Petition for Writ of Certiorari — Bandido's, Inc. v. Journal-Gazette Co.

Supreme Court brief1999

Ask Donna

What actually matters in this document.

Text

G@aprems Court, Us.

FILED

)

eh) 499 SEP 2 1 1999

No. OFFICE OF THE CLERK

In The

Supreme Court of the United States

BANDIDO’S, INC.,

Petitioner,

JOURNAL-GAZETTE COMPANY, INC.,

Respondent.

On Petition For A Writ Of Certiorari

To The Supreme Court Of Indiana

“

PETITION FOR A WRIT OF CERTIORARI

€

MILLER CARSON BOXBERGER

& Murpuy LLP

Epwarp L. Murpny, Jr.

Counsel of Record

Diana C. BAUER

1400 One Summit Square

Fort Wayne, IN 46802

Telephone: (219) 423-9411

O’Dowp, RieBpeNack & CONNOLLY

Rosert E. CONNOLLY

110 W. Berry, Suite 1910

Fort Wayne, IN 46802

Telephone: (219) 423-3343

Attorneys for Petitioner,

Bandido’s, Inc.

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

\S\ ax

QUESTIONS PRESENTED

1. Whether the First Amendment jurisprudence of

this Court requires application of a negligence standard

to a private person defamation action where the actual

malice standard adopted by the Indiana Supreme Court

effectively abolishes defamation actions in Indiana and is

in conflict with a wealth of decisions of other state courts.

2. Whether the First Amendment jurisprudence of

this Court permits independent appellate evaluation of

the sufficiency of the evidence when reviewing a jury

verdict in a defamation case involving a private person

where such independent review usurps the province of

the jury in awarding damages.

TABLE OF CONTENTS

Page

QUESTION PRESENTED. . 6.264 .0scscccvescecsscoes i

TABLE OF CONTENES .. 2. iscccssccsscnecscscnesece ii

TABLE OF AUTHORITIES ..........cccccesccsccces iii

OPINIONS AND ORDERS BELOW ................ 1

JURISDICTIONAL STATEMENT...............--5- 1

RELEVANT CONSTITUTIONAL PROVISIONS...... 2

STATEMENT OF THE CASE..........cccccsccescoen 3

STATEMENT OF PACTS . . 25.4. scasssnagecsoencsses 9

REASONS FOR GRANTING THE PETITION ....... 16

QUESTION ONE «0. i cccstccccnnampecsoeuesesses 16

CUES SION TWO). . uss cce ccamenage pwameneeneuens 26

CONCTAISIIN 6.0653 (34 isd shee eeeeeenes 30

APPUNMOWK . .icis ci App. 1

ili

TABLE OF AUTHORITIES

Page

| CAsEs:

; Aafco Heating & Air Conditioning Co. v. Northeast

Publications, Inc., 162 Ind. App. 671, 321 N.E.2d

580 (1974), cert. denied, 424 U.S. 913, 96 S.Ct.

1112, 47 L.Ed.2d 318 (1976)........scecscccccsccees 3

Adams v. Frontier Broadcasting Co., 555 P.2d 556

(Wry. 1976) ......ccccccccccccccccccccssseccccccce 21

Bandido’s v. Journal-Gazette, Inc., 575 N.E.2d 324

(Ind. App. 1991)........ccccccccccccceccccccces 3, 4, 8

Bose Corp. v. Consumer Union of the United States,

Inc., 446 U.S. 485, 104 S.Ct. 1949, 80 L.Ed.2d 502

NG UN dink dhideudsececcce64 64000000 6sénn 27, 28, 29

Brewer v. Memphis Publishing Co., 626 F.2d 1238

(5th Cir. 1980), cert. denied, 456 U.S. 962, 101

S.Ct. 3112, 69 L.Ed.2d 973 (1981). .............20.- 22

Cahill v. Hawaiian Paradise Park Corp., 543 P.2d 1356

) CE bo che ub bab esnbsecccccessccdsctacsccses 20

Colombo v. Times-Argus Ass‘n., 380 A.2d 80 (Vt.

) MEM Dh ang 54 n00500e00s 600s eeepeaeecscns 21

Corbett v. Register Publishing Co., 356 A.2d 472

; (Conn. Super. 1975)........cccsccccccccccccccscess 21

Crump v. Beckley Newspapers, Inc., 320 S.E.2d 70

| cb dAGA i vestuawevensdiersrescnsesess 21

Curtis Publishing Co. v. Butts, 388 U.S. 130, 87 S.Ct.

} 1975, 18°L.BG.2d 1094 (1967)... 2... ccccccccccccces: 17

DeCarvalho v. Dasilva, 414 A.2d 806 (R.I. 1980)....... 21

Denny v. Mertz, 318 N.W.2d 141 (Wis. 1982), cert.

denied, 459 U.S. 883, 103 S.Ct. 179, 74 L.Ed.2d

PPT iGadl cs Cesnebhdesccnnsss cenceect 21, 22, 23

SEE eer a

TABLE OF AUTHORITIES - Continued

Page

Dodrill v. Arkansas Democrat Co., 590 S.W.2d 840

CMR: TONE hae ck ccncsdenedcsgisaceecsavnterabasecs 20

Embers Supper Club, Inc. v. Scripps-Howard Broad-

casting Co., 457 N.E.2d 1164 (Ohio 1984).......... 21

Foster v. Loredo Newspapers, Inc., 541 S.W.2d 809 —

Ca. TO Ss diwcksdbakeaeedesaeshe acne tanaakuns 21, 23

Gazette, Inc. v. Harris, 325 S.E.2d 713 (Va. 1985) ..21, 23

Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.ct.

2997, GA LEGA TOD C176) 060s ccccncsvvccseas passim

Gobin v. Globe Publishing Co., 531 P.2d 76 (Kan.

POR ccsvccksssahavencsahvincavaaseupsdianderares 20

Harte-Hanks Communications, Inc. v. Connaughton,

491 U.S. 657, 109 S.Ct. 2678, 105 L.Ed.2d 562

CRUE 6c oe eb sehesecuedsccbecbecedceuesbasanes 27

Hurley v. Irish American Gay Lesbian & Bisexual

Group of Boslin, 515 U.S. 557, 115 S.Ct. 2338, 132

Le SOF CHRD). 6 on o's ied a Cetwabeviehece dives 27

Hyde v. Columbia, 637 S.W.2d 251 (Mo.App. 1982),

cert. denied, 459 U.S. 1226, 103 S.Ct. 1233, 75

LDS GF THRs iv cine cdédccdkexvicdsigercssesi 21

Jacron Sales Co. v. Sindorf, 350 A.2d 688 (Md. 1976) .... 21

Jones v. Palmer Communications, Inc., 440 N.W.2d

SOA GONE TED oc ano cenccknncgennngccdapes aasones 20

Jones v. Sun Publishing Co., 292 S.E.2d 23 (S.C.

SOUR ams 0:5 hans encaes bncesccshstcecseeamesenneaaees 21

Journal-Gazette Company, Inc. v. Bandido’s, Inc., 712

ke ey errr rere ete 1

;

TABLE OF AUTHORITIES - Continued

Journal-Gazette Company, Inc. v. Bandido’s, Inc., 672

PERAG SGP Cem Aw. TGIG) ass hina ec cVannsccet en a3

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

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

102 S.Ct. 2239, 72 L.Ed.2d 849 (1982) ............. 20

McCusker v. Valley News, 428 A.2d 493 (N.H. 1981).... 21

Madison v. Yunker, 589 P.2d 126 (Mont. 1978)........ 21

Marchiondo v. Brown, 649 P.2d 462 (N.M. 1982) ...... 21

Martin v. Griffin Television, Inc., 549 P.2d 85 (Okla.

| Ree Ae Per rer ery ager eee 23; 3

Mathis v. Philadelphia Newspapers, Inc., 455 F.Supp.

G6 (RDPO. THT 6 0d 6 S088) NGI 22

Memphis Pub. Co. v. Nichols, 569 S.W.2d 412 (Tenn.

ROTM. 0.0.2 kchs vib cindasdbscccdub name cerns eet 21, 22

Miami Herald Publishing Co. v. Ane, 458 So.2d 239

Rh, PO cdi pt neecscaascapeninbaueiaeee dbase 20

Mobile Press Register, Inc. v. Faulkner, 372 So.2d

BOS CA. FOR cence cen cndpndens Ceaeeeeer reece 20

New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct.

710, 11 L.Ed.2d 686 (1964) ........ 17, 19, 23, 26, 27, 28

Peagler v. Phoenix Newspapers, Inc., 560 P.2d 1216

RE, FOE ho kk cides bce dnewedeunddeendansaeane 20

Phillips v. Evening Star Newspaper Co., 424 A.2d 78

tie. Pere rrr ere Tee rr era ere yo. erie) Sto Prey 21

Re v. Gannett Co., 480 A.2d 662 (Del.Super.Ct.

1984), aff'd, 496 A.2d 553 (Del. 1985).............. 20

Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 91 S.Ct.

SRE; DD Ue See Cee Ais o's cccvecvscsces 18, 19, 23

TABLE OF AUTHORITIES - Continued

Page

Ross v. Bricker, D.D.S., 770 F.Supp. 1038 (D. Virgin

BORGES BOGEN vc vccccécccacuns cOsenesadssbenenaene 21

Rouch v. Enquirer & News of Battle Creek, 398

INU BES GG, BRB ccccccccccccssctsocensosns 21

Seegmiller v. KSL, Inc., 626 P.2d 968 (Utah 1981) ..21, 23

Stone v. Essex County Newspapers, Inc., 330 N.E.2d

BG) DEAD. BAF pies dcccodcccccevdescteteesskatntas 21

Taskett v. King Broadcasting Co., 546 P.2d 81 (Wash.

BITE cc cccccccccnscnccacccsoccccoonns seeeunuans 21, 24

Time, Inc. v. Firestone, 424 U.S. 448, 96 S.Ct. 958, 47

Se BDO CAFU URs coc ccccecccviéacancisasanbensons 20

Triangle Publications, Inc. v. Chumley, 317 S.E.2d

SOO Cee. BID. cc ccccccccvvesiscccscewiewethenanes 20

Troman v. Wood, 340 N.E.2d 292 (Ill. 1975)........... 20

Walters v. Sandford Herald, Inc., 228 S.E.2d 766

CULAR. TVG cc scccccicccesséccsscadunevuee cues 21

Weimer v. Rankin, 790 P.2d 347 (Idaho 1990)......... 20

Wheeler v. Green, 593 P.2d 777 (Or. 1979) ............ 21

Wilson v. Capital City Press, 315 So.2d 393 (La.App.

BOVE o cc ccccccusceseeccacenéapedtgschapsasuteceses 20

STATUTES AND RULEs:

BD WDA. FEAT co cccccccvescececacccacnsdumbaensadl 2

WS. SAR. BR BBR e oi isc cbncesdtiecceck cpaapinesis 2

EnGiome Rees OF Ae. FMRC. BE occcancdccncdscucecas 1

Indiana Rules of App. Proc. 11(B).................... 2

Pe ee

Vii

TABLE OF AUTHORITIES - Continued

Page

CONSTITUTIONAL PROVISIONS:

US. Comet. Age, Bao ccscscccccccccccscsscsens passim

CD, Gee. FOIE, Vis ccc cccccscccccscscctccsese 2, 26

CS, CMOS. BGR. FES ccicccccccccsssccccveccecas 2,3

Ret, SG. Es kc veccccccccescsucncwstsncasec 26

—eee 4 ene

P a Se a

OPINIONS AND ORDERS BELOW

The decision by the Indiana Supreme Court that

gives rise to this Petition is published as Journal-Gazette

Company, Inc. v. Bandido’s, Inc., 712 N.E.2d 446 (Ind. 1999).

A copy of that decision is reprinted in the Appendix

hereto in Appendix A at p. A-1.

JURISDICTIONAL STATEMENT

On March 30, 1994, a jury in the Noble Circuit Court,

Nobie County, Indiana, returned a verdict in favor of

Bandido’s, Inc. (hereinafter “Bandido’s”), and against the

Journal-Gazette Company, Inc. (hereinafter “Journal-

Gazette”), in the amount of Nine Hundred Eighty-Five

Thousand Dollars ($985,000.00). On April 13, 1994, the

Trial Court entered judgment pursuant to the jury’s ver-

dict.

On April 26, 1994, the Journal-Gazette initiated an

appeal by filing a Praecipe with the Noble Circuit Court,

Noble County, Indiana.

On November 26, 1996, the Indiana Court of Appeals

entered a decision published as Journal-Gazette Company,

Inc. v. Bandido’s, Inc., 672 N.E. 969 (Ind.App. 1996), in

which the Indiana Court of Appeals reversed the jury’s

verdict in favor of Bandido’s.

On December 24, 1996, Bandido’s timely filed a Peti-

tion for Transfer to the Indiana Supreme Court pursuant

to Rule 11 of the Indiana Rules of Appellate Procedure.

On September 12, 1997, the Indiana Supreme Court

granted Bandido’s Petition for Transfer pursuant to

Appellate Rule 11(B) of the Indiana Rules of Appellate

Procedure. —

This Petition for Writ of Certiorari is being timely

filed in accordance with Rule 13.1 of the Rules of the

Supreme Court of the United States. This Court has juris-

diction pursuant to 28 U.S.C. § 1257(a).

RELEVANT CONSTITUTIONAL PROVISIONS

The Constitutional provisions at issue in this case are

U.S. Const. amend. I:

Congress shall make no law respecting an estab-

lishment of religion, or prohibiting the free exer-

cise thereof; or bridging the freedom of speech

or of the press; or the right of the people peace-

ably to assemble, and to petition the Govern-

ment for a redress of grievances.

U.S. Const. amend. VII:

In Suits at common law, or the value in contro-

versy shall exceed twenty dollars, the right of

trial by jury shall be preserved, and no fact tried

by a jury, shall be otherwise reexamined in any

court of the United States, than according to the

Rules of the Common Law.

U.S. Const. amend. XIV:

All persons born or naturalized in the United

States, and subject to the jurisdiction thereof, are

citizens of the United States and of the State

wherein they reside. No State shall make or

enforce any law which shall abridge the privi-

leges 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 this jurisdic-

tion the equal protection of the laws.

STATEMENT OF THE CASE

This appeal arises from a defamation action filed by

the petitioner, Bandido’s, against the Journal-Gazette as

the result of a false and defamatory subheadline written

for an article that appeared in the October 6, 1988 issue of

the Journal-Gazette. On November 21, 1988, Bandido’s

filed a Complaint for Damages and Demand for Jury

Trial, asserting a defamation claim against the Journal-

Gazette. On October 2, 1989, Bandido’s filed an Amended

Complaint with Demand for Jury Trial.

On July 2, 1990, the Journal-Gazette filed a Motion

for Summary Judgment. On November 11, 1990, the

Noble Circuit Court entered its Findings of Fact, Conclu-

sions of Law and Judgment on the Motion for Summary

Judgment, in favor of the Journal-Gazette.

Bandido’s timely filed an appeal with the Indiana

Court of Appeals concerning the granting of the Journal-

Gazette’s Motion for Summary Judgment. As part of that

appeal, Bandido’s requested that the Court abandon the

actual malice test adopted in Indiana by Aafco Heating &

Air Conditioning Co. v. Northwest Publications, Inc., 321

N.E.2d 580 (Ind.App. 1975) in favor of a negligence stan-

dard for defamation actions involving private individ-

uals.

In Bandido’s, Inc. v. Journal-Gazette Company, Inc., 575

N.E.2d 324 (Ind.App. 1991), the Indiana Court of Appeals

reversed the Trial Court’s grant of summary judgment,

finding that there remained a factual dispute on the issue

of whether the Journal-Gazette published the article with

actual malice. With respect to Bandido’s request for a

change in the law, the Court held that “when a compel-

ling case can be made for modification of Indiana’s libel

law, our courts will respond accordingly.” 575 N.E.2d at

327 n. 3. The Journal-Gazette’s Petition to Transfer to the

Indiana Supreme Court was denied and the case pro-

ceeded to trial.

The case was tried to a jury in the Noble Circuit

Court for eight (8) days from March 21 through March 30,

1994. On March 30, 1994, the jury returned its verdict in

favor of Bandido’s and against the Journal-Gazette in the

amount of $985,000.00. On April 13, 1994, the Trial Court

entered judgment pursuant to the jury’s verdict.

On April 26, 1994, the Journal-Gazette filed a Prae-

cipe with the Noble Circuit Court.

Bandido’s filed its Brief in the Indiana Court of

Appeals on December 23, 1996. In its Brief, Bandido’s

raised the issue of whether the Indiana Court of Appeals

should abrogate the actual malice standard in favor of a

negligence standard in libel cases involving private indi-

viduals.

On November 26, 1996, the Indiana Court of Appeals

reversed the jury’s verdict in favor of Bandido’s and

entered judgment in favor of the Journal-Gazette. 672

N.E.2d 996 (Ind.App. 1996). As the Court reversed the

jury’s verdict, it did not address the impropriety of the

actual malice standard as applied to private individuals.

Bandido’s timely filed its Petition for Transfer with

the Indiana Supreme Court. In that Petition, Bandido’s

once again specifically raised the issue of whether the

Indiana Supreme Court should abolish the actual malice

standard in favor of a negligence standard in order to

bring Indiana in line with the overwhelming majority of

States which have adopted a simple negligence standard

in defamation cases involving private individuals:

The opinion of the Court of Appeals correctly

follows its own precedent in Aafco Heating & Air

Conditioning Co. v. Northwest Publications, Inc.,

321 N.E.2d 580 (Ind.App. 1974), but there is no

ruling precedent from this Court and the actual

malice standard adopted twenty-two years ago

in Aafco is erroneous and in need of modifica-

tion and should be abolished by this Court in

favor of a negligence standard, as adopted by an

overwhelming majority of jurisdictions.

On September 12, 1997, the Indiana Supreme Court

granted Bandido’s Petition to Transfer. On June 23, 1999

in a 3-2 decision, the Indiana Supreme Court entered an

opinion in which it refused to adopt the negligence stan-

dard and held that under Indiana law, both public and

private individuals must satisfy the actual malice stan-

dard in order to prevail in a defamation action:

Having previously granted transfer, we adopt

Aafco and hold that both private individuals and

public figures must prove actual malice to

recover in a defamation suit involving matters

of public or general concern. We also hold that

Bandido’s has failed to prove that Journal-

Gazette acted with actual malice and hereby

reverse the judgment of the trial court. (See

A-55).

Chief Justice Shepherd and Justice Dickson authored

vociferous and well-reasoned dissenting opinions in

which they sadly predict that the majority’s opinion

leaves citizens of the State of Indiana with no legal

recourse for defamation claims against media defendants.

As Chief Justice Shepard wrote:

Today’s decision makes life more difficult for

Indiana’s citizens when they have been falsely

and publicly maligned in front of their neigh-

bors.

Constructing a regime that affords news organi-

zations a respectable defenses for defamation

claims might well include some of the walls

erected today, but the cumulative effect of this

series of barriers is to leave defamed citizens

virtually without a remedy. The U.S. Supreme

Court and thirty state supreme courts have con-

cluded that a free society can flourish without

making it so hard for the average person to

defend his or her reputation as it will now be in

Indiana. Just one or two state courts have

thought otherwise. (See A-62).

+ * +

At the end of the day, we have a case before us

in which a copy editor wrote a defaming head-

line that could not be justified on the basis of

the reporter’s story about reports from the

board of health. The copy editor was an

employee whose job evaluations reveal that the

newspaper knew she produced inaccurate head-

lines. A local judge had warned the newspaper

about the special risks of improper inferences or

interpretations of health department inspection

reports. Nevertheless, newspaper management

had never given the copy editor any directions

areata

c ictal? PI

or cautions about dealing with health depart-

ment reports on restaurants. Finally, when

newspaper management did focus on what its

editors had done, it decided not to publish a

retraction conforming to Indiana’s statute on

retractions.

A jury of people in Fort Wayne were satisfied

that all this showed reckless indifference and

that this small business was badly hurt. The

appellate judges are not convinced. Judgment

for the newspaper.

Most injured plaintiffs will not have the smok-

ing guns that Bandido’s brought to this lawsuit.

When the Court declares its dissatisfaction with

the jury and the evidence in this case, it effec-

tively says to other injured citizens, “You're

toast.” (See A-65-66).

Justice Dickson echoed Chief Justice Shepard’s senti-

ments:

The majority’s preference to repudiate the negli-

gence standard of proof in favor of the actual

malice standard for private figure defamation

cases presents an unnecessary and substantial

impairment to the right of injured citizens to

seek legal recourse and remedy in Indiana

courts. This limitation is opposite to the words,

spirit, and history of the Indiana Constitution,

contrary to the overwhelming authority from

other state jurisdictions, and detrimental to

sound public policy. I believe that the majority

approach endangers personal privacy, encour-

ages irresponsible journalism, and unnecessarily

deprives injured persons of reasonable recourse

for harm suffered from defamatory distortions

and falsehoods published by entertainment and

news media. For these reasons, I dissent. (See

A-114).

Parenthetically, in a footnote to his majority opinion,

Justice Sullivan made reference to an isolated jury

instruction which stated that “Bandido’s is a limited-

purpose public figure.” The footnote further stated that

“to the extent Bandido’s was tried as a public figure, the

holding in AAFCO is not relevant to resolve the case at

hand...” (See A-10). (Italics added).

In fact, despite the instructions, Bandido’s was tried

as a private individual, not as a public figure. The law of

the case, Bandido’s, Inc. v. Journal-Gazette Co., 575 N.E.2d

324, 326 (Ind.App. 3 Dist. 1991) in defining the plaintiff’s

burden at trial stated: “In Indiana a ‘private individual’

such as Bandido’s may recover for defamatory statements

published in a newspaper only upon a showing that the

statement was published with ‘actual malice.’ ” Further,

the record of the entire case is devoid of any evidence of

any kind that Bandido’s was a limited-purpose public

figure. The remainder of the jury instructions addressed

the issue of public concern without reference to the status

of Bandido’s as a private or public figure.

The instructions made no practical difference because

the controlling standard in Indiana for both private fig-

ures involved in matters of public concern and public

figures regardless of the status, was, and is, actual malice

as delineated in New York Times. The standard of proof

required of Bandido’s and established to the satisfaction

of the jury was identical. Bandido’s was tried as a private

figure and the extensive review and analysis by the Indi-

ana Supreme Court was appropriate. As a result, this

petition to provide Indiana residents with the same

redress for defamatory falsehoods as is available in vir-

tually every other state is also appropriate.

STATEMENT OF FACTS

The Journal-Gazette is a newspaper of general circu-

lation that publishes three (3) editions each day. The first

edition is known as the “Ohio Edition” and is circulated

in several northwest Ohio counties, including Allen

County, Ohio. (R. at 173). The second edition is known as

the “Indiana Edition” and is circulated in Indiana coun-

ties other than Allen County, Indiana. (R. at 173). The last

edition published is known as the “Final Edition” and is

circulated in Allen County, Indiana. (R. at 174).

Bandido’s operates four (4) Mexican-style restau-

rants, three of which are located in Fort Wayne, Indiana,

and one of which is located in Lima, Allen County, Ohio.

(R. at 1195). The Bandido’s restaurant at issue in this case

is the Bandido’s located in Northcrest Shopping Center in

Fort Wayne, Indiana, which will be referred to as the

Northcrest Bandido’s.

The Fort Wayne-Allen County Board of Public Health

(“Board of Health”) periodically inspects restaurants in

its jurisdiction to determine whether the restaurants are

in compliance with established health laws and regula-

tions. (R. at 1702). The inspectors use a standard form

known as a “Food Establishment Inspection Report” that

contains a checklist of items to be inspected at the restau-

rant. (R. at 1527). There are 40 numbered items on the

Food Establishment Inspection Report. If an inspection

reveals that a restaurant is not in compliance with one of

the items, the inspector circles or marks the particular

item that does not comply with health laws and regula-

tions. (R. at 1137). The reverse side of the Food Establish-

ment Inspection Report provides space for the inspector

to write comments concerning any of the items marked

on the front side of the Inspection Report. (R. at 1137).

In 1988, the Journal-Gazette filed a lawsuit against

the Board of Health to gain access to the Food Establish-

ment Inspection Reports, arguing that the reports were

public records to which the newspaper was entitled to

access. On May 6, 1988, the Honorable Vern Sheldon of

the Allen Superior Court entered a Decision in which he

held that the Food Establishment Inspection Reports were

public records to which the Journal-Gazette was entitled

to access. (R. at 1702, Exhibit 30). Although Judge Shel-

don granted the Journal-Gazette access to the Food Estab-

lishment Inspection Reports, he cautioned the Journal-

Gazette that “[t]here is a possibility that public disclosure

of the inspection reports might result in improper infer-

ences or interpretations as to the seriousness of the viola-

tions noted.” (R. at 1702, Exhibit 30, p. 1).

On September 13, 1988, Debbie Consadine (“Con-

sadine”), an inspector from the Board of Health, con-

ducted an inspection of the Northcrest Bandido’s. (R. at

1137, Exhibit 1). Consadine circled several items on the

Food Establishment Inspection Report including Item 35.

That box states as follows:

“INSECT, RODENT AND OTHER ANIMAL

CONTROL

*35 NO EVIDENCE OF INSECTS OR RODENTS

PRESENT AND OUTER OPENINGS ADE-

QUATELY PROTECTED. NO OTHER ANIMALS

PRESENT.” (R. 1137, Exhibit 1).

On the reverse side of the Food Establishment

Inspection Report, Consadine made the following nota-

tion concerning Item 35:

“Evidence of flies, roaches and rodents noted.

Advise exterminator to do a full clean out of

premise. Rodent droppings noted only in rest-

room.” (R. at 1137, Exhibit 1).

Northcrest Bandido’s complied with Inspector Con-

sadine’s request that an exterminator perform a complete

clean out of the premises. (R. at 1143). After receiving the

September 13, 1988 Food Establishment Inspection

Report, Bandido’s contacted its regular pest control main-

tenance man, George Carney (“Carney”) from Pest Pre-

vention. (R. at 1144). Carney performed the clean out on

September 22, 1988 and provided Northcrest Bandido’s

with a Sanitation Report concerning his clean-out. (R. at

1471).

On October 4, 1988, Loren Robertson (“Robertson”),

the Director of the Division of Food Protection with the

Board of Health conducted another inspection of the

Northcrest Bandido’s. (R. at 1147, 1531). The purpose of

Robertson’s inspection was to determine if the Northcrest

Bandico’s had corrected the problems noted on a Septem-

ber 13, 1988 Food Establishment Inspection Report and to

determine the necessity for a hearing on Bandido’s

license scheduled for October 5, 1988. (R. at 1531).

a iio Tinitieeteiadiaented ime —— ee

Robertson prepared a Food Establishment Inspection

Report which contained several violations and therefore

determined that it was necessary to follow through with

the October 5, 1988 hearing. However, with respect to

Item 35, Robertson did not make any marks on the Food

Establishment Inspection Report. (R. at 1532). When

Robertson inspected the Northcrest Bandido’s on October

4, 1988, he saw no evidence of mouse or rodent drop-

pings and also did not observe any rodents. (R. at 1532).

On October 5, 1988, the Board of Health held a hear-

ing to determine whether the Northcrest Bandido’s

should be closed. (R. at 1533). The Northcrest Bandido’s

was ultimately closed based upon a pattern of violations

and noncompliance throughout the year of 1988. (R. at

1597).

June Remley (“Remley”), a Journal-Gazette staff

writer who covered county government and health

issues, wrote an article about the Northcrest Bandido’s

closure. (R. at 2390). When Remley wrote the article, she

was in possession of the September 13, 1988 Food Estab-

lishment Inspection Report. (R. at 2401). Remley was also

aware of the fact that Robertson conducted an inspection

on October 4, 1988 during which he found no evidence of

rats, rodents, roaches or bugs. (R. at 2402-3). At no time

did Robertson ever inform Remley that the Northcrest

Bandido’s was being closed because rats were found in

the restaurant. (R. at 2406).

After Remley typed the article into her computer, her

computer forwarded the article to Gabriella Jacobs

(“Jacobs”), an assistant metro editor, for review. (R. at

1615). Jacobs’ responsibility was to get the article “pub-

lication ready” and resolve any questions about the arti-

cle with the author, Remley. (R. at 1615). Next, the article

was sent to Ellen Garner (“Garner”), a news editor, for

lay-out. (R. at 1616, 1617).

Garner then sent the article to Sheila Pinkley (“Pink-

ley”) a copy editor. (R. at 1618). As copy editor, it was

Pinkley’s responsibility to perform a final edit of the

article and to write an appropriate headline for the arti-

cle. (R. at 1618).

Prior to writing the headline, it was Pinkley’s respon-

sibility to read Remley’s article word-by-word and line-

by-line and to resolve any questions she might have

about the article. (R. at 1618, 2449). The purpose of per-

forming a word-by-word, line-by-line review of that arti-

cle prior to writing a headline is to insure that the story

supports the headline. (R. at 1621-22).

According to Craig Klugman (“Klugman”), the editor

of the Journal-Gazette, it is the Journal-Gazette’s policy

that if a word is going to appear in a headline or a

subheadline, that word must also appear somewhere in

the body of the article. (R. at 1729). Tim Harmon (“Har-

mon”), the managing editor of the Journal-Gazette, con-

firms that if a word is used in a headline, that particular

word must be somewhere in the article. (R. at 2450).

Although the word rat did not appear anywhere in

Remley’s article, Pinkley wrote the following headline

and subheadline for the article, in bold-face type:

Health board shuts doors

of Bandido’s

Investigators find rats, roaches”

at local eatery

Only two and one-half months prior to writing the

erroneous headline, Pinkley received a performance eval-

uation in which she was criticized for writing inaccurate

headlines. (R. at 1625, Exhibit 28). For example, Pinkley

was criticized for writing a story about a plane crash

where an aircraft lost part of its roof over the ocean, but

did not crash. (R. at 1625, Exhibit 28).

After Pinkley edited the article and wrote the head-

line and subheadline, she sent the article to William

Leonard (“Leonard”), the Journal-Gazette’s copy desk

chief. (R. at 1619). As the copy desk chief, it was

Leonard's responsibility to give the article a final review,

which would include a determination as to whether the

headline accurately summarized the story. (R. at 1619,

1717).

In reviewing the headline and subheadline prepared

by Pinkley, Leonard did not conduct a word-by-word,

line-by-line review of Remley’s article to determine if the

word “rats” in the subheadline also appeared somewhere

in the article. (R. at 1642, 1643, 1666). In reading the

article, Leonard did not see the word “rat.” (R. at 1645).

Leonard simply assumed that the word “rats” appeared

somewhere in the story. (R. at 1666). He relied upon

Pinkley to insure that the word “rats” appeared some-

where in the article. (R. at 1642). Leonard took no special

precautions to insure that the word “rats” appeared

somewhere in the article. (R. at 1668).

—

a UNE SENSI? SONNETS FAC RT ca

Leonard received a performance review on March 23,

1988, in which he was also criticized for inaccurate head-

lines written by copy editors, like Pinkley. (R. at 1632,

Exhibit 29). Leonard was told to work with his copy

editors as they sometimes wrote “vague, offtarget [and]

inappropriate” headlines. (R. at 1632, Exhibit 29).

Remley’s article, accompanied by the headline and

subheadline prepared by Pinkley, appeared in the Ohio

edition of the Journal-Gazette. (R. at 1190, Exhibit 9). The

second edition of the Journal-Gazette, known as the Indi-

ana edition, did not contain the subheadline “Inspectors

Find Rats, Roaches at Local Eatery.” (R. at 1189, Exhibit

10).

The subheadline reappeared in the final edition

which is circulated in Allen County, Indiana. (R. at

1658-59). The word inspectors was changed to investiga-

tors, the word roaches was changed to bugs, and the

phrase “local eatery” was changed to “north-side eatery.”

(R. at 1189, Exhibit 8). Leonard requested the changes in

the subheadline. (R. at 1658). He sent the subheadline

back to Pinkley to recast. (R. at 1663). He also asked her

to fine-tune the headline so that the readers would know

which Bandido’s restaurant was being closed. (R. at

1663). The headline and subheadline in the final edition

are as follows:

Health board shuts doors

of Bandido’s

Investigators find rats, bugs

at north-side eatery

As soon as the managing editor of the Journal-

Gazette, Tim Harmon (“Harmon”), read the story, he

knew the subheadline was false. (R. at 2451). The word

“rats” did not appear in the article and therefore could

not appear in the headline. (R. at 2451).

Craig Klugman (“Klugman”), the editor, was in

Nashville, Tennessee when the article and headline

appeared in the Journal-Gazette. (R. at 1717). Harmon

contacted Klugman and told him that the Journal-Gazette

made an error in a headline in a food inspection story. (R.

at 1719). Klugman was very upset by this news. (R. at

1719). In fact, Klugman thought the error was a careless

error and he was mad as hell about the error. (R. at 1720).

In Klugman’s opinion, Leonard should have caught the

erroneous headline prior to publication. (R. at 1724).

REASONS FOR GRANTING THE PETITION

QUESTION ONE

This appeal once again brings to the forefront the

delicate interplay between an individual's right to the

protection of his good name and reputation, on the one

hand, and the First Amendment guarantees of freedom

and speech and freedom of the press, on the other hand.

Rather than strike a balance between these two compet-

ing interests, as both this Court and the vast majority of

state courts have done, the Indiana Supreme Court

stomps on, and virtually extinguishes, individual citi-

zen’s rights, all in the name of providing special protec-

tion to the media. Indeed, the practical effect of the

Indiana Supreme Court's decision is to immunize media

defendants from liability.

a SS ee

Unlike the citizenry in almost any other state in the

Union, an Indiana resident defamed by a media defen-

dant is left with no reasonable recourse for the irrepar-

able damage to his or her reputation as a result of the

media’s conduct. If the majority opinion is allowed to

stand, it signals the death-knell for defamation actions in

Indiana. This Court’s review is necessary to ensure that

the citizens of the State of Indiana are entitled to the same

protections as the citizenry of most other states when a

newspaper or other media defendant publishes false and

defamatory information about a private person.

Since New York Times v. Sullivan, 376 U.S. 254, 84 S.Ct.

710, 11 L.Ed.2d 686 (1964), this Court has acknowledged

that the media does not enjoy complete immunity when it

comes to publishing information that injures an individ-

ual citizen’s reputation. Indeed, as this Court commented

in Gertz v. Robert Welch, Inc., 418 U.S. 323, 341, 94 S.Ct.

2997, 3007, 41 L.Ed.2d 789 (1974):

The need to avoid self-censorship by the news

media is, however, not the only societal value at

issue. If it were, this court would have embraced

long ago the view that publishers and broadcas-

ters enjoy an unconditional and indefeasible

immunity from liability for defamation.

The New York Times’ Court held that a public official

could not maintain a defamation action without showing

that the defamatory statement “was made with actual

malice.” 376 U.S. at 279-80, 84 S.Ct. at 726. Three years

later, in Curtis Publishing Co. v. Butts, 388 US. 130, 87

S.Ct. 1975, 18 L.Ed.2d 1094 (1967), this Court extended

the New York Times actual malice standard to defamation

actions involving public figures.

In Rosenbloom v. Metro Media, Inc., 403 U.S. 29, 91

S.Ct. 1811, 29 L.Ed.2d 296 (1971), a three-judge plurality,

in a badly-fractured opinion, extended the New York Times

actual malice standard to all publications involving mat-

ters “of public or general interest,” even if the defamed

party was a private individual. The Rosenbloom Court

wrote five separate opinions, indicative of the Court's

concern about the potentially overexpansive reach of the

New York Times actual malice standard. One of those

opinions was a dissenting opinion by Justice Harlan.

Justice Harlan suggested that a less stringent standard

apply to defamation actions instituted by private individ-

uals. Justice Harlan formulated a “reasonable man” negli-

gence standard. 403 U.S. at 67, 76, 91 S.Ct. at 1830.

Three short years later, in Gertz, supra, a majority of

this Court retreated from its previous position, expressly

repudiated the Rosenbloom extension, and held that the

controlling factor in determining the applicable standard

was whether the plaintiff was a private individual or a

public official or figure, not whether the statements

related to an issue of public or general concern. The

necessity of providin: actual malice in defamation suits

by private individuals was struck down.

This Court reevaluated the Rosenbloom plurality deci-

sion in an effort to strike an appropriate balance between

freedom of the press and the state’s interest in protecting

private individuals from defamatory publications. The

Gertz Court held that the interest of a private person in

recovering damages for injury to reputation must be bal-

anced against the media’s exercise of its First Amend-

ment rights. In addition, the Gertz Court held that the

New York Times actual malice standard did not adequately

take this reputational interest into account when a private

individual was defamed. The Court rejected the “public

or general interest” standard for determining appli-

cability of the New York Times’ standard to private defa-

mation actions. As this Court wrote:

“[W]e conclude that the State’s interest in com-

pensating injury to the reputation of private

individuals requires that a different rule should

obtain with respect to them.” 418 U.S. at 343, 94

S.Ct. at 3008.

After rejecting the Rosenbloom plurality, the Gertz

Court held that individual states should be permitted to

set the standard of proof in cases where a defamatory

statement is published by a media defendant concerning

a private individual. As the Court wrote:

[As] long as they do not impose liability without

fault, the states may define for themselves the

appropriate standards of liability for a publisher

or broadcaster of defamatory falsehood inju-

rious to a private individual. Gertz, supra, 418

U.S. at 347, 94 S.Ct. at 3010.

The Court reasoned that “this approach provides a

more equitable boundary between the competing con-

cerns involved,” and “recognizes the strength of the legit-

imate state interest in compensating private individuals

for wrongful injury to reputation, yet shields the press

and broadcast media from the rigors of strict liability for

defamation.” 418 U.S. at 347-48, 94 S.Ct. at 3010.

Justice Blackmun, in a concurring opinion, wrote,

“the Court now conditions a libel action by a private

person upon a showing of negligence, as contrasted with

a showing of willful or reckless disregard.” Id. at 353, 94

S.Ct. at 3014. The negligence standard was confirmed in

Justice Powell’s concurring opinion in Time, Inc. v. Fire-

stone, 424 U.S. 448, 96 S.Ct. 958, 970, 47 L.Ed.2d 154

(1976):

“Thus, while a State may elect to hold a pub-

lisher to a lesser duty of care, there is no First

Amendment constraint against allowing recov-

ery upon proof of negligence.”

Taking their cue from Gertz, supra, a resounding

majority of Indiana’s sister states have enthusiastically

embraced a simple negligence standard in private figure

defamation cases. To date, thirty-eight (38) states, the

District of Columbia, and the United States Virgin Islands

have adopted the Gertz negligence standard for their

respective jurisdictions. Thirty-one (31) states, the District

of Columbia, and the United States Virgin Islands have

expressly adopted the Gertz standard of negligence. !

' ALABAMA: Mobile Press Register, Inc. v. Faulkner, 372

So.2d 1282, 1284 (Ala. 1979); ARKANSAS: Dodrill v. Arkansas

Democrat Co., 590 S.W.2d 840 (Ark. 1979); ARIZONA: Peagler v.

Phoenix Newspapers, Inc., 560 P.2d 1216, 1222 (Ariz. 1977);

DELAWARE: Re v. Gannett Co., 480 A.2d 662 (Del.Super.Ct.

1984), aff'd, 496 A.2d 553 (Del. 1985); FLORIDA: Miami Herald

Publishing Co. v. Ane, 458 So.2d 239 (Fla. 1984); GEORGIA:

Triangle Publications, Inc. v. Chumley, 317 S.E.2d 534, 541 (Ga.

1984); HAWAII: Cahill v. Hawaiian Paradise Park Corip., 543 P.2d

1356, 1366 (Haw. 1975); IDAHO: Weimer v. Rankin, 790 P.2d 347,

354-55 (Idaho 1990); ILLINOIS: Troman v. Wood, 340 N.E.2d 292,

299 (Ill. 1975); IOWA: Jones v. Palmer Communications, Inc., 440

N.W.2d 884 (lowa 1989); KANSAS: Gobin v. Globe Publishing Co.,

531 P.2d 76 (Kan. 1975); KENTUCKY: McCall v. Courier-Journal &

Louisville Times Co., 623 S.W.2d 882, 886 (Ky. 1981), cert. denied,

456 U.S. 975, 102 S.Ct. 2239, 72 L.Ed.2d 849; LOUISIANA: Wilson

Five states have assumed, without discussion, that

the Gertz negligence standard is the proper standard

in cases involving private plaintiffs.2 In two States,

v. Capital City Press, 315 So.2d 393 (La.App. 1975); MARYLAND:

Jacron Sales Co. v. Sindorf, 350 A.2d 688 (Md. 1976);

MASSACHUSETTS: Stone v. Essex County Newspapers, Inc., 330

N.E.2d 161, 168 (Mass. 1975); MICHIGAN: Rouch v. Enauirer &

News of Battle Creek, 398 N.W.2d 245, 265 (Mich. 1986);

MISSOURI: Hyde v. Columbia, 637 S.W.2d 251 (Mo.App. 1982),

cert. denied, 459 U.S. 1226, 103 S.Ct. 1233, 75 L.Ed.2d 467 (1984);

MONTANA: Madison v. Yunker, 589 P.2d 126 (Mont. 1978); NEW

HAMPSHIRE: McCusker v. Valley News, 428 A.2d 493, 494 (N.H.

1981); NEW MEXICO: Marchiondo v. Brown, 649 P.2d 462, 470

(N.M. 1982); NORTH CAROLINA: Walters v. Sandford Herald,

Inc., 228 S.E.2d 766 (N.C.App. 1976); OHIO: Embers Supper Club,

Inc. v. Scripps-Howard Broadcasting Co., 457 N.E.2d 1164 (Ohio

1984); OKLAHOMA: Martin v. Griffin Television, Inc., 549 P.2d 85,

92 (Okla. 1976); SOUTH CAROLINA: Jones v. Sun Publishing Co.,

292 S.E.2d 23 (S.C. 1982); TENNESSEE: Memphis Pub. Co. v.

Nichols, 569 S.W.2d 412 (Tenn. 1978); TEXAS: Foster v. Loredo

Newspapers, Inc., 541 S.W.2d 809 (Tex. 1976); UTAH: Seegmiller v.

KSL, Inc., 626 P.2d 968 (Utah 1981); VIRGINIA: Gazette, Inc. v.

Harris, 325 S.E.2d 713 (Va. 1985); WASHINGTON: Taskett v. King

Broadcasting Co., 546 P.2d 81 (Wash. 1976); WEST VIRGINIA:

Crump v. Beckley Newspapers, Inc., 320 S.E.2d 70 (W.Va. 1983);

WISCONSIN: Denny v. Mertz, 318 N. W. 2d 141 (Wis. 1982), cert.

denied, 459 U.S. 883, 103 S.Ct. 179, 74 L.Ed.2d 147 (1982);

DISTRICT OF COLUMBIA: Phillips v. Evening Star Newspaper

Co., 424 A.2d 78 (D.C. 1980); VIRGIN ISLANDS: Ross v. Bricker,

D.D.S., 770 F.Supp. 1038 (D. Virgin Islands 1991).

* CONNECTICUT: Corbett v. Register Publishing Co., 356

A.2d 472 (Conn. Super. 1975); OREGON: Wheeler v. Green, 593

P.2d 777 (Or. 1979); RHODE ISLAND: DeCarvalho v. Dasilva, 414

A. 2d 806 (R. I. 1980); VERMONT: Colombo v. Times-Argus Ass‘n.,

380 A.2d 80 (Vt. 1977); and WYOMING: Adams v. Frontier

Broadcasting Co., 555 P.2d 556 (Wyo. 1976).

Pennsylvania and Virginia, federal courts have inter-

preted the respective state law as adopting Gertz.3

Many courts cite public policy reasons for adoption

of the negligence standard rather than the more stringent

actual malice standard, holding that the negligence stan-

dard strikes a balance between the protection of a private

individual’s reputation and the media’s right to freedom

of speech and press. The Tennessee Supreme Court

observed in Memphis Pub., supra, 569 S.W.2d at 418:

It is our conclusion that the ordinary negligence

standard permitted by Gertz for all defamation

actions brought by private persons against

media defendants, is the only standard of liability

that achieves the desired accommodation of First

Amendment guarantees and the interest in protect-

ing individual reputation. (Emphasis added).

Similarly, in Denny, supra, the Wisconsin Supreme

Court echoed the balancing of the interests when it

adopted the negligence standard:

A person’s reputation and good name is of ines-

timable value to him and once it has been

besmirched by another through carelessness or

* MISSISSIPPI: Brewer v. Memphis Publishing Co., 626 F.2d

1238, 1247 (Sth Cir. 1980), cert. denied, 456 U.S. 962, 101 S.Ct.

3112, 69 L.Ed.2d 973 (1981) (interpreting Mississippi law as

adopting a negligence standard because “[the overwhelming

majority of state court responding to [the] mandate of Gertz

have adopted negligence as the rule of liability”);

PENNSYLVANIA: Mathis v. Philadelphia Newspapers, Inc., 455

F.Supp. 406, 410 (E.D.Pa. 1978) (“Pennsylvania law allows a

‘private figure’ plaintiff to recover based on a showing of

negligence”).

malice, restoration is virtually impossible. Pro-

tection of a citizen's good name is a proper concern

of the state.

. . . » This standard strikes an appropriate balance

between that interest and society's interest in free

communication of ideas which is protected by the

First Amendment . . . and the Wisconsin Constitu-

tion. 318 N.W.2d at 151-52 (emphasis added).

Likewise, the Utah Supreme Court emphasized that

state’s interest in protecting an individual's reputation in

Seegmiller, supra, 626 P.2d at 973:

[W]e recognize that the integrity of an individ-

ual’s reputation is essential to his standing in

society, in his vocation, and even in his family. It

may indeed be indispensable to one’s sense of

self-worth. .. .

See also, Gazette, Inc., supra, 325 S.E.2d at 725 (“a negli-

gence test strikes a proper balance between the rights of

the news media and the rights of private individuals”);

Martin, supra, 549 P.2d at 92 (actual malice standard does

not adequately accommodate the private figure’s interest

in protecting his reputation); Foster, supra, 541 $.W.2d at

819-20 (negligence standard achieves a fair balance

between competing interests).

The Indiana Supreme Court's majority opinion reins-

tates the public-interest standard from the Rosenbloom

plurality; a concept that was expressly rejected as a mat-

ter of federal constitutional law by the Gertz Court. For

all practical purposes, the Indiana Supreme Court has

resurrected the New York Times actual malice test as

applying to defamation cases brought by private figure

plaintiffs involved in issues of public concern. In so

doing, the Court pays nothing more than lip-service to

the Gertz Court’s admonition that a balance must be

struck between freedom of the press and an individual

citizen’s right to his good name and reputation. Indeed,

the Indiana Supreme Court goes so far as to suggest that

the Gertz rationale undermines the First Amendment.

If application of a negligence standard so under-

mines freedom of the press, why is it that the vast major-

ity of states have chosen a negligence standard in

defamation actions brought by private figure plaintiffs,

even where the subject matter of the publication might

involve a matter of public concern or importance? The

answer is simple. Application of a negligence standard

does not have the chilling effect or self-censorship which

the Indiana Supreme Court apparently fears will result

upon application of any standard other than the actual

malice standard. For example, in Taskett, supra, the Wash-

ington Supreme Court observed that application of a

negligence standard would not curtail the freedom of the

press nor result in media self-censorship:

It has been argued by the defense that to reduce

the standard first enunciated in New York Times,

and subsequently adopted in both Rosenbloom

and Miller, will have a “chilling effect” upon the

press, and therefore, result in self-censorship.

We find this contention to be without merit. It is

true that greater caution must now be exercised

where the subject of a publication is a private

person, yet such a rule is totally justifiable in

light of the State’s overriding interest in provid-

ing a realistic remedy to an otherwise helpless

private citizen. . . . Furthermore, since erroneous

statements of fact are inevitable, this newly

announced standard does not require the media to

guarantee the absolute fact of their publications, as

would be required under a strict liability scheme.

However, just as the First Amendment will not

tolerate a strict liability criteria, neither will this

State’s strong policy, providing a means of com-

pensation to private citizens for injuries to their

reputations, tolerate the giving to a near-abso-

lute immunity to the media. 546 P.2d at 86

(emphasis added).

All of Indiana’s neighboring sister states, Illinois,

Michigan, Ohio, and Kentucky, apply a negligence stan-

dard to defamation claims brought by private individ-

uals. Thus, if the Chicago Tribune printed a similar article

and headline about a restaurant in Chicago, that restau-

rant need only to prove negligence in order to prevail ina

defamation action. Similarly, if the Detroit Free Press

published an article and similar headline about a restau-

rant in Detroit, the negligence standard applies.

Under the standard articulated by the majority of the

Indiana Supreme Court, even a defamation plaintiff

armed with numerous “smoking guns,” cannot prevail.

Unless a media defendant in Indiana admits to publica-

tion of information with knowledge of its falsity, a most

unlikely event, media defendants are effectively immune

from liability. This result simply cannot be justified under

Gertz.

Under the standards articulated by the Indiana

Supreme Court, the only potentially successful plaintiff in

a defamation action in Indiana is a private individual not

engaged in a matter of public concern. However, it is

impossible to even conjure up this type of hypothetical

private figure plaintiff. If the news media in Indiana

publishes an article or broadcasts a story, the media

defendant will always argue that the story involved a

matter of public concern. Indeed, if the matter involved a

purely private matter, it would be of no interest to the

media.

The Indiana Supreme Court’s majority opinion

applies the New York Times actual malice standard across

the board to all plaintiffs, a concept squarely rejected by

this Court in Gertz. Plaintiffs in defamation actions in

Indiana are now left with no remedy for the damage to

his or her reputation. On the other hand, media defen-

dants in Indiana have free rein to publish false and

defamatory information, along with the Indiana Supreme

Court's blessing that they are virtually immune from any

and all liability. This Court’s review is necessary to right

this wrong.

QUESTION TWO

Both the Indiana Constitution, Ind. Const. art. 1 § 20,4

and the United States Constitution, U.S. Const. amend.

VIL, specifically preserve the right of trial by jury and

restrict the Appellate Courts ability to reweigh decisions

rendered by a properly instructed jury.

Notwithstanding these Constitutional provisions,

this Court has balanced the “natural commitment to the

free exchange of ideas, as ensured by the First Amend-

ment... ” against the integrity of jury verdicts and

* In all civil cases, the right of trial by jury shall remain

inviolate.

determined that in some circumstances, an independent

review of the entire record of a case is necessary to

protect freedom of expression. Harte-Hanks Communica-

tions, Inc. v. Connaughton, 491 US. 657, 686, 109 S.Ct. 2678,

105 L.Ed.2d 562 (1989).

The requirement of an independent appellate review

in First Amendment cases, has been identified as a rule of

federal constitutional law in Bose Corp. v. Consumer Union

of the United States, Inc., 446 U.S. 485, 510, 104 S.Ct. 1949,

80 L.Ed.2d 502 (1984).

This rule of federal constitutional law is applied

wherever there is a claim that the activity at issue is in

the nature of protected speech. Hurley v. Irish-American

Gay Lesbian & Bisexual Group of Boston, Inc., 515 U.S. 557,

567, 115 S.Ct. 2338, 132 L.Ed.2d 487 (1995). This holding

in Hurley apparently creates a pervasive opportunity for

an appellate court to set aside a jury verdict whenever the

issue at bar contains a First Amendment “protected

speech” claim.

Prior to the Indiana Supreme Court’s decision, when

a case involved defamation by media defendant, this

independent judicial review was restricted to those occa-

sions where the plaintiff was a public figure. This rule

applied because it was in those cases that The New York

Times test of actual malice by clear and convincing evi-

dence applied. Bose Corp., 466 U.S. at 502, 104 S.Ct. at

1960. The appellate court’s independent analysis was

intended to ensure that the record, taken in its entirety,

established malice by clear and convincing evidence.

The Indiana Supreme Court has now decided that the

“independent analysis” rule of federal constitutional law

should also be applied to cases involving private persons.

By applying the New York Times test to private persons,

the Indiana Supreme Court reasoned that the indepen-

dent review described in Bose Corp. and utilized for pub-

lic figure plaintiffs should also apply.

This special standard requires that appellate judges

exercise independent judgment to ensure that evidence in

the record “is sufficient to cross the constitutional thresh-

old that bars entry of any judgment that is not supported

by clear and convincing proof of ‘actual malice.’” Bose

Corp., 466 U.S. at 511, 104 S.Ct. at 1965. That detailed

analysis, which constituted two thirds (2/3) of the Indi-

ana Supreme Court’s majority opinion, independently

evaluated five (5) significant Pieces of evidence to deter-

mine whether “any of these items alone shows by clear

and convincing evidence that the Journal-Gazette acted

with actual malice or whether the evidence cumulatively

suggests actual malice.” (See A-23). This detailed anal-

ysis, including a review of the testimony of witnesses

ebviously without the Opportunity to consider the

demeanor or credibility of the witnesses, resulted in the

Indiana Supreme Court's decision that the evidence they

analyzed did not establish actual malice by clear and

convincing evidence and the jury’s verdict was reversed.5

° In reversing the Trial Court's Order of Summary

Judgment in prior appellate proceedings on the same case, the

Indiana Court of Appeals analyzed depositions and pre-trial

discovery and held that a reasonable jury could find actual

malice by clear and convincing evidence and, as a result, the

matter proceeded to jury trial and verdict. Bandido’s, Inc. v.

By requiring that private persons involved in matters

of public interest prove actual malice by clear and con-

vincing evidence, the Indiana Supreme Court places citi-

zens of this State in a legal position which virtually

eliminates any remedy they may have if defamed by

media defendants.

That alone is a heavy burden, but it is one which

Bandido’s met to the satisfaction of a jury in Noble

County, Indiana. By also extending the Bose Corp. require-

ment of an independent review from public figure cases

to private person cases, the Indiana Supreme Court has

eliminated even that narrow opportunity for redress by

defamed Indiana residents. The result can be summarized

in the words of Chief Justice Shephard who concluded his

strong dissent in this case by stating:

“Most injured plaintiffs will not have the smok-

ing guns that Bandido’s brought to this lawsuit.

When the Court declared its dissatisfaction with

the jury and evidence in this case, it effectively

says to other injured citizens, ‘You're toast.’ ”

(See A-66).

Journal-Gazette, 575 N.E.2d 324 (Ind.App. 3 Dist. 1991), trans.

denied.

CONCLUSION

For all of the reasons stated herein, the Petition for

Writ of Certiorari should be granted.

Respectfully submitted,

MiLcer CARSON BOXBERGER

& Murpuy LLP

Epwarp L. Murpny, Jr.

Counsel of Record

Diana C. BAuER

1400 One Summit Square

Fort Wayne, IN 46802

Telephone: (219) 423-9411

O’Dowp, RiEBENACK & CONNOLLY

Rosert E. CONNOLLY

110 W. Berry, Suite 1910

Fort Wayne, IN 46802

Telephone: (219) 423-3343

Attorneys for Petitioner,

Bandido’s, Inc.

App. 1

APPENDIX

JOURNAL-GAZETTE COMPANY, INC.,

Appellant (Defendant below),

Vv.

BANDIDO’S, INC., Appellee

(Plaintiff below).

No. 57S03-9709-CV-00495.

Supreme Court of Indiana.

June 23, 1999.

Reversed.

Opinion, 672 N.E.2d 969, vacated.

Boehm, J., filed concurring opinion.

Shepard, C.]J., filed dissenting opinion in which Dick-

son, J., concurred.

Dickson, J., filed dissenting opinion in which Shep-

ar«, C.J., concurred.

James P. Fenton, Eilbacher Scott, P.C., Cathleen M.

Shrader, John D. Walda, Barrett & McNagny, Fort Wayne,

Indiana, Attorneys for Appellant.

Edward L. Murphy, Jr., Diana C. Bauer, Miller Carson

Boxberger & Murphy, Robert E. Connolly, O’Dowd

Wyneken & Connolly, Fort Wayne, Indiana, Attorneys for

Appellee.

App. 2

ON PETITION TO TRANSFER

SULLIVAN, Justice.

In grappling with the right to freedom of speech

provided by the First Amendment versus the right of

individuals to be protected from attacks upon their repu-

tations, the Court of Appeals determined that Bandido’s

failed [sic] to prove by clear and convincing evidence that

the Fort Wayne Journal-Gazette newspaper published a

subheadline with actual malice. While we agree with the

Court of Appeals’s conclusion, we write to hold that the

actual malice standard of proof required in defamation

cases involving matters of public or general concern

applies not only to public figures, but to private individ-

uals as well.

Background

Bandido’s is a Mexican-style restaurant with three

locations in Fort Wayne Indiana, and one in Lima, Ohio.

On September 13, 1988, the Allen County Board of Public

Health conducted a health inspection of the north-side

Bandido’s in Fort Wayne. In the report, the inspector

identified several violations and made the following rele-

vant remarks: “Evidence of flies, roaches and rodents

noted. Advise exterminator to do a full clean out of

premise. Rodent droppings noted only in restroom.” (R.

at 631.) Immediately thereafter, Mr. Schindler, the owner

of Bandido’s, received a letter from the Fort Wayne -

Allen County Board of Public Health advising him of a

hearing to determine whether the restaurant permit

should be revoked. On October 3, the day before the

hearing, another inspector visited the restaurant for the

App. 3

sole purpose of gathering information for the hearing. At

this time, the inspector did not find any evidence of

rodents. On October 4, without permitting Mr. Schindler

to speak, the Board of Public Health revoked Bandido’s

permit and closed the restaurant. In a letter dated Octo-

ber 5, 1988, to Mr. Schindler, Dr. Irmscher, the Commis-

sioner for the Board of Public Health, stated that “This

permit was revoked after a full and complete hearing and

review of all food inspections for 1988.” (R. at 1155.)

June Remley was assigned the task of writing an

article concerning the closing of Bandido’s for the Fort-

Wayne Journal-Gazette, a daily newspaper. Once written,

the story was turned over to her supervisor, Gabby

Jacobs, the Assistant Metro Editor. The story was untitled

and Remley never saw the story again before publication.

Jacobs’s job was to resolve any questions or ambiguities

and generally get the story ready for publication. The

story was then submitted to the news editor, Ellen Gar-

ner. Garner’s role was to lay out the story for publication,

do an initial edit, and make sure the story was still

current. Garner also determined how much space was

available for the story and for the headline. Next, the

story proceeded to the copy editor, Sheila Pinkley. Pink-

ley’s responsibility was to do a final edit of the story

which required a word for word, line by line read. Pink-

ley’s job was also to make any necessary changes to meet

the spacing guidelines. Finally, Pinkley wrote the head-

line and the subheadline which are at issue in this case.

The story with the headline was then submitted to Pink-

ley’s supervisor, Bill Leonard. Leonard’s duty was to

approve everything that had been done, do a final review,

make sure the layout was acceptable, and make sure the

App. 4

headline accurately summarized the story. The story then

went to the Managing Editor, Ellen Garner.! Garner

reviewed the story and headline. Finally, the page proof

editor, Tom Jones, looked for typographical errors, story

and headline problems and things of that sort.

The article was published on October 6, 1998 [sic],

and the headline read:?

Health board shuts doors of Bandido’s

Inspectors find rats, roaches at local eatery

While the story itself was accurate, the subheadline inac-

curately used the word “rats.” The health board never

discovered rats at Bandido’s and the word “rats” never

appeared in the article. The next day, Mr. Schindler

advised the Journal-Gazette of the mistake and asked for

an immediate retraction. On October 7, 1988, the Journal-

Gazette published another article in which it noted the

' Ordinarily, Sylvia Smith worked as the Managing Editor

but was off that evening.

* The Journal-Gazette publishes three editions each day.

The first edition is circulated in northwestern Ohio. The second

edition is provided to Indiana counties surrounding Fort

Wayne. The final edition is published for the Fort Wayne area.

The headline provided in the text ran in the first edition while

the second edition contained the headline, but not the

subheadline. Consequently, the trial court determined that the

second edition was not defamatory. The third edition contained

a revised subheadline: “Investigators find rats, bugs at north-

side eatery.”

App. 5

mistake and apologized.3 The next day, Robert Wright,

Bandido’s attorney, wrote the Journal-Gazette and the

Journal-Gazette’s attorney a letter expressing his and Mr.

Schindler’s satisfaction with the article and the apology

that appeared in the story, and his belief that the correc-

tion would hopefully reduce the damages suffered by Mr.

Schindler. Shortly after this letter was written, Mr.

Schindler retained a new lawyer. On October 18, 1988,

Robert Connolly, Bandido’s new attorney, sent the Jour-

nal-Gazette a letter indicating that the October 7, 1988,

follow-up story was insufficient because the headline

made no reference to a retraction. This letter requested

the Journal-Gazette to print a headline retraction the

same size as the original story and in the same location.

The Journal-Gazette did not comply with this request and

consequently Bandido’s filed a defamation suit on

November 21, 1988.

The trial court concluded that there was no genuine

issue of material fact with respect to the element of actual

malice and granted summary judgment in favor of the

journal-Gazette. On appeal, the Court of Appeals deter-

mined that there were facts in dispute and conflicting

* The article was titled “Owner says Bandido’s likely to

reopen today.” The third paragraph of the story contained the

following relevant statements:

Because of an editing error, a headline — not the story

~ in some editions of Thursday’s Journal Gazette said

inspectors had found rats and bugs at the restaurant.

No evidence of rats was found at the restaurant.

Journal-Gazette apologizes for the inaccuracy of the

headline.

(R. at 1203.)

App. 6

inferences on the issue of actual malice, reversed the trial

court’s decision, and remanded for a trial on the merits.

Bandido's, Inc. v. Journal-Gazette Co., 575 N.E.2d 324

(Ind.Ct.App.1991), transfer denied. At the conclusion of

trial, the jury awarded Bandido’s $985,000 in damages.

The Journal-Gazette appealed and the Court of Appeals

reversed the trial court, finding that there was not clear

and convincing proof of actual malice. Journal-Gazette Co.

v. Bandido’s, Inc., 672 N.E.2d 969 (Ind.Ct.App.1996).

We will provide additional facts when necessary.

Discussion

Bandido’s defamation suit against the Journal-

Gazette implicates the First Amendment to the United

States Constitution. The First Amendment secures free-

dom of the press.* It “was fashioned to assure unfettered

interchange of ideas for the bringing about of political

and social changes desired by the people.”® New York

4 The First Amendment provides the following:

Congress shall make no law respecting an

establishment of religion, or prohibiting the free

exercise thereof; or abridging the freedom of speech,

or of the press; or the right of the people peaceably to

assemble, and to petition the government for a

redress of grievances.

° The First Amendment goal of protecting speech serves

several purposes. Gerald R. Smith, Of Malice and Men, 27 Val.

U.L.Rev. 39, 43 (1992). First, “[t]he free flow of information in

the ‘marketplace of ideas’ ensures the vitality of a democratic

government, provides a check on governmental abuse, and aids

in the choices among competing opinions and options.” Second,

“[f]reedom of speech also acts as a safety valve, reducing the

App. 7

Times Co. v. Sullivan, 376 U.S. 254, 269, 84 S.Ct. 710, 11

L.Ed.2d 686 (1964) (quoting Roth v. United States, 354 U.S.

476, 484, 77 S.Ct. 1304, 1 L.Ed.2d 1498 (1957)). There is a

“national commitment to the ‘principle that debate on

public issues should be uninhibited, robust, and wide-

open.” Id. at 270-71, 84 S.Ct. 710. The First Amendment

has particularly protected the press because it is the

means through which the public is informed of govern-

ment actions and other matters of public interest. How-

ever, the rights under the First Amendment are not

absolute, for they must be weighed against other societal

interests. For example, because society has a strong inter-

est in protecting attacks upon individual reputation, the

law of defamation was created. A defamatory communi-

cation is defined as one that “tends so to harm the reputa-

tion of another as to lower him in the estimation of the

community or to deter third persons from associating or

dealing with him.”© Doe v. Methodist Hospital, 690 N.E.2d

681, 686 (Ind.1997) (quoting Restatement (Second) of

Torts § 559 (1977)); see Near East Side Community Org. v.

Hair, 555 N.E.2d 1324, 1330 (Ind.Ct.App.1990); Cochran v.

incidence of more destructive modes of expressing

dissatisfaction.” And finally, “(t]he right to free expression also

promotes self-fulfillment, personal growth and self-

realization.” Id. at 44.

among other factors, upon the temper of the times, the current

of contemporary public opinion, with the result that words,

harmless in one age, in one community, may be highly

damaging to reputation at another time or in a different place.’ ”

Schermerhorn v. Rosenberg, 73 A.D.2d 276, 426 N.Y.S.2d 274, 282

(1980) (quoting Mencher v. Chesley, 297 N.Y. 94, 75 N.E.2d 257,

259 (N.Y.Super.Ct.1947)).

App. 8

Indianapolis Newspapers, Inc., 175 Ind.App. 548, 553, 372

N.E.2d 1211, 1217 (1978).

In the process of protecting reputation, limitations

have been placed on the freedom of speech. This was a

result of the long standing principle that defamation was

not protected speech, Chaplinsky v. New Hampshire, 315

U.S. 568, 571-72, 62 S.Ct. 766, 86 L.Ed. 1031 (1942), and

could therefore be legislated by the states individually.

However, the law of defamation has dramatically

changed in the last few decades. In the landmark decision

of New York Times, 376 U.S. at 254, 84 S.Ct. 710, the United

States Supreme Court placed limits on the liability for

defamation. New York Times was just the beginning of the

Supreme Court’s attempt to confine the state laws on

defamation to conform with First Amendment privileges.

In New York Times, the Supreme Court held that the

Constitution mandates “a federal rule that prohibits a

public official from recovering damages for a defamatory

falsehood relating to his official conduct unless he proves

that the statement was made with ‘actual malice’ — that is,

with knowledge that it was false or with reckless disre-

gard of whether it was false or not.” Id. at 279-80, 84 S.Ct.

710. Soon thereafter, the Supreme Court determined that

the same requirement should apply to “public figures.”

Curtis Publ’g Co. v. Butts, 388 U.S. 130, 164, 87 S.Ct. 1975,

18 L.Ed.2d 1094 (1967). Several years later, in Rosenbloom

v. Metromedia, the Court rejected any distinction between

a public and private individual because it made “no sense

in terms of the First Amendment guarantees.” 403 U.S.

29, 46, 91 S.Ct. 1811, 29 L.Ed.2d 296 (1971). Instead, the

Rosenbloom Court determined that the controlling issue in

determining when the New York Times standard of actual

SE fe ee

App. 9

malice applied was whether the issue concerned a matter

of public or general concern. Rosenbloom, 403 US. at 52,

91 S.Ct. 1811.

Three years later, observing that there had been a

“general problem of reconciling the law of defamation

with the First Amendment,” the Supreme Court recon-

sidered its decision in Rosenbloom. Gertz v. Robert Welch,

Inc., 418 U.S. 323, 333, 94 S.Ct. 2997, 41 L.Ed.2d 789

(1974). In doing so, the Supreme Court determined “that

the state interest in compensating injury to the reputation

of private individuals requires that a different rule should

obtain with respect to them.” Id. at 343, 94 S.Ct. 2997.

Consequently, the Supreme Court changed its position

and decided that a negligence standard would be

imposed for defamation suits brought by private individ-

uals in federal court, but left it up to States to define for

themselves the appropriate standard of liability for

defamatory statements made about a private individual.

Id. at 347, 94 S.Ct. 2997.

The Indiana Court of Appeals defined the standard it

would apply for defamation of private individuals in

Aafco Heating & Air Conditioning Co. v. Northwest Publica-

tions, Inc., 162 Ind.App. 671, 321 N.E.2d 580 (1974), cert.

denied, 424 U.S. 913, 96 S.Ct. 1112, 47 L.Ed.2d 318 (1976).

In Aafco, the Court of Appeals decided to continue with

the Rosenbloom approach of applying the New York Times

actual malice standard for matters of general or public

concern, irrespective of whether the allegedly defamed

plaintiff was a public or private individual. Although it

has been over two decades since this approach was

App. 10

adopted by the Court of Appeals, this is our first oppor-

tunity to address the standard of liability required for

private individuals claiming defamation.

Today, we expressly adopt the Aafco approach estab-

lishing an actual malice standard in matters of public or

general concern for private individual plaintiffs.? For

nearly twenty-three years the law in Indiana has been

that both private individuals and public figures must

prove actual malice in order to recover in a defamation

suit. As we have commented on numerous occasions, we

? As stated under Background, supra, the trial court initially

granted summary judgment in favor of the Journal-Gazette.

Bandido’s appealed the grant of summary judgment and in the

course of remanding to the trial court for a trial on the merits,

the Court of Appeals referred to Bandido’s as a “private

individual.” Bandido’s, Inc. v. Journal-Gazette Co., 575 N.E.2d 324,

326 (Ind.Ct.App.1991). During trial, the jury was instructed that

if the material published concerned an event of public or

general concern, then Bandido’s was required by Aafco to prove

actual malice. (R. at 882.) A determination of whether a

controversy is of general or public concern is a question of law

to be determined by the trial judge and not the jury.

Consequently, it was error for the court to provide this )

instruction. The jury was also instructed that Bandido’s is a |

limited-purpose public figure and Bandido’s did not object to

this characterization at trial. (R. at 850.) To the extent that

Bandido’s was tried as a limited-purpose public figure, the

holding in Aafco is not relevant to resolve the case at hand nor is

the issue properly before this Court. Nevertheless, we find it

appropriate to address our view on Aafco as it relates to the

future of defamation law in Indiana.

App. 11

place a high value on adherence to precedent as a pri-

mary instrument in providing the people of our state a

predictable body of law.® Because we find no pressing

reason to change the law, we affirm Aafco to be the law in

Indiana.

Our decision to uphold Aafco is also based on our

strong commitment to protecting the freedom of speech

and expression provided in the First Amendment to the

United States Constitution. Such commitment, we

believe, should persist irrespective of the status of an

alleged defamed plaintiff.

“If a matter is subject [sic] of public or general

interest, it cannot suddenly become less so

merely because a private individual is involved,

or because in some sense the individual did not

‘voluntarily’ choose to become involved. The

public’s primary interest is in the event; the

public focus is on the conduct of the participant

and the content, effect, and significance of the

conduct, not the participant’s prior anonymity

or notoriety.”

Aafco, 321 N.E.2d at 587 (quoting Rosenbloom, 403 U.S. at

43, 91 S.Ct. 1811). The Indiana Court of Appeals properly

noted that applying a negligence standard to private

® See Nelson v. Parker, 687 N.E.2d 187, 190 (Ind.1997)

(recognizing the importance of settled rules in property law and

that stability is desirable to predict outcomes): Marsillett v. State,

495 N.E.2d 699, 704 (Ind.1986) (“Under the doctrine of stare

decisis, this Court adheres to a principle of law which has been

firmly established. Important policy considerations militate in

favor of continuity and predictability in the law.”) (emphasis in

Original).

App. 12

individuals and an actual malice standard to public fig-

ures “assumes that society has a greater interest in pro-

tecting ‘private’ reputation than safeguarding the

community standing and repute of ‘public officials’ and

‘public figures.’” Such an assumption does not exist in

Indiana in matters of public or general concern where

“[t]he reputations of public figures and public officials

mcrit the same quantum of protection as those of private

citizens.” Id. at 587.

Second, we believe that in most instances there is

little disparity in the ability of private versus public

individuals to obtain access “to the channels of effective

communication” in order to “counteract false state-

ments.” But see Gertz, 418 U.S. at 344, 94 S.Ct. 2997

(stating that public figures can more easily rebut false

statements due to increased access to communication

channels).

Only rarely will a public official or public figure

have attained sufficient prominence to com-

mend media attention which will provide a

meaningful chance to rebut and defend against

defamatory falsehood. Even in the rare case

where an adequate opportunity for reply is

afforded, it is unlikely that the rebuttal state-

ments will receive the same degree of public

attention as the published defamation. It would

appear that the proper solution for any lack of

access on the part of all citizens, whether “pub-

lic” or “private” is not the expansion of the right

to sue for defamation, but rather the passage of

state laws creating a limited right to respond to

defamatory falsehoods.

Aafco, 321 N.E.2d at 587 (footnote omitted).

App. 13

Third, we do not find that public figures’ voluntary

exposure to public scrutiny necessarily entitles non-pub-

lic figures to greater protection from defamation.

The argument that public officials and public

figures assume the risk of defamation by volun-

tarily placing themselves in the public eye is a

misconception of the role which every citizen is

expected to play in a system of participatory

self-government. Every citizen, as a necessary

part of living in society, must assume the risk of

media comment when he becomes involved,

whether voluntarily or involuntarily, in a matter

of general or public interest. It has long been

recognized that “[e]xposure of the self to others

in varying degrees is a concomitant of life in a

civilized community.”

Id. at 588 (alteration in original) (quoting Time, Inc. v. Hill,

385 U.S. 374, 388, 87 S.Ct. 534, 17 L.Ed.2d 456 (1967)). The

Rosenbloom Court responded to similar arguments in the

following manner:

[T]he idea that certain “public” figures have

voluntarily exposed their entire lives to public

inspection, while private individuals have kept

theirs carefully shrouded from public view is, at

best, a legal fiction. In any event, such a distinc-

tion could easily produce the paradoxical result

of dampening discussion of issues of public or

general concern because they happen to involve

private citizens while extending constitutional

encouragement to discussion of aspects of the

lives of “public figures” that are not in the area

of public or general concern.

Rosenbloom, 403 U.S. at 48, 91 S.Ct. 1811.

App. 14

We acknowledge the appeal of the arguments made

in Gertz and think that the news media bear a heavy

moral responsibility not to invade the private lives of

private citizens with respect to their private affairs. And

when they do, they not only damage their own reputa-

tions, but undermine support for their First Amendment

protections. But, moral responsibility is not in this context

identical to legal liability. In our view, imposing legal

liability only when the news media engage in conduct

with actual malice in matters of public or general concern

protects the rights and values embodied in the First

Amendment to the fullest extent. A negligence standard

in matters of public or general concern for private indi-

viduals likely would require the news media to censor

s.ories of public or general concern or avoid publication

of controversial articles. See Aafco, 321 N.E.2d at 588. This

is because a negligence standard would permit private

individuals to obtain favorable judgments on the basis

that the news media failed to use reasonable care. “The

uncertainty attendant upon a reasonable care standard

would charge the press with ‘the intolerable burden of

guessing how a jury might assess the reasonableness of

steps taken by it to verify the accuracy of every reference

to a name, picture or portrait.’ ” Id. at 588 (quoting Time,

385 U.S. at 389, 87 S.Ct. 534). Such a rule would curtail

the freedom of the press and undermine our attempt to

protect speech that relates to matters of public or general

concern.?

9 See Aafco, 321 N.E.2d at 588-89:

“In the normal civil suit where [the preponderance of

the evidence] standard is employed, ‘we view it as

App. 15

For all of the foregoing reasons, we adopt the rule in

Aafco and hold it to be the law in Indiana.

In exploring the parameters of public figure status,

the United States Supreme Court established two classes

of public figures: general-purpose and limited-purpose

public figures. Gertz, 418 U.S. at 352, 94 S.Ct. 2997. “Gen-

eral purpose public figures are those individuals who

‘achieve such pervasive fame or notoriety that [they]

become[] a public figure for all purposes and in all

contexts.’ ” Trotter v. Jack Anderson Enters., Inc., 818 F.2d

431, 433 (Sth Cir.1987) (quoting Gertz, 418 U.S. at 351, 94

S.Ct. 2997 (both alterations in original)). Consequently,

“[a]bsent clear evidence of general fame or notoriety in

the community, and pervasive involvement in the affairs

of society, an individual should not be deemed a public

personality for all aspects of his life.” Gertz, 418 U.S. at

352, 94 S.Ct. 2997. In the case of limited purpose public

figures, they achieve their status by “thrust[ing] them-

selves to the forefront of particular public controversies

more serious in general for there to be an erroneous

verdict in the defendant’s favor.’ In re Winship, 397

U.S. 358, 371, 90 S.Ct. 1068, 25 L.Ed.2d 368 (1970). In

libel cases, however, we view an erroneous verdict for

the plaintiff as most serious. No only does it mulct the

defendant for an innocent misstatement . . . but the

possibility of such error, even beyond the vagueness

of the negligence standard itself, would create a

strong impetus toward self-censorship, which the

First Amendment cannot tolerate.”

Id. (quoting Rosenbloom, 403 U.S. at 50, 91 S.Ct. 1811).

App. 16

in order to influence the resolution of the issues

involved.” Id. at 345, 94 S.Ct. 2997.

Whether an individual is a public figure is a question

of law for the court to resolve. Rosenblatt v. Baer, 383 U.S.

75, 88, 86 S.Ct. 669, 15 L.Ed.2d 597 (1966). In the present

case, there was no dispute as to Bandido’s status. The

trial court instructed the jury that Bandido’s was a lim-

ited-purpose public figure, and Bandido lodged no objec-

tion to this characterization.'!° Given that no objection

was made, we find this instruction to be binding on

Bandido’s and sufficient to establish its status as a lim-

ited-purpose public figure. See Groves v. First Nat'l Bank of

Valparaiso, 518 N.E.2d 819, 824 (Ind.Ct.App.1988) (finding

that an instruction to which no objection was made

becomes the law of the case).

Moreover, even had Bandido’s sought to contest its

status as a limited-purpose public figure, we conclude

that the authority on this issue cuts squarely against such

a challenge. Restaurants and other establishments that

actively advertise and seek commercial patronage have

been routinely held to be public figures, at least for the

limited purpose of consumer reporting on their goods

and services. See, e.g., Steaks Unlimited, Inc. v. Deaner, 623

F.2d 264, 272 (3d Cir.1980); Quantum Elec. v. Consumers

Union of United States, 881 F.Supp. 753, 764 (D.R.I.1995); S

& W Seafoods Co. v. Jacor Broad. of Atlanta, 194 Ga.App.

10 The trial court’s instruction stated, in pertinent part: “In

this case, the statements upon which suit has been brought

relate to a limited purpose public figure as well as a mater [sic]

of public interest at least for the purpose of the statements at

issue.” (R. at 850).

App. 17

233, 390 S.E.2d 228, 23€ (1989); Greer v. Columbus Monthly

Publ’g Corp., 4 Ohio App.3d 235, 4 O.B.R. 426, 448 N.E.2d

157, 162 (Ohio Ct.App.1982). Hence, while Bandido’s may

not necessarily have been a public figure before the

health department closed the restaurant, we find that it

certainly became a public figure for the limited purpose

of issues concerning the health department's report and

the circumstances giving rise to the closing of the restau-

rant.

Bandido’s contends that the Court of Appeals

exceeded the proper standard of review in determining

that there was insufficient evidence to support the jury

verdict that the Journal-Gazette published the incorrect

subheadline with actual malice. Additionally, Bandido’s

suggests that the “applicable appellate standard of

review in a libel case is whether the evidence and reason-

able inferences drawn therefrom support the verdict.”

Appellee’s Br. at 2. The Journal-Gazette contends that the

appellate court should undertake an independent and

searching review of the record to determine whether

Bandido’s has met its burden of proof. We agree with the

Journal-Gazette.!!

In New York Times, the United States Supreme Court

determined that because proof of actual malice was

‘ Because Bandido’s is a public figure, see Part II, supra, we

do not address the appellate standard of review to be employed

in reviewing a judgment in a defamation case involving matters

of public or general concern and a private individual plaintiff.

App. 18

required for libel actions brought by public official plain-

tiffs, effective judicial administration required review of

the entire record to determine whether the evidence

could constitutionally support a judgment. 376 U.S. at

285, 84 S.Ct. 710. Additionally, the Court made the fol-

lowing comments:

This Court’s duty is not limited to the elabora-

tion of constitutional principles; we must also in

proper cases review the evidence to make cer-

tain that those principles have been constitu-

tionally applied. This is such a case, particularly

since the question is one of alleged trespass

across “the line between speech unconditionally

guaranteed and speech which may legitimately

be regulated.” In cases where that line must be

drawn, the rule is that we “examine for our-

selves the statements in issue and the circum-

stances under which they were made to

see .. . whether they are of a character which

the principles of the First Amendment, as

adopted by the Due Process Clause of the Four-

teenth Amendment, protect.” We must “make an

independent examination of the whole record,”

So as to assure ourselves that the judgment does

not constitute a forbidden intrusion on the field

of free expression.

Id. (omission in original) (citations omitted). In Rosen-

bloom, the Court emphasized that it “has an ‘obligation to

test challenged judgments against the guarantees of the

First and Fourteenth Amendments,’ and in doing so ‘[it]

cannot avoid making an independent constitutional judg-

ment on the facts of the case.’ ” Rosenbloom, 403 U.S. at 54,

91 S.Ct. 1811 (quoting Jacobellis v. Ohio, 378 U.S. 184, 190,

84 S.Ct. 1676, 12 L.Ed.2d 793 (1964) (alteration added)).

App. 19

“The simple fact is that First Amendment questions of

‘constitutional fact’ compel this Court’s de novo review.”

Id.; see also Bose Corp. v. Consumers Union of United States,

Inc., 466 U.S. 485, 499, 104 S.Ct. 1949, 80 L.Ed.2d 502

(1984) (quoting New York Times, 376 U.S., at 284-86, 84

S.Ct. 710, and citing NAACP v. Claiborne Hardware Co., 458

U.S. 886, 933-34, 102 S.Ct. 3409, 73 L.Ed.2d 1215 (1982);

Greenbelt Cooperative Publ’g Ass'n v. Bresler, 398 U.S. 6, 11,

90 S.Ct. 1537, 26 L.Ed.2d 6 (1970); St. Amant v. Thompson,

390 U.S. 727, 732-33, 88 S.Ct. 1323, 20 L.Ed.2d 262 (1968))

(In cases raising First Amendment issues, “an appellate

court has an obligation to ‘make an independent exam-

ination of the whole record.’ ”).

In justifying the use of an independent examination,

the Supreme Court stated that “the rule of independent

review assigns to judges a constitutional responsibility

that cannot be delegated to the trier of fact, whether the

factfinding function be performed in the particular case

by a jury or by a trial judge.” Bose Corp., 466 U.S. at 501,

104 S.Ct. 1949.

The requirement of independent appellate

review reiterated in New York Times Co. v. Sul-

livan is a rule of federal constitutional law. It

emerged from the exigency of deciding concrete

cases; it is law in its purest form under our

common law heritage. It reflects a deeply held

conviction that judges - and particularly Mem-

bers of this Court - must exercise such review in

order to preserve the precious liberties estab-

lished and ordained by the Constitution. The

question whether the evidence in the record in a

defamation case is of the convincing clarity

App. 20

required to strip the utterance of First Amend-

ment protection is not merely a question for the

trier of fact. Judges, as expositors of the Consti-

tution, must independently decide whether the

evidence in the record is sufficient to cross the

constitutional threshold that bars the entry of

any judgment that is not supported by clear and

convincing proof of “actual malice.”

Bose Corp., 466 U.S. at 510-11, 104 S.Ct. 1949. This princi-

ple was recently reaffirmed by a unanimous Court in

Hurley v. Irish-American Gay, Lesbian & Bisexual Group of

Boston, Inc., 515 U.S. 557, 567, 115 S.Ct. 2338, 132 L.Ed.2d

487 (1995).

We believe the language in the cases cited supra

indicates that the Supreme Court has mandated that

appellate courts use independent examination of the

whole record as the standard of review when proof of

actual malice is required as a matter of federal constitu-

tional law in defamation cases.

In the final part of our analysis, we must review the

evidence to determine whether there was sufficient evi-

dence to support a finding of actual malice. We hold that

the evidence was insufficient.

Actual malice must be shown by clear and convinc-

ing evidence. Heeb v. Smith, 613 N.E.2d 416, 419

(Ind.Ct.App. 1993) (citing Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)); see

Rosenbloom, 403 U.S. at 52, 91 S.Ct. 1811. Actual malice

App. 21

exists when the defendant publishes a defamatory state-

ment “with knowledge that it was false or with reckless

disregard of whether it was false or not.” New York Times,

376 U.S. at 279-80, 84 S.Ct. 710; see Masson v. New Yorker

Magazine, Inc., 501 U.S. 496, 510, 111 S.Ct. 2419, 115

L.Ed.2d 447 (1991); Harte-Hanks Communications, Inc. v.

Connaughton, 491 U.S. 657, 659, 109 S.Ct. 2678, 105

L.Ed.2d 562 (1989); Gertz, 418 U.S. at 342, 94 S.Ct. 2997;

Rosenbloom, 403 U.S. at 52, 91 S.Ct. 1811; Curtis Publ’g Co.,

388 U.S. at 134, 87 S.Ct. 1975. “[R]eckless conduct is not

measured by whether a reasonably prudent man would

have published, or would have investigated before pub-

lishing.” St. Amant, 390 U.S. at 731, 88 S.Ct. 1323. To

demonstrate reckless disregard, “[t]here must be suffi-

cient evidence to permit the conclusion that the defen-

dant in fact entertained serious doubts as to the truth of

his publication,” id., or proof that the false publication

was made with a “high degree of awareness of their

probable falsity,” Garrison v. Louisiana, 379 U.S. 64, 74, 85

S.Ct. 209, 13 L.Ed.2d 125 (1964); see Masson, 501 U.S. at

510, 111 S.Ct. 2419; Harte-Hanks Communications, 491 U.S.

at 668, 109 S.Ct. 2678. Hence, a defendant's actual state of

mind is a critical factor in the analysis. See Herbert v.

Lando, 441 U.S. 153, 160, 99 S.Ct. 1635, 60 L.Ed.2d 115

(1979); see also Woods v. Evansville Press Co., 791 F.2d 480,

485 (7th Cir.1986); Long v. Arcell, 618 F.2d 1145, 1147 (5th

Cir.1980). A defendant's state of mind is a subjective fact

and may be shown by indirect or circumstantial evidence.

See Zerangue v. TSP Newspapers, 814 F.2d 1066, 1070 (5th

Cir.1987) (citing Herbert v. Lando, 441 U.S. 153, 165, 99

S.Ct. 1635, 60 L.Ed.2d 115 (1979)); Harte-Hanks Communi-

cations, 491 U.S. at 668, 109 S.Ct. 2678.

App. 22

The question of whether there is sufficient evidence

to support a finding of actual malice is a question of law

to be determined by the court. See Harte-Hanks Communi-

cations, 491 U.S. at 685, 109 S.Ct. 2678 (citing Bose Corp.,

466 U.S. at 510-11, 104 S.Ct. 1949}-This rule is premised

on two important considerations: (1) the “national com-

mitment to the free exchange of ideas, as enshrined in the

First Amendment;” and (2) the recognition that

“ ‘[j]udges as expositors of the Constitution’ have a duty

to ‘independently decide whether the evidence in the

record is sufficient to cross the constitutional threshold

that bars the entry of any judgment that is not supported

by clear and convincing proof of “actual malice.” ’ ” Id. at

686, 109 S.Ct. 2678 (quoting Bose Corp., 466 U.S. at 511,

104 S.Ct. 1949 (alteration in original)). We discussed supra

in Part III the need to conduct an examination of “the

factual record in full.” Id. at 688, 109 S.Ct. 2678. In an

independent review, each piece of evidence may be con-

sidered cumulatively. See id. at 689, 109 S.Ct. 2678.

Bandido’s contends that there were five significant

pieces of evidence indicating that the Journal-Gazette

published the inaccurate newspaper subheadline with

actual malice: (1) printing a subheadline using the word

“rats”; (2) a warning provided by the Allen Superior

Court when it ruled “that public disclosure of the inspec-

tion reports might result in improper inferences or inter-

pretations as to the seriousness of the violations noted;”

(3) job evaluations of two Journal-Gazette employees; (4)

the Journal-Gazette’s failure to publish a retraction in

accordance with Ind.Code § 34-4-15-1; and (5) the sub-

headline appeared in the first and final editions of the

Journal-Gazette, but not in the second edition. We review

App. 23

each piece of evidence to determine whether any of these

items alone shows by clear and convincing evidence that

the Journal-Gazette acted with actual malice or whether

the evidence cumulatively suggests actual malice.

It is a question of law for the court to decide whether

a statement considered in its entirety is capable of pos-

sessing a defamatory meaning or implication. Woods, 791

F.2d at 486 (citing Rose v. Indianapolis Newspapers, Inc., 213

F.2d 227, 229 (7th Cir.1954)). If a statement is susceptible

to both defamatory and non-defamatory meanings, the

matter of interpretation should be left to the jury. Id. In

order to impose liability for defamation, the United States

Constitution requires a false statement of fact. Heeb, 613

N.E.2d at 421 (citing Hustler Magazine v. Falwell, 485 U.S.

46, 108 S.Ct. 876, 99 L.Ed.2d 41 (1988)); see Philadelphia

Newspapers, Inc. v. Hepps, 475 U.S. 767, 776, 106 S.Ct. 1558,

89 L.Ed.2d 783 (1986) (noting that a statement on matters

of public concern must be provable as false before there

can be liability under state defamation law). “[T]he state-

ment is not considered false unless it ‘would have a

different effect on the mind of the reader from that which

the pleaded truth would have produced.’ ” Masson, 501

U.S. at 517, 111 S.Ct. 2419 (quoting R. Sack, Libel, Slander,

and Related Problems 138 (1980)); see Heeb, 613 N.E.2d at

421 (citing AIDS Counseling & Testing Centers v. Group W

Television, Inc., 903 F.2d 1000 (4th Cir.1990)) (“The test for

determining whether a statement is substantially true is

whether any inaccuracies caused the statement to pro-

duce a different effect on the audience than would have

been produced had the literal truth been spoken.”);

App. 24

Cochran, 372 N.E.2d at 1217 (“In determining whether a

defamatory meaning is possible, the test is the effect

which the article is fairly calculated to produce and

impression it would naturally engender in the mind of

the average person.”); MclIlvain v. Jacobs, 794 S.W.2d 14, 16

(Tex.1990) (Substantial truth is an absolute defense in

defamation actions and the test is “whether the alleged

defamatory statement was more damaging to [plaintiff's]

reputation, in the mind of the average listener, than a

truthful statement would have been.”).

A-l

Our first inquiry is to decide whether the sub-

headline and the article should be read together or inde-

pendently in order to determine whether the subheadline

was defamatory.

Both Bandido’s and the Journal-Gazette rely on

Sprouse v. Clay Communication, Inc., 158 W.Va. 427, 211

S.E.2d 674 (1975), as authority for the determination of

whether the subheadline and the article should be read

together or separately. In Sprouse, the court made the

following statements:

Generally where the headline is of normal size

and does not lead to a conclusion totally unsup-

ported in the body of the story, both headlines

and story should be considered together for

their total impression. However, where over-

sized headlines are published which reasonably

lead the average reader to an entirely different

conclusion than the facts recited in the body of

the story, and where the plaintiff can demon-

strate that it was the intent of the publisher to

App. 25

use such misleading headlines to create a false

impression on the normal reader, the headlines

may be considered separately with regard to

whether a known falsehood was published.

Id. at 686 (emphasis added).

The Sprouse court viewed the headline independently of

the article but emphasized that its reason for doing so

was “because the plaintiff proved that the newspaper

abdicated its traditional role of fairly reporting the news

and became a participant in a scheme or plan, the object

of which was to employ grossly exaggerated and patently

untrue assertions, embodied primarily in headlines, to

destroy the character of Sprouse.” Id. at 691. In this case,

there is no evidence that the Journal-Gazette engaged in

such conduct.

“The majority of jurisdictions support the rule that

headlines are to be construed in conjunction with their

accompanying articles.” Molin v. Trentonian, 297

N.J.Super. 153, 687 A.2d 1022, 1024 (N.J.Super.Ct.App.

Div.1997) (citing cases). However, there are some jurisdic-

tions which hold that a newspaper headline alone is

libelous. See, e.g., Las Vegas Sun, Inc. v. Franklin, 74 Nev.

282, 329 P.2d 867, 870 (Nev.1958) (Because the “public

frequently reads only the headline,” the headline may be

construed apart from its accompanying article.). Some

minority jurisdictions have adopted what is known as the

“fair index” rule. See Burgess v. Reformer Publ’g Corp., 146

Vt. 612, 508 A.2d 1359, 1363 (Vt.1986); Schermerhorn v.

Rosenberg, 73 A.D.2d 276, 426 N.Y.S.2d 274, 283

(N.Y.App.Div.1980); Hein v. Lacy, 228 Kan. 249, 616 P.2d

277, 286 (Kan.1980); Bray v. Providence Journa! Co., 101 R.1.

App. 26

111, 220 A.2d 531, 535 (R.1.1966). Under the fair index

rule:

“If the headline is a fair index of an accurate

article, it is not actionable. If it is not a fair index

[- does not fairly indicate the substance of the

matter to which it refers -] then the headline

must be examined independently to determine

whether it is actionable under general principles

of libel.”

Burgess, 508 A.2d at 1363 (quoting Schermerhorn, 426

N.Y.S.2d at 283 (alteration in original)). In deciding to

follow the fair index rule, the Burgess court remarked that

it “cannot ignore the fact that ‘many people in a hurried

and busy society are headline readers,’” id. (quoting

Cross v. Guy Gannett Publ’g Co., 151 Me. 491, 121 A.2d 355,

358 (Me.1956)), and that “[aJlthough ‘the defamatory

meaning of the headline may be dispelled by a reading of

the entire article . . . , [a] headline is often all that is read

by the casual reader and therefore separately carries a

potential for injury as great as any other false publica-

tion,’ ” id. (quoting Schermerhorn, 426 N.Y.S.2d at 283

(second alteration in original));!2 see Reardon v. News-

12 The Burgess court also agreed with the following

comments made by the court in Black v. Nashville Banner

Publishing Co., 24 Tenn.App. 137, 141 S.W.2d 908

(Tenn.Ct.App.1939):

“The headline of an article or paragraph, being so

conspicuous as to attract the attention of persons who

look casually over a paper without carefully reading

all its contents, may in itself inflict very serious injury

upon a person, both because it may be the only part of

the article which is read, and because it may cast a

graver imputation than all the other words following

App. 27

Journal Co., 53 Del. 29, 164 A.2d 263, 265 (Del.1960)

(“[T]he sting of a libel may sometimes be contained in a

word or sentence used in a headline to the body of the

article, even though the facts are correctly set forth in the

body.”).

We agree with the minority of jurisdictions that fol-

low the “fair index” rule for the reasons mentioned

herein and adopt this approach when determining

whether a headline is defamatory. We believe this to be

the best approach because in many respects, a defama-

tory headline may be much more injurious to a party than

a defamatory article where the false statement may be

buried in the story and go unnoticed by the average

reader. This is especially true when an individual reads

only the headline and not the story. In Indiana, a defama-

tory headline will be actionable even if the story follow-

ing it is accurate, unless the headline is a fair index of the

accurate article. “[I]n determining whether a headline

fairly indicates the substance of the matter to which it

refers, the headline and article must be considered

together.” Burgess, 508 A.2d at 1363.

it. There is no doubt that in publications . . . claimed

to be libelous, the headlines directing attention to the

publication may be considered as a part of it, and may

even justify a court or jury in regarding the

publication as libelous when the body of the article is

not necessarily so.”

Burgess, 508 A.2d at 1363 (quoting Black, 141 S.W.2d at 912

(omission in original)).

App. 28

The headline in this case read: “Health Board Shuts

Doors of Bandido’s” and the subheadline read: “Inspec-

tors find rats, roaches at local eatery.”1> One interpreta-

tion, and perhaps the most logical, of the subheadline is

that Bandido’s was shut down because the health board

found rats and roaches (or bugs) at the restaurant. The

article which has been deemed to be accurate states that

the restaurant was closed “because of health violations

including evidence of insects and rodents.” The article

goes on to mention some of the significant violations

cited by the health board. The subheadline clearly creates

the impression that Bandido’s was closed solely because

of the discovery of rats!4 and roaches (or bugs) and in

addition, conjures up a depiction of the restaurant which

is not entirely accurate.!5 As such, we are hard pressed to

13 This is how the subheadline read in the first edition. As

mentioned earlier, the subheadline was deleted from the second

edition and the third edition contained the following

subheadline: “Investigators finds [sic] rats, bugs at north-side

eatery.” We do acknowledge that the headline as published is in

bold type face and oversized and the subheadline, while smaller

than the headline, is somewhat larger than the text of the article.

14 The subheadline’s reference to the discovery of rats in

and of itself is not entirely accurate, but is at least substantially

true. See infra Part A-2 for a discussion of this issue.

15 Jan Ashburn, a witness for Bandido’s, provided the

following testimony when asked what he: reaction to the

subheadline was:

Uh, I was, uh, in shock and I was really upset thinking

about rats. I envisioned rats running through. I

envisioned sitting at a restaurant much like, uh, as I

say in my deposition, I’ve done some, uh, quite a bit

of traveling, so I envisioned some, some places that

we have been in some third world countries where

there was just, uh, you couldn’t eat a meal because of,

ee ee

App. 29

conclude that the subheadline was a fair index of the

story. Consequently, we examine the subheadline inde-

pendently to determine whether the subheadline is

defamatory and actionable under libel principles. 1¢

A-2

To determine whether the subheadline is defamatory,

we must decide whether the substitution of the word

of the bugs and the filthy conditions. And so that’s

what I, when I looked at the headline that’s what I

envisioned. Was just completely filthy conditions.

With rats, I equate rats with, with filth. _

(R. at 1991.) Beverly Zuber, another witness for Bandido’s,

testified that when she read the subheadline, she “was

appalled” and “imagined bowls [of] white rice and rats jumping

from bowl to bowl.” (R. at 2014.)

16 We note that in Woodcock v. Journal Publishing Co., 230

Conn. 525, 646 A.2d 92, 106 (Conn.1994), the plaintiff alleged

that a subheadline was libelous because it indicated that a

developer who benefited by plaintiff’s proposal was a business

associate whereas the truth was that the developer had a

business relationship with other members of plaintiff’s family.

The court determined that the inaccuracy was clarified in the

first paragraph of the article and that although the subheadline

mischaracterized the relationship between the plaintiff and the

developer, it was “not libelous as a matter of law in view of the

accompanying clarification.” Similarly, in Contemporary Mission,

Inc. v. New York Times, Co., 842 F.2d 612, 624-25 (2d Cir.1988), a

subheadline inaccurately stated that certain priests’ ordinations

were forged when the truth was that the documentation

Supporting the ordinations had been forged. The court

determined that even though the subheadline mischaracterized

the controversy, the subheadline was followed by the article

which accurately clarified the subheadline and thus held that

the statement was not defamatory.

App. 30

“rats” for “rodents” was false. Webster’s New World

Dictionary (3d ed.1988) defines rodent as “any of a very

large order (Rodentia) of gnawing mammals including

rats, mice, squirrels, beavers, et. [sic], characterized by

—— constantly growing incisors adapted for gnawing or-

nibbling; esp., in popular usage, a rat or mouse.”

(emphasis added). Rat is defined as “any of numerous

long-tailed rodents . . . , resembling, but larger than, the

mouse; . . . rats are very destructive pests and carriers of

highly contagious disease, as bubonic plague, typhus,

etc.” As indicated by the definition, every rat is a rodent

although every rodent is not necessarily a rat. Rodent is a

more generic term whereas rat denominates a specific

type of rodent.

During trial, Bandido’s contended that if the headline

had used the words “evidence of rodent droppings”

instead of “rats,” there would be no dispute and the

impact would not have been nearly the same.!7 (R. at

17 After an in depth cross-examination of Mr. Schindler, the

owner of Bandido’s restaurant, regarding all the health

violations of the restaurant in recent years and the other

violations noted by the Board of Health in the September 13,

1988, inspection which discovered the evidence of rodent

droppings, the following colloquy occurred:

Q: Alright. Don’t you think, Sir, that those are all things

that might influence whether or not people want to eat in a

restaurant?

A: I don’t think it would have near the impact as rat

headline, if that’s the question.

Q: So you think you’d been a lot better off if the headline

wouldn’t sai -, would have said, inspectors find rodent

droppings, roaches at local eatery?

App. 31

1346.) During the direct examination of June Remley,

author of the article and not the subheadline, Bandido’s

had the witness agree that the word “rat” connotates

dirtiness, filth, pestilence, disease, infection, and

plague.’® (R. at 1609.)!9 We would agree that the word

“rat” connotes such ideas and find that the definition of

rat supports such a belief. However, we do not agree that

use of the word “rat” is so distasteful that it created an

impression that was so different than would have been

created had the Journal-Gazette used the words “evi-

dence of rodents” or “evidence of rodent droppings.” See

Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 517, 111

S.Ct. 2419, 115 L.Ed.2d 447 (1991) (providing that a

“false” statement will have a different effect on the

reader’s mind).

One might say that the word “rat” is common usage

for the more proper term “rodent” or that “rat” is often

used in colloquial speech to refer to “rodent.”29 See

A: Uh, they didn’t find it. It would be mis -, it would still

be wrong. Read the report. On the back it says “evidence of”.

They never found the first one.

(R. at 1346.)

‘8 When asked whether she could think of anything by way

of connotation from rat that is nice, June Remley responded,

“Well, sir, I’m aware that some people do keep them as pets so in

some circles they are considered very acceptable pets.” (R. at

1609.)

19 June Remley’s deposition was read into the record with

another witness reading her responses.

20 We take judicial notice that the words “rats” and

“rodents” are frequently used interchangeably. See, e.g., Lynn

Snowden, Attack of the Giant Rats, George, July, 1998, at 90, 92

(“[C]onditions for rodents were so favorable that a rat blithely

App. 32

Simonson v. United Press Int'l, Inc., 654 F.2d 478, 481, 482

(7th Cir.1981) (determining that “ ‘rape’ as defined by

common usage is incorporated into second-degree sexual

assault under Wisconsin law” and the publications “were

in no manner made false by substituting the word in

common usage for an exact legalism”) (footnote omitted);

Orr v. Argus-Press Co., 586 F.2d 1108, 1112 (6th Cir.1978)

(conceding that while use of the “word ‘swindle’ may

imply more serious wrongdoing than was involved ...,

the word is frequently used in colloquial speech as a

substitute for ‘defraud’ ”).

Clearly, if the subheadline had read “investigators

find evidence of rodents,” the average reader would infer

that there were rodents in the restaurant.2! Ordinarily,

only two types of rodents are perceived as habitating in a

restaurant — rats and mice. Thus, if the subheadline had

used the words “evidence of rodents” and the average

reader inferred from this that the restaurant contained

rodents, then the average reader would just as likely

wandered up to Mayor Rudolph Giuliani. . . . [T]he mayor

announced the $8 million Comprehensive Rodent Control

Initiative, an all-out war against rats.”).

21 See Zerangue v. TSP Newspapers, Inc., 814 F.2d 1066, 1073

(5th Cir.1987) (“In determining whether the gist and sting of a

story is true, the court must view the story through the eyes of

the average reader or member of the audience.”); Molin v.

Trentonian, 297 N.J.Super. 153, 687 A.2d 1022, 1023

(N.J.Super.Ct.App.Div.1997) (In determining whether a

statement is defamatory, one “must evaluate the language in

question ‘according to the fair and na‘*»ral meaning which

would be given it by reasonable persons of ordinary

intelligence.’ ”) (quoting Herrmann v. Newark Morning Ledger

Co., 48 N.J.Super. 420, 138 A.2d 61 (N.J.Super.Ct.App.Div.1958)).

App. 33

conclude that there must be either mice or rats in the

restaurant.*? We doubt that the use of the word “mice” in

the subheadline would have been less damaging than use

of the word “rats.”23 Additionally, we believe that had

2 During a deposition, one of Bandido’s witnesses stated

that when she hears the term “rodents,” she thinks of rats. (R. at

2018.) Another Bandido witness stated during a deposition

which was admitted at trial that when she sees the word

“rodents,” she thinks of mice; however, even if the headline had

used the word “rodents,” she still would not have gone back to

the restaurant. (R. at 2024.)

*3 At trial, Bandido’s admitted into evidence its October 18,

1988, letter to the Journal-Gazette expressing dissatisfaction

with the Journal-Gazette’s fottow<up correction story. In the

letter, Bandido’s alleged that if the Journal-Gazette had

interviewed inspectors at the Board of Health, it would have

discovered that “as a matter of course, use of the term ‘rodents’

means ‘mice’ and use of the term ‘rats’ means ‘rats.’ ” (R. at

1272.) At trial, Bandido’s often used the words “rodent” and

“mice” interchangeably, (R. at 1450), and even tried to elicit

testimony suggesting that a headline using the word “mice”

would have been far less damaging. (R. at 1227.) Bandido’s

called the health inspector who observed the Bandido’s

restaurant em October 4, 1988, in order to gather information for

the revocation hearing testified at trial. The inspector testified

that before inspecting Bandido’s, she reviewed the September

13, 1988, health inspection report which noted the discovery of

“evidence of rodent droppings” and talked with the inspectors

who did the report. The conversation revealed that the rodent

droppings were small and indicative of mouse droppings

instead of rat droppings which are much larger. (R. at 1533.)

Bandido’s contends that if the Journal-Gazette had spoken with

these inspectors, it would have uncovered this truth. Without

delving into the merits of this claim, we simply state that

numerous courts have determined that the failure to investigate

or verify facts is not sufficient evidence of actual malice. See

Chester v. Indianapolis Newspapers, 553 N.E.2d 137, 140

App. 34

the Journal-Gazette used the word “rodents” in the sub-

headline, it would have created substantially the same

effect on a reader as was created with use of the word

“rats.”24 Either way, readers would have perceived Ban-

dido’s as an unsanitary, dirty restaurant. See, e.g., Wood-

cock v. Journal Publ’g Co., 230 Conn. 525, 646 A.2d 92, 106

(Conn.1994) (“[T]he absolute truth - that [the developer]

was a business associate of other members of the plain-

tiff’s family, rather than of the plaintiff herself - would

have had the same effect on the reader as the inaccurate

subheadlines” in that “[e]ither way, the reader would

have perceived that the plaintiff had a conflict of inter-

est.”); Zerangue, 814 F.2d at 1074 (In citing to numerous

cases where a_publisher had printed an inaccurate but

substantially true article, the court determined that the

“common thread” running through the cases was that

(Ind.Ct.App.1990); see also St. Amant v. Thompson, 390 U.S. 727,

733, 88 S.Ct. 1323, 20 L.Ed.2d 262 (1968); Beckley Newspapers

Corp. v. Hanks, 389 U.S. 81, 84, 88 S.Ct. 197, 19 L.Ed.2d 248

(1967); New York Times Co. v. Sullivan, 376 U.S. 254, 287, 84 S.Ct.

710, 11 L.Ed.2d 686 (1964); Herbert v. Lando, 781 F.2d 298, 108 (2d

Cir.1986); Bartimo v. Horsemen’s Benevolent & Protective Ass'n, 771

F.2d 894, 898 (5th Cir.1985); McDowell v. Paiewonsky, 769 F.2d

942, 951 (3d Cir.1985); Smith v. A. Pocono, 686 F.Supp. 1053, 1061

(M.D.Pa.1987); Live Oak Publ’g Co. v. Cohagan, 234 Cal.App.3d

1277, 286 Cal.Rptr. 198, 205 (Cal.Ct.App.1991); Tagawa v. Maui

Publ’g Co., 50 Haw. 648, 448 P.2d 337, 340 (Haw.1968); Sweeney v.

Prisoners’ Legal Servs., 84 N.Y.2d 786, 622 N.Y.S.2d 896, 647

N.E.2d 101, 104 (N.Y.1995).

24 We acknowledge that one of Bandido’s expert witnesses,

Professor Dennis Hale, who teaches Journalism testified that

“the word ‘rats’ is much more damaging, much more

threatening. The word ‘rodents’ is more general, uh, vague,

simply as, not as potentially derogatory.” (R. at 1964.)

PRP SN i ee es x

~~. ~~” et

App. 35

while the defendant newspaper reported the substance of

the criminal proceedings, the defendant erred in the use

of legal terminology and that the average person would

likely characterize the mistakes as a “technicality” and if

the story had been free of error, the plaintiffs “would

have been exposed to roughly the same amount of com-

munity opprobrium.”). While admittedly the word “rat”

conjures up more bad connotations than “mice” does (or

“rodents” for that matter), the sting of this inaccuracy

was sufficiently similar to the gist of the truth — Ban-

dido’s was closed and the inspectors did find evidence of

rodents and evidence of rodent droppings in the rest-

rooms. See Chapin v. Knight-Ridder, Inc., 993 F.2d 1087,

1092 (4th Cir.1993) (“The falsity of a statement and the

defamatory ‘sting’ of the publication must coincide — that

is, where the alleged defamatory ‘sting’ arises from sub-

stantially true facts, the plaintiff may not rely on minor or

irrelevant inaccuracies to state a claim for libel.”). In this

respect, we believe the inaccuracy did not create a false-

hood, but rather was substantially true.

Whatever distinction one might draw between a rat

and rodent, we believe the difference “fits easily within

the breathing space that gives life to the First Amend-

ment.” Bose Corp., 466 U.S. at 513, 104 S.Ct. 1949. Even if

we were to assume that the inaccuracy conceded to by the

Journal-Gazette created a falsehood, “[s]ome degree of

abuse is inseparable from the proper use of everything;

and in no instance is this more true than in that of the

press.” Gertz, 418 U.S. at 340, 94 S.Ct. 2997. “The First

Amendment requires that we protect some falsehood in

order to protect speech that matters.” Id. at 341, 94 S.Ct.

2997. “ ‘[T]o insure the ascertainment and publication of

App. 36

the truth about public affairs, it is essential that the First

Amendment protect some erroneous publications as well

as true ones.’ ” Rosenbloom, 403 U.S. at 51-52, 91 S.Ct. 1811

(quoting St. Amant, 390 U.S. at 732, 88 S.Ct. 1323 (alter-

ation in original)).

All that being said, we do not rest our decision in this

case on the basis that the subheadline was substantially

true. See St. Amant, 390 U.S. at 730-31, 88 S.Ct. 1323

(“ ‘Reckless disregard,’ it is true, cannot be fully encom-

passed in one infallible definition. Inevitably its outer

limits will be marked out through case-by-case adjudica-

tion, as is true with so many legal standards for judging

concrete cases; whether the standard is provided by the

Constitution, statutes, or case law.”). For this reason, we

examine the evidence which Bandido’s contends proves

that the Journal-Gazette published the subheadline with

actual malice.

Bandido’s most compelling piece of evidence that

the Journal-Gazette acted with actual malice is the

Journal-Gazette’s use of the word “rats” instead of

“rodents” in the subheadline. Bandido’s contends that

because the word “rats” does not appear in the article,

the mere fact that the word “rats” was erroneously

used in the subheadline was more than an extreme depar-

ture from normal professional standards and in fact is

indicative of actual malice. We disagree with

25 During trial, Bandido’s attempted to show that the

Journal-Gazette had a general rule that for a word to appear in a

App. 37

Bandido’s.26

Contrary to Bandido’s assertion, “[mJalice cannot be

deduced from the mere fact of publication alone.”

LaBruzzo v. Associated Press, 353 F.Supp. 979, 985

(W.D.Mo.1973) (citing Hurley v. Northwest—Publications, -

Inc., 273 F.Supp. 967 (D.Minn.1967)). Consequently, Ban-

dido’s cannot rely solely on the fact that there is a vari-

ance between what the article reported the health

inspector found and what the Journal-Gazette printed in

the subheadline as proof of actual malice. See Hodges v.

Oklahoma Journal Publ 'g Co., 617 P.2d 191, 196 (Okla.1980)

(“[W]here there was no evidence that the publisher

intended or was aware of a potentially defamatory mean-

ing of an article, which meaning was admitted]ly—at-vari-

ance with the known truth, ‘malice’ as required by New

York Times . . . could not be inferred.”) (citing Tilton v.

Cowles Publ’g Co., 76 Wash.2d 707, 459 P.2d 8 (Wash.

headline, the word must appear in the article. According to

Bandido’s, the failure to apply this rule is proof that the Journal-

Gazette departed from its professional standards. However, we

find that even if the Journal-Gazette did maintain such a rule

(and the record appears to reflect that it did), the Journal-

Gazette’s failure to apply the rule in this case may be evidence

of an extreme departure from professional standards, but is not

evidence of actual malice. See Harte-Hanks Communications, Inc.

v. Connaughton, 491 U.S. 657, 665, 109 S.Ct. 2678, 105 L.Ed.2d 562

(1989) (The New York Times actual malice standard plainly

requires a public figure plaintiff to “prove more than an extreme

departure from professional standards.”); see also Travelers

Indem. Co. v. Armstrong, 442 N.E.2d 349, 362 (Ind.1982).

¢ In its brief to this Court, Bandido’s states that the

evidence at trial showed that the Journal-Gazette’s publication

of the headline was an “extremely careless error.” (Appellee’s

Br. at 5-6.) Careless error is not the equivalent of actual malice.

App. 38

1969)). As suggested supra, Bandido’s must show that the

Journal-Gazette was aware of the inaccuracy at the time

of publication or had serious doubts as to its accuracy.

Bandido’s has failed in this regard.

During trial, Sheila Pinkley, the author of the head-

line, testified that she thought the headline was accu-

rate.27 She stated, “Well, at the time I thought it was

accurate. A rat is a rodent. Um, if I would have just said

rodent, that would have been accurate. So, to me, a

rodent suggested rat. And it, that is why I wrote the word

‘rat.’ ” (R. at 2478.) There was no other evidence reflect-

ing Pinckley’s state of mind or whether she “entertained

serious doubts as to the truth of the headline” or had a

“high degree of Awareness” of fhe Headline’s probabte~ —

27 Testimony by a defendant that he or she published in

good faith or believed the publication to be true is not sufficient

to dispel the notion that the defendant acted with actual malice.

See St. Amant v. Thompson, 390 U.S. 727, 732, 88 S.Ct. 1323, 20

L.Ed.2d 262 (1968) (“The defendant in a defamation action

brought by a public official cannot, however, automatically

insure a favorable verdict by testifying that he published with a

belief that the statements were true.”).

In St. Amant, the Court set forth several circumstances in

which profession of a good faith by the defendant would not be

persuasive: (1) where a story is fabricated by the defendant; (2)

where the story is the product of defendant's imagination; (3)

where the story is based wholly on an unverified anonymous

telephone call; (4) where the defendant’s allegations are so

inherently improbable that only a reckless person would have

put them in circulation; and (5) where there are obvious reasons

to doubt the veracity of the informant or the accuracy of the

informant’s reports. Id. at 732, 88 S.Ct. 1323. The circumstances

of this case do not fall within any of the scenarios mentioned in

St. Amant.

App. 39

falsity. Our research has revealed several cases in which

courts have determined that use of an inaccurate word as

a result of a misconception or poor interpretation is not

actual malice. We find the following cases particularly

instructive.

In Time, Inc. v. Pape, 401 U.S. 279, 91 S.Ct. 633, 28

L.Ed.2d 45 (1971), a news magazine reported on the Com-

mission on Civil Rights Report entitled “Justice.” A part

of the Commission’s Report described an alleged incident

of police brutality. When the magazine published an arti-

cle, it quoted the summary of the complaint but left out

the word “alleged.” This created the impression that the

facts described in the Commission’s Report were indeed

true. Id. at 282-83, 91 S.Ct. 633. The detective who was the

target of the police brutality complaint filed a libel suit.

The author of the article testified that he knew the mean-

ings of the words “alleged” and “complaint” and the

researcher testified that she was aware of the omission of

the word “alleged” in the article, but believed the article

to have been true as written. Id. at 283, 91 S.Ct. 633. The

Supreme Court determined that under the totality of the

circumstances, the failure to mention that the incident

described in the Commission’s Report was based on an

allegation was not a “falsification” sufficient to sustain a

jury finding of “actual malice.”28 Id. at 289, 91 S.Ct. 633.

* The Court also supported its conclusion with the

following comments:

The author of the Time article testified, in substance,

that the context of the report of the [police brutality]

incident indicated to him that the Commission

believed that the incident had occurred as described.

He therefore denied that he had falsified the report

App. 40

The Court continued by stating that “Time’s omission of

the word ‘alleged’ amounted to the adoption of one of a

number of possible rational interpretations of a document

that bristled with ambiguities. The deliberate choice of

such an interpretation, though arguably reflecting a mis-

conception, was not enough to create a jury issue of

‘malice’ under New York Times.” Id. at 290, 91 S.Ct. 633. _

“We have held that if ‘the freedoms of expression are to

have the breathing space that they need . . . to survive,’

misstatements of this kind must have the protection of

the First and Fourteenth Amendments.” Id. at 292, 91

S.Ct. 633 (quoting New York Times, 376 U.S. at 271-72, 84

S.Ct. 710) (internal quotation marks omitted).

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

~ an engineer for a-consumer product testing-organization-- —

prepared a report on a loudspeaker system suggesting

that instruments had a tendency to “wander about the

room.” 466 U.S. at 493, 104 S.Ct. 1949. At trial, it became

clear that what the engineer really perceived was that the

sound wandered “along the wall,” although the engineer

refused to admit that there was any inaccuracy in his

when he omitted the word “alleged.” The Time

researcher, who had read newspaper stories about the

incident and two reports from a Time reporter in

Chicago, as well as the accounts of [the police

detective’s] earlier career, had even more reason to

suppose that the Commission took the charges to be

true.

Time, 401 U.S. at 289, 91 S.Ct. 633.

App. 41

description.”° The trial court concluded that it was impos-

sible “to believe that [the engineer] interprets a common-

place word such as ‘about’ to mean anything other than

its plain ordinary meaning.” Id. at 487, 104 S.Ct. 1949.

Relying on Time, Inc., v. Pape, the Bose Court determined

that the engineer’s “choice—of such— language, though

reflecting a misconception, does not place the speech

beyond the outer limits of the First Amendment's broad

protective umbrella.” Id. at 513, 104 S.Ct. 1949. The Court

additionally stated that this case “represents the sort of

inaccuracy that is commonplace in the forum of robust

debate to which the New York Times rule applies.” Id.; see

Chester, 553 N.E.2d at 140 (A negligent interpretation of

public records or misconstruction of a statement from a

_ person interviewed falts short of the constitutional

requirement of actual malice.).

The circumstances in Schwartz v. Worrall Publications,

Inc., 258 N.J.Super. 493, 610 A.2d 425 (N.J.Super.Ct.App.

Div.1992),3° are somewhat similar to the circumstances of

29 The Court made the following comments with respect to

the engineer’s refusal to admit his mistake:

“[The engineer] displayed a capacity for rationali-

zation. He had made a mistake and when confronted

with it, he refused to admit it and steadfastly

attempted to maintain that no mistake had been made

- that the inaccurate was accurate. That attempt

failed, but the fact that he made the attempt does not

establish that he realized the inaccuracy at the time of

publication.”

Bose Corp., 466 U.S. at 512, 104 S.Ct. 1949.

3° Schwartz was an appeal from the denial of summary

judgment for the defendant newspaper.

App. 42

the case at hand. In Schwartz, a reporter wrote a story on

the investigation of a school board association. After

completing the story, the reporter left it with the copy

editor and then left town. The copy editor found the

article to be confusing and after reading it several times,

thought he “knew what [the writer] was trying to say.” Id.

at 427. The editor revised the article in the mistaken belief

that the attorney of the school board association was the

target of the investigation. The editor provided the fol-

lowing explanation:

I was under the assumption that because

there was a local angle, that the reason the story

was being written was that the local person was

the gist of the story. . . . I was confused. So in

my confusion, I saw a local person; and I

assumed that oh, this local person must be the

primary focus of the story and I was trying to

simplify it.

Id. The editor never spoke with the writer during the

editing process even though there was opportunity to do

so and also did not have access to the information upon

which the writer relied in drafting the story. The court

determined that a review of the record revealed “no

indication that anyone at [the newspaper] knew that the

facts being published were false.” Id. at 429. Additionally,

the court commented that while the record “would justify

a finding of an irresponsible and uncaring attitude on

[the newspaper’s] part,” id., this was not the same as

reckless disregard, since there must be clear and convinc-

ing proof that the statements were published with a “high

degree of awareness of their probable falsity,” or with

App. 43

“serious doubts as to the truth of [the] publication,” id. at

430 (citations omitted) (alteration in original).31

In Woodcock v. Journal Publishing Co., 230 Conn. 525,

646 A.2d 92, 98 (Conn.1994), a newspaper printed an

inaccurate subheadline. The subheadline read: “Devel-

oper claims Woodcock aim to aid business associate.” Id.

at 95. The author of the article admitted that this state-

ment was inaccurate, but that he did not write the sub-

headline. He also testified that “the author of the

subheadlines could conclude that they were accurate

because of the reference in the Story to . . . business

connections with the Woodcock family.” Id. at 98. The

court concluded that “[b]ecause the record fails to reveal

anything that would have caused the author of the sub-

headlines to ‘[entertain] serious doubts as to the truth of

[the subheadlines]’; we cannot say that it has been dem-

onstrated with convincing clarity that the subheadlines

were prepared or printed with actual malice.” Id. (citation

%! The court in Schwartz also made the following comments:

[Plaintiff] presented no evidence to contradict or

throw doubt on [the editor’s] testimony that, in his

haste to edit the article while managing multiple

responsibilities, he pared [the writer’s] text down to

make it more readable, without realizing that his snap

conclusions had actually changed the story’s

intended focus. That explanation does not excuse the

unfortunate result, but also does not provide clear

and convincing evidence of reckless disregard for the

truth.

Schwartz, 610 A.2d at 430. Similarly, in this case, Bandido’s did

not present any evidence at trial disputing the fact that Pinkley

truly had the misconception that a rodent is a rat.

App. 44

omitted) (second and third alterations in original). Addi-

tionally, the court commented that the “most that can be

said of the inaccurate subheadlines is that the defendants

were negligent in their preparation and publication.” Id.

“ TA] merely negligent misstatement of fact about a pub-

lic official retains the constitutional protection afforded

free expression.’” Id. (quoting Holbrook v. Casazza, 204

Conn. 336, 528 A.2d 774, 779 (Conn.1987)).

We similarly believe that while the Journal-Gazette

may have exhibited an “irresponsible and uncaring atti-

tude” in meeting its goal of accuracy, the evidence did

not demonstrate awareness of the inaccuracy in the sub-

headline. Pinkley (author of the headline) testified that

she spent “ten minutes tops” reading the article prior to

writing the headline. She stated that “[w]Jhen I wrote the

headline, I considered them to be accurate.” (R. at 24-25.)

“I looked at the words rodent droppings and I came up

with rats.” (R. at 25.) This evidence indicates nothing

more than a misconception. Bill Leonard who was Pink-

ley’s supervisor and responsible for checking the accu-

racy of her work testified that when editing the story, he

did not read it line by line, word for word. He relied on

the copy editor, Pinkley, to do those kinds of edits.

Leonard also testified that “{t]here was nothing on this

story that told me that I should, you know, that we were

doing anything wrong in terms of the accuracy or any-

thing. As far as I knew the story was accurate and the

headline was accurate.” (R. at 42-53.) Leonard also said

that he did not observe that the word “rats” did not

appear in the story. (R. at 58.) This evidence, while clearly

indicating that the Journal-Gazette was careless and neg-

ligent, was not indicative of actual malice. Additionally,

App. 45

the article and headiine was read by at least three other

employees before being published and there is no evi-

dence suggesting that any of these employees had serious

doubts about the accuracy of the subheadline or that they

were aware that the word “rats” did not appear in the

story. While the chances of this mistake occurring after

five people had reviewed the story suggests serious qual-

ity control concerns, it alone is not sufficient to support a

finding of actual malice.32 See Chester, 553 N.E.2d at 140

32 When courts have found the defendant to have

published statements with actual malice, the evidence has been

far more compelling than the evidence presented in this case.

See, e.g., Carson v. Allied News Co., 529 F.2d 206 (7th Cir.1976)

(The defendant completely fabricated defamatory quotations

and printed defamatory allegations which were contradicted by

a prior publication which was the source of the article.); Buckley

v. Littell, 539 F.2d 882, 896 (2d Cir.1976) (The defendant admitted

he did not believe that plaintiff engaged in the conduct alleged

in his book.); Goldwater v. Ginzburg, 414 F.2d 324, 339 (2d

Cir.1969) (The defendant wrote that presidential candidate was

mentally ill with knowledge that the statement was false.);

Curtis Publ’g Co. v. Butts, 388 U.S. 130, 157, 87 S.Ct. 1975, 18

L.Ed.2d 1094 (1967) (In the course of publishing an article

accusing an athletic director of conspiring to fix a football game,

the magazine recognized the need for a thorough investigation

of serious charges and realized that the source of the story was

on probation for bad check charges but published the story

without viewing the source’s notes, without substantial

independent support, without interviewing a friend who was

allegedly with the source when the defamatory conversation

was overheard, and without reviewing the game to see if the

source’s information was accurate.); Rinaldi v. Viking Penguin,

Inc., 52 N.Y.2d 422, 438 N.Y.S.2d 496, 420 N.E.2d 377, 383

(N.Y.1981) (The editor discovered that allegations in the

hardback book were false but failed to correct the book prior to

publication in a paperback edition.).

App. 46

(“’The publisher who maintains a standard of care

designed to avoid knowing or reckless falsehood must be

accorded sufficient assurance that those factual errors

which nonetheless occur will not expose him to indeter-

minate liability.’”) (quoting Aafco, 321 N.E.2d at 591).

Bandido’s contends that the Journal-Gazette’s failure

to heed Judge Sheldon’s warning about the dangers

inherent in misinterpreting the inspection reports sug-

gests that the Journal-Gazette acted with actual malice.

Our review of the record indicates that Bandido’s has

misinterpreted Judge Sheldon’s findings of fact and con-

clusions of law.

Prior to 1988, inspection reports prepared by the

Board of Health were not accessible by the general public

in Fort Wayne-Allen County. In order to obtain access to

the Food Establishment Inspection Reports, the Journal-

Gazette filed a lawsuit against the Board of Health argu-

ing that the reports were public records to which the

newspaper was entitled. Journal-Gazette Co. v. Fort Wayne-

Allen County Bd. of Pub. Health, No. 02D01-CT-8802-302

(Allen Sup.Ct. filed Feb. 26, 1988). On March 1, 1988,

Judge Sheldon conducted a hearing in connection with

the Journal-Gazette’s application for a Preliminary

Injunction and Order of Mandate requesting the Board of

Health to disclose certain public records. The court

ordered the Fort Wayne - Allen County Board of Public

Health to disclose all records dealing with the inspection

of Allen County restaurants and food establishments

because such records were public records within the

App. 47

meaning of Ind.Code § 5-14-3-1 et. seq. (R. at 1702.) The

court made the following relevant findings which Ban-

dido’s interprets as a warning:

There is no question in the Court’s mind that the

Defendant, Fort Wayne - Allen County Board of

Public Health, in denying disclosure, acted in

good faith and pursued an established policy it

had adopted many years ago. Nearly all its con-

cerns, which it suggested were the basis for its

policy, were reasonable. For example, there is a

possibility that public disclosure of the inspec-

tion reports might result in improper inferences

or interpretations as to the seriousness of the

violations noted. However, such policy consid-

erations clearly fall outside the exceptions to

disclosure authorized in Section 4 of the Access

to Public Records Act.

(R. at 1702.) (emphasis in original). We view these find-

ings to be neither a warning nor the opinion of the court,

but instead a recitation of the Board of Public Health’s

policy reason for not disclosing its inspection reports.

Even if were [sic] to assume for the sake of argument that

this was a warning to the Journal-Gazette, such warning

reveals nothing with respect to the newspaper’s state of

mind when the headline was published. Indeed, Pinkley

testified that she never participated in any discussions at

the Journal-Gazette relating to the standard of care to be

used when dealing with matters concerning restaurants

and Board of Public Health inspection reports. Craig

Klugman, a news editor, testiiied that Pinkley was never

given any directions or precautions to be taken when

dealing with Board of Public Health inspection reports of

restaurants. The record also indicates that Leonard was

App. 48

never advised of any limitations, or cautions, that the

Journal-Gazette allegedly received from Judge Sheldon.

Leonard also testified that he did not give the story more

careful consideration than any other story and did not

take special precautions to insure that the word “rats”

appeared in the story. Cf. McDowell v. Paiewonsky, 769 F.2d

942, 951 (3d Cir.1985) (Where among other things, plain-

tiff claimed actual malice existed because “several people

apparently warned defendant to check his facts before

making his broadcasts,” the court stated that defendant’s

“failure to verify his facts may have been negligent, but

does not rise to the level of actual malice.”) (emphasis

added). Similarly, even if the court’s statements can be

construed as a warning, the Journal-Gazette’s failure to

check more thoroughly the accuracy of its headline did

not rise to the requisite level of actual malice.

Bandido’s also contends that job evaluations of Pink-

ley and Leonard indicate that the newspaper acted with

actual malice. At trial, Bandido’s introduced the job eval-

uations of both Pinkley and Leonard. A job evaluation of

Pinkley provided the following relevant information:

While you can write an excellent feature head-

line, news headlines remain your weak area.

You are prone to overuse cliches, and the tone of

some headlines comes uncomfortably close to

slang (“folks” should be used rarely, for

instance). Bill has worked with you on these

points and reports some improvement, but your

headline performance lacks consistency. There

have been instances when you’ve produced

App. 49

inaccurate heads — and this is something we just

can’t have. For instance, on a story about the

Boeing jet that lost part of its roof over the

Pacific, you referred to a jet “crash.” That flight

did not crash. You are very responsive to redo-

ing a head when you are asked, but you need to

work on accuracy and tone in the next review

period. Please don’t lose your lovely touch for

feature heads, however - especially the heads

you give to newsmaker stories. Those heads are

superb examples of good headline writing.

(R. at 1625.) A performance review of Leonard was also

introduced at trial because of its reference to Pinkley. The

following statements are relevant:

You have done good work in the past year in the

development of several of the new copy editors.

Now its time to concentrate on Sheila [Pinkley],

giving her one-on-one feedback sessions at least

three times a week. She has potential and needs

a guiding hand, particularly in headline writing.

Despite all the successes in the headline area,

there are still headlines that are vague, off-target

or inappropriate.33 Sometimes those heads

appear when you are in a lot; more often they

appear on your days off... .

(R. at 1632.)

Bandido’s contends that this circumstantial evidence

reflecting Pinkley’s difficulties in writing accurate head-

lines suggests that the newspaper acted with actual mal--

ice when it allowed the headline to be printed. Although

33 Leonard testified that he interpreted the statements to

mean that Pinkley’s headlines were vague, off-target or

inappropriate as opposed to his own. (R. at 1634.)

App. 50

not stated in Bandido’s brief, we assume based upon the

direct examination of Leonard at trial, Bandido’s argu-

ment is that Leonard acted with actual malice by failing

to check more thoroughly Pinkley’s work. In other words,

since Leonard was at least aware of Pinkley’s alleged

problem with writing inaccurate headlines,** Bandido’s

contends that Leonard was on notice and should have

taken more care in reviewing her work, rather [sic] just

relying on Pinkley to do her job.

We disagree with Bandido’s that this circumstantial

evidence rises to the level of actual malice. In Washington

Post Co. v. Keogh, 365 F.2d 965, 971 (D.C.Cir.1966), an

allegedly defamed politician filed an affidavit containing

a series of excerpts from various magazine and news-

paper articles attempting to demonstrate that the

author’s “ ‘reputation for accuracy and veracity’ was

such ‘that mere reliance upon his word is grossly negli-

gent and reckless.’ ” Id. at 969. The newspaper employees

filed affidavits indicating there was no evidence causing

them to suspect the information contained in the article to

be false. Id. The court found the unimpeached newspaper

employee depositions dispositive that no genuine issue of

facts existed that the article was published with actual

knowledge of falsity. Additionally, the court stated that

[p]roof of isolated instances of inaccuracy, there-

fore, in a 35-year career during which [the

author] has published well over 10,000 columns,

34 Leonard’s testimony suggests that he does not recall ever

seeing the job evaluation of Sheila Pinkley. (R. at 1627.) There

was also some debate as to whether this was really a job

evaluation.

App. 51

cannot be accorded significance, since the rele-

vant rule of law contemplates that “erroneous

statement is inevitable in free debate, and .. . it

must be protected if the freedoms of expression

are to have the breathing space they need to

survive.”

Id. at 971-72 (quoting Garrison, 379 U.S. at 74, 85 S.Ct. 209

(omission in original)). Similarly, we find Pinkley’s iso-

lated instances of inaccuracy not to be indicative of

whether she was aware of the inaccuracy at the time she

wrote the subheadline. Additionally, even if Leonard was

aware of Pinkley’s suggested problem of writing inaccu-

rate headlines, his decision to rely on her work without

checking it more carefully is at most negligent.

Bandido’s argues that the Journal-Gazette’s failure to

retract the subheadline in the manner prescribed by

Ind.Code § 34-4-15-1(1988)35 suggests the Journal-Gazette

38 Ind.Code § 34-4-15-1 (1988) provides in relevant part:

(b) If it appears at the trial of the action that the

article was published or transmitted in good faith,

and that its falsity was due to mistake or

misapprehension of the facts, the plaintiff in the case

is entitled to recover only actual damages if: >

(1) full and fair retraction of any factual

statement alleged to be false and defamatory was

~~ published in the regular issue of the newspaper

or transmitted to its members or subscribers by

the news service:

(A) within three (3) days by a news service;

App. 52

acted with actual malice. The Court of Appeals appro-

priately noted that Indiana’s retraction statute does not

place a duty upon the Journal-Gazette to publish a retrac-

tion, but only permits a mitigation of damages if the

Journal-Gazette had opted to print a retraction in accor-

dance with the specification required in Ind.Code

§ 34-4-15-1. The Journal-Gazette did in fact publish an

article correcting its inaccurate headline and apologized

for its mistake. Although the correction did not meet the

standards of the Indiana retraction statute, we do not find

such failure dispositive of the issue of actual malice.

In New York Times, 376 U.S. at 286, 84 S.Ct. 710, after

stating that the failure to retract is “not adequate evi-

dence of malice for constitutional purposes,” the Court

left open the question of “[wJhether or not a failure to

retract may ever constitute such evidence.” Since New

York Times, some courts have determined that the failure

to retract is not sufficient proof of actual malice whereas

other courts have found that a retraction negates proof of

actual malice. See Zerangue, 814 F.2d at 1071 (“[RJeadiness

(B) within five (5) days, if the newspaper is a

daily publication; or

weekly publication;

after the mistake or misapprehension was

brought to the knowledge of the publisher or

bureau chief; and

(2) the retraction was published in as

conspicuous a place and type as the original item

appeared in the newspaper or was transmitted by

a news service to all members or subscribers to

whom the original item was transmitted.

App. 53

to retract tends to negate ‘actual malice.’ ”); Hoffman v.

Washington Post Co., 433 F.Supp. 600, 604 (D.D.C.1977)

(Publication of a retraction of the indisputably inaccurate

statement is “significant and tends to negate any infer-

ence of actual malice.”), aff'd, 578 F.2d 442 (D.C.Cir.1978);

Trans World Accounts, Inc. v. Associated Press, 425 F.Supp.

814, 823 n. 6 (N.D.Cal.1977) (Publication of a retraction

“may create a large obstacle to plaintiff's efforts to prove

actual malice.”); Gonzales v. Hearst Corp. 930 S.W.2d 275,

277 (Tex.Ct.App.1996) (“Refusal to print a retraction is

evidence of an action after the publication, but it can lend

support to a claim that reckless disregard of knowledge

existed at the time of publication.”) (emphasis in origi-

nal).

Under the circumstances of this case, because the

Journal-Gazette has admitted without hesitation from the

very beginning that it made a mistake and because it

printed a correction story the next day along with an

apology, albeit not in compliance with the retraction stat-

ute, we find the refusal to print a headline retraction not

to be sufficient proof of actual malice.3

decision not to print a retraction pursuant to the statute was

based on its understanding that at least Bandido’s first attorney

was satisfied with the follow-up story. We make no comment on

the reasonableness of the justification provided by the Journal-

Gazette. See Connelly v. Northwest Publications, Inc., 448 N.W.2d

901, 905 (Minn.Ct.App.1989) (A failure to retract is not

probative evidence of actual malice but instead is evidence that

the publisher reasonably believed that the plaintiff had not been

defamed.).

App. 54

Lastly, Bandido’s argues that the fact that the inaccu-

rate subheadline appeared in the first edition, was

removed from the second edition, and then revised and

added back into the third edition is proof of actual mal-

ice.

We attach no significance to the deletion of the sub-

headline in the second edition. Publishing the sub-

headline in all editions would be more probative of

malice. In any event, Leonard testified that he was

unaware of who made the decision to delete the sub-

headline from the second edition.%”

Leonard also testified that he requested a change be

made from the first to the third edition. Leonard asked

that “local eatery” be changed to “north-side eatery”

because he wanted to make a distinction since he “was

aware that Bandido’s had three restaurants” and wanted

the “readers to know that it was not the entire chain.”

Although Leonard requested the change, he did not re-

write the headline. The subheadline in the third edition

was also altered from the first edition in that the word

“inspector” was substituted for “investigator” and the

word “bugs” was substituted for “roaches.” Leonard pro-

vided no explanation for these changes. Pinkley testified,

“Well, I believe if you look at the second line, north side

37 The Court of Appeals noted that a “plausible explanation

is that the item was not as newsworthy in areas serviced by the

second edition.” Bandido’s, 672 N.E.2d at 974. We find that

another plausible explanation may be that there was less space

to publish the article in the second edition and thus the

subheadline was removed to make the article fit.

App. 55

takes up more room than local, so roaches was shortened

to bugs.” (R. at 2508.) She did not explain why “inspec-

tors” was changed to “investigators,” but when asked if

there wasn’t enough room for rodents on the first line of

the subheadline, she responded, “No, Sir, my testimony

is, I looked at the word “rodent” .. . “rodent droppings”

and I wrote the word “rats.” (R. at 2508.) We do not find

these changes in any way indicative of malice. Nothing

about them suggests that either Pinkley or Leonard were

aware or had become aware of the inaccuracy in the

subheadline. Neither change required that the article be

re-read and neither Pinkley nor Leonard testified that

they re-read the article before revising the subheadline

Conclusion

Having previously granted transfer, we adopt Aafco

and hold that both private individuals and public figures

must prove actual malice to recover in a defamation suit

involving matters of public or general concern. We also

hold that Bandido’s has failed to prove that Journal-

Gazette acted with actual malice and hereby reverse the

judgment of the trial court.

~~ SELBY, J., concurs.

BOEHM, J., concurs with separate opinion.

SHEPARD, CJ., dissents with separate opinion in

which DICKSON, J., concurs.

DICKSON, J., dissents with separate opinion in

which SHEPARD, C_J., concurs.

BOEHM, Justice, concurring.

App. 56

For the reasons set forth in Justice Sullivan’s opinion,

| agree that the free flow of ideas and information

requires giving the press considerable latitude in report-

ing on matters of public concern. Specifically, I agree that

the “actual malice” standard should be applied to reports

on matters of public concern, and that clear and convinc-

ing evidence should be required for a defamation recov-

ery on a matter of public concern. I agree that this

standard should apply to discourse on matters of public

concern irrespective of the characterization of the plain-

tiff as a public or private figure. In the vast majority of

cases involved, it may make little practical difference

whether this higher standard is based on the activity

rather than the persons because a matter of public con-

cern seems to generate a finding of public or “quasi

public” figure. Nevertheless, in considering the extent to

which we should tip the scales in favor of free expression,

I believe it is helpful to think in terms of the activity

rather than the persons involved. Finally, I agree with

Justice Sullivan that the fair index test, generously con-

strued, is the proper standard for evaluating a headline.

I reach all of these conclusions purely as a matter of

Indiana defamation law. I agree with Justice Sullivan that

this case can be resolved under existing federal constitu-

tional precedent and that this analysis produces the same

result as I reach under state law and the Court of Appeals

reached under Aafco Heating & Air Conditioning v. North-

west Publications Inc., 162 Ind.App. 671, 321 N.E.2d 580

(1974). I do not agree with Justice Dickson that the avail-

ability of a federal constitutional resolution renders it

inappropriate to express an opinion on these state law

issues. To the contrary, I believe this Court should first

eT ENE s ae SE EST Ne

App. 57

address the state law issues. In my view their resolution

disposes of this case consistent wii): justice Sullivan’s

opinion. However, I disagree with Jue Sullivan’s anal-

ysis in some respects.

The “Fair Index” Test

First, I would conclude that the “fair index” test is

met on the facts of the case. The fair index test requires a

court to determine whether the headline fairly indicates

the substance of the matter to which it refers. Maj. op. at

458 (quoting Burgess v. Reformer Publishing Corp., 146 Vt.

612, 508 A.2d 1359 (Vt.1986)). The substance of the article

was that the restaurant had been ordered to close because

of health concerns including “evidence of insects and

rodents.” The subheadline read: “Inspectors find rats,

roaches! at local eatery.” In my view, giving reasonable

license to editorial choice of words, this subheadline

fairly captured the topical sentence of the article and that

is the end of the analysis.2

' Another edition used “bugs” instead of “roaches.”

* The conclusion that this headline meets the fair index test

is supported by application of the test in other cases. Compare

Hein v. Lacy, 228 Kan. 249, 616 P.2d 277 (Kan.1980) (headline that

Senator Hein voted to “legalize homosexuality” accurately

reflected the content of the text where Hein had voted to remove

the “legal prohibition of consensual homosexual relationships”)

with Burgess, 508 A.2d at 1359 (headline “Grand Jury Probes

Embezzlement: Burgess denies getting funds” failed the fair

index test because it conveyed the false impression that Burgess

was being investigated by a grand jury when in fact he was only

a witness).

App. 58

The Meaning of “Actual Malice” and “Reckless Disre-

gard”

Even if the headline were not a fair index of the

article, I agree that Bandido’s failed to demonstrate that

the paper acted with actual malice. I reach that conclu-

sion under state law alone, applying the clear and con-

vincing evidence standard. For the reasons Justice

Dickson explains in Part B.5. of his dissent, state law

should adhere to the conventional standard of appellate

review of jury verdicts. Applying that standard, I none-

theless agree with Justice Sullivan’s ultimate resolution of

this case. The Journal Gazette may properly adopt an

internal rule that headlines should be comprised of terms

taken from the story, but failure to observe that guideline

is not in itself evidence of malice or reckless disregard for

the truth. To the contrary, in my view a headline writer’s

translation of “rodents” to “rats” does not by itself come

close to supporting a finding of actual malice. I base that

conclusion not on the testimony of the headline writer

but on ordinary usage. As a matter of law some latitude

in choice of language is required and substitution of rats

for rodents in this context is within that permissible

range.

I also write separately to make clear my view that

Indiana law need not parallel federal public figure law in

all respects. The federal constitution may require a higher

degree of malice for claims by a public official or public

figure. However Gertz v. Welch, 418 U.S. 323, 347, 94 S.Ct.

2997, 41 L.Ed.2d 789 (1974), explicitly gives the states

latitude in formulating their defamation law as to claims

by a private individual. As the Court of Appeals held in

Aafco and this Court holds today, Indiana law requires a

a os be

App. 59

showing of actual malice for claims by private individ-

uals based on publication of matters of public concern. In

this case, there is no basis to conclude that any reckless

disregard or serious doubt existed to support a finding of

actual malice. The writer of the article inferred from the

public report of rodent droppings that a rodent must be

in the area. The headline writer assumed from this, at

worst somewhat imprecisely, that the rodent was a rat

and not some other rodent. Neither inference in my view

approaches recklessness or ill will.

Apart from the specific facts in this case, the “reck-

less disregard” prong of “actual malice” should be satis-

fied under Indiana law if one publishes a report with no

idea whether it is true or not. Accordingly, although New

York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11

L.Ed.2d 686 (1964), and Aafco, utilize the term “reckless

disregard,” I think “reckless indifference” for the truth

may be a better term for the activity that is sufficient to

impose liability. Thus, in my view, Indiana law should

recognize the five scenarios described by Justice White

and discussed by Justice Sullivan in footnote 27 as meet-

ing the legal standard of reckless disregard. Justice White

identified these as examples of situations where a trier of

fact may find assertions of good faith unpersuasive, and

described them as:

Professions of good faith will be unlikely to

prove persuasive, for example, where a story is

fabricated by the defendant, is the product of

the his [sic] imagination, or is based wholly on

an unverified anonymous telephone call. Nor

will they likely prevail when the publisher’s

allegations are so inherently improbable that

only a reckless [person] would have put them in

App. 60

circulation. Likewise, recklessness may be found

where there are obvious reasons to doubt the

veracity of the informant or the accuracy of the

[informant’s] reports.

St. Amant v. Thompson, 390 U.S. 727, 732, 88 S.Ct. 1323, 20

L.Ed.2d 262 (1968). I believe these circumstances, if found

by the trier of fact and not offset by other facts support-

ing veracity, should constitute reckless disregard for pur-

poses of liability for injury to reputation of a private

person as a matter of Indiana law, even on topics of

public concern.

Identifying Matters of Public Concern

I also wish to emphasize the point in the majority

opinion that matters of public concern do not include

every activity of a person who for other reasons is in the

public eye. I recognize that drawing a line between mat-

ters of public and private concern may prove to be prob-

lematic. Over time, however, guidelines will emerge and

some are already available, assuming Indiana law will

track federal constitutional doctrine on this point. See,

e.g., Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472

U.S. 749, 761-62, 105 S.Ct. 2939, 86 L.Ed.2d 593 (1985).

Restricting the actual malice requirement to publications

on subjects of public concern will leave the vast majority

of the six million Hoosiers for whom Chief Justice Shep-

ard expresses concern subject to a simple negligence stan-

dard for defamation. The drawing of these lines

illuminated by the experience of concrete cases will

afford the opportunity to rein in abuses that are per-

ceived to flow if the press proves to be insufficiently

checked by an actual malice standard. In order to strike

sil

App. 61

this balance properly it is important that Indiana law, like

federal constitutional law, treat the determination of pub-

lic concern as a proposition of law, not a factual deter-

mination. Moreover, if the issue is left to the trier of fact,

a very substantial risk of chilling speech would likely

result from its often inconsistent and unclear resolution.

Finally, we have a quarter of a century of experience

under Aafco and so far the harm to the citizenry is not

apparent. In any event, this case presents no significant

question on this point. The health status of a restaurant

open to the public is plainly a matter of public concern

under the precedents and for the reasons cited by Justice

Sullivan.

Indiana Constitutional Provisions

I agree with Justice Dickson that it is appropriate on

occasion to look to constitutional provisions for direction

in the development of our common law. See, e.g., Doe v.

Methodist Hosp., 690 N.E.2d 681 (Ind.1997). However, here

we find somewhat specific provisions pointing in oppo-

site directions. In my view, adopting an actual malice test

for defamation actions on matters of public concern gives

appropriate recognition to the balance necessary between

the conflicting values evidenced in our state constitution:

a remedy for injury to reputation and the important inter-

est in the free interchange of thought and opinion. Article

I, section 12,

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.