Opposition Brief — Frank B. Hall & Co. v. Buck

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NO. 84-1639

Supreme Court of the United States

OcTOBER TERM, 1984

FRANK B. HALL & CO. INC.,

FRANK B. HALL & CO. INC. OF TEXAS

AND FRANK B. HALL & CO.,

Petitioners,

Vv.

LARRY W. BUCK,

Respondent.

On Petition for a Writ of Certiorari to the

Fourteenth Supreme Judicial District

Court of Appeals of the State of Texas

RESPONDENT'S BRIEF IN OPPOSITION

STEPHEN D. SUSMAN

2400 Allied Bank Plaza

Houston, Texas 77002

(713) 651-9366

Counsel for Respondent

Of Counsel:

FRANC! N. BECK

JAMES T. MCCARTT

SUSMAN, GODFREY & MCGOWAN

2400 Allied Bank Plaza

Houston, Texas 77002

Alpha Law Brief Co., Inc.—5606 Parkerst Houston, Texas 77036—223-3003

BEST AVAILABLE COPY

I

QUESTIONS PRESENTED FOR REVIEW

I. In a defamation suit between a private plaintiff and

a non-media defendant, where the plaintiff has proved

actual malice, does the federal Constitution preclude

the State of Texas from applying its common-law

rule that truth is a defensive matter?

II. Where a State trial court has awarded punitive dam-

ages in a private defamation suit against a non-

media defendant, does the federal Constitution re-

quire a State appellate court to make an independent

review of all evidence relevant to actual malice?

III. Is evidence of ill will relevant to the issue of actual

malice?

IV. Does the evidence support the jury’s finding of actual

malice?

I

TABLE OF CONTENTS

QUESTIONS PRESENTED FOR REVIEW ............

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REASONS WHY THE WRIT SHOULD BE DENIED ..

I.

II.

Il.

“In a defamation suit between a private plaintiff and

a non-media defendant, where the plaintiff has proved

actual malice, does the federal Constitution preclude

the State of Texas from applying its common-law rule

that truth is a defensive matter?” ...............

A. Hall has not show a conflict of decisions. .......

B. The burden was properly placed on the defendant.

C. In this case, any error in allocating the burden of

proof would be harmless. ...................

‘“‘Where a State court has awarded punitive damages

in a private defamation suit against a non-media

defendant, does the federal Constitution require a

State appellate court to make an independent review

of all evidence relevant to actual malice?” .......

A. There is no conflict of decisions. ..............

B. This issue was not seasonably raised in the state

GRU, | on cdnuu candace buen ceehi bates

C. The Constitution does not require independent re-

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D. This case has been subjected to intense review.

“Ts evidence of ill will relevant to the issue of actual

WEG 66. cba ue ake cack ae e

A. There is no conflict of decisions. ......... (ake

B. This issue was not seasonably raised in the state

GGA 0 oh 0 068 ua ds ba ubenn 66050 beebencauens

C. Evidence of ill will is relevant to the issue of

I A 6 6 oo n.d ceca er cen cece.

ao mn NON om

10

11

12

12

12

13

14

14

15

17

IV. “Does the evidence support the jury’s finding of

ica bee od be 6p sdk abe saneheause

A. This is a restatement of another non-reviewable

LER aaa ip a are os a

B. There is no conflict of decisions. ..............

C. There is sufficient evidence of malice. ..........

A NOTE ON THE DISPOSITION OF THIS PETITION

EY eee ae eee Ore eee ee rrr ee

CRTSPICATE GOP GRRVICE ............06605560.05.

TABLE OF AUTHORITIES

CASES

Applestein v. Knight Newspapers, Inc., 337 So.2d 1005

PURPA RU, EGPO) cc knw ccc isssccrscccvssveses

Beamer v. Nishiki, 66 Hawaii 572, 670 P.2d 1264 (1983)

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

US. e Fie Oe eee

Burke v. Diener, 190 N.J.Super. 382, 463 A.2d 963 (App.

Page

17

18

18

19

20

21

21

Page

x~

11, 18

Div. 1983), reversed, 97 N.J. 465, 479 A.2d 393 (1984) .14, 15, 18

Burnett v. Motyka, 610 S.W.2d 735 (Tex. 1980) ........ 13

Cox Broadcasting Corp. v. Cohn, 420 U.S. 469 (1975) ... 8

Curtis Publishing Co. v. Butts, 388 U.S. 130 (1967) ...... 17

Fink v. Combined Communications Corp., 679 P.2d 1108

MD, a cw eed es cewetcesesneseseecsss 18

Fisher Construction Co. v. Riggs, 325 S.W.2d 126 (Tex.

eee Ga ae by CN OLR RORS OHO WERE 0 44> 13

Fogus v. Capital Cities Media, Inc., 111 Ill.App.3d 1060,

ee ED cc icc ckoveceseuhecnassncees i+

Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974) ...... 8,9, 10, 2

Golden Bear Distributing Systems of Texas, Inc. v. Chase

Revel, Inc., 708 F.2d 944 (Sth Cir. 1983) ............ 18

Gomes v. Fried, 186 Cal.Rptr. 605, 136 Cal.App.3d 924

ESTE OR an aS or ee ere ear 6

Goodrich v. Waterbury Republican-American, Inc., 188

a a ee et eS at |) ere 7

Greenmoss Builders, Inc. v. Dun & Bradstreet, Inc., 143

Vt. 66, 461 A.2d 414, cert. granted, US. , 104

es ee ede week etae a eks Re 8a 20

IV

CASES 1 Page

Jacron Sales Co., Inc. v. Sindorf, 276 Md. 580, 350 A.2d

Fe errr rer rr nrrr rrr. or Tr 7

McCall v. Courier-Journal & Louisville Times Co., 623

S.W.2d 882 (Ky. 1981), cert. denied, 456 U.S. 975 (1982) 7

Nevada Independent Broadcasting Corp. v. Allen, 99 Nev.

Me We Be I i ks cr caccpa es necees 7

New York Times v. Sullivan, 376 U.S. 254 (1964) ....... 9,13

Pierce v. Pacific & Southern Co., 166 Ga.App. 113, 303

BIER BEG EOGRED 5 kc ckass hcundien 406 00e08nbsssce0 7

Radio Station WOW v. Johnson, 326 U.S. 120 (1945) .. 12,16

Rinaldi v. Holt, Rinehart & Winston, Inc., 42 N.Y.2d 369,

397 N.Y.S.2d 943, 366 N.E.2d 1299, cert. denied, 434

if a et 6g ery errr re Trrry eV ry sare 7

Rose v. Koch, 278 Minn. 235, 154 N.W.8d 409 (1967) ... 14, 15

Sivulich v. Howard Publications, Inc., 126 Ill.App.3d 129,

466 N.E.2d 12718 (C1GG4) ono caccvdverscccancescvoncs 7

St. Amant v. Thompson, 390 U.S. 727 (1968) .........-.. 17,19

Stearns v. McManis, 543 S.W.2d 649 (Tex. Civ. App.—

Houston [lst Dist.] 1976, writ dism’d) ............... 16

Time, Inc. v. Firestone, 424 U.S. 448 (1976) ........... 7

United States v. Johnston, 268 U.S. 220 (1925) ......... 19

Williams v. Trust Co. of Georgia, 140 Ga.App. 49, 230 S.E.

a EG | ere er errr re rT Tere rer fc tiee 18

Wilson v. Scripps-Howard Broadcasting Co., 642 F.2d 371

(6th Cir.), cert. granted, 454 U.S. 962, cert. dismissed

pursuant to Rule 53, 454 U.S. 1130 (1981) ......... 6, 7,10

UNITED STATES STATUTES

Re fel br | RPP yee eee Pera e 2

TREATISES

Restatement (Second) cf Torts § 580A, Comment d ...... 17,18

Restatement (Second) of Torts § 580B, Comment j ...... 10

Restatement (Second) of Torts § 581A, Comment b ...... 11

Restatement (Second) of Torts Caveat to § 613 ......... 11

NO. 84-1639

IN THE

Supreme Court of the United States

OCTOBER TERM, 1984

FRANK B. HALL & CO. INC.,

FRANK B. HALL & CO. INC. OF TEXAS

AND FRANK B. HALL & CO.,

Petitioners,

V.

LARRY W. BUCK,

Respondent.

On Petition for a Writ of Certiorari to the

Fourteenth Supreme Judicial District

Court of Appeals of the State of Texas

RESPONDENT’S BRIEF IN OPPOSITION

OPINION BELOW

The opinion of the Texas court of appeals is reported

at 678 S.W.2d 612, and is reprinted in the Appendix to

the Petition for Certiorari, at Al-A34. Petitioners’ sub-

sequent application to the Supreme Court of Texas for a

writ of error was refused without opinion, with the

notation “No Reversible Error.” (Appendix to Petition

for Certiorari, at B1.)

2

JURISDICTION

Petitioners’ writ of error was refused by the Supreme

Court of Texas on December 12, 1984. That court over-

ruled Petitioners’ motion for rehearing on January 23,

1985, and the petition for certiorari was filed on April

17, 1985. Respondent received the petition on April 22,

1985.

Petitioners are invoking this Court’s jurisdiction under

28 U.S.C. § 1257(3).

STATEMENT OF THE CASE

Respondent Larry W. Buck (“Buck”) brought this suit

against Petitioners Frank B. Hall & Co. Inc., Frank B.

Hall & Co. Inc. of Texas and Frank B. Hall & Co. (col-

lectively referred to as “Hall”). Hall is an insurance

brokerage firm.

In 1976, Buck was an insurance salesman for Alex-

ander & Alexander, an insurance brokerage firm that com-

petes with Hall. Buck was the top salesman in Alexander

& Alexander’s Houston office, and was among Alexander

& Alexander’s top five salesmen nationally.

Hall hired Buck away from Alexander & Alexander.

He began work on June 1, 1976 under a three-year em-

ployment contract. Several Alexander & Alexander em-

ployees followed Buck to Hall’s office. During the next

several months, Buck generated substantial commission

income for Hall and brought several major accounts to

the firm.

In March 1977, Buck was abruptly fired by Mendel

Kaliff (the president of Hall’s Texas operations) and

Lester Eckert (a Hall vice-president in charge of its

3

Houston office manager, and a former Alexander & Alex-

ander employee). Buck’s termination had been orches-

trated by Kaliff, Eckert and Virginia Hilley (another

Hall vice-president and former Alexander & Alexander

employee).

Subsequent to Buck’s termination from Hall, several

defamatory statements were made by Kaliff, Eckert and

Hilley. As a result, Buck was unable to procure a similar

sales position. His accounts stayed with Hall.

After a five-week trial in Texas state court, the jury

returned a verdict for Buck on his claims for breach of

contract and defamation. The jury specifically found,

inter alia, that

— Hall and Buck entered an agreement on April 30,

1976

— Hall did not have good cause to discharge Buck

— Hall uttered seventeen defamatory statements con-

cerning Buck

— Each of the defamatory statments was made with

actual malice’

— None of the defamatory statements was substan-

tially true

— Hall’s defamatory statements damaged Buck in

the amount of $605,000, of which $414,000 oc-

curred prior to May 31, 1979

— Hall’s breach of contract damaged Buck in the

amount of $479,000 through the end of the con-

tract term (May 31, 1979)

1. The jury was instructed, “A statement is made with ‘malice’

if it is made with knowledge that it is false or with reckless disregard

of whether it was false or not.”

sain aicieclilnaiaaeal

4

— Hall should pay $1,300,000 in exemplary dam-

ages

— The reasonable attorneys’ fees for the breach-of-

contract claim were $335,000.

The trial court then entered judgment against Hall for

$670,000 actual damages,’ $1,300,000 exemplary dam-

ages and $335,000 attorneys’ fees.

Hall has raised a plethora of issues in the post-trial

proceedings. Among those has been

— (a) the argument that the trial judge erroneous- |

ly placed upon Hall the burden of proving |

the substantial truth of its defamatory state-

ments. This issue was raised in the trial

court, in Hall’s appeal, and in Hall’s peti-

tion for writ of error to the Supreme Court

of Texas.

— (b)_ the argument that the appellate court should

undertake an “independent review” of the

evidence concerning actual malice. This is-

sue was raised for the first time in Hall’s

motion for rehearing in the court of appeals.

— (c) the argument that evidence of ill will is ir-

relevant to the determination of actual

malice. This issue was raised for the first

time in Hall’s motion for rehearing in the

court of appeals.

— (d) the argument that an “independent review”

would show that the evidence does not sup-

port the jury’s finding of actual malice. As

2. This amount was calculated by adding $479,000 (breach of

contract) and $605,000 (defamation)—then subtracting $414,000

for the temporal overlap between the two.

a

5

stated above, the notion of “independent re-

view” was raised for the first time in Hall’s

motion fo: rehearing in the court of ap-

peals.

SUMMARY OF ARGUMENT

Respondent Buck submits that the writ should be de-

nied:

I. Hall has failed to show that the ruling that truth is a

defensive matter raises an issue worthy of review by this

Court. Its assertion of a conflict of decisions is belied by

a careful review of the cited cases. In any event, the state

court’s ruling was correct. Moreover, any error would

have been harmless, because Buck’s proof of actual

malice established falsity “as a practical matter.”

II. Hall has shown no conflict of decisions as to whether

an “independent review” is required in non-media cases.

Moreover, Hall did not raise this issue seasonably. Even

though the Constitution does not require “independent re-

view,” this case has been subjected to intense review.

III. Again, Hall has shown no conflict of decisions as

to whether evidence of ill will is relevant to the determina-

tion of actual malice. The ill will issue was not raised

seasonably in the state courts and has not been preserved

for review by this Court. In any event, evidence of ill

will is clearly relevant.

IV. Hall’s suggestion that an independent review would

show the absence of actual malice is simply a restatement

of its second issue, which was not raised seasonably. In

addition, there is no conflict of decisions on this point.

Finally, the record contains ample evidence of malice.

6

REASONS WHY THE WRIT SHOULD BE DENIED

I. “In a defamation suit between a private plaintiff

and a non-media defendant, where the plaintiff

has proved actual malice, does the federal Con-

stitution preclude the State of Texas from ap-

plying its common-law rule that truth is a de-

fensive matter?”

Hall has asked this Court to review the ruling that

Hall had the burden of proving that its defamatory state-

ments were substantially true. According to Hall, the

First Amendment required the State of Texas to abandon

its common-law rule that defamatory statements are pre-

sumptively false, and so truth is a defensive matter.

Buck submits that Supreme Court review of this issue

is not warranted.

A. Hall has not shown a conflict of decisions.

As Hall acknowledges, this case “involves a private

plaintiff and a non-media defendant.” (Petition for Cer-

tiorari, at 10.) Plaintiff Buck is not a public figure or a

public official, nor is Hall a media defendant. When Hall

argues that this issue presents a conflict of decisions,

however, it chooses to forget these fundamental dif-

ferences.

Hall cites eleven decisions supposedly in conflict with

the ruling in this case. (/d., at 12-13.) Of those eleven

decisions, ten involved media defendants. Wilson v.

Scripps-Howard Broadcasting Co., 642 F.2d 371 (6th

Cir.), cert. granted, 454 U.S. 962, cert. dismissed pur-

suant to Rule 53, 454 U.S. 1130 (1981) (private plain-

tiff, television defendant); Gomes v. Fried, 186 Cal.Rptr.

605, 136 Cal.App.3d 924 (1982) (public plaintiff, news-

7

paper defendant); Goodrich v. Waterbury Republican-

American, Inc., 188 Conn. 107, 448 A.2d 1317 (1982)

(public plaintiff, newspaper defendant); Applestein vy.

Knight Newspapers, Inc., 337 So.2d 1005 (Fla. Dist.

Ct.App. 1976) (private plaintiff assumed arguendo, news-

paper defendant); Pierce v. Pacific & Southerr Co., 166

Ga.App. 113, 303 S.E.2d 316 (1983) (public plaintiff,

television defendant); Beamer v. Nishiki, 66 Hawaii 572,

670 P.2d 1264 (1983) (public plaintiff, newspaper de-

fendant); Sivulich v. Howard Publications, Inc., 126 Ml.

App.3d 129, 466 N.E.2d 1218 (1984) (private plaintiff

assumed arguendo, newspaper defendant); McCall v.

Courier-Journal & Louisville Times Co., 623 S.W.2d

882 (Ky. 1981), cert. denied, 456 U.S. 975 (1982)

(private plaintiff, newspaper defendant); Rinaldi v. Holt,

Rinehart & Winston, Inc., 42 N.Y.2d 369, 397 N.Y.S.2d

943, 366 N.E.2d 1299, cert. denied, 434 U.S. 969 (1977)

(public plaintiff, book publisher defendant); Nevada In-

dependent Broadcasting Corp. v. Allen, 99 Nev. 404, 664

P.2d 337 (1983) (public plaintiff, television defendant).°

The eleventh case, Jacron Sales Co., Inc. v. Sindorf,

276 Md. 580, 350 A.2d 688 (1976), is the only one

involving a private plaintiff and a non-media defendant.

But in that decision, the Maryland Court rested its ruling

on state Jaw rather than the federal Constitution. Id. at

695.

3. Only four of these cases involved private plaintiffs. Of those

four, three involve summary judgment motions—and so the question

was whether there were triable disputes of fact, not which party

had the burden of resolving those disputes. Applestein v. Knight News-

papers, Inc.; Sivulich v. Howard Publications, Inc.; McCall v.

Courier-Journal & Louisville Times Co.

The fourth private-plaintiff case, Wilson v. Scripps-Howard Broad-

casting Co., is a questionable decision. See 454 U.S. 962 (granting

certiorari). In any event, it is inapposite because (a) it involves a

media defendant and (b) there was no finding of actual malice.

8

Hall has not cited any holding that—in a defamation

suit between a private plaintiff and a non-media defendant

—the Constitution requires a State to impose upon the

plaintiff the burden of affirmatively proving the falsity

of defamatory statements.

B. The burden was properly placed on the de-

fendant.

According to Hall, this Court’s recent decisions have

jettisoned the common-law rule that “truth is a defense”

in private defamation actions. The Texas court of appeals

_explained why Hall is wrong:

[T]he decisions of the United States Supreme Court

in the mid 1970’s do not compel the change in Texas

law argued by appellant Hall. In Gertz v. Robert

Welch, Inc., 418 U.S. 323 (1974), the Supreme

Court specifically held that the First Amendment to

the Constitution does not permit the imposition of

liability without fault on a publisher or broadcaster

of defamatory falsehoods injurious to a private in-

dividual. Aside from this restriction, the Court said

the states may define for themselves the appropriate

standard of liability. 418 U.S. at 346-47. ... In

fact the year after Gertz was decided the United

States Supreme Court in Cox Broadcasting Corp.

v. Cohn, 420 U.S. 469 (1975) declined even to

state whether the Constitution required that truth

be recognized as a defense in a defamation action

brought by a private person. The Court stated:

It is true that in defamation actions, where the

protected interest is personal reputation, the pre-

_ vailing view is that truth is a defense; .. .

The Court has nevertheless carefully left open the

question whether the First and Fourteenth Amend-

ments require that truth be recognized as a de-

9

fense in a defamation action brought by a private

person as distinguished from a public official or

public figure.

420 U.S. 489-90. In our opinion Gertz does not

imply that the Constitution places on private defama-

tion plaintiffs the burden of proving falsity. We be-

lieve that another decision by the United States

Supreme Court, in Time, Inc. v. Firestone, 424 U.S.

448 (1976), supports our conclusion in this regard.

In Firestone, a Florida state trial court kad placed

the burden on the defendant to prove that a news-

paper report about a non-public plaintiff was true.

Under Florida law the only findings required for

determination of liability were (1) whether the ar-

ticle was defamatory, (2) whether it was true, and

(3) whether the defamation caused the plaintiff harm.

The Supreme Court held that with respect to liability

for defamation of a private plaintiff, these three

findings would have been sufficient to impose liability

if there had been some finding of fault on the part

of the defendant. The Supreme Court vacated and

remanded the case, not because the burden of prov-

ing truth had been placed on the defendant, but

because there had been no finding of fault on the

part of the defendant within the meaning of Gertz.

Under the decisions of the Supreme Court in Gertz,

Cox Broadcasting and Firestone a private defamation

plaintiff satisfies the Constitution by proving fault.

In this case Buck, the appellee, has satisfied the Con-

stitution’s requirements by proving malice as defined

New York Times v. Sullivan [, 376 US. 254

(1964)].

(Petition fo» Certiorari, at A21-A23.)

Hall was given ample opportunity to prove that its

defamatory statements were true. It was thus given its

due under Texas common law. This Court’s recent de-

cisions are not to the contrary.

10

©. In this case, any error in allocating the bur-

den of proof would be harmless.

Both as a matter of logic and as a matter of the record

evidence in this case, falsity has been established in this

case.

In arguing that the logic of Gertz impliedly placed

the burden of proving falsity upon a defamation plaintiff,

Hall referred the Texas courts to Comment j to § 580B

of the Restatement (Second) of Torts:

The burden of proof of showing fault is undoubtedly

upon the plaintiff. If the plaintiff has the burden

of showing that the defendant was negligent in fail-

ing to ascertain the falsity or the defamatory char-

acter of the statement or that he acted recklessly or

knowingly in this record, there remains little, if any,

significance in the common law position that truth

of the statement is a defense to be raised by the de-

fendant and on which he has the burden of proof.

(See § 581A). As a practical matter, in order

to meet the constitutional obligation of show-

ing defendant’s fault as to truth or falsity the plaintiff

will necessarily find that he must show the falsity of

the defamatory communication.

(Quoted in Brief for Appellants, at 60; cited in Petitioners’

Application for Writ of Error, at 67.)* In discussing the

plaintiff's burden of showing fault, the editors thus point

out that “as a practical matter,” a showing of fault neces-

4. Hall stresses the (inapposite) decision in Wilson v. Scripps-

Howard Broadcasting Co., 642 F.2d 371 (6th Cir. 1981). According

to the Sixth Circuit, it removed the burden from a media defendant

because “a rule that places the burden of proving truth on the de-

fendant permits the imposition of liability without fault in certain

situations.” Jd. at 375. That is, the court was really concerned lest

there be liability without fault.

eae

11

sarily encompasses a showing of falsity.* Because Buck

did establish falsity “as a practical matter” when he es-

tablished fault, any error as to the burden on the specific

issue of truth or falsity would be harmless.°®

The evidence in this case confirms this logic. On the

record, there can be no serious doubt that the defamatory

statements were false.

In effect, review by this Court would merely produce

an advisory opinion. If the Court is interested in the

issue, it should await a case where the issue is more

clearly presented and where the issue was essential to

the judgment below.

II. “Where a State court has awarded punitive dam-

ages in a private defamation suit against a non-

media defendant, does the federal Constitution

require a State appellate court to make an in-

dependent review of all evidence relevant to ac-

tual malice?”

The jury found that Hall acted with actual malice.

Groping for support from this Court’s decision in. Bose

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

U.S.__, 104 S.Ct. 1949 (1984), Hall now argues that the

Texas court of appeals should have extended its “indepen-

dent review” of the evidence on actual malice.

5. The Restatement actually refuses to state any opinion as to

which party has the burden of proof of the issue of truth and falsity.

Restatement (Second) of Torts, Caveat to § 613 at 307; Jd., Com-

ment b to § 581A at 235-36. The editors do point out, however, “It

has been consistently held that truth is an affirmative defense which

must be raised by the defendant and on which he has the burden

of proof.” Jd.

6. Indeed, Buck proved actual malice, which is the most stringent

variant of fault.

12

‘

For several reasons, this issue is not appropriate for

review.

A. There is no conflict of decisions.

In its brief discussion on this point (Petition for

Certiorari, 19-21), Hall does not even attempt to show

a conflict between this case and others. It cites no deci-

sions from other States or from lower federal courts, and

it acknowledges that “this Court has not addressed the

issue of whether an independent review must be conducted

in this type of situation.” (Jd. at 21.)

B. This issue was not seasonably raised in the

state courts.

Hall did not even ask the State court of appeals to under-

take any constitutionally required “independent review” of

this case; instead, it simply pursued the traditional Texas “no

evidence” and “insufficient evidence” issues. Only after the

appellate decision had been rendered—in the motion for

rehearing—did Hall first refer to any notion of indepen-

dent review. Under established principles, that was too

late. See, e.g., Radio Station WOW v. Johnson, 326 US.

120, 128 (1945) (“Questions first presented to the highest

State court on a petition for rehearing come too late

for consideration here, unless the State court exerted its

jurisdiction in such a way that the case could have been

brought here had the questions been raised prior to the

original disposition.”).

C. The Constitution does not require independent

review in this case.

In Bose, this Court reaffirmed the role of independent

review “in proper cases”—i.e., where the “line must be

——

13

drawn” between speech unconditionally guaranteed and

speech which may be regulated. 104 S.Ct. at 1963-64,

quoting New York Times v. Sullivan, 376 U.S. at 285.

This is not one of those “proper cases” for independent

review. It involves neither a public plaintiff nor a media

defendant. Even if it did, its facts do not place it on the

cutting edge between protected and unprotected speech,

where independent review might be appropriate.

D. This case has been subjected to intense review.

Respondent Buck would emphasize the thorough judi-

cial scrutiny to which the extensive record in this case

has actually been subjected.

After a five-week jury trial, the trial court thoughtfully

considered several post-trial motions. Hall’s motion for new

trial, for example, did cause the judge to consider whether

the jury’s findings were based on sufficient evidence, in

light of the entire record. Burnett v. Motyka, 610 S.W.

2d 735 (Tex. 1980); Fisher Construction Co. v. Riggs,

325 S.W.2d 126 (Tex. 1959). The record was then

scrutinized under the same standard by the court of ap-

peals, id., after which the state supreme court denied

Hall’s writ of error with the notation “no reversible er-

ror.” The extensive post-trial procedures have taken al-

most three-and-a-half years.

Hall simply disagrees with the jury’s findings, and the

acceptance of these findings by three reviewing courts.

There is no legitimate basis for doubting the adequacy of

appellate review.

14

Ill. “Is evidence of ill will relevant to the issue of

actual malice?”

Hall asks this Court to hold that “ill will evidence is

irrelevant” to the issue of actual malice. (Petition for

Certiorari, at 23.)

Like the others raised by Hall, this issue is not appro-

priate for review by this Court.

A. There is no conflict of decisions.

Hall cites three cases supposedly in conflict with the

view that ill will is relevant to the issue of actual malice.

Fogus v. Capital Cities Media, Inc., 111 Il.App.3d 1060,

444 N.E.2d 1100 (1982); Rose v. Koch, 278 Minn. 235,

154 N.W.2d 409 (1967); Burke v. Diener, 97 N.J. 465,

479 A.2d 393 (1984). (See Petition for Certiorari, at

22.) But there is no real conflict.

In Fogus, a lower court in Illinois did state broadly

that “bias, ill will, or even hatred of a public official is

irrelevant.” 444 N.E.2d at 1103. But that court was ad-

dressing “a mere grudge,” and immediately went on to

“emphasize that under some facts, the difference between

a mere grudge and an effort to act maliciously might in-

volve a subtle nuance in the evidence”; the court then

acknowledged that “proving actual subjective malice is

a complicated task.” Jd. In any event, the entire passage

is dictum, for the court expressly stated that “we need

only decide the threshold issue of whether the allegations

are sufficient to state a cause of action.” Jd."

7. Indeed, the court held that it was sufficient to allege that the

defendants made statements “in retaliation for certain drug arrests

made by the plaintiff.” 444 N.E.2d at 1104.

15

In Rose, the Minnesota court rejects, without discus-

sion, an instruction that in an actual malice determination,

a jury “could consider evidence of personal ill will, the

exaggerated language of the libelous document, the extent

of its publication, or any other factors that the jury might

regard as equally relevant.” 154 N.W.2d at 421 (em-

phasis added); id. at n. 26. At best, it is not clear what

portion of the instruction was deemed objectionable. The

probable source of the court’s concern was the open-ended

final clause. The ambiguity of the court’s opinion severly

undermines Hall’s assertion of a true conflict.

In Burke, the New Jersey court contrasted actual malice

with common-law malice, 479 A.2d at 399, then ruled

that actual malice did not exist where the plaintiff's own

evidence belied the notion that the defendants entertained

serious doubts that their statements were true. Jd. at 401.

Though one sentence states that “the jury is not to look

for evidence of spite or ill will to judge the actor’s speech,”

id. at 399, that notion is not only overstatement but also

dictum.

B. This issue was not seasonably raised in the

state courts.

At trial, Hall made no objection to any evidence of ill

will. Afterwards, on appeal, Hall took the (uncontro-

verted) position that evidence of iil will alone is not suffi-

cient to establish actual malice. For example, Hall stated

to the court of appeals,

Decisions of the United States Supreme Court

have made it clear that ill will alone is never suffi-

cient to establish New York Times malice. . . .

16

While evidence of ill will may be probative on the

issue of New York Times malice, it can never be

dispositive of that issue... .

(Reply Brief for Appellants, at 24-25.) The court of

appeals accepted this proposition:

While evidence of ill wili alone is not enough to

establish malice, proof that the defendant entertained

ill will toward the plaintiff is probative evidence that

the defendant published the information either know-

ing of its falsity or with reckless disregard for its

truth or falsity. See Stearns v. McManis, 543 S.W.2d

649 (Tex. Civ. App.—Houston [Ist Dist.] 1976,

writ dism’d). Thus, when coupled with other evi-

dence, proof of ill will may furnish a sufficient basis

for a jury's finding of malice.

(Petition for Certiorari, at All.)

In its motion for rehearing in the state appellate court,

Assignment 41.

The Court of Appeals erred in holding that malice

on the part of Hall’s employees could be established

by proof of ill will, coupled with other evidence.

(Motion for Rehearing for Appellants, at 36.) Hall thus

began the shift to its present position that ill will is ir-

relevant.

Having failed to raise this new position seasonably,

Hall is in no position to pursue it before this Court. See,

e.g., Radio Station WOW v. Johnson, 326 US. 120,

128 (1945).

17

C. Evidence of ill will is relevant to the issue of

actual malice.

On the merits, Hall's present position does not raise a

substantial question for this Court. The notion that ill

will is relevant to actual malice is inconsistent with com-

mon sense and with sound legal principles. Evidence of

a speaker's ill will obviously bears upon the existence of

“either deliberate falsification or reckless publication ‘de-

spite the publisher's awareness of probable falsity’.” St.

Amant v. Thompson, 390 U.S. 727, 731 (1968), citing

Curtis Publishing Co. v. Butts, 388 U.S. 130, 153 (1967).

To be sure, ill will alone may not equate with actual

malice. But that is far different from saying ill will is

logically irrelevant. See Restatement (Second) of Torts

§ 580A, Comment d (1977) (Ill will does not “in itself”

constitute actual malice, but it can “assist in the drawing

of an inference that the publisher knew that his statement

was false or acted in reckless disregard of its falsity.”).

Evidence of ill will shows that the speaker had a motive

to lie about his victim. Though it may be neither neces-

sary nor sufficient for a finding of actual malice, it cer-

tainly is relevant to the inquiry."

IV. “Does the evidence support the jury’s finding of

actual malice?”

Hall states that an “independent review” will show that

there was not enough evidence to support the jury's

finding.

This issue, too, is not appropriate for review.

8. Consider an analogy from criminal law: A criminal defendant's

il will toward a murder victim is not sufficient im itself to show that

the defendant committed the murder. But surely it is relevant.

18

A. This is a restatement of another non-review-

able issue.

Though Hall states this as a separate issue (Petition

for Certiorari, at 23-24), it is essentially a restatement

of Hall’s request for an “independent review.” As dis-

cussed above, the issue of independent review was not

raised seasonably in the Texas courts.

B. There is no conflict of decisions.

Any review of the voluminous record in this case turns

solely on the particular facts involved. Consequently, it

is meaningless to assert a conflict with decisions in other

cases.

Hall does cite three cases that supposedly hold that

motive is not relevant to issues of actual malice. Fink v.

Combined Communications Corp., 579 P.2d 1108 (Colo.

Ct. App. 1984); Burke v. Diener, 190 N.J. Super. 382,

463 A.2d 963 (App. Div. 1983), reversed, 97 N.J. 465,

479 A.2d 393 (1984); Williams v. Trust Co. of Georgia,

140 Ga. App. 49, 230 S.E.2d 45 (1976). (See Petition

——

i

19

C. There is sufficient evidence of malice.

The record is voluminous, and the evidence has been

briefed extensively in the state courts. There should be

no question as to the adequacy of the evidence of actual

malice. Indeed, the court of appeals’ opinion merely

touches the tip of the evidentiary iceberg—which is un-

derstandable, given that there were seventeen different

instances of defamation. In general, however, the evidence

showed (1) most importantly, the speakers knew the truth

as a matter of personal knowledge,"” (2) they did not

tell the truth, either at the time or in court, (3) they told

different stories to different people, (4) they had sub-

stantial economic incentives to prevent Buck from taking

his accounts elsewhere, (5) their personal ill will toward

Buck provided a motive to lie about him, and (6) treat-

ment of Buck provided a motive to lie about his perform-

ance at Hall. Other than actual admissions of knowing

falsity or reckless disregard, there is little other evidence

of actual malice that the record could contain. See United

10. Language from St. Amant is instructive:

The defendant in a defamation action brought by a public

official cannot, however, automatically insure a favorable verdict

by testifying that he published with a belief that the statements

true. The finder of fact must determine whether the publica-

made in good faith. Professions of good faith will

be unlikely to prove persuasive, for example, where a story is

fabricated by the dejendant, is the product of his imagination,

or is based wholly on an unverified anonymous telephone call.

Nor will they be likely to prevail when the publisher’s allegations

are so inherently improbable that only a reckless man would

have put them in circulation. Likewise, recklessness may be

found where there are obvious reasons to doubt the veracity of

the informant or the of his reports.

390 US. at 732 (emphasis ). Note that unlike most media

defendants, Hall is in no position to argue that it innocently relied

on seemingly reliable information.

20

States v. Johnston, 268 U.S. 220, 227 (1925) “We do

not grant a certiorari to review evidence and discuss

specific facts.”).

A NOTE ON THE DISPOSITION

OF THIS PETITION

Hall points out that this Court has granted certiorari

in Greenmoss Builders, Inc. v. Dun & Bradstreet, Inc.,

143 Vt. 66, 461 A.2d 414, cert. granted, ___US. :

104 S.Ct. 389 (1983). (See Petition for Certiorari, at

11.) The issues in Greenmoss are (a) whether the Gertz

rules—i.e., that in the absence of actual malice, neither

presumed actual damages nor punitive damages may be

awarded—apply to defamation suits against non-media

defendants, and (b) whether those rules apply where the

speech is of a commercial or economic nature. 53

U.S.L.W. 3045.

Buck submits that Greenmoss provides no reason to

defer disposition of the instant petition. Even if the Gertz

rules applied to this type of situation, that would not

affect this case because actual malice has actually been

proved.”

11. Significantly, falsity “has never been disputed” in Greenmoss.

461 A.2d at 415.

21

CONCLUSION

For the reasons stated, the petition for a writ of

certiorari should be denied.

Respectfully submitted,

STEPHEN D. SUSMAN

2400 Allied Bank Plaza

Houston, Texas 77002

(713) 651-9366

Counsel for Respondent

CERTIFICATE OF SERVICE

I, the undersigned, do hereby certify that three true

and correct copies of the aforegoing Respondent’s Brief

in Opposition have been served on all parties required

to be served by serving opposing counsel, Irving C. Stern,

1980 Post Oak Boulevard, Suite 1600, Houston, Texas

77056, by certified first class United States mail, postage

prepaid, return receipt requested, all in accordance with

Rule 28.3, on the day of May, 1985.

STEPHEN D. SUSMAN