Opposition Brief — Bressler v. Fortune Magazine

No. 92-1210

FER

IN THE

Supreme Court of the Wnited States

2 TERM, 1992

IT OF CERTIORARI TO TIHII

\PPEALS FOR THE SIXTH CIRCUTI

BRIEF OF RESPONDENT FORTUNE MAGAZINE

IN OPPOSITION TO PETITION FOR

\ WRIT OF CERTIORARI

FLOYD ABRAMS

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QUESTION PRESENTED

Whether the court below correctly held, based on its review

of the entire record, including substantial evidence provided by

a variety of mutually corroborative sources, that plaintiff, a

public official, failed to demonstrate that the challenged por-

tion of the article was published with actual knowledge of its

falsity or serious doubts as to its truth.

il

TABLE OF CONTENTS

PAGE

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SAAR Ge PARP OP TRE Bs 8 066d Svcs Geneeedeébendsb ences lil

COUNTER-STATEMENT OF THE CASE...........0000 2

ASR Se CRUAPEMNEE isk ne insu nbdn eke caecavennes 14

REASONS FOR DENYING THE WRIT.................. 16

THE SIXTH CIRCUIT’S APPLICATION OF

ESTABLISHED CONSTITUTIONAL PRINCIPLES

IN THIS DEFAMATION ACTION IN ACCORDANCE

WITH PRECEDENTS OF THIS COURT RAISES

NO ISSUE WORTHY OF THIS COURT'S CON-

ARN TET os ike bd cndnunvankewksendwhedsceesdeeinn’s 16

A. The Majority Opinion Below Properly Considered

the “Gist” or “Sting” of the Article with Respect

0 FORE SR hss. 0'6ha whee Un eeunebasikecsess 17

B. The Majority Opinion Below Reviewed the

Record in Accordance with This Court’s

Precedents and Properly Concluded, Based

on Substantial Documentary Evidence, that

Plaintiff Had Failed To Demonstrate Fortune’s

Actual Knowledge of Falsity or Serious

Doubts as to the Truth of the Article............ 21

(APO APURINY 5 00500 65600ns 054000065 sen ekmen URE ees 24

iil

TABLE OF AUTHORITIES

Cases PAGE

Anderson v. Cramlet, 789 F.2d 840 (10th Cir. 1986)...... 18

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

EE, CE RUED sco ccccessvesedsvecuseesess 15, 16, 21

Clyburn v. News World Communications, Inc., 903 F.2d

UE cap escbsevscndcaceneccesersevseess 22

Edwards v. Bell, 130 Eng. Rep. 162 (1824) .............-. 18

Harte-Hanks Communications, Inc. v. Connaughton,

SD CRUD scone ccccscvcsasscvcssvsccesces passim

Liberty Lobby, Inc. v. Dow Jones & Co., 838 F.2d 1287

(D.C. Cir.), cert. denied, 488 U.S. 825 (1988)....... 18

Lothschuetz v. Carpenter, 898 F.2d 1200 (6th Cir. 1990). 16

Masson v. New Yorker Magazine, Inc., 111 S.Ct. 2419

ese e ee Sie hcabsseeccrescensacesse iS, 17, 19

New York Times Co. v. Sullivan, 376 U.S. 254 (1964) ..21, 22

Orr v. Argus-Press Co., 586 F.2d 1108 (6th Cir. 1978),

cert. denied, 440 U.S. 960 (1979)............0.22005. 18

Constitutional Provisions

SO I IE, Be cc waccnccccccccsesscccsecesccsccee passim

Rules and Regulations

Supreme Court Rules

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re dee ek pane ase tones sessseccuesnccecsancs n.1

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PAGE

Nuclear Regulatory Comm’n Rules

Fe ain ls is CU OF CED an pb kc dcbuckcicancnibeons 4-5

Other Authorities

W. Keeton et al., Prosser and Keeton on Torts (Sth ed.

PRLS Sb otukedeSal baer caecheheoSUENs oh ecea in enaeeenss 18

IN THE

Supreme Court of the United States

OCTOBER TERM, 1992

No. 92-1210

_>

MARCUS N. BRESSLER,

Petitioner,

FORTUNE MAGAZINE, A DIVISION OF TIME INC.,

Respondent

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE SIXTH CIRCUIT

>

BRIEF OF RESPONDENT FORTUNE MAGAZINE

IN OPPOSITION TO

PETITION FOR A WRIT OF CERTIORARI

Respondent Fortune Magazine (“‘Fortune”’)' respectfully sub-

mits that a writ of certiorari to review the judgment of the

United States Court of Appeals for the Sixth Circuit should not

issue because that judgment is not in conflict—nor even said to

be in conflict—with that of any other circuit, because no ques-

tion worthy of the exercise of the Court’s certiorari jurisdiction

is presented and because, in any event, the decision below is in

all respects correct.

l Pursuant to Supreme Court Rule 29.1, Fortune advises the

Court that it is a division of Time Inc., a wholly-owned sub-

sidiary of Time Warner Inc. A list of all other affiliated compa-

nies, including all other subsidiaries (except wholly-owned

subsidiaries) of Time Warner Inc. is attached as an appendix to

this brief.

COUNTER-STATEMENT OF THE CASE

The Petition misstates certain significant facts and omits

mention of the documentary evidence in the record reflecting

Fortune’s extensive investigation and its reliance on a number

of mutually corroborative sources for the article at issue. The

Petition also wholly fails to note that Petitioner refused to

speak with Fortune when its reporter sought to interview him.

These and other omissions and misstatements necessitate this

counter-statement. See Supreme Court Rule 15.1.”

The Article

The October 27, 1986 Fortune article at issue, “Nuclear

Scandal Shakes The TVA,” was primarily devoted to a dis-

cussion of the nine non-operating nuclear power plants owned

by the Tennessee Valley Authority (TVA) and to an investiga-

tion concerning allegations of conflict of interest on the part of

the TVA’s chief of nuclear operations. Seven paragraphs of the

article (at 40, 44) reported on federal and private investigators’

“allegations about an attempted cover-up of safety questions at

the Watts Bar plant” and the involvement therein of Marcus

Bressler, the TVA specialist on nuclear engineering quality and

safety standards.

The article reported that a number of welds in pipes carrying

water and steam into and out of the reactor containment area at

that nuclear power plant had not been inspected in accordance

with the governing engineering code requirements. (/d. at 44)

Investigators had found evidence, the article reported, that an

independent inspector employed by the Hartford Steam Boiler

Inspection and Insurance Company (“Hartford’’) under a con-

2 We have also submitted for lodging with the Court a photo-

copy of the article at issue, which appeared in the record below

(Joint Exhibit (“Ex. J”) 23-29; Joint Appendix (“JA”)

251-52, 1687), since the Petition provides only edited excerpts.

(Compare Petition (“Pet.’’) at 3-5 with article at pp. 44, 48.)

as

3

tract with TVA had objected to the use of such pipe welds “as

is” but that he had been directed by his superiors to accede to

such use. (/d. at 44) The article stated that TVA’s own inves-

tigators (identified by name) found evidence that “pressure”

was brought to bear by TVA “to cover up the safety violation”

and it reported that the Hartford incident was confirmed in a

draft report by the federal Nuclear Regulatory Commission

(“NRC”). (/d. at 48) Petitioner Marcus Bressler, of TVA’s engi-

neering code compliance group, was said to have been named

by investigators as having “exerted” “pressure” “to cover up

the breach of safety standards” and to have “warned” Hartford

“to get its inspectors in line” or face the loss of renewal of its

inspection contract. (/d. at 48) The article also reported that

two of the internal TVA investigators who had looked into this

and other allegations of safety violations had complained that

they had themselves been “harassed and intimidated by TVA

management” for their investigative efforts. (/d. at 48) Their

claims of harassment, the article pointed out, were upheld by

the United States Department of Labor. (/d.)

Several months after the Fortune article appeared, the

Nuclear Regulatory Commission, the federal agency with over-

sight responsibility for TVA nuclear plants (and which con-

ducted one of the investigations reported upon by Fortune),

issued a formal Report of Investigation. The NRC Report con-

cluded that

a preponderance of testimonial, documentary, and cir-

cumstantial evidence established that four of nine ANIs

{Authorized Nuclear Inspectors] were either coerced,

pressured, harassed, intimidated, and/or threatened by

HSBII [Hartford] management. This included one ANI

who was directed by his management to accept the dis-

position of an NCR [nonconforming condition, or non-

conformance, report] which did not meet code

requirements. Furthermore, it appears that responsible

TVA managers searched for avenues to avoid the delay of

fuel loading and the expense of inspecting the hidden

welds, and may have pressured HSBII [Hartford] man-

agement to accept the disposition of this NCR that vio-

lated code requirements.’

The only “TVA personnel,” management or otherwise, referred

to in the conclusion section of the Report were Bressler and

two colleagues in the Office of Code Administration, which he

headed.‘

* * *

In 1986, as today, the role of nuclear power, the safety and

reliability of nuclear power plants, and the procedures that

safeguard them were of intense public interest, controversy,

and concern.

TVA is (and was) responsible for meeting “quality assurance

requirements for the design, construction, and operation of

[nuclear power plant] structures, systems, and components. . .

[and for] all activities affecting the safety-related functions of

those structures, systems, and components” at each of its power

plants. 10 C.F.R. Pt. 50, App. B, at 772 (1992). The applicable

regulations permitted TVA to delegate these “quality assurance”

functions to “independent” contractors. /d. at 772-73. TVA was

required, however, to ensure that the individuals who performed

3 United States Nuclear Regulatory Commission, Report of

Investigation: Watts Bar Nuclear Power Plant—Alleged Coercion

of Authorized Nuclear Inspectors (ANI) by ANI Management

Through TVA Management (Nov. 20, 1986) (“NRC Report”) at 2

(Ex. J-37; JA 341-42, 1693).

4 See NRC Report at 34-36. Although the Petition asserts that

the “final [NRC] report did not even mention Bressler, much less

any of Fortune’s serious allegations about him”’ (Pet. 9), Bressler

was explicitly mentioned in the Report by name as the subject of

allegations to the effect that he had told Hartford management

that the conduct of their inspectors might cause their company to

lose its inspection contract with TVA. (NRC Report at 13, 26, 35)

The Petition’s statement in this crucial respect is flatly at variance

with the record.

these important “quality assurance” functions “shall have suf-

ficient authority and organizational freedom to identify quality

problems; to initiate, recommend, or provide solutions; and to

verify implementation of solutions.” /d. at 773.

TVA contracted with Hartford to perform inspections at

TVA’s Watts Bar nuclear power plant so as to identify any such

problems during the construction of that facility. On-site

inspections of Watts Bar were performed by Hartford person-

nel known as Authorized Nuclear Inspectors (“ANIs”), each of

whom received substantial training before attaining such sta-

tus. The ANIs inspected nuclear plant construction to deter-

mine, inter alia, if such construction satisfied the requirements

of the Code promulgated by the American Society of Mechan-

ical Engineers (ASME) for such construction.

The Fortune statements concerning Petitioner Bressler

related to the role he played in the treatment of a “noncon-

forming condition report” (NCR) concerning an acknowledged

departure from that Code and pressure that was brought to bear

on individual ANIs through their employer Hartford in con-

nection with the handling of that report.

In the spring of 1984, a Hartford inspector named Howard

Haston learned from a TVA employee that certain welds on

pipes contained within the “penetration assemblies” at the

Watts Bar plant, then under construction by TVA, had not been

visually inspected for possible leakage as part of certain

required testing. The piping in question, as one of plaintiff's

experts testified at trial, “penetrate[d]” the “steel containment

vessel” which contains “the reactor vessel” as well as “the pri-

mary reactor coolant piping, which is what contains the more

critical nuclear fuel, the radiated water, fluids, and poses the

greatest danger” in the event of an accident. The ASME Code

requires that the welds on all such pipes be tested under water

pressure and visually observed as part of this test to detect any

leakage (“hydrostatically tested”). No leakage whatsoever is

permitted under the ASME Code. At least one internal weld in

each of the approximately 50 penetration assemblies at issue in

Unit One at Watts Bar had not been visually inspected. These

welds were, as both plaintiff and plaintiff's expert conceded,

“safety-related welds”.°

Some time after inspector Haston prepared a preliminary

“monitoring report” on the uninspected welds, TVA personnel

prepared a nonconforming condition report describing the fail-

ure to meet the Code requirements. A TVA engineer reviewed

the report and, after consulting with plaintiff Bressler, decided

that no further action was required to deal with the lack of

inspection. The engineer prepared a disposition recommenda-

tion for “use as is”. He acknowledged that Bressler was “instru-

mental in suggesting the disposition and the rationale” set forth

in his recommendation memo.

Inspector Haston’s signature was required on the report to

approve the use of the welded pipes, notwithstanding the non-

conforming condition. In its absence, TVA would have been

obliged to seek approval from the Nuclear Regulatory Com-

mission, an approval process that Bressler and others at TVA

feared might delay scheduled fuel loading. (NRC Report at 35)

But inspector Haston was unwilling to “certify that to the best

of my knowledge all code requirements have been met” for the

simple reason that they had not—the safety-related welds had

not been visually inspected for leakage as part of the hydro-

Static testing. (Testimony of Howard Haston, JA 628)

Bressler contacted Haston on April 20, 1984, after Haston

had “identified the problem” but before the “use as is” dispo-

sition was prepared. Haston continued to insist that there was

a Code violation. He reported the violation first orally and then

in writing to his Hartford superiors. Although denying that any

improper pressure was exerted, Bressler, Haston and two of

5 A safety-related weld is one that would “prevent or mitigate”

the consequences of an accident. (TVA, ASME Section III Quai-

ity Assurance Manual, at 9) (Defendant's Exhibit (“Ex. D’’) 24;

JA 587-88, 1767)

7

Haston’s superiors, Harold Robison and William Higgin-

botham, all acknowledged that during this period Bressler dis-

cussed the matter directly with them.

Robison thereafter wrote a memorandum to Haston telling

him that Hartford management had concluded that the TVA’s

resolution was acceptable. The memo was based on the

assumption that Haston’s objection was only that he or another

ANI personally had not visually inspected the welds as part of

the tests. But as Haston explicitly observed in his written

response and in his conversations with Robison, his concern

was that no one had visually inspected the welds for leakage.

Despite Haston’s remonstrations and notwithstanding the Code

requirements, Haston’s Hartford superiors directed him, against

his will, to sign the report approving the welds.

After receiving that direction, Haston did sign the report, but

only after placing on it an explicit notation that he did so “per

written and verbal direction of H.L. Robison”. Higginbotham

acknowledged that Haston did “sign against his will”, that a

sign-off accompanied by a notation such as Haston’s was with-

out precedent in his experience, and that in retrospect, the “use

as is” disposition in the report at issue represented “a poor

judgment call”. Bressler himself later acknowledged that the

welds in question did not satisfy the Code. (NRC Report at 33)

In February, 1985, TVA certified to the Nuclear Regulatory

Commission that Watts Bar was ready for an operating license.

By the next month, however, the Subcommittee on Oversight

and Investigation of the House Committee on Commerce and

Energy had assigned an investigator to look into “employee

concern having to do with allegations there was collusion

between TVA and Hartford Steam Boiler of Atlanta to the

effect their on-site nuclear inspectors were being intimidated

or forced to sign off on systems that they felt were not safe.”

The TVA Board of Directors was advised in April, 1985 by an

engineer on TVA’s Nuclear Safety Review Staff (NSRS) that

Towards the end of January 1984 through February 1984

a series of anonymous Calls started to come in pouring out

their hearts on structural welding and piping welding

(ASME). . . . Most of these calls centered on two sub-

jects, NCR [nonconformance report] 2111 from Watts Bar

and the ANIs (Authorized Nuclear Inspectors). . . . The

stories on the ANIs were horrendous. They came in two

versions, one that they had been “bought off”, the other

was that they had been told to back off by their employers

as a result of “TVA pressure”. (Ex. J-10 at 6; JA 242-43,

1266)

The TVA Board hired an independent contractor, the Quality

Technology Corporation (QTC), to investigate those concerns.

Mansour Guity, an investigator for the NSRS, was later also

assigned by TVA to look into the underlying claims of collu-

sion or coercion. After interviewing Hartford ANIs and review-

ing Hartford documents, Guity reported to his TVA superiors

that he had gathered evidence demonstrating, inter alia, col-

lusion between TVA managers and Hartford managers in pres-

suring inspectors to accept nonconforming items. Guity himself

told TVA’s Assistant General Counsel that Bressler played a

central role in the apparent “collusion”, by “using his position

on various national code committees to cause Hartford to take

positions on TVA Code technical issues they wouldn’t other-

wise take”.

At a meeting involving Hartford personnel and Bressler, held

during a period in which QTC investigators were making

inquiries of TVA personnel and TVA was considering a renewal

of the Hartford contract with TVA, Bressler complained about

communications between Hartford inspectors and the very QTC

investigators whom TVA had hired to look into employees’

safety concerns. (Testimony of Marcus Bressler, JA 766-67) In

part as a result of Bressler’s complaints, Hartford issued new

regulations restricting communications between its inspectors

and outside investigators, regulations requiring that all code or

quality issues be cleared with Hartford management by indi-

9

vidual ANIs before they discussed them with the investigators.

(Ex. D-45, JA 423, 1785)

In October 1985, Guity resigned from the still uncompleted

NSRS investigation into the alleged “collusion”, on the ground

that his TVA superiors were exerting “undue pressure” on him

during the investigation.®

In November 1985, the NRC Office of Investigation began

yet another investigation into the safety concerns. On Novem-

ber 20, 1986, about a month after Fortune's article was pub-

lished, the NRC released its final report. The Report, entitled

“Watts Bar Nuclear Plant: Alleged Coercion of Authorized

Nuclear Inspectors (ANI) by ANI Management Through TVA

Management,” specifically confirmed that ANI Haston was

among those “coerced, pressured, harassed, threatened and/or

intimidated by Higginbotham [or] Robison . . . .” (NRC

Report at 34) Bressler specifically admitted to the NRC that

“the ASME Code was violated when the inaccessible welds

were not examined for leakage during the system hydrostatic

testing” and that “the planned schedules for fuel loading were

also a factor in not inspecting the welds.” (/d. at 35)

The NRC Report quoted Hartford ANIs who stated that they

had been pressured by the TVA, through Hartford management.

One of the ANIs, Henry Best (who had replaced Haston at

Watts Bar in the early fall of 1985), told the NRC that his

supervisor, Higginbotham, had named Bressler as the source of

a warning that Best might cause Hartford to “los[e its] contract

with TVA.” (NRC Report at 13) The NRC Report also quoted

6 Guity filed a retaliation claim against TVA in December 1985

before the Department of Labor, asserting that he had been pres-

sured because of his investigation’s preliminary findings. So did

the engineer who had advised TVA'’s Board about “TVA pres-

sure’’. After the Department of Labor ruled in favor of both

claimants, and prior to the hearing of its appeal, TVA settled the

cases, agreeing to provide back pay, attorneys’ fees, and rein-

statement as part of the settlement.

10

Higginbotham’s acknowledgment that “he has had calls from

. Bressler and Joest of CSM [Codes, Standards and Mate-

rials], complaining about activities of the ANIs” and confirmed

Haston’s quotation to a Fortune reporter of Higginbotham’s

comment, “Woe be to any inspector that costs us a contract”.

Hartford inspector George Deaton, a colleague of Best's at

Watts Bar, told the NRC investigators that Higginbotham had

informed him in October of 1985 that if Deaton pursued his

questioning (first raised by Haston in the spring of the previ-

ous year) of the “use as is” disposition of the welds covered by

Report 5609, Higginbotham would receive a phone call from

TVA managers. While noting Bressler’s denial that he had

applied pressure on ANIs to accept “rejectable work”’, the NRC

Report also concluded that “[t]here is testimonial evidence to

support that TVA, through [Hartford], attempted to discourage

the site ANIs from talking to QTC and NSRS personnel”. (/d.

at 35)

After summarizing the evidence, the NRC Report stated as

its “Agents’ Conclusion” that Hartford personnel “failed, either

inadvertently or by design” to deal with Haston’s concer from

a “technical or potential safety standpoint” and that this dis-

position may have been “influenced by discussions” between

“TVA personnel” and Hartford and fear that other actions could

“jeopardize” its TVA contract. (/d.)

The Record as to Fortune’s Reporting

Extensive documentary evidence in the record revealed that

in researching the statements about Bressler, the Fortune

reporters interviewed a TVA investigator, a TVA engineer, two

private investigators hired by TVA, a Congressional aide, and

an authorized nuclear inspector (ANI), and reviewed sworn

deposition testimony of TVA’s Assistant General Counsel, a top

TVA investigator, and a Congressional investigator. The inves-

tigative sources collectively confirmed that the ANI, Haston,

had been forced, as a result of pressure from TVA’s Bressler

1]

through the ANI’s employer, to sign a report certifying con-

struction code compliance of certain welds in water and steam

pipes at the Watts Bar nuclear power plant when the ANI

believed (correctly) that no such compliance existed.

Documentary evidence also demonstrated that Fortune had

learned in its interview and research process that four separate

investigations—by the QTC, the House Committee on Com-

merce and Energy, the NSRS and the NRC—had turned up

evidence of undue pressure by TVA, through Hartford manage-

ment, on nuclear plant inspectors not to communicate their

safety concerns to investigators. In the record at trial were the

Fortune reporters’ interview notes, and the swom deposition

testimony of a TVA investigator, a Congressional subcom-

mittee investigator, and a TVA attorney also contained in For-

tune’s files, all of which provided consistent summaries of this

evidence. The notes show that three of the reporters’ sources

named Bressler specifically as the source of pressure on Hart-

ford: and two of the three named Bressler as the individual at

TVA who pressured a Hartford inspector with respect to his

refusal to approve the uninspected welds in April 1984. The

Fortune article writer testified that a fourth source identified

Bressler as the source of a specific threat, documented in his

interview notes, that TVA would not renew Hartford’s contract

if Hartford did not “play ball”.

In the course of the Fortune research in September 1986 into

investigators’ allegations that pressure had been exerted on

nuclear inspectors not to voice their safety concerns, Owen

Thero, a former QTC investigator, told the writer, Brian

Dumaine, that Bressler had cautioned Hartford management,

“If you don’t play ball—Hartford could lose [its] contract” with

the TVA. Dumaine subsequently interviewed Guity, a former

investigator for TVA’s Nuclear Safety Review Staff, and Jerry

Smith, a former NSRS engineer, in Tennessee. Dumaine’s notes

indicate that Guity told Dumaine that “the TVA management

and Hartford managers forced (other) Hartford managers to

sign off on pipes despite objections of Hartford inspectors”.

12

Brett Fromson, another Fortune reporter, interviewed Guity

on three subsequent occasions in September 1986. Fromson’s

notes on Guity’s statements about the Haston incident reflect

that TVA had “pressured” Hartford “to accept the work”; that

there had been “apparent collusion between the Hartford

regional managers and TVA managers to persuade the ANI to

approve penetration welds which were not hydrostatically

tested”; and that Bressler was “the head man in the welds area

at Watts Bar”.

The reporters knew that Guity’s statements to Fortune had

been confirmed by the swom testimony (which the reporters

reviewed prior to publication) of the former chief of investi-

gation of the NSRS and of a former assistant general counsel to

TVA. The TVA’s Assistant General Counsel, William Mason,

had testified that there “was a serious question, whether there

was an improper T.V.A. link that was defeating the purpose of

the [Hartford inspection] contract and that independent nuclear

inspector”. His sworn testimony confirmed that Michael Kidd

(then the NSRS chief of investigation) had advised Mason in

early October, 1985 that Guity “had talked to some ANI’s and

had developed some information which he thought supported

a conclusion that there was some collusion or improper pres-

sure on communication between TVA and Hartford Steam

Boiler”. Specifically, Guity had learned that “Mark Bressler

. . who is in the Office of Engineering in the Code Section,

was using his position on various national code committees to

cause Hartford to take positions on T.V.A. code technical issues

that they wouldn’t otherwise take”. Guity himself had informed

Mason that

Bressler would talk to somebody in the Hartford office in

Atlanta about Code issues raised at the nuclear plant sites,

. . . Hartford Atlanta would then call the T.V.A. plant site

and explain away or order the resolution of the Code

issues at the plant site despite the fact that the Code or the

required engineering and substitution for the Code may

not have been in fact done.

Kidd’s testimony confirmed Mason’s account.

13

Fromson also learned in September, 1986 that Guity’s find-

ings had been confirmed by the preliminary results of an inves-

tigation by the NRC. A science adviser to the House

Subcommittee on Oversight and Investigations named Henry

Myers, who had been briefed by the NRC on its investigation,

told Fromson (as reflected in notes admitted at trial) that the

NRC had

found evidence supporting most of the NSRS allegations.

That there was a violation of the ASME Code. That

Bressler at TVA pressured Higginbotham . . . That Higg

told Robison to pressure Haston. That Robison did so.

Bressler is the guy who pressured Hartford in Atlanta.

Fromson subsequently interviewed a second former QTC

investigator, William Kemp, who also identified Bressler as a

source of TVA pressure on Hartford, specifically in the Haston

incident. Kemp told Fromson, as the reporter's notes indicate,

that

Since Hasten [sic] refused to sign the April 1984 NCR

[nonconformance report], Bressler at TVA called Hig-

ginbotham at Hartford in Atlanta, the regional manager.

“Hey your guy is raising hell.” Higg tells . . . Robison,

to tell Haston to sign the NCR. So in May, Haston signs

the NCR per request of Robison.

Kemp described this incident, according to the Fortune notes,

as an example of the “implicit threat” presented by TVA to its

outside inspection contractors that TVA would find another

inspection company if its current inspectors did not “back off”.

Fromson reached Haston himself by telephone at his home in

Texas in late September 1986. Fromson’s notes on the inter-

view reveal that Haston told him that before he had signed, at

the direction of his supervisor Robison, the nonconformance

report, the Hartford Regional Manager, Higginbotham,

was getting calls from Bressler, the guy in charge of

ASME codes and standards . . . I don’t think Bressler

ever directly threatened Higginbotham to pull the con-

14

tract, but the fear that it might be pulled was always there

for Hartford. Higginbotham had a saying, “Woe to the

inspector who costs us a contract.”

Although the Petition does not refer to it, Bressler himself

acknowledged at trial that he had received at least one tele-

phone message from a Fortune reporter in late September, 1986

seeking his comment in connection with the forthcoming arti-

Cle, and that he did not return the reporter’s call. (Bressler Tes-

timony, JA 756-58) It was undisputed that, as reported in the

article, a spokesperson for TVA also declined comment and

that Hartford was only willing to tell the reporters that it “has

done nothing wrong”.

Bressler and Fortune reporters Dumaine and Fromson testi-

fied at the trial in this action. Neither side called the various

sources relied upon, apart from Haston, but the reporters’ notes

of the interviews they had conducted and the materials they had

reviewed were introduced into evidence by the plaintiff and

admitted, without objection or limitation as to their use, as joint

trial exhibits.

SUMMARY OF ARGUMENT

A review of the record in this case demonstrates that the

majority opinion below is not in conflict with that of any other

7 At trial Haston acknowledged that he had told Fortune that his

Hartford supervisors had consulted with TVA before they

instructed Haston to approve TVA’s proposed “use as is”’ dis-

position and thus certify that welds were in compliance with the

Code when they were not. He denied knowledge of what pres-

sure, if any, was brought to bear by TVA, noting that while he

knew that Bressler spoke with Higginbotham of Hartford in April

and May of 1984, Haston had not been preseni at those discus-

sions. Thus the Petition’s suggestion (at 9) that Haston had

“direct knowledge of any conversations between Bressler and

Haston’s superiors at Hartford”’ is not supported by Haston’s own

testimony.

15

Circuit or the highest court of any state. Nor is it even argued

to be. Nor did the Sixth Circuit’s ruling depart from this

Court’s determinations in Harte-Hanks Communications, Inc.

v. Connaughton, 491 U.S. 657 (1989), or Masson v. New Yorker

Magazine, Inc.,___ U.S. ____, 111 S. Ct. 2419 (1991).

Petitioner’s contention that the majority opinion deviated

from this Court’s decision in Masson by focusing on the rep-

utational impact, or “gist”, of the challenged article can only be

sustained by ignoring (as the Petition does) both the reasoning

of Masson itself and a line of libel decisions extending back for

generations which relies on the “gist” concept. Petitioner’s

argument also requires him to ignore, as well, the allegations

in his own Amended Complaint (§ 12), which are strikingly

similar to the “gist” analyzed in the majority opinion and now

attacked by the Petition.

Petitioner misstates the record and the holding below in

asserting that the majority opinion departed from this Court’s

standard of review, as set forth in Bose Corp. v. Consumers

Union of United States, Inc., 466 U.S. 485 (1984), and Harte-

Hanks v. Connaughton, supra, “(bly failing to give due def-

erence to the jury’s credibility determinations”. (Pet. 22)

Petitioner offers but a single instance in which he alleges that

a credibility judgment was ignored—and in that instance, as

explained below, the Court explicitly adopted Petitioner’s view

of the disputed fact, thus giving effect to the very credibility

assessment he claims was ignored.

The decision of the Court of Appeals was based on a thor-

ough review of the entire record—a review commanded by this

Court’s decisions. Petitioner wholly fails to deal with what the

majority opinion below determined were “consistent statements

from multiple reliable sources” (Petition Appendix (“App.”) at

14), all of which were documented in the reporters’ extensive

written notes and in sworn deposition testimony in their files

and admitted into evidence at trial in this action without objec-

tion or limitation. Petitioner’s selective omission of these sig-

16

nificant aspects of the record further emphasizes the unwor-

thiness of this case for review by the Court.

REASONS FOR DENYING THE WRIT

THE SIXTH CIRCUIT’S APPLICATION OF ESTAB-

LISHED CONSTITUTIONAL PRINCIPLES IN THIS

DEFAMATION ACTION IN ACCORDANCE WITH

PRECEDENTS OF THIS COURT RAISES NO ISSUE

WORTHY OF THIS COURT’S CONSIDERATION

The Court below concluded that plaintiff Bressler had failed

to demonstrate by the requisite clear and convincing evidence

that Fortune published statements about plaintiff with “actual

malice,” that is, with actual subjective knowledge of the falsity

of such statements or serious doubts as to their truth. (App. 2)*

Before so concluding, and in accordance with precedents of this

Court, it engaged in an examination of the “entire record” to

assure that the First Amendment protections established by law

were given their full intended effect. (App. 5) See Harte-Hanks

v. Connaughton, supra, 491 U.S. at 688-89; Bose v. Consumers

Union, supra, 466 U.S. at 505, 510-11; see also Lothschuetz v.

Carpenter, 898 F.2d 1200, 1206 (6th Cir. 1990) (citing Harte-

Hanks and Bose). The Court below held:

Based on our review of the entire record—the several

sources on which the Fortune reporters relied, the sub-

stance of those sources’ statements, and the content of the

8 Fortune had also urged on appeal that the judgment at trial in

plaintiff’s favor should be reversed because plaintiff had failed

to carry his burden of proving the requisite falsity of the article

and because the district court had failed to charge that such fal-

sity had to be proved by clear and convincing evidence. The

majority noted that while its “conclusion regarding actual malice

in this case necessarily suggests that the gist of the article was

substantially true, we do not reach this issue.” (App. 6) The

majority also did not reach the issue of the proper standard of

proof of falsity. (/d.)

17

various documents consulted in preparing the article—we

believe the evidence could not have supported a finding of

actual malice under the “clear and convincing” standard.

(App. 6)

One judge dissented. No judge of the Court of Appeals voted

to grant en banc review.

A. The Majority Opinion Below Properly Considered the

“Gist” or “Sting” of the Article with Respect to Plain-

tiff Bressler

The majority opinion focused on the “gist” of the challenged

portion of the article relating to Bressler in evaluating both

truth (in the context of “actual malice”) and actual malice

itself. As described by the majority opinion,

The “gist” of the contested portion of the Fortune article

was that plaintiff Bressler allegedly played a lead role in

pressuring an independent inspector to certify, contrary to

fact, that certain safety-related welds in the Watts Bar plant

met the engineering code requirements, and that Bressler

also attempted to cover up that safety violation. (App. 6)

The Petition (and the dissenting opinion below, on which it

relies heavily) challenge this approach, insisting that only the

actual words used in the article may be employed in the anal-

ysis without regard to the impact of the statements taken as a

whole.

Petitioner is compelled to acknowledge that this Court itself,

in Masson v. New Yorker Magazine, Inc., ___ a i. Cae

S. Ct. 2419 (1991), reiterated the long-established principle

“that as long as ‘the substance, [the] gist, the sting’ of a state-

ment is substantially true, its author should not be liable for

minor inaccuracies.” (Pet. 20)? Indeed, this Court expressly

9 Strikingly, the dissenting judge below dismissed this Court’s

use of the word “gist”’ as “unfortunate”’ and “almost certain to

generate . . . confusion and difficulty in application’”’.

(App. 22) The dissent made no reference to the long history of

the use of this term in libel jurisprudence.

18

held that reviewing courts were to look at the gist of the

alleged statements and compare them to the truth in assessing

both truth and actual malice. 111 S. Ct. at 2432-33. The reason

for this analysis, as the Court explained, is that the law of libel

“overlooks minor inaccuracies and concentrates upon sub-

stantial truth”, because it exists to protect against injury to rep-

utation, not to correct every inaccuracy as such. /d. This Court

expressly concluded, “[oJur definition of actual malice relies

upon this historical understanding”. /d. at 2433.

As the Court’s use of the term “historical” denotes, reliance

on the gist of a statement is not some recent innovation, but has

been utilized in analyzing claims of libel for well over a cen-

tury. See, e.g., Liberty Lobby, Inc. v. Dow Jones & Co., 838

F.2d 1287, 1296 (D.C. Cir.) (Bork, J.), cert. denied, 488 U.S.

825 (1988); Anderson v. Cramlet, 789 F.2d 840, 843 (10th Cir.

1986); Orr v. Argus-Press Co., 586 F.2d 1108, 1112 (6th Cir.

1978), cert. denied, 440 U.S. 960 (1979); B.Sanford, Libel and

Privacy § 6.4, at 216-18 (2d ed. 1991); W. Keeton et ali.,

Prosser & Keeton on Torts § 116, at 842 (Sth ed. 1984); and

see Edwards v. Bell, 130 Eng. Rep. 162, 164, 165 (C.P. 1824).

Petitioner’s challenge is not really a conceptual challenge to

the use of a “gist” to summarize the meaning of extended pas-

sages. Rather, the real challenge is to the particular “gist”

which the majority opinion below determined to be the repu-

tational impact of the article. This is demonstrated by the Peti-

tioner’s Own recourse to a summary of the article’s statements

about him. (Pet. 5) Petitioner asserts that, unlike his own sum-

mary, the majority opinion below rests “on an homogenized

version of the statements at issue” (Pet. 19) which “substan-

tially recharacterizes the charges levied against Petitioner by

Respondent.” (Pet. 17) This challenge to the majority’s deter-

mination as to the particular substance of the article at issue in

this case does not raise an issue of sufficient significance to

other litigants to merit review by this Court. It is, in any event,

wrong, as Petitioner’s own pleadings, let alone even a cursory

review Of the article at issue, make plain.

19

The Amended Complaint on which the case was tried itself

contends that the article misstated the asserted truth that

Bressler’s

relationship with representatives of Hartford Steam Boiler

was always proper and professional. He never exerted

pressure upon Hartford to cover up safety violations.

(Amended Complaint, ¢ 12) (JA 25) This statement in plain-

tiff’s pleading (nowhere referred to in either the Petition or the

dissenting opinion below) focused on denials of “pressure” and

a “cover-up” of “safety violations”. It precisely paralleled the

“gist” relied on by the majority. (See App. 6)’ This is the

meaning which Petitioner understood the article put at issue

and which he challenged at trial.

The majority opinion thus engaged in no “rewriting”

(App. 19) but rather, in accordance with this Court’s opinion in

Masson and scores of opinions of other courts, focused on the

substance of the charge as pled by Petitioner to determine

whether it was “ ‘proved true, irrespective of slight inaccuracy

in the details.’ " Masson v. New Yorker Magazine Inc., supra,

111 S. Ct. at 2433.

In any event, the gist relied on by the Court below reflects a

sound basis for analyzing the evidence of actual malice. A

comparison of it with the Petition’s own summary (Pet. 5) and

the article itself suggests that each would have a similar impact

on the reader. The Petition’s efforts to suggest that while

(apparently concededly) such actual malice did not exist as to

10 ‘It also paralleled the trial judge’s summary in his jury charge

that

The plaintiff claims that in this article, he was accused of illegal,

unethical and unprofessional conduct including exertion of pres-

sure on Hartford Steam Boiler personnel to cover up breaches of

safety standards.

The Pretrial Order (at par. II(d)) in this action, dated August 5, 1988,

which was discussed and approved for entry by counsel for Petitioner

and Respondent, also contained almost identical language.

20

the “gist” it did exist as to specific allegations in the article is

based on misstatements and distortions of the record.

Thus the Petition asserts, for example, that Fortune acted

with malice in reporting a “cover-up” and “suppress[ion]” of

safety documents because the “purpose” of the nonconfor-

mance report “was to disclose, not to hide, a deviation dis-

covered by a utility company during construction of its plant.”

(Pet. 16) And it asserts that Fortune knew that “the purpose of

all such reports was to disclose rather than to suppress evidence

of deviations from code”. (/d.) This is, simply put, legal

sophistry, as the Petition itself reveals. Because the ANI finally

agreed (at the “written and verbal direction” of his superior) to

sign the nonconformance report providing for a “use as is” dis-

position of the welds in question, the NCR was indeed filed.

But, as the Petition acknowledges in a footnote, where the ANI

agrees with TVA, “no further action is necessary, other than

maintaining the NCR as a document”. (Pet. 6, n.3) As the Peti-

tion also recognizes, however, had the inspector and TVA not

agreed, the NCR would have been “dispatched to the Nuclear

Regulatory Commission” for a decision as to the appropriate

disposition. (/d.) This public discussion of the “use as is”

disposition—a disposition which Hartford itself later came to

recognize was a “poor judgment call’”—and the attendant fuel-

loading delay Bressler and others said they feared (NRC Report

at 35) was just what the pressure on ANI Haston was designed

to avoid. To laud this treatment of the NCR as a “disclosure”

Says much about the Petition."

11 Perhaps even more striking is the Petition’s insistence that a

greater defamatory impact was conveyed by the article’s state-

ment that certain welds were “untested” (Pet. 5, 6-7) as opposed

to the asserted reality, as described in the Petition, that “the Code

deviation disclosed in NCR 5609 involved only the omission to

visually inspect the welds during the hydrostatic testing proce-

dure.’ (Pet. 7) (emphasis added) In other words, Petitioner con-

tends that the “hydrostatic” test—running water at pressure

through the pipes in question—was conducted although he con-

21

B. The Majority Opinion Below Reviewed the Entire

Record in Accordance with This Court’s Precedents

and Properly Concluded, Based on Substantial Docu-

mentary Evidence, that Plaintiff Had Failed To

Demonstrate Fortune’s Actual Knowledge of Falsity or

Serious Doubts as to the Truth of the Article

The Petition (and the dissenting opinion below) also cast

their disagreement with the majority opinion in terms of an

asserted difference as to the application of the standard of

appellate review required by cases ranging from New York

Times Co. v. Sullivan, 376 U.S. 254 (1964), through Bose Corp.

v. Consumers Union of United States, Inc., 466 U.S. 485

(1984), to Harte-Hanks Communications, Inc. v. Connaughton,

491 U.S. 657 (1989), aff’ g 842 F.2d 825 (6th Cir. 1988). The

Petition argues that the majority opinion below deviated from

the appropriate review standard “[b]y failing to give due def-

erence to the jury’s credibility determinations”. (Pet. 22) This

contention is simply inaccurate. First, the majority opinion

never even suggests that it is declining to accept the jury's

credibility assessments. This is not surprising, for its analysis

is premised on uncontradicted documentary evidence. And in

the only instance pointed to by the Petitioner in which con-

troverted oral testimony is at issue, the Court (contrary to the

Petitioner's assertion) explicitly relied upon the version sup-

porting Petitioner's position.

The single example offered by the Petition involves the fail-

ure of the Fortune reporters to interview Harry Jackson, an

expert on engineering codes who was described as a “straight

shooter” and “Mr. Codes and Standards”. The Petition correctly

notes that reporter Fromson testified that he had tried to reach

Jackson and been unsuccessful. (Pet. 24) It also notes that the

jury could have disbelieved the reporter. (/d.) What it does not

cedes that no one at all observed its results (i.e., whether or not

any water had actually leaked out of the pipes through the welds).

Conducting a “test’’ without determining its results is, of course,

a meaningless exercise.

— ——E

note is that the Court of Appeals explicitly accepts Petitioner’s

version of this occurrence (i.e., that Fortune made a “decision

not to gain additional comment from Harry Jackson”) and,

assuming this to be the case, held that the decision did not

amount to the purposeful avoidance of the truth of the sort pre-

sent in Harte-Hanks. (App. 15) This holding was plainly cor-

rect.'*? But even more importantly, this example reflects the

inaccuracy of Petitioner’s central contention; contrary to Peti-

tioner’s claim, the Court below did not reject or ignore the

jury's credibility determination. There is no issue presented on

this point.

In an effort to create a standard of review issue, the Petition

completely discounts the numerous and consistent investigative

sources on whom the reporters relied as having no “first-hand”

knowledge and no “direct knowledge”. (Pet. 9; see also

App. 55) But there is no requirement that journalists rely on

only legally admissible, non-hearsay evidence. As this Court

recognized in New York Times v. Sullivan, supra, one of the

reasons behind the adoption of the actual malice rule was to

avoid the chilling of speech inherent in requiring a reporter to

“adduc([e] legal proofs” of the charge. 376 U.S. at 279; and see

Clyburn v. News World Communications, Inc., 903 F.2d 29, 34

(D.C. Cir. 1990) (“Reporters cannot be expected to insist on

Statements that would be admissible under the Federal Rules of

Evidence ... .”). It is hard to imagine that many reports

about cover-ups or conspiracies could ever be written if only

“direct” testimony by participants in the scheme could support

a defense against a charge of actual malice. The Petition cites

no authority for eliminating such sources from a court’s con-

sideration.

Finally, the Petition seeks to rely heavily on this Court’s

opinion in Harte-Hanks Communications, Inc. v. Connaughton,

12 Jackson was not identified by anyone as having any specific

knowledge about the handling of the NCR at issue here or the

other facts as reported by Fortune.

23

supra. (Pet. 24-25) In Harte-Hanks, however, the article at

issue was based on a single source (Thompson) although six

witnesses had “consistently and categorically” denied her

account. 491 U.S. at 683. Yet the newspaper purposefully

avoided interviewing the single witness (Stephens) and review-

ing the one audiotape which could have provided dispositive

evidence of falsity. In contrast, documentary evidence in the

record here demonstrates that the Fortune reporters based their

article on a large number of official sources, each of whom

consistently supported the account ultimately published.’

While in Harte-Hanks the newspaper staff consciously avoided

interviewing the single witness who could have confirmed

Thompson’s story, here it was Petitioner who avoided Fortune,

admitting at trial that he refused to return a telephone request

from Fortune for comment. The contrast with Harte-Hanks

could not be clearer.

None of the source materials on which the majority opinion

based its determination raises an issue of credibility. The

majority opinion below, in accordance with the precedents of

this Court, properly concluded that the reporters had substan-

tial materials before them which plainly rebutted any sugges-

tion, let alone any finding by clear and convincing evidence,

that their article was published with knowledge of falsity or

serious doubts as to the truth of charges which, only a month

later, were formally reflected in the official findings of a final

report of the Nuclear Regulatory Commission.

13 The Petition points to only one source relied on by the

reporters (Haston) whose account arguably differed from theirs

not as to the facts, which were agreed upon by all sources, but as

to the relative significance of the problem at issue. (Pet. 9) This

does not begin to provide adequate support for a finding of actual

malice.

CONCLUSION

The Petition for a writ of certiorari should be denied.

February 16, 1993

Of Counsel:

HARRY M. JOHNSTON, III

ROBIN BIERSTEDT

TIME INC.

Time & Life Building

Rockefeller Center

New York, New York 10020

(212) 522-3217

Respectfully submitted,

FLOYD ABRAMS

Counsel of Record

DEAN I. RINGEL

AMY GLICKMAN

CAHILL GORDON & REINDEL

(a partnership including

a professional corporation)

80 Pine Street

New York, New York 10005

(212) 701-3000

R. LOUIS CROSSLEY, JR.

LONG, RAGSDALE

& WATERS, P.C.

190 Market Place Blvd.

Knoxville, Tennessee 37922

(615) 690-2144

Attorneys for Respondent

APPENDIX

la

Supreme Court Rule 29.1 Statement

Pursuant to Supreme Court Rule 29.1, the Court is advised that Time

Wamer Inc. has no parent company and that its affiliated companies, includ-

ing non-wholly owned subsidiaries and their non-wholly owned sub-

Sidiaries, are listed here:

A.P. Schmidt Company

Aberbach (Wien) Gesellschaft

m.b.H.

Abigail Music London Ltd.

Abril Livros Ltda.

Acapulco 37, S.A. de C.V.

Atram Films Inc.

Akoursberga Vision AB

Alpha Theatres, Inc.

American Cablevision of Kansas

City, Inc.

American Cablevision of

Monroeville, Inc.

American Communications

Corporation

American Digital

Communications, Inc.

American Family Publishers

(a partnership)

American Heritage Cablevision,

Inc.

American Lawyer Media L.P.

American Motion Picture Export

Company, Inc.

American Television and

Communications Corporation

American Television of California,

Inc.

Amicus Television Pty, Ltd.

Anfel-Kabelkorn Kabel-

kommunikacios Kft

Anthracite-Lorimer: Dallas the

Early Years

Anxious Records Ltd.

Anyway Music S.r.I.

ARP 113, Inc.

ARP Partnership

Arrow Music Corp.

Ascherberg Hopwood & Crew Ltd.

Asiaweek Limited

Atari Corporation

Atari Far East Limited

Atari Games Corporation

Atari International (Hong Kong)

Ltd.

Atari- Wong Company

ATC Cablevision of San Marino,

Inc.

ATC Cablevision of South

Pasadena, Inc.

ATC Holdings, Inc.

ATC Holdings II, Inc.

ATC Satellite, Inc.

ATC-PPY, Inc.

Australian Multiplex Joint Venture

Babel Music N.V.

Bennie Benjamin Music, Inc.

Bernie Brilstein Productions, Inc.

Black Entertainment Television

Inc.

Boston Ventures Limited Partner-

ship II

Boston Ventures Limited Partner-

ship III

Bountiful Co. Limited

Bozell Inc.

Brae Company

Brookfield CATV

Bubbles Music Ltd.

Burlington Music Company Ltd.

Cafe Americana Inc.

Canciones Del Mundo S.A.

Capital Cablevision Systems, Inc.

Capriccio Musikverlag GmbH

Carolina Network Corporation

CAT Partnership

Central Pennsylvania Cable AdNet

(GP)

Century Venture Corporation

Century Colorado Corp.

Chameleon Music Group

Chappell Music Company, Inc.

Chappell Music Ltd.

Chappell Nordiska, AB

Chappell Theatrical Rights Ltd.

Chappell & Co. GmbH

Chappell & Co. (Australia) Pty.

Ltd.

Chappell & Intersong Music

Group (Australia) Ltd.

Chappell & Intersong Music

Group (Germany) Ltd.

Chappell-Morris Ltd.

Chappell-Styne Inc.

Chatham Music Corporation

Cinamerica Theatres L.P.

Cinema Data Service S.r.L.

Classics FM Limited

COGEDEP

2a

Collection Inc.

Collins Licensing L.P.

Colorado Invesco, Inc.

Colorado Springs Cablevision,

Inc.

Colorado Springs Citizens Cable,

Inc.

Columbia House Company

Columbia-Cannon- Warmer Bros.

Distributors Ltd.

Columbia TriStar & Warner Filmes

de Portugal, Lda.

Comedy Partners

Compagnia Generale del Disco

S.p.A.

Cosmos Soccer Club, Inc.

Courtroom Television Network

Crimson Satellite Associates

Curci de Espana S.L.

CV of Viera

Dagmar Teatret I/S

Dash Inc.

DC Comics

DC Comics Inc.

Def America Records

Delfont Music Ltd.

DF/ATC Communications

Management Venture (GP)

Dolmatch Publications, Inc.

Dorella Music Inc.

Dubey-Karr Corp.

East West Records GmbH

Ediciones Musicales Sagitario

S.A.

Ediciones Musicales Sympathy

S.A.

Edition Autarc GmbH

Editions Chappell SARL

Editions et Productions Theatrales

Chappell S.A.

Editoria de Musica WEA, S.A. de

C.v

Editorial Musical America Toda

SL

Editorial Musical Korn Intersong

SAIC

Edizioni Chappell S.r.I.

Eldorado Musikverlag GmbH

Erato Disques S.A.

Erie Telecommunications, Inc.

Exeter Distributing Inc.

Express Music Ltd.

E.C. Creations, Inc.

E.C. Publications, Inc.

E/A Music, Inc.

E! Entertainment Television, Inc.

Fanch/ATC Communications

Management Venture (GP)

FCI/ATC Communications

Management Joint Venture

Finvision AB

Foreign Press Distributors Ltd.

Fortissimo Gruppo Editoriale S.r.I.

Fortune Italia, S.p.a.

Foster Frees Music, Inc.

Franklin Mint Company

Geffen Film Company

GHK Partners, L.P.

Giant Merchandising

Giant Records

Girl Group Company

Gliro Music, Inc.

Gloria Musikverlag Kommandit-

gesellschaft

Gulf Coast Cable Television

GWWR Acquisition Company L.P.

Hajdu-Kabelkom Kabelkommuni-

kacios Kft

Halnstad Kabelvision AB

Hankook Ilbo Time-Life Ltd.

Hank Snow Music Inc.

Hanks Music Inc.

Hanseatic Musikverlag GmbH

Happy Musikverlag GmbH

Happy Musikverlag GmbH & Co.

KG

Harmonie Verlagsgesellschaft fur

Literatur und Kunst GmbH

Harry Gray, Mel Klein & Partners,

mo

HBO Asia, C.V.

HBO Enterprises UK Lid.

HBO Film Management, Inc.

HBO Ole

HBO Ole Distribution 1 A.V.V.

HBO Ole International Sales

Company Ltd.

HBO Ole Services S.A.

HBO Ole Producciones S.A.

HBO Satellite Services, Inc.

HBO Turkey Holdings I Inc.

HBO Turkey Holdings II Inc.

Hermann Schneider Musikalien

und Buehnenverlags Komman-

ditgesellschaft

Hippocrates Partners

HKP Partners of New Zealand

Hobby Films Limited

Home Box Office, Inc.

Home Box Office, Inc.

Home Box Office (Singapore) Pts.

Lid.

Houston Cable TY, Inc.

Initial Group

Interice Corporation

International Music Publications

Ltd.

Interscope Records

Interscope/T VT Joint Ventures

(Nine Inch Nails)

Intersong Hellas Ltd.

Intersong Music Ltd.

Intersong Musikverlag GmbH

Intersong Primavera S.A.

Intersong Pty. Ltd.

Intersong U.S.A., Inc.

Intersong-Basart Publishing Group

B.V.

Intersong-Forlagen AB

Inverness/ATC Joint Venture

IPH-TLA Kumial

Jader Music Corporation

Japan Records Distribution

System, Inc.

Japanese Visitor Network

Jewel Music Publishing Company

Ltd.

Jonathan Music (Australia) Pty.

Ltd.

Jubilee Music Inc.

Kabeldatakom Szamitastechnikai

Kft

Kabelkom Management Co.

Kabekom Holding Co.

Kabelkom Kabeltelevizio Kft

Kabelvision KB

Kabelkom-Dunaujvaros Kabel-

kommunikacios Kft

Kabelkom-Kelenfold Kabel-

televizio Kft

Kabelkom-Nagykanizsa Kabel-

televizio Kft

Kabelkom-Nyiregyhaza Kabel-

kommunikacios Kft

Kabelkom-Szehesfehvar Kabel-

kommunikacios Kft

Kabelkom-Veszprem Kabel-

kommunikacios Kft

Kansas City Cable Partners

Kay Holdings Limited

Kirshner Warner Bros. Music Ltd.

Kremlin Productions, Inc.

Laurel Cablevision, Inc.

LEM America, Inc.

Litton Musikverlag GmbH

Little Reata Music Inc.

Living In America Inc.

Lombardo Music, Inc.

Lorimer Canada, Inc.

Lorimer Distribution International

(Canada) Corp.

Lorimer Film Partners

Lorimer International Italia S.R.L.

Lorimer Motion Picture

Management, Inc.

Lorimer Music A Corp.

Lorimer Music Bee Corp.

Lorimer Music Publishing, Inc.

Lorimer-Hauck “Valerie” Joint

Venture

Lorimer-Telepictures International

Limited

Lorimer-Telepictures Magazines,

Inc.

Lorimer-Telepictures Pty. Limited

Love & War Associates

Low Country Cablevision L.P.

Lower Bucks Cablevision, Inc.

Lu-Jac Music Inc.

L.D.C.A. of Maryland, Inc.

Magnet Music Ltd.

Marmaiade Music Ltd.

Maverick Recording Company,

A

Medical Sciences International

Ltd.

Medai Editora Medica e Cientifica

Memphis CATV, Inc.

Metro Cable Marketing Co-op,

Inc.

Metrocolor Laboratories (U.K.)

Limited

Metrocolor London Limited

Microband Pacific Corporation

Miie Hi Cablevision, Inc.

Mile Hi Cablevision Associates,

Ltd.

Milwaukee Entertainment

Television, Inc.

Motion Picture Export Association

of America, Inc.

Movieworld Enterprises

Partnership

Movieworld Holdings Partnership

MSC, Music Service Center

Tontragervertriebs GmbH

Musicom S.A.

Musik unserer Zeit Verlag GmbH

Musikverlag Intersong GmbH

Muzickuitgeverij Artemis B.V.

n-tv Nachrichtenfernschen GmbH

& Co. KG

Nabland Ltd.

National Cable Advertising, L.P.

Neue Velt Musikverlag GmbH

New Chappell Inc.

New Kary S.r.L.

New World Music Company (Ltd.)

Night Owl Club, Inc.

NPP Music Corp.

Notservice AB

Nova-Net Communications, Inc.

Nucable Resources Corporation

Nuova Carisch S.p.A.

Offsetdruckerei Rotapress Warner

Chappell Musikverlag

Gesellschaft mbH & Co. KG

Olive Avenue Distributing Inc.

Paisley Park Records

Palace Music Company Ltd.

Palm Springs Communications

Corporation

Pamela Music Inc.

Paragon Communications

Patricia Music Ltd.

Pay-Per-View Network, Inc.

Pendulum Records

Pepamar Music Corp.

Peoples Cable Corporation

Pesci Kabeltelevizio Kft

Philadelphia Community Antenna

Television Company

Played Like a Stepsun Music, Inc.

Polaris Partners I, L.P.

Potential Music, Inc.

PPVN Holding Company

President Incorporated

PriCellular

PRIMESTAR Partners L.P.

Productions et Editions Cinema-

tographiques Francaises SARL

Productions et Editions Musicales

Baboo SARL

Public Cable Company

Publishers Express Inc.

Publishers (Georgia) Express Inc.

Putnam Music Inc.

Qweens Inner Unity Cable System

Quincy Jones Entertainment

Company L.P.

Quinn Martin Warner FBI Stories

Quinn Martin Warner Productions

QVC Network, Inc.

Rainbowcheer Ltd.

Rainmaker Productions Limited

RCF/ATC Communications

Management Joint Venture

RCF Michigan/ATC

Communications Management

Joint Venture

Reata Publishing Inc.

Record Service Benelux V.O.F.

Rhino Entertainment Company

Rick's Music Inc.

Rightsong Music Inc.

Riverside Avenue Distributing Inc.

Rodart Music Corporation

Rogli Music Inc.

Rondo- Verlag GmbH

rooArt Pty. Limited

Rosemeadow Publishing Corp.

Running Mates, Inc.

R.S.Q. Publishing B.V.

Sahara Music Inc.

Sari Lodge Pty. Limited

Savoy Pictures Entertainment Inc.

Scala Biograferne I/S

SCD Finans AB

SCD Holdings AB

SCD Kabel TV AB

Sea Chime Music, Inc.

Sea World Aviation Partnership

Sea World Enterprises Partnership

Sea World Management Pty.

Limited

Sea World Nara Equipment

Company Pty. Limited

Sea World Nara Resort Hotel Pty.

Limited

Sea World Property Trust

Select Records

Sevin Rosen Bayless & Borovoy

Sevin Rosen Fund IV

SF Holdings Inc.

SHE AB

Shows, Inc.

Shubert Music Publishing

Corporation

Sifta Milwaukee Cable Corp.

Simba Productions, Inc.

Sire Records Ltd.

Six Flags Entertainment

Corporation

Six Flags Theme Parks Inc.

SKY Network Television Limited

SMSG, Inc.

Soccer Camps of America, Inc.

Specchio Inc.

SRB Partners Fund L.P.

SR/MDM Venture Inc.

St. Louis Interconnect Company

Steinbruch Musikverlag GmbH

Stepsun Music Entertainment Co.,

LP.

Summy-Birchard, Inc.

Sunshine Network, Inc.

Sunshine Network of Florida, Ltd.

(LP)

Swedish Dish and Cable AB

SCD Invest AB

TA Milwaukee Cable Co., Inc.

TCW Americas Development ~

Association L.P.

Teldec Classics International

GmbH

Teldec Press Tontrager GmbH &

Co. KG

Teldec Press Tontrager

Verwaltungs GmbH

Telestar-Kabelkom Kabel-

kommunikacios Kft

The Atrium Development Co.

The Ladd Corporation

The Miss Saigon Company L.P.

The Music Sound Exchange

Company

The Sunshine Network Joint

Venture

The Track Marketing Company

The Travel Channel, Inc.

Throat Music Ltd.

Time Australia Magazine Pty. Ltd.

Time Distribution Services

Time Warner Cable Inc.

Time Warner Cable New Zealand

Ltd.

7a

Time Warner City Cable

Advertising

Time Warner Entertainment

Australia Pty. Ltd.

Time Warner Entertainment

Company, L.P.

Time Warner Entertainment GmbH

Time Warner Entertainment Japan

Inc.

Time Warner Entertainment UK

Limited

Time Warner Entertainment

Limited

Time Warner Inc.

Time Warner Merchandising

Canada Inc.

Time Warner Pay-Per-View

Distribution Inc.

Time Warner Stage Productions

Ltd.

Time-Hachette Japan, Inc.

Time-T.I. Communications Co.

Ltd.

Tonika Musikverlag Horst Bussow

KG

Torremodo Limited

Tri-Chappell Music Inc.

Tri-County Cable Television

Company

Turner Broadcasting Systems, Inc.

Turner/HBO Ltd. Purpose Joint

Venture

TV 1000 Sverige AB

TWE Finance Limited

Twins Ediciones Musicales, S.A.

Unichappell Music Inc.

Vernon Music Corporation

Victory Film Productions, Limited

Viewer’s Edge Partnership

W Cinemas Inc.

W Cinemas Holding Inc.

W.B.M. Music Corp.

WAC Productions, Inc.

Wallaby Music Pty. Ltd.

Warner Air Inc.

Warner Bros. Belgium S.A./N.V.

Warner Bros. Beteiligungs

Gesellschaft mbH

Warner Bros. Canada Inc.

Warner Bros. Consumer Products

(UK) Ltd.

Warner Bros. Deutschland PAY TV

GmbH

Warner Bros. Distributing

(Canada) Limited

Warner Bros. Distributors Ltd.

Warner Bros. Film GmbH

Warner Bros. Film GmbH Kino-

bertriebe

Warner Bros. Film Ve Video

Sanayi Ve Ticaret A.S.

Warner Bros. Holdings Sweden

AB

Warner Bros. Inc.

Warner Bros. Investments

(Pilsworth) Limited

Warner Bros. Italia S.p.A.

Warner Bros. Licensing Espanola

S.A.

Warner Bros. Music Australia Pty.

Ltd.

Warner Bros. Music GmbH

Germany

Warner Bros. Music Holland BV

8a

Warner Bros.

Inc.

Warner Bros.

Warner Bros.

Warner Bros.

Warner Bros.

Music International

Music (Italy) S.r.l.

Pictures, Inc.

Productions Limited

Properties Australia

Pty. Limited

Warner Bros. Publications Inc.

Warner Bros. Singapore Pts. Ltd.

Warner Bros. Theatres Advertising

Agency Limited

Warner Bros. Theatres Equipment

Supply Limited

Warner Bros. Theatres Ltd.

Warner Bros. Theatres (Australia)

Pty Limited

Warner Bros. Theatres (Holland)

B.V.

Warner Bros. Theatres (UK) Ltd.

Warner Bros. Twelve Star

Distributing Co. (GP)

Warner Bros. Video Pty. Limited

Warner Bros. /S 1984-1985

Television Co. (GP)

Warner Bros. (Africa) Pty. Ltd.

Warner Bros.

Warner Bros.

Warner Bros.

Warner Bros.

Warner Bros.

Warner Bros.

Warner Bros.

Warner Bros.

Warner Bros.

Warner Bros.

Warner Bros.

Warner Bros.

Warner Bros.

Warner Bros.

(Australia) Pty. Ltd.

(D) A/S

(Finland) OY (OLD)

(Finland) OY (NEW)

(F.E.) Inc.

(Holland) B.V.

(Japan) Inc.

(Korea) Inc.

(Mexico) S.A.

(Norway) A/S

(N.Z.) Limited

(South) Inc.

(Sweden) AB

(Transatlantic) Inc.

Warner Cable Communications

Company

Warner Cable Communications

Company of Greater Cincinnati

Warner Cable Communications

Inc.

Warner Cable Communications of

Cincinnati, Inc.

Warner Cable Communications

Operating Corp.

Warner Cable Communications

Operating, Ltd.

Warner Cable of Brookfield, Inc.

Warner Cable of New Jersey, Inc.

Warner Cable of New York, Inc.

Warner Cable of Vermont, Inc.

Warner Cable Operating Inc.

Warner Cable SSD Inc.

Warner Chappell Music France

S.A.

Warner Chappell Music GmbH

Germany

Warner Chappell Music Group

(Netherlands) B.V.

Warner Chappell Music Holland

B.V.

Warner Chappell Music Italiana

S.p.A.

Warner Chappell Musikverlag

Gesellschaft mbH

Warner Custom Music Corp.

Warner Dagmar A/S

Warner Entertainment Italia S.r.L.

Warner Films Consolidated Inc.

Warner Holdings Australia Pty.

Limited

Warner Home Video Espanola S.A.

Warner Home Video France S.A.

9a

Warner Home Video GmbH

Warner Home Video Limited

Warner Home Video Portugal Lda.

Warner Home Video Pty. Limited

Warner Home Video spol s.r.o.

Warner Home Video (Canada) Ltd.

Warner Home Video (Ireland) Ltd.

Warner Home Video (Nederland)

B.V.

Warner Home Video (Sweden) AB

Warner Home Video (U.K.) Ltd.

Warner Leisure, Inc.

Warner Morgan Creek Multiplex

Cinemas

Warner Music Argentina SRL

Warner Music Brasil Ltda.

Warner Music Chile S.A.

Warner Music Exports Ltd.

Warner Music Finland OY

Warner Music Germany GmbH

Warner Music Japan Inc.

Warner Music Manufacturing

Europe GmbH

Warner Music (Northern Ireland)

Limited

Warner Mycal Corporation

Warner Scala A/S

Warner Sea World Aviation Pty.

Limited

Warner Sea World Investments

Pty. Limited

Warner Sea World Operations Pty.

Limited

Warner Sea World Units Pty.

Limited

Warner World Australia Pty.

Limited

Warner & Metronome Films ApS

Warner-Elektra-Atlantic

Development Corp.

Warner-Lusomundo Sociedade

Iberica de Cinemas Ltda.

Warner-Tamerlane Publishing

Corp.

Warner/Chappell Edicoes

Musicalis Ltda.

Warner/Chappell Music Belgium

N.V.

Warner/Chappeli Music Canada

Limited

Warner/Chappell Music Denmark

A/S

Warner/Chappell Music Japan KK

Warner/Chappell Music Mexico

S.A. de C.V.

Warner/Chappell Music Norway

A/S

Warner/Chappell Music

Scandinavia AB

Warner/Chappell Music

(Services), Inc.

Warner/Chappell Music Note-

service A/S

Warner/Elektra/Asylum Music Inc.

Warner/Noreale Music Inc.

Warner/Refuge Music Inc.

WB Gold Music Corp.

WB Music Corp.

WBM/House of Gold Music, Inc.

Wenatchee Mountain, Inc.

Wheatley Music Pty. Ltd.

Wheatley Music Publishing Pty.

Ltd.

Whittle Communications, L.P.

Whittle Schools L.P.

White River Cablevision L.P.

Wide Music, Inc.

WLE Acquisition Company L.P.

Working Woman Inc.

WSW Partners, L.P.

WWT Partnership

ZTT Records Limited