# Appendix — Tavoulareas v. Washington Post Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385019_0360%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1987 - **Citation:** 484 U.S. 870 ## 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. A2 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. | A3 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 A4 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 ee 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 | Al 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). A8 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- A9 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- Al0 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. Al2 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. Al3 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. Al4 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 Al5 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. Al6 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: A46 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 A50 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. . A52 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 A53 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 « i * 7 f 3 A55 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 A56 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). A58 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 eee" ww. 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. - A60 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. A62 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. A64 Panei Majority 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 circums [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385019_0360%3A2. Public record. Not legal advice.