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Mount Juneau Enterprises v. Juneau Empire (3/17/95), 891 P 2d 829
<![CDATA[
NOTICE: This opinion is subject to formal correction
before publication in the Pacific Reporter. Readers
are requested to bring errors to the attention of the
Clerk of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501; (907) 264-0607.
THE SUPREME COURT OF THE STATE OF ALASKA
MOUNT JUNEAU ENTERPRISES, )
INC., ALASKA TRAMS, INC., )
ARNT I. ANTONSEN, CHARLES )
KEEN, and KAREN KEEN, )
) Supreme Court No. S-5651
Appellants, )
) Superior Court No.
v. ) 1KE-91-642 CI
)
JUNEAU EMPIRE, ) O P I N I O N
)
Appellee. ) [No. 4180 - March 17, 1995]
______________________________)
Appeal from the Superior Court of the
State of Alaska, First Judicial District,
Ketchikan,
Thomas E. Schulz, Judge.
Appearances: Phillip Paul Weidner,
Weidner & Associates, Inc., Anchorage, for
Appellants. L. Merrill Lowden and E. Budd
Simpson, Birch, Horton, Bittner & Cherot,
Juneau, for Appellee.
Before: Moore, Chief Justice,
Rabinowitz, Matthews, Compton and Eastaugh,
Justices.
RABINOWITZ, Justice.
I. INTRODUCTION
Mount Juneau Enterprises, Alaska Trams, Inc., Arnt I.
Antonsen, Charles Keen and Karen Keen (collectively Mount Juneau
Enterprises) sued the Juneau Empire, contending that two of the
newspaper's articles libeled them. Mount Juneau Enterprises
challenges the superior court's dismissal of its libel action
following the court's grant of the Juneau Empire's summary
judgment motion as to whether Charles Keen was a public figure
and whether the Juneau Empire acted with actual malice. Mount
Juneau Enterprises also challenges the superior court's award of
attorney's fees to the Juneau Empire.
II. FACTS AND PROCEEDINGS
Alaska Trams, Inc. (Alaska Trams) and Mount Juneau
Enterprises joined together to build a tramway from downtown
Juneau to the top of Mount Juneau. Charles Keen was president of
Alaska Trams, and had financial interests in both Alaska Trams
and Mount Juneau Enterprises. In 1989, Keen, his wife, and the
two corporations purchased property for the tramway project from
the City and Borough of Juneau (City). In addition, the
corporations obtained a building permit from the City for
construction of the tramway. As of September 1990, Alaska Trams
was in bankruptcy but was seeking to reorganize and be taken out
of bankruptcy, and to obtain financing for the project.
On September 12, 1990, the Juneau Empire published an
article by reporter Jeanine Pohl under the headline "Trustee
Deals Blow to Tramway Project." Several statements from this
article are at issue in this litigation:
Another blow has been dealt to
developer Chuck Keen's plans to build a
tramway to the top of Mount Juneau.
The trustee for the U.S. Bankruptcy
Court in Anchorage has recommended that the
assets of Keen's Alaska Trams Corp. be
declared bankrupt and liquidated.
The corporation filed for
protection from creditors under bankruptcy
laws in 1986. In a court filing last week,
bankruptcy court adviser Barbara Franklin
said, "There are no prospects for
rehabilitation"of the corporation.
. . . .
Franklin said Keen has been unable
to reorganize his company even with
protection, and that he has not filed court-
required financial statements or plans to
reorganize and get out of bankruptcy.
. . . .
Efforts by Keen to conduct business
through Mount Juneau Enterprises are another
reason to force Alaska Trams into liquidation
bankruptcy, Franklin said in her motion
before the bankruptcy court.
Franklin said Keen's effort to use
Mount Juneau Enterprises for construction of
the tramway terminal is a breach of trust to
his creditors.
. . . .
In addition to lack of plans for
financial reorganization, Franklin said "the
assets of the estate continue to diminish
while the expenses of administration continue
to increase."
. . . .
Franklin's motion also alleges that
Keen transferred property out of the
bankruptcy estate without court approval.
In an opposition filed against
Franklin's motion, Keen denied transferring
land on South Franklin Street to Reliable
Transfer Corp. He said Alaska Trams was
merely accommodating a neighboring property
owner who was trying to clear a land title.
. . . .
According to Keen, progress other
than construction has been made on the tram.
"Continual efforts are being made
to obtain financing for the entire project,
with some apparent success," he told the
court in his filing.
His opposition to Franklin's motion
includes a copy of a letter of intent for
financing of up to $36 million from a Zurich,
Switzerland-based investment company - if
Alaska Trams comes up with $95,000 for a
feasibility study of the project.
Pohl asserted that she relied upon several sources when
preparing the bankruptcy article. She spoke with the City's
municipal attorney. In addition, the municipal attorney gave her
a copy of a liquidation motion which two insurance companies had
filed in the bankruptcy proceedings. She also relied upon a
joinder to the insurers' motion, filed by the attorney-advisor to
the United States Trustee, for the material attributed to Barbara
Franklin.
The article contained some minor inaccuracies.1 The
joinder motion identifies Barbara Franklin as the attorney-
advisor to the United States Trustee, not a "bankruptcy court
advisor"as the article identifies her. The article also stated
that Keen had filed his opposition to Franklin's joinder motion,
but actually this opposition was to the insurers' motion.
On September 13, 1990, the Juneau Empire published
another article by Pohl that discussed a charge by Keen's counsel
that Franklin's joinder motion contained incorrect allegations.
The article called Franklin the "trustee," but corrected the
September 12 statement that Keen's opposition was to Franklin's
report.
On May 14, 1991, an article by Pohl was published under
the headline "Goose's Gooey Death." The article discussed a
goose that allegedly flew into an abandoned oil tank on Keen's
property and landed in sticky fuel residue:
An abandoned oil tank on South
Franklin Street with more than 60,000 gallons
of gooey fuel still inside has killed a young
goose, and a state environmental official
says property owner Chuck Keen has promised
to begin cleaning up the site within a week.
A collapsed roof over the fuel tank
. . . allowed the bird to enter the tank and
land in the sticky fuel . . . .
Juneau Raptor Center volunteer
Linda Kline said a neighbor told her about
the goose Saturday after some children saw it
fly into the tank . . . .
She found the bird . . . and took
it home to try to wash off some of the oil.
. . . .
She then took the bird to another
raptor center volunteer, who washed it again
Sunday afternoon. Later the goose tried to
preen itself, "and oil just started pouring
out."
The bird died a short time later,
Kline said today.
. . . .
Keen refused comment today on the
tank.
. . . .
In the case of the goose death,
Keen could be in violation of the federal
Migratory Bird Treaty Act - a felony offense,
said U.S. Fish and Wildlife Service biologist
Deb Rudis.
. . . .
The act makes it a felony to kill
migratory birds intentionally or accidentally
by poisoning, hunting or an oil spill.
This article also contained some inaccuracies. As the
Juneau Empire admits, any alleged violation of the Migratory Bird
Treaty Act on Keen's part would only be a misdemeanor, not a
felony. See 16 U.S.C. 703, 707(a) (1988). In addition,
Alaska Trams, and not Keen himself, owned the abandoned tank.
And finally, though Keen refused to discuss the "gooey goose"
matter with Pohl because he considered her biased against him and
the tramway project, he was willing to talk with any other
reporter from the Juneau Empire.
In June 1991, Mount Juneau Enterprises filed a libel
suit against the Juneau Empire.2 The complaint alleged that the
accounts of Franklin's motion in the bankruptcy matter and the
"gooey goose"incident defamed Mount Juneau Enterprises, Alaska
Trams, and Keen himself, and that the newspaper acted with malice
and negligence in publishing them. Count Fourteen of the
complaint alleged that the newspaper "has on many occasions
including but not limited to the newspaper articles dated
September 12, 199[0] and May 14, 1991 caused to be printed false
stories with malicious intent to impede the tramway project and
to defame the reputation of the tramway project, [its] financial
supporters and the Keen family."
The Juneau Empire subsequently moved for summary
judgment. The Juneau Empire supported its motion with an
affidavit from Pohl in which she stated that the articles
accurately and fairly conveyed the statements in the documents
that she researched and the persons whom she interviewed. In her
affidavit Pohl also stated that she neither entertained any doubt
that the interviewees for the "gooey goose"article were truthful
nor intended to hinder the tramway project by publishing the
articles.3
The superior court granted the Juneau Empire's motion.
Determining that Keen was a public figure, the superior court
applied the actual malice test as set out in New York Times Co.
v. Sullivan, 376 U.S. 254 (1964). The superior court concluded
that Mount Juneau Enterprises presented no genuine issue of
material fact as to whether the Juneau Empire knew its
publications to be false or acted with reckless disregard as to
their truthfulness. Though the superior court stated that the
articles of September 12, 1990 and May 14, 1991 were at issue,
the only alleged inaccuracy that it discussed was the
misidentification of the bankruptcy advisor in the September 12
article.
The Juneau Empire then filed a motion for attorney's
fees pursuant to Alaska Civil Rule 82. The Juneau Empire claimed
that it had incurred a total of $52,084.50 in attorney's fees,
and supported its motion with an extensive itemization of
expenses. Mount Juneau Enterprises opposed the motion contending
that it was a public interest litigant and should not be subject
to an award of full fees. Mount Juneau Enterprises subsequently
moved for an extension of time to file a further opposition as to
the alleged inflated figures of the Juneau Empire's bill for
attorney's fees.
The superior court issued a memorandum opinion that
denied the motion for additional time, rejected Mount Juneau
Enterprises' public interest litigant arguments, and awarded the
Juneau Empire 60% of its total claimed attorney's fees, or
$31,250.70. Mount Juneau Enterprises subsequently moved for
reconsideration, and thereby expanded upon its contention that
counsel for the Juneau Empire had unreasonably inflated the
billing in this case.
In March 1993 the superior court issued a final
judgment pursuant to Alaska Civil Rule 54(b) dismissing Mount
Juneau Enterprises' complaint against the Juneau Empire with
prejudice. In April 1993 the superior court issued a final
attorney's fee order which sustained its original award to the
Juneau Empire. This appeal followed.
III. DISCUSSION
Mount Juneau Enterprises raises three principal
arguments on appeal: (1) that the superior court erred in
granting the Juneau Empire's summary judgment motion as to
whether Keen was a public figure; (2) that the superior court
erred in granting the Juneau Empire's summary judgment motion as
to whether the statements at issue were made with actual malice;
and (3) that the superior court erred in basing its attorney's
fee award on the inflated billings of the Juneau Empire's
counsel.
A. Standard of Review
When reviewing a grant of summary judgment, this court
determines whether a genuine issue of material fact exists and
whether the moving party is entitled to judgment as a matter of
law.4 Zeman v. Lufthansa German Airlines, 699 P.2d 1274, 1280
(Alaska 1985). All reasonable inferences of fact from the
proffered evidence must be drawn against the moving party and in
favor of the non-moving party. Id. Because the actual malice
test is subjective, this court must determine "whether there is a
genuine issue of material fact on whether [the defendant]
entertained serious doubts as to the truth of the statements."
Moffatt, 751 P.2d at 944; accord Beard v. Baum, 796 P.2d 1344,
1353 (Alaska 1990).
As to the award of attorney's fees, this court will
reverse an award of attorney's fees under Alaska Civil Rule 82
only if the superior court abused its discretion. Bohna v.
Hughes, Thorsness, Gantz, Powell & Brundin, 828 P.2d 745, 766
(Alaska 1992). An abuse of discretion exists only upon a showing
that the award was arbitrary, capricious, manifestly
unreasonable, or the result of an improper motive. Id. at 766-
67.
B. The Applicability of the Actual Malice Standard
In New York Times Co. v. Sullivan, the Supreme Court
held that the First Amendment of the U.S. Constitution restricts
a state's power "to award damages for libel in actions brought by
public officials against critics of their official conduct."5
376 U.S. at 283. In order to recover damages for a purportedly
defamatory6 publication related to his official conduct, a public
official must prove "that the statement was made with _actual
malice_ -- that is, with knowledge that it was false or with
reckless disregard of whether it was false or not." Id. at 279-
80. The Supreme Court emphasized the chilling effect that common
law libel rules would have on the free exchange of ideas:
A rule compelling the critic of
official conduct to guarantee the truth of
all his factual assertions -- and to do so on
pain of libel judgments virtually unlimited
in amount -- leads to a comparable "self-
censorship." Allowance of the defense of
truth, with the burden of proving it on the
defendant, does not mean that only false
speech will be deterred. . . . Under such a
rule, would-be critics of official conduct
may be deterred from voicing their criticism,
even though it is believed to be true and
even though it is in fact true, because of
doubt whether it can be proved in court or
fear of the expense of having to do so.
Id. at 279. To this effect, the Supreme Court reasoned that
"erroneous statement is inevitable in free debate, and . . . must
be protected if the freedoms of expression are to have the
_breathing space_ that they _need . . . to survive._" Id. at 271-
72.
In Curtis Publishing Co. v. Butts, the Supreme Court
extended the New York Times protections to public figures as well
as public officials. 388 U.S. 130, 155 (1967). However, if the
defamation plaintiff is a private individual, then states may
apply their own standard of liability so long as they do not
impose liability without fault. Gertz v. Robert Welch, Inc., 418
U.S. 323, 347 (1974).
Thus, if Keen is a public figure, he must prove actual
malice in order to recover against the Juneau Empire for libel.
This court must therefore determine whether the superior court
erred in concluding that Keen was a public figure.
1. The Public Figure Test
In Gertz, the Supreme Court described public figures as
follows:
For the most part those who attain this
[public figure] status have assumed roles of
especial prominence in the affairs of
society. Some occupy positions of such
persuasive power and influence that they are
deemed public figures for all purposes. More
commonly, those classed as public figures
have thrust themselves to the forefront of
particular public controversies in order to
influence the resolution of the issues
involved. In either event, they invite
attention and comment.
Id. at 345. The Supreme Court further elaborated regarding
public figures as follows:
That designation may rest on either of
two alternative bases. In some instances an
individual may achieve such pervasive fame or
notoriety that he becomes a public figure for
all purposes and in all contexts. More
commonly, an individual voluntarily injects
himself or is drawn into a particular public
controversy and thereby becomes a public
figure for a limited range of issues.
Id. at 351. On several occasions, we have applied the Gertz
public figure test to require application of the actual malice
standard in Alaska defamation cases. Beard, 796 P.2d at 1353-54;
Rybachek v. Sutton, 761 P.2d 1013, 1014 (Alaska 1988) (per
curiam) (holding that a newspaper columnist who regularly
discussed natural resource and mining issues was a public figure
within the limited range of those issues); Moffatt, 751 P.2d at
941.
2. The Burden of Proof
Mount Juneau Enterprises contends that the Juneau
Empire failed to meet its burden of proof on the public figure
issue. The Restatement (Second) of Torts 580A (1977), which
adopts the New York Times standard of liability for defamation of
public officials or public figures, includes a comment on
distinguishing public figures from private individuals:
The question of whether a plaintiff
is a public official or a public figure . . .
is one of law, not of fact, though the facts
on which the determination is to be made may
be in dispute and therefore subject to the
determination of the fact finder. Where the
burden of proof lies as to these facts has
not been settled.
Id. cmt. c. Emphasizing the comment's remarks in regard to the
uncertainty as to the burden of proof and the fact finder's role
where facts are in dispute, but without citing to any other case
authority, Mount Juneau Enterprises contends that the Juneau
Empire should bear the burden of proving that Keen was a public
figure because the Juneau Empire seeks the special constitutional
protection of the New York Times standard. Mount Juneau
Enterprises also contends that the Juneau Empire, as the party
moving for summary judgment, raised no evidence establishing an
absence of genuine issues of material fact on the public figure
issue.
Mount Juneau Enterprises is mistaken. The U.S. Supreme
Court has stated that "as is the case with questions of privilege
generally, it is for the trial judge in the first instance to
determine whether the proofs show [a defamation plaintiff] to be
a _public official._" Rosenblatt v. Baer, 383 U.S. 75, 88
(1966). The nearly universal rule is that determination of
public figure status is a question of law for the court to
determine. E.g., Tavoulareas v. Piro, 817 F.2d 762, 772 (D.C.
Cir.) (en banc), cert. denied, 484 U.S. 870 (1987); Rebozo v.
Washington Post Co., 637 F.2d 375, 379 (5th Cir.), cert. denied,
454 U.S. 964 (1981); Reader's Digest Ass'n, Inc. v. Superior
Court, 690 P.2d 610, 614-15 (Cal. 1984), cert. denied, 478 U.S.
1009 (1986); Knudsen v. Kansas Gas & Elec. Co., 807 P.2d 71, 78
(Kan. 1991); Wheeler v. Green, 593 P.2d 777, 785 n.7 (Or. 1979)
(holding that public figure status is a question for the court
when the facts are undisputed); see also Williams v. Pasma, 656
P.2d 212, 214-15 (Mont. 1982) (repudiating earlier Montana
authority that had held public figure status to present a jury
question under state constitution), cert. denied, 461 U.S. 945
(1983). But see Note, Defining a Public Controversy in the
Constitutional Law of Defamation, 69 Va. L. Rev. 931, 943-44 &
n.75 (1983) (observing that the U.S. Supreme Court has not
expressly addressed the burden of proof in the public figure
determination, and suggesting the possibility that the defendant
could have this burden).7
We have held that an evidentiary hearing may sometimes
be required in order to determine whether an individual is a
public figure, but such a determination may be resolved on
summary judgment if the facts relating to public figure status
are uncontroverted. Rybachek, 761 P.2d at 1014; accord Rebozo,
637 F.2d at 379; see also Rosanova v. Playboy Enter., 580 F.2d
859, 862 (5th Cir. 1978) ("[W]here undisputed facts admit to but
one conclusion, then, on motion for summary judgment, the court
properly decides the issue.").
In the case at bar, the facts underlying the superior
court's public figure analysis were not disputed. Mount Juneau
Enterprises acknowledged in the complaint that it sought to build
a tramway, sought City approval for the project, and attempted
numerous real property transactions with the City in order to
obtain land for the project. The dispute in this appeal pertains
not to the validity of these facts but to the legal conclusion
that the superior court derived from them. Because no genuine
issue of material fact existed, the only issue for the superior
court to address was whether the Juneau Empire was entitled to
summary judgment as a matter of law.
3. Keen's Public Figure Status as to the
Bankruptcy Article
According to Mount Juneau Enterprises, the efforts of
Alaska Trams to obtain building permits for the tramway were
merely those of "a private party . . . trying to build a project
which requires building permits, such as that required by any
other private building project." Mount Juneau Enterprises
contends that by this action Keen did not inject himself into any
public controversy and thus did not become a public figure. The
superior court rejected this argument:
[T]his tram project has been going on in
the City and Borough of Juneau for a long
time. It has involved a lot of public
comment, pro and con. There have been a
number of hearings. Mr. Keen . . . has been
in the forefront of the efforts to get the
tram project both financed and the necessary
permits for it.
A public controversy is not simply a matter of interest
to the public, but rather "a real dispute, the outcome of which
affects the general public or some segment of it in an
appreciable way." Waldbaum v. Fairchild Publications, Inc., 627
F.2d 1287, 1296 (D.C. Cir.), cert. denied, 449 U.S. 898 (1980);
see also Tavoulareas, 817 F.2d at 772-73. In order to have
voluntarily injected himself or herself into the controversy, the
defamation plaintiff "either must have been purposely trying to
influence the outcome or could realistically have been expected,
because of his position in the controversy, to have an impact on
its resolution." Waldbaum, 627 F.2d at 1297; see also Laurence
H. Tribe, American Constitutional Law 12-13, at 881-82 (2d ed.
1988).
Our prior opinions in which defamation plaintiffs were
held to be public figures all fit within these guidelines. See
Beard, 796 P.2d at 1353 (holding that former employee of state
transportation department who brought allegations of departmental
corruption to public attention was a public figure as to his job
performance given his charges that his termination resulted from
his whistle-blowing activities and not from job performance);
Rybachek, 761 P.2d at 1014 (holding that newspaper columnist on
natural resource and mining issues injected herself into public
controversy on those issues); Moffatt, 751 P.2d at 941 (holding
that candidate for state medical board voluntarily placed herself
in position of public attention and comment given the strong
public interest in a board appointee's qualifications).
Under the above analysis, Keen is a public figure. As
the complaint itself alleges, pursuant to the tramway project
Alaska Trams purchased property from the City, sought building
permits for the tramway, and negotiated ordinances to facilitate
a property trade with the City. In this fashion, Keen, in his
capacities as president of Alaska Trams and a principal investor
in the entity,8 voluntarily sought public approval of the
ambitious tramway project. See Greenbelt Coop. Publishing Ass'n
v. Bresler, 398 U.S. 6, 8-9 (1970) (holding that real estate
developer who was "deeply involved in the development" of the
community was a public figure in regard to allegedly defamatory
articles on his efforts to obtain a zoning variance and to
negotiate land trade with the city).9 Furthermore, Keen conceded
in his opposition to summary judgment that the tramway project
was a matter of public concern. Therefore, we hold that the
superior court did not err in concluding that Keen was a public
figure.
4. The "Gooey Goose"Article and Freedom of
Expression on Matters of Public Interest
Mount Juneau Enterprises also argues that because the
superior court offered explicit findings only as to the
bankruptcy article of September 12, 1990, a remand is necessary
for an additional determination on Keen's public figure status
concerning the "gooey goose"article of May 14, 1991. Mount
Juneau Enterprises is mistaken.
Pursuant to this court's defamation decisions the
public figure test is not the only route to application of the
actual malice standard. We further protect the free exchange of
ideas by applying the actual malice standard to publications on
issues of public interest and concern, even if the defamation
plaintiff is not a public figure:
On the one hand there is the interest in
safeguarding the right to one's reputation.
On the other hand there is the interest in
allowing freedom of debate and expression on
public questions and issues. We believe that
a fair balance of these competing interests
is achieved where the law of defamation
permits one, without liability for damages,
to comment, criticize and pass judgment on
statements made by another on an issue or
matter of public interest, even if such
comment, criticism and judgment involves
misstatements of fact--so long as such
misstatements are relevant to the subject
matter spoken or written about by the one
claiming to be defamed and are not shown by
him to have been made with actual malice.
Pearson v. Fairbanks Publishing Co., 413 P.2d 711, 713 (Alaska
1966); see also Gay v. Williams, 486 F. Supp. 12, 16-17 (D.
Alaska 1979); Schneider v. Pay'N Save Corp., 723 P.2d 619, 623-24
(Alaska 1986); Doe v. Alaska Superior Court, 721 P.2d 617, 627-28
(Alaska 1986); West v. Northern Publishing Co., 487 P.2d 1304,
1305-06 (Alaska 1971).
Assuming arguendo that Keen was not a public figure for
the purposes of the "gooey goose"article, the actual malice
standard applies nonetheless, because the subject of the article
concerned matters of public interest. Keen does not dispute that
the property on which the oil tank was located was originally
purchased for the purpose of the tramway project. In addition,
cleanup of the hazardous materials on the site poses an
additional issue of public interest. Therefore, under the
Pearson test, we hold that the actual malice standard applies to
the "gooey goose" article, and that this issue need not be
remanded to the superior court for additional findings.
C. Liability of the Juneau Empire Under the Actual
Malice Standard
Mount Juneau Enterprises further contends that genuine
issues of material fact existed as to whether the Juneau Empire
acted with malice in publishing the articles of September 12,
1990 and May 14, 1991. This contention may be divided into two
subarguments: that the superior court improperly placed
excessive reliance on Pohl's testimony, and that the superior
court failed to consider the Juneau Empire's failure to publish
retractions.
In order to show a defendant's reckless disregard for
truth or falsity of published material, the plaintiff in a
defamation case must present "sufficient evidence to permit the
conclusion that the defendant in fact entertained serious doubts
as to the truth of his publication." St. Amant v. Thompson, 390
U.S. 727 (1968); accord Moffatt, 751 P.2d at 941-42; see also
Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 511 (1991).
Accordingly, application of the actual malice standard focuses on
the defendant's subjective intent. See Moffatt, 751 P.2d at 944;
Green, 655 P.2d at 742. The superior court correctly concluded
that neither Pohl nor anyone else from the Juneau Empire
acknowledged any reason to doubt the truth of what they printed.
On appeal, Mount Juneau Enterprises offers no record evidence
that any member of the Juneau Empire staff subjectively
entertained any doubt as to the truthfulness of the articles at
issue.
Instead, Mount Juneau Enterprises points to perceived
inadequacies in the Juneau Empire's preparation of the articles:
[T]here was evidence adduced before the
court through the deposition testimony that
Jeanine Pohl only reported one side of the
issue; that Jeanine Pohl relied primarily
upon people with ulterior motives or bias
against the appellants; that Jeanine Pohl was
not ever told by anyone at The Juneau Empire
to check her facts before writing stories;
that she conducted a grossly inadequate
investigation; that she was given this
assignment despite a lack of training or
understanding of legal matters; that she
assumes without question, whatever people
tell her is "true"; that there was no rush or
deadline on this case, and thus no reason for
failing to adequately investigate and
ascertain the true facts before publishing
the article . . . .
Assuming arguendo that these contentions are true, they alone do
not establish actual malice. Failure to make a prior
investigation into the accuracy of published statements does not
itself "constitute[] proof sufficient to present a jury question
whether the statements were published with reckless disregard of
whether they were false or not." Beckley Newspapers Corp. v.
Hanks, 389 U.S. 81, 84-85 (1967); accord St. Amant, 390 U.S. at
733; Tavoulareas, 817 F.2d at 797-98; see also Gay 486 F. Supp.
at 16-17 (declining to find actual malice where local newspaper
printed release from national wire service without independent
investigation of the article's accuracy). Reckless disregard "is
not measured by whether a reasonably prudent man would have
published, or would have investigated before publishing." St.
Amant, 390 U.S. at 731. The U.S. Supreme Court has also stated
that "a public figure plaintiff must prove more than an extreme
departure from professional standards and that a newspaper's
motive in publishing a story--whether to promote an opponent's
candidacy or to increase its circulation--cannot provide a
sufficient basis for finding actual malice." Harte-Hanks
Communications, Inc. v. Connaughton, 491 U.S. 657, 665 (1989).
One commentator accordingly has concluded that "recklessness may
not be inferred from a publisher's failure to inquire into a
matter's truth or falsity, although a responsible reporter might
well have inquired." Tribe, supra, 12-12, at 871.
As Mount Juneau Enterprises correctly notes, the
testimony of the defendant alone is not always sufficient to
establish an absence of actual malice. Moffatt, 751 P.2d at 941-
42 (quoting St. Amant, 390 U.S. at 732). However, Mount Juneau
Enterprises' reliance on this language is futile. In Moffatt we
articulated a test to determine when the defendant's testimony
alone is sufficient to counter a claim of actual malice:
The defendant's testimony that he
published the statement in good faith should
be sufficient to counter a claim of actual
malice when (1) the plaintiff has failed to
present conflicting evidence, and (2) the
circumstances do not indicate that the
statement was "fabricated by the defendant,
. . . the product of his imagination, . . .
based wholly on an unverified anonymous
telephone call . . . [or] so inherently
improbable that only a reckless man would
have put them in circulation."
Moffatt, 751 P.2d at 946 (quoting St. Amant, 390 U.S. at 732)
(alterations in original). Mount Juneau Enterprises presents no
evidence indicating that the Juneau Empire fabricated the
articles at issue, created them from imagination, based them on
an anonymous phone call, or could consider them inherently
improbable.
Indeed, the circumstances of this case resemble those
of Time, Inc. v. Pape, 401 U.S. 279 (1971), the case on which the
superior court relied. There, Time magazine, quoting from a
report by the U.S. Commission on Civil Rights, described an
account of a police detective's purported mistreatment of an
African-American resident of Chicago, but failed to indicate that
this account was based upon the resident's complaint and not upon
the Commission's independent findings. The U.S. Supreme Court
declined to find actual malice sufficient to sustain the
detective's defamation claim because the magazine's omission of
language that would qualify the material as an allegation
constituted "the adoption of one of a number of possible rational
interpretations of a document that bristled with ambiguities."
Id. at 290; see also Bose Corp. v. Consumers Union of United
States, Inc., 466 U.S. 485, 512-13 (1984). The Supreme Court
concluded that to find actual malice in that case would apply a
far stricter standard of liability on errors of interpretation
than on errors of fact. Pape, 401 U.S. at 290. Application of
such a standard would have created the same concerns of self-
censorship that caused the Supreme Court to fashion the New York
Times rule:
These considerations apply with even
greater force to the situation where the
alleged libel consists in the claimed
misinterpretation of the gist of a lengthy
government document. Where the document
reported on is so ambiguous as this one was,
it is hard to imagine a test of "truth"that
would not put the publisher virtually at the
mercy of the unguided discretion of a jury.
Id. at 291.
Similarly, one of Mount Juneau Enterprises' principal
complaints is that Pohl misidentified Barbara Franklin, the
attorney-advisor to the U.S. Trustee in the Alaska Trams
bankruptcy proceeding, as the bankruptcy trustee. However,
Franklin's motion paperwork presents her title in such a fashion
that a lay person could easily misconstrue the term "United
States Trustee"to mean "bankruptcy trustee." Pape's holding was
designed to protect publishers who make minor mistakes in
construing documents that because of their ambiguity could be
misconstrued by lay persons. The misidentification of Franklin
is one of those mistakes. Therefore, we hold that the superior
court's determination that there was no genuine issue of material
fact as to whether the articles were published with actual malice
should be sustained.10
Mount Juneau Enterprises also contends that the Juneau
Empire's failure to retract raised an inference of actual malice
which precluded summary judgment. We disagree. If a refusal to
retract alone created a genuine issue of fact, then a defamation
plaintiff could avoid summary judgment by making a self-serving
demand to retract before filing suit, and the possibility of
summary judgment in a defamation case would be virtually
nonexistent.
Mount Juneau Enterprises' reliance on Golden Bear
Distributing Systems of Texas, Inc. v. Chase Revel, Inc., 708
F.2d 944 (5th Cir. 1983), and Holbrook v. Casazza, 528 A.2d 774
(Conn. 1987), cert. denied, 484 U.S. 1006 (1988), is not helpful
here.11 As the Juneau Empire correctly notes, both cases
"involved a plaintiff who was accused of wrongdoing in terms
sufficiently factual to be susceptible of being proved true or
false, who demonstrated to the publisher the falsity of the
publication, yet the publisher refused to retract." See Golden
Bear, 708 F.2d at 950; Holbrook, 528 A.2d at 780. Golden Bear
involved a magazine article that impliedly imputed to the
plaintiff firm the fraud of a different company, with the same
name, located in another state. 708 F.2d at 946-47.
Furthermore, the refusal to retract occurred in circumstances
where other evidence clearly indicated actual malice: The
defendants knew at the time of publication that specific facts
were false. Id. at 950. Holbrook involved a defendant's refusal
to retract an accusation of wrongdoing against the plaintiff,
even after the plaintiff obtained a second official exoneration
of the purported improprieties. 528 A.2d at 780. By contrast,
the material of concern to Mount Juneau Enterprises merely
reproduced or paraphrased the statements of third parties, and
did not embrace the positions of those individuals.
In sum, Mount Juneau Enterprises did not present
evidence of actual malice sufficient to create a genuine issue of
material fact and thus survive the Juneau Empire's motion for
summary judgment both as to the bankruptcy article and the "gooey
goose" article. We thus conclude that the superior court
properly granted summary judgment in favor of the Juneau Empire
on this issue.12
D. The Award of Attorney's Fees
Finally, Mount Juneau Enterprises contends that the
superior court's award of 60% of attorney's fees was improper.
There are two prongs to this argument: that the superior court
improperly punished Mount Juneau Enterprises for conducting
discovery, and that counsel for the Juneau Empire had inflated
the total bill from which the partial fee award was calculated.
The superior court held that much of the Juneau
Empire's bill for legal services stemmed from the time required
for the extensive discovery on which Mount Juneau Enterprises
insisted:
In this case, the issues were not
particularly complex, and plaintiff's claim
was never particularly strong. Nevertheless,
plaintiff insisted on a lengthy continuance
and a significant amount of discovery (which
was of minimal assistance in resolving the
summary judgment issue). Thus a significant
amount of the Empire's fees is the result of
plaintiff's own conduct.
. . . .
As a sort of benchmark, this court
considers 50% of attorney fees as a good
place to start . . . . In this case,
attorney fees at 60% of the amount billed
. . . are reasonable given the unreasonable
discovery undertaken by plaintiffs on the
summary judgment motion.
Mount Juneau Enterprises does not directly challenge the
determination that discovery was unreasonable, but instead
contends, without citation to authority, that the voluminous
discovery in this case was necessary given the difficulty that a
defamation plaintiff has in meeting the New York Times actual
malice standard. This contention does not raise an abuse of
discretion by the superior court because such an argument does
not adequately address the finding that most of the discovery in
this case was unnecessary.
Furthermore, Mount Juneau Enterprises offers little
support for the argument that the Juneau Empire's attorneys
inflated their bills. Essentially, Mount Juneau Enterprises
argues that the portion of the attorneys' time taken up with
discovery was not excessive, invites this court to speculate on
the amount of legal research that the Juneau Empire's counsel had
to perform in order to prepare this case, and implies that
conferences among the firm's attorneys are not a proper part of
the research process. None of these arguments have merit, nor do
they point to an abuse of discretion on the superior court's
part. Therefore, we affirm the award of attorney's fees.
IV. CONCLUSION
Because Keen is a public figure, at a minimum for the
purpose of the bankruptcy article of September 12, 1990, and
because both the article of September 12, 1990 and the "gooey
goose" article of May 14, 1991 addressed matters of public
interest and concern, we hold that the actual malice standard
applies. Furthermore, we hold that Mount Juneau Enterprises
failed to present evidence of actual malice at the summary
judgment stage as to either the bankruptcy article or the "gooey
goose"article. Finally, we hold that the superior court's award
of attorney's fees to the Juneau Empire was not an abuse of
discretion.
AFFIRMED.
_______________________________
1 In its briefing before this court, Mount Juneau
Enterprises cites extensively to Keen's affidavit and to
correspondence between Keen and his attorney at the time that the
September 12, 1990 article was published. The Juneau Empire
argues that the correspondence and the affidavit contain
inadmissible hearsay statements which cannot be relied upon to
oppose summary judgment.
We agree. We do not consider any hearsay statements by
Keen or Keen's attorney for the truth of the matter. See
Broderick v. King's Way Assembly of God, 808 P.2d 1211, 1215,
1218 (Alaska 1991) (inadmissible hearsay assertions cannot be
used either to oppose or support a motion for summary judgment).
Mount Juneau Enterprises' contention that the Juneau Empire
failed to object to this evidence is without merit. At the
summary judgment stage, the Juneau Empire expressly objected both
to the correspondence between Keen and his lawyer and to the Keen
affidavit's hearsay accounts of alleged statements by Linda Kline
and Deb Rudis.
2 The complaint also included claims against the City
which stemmed from its alleged abandonment of commitments to
exchange real property with Mount Juneau Enterprises, to avoid
interfering with the tramway project, and to deal in good faith
with the project's financial backers. These claims are not at
issue in this appeal.
3 The affidavit also contains a statement that Pohl
obtained information for the September 12, 1990 bankruptcy
article solely from the insurers' liquidation motion. In October
1991, after her deposition testimony, Pohl filed a supplemental
affidavit in which she stated that she obtained information for
the September 12, 1990 bankruptcy article not only from the
insurers' motion but also from Franklin's joinder motion. Pohl
did not otherwise change the substance of her earlier affidavit.
4 While the federal courts grant summary judgment in
libel cases only where the plaintiff has shown actual malice by
clear and convincing evidence or where no reasonable jury could
find such actual malice was present, this court continues to
apply the standard of review for summary judgment motions
pursuant to Alaska Civil Rule 56(c). Moffatt v. Brown, 751 P.2d
939, 943 (Alaska 1988) (declining to incorporate the applicable
substantive evidentiary standard into this state's summary
judgment practice). It is somewhat harder for a libel defendant
to win summary judgment in Alaska state courts using the "no
genuine issue of material fact"standard than it is in federal
court. Id. at 944.
5 As applied to the states through the Fourteenth
Amendment, the First Amendment prohibits any law "abridging the
freedom of speech, or of the press." U.S. Const. amend. I; cf.
Alaska Const. art. I, 5 ("Every person may freely speak, write,
and publish on all subjects, being responsible for abuse of that
right.").
6 A communication is defamatory if it tends to harm the
reputation of another so as to lower him in the estimation of the
community or to deter third persons from associating or dealing
with him. See Restatement (Second) of Torts 559 (1977); Green
v. Northern Publishing Co., 655 P.2d 736, 742 (Alaska 1982),
cert. denied, 463 U.S. 1208 (1983).
7 The absence of analysis regarding the burden of proof
in public figure determinations has been attributed to the fact
that courts treat this question as one of law. Note, supra, at
944 n.76.
8 In its appellate brief, Mount Juneau Enterprises cites
to Pohl's deposition testimony that she considered Keen and
Alaska Trams to be interchangeable, and also notes that the May
1991 "gooey goose"article inaccurately named Keen, not Alaska
Trams, as the owner of the oil tank. However, Mount Juneau
Enterprises does not argue that Keen avoided public figure status
merely by pursuing his business venture through the corporate
form.
9 In support of its argument that the allegedly defamed
parties were not public figures, Mount Juneau Enterprises relies
upon Time, Inc. v. Firestone, 424 U.S. 448 (1976). The Firestone
court held that a prominent socialite's judicial divorce
proceedings did not make her a public figure, in part because she
had no choice but to resort to the courts in order to obtain the
divorce. Id. at 454-55. Mount Juneau Enterprises contends that
similarly, neither Alaska Trams' bankruptcy proceedings nor its
efforts to obtain required building permits from the City make
Keen a public figure.
Firestone is distinguishable. The Firestone court held
that judicial dissolution of a marriage did not constitute the
sort of public controversy that mandated treating the spouses as
public figures. Id. Contrary to the implication of Mount Juneau
Enterprises, Firestone did not create a bright-line rule erasing
an individual's public figure status merely because he or she was
required to participate in government proceedings. Cf. Tribe,
supra, 12-13, at 881 (proposing that the reasoning for
Firestone is not so much the fact that people must use courts to
get divorces as that "the Firestone majority decided that gossip
about the rich and famous is not a matter of legitimate public
interest").
10 The "gooey goose"article doesn't accuse Keen of
committing a felony. It does contain a mistaken statement by a
third party that the accidental killing, by oil contamination, of
migratory birds was a felony under the Migratory Bird Treaty Act.
A lay person could reasonably rely on a U.S. Fish and Wildlife
Service biologist's statement that a potential felony offense was
implicated under the Act.
11 Mount Juneau Enterprises in part relies on the panel
decision in Tavoulareas v. Piro, 763 F.2d 1472 (D.C. Cir. 1985)
to support this argument. The Tavoulareas panel decision is not
persuasive authority. The Circuit for the District of Columbia
subsequently granted rehearing of this case en banc, id. at 1481,
vacated the panel decision, id., and issued a new opinion
rejecting the analysis of the panel. See Tavoulareas v. Piro,
817 F.2d 762 (D.C. Cir. 1987) (en banc).
12 In the alternative, the Juneau Empire contends that the
articles at issue enjoyed immunity under the "neutral reportage"
doctrine, were constitutionally protected opinion, or were
incapable of defamatory interpretation. Additionally, the Juneau
Empire argues that the bankruptcy article enjoyed an absolute
privilege for the truthful reporting of judicial proceedings. In
light of our disposition of this case, we need not reach these
other issues. Although we do note that the bankruptcy article in
question here is in essence truthful.
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