Petition for Writ of Certiorari — Schuler v. McGraw-Hill Cos., Inc.

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8 705 aus 2 4 1999

No. JF std Caton

In The

SUPREME COURT OF THE UNITED STATES

October Term, 1998

ELEANOR SCHULER,

Petitioner,

vs.

THE MCGRAW-HILL COMPANIES, INC.,

including BUSINESS WEEK, an

unincorporated division or subsidiar:

of THE MCGRAW-HILL COMPANIES, INC..,

a New York Corporation, BUSINESS WEEK ONLINE,

GARY WEISS, individually and as employee of

THE MCGRAW-HILL COMPANIES, INC., and

MICHAEL SCHROEDER, individually and as

employee of THE MCGRAW-HILL COMPANIES, INC.,

Respondents.

On Petition for a Writ of Certiorari to the United States

Court of Appeals for the Tenth Circuit

PETITION FOR A WRIT OF CERTIORARI

Eleanor Schuler

Petitioner, Pro Se

2201 Spruce Needle Rd.

Rio Rancho, NM 87124

(505) 892-2189

QUESTIONS PRESENTED

Is an American Citizen’s right to protect her reputation

entitled to equal protection of the law as against media

attacks?

Can a trial court deny a citizen’s right to and demand for

a jury trial and determine matters of fact, innuendo,

insinuation, and malice, which Clearly are within the

purview of the jury to decide?

PARTIES TO THE PROCEEDING

In addition to the parties named in the caption, the

Petitioner is associated with the following entities: Printron,

Inc. and it's subsidiary Heartbeat Medical Corporation.

Respondents listed the following entities and subsidiaries

in its corporate disclosure statement: The McGraw-Hill

Companies, Inc.; CM Research, Inc.; Capital Radio Engineering

Institute, Inc. (National Radio Institute); Computer and

Communications Information Group, Inc.; DRI Europe Inc.;

International Advertising/McGraw-Hill, Inc.; J. J. Kenny

_Company, Inc. (J.J. Kenny Drake, Inc. & Kenny Services, Inc.

& Liberty Brokerage Investment Corp.); McGraw-Hill

Broadcasting Company, Inc.; McGraw-Hill Capital Corporation;

McGraw-Hill Capita!, Inc. (International Valuation Services,

Inc.); McGraw-Hill financial Publications, Inc.; McGraw-Hill

Interamericana, Inc.; McGraw-Hill International Enterprises,

Inc. (McGraw-Hill Korea, Inc. & McGraw-Hill (Malaysia)

Sdn.Bhd); McGraw-Hill New Bureaus, Inc.; McGraw-Hill

Publications Overseas Corporation; McGraw-Hill; McGraw-Hill

Real Estate, Inc.; McGraw-Hill World University, Inc.; MMS

International; Money Market Directories, Inc.; Rock-McGraw,

Inc.; S&P ComStock, Inc.; Standard & Poor's International

Ratings, Ltd.;Standard & Poor's Investment Advisory Services,

Inc.; Standard & Poor's Ltd. (Fund Research Limited);

Standard & Poor's Securities, Inc.; Tower Group International,

Inc. (Tower Group International Canada Inc.); Columbia

Administration Software Publishing Corporation; editora

McGraw-Hillde Portugal, Ltda.; Editorial Interamericana, S.A.;

Editoriales Pedagogicas Associadas, $.A.; McGraw-Hill Book

Company <ustralia Pty. Limited (McGraw-Hill Book Company

New Zealand, Pty. Limited & Standard & Poor's (Australia) Pty.

Limited); McGraw-Hill Data Services -Ireland, Ltd.; McGraw-

iii

Hill Holdings (U.K.) Limited (McGraw-Hill International (U.K.)

Limited: McGraw-Hill Information Systems Company of

Canada Limited; McGraw-Hill/Interamericana de Chile

Limitada; McGraw-Hill/Interamericana de Espana, S.A.

(Standard & Poor's Espana, S.A.); McGraw-Hill/Interamericana

de Venezuela S.A.; McGraw-Hill/Interamericana Editores, S.A.

de C.V. (Ediciones Pedagogicas, S.A. de C.V.); McGraw-Hill

/Interamericans S.A. (Editora McGraw-Hill de Espana S.A.);

McGraw-Hill Libri Italia; McGraw-Hill Ryerson Limited;

Medical China Publishing Limited; MHFSCO, Ltd; Science

Research Associates, Pty., Ltd.; Science Research Associates,

Limited; Standard & Poor's ADEF; Standard & Poor's

International, $.A.; Standard & Poor's AB; Standard & Poor's

S.A. de C.V.; Tata McGraw-Hill Publishing Company Private

PETITION T F

QUESTIONS PRESENTED ............ i

PARTIES TO THE PROCEEDING ...... ii

TABLE OF AUTHORITIES ........... v

CRPRPITOD EAP vec ccessedascccss 1

STATEMENT OF JURISDICTION ...... 1

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED .......... 1

STATEMENT OF THE CASE ......... 2

REASONS FOR GRANTING THE WRIT 3

MME Kees tnesuadicdsansden 6

TABLE OF OR

Statute/Case Page

FEDERAL STATUTES and RULES

U.S. Const., Amend. VII ......---+--eeeeeeee 2,4 &5

U.S. Const., Amend. XIV, §1....----+eeee creer 1

2B U.S.C. § 12541) «0. ec cece reece eeecceccces 1

Fed.R.Civ.P. 12(b)(6) ...--- cere e reece reece: 2&3

Fed. R.Civ.P. 38(a) 0... - eee c cere cree eecees 2,4&5

FEDERAL CASES

Innovative Digital Equip., Inc., v. Quantum Tech.,

Inc., 597 F. Supp. 983, 988 (N.D. Ohio 1984) ..... 4

Rosenblatt v. Baer, 383 U.S. 75, 92-94 (1966) ....-- 3

NEW MEXICO AUTHORITIES

N.M. UJI § 13-1004 ....-2--eecceccrecreecrceee 3

OTHER AUTHORITIES

L. Eldridge, The Law of Defamation § 53,

pp. 293-94 CIDE) coc oii vee w esc e ccs sce enss 3

Petitioner Eleanor ‘schuler respectfully requests that a

writ of certiorari be issued to review the judgment of the United

States Court of Appeals for the Tenth Circuit in this case.

OPINIONS BELOW

The opinion of the United States Court of Appeals for

the Tenth Circuit in Schuler v. McGraw-Hill Companies, Inc.,

et. al., No. 97-2225, was not published, but can be found in

Petitioner’s Appendix (Appendix), pp.3-7. The opinion of the

United States District Court for the District of New Mexico in

Schuler v. McGraw-Hill Companies, Inc., et. al., CTV No. 96-

0292 SC/RLP also was not published, but can be found in

Petitioner’s Appendix pages 10-34.

STATEMENT OF JURISDICTION

The judgment of the United States Court of Appeals for

the Tenth Circuit (Tenth Circuit) was entered on April 22, 1998.

(App. at 3-7). The Tenth Circuit denied a timely petition for

rehearing on May 27, 1998. (App. at 8-9). This Court has

jurisdiction of this matter under 28 U.S.C. § 1254(1).

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

The United States Constitution, Amendment XIV,

Section 1 states in relevant part:

No State shall make or enforce any law which

shall abridge the privileges or immunities of citizens of

the United States; nor shall any State deprive any person

of life, liberty, or property, without due process of law;

nor deny to any person within its jurisdiction the equal

protection of the laws.

The United States Constitution, Amendment VII, states

in relevant part: “In Suits at common law, where the value in

controversy shall exceed twenty dollars, the right of trial by jury

shall be preserved[.]”

Federal Rule of Civil Procedure 38(a) provides:

The right of trial by jury as declared by the Seventh

Amendment to the Constitution or as given by statute of

the United States shall be preserved to the parties

inviolate.

Federal Rule of Civil Procedure 12(b)(6) provides in

relevant part:

[A] motion asserting the defense numbered (6)

to dismiss for failure of the pleading to state a claim

upon which relief can be granted . . . shall be treated as

one for summary judgment and disposed of as provided

in Rule 56, and all parties shall be given reasonable

opportunity to present all material made pertinent to

such a motion by Rule 56.

STATEMENT OF THE CASE

The central issue in this case is whether a private

person’s right to protect her reputation is entitled to equal

protection of the law. Related issues include whether and under

what circumstances the media are accountable for disseminating

defamatory information and destroying every aspect of

American citizens’ personal, business and private lives. The

issues arose as a result of Respondents’ publication of a four (4)

page Business Week magazine article, also published on the

“world-wide web,” which falsely portrayed Ms. Schuler as

having concealed her past medical, business, and personal

history (which included service as a double agent for the United

States and a sex-change) and which falsely stated that she

should have disclosed such matters in securities disclosure

documents.

REASONS FOR GRANTING THE WRIT

THE PETITION SHOULD BE GRANTED

BECAUSE THE OPINION BELOW

CONFLICTS WITH PETITIONER’S

CONSTITUTIONAL RIGHT TO EQUAL

PROTECTION OF THE LAW

Ms. Schuler’s right to protect her reputation is a

fundamental and indispensable part of the United States’

Constitution. That right is entitled to equal protection under the

law and is not to be destroyed by a media intent on selling

magazines at any cost. Rosenblatt v. Baer, 383 U.S. 75, 92-94

(1966); L. Eldridge, The Law of Defamation § 53, pp. 293-94

(1978). The decisions of the lower courts have permitted

Respondents to defile the United States Constitution, and with

it, the reputation of Ms. Schuler.

Respondents moved to dismiss Ms. Schuler’s claims

under Federal Rule of Civil Procedure 12(b)(6). In determining

such a motion, the courts below were bound by law to view Ms.

Schuler’s Amended Complaint for Damages as true, as a whole

and in the light most favorable to her. Innovative Digital

Equip., Inc., v. Quantum Tech., Inc., 597 F. Supp. 983, 988

(N.D. Ohio 1984); N.M. UJI § 13-1004. (App. at 35-56).

A fair and reasonable reading of the article directly

conflicts with the lower courts’ determination in this case. Any

person reading the article is left with a very negative, false, and

defamatory impression of Ms. Schuler. (App. at id.). The

article’s discussion of consent decrees inflated them to the level

of major criminal events when, in fact, such matters were

virtually insignificant in this context. Ms. Schuler’s unique and

extraordinary personal history as patriotic double agent against

soviet spies, entrepreneur, and her sex-change were falsely

characterized as instruments of deception and criminality. The

article’s obsession with Schuler’s sex, gender and medical sex-

change, mentioned over twenty (20) times in the article,

exemplifies Respondents’ sensationalization of Schuler in an

attempt to “shock” its audience into buying its magazines.

Respondents’ behavior should not be allowed to stand

as an example permitting the media to erode and destroy the

lives of American citizens for mere entertainment value or as a

tool to sell its wares. The Supreme Court is in the unique

position of being able to correct and regulate media behavior

such as that exhibited by Respondents, and to reverse the tabloid

trend in modern media communications.

At every stage of these proceedings the lower ccurts

have placed Respondents’ interests above those of Ms. Schuler.

To date, she has not received a hearing in this matter and has

not been permitted to discover any information from

Respondents. In other words, she has not been accorded an

equal right to protect her reputation, as required by law. (App.

at 85-136). The Petition should be granted so that the Court

can affirm the sacred ard fundamental importance of a private

person’s reputation and to establish boundaries of media abuse

o* such persons.

IL.

THE PETITION SHOULD BE GRANTED

BECAUSE THE OPINION BELOW

CONFLICTS WITH PETITIONER’S

CONSTITUTIONAL RIGHT TO A JURY

TRIAL AND TO HAVE A FACT FINDER

DETERMINE ISSUES

As noted above, the courts below failed to view Ms.

Schuler’s claims as true in the evidence in the light most

favorable to Ms. Schuler and decided matters of fact, innuendo,

insinuation, and malice, instead of letting the jury decide such

matters. Ms. Schuler’s briefs describe in detail the merits of her

claims and the lower courts’ failure to let a jury determine

factual matters. (App. at 57-84, 85-136, 137-168).

Ms. Schuler’s right to have a jury determine the facts in

her case is inviolate and may not be denied by the lower courts.

U.S. Const. Amend. VII; Fed. R. Civ. Pro. 38(a). At every

stage of these proceedings the lower courts have failed to

construe pleadings and law in Ms. Schuler’s favor and have

failed to give her a fair or reasonable opportunity to pursue her

claims. By granting this Writ, the Court will affirm the right to

jury trial guaranteed to American citizens and will restore the

importance and significance of that right as it relates to

protection of one’s reputation. Also, the Court will further

define the media’s boundaries with regard to private American

citizens.

CONCLUSION

This case presents a question of the utmost importance -

whether the right to protect one’s reputation against defamation

has any meaning when that reputation is destroyed by a

multinational media corporate entity. The behavior of modern

media has become increasingly hostile, malicious, reckless and

powerful. Multinational media entities such as Respondents

now command great wealth and have come to believe that they

are above the law. By granting certiorari, the Court can correct

this false impression and reinforce the notion that even

Respondents must follow the law.

By granting certiorari, the Court also will be able to

establish recognizable boundaries with regard to media

communications about private persons and clear penalties for

violation of those boundaries, particularly as such

communications relate to similarly situated citizens. For far too

long now, the media have abused the privileges of the First

Amendment at the expense of American citizens. Tabloid

sensationalism has replaced once reputable journalism and have

become the norm. The founding fathers did not intend for the

United States Constitution to be used as an excuse for the media

to defame and ruin the lives of American citizens and the Court

can prevent such a result by accepting certiorari of this case.

By taking a fresh look at the present day media and its

slash and burn behavior with regard to private citizens. By

doing so, the Court will be able to reexamine and alter media

boundaries to coincide with present day technology and its

ability to disseminate false and defamatory information

worldwide and in record time.

Ms. Schuler’s extraordinary personal history has made

her the subject of bias, prejudice, fear, and misunderstanding.

The lower courts’ treatment of her case exemplifies the impact

of such biases or preconceptions and reflects serious rank

prejudice due to Ms. Schuler’s unique past. Ms. Schuler has

been denied equal protection of the law and her right to have a

jury determine the issues in her case. Meanwhile, Respondents’

loathsome behavior is allowed to continue. By granting

certiorari, this Court can restore justice and establish fair and

reasonable limits on media communications which coincide with

technological advances in spreading such communications. Also

a grant of certiorari will allow the Court to correct the lower

court opinions which do not coincide with Ms. Schuler’s

constitutional rights or with a fair and reasonable reading of the

subject article. Accordingly, Petitioner respectfully requests that

the Court grant her Petition for Writ of Certiorari and such

other relief the Court deems proper.

Respectfully submitted,

Beane Glo,

Eleanor Schuler

Petitioner, Pro Se

2201 Spruce Needle Rd.

Rio Rancho, NM 87124

(505) 892-2189

a ee

App. 1

No.

In The

SUPREME COURT OF THE UNITED STATES

October Term, 1998

ELEANOR SCHULER,

Petitioner,

VS.

THE MCGRAW-HILL COMPANIES, INC.,

including BUSINESS WEEK, an

unincorporated division or subsidiary

of THE MCGRAW-HILL COMPANIES, INC.,

a New York Corporation, BUSINESS WEEK ONLINE,

GARY WEISS, individually and as employee of

THE MCGRAW-HILL COMPANIES, INC., and

MICHAEL SCHROEDER, individually and as

employee of THE MCGRAW-HILL COMPANIES, INC.,

Respondents.

On Petition for a Writ of Certiorari to the United States

Court of Appeals for the Tenth Circuit

APPENDIX _

Eleanor Schuler

Petitioner, Pro Se

2201 Spruce Needle Rd.

Rio Rancho, NM 87124

_(505) 892-2189

App. 2

APPENDIX INDEX

App.

Description of Document Pages

ORDER AND JUDGMENT........... 3-7

I ac hs ee eon ss ce 8-9

MEMORANDUM OPINION AND

(2) SUMS ORE ter ae rer Deere 10-33

ORDER OF DISMISSAL ........... . 34

AMENDED COMPLAINT FOR

DAMAGES (Exhibits omitted. See

Lodging for Exhibit of the offending

MOS Ve8 Faas ee a is 35-56

PLAINTIFF'S RESPONSE TO

MOTION TO DISMISS ........ 57-84

APPELLANT’S OPENING BRIEF

(exhibits omitted) .............. 85-136

APPELLANT’S REPLY BRIEF... . 137-168

App. 3

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

ELEANOR SCHULER,

Plaintiff- Appellant,

v. No. 97-2225

(D.C. No. CIV-96-292-SC)

THE MCGRAW-HILL (D.N.M.)

COMPANIES, INC., (Filed April 22, 1998)

BUSINESS WEEK, a part of or

subsidiary of McGraw-Hill Inc., a

New York corporation doing

business in New Mexico;

BUSINESS WEEK ONLINE;

GARY WEISS AND MICHAEL

SCHROEDER, individually and as

employees of The McGraw-Hill

Companies, Inc.,

Defendants-Appellees.

ORDER AND JUDGEMENT *

Before BRORBY, BARRETT and BRISCOE, Circuit

Judges.

law of the case, res judicata, and collateral estoppel. The court generally disfavors

the citation of orders and judgements; nevertheless, an order and judgment may be

cited under the terms and conditions of 10th Cir. R. 36.3.

App. 4

After examining the briefs and appellate record, this

panel has determined unanimeusly that oral argument would not

_ materially assist the determination of this appeal. See Fed. R.

App. P. 34(a); 10th Cir. R. 34.1.9. The case is therefore

ordered submitted without oral argument, and appellant's

request for oral argument is denied.

Plaintiff Eleanor Schuler brought this action alleging

defamation and other torts relating to defendants’ publication in

Business Week magazine in September 1994 of an article

entitled "Did the Amex Turn a Blind eye to a ‘showcase’

Stock?". The article was subtitled, "The Bizarre Printron Case

Shows the Exchange Too Often Ignores the Most Glaring Signs

of Trouble," and it discusses the American Stock Exchange's

("Amex") listing of small companies on its Emerging Company

Marketplace ("ECM"). The article focuses on Printron, Inc., an

Albuquerque company of which Plaintiff had been chairman and

chief executive officer. As it relates to plaintiff, the district

court aptly summarized the article as follows:

The article refers to Plaintiff's status as a

transsexual and it treats certain aspects of her

life when she was a man known as John

Huminik, Jr. The article also examines Plaintiff's

involvement in two lawsuits filed against her by

the Securities and Exchange Commission

("SEC"). One of the lawsuits was filed against

Plaintiff in the mid-1970s when she was John

Huminik; the other was filed against Plaintiff in

1991 when she was Eleanor Schuler, that is,

after her sex change. Both lawsuits were

resolved by injunctions barring Plaintiff from

App. 5

committing future securities law violations. In

both cases, Plaintiff neither admitted nor denied

the allegations against her; however, she signed

consent decrees agreeing to entry of the

permanent injunctions.

After Printron was listed on the ECM,

the value of its stock plummeted from fourteen

dollars ($14.00) per share to twenty-two cents

($.22) per share. The article criticizes the Amex

for failing to screen companies properly before

isting them on the ECM. In addition, the article

criticizes Printron for failing to reveal to

investors Plaintiffs involvement in the SEC

lawsuit filed against her when she was a man.

The article raises the question of why Schuler

received such lenient treatment in the 1991

lawsuit, and the article speculates that perhaps

the SEC did not know that Huminik and Schuler

were the same person.

Schuler v. McGraw-Hill Cos., __ F. Supp. __, No. CIV. 96-

292 SC/RLP, 1997 WL 809755, at *1-2 (D.N.M. June 11,

1997).

Plaintiff filed this action asserting claims for defamation;

invasion of privacy through false light, publication of private

facts and intrusion; intentional infliction of emotional distress;

interference with contractual and prospective business relations,

and prima facie tort. She contends generally that the article

defamed her by stating or implying that she was dishonest and

deceptive, that she underwent her sex change to conceal her

past, and that she concealed ber sex change and prior SEC

problems from the Amex, investors and the SEC.

App. 6

On defendants’ motion pursuant to Fed. R. Civ P.

12(b)(6), the district court dismissed the complaint. The court

concluded that the article did not include any false statements of

fact ou which to base the defamation or false light claims. The

court rejected plaintiffs claim for publication of private facts

because her sex and name change had previously been discussed

in magazine and newspaper articles. It concluded that because

the article did not contain defamatory falsehoods or other

indication of outrageous conduct, plaintiff did not state a claim

for intentional infliction of emotional distress. The court also

held that because her interference with business relations claims

were premised on her claims for defamation, invasion of privacy

an infliction of emotional distress which had failed, these claims

should fail as well. Finally, the court concluded that plaintiff

abandoned her intrusion and prima facie tort claims, and in any

event, her allegations did not state valid claims. Plaintiff appeals

the dismissal of all claims except the latter two.

We review a district court's dismissal of a cause of action

for failure to state a claim de novo, and will uphold a dismissal

“only when it appears that the plaintiff can prove no set of facts

in support of the claims that would entitle [her] to relief,

accepting the well-pleaded allegations of the complaint as true

and construing them in the light most favorable to the plaintiff."

Yoder v. Honeywell, Inc., 104 F.3d 1215, 1224 (10th Cir.),

cert. denied, 118 S. Ct. 55 (1997). We have fully considered

plaintiffs arguments and reviewed the record, and we reject

plaintiffs contention that she stated valid claims. Therefore, for

substantially the same reasons as stated by the district court, we

affirm the district court's dismissal of her complaint.

The judgment of the district court is AFFIRMED.

App. 7

Entered for the Court

/s/

Wade Brorby

Circuit Judge

App. 8

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

ELEANOR SCHULER,

Plaintiff-Appellant,

v. No. 97-2225

(Filed May 27, 1998)

THE MCGRAW-HILL COMPANIES,

INC.; BUSINESS WEEK, a part of or

subsidiary of McGraw-Hill Inc., a New

York corporation doing business in New

Mexico; BUSINESS WEEK ONLINE;

GARY WEISS and MICHAEL

SCHROEDER, individually and as

employees of The McGraw-Hill

Defendants- Appellees

ORDER

Filed May 27, 1998

Before BRORBY, BARRETT, and BRISCOE, Circuit

Judges.

App. 9

Appellant's petition for rehearing is denied by the panel

that rendered the decision. The suggestion for rehearing en

banc was transmitted to all of the judges of the court who are in

regular active service as required by Fed. R. App. P.35. No

member of the panel and no judge in regular active service on

the court requested that the court be polled on rehearing en banc

so the suggestion for rehearing is also denied.

Entered for the Court

PATRICK FISHER, Clerk of the Court

/S/

by: Audrey Weigel

Deputy Clerk

App. 10

APPENDIX _C

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW MEXICO

ELEANOR SCHULER

Plaintiff

vs. No. Civ. 96-292 SC/RLP

(Filed June 11, 1997)

THE McGRAW-HILL

COMPANIES, INC., including

BUSINESS WEEK, an

unincorporated division or

subsidiary of THE MCGRAW-

HILL COMPANIES, INC., a New

York corporation, BUSINESS

WEEK ONLINE; GARY WEISS,

individually and as employee of the

McGRAW-HILL COMPANIES,

INC., and MICHAEL SCHROEDER,

individually and as employee of THE

McGRAW-HILL COMPANIES, iNC.,

Defendants

MEMORANDUM OPINION AND ORDER

THIS MATTER comes before the Court on Defendants’

Motion to Dismiss, filed January 6, 1997. The Court, having

considered the motion and memoranda submitted by the parties,

and being apprised of the applicable law, finds that the motion

is well taken. I shall grant the motion for the reasons set forth

App. 11

below.

I. BACKGROUND

This lawsuit arises out of an article in BUSINESS

WEEK magazine. Plaintiff avers various claims, including

defamation, invasion of privacy, interference with business

relations, intentional infliction of emotional distress, and prima

facie tort. In a Memorandum Opinion and Order filed in

October 1996, I denied Plaintiffs Motion to Remand, and I

directed Plaintiff to file an amended complaint in order to

provide Defendants a more definite statement of her defamation

claim. Plaintiff filed her First Amended Complaint, and

Defendants now seek dismissal of that complaint for its alleged

failure to state a claim upon which relief can be granted.

I. DEFENDANTS' MOTION TO DISMISS

A. Legal Standard

Granting a motion to dismiss for failure to state a claim

is "‘a harsh remedy which must be cautiously studied, not only

to effectuate the spirit of the liberal rules of pleading but also to

protect the interests of justice.’" irez V. t. of

Mental Health, 41 F. 3d 584, 586-87 (10th Cir. 1994) (quoting

v. Ci wlins, 792 F. 2d 975, 978 (10th Cir.

1986). When ruling on a 12 (b)(6) motion, I must construe the

plaintiffs complaint liberally. Swanson v. Bixler, 750 F. 2d 810,

813 (10th Cir. 1984). All of the well-pleaded allegations in the

complaint must be accepted as true. Albright v. Oliver, 114 S.

Ct. 807, 810 (1994). Conclusory allegations, however, need not

be taken as true. Swanson, 750 F. 2d at 813. All reasonable

inferences must be indulged in favor of the plaintiff.

Weatherhead v. Globe International, Inc., 832 F. 2d 1226, 1228

App. 12

(10th Cir 1987). A claim may be dismissed only when "no relief

could be granted under any set of facts that could be proved

consistent with the allegations." Hishon v. King & Spalding,

467 U.S. 69, 73 (1984).

B. Facts

The facts, for the purposes of the motion to dismiss, are

as follows. In September 1994, BUSINESS WEEK ran an

article entitled "Did the Amex Turn a Blind Eye to a ‘Showcase’

Stock?" The article's subtitle stated, "[t]he bizarre Printron case

shows the exchange shows the exchange too often ignores the

most glaring signs of trouble." The article recounts a chapter in

the story of the American Stock Exchange's ("the Amex") listing

of small companies on the Emerging Company Marketplace

("ECM"). In particular, the article focuses on Prirtron, Inc., an

Albuquerque-based company. Prior to the time the article was

published, Plaintiff had been the CEO of Printron.

The article refers to Plaintiff's status as a transsexual and

it treats certain aspects of her life when she was a man known

as John Huminik, Jr. The article also examines Plaintiffs

involvement in two lawsuits filed against her by the Securities

and Exchange Commission ("SEC"). One of the lawsuits was

filed against Plaintiff in the mid-1970s when she was John

Huminik; the other was filed against Plaintiff in 1991 when she

was Eleanor Schuler, that is, after her sex change. Both

lawsuits were resolved by injunctions barring Plaintiff from

committing future securities law violations. In both cases,

Plaintiff neither admitted nor denied the allegations against her;

however, she signed consent decrees agreeing to entry of the

permanent injunctions.

After Printron was listed on the ECM, the value of its

App. 13

stock plummeted from fourteen dollars ($14.00) per share to

twenty-two cents ($.22) per share. The article criticizes the

Amex for failing to screen companies properly before listing

them on the ECM. In addition, the article criticizes Printron for

failing to reveal to investors Plaintiff's involvement in the SEC

lawsuit filed against her when she was a man. The article raises

the question of why Schuler received such lenient treatment in

the 1991 lawsuit, and the article speculates that perhaps the

SEC did not know that Huminik and Schuler were the same

person.

C. Discussion

1. Defamation

In general, a plaintiff must prove the following elements

in order to prevail on a defamation claim: 1)-the defendant

published a defamatory communication; 2) the communication

contained a false statement of fact; 3) the communication was

concerning the plaintiff, an 4) the communication proximately

caused actual injury to the plaintiff's reputation. N.M. UJI § 13-

1002 (1997). In addition , a plaintiff must prove a certain level

of culpability on the part of the defendant. The level of

culpability that the plaintiff must prove depends upon whether

the plaintiff is considered a public figure. The question of

whether a person is a public figure is a question of law for the

court. Marchiondo v. Brown, 98 N.M. 394, 399 (1982).

If the plaintiff is a public figure, she must prove that the

defendant acted with actual malice when publishing the

defamatory communication. New York Times Co. v. Sullivan,

376 U.S. 254, 279-80 (1964). That is, a public figure must

prove that the defendant knew the statement was false, or that

the defendant acted with reckless disregard for the truth or

App. 14

falsity of the statement. Id at 280. By contrast, an ordinary

negligence standard of proof applies to a private defamation

plaintiff. Newberry v. Allied Stores, Inc., 108 N.M. 424, 429,

773 P. 2d 1231, 1236 (1989). Thus, a private defamation

plaintiff need only prove that the defendant negligently failed to

recognize the falsity of the statement.

Plaintiff alleges that she was a public figure from 1966

to 1979. She claims however, to have been a "private figure” at

all times relevant to this action. The Supreme Court has

expressly declined to decide "whether or when an individual

who was once a public figure may lose-that status by the

passage of time." Wolston v. Reader's Digest Ass'n, Inc., 443

U.S. 157, 166 n. 7 (1979). In any event, it is not necessary for

me to decide the issue. I shall assume, without deciding, that

Plaintiff is not a public figure; therefore, her claim that

Defendant's article was defamatory will be governed by an

ordinary negligence standard. If she has not stated a claim

under this standard, she would be unable to state a claim under

the more stringent "actual malice" standard.

As for the article itself, as stated above, it must be

defamatory. A statement is defamatory if "it has a tendency to

render the party about whom it is published contemptible or

ridiculous in public estimation, or expose him to public hatred

or contempt, or hinder virtuous men from associating with him."

Andrews v. Stallings, 119 N.M. 478, 482, 892 P. 2d 611, 615

(Ct. App. 1995) (citation omitted). The defamatory

communication must contain a false statement of fact. The

expression of an opinion or an idea is generally protected by the

First Amendment to the United States Constitution. Gertz v.

Robert Welch, Inc., 418 U.S. 323, 339-40 (1974); but cf.

Milkovich v. Lorain Journal Co., 497 U.S. 1, 21 (1990) (no

separate constitutional privilege for opinions apart from

App. 15

protections delineated in prior cases). However, an opinion can

be actionable "if it implies the allegation of undisclosed

defamatory facts as the basis of or the opinion." Andrews, 119

N.M. at 482, 892 p. 2d at 615 (citing RESTATEMENT

(SECOND) OF TORTS § 566 (1976)). The trial court

determines in the first instance-whether a statement is fact or

opinion, assuming the statement is unambiguously one or the

other. Marchiondo, 98 N.M. at 404, 649 P.2d at 472 (1982)

(citation omitied).

One final requirement of a defamatory communication,

as noted above, is that the communication must be concerning

the plaintiff. "The communication is concerning the plaintiff if

the person to whom it was communicated reasonably

understood that it was intended to refer to the plaintiff." N.M.

UJI § 13-1005 (1997); see alse RESTATEMENT (SECOND)

OF TORTS § 564 (1977) ("[a] defamatory communication is

made concerning the person to whom its recipient correctly, or

mistakenly but reasonably, understands that it was intended to

refer.")

With the above precepts in mind, I turn now to the

merits of Plaintiff's defamation claim. Plaintiff points to various

portions of the Business Week article which she claims are

defamatory. She distinguishes between statements which are

allegedly defamatory per se and those which are allegedly

defamatory per quod. The per se/per quod distinction “has

probably been overtaken by rulings of the United States

Supreme Court" Newberry, 108 N.M. at 429, 773 P. 2d at

1236. While the New Mexico Supreme Court has not abolished

the distinction outright, it has noted its dissatisfaction with jury

instructions incorporating the distinction. Marchiondo, 98 N.M.

at 403, 649 P. 2d at 471. Accordingly, the latest version of the

N.M. Uniform Jury Instructions does not contain any such

App. 16

distinction. See N.M. UJI § 13-1002 (1997), committee

comment (noting that, in keeping with Marchiondo, the current

instruction abolishes the per Se/per quod distinction). I,

therefore, will draw no distinction between the statements which

Plaintiff claims are actionable. Throughout the discussion which

follows, the allegedly defamatory statements will be noted in

italics.

a. “Change sex, change the past: before

becoming Printron CEO as Eleanor Schuler, John Huminik Jr.

ran two companies the SEC accused of fraud. Who knew?”

Defendants argue that this does not constitute a false

statement of fact. That the SEC accused John Huminik and two

of his companies of fraud is a true statement. Plaintiff claims

that the statement implies that Schuler changed her sex in order

to conceal an SEC filing rather than to cure her gender

dysphoria syndrome. Plaintiff also claims that the SEC knew

that Schuler and Huminik were one and the same person. The

latter contention is at least debatable, since the SEC declined to

comment during Defendants’ preparation of the article. As for

the former contention, regardless of the medical reasons for

Plaintiff's decision to change her sex, the article raises the

legitimate issue of whether Plaintiff's sex change worked to her

advantage by concealing part of her past. I agree that this is not

a false statement of fact, nor is it defamatory.

b. "Did the Amex turn a blind eye toa

‘Showcase’ stock?”

Defendants argue that this is a question , not a statement

of fact. I agree. Plaintiff argues that the question insinuates

wrongdoing on her part. However, taken in isolation, as well as

in the context of the rest of the article, this question is not

App. 17

concerning Plaintiff. Rather, the question implies criticism of

the stock exchange.

c. "Finance Investigations"

Defendants argue that this heading is not even a part of

the article. Instead, it merely identifies the section of the

magazine in which the article appears. This phrase does not

constitute a false stavement of fact; therefore, it cannot defame

Plaintiff.

d. "The bizarre Printron case shows the

exchange too often ignores the most glaring signs of trouble.”

Defendants argue that this statement criticizes the stock

exchange, not Plaintiff. Furthermore, it contains protected

opinions, namely that the Printron case is "bizarre" and that the

Amex "too often" ignores signs of trouble. I agree.

e. “But she didn't like to talk about that."

Plaintiff argues that this statement is defamatory because

it subjects her "to ridicule and contempt as a loyal U.S. citizen."

Plaintiffs Response to Motion to Dismiss, at 5. From the

context of the article, it appears that the statement refers to

Plaintiff's days (when she was a man) as an FBI agent battling

Soviet spies during the Cold War, about which she published a

book. Stating that Plaintiff does not like to talk about those

days is not defamatory, cven if she does like to talk about those

days. Not every falsehood stated about a person rises to the

level of defamation. Furthermore, "[aJlthough the erroneous

statement of fact is not worthy of constitutional protection, it is

nevertheless inevitable in free debate. Gertz, 418 U.S. at 340.

App. 18

f. “Checkered Record"

Defendants argue that the Constitution protects

them from incurring liability for expressing the opinion that

Plaintiff's record is "checkered." Plaintiff argues that it is for the

jury to decide whether this phrase constitutes an opinion. I find

that this phrase unambiguously states an opinion, and, as such,

is not defamatory as a matter of law.

g. "[17 ]here was a stain on her record. She had

twice been sued in Federal Court by the SEC, twice agreeing to

injunctions, without admitting or denying guilt, that prohibited

her from violating the securities laws. One of the injunctions

was known to the Amex when it approved Printon'’s listing on

the ECM. The other was not.”

Plaintiff insists that these statements are patently false

because by law, she had no duty to disclose the 1975 injunction,

and , in addition, she signed both consent decrees using the

name "Eleanor Schuler."’ Defendants counter that whether

there was a "stain" on Plaintiff's record is a matter of opinion.

Furthermore, the statement that Amex knew of one injunction

but not the other is not a statement concerning Plaintiff. Finally,

Defendants argue that the remainder of the statement is true. I

agree with Defendants. In addition, I note that the issue of

whether Plaintiff had a duty to disclose the earlier injunction is

open to legal interpretation, and the article is clear in pointing

that out.

'The first consent decree was signed late in 1975, around

the time of Plaintiffs sex change operation. The 1975 consent

decree contains Eleanor Schuler’s signature. Beneath the

signature line are the words "John Huminik, Jr., now known as

Eleanor L. Schuler."

App. 19

h. "Eleanor Schuler had two records of alleged

securities law transgressions--one as a woman, and one as a

man. In fact, the name ‘Eleanor Schuler’ was one that she had

made up out of thin air."

Plaintiff argues that this statement is false because she

signed the earlier consent decree "Eleanor Schuler.” Therefore,

she reasons, the earlier injunction was entered against Schuler

and not Huminik. However, the earlier SEC lawsuit was filed

against John Huminik. Although the consent decree is a matter

of public record, Huminik was the party of record in that

lawsuit. A search for litigation filed against "Schuler" may not

reveal the lawsuit against Huminik. Thus, the first sentence in

this statement is true, and, therefore, not defamatory.

Plaintiff argues further that her new name was not "made

up out of thin air," but, rather, was "thoroughly researched and

thought out.” Plaintiff's Response to Motion to Dismiss, at 6.

I do not think the two contentions are mutually exclusive. In

any event, it goes without saying that the names "John Huminik"

and "Eleanor Schuler" bear little resemblance to one another.

I fail to see how use of the turn of phrase “out of thin air”

defames Plaintiff.

i. "Her earlier SEC record, and her change in

gender, were concealed by Printron not only from Barnes but

from the Amex’ ‘blue ribbon’ panel of Wall Street notables that

had handpicked the 23 ECM cor-™anies. Schuler also hid her

previous identity, and the injunction, from securities regulators

in New York, in a ‘sunshine law filing 14 months before the

day the balloons fell on the Amex floor.”

Defendants argue, as to the second statement, that it is

true and is a matter of public record. Plaintiff argues that the

App. 20

statement insinuates that she lied to the SEC. It is undisputed,

however, that Plaintiff did not disclose her previous identity nor

her previous injunction in the sunshine law filing. Whether she

even had a duty to do so, as discussed above, is a matter of legal

opinion. But even if she did not have a legal duty to disclose the

fact that she formerly used another name, one could infer that

her response, “no,” to the question, "[have you] used or been

known by any other name?" constituted concealment.

Plaintiff continues to argue that she did not conceal

anything which is evident because the consent decree refers to

both names, and because her "name and sex had been changed

all the way back to her birth certificate," a public record.

Plaintiffs Response to Motion to Dismiss at 6. This argument

is not only nonresponsive, but it is irrelevant. At issue are

Plaintiff's responses in the sunshine law filing. The fact remains

that she answered "no."

As to the first statement, Defendants argue that

accusations against Printron are not concerning Plaintiff. I

agree. In the alternative, even if Plaintiff is so closely identified

with Printron that the statement does concern her, it is not a

false statement. Plaintiff does not argue that Printron did

disclose her earlier lawsuit to investors and to the Amex. To

say that both consent decrees were signed in her new name is,

as noted above, nonresponsive.

j. “And the Amex is still reeling from the ECM

imbroglio, even though its greatest embarrassment, Printron,

has never been publicly aired.”

Defendants argue that this statement expresses

constitutionally protected opinions, and, in any event, it is not

concerning Plaintiff. Plaintiff does not respond to this argument.

App. 21

I agree that this statement does not defame Plaintiff.

k. “Schuler/Huminik affair,” “the next

Huminik/Schuler exploit,” “Huminik/Schuler matter”

Plaintiff complains that these phrases suggest that she

has a multiple personality disorder or that she is "involved in a

game of hide and seek." Plaintiffs Response to Motion to

Dismiss, at 12. Defendants counter that these phrases are

convenient shorthand for referring to the matters reported in the

article. Most obviously, these phrases do not amount to false

statements of fact. Referring to Plaintiff using her current and

former names does not constitute defamation, especially

considering the subject matter of the article. Nor is it

defamatory to refer to the situation in which Plaintiff has been

involved as an "affair," "exploit," or "matter."

l. “Printron was little more than a fraud--a

‘sting,’ as the suit puts it."

Plaintiff fails to note that the article states that this is an

allegation from a lawsuit filed against Printron in United States

District Court in New York. Defendants argue that, as such, it

is protected by the fair report privilege which provides that "no

liability will attach for the republication of the defamatory

statements so long as the republication is a fair and accurate

report of an official or public proceeding." Stover v. Journal

Publishing Co., 105 N.M. 291, 294, 731 P.2d 1335, 1338 (Ct.

App. 1985). This privilege can be abused if a publisher does not

give a fair and accurate report of the proceeding. Id, 105 N.M.

at 295, 731 P.2d at 1339. Plaintiff does not argue that

Defendants have abused this privilege, nor does she respond in

any way to Defendants' argument. I find that this statement is

indeed protected by the fair report privilege.

App. 22

m. “How did Printron get past the gatekeepers

at the Amex? Could the Printron fiasco be repeated?”

Defendants argue that these are not false statements of

fact, but, rather, questions. Furthermore, they are not

concerning Plaintiff. Instead, they are critical of the stock

exchange. I agree.

n. “He was a double agent for the FBI and the

Soviet government.”

Defendants argue that this statement is true. Plaintiff

does not respond to this argument. My conclusion that this

Statement is true is supported by the fact that Plaintiff herself

wrote a book entitled Double Agent recounting her experiences

as a spy during the Cold War.

0. “As recounted in his slickly written 1997

book.”

Plaintiff complains that to describe her book as “slickly

written" is not complimentary. Plaintiff argues that even if this

statement expresses an Opinion, it is not protected because it is

based upon the existence of undisclosed defamatory facts.

However, she never bothers to identify what those "undisclosed

facts" might be. The Court is not required to guess. The term

"slick" is capable of various meanings, some complimentary, and

some insulting.’ Nonetheless, to express the opinion that

*As Justice Holmes expressed it, "[a] word is not a

crystal, transparent and unchanged, it is the skin of a living

thought and may vary greatly in color and content according to

the circumstances and the time in which it is used." Towne v.

Eisner, 245 U.S 418, 425 (1918).

App. 23

Plaintiff's book is "slick" simply does not give rise to lability.

p. "Neither the book nor the double-agent career

were mentioned in any of Printron'’s filings with investors and

regulators.”

Once again, Plaintiff falls back on her "I had no duty to

disclose" argument. That simply is not the point. Either

Printron did disclose the double agent career, or it did not.

Plaintiff does not claim that it did. Furthermore, the very next

sentence in the article states that Printron did not have a duty to

disclose such information according to SEC rules.

q. "‘we have nothing against transsexuals.’”

This is a direct quotation from the lawyer representing

an investor who sued Printron. Plaintiff does not dispute the

accuracy of the quotation. Instead she argues that the statement

insinuates “that transsexualism is a negative state of being, " and

that she had a duty to disclose her sex change in the prospectus.

Plaintiffs Response to Motion to Dismiss, at 12. Even if

Plaintiffs characterizations are accepted, such “insinuations”

would constitute protected opinions.

r. "Atissue is not her sex change, but rather the

extent to which her concealment of that change masked other

things.”

Plaintiff once again argues that she concealed nothing,

relying on the fact that the consent degree was signed in her new

name. We have covered this ground previously. The argument

is without merit.

App. 24

s. “The trouble...arises whenever Schuler's pre-

Schuler activities are mentioned in Printron's public disclosures.

Time after time, they refer to Schuler as a 'she'--even when

discussing positions held when Schuler was a “he'”.

Plaintiff argues that the reason all the Printron

disclosures use the feminine pronoun is because all of the

“documents are signed by Eleanor Schuler, a female." Plaintiff's

Response to Motion to Dismiss, at 13. It is undisputed,

however, that the first SEC lawsuit was filed against John

Huminik. In any event, Plaintiff does not dispute that the public

disclosures do, indeed use only the feminine pronoun. That is

what is at issue.

t. “Was Schuler being shy--or was she

improperly misleading investors?”

This is not a statement at all, but rather, a question.

Plaintiff argues that the question insinuates that she has faced

criminal charges. She also argues that there is no evidence to

Support an allegation that she misled investors. Plaintiff's

arguments are unavailing in the context of a defamation action.

u. “Zimmermann maintains that a previous

injunction is a ‘material event’ that must be disclosed beyond

the five-year period set by the rules.”

Zimmermann is the lawyer representing an investor who

sued Printron. He is expressing a legal opinion, which is not

actionable. And, as the article points out in the next line, a

securities lawyer questioned on the matter stated, "[i]f you ask

a dozen lawyers, you'll get a dozen answers." Amended

Complaint for Damages, Ex. 1, p.4,col. 1, q 3.

App. 25

v. “John Huminik was no longer exhibiting a

James Bond persona. ‘Marine blue shadow haloes the

eyelids...The Post went on to describe the sex change and, in

graphic detail....None of this would amount to a hill of beans

if Eleanor Schuler, as Printron CEO, hadn't fallen afoul of the

SEC.”

Plaintiff argues that the statement is false. She claims

that she has never fallen afoul of the SEC because as CEO of

Printron, she has never been sanctioned. This is irrelevant. The

SEC has filed two lawsuits against Schuler. Thus, the

characterization is a fair one. In any event, it is a matter of

opinion whether Plaintiff has “fallen afoul” of the SEC.

w. "The Huber-Schuler ties were shrugged off

by the blue-ribbon panel. ‘We were assured by the Amex Staff

that the issue had been resolved.’”

Plaintiff was brought into the company (Printron) by Mr.

Huber, who is a convicted felon and disbarred lawyer. She does

not dispute this. Instead, Plaintiff argues that the statement

implies that she and Huber were engaged in a conspiracy. She

further argues that she was not aware of Huber's past, and she

was not under an obligation to investigate. Whether she knew

anything about Mr. Huber is irrelevant. "Ties" can be attributed

to two people simply because they are employed by the same

company. There is nothing defamatory about such a term.

x. "But Hamarat and another former panel

member...now say that the panel didn't know that Eleanor

Schuler used to be John Huminik--or that Schuler consented to

not one but two injunctions by the SEC. If they had known,

they say, Printron’s listing would never have been approved.”

App. 26

Plaintiff relies on her stock argument that she did not

conceal her former identity. She does not dispute, however,

that panel members have stated they did not know that Eleanor

Schuler used to be John Huminik. Thus, there is no false

statement of fact contained within this passage.

y. “The SEC's mild treatment of Schuler in 199]

raises yet another issue: Did the SEC know in 1991 that

Schuler was Huminik?”

Quite »bviously, once again what we have here is a

question. Plaintiff insists that the answer to the question is an

affirmative one, and that the article implies that the answer is a

negative one. Plaintiff's insistence notwithstanding, Defendants’

conduct in posing the question is simply not actionable.

z. “One explanation might be that the SEC felt

so much time had passed that it would not pursue a criminal

contempt action against Schuler.”

This statement expresses a theory or idea. Plaintiff

argues that the statement insinuates that she committed criminal

acts. On the contrary, the statement speculates as to why

Schuler was allowed to sign another consent decree after she

had previously been enjoined from committing securities

violations. There are various plausible theories, but simply

advancing them, as Defendants have done here, is not

actionable.

aa. “But they are listed as two separate people,

with one ‘incident’ to his name and one to hers.”

Plaintiff fails to note that just prior to this statement, the

article explains that the National Association of Securities

App. 27

Dealers has both John Huminik and Eleanor Schuler in its

database. Plaintiff does not dispute the truth of either statement.

Rather, she falls back on the argument that she signed both

consent decrees as Eleanor Schuler. This is irrelevant to the

issue of whether the electronic database to which Defendants

refer attributes the earlier consent decree to John Huminik.

Either it does or it does not. Plaintiff does not dispute that it

does.

bb. "A NASD spokesman notes that more

detailed information, such as social security numbers, is only

maintained for NASD members--not corporate officers who fall

afoul of the SEC.”

Defendants argue that this statement is critical of the

National Association of Securities Dealers, not of Plaintiff.

Plaintiff has failed to respond to this argument. I agree with

Defendants that this statement does not defame Plaintiff.

In sum, I find that the article entitled "Did the Amex

Turn a Blind Eye to a ‘Showcase’ Stock?" published in the

September 12, 1994 edition of BUSINESS WEEK magazine,

did not defame Plaintiff. I note that although I have analyzed

each allegedly defamatory statement separately, I have

considered each statement in the context of the entire article.

Whether the statements are considered in isolation, or in

context, they do not meet the elements of defamation according

to the law of New Mexico. In regard to Plaintiff's defamation

claim, in general, it is worth recalling the words of Judge

Learned Hand. He said that the First Amendment "presupposes

that right conclusions are more likely to be gathered out of a

multitude of tongues, than through any kind of authoritative

selection. To many this is, and always will be, folly; but we have

staked upon it our all." United States v. Associated Press, 52 F.

App. 28

Supp. 362, 372 (S.D. N.Y. 1943).

2. Invasion of Privacy

Plaintiff avers three separate invasion of privacy claims:

1) false light; 2) publication of private facts; and 3) intrusion. I

shall address each in turn.

a. False Light

False light invasion of privacy is closely related to

defamation. Andrews, 119 N.M. at 492, 892 P.2d at 625.

However, in order to state a claim for false light invasion of

privacy, a plaintiff need not prove that s/he has been defamed.

Rather, ““[i]t is enough that he is given unreasonable and highly

objectionable publicity that attributes to him characteristics,

conduct or beliefs that are false, and so is placed before the

public in a false position.”” v. i . 118

N.M. 375, 383, 881 P.2d 735, 743 (Ct. App. 1994) (quoting

RESTATEMENT (SECOND) OF TORTS § 652E cmt. b, at

395). Thus, like defamation, false light invasion of privacy

requires proof of a false statement of fact. Andrews, 119 N.M.

at 492-93, 892 P.2d at 625-626.

The majority of the statements upon which Plaintiff

bases her false light claim are also relied upon to support her

defamation claim. I have considered these statements, as well

as the additional statements and photographs that allegedly

placed Plaintiff in a false light. Furthermore, I have considered

Plaintiff's arguments, which essentially mirror those she made in

support of her defamation claim. I find that Plaintiff has failed

to establish that the article contains false statements of fact

which portrayed her in a false light. Thus this claim must fall.

App. 29

b. Publication of Private Facts

"This tort involves the publication of true but intimate or

private facts about the plaintiff, such as matters concerning the

plaintiff's sexual life or health." Moore, 118 N.M. at 383, 881

P.2d at 743 (quoting RODNEY A. SMOLLA, LAW OF

DEFAMATION § 10.01[2], at 10-3). In order to be actionable,

the facts disclosed may not be public. McNutt v. New Mexico

State Tribune Co., 88 N.M. 162, 166, 538 P.2d 804, 808 (1975)

(citing PROSSER ON TORTS § 117, at 810-11 (1971)).

Plaintiff concedes that in the 1970's, she granted interviews to

THE WASHINGTON POST and PEOPLE magazine,

concerning her sex change. She argues that the purpose of

those interviews "was to inform the public about people...who

suffered from gender reversal." Plaintiffs Response to Motion

to Dismiss, at 21. She then proceeds to argue that Defendants

invaded her privacy because they published facts concerning her

sex change, "a topic...of no legitimate concern to the public."

Plaintiffs Response to Motion to Dismiss, at 22. Plaintiff

cannot have it both ways. She sought publicity at the time of

her sex change. Even if she shunned publicity several years

later, her sex change is a matter of public record. In addition, as

Defendants point out, mention of Plaintiff's sex change was not

gratuitous, but was central to the article's thesis. I find that

Plaintiff has failed to state a claim for invasion of Privacy based

on the publication of private facts.

c. Intrusion

"This tort, distinct from but related to trespass, involves

an invasion of the plaintiffs ‘private’ space or solitude--

eavesdropping on private conversations or peeping through the

bedroom window, for example." Moore, 118 N.M. at 383, 881

P.2d at 743 (quoting RODNEY A. SMOLLA, LAW OF

App. 30

DEFAMATION § 10.01[2], at 10-3). The intrusion need not be

physical RESTATEMENT (SECOND) OF TOR7S § 652B

(1977). However, the intrusion must be upun a person's

“private affairs or concerns.” Id. ‘

Defendants argue that Plaintiff has mereiy repeated her

allegations of publication of private facts, and that they do not

State a claim for intrusion. I agree. In addition, Plaintiff has

failed to respond to Defendants’ motion on this cause of action.

Therefore, she has apparently abandoned this claim.

3. Intentional Infliction of Emotional Distress

In order to prevail on a claim of intentional infliction of

emotional distress, a plaintiff must show that “defendant’s

conduct was extreme and outrageous, and was done recklessly

or with the intent to cause severe emotional distress.” Andrews,

119 N.M. at 491, 892 P.2d at 624. Extreme and outrageous

conduct goes “‘beyond all possible bounds of decency, and [is]

to be regarded as atrocious, and utterly intolerable in a civilized

community.’” Id (quoting RESTATEMENT (SECOND) OF

TORTS § 46 (1965)). As for the emotional distress inflicted, it

must be so severe that no reasonalbe person could be expected

to endure it. Dominguez v. Stone, 97 N.M. 211, 215, 638 P.2d

423, 427 (Ct. App. 1981). “It is for the court to determine, in

the first instance, whether the defendant’s conduct may

reasonably be regarded as so extreme and outrageous as to

permit recovery.” Salazar v. Furr’s, Inc., 629 F. Supp. 1403,

1411 (D. N.M. 1986) (quoting RESTATEMENT (SECOND)

OF TORTS § 46 cmt. h (1965)).

The gravamen of this claim appears to be that the article

made numerous references to Plaintiff's “sex,” “gender,” or

“transsexual” status, and that Defendants failed to “check facts”

App. 31

before publishing the article. As discussed above, the article

does not contain defamatory falsehood. Furthermore, the

references to Plaintiff’s transsexual status were highly relevant

to the central inquiry of the article. In short, there is nothing

extreme or outrageous about Defendants’ conduct.

Accordingly, their motion will be granted on this claim, as well.

4. Interference with Contractual Relations/

Prospective Advantage

In order to state a claim for tortious interference with

existing or prospective contractual relations, a plaintiff must

allege that the defendant “interfered [with contractual relations]

with an improper motive or by improper means, or acted

without justification or privilege.” Quintana v. First Interstate

Bank, 105 N.M. 784, 786, 737 P.2d 896, 898 (Ct. App. 1987)

(internal citations omitted). The defendant acts with an

“improper motive” when s/he acts solely to harm plaintiff. M&

M Rental Tools, Inc. v. Milchem, Inc., 94 N.M. 449, 454, 612

P.2d 241, 246 (Ct. App. 1980). “Improper means” include

“violence, threats or other intimidation, deceit or

misrepresentation, bribery, unfounded litigation, defamation, or

disparaging falsehood.” Id. (citation omitted). The plaintiff

bears the burden of proving that the interference was improper.

Anderson v. Dairyland Ins. Co., 97 N.M. 155, 159, 637 P.2d

837, 841 (1981). There is a somewhat more difficult burden

placed on the plaintiff who seeks to prove inteiference with

prospective advantage:

‘American courts are not as willing to protect

interests in prospective contractual relations as

they are to protect interests in existing contracts.

Where the defendant is accused of interfering

with the plaintiff's opportunity to enter into

App. 32

contracts with third persons, a strong showing

must be made that the defendant acted not from

a profit motive but from some other motive,

such as personal vengeance or spite.’

Anderson, 97 N.M. at 158, 637 P.2d at 840 (quoting J.

HENDERSON & R. PEARSON, THE TORTS PROCESS

1166 (2d ed. 1981)).

Plaintiff bases her claim for interference on the premise

that Defendants defamed her, invaded her privacy, and

intentionally inflicted emotional distress on her. I have found

that Plaintiff has failed to state a claim for either of these three

torts. Furthermore, there is simply no evidence that Defendants

acted with an improper motive or used improper means when

they published the article. In publishing the article, Defendants

were exercising their First Amendment right to freedom of the

press. I find that Plaintiff has failed to state a claim for

interference with existing or prospective contractual relations.

5. Prima Facie Tort

The elements of prima facie tort are as follows: “(1)

defendant’s lawful but intentional act; (2) defendant’s intent to

injure the plaintiff; (3) injury to the plaintiff; and (4) no

justification for defendant’s act.” Andrews, 119 N.M. at 493,

892 P.2d at 626 (citing Schmitz v. Smentowski, 109 N.M. 386,

394, 785 P.2d 726, 734 (1990)). Prima facie tort is intended “‘to

provide remedy for intentionally committed acts that do not fit

within the contours of accepted torts.” Schmitz, 109 N.M. at

396, 785 P.2d at 736. “[P]rima facie tort should not be used to

evade stringent requirements of other established doctrines of

law.” Id., 109 N.M. at 398, 785 P.2d at 738.

App. 33

Plaintiff's reliance on prima facie tort as a means of

recovery is misplaced. The conduct alleged by Plaintiff clearly

fits within the contours of several traditional torts. Plaintiff is,

then, relying on prima facie tort to evade the requirements of

these more traditional torts which is not the proper use of this

tort. In addition, Plaintiff failed to respond to Defendants

motion with regard to this claim. Thus, she has apparently

abandoned it.

NOW, THEREFORE, IT IS ORDERED that

Defendants’ Motion to Dismiss [doc. #18], filed Januray 6,

1997, should be, and hereby is, GRANTED.

/s(/Santiago E. Campos_

SENIOR UNITED STATES DISTRICT JUDGE

Counsel for Plaintiff: Donna Trujillo Dodd, Albuquerque, New

Mexico

Counsel for Defendant: William S. Dixon, Charles K. Purcell,

RODEY, DICKASON, SLOAN, AKIN & ROBB,

Albuquerque, New Mexico

App. 34

APPENDIX D

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW MEXICO

ELEANOR SCHULER,

Plaintiff,

vs. No. Civ. 96-292 SC/RLP

(Filed June 11, 1997)

THE McGRAW-HILL COMPANIES,

INC., including BUSINESS WEEK, an

unincorporated division or subsidiary of

THE McGRAW-HILL COMPANIES,

INC., a New York Corporation,

BUSINESS WEEK ONLINE, GARY

WEISS, individually and as employee of

THE McGRAW-HILL COMPANIES,

INC., and MICHAEL SCHROEDER,

individually and as employee of THE

McGRAW-HILL COMPANIES, INC.,

Defendants.

ORDER OF DISMISSAL

THE COURT, having granted Defendants’ Motion to

Dismiss in a Memorandum Opinion and Order entered

contemporaneously herewith, hereby dismisses Plaintiff's

Amended Complaint for Damages in its entirety.

Js/Santiago E. Campos

SENIOR UNITED STATES DISTRICT JUDGE

App. 35

APPENDIX E

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW MEXICO

ELEANOR SCHULER,

Plaintiff,

v. No. CIV 96-0292 SC/RLP

(Filed October 23, 1996)

THE McGRAW-HILL COMPANIES,

INC., including BUSINESS WEEK,

an unincorporated division or subsidiary

of THE McGRAW-HILL COMPANIES,

INC., a New York Corporation,

BUSINESS WEEK ONLINE, GARY

WEISS, individually and as employee of

THE McGRAW-HILL COMPANIES,

INC., and MICHAEL SCHROEDER,

individually and as employee of THE

McGRAW-HILL COMPANIES, INC.,

Defendants.

AMENDE MPL FOR DAMA

COMES NOW the Plaintiff, Eleanor Schuler, by and

through her counsel of record, Donna Trujillo Dodd, and states

the following in support of her Complaint against Defendants:

1. At all times material to this action Plaintiff was

a United States citizen and a resident of Sandoval County, New

Mexico.

App. 36

2. At all times material to this action Defendants,

The McGraw-Hill Companies, Inc., includes its unincorporated

division or subsidiary “Business Week" and Business Week

Online. Also, at all times material to this action, McGraw was

a New York Corporation duly authorized to do business in New

Mexico with its principal place of business in New York.

3. Upon information and belief, at all times material

to this action Defendant, Gary Weiss was employed by Business

Week and is believed to be a resident of New York.

4. Upon information and belief, at all times material

to this action Defendant, Michael Schroeder was employed by

Business Week and is believed to be a resident of the

Washington, D.C. Region.

5. Upon information and belief, Defendants were

engaged in the general business of investigating, editing,

researching, reviewing, publishing, producing, printing, and

distributing items including Business Week magazine in hard

copy and electronic internet form (Exhibit 2).

6. Upon information and belief Business Week

magazine publishes matters of business and financial interest.

7. All acts or omissions complained of herein

occurred within the United States, Canada and on the global

internet through Business Week Online (Exhibit 2).

8. The jurisdiction of this Court is proper under 28

U.S.C. Sections 1331, 1332, and 1343(a)(3) (1989). The

matter in controversy exceeds the sum of fifty thousand dollars

($50,000), exclusive of interest and costs.

App. 37

9. Venue is properly in this district under 28 U.S.C.

Section 1391 (1989).

10. Plaintiff, once a public figure (1966-1979),

regained the mantel of a private citizen engaged in ordinary

business. Defendants attempted to vortex Plaintiff back into the

public light.

11. At all relevant times material to this action

Plaintiff was a private figure.

12. On or about September 12, 1994, Defendants

authored, investigated, edited, researched, published, produced,

printed, and distributed an article entitled "DID THE AMEX

TURN A BLIND EYE TO A ‘SHOWCASE’ STOCK ?" A

copy of that article is attached hereto as Exhibit 1. Plaintiff s

Exhibit 2 is Business Week Online's electronic internet version.

13. The article contained the following items and

statements:

a. Photograph of Plaintiff in black and

white in contrast to all other surrounding

color photographs, accentuating Ms.

Schuler’s femininity depicting close up of

Plaintiff in social attire and social setting

and pose while other pictures of business

people are photographed in professional

business attire and professional settings.

Exhibit 1, p. 1, column 2.

b. Photograph caption "CHANGE SEX,

CHANGE THE PAST: BEFORE

BECOMING PRINTRON CEO AS

App. 38

ELEANOR SCHULER, JOHN

HUMINIK, JR. RAN TWO

COMPANIES THE SEC ACCUSED

OF FRAUD. WHO KNEW ?" Exhibit

1, p. 1, column 2.

"DID THE AMEX TURN A BLIND

EYE TO A ‘SHOWCASE’ STOCK ?"

Exhibit 1, p. 2, title.

"Finance INVESTIGATIONS" Exhibit

1, p. 2, page heading.

"The bizarre Printron case shows how

- the exchange too often ignores the most

glaring signs of trouble." Exhibit 1, p. 1,

column | (table of contents) and Exhibit

1, p. 2, subtitle.

"But she didn't like to talk about that."

Exhibit 1, p. 2, column 1, 3.

“CHECKERED RECORD." Exhibit 1,

p. 2, column 1, 4 subheading.

“there was a stain on her record. She

had twice been sued in Federal Court by

the SEC, twice agreeing to injunctions,

without admitting or denying guilt, that

prohibited her from violating the

securities laws. One of the injunctions

was known to the Amex when it

approved Printron's listing on the ECM.

The other was not." Exhibit 1, p. 2,

App. 39

column 2, ¢ 1.

"Eleanor Schuler had two records of

alleged securities law transgressions-one

as a woman, and one as a man. In fact,

the name “Eleanor Schuler’ was one that

she had made up out of thin air."

Exhibit 1, p. 2, column 2, { 2.

"Before a sex-change operation in the

late 1970s, she had used the name her

parents gave her:" Exhibit 1, p. 2,

column 2, § 2.

"Her earlier SEC record, and her change

in gender were concealed by Printron

not only from Barnes but from the

Amex' “blue ribbon' panel of Wall Street

notables that had handpicked the 23

ECM companies. Schuler also hid her

previous identity, and the injunction,

from securities regulators in New york,

in a ‘sunshine law’ filing 14 months

before the day the balloons fell on the

Amex floor (box)." Exhibit 1, p. 2,

column 2, ¥ 2-column 3, { 1.

"And the Amex is still reeling from the

ECM imbroglio, even though its greatest

embarrassment, Printron, has never been

publicly aired." Exhibit 1, p. 2, column

3, 4 2.

App. 40

Insert photographs of Plaintiff and

caption "HE DID/SHE DID:

PRINTRON'S PAST . . . The SEC may

have thought they were two separate

people." Exhibit 1, p. 2, columns 2-3.

"Schuler/Huminik affair," Exhibit 1, p. 3,

column 1, { 1.

“Printron was little more than a fraud-a

"sting," as the suit puts it," Exhibit 1,

p.3, column 2-3, { 2.

"How did Printron get past the

gatekeepers at the Amex? Could the

Printron fiasco be repeated?” Exhibit 1,

p. 3, column 3, { 1.

"A good place to address these

questions is at the very beginning-in the

story of Eleanor Schuler’s previous

manifestation, John Huminik, Jr...."

Exhibit 1, p. 3, column 3, { 2.

"He was a double agent for the FBI and

the Soviet government." Exhibit 1, p. 3,

column 3, q 3.

"As recounted in his slickly written 1967

book," Exhibit 1, p. 3, column 3, { 4.

"Neither the book nor the double-agent

career were mentioned in any of

Printron's filings with investors and

App. 41

regulators." Exhibit 1, p. 3, column 3, {

""We have nothing § against

transsexuals,"" Exhibit 1, p. 4, column 1,

q 1.

"At issue is not her sex change, but

rather the extent to which her

concealment of that change masked

other things." Exhibit 1, p. 4, column 1,

q 1.

"The trouble . . . arises whenever

Schuler's pre-Schuler activities are

mentioned in Printron's_ public

~ disclosures. Time after time, they refer

to Schuler as a “she’- even when

discussing positions held when Schuler

was a ~he."" Exhibit 1, p. 4, column 1,

y 4

"Moreover, the filings say that Schuler

was a ‘self-employed technology and

corporate consultant’ from 1966 to

1991. In fact, Schuler, as Huminik, was

president of General Industrial Corp. and

General Enterprises Corp., which

allegedly defrauded investors during the

1970s." Exhibit 1, p. 4, column 1, {{ 2-

"Huminik repeatedly lied to investors

about GIC. Huminik agreed to a

(Mai 4

App. 42

permanent injunction barring him from

making untrue statements, and otherwise

defrauding investors, in the future. He

agreed to the injunction without

admitting or denying the SEC's

allegations." Exhibit 1, p. 4, column 1,

q 3.

z. "Was Schuler being shy-or was she

improperly misleading investors?"

Exhibit 1, p. 4, column 1, q 4.

aa. "Schuler was within her rights to hide

her previous gender and to not disclose

the 1976 injunction, because of the SEC

rule requiring disclosure only for five

years." Exhibit 1, p. 4, column 1, § 4.

ab. § "Zimmerman maintains that a previous

injunction is a ‘material event’ that must

be disclosed beyond the five-year period

set by the rules." Exhibit 1, p. 4, column

1,9 4.

ac. "the next Huminik/Schuler exploit"

Exhibit 1, p. 4, column 1, ¢ 4.

ad. "John Huminik was no longer exhibiting

a James Bond persona. ‘Marine blue

shadow haloes the eyelids,’... The Post

went on to describe the sex change and,

in graphic detail...None of this would

amount to a hill of beans if Eleanor

Schuler, as Printron CEO, hadn't fallen

—

ag.

App. 43

afoul of the SEC." Exhibit 1, p. 4,

column 1, 4 5 - column 2, § 1.

"The Huber-Schuler ties were shrugged

off by the blue-ribbon panel. ‘We were

assured by the Amex staff that the issue

had been resolved," Exhibit 1, p. 4,

column 2, ¥ 2 - column 3, 1.

“But Hamarat and another former panel

member,...now say that the panel didn't

know that Eleanor Schuler used to be

John Huminik-or that Schuler consented

to not one but two injunctions by the

SEC. If they had known, they say,

Printron's listing would never have been

approved." Exhibit 1, p. 4, column 3, {

"The SEC's mild treatment of Schuler in

1991 raises yet another issue: Did the

SEC know in 1991 that Schuler was

Huminik?" Exhibit 1, p. 4, column 3,

y 5

"One explanation might be that the SEC

felt so much time had passed that it _

would not pursue a criminal contempt

action against Schuler." Exhibit 1, p. 4,

column 3, § 2.

“Huminik/Schuler matter" Exhibit 1, p.

4, column 3, { 2.

App. 44

aj. "If the SEC didn't know that the Eleanor

Schuler of 1991 was the John Huminik

of 1976-and the Amex surely didn't

know-there was one _ possible

explanation. The Central registry of the

National Association of Securities

Dealers ... has John Huminik on its data

base. And Eleanor Schuler too." Exhibit

1, p. 4, column 3, q 3.

ak. "But they are listed as two separate

people, with one ‘incident’ to his name

and one to hers." Exhibit 1, p. 4, column

3.9

al. "A NASD spokesman notes that more

detailed information, such as social

security numbers, is only maintained for

NASD members-not corporate officers

who fall afoul of the SEC." Exhibit 1, p.

4, column 3, § 3.

am. "But the Printron disaster and the

miserable performance of the other ECM

companies make it plain that the Amex

hasn't gone far enough." Exhibit 1, p. 5,

column 1, q 4.

COUNT I

DEFAMATION

(LIBEL)

14. The foregoing allegations of paragraphs 1

through 13 are incorporated herein by reference.

aie aeenielinanammcammaiaiiiaiel

App. 45

15. Specifically, statements contained in Exhibit 1

and 2, as set forth in paragraph 13 (b), (f), (h), @), (kK), ©, ©,

(s), (v), (ab), (ah), and (ak) are all defamatory per se. Each of

the listed paragraphs (in part or in whole) allege information that

is false.

16. Specifically, statements contained in Exhibit 1

and 2, as set forth in paragraph 13 (c), (d), (e), (g), (kK), (n), (0),

(p), (s), (t), (u), (w), (Z), (ac), (ad), (ae), (af), (ag), (ai), and (al)

are all defamatory per quod. Each of the listed paragraphs make

statements filled with false implication, innuendo and insinuation

upon which a defamatory inference may be drawn.

17. Said statements in paragraph 16 were made by

the Defendants with knowledge of extrinsic facts and

information.

18. | The published article when read as a whole is

malicious and has a tendency to render the Plaintiff contemptible

and exposes her to ridicule, public hatred, contempt and

disgrace, damages her reputation and hinders association in the

business community.

19. Said statements in paragraphs 15 and 16 were

made negligently and rose to a level of actual malice in that

Defendants made the statements with knowledge of there falsity

or with a reckless disregard of whether they were true or false.

20. | Defendants acted with malice and Plaintiff is

entitled to an award of punitive damages.

21. Defendants acted with knowledge and or reckless

disregard as to its falsity which directly and proximately caused

injury and irreparable harm to the Plaintiff including but not

App. 46

limited to harm to her privacy rights, peace of mind, mental

anguish and distress, embarrassment, humiliation, compensatory

damages, harm to her name and reputation, loss of employment,

loss of current and future business relations, impairment of

reputation and standing in the community, personal humiliation,

mental anguish, and pain and suffering.

COUNT

INVASION OF PRIVACY

(FALSE LIGHT)

22. The foregoing allegations of paragraphs |

through 21 are incorporated herein by reference.

23. Defendants’ broadly disseminated publication

identifying Plaintiff, as referenced above in paragraph 13 (a),

(b), (c), (e), (f), (g), ih), (i), (k), (m), (t), (v), (w), (x), (y), and

(ag) were false individually and when considered in the context

of the entire article invaded her personal right to privacy.

24. Defendants’ acts and or omissions, including

publication of the subject article and its contents referenced in

paragraph 13 (a), (b), (c), (e), (f), (g), (h), @, (kK), (m), (0, (v),

(w), (x), (y), and (ag) publicly disclosed matters concerning

Plaintiff that unreasonably placed her in a false light before the

public.

25. Specifically, statements contained in Exhibit 1

and 2, as set forth in paragraph 13 (f), (g), (h), @, (kK), (m), (0,

(v), and (w) place Plaintiff in a false light by containing false

Statements and by unfairly and improperly implying or

insinuating that Plaintiff had a duty and failed to disclose her sex

change and thus, her prior employment and history, in order to

conceal improper acts in her past.

App. 47

26. | Defendants’ acts and or omissions, including its

publication of matters concerning Plaintiff's private life is of a

kind that would be highly offensive to a reasonable person.

27. Defendants also acted with knowledge and or

rec‘:less disregard as to the falsity of the publicized matters

concerning Plaintiff and the false light in which Plaintiff would

be placed.

28. As adirect and proximate cause of Defendants’

wrongful acts, Plaintiff suffered severe and irreparable harm

including but not limited to, invasion of her privacy rights,

interests, peace of mind. Defendants’ acts caused mental

anguish, distress, embarrassment, humiliation, compensatory

damages, harm to her name and reputation, and loss of earnings

and earning capacity. y

29. Further, Defendants acted intentionally with

knowledge and or with reckless disregard of Plaintiffs privacy

rights and are liable for punitive damages.

COUNT Ii

INVASION OF PRIVACY

(PUBLICATION OF PRIVATE FACTS)

30. | The foregoing allegations of paragraph | through

29 are incorporated herein by reference.

31. | Defendants’ broadly disseminated publication

regarding Plaintiff, specifically, statements contained in Exhibit

1 and Exhibit 2, as set forth in paragraph 13 (b) "Change Sex",

(j), (k) "change in gender [sex]", (m) "HE DID/SHE DID", (q),

(u), (v) “At issue is not her sex change", (w) "pre-Schuler

activities", "Schuler as a he" "when Schuler was a he" , (x)

App. 48

"Schuler as Huminik", (aa), (ac), (ad), (af), (ag) "Did the SEC

know... that Schuler was Huminik?", (ai), and (aj), (in part or in

whole) were intimate or private facts individually and when

considered in the context of the entire article invaded her

personal right privacy.

32. | Defendants’ publication and distribution of the

subject article throughout the United States, Canada, and

internet as referenced in Exhibit 1 and 2, as set forth in

paragraph 31 above, unreasonably publicized matters concerning

Plaintiff that were intimate or private with respect to her medical

treatment and history and contained numerous inapplicable

references to her previous sex.

33. | Statements contained in Exhibits 1 and 2, as set

forth in paragraph 31 above publicly disclosed private

information regarding Plaintiff's medical privacy by accentuating

her medical history; specifically, the 1975 - 1976 sex change and

numerous inapplicable references to her previous sex.

34. Defendants’ publication and distribution of

private facts and matters concerning Plaintiff's medical history

was of a kind that would be highly offensive and objectionable

to a reasonable person.

35. Defendants’ publication and distribution of

private facts and matters concerning Plaintiff's medical history

was of a kind that was of no legitimate concern to the public.

36. | Defendants also acted with knowledge and or

reckless disregard as to the factual dissemination of her private

medical history.

37. | Asadirect and proximate cause of Defendants’

App. 49

wrongful acts, Plaintiff suffered severe and irreparable harm

including but not limited to, invasion of her privacy rights,

interests, peace of mind. Defendants’ acts caused mental

anguish, distress, embarrassment, humiliation, compensatory

damages, harm to her name and reputation, and loss of earnings

and earning capacity.

38. Further, Defendants acted intentionally with

knowledge and or with reckless disregard of Plaintiff's privacy

rights and are liable for punitive damages.

COUNT IV

INVASION OF PRIVACY

(INTRUSION) oi

39. Theforegoing allegations of paragraph 1 through

38 are incorporated herein by reference.

40. Defendants publications regarding Plaintiff,

specifically, statements contained in Exhibit 1 and 2, as set forth

in paragraph 13 (b), (j), (k), (m), (q), (u), (v), (w), (x), (aa),

(ac), (ad), (af), (ag), (ai), and (aj), (in part or in whole) were

intimate or private facts individually and collectively when

considered in the context of the entire article intruded on

Plaintiff's right to privacy.

41. | Defendants' publication and distribution of the

subject article throughout the United States, Canada, and internet

as referenced in Exhibit 1 and 2, set forth in paragraph 13 (b), (j),

(k), (m), (q), (u), (v), (w), (x), (aa), (ac), (ad), (af), (ag), (ai), and

(aj) unreasonably publicized intimate and private facts and

matters concerning Plaintiff, intruded into her medical treatment

and history and made numerous inappropriate references to her

previous sex.

App. 50

42. | Statements contained in Exhibits 1 and 2, as set

forth in paragraphs 13 (b), (j), (k), (m), (q), (u), (v), (w), (x), (aa),

(ac), (ad), (af), (ag), (ai), and (aj) above, intruded into Plaintiff's

space. Defendants publicly disclosed private information about

Plaintiff's medical privacy by accentuating her medical history;

specifically, her 1975 - 1976 sex change and numerous

inappropriate references to her previous sex.

43. Defendants’ intrusion of into the private space or

solitude of Plaintiff with respect to her medical history was of a

kind that would be highly offensive and objectionable to a

reasonable person.

44. Defendants’ intentional intrusion into Plaintiffs

medical history invaded Plaintiff's interest in solitude, seclusion,

and her private concerns.

45. Defendants also acted with knowledge and or

reckless disregard as to the ramifications of the intrusion into

Plaintiff's private medica! history.

46. Asadirectand proximate cause of Defendants’

wrongful acts, Plaintiff suffered severe and irreparable harm

including but not limited to, invasion of her privacy

rights, interests, peace of mind. Defendants’ acts caused mental

anguish, distress, embarrassment, humiliation, compensatory

damages, harm to her name and reputation, and loss of earnings

and earning Capacity.

47. Further, Defendants acted intentionally with

knowledge and or with reckless disregard of Plaintiffs privacy

rights and are liable for punitive damages.

App. 51

48. The foregoing allegations of Paragraph 1 through

47 are incorporated herein by reference.

49. Defendants are lawfully engaged in the business

of publishing and distributing of a business magazine.

Defendants intentionally authored, published, edited and

distributed the September 12, 1994, offending article.

50. Defendants’ statements contained in Exhibit 1

and 2, as set forth in paragraph 13 (a) - (am) (in part or in

whole) were written and subsequently published to defame the

51. Defendants’ statements contained in Exhibit 1

and 2, as set forth in paragraph 13 (a) - (am) (in part or n

whole) were written and subsequently published to discredit the

Plaintiff professionally.

52. -Defendants’ statements contained in Exhibit 1

and 2, as set forth in paragraph 13 (a) - (am) (im part or in

whole) subsequently injured the Plaintiff in that the Plaintiff was

53. Defendants’ statements contained in Exhibit 1

and 2, as set forth in paragraph 13 (a) - (am) (in part or in

whole) subsequently injured the Plaintiff in that the Plaintiff was

dishonored personally.

54. Defendants’ statements contained in Exhibit 1

and 2, as set forth in paragraph 13 (a) - (am) (in part or in

whole) which discredited the Plaintiff both personally and

App. 52

professionally, were written without justification.

55. Defendants authored, published, edited and

distributed the offending article with the specific intent to harm

the Piaintiff personally and professionally without excuse or

justification.

56. Defendants also acted with knowledge and or

reckless disregard as to the defamatory ramifications the article

would depict on Plaintiff personally and professionally.

57. As adirect and proximate cause of Defendants’

wrongful acts, Plaintiff suffered severe and irreparable harm

including but not limited to, invasion of her privacy rights,

interests, peace of mind. Defendants’ acts caused mental

anguish, distress, embarrassment, humiliation, compensatory

damages, harm to her name and reputation, and loss of earnings

and earning capacity.

58. Further, Defendants acted intentionally with

knowledge and or with reckless disregard of Plaintiff's

reputation in the community and are liable for punitive damages.

COUNT VI

INTENTIONAL INFLICTION OF

EMOTIONAL DISTRESS

59. The foregoing allegations of paragraphs 1

through 58 are incorporated herein by reference.

60. Defendants’ conduct toward Plaintiff in

researching, authoring, editing, publishing, and distributing the

offending article contained in Exhibits 1 and 2, as more fully set

out above in paragraph 13 (a) - (am) was extreme, outrageous

App. 53

and unreasonable.

61. Further, Defendants’ acted with reckless

disregard of Plaintiff's rights and interests and or with the intent

to cause Plaintiff severe emotional distress.

62. Asa direct and proximate cause of Defendants’

wrongful acts, Plaintiff suffered severe and irreparable harm

including but not limited to, invasion of her privacy rights,

interests, peace of mind. Defendants’ acts caused mental

anguish, distress, embarrassment, humiliation, compensatory

damages, harm to her name and reputation, and loss of earnings

and earning capacity.

63. Defendants’ outrageous conduct in publishing the

offending article made 16 references to aspects of Plaintiff's

"sex," "gender" and "transsexual" status.

64. Defendants acted with reckless disregard of

Plaintiff's rights and interests, with the intent to cause Plaintiff

severe emotional distress, thus making them liable for punitive

damages.

INTERFERENCE WITH

CONTRACTUAL RELATIONS

65. The foregoing allegations of paragraphs 1

through 64 are incorporated herein by reference.

66. Plaintiff had an existing contract with Printron,

Inc. and was engaged in the business of serving as a corporate

officer and was the principal fund raiser for the corporation.

App. 54

67. | Defendants maliciously published and distributed

the offending article contained in Exhibits 1 and 2, as more fully

set Out above in paragraph 13 (a) - (am) with an intent to injure

and impugn the reputation of the Plaintiff and the corporation.

68.. Upon circulation of said article, the Plaintiff

stopped receiving the numerous phone calls and possible

contacts which comprise her business.

69. Defendants’ offending article caused a chilling

effect within her business community and instigated conditions

under which Plaintiff was unable to perform and retain her job

resulting in a constructive breach of Plaintiffs employment

contract.

70. | Defendants made the defamatory statements with

intent to interfere with Plaintiffs corporate employment

relationship resulting in pecuniary damage.

71. Defendants acted with knowledge and or reckless

disregard for Plaintiffs contractual relations.

72. — Asa direct and proximate cause of Defendants’

wrongful acts, Plaintiff suffered severe and irreparable harm

including but not limited to, harm to her employment interests,

compensatory damages, harm to her name and reputation, and

loss of earnings and earning capacity.

73. | Further, Defendants acted intentionally with

knowledge and or with reckless disregard of Plaintiffs

employment interests and are liable for punitive damages.

App. 55

COUNT VII

INTERFERENCE WITH PROSPECTIVE

ADVANTAGE

74. The foregoing allegations of paragraphs 1

through 73 are incorporated herein by reference.

75. Defendants' article was maliciously written and

distributed with intent to damage Plaintiff's reputation within the

‘business community, resulting in loss of future business

opportunities and loss cf pecuniary interests.

76. Defendants knew that the offending article

contained in Exhibits 1 and 2, as more fully set out above in

paragraph 13 (a) -(am) would cause interference with Plaintiff's

reputation and future business relations.

77. The damage caused by the offending article

prevented Plaintiff from conducting business within the

community and decimated her future business relations.

78. Defendants’ tortious conduct has and will

continue to compound Plaintiffs damages into the future

because Plaintiffs age will hinder her from obtaining

employment of similar salary and status.

79. Defendants acted with knowledge and or reckless

disregard for Plaintiff's perspective business relations.

80. As a direct and proximate cause of Defendants’

wrongful acts Plaintiff suffered severe and irreparable harm

including but not limited to, harm to future employment

interests, Compensatory damages, harm to her name and

reputation, and loss of earnings and future earning capacity.

App. 56

81. Further, Defendants acted intentionally with

knowledge and or with reckless disregard of Plaintiffs future

employment interests and are liable for punitive damages.

Plaintiff hereby respectfully requests a trial by jury.

WHEREFORE, Plaintiff prays the Court to enter

judgment in her favor and against Defendants on all counts, for

compensatory damages, punitive damages, special damages,

pre-judgment interest, attorney fees, costs, and such other relief

as the Court deems just and proper.

Respectfully Submitted,

_ls/_

Donna Trujillo Dodd

Attorney for Plaintiff

509 Roma Ave., NW

Albuquerque, NM 87102

(505) 243-5060

App. 57

APPENDIX F

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW MEXICO

ELEANOR SCHULER,

Plaintiff,

v. No. CIV 96-0292 SC/RLP

(Filed January 6, 19$7)

THE McGRAW-HILL COMPANIES,

INC., including BUSINESS WEEK, an

unincorporated division or subsidiary of

THE McGRAW-HILL COMPANIES,

INC., a New York Corporation,

BUSINESS WEEK ONLINE, GARY

WEISS, individually and as employee of

THE McGRAW-HILL COMPANIES,

INC., and MICHAEL SCHROEDER,

individually and as employee of THE

McGRAW-HILL COMPANIES, INC.,

Defendants.

PL : NSE TO MOTION TO DISMIS

COMES NOW Plaintiff Eleanor Schuler, by and through

her attorney Donna Trujillo Dodd, and respectfully requests that

the Court deny Defendants' Motion to Dismiss (Motion) on

grounds that Plaintiffs Complaint properly states a claim upon

App. 58

‘which relief can be granted. Plaintiff states the following in

support of her Response:

This Motion, and the underlying Complaint, concern a

September 12, 1994, article entitled "DID THE AMEX TURN

A BLIND EYE TO A 'SHOWCASE' STOCK?", that

Defendants’ authored and distributed. The article contained

numerous defamatory statements about the Plaintiff when read

individually and when taken as a whole. Plaintiff seeks damages

for the improper acts of The McGraw-Hill Companies, Inc.,

including Business Week, Business Week Online, Gary Weiss,

and Michael Schroeder.

REQUIREMENTS FOR DISMISSAL UNDER FEDERAL

RULE OF CIVIL PROCEDURE 12(b)(6)

A motion to dismiss tests only the sufficiency of

pleadings and assumes the truth of all facts plead in the

complaint. Carol v. Bunt, 50 N.M. 127, 172 P.2d 116 (1946).

As correctly stated by the Defendants in their Motion, dismissal

is proper only if there is no set of possible facts under which the

Plaintiffs may be granted relief. McCasland v. Prather, 92 N.M.

192, 585 P.2d 336 (1978>

In determining such a motion, the Court "must accept all

well-pleaded allegations in the complaint as true and construe

them in the light most favorable to the Plaintiff." Innovative

Digital Equip., Inc. v. Quantum Tech., Inc., 597 F. Supp. 983,

988 (N.D. Ohio 1984). The Court may consider documents

attached to Plaintiffs Complaint, in determining whether

Plaintiffs Complaint is sufficiently plead. Id. At issue is

whether Plaintiff is entitled to offer evidence to support her

claims, not the merits of the claims themselves. Dear, 854 F.

Supp. at 631-32.

5 Ba ett

“ 7 " a -"

App. 59

Motions to dismiss under Rule 12(b)(6) are viewed with

disfavor. Resolution Trust Corp. v. Dean, 854 F. Supp. 626,

632 (D. Ariz. 1994). Dismissal of a complaint under Federe’

Rule of Civil Procedure 12(b)(6) can be granted only if it

appears beyond doubt that the Plaintiff can prove no set of facts

that would entitle her to judgment. Lafoy v. HMO Colorado,

988 F.2d 97, 98 (10th Cir. 1993); Dean, 854 F. Supp. at 631.

Conversely, the Court should deny such a motion if any legal

theory exists for recovery. Innovative Digital Equip., Inc. v.

Quantum Tech., Inc., 597 F. Supp. 983, 988 (N.D. Ohio 1984).

In this case, the Defendants’ Motion relies upon facts

which are outside the scope of the pleadings, and those facts are

neither undisputed nor supported by affidavit or deposition

testimony. While Plaintiff is not prepared to submit all of its

legal arguments at this time, and is not procedurally required to

do so, she will present certain legal arguments in response to the

Motion to Dismiss.

Defendants pick out a number of statements from the

more than four page article and state that they are undisputed

facts. Those facts, Defendants claim, are neither defamatory nor

invade Plaintiff's privacy and make Plaintiff's case groundless.

The exact opposite is true. The article, when read as a whole is

malicious and defamatory to Plaintiff. Even if some of the

Statements are true, arguendo, the article must be read as a

whole and then specific statements analyzed separately for each

individual harm.

The Defendants state that Plaintiff's claims should be

dismissed because they are unwarranted and may create a

chilling effect on public disclosure. Nevertheless, the Motion to

Dismiss must be analyzed in the light most favorable to the

Plaintiff.

App. 60

PL :

Defamation is recognized as a cause of action in New

Mexico. Bookout v. Griffin, 97 N.M. 336, 539 P.2d 1193

(1982); Marchiondo v. N.M. State Tribune Co., 98 N.M. 282,

648 P.2d 321 (Ct. App. 1981). A statement is defamatory if it

injures the reputation of the Plaintiff in the community and

subjects the Piaintiff to hatred, contempt or ridicule. In order to

be actionable, the statement must concern the Plaintiff, be false,

and must bring the Plaintiff into disrepute and impeach her

honesty, integrity, virtue, or reputation.

A. DEFAMATION PER SE

(1) Complaint Paragraph 13 (b)

"CHANGE SEX, CHANGE THE PAST:

BEFORE BECOMING PRINTRON CEO AS

ELEANOR SCHULER, JOHN HUMINIK JR.

RAN TWO COMPANIES THE SEC

ACCUSED OF FRAUD. WHO KNEW?"

Defendants ask the Court to believe that the statement

"CHANGE SEX, CHANGE THE PAST" invokes a question.

Defendants want the Court to believe this phrase to be a tag

line. This "tag line" is defamatory in that it infers that Schuler

changed her sex in order to change her past so the SEC would

overlook a 1976 injunction against her when the agency

imposed a similarly lenient penalty against her for another

episode of alleged securities fraud in 1991. The statement is no:

a question. There is nothing in the article supporting

Defendants’ allegation that the SEC overlooked the 1976

Pe ee

App. 61

injunction because of Plaintiffs sex change and not knowing

Schuler to be Huminik, and subsequently imposed a similarly

lenient penalty in 1991. Not only is the statement false, but the

Defendants try to insinuate Schuler's alleged: cover-up by

innuendo and insinuation that her sex change waswreformed for

any reason other than a medical one.

Schuler's sex change was preformed in early 1976. The

1976 consent decree was signed by Schuler and clearly stated

"formerly known as John Huminik, Jr.". The 1991 consent

decree was also signed by Schuler. The SEC clearly knew she

was one in the same. The plain and obvious import outlined in

Andrews, 119 N.M. at 485, 892 P.2nd at 618 was to defame

Plaintiff. The Defendants would have the readers believe

Schuler opted for a sex change operation to conceal an SEC

filing rather than to cure a gender disorder.

(2) Complaint Paragraph 13 (f)

"But she doesn't like to talk about that"

Defendants would have the readers believe that Plaintiff

didn't like to talk about her "pistol packing" days. This

statement is also false. Schuler wrote a book about her

adventures as a United States FBI agent. Defendants turn

Schuler's patriotism for the United States into a mockery.

Plaintiff openly talked about that aspect of her life. Nonetheless,

in 1979 Schuler quit making public appearances. She sought the

mantel of a private person by relocating to a smaller town, and

she ceased making public appearances. The statement is

defamatory in that it subjects Schuler to ridicule and contempt

as a loyal U.S. citizen. Not only do Defendants make a false

statement but in addition, they insinuate that Plaintiff's role as an

FBI agent was less than honorable and that Plaintiff tried to hide

App. 62

it.

(3) Complaint Paragraph 13 (h)

"There was a stain on her record... One of the

injunctions was known to the Amex when it

approved Printron's listing on the EMC. The

other was not."

This excerpt of the statement is patently false. The SEC

regulations hold that any involvement in certain legal

proceedings that occurred during the last five years must be

disclosed 17 C.F.R. §§ 229.401(f). Although Defendants

intimate otherwise, Plaintiff had no duty to disclose the 1976

injunction. In addition, Plaintiff signed both injunctions as

"Eleanor L. Schuler" making it known to whoever researched

her or Huminik's business history.

(4) Complaint Paragraph 13 (i)

“Eleanor Schuler had two records of alleged

securities law transgressions -- one as a woman

and one as a man. In fact, the name “Eleanor

Schuler’ was one that she had made up out of

thin air."

Once again the statement is false. Eleanor Schuler had

already completed the sex change operation at the time of the

1976 consent decree. She signed the 1976 consent decree as

Eleanor L. Schuler; therefore, both were entered as against

Schuler and not Huminik. The name Eleanor L. Schuler was not

made up out of thin air as Defendants lead the Court to believe;

but, was thoroughly researched and thou ht out by Plaintiff at

the time of the sex change. The name does not have to resemble

App. 63

"Huminik" to be valid and/or meaningful.

(5) Complaint Paragraph 13 (k)

"Her earlier SEC record, and her change in

gender, were concealed by Printron... Schuler

also hid her previous identity, and the injunction,

from securities regulators in New York..."

The "box" information as the Defendants put it, ask

questions to which Schuler replied. At the time Plaintiff signed

the consent decree she had just become Printron's CEO.

However, at the time of the infraction which eventually lead to

the consent decree, Schuler had no leadership role in the

company and merely signed the consent decree on behalf of

Printron, Inc., so that the company could proceed with its

offering. The questions highlighted by Defendants seek to

insinuate that Plaintiff deliberately lied or misled the SEC.

Plaintiff's name and sex had been changed all the way back to

her birth certificate. Plaintiff did not and does not consider her

medical background material to her business proceedings; that

which was material had been reported honestly and fairly. Both

consent decrees were signed by Schuler, and both are a matter

of public record. Additionally, as the 1976 decree was signed

by Schuler, it clearly states under the signature line, "John

Huminik Jr., now known as Eleanor L. Schuler." Schuler in no

way hid her identity nor the 1976 consent from SEC Regulators.

However, by blatantly stating that Schuler “hid her previous

identity, and the injunction," Defendants' maliciously misstated

the facts.

(6) Complaint Paragraph 13 (s)

"As recounted in his slickly written 1967 book"

App. 64

The phrase "slickly written" on its face is not

complementary, despite Defendant's assertions. Defendants’

assertions that the statements at issue are “opinions” is not

supported by the evidence. In determining whether a

communication is or contains a statement of "fact" or “opinion,”

the fact finder must consider: "(A) The entirety of the

communication and the context in which the communication was

made; and (B) wither reasonable persons would be likely to

understand the communication to be a statement of the

Defendants’ opinion or a statement of fact." $.C.R.A. 1896, 1-

004 (Repl Pamp. 1986).

"[An] opinion which implies that it is based upon the

existence of undisclosed facts is the same as a statement of fact."

Id. Where a statement alleged to be defamatory can be

interpreted as either fact or opinion, and the Court cannot rule

that, as a matter of law, the statement was not understood as

fact, "there is a triable issue of fact for the jury." Marchiondo v.

Brown, 98 N.M. 394, 404, 649 P.2d 462, 472 (1982) (quoting

Bindrim v. Mitchell, 92. Cal. App. 3d 61, 155 Cal. Rptr. 29, 39,

cert.denied., 444 U.S. 984, 62 L. Ed. 2d 412, 100 S. Ct. 490

(1979)). Likewise, statements purporting to be opinions often

are understood to be factual statements. See Marchiondo, 98

N.M. at 401, 649 P.2d at 469. “[W]Jhere there are implications

in the statement “that the writer has private, underlying

knowledge to substantiate his comments about Plaintiff," and

such knowledge implies the existence of defamatory facts, the

Statement is deemed to be factual and not protected or

privileged. Kurtz v. Independent Pub. Co., Inc., 97 N.M. 243,

246, 638 P.2d 1088, 1091 (Ct. App 1981); Marchiondo v.

Brown, 98 N.M. 394, 649 P.2d 472 (1982).

App. 65

(7) Complaint Paragraph 13 (v)

"At issue is not her sex change, but rather the

extent to which her concealment of that change

masked other things."

Defendants argue that the statement above is nothing

more than a pointed issue of public concern. The statement is

not meant as a “pointed question" but as a malicious defamatory

statement made to insinuate that Schuler hid her sex change to

conceal the 1976 consent decree. That consent decree was

signed by Schuler. She hid nothing about her past business

dealings. The Defendants wrote the statement to subject

Plaintiff to ridicule and public hatred. Plaintiff had no duty to

disclose her medical background. She had the sex change for

valid medical purposes; she did not have a sex change operation

to hide her past. Furthermore, although Defendants state that

the sex change is not at issue, they make reference to it over a

dozen times throughout the four page article. Each reference is

mean toned and malicious and has absolutely nothing to do with

Plaintiff's business dealings.

(8) Complaint Paragraph 13 (ab)

"Zimmerman maintains that a previous

injunction is a ‘material event’ that must be

disclosed beyond the five-year period set by the

rules."

Plaintiff both disputes the accuracy of Zimmerman's

Statement and the manner and tone in which it is conveyed.

Defendant's argue the statement is legal opinion, however,

Statements purporting to be opinion are often understood to be

factual statements and questions for the jury. Marchiondo, 98

N.M. at 401, 649 P.2d at 469. The statement is materially false

App. 66

and is written into the article to insinuate that Plaintiff has

committed criminal acts. Defendants imply that Schuler had an

obligation to disclose the previous injunction “beyond” five

years as being a “material event". This statement is patently

false. In fact, 17 CFR Chapter 11 § 229.401 (f) states in part,

"involvement in certain legal proceedings. Describe any of the

following events that occurred during the past five years and

that are material..." Defendant's argue that more statements also

pose questions but that still does not make this statement any

less defamatory or false.

(9) Complaint Paragraph 13 (ah)

"One explanation might be that the SEC felt so

much time had passed that it would not pursue

a criminal contempt action against Schuler."

Defendants suggest that his statement is not ‘concerning’

Schuler. It specifically talks about Schuler and suggests,

implies, and insinuates that she committed criminal acts.

Defendants try to mask the false statements as theory or

opinion. However, such statements describe acts of which there

is not a shred of proof. Defendants have written several false

Statements into the four page article. The Defendants hide

behind the cloak of opinion and theory; however, the malicious

nature and meaning of the article is clear. Defendant's argue the

statement is legal opinion, however, statements purporting to be

opinion are often understood to be factual statements and

questions for the jury. Marchiondo, 98 N.M. at 401, 649 P.2d

at 469.

App. 67

(10) Complaint Paragraph 13 (ak)

"But they are listed as two separate people, with

one ‘incident’ to his name and one to hers."

Defendants purport that this statement does not

‘concern’ Schuler. The statement specifically talks about

Plaintiffs two consent decrees. The Defendants fail to tell its

readers that Schuler’s sex change had already taken place and

that Plaintiff signed both consent decrees as Eleanor L. Schuler.

Allegations that the article contained false statements

“maliciously made" must be taken as admitted and the

Complaint cannot be dismissed for failure to state a claim.

Stewart v. Ging, 64 N.M. 270, 274, 327 P.2d 333 (1958).

Plaintiff's above referenced statement sufficiently state a claim

for defamation and thus defendants motion should be denied.

In the event that the Court accepts that the above

outlined statements are opinion and theory rather than

statements defamatory per se, Plaintiff maintains her cause of

action for defamation in that the statements remain defamatory

because they are filled with innuendo and insinuation that

Plaintiff hid illegal business practices through her sex change

when in fact she followed the SEC rules and regulations in filing

and simply kept her medical history private, to which she had

every right to do.

B. DEFAMATION PER D

New Mexico recognizes liability for statements from

which a defamatory inference may be drawn. Moore v. Sun

Publishing Corp., 118 N.M. 375, 884 P.2d 735 (Ct. App.

1994). A cause of action will lie for defamation even if the

App. 68

statement is not per se false if the statement is filled with

implication, insinuation or innuendo accompanied by

explanatory circumstances.

(1) Complaint Paragraph 13 (c)

"DID THE AMEX TURN A BLIND EYE TO

A “SHOWCASE' STOCK?"

Although Schuler's name does not appear in the title, the

article concerns her prior business practices and prior two

consent decrees. Defendants state that the target of the criticism

is the American Stock Exchange, not Schuler, but yet one

picture of Schuler & one picture of John Huminik appear on the

title page of the offending article. The title insinuates that there

was wrongdoing in that Schuler hid her prior consent decree

with a sex change operation, that she had a duty to disclose the

1976 consent decree as well as her sex change operation and

that the AMEX knew Schuler failed to disclose the

aforementioned, and thus ignored said wrongdoing.

(2) Complaint Paragraph 13 (g)

“CHECKERED RECORD" implies a sort of shifty or

shady past. Defendants maintain this to be opinion but, once

again this is an issue for the jury to decide. See supra pt.

I(A)(8)

(3) Complaint Paragraph 13 (k)

"Her earlier SEC record," etc. See supra pt. I(A)(5)

App. 69

(4) Complaint Paragraph 13 (n)

"Schuler/Huminik affair"

Defendants wov.d have the Court believe the statement

was convenient shorthand needless to say, the only shorthand in

a four page article. There was never a Huminik-Schuler affair.

The above listed statement is not shorthand but in fact words

used to portray that Schuler did not act honestly. The statement

sugg¢ sts that Schuler is either a multiple personality or involved

in a game of hide and seek.

(5) Complaint Paragraph 13 (s)

"As recounted in his slickly written 1967 book"

See supra pt. I(A)(6).

(6) Complaint Paragraph 13 (t)

"Neither the book nor the double-agent career

were mentioned in any of Printron’s filings with

investors and regulators."

Plaintiff had no duty to disclose such information when

in fact there was no such duty imposed by the SEC. Defendants

try to circumvent the malicious nature of the statement by

stating that the next sentence dispels the implication.

(7) Complaint Paragraph 13 (u)

“We have nothing against transsexuals"

Defendants insinuate that transsexualism is a negative

state of being and that plaintiff had a duty to disclose her sex

change in the perspectus. There is no such requirement.

App. 70

Defendants further state that the quote does imply anything

derogatory about transsexuals in general or Schuler in

particular. The fallacy of their argument becomes apparent

when one substitutes the term "nigger" or "mexican" for

"transsexuals".

(8) Complaint Paragraph 13 (w)

"The trouble... arises whenever Schuler’s pre-Schuler

activities are mentioned in Printron's public disclosures. Time

after time, they refer to Schuler as a ‘she’ -- even when

discussing positions held when Schuler was a “he’."

This statement leads the readers to believe that Plaintiff's

pre-Schuler activities were both illegal and not disclosed in the

Printron filing. In reality, Plaintiff committed no wrong doing.

Printron followed the letter of the law and all of the SEC's rules

and regulations. Furthermore, Plaintiff had no duty to disclose

her sex change. Both consent decrees were signed by Eleanor

L. Schuler. Plaintiff agreed to be held accountable for both

infractions. Defendants would have the readers believe the two

consent decrees were grave criminal acts; however, they are

standard pleadings companies admit to when a prospectus has

not been fully complied with. Perhaps that is one reason the

SEC does not require disclosure beyond five years.

Printron's disclosures refer to Schuler as a "she" because

all the documents are signed by Eleanor Schuler, a female.

Schuler's sex change occurred in 1976.

(9) Complaint Paragraph 13 (z)

"Was Schuler being shy -- or was she improperly

misleading investors?"

App. 71

Once again the Defendants’ insinuate that this is a

question of public concern. However, because Plaintiff had

never been charged criminally, for Defendants’ to insinuate so,

was simply false. Furthermore, there is no evidence to illustrate

that Plaintiff properly misled investors, thus, to elude is also

false.

- (10) Complaint Paragraph 13 (ac)

"The next Huminik/Schuler exploit"

See supra pt. I(B)(4), except that "exploit is used rather

than "affair."

(11) Complaint Paragraph 13 (ad)

"John Huminik was no longer exhibiting a James

Bond persona. “Marine blue shadow haloes the

eyelids,'... The Post went on to describe the sex

change and, in graphic detail... None of this

would amount to a hill of beans if Eleanor

Schuler, as Printron CEO, hadn't fallen afoul of

the SEC."

The statement is false because Plaintiff did not and has

not fallen afoul to the SEC. Schuler did in fact sign two

separate consent decrees, however, as the CEO of Printron,

Inc., has never been sanctioned.

(12) Complaint Paragraph 13 (ae)

“The Huber-Schuler ties were shrugged off by

the blue-ribbon panel. “We were assured by the

Amex staff that the issue had been resolved.”

App. 72

Defendants imply that Huber-Schuler were acting in

concert to commit wrongdoing. There is no evidence to support

Defendants’ notion of conspiracy or any deception whatsoever.

Not only was Plaintiff not aware of Huber's past, but she was

under no obligation to know, since she was hired by Huber.

(13) Complaint paragraph 13 (af) and (ag)

"But Hamarat and another former panel

member,... now say that the panel didn't know

that Eleanor Schuler used to be John Huminik --

or that Schuler consented to not one but two

iniunctions by the SEC. If they had known, they

say, Printron's listing would never have been

approv "

"The SEC's mild treatment of Schuler in 1991

raises yet another issue: Did the SEC know in

1991 that Schuler was Huminik?

See supra pt. I(A)(5)

(14) Complaint Paragraph 13 (ai)

"Huminik/Schuler matter” See supra pt. I(B)(<)

Plaintiff's above referenced statements sufficiently state

a Claim for defamation.

EEA ET ALTE CERES SIE AGEL EE ATER a nar NE Sep etna Agr

App. 73 _

COUNT I

PL PROPERLY

ATES A FOR F LIGHT

INV N OF PRIVACY

Invasion of privacy is recognized as a cause of action in

New Mexico. Moore v. Sun Publishing Corp., 118 N.M. 375,

383, 881 P.2d 735, 743 (Ct. App. 1994), cert. denied, 118 N.M.

430, 882 P.2d 21 (1994). False light invasion of privacy

consists of placing one in a false light before the public. id. To

establish such a claim, a plaintiff need only show that she was

“given unreasonable and highly objectionable publicity that

attributes to [her] characteristics, conduct or beliefs that are

false, and so is placed before the public in a false position."

Restatement (Second) of Torts § 652E cmt. b, at 395.

"[A] false light claim may be established where true

information is published if the information tends to imply

falsehoods. Larsen v. Philadelphia Newspapers, Inc., 375 Pa.

Super. 66, 543 A.2d 1181, 1189 (Pa. Super. Ct.), appeals

denied, 552 A.2d 251 and 552 A.2d 252 and 552 A.2d 968

(1988), cert. denied, 489 U.S. 1096 (1989). See also Jonap v.

Silver, 1 Conn. App. 550, 474 A.2d 800, 806 (Conn. Ct. App.

1984) Gury verdict sustained where there was evidence that

defendants caused letter to be published in a magazine that

attributed to plaintiff views that were not his own and that there

was a major misrepresentation of his character, history,

activities, or beliefs).

Further New Mexico recognizes the tort of defamation

by implication. Moore v. Sun Publishing Corp., 118 N.M. 375,

381, 881 P.2d 735, 741 (Ct. App.), cert. denied, 118 N.M. 430

(1994). In Moore the New Mexico Court of Appeals

recognized that "reputational injury caused by acommunication

App. 74

may result not from what is said but from what is imptied."" Id.

at 381 (quoting Rodney A. Smolla, Law of Defamation §

4.05[1], at 4-17 (1994)).

The statements outlined by Plaintiff's Complaint

(Complaint), and included in its entirety as Exhibit 1 to that

Complaint, give “unreasonable and highly objectionable publicity

that attributes to [her] characteristics, conduct or beliefs that are

false," and which place her before the public in = false position.

See Restatement (Second) of Torts § 652E cmt. b, at 395. The

statements referenced in Plaintiff's Complaint were made in the

context of an internationally circulated "business" periodical, in

its "Finance" section. The article appeared within a "Finance"

subsection entitled "Investigations." This context is one in

which a reasonable person would expect to find statements of

fact and in which reasonable persons would interpret statements

as factual. Further, the magazine is targeted at business

professionals and others associated with and/or interested in

business matters. It is in this context that the offending article

must be evaluated.

(1) Complaint Paragraphs 13 (a) and (b)

Plaintiffs Complaint paragraph 13 (a) depicts a

photograph of Plaintiff in a manner which implies falsehoods.

The subject photograph features a close up black and white shot

of Plaintiff in a social setting, set in the top, center of the index,

in contrast to surrounding color photographs of persons in

professional attire and settings. This portrayal of Plaintiff

sharply contrasts with the magazine's typical portrayal of

business professionals.

Both separately and taken together, the subject

photograph and its caption ("CHANGE SEX, CHANGE THE

App. 75

PAST") attribute to Plaintiff characteristics including the

implication that she is deceptive, dishonest, immoral, and

untruthful, particularly with regard to her past business dealings.

They further imply that Plaintiff changed her sex for other than

medical reasons, in order to escape liability or responsibility for

some heinous act in her past, and° that the authors have

knowledge of undisclosed facts supporting such a conclusion.

This portrayal of Plaintiff is highly objectionable and

unreasonable, particularly in light of the fact that the article's

target audience is of the type with whom Plaintiff does business.

Plaintiff denies that she changed sex for other than

medical reasons. The reasons for Plaintiff's sex change and her

prior and past reputation in the business community are matters

of fact which can be proven or disproved. Therefore,

Defendants' contentions that these items are constitutionally

protected "opinion" is not supported by the evidence and their

Motion should be denied on this point.

Defendants assert that Plaintiffs privacy could not be

invaded by republication of photograph for which she posed.

This is clearly false. The subject photograph is not the

photograph published in People magazine.

Further, Defendants characterization of the photograph

Caption as "a question" is not supported by the evidence. The

relevant portion of the caption does not contain a question mark

at the end of that phrase and clearly asserts the matters

referenced above, including the implication that Plaintiff had

good reason to change her past to avoid responsibility for and

serious consequences of her past misdeeds.

App. 76

(2) Complaint Paragraph 13 (f)

The article also includes the following statements:

In her wildly varied career, she had been a welder,

entrepreneur, corporate executive, and even a pistol-

packing Federal Bureau of Investigation double agent

who had battled Soviet spies during the Cold War. But

The underlined statement is a false statement of fact. It

can be proven or disproved whether Plaintiff “liked to" or in fact

“did" talk about her career history. Defendants’ statement that

Plaintiff didn't like to talk about her past career is unreasonable

and highly objectionable particularly in view of facts that she

published a book about her experiences as a "double agent" and

other discussions of her career. The subject staternent attributes

to Plaintiff false characteristics, conduct, and/or beliefs including

that she is unwilling to discuss or acknowledge her past careers,

that she is attempting to hide or conceal her past, that she is

untruthful and deceptive, and that she has good reason to hide

her past to avoid responsibility for prior misdeeds.

(3) Complaint Paragraphs 13 (h), (k), (t),

and (w)

Several paragraphs in the offending article imply that

Plaintiff had a duty to disclose certain information, when in fact

no such duty existed. For example, Plaintiffs Complaint

references the following portions of the offending article:

One of the in; stions was known to the Amex

when it approv. Printron's listing on the ECM.

The other was not. (h)

App. 77

Schuler also hid her previous identity, and the

injunction, from securities regulators in New

York, in a "sunshine law" filing[.] (k)

Neither the book nor the double-agent career

were mentioned in any of Printron's filings with

investors and regulators. (t)

Time after time [Printron's public disclosures]

refer to Schuler as a "she" - even when

discussing positions held when Schuler was a

"he." (w)

All of the above statements imply that Plaintiff had a

duty to disclose the referenced information and that she failed to

do so. Thus, the statements imply falsehoods with regard to

Plaintiffs' disclosure duties and attribute to her the

characteristics noted above in this section, including deceptive,

devious, immoral, and untruthful conduct.

(4) Complaint Paragraph 13 (i)

The article's statement that "[i]n fact, the name “Eleanor

Schuler’ was one that she had made up out of thin air[,]" places

Plaintiff in a false light by stating as a fact that the name was

"made up," and by further implying that Plaintiff "made up” the

name for fraudulent or deceptive reasons.

(S) | Complaint Paragraph 13 (v)

Likewise, Defendant's statement in the offending article

that “At issue is not [Schuler's] sex change, but the extent to

which her concealment of the change masked other things[,]"

falsely states that Plaintiff concealed her sex change and further

App. 78

implies that she did so in order to "mask" or "conceal"

additional matters. As in the case of the above statements, this

statement places Plaintiff in a false light by unreasonably and in

a highly objectionable manner attributing to her characteristics,

belief, and/or conduct including deception, dishonesty, and other

misdeeds. Plaintiff sufficiently states a claim for false light on

this point.

(6) Complaint Paragraph 13 (x)

Defendants’ article also includes the following

Statements:

Moreover, the filings say that Schuler was a ‘self-

employed technology and corporate consultant’ from

1966 to 1991.

In fact, Schuler, as Huminik, was president of

General Industrial Corp. and General Enterprises Corp.,

which allegedly defrauded investors during the 1970s.

These statements imply that Plaintiff's description of her

past employment included in the "filings" is deceptive. As with

the above statements, these statements place Plaintiff in a false

light by attributing to her false characteristics and conduct,

including deception, dishonesty, and an intent to defraud

company investors and others. Plaintiff's claims in this regard

sufficiently state a claim for false light.

(7) Complaint Paragraph 13 (ag)

The article also included the following statement:

App. 79

The SEC's mild treatment of Schuler in 1991 raises yet

another issue: Did the SEC know in 1991 that Schuler

was Huminik?

The last sentence of this statement clearly implies that

the SEC did not know that Schuler was Huminik, thus, implying

that Schuler was deceitful, dishonest, and deceptive in sone

manner with regard to the SEC and her business dealings. In

fact, the SEC did know that Schuler was Huminik as evidenced

by the Consent, attached hereto as Exhibit 1, regarding the

injunction involving General Industrial Corporation and General

Enterprises Corporation. Specifically, the Consent's signature

line reads "John Huminik, Jr., now known as Eleanor L.

Schuler[.]" Defendants’ statement and inquiry into this area

placed Plaintiff in a false light before the public by stating as a

fact and implying that she deceived the SEC by hiding her prior

sex change from it, and further, that she did so to further her

own devious ends.

When read as a whole, the article clearly indicates that

Plaintiff is a deceptive, dishonest, disreputable business person

who has committed "offensive" and "illegal" acts. The above

statements, and those referenced in Plaintiffs Complaint and

incorporated herein by reference, sufficiently state a claim for

false light. Interpreting these statements in the light most

favorable to Plaintiff, she states a claim upon which relief can be

granted and Defendants’ Motion is should be denied.

"Every person may freely speak, write and publish his

sentiments on all subjects, being responsible for the abuse of

that right; * * *" (Emphasis supplied.) Even the freedom oi

the press has its limitations. Blount v. T.D. Publishing Corp.,

77 N.M. 384, 388, 423 P. 2d 421 (1966) citing N.M. Const. art.

2, sec. 17. Constitutional rights of freedom of press, right of

privacy, are all relative and not absolute. U.S.C.A. Const.

Amends. 1, 4; Const. art. 2, § 17. The framers of our

constitution, federal and state, were cognizant of the right of an

individual to privacy and sought to prevént unreasonable

intrusion, Trupiano v. United States, 334 U.S. 699, 68 S.Ct.

1229, 92 L.Ed. 1663. Ms. Schuler freely admits to giving

interviews to People Magazine and the Washington Post. The

purpose of which was to inform the public about people, like

her, who suffered from gender reversal, a birth defect, not for —

the purposes of providing a dog and pony show.

Publication of private facts invasion of privacy involves

the publication of true but intimate or private facts about the

plaintiff, such as matters concerning the plaintiffs sexual life or

health. Moore, 77 N.M. at 383.

One who gives publicity to a matter concerning the

private life of another is subject to liability to the other

for invasion of his privacy, if the matter publicized is of

a kind that

(a) would be highly offensive to a reasonable

person, and

A HERR SYS RET AR ei Ea

Pee anon wales mceocgepi8 ane

App. 81

(b) is not of legitimate concern to the public. See

Restatement (Second) of Torts § 652 D at 383

Defendants’ offending article publicized facts about

Schuler's sex change, a topic that would be highly offensive to

a reasonable person and of no legitimate concern to the public.

Certainly Defendants would not suggest that Schuler's sex

change was of a legitimate concern to the reading public of

Business Week Magazine. The legitimate concern should have

been that two consents had been signed by Eleanor Schuler, a

person, not that they were signed by Eleanor Schuler, the

transsexual who underwent a sex change. In fact, the offending

article states that one consent was signed by John Huminik and

the other by Eleanor Schuler. That is patently false. Both

consents were signed by Eleanor Schuler. Schuler hid nothing.

Complaint paragraphs (b), (j), (k), (m), (q), (u), (v), (w),

(aa), (ad), (af), and (aj) all make reference to Schuler's sex

change, transsexualism, her prior sex as John Huminik. All of

which are private facts of no legitimate concern to anyone but

Schuler, and none of which are the least bit relevant to the issue

of Eleanor Schuler signing both consent decrees. See Exhibit 1.

Plaintiff concedes that she “pulled back the curtain"

when she provided interviews for the Washington Post and

People magazine. The limited purpose of which was to inform

people about gender reversal. Curtains open and curtains close.

",..once a matter has become newsworthy how long does it

continue to be newsworthy so that an individual may have no

respite from the glare of unsought notoriety. Blount v. TD

Publishing, 77 N.M. 384, 423 P.2d 421 (1966). Schuler

assumed the mantle of a private citizen by moving to a small

town where no one knew her and all publicity ceased. Where

= eet ae

App. 82

the individuals right of privacy is concerned and where the right

of the public to be informed is involved, the question of fact

should be resolved by the trier of facts. Id. Defendants’ motion

should be denied.

INFLICTION OF EMOTIONAL DISTRESS

In order to state a claim for intentional infliction of

emotional distress Plaintiff must show that Defendants’ conduct

was extreme, outrageous, and done intentionally or recklessly

causing her severe emotional distress. See Hakkila v. Hakkila,

112 N.M. 172, 175, 812 P.2d 1320, 1323 (Ct. App. 1991).

Defendants’ conduc? referenced in Plaintiff's Complaint and this

Response clearly establish a claim for intentional infliction of

emotional distress. Defendants’ portrayal of Plaintiff in the

offending article. its failure to check facts such as whether the

SEC knew that Plaintiff had changed her name or sex, and other

items referenced herein constitute the type of outrageous

conduct that this tort was meant to address.

As noted above, at this stage of the proceedings,

Plaintiffs’ allegations in her Complaint and related pleadings

must be taken as true. Under this standard, Plaintiff has

sufficiently plead a claim for intentional infliction of emotional

distress and should be permitted to present evidence in support

of this claim. Defendants’ Motion should be denied.

App. 83

The Defendants interfered with her present and

prospective business relations by "maliciously" publishing an

article that "caused a chilling effect within the business

community." Complaint §§ 66-81. Intentional interference,

whether with existing or prospective contracis, may be

accomplished by improper means or with improper motive.

Knight v. Snapp-On Tools Corp., 3 F. 3rd 1398, 1401 (10th

Circuit 1993.). As the defendants did defame Schuler, as well

as invade her privacy and commit the tort of outrage against her,

the interference with contractual relations count is actionable, as

there is basis for finding that the Defendants’ conduct was

improper. See, e.g. Redco Corp v. CBS, Inc., 758 f.2d 970, 973

(3rd Cir.), cert. denied, 474 U.S. 843 (1985).

Additionally, the Defendants published the article with

an improper motive. In the matter at hand, the Defendants did

not speak truthfully about matters of public concern, nor did

they express opinions based on accurately stated facts. Instead

the Defendants published information about Schuler which was

false. Complaint { 13a. - 13am. Plaintiff has stated a claim

upon which relief can be granted and Defendant's motion should

be denied.

WHEREFORE, for the foregoing reasons, Plaintiff

respectfully requests that the Court deny Defendants’ Motion to

Dismiss in its entirety and enter an order requiring Defendants

to properly answer and respond to the allegations in Plaintiffs

Complaint, and permit this case to proceed to trial on the merits.

App. 84

Respectfully Submitted,

_Is/

Donna Trujillo Dodd

509 Roma NW

Albuquerque, NM 87102

(505) 243-5060 |

Attorney for Plaintiff

App. 85

APPENDIX G

; UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

ELEANOR SCHULER,

Plaintiff/Appellant,

v. No. 97-2225

(Filed September 9, 1997)

THE MCGRAW-HILL COMPANIES, INC.,

including BUSINESS WEEK, an

unincorporated division or subsidiary of THE

MCGRAW-HILL COMPANIES, INC., a

New York Corporation, BUSINESS WEEK

ONLINE, GARY WEISS, individually and as

employee of THE MCGRAW-HILL

COMPANIES, INC.,and MICHAEL

SCHROEDER, individually and as employee of

THE MCGRAW-HILL COMPANIES, INC.,

Defendants/A ppellees.

On Appeal from the United States

District Court for the

District of New Mexico

The Honorable Santiago Campos

District Judge

_D.C. No. CIV 96-0292 SC/RLP _

APPELLANT'S OPENING BRIEF

App. 86

Kear sobs

ELEANOR SCHULER

2201 Spruce Needle Rd.

Rio Rancho, NM 87124

(505) 892-2189

Pro Se for Plaintiff/Appellant

STATEMENT REGARDING ORAL ARGUMENT

Appellant desires oral argument.

App. 87

L TABLE OF CONTENTS

STATEMENT REGARDING ORAL

ee Se cs ee nds 86

TABLE OF AUTHORITIES ................ 9}

x Federal Statutes and Rules 91

2. United States Supreme Court Cases ..... 91

3. Tenth Circuit Authorities ............ He

4. Other Federal Authorities ............. 92

5. New Mexico Authorities ............ 92-93

a. New Mexico Statutes .......... 92

b. New Mexico Decisions ......... 92

6. Authorities from Other States .......... 93

7 NS ins bec enue 93

PRIOR OR RELATED APPEALS ........... 93

STATEMENT OF SUBJECT MATTER

AND APPELLATE JURISDICTION ....... 94

STATEMENT OF ISSUES PRESENTED

ua cbse ees 95

1. Whether the trial court erred by granting

McGraw-Hill’s motion to dismiss ....... 95

STATEMENT OF THE CASE ............ 95-97

1. i een cennenes 95

2. Course of Proceedings ............... 95

App. 88

3. Trial Court Disposition ............... 97

4 Statement of Relevant Facts ........ 97-104

G. SUMMARY OF ARGUMENT ............. 104

#~ ARIF ecsce esi eee a ee 105-135

1 APPELLATE REVIEW

ST A aes en have cuka 105-106

z THE TRIAL COURT ERRED BY

GRANTING MCGRAW-HILL'S

-~ MOTION TO DISMISS .......... 105-135

a. THE TRIAL COURT

FAILED TO VIEW THE

PLEADINGS, AS TRUE, IN

FAVOR OF SCHULER ....... 106

(1) Trial Court's Obligation .. 106

SCHULER STATED A VALID

CLAIM FOR DEFAMATION .. 106

(1) Defamation Elements . 106-107

(2) McGraw-Hill's Article

SCHULER STATED A VALID

CLAIM FOR FALSE LIGHT

INVASION OF PRIVACY . 122-131

(1) False Light Elements . 122-123

SCHULER STATED A VALID

CLAIM FOR PUBLICATION

OF PRIVATE FACTS

INVASION OF PRIVACY ..... 131

(1)

(2)

Elements of Claim

for Publication of

Ea 131

McGraw-Hill Published

Private Facts About

Schuler, Invading her

| ee 131

SCHULER STATED A VALID

CLAIM FOR INTENTIONAL

INFLICTION OF

EMOTIONAL DISTRESS . . 132-133

(1)

(2)

Elements of Intentional

Infliction of Emotional

0 ERA 132-133

App. 90

£ SCHULER STATED A VALID

CLAIM FOR INTERFERENCE

WITH CONTRACTUAL

RELATIONS/PROSPECTIVE

ADVANTAGE ........... 133-135

(1) Elements of Interference

with Contractual

Relations/Prospective

Advantage ......... 133-134

(2) McGraw-Hill

Interfered with

Schuler’s Contractual

Relationships and

Prospective

Advantage ......... 134-135

ee we RE Perr eT er TT ee rerer 135

STATEMENT REGARDING ORAL

ps ee Seer ere eee 86, 136

CERTIFICATE OF SERVICE .............. 136

ATTACHMENTS

1. Business Week Article ...... (See Lodging)

App. 91

TABLE OF AUTHORITIES

Statute/Case Page

F Statut R

28 U.S.C. §§ 1331, 1332, 1343(a)(3), and 1441 ....... 94

SFG: TE ST oo a. 109

EI on oC ac dic 70% Cian de ok cane 94

Ls 4 GRR Rn St nee nape 105

ni tes Supre Cases

Gertz v. Welch, Inc.. 418 U.S. 323 (1974) ........... 104

New York Times Co. v. Sullivan, 376 U.S. 254 (1964) . 107

Rosenblatt v. Baer, 383 U.S. 75 (1966) ......... 104, 107

Tenth Circuit Authorities

Gagan v. Norton, 35 F.3d 1473 (10th Cir. 1994),

cert. denied, 115 S. Ct. 1175 (1995) ............... 105

Jojola v. Chavez, 55 F.3d 488 (10th Cir. 1995) ....... 105

Lafoy v. HMO Colorado, 988 F.2d 97 (10th Cir. 1993) . 106.

Noland v. McAdoo, 39 F.3d 269 (10th Cir. 1994) ..... 105

App. 92

Williams v. Meese, 926 F.2d 994 (10th Cir. 1991) ..... 105

Other Federal Authorities

‘ve Digital Eauio.. ] 0 Tect

Inc., 597 F. Supp. 983 (N.D. Ohio 1984) ............ 106

Leyba v. Renger, 874 F. Supp. 1218 (1994).......... 134

New Mexico Authorities

New Mexico Statutes

WEDGE, CS Ree G8 UES oes Séedecedcacaccnaes 107

Rae, Gee Pe 8s 6 6S Sed eccnee ékéuesebeaoones 107

New Mexico Decisions

Andrews v. Stallings, 119 N.M. 478,

892 P.2d 611 (Ct. App. 1995) ..............5. 111, 112

Dough v. Adventist Health Systs., Inc.,

108 N.M. 806, 780 P.2d 627 (1989) ............... 134

Hakkila v. Hakkila, 112 N.M. 172, 812 P.2d 1320

CR Ri Ma Tie Coss BOs utk brates eadkanat 132

Kutz v, Independent Pub. Co:, Inc., 97 N.M. 243,

638 P.2d 1088 (Ct. App. 1981) ..............0000. 107

App. 93

Marchiondo v. Brown, 98 N.M. 394,

ES 107

Moore v. Sun Publishing Corp., 118 N.M. 375,

881 P.2d 735 (Ct. App.), cert. denied,

To | eee re 123, 131

Authorities from Other States

Bindrim v. Mitchell, 92 Cal. App. 3d 61,

155 Cal. Rptr. 29, cert. denied, 444 U.S. 984 (1979) ... 107

Jonap v. Silver, 1 Conn. App. 550, 474 A.2d 800

Ee ee 122

Larsen v. Philadelphia Newspapers, Inc.,

375 Pa. Super. 66, 543 A.2d 1181 (Pa. Super. Ct.),

appeals denied, 552 A.2d 251 and 552 A.2d 252

and 552 A.2d 968 (1988), cert. denied,

EEE eee 122

Other Authorities

L. Eldridge, The Law of Defamation § 53 (1978) ...... 104

Restatement (Second) of Torts §652D............. 131

Restatement (Second) of Torts § 652E cmt.b ........ 12.2

Rodney A. Smolla, Law of Defamation

RE re 123

THERE ARE NO PRIOR OR

RELATED APPEALS IN THIS CASE

App. 94

IL STATEMENT OF SUBJECT MATTER

AND APPELLATE JURISDICTION

The United States District Court for the District of New

_ Mexico (trial court) had subject matter jurisdiction over this

matter pursuant to 28 U.S.C. Sections 1331, 1332, 1343(a)(3),

and 1441. On February 5, 1996, Plaintiff/Appellant Eleanor

Schuler (Schuler) filed her Complaint and Demand for Jury Trial

in this case in New Mexico's Thirteenth Judicial District Court.

Aplt. App., 1-17. On March 4, 1996, Defendants/Appellees

McGraw-Hill Companies Inc., including Business Week and

Business Week Online (McGraw-Hill), and its employees Gary

Weiss (Weiss) and Michael Schroeder (Schroeder) filed a Notice

of Removal seeking to have the case removed to the trial court

on grounds that the parties were diverse; with Schuler residing

in New Mexico, McGraw-Hill a foreign corporation, and Weiss

and Schroeder living outside New Mexico. (in this brief

"McGraw-Hill" refers to Defendants/Appellees McGraw-Hill,

Weiss and Schroeder, unless Weiss and Schroeder are

individually referenced). Aplt. App., 18-40. McGraw-Hill then

filed a Notice of Filing Motion in Lieu of Answer. Aplt. App.

41.

The Tenth Circuit Court of Appeals (Tenth Circuit) has

jurisdiction over this matter under Federal Rule of Appellate

Procedure 3. On June 11, 1997, the trial court entered a

Memorandum Opinion and Order granting McGraw-Hill's

Motion to Dismiss and an Order of Dismissal. Aplt. App., 225-

251. The Court's Orders disposed of all claims with respect to

the parties in this case. Schuler timely filed a Notice of Appeal

on July 10, 1997. Aplt. App., 252-253.

App. 95

Ii. STATEMENT OF ISSUES

PRESENTED FOR REVIEW

Schuler raises the following issues on appeal:

1. Whether the trial court erred by granting McGraw-Hill's

Motion to Dismiss.

IV. STATEMENT OF THE CASE

A. Nature of the Case

This action arose when McGraw-Hill published,

produced, authored, edited, investigated, researched, printed,

and distributed a four (4) page article appearing in Business

Week magazine which included tortious statements regarding

Schuler's personal, private and business affairs. Based on that

tortious article, Schuler brought this action against McGraw-Hill

in New Mexico's Thirteenth Judicial District Court for

defamation, invasion of privacy, prima facie tort, outrageous

conduct, interference with advantageous relations, and

intentional infliction of emotional distress. Aplt. App., 1-17.

B. Course of the Proceedings

McGraw-Hill sought to remove the case to the trial

court on March 4, 1996. Aplt. App., 18-40. In lieu of filing an

Answer, on March 8, 1997, McGraw-Hill filed a motion

package including: 1) McGraw-Hill's Motion for Dismissal or

Alternatively for More Definite Statement and supporting brief,

2) .chuler's Response to Motion for Dismissal or Alternatively

for More Definite Statement; and 3) McGraw-Hill's Reply Brief

in Support of Defendants['] Motion for Dismissal or

Alternatively for More Definite Statement. Aplt. App., 43-71.

App. 96

On April 18, 1997, Schuler filed a motion package including: 1)

Schuler's Motion to Remand to State Court and supporting

Memorandum Brief; 2) Defendant['] Response to Motion for

Remand to Sta2e Court; and 3) Schuler’s Reply Supporting

Plaintiffs Motion for Remand to State Court. Aplt. App., 72-

111.

On October 9, 1996, the trial court entered a

Memorandum Opinion and Order addressing Schuler’s Motion

for Remand to State Court and McGraw-Hill's Motion for

Dismissal or Alternatively for More Definite Statement. The

trial court denied Schuler’s Motion for Remand to State Court

ruling that it had jurisdiction over the case. Also, the trial court

denied McGraw-Hill's Motion to Dismiss Schuler's Complaint,

but required Schuler to amend her Complaint to identify specific

statements which formed the basis of her claims. Aplt. App.,

112-124.

On October 23, 1996, Schuler filed an Amended

Complaint for Damages (Amended Complaint) against

McGraw-Hill seeking damages for defamation, invasion of

privacy, prima facie tort, intentional infliction of emotional

distress, interference with contractual relations, and interference

with prospective advantage. Aplt. App., 125-153. On January

6, 1997, McGraw-Hill again filed a Motion to Dismiss (Motion)

in lieu of filing an answer to Schuler's Amended Complaint.

Aplt. App., 155. At that time a motion package was filed which

included: 1) McGraw-Hill's Motion to Dismiss and supporting

brief; 2) Schuler’s Response to Motion to Dismiss; and 3)

McGraw-Hill's Reply Brief in Support of Defendants[‘] Motion

to Dismiss. Aplt. App., 155-224. No initial scheduling

conference was held in this case and, in accordance with District

Court of New Mexico Local Rule (Civil) 26.4(a), discovery was

prevented from beginning in this case.

App. 97

Gi Trial Court Disposition

On June 11, 1997, the trial court entered a

Memorandum Opinion and Order and an Order of Dismissal

granting McGraw-Hill's second Motion to Dismiss. Aplt. App.,

225-251. Schuler timely filed a Notice of Appeal on July 10,

1997. Aplt. App., 252.

D. Statement of Relevant Facts

On or about September 12, 1994, Eleanor Schuler was

living as a private person in Rie Rancho, New Mexico. Aplt.

App., 125, 4 1; 126,411. At that time, she was employed as a

corporate officer with Printron, Incorporated, and enjoyed a

good reputation. Aplt. App. 3, § 12.

Also, on or about September 12, 1994, McGraw-Hill

published, produced, distiibuted, printed, authored, edited,

researched, and investigated a four (4) page article which

appeared in its Business Week magazine, alternately identified

as "CHANGE SEX, CHANGE THE PAST: BEFORE BECOMING

PRINTRON CEO AS ELEANOR SCHULER, JOHN HUMINIK JR.

RAN TWO COMPANIES THE SEC ACCUSED OF FRAUD.

WHO KNEW?" and "DID THE AMEX TURN A BLIND EYE TO

A “SHOWCASE' STOCK?" Aplt. App., 126, § 12; 143, 144.

McGraw-Hill also distributed and made available its article over

the internet. Aplt. App., 148-153. The article continues to be

available and accessible, world-wide, through that medium.

The article contained the following items and statements

referenced in Schuler's Amended Complaint and Schuler's

Response to Motion to Dismiss (Kesponse), which for

convenience of reference, are lettered as in Schuler's Amended

Complaint:

App. 98

Photograph of Plaintiff in black and white in

contrast to all other surrounding color

photographs, accentuating Ms. Schuler's

femininity depicting close up of Plaintiff in social

attire and social setting and pose while other

pictures of business people are photographed in

professional business attire and professional

settings. Aplt. App., 127, 143, column 2.

Photograph caption "CHANGE SEX, CHANGE

THE PAST: BEFORE BECOMING PRINTRON

CEO AS ELEANOR SCHULLER, JOHN

HUMINIK, JR. RAN TWO COMPANIES THE

SEC ACCUSED OF FRAUD. WHO KNEW 2?”

Aplt. App., 127, 143, column 2.

"DID THE AMEX TURN A BLIND EYE TO A

‘SHOWCASE’ STOCK ?" Aplt. App., 144, title.

"Finance INVESTIGATIONS[.]" Aplt. App.,

127, 144 heading.

"The bizarre Printron case shows how the

exchange too often ignores the most glaring

signs of trouble." Aplt. App., 127; 143, column

1 bottom; 144, subtitle.

But she didn't like to talk about that." Aplt.

App., 127, 144, column 1, { 3.

App. 99

"CHECKERED RECORD." Aplt. App., 127,

144, { 4 subheading.

“there was a stain on her record. She had twice

been sued in Federal Court by the SEC, twice

agreeing to injunctions, without admitting or

denying guilt, that prohibited her from violating

the securities laws. One of the injunctions was

known to the Amex when it approved Printron's

listing on the ECM. The other was not." Apit.

App, 127, 144, column 2, { 1.

"Eleanor Schuler had two records of alleged

securities law transgressions-one as a woman,

and one as a man. In fact, the name “Eleanor

Schuler’ was one that she had made up out of

thin air.” Aplt. App., 127-28, 144, column 2, §

y 5

"Before a sex-change operation in the late

1970s, she had used the name her parents gave

her[.]" Apit. App., 128, 144, column 2, § 2.

"Her earlier SEC record, and her change in

gender were concealed by Printron not only

from Barnes but from the Amex' “blue ribbon’

panel of Wall Street notables that had

handpicked the 23 ECM companies. Schuler

also hid her previous identity, and the injunction,

from securities regulators in New [Y]ork, in a

“sunshine law’ filing 14 months before the day

the balloons fell on the Amex floor (box)." Apt.

App., 128, 145, column 2, § 2-column 3, { 1.

App. 100

"And the Amex is still reeling from the ECM

imbroglio, even though its greatest

embarrassment, Printron, has never been publicly

aired." Aplt. App., 128, 144, column 3, § 2.

Insert photographs of [Schuler] and caption "HE

DID/SHE DID: PRINTRON'S PAST . . . The

SEC may have thought they were two separate

people.” Aplt. App., 128, 144, columns 2-3,

highlighted box.

"Schuler/Huminik affair{]" Aplt. App., 128,

145, column 1, § 1.

"Printron was little more than a fraud - a ‘sting,’

as the suit puts it[.]" Aplt. App., 128, 145,

columns 2-3, § 2.

“How did Printron get past the gatekeepers at

the Amex? Could the Printron fiasco be

repeated?" Aplt. App. 128, 145, column 3, { 1.

"A good place to address these questions is at

the very beginning-in the story of Eleanor

Schuler’s previous manifestation, John Huminik,

Jr[.]" Aplt. App., 128, 145, column 3, § 2.

"He was a double agent for the FBI and the

Soviet government.” Aplt. App., 128, 145,

column 3, { 3.

"As recounted in his slickly written 1967

book[{]" Aplt. App., 128, 145, column 3, { 4.

App. 101

“Neither the book nor the double agent career

were mentioned in any of Printron's filings with

investors and regulators." Aplt. App., 128-29,

145, column 3, ¢ 5.

"[]We have nothing against transsexuals[']"

Aplt. App., 129, 146, column 1, § 1.

“At issue is not her sex change, but rather the

extent to which her concealment of that change

masked other things." Aplt. App., 129, 146,

column 1, q 1.

“The trouble . . . arises whenever Schuler’s pre-

Schuler activities are mentioned in Printron's

public disclosures. Time after time, they refer to

Schuler as a ‘she’- even when discussing

positions held when Schuler was a “he.” Aplt.

App., 129, 146, column 1, § 2.

“Moreover, the filings say that Schuler was a

“self-employed technology and corporate

consultant’ from 1966 to 1991. In fact, Schuler,

as Huminik, was president of General Industrial

Corp. [GIC] and General Enterprises Corp.,

which allegedly defrauded investors during the

1970s." Aplt. App., 129, 146, column 1, 4 2-3.

“Huminik repeatedly lied to investors about

GIC. Huminik agreed to a permanent injunction

barring him from making untrue statements, and

otherwise defrauding investors, in the future.

He agreed to the injunction without admitting or

denying the SEC's allegations." Aplt. App., 129,

ab.

ac.

App. 102

146, column 1, { 3.

"Was Schuler being shy-or was she improperly

misleading investors?" Aplt. App., 129, 146,

column 1, { 4.

"Schuler was within her rights to hide her

previous gender and to not disclose the 1976

injunction, because of the SEC rule requiring

disclosure only for five years.” Aplt. App., 129,

146, column 1, { 4.

"Zimmerman maintains that a previous

injunction is a “material event’ that must be

disclosed beyond the five-year period set by the

rules." Aplt. App., 129, 146, column 1, 4.

"the next Huminik/Schuler exploit" Aplt. App.,

129, 146, column, 1, { 4.

"John Huminik was no longer exhibiting a James

Bond persona. “Marine blue shadow haloes the

eyelids,’ . . . The Post went on to describe the

sex change and, in graphic detail . . . None of

this would amount to a hill of beans if Eleanor

Schuler, as Printron CEO, hadn't fallen afoul of

the SEC." Aplt. App., 129-30, 146, column 1,

q 5.

"The Huber-Schuler ties were shrugged off by

the blue-ribbon panel. “We were assured by the

Amex staff that the issue had been resolved[.]""

Aplt. App., 130, 146, column 2, { 2 - column 3,

q 1.

aj.

App. 103

“But Hamarat and another former panel

member[] . .. now say that the panel didn't

know that Eleanor Schuler used to be John

Huminik-or that Schuler consented to not one

but two injunctions by the SEC. If they had

known, they say, Printron's listing would never

have been approved.” Aplt. App., 130, 146,

column 3, § 1.

"The SEC's mild treatment of Schuler in 1991

raises yet another issue: Did the SEC know in

1991 that Schuler was Huminik?" Aplt. App.,

130, 146, column 3, ¢ 2.

"One explanation might be that the SEC felt so

much time had passed that it would not pursue

a criminal contempt action against Schuler.”

Aplt. App., 130, 146, column 3, § 2.

“Huminik/Schuler matter" Aplt. App., 130, 146,

column 3, ¥ 2.

"If the SEC didn't know that the Eleanor Schuler

of 1991 was the John Huminik of 1976-and the

Amex surely didn't know-there was one possible

explanation. The Central registry of the

National Association of Securities Dealers . . .

has John Huminik on its data base. And Eleanor

Schuler too." Aplt. App., 130, 146, column 3,

q 3.

“But they are listed as two separate people, with

one ‘incident’ to his name and one to hers.”

Aplt. App., 130, 146, column 3, § 3.

App. 104

al. "A NASD spokesman notes that more detailed

information, such as social security numbers, is

only maintained for NASD members-not

corporate officers who fall afoul of the SEC.”

Aplt. App., 130, 146, column 3, 3.

am. “But the Printron disaster and the miserable

performance of the other ECM companies make

it plain that the Amex hasn't gone far enough."

Aplt. App., 130-31, 147, column 1, § 4.

Vv. SUMMARY OF ARGUMENT

For over one thousand years, a person's good name and

reputation have been recognized as important interests requiring

legal protection. L. Eldridge, The Law of Defamation § 53, pp.

293-294 (1978). Schuler's right to protect her own good name

and reputation "from unjustified invasion and wrongful hurt

reflects no more than our basic concept of the essential dignity

and worth of every human being -- a concept at the root of any

decent system of ordered liberty." Rosenblatt v. Baer, 383 U.S.

75, 92 (1966). This right is "a basic of our constitutional

system[]" and is entitled to equal recognition by the court. Id.

Private persons, such as Schuler, are more vulnerable to injuries

caused by defamation and also are more deserving of recovery.

Id. at 93-94. Gertz v. Welch, Inc.. 418 U.S. 323, 344 (1974).

The trial court failed to give equal import and deference

to laws meant to protect Schuler's reputation, when it reviewed

the article's statements individually and the article as a whole.

When properly viewed, Schuler's Amended Complaint

adequately states claims and causes of action for defamation,

false light invasion of privacy, intentional infliction of emotional

distress, interference with contractual relations, and interference

ONO Pc ee Lee Oe DER meee Mee Te MONT RE eT

App. 105

with prospective advantage. Aplt. App., 125-153, 1-17.

McGraw-Hill's tortious statements irreparably damaged

Schuler’s business and private life. Under these circumstances,

the trial court's summary dismissal of Schuler’s Amended

Complaint was highly improper and should be reversed on

appeal.

VI. ARGUMENT

A. APPELLATE REVIEW STANDARD

In reviewing the trial court's grant of McGraw-Hill's

second Motion to Dismiss under Federal Rule of Civil

Procedure 12(b)(6), the appellate court reviews the trial court's

decision "de novo.” Jojola v. Chavez, 55 F.3d 488, 490 (10th

Cir. 1995); Gagan v. Norton, 35 F.3d 1473, 1474 n.1 (10th Cir.

1994), cert. denied, 115 S. Ct. 1175 (1995). The appellate

court must accept as true, all well pleaded allegations of the

complaint and "construe them in the light most favorable to the

plaintiff." Id.; Gagan, id. (quoting Williams v. Meese, 926 F.2d

994, 997 (10th Cir. 1991)). Dismissal is only proper when a

plaintiff can prove no set of facts to support a claim for relief.

Jojola, id.; Noland v. McAdoo, 39 F.3d 269, 273 (10th Cir.

1994).

B. THE TRIAL COURT ERRED BY GRANTING

MCGRAW-HILL'S MOTION TO DISMISS

Despite long standing historical interest in protecting

Schuler's reputation and good name, the trial court failed to

adhere to the applicable standard of review favoring Schuler.

Instead, the trial court viewed the pleadings to Schuler's

detriment and failed to fairly and objectively evaluate the

allegations of her Complaint and Amended Complaint. For

;

pF!

;

App. 106

reasons discussed below, the trial court's error should be

corrected on appeal and its decision should be reversed.

1. THE TRIAL COURT FAILED TO VIEW

THE PLEADINGS, AS TRUE, IN FAVOR

OF SCHULER

(a) Trial Court's Obligation

In deciding McGraw-Hill's Motion to Dismiss, the trial

court was obligated to accept as true all well pleaded allegations

in the complaint and to construe them in the light most favorable

to Schuler. Innovative Digital Equip., Inc. v. Quantum Tech.,

Inc., 597 F. Supp. 983, 988 (N.D. Ohio 1984). Also, the trial

court was obligated to deny McGraw-Hill’s Motion if any legal

theory existed for recovery. The trial court should not have

granted McGraw-Hill's Motion absent a finding, beyond doubt,

that Schuler could prove no set of facts that would entitle her to

judgment. See Lafoy v. HMO Colorado, 988 F.2d 97, 98 (10th

Cir. 1993). The trial court erred by failing to adhere to the

above requirements in deciding McGraw-Hill's Motion and its

decision should be reversed.

2. SCHULER STATED A VALID CLAIM

FOR DEFAMATION

(a) Defamation Elements

To prove her defamation claim, Schuler is required to

show that McGraw-Hill published a false statement of fact,

concerning Schuler, which was defamatory, was understood to

be defamatory by the recipients of the statement, and which

caused actual injury to Schuler’s reputation. Schuler also must

show that McGraw-Hill either knew the communication was

App. 107

false or negligently failed to recognize that it was false or acted

with malice. N.M. UJI § 13-1002 to 13-1011 (1997).

In determining whether a communication is or contains

a Statement of "fact" or “opinion,” the fact finder must consider:

"(A) The entirety of the communication and the context in

which the communication was made; and (B) whether

reasonable persons would be likely to understand the

communication to be a statement of the defendant's opinion or

a statement of fact." Id. at § 13-1004. "[A]n opinion which

implies that it is based upon the existence of undisclosed facts is

the same as a statement of fact." Id. Where a statement alleged

to be defamatory can be interpreted as either fact or opinion,

and the court cannot rule that, as a matter of law, the statement

was not understood as fact, “there is a triable issue of fact for

the jury." Marchiondo v. Brown, 98 N.M. 394, 404, 649 P.2d

462, 472 (1982) (quoting Bindrim v. Mitchell, 92 Cal. App. 3d

61, 155 Cal. Rptr. 29, 39, cert. denied, 444 U.S. 984 (1979)).

Likewise, statements purporting to be opinions often are

understood to be factual statements. See Marchiondo, 98 N.M.

at 401, 649 P.2d at 469. "[WJhere there are implications in the

statement “that the writer has private, underlying knowledge to

substantiate his comments about plaintiff,” and such knowledge

implies the existence of defamatory facts, the statement is

deemed to be factual and not privileged. Kutz v. Independent

Pub. Co., Inc., 97 N.M. 243, 246, 638 P.2d 1088, 1091 (Ct.

App. 1981). In determining whether a statement is “of and

concerning” a person, the statements substance, as opposed to

its form is critical. See Rosenblatt, 383 U.S. at 86; New York

Times Co. v. Sullivan, 376 U.S. 254, 288 (1964).

App. 108

tb) McGraw-Hill's Article Defamed

Schuler

Schuler’s Amended Complaint and Response identified

_ fumerous statements made by McGraw-Hill in its Business

Week article. Aplt. App., 125-153; 182-209. The defamatory

statements included the items listed in Section IV (D) herein

lettered as b, f, h, i, k, n, s, t, u, v, w, Z, ac, ad, ae, af, ag, ai, and

ak. These defamatory statements are discussed below.

b. Photograph caption "CHANGE

SEX, CHANGE The PAST:

BEFORE BECOMING

PRINTRON CEO AS ELEANOR

SCHULER, JOHN HUMINIK, JR.

RAN TWO COMPANIES THE

SEC ACCUSED OF FRAUD.

WHO KNEW?" (Aplt. App.,

143, column 2, top.).

The statement "CHANGE SEX, CHANGE THE PAST"

appeared in the top center of Business Week's index;

prominently displayed to readers. Aplt. App. 143, column 2,

top. This phrase stated as a fact that Schuler was able to change

her past business and other history as a man, by changing her

sex. When viewed in the context of the entire sentence, the

statement further implied that Schuler had some evil motive that

either required or contributed to her decision to change her sex.

McGraw-Hill's article also included the following related

statements regarding the SEC's knowledge or lack of knowledge

of Schuler's past:

App. 109

Before becoming Eleanor Schuler, John Huminik Jr. ran

two companies that the SEC accused of fraud. Later,

she signed another consent decree. The SEC may have

thought they were two separate people. Aplt. App.,

144, highlighted box.

The SEC's mild treatment of Schuler in 1991 raises yet

another issue: Did the SEC know in 1991 that Schuler

was Huminik? Aplt. App., 146, column 3, § 2.

Before the trial court, McGraw-Hill also argued that the SEC's

lack of knowledge of the two consents may be explained due to

the organization of computerized judicial databases by caption.

Aplt. App., 212.

McGraw-Hill's above statements that the Securities and

Exchange Commission (SEC) did not know, or may not have

known, that Schuler was the signatory on a 1976 consent and a

1991 consent are statements of fact capable of being proved or

disproved. Schuler signed both consents after her sex change

and under her current name. Aplt. App., 185, 207-209.

Nevertheless, Schuler had no duty to disclose the prior consent

or her sex change beyond a five (5) year period. See 17 C.F.R.

11 § 229.401(f).

Schuler asserts that the SEC knew she signed both

consents and that McGraw-Hill's statements are false. Her

assertions must be viewed as true for purposes of appeal.

The statement "CHANGE SEX, CHANGE THE PAST"

was not a question. No question mark follows the statement

and an ordinary person would not read it as such. A question

mark did appear following the phrase "WHO KNEW?" That

phrase, when viewed in the context of the preceding sentence,

App. 110

confirmed that Schuler changed her known history as a man by

changing her sex to female. It further implied that Schuler's sex

change effectively deceived others with whom she had business

dealings.

Further, the statement, when viewed in context, implied

that it was based on undisclosed facts or sources, likely

including SEC personnel. Thus, the statement was not an

opinion.

Also, the above statement was not a harmless "tag line."

As noted above, the statement attributed to Schuler improper

motives and painted her as deceptive, dishonest, and immoral,

particularly when viewed in the context of the entire article. A

fair reading of Schuler's Amended Co:nplaint and Response

reveals that she has sufficiently alleged that the above statement

is defamatory and the trial court erred in concluding otherwise.

f. "But she didn't like to talk about

that." Aplt. App., 144, column

1, q 3.

This sen

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