 256, 261 (1970)

(Jacobson, J., concurring) (“It is in the public interest to

discourage the marketing of defective products.’’).

Because Rooney’s statements involved a matter of public

concern, Unelko would bear the burden of proof at trial as to

whether Rooney’s statements were false. Philadelphia

Newspapers, Inc. v. Hepps, 475 U.S. 767, 776 (1986);

Dombey v. Phoenix Newspapers, Inc., 150 Ariz. 476, 724

P.2d 562, 567 (1986); see also Phoenix Newspapers v.

Church, 103 Ariz. 582, 447 P.2d 840, 854-55 (1968) (en

banc) (falsity must be established by a preponderance of

the evidence), cert. denied, 394 U.S. 959 (1969). Our

determination whether to affirm the grant of summary

judgment thus hinges on whether Unelko provided the

district court with a sufficient showing that any of Rooney’s

statements, including his implied factual assertions about

Rain-X’s performance, were untrue.

[7] The only evidence Unelko offered to defeat Rooney’s

summary judgment motion consisted of: (1) a comparison

of a test performed on Rooney’s automobile on June 9, 1988

that revealed no traces of Rain-X and a test performed on a

“control vehicle” that exhibited traces of Rain-X after six

months of use and exposure; (2) the deposition testimony of

A-21

UNELKO CORP V. ROONEY

Marguerite Rooney, Rooney’s wife, which stated that the

windshield Rooney had purportedly just treated with

Rain-X corresponded in appearance to a picture of a wind-

shield without Rain-X on the Rain-X box; and (3) Rooney’s

deposition testimony, in which he was unable to identify

with precision the amount of time he spent applying Rain-X

to his automobiles or the exact date on which he used the

product. Unelko argues that this evidence constitutes a

sufficient showing to raise a triable issue of fact as to

whether Rooney used Rain-X at all, and thus as to the

falsity of factual assertions stated or implied in Rooney’s

segment.

{8] The district court’s finding that, in spite of this

evidence, “no reasonable jury could conclude that Rooney

did not use Rain-X on two of his vehicles sometime during

the winter of 1987-88” is persuasive. As the district court

noted, Unelko’s evidence is inferential and ambiguous.

Rooney’s deposition testimony, although not precise, reveals

familiarity with Rain-X’s properties when applied. Margue-

rite Rooney’s deposition testimony supports her husband’s

testimony that he used Rain-X; she testified that she first

learned of Rooney’s Rain-X use in late 1987, when her

windshield appeared foggy and asked her husband what he

had done to the car. Finally, given the absence of any

evidence that Rooney’s Connecticut-based vehicles and

Unelko’s Arizona-based “control vehicle” were maintained

under the same conditions, the district court properly found

that the test evidence did not satisfy Unelko’s burden of

making a showing of falsity. Cf Cowens v. Siemens-Elema

AB, 837 F.2d 817, 820 (8th Cir. 1988) (“It is settled law

that evidence of experimental tests is inadmissible absent a

foundational showing that the tests were conducted under

A-22

UNELKO CORP V. ROONEY

conditions similar to those surrounding the incident at

issue.”).

As the Supreme Court noted in Anderson, “[t]he ques-

tion here is whether a jury could reasonably find either that

the plaintiff proved his case by the quality and quantity of

evidence required by the governing law or that he did not.”

477 U.S. at 254 (emphasis in original). A reasonable jury

could not find that Unelko met its burden of proving falsity

by a preponderance of the evidence. Unelko provided no

evidence that traces of Rain-X on Rooney’s vehicles would

survive a Connecticut winter*; moreover, “ ‘discredited testi-

mony is not [normally] considered a sufficient basis for

drawing a contrary conclusion.’” Jd. at 256-57 (quoting

Bose Corp. v. Consumers Union of United States, Inc., 466

U.S. 485, 512 (1984)). Unelko has thus failed to produce

any “affirmative evidence . . . to defeat a properly supported

motion for summary judgment.” /d. at 257. It has, at best,

created ambiguity, and this fails to meet the constitutional

standard. See Hepps, 475 U.S. at 776 (“[T]he burden of

proof is the deciding factor . . . when the evidence is

ambiguous .... [W ]here the scales are in such an uncertain

balance, we believe that the Constitution requires us to tip

them in favor of protecting true speech.”’).

[9] A factual statement need only be substantially true

in order to be protected from a suit for defamation. Fendler

v. Phoenix Newspapers, Inc., 130 Ariz. 475, 636 P.2d 1257,

1261 (Ct. App. 1981). Unelko’s evidence did not demon-

strate that any of Rooney’s statements were false in sub-

* Indeed, Unelko’s promotional literature states that the length

of time Rain-X remains on car windows is dependent upon such

factors as environment, climate, and time of year.

A-23

UNELKO CORP V. ROONEY

stance and thus was not sufficient to avoid summary judg-

ment. Because there was not sufficient evidence favoring

Unelko for a jury to return a verdict against Rooney, the

district court properly granted summary judgment on

Unelko’s defamation claim.

II. Unelko’s Other Claims

Unelko also argues that its claims for product disparage-

ment, or “trade libel,” and for tortious interference with

business relationships were improperly dismissed. These

claims, however, are subject to the same first amendment

requirements that govern actions for defamation. See Gee v.

Pima County, 126 Ariz. 116, 612, P.2d 1079, 1079 (Anz.

App. 1980) (requiring “the intentional publication of an

injurious falsehood” for trade libel); Snow v. Western Sav. &

Loan Ass'n, 152 Ariz. 27, 35, 730 P.2d 204, 212 (1986) (en

banc) (“To be ‘improper’ an interference [with business

relationships] must be ‘wrongful by some measure beyond

the fact of the interference itself.’ ”” (quoting Top Serv. Body

Shop, Inc. v. Allstate Ins. Co., 283 Or. 201, 209, 582 P.2d

1365, 1371 (1978)). See generally Falwell, 485 U.S. at 57

(noting that when a claim for defamation fails because

defendant’s speech is constitutionally protected, a claim for

intentional infliction of emotional distress “cannot, consist-

ently with the First Amendment, form a basis for the award

of damages”); Fendler, 636 P.2d at 1262-63 (defense of

truth is equally applicable to other causes of action based

upon the same libel claim). Because it properly found that

no genuine issue of fact existed as to whether Rooney’s

words constituted defamatory statements of fact, the district

court did not err in granting summary judgment on Unelko’s

other claims.

The district court’s judgment is AFFIRMED.

iii aaa

A-24

JUDGMENT

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNELKO Corp.; etc. ,

Plaintiffs-Appellants, No. 89-1575]

we CV-88-0705-

ANDY ROONEY, an individual; PHX-RCB

CBS, INC.,

Defendants-Appellees.

APPEAL from the United States District Court for the

District of ARIZONA (Phoenix)

THIS CAUSE came on to be heard on the Transcript of

the Record from the United States District Court for the

District of

and was duly submitted.

ON CONSIDERATION WHEREOF, It is now iiere

ordered and adjudged by this Court, that the

judgment of the said District Court in this Cause be, and

hereby is AFFIRMED.

A TRUE COPY

CATHY A. CATTERSON

Clerk of Court

ATTEST

DEC 11 1990

by:

Deputy Clerk

A-25

Filed and entered AUGUST 24, 1990

FILED DEC 17 1990

United States District Court

for the District of Arizona

By:

Deputy Clerk

APPENDIX B

FILED APRIL 25, 1989

IN THE UNITED STATES DISTRICT COURT

IN AND FOR THE DISTRICT OF ARIZONA

:

UNELKO Corp., et al.,

Plaintiffs, | No. CIV 88-705

- + RCB PHX

ANDY ROONEY, et al., ORDER

Defendants. |

The issue for purposes of this summary judgment motion

is whether a well-known humorist and social commentator’s

pronouncement on national television that a product does

not work subjects him and his network to liability to the

product manufacturer for defamation, product disparage-

ment and tortious interference with business relationships.

After consideration of the pleadings, papers and exhibits in

both written and video form, hearing of oral argument and

review of the applicable case law, this Court finds that the

comments made by defendant Andy Rooney are not defam-

atory as a matter of law and thereby grants defendants’

motion for summary judgment.

This lawsuit arises out of the April 17, 1988 broadcast by

defendant CBS Inc. (“CBS”) of “60 Minutes,” the popular

weekly television news magazine show. During the broad-

cast, Andy Rooney did a feature on the variety of things

people sent him. Among other items, Rooney discussed

Rain-X, a product which is applied to automobile wind-

shields and is designed to improve visibility in inclement

weather by repelling rain, snow and sleet. Rain-X is manu-

factured by plaintiff Unelko Corporation (“Unelko”) of

Scottsdale, Arizona. Plaintiff Howard Ohlhausen is the

B-2

President of Unelko and the inventor of Rain-X. Rooney’s

specific comments concerning Rain-X were as follows:

Here’s something for the windshield of your car called

Rain-X. The fellow who makes this sent me a whole

case of it. He’s very proud of it. I actually spent an hour

one Saturday putting it on the windshield of my car. I

suppose he’d like a commercial or a testimonial. You

know how they hold the product up like this? It didn’t

work.

Plaintiffs filed this lawsuit on May 4, 1988 claiming that

Rooney’s comments concerning Rain-X were false and

defamatory. In their complaint, plaintiffs alleged causes of

action for product disparagement, defamation of Unelko and

Ohlhausen and tortious interference with business

relationships.

On the May 8, 1988 broadcast of “60 Minutes” Rooney

did a follow-up piece on Rain-X and the initiation of this

lawsuit. Plaintiffs claimed that remarks made by Rooney

during this broadcast were also defamatory and were inten-

tionally crafted to hold plaintiffs up to further ridicule.

Plaintiffs subsequently filed a motion to amend their com-

plaint. By order of this Court dated November 15, 1988,

plaintiffs were allowed to amend their complaint to include

these additional statements.’

' The remarks made by Rooney in the May 8 broadcast are set

forth in their entirety.

Tonight I feel like a rich man. Along with CBS, I’m being

sued for $16 million. I hope they take American Express.

You may recall that three weeks ago I talked about things

people have sent me. One of the items was this product,

called Rain-X, made by the Unelko Corporation of Scotts-

dale, Arizona. The tag on this three and a half ounce bottle

says that it lists for $6.59, sells for $3.70.

B-3

“Dramatically improves wet weather visibility, even with-

out wipers. Repels rain, sleet and snow. Makes frost, bugs,

mud and grime easy to remove.”

Well I said I tried it and it didn’t work for me. No matter

what you say on 60 Minutes, you get a reaction. The clock

was still ticking when I got a call from a fellow at a local

boatyard in our town, saying he’d come right over and show

me how to use Rain-X.

Then we got letters saying it was a good product. David

Fryer of Silver Spring, Maryland says “Granted, the product

is not easy to apply correctly, but once it is applied, it

performs absolutely everything its manufacturer claims for

it.” John Wadsworth of Greensburg, Pennsylvania, says it

works “if you use just water and not window cleaner in your

windshield sprayer.” Robert DeLay of Ettawa, Tennessee,

says “If I were Rain-X I’d sue you.” June Willis of Houston

says, “I think you owe the inventor, Howard Ohlhausen, an

apology.” Well, I tell you, June, he’d have a lot easier time

getting an apology out of me than $16 million. Jim Mills,

Automotive News western sales manager, says, “Your com-

ments about Rain-X were very unfair.”

Several letters said that Rain-X works best when you’re

going fast, and maybe that was my trouble. I called Ameri-

can Airlines trying to find out what they think of Rain-X,

and I called several automobile manufacturers to see what

they say about it, but I didn’t get any help there because they

don’t use it, and I haven’t beer «bic to find out what Rain-X

is made of.

So that’s my problem tonight, friends. This fellow sent me

his product to evaluate, and I did. Was I only expected to

comment on it if I loved it? What if he’d sent me two tickets

to a movie he’s made, and I didn’t like the plot? He must

know I don’t do commercials. But, in spite of all that, to tell

you the truth, I feel sort of bad about the whole thing. Please

don’t send money unless I ask for it.

B-4

Defendants now bring this motion for summary judgment

pursuant to Fed. R. Civ. P. 56 on the basis that Rooney’s

statements are not defamatory under Federal and State

Constitutional law in that they constitute opinion and/or are

substantially true. Plaintiffs oppose defendants motion for

summary judgment by arguing that Rooney’s comments

contain actionable statements of fact and that an issue

remains as to whether Rooney indeed ever tried Rain-X or

else misused the product.

SUMMARY JUDGMENT STANDARD

Under Rule 56 of the Federal Rules of Civil Procedure, a

movant is entitled to summary judgment if the record

establishes that there exists “no genuine issue as to any

material fact and that the moving party is entitled to

judgment as a matter of law.” Fed. R. Civ. P. 56(c). In

determining whether summary judgment should issue, the

facts and inferences from these facts are viewed in the light

most favorable to the non-moving party and the burden is

placed on the moving party to establish both that there is no

genuine issue of material fact and that he is entitled to

judgment as a matter of law. Matsushita Electric Industrial

Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348,

1356-1357, 89 L.Ed.2d 538 (1986). The moving party may

discharge this burden by showing there is an absence of

evidence to support the non-moving party’s case. Celotex

Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2552, 91

L.Ed.2d 265 (1986). The party opposing a motion for

summary judgment cannot rest upon his mere allegation or

denials of his pleadings, but must set forth specific facts

showing there is a genuine issue for trial. Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2515, 91

L.Ed.2d 202 (1986).

B-5

Under recently enunciated standards set forth by the

United States Supreme Court, the mere existence of some

alleged factual dispute between the parties will not defeat an

otherwise properly supported motion for summary judg-

ment. The requirement is that there be no genuine issue of

material fact. Anderson, supra, 106 S. Ct. at 2514. A

material fact is genuine if the evidence is such that a

reasonable jury could return a verdict for the non-moving

party. Jd., 106 S. Ct. at 2510.

At the summary judgment stage, the trial judge’s function

is to determine whether there is a genuine issue for trial.

There is no issue for trial unless there is sufficient evidence

favoring the non-moving party for a jury to return a verdict

for that party. If the evidence is merely colorable or is not

significantly probative, the judge may grant summary judg-

ment. /d., 106 S. Ct. at 2511.

USE OF RAIN-X

As a sort of preliminary bout to the main event, the main

event involving First Amendment rights under the United

States and Arizona Constitutions, plaintiffs argue that

before the constitutional issues can even be addressed, there

exists an issue of fact precluding summary judgment as to

whether Rooney actually used Rain-X as he represented

and/or whether he used it properly. Plaintifis contend that

implicit ir Rooney’s declaration that Rain-X did not work is

the express representation that Rooney actually used the

product and properly applied it to his automobiles. Plaintiffs

claim that if the expressed or assumed facts underlying a

statement, even a statement of opinion, are false, a defen-

B-6

dant cannot escape liability for defamation or

disparagement.’

In opposing defendants’ summary judgment motion,

plaintiffs submit evidence which they claim indicates that

Rooney never applied Rain-X to his automobiles as he

represented during his broadcast. This evidence consists

largely of a comparison of the results of a test conducted by

plaintiffs of Rooney’s automobiles on June 9, 1988 and a test

of a control vehicle treated with Rain-X approximately six

months earlier. The purpose of the test was to determine the

presence or absence of Rain-X on each vehicle. According

to the affidavit of Howard Ohlhausen, the test revealed no

evidence of Rain-X on any of Rooney’s automobiles while

Unelko’s control vehicle still exhibited the presence of

Rain-X after more than six months of use and exposure.

Plaintiffs claim that the results of this test indicate that

Rooney’s vehicles were either never treated with Rain-X or,

at the very least, had not been treated properly according to

Unelko’s explicit instructions.

Plaintiffs also set forth the deposition testimony of

Rooney’s wife, Marguerite Rooney, to the effect that when

she observed rain on the automobile windshield that had

purportedly just been treated with Rain-X by her husband,

she observed an effect corresponding to a photograph on the

Rain-X box that portrays a windshield without Rain-X.

From this, plaintiffs conclude that Mrs. Rooney’s testimony

? The Restatement (Second) of Torts §§ 565 and 566 provide

that a defamatory communication may consist of a statement of

fact or a statement in the form of an opinion but that the latter is

actionable only if it implies the allegation of undisclosed defama-

tory facts as the basis for the opinion. Restatement (Second) of

Torts §§ 565, 655 (1977).

B-7

regarding her observation of the vehicle’s windows confirms

the absence of Rain-X from the windshield of the car.

Finally, plaintiffs claim that the fact that Rooney admit-

ted in his deposition that he did not spend an hour applying

Rain-X to the windshield of his car nor could he testify with

any degree of accuracy as to the date he used Rain-X

indicate that Rooney did not use Rain-X as he represented

during his broadcast.

Plaintiffs bear the burden of proof on the issue of the

falsity of Rooney’s statements. See Philadelphia Newspa-

pers, Inc., v. Hepps, 475 U.S. 767, 106 S. Ct. 1558 (1986).°

Under Fed. R. Civ. P. 56(e), the party opposing a motion

for summary judgment cannot rest upon his mere allegation

or denials of his pleading, but must set forth specific facts

showing that there exist genuine issues of material fact to be

resolved. Anderson v. Liberty Lobby, supra, 106 S. Ct. at

2514. Where the record taken as a whole could not lead a

rational trier of fact to find for the non-moving party, there

is no “genuine issue for trial.” Matsushita, supra, 106 S. Ct.

at 1356.

In this instance, the evidence set forth by plaintiffs fails to

convince this Court that a genuine issue of fact exists as to

whether or not Rooney used plaintiffs’ product Rain-X on

his automobile as represented during his broadcast. The

Court finds that no reasonable jury could conclude that

Rooney did not use Rain-X on two of his vehicles sometime

> In Philadelphia Newspapers, the Supreme Court held, at least

in context of a media defendant, “that the common law’s rule on

falsity-that the defendant must bear the burden of proving truth-

must similarly fall here to a constitutional requirement that the

plaintiff bear the burden of showing falsity, as well as fault, before

recovering damages.” /d., 106 S. Ct. at 1563.

B-8

during the Winter of 1987-88. The evidence offered by

plaintiffs to the contrary is inferential and ambiguous at

best.

The deposition testimony of both Andy and Marguerite

Rooney indicate that Rooney applied Rain-X to the wind-

shield of both his and his wife’s car one Saturday while

washing the cars. Rooney testified that before he began

washing the cars, he noticed a couple bottles of Rain-X in

his garage and decided to try it. He claims he read the

directions, carefully washed and dried the windows of the

car and then applied Rain-X first to his car and then to his

wife’s car. Particularly probative is Rooney’s testimony that

after applying Rain-X to the windshield of his car, a haze or

film developed on the window which he then wiped clean.

This Court’s review of the video tape provided by plaintiffs

which demonstrates how to use Rain-X also reveals that a

slight haze or film develops on the windshield after it is

applied. This process would likely not be one that a person

who had not used Rain-X would be cognizant or aware of.

That Andy Rooney testified to this hazing or filming effect

during his deposition is indicative of and consistent with the

fact that Rooney did use plaintiffs product on his

automobiles.

The truth or veracity of Rooney’s testimony is further

supported by the fact that although plaintiffs contend there

is an issue of fact as to whether Rooney used Rain-X,

plaintiffs also concede that Rooney could have used Rain-X

in an improper manner. Plaintiffs never directly contend that

Rooney is lying or attempting to fabricate a cover story

when Rooney states he applied Rain-X to the windshield of

his car. Rooney’s testimony that he used Rain-X is highly

plausible. Alternately, plaintiffs’ evidence to the contrary is

insufficient under the trilogy of recent United States Su-

preme Court cases to satisfy their burden on summary

B-9

judgment of proving that a genuine issue of material fact

remains as to the truthfulness of Rooney’s statement that he

used Rain-X.

Marguerite Rooney’s deposition testimony, contrary to

plaintiffs assertions, supports her husband’s testimony that

he used Rain-X. Mrs. Rooney testified that she learned of

Rain-X for the first time in late 1987 when, after she

complained about a deterioration in their windshield visibil-

ity, her husband told her that he had put Rain-X on the

windshield of the automobile. It was her testimony that the

windshield appeared foggy and she asked her husband what

he had done to the car. In response, Rooney acknowledged

putting Rain-X on the windshield. This exchange occurred

months before the commencement of this lawsuit and seem-

ingly long before Rooney would have any possible motive to

be untruthful about whether he had actually used Rain-X.

The absence of any plausible motive to engage in the

conduct charged is highly relevant to whether a “genuine

issue for trial” exists within the meaning of Rule 56(e).

Matsushita, supra, 106 S. Ct. at 1361 (“Lack of motive

bears on the range of permissibie corclusions that might be

drawn from ambiguous evidence’’).

To contradict Rooney’s statement and testimony that he

used Rain-X, plaintiffs cite the fact that Rooney cannot

remember the exact date of this usage. Although Rooney

cannot pinpoint the exact date of when this occurred, the

Court does not view this as especially probative or disposi-

tive on the issue of whether Rooney actually used Rain-X

The Court recognizes that washing one’s car is usually not a

significant enough event in one’s life to commit to memory

the exact date upon which it occurred.

Plaintiffs also appear to place much emphasis on the fact

that Rooney admits in deposition testimony that he probably

did not spend an hour putting Rain-X on the windshield of

B-10

his car as he represented in his broadcast. The implication or

conclusion plaintiffs apparently draw from this is that

Rooney did not actually use Rain-X but instead invented

“facts and then broadcast{ed] opinions allegedly based

upon those fabrications.”

The Court fails to see any relevance or connection be-

tween the fact that Rooney stated in his deposition that it

did not take an hour to apply Rain-X and the issue of

whether he used Rain-X at all.

First, Rooney states in his deposition that it took about an

hour to wash two cars, dry the windshields, apply Rain-X to

both vehicles, wipe off the haze or film which had developed

and then put on a second coat of Rain-X pursuant to the

product’s instructions. Rooney admits that when he claimed

on the broadcast that it took an hour to apply Rain-X to the

windshield of his car, he did not separate or differentiate

between the functions of washing his cars and applying

Rain-X. Whether this tends to raise a genuine issue of

material fact sufficient to lead a reasonable jury to find that

Rooney did not use Rain-X as asserted is 4 tenuous proposi-

tion at best.

Second, the time it took for Rooney to apply Rain-X is

not a maternal statement nor a crucial element in determin-

ing the truth of Rooney’s representation that he used

Rain-X. It is well established that literal truth of a publica-

tion need not be established, only that the statement be

substantially true in order for it to provide an absolute

defense to an action for defamation. Fendler v. Phoenix

Newspapers Inc., 130 Ariz. 475, 636 P.2d 1257, 1261 (Ariz.

App. 1981). See also Alioto v. Cowles Communications,

Inc., 623 F.2d 616 (9th Cir. 1980). Thus, the fact that it

might not have taken Rooney an hour to apply Rain-X is not

especially relevant to nor indicative of the falsity of the rest

B-11

of Rooney’s statements for purposes of holding defendants

liable for defamation.

Finally, the Court is persuaded that the result of tests

plaintiffs performed on both Rooney’s automobile and a

control vehicle would not “lead a rational trier of fact” to

find for plaintiffs on this particular issue. Plaintiffs claim

their tests failed to detect the presence of Rain-X on

Rooney’s car thus raising an issue of fact as to whether

Rooney ever used Rain-X in the first place.* The Court

“The method of testing and the results of the test are set forth

in the affidavit of Howard Ohlhausen. According to his affidavit,

on June 9, 1988, Ohihausen personally tested the windshield and

side window of Rooney’s BMW sedan and Ford station wagon for

the presence of Rain-X. This was done by applying Rain-X to half

the windshield and side window of Rooney’s vehicles and compar-

ing it to the half not so treated. The half treated by Rain-X on

June 9 was visibly repellent to water compared to the half that

was not treated. Based on this test, Ohlhausen concludes that

there was no evidence of any Rain-X coating on Rooaey’s

vehicles and that either Rooney did not apply Rain-X or if it had

been applied, was done so incorrectly and insufficiently as to

preclude product adhesion and performance.

To verify the durability of Rain-X and the validity and reliabil-

ity of the test procedures employed on the Rooney cars,

Ohlhausen instructed Unelko employees not to re-treat a previ-

ously treated Unelko vehicle for a period of approximately six

months. The vehicle was driven in a normal manner and periodi-

cally washed but was not garaged in order to permit maximum

exposure to the elements. On January 5, 1989, the Unelko vehicle

was tested for the presence of Rain-X, using the identical proce-

dures and sequence employed during the testing of the Rooney

vehicles on June 9, 1988. Plaintiffs claim that the results of the

test revealed that the Unelko vehicle, six months after last: being

treated with Rain-X, still demonstrated significant water beading,

indicating the presence of Rain-X.

B-12

agrees with defendants’ contention that no reasonable paral-

lel can be drawn by comparison of the Unelko “control”

vehicle to the Rooney vehicles in the absence of any

evidence that the Unelko vehicle was maintained under the

same conditions as the Rooney cars. “It is settled law that

evidence of experimental tests is inadmissible absent a

foundational showing that the tests were conducted under

conditions substantially similar to those surrounding the

incident at issue.” Cowens v. Siemens-Elema AB, 837 F.2d

817, 820 (8th Cir. 1988). It does not take the testimony of

Willard Scott for this Court to take judicial notice of the

fact that the climatic conditions in Connecticut where

Rooney resides are vastly different from those in the Phoe-

nix area where the Unelko control vehicle was tested.

Greater snow and rain precipitation in Connecticut creates

lengthier periods of windshield wiper use and scraping.

According to the Ohlhausen affidavit, “Rain-X dissipates as

a result of the extended abrasive action of mechanical

windshield wipers. . . .”* In addition, defendants attach as

Exhibit A to their Reply brief, a copy of a page of Rain-X

literature which states that: “Depending upon the environ-

ment, climate, time of year, amount of driving and fre-

quency of mechanical wiper use; a typical application of

Rain-X on the windshield will last anywhere from one week

to several months.” As a result, plaintiffs’ own literature

concedes that even if Rooney had used Rain-X shortly

before his April 17 broadcast, it could have worn off long

before the June 9th test date. Although unsure as to the

exact date, Rooney is certain that he applied Rain-X to his

vehicles sometime during the winter months either in late

1987 or early 1988. The fact that Rain-X could not be

detected on Rooney’s vehicles approximately 5 to 6 months

after application is neither indicative nor dispositive of

° Affidavit of Howard G. Ohlhausen, 72.

B-13

whether Rooney actually used Rain-X and thus fails to

create a genuine issue of material fact.

Plaintiffs have failed to carry their burden of raising a

genuine issue of fact concerning whether or not Rooney

actually used Rain-X as he represented in his broadcast.

There is no issue for trial unless there is sufficient evidence

favoring the non-moving party for a jury to return a verdict

for that party. If the evidence is merely colorable or is not

significantly probative, the judge may grant summary judg-

ment. Anderson v. Liberty Lobby, supra, 106 S.Ct. at 2511.

As a result, defendants’ summary judgment motion will not

be denied on the basis of plaintiffs’ contention that Rooney’s

broadcast contained false statements or false implications of

fact.

STATEMENT OF FACT OR STATEMENT OF

OPINION

The Court now turns its attention to the more important

issue raised by this case. This case involves the inherent

tension and conflict between the First Amendment and its

guarantees of freedom of speech versus speech which is

defamatory in nature and not subject to constitutional pro-

tection. In this instance, the fundamental issue is whether

Rooney’s statements regarding Rain-X were false state-

ments of opinion subject to protection under the First

Amendment.

A communication is defamatory if it tends so to harm the

reputation of another as to lower him in the estimation of

the community or to deter third persons from associating or

dealing with him. Restatement (Second) of Torts § 559

(1977). Recovery for defamation may be had only for false

statements of facts. Restatement (Second) of Torts § 581A.

Statements of opinion are not actionable under the First

B-14

Amendment of the United States Constitution and Article

2, Section 6 of the Arizona Constitution. Gertz v. Robert

Welch, Inc., 418 U.S. 323, 339-40, 94 S.Ct. 2997, 41

L.Ed.2d 789 (1974); MacConnell v. Mitten, 131 Ariz. 22,

25, 638 P.2d 689, 692 (1981).

Constitutional protection for the expression of opinion is

based on the Supreme Court’s pronouncement in Gertz that

there is no such thing as a false idea.

Under the First Amendment there is no such thing as a

false idea. However pernicious an opinion may seem,

we depend for its correction not on the conscience of

judges and juries but on the competition of other ideas.

Id. at 339-40, 94 S.Ct. at 3007. The determination of

whether an allegedly defamatory statement is a statement of

fact or statement of opinion is a question of law for the

court. See, e.g. Greenbelt Cooperative Publishing Assn. v.

Bresler, 398 U.S. 6, 13-15, 90 S.Ct. 1537, 26 L.Ed.2d 6

(1970); Lewis v. Time Inc., 710 F.2d 549, 553 (9th Cir.

1983).

It is well settled in this Circuit that the fact or opinion

distinction in diversity cases is to be decided as a question of

federal law. Ault v. Hustler Magazine, Inc., 860 F.2d 877,

880 (9th Cir. 1988). The three-prong test of whether the

substance of a statement or publication is fact or opinion is:

(1) whether the words can be understood in a defamatory

sense in light of the facts surrounding the publication,

including the medium by which and the audience to which

the statement is disseminated; (2) whether the context in

which the statements were made would lead the audience to

anticipate persuasive speech; and (3) whether the language

used is the kind generated in a “spirited legal dispute.” Jd. at

881; Lewis, supra, 710 F.2d at 533; Information Control

ee

— ll OOOO OT OO

B-15

Corp. v. Genesis One Computer Corp., 611 F.2d 781, 783-84

(9th Cir. 1980).

Discussing the three factors in turn, this Court concludes

that the facts surrounding Rooney’s statements weigh in

favor of opinion, rather than fact.

Turning to the first factor, Rooney’s allegedly defamatory

statements were made during the course of his weekly

commentary on “60 Minutes”. “60 Minutes” is a newsma-

gazine show which broadcasts features or segments involv-

ing investigative reports and interviews with well-known

newsmakers and personalities. “60 Minutes’s” regular fea-

tures are presented by correspondents, i.e., television report-

ers who conduct research and investigations into the subject

matter of their report. These reports or features involve,

among other things, the presentation of factual information.

However, Andy Rooney does not appear on any of “60

Minutes” regular news reports or features. Instead, Rooney

appears each week near the end of the show in his own

segment entitled “A Few Minutes With Andy Rooney.”

Despite being characterized by plaintiffs as a correspondent,

it is obvious that Rooney acts more in the role of a

commentator during his weekly segment.° Unlike the other

° Webster’s Dictionary defines correspondent as “one employed

by a newspaper or broadcasting company to contribute regular

news reports or interpretations.” Commentator is defined as “one

who reports and discusses current events or daily news with

interpretation and analysis.” Webster's Third New International

Dictionary (1981). The inclusion of the words “discusses” and

“analysis” in the definition of commentator implies the setting

forth of one’s own observations, thoughts and opinions. This is an

appropriate description of what Andy Rooney does during his

segment on “60 Minutes”. See Miller, Sixty Minutes with Andy

Rooney, Saturday Evening Post, p. 64 (March 1984) (“A Few

B-16

regulars on the program, he does not report or interpret

current events or hard news items but rather shares insights,

observations, experiences and opinions on a host of topics

ranging from life in general to everyday common occur-

rences and events.’ Consequently, it can hardly be disputed

that those who turn in to watch Andy Rooney on “60-

Minutes” understand that his comments and statements are

humorous, satirical, full of ridicule and often to be taken

with a grain of salt. His audience realizes that what they get

from Rooney is not a factual summation of the news but

rather Rooney’s opinions on a variety of subjects. Thus, they

are less likely to take his comments seriously or as the

absolute truth than they would statements from a newspaper

or newsprogram whose purpose is to report factual news

stories. As a rest, the facts surrounding the publication of

Rooney’s statements support a finding that, rather than

constituting statements of fact in the defamatory sense,

Rooney’s comments evolved from his own opinion of the

product and were understood by the audience as such.

Turning to the second prong of the test, the context ‘n

which the allegedly defamatory statements were made

would lead the average listener to anticipate persuasive

speech. The conte of Rooney’s statements clearly indicate

or signal to the listener the presence of rhetoric, ridicule,

satire, sarcasm and humor. The Court’s focus under this

prong is not just on Rooney’s statements concerning Rain-X

Minutes With Andy Rooney” is known for its “humorous

commentary.”).

’The Saturday Evening Post has described Rooney as “the

folksy philosopher who understands little things . . . Often sage,

sometimes silly, always succinct, his messages zing in on truths

common to everyone. He can evoke chuckles when he sounds off

on designer jeans and tears when he comments on the pain of

growing old.” Jd. at 64-65.

B-17

but rather upon his entire broadcast. The test to be applied

in determining whether an allegedly defamatory statement

constitutes an actionable statement of fact requires that the

court examine the statement in its totality in the context in

which it is uttered or published. /nformation Control, supra,

611 F.2d at 783. The Court must consider all the words

used, not merely a particular phrase or sentence. In addition,

the court must give weight to cautionary terms used by the

person publishing the statement.

A further consideration involves the visual aspect of

Rooney’s statements. In studying a television program for

nossible defamatory meanings, the court must not confine its

analysis to the words alone. The court must also consider the

impact of the video portion of the program since the

television medium offers the publisher the opportunity,

through visual presentation, to emphasize certain segments

in ways that cannot be ascertained from a mere reading of

the transcript. It is the entirety of the program, both audio

and video, that must be considered susceptible of a defama-

tory meaning. See Lasky v. American Broadcasting Compa-

nies, Inc., 631 F.Supp. 962, 970 (S.D.N.Y. 1986).

Review of both the transcript and video portion of

Rooney’s April 17 broadcast underscores the humorous and

satirical nature of the feature.* It concerns things, i.c.,

*The April 17 broadcast of “A Few Minvtes With Andy

Rooney” begins with a lead-in by Mike Wallac-.

Mike Wallace. You think you get junk mail? How would

you like to be Andy Rooney? Or, even worse, how would you

like to be Andy Rooney’s mailman.

Andy Rooney: People send me things. I get an awful lot of

junk that I don’t want that just seems too interesting to throw

away. Some people send me stuff because they’re friendly.

B-18

“junk” people send him. He talks about thirteen items of

unsolicited “stuff,” “junk,” or “things” he received and

Others, of course, send it because they’re looking for a plug

on the air.

I get a lot of caps, and a lot of cups. This is a cup from the

ship Guam that I spent some time on off Beirut. Captain

Quarterman sent me this; I like it. This is a musical cup, I

don’t like that much.

I get a lot of music sent me. People send me songs they’ve

written on tape, which I don’t listen to. This is a piece of

sheet music. It’s from a prisoner in Florida, and the song is

called “Lady Liberty, Oh How I Love Thee.” He’s in prison

for murder, so he’s going to be there a long time without

liberty.

Hamilton Watch sent me this expensive watch. It’s not

really proper for me to keep something like this, and I should

send it back.

I get pictures of myself. Here’s a picture of me at a party

with John Chancellor. You probably didn’t know I traveled

in those circles.

Here’s the sort of thing I get a lot of. I don’t know why

they sent me this. It’s a piece of a door. I guess they were

pushing some new kind of material.

Here’s something for the windshield of your car called

Rain-X. The fellow who makes this sent me a whole case of

it. He’s very proud of it. I actually spent an hour one

Saturday putting it on the windshield of my car. I suppose

he’d like a commercial or a testimonial. You know how they

hold the product up like this? It didn’t work.

And then I get books. Holy mackerel, do I get books.

Mostly from publishers, but I get a lot from authors too.

They send me their manuscripts. They want me to read

them.

Be Vite dein eel Cree onan leak eetes

B-19

expresses a comment or opinion on each one. For instance,

Rooney describes a song he received from a prisoner in

Florida entitled “Lady Liberty, Oh How I Love Thee.”

Rooney then opines that since the prisoner is in prison for

murder, he will be there a long time without lib-

erty—certainly a humorous play on words and a signal to the

viewer that this is a satirical piece. Rooney talks about an

illustrated picture of himself that someone sent him. Rooney

says that the illustrator “ripped off a picture of me” and “I

suppose I could have sued him, but I was busy that day.” It

is obvious, however, that Rooney is not very serious about

suing and the audience recognizes that through Rooney’s

comment that he was busy that day.

Equally relevant are Rooney’s statements containing his

personal views of some of the items he receives (e.g., “I like

it”; “I don’t like that much”; “one of the best things I ever

Look at this. Several people have sent me this over the

years. The illustrator ripped off a picture of me. I suppose I

could have sued him, but I was busy that day.

This is the most repulsive thing anyone sent me. It’s from

some anti-cigarette group. It’s an ashtray in the shape of a

human lung.

Someone suggested I could neaten up my office with these

giant paper clips. Sort of a good idea.

This is one of the best things I ever got. It’s an orange

peeler. It’s changed by life. Simple enough, made by some

company in Tulon, Illinois. I have an orange almost every

morning of my life and I love peeling it this way. It really is

magic. You can amaze your friends with this. Look at that.

There. Presto!

People are very nice. But would you do me two favors?

One, don’t send me anything more. And two, don’t ask me to

send any of this to you.

B-20

got”; “the most repulsive thing anyone sent me’”’). These are

clearly comments regarding Rooney’s personal views and

opinions on some of the items he receives. In this context,

Rooney’s comment concerning Rain-X, i.e., “It didn’t

work,” is an expression of his personal opinion of the

product.

Thus, within the context of the April 17 broadcast, the

Court concludes that Rooney’s comments concerning

Rain-X could only be viewed by the audience as the

manifestation of Rooney’s personal opinion on and experi-

ence with Rain-X rather then a blanket statement of fact

concerning the product’s capabilities.

The third prong of the fact/opinion test involves consider-

ation of the specific language of the allegedly defamatory

statement. Under this prong, the Court focuses on Rooney’s

statement “It didn’t work” since that is the only statement

which arguably could be construed as defamatory. Whether

those three words signify a statement of fact or statement of

opinion is central to the claim of defamation. Much depends

upon whether Rain-X is capable of or susceptible to an

objective characterization of its performance.

As an example, whether or not a lightbulb works is an

objective determination. Either it gives off light or it doesn’t.

Its performance is constant. Consequently, whether its

works can be determined solely by one’s own sensory per-

ception; there is no room for differences of opinion. Other

products are incapable of such objective determination.

Whether they work depends upon one’s subjective evalua-

tion or opinion which may be influenced by a multitude of

differing factors, conditions, situations and perspectives.

Rain-X is in the latter category as evidenced, in part, by the

letters in the record from consumers expressing both plea-

sure and displeasure with the product. Consequently,

whether Rain-X works is a subjective determination capable

B-21

of producing divergent opinions among those who try it.

When Rooney stated “it didn’t work,” he was simply expres-

sing his opinion of the product. As a result, in this context no

defamatory meaning can be attached to Rooney’s statement.

The Court’s ruling that Rooney’s statements are state-

ments of opinion rather than statements of fact and thus not

defamatory is supported by cases with similarly analogous

facts. Both parties attempt to bolster their respective posi-

tions by reference to a line of cases which they claim control

this particular factual situation. Defendants cite the example

of libel cases involving restaurant and movie reviews where

the courts held in favor of the defendants. See e.g, Mr.

Chow of New York v. Ste. Jour Azur S.A., 759 F.2d 219 (2d

Cir. 1985). Defendants argue that Rooney’s specific com-

ments about Rain-X were in the nature of a review of the

product and that such reviews clearly involve the expression

of opinion. Plaintiffs claim that the nature of this incident is

not analogous to a movie or restaurant review and the Court

agrees. Those types of reviews are premised upon the idea

that the opinions expressed by the reviewer are exactly that,

his or her opinion. That is a premise already well established

and recognized by the audience.

Neither does the Court quite agree with plaintiffs’ conten-

tion that this case is similar to several cases involving

consumer groups and experts where the courts recognized

that defamatory statements concerning products and prod-

uct manufacturers may be actionable. See e.g., Bose Corp. v.

Consumers Union of U.S. Inc., 466 U.S. 485, 1041 S.Ct.

1949, 80 L.Ed.2d 502 (1984); Cranberg v. Consumers

Union of U.S. Inc., 756 F.2d 382 (Sth Cir. 1985); Simmons

Ford, Inc. v. Consumers Union of U.S. Inc., 516 F.Supp. 742

(S.D.N.Y. 1981). When consumer groups voice their opin-

ions concerning a product, they are understood to have

expertise in the area of consumer products and are expected

B-22

to have extensively tested the product. Whatever else Andy

Rooney is, he is not an expe.t on consumer products and

does not hold himself out as one. Neither does his audience

understand him to be nor expect him to be an expert on

consumer products.

This Court views this case as similar in nature to

Polygram Records v. Superior Court, 170 Cal. App. 3d 549,

216 Cal. Rptr. 252 (1985), in which a California court ruled

that a joke by comedian Robin Williams concerning a black

wine named “Rege” was not defamatory to defendant, a

producer and distributor of wine whose last name was Rege.

Although the court in Polygram rejected the contention that

comedy is categorically protected by the First Amendment,

the court ruled that in light of the occasion at which the joke

was delivered and the attending circumstances of the case,

the joke, as a matter of law, was not defamatory. The court

ruled that the threshold inquiry in cases of this sort is

whether the communication in question could reasonably be

understood in a defamatory sense by those who received it.

See, Restatement (Second) of § Torts 563, com. C (1977).

This is not to say that the discernibly humorous intent

of the publisher is irrelevant, or that a court may not

consider and give weight to the comedic context in

which publication occurred, or the nature of audience

response; for considerations of this sort invariably will

bear upon the determination whether a defamatory

meéaning could reasonably be attached to the communi-

cation in question.

Polygram, supra, 170 Cal. App. 3d at 554, 216 Cal. Rptr. at

259. As set forth in this Court’s analysis of the fact/opinion

distinction, consideration of these same factors, including

the circumstances, context and language of Rooney’s broad-

casts lead to the conclusion that, as a matter of law, his

B-23

statement’s concerning Rain-X were not and are not

defamatory.

As for any and all other statements made by Rooney in

both his April 17 and May 8 broadcast which have not been

specifically addressed, the Court does not find any of these

statements to be actionable. The Court bases its findings on

the fact that none of the other statements are both false and

defamatory. In other words, those statements which could

be characterized as objectively false, are not defamatory in

that they do not tend to harm plaintiffs’ reputation.

For instance, even if Rooney did not spend an hour

applying Rain-X to his vehicles as he represented during his

April 17 broadcast, the statement itself would not tend to

harm plaintiffs’ reputation. On May 8, Rooney talked about

the fact that he was being sued for the comments he made

regarding Rain-X in his April 17 broadcast. Referring to the

first broadcast, Rooney states: “Well I said I tried it and it

didn’t work for me.” Although Rooney did not use the words

“for me” in his first broadcast, the inclusion of those two

words in the May 8 broadcast does not rise to the level of

making that particular statement defamatory.

Rooney also refers to the fact that “the fellow who makes

this sent me a whole case of it” and “[t]his fellow sent me

his product to evaluate, and I did.” Indeed, Rooney was sent

a sample package of Rain-X by Unelko. Unelko’s National

Sales Manager, Wayne Morrison, sent a letter to Rooney

stating: “In order that you may personally test and evaluate

RAIN-X performance, we have forwarded a small supply to

you today via U.P.S.” Although it is unclear exactly who

sent the Rain-X to Rooney or for that matter the identity of

“the fellow who makes” Rain-X, Rooney’s statements are

substantially true; he was sent the product by someone at

B-24

Unelko in order to personally test and evaluate. As noted

previously, literal truth of a publication need not be estab-

lished, only that the statement be substantially true in order

for it to provide an absolute defense to an action for

defamation.

As a result, neither the April 17 broadcast nor the May 8

broadcast contain any statements which are both defama-

tory and actionable at law. Therefore, defendants’ motion for

summary judgment is granted with respect to Counts 2 and

3 of the complaint which aliege causes of action for

defamation.

PRODUCT DISPARAGEMENT

Plaintiffs’ first cause of action is based on product dispar-

agement. This type of action is set forth in Restatement

(Second) of Torts § 623A which is entitled “Liability for

Publication of Injurious Falsehood.” The particular form of

injurious falsehood that involves disparagement of quality is

commonly called “trade liable.” An action for trade libel lies

when the publisher disparages plaintiffs’ property and should

recognize that pecuniary loss from the conduct of third

persons is the most likely result. Restatement (Second) of

Torts § 626 (1977).

Product disparagement or injurious falsehood is subject to

the same First Amendment requirements as is an action for

defamation. Restatement (Second) of Torts § 623A, com. e

(1977). In other words, an expression of mere opinion is no

longer actionable unless it is found to imply the existence of

undisclosed defamatory facts justifying the opinion. Jd. This

Court has ruled that Rooney’s comments concerning

Rain-X were not defamatory as a matter of law in that they

constituted expressions of opinion not based on undisclosed

B-25

defamatory facts.’ As a result, plaintiffs’ failure to survive

summary judgment on the defamation counts also precludes

their recovery under a cause of action for product

disparagement.

TORTIOUS INTERFERENCE WITH BUSINESS

RELATIONSHIPS

As with plaintiffs’ claim for product disparagement, plain-

tiffs’ fourth cause of action based on tortious interference

with business relationships must likewise fail. Plaintiffs

allege its business relationships with other parties were

interfered with as a result of Rooney’s alleged defamatory

comments. Since this Court has already ruled, however, that

Rooney’s comments were not defamatory but rather state-

ments of opinion protected under the First Amendment,

plaintiffs cannot maintain their claim for tortious

interference.

In similar circumstances, the Ninth Circuit affirmed the

dismissal cf alternative of derivative causes of action based

on plaintiffs’ failure to state a claim for libel. See Ault v.

Hustler Magazine, Inc., 860 F.2d 877, 881 (9th Cir.

1988) (“Our holding that the Hustler article about Ault is

constitutionally protected opinion forecloses her claims for

libel, for invasion of privacy by placing her in a false light

and for intentional infliction of emotional distress’). The

same principle holds true under Arizona law. See Fendler v.

Phoenix Newspapers, Inc., 130 Ariz. 475, 636 P.2d 1257,

1262-63 (Ariz. App. 1981) (the defense of truth as a com-

*The alleged undisclosed defamatory facts in this instance

being that Rooney did not actually use Rain-X as he represented

in his broadcast. The Court previously concluded that the record

taken as a whole could not lead a rational trier of fact to find that

Rooney did not use Rain-X.

B-26

plete defense to a charge of defamation is equally applicable

to other causes of action based on the same libel claim).

IT IS ORDERED granting defendants’ motion for summary

judgment on all causes of action and plaintiffs’ complaint

and action are hereby dismissed.

DATED this 25th day of April, 1989.

Robert C. Broomfield

United States District Court

Copies to all counsel of record

An asenssessnnaieaa

APPENDIX C

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NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNELKO CorpP., an Illinois

corporation; HOWARD G.

OHLHAUSEN, No. 89-1575]

Plaintiffs-Appellants, D.C. No.

. CV-88-0705-

aa kes PHX-RC

ANDY ROONEY, an individual;

CBS, INC., ORDER

Defendants-Appellees. |

Before: ALARCON and POOLE, Circuit Judges, and HATTER,

District Judge*

The panel as constituted in the above case has voted

unanimously to deny the petition for rehearing. Judges

Alarcon and Poole have voted to reject the suggestion for a

rehearing en banc and Judge Hatter so recommends.

The full court has been advised of the suggestion for an en

banc hearing and no judge of the court has requested a vote

on the suggestion for a rehearing en banc. Fed. R. App. P.

35(b).

The petition for rehearing is denied and the suggestion for

a rehearing en banc is rejected.

FILED, NOVEMBER 20, 1990—CLERK, U.S. CourRT OF

APPEALS

* Honorable Terry J. Hatter, United States District Judge for

the Central District of California, sitting by designation.