Appendix — Tavoulareas v. Washington Post Co.
Supreme Court brief1987
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Text
nB.Gs 1967
IN THE
Supreme Court of the United Sf
OCTOBER TERM, 1986
.
WILLIAM P. TAVOULAREAS,
Petitioner,
Vv.
THE WASHINGTON POST COMPANY,
and
PATRICK TYLER,
Respondents.
WILLIAM P. TAVOULAREAS,
Petitioner,
Vv.
PHILIP PIRO,
Respondent.
APPENDIX TO PETITION FOR A WRIT OF CERTIORARI
Of Counsel: ,
CHARLES ALAN WRIGHT JOHN J. WALSH
727 East 26th Street 100 Maiden Lane
Austin, Texas 78705 New York, New York 10038
(512) 471-5151 (212) 504-6000
Counsel of Record for Petitioner
wy + son EDWIN DAvip ROBERTSON
TERRENCE J. CONNOLLY
Gi Me po Bory! York 10027 BARBARA A. SOLOMON
CADWALADER, WICKERSHAM
& TAFT
100 Maiden Lane
New York, New York 10038
(212) 504-6000
Counsel for Petitioner
William P. Tavoulareas
June 11, 1987
—_—___ ;
TABLE OF CONTENTS
PAGE
Tavoulareas v. The Washington Post Company, 567
Ei kh. | rr Al
Tavoulareas Vv. Piro, No. 80-2387 (D.D.C. May
NPE PO Te eee eee ee TET Oe A23
Tavoulareas v. The Washington Post Company, 759
ee Oe Ce le RD nb 8h boc ck ctecsces A27
a. Majority Opinion of the Three-Judge
0 pra ere re A29
b. Dissenting Opinion of the Three-Judge
ee hl ee Cees a eae A128
Tavoulareas v. The Washington Post Company, 763
ae BOFe Cee Ge BOGE) sk awacccasceas A177
a. Majority Opinion on Motion for Re-
GR ora ee ne ee A178
b. Dissenting Statement of Judge Wright . A195
Briefing Order of the United States Court of Appeals
for the District of Columbia Circuit ......... A196
Tavoulareas Vv. The Washington Post Company,
Nos. 83-1604, 83-1605 (D.C. Cir. March 13,
BOUT) COR WRG GUMIOR) onc ccc esc ccens A198
a. En Banc Majority Opinion ......... A200
b. Chief Judge Wald’s Concurrence in
EN £1 a Sh 5a khan ee eesaeae ek A283
c. Judge Ginsburg’s Concurring Opinion . A288
d. Judge MacKinnon’s Dissent ......... A295
ii
PAGE
Memorandum of Christine Peterson ........... A362
Memorandum of Patrick Tyler ............... A364
District Court’s Initial Public Figure Order ..... A369
Tavoulareas v. The Washington Post Company, 8
Media L. Rptr. 2262 (D.D.C. July 26, 1982) .. A372
Order of the United States Court of Appeals for the
District of Columbia Circuit Granting Rehearing
Pe ee) oe oe A391
Opinion of the District Court
UNITED STATES DISTRICT COURT
DISTRICT OF COLUMBIA
Civ. A. Nos. 80-3032, 80-2387.
May 2, 1983.
a
—
WILLIAM P. TAVOULAREAS, et al.,
Plaintiffs,
Vv.
THE WASHINGTON Post COMPANY, et al.,
Defendants.
WILLIAM P. TAVOULAREAS, et al.,
Plaintiffs,
Vv.
PHILIP PIRO,
Defendant.
MEMORANDUM
GASCH, District Judge.
Plaintiffs, William P. Tavoulareas and his son Peter, filed
suit in this case against defendants, The Washington Post
Company (WPC), Patrick E. Tyler, Sandy Golden,
Benjamin C. Bradlee, and Robert U. Woodward.’ Plaintiffs
1 Plaintiffs also included Katharine Graham, Chairman of the
Board and Chief Executive Officer of The Washington Post Com-
pany, in their original complaint but on September 10, 1981, this
Court entered summary judgment in her favor dismissing her from
the case.
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District Court Opinion
claimed that they were libe'ed by two articles concerning
the establishment of Atlas Maritime Corporation and its
relationship with Mobil Oil Corporation published in The
Washington Post (The Post) on November 30, 1979 and
December 1, 1979. Defendant Tyler, an investigative
reporter for The Post, wrote the stories aided by defendant
Golden, a freelance reporter who contributed to the first
article and was designated in it as a “special correspondent.”
Basically, the complaint alleged that these articles falsely
suggested that William Tavoulareas, the president of Mobil,
used his influence to set up and maintain his son Peter in
Atlas, a London-based shipping firm. On July 30, 1982,
a jury found that defendants WPC, Tyler and Golden had
libeled the elder Tavoulareas in the November 30 article.?
They awarded him $250,000 in compensatory and $1.8
million in punitive damages.? This matter is currently be-
fore the Court on the defendants’ alternative motions for
judgment notwithstanding the verdict ( n.0.v.), new trial
or reduction in the amount of the judgment.‘ For the
reasons discussed below, the Court finds an insufficient
evidentiary basis to support the jury’s verdict and, therefore,
grants defendants’ motions for judgment n.o.v.
? The jury found that Bradlee and Woodward were not liable to
either of the plaintiffs; that WPC, Tyler, and Golden were not liable
to William Tavoulareas for the publication of the December 1 article;
and that WPC, Tyler, and Golden were not liable to Peter Tavou-
lareas for either of the two articles.
3.The jury assessed the compensatory damage award against de-
fendants » Tyler and Golden but the punitive damage award
was assessed only against defendant WPC.
*In the consolidated case of William P. Tavoulareas v. Philip
Piro, Civil Action No. 80-2387, the jury found defendant Piro liable
to both Tavoulareases for slander. They awarded Peter ape
and William $5,000.00 in compensatory damages. Currently pend-
ing before the Court, but not addressed in this opinion, is defendant
Piro’s motion for judgment n.o.v. |
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District Court Opinion
I. The Standard for Judgment n.o.v. Under Rule 50(b)
of the Federal Rules of Civil Procedure
, Defendants bear a heavy burden of proof on their mo-
tions for judgment n.o.v. A trial court may grant such a
motion only when “the evidence, together with all infer-
ences that can reasonably be drawn therefrom is so one-
sided that reasonable men could not disagree on the
verdict.” Vander Zee v. Karabatsos, 589 F.2d 723, 726
(D.C.Cir.1978), cert. denied, 441 U.S. 962, 99 S.Ct. 2407,
60 L.Ed.2d 1066 (1979). A court may not evaluate the
credibility of the evidence and if there is conflicting evidencs
present in the record, the motion may not be granted. 5A
J. Moore, Moore’s Federal Practice 4 50.07[2] (2d ed.
1982). If, however, the nonmoving party has presented
only a “mere scintilla” of evidence at trial, the verdict may
not stand. Pennsylvania R.R. Co. v. Chamberlain, 288
U.S. 333, 343, 53 S.Ct. 391, 394, 77 L.Ed.2d 819 (1933):
Murray v. Towers, 239 F.2d 914, 915 (D.C.Cir.1956);
Riss & Co. v. Association of American Railroads, 187
F.Supp. 306, 312 (D.D.C.1960).
Technically, a motion for judgment n.o.v. is merely the
renewal of a motion for directed verdict made at the close
of all the evidence. 9 C. Wright & A. Miller, Federal Prac-
tice and Procedure, § 2537 at 596 (1970). The standard
for granting a judgment n.o.v. is, therefore, the same as the
standard for awarding a directed verdict.* Id. at 599. See
Lester v. Dunn, 475 F.2d 983, 985 (D.C.Cir.1973).
5 A motion for directed verdict may only be granted when all the —
evidence
. . . along with all inferences reasonably to be drawn there-
from, when viewed in the light most favorable to the plaintiff
is such that reasonable jurors in fair and impartial exercise
of their judgment could not reasonably disagree in finding
for the defendant .. .
Alden vy. Providence Hospital, 382 F.2d 163, 165 (D.C.Cir.1967).
te emets
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District Court Opinion
II. Actual Malice and the Public Figure Plaintiff
Just as the defendants at this stage of the proceeding
face a stringent test for the successful maintenance of a
motion for judgment n.o.v., plaintiff faced a substantially
different, but equally difficult, task at trial. On June 30,
1982, this Court held that William Tavoulareas was to be
considered a public figure for purposes of this trial. As a
result of this ruling, plaintiff had to establish by clear and
convincing evidence, Gertz v. Robert Welch, Inc., 418 U.S.
323, 342, 94 S.Ct. 2997, 3008, 41 L.Ed.2d 789 (1974),’
that the defendants published the November 30 article with
“actual malice.” In this context, plaintiff must show that
The Post published the article either knowing at the time
of publication that it was false or with reckless disregard
of its truth or falsity. New York Times Co. v. Sullivan,
376 U.S. 254, 279-80, 84 S.Ct. 710, 725-26, 11 L.Ed.2d
686 (1964); Gertz v. Robert Welch, Inc., 418 U.S. at 342,
94 S.Ct. at 3008.
The Supreme Court first developed the actual malice
standard in New York Times Co. v. Sullivan.* Emphasizing
the importance of uninhibited, robust discussion on public
issues, the Court noted that such discussion might include
“vehement, caustic, and sometimes unpleasantly sharp at-
tacks” on certain public officials. Jd. at 270, 84 S.Ct. at
721. Despite the fact that some of these attacks may be
* On July 17, 1982, this Court held a further hearing on the public
figure status of William Tavoulareas in order to reconsider its June 30
ruling. On July 26, 1982 the Court issued a memorandum adhering
to the earlier ruling.
? See also Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 52, 91
S.Ct. 1811, 1824, 29 L.Ed.2d 296 (1971); Waskow v. Associated
Press, 462 "F.2d 1173, 1175 (D.C.Cir.1972); Logan v. District of
Columbia, 447 F.Supp. 1328, 1331 (D.D.C. 1978).
* Sullivan involved a public official plaintiff rather than a public
figure plaintiff but the basic lesson to be gleaned from that case is the
same.
AS
District Court Opinion
erroneous and defamatory, the Court held that statements
of this variety must be protected if the First Amendment
is to retain its vitality. Jd. at 271-72, 84 S.Ct. at 721-22.
In subsequent decisions, however, the Court excluded one
type of defamatory speech from constitutional protection.
In Garrison v. Louisiana, 379 U.S. 64, 85 S.Ct. 209, 13
L.Ed.2d 125 (1964), the Court explicitly held that the
calculated falsehood, “the lie, knowingly and deliberately
published about a public official”, makes no contribution
to society’s vigorous interchange of ideas and is, therefore,
beyond the constitutional pale. Jd. at 75, 85 S.Ct. at 216.
Under the standards enunciated by the Supreme Court,
therefore, the jury verdict in this case will withstand the
motions for judgment n.o.v. only if there is sufficient evi-
dence in the record from which a jury could reasonably
find, by clear and convincing proof, that the defendants
published the November 30 article with actual malice.’
The article in question falls far short of being a model
of fair, unbiased, investigative journalism. There is no evi-
dence in the record, however, to show that it contained
knowing lies or statements made in reckless disregard of
the truth. Reviewed under the stringent test set forth by
the Supreme Court in New York Times Co. v. Sullivan, the
verdict in plaintiff's favor must be set aside.
Il. Plaintiff's Arguments in Support of the Verdict
As a preliminary matter, it should be noted that this
article was neither “fabricated” by the defendants nor was
® Of course, plaintiff also had to prove that the allegedly libelous
statements were false. At trial, in opposition to plaintiffs’ claims
that many of the statements in the articles were false, defendants
steadfastly maintained that every word in both articles was true.
Because the Court finds that there was no proof of actual malice,
it does not have to address this question directly.
A6é
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District Court Opinion
it based merely upon the imaginations of two newspaper
reporters. See St. Amant v. Thompson, 390 U.S. 727, 732,
88 S.Ct. 1323, 1326, 20 L.Ed.2d 262 (1968). Despite
the fact that certain portions of the story may have been
“slanted,” the record clearly reflects that Tyler expended
a large amount of time and effort on its preparation. Among
others, he interviewed George Comnas, the first managing
director of Atlas, John Kousi, a Saudi Maritime Company
(Samarco) director, and Lewis Lapham, a member of the
Mobil board of directors. He researched the oil tanker
management business and reviewed documents from the
Federal Maritime Commission, the Subcommittee on
Energy and Power of the Committee on Interstate and
Foreign Commerce of the United States House of Represen-
tatives, and the Securities and Exchange Commission
(SEC). Tyler attempted to speak to high level Mobil
executives and to William and Peter Tavoulareas on a
number of occasions but they consistently rebuffed his
efforts. Mobil ultimately responded to Tyler’s requests by
furnishing him with written responses to his inquiries, and
he included most of this information in the article.
This undisputed evidence of Tyler’s extensive prepara-
tion is not dispositive, however, of the issue of actual malice.
A reporter cannot shield himself from a charge of reckless
disregard merely by showing that he invested a large amount
of time and effort on an article’s preparation. Plaintiff has
provided four major bases from which he contends the
jury could have properly found that the defendants acted
with actual malice. Each of these contentions is addressed
below.
A. The Christine Peterson Memorandum
At the time The Post published the November 30 article,
the newspaper employed Christine erson as a copy
editor. At trial she described her duties as follows:
ee |
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District Court Opinion
A copy editor is a [sic] last person on the news
room floor to see a piece of copy report [before it]
goes into the composing room to be set into type.
The copy editor basically edits a story for style,
punctuation, grammar, checks what facts can be
checked, with source material at hand, things like
the population of the State of Utah or the area of
Lake Superior, that sort of thing.
Trial Transcript at 2827. Ms. Peterson had the task of
performing this “final edit” on the November 30 article.
On November 27 she took the rather unusual step of writ-
ing a memorandum to her superior, Peter Milius, and dis-
cussed certain problems she had ates Tyler’s story. She
stated that:
I’ve read the Mobil story several times, and while
I’m impressed with the amount of work the reporter
obviously did, I’m still left with an overwhelming
sense of So What? Is there any way to give this
story of high-level nepotism a dollars-and-cents
angle? Did Mobil’s shareholders lose anything?
Mobil’s customers? Parts of Tyler’s case against
Tavoulareas seem tenuous, and the whole—a
$680,000-a-year plaything for an indulged son, at
worst—just seems like a withered peanut in an 84”
gilded shell.
A far more interesting angle, it seems to me, is
Mobil’s concern about Saudi preference shipping—
a concern so profound that it led to the formation
of an entire dummy corporation. It’s impossible to
believe that Tavoulareas alone could put together
guch a scheme for the sake of his son’s business
career, or that he would want to.
Pls.” Exh. 542 (emphasis supplied).
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District Court Opinion
Plaintiff contends that the underlined portion of the
memorandum alone could serve as a proper evidentiary
basis for the jury’s finding of actual malice because one
editor explicitly stated to another that the major premise
of the article was “impossible to believe.” He claims that
this proves that The Post published the article despite the
fact that one of its editors had substantial doubts about
its acturacy.
The defendants have advanced a strained interpretation
of the memorandum in an attempt to show that Ms. Peterson
did not actually mean that she found the article impossible
to believe. On this motion for judgment n.o.v., however,
the Court must examine all the evidence in the light most
favorable to the plaintiff, and, therefore, defendants’ version
must be rejected. Nevertheless, no matter how this memo-
randum is construed, it does not prove that The Post acted
with actual malice.
Ms. Peterson was a copy editor and her primary respon-
sibility was to fine tune the article grammatically after its
substance had been examined by other editors. There is
no evidence whatsoever to show that Ms. Peterson had any
“inside” information about Tyler’s sources or research that
would enable her to know, or even suspect, that the story
was inaccurate. She was merely expressing her uninformed
opinion that she found the story hard to believe.
If Ms. Peterson had investigated the article’s substance
and sources and thereafter had expressed a similar state-
ment of doubt as to the article’s veracity, plaintiff's argu-
ment might prevail. Plaintiff, however, has offered no evi-
dence to this effect. The actual malice test focuses on the
state of mind of the author and publisher of the allegedly
libelous statements. Ms. Peterson’s memorandum does not
show that those who were responsible for the article’s sub-
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District Court Opinion
stance entertained any doubts whatsoever about its
accuracy.
B. The Reliability of George Comnas and Philip Piro
as Sources
One method of proving that a libel defendant acted with
actual malice is to show that he had “obvious reasons to
doubt the veracity of the informant or the accuracy of his
reports.” St. Amant v. Thompson, 390 U.S. at 732, 88
S.Ct. at 1326. See also Curtis Publishing Co. v. Butts,
388 U.S. 130, 169-70, 87 S.Ct. 1975, 1998-99, 18 L.Ed.2d
1094 (Warren, C.J., concurring in the result) and 172
(Brennan, J., dissenting) (1967); Carey v. Hume, 492
F.2d 631, 637 (D.C.Cir.), cert. dismissed, 417 U.S. 938,
94 S.Ct. 2654, 41 L.Ed.2d 661 (1974). Plaintiff claims
that George Comnas and Philip Piro (two of Tyler’s sources
for the article) were so untrustworthy that reliance upon
their statements was reckless and justified the jury’s finding
of actual malice.
1. George Comnas
George Comnas is a highly experienced Greek shipping
executive who was one of the founders of Atlas in 1974.
In 1975, he resigned from this position for reasons that are
in dispute, As part of his attempt to show that defendants
knew Comnas to be an unreliable source, plaintiff cites
several alleged inconsistencies between what Comnas told
Tyler and what Tyler knew to be the truth from other
sources. Even if these inconsistencies existed, they are
pot sufficient to raise a jury question of actual malice.
Simply stated, as a matter of law, reliance upon George
Comnas as a primary source does not come close to ap-
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District Court Opinion
proaching the Jevel of recklessness required by the Supreme
Court.
In St. Amant v. Thompson, the Supreme Court noted
that actual malice and reckless disregard are terms that can
only be defined on a case by case basis. 390 U.S. at 730-
31, 88 S.Ct. at 1325-26. The Court did, however, present
certain examples of reportorial behavior that might consti-
tute actual malice:
Professions of good faith [on the part of the
publisher] will be unlikely to prove persuasive, for
example, where a story is fabricated by the de-
fendant, 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.
Id. at 732, 88 S.Ct. at 1326 (emphasis supplied). While
these hypotheticals of actual malice are certainly not ex-
haustive, their extreme nature serves to illustrate the enor-
mous burden that a public figure plaintiff must overcome
before he can prevail in a case such as this. He cannot
merely point to a few inconsistencies in a source’s state-
ments and claim that he has proved the existence of actual
malice.
In Washington Post Co. v. Keogh, 365 F.2d 965
(D.C.Cir.1966), cert. denied, 385 U.S. 1011, 87 S.Ct. 708,
17 L.Ed.2d 548 (1967), a New York congressman sued
The Post for publishing an allegedly libelous article written
by a syndicated columnist. Plaintiff claimed that the
columnist’s reputation for veracity was so poor that the
newspaper’s reliance upon his word without conducting an
All
District Court Opinion
independent investigation of his sources constituted reck-
less disregard.’ The Court rejected this argument on the
ground that the affidavits presented in support of plaintiff's
position merely showed that the columnist “had made er-
roneous statements on a very few prior occasions” and that
he had a controversial reputation.’ Jd. at 971.
In this case, much of Comnas’ information was inde-
pendently verified by other sources whose credibility even
the plaintiff does not now challenge. Comnas was the former
president of Esso Mediterranean and Esso Africa and he
obviously had a substantial business career and reputation
that could be damaged if he lied. Tyler had discovered
many unsolicited laudatory comments made about Comnas
by Paul Wolfe (Mobil Executive Vice President), Kousi,
and William Tavoulareas himself. In addition, Comnas
provided virtually the same information to Tyler as he gave
to investigators for the House Subcommittee on Energy
and Power.
Plaintiff also claims that defendants should not have
relied upon Comnas’s statements because they knew that
Comnas had left Atlas after being accused of certain im-
proprieties and, therefore, might have a motive to lie about
the circumstances surrounding his departure. It is true that
Dr. Piro told Tyler that Comnas left the company because
he “was caught in some fraud.” Kousi told Tyler, however,
10 The facts of the instant case are somewhat different from those
in Keogh. In Keogh, the Court was very concerned with the burden
that would be imposed on newspapers if they were required to check
the sources of all syndicated news reports and columns, 365 F.2d
at 972. Because Tyler is a staff reporter for The Post, this concern
would not appear to be so acute.
‘ The court noted that a publisher would have “reason to suspect
a publication’s accuracy where he knows or should know that the
author or endorser is persistently inaccurate.” 365 F.2d at 971.
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District Court Opinion
that he knew of no such accusations and when plaintiff
testified before the SEC in 1977, he did not discuss any
of these improprieties when setting forth the reasons for
Comnas’ departure. Kousi and Tavoulareas stated that
Comnas left Atlas because he was not handling the business
in a Satisfactory fashion. Thus, it is not at all clear that
Comnas left Atlas under circumstances that should have
aroused Tyler’s suspicions as to his motivation for speaking
unfavorably about the plaintiff.’
Even if Comnas harbored some animosity towards Mobil
or the Tavoulareases as a result of the circumstances under
which he left Atlas, Tyler would not necessarily be pre-
cluded from reporting his statements. In Garrison v.
Louisiana, the Supreme Court emphasized that even if an
individual is motivated to speak out of hatred, so long as
the statement is honestly believed to be true, he makes a
contribution to society’s free interchange of ideas. The
actual malice test penalizes only the “calculated falsehood.”
379 US. at 73-75, 85 S.Ct. at 215-216.
2. Philip Piro
At the time Sandy Golden introduced Philip Piro to
Tyler, Piro was in the midst of a less than amicable divorce
proceeding with plaintiff's daughter. He was openly hostile
to the Tavoulareas family and undoubtedly harbored a
considerable amount of ill will towards them. In addition,
Tyler testified that he was very skeptical about Piro’s reli-
12 Tyler was fully aware of the allegations of Mobil’s and/or
Samarco’s dissatisfaction with Comnas’ business prowess. This, how-
ever would not appear to reflect poorly on his credibility as a source.
As defendants contend, “[a] man’s ability to run a business is simply
not pertinent to whether ‘there are obvious reasons to doubt the
veracity’ of information he supplies concerning events that he per-
sonally witnesses.” Defendants’ Reply Memorandum at 17.
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District Court Opinion
ability because much of the information he supplied was
inaccurate.
The fact that Dr. Piro may have been an unreliable
informant is irrelevant, however, because he was not a
primary, or even a secondary, source for the November 30
article. He may have been the person who rekindled The
Post’s interest in the Atlas story but, because of Tyler’s.
skepticism, The Post relied on other sources as authority
for many of Piro’s remarks. In addition, Tyler ignored
much of the information Piro supplied to him.
C. Defendants’ Disregard of Certain Information Avail-
able to Them
Plaintiff claims that at trial he presented substantial evi-
dence upon which the jury could reasonably find not only
that the defendants recklessly disregarded the truth but that
they deliberately ignored it every time it stood in their path.
In support of this contention, he cites certain information
that was available to the defendants that they did not in-
clude in the November 30 article. Defendants claim that
this information is irrelevant to the question of actual malice
because they can only be held accountable for the informa-
tion that they actually printed and not for items that were
omitted and which, if included, may have made the article
more balanced. Of course, this statement of the law is only
partially correct. Obviously, if the defendants possessed
information that showed that some of the article was in-
correct, ignoring it would constitute actual malice.
The information that plaintiff claims the article should
have contained falls far short of proving, however, that the
story included knowing lies or reckless untruths. The most
that can be said about this information is that its absence
caused the article to be “shaded” against Mobil’s position.
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District Court Opinion
In submissions subsequent to oral argument, the parties
addressed the issue of whether “selective” or “slanted” re-
porting could constitute actual malice. Plaintiff relied heav-
ily on a case decided by the United States Court of Appeals
for the Fifth Circuit, Rebozo v. Washington Post Co., 637
F.2d 375, cert. denied, 454 U.S. 964, 102 S.Ct. 504, 70
L.Ed.2d 379 (1981), which appears to hold that actual
malice can be proved if the plaintiff shows that the publisher
resolved ambiguities in source material in favor of the most
potentially damaging alternative. Id. at 382.
That holding, however, is arguably inconsistent with the
Supreme Court’s opinion in Time, Inc. v. Pape, 401 US.
279, 91 S.Ct. 633, 28 L.Ed.2d 45 (1971).** In that case,
the United States Commission on Civil Rights prepared a
report that discussed some of the allegations contained in a
complaint filed against a group of Chicago police officers.
Time magazine admitted that it knew that the accusations in
the summary were merely allegations yet it reported them
as findings of the Commission. In reversing the Court of
Appeals, the Supreme Court held that the “omission of the
word ‘alleged’ amounted to the adoption of one of a number
of possible rational interpretations” of an ambiguous docu-
ment and this “was not enough to create a jury issue of
‘malice’ under New York Times.” Id. at 290, 91 S.Ct. at
639. Thus, the Court found no actual malice despite the
fact that certain crucial information was omitted from the
article. In the absence of any further guidance on the issue
from this Circuit or the Supreme Court, this Court is not
13 See also, Ryan v. Brooks, 634 F.2d 726, 733 (4th Cir.1980);
Simmons Ford, Inc. v. Consumer's Union, 516 F.Supp. 742, 749-50
(S.D.N.Y. 1981); Hutchinson v. Proxmire, 431 F.Supp. 1311, 1329
(W.D.Wis.1977), affd, 579 F.2d 1027 (7th Cir.1978), rev’d on
other grounds, 443 U.S. 111, 99 S.Ct. 2675, 61 L.Ed.2d 411 (1979).
Sn et tins
eh Ree PAT WOK CM
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District Court Opinion
prepared to consider saving the verdict in this case on the
basis of the holding in Rebozo."*
The issue in this case is, therefore, not whether the article
was partisan, narrow or one-sided. The only issue before the
Court is whether “the defendant in fact entertained serious
doubts as to the truth of his publication.” St. Amant v.
Thempson, 390 U.S. at 731, 88 S.Ct. at 1325. As the
Supreme Court stated in another context in Miami Herald
Publishing Co. v. Tornillo:
A newspaper is more than a passive receptacle or
conduit for news, comment, and advertising. The
choice of material to go into a newspaper . . . and
treatment of public issues and public officials—
whether fair or unfair—constitute the exercise of
editorial control and judgment.
418 U.S. 241, 258, 94 S.Ct. 2831, 2840, 41 L.Ed.2d 730
(1974). Plaintiff supplied the Court with six separate ex-
amples of material that the defendants disregarded. Several
of these will be addressed below.
Before The Post published the article, Tyler interviewed
Lewis Lapham, one of Mobil’s outside directors. He told
Tyler that the Mobil board of directors consistently re-
viewed the relationship between Mobil and Atlas and that
the board was completely satisfied with all aspects of it. He
also told Tyler that he did not believe that plaintiff played
a personal role in Atlas and that at key board meetings
plaintiff would leave the room to facilitate the opportunity
for more open discussion of the subject. Plaintiff claims that
the jury was entitled to find actual malice because Lapham’s
14 Tt should be noted that the November 30 article did contain
well over twenty separate paragraphs that set forth Mobil’s position
on the matter.
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District Court Opinion
quotes were included in an earlier draft of the article but
removed from the draft that The Post ultimately published.
Despite the fact that the November 30 article did not
contain this exact information, it did include at least three
paragraphs that conveyed almost everything that Lapham
had said. For example, paragraphs 13, 19 and 25 of the
article stated that:
The Mobil board of directors was told from the
outset about the Atlas arrangement but was assured
that company president Tavoulareas was not in-
volved in his son’s venture in any way... .
Mobil Chairman Warner says he assured directors
in board meetings that Tavoulareas “does not par-
ticipate in any decisions” relating to Mobil’s business
with Atlas. ©
The elder Tavoulareas . . . stated that he divorced
himself from Mobil’s business with Atlas after his
son joined the company.
Thus, the fact that Tyler ignored Lapham’s comments may
indeed demonstrate that he attempted to understate Mobil’s
position but it does not show that he acted in reckless dis-
regard of the truth.**
Plaintiff also objects that the defendants made no mention
whatsoever of the fact that Atlas was an efficient manage-
ment firm or that Mobil received economic benefits from
. 35 These paragraphs of the article also essentially summarize the
contents of two 1974 Mobil memoranda that The Post had in its
possession. Paul Wolfe, Mobil Executive Vice-President, wrote one
of the memos and in it he instructed all Mobil personnel dealing with
Samarco to be sure that all business was conducted at “arm’s length.”
Plaintiff wrote the other memo himself, directing Wolfe to bypass
him on all Samarco matters in favor of Mobil Chairman Rawleigh
Warner.
ae
Al7
District Court Opinion
the relationship. Undisputably, there was much evidence in
the record that showed that Mobil profited - significantly
from this relationship and that Atlas was not merely a fly-
by-night organization set up solely for Peter’s benefit. These
facts, however, are legally immaterial to a finding of actual
malice. Presumably, plaintiff would prefer that the article
mention the beneficial effects of the arrangement. However,
he cannot force The Post to include facts that he believes
to be important. See Miami Herald Publishing Co. v.
Tornillo, 418 U.S. at 258, 94 S.Ct. at 2839.
The November 30 article simply did not relate whether
the establishment of Atlas was a good or bad business de-
cision. It explicitly stated that Atlas and Samarco were
formed in response to Mobil’s anticipation of the enactment
of Saudi preference shipping laws. It then proceeded to
discuss the actions Mobil undertook in response to these
fears. If the article had contained a description of Atlas’
beneficial economic effects, it may have been more balanced,
but the fact that such a description was not included does
not mean that the defendants acted with actual malice.
D. The Language and Innuendo of the Article
A thorough examination of the plain language of the
article, the innuendoes that could reasonably be derived
therefrom, and the thrust of the article as a whole reveals
that no part of it was published with actual malice as that
term is understood in the law of libel. At trial, much of the
testimony revolved around the article’s first paragraph which
stated that plaintiff “set up his son . . . as a partner in a
London-based shipping management firm.” Even this state-
ment, presumably one of the most offensive in the article,
was not published with actual malice. Plaintiffs own 1977
SEC testimony provided Tyler with a sufficient basis for this
Al8
District Court Opinion
allegation. During that testimony, plaintiff stated that he
knew in early 1974 that Comnas and his son were seriously
discussing the possibility of going into business together.
When Samarco became a viable option a few months later,
plaintiff testified that he met personally with Comnas in
order to recruit him to run the management arm of the
business. Tyler also had Comnas’ statements that plaintiff
had personally recruited him and that plaintiff had requested
that Peter be brought into Atlas. In addition, Kousi had
referred to Peter’s employment as a nepotistic act.
Based on all this information, Tyler wrote that William
had “ set up” Peter in Atlas. This may not be most felicitous
choice of vocabulary that could have been used to describe
the situation but, given the material that formed the basis for
this statement, it cannot be said that it was a lie or a reckless
untruth. Defendants correctly point out that while plaintiff
may contest the ultimate truth of some of this information,
he does not dispute the fact that Tyler had this material in
his possession at the time he wrote the story. Most im-
portantly, as discussed in part ITI(B) above, he was entitled
to rely upon the information his sources provided.
Plaintiff also contends that the article goes far beyond
siniply stating that he “set up” his son in a lucrative business.
Because the implications or innuendoes that the article con-
veys may also be libelous, the defendants cannot escape
liability merely by asserting that the literal language of the
article was not published with actual malice. It is up to
the Court, however, to decide whether the meaning claimed
by the plaintiff can reasonably be inferred from the article’s
language. Plaintiff cannot add a defamatory meaning to the
article by construing it in the most damaging light possible
unless there is a basis to support this interpretation. See
W. Prosser, Law of Torts § 111, at 749 (4th ed. 1971);
Al9
District Court Opinion
L. Eldredge, The Law of Defamation at 44-45 (1978). In
this case, plaintiff reads certain implications into the article’s
text that, as a matter of law, are unreasonble.
A prime example of this can be found by examining one
of the statements made at the December 15, 1982 hearing
on these post-trial motions by-counsel for plaintiff, Mr.
Walsh. He argued that:
The article said that Tavoulareas was the driving
force, that he set the whole thing up, that he con-
ceived this. And certainly a reasonable [sic] could
take—it was simply more than just following it up.
Right from the headline, Mobil chief sets up son in
venture, and through those all important lead para-
graphs, the theme was that William Tavoulareas had
done this and the [sic] he didn’t have any particular
business justification ... .
Judgment n.o.¥v. Transcript at 78. The article cannot reas-
onably be interpreted to convey this meaning because it did
not say that William Tavoulareas put together the Mobil-
Atlas-Samarco arrangement solely for the sake of his son.*®
As mentioned above, the article specifically stated (in para-
graphs 40-41) that Samarco and Atlas were created for
certain political and economic reasons. The nepotism dis-
cussed in the article clearly had its origin in a legitimate
business opportunity.
Plaintiff also erroneously contends that the November 30
article impliedly accused him of misusing Mobil’s assets,
misleading the SEC, and failing to report his activities with
*6 More specifically, the story does not say that plaintiff “set up”
Atlas for his son. Rather, it states that he “set up” his son in Atlas.
On its face, this distinction may a a
it is critical to a proper reading of th
A20
District Court Opinion
Atlas to Mobil’s shareholders, officers, and directors. This
might conceivably be an accurate description of the De-
cember 1 article but not of the November 30 story—the one
that the jury found the defendants liable for publishing.
In addition, the defendants have attempted to explain and
support five particular innuendoes they believe plaintiff con-
tends the article contained.’’ Most of these statements were
incorrectly labeled as innuendoes by the defendants because
they are explicitly stated in, rather than implied by, the
article. Nevertheless, how they are classified is irrelevant
because there is no evidence in the record that proves that
any of them were published with actual malice. For ex-
ample, paragraph 21 of the article states that:
Tavoulareas personally recruited two shipping
executives, one an outside consultant and the other
a Mobil vice president, for Atlas.
Plaintiff claims that defendants published this statement
knowing it was false. The basis for part of this statement,
however, is plaintiff's testimony before the SEC in 1977 in
which he stated that he recruited George Comnas to head
Atlas. In addition, it is undisputed that Mobil made Har-
mon Hoffmann, the president of Mobil Shipping and Trans-
portation Company, available as an interim manager of
Atlas to fill the void created in the company by Comnas’
departure. Plaintiff apparently participated to some extent
in the discussions that led to Hoffmann’s temporary assign-
17 The five “innuendoes” defendants identify are that, (1) plain-
tiff recruited shipping executives for his son’s company, (2) plaintiff
negotiated the contract between Samarco and Atlas, (3) plaintiff
urged that his son be included as a partner in Atlas, (4) plaintiff
forced out Comnas to permit Peter to gain control of the
and (5) plaintiff misled Mobil and the SEC and refused to be inter-
viewed by The Post.
otal
A2l
District Court Opinion
ment at Atlas. Tyler also made a note of a conversation he
had with Mobil Vice President Everett Checket that con-
firmed that plaintiff had stated that he had sent Hoffmann
to Atlas."* These undisputed factors alone negate any pos-
sible inference of actual malice.
IV. Conclusion
As discussed above, on this motion for judgment n.o.v.,
the evidence adduced at trial must be construed in the light
most favorable to the plaintiff. With this in mind, the
Court has thoroughly reviewed the massive record in this
case and has concluded that there is no evidence to support
the jury’s verdict. No matter how the Christine Peterson
memorandum is construed, it does not show that anyone
responsible for the substance of the article knew that it was
false. Even if the Court accepts every inconsistency plain-
tiff claims existed in George Comnas’ statements, reliance
upon him by the defendants was not reckless. Similarly,
even if the defendants possessed all the information plaintiff
contends that they disregarded, a careful examination of this
material in the light most favorable to the plaintiff reveals
that none of it proves that the article contained lies or reck-
less untruths. In the absence of “actual malice,” the judg-
ment rendered against the defendants must be set aside.
Whether or not a newspaper can survive a succes-
sion of such judgments, the pall of fear and timidity
imposed upon those who would give voice to public
criticism is an atmosphere in which the First Amend-
ment freedoms cannot survive.
18 Checket denies that he gave such a statement to Tyler. Tyler
may, therefore, have been negligent in transcribing Checket’s state-
ment but plaintiff introduced no evidence that would show that Tyler
deliberately falsified this document.
A22
District Court Opinion
New York Times Co. v. Sullivan, 376 U.S. at 278, 84 S.Ct.
at 725. An order granting defendants’ motions for judg-
ment n.0.v. accompanies this memorandum.
ORDER
Upon consideration of the alternative motions for judg-
ment non obstante veredicto (n.o.v.), for a new trial, or for
reduction in the amount of the judgment filed by defendants
The Washington Post Company, Patrick E. Tyler and Sandy
Golden, the memoranda and supplemental memoranda of
points and authorities in support thereof and in opposition
thereto, the arguments of counsel in open court, the entire
record herein, and for the reasons stated in the accompany-
ing memorandum, it is by the Court this 2nd day of May,
1983,
ORDERED that defendants’ motions for judgment n.0o.v.
be, and hereby are, granted; and it is further
ORDERED that the judgment entered in this action on
August 3, 1982 in favor of plaintiff William Tavoulareas
and against defendants The Washington Post Company,
Patrick E. Tyler, and Sandy Golden be, and hereby is,
vacated; and it is further
ORDERED that judgment be, and hereby is, entered in
favor of defendants The Washington Post Company, Patrick
E. Tyler, and Sandy Golden and against plaintiff William
Tavoulareas; and it is further
ORDERED that defendants’ motions for new trial and
for a decrease in the amount of the judgment be, and hereby
are, denied without prejudice.
A23
Opinion of the District Court Granting Piro
Judgment Notwithstanding the Verdict
UNITED STATES DISTRICT COURT
For THE DISTRICT OF COLUMBIA
Civ. A. Nos. 80-2387, 80-3032
May 19, 1983
a
vv
WILLIAM P. TAVOULAREAS, et al.,
"Plaintiffs,
Vv.
PHILIP PrIRo,
Defendant.
WILLIAM P. TAVOULAREAS, et al.,
Plaintiffs,
Vv.
THE WASHINGTON PosT COMPANY, et al.,
Defendants.
a
v
MEMORANDUM-ORDER
The facts and circumstances surrounding this case are
more fully discussed in the memorandum opinion issued by
this Court on May 2, 1983 in the consolidated case of
Tavoulareas v. The Washington Post Co., Civil Action
No. 80-3032. In this portion of the case, plaintiffs William
and Peter Tavoulareas sued defendant Dr. Philip Piro, Jr.
A24
Piro j.n.o.v.
for slander. Plaintiffs al'eged that defendant uttered the
following slanderous statements that caused them injury:
(1) William arranged for Peter’s first job with
C. M. Lemos & Company;
(2) William set-up Peter as a partner in Atlas
Maritime Company;
(3) William described his interest at the time as
“giving Peter a little nudge to get him along”;
(4) After George Comnas left Atlas, William dis-
patched a senior Mobil shipping executive to help
Peter run Atlas; and
(5) Peter illegally took $25,000 to the Bahamas
or another foreign country from the United States.
The jury returned a verdict in favor of both plaintiffs,
and awarded William $5,000.00 and Peter, $1,000.00 in
compensatory damages. Presently before the Court is de-
fendant Piro’s motion for judgment notwithstanding the
verdict (n.o.v.). For the reasons discussed below, the Court
grants defendant’s motion as it pertains to William Tavou-
lareas but denies it as to Peter.’
In evaluating the merits of defendant’s motion, the Court
will apply the same legal standards discussed in the May 2
memorandum concerning the burden that a “public figure”
plaintiff bears and the burden that a movant for judgment
‘n.O.Vv. must satisfy. As discussed in that opinion, at trial
William had to overcome the “actual malice” test; that is,
he had the burden of proving by clear and convincing evi-
dence that Piro uttered the allegedly dafamatory falsehoods
1 It should be noted that the Court does not consider statements
(1) and (3) to be defamatory.
SS tte Lee eat alae 2 Nt ne
vy OMe rc, tee ee ee
A25
Piro j.n.o.v.
either knowing that they were false or in reckless disregard
of their truth or falsity. New York Times Co. v. Sullivan,
376 U.S. 254, 279-80 (1964); Gertz v. Robert Welch, Inc.,
418 U.S. 323, 342 (1974). Once again, a thorough exami-
nation of the record shows that plaintiff did not prove that
these statements were said with actual malice.’ For ex-
ample, William claims that Piro “fabricated” statement
number (2).° If this utterance were a fabrication, the actual
malice test would have been satisfied. See St. Amant v.
Thompson, 390 U.S. 727, 732 (1968). Plaintiff alleges
that he proved that Piro invented this statement because
defendant admitted that he knew very little about the details
of the Mobil-Atlas-Samarco arrangement. He was totally
unaware of the financimg arrangements for the various com-
panies, and had ever heard of Samarco or the Alireza
family. This ignorance does not show, however, that de-
fendant knew his statement to be false or that he uttered
it in reckless disregard of whether it was true or false. In
short, knowledge of the complexities of this business rela-
tionship is largely irrelevant to the veracity of the assertion
that William set up Peter in Atlas.
Peter Tavoulareas iis not a public figure.‘ As a result,
he merely had to prove that defendant uttered one of these
defamatory statements negligently. Examining the evidence
in the light most favorable to the plaintiff, the jury could
_? Plaintiff's case against Dr. Piro does, however, present a more
difficult Sg of the existence of actual malice than did his case
— Washington Post Company, Patrick Tyler and Sandy
’ Despite defendant’s arguments to the contrary, there was suf-
ficient evidence in the record from which the jury could conclude
that he uttered the words “set up.”
* On June 30, 1982, thiis Court held specifically that Peter Tavou-
lareas was to be considered a private individual not subject to the
New York Times v. Sullivan actual malice standard.
A26
Piro j.n.o.v.
find that at least statement number (5) was false and was
made negligently by the defendant.*
Despite the fact that defendant may never have explicitly
stated that Peter illegally took money out of the country,
the context in which he related the story clearly implied
that Ares Emmanuel and he traveled to the Bahamas under
suspicious circumstarices. In addition, those who heard
the statement apparently understood it to be defamatory.
At the very least, plaintiff presented sufficient evidence to
create a jury question on the issue.
Accordingly, it is by the Court this 19th day of May,
1983,
ORDERED that defendant Piro’s motion for judgment
n.o.v. as to plaintiff William Tavoulareas be, and hereby is,
granted; and it is further
ORDERED that the judgment entered in this action on
August 3, 1982 in favor of plaintiff William Tavoulareas
and against defendant Piro be, and hereby is, vacated; and
it is further
ORDERED that judgment be, and hereby is, entered in
favor of defendant Piro and against plaintiff William
Tavoulareas; and it is further
ORDERED that defendant Piro’s motion for judgment
n.o.v. as to plaintiff Peter Tavoulareas be, and hereby is,
denied.
5 This allegedly defamatory statement made no reference whatso-
ever to plaintiff- Wiliam Tavoulareas.
tre
A27
Main Opinion of the Three-Judge Panel
Notice: This opinion is subject to formal revision before publication
in the Federal Reporter or U.S.App.D.C. Reports. Users are requested
to notify the Clerk of any formal errors in order that corrections may be
made before the bound volumes go to press.
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
No. 83-1604
WILLIAM P. TAVOULAREAS, APPELLANT
PETER TAVOULAREAS
Vv.
PHILIP PIRO
No. 83-1605
WILLIAM P. TAVOULAREAS, APPELLANT
PETER TAVOULAREAS
’ Ve
THE WASHINGTON Post COMPANY,
d/b/a THE WASHINGTON Post,
a Delaware Corporation, et al.
Appeals from the United States District Court
for the District of Columbia
(Civil Action Nos. 80-02387 and 80-03032)
Bills of costs must be filed within 14 days after entry of judgment. The
court looks with disfavor upon motions to file bills of costs out of time.
A28
Argued February 10, 1984
Decided April 9, 1985
John J. Walsh, of the Bar of the Court of Appeals of
New York, pro hac vice by special leave of the Court,
with whom Joseph A. Artabane and Charles Alan Wright
were on the brief, for appellant.
David E. Kendall, with whom Irving Younger, Kevin
T. Baine and Scott M. Matheson, Jr. were on the brief,
for appellees The Washington Post Company and Patrick
E. Tyler.
H. Bartow Farr, III, with whom Peul M. Smith was
on the brief, for appellee Sandy Golden.
David Machanic for appellee Philip Piro.
Daniel J. Popeo was on the brief for amicus curiae,
American Legal Foundation, urging reversal.
Before: WRIGHT and SCALIA, Circuit Judges, and
MACKINNON, Senior Circuit Judge.
Opinion for the Court filed by Senor Circuit Judge
MACKINNON.
Opinion concurring in part and dissenting in part filed
by Circuit Judge WRIGHT.
PE ye Pe eT
Rika hbk Ni et liters A niet rh alle Fina aL AS we,
A29
Panel Majority
TABLE OF CONTENTS
Page
a III UN oo con cnvsccunvecveccoconcecevesceevecectens 5
es cI ci assncceacnsevecocevectooeccesecovsoee 16
III. DEFAMATION AND FALSITY................00.....-0--0-0-0000000--- 29
1. Defamatory Character of the November 30
EG A a 29
a i ss csectidasuens 82
IV. RECKLESS DISREGARD OF TRUTH OR FALSITY—
eo 37
1. The Christine Peterson Memorandum........... 39
2. The Defendants’ Motivation............................. 44
3. Resolution of Inferences Adverse to the
a Seer 54
4. Suppression of Information Favorable to the
ny cicanaleduinnnpnce 57
5. “Personally Dispatched”: The Checket Con-
versation ....... 2 AE AYR RE RE SO PP OT OE 62
6. The SEC Paragraphs ...................0...........2....-.. 64
7. Meeemeeee OF Sources .......................0--.0i,0.-00052. 67
at EE eee IN 67
a cadneakn ecdamnigcationh 69
8. Other Indicia of Actual Malice ...................... 74
9. The Defendants’ Evidence ........................... 77
10. Some cf Defendants’ Suggested Inferences
Pram Cee TEVIGGCS -...nn nn ..ncc..nncscc.--cc00cccccceeceses 79
a scesnacowmsaabennduais 81
V. THe VERDICT AGAINST PIRO .......0..0.-o- eee 82
VI. THE VERDICT AGAINST GOLDEN ............................... 85
VII. CONCLUSION ....... EAE en Oe AE RC RRS TE Ee 87
ASI dan 2 is PINE saree eC 89
A30
Panel Majority
MACKINNON, Senior Circuit Judge: Plaintiffs William
and Peter Tavoulareas brought suit against The Wash-
ington Post (“Post”) and several other defendants for
libel and against defendant Piro, a source for the story,
for slander and its foreseeable republication. The Ta-
voulareases alleged that they were defamed by articles
in the Post which stated. among other things, that Wil-
liam Tavoulareas, as President and Chief Executive Of-
ficer of Mobil Oil Corporation (“Mobil”), had used his
influence to “set up” his son Peter in the shipping busi-
ness, and then had diverted some of Mobil’s shipping
business to him. The basic theme of the article was that
William Tavoulareas had misused his position and cor- -
porate assets to benefit his son. The case was submitted
to the jury, which was instructed, in accordance with
standards constitutionally required for public figures,
that defendants could be held liable only if they published
false matter with “actual malice”’—i.e., with knowledge
of its falsity or reckless disregarf of whether it was false
or not. The jury returned verdicts for the plaintiffs. The
trial judge then ruled on motion that the evidence was
insufficient to support such a verdict and entered judg-
ment notwithstanding the verdict (“n.o.v.”) for the de-
fendants. Tavoulareas v. Washington Post Co., 567 F.
Supp. 651 (D.D.C. 1983). After a careful and independ-
ent review of the entire record in the case, we conclude
that the evidence adduced by the plaintiffs was sufficient
to “establish[] actual malice with convincing clarity,”
Bose Corp. v. Consumers Union of United States, 52
U.S.L.W. 4518, 4521 (U.S. Apr. 30, 1984), and accord-
ingly reverse the grant of the judgments n.o.v. as to the
Post defendants and defendant Piro, and remand the
case to the district court for further proceedings. We
affirm the trial court’s judgment n.o.v. with respect to
defendant Golden because of his lack of responsibility for
the publication.
abn Vedi
Oe ea ee oe ene neh ot i akan. SOB alone e Caen
A31
Panel Majority
I. BACKGROUND FACTS
The business relationships that gave rise to this case
began in 1974, when Mobil bought a 30 percent interest
in the Saudi Arabian Maritime Company (“Samarco’”),
a joint venture that had been formed a short time before
by Fairfield Maxwell Ltd. and members of a powerful
Saudi Arabian family, the Alirezas. The Alirezas were
the majority shareholders in Samarco. Mobil bought a
minority interest in Samarco because, at that time, Mobil
believed the Saudi government was going to give strong
oil shipping preferences to Saudi-owned shippers. Ulti-
mately, however, these preferences were never adopted by
the Saudi government.
The Samarco partners agreed to hire an outside firm to
manage the ships that Samarco would operate. Mobil sug-
gested Atlas Maritime Company, a new venture being
formed by Greek shipping executive George Cdmnas.
Comnas had previously worked for the Greek maritime
firm of C. M. Lemos & Co., where Peter Tavoulareas, a
24-year-old graduate of the Master of Business Adminis-
tration program at Columbia University, was also em-
ployed as a junior executive. Peter had first approached
Lemos in August, 1972 with respect to employment and
by January 1, 1973 had started working in the shipping
business with C. M. Lemos & Co. (Trial Transcript (Tr.)
2385, 2387, 2451).
Mobil owned a fleet of oil tankers. It wanted some of
those ships to be operated under Samarco’s name in order
to get the expectéd shipping preference. Mobil agreed
to “bareboat charter” its ships (i.e., charter the ships
empty and unmanned) to Samarco, which would in turn
“time charter” them (1.e., charter the vessels complete
with crews and provisions) back to Mobil. Mobil thus
1“TSjome 12 or 14 other [oil] companies [were] establish-
ing similar organizations ...” (Tr. 1090). One of defendants’
principal witnesses, a former director of the shipping concern
A32
Panel Majority
in a sense was “chartering” its own ships to itself and
essentially obtaining its crews and provisions through
Samarco.? In admiralty law “for many, if not most, pur-
poses the bareboat charterer is to be treated as the
owner” of the chartered vessel. Reed v. The Yaka, 373
U.S. 410, 412 (1963). Thus, the contractual arrange-
ment placed considerable responsibility upon Samarco
for Mobil’s ships. Samarco, for its part, obtained crews
and provisions through its management firm, Atlas.
Comnas, in setting up Atlas, asked two young co-
workers at Lemos, Peter Tavoulareas and Ares Em-
manuel, to join him as partners. When Peter joined
Atlas in August 1974, his father William notified Mobil’s
Conflict of Interest Committee and formally removed him-
self from taking part in decisions regarding Atlas.* The
Mobil Committee found no impropriety in the arrange-
of Fairfield-Maxwell Ltd., John Kousi, stated in his deposition
testimony that such circuitous leasing, in contemplation of
Saudi preference laws, “was a commonly understood business
idea at the time,” devised as a means to capitalize on an op-
portunity to make substantial profits by using surplus tankers
laid up by the world-wide depression in oil (Tr. 3220-22,
8263, 3167), and that Atlas could operate ships at less cost
than Mobil (Tr. 3246).
2 Mobil stated that it wanted an independent shipping
operation to avoid a conflict of interest between the shipping
interests of Mobil and those of Fairfield-Maxwell Ltd. (Tr.
$126).
’In January, 1974, William Tavoulareas notified Mr. War-
ner, Chairman of Mobil’s Board of Directors, that “there
was a chance of [his son Peter] participating in some kind
of a venture with George Comnas” (Tr. 4185). Shortly there-
after, the transaction was disclosed to George Birrell, Chair-
man of Mobil’s Conflict of Interest Committee (Tr. 1515-18).
Atlas was organized in July, 1974 (Tr. 4427). Peter joined
Atlas in August 1974 (Tr. 1521, 1958). On August 2, 1974,
William Tavoulareas wrote a letter stating, “I will not make
decisions” (Tr. 4136). And on the same date Mr. Wolfe wrote
a letter “notifying the people in the [Mobil] organization on
a need to know basis of Peter’s participation” (Tr. 4136).
A33
Panel Majority
ment, which was fully disclosed to the Mobil Board of
Directors.
Comnas was forced out of Atlas a year later, in 1975,
ostensibly because of self-dealing, fraudulent practices,
and dissatisfaction with his performance on the part of
Mopjl and the Saudis. He was placed on Mobil’s payroll
as a consultant, and Atlas reimbursed Mobil for his sal-
ary. Mobil sent Harmon Hoffmann,‘ a Mobil shipping
executive, to act as interim head of Atlas. Hoffmann was
offered Comnas’ share of Atlas stock (Tr. 4151), but
turned down the offer to become an equity partner, and
after six months returned to Mobil. Peter Tavoulareas
and Emmanuel then assumed the management duties of
Atlas. Atlas prospered during the succeeding years; by
1979 it apparently was operating 17 ships, including 7
for Samarco, only 4 of which were Mobil’s.
The Mobil-Samarco-Atlas relationship—and specifically
the Tavoulareas-Atlas connection—was explained to Mobil
shareholders in a 1976 letter. At about the same time,
a party or parties sent anonymous letters to a number
of newspapers, alleging that the arrangement violated
the federal securities laws. One of those letters went to
reporter Robert Woodward of the Post. Woodward, along
with reporters for several other newspapers, investigated
the anonymous charges; but none of them apparently {4
found any wrongdoing, and no stories were published.
The Securities and Exchange Commission, which obtained
a copy of one of the letters, launched an informal investi-
gation and called upon William Tavoulareas to testify in
non-public proceedings. The SEC found no impropriety.
Evidence presented by the plaintiffs showed that
Mobil did not exert control over Samarco, in which it
* Hoffmann’s name was reported as Herman Hoffmann in
the Post’s November 30 article.
_——
A34
Panel Majority
was a minority shareholder, a1.d that all of the decisions
relating to Atlas were approved by the controlling Saudi
partne:s. The arrangement was fully disclosed to Mobil’s
Conflicts of Interest Committee, Mobil’s Board of Direc-
tors, and to the company’s shareholders. Evidence indi-
cated that Mobil and its shareholders had derived eco-
nomic benefits from’ the Samarco-Atlas arrangement be-
cause Atlas operated the Mobil ships more cheaply than
could Mobil.
The article at issue in this case had its genesis five
years after the creation of Atlas and three years after
disclosure to the shareholders. In October, 1979, Samuel
“Sandy” Golden, a reporter for The Montgomery [Mary-
land] Journal, met Philip Piro, a physician who was mar-
ried to William Tavoulareas’ daughter. Piro was in the
midst of a less than amicable divorce proceeding. Piro
told Golden about the Atlas transactions. Golden testified
that Piro told him that Mobil Oil president William
Tavoulareas had set up his son Peter in the business,
and that it had made Peter an “overnight millionaire”
(Tr. 166). Piro mentioned that Woodward had previ-
ously investigated the story.
Golden, who had been angling for a job at the Post
for some time, sensed a story. He unsuccessfully called
Woodward several times and finally left a message that
he “had a story about the president of Mobil setting up his
son to become an overnight millionaire” (Joint Appendix
(J.A.) 786). Woodward, by then an editor at the Post,
assigned reporter Patrick Tyler to return Golden’s call.
Tyler called Golden. Golden told Tyler that he had a hot
source for the Tavoulareas story. Tyler agreed that if
Golden’s source led to a big story they would share a
Post byline. The two reporters met at The Owl restau-
rant in Baltimore, where they jointly interviewed Piro.
Tyler apparently was pleased with Piro’s evidence; on
ate
A35
Panel Majority
leaving the restaurant he remarked that it’s “not every
day you knock off one of the seven sisters.” °
At this point, the two reporters began following sep-
arate trails. Golden concentrated on getting more in-
formation from Piro and conducted several telephone in-
terviews with him. Although Golden repeatedly assured
Piro that he was not recording them, he taped several
of the conversations. Golden also began seeking “possible
enemies” of Tavoulareas, i.e., those with a “motive for
revenge” and “with a reason to say bad things about Mr.
Tavoulareas” (J.A. 815). In his search, he met Peter
Stockton, an investigator for Rep. John Dingell, Chairman
of the House of Representatives Subcommittee on Energy
and Power. Stockton moonlighted as an employee of
CBS’ “60 Minutes” television show. Golden believed
that Stockton, who had something of a reputation as a
crusader, “hate[d] people with money.” Golden played
the Piro tapes for Stockton, who at some point relayed
Golden’s information to Congressman Dingell. Stockton
later contacted Tyler and passed other information to
him. Dingell wrote to the SEC seeking an investigation.
Tyler, meanwhile, tracked down Comnas and met with
him in New York. Comnas, who initially requested
anonymity, allegedly told Tyler about the Atlas arrange-
ments. The Post contends that Comnas was the major
source for its stories. (Since Comnas did not testify at
trial and Tyler is a reporter who does not use tape
recorders, only Tyler’s own account of the convd@sations
is available.) Tyler also talked to John Kousi, an execu-
tive of Fairfield Maxwell, Ltd., one of the Samarco part-
ners. Parts of Kousi’s deposition were placed into
evidence.
Tyler also tried to interview William Tavoulareas and
other Mobil executives, but generally was rebuffed. Wit-
nesses for the plaintiffs stated that they were wary of
5 “Seven Sisters” is a colloquial term for the seven largest
oil companies, one of which is Mobil.
A36
Panel Majority
talking with Tyler because in an earlier story on the oil
shortage he had misrepresented statements made by
Mobil executives. Tavoulareas, however, agreed to give
written answers to questions that Tyler would submit
in writing, which was done.
Tyler wrote the story, and the Post submitted it to
its editing process.’ During editing, several pieces of
material were deleted that were favorable to Mobil and
Tavoulareas, chiefly opinions of various persons in and
out of Mobil (1) that the Atlas arrangement had ben-
efitted the company, and (2) that William Tavoulareas
had not been directly involved in Atlas. The Post copy
editor assigned to the story, Christine Peterson, read it,
considered its implications, and wrote a memorandum to
other editors that she found it “impossible to believe”
that William Tavoulareas had arranged the Atlas affair
in order to benefit his son. Tyler responded with a memo
in which ‘he acknowledged that “a good editor might say
that part of our case against Tavoulareas seems tenu-
ous,” and noted that a couple of “key points” were based
on a single source—presumably Comnas. The Post editors
did not alter the story in response to Peterson’s memo,
and the story, after clearance from the lawyers, was
published.
When the article appeared, Tyler was given sole byline
credit for it, but Golden received designation as a “Special
Correspondent” who had “contributed” to the story.
The first article—which is reprinted as an Appendix
to this opinion—appeared on November 30, 1979.° It
bore the headline “Mobil Chief Sets Up Son in Venture,”
and its essential theme is made clear from its beginning:
Mobil Oil Corp. president William P. Tavoulareas
set up his son five years ago as a partner in a
London-based shipping management firm that has
since done millions of dollars in business operating
Mobil-owned ships under exclusive, no-bid contracts.
a A = 46 . | see . 7 * rr . 7 ~~ ~— -—
en ee ee ee
A37
Panel Majority
The article detailed the transactions that led to the crea-
tion of Samarco and Atlas. Although the article con-
tained a great deal of innuendo,’ the defamatory picture
it conveyed is based upon certin factual allegations con-
tained therein. Specifically, it alleged:
1. William Tavoulareas “set up his son... as a
partner” in Atlas, a company to which William
and Mobil would divert a great deal of business.
2. “As the formation of Atlas was being planned in
April 1974, [William] Tavoulareas personally
urged [Comnas] that his son be included as an
equity partner in Atlas.”
3. Although he had told the Mobil board that he
recognized the potential conflict of interest and
would not personally be involved in dealings with
Atlas, it was nevertheless “the elder Tavoulareas
[who] dispatched one of his senior shipping ex-
ecutives, Herman F. Hoffmann, [sic] to London
to help run ‘Atlas” after Comnas left the firm.
The core allegations—baldly stated as facts in the article
—were that William Tavoulareas set up Peter in Atlas
and then dispatched a Mobil employee and used Mobil
resources to bail out Atlas when Comnas was forced out.
Without these “facts,” the story would be nothing more
than a report that Mobil had business dealings with a
small company in which its president’s son had a part
interest—hardly page 1 material.
7 H.g., the statement in {31 of the article that “the Mobil
president’s son was graduated from St. Johns University in
New York, where his father sits on the board of trustees,”
and the following parenthetical aside in { 68, immediately
succeeding quotation of Mobil’s statement that “the overriding
selection criteria for [ship management] operations is the
prospect of good, safe performance”: “(Atlas has lost one
ship ... which exploded and burned last May ... . The ship
was sold for scrap in July.) .”
A38
Panel Majority
These core “facts” formed the foundation on which the
implications of the article rested. In a memo to his su-
periors at the Post (J.A. 2488-91), Tyler characterized
the story as dealing with the “incredibly fancy corpo-
rate footwork” undertaken by Tavoulareas and Mobil
to (1) “ingratiate itself with the Saudis,” and (2)
“set up the son of Mobil’s president in a shipping
business when business was bad and the business, there-
fore, stood little chance of prospering without Mobil’s
help.” In the memo, he called it a “stor[y] of nepotism,
reward without merit and favoritism by those who wield
vast amounts of power.” He continued:
. . . Mobil—which originally turned down a chance
to join Samarco—changed its mind after it dawned
on Mobil’s president that such a partnership would
justify creation of a small management firm at a
time when: Tavoulareas’ son was aspiring to such a
career and was already at work with one of the
Greek shippers.
The story showed, wrote Tyler, “that Mobil’s decisions in
this case were not made for the traditional business rea-
sons, or for the reasons stated by Mobil.” In specific
response to Peterson’s assertion that it was “impossible
to believe that Tavoulareas alone could put together [the
Samarco-Atlas] scheme for the sake of his son’s business
career, or that he would want to,” he wrote:
Samarco can be seen as nothing more complicated
than a slight diversion from Mobil in the way it
moved its crude oil from point A to point B.
The question of “why” Mobil’s president would want
to orchestrate such a diversion’ when it would benefit
his son’s business career is begging things a little.
Tyler’s interpretation of the article’s implications was
echoed by Peterson, who apparently read the story to sug-
gest that “Tavoulareas alone . . . put together [the Atlas-
Samarco] scheme for the sake of his son’s business
career.” As a whole, she wrote, the story was about the
A39
Panel Majority
use of $680,000-a-year of Mobil’s assets as a “plaything
for an indulged son.”
The interpretations of Tyler and Peterson reflect fairly
accurately the defamatory implications that an average
reader would draw from the story: (1) that William
Tavoulareas, using his position as a principal officer of
Mobil, “set up” his son in Atlas; (2) that a primary mo-
tive for Mobil’s participation in the Atlas deal was to
benefit Peter Tavoulareas; * (3) that William Tavoulareas,
although claiming to have isolated himself from business
dealings with Atlas, nevertheless directly participated in
important matters and personally channelled a Mobil em-
ployee and resources to help Atlas; and (4) that
Tavoulareas and Mobil may have violated the securities
laws by failing to disclose Peter’s involvement in Atlas.°
Ultimately, the basic implication was that Tavoulareas
improperly used his position and the resources of Mobil
to benefit his undistinguished 24-year-old son. All of
these defamatory implications are based on the statements
of “fact” identified above. :
After the first publication, William Tavoulareas de-
nied the story and demanded a retraction. The Post has
steadfastly refused to retract it and presently asserts
that the “story was in fact true.” Brief of Post at 18.
Other publications picked up the story, which enjoyed a
brief flurry in the press. It does not appear, however,
that either the Mobil shareholders or the Securities and
8 See discussion at pp. 79-80 infra.
® The district court’s charge to the jury similarly instructed
that William Tavoulareas’ complaint contended that the arti-
cles reasonably implied:
That he breached his fiduciary duties to Mobil. That he
wasted and misused assets of Mobil. That he wrongfully
diverted such assets to Peter Tavoulareas for his benefit,
and four, that he committed criminal acts.
(Tr. 4550).
A40
Panel Majority
Exchange Commission ever found any impropriety in the
transactions at issue.
William and Peter Tavoulareas brought two actions:
one for libel against The Washington Post Company
and several individuals (collectively, the “Post defend-
ants’), including Tyler, Golden, and Woodward (No. 83-
1605) ,’! and one for slander and its foreseeable republi-
cation against Piro (No. 83-1604). The two actions were
consolidated. After trial, the jury returned verdicts in
which they awarded damages that indicated they neces-
sarily determined that:
1. In the November 30 article the Post defendants
defamed William Tavoulareas. The premise of
the article was false and was published with
knowledge or reckless disregard of its falsity.
‘The jury awarded Tavoulareas $250,000 in com-
pensatory damages and $1,800,000 in punitive
damages against the Post defendants.
2. The Post defendants did not defame Peter Ta-
voulareas.
3. Piro defamed both William and Peter Tavoul-
areas. The jury awarded compensatory damages
of $5,000 to William and $1,000 to Peter.
After receipt of the verdicts, the district court granted
judgments n.o.v. for Piro and for the Post defendants
against William Tavoulareas. The trial court found that
Tavoulareas was a public figure and that there was no
proof that the defendants had acted with actual malice:
10 The Washington Post Co. is a large multimedia corpora-
tion which has substantial broadcast holdings and which
publishes magazines and newspapers, including the Post. .
11 Also named in the complaint was Post president Katharine
Graham, but the district court dismissed the case against her,
and the plaintiffs do not contest this. Accordingly, she is nota
party to this appeal.
A4l1
Panel Majority
The article in question falls far short of being a
model of fair, unbiased, investigative journalism.
There is no evidence in the record, however, to show
that it contained knowing lies or statements made in
reckless disregard of the truth.
567 F. Supp. at 654. The district court affirmed the jury
verdict in favor of Peter Tavoulareas against Piro.
On appeal, the parties have argued two issues. First,
whether William Tavoulareas is a public figure, requiring
application of the actual malice standard of New York
Times v. Sullivan, 376 U.S. 254 (1964)? And second,
whether there is sufficient, evidence in the record to sup-
port a finding of actual malice? On review, we consider the
second of these issues and, in addition, inquire whether the
charge that William Tavoulareas “set up” his son in the
manner alleged, and certain implications reasonably flow-
ing from the specifically pleaded defamatory allegations,
were defamatory and false. Because we find, after re-
view of the whole record, that the evidence was sufficient
to demonstrate “clearly and convincingly” that the article
was defamatory and false and that the defendants acted
with actual malice—and hence to meet the New York
Times standard—we do not reach the issue whether
Tavoulareas was a “public figure.”
12'We note, however, that the public figure determination
in this case would not be free from difficulty. The Supreme
Court has defined two classes of public figures. “General pub-
lic figures” are those who are always, for every purpose, to be
considered public figures; the class is small and specifically
limited to those who have “general fame or notoriety in the
community.” Gertz v. Robert Welch, Inc., 418 U.S. 323, 351-
52 (1974). The district court rejected the suggestion that Wil-
liam Tavoluareas was an all-purpose public figure; in the
absence of any evidence that William Tavoulareas was a
household word prior to the Post’s accusations, that deter-
mination appears correct. More common than general public
figures, however, are “limited public figures,” i.e., those who
are public figures only with regard to certain issues. They are
those who have “thrust themselves to the forefront of partic-
A42
Panel Majority
II. THE LEGAL STANDARD
The constitutional standard of liability for public fig-
ures, as established by the Supreme Court in New York
Times and restated in Gertz v. Robert Welch, Inc., 418
U.S. 323 (1974), is well settled. A public figure cannot
recover for defamatory falsehoods, no matter how dam-
aging and how utterly baseless, unless he can show “ac-
tual malice’—i.e., establish by “clear and convincing
proof that the defamatory falsehood was made with
knowledge of its falsity or with reckless disregard for the
truth.” Gertz, 418 U.S. at 342 (emphasis added). The
Court consistently has refused to apply objective stand-
ular public controversies in order to influence the resolution
of the issues involved.” Jd. at 345 (emphasis added). The
district court found that William Tavoulareas was a limited
public figure.
The framework for analyzing limited public figures was set
forth by this court in Waldbaum v. Fairchild Publications,
Inc., 627 F.2d 1287 (D.C. Cir.), cert. denied, 449 U.S. 898
(1980). The court must (1) define the precise controversy
involved, (2) analyze the plaintiff’s role in the controversy,
and (3) determine if the defamatory material was germane
to the plaintiff’s participation in the controversy. Jd. at 1296-
98. The difficulty in this case is finding any “particular public
controversy” regarding the Mobil-Atlas-Samarco arrange-
ment which existed before Tyler’s story was published. A de-
fendant obviously cannot create a controversy by publishing
defamatory falsehoods and then escape liability by pointing
to the resulting furor as evidence of a public controversy. The
Post in its brief has proffered several “controversies” to which
its article might be “germane,” but without deciding the issue
we note that on this record these are either virtually non-
existent (e.g., the alleged “pre-existing public controversy”
over the Mobil-Samarco-Atlas arrangements) or apparently
unrelated to the subject of nepotism within Mobil (e.g., the
“debate” between energy conservationists and those favoring
increasing oil imports, or the alleged public controversy over
Mobil continuing to obtain oil from Saudi Arabia). Our dis-
position of the case, however, makes it unnecessary to reach
these issues. .
A43
Panel Majority
ards to determining actual malice; no matter how un-
reasonable the defamatory statement, the defendant can-
not be held accountable unless he “in fact entertained seri-
ous doubts as to the truth of his publication.” St. Amant
v. Thompson, 390 U.S. 727, 731 (1968). At issue, then, is
the state of mind of the defendants.”
Proof of mental state very often “depends . . . on the
credibility of the witnesses, which can best be determined
by the trier of facts after observation of the demeanor
of the witnesses during direct and cross-examination.”
Morrison v. Nissan Motor Co., 601 F.2d 139, 141 (4th
Cir. 1979) (cases cited) ; accord, Mutual Fund Investors,
Inc. v. Putnam Management Co., 553 F.2d 620, 624 (9th
Cir. 1977). Thus, in the ordinary case, federal courts are
reluctant to decide state of mind issues in summary
fashion. See, e.g., Morrison, 601 F.2d at 141. It is not
that summary disposition is disfavored when the issue is
the mental state of the defendant; rather, the very nature
of the inquiry is frequently so bound up with the weigh-
ing of credibility that courts, as a practical matter, will
only infrequently find the facts regarding mental state so
crystal-clear that a reasonable jury could reach only one
conclusion.
A few courts have argued that the public interest in
fostering free debate requires that summary disposition
be used especially freely in defamation cases—that it
should, in fact, be the “rule,” rather than the “excep-
tion.” See, e.g., Oliver v. Village Voice, Inc., 417 F.
Supp. 235, 237 (S.D.N.Y. 1976) ; Guitar v. Westinghouse
18 The Washington Post Co. is being sued in its corporate
capacity. As a corporation, it acts only through its employees
or other agents. These employees include in this case not only
reporter Tyier, but all those responsible for the November 30
article. It is the state of mind of these persons that connects
liability to the Post. We note that the jury was properly
instructed in this regard (Tr. 4559).
A44
Panel Majority
E'ectric Corp., 396 F. Supp. 1042, 1053 (S.D.N.Y.),
aff'd, 588 F.2d 309 (2d Cir. 1976). Summary judgment,
in particular, is said to be necessary because the suit
itself, not merely the unfavorable verdict, could “chill”
protected speech: Due to the possibly overwhelming ex-
pense of even a successfully defended defamation action,
the threat of litigation itself may cause potential de-
fendants to steer far wider of the unlawful zone and act
as self-censors. See, e.g., New York Times Co. v. Sulli-
van, 376 U.S. 254, 279 (1964) (quoting Speiser v..
Randall, 357 U.S. 518, 526 (1958)) (“[Critics] tend to
make only statements which ‘steer far wider of the
unlawful zone.’”). The theory is that frivolous suits
should be ended quickly by summary proceedings. By
analogy, it could be argued that “[t]he policies gov-
erning the propriety of summary judgment presumably
apply to motions for directed verdict and for judgment
n.o.v.” R. Sack, Libel, Slander, and Related Problems
557 (1980). But that is not the case. Whatever value
summary judgment has in sparing defamation defend-
ants the expense of actually going to trial, there is no
such value in judgments n.o.v., for they come into being
after the trial is over and virtually all of the expense has
been incurred. Strictly in terms of court costs and legal
fees, the “chill” is the same whether judgment after
trial is based on a jury verdict or a judgment n.o.v.
In any event, the general proposition that summary
proceedings are favored in defamation law has been
seriously undercut by recent Supreme Court pronounce-
ments. The Court, recognizing the critical role credibility
frequently plays in assessing mental state, has acknowl-
edged that “proof of ‘actual malice’ . . . does not readily
lend itself to summary disposition,” and expressed “some
doubt” that summary judgment should be considered the
“rule” rather than the “exception” in defamation cases.
Hutchinson v. Proxmire, 443 U.S. 111, & 120 n.9 (1979) ;
see also Liberty Lobby, Inc. v. Anderson, 746 F.2d 1563,
A45
Panel Majority
1570 (D.C. Cir. 1984). In the recent case of Calder v.
Jones, 52 U.S.L.W. 43849, 4351 (U.S. Mar. 20, 1984),
the unanimous Court remarked:
[T]he potential chill on protected First Amendment
activity stemming from libel and defamation actions
is already taken into account in the constitutional
limitations on the substantive law governing such
suits. . . . We have already declined in other con-
texts to grant special procedural protections to de-
fendants in libel and defamation actions in addition
to the constitutional protections embodied in the
substantive laws.
The Calder Court cited Hutchinson for the proposition
that “no special rules apply for summary judgment” in
defamation cases. Id.
Under Fed. R. Civ. P. 50(b), a motion for judgment
n.o.v. is essentially a motion for directed verdict made
after the jury has returned its verdict. Consequently,
“the standard for awarding a judgment n.o.v. is the
same as that applied when ruling on a motion for a
directed verdict.” Vander Zee v. Karabatsos, 589 F.2d
723, 726 (D.C. Cir. 1978), cert. denied, 441 U.S. 962
(1979) ; see Lester v. Dunn, 475 F.2d 983, 985 (D.C. Cir.
1973); 5A Moore’s Federal Practice 7 50.07[2] (2d. ed.
1982). The standard usually applied was elaborated by
this court in Alden v. Providence Hospital, 382 F.2d 163,
165 (D.C. Cir. 1967):
Unless the evidence, along with all inferences reason-
ably to be drawn therefrom, when viewed in the light
_ most favorable to the plaintiff is such that reasonable
jurors in fair and impartial exercise of their judg-
ment could not reasonably disagree in finding for
the defendant, the motion must be denied.
Accord, Vander Zee, supra, 589 F.2d at 726 (emphasis
added) (footnote omitted). The Ninth Circuit aptly |
summed up the application of these rules in a defamation
, action:
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Panel Majority
[I]n a libel case, as in other cases, the party against
whom ...a motion for a judgment notwithstanding
the verdict is made is entitled to have the evidence
viewed in the light most favorable to him and to all
inferences that can properly be drawn in his favor
by the trier of fact. We think, too, that in such cases
it is not only not the duty of the judge, or this court
of appeal, to weigh the credibility of the evidence, or
to draw inferences in favor of the moving party
(except, of course, when no contrary inference can
legitimately be drawn) but that neither the judge
nor this court on appeal has the authority to weigh
credibility or to choose among legitimate inferences
in such cases [emphasis added].!**)
The standard against which the evidence must be
examined is that of New York Times and its prog-
eny. But the manner in which the evidence is to be
examined in the light of that standard is the same
as in all other cases in which it is claimed that a
case should not go to the jury. If the evidence, so
considered, measures up to the New York Times
standard, the case is one for the jury, and it is error
to grant a directed verdict ....
14 Even though the trial judge may form opinions about the
credibility of witnesses during the course of a jury trial,
credibility cannot be a factor in granting a motion for judg-
ment n.o.v. Morelock v. NCR Corp., 586 F.2d 1096, 1104
(6th Cir. 1978) (“the trial court may neither weigh the evi-
dence, pass on the credibility of witnesses nor substitute its
judgment for that of the jury”), cert. denied, 441 U.S. 906
(1979) ;5A J. Moore, Moore’s Federal Practice {j 50.07[2] (2d
ed. 1984) (“the motion for judgment n.o.v. may be granted
only when, without weighing the credibility of the evidence,
there can be but one reasonable conclusion as to the proper
judgment”). A judgment n.o.v. is particularly inappropriate
where the case depends on witness credibility. Cf. Polehmus
v. Water Island, Inc., 252 F.2d 924, 928 (8d Cir. 1958). On
review, an appellate court need not defer to any credibility
findings used by the trial judge to support a grant of judg-
ment n.o.v., but any such credibility findings could indeed be
grounds for reversal.
A47
Panel Majority
Guam Federation of Teachers, Local 1581 v. Ysrael, 492
F.2d 438, 441 (9th Cir.), cert. denied, 419 U.S. 872
(1974). As the Ninth Circuit held in Alioto v. Cowles
Communications, Inc., 519 F.2d 777, 780 (9th Cir.),
cert. denied, 423 U.S. 930 (1975):
A district judge on motion for judgment n.o.v., or an
appellate judge on review, must examine the evi-
dence to see whether, if all permissible inferences
were drawn in the plaintiff's favor and all questions
of credibility were resolved in his behalf, the evi-
dence would then demonstrate by clear and convinc-
ing proof that the libelous material was published
with actual malice.
See also Yiamouyiannis v. Consumers Union of the
United States, Inc., 619 F.2d 932, 940 (2d Cir.) (“[dJef-
amation actions are, for procedural purposes, such as...
summary judgment, to be treated no differently from
other actions”), cert. denied, 449 U.S. 839 (1980);
Maheu v. Hughes Tool Co., 569 F.2d 459, 464 (9th Cir.
1977) (“traditional standard for appellate review of mo-
tions for a directed verdict and judgment n.o.v. should
be applied in [a defamation] case”); Time, Inc. v.
Ragano, 427 F.2d 219, 221 (5th Cir. 1970) (“all in-
ferences to be drawn from the underlying facts must be
viewed in the light most favorable to the party opposing
the motion for summary judgment”); Vandenburg v.
Newsweek, Inc., 441 F.2d 378, 379 (5th Cir.) (same),
cert. denied, 404 U.S. 864 (1971).
The district court correctly stated this legal standard,
567 F. Supp. at 652-53, and even the defendants con-
cede that “the evidence must be construed most favor-
ably to William Tavoulareas.” Brief of Post at 29-30.
The question thus is whether the evidence and the reason-
able inferences derived from it, when examined in the
light most favorable to the plaintiffs, establishes by clear
and convincing evidence that the defendants acted with
knowledge that the charge was false or with reckless
disregard of its truth or falsity.
ee
A48
Panel Majority
But a court evaluating a defamation verdict which
significantly involves First Amendment considerations
must be far less deferential to the verdict of the jury.
The Supreme Court held in New York Times v. Sullivan
that in public figure defamation cases courts “must
‘make an independent examination of the whole record,’
. . . 80 as to assure, [themselves] that the judgment does
not constitute a forbidden intrusion on the field of free
expression.” 376 U.S. at 285 (quoting Edwards v. South
Carolina, 372 U.S. 229, 235 (1963) (emphasis added).
This principle has been consistently followed by the
Court in subsequent cases. See, e.g., St. Amant v. Thomp-
son, 390 U.S. 727, 732-33 (1968) ; Greenbelt Cooperative
Publishing Ass’n v. Bresler, 398 U.S. 6, 11 (1970). The
rule has been recognized and followed by the courts of
appeals. See Guam Federation, supra, 492 F.2d at 442
(recognizing duty to “make an independent evaluation of
the whole record”) (quoting Edwards v. South Carolina,
372 U.S. 229, 235 (1963)); Alioto, 519 F.2d at 780
(court must examine record and evaluate evidence itself
on issue of actual malice).
The Supreme Court recently reaffirmed that rule in
Bose Corp. v. Consumers Union of United States, 52
U.'S.L.W. 4513 (U.S. Apr. 30, 1984). The court held:
The-question whether the evidence in the record in a
defamation case is of the convincing clarity required
to strip the utterance of First Amendment protection
is not merely a question for the trier of fact. Judges,
as expositors of the Constitution, must independently
decide whether the evidence in the record is sufficient
to cross the constitutional threshold that bars the
entry of any judgment that is not supported by clear
and convincing proof of “actual malice.”
Id. at 4520 (emphasis added). This is the standard
that controls our review of the record in this case.
The issue Bose presents in the present context is
whether we.are to apply our independent judgment to
)
; Fee
A49
Panel Majority
each separate fact determination that forms the basis
for the ultimate conclusion of “actual malice,” or rather
only to the ultimate conclusion of clear and convincing
proof of “actual malice.” For a number of reasons, we
think the latter is the case.
First, the Court’s expression of its holding in Bose is
phrased only in terms of the ultimate issue; and certio-
rari had been granted only “to consider whether the
Court of Appeals erred when it refused to apply the
clearly erroneous standard of Rule 52(a) to the District
Court’s ‘finding’ of actual malice.” Jd. at 4515. Ad-
mittedly, independent review. of the ultimate issue, of
course, could be thought to subsume independent review
of the preliminary factual issues on which it is based.
But as detailed below, the Supreme Court discussed ex-
tensively the distinction between purely factual findings
and so-called ultimate facts to repel such a conclusion.
Second, the court of appeals decision affirmed in Bose
had not questioned the factfinder’s preliminary factual
determinations. The issue under review was whether it
could properly be found defamatory, under an “actual
malice’ standard, for the defendant to print that the
loudspeakers manufactured by the plaintiff caused musi-
cal instruments to sound as though they were wandering
“about the room.” ** As the Supreme Court noted, the
15 The Supreme Court noted:
The factual portion of the District Court’s opinion may
fairly be read as including the following findings: (1)
Seligson’s [the defendant’s engineer’s] actual perception
of the apparent movement of the sound source at the time
the [speaker] was tested was “along the wall” rather
than “about the room”; (2) ... neither the “average
reader,” nor any other intelligent person, would interpret
the word “about” to mean “across”; (3) Seligson is an
intelligent, well educated person; (4) the words “about
the room” have the same meaning for Seligson as they
do for the populace in general; and (5) although he was
otherwise a credible witness, Seligson’s testimony that
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Panel Majority
court of appeals. had uccepted all the district court’s
factual findings, observing “that it ‘was in no position
to consider the credibility of witnesses and must leave
such questions of demeanor to the trier of fact.’” Id. at
4515 (quoting 692 F.2d at 195). The Supreme Court
noted with approval this refusal of the court of appeals
to second-guess credibility findings of the factfinder. Id.
at 4517.° The Court likewise did not question them:
We may accept all of the purely factual findings
of the District Court and nevertheless hold as a
matter of law that the record does not contain clear
and convincing evidence that Seligson or his em-
ployer prepared the loudspeaker article with knowl-
edge that it contained a false statement, or with
reckless disregard of the truth.
Id. at 4521. What both the court of appeals and the
Supreme Court held was that in the reviewing court’s
own judgment, these accepted preliminary facts did not
support the ultimate conclusion of clear and convincing
proof of actual malice.
It is entirely clear, then, that Bose does not hold that
any factual determination other than the ultimate con-
(a) he did not “know what made me pick that particular
choice of words” and (b) that the word “about” meant
what he had drawn on the board, is not credible.
Id, at 4520.
16The Court recently reaffirmed this point in Patton v.
Yount, 52 U.S.L.W. 4896, 4900 (U.S. June 26, 1984), where it
noted that where the determination is one of credibility, it is
largely one of demeanor. The Court acknowledged, “[a]s we
have said on numerous occasions, the trial court’s resolution
of such questions is entitled, even on direct appeal, to ‘special
deference,’ ” citing Bose. Jd. This court has implicitly recog-
nized this principle in Lebron v. Washington Metro. Area
Transit Auth., 749 F.2d 893, 897 (D.C. Cir. 1984). Even the
dissent confesses that the “[c]redibility of a witness may be
the most compelling case for deferring to the factfinder.”
Dissent at 18. The fact finder here was the jury.
AS51
Panei Majority
clusion may be independently reviewed. The only ques-
tion is whether it suggests so. One indication that it does
not is the following statement in the opinion:
Rule 52(a) commands that “due regard” shall be
given to the trial judge’s opportunity to observe the
demeanor of the witnesses; the constitutionally-based
rule of independent review permits this opportunity
to be given its due.
Id. at 4517. Unless one attributes to this statement the
unthinkable obfuscation that “permitting the opportunity
to be given its due” includes ignoring the factfinder’s
credibility determination and making an independent
judgment, this must mean that de novo review does not
apply to those preliminary factual determinations based
on credibility. Since this typically includes most pre-
liminary factual determinations, there would be little
sense in preserving the “independent judgment” rule for
the remainder."
That Bose addresses only the ultimate question of
actual malice is shown, thirdly, by its reliance upon the
distinction between questions of fact (which are gov-
erned by Rule 52(a)) and questions of law (which are
for the court). “At some point,” the Court says, “the
reasoning by which a fact is ‘found’ crosses the line be-
tween application of those ordinary principles of logic
17 It would not be valid to argue that the obfuscatory read-
ing must be adopted or else the factfinder’s credibility-based
determination on even the ultimate issue itself would have to
be accepted, thus destroying the core holding of the case. It
is possible for a credibility determination to conclude the
ultimate issue for the defendant (which would not of course
trigger any requirement of independent review) but not
against him. Only the defendant can testify of his own knowl-
edge as to his state of mind. Thus, the jury may choose to
believe the defendant’s assertion that he did not know the
falsity of the statement; it would not be permitted to consider
the conclusory statement of someone else that he did. .
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Panel Majority
and: common experience which are ordinarily entrusied
to the finder of fact into the realm of a legal rule upon
which the reviewing court must exercise its own inde-
pendent judgment.” Jd. at 4518 n.17. And again: “When
the standard governing the decision of a particular case
is provided by the Constitution, this Court’s role in
marking out the limits of the standard through the proc-
ess of case-by-case adjudication is of special importance.”
Id. at 4518 (emphasis added). Such descriptions, and
such reliance upon the law-fact distinction, makes sense
as applied to the ultimate issue of whether, given certain
facts, the constitutional standard of “actual malice” has
been met. The Court’s statements in Bose would make
little sense if applied to such preliminary issues as
whether the reporter was told thus-and-so by a particular
source.
In sum, if the Court’s statement in Bose that “First
Amendment questions of ‘constitutional fact’ compel this
Court’s de novo review,” id. at 4519 n.27, is not limited
to the ultimate constitutional fact (e.g., whether the writ-
ing was “obscene,” whether there was a “clear and pres-
ent danger,” or, in the context of the present case,
whether there was “actual malice”), then we see no ra-
tional stopping point short of holding that all factual
issues in a First Amendment case are for the court. To
embrace that kind of de novo review, as advocated by the
dissent, would eviscerate the role of the jury and, in
effect, vest appellate courts with original jurisdiction in
libel actions. There is no indication that Bose was meant
. to set forth such a sweeping proposition. Indeed, its fre-
quent references to the continuing applicability of Rule
52(a) would be incomprehensible on that basis.
This searching review of the evidence is fully harmo-
nious with the established rule that in evaluating such
evidence, all reasonable inferences must be granted to
the plaintiff. The Guam Federation-Alioto line of cases
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Panel Majority
correctly applied the New York Times requirement of
review of the entire record, and nothing in Bose indi-
cates that they are no longer good law. Moreover,
neither New York Times nor Bose suggests that a dis-
trict court or a court of appeals is to substitute its as-
sessment of credibility or its general appraisal of the
evidence for that of the jury. Courts reviewing the de-
terminations of a factfinder—be it judge or jury—are
not to examine the evidence of the plaintiffs and that of
the defendants and decide which to believe. That is the
function of the factfinder. Rather, they must carefully
examine the evidence, draw all reasonable inferences in
favor of the verdict of the jury, and then determine
whether that evidence demonstrates clearly and convinc-
ingly that the defendant acted with actual malice."
18 As the dissent notes, see Dissent at 6, 11, the Supreme
Court in Bose stated that judges must make “an independent
assessment ... of the evidence germane to the actual malice
determination.” Bose, 52 U.S.L.W. at 4521 n.81. But the
Court was not announcing some novel rule. It noted expressly
that the rule in Bose, which originally was used for defamation
cases in New York Times v. Sullivan, had been applied “un-
counted times before.” Bose, 52 U.S.L.W. at 4521. The Guam
Federation-Alioto line of cases was decided in light of this
standard. See Guam Federation, supra 492 F.2d at 442;
Alioto, 519 F.2d at 780. The Bose court did not even mention
these cases, much less cast any doubt upon their continued
vitality. Absent some clear signal from the Court, we are
reluctant to reac Bose as overruling, sub silentio, such a well-
reasoned and well-established line of authority.
19 We make it clear that in no way will jury verdicts in
libel cases be protected by indulging in unreasonable infer-
ences on appeal. No set of inferences could transfigure an
otherwise inadequate factual record into a clear and con-
vincing finding of actual malice. The inferences drawn must
be reasonable. Schneider v. Chrysler Motors Corp., 401 F.2d
549, 555 (8th Cir. 1968) (“plaintiff .. . is not entitled to the
benefit of unreasonable inferences, or inferences at war with
undisputed facts”).
Moreover, as our discussion indicates, in performing our
constitutionally prescribed function we conduct our own inde-
AS4
Panel Majority
With the Supreme Cuurt’s admonitions in mind, and
cognizant of our duty io “exercise [our] independent
judgment and determine whether the record establishes
actual malice with convincing clarity,” Bose, 52 U.S.L.W.
at 4521, we turn to the required extended examination of
the evidence as it relates to that issue. Such independent
inquiry convinces us that the evidence is sufficient to
clearly and convincingly establish actual malice, which
the jury found existed on the part of the defendants.
Before we begin our actual malice discussion, though,
we first consider two issues necessary to reinstating the
jury verdict, namely the defamatory character of the
article and proof of falsity.
pendent review of the whole record under the mandate recently
reaffirmed by the Supreme Court in Bose in conjunction with
the established rule for awarding a judgment n.o.v. While
fully embracing the independent review standard, the dissent
ignores the important fact that we are reviewing a jury ver-
dict set aside by a judgment n.o.v. This is revealed in the
dissent’s curious and frequent citations to the “findings” of
the trial judge and the dissent’s suggestions that those “find-
ings” somehow control our review. See e.g., Dissent at 16,
17, 18, 27, 28, 32, 36, 38-40. The dissent thus takes two
wholly contradictory positions. It is precisely because this
court is independently reviewing, the whole record that it
cannot be bound by any “findings” of the trial judge where,
as in this case, the case was tried to a jury, not to the trial
court. The trial judge reviewed the evidence once. Now this
court must undertake anew that same review independently
_ of the review already conducted by the district court judge.
- To be bound in the manner suggested by the dissent would
“cabin” our review and render it meaningless, see Dissent at
6, requiring of this court the impossible task of independent
review while still being bound by the district court’s findings
in support of the judgment n.o.v. Thus the standard of review
the dissent proposes is impossible to follow: it contradicts
not only Supreme Court precedent, but itself as well, and could
not be followed without espousing the most blatant solecisms.
q
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i
*
7
f
3
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Panel Majority
III. DEFAMATION AND FALSITY
1. Defamatory Character of the November 30 Article
Statements do not constitute actionable defamation
merely because they are false. They must be demon-
strated to be dafamatory to the plaintiff. As the district
court instructed the jury, consistent with the standard
in the District of Columbia, a publication is defamatory
if it “tends to injure plaintiff in his trade, profession,
or community standing, or lower him in the estimation
of the community or subject him to scorn, ridicule,
shame, contempt or embarrasment” (Tr. 4548). See
Afro-American Publishing Co. v. Jaffee, 366 F.2d 649,
654 (D.C. Cir. 1966). The Supreme Court has instructed
us that “[a] publication claimed to be defamatory must
be read and construed in the sense in which the readers
to whom it is addressed would ordinarily understand it.”
Washington Post Co. v. Chaloner, 250 U.S. 290, 293
(1919). It is clear that while we must consider each
portion of the article specified in the complaint, the
words should not be considered in isolation; they must
be ascribed their plain and natural meaning in the con-
text of the article as a whole. In addition to the plain
text, we consider what the article conveys through its
structure, implications, and connotations.
The theme of the Post article here is expressed in its
headline—“Mobil Chief Sets Up Son In Venture” and
in the lead paragraph—“Mobil Oil Corp. president Wil-
liam P. Tavoulareas set up his son five years ago as a
partner in a London-based shipping management firm
that has since done millions of dollars in business operat-.
ing Mobil-owned ships under exclusive, no-bid contracts.”
See Appendix. William Tavoulareas maintains that the
article reasonably implies that he breached his fiduciary
duties to Mobil, that he wasted and misused Mobil as-
sets, and that he wrongfully directed those assets to his
son Peter for his benefit (Tr. 4550). The Post attempts
to trivialize the import of the phrase “set up” and argues
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Panel Majority
that it was “just a simple way of describing how some-
thing came to be.” Brief of Post at 39.
The district court, in ruling on the motion for judg-
ment n.o.v., concluded that the term “set up” “may not
be the most felicitous choice of vocabulary that could
have been used to describe the situation but ... it can-
not be said that it was a lie or a reckless untruth.” 567
F. Supp. at 659. The court similarly rejected, as unrea-
sonable as a matter of law, the conclusion that the article
implied that William Tavoulareas put together the whole
Mobil-Atlas-Samarco arrangement solely for the sake of
his son. Id. at 660. The November 30 article, the court
said, also does not impliedly accuse Tavoulareas of mis-
using Mobil assets. Id.
We conclude that the district court was in error and
hold that both the phrase “set up,” in the context used,
and the article in general, defame William Tavoulareas.”
Notwithstanding the fact that some statements in the
article may imply that Mobil’s involvement with Atlas was
purportedly justified on legitimate business grounds, the
article could reasonably be read to suggest that William
Tavoulareas became involved with Atlas-Samarco pri-
marily to benefit his son. Certainly, this was the inter-
pretation that Post editors Peterson and Tyler gave the
article.21_ Such interpretation by the jury would be
20 At trial William Tavoulareas presented evidence that his
previous reputation for honesty, integrity, and fair dealing
(Tr. 1510-13, 1947-48) was injured by the November 380 arti-
cle by introducing additional defamatory publications spurred
by its publication (Tr. 1977-84, 1995-2018, 2037, 2139-54).
21 Peterson interpreted the article to charge Atlas was “a
$680,00 [sic]-a-year plaything for an indulged son” and in
reacting to the article wrote that “‘[i]t’s impossible to believe
that [William] Tavoulareas alone could put together such a
scheme for the sake of his son’s business career” (J.A. 2486).
Tyler’s responsive memorandum stated :
Our story does show that Mobil’s decisions in this case
were not made for the traditional business reasons, or
¢
3
3
)
AS7
Panel Majority
wholly justified since in this case the article would have
little or no news value if it merely intended to report
a legitimate business act. At a minimum, the article
implies that, irrespective of the motivation for creating
the Mobil-Atlas-Samarco relationship, William misused
Mobil assets and his position as president to advance his
allegedly undeserving son—an act of corporate nepotism.
Indeed, this interpretation of alleged nepotism was recog-
nized by the district court as the basic theme of the
article. 567 F. Supp. at 660. The caption and lead
paragraph clearly connote this. This lead material sets
the tone of the article which is not diminished by sub-
sequent statements. On the contrary, the body of the
story lends further support to such conclusion. While
portions of the article are true, “the defamer may be the
more successful when he baits the hook with truth.”
Afro-American, 366 F.2d at 655. The article’s seem-
ingly detailed support, which gives the impression that
it states facts, lends apparent truth to its accusations.
The other statements specifically challenged as false, see
falsity discussion infra, in similar fashion contribute to
the defamatory premise of alleged nepotism.
We thus conclude that the November 30 article, in its
headline and considered as a whole, would reasonably be
understood by the average reader in the community as
being defamatory in its implication that William Ta-
voulareas was guilty of corporate nepotism, breached his
fiduciary duty to Mobil, and misused Mobil assets.
for the reasons stated by Mobil. . . . It should not seem
impossible that Mobil—which originally turned down a
chance to join Samarco—changed its mind after it dawned
on Mobil’s president that such a partnership would justify
the creation of a small management firm at a time when
Tavoulareas’ son was aspiring to such a career and was
already at work with one of the Greek shippers.
(J.A. 2489-90).
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Panel Majority
2. Falsity
As the district court properly instructed the jury, li-
ability for defamation requires, as part of the plaintiff's
case and prior to a finding of actual malice, proof of
falsity. Garrison v. Louisiana, 379 U.S. 64, 74 (1964) ;
New York Times v. Sullivan, 376 U.S. 254 (1964). Be
cause the jury returned verdicts against the Post,
Golden, and Piro in favor of William Tavoulareas, it
necessarily found that the challenged statements in the
November 30 article were false. In granting judgment
n.o.v., the trial court found that there was insufficient
proof of actual malice and thus did not consider it neces-
sary to address directly the issue of falsity. 567 F. Supp.
at 654 n.9. Tavoulareas maintains that the jury’s finding
of falsity “remains undisturbed” on appeal. Brief of
Tavoulareas at 17a-17b. The defendants, while on ap-
peal concentrating principally on the actual malice issue,
rest on a general statement “that the story was in fact
true.” Brief of Post at 18.
In the circumstances of this case, the issue of actual
malice, which is the major point on appeal, is inter-
twined with the issue of falsity of the defamatory allega-
tions, since the evidence establishing falsity, and the
degree of that evidence, overlaps with and constitutes
much of the proof of actual malice. The issue of falsity
was briefed and argued before the trial court, and con-
stitutes part of the record that we have reviewed.”* The
22 Discussion of falsity can be found, among other docu-
ments, principally in the following: Supplemental Memoran-
dum of Points and Authorities in Support of Alternative
Motions of Defendants Post and Tyler, Tavoulareas v. Wash-
ington Post Co., Civ. No. 80-3032, Doc. 367 (D.D.C. Oct. 1,
1982) ; Reply of Defendants Post and Tyler to Plaintiff’s Op-
position to Alternative Motions, id., Doc. 8377 (Nov. 23, 1982) ;
Supplemental Post-Argument Memorandum of Defendants
Post and Tyler, id., Doc. 380 (Jan. 23, 1983); Points and
Authorities in Support of Motion of Defendant Piro for Judg-
ment n.o.v., Tavoulareas v. Piro, Civ. No. 80-2387, Doc. 348
(D.D.C. Aug. 4,.1982) ; Plaintiff’s Memorandum of Points and
MOVE TAL eg Pere ae
Ce ees
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AS5S9
Panel Majority
procedural posture of this case, reviewing a grant of
judgment n.o.v., makes the question of proof of falsity
one of law. We accordingly address the falsity issue,
and our subsequent discussion of the issue in connection
with malice will implicitly expand upon the same point.
For purposes of our review we assume, without deciding,
that a showing of falsity requires clear and convincing
proof.
Conclusions to be drawn from the evidence in this case,
particularly with respect to the issues of falsity and ac-
tual malice, depend in large part on the determination
of the credibility of the principal witnesses.2* As pre-
viously detailed, we must view the evidence, with all
inferences reasonably to be drawn therefrom, in the light
most favorable to the party against whom the judgment
n.o.v. was ordered, i.e., the plaintiff. Guam Federation
of Teachers, Local 1581 v. Ysrael, 492 F.2d 438, 439-41
(9th Cir.), cert. denied, 419 U.S. 872 (1974); see dis-
cussion and cases cited in Section II supra.
On the key charge that William Tavoulareas “set up”
his son in the shipping business, the evidence of truth
is (1) Comnas’ alleged statement—as testified by Tyler—
that Comnas had taken Peter into the firm only because
William suggested it and (2) Piro’s assertion that William
had once said that he had given Peter a “nudge” to get
him into the shipping business. As to the first, William
Tavouiareas’ testimony flatly contradicted Comnas’ al-
leged accusation (Tr. 1425), as did William’s prior testi-
Authorities in Opposition to Alternative Motions of The
Washington Post and Tyler for (1) Judgment n.o.v., (2) New
Trial, or (3) Reduction in the Amount of the Judgment, id.,
-Doc. 372 (Nov. 1, 1982); Plaintiff’s Memorandum of Points
and Authorities in Opposition to Motion of Defendant Piro
for Judgment n.o.v., id., Doc. 371 (Nov. 1, 1982); Hearing
(Revised Transcript) 8-13, 62, 74-77, id. (Dec. 16, 1982).
23 See note 16 supra and accompanying text. -
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Panel Majority
mony before the SEC (J.A. 2398-2459). The defendants
at trial did not produce Comnas’ deposition testimony,
though he was their principal source relied upon for the
charges made in the article. Nothing uncovered in the
Post’s massive pretrial discovery and none of the Post’s
witnesses except defendants Piro and Tyler, provides
any basis for the charge that William “set up” Peter.
As to Piro, Golden testified that at his first meeting
with him, Piro told him that “William Tavoulareas had
set up his son in a shipping company that made him an
overnight millionaire,” or “words to that effect” (Tr.
164-65). Piro never denied he said this at that meeting,
but only denied using the words “set up” at the subse-
quent meeting at The Owl restaurant (Tr. 2897). As to
defendant Tyler, he is discussed below regarding the
“second allegation.”
As to the “nudge” statement, even if it can be con-
sidered a reference to Peter’s landing the job at Atlas
instead of his first shipping-related job at Lemos, the
jury had only Piro’s unsupported recollection of the
statement. William flatly denied ever making such a re-
mark to Piro (Tr. 13849). The jury in weighing credi-
bility obviously could accept William’s testimony over
Piro’s.
The second allegation William Tavoulareas challenges
as false is that he “personally urged” that Peter be in-
cluded as an equity partner in Atlas. The statement is
unattributed in the article. William Tavoulareas testi-
fied that he never urged that his son be included in Atlas
(Tr. 1293-94, 1296-97, 1433).%* Defendants rely on a
statement allegedly made in a conversation between Tyler
and Comnas for the truth of the statement, but the de-
24 William Tavoulareas testified that he told his superiors:
“It’s not a question of helping my son, it’s now a question of
not standing in his way. I have nothing to do with this thing.
George Comnas is asking him [Peter]” (Tr. 1293-94).
Pinar Ls. or eS
Aél1
Panei Majority
fendants never introduced Comnas’ deposition at trial.*
The conversation was received through Tyler’s testimony
(J.A. 979, 981, 1150, 2054, 2074-75, 2498, 2674, 3141,
3143, 3157), which the jury was entitled to weigh and to
credit or discredit as it deemed appropriate.** When
pressed to relay what Comnas purportedly said to him,
Tyler testified that “I don’t recall” whether Comnas said
specifically that “William personally urged him [Comnas]
to take his son into the [Atlas] operation,” but stated
only that he used “words to that effect” (J.A. 981). Piro
admitted that he had told Tyler he had “no knowledge”
of whether William Tavoulareas had requested or urged
that his son be included in Atlas (Tr. 292-93).
The district court, in discussing “actual malice,” in-
dicated that Kousi’s “nepotistic act’? comment could be
interpreted to support the “personally urged-set-up” al-
legation, 567 F. Supp. at 659. However, as to the issue
of falsity, there was no evidence that this comment was
based on personal knowledge. See note 45 infra. If the
testimony of Tavoulareas is believed and that of the de-
fendants and their witnesses disbelieved, as would have
been reasonable for the jury to have found, the allegations
are clearly false.
The third allegation in the article was that “the elder
[William] Tavoulareas [personally] dispatched . . . Her-
ma’. [sic] F. Hoffmann ... to help run Atlas.” The defend-
25 Defendants also point to a memorandum prepared by the
staff of the House Subcommittee on Energy and Power. That
memorandum, however, summarizes Comnas’ statements to
subcommittee staff members made during an interview at
Comnas’ home (J.A. 2467, 2471). Thus, its sole source of
truthfulness is Comnas.
26 Comnas’ motivation to offer Peter a position in Atlas may
not have been that William had urged it, as appellees assert
occurred, but could easily have been that Comnas hoped by do-
ing so he would curry favor with Peter’s father, as appellant
argues. This is a reasonable inference which the jury was
entitled to draw from the evidence.
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Panei Majority
ants rely on three sources for the truth of this statement:
(1) Paul Wolfe’s testimony that William Tavoulareas
“participated” in discussions where it was decided that
Hoffmann would replace Comnas (Tr. 1193); (2) Mobil’s
November 20, 1979 letter to Tyler stating that William
Tavoulareas was involved in Comnas’ departure (J.A.
2345 (Plaintiffs’ Ex. 23)) (presumably, as defend-
ants urge, “to open the door” for Hoffmann’s arrival) ;
and (3) Piro’s testimony that he had overheard Tavoula-
reas state to Mobil Vice-President Checket “that he [Ta-
voulareas] had sent Harmon Hoffmann over to Atlas af-
ter Comnas had left” (Tr. 3720-21). The first two of
these do not represent a clear assertion that Tavoulareas
had any personal hand in deciding that Hoffmann would
be dispatched, and are at best very weak circumstantial
evidence to that effect. William Tavoulareas testified that
he did not personally send Hoffmann to Atlas (Tr. 1440).
Paul Wolfe testified that it was he who recommended to
Mobil Chairman Rawleigh Warner (in the presence of
William Tavoulareas) that Comnas be replaced (Tr.
1069, 1070, 1098, 1186).**7 Checket denied that the al-
leged conversation between himself and Tavoulareas ever
took place (J.A. 1844-48). Again, if the testimony of
Tavoulareas, Wolfe or Checket is believed, which we
conclude reasonable inferences from the record permitted
the jury to find, the statement that Tavoulareas per-
sonally dispatched Hoffmann is false.**
27 Questioning of Paul Wolfe included the following:
Q. Mr. Wolfe, if anyone dispatched Harmon Hoffmann
to London to help with Atlas, who did it?
A. Idid.
(Tr. 1098).
28 Tavoulareas does not deny that Mobil, qua Mobil, sent
Hoffmann to Atlas. Given the theme of the article that
William Tavoulareas personally “set up” his son, the distinc-
tion between whether Mobil or Tavoulareas personally sent
Hoffmann achieves crucial importance.
a es
To”
Se ee ee oe ee -
A63
Panei Majority
In conclusion, our review of the record reveals evi-
dence that, when resolved in the light most favorable to
the jury verdict, as it must be, demonstrates convinc-
ingly that the alleged defamatory statements in the
November 30 article are clearly false.** Additionally, our
succeeding examination of the record on the “actual
malice” question discloses further evidence which, under
our prescribed standard of review, demonstrates that the
challenged statements are clearly and convincingly false.
Rather than to duplicate that discussion here, we refer
to our actual malice discussion, infra.
IV. RECKLESS DISREGARD OF TRUTH OR FALSITY—
ACTUAL MALICE
We first note that the defendants have uniformly de-
nied that they knew what they wrote was false or that
they had serious doubts about its truthfulness. They
have testified that they honestly believed the stories were
true. The defendants argue that “[t]his unimpeached tes-
timony as to the mental elements of actual malice is
‘dispositive.’” Brief of Post at 32. The defendants’ ap-
parent claim is that actual malice can be proved only
if the reporter or editor confesses to having had actual
2° Contrary to any hints by the dissent, our conclusion as
to falsity does not “ignore” any evidence presented at trial.
For example, regarding the statements made to Tyler by
Wolfe and Kousi, and Tavoulareas’ own SEC testimony, as
explained here and as amplified infra in the actual malice
discussion, Wolfe merely confirmed that when Mobil began
to form an independent shipping company Tavoulareas was
involved in recruiting Comnas, and Kousi had no personal
knowledge to support his statement that the hiring of Peter
Tavoulareas by Comnas was a “nepotistic act.” The jury was
entitled to find that such circumstantial evidence was clearly
outweighed by William Tavoulareas’ SEC testimony, which—
far from providing evidence that he “set up” his son—denied
any role in setting up Peter, and by the testimony of the plain-
tiffs and other Mobil officers.
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doubts regarding the truthfulness of the defamatory
articles.
But courts do not labor under such unreasonable rules
regarding evidence. As the Supreme Court has noted:
The defendant in a defamation action . . . cannot
. . automatically insure a favorable verdict by
testifying that ‘the published with a belief that the
statements were true. The finder of fact must de-
termine whether the publication was indeed made in
good faith.
St. Amant, supra, 390 U.S. at 732 (emphasis added).
Hence, a defamation plaintiff is not required to accept
the word of the defendant as to his state of mind any
more than the government or a jury is required to take
the word of a criminal defendant that he lacked the in-
tent required for a criminal conviction. In any case
where the mental state of the actor is at issue, it can
be proved by the cumulation of circumstantial evidence:
[I]n attempting to meet the test the plaintiff may
rely upon “evidence of negligence, of motive and of
intent . . . for the purpose of establishing, by
cumulation and by appropriate inferences,” the req-
uisite degree of culpability. Mere statements by the
defendant of his belief in the truth of a publication
will carry the day only if they are not overridden by
evidence establishing knowing or “reckless” falsity.
R. Sack, supra, at 214 (footnotes omitted) (emphasis
added) (quoting Goldwater v. Ginzburg, 414 F.2d 324,
342 (2d Cir. 1969), cert. denied, 396 U.S. 1049 (1970) ).
Although recklessness in the defamation arena requires
a showing of subjective doubts, see St. Amant, supra,
390 U.S. at 731, it “is ordinarily inferred from objective
facts.” Washington Post Co. v. Keogh, 365 F.2d 965,
968 (D.C. Cir. 1966), cert. denied, 8385 U.S. 1011 (1967).
As the First Circuit has noted:
The subjective determination of whether [a de-
fendant] in fact entertained serious doubts as to the
pad ea re F
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truth of the statement may be proved by inference,
as it would be rare for a defendant to admit such
doubts. ... A court typically will infer actual malice
from objective facts. . . . These facts should provide
evidence of negligence, motive, and intent such that
an accumulation of the evidence and appropriate
inferences supports the existence of actual malice.
Bose Corp. v. Consumers Union of United States, 692
F.2d 189, 196 (1st Cir. 1982), aff'd, 52 U.S.L.W. 4513
(U.S. Apr. 30, 1984) (emphasis added) (citations
omitted).
The plaintiffs here attempted to demonstrate by a web
of circumstantial evidence that the defendants acted with
actual malice. Each of the major categories of evidence
will be discussed in turn, though their order of appear-
ance is not meant to reflect their relative importance.
1. The Christine Peterson Memorandum
After Tyler wrote his first story, it entered into the
Post’s editing process. During the course of that process
it was given to copy editor Christine Peterson for editing.
After reviewing the article, and prior to publication,
Peterson sent a memorandum to assignment editor Peter
Milius. The memorandum stated, in part:
I’ve read the Mobil story several times, and while
I’m impressed with the amount of work the reporter
obviously did, I’m still left with an overwhelming
sense of So What? Is there any way to give this
story of high-level nepotism a_ dollars-and-cents
angle? Did Mobil’s shareholders lose anything?
Mobil’s customers?
Parts of Tyler’s case against Tavoulareas seem tenu-
ous, and the whole—a $680,00-a-year [sic] plaything
for an indulged son, at worst—just seems like a
withered peanut in an 84” gilded shell.
A far more interesting angle, it seems to me, is
Mobil’s concern about Saudi preference shipping—a
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concern so profound that it led to the formation of
an entire dummy corporation. /t’s impossible to be-
lieve that Tavoulareas alone could put together such
a scheme for the sake of his son’s business career,
or that he would want to.
(J.A. 2486) (emphasis added}. Peterson, who at the
time was still in the employ of the Post, testified at trial
that when she used the phrase “impossible to believe”
she did not really mean that the story was “impossible
to believe’—only that she felt that “the focus of the
story should have been the formation of the company
Samarco in anticipation of preference shipping” (J.A.
1837). Peterson, as a Post employee, was an interested
witness, and the jury was entitled to evaluate her testi-
mony accordingly. It was not obliged to credit her sub-
sequent protestations that she did not really mean what
she wrote.
Not surprisingly, the district court found the interpre-
tation offered by the defendants to be “strained.” 567
F. Supp. at 655. A reasonable reading of the memoran-
dum is that (1) Peterson read the article as saying that
William Tavoulareas led Mobil into the Samarco-Atlas
venture substantially as a means of benefitting his son,
and (2) she found the charges in the artice, as she wrote,
“impossible to believe.” This is the district court’s inde-
pendent evaluation of the facts as set forth in the article.
*° The fact that a witness is an employee of a litigant is in
itself reason for discounting his evidence. As the Supreme
Court explained:
If the evidence is possible of contradiction in the circum-
stances; if its truthfulness, or accuracy, is open to a rea-
sonable doubt upon the facts of the case, and the interest
of the witness furnishes a proper ground for hesitating
to accept his statements, it is a necessary and just rule
that the jury should pass upon it.
Chesapeake & Ohio Ry. v. Martin, 283 U.S. 209, 218 (1931)
(employee of party as interested witness).
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The district court, relying heavily on what it felt to be
Peterson’s relatively minor role in the editing process *
and the fact that she testified that she had done no inde-
pendent research on the story, found that she was merely
“expressing her uninformed opinion that she found the
story hard to believe.” (Her actual appraisal was that
the article was “impossible to believe.”) The district
court continued:
If Ms. Peterson had investigated the article’s sub-
stance and sources and thereafter had expressed a
similar statement of doubt as to the article’s veracity,
plaintiff’s argument might prevail. Plaintiff, how-
ever, has offered no evidence to this effect. The
actual malice test focuses on the state of mind of the
author and publisher of the allegedly libelous state-
ments. Ms. Peterson’s memorandum does not show
that those who were responsible for the article’s sub-
stance entertained any doubts whatsoever about its
accuracy.
567 F.2d at 655 (emphasis added).
The district court’s conclusion, however, depends en-
tirely upon the court’s finding that copy editors at the
Post have no responsible role in preparing articles for
publication. The court’s opinion implicitly credited the
defendants’ testimony and its reasonable inferences. Yet,
the character of the Peterson memorandum and the re-
sponses it evoked within the Post organization indicate
that her job involved more than mere proofreading. It
is undisputed that copy editors are responsible for so-
8! Peterson described her job as “copy editor” as “basically
edit[ing] a story for style, punctuation, grammar, check [ing]
what facts can be checked, with source material at hand,
things like the population of the State of Utah or the area of
Lake Superior, that sort of thing.” 567 F. Supp. at 654. (In
weighing Peterson's credibility, the jury doubtless realized
that the Post defendants and their employee, Peterson, would
have an obvious motive to downplay the importance of her
job.) $
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called “style” editing (which involves control over the
.. exact language that will be used in the article) and for
checking at least some of the facts in a story. See note
31 supra. Although at trial she described her position as
having a very limited role, Peterson in her memorandum
apparently felt free to question the substance of an
article, indicate the direction it should take, and suggest
substantive changes—the sort of things that persons who
did have responsibility would do. Moreover, as we shall
see, those Post employees who unquestionably had final
responsibility for the article’s content took her comments
seriously and did not treat them as the remarks of some-
one poking in where she did not belong. Thus, it is not
clear that even Peterson’s ordinary duties gave her no
responsibility for the article’s content, and a jury reason-
ably could infer from Peterson’s memorandum and the
responses it evoked that her job was more responsible
than she claimed.*
But exclusive concentration on Peterson’s ordinary re-
sponsibilities is in any event misplaced. The Post cannot
avoid liability merely by pointing to responsibilities as-
signed in the newspaper’s organizational chart. That an
employee’s or agent’s job duties are so limited is relevant
but not dispositive. Peterson’s memorandum to Milius,
and the reaction of other editors to it, permitted the jury
to find that at least one Post editor who exercised some
responsibility for the story had a serious doubt about the
accuracy of the charge made in the article that William
Tavoulareas, as president of Mobil Oil Corporation, im-
properly used his office to “set up” his son in Atlas.**
82 This is particularly true since the net result of minimiz-
ing Peterson’s role is so obviously favorable to the defendants.
She was the only editor who recorded doubts about the arti-
cle’s accuracy; it is thus plainly in the defendants’ interest
to show her as isolated as possible from editorial responsibility.
33 Such serious doubt evidences actus! malice:
{R]Jeckless conduct is not measured by whether a rea-
sonably prudent man would have published, or would
ETRE Be Sot
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But even if the district court was correct, and Peterson
had only a minor role in the process, her memorandum
is still relevant because of the objections it raised. The
issue is not whether the memorandum alone proves
clearly and convincingly that the article was published
with actual malice; it is whether it is evidence that,
taken in conjunction with other evidence, tends to prove
that fact clearly and convincingly. It does. Peterson’s
appraisal of the story gains force from the reasonableness
of its interpretation and conclusion. Thus, looked at in
the light most favorable to the plaintiffs, the memoran-
dum indicates that, prior to publication, serious doubts
about the accuracy of the article had been voiced within
the Post’s editorial staff and communicated to those who
prepared the article. The memorandum was written to
Milius, an editor who apparently did have responsibility
for the substantive aspects of the story. Milius appar-
ently gave the Peterson memorandum enough credence to
send it to Tyler for his response. Tyler thus learned that
at least one editor doubted the correctness of his central
premise. Tyler wrote a memorandum responding to
Peterson’s which was directed to yet another Post editor,
Bill Greider, who also had authority over the substance
of the article. Though alerted to the “sensitive” nature
of the story, Greider testified that he had no “specific
recollection” of reviewing with Tyler any of his docu-
ments or notes (J.A. 1887-88, 1895-97). Thus, at the
very least, reporter Tyler and editors Milius and Greider
have investigated before publishing. There must be
sufficient evidence to permit the conclusion that the de-
fendant in fact entertained serious doubts as to the truth
of his publication. Publishing with such doubts shows
reckless disregard for truth or falsity and demonstrates
actual malice.
St. Amant v. Thompson, supra, 390 U.S. at 731.
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were aware of Peterson’s misgivings and may have recog- |
nized the merit in her analysis.
Tyler’s memorandum to Greider responded specifically
to Peterson’s statement that the story was “impossible
to believe.” He acknowledged that “[b]ecause we base a
couple of key points in the story on one source, I can see
why a good editor might say that part of our case against
Tavoulareas seems tenuous.” (Emphasis added.) But he
defended his reliance on that single sourcee—presumably
Comnas—because of the source’s “background, position
in the company and overall credibility” (J.A. 2489-90).
(As anyone with passing familiarity with the matters
here at issue would have known, Comnas’ background
was in fact checkered and his credibility highly suspect.
See section IV. 7.B. infra.) Tyler was far more concerned
with Peterson’s statement that the article was “un-
interesting” than her assertion that it was “impossible
to believe.”
In our opinion it is clear that a jury reasonably could
infer from the Peterson memorandum and its surround-
ing circumstances that (1) serious doubts were circulat-
ing within the Post’s newsroom while the article was
being prepared, (2) at least three responsible individuals
who participated in reviewing the substance of the article
(four, if Peterson’s participation is found to have been
sufficiently responsible) were aware of such doubts, and
(3) the article was published without apparent additional
investigation and without substantial change. This evi-
dence supports the conclusion that the defendants had
reason to believe that the story was false and that they
acted recklessly in publishing it.
2. The Defendants’ Motivation
The plaintiffs in this case produced evidence which,
they argue, demonstrates that (1) one defendant, Piro,
had strong personal ill-will toward the plaintiffs; (2)
:
$
3
3
:
+
}
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enthusiastic reporters Tyler and Golden were out to “get”
the elder Tavoulareas; and (3) the Post had a policy
favoring sensational expos¢s. The plaintiffs argue that
this evidence—the first two elements of which demon-
strate common law malice—provides a motive to publish
derogatory information without regard to falsity, and
hence is evidence that the defendants acted knowingly or
recklessly in publishing their falsehoods. The defendants
argue that actual malice, not common law malice, is
required in defamation cases and that the evidence of
motive is therefore irrelevant. The district court did:
not address this issue specifically in its opinion.
It is clear, as the defendants argue, that common law
malice is not the equivalent of actual malice in the defa-
mation context, and that common law malice alone will
not support a finding of actual malice. Beckley News-
papers Corp. v. Hanks, 389 U.S. 81, 82 (1967) (per
curiam); Henry v. Collins, 380 U.S. 356, 357 (1965)
(per curiam). Similarly, the mere fact that a news-
paper has a general policy favoring sensational or even
muckraking stories does not, in itself, prove that a de-
fendant acted with actual malice. Martin Marietta Corp.
v. Evening Star Newspaper Co., 417 F. Supp. 947, 959
(D.D.C. 1976). But, contrary to the assertions of the
defendants, it is equally well settled that the presence of
common law malice or evidence that a newspaper followed
a sensationalistic policy, because it provides a motive for
knowing or reckless falsehood, is evidence of actual malice.
See, e.g., Curtis Publishing Co. v. Butts, 388 U.S. 130,
169 (1967) (Warren, C.J., concurring) (defendant had
adopted a “program of ‘sophisticated muckraking,’ de-
signed to ‘provoke people, make them mad’”’) (footnote
omitted) ; Goldwater v. Ginzburg, 414 F.2d 324, 342 (2d
Cir. 1969) (“evidence of . . . motive and intent” may
help establish actual malice), cert. denied, 396 U.S. 1049
(1970); Bose Corp. v. Consumers Union of United
States, 692 F.2d 189, 196 (1st Cir. 1982) (same), aff'd,
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Panel Majority
52 U.S.L.W. 4513 (U.S. Apr. 30, 1984); Cochran v.
Indianapolis Newspapers, Inc., 175 Ind. App. 548, 560,
372 N.E.2d 1211, 1220 (1978) (desire to “get” plaintiff
is “relevant and admissible as evidence in the determi-
nation of whether defendant possessed a state of oer"
highly conducive to reckless disregard of falsity”) ;
Sack, supra, at 214 n.168 (“Although common law ac-
tual malice—spite or ill-will—is not equivalent to or
sufficient to prove constitutional ‘actual malice,’ evidence
as to the former is admissible to prove the latter.”). A
the Supreme Court of West Virginia explained:
[Wlhen [Associated Press v. Walker, 388 U.S. 130
(1967)] and Curtis are read together, they still
stand for the proposition that personal motives on
the part of a newspaper, or participation by a news-
paper in a plan or scheme to injure, is evidence of
recklessness and willful disregard for truth which
may be considered along with other evidence on the
question of actual malice.
Sprouse v. Clay Communication, Inc., 211 §$.E.2d 674,
688 (W. Va.), cert. denied, 423 U.S. 882 (1975) (em-
phasis added).
Indeed, a contrary position would appear to be wholly
irrational. The mere existence of a preconceived plan to
“get”? the subject of a defamatory story does not prove
that the publisher acted knowingly or recklessly in pub-
lishing false information. But it is beyond question that
one who is seeking to harm the subject of a story—
whether motivated by simple ill will (Cochran), or parti-
san political considerations (Sprouse), or otherwise laud-
able concern for the safety of the nation (Ginzburg), or
a mere desire to attract attention and boost circulation
(Butts)—is morely likely to publish recklessly than one
without such motive.** We turn, then, to the evidence of
the defendants’ motive to “get” the plaintiffs.
%4 The dissent rejects the idea that motive can be evidence
of actual malice when it is not an element of the tort. Dissent
q osetia Scie: hg Med
IS SRE RH SOE
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Panel Majority
Philip Piro. Piro, who had gone through a very diffi-
cult divorce from William Tavoulareas’ daughter, har-
bored strong feelings against his father-in-law. The
district court in fact found that Piro
was openly hostile to the Tavoulareas family and un-
doubtedly harbored a considerable amount of ill will
towards them. In addition, Tyler testified that he
was very skeptical about Piro’s reliability because
much of the information he supplied was inaccurate.
567 F. Supp. at 657. That finding is eminently supported
by the record.** Knowledge by the Post of Piro’s evident
personal animosity against the Tavoulareases was a cir-
cumstance, which in combination with other evidence,
was probative of a mental state conducive to the reckless
disregard of falsity.
Patrick Tyler. Reporter Tyler, unlike Piro, had little
reason for personal animus against the Tavoulareases.
The plaintiffs’ evidence purports to demonstrate that
Tyler wanted to “get” Mobil and the Tavoulareases, not
for reasons of ill will but simply for the sake of a big
story and because of Tyler’s general bias against the oil
industry. The plaintiffs rely on the following evidence:
1. Tyler, in a previous front-page story on the 1979
oil shortage (co-written with another reporter, Neumann)
allegedly had seriously misstated the response of at least
one Mobil official to Tyler’s questions. That official wrote
a letter to the editor, published a month later by the Post,
at 21 n.11. The distinction, however, is akin to that between
motive to kill (e.g., greed or hatred) and intent to kill in a
murder prosecution. They are not the same thing. The second
is an element of the crime of murder; the first is evidence
admissible to prove that element.
35 Piro’s happy laughter at the thought of William Tavoula-
reas getting fired—recorded on one of the Golden tapes—
exemplifies his ill will toward his former father-in-law. See
note 37 infra.
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Panel Majority
in which he claimed he was “astounded” at the reporters’
implication that he had been unable to offer an explana-
tion of the reason for the shortage, an implication he
called “outrageous.” ** He wrote that he “expect[ed]
more responsible reporting” than that reflected in the
story.
86 The story by Tyler and Neumann in the Post stated:
While American motorists were waiting in gasoline
lines earlier this year, U.S. oil firms were importing
9 percent more crude oil than they did in 1978.
None of the company officials offered an explanation of
how this summer’s gasoline shortage was touched off in
the face of fast-growing imports.
“We at Mobil don’t make or create gasoline lines, that’s
an industry phenomenon,” said Bonner Templeton, a vice-
president for supply and distribution.
Washington Post, Aug. 29, 1979, at 1. The story thus implies
that Templeton could offer no explanation for the perceived
phenomenon. Templeton wrote, rather angrily, to the Post:
I was astounded to read . . . that “none of the company
officials [interviewed] offered an explanation of how this
summer’s gasoline shortage was touched off in the face
of fast-growing imports.” I was astounded because I was
one of the officials interviewed, and spent an hour and a
quarter answering all of the reporters’ questions and
attempting to explain what they saw as a discrepancy. ...
Apparently, Messrs. Tyler and Neumann did not 1)
agree with or 2) understand my explanation. For what-
ever reason, they did not deem it important enough to
include in the story. But to go a step further and contend
that I did not even offer one is outrageous.
The petroleum business is a complex one, and we
don’t expect everyone to understand it. But we do expect
more responsible reporting than the assertion that we
were at a loss to explain something we had explained
in detail.
Washington Post, Sept. 26, 1979, at A-24 (letter to the editor
of Bonner Templeton).
Vi EER LSE EO ss
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Panel Majority
2. Golden’s notes show that after the initial joint in-
terview of Piro, Tyler remarked that “[i]t is not every
day you knock off one of the seven sisters” (J.A. 789).
3. During the Piro interview, Tyler asked Piro
whether “he knew of a family member who would rifle
[Tavoulareas’} safe and [x]Jerox doc[uments]” (Tr.
179). The question was referred to during one of Gold-
en’s conversations with Piro; from the tape that was
played to the jury, it appears that Piro believed that
Tyler was joking, but Golden seemed to consider that the
question was serious. Indeed, Golden later reminded Piro
that Tyler had asked him (Piro) “to commit a crime.”
Ex. 308-034801 (Side 2); (J.A. 821). Even the dissent
is struck by the “troubling” nature of this evidence.
Dissent at 26. If made seriously, which a reasonable jury
could conclude it was, this indicates that Tyler was so
interested in getting Tavoulareas or Mobil that he would
risk arranging a burglary and safe cracking, i.e., com-
miting a felony to secure evidence. This is indicative of
a very reckless state of mind and constitutes evidence of
a plan to “get” Tavoulareas; the evaluation of this testi-
mony was for the jury, who could reasonably infer the
same.
4. After Tyler saw the Peterson memorandum, which
referred to “Tyler’s case against Tavoulareas,” he wrote
his own memo to the editors, acknowledging that he could
“see why a good editor might say that part of our case
against Tavoulareas seems tenuous” (J.A. 2489) (em-
phasis added). The plaintiffs interpret this as an indi-
cation that Tyler conceived of himself as a sort of jour-
nalistic prosecutor, building a case against Tavoulareas,
not a reporter attempting to accurately report facts.
5. After the article appeared, Mobil issued a state-
ment denying the allegations in the story. Tavoulareas -
went to the Post’s office to protest and requested a re-
traction, which was refused (J.A. 1439-42). A few days
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Panei Majority
after the story appeared, Tyler talked to Golden on the
telephone; Tyler told Golden that “[t]he Post laughed
at the Mobil statement”; the Post; said Tyler, “blew
{Tavoulareas] out of the water,” and sent him “home
with his tail between his legs” (J.A. 857-58).
The evidence produced by the plaintiffs paints a picture
of a reporter who, in developing and writing what he
described as his “stor[y] of nepotism, reward without
merit and favoritism by those who wield vast amounts
of power” (J.A. 2488), knowingly adopted an adversarial
stance toward Tavoulareas. Such a mind-set, which the
jury could reasonably have found, is highly probative of
whether he acted knowingly or recklessly in writing his
falsehoods.
Sandy Golden. Golden, like Tyler, had no apparent per-
sonal animosity toward the plaintiffs. He was then work-
ing for a small suburban newspaper, and the evidence
shows that he badly wanted a job at the Post. In a
telehone interview with Piro—Golden tape-recorded it
although he expressly told Piro that he was not doing
so—he explained his motivation for the Tavoulareas
story:
Obviously, I’m trying to work myself into a job at
the Post through this story, and that’s all well and
good.
Ex. 308-034805 (Side 1). Golden expected to get some
compensation from the Post—$50 or $100—but immedi-
ate money was not his chief motivation. Jd. Rather, the
Tavoulareas story was to be his ticket to at least a Post
byline, and perhaps a Post job offer.
The Golden-Piro tapes, relevant to the issue of intent,
were played for the jury. The jury thus heard Piro and
Golden speculating about what Mobil Chairman Rawleigh
Warner would do when the story broke, and Piro’s ob-
vious pleasure at Golden’s suggestion that the elder
4 |
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Tavoulareas would be fired.*7 The jury also heard Gold-
en’s reference to a United States Senator whom Tavou-
lareas had offended as a “possible enemy” who would be
willing to “talk”:
Now, on this tape that we have just listened
to a U.S. Senator was identified as a possible enemy.
Those were your words with the words “possible
enemy’’; is that right?
A That’s correct.
Q Did you mean by that a person who had a
motive for revenge against the plaintiff, William
Tavoulareas?
A I meant somebody would have a reason to talk
about Mr. Tavoulareas, yes.
Q A reason to say bad things about Mr. Tavou-
lareas?
A Yes.
(J.A. 815.)
In sum, the evidence showed that Golden was an am-
bitious young reporter looking for his big break. He
3t GOLDEN: Why are you convinced that [Warner]
doesn’t know [about the Tavoulareas-Atlas connection] ?
PIRO: Uh, because he strikes me as such an honest
guy; a guy who’s really above suspicion, you know? And
he’s not a greedy guy at all, you know? He’s nice guy. |
GOLDEN: What do you think’s gonna happen if in
fact he doesn’t know?
PIRO: I don’t know; that’s pure speculation. But [
know that if I was in his position I probably wouldn’t be
very happy. (Laughs.)
GOLDEN: Yeah.
PIRO: What do you think, Sandy?
GOLDEN: Oh, I think he’s gonna have to... get
rid of your father-in-law.
PIRO: (Laughs.)
GOLDEN: I think he’s gonna have to worry about
the... stock market, too.
Ex. 308-034801 (Side 1).
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Panel Majority
was anxious to take part in a “major” investigative
story and to earn a Post byline. His willingness to en-
gage in activities that are, at best, highly questionable
(e.g. surreptitiously recording Piro’s conversations and
playing them back to third parties) and the almost ex-
clusive focus of his investigation on “enemies” (e.g., Piro
and Stockton) who would tend to be biased sources for
the story, is evidence that his primary motive in working
on the story was to get a byline on a Post story. As dis-
cussed above, such evidence of motive has considerable
bearing on whether or not he acted with actual malice.
The Post. The Post is a newspaper which seeks, among
other things, hard-hitting investigative stories. Robert
Woodward, its Assistant Managing Editor at all times
relevant to this case, testified that he regularly con-
ducted staff meetings at which he “describe[d] the kind
of stories [he] was looking for’:
Q. Did you tell them you were looking for stories
that would go on the front page, big, significant
stories?
A. Not all significant stories go on the front
page. I tried to describe the kind of coverage we
should have and how we should direct our efforts,
yes, sir.
Q. Did you tell them you were looking for stories
with impact?
A. Not precisely that word.
Q. In any of these discussions did you ever use
a term such as “I’m looking for something called a
holy shit story’?
A. Yes,Idid....
(J.A. 2176.) What Woodward meant in exhorting his
reporters to come up with the “holy shit” stories is not
exactly clear, but a reasonable inference is that Wood-
ward, as editor, wanted from his reporters the same kind
of stories on which he built his own reputation: high-
impact investigative stories of wrongdoing.*® During
88 It seems likely that to most hearers, this phrase would
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these meetings with reporters, Woodward also tried to
imbue them with the same spirit to which he attributed
his success:
Q. .. . Have you attempted to communicate
some of the experiences and perhaps values that you
had in your years as a reporter to those working for
you after you became assistant managing editor?
A. aay.
Q. Did you once describe your approach to being
a reporter with words like, “I guess you have to have
a compulsive need to succeed. You have to be in-
secure and to want desperately to please your boss’’?
A. Yes, I did.
(J.A. 2178.) From Woodward’s testimony it was proper
for the jurors to infer that the Post put some pressure
on its reporters to come up with “holy shit” stories—a
category into which the Tavoulareas story (described by
Peterson as one of “high-level nepotism” in the corporate
context) presumably fit. Regardless of whether one
chooses to characterize this policy as conducive to “hard
hiting investigative journalism,” or (to borrow Chief
Justice Warren’s description of the policy of The Satur-
day Evening Post in Butts) “sophisticated muckraking,”
it certainly is relevant to the inquiry of whether a news-
startle readers, i.e., might make them exclaim involuntarily.
Woodward explained that he actually used the phrase to de-
scribe stories that were merely “[u]nusual, and perhaps
surprising, and relevant and of consequence” (J.A. 2178)—
i.€., a8 a virtual synonym for “newsworthy.” To an ordinary
observer, however, the phrase would connote an article with
more extreme charges than the ordinary run of front-page
fare. The jury, which was able to observe Woodward’s de-
meanor throughout his testimony, was not required to believe
his explanation of what he meant by using a particular
phrase—particularly when that explanation is not the most
likely inference.
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Panel Majority
paper’s employees acted in reckless disregard of whether
a statement is false or not.”
3. Resolution of Inferences Adverse to the Plaintiffs
It is settled that in a situation where the facts are
ambiguous, the mere selection of the most damaging in-
ference by the reporter does not, alone, indicate actual
malice. In Time, Inc. v. Pape, 401 U.S. 279 (1971), the
Court held that Time magazine’s resolution of one such
ambiguity in the light most damaging to the plaintiff did
not amount to actual malice:
Time’s omission of the word “alleged” amounted
to the adoption of one_of_a number of possible
rational interpretations of a document that bristled
with ambiguities. The deliberate choice of such an
interpretation, though arguably reflecting a miscon-
ception, was not enough to create a jury issue of
“malice” under New York Times.
Id. at 290 (emphasis added). As stated by the Court,
this holding makes obvious sense; since the focus of the
malice inquiry is subjective, not objective, the mere selec-
tion of a single damaging inference is ordinarily not
sufficient to prove actual malice. The question is whether
the reporter believed that the selected inference was true.
The defendants argue from Pape that the consistent
selection of the inferences most damaging to the Tavou-
lareases would be irrelevant to the issue of actual malice.
3° We obviously are not suggesting that there is something
wrong with aggressive investigative reporting, especially
where public corporations or public officials are involved.
The exposure of wrongdoing by individuals, and especially by
public individuals, is one of the highest functions of the press
in our society. Newspapers provide a vital service by acting
as watchdog for the public. This interest is protected by The
New York Times actual malice standard. It is not further
protected by requiring the jury to blind itself to evidence of
editorial pressure for sensationalistic stories.
TAR i AEN
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Panel Majority
Brief of Post at 62. Such an assertion, however, is en-
tirely inconsistent with the subjective nature of the
malice inquiry. One who publishes a story containing a
damaging inference which he knows or seriously suspects
is false is not shielded by the fact that what he wrote was
objectively a reasonable inference. Certainly, a defend-
ant’s selection of a reasonable inference from among a ~
number of ambiguities, whether damaging or not, may be
evidence that he acted without malice. But a defendant’s
selection of the most damaging inference—an inference
which is, in fact, false—may be probative of a determina-
tion to incorrectly describe the plaintiff, place him in the
most damaging light, and thereby with other evidence
demonstrate a state of mind that is probative of a reck-
less disregard for truth.
Pape offers no support for the defendants’ analysis of
the editorial conduct here. The Supreme Court explicitly
stated only that choices made by reporters in the face of
ambiguities were not enough to prove actual malice—it
did not say that they were entirely irrelevant to the issue.
This conclusion is buttressed by the Fifth Circuit’s
holding in Rebozo v. Washington Post Co., 637 F.2d 375
(5th Cir.), cert. denied, 454 U.S. 964 (1981). In Rebozo,
the defendant reporter (Kessler) had written that the
plaintiff (Rebozo) had “cashed $91,500 in stolen stocks
. after he was told by an insurance investigator it
was stolen.” 637 F.2d at 377. A memorandum written |
by the reporter acknowledged that it was not entirely
clear who had actually cashed the stocks, but that one
inference was that it was Rebozo, a close friend and
associate of President Nixon. The charge that it was
Rebozo who had cashed the stocks made it a front page
story. In passing on whether summary judgment was
proper for the defendants, the court stated:
This memorandum, plus the fact that Kessler re-
solved the uncertainty expressed in it in such a way
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Panel Majority
as to cast plaintiff Rebozo in the worst possible light
and to make for Kessler a front-page story of an
episode which otherwise might not have commanded
any significant attention, when taken in a light most
favorable to Rebozo, could amount to evidence of the
reporter’s reckless disregard for the truth or falsity
of the assertion....
Id. at 382 (emphasis added).
The defendants call Rebozo “anomalous,” and argue
that its holding is “utterly inconsistent with Pape.” The
district court considered that Rebozo “is arguably in-
consistent” with Pape, and stated that “[i]n the absence
of any further guidance on the issue from this Circuit
or the Supreme Court, this Court is not prepared to con-
sider saving the verdict in this case on the basis of the
holding in Rebozo.” 567 F. Supp. at 658. This reasoning
appears rooted in two misconceptions. The first—implicit
in the opinions of the district court here and the dissent,
infra, and the briefs of the defendants—is that the plain-
tiff must have at least one piece of evidence which, by
itself, proves actual malice. This has been refuted previ-
ously. The plaintiff may clearly and convincingly prove
actual malice by a cumulation of many pieces of evidence,
no one of which, by itself, is clear and convincing.
Though “[a] brick is not a wall,” E. Cleary, Mc-
Cormick’s Handbook on the Law of Evidence § 185 (2d
ed. 1972), many bricks are.
The second misconception, which perhaps follows natu-
rally from the first, is the contention that Rebozo must
have held that deliberate slanting or consistent selection
of damaging inferences was a piece of evidence which
in and of itself would prove actual malice. But Rebozo
merely held that resolution of ambiguities in the most
damaging light “could amount to evidence of the re-
porter’s reckless disregard for the truth or falsity of the
assertion,” id. (emphasis added)—i.e., some evidence of
actual malice. Since Pape simply held it was not enough
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Panel Majority
evidence to demonstrate actual malice, the two cases are
fully consistent. There is thus no question of “saving”
the verdict solely through the logic expressed in Rebozo.
Evidence of deliberate slanting and consistent selection
of damaging inferences may constitute probative evidence
of actual malice and must be examined and evaluated,
not ignored, in conjunction with all of the other circum-
stantial evidence produced by the plaintiffs.‘
In sum, to the extent that the facts known to the de-
fendants, like those in Rebozo, were suspectible of more
than one possible interpretation, the numerous instances
in which the defendants selected the most damaging—
and most sensational—alternative is some evidence which
a jury, and an appellate court on review, can evaluate in
determining whether publication was made with reckless
disregard of whether it vas false or not.
4. Suppression of Information Favorable to the Plaintiffs
The plaintiffs also presented evidence that the defend-
ants had information which put the transactions involved
in a light more favorable to the plaintiffs and Mobil,
and which was deliberately excised or suppressed during
the writing and the editing of the story in order to
strengthen the “case against” the Tavoulareases. The
district court examined several of these pieces of in-
formation which were known to Tyler but were not
included in the story:
*° The Post argues in a footnote that Rebozo, if it applies at
all, must be limited strictly to summary judgment motions, not
judgments n.o.v. Brief of Post at 63 n.52. The two motions
are of course, distinguishable. But the Post offers no rational
explan
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