report on October 18, 1975 that Defense Secretary Schlesinger had ordered an inquiry into the entertainment of Defense Department officials by defense contractors.
On October 22, 1975, the Star published an article written by Peter Gruenstein and distributed by CHNS entitled "3 Other Firms Entertained VIP's." The article stated that Rockwell International Corporation, Raytheon, and Martin Marietta used hunting facilities in Maryland to entertain Defense Department officials and members of Congress. Between October 22 and October 27 at least thirteen newspapers across the country carried versions of this story, attributed to CHNS, and each version mentioned Martin Marietta. The October 22 article was the twelfth in a series on defense contractor entertainment activities written by Gruenstein, distributed by CHNS, and printed by the Star. The first article in the series, which focused primarily on Northrop Corporation, appeared on May 8, 1975.
An article by William H. Jones on the Congressional investigation of the relationship between defense contractors and the Pentagon was published in the Washington Post on October 23, 1975. According to the article, congressional investigators related that at least five of the largest defense contractors maintain hunting and fishing lodges for use by Defense Department officials or arrange hunting vacations for these officials. Further, the investigators were said to have named Martin Marietta as one of the firms known to have entertained military officials at an Eastern Shore hunting lodge. Numerous papers across the country printed versions of the Jones article, all mentioning Martin Marietta, on October 22, 23, and 24.
On October 23, 1975, an article by Robert Lenzner in the Boston Globe, entitled "Raytheon Co. admits 'trips' for US officials," detailed congressional staff allegations against Raytheon and the company's response. In addition, the article mentioned Martin Marietta as one of the companies under investigation for similar conduct.
Clark Mollenhoff wrote an article for the October 24 Des Moines Register entitled "GAO to Probe Defense Firm Hospitality." The story reported that Senator Proxmire had requested the General Accounting Office to investigate the entertainment practices of several defense contractors, specifically including Martin Marietta. On October 25, 1975, many newspapers carried stories about the Proxmire request and made references to plaintiff. An Associated Press story appearing on October 26 and 27 also referred to Proxmire's request that Martin Marietta be investigated, although the focus of the story was a report that Admiral Harold E. Shear used Northrop hunting lodge facilities.
The Washington Post of October 28, 1975, published an article entitled "Goose Guide Shrugs at Northrop 'Fuss'," by Karen De Young. The article described the reaction of a goose guide and Eastern Shore residents to news reports of defense contractor entertaining at hunting lodges in the area and mentioned Martin Marietta as one of the companies reported to have sponsored hunting trips for government officials. Between October 28 and October 30 various versions of the article appeared in numerous papers.
Martin Marietta's business status as of October 1975 reinforced its association with the topic of entertainment in the defense industry. The corporation was the 20th largest defense contractor in fiscal year 1975, receiving $320.3 million in public funds from defense contracts. In furtherance of its business interests, Martin Marietta regularly provided uniformed officers and Defense Department officials with free transportation on company aircraft and free access to the hunting facilities at Wye Island. In addition, the company regularly participated in advisory panels, technical exchange programs, and private defense and aerospace related organizations.
Against this backdrop, preparation of the October 31 article began. Undisputed portions of the record amassed in the instant case reveal that the following Star employees, and only the following Star employees, played a direct role in the publication of the article: Editor James Bellows, Managing Editor Sidney Epstein, National Editor Barbara Cohen,
and Ross Evans, a National Desk Editor. Author Gruenstein was not employed by the Star, but by CHNS at the time he prepared the article. CHNS, a nonprofit corporation chartered in 1974, operated as an independent news service, supplying its regular subscribers with daily stories concerning activities in Washington, D.C. In addition, CHNS regularly contacted the Washington offices of the Star, the Detroit News, the Saint Louis Post Dispatch, the Los Angeles Times, and the Des Moines Register-Tribune to ascertain whether these non-subscribers would be interested in buying specific pieces prepared for general distribution to regular customers.
Prior to October 31, 1975, the Star had purchased 14 articles from CHNS, including the 12 in the defense contractor series, for fees ranging from $50 to $150.
The Star first learned that Gruenstein was working on the story which eventually became the allegedly libelous article on October 24, 1975. On this date, Gruenstein spoke with Barbara Cohen, the editor who had handled the previous 12 articles in the defense contractor series, and informed her that he was following some leads concerning the providing of prostitutes for Defense Department personnel. Cohen informed Gruenstein that the Star would be interested in using the article if it was specific in its allegations. Cohen also granted Gruenstein's request for use of the Star's "morgue" in preparing the story.
Cohen next heard from Gruenstein on October 27 or 28, when he informed her that he was nearing the conclusion of his investigation and might have an article ready to go by the end of the week. She, in turn, mentioned the possibility that a story by Gruenstein on defense contractors and prostitutes might be available for the weekend editions of the Star at the weekly editors meeting held on Tuesday, October 28. Editor James Bellows indicated that, if the article panned out, it was a likely candidate for publication.
Gruenstein actually delivered the article on Thursday, October 30.
In addition to providing the Star with the article on that day, CHNS sent it to all its subscribers and to the Detroit News, which had expressed an interest in the story. The St. Louis Post Dispatch similarly received the story on October 30 or 31.
After reading the article several times, Cohen called Gruenstein to discuss its accuracy. During the course of the discussion, Gruenstein affirmatively vouched for the reliability of his sources, the date of the party, the payment to the prostitute, the nature of the Martin Marietta denial, Martin Marietta's lease of the lodge, the care of his investigation, and the general use of prostitutes by defense contractors. Gruenstein also stated that he had personally spoken with the three guests mentioned in the second paragraph of the article. The only detail Gruenstein could not support unequivocally was the type of animal head from which the prostitute swung and Cohen stated that she was going to substitute "stuffed animal head" for "moose head" to alleviate any possibility of error.
Cohen devoted special attention to paragraph 15 of the article which contained broad allegations of procuring by other defense contractors. Cohen declared that the paragraph was too vague and that she would recommend its deletion from the article. Gruenstein advocated the retention of the paragraph since it indicated that Martin Marietta was not alone in engaging in this type of conduct.
Following her conversation with Gruenstein, Cohen changed the moose head reference and deleted paragraphs seven and eight. These paragraphs, describing the rental of another hunting lodge by Martin Marietta, did not relate to the stag party episode and were considered irrelevant. After consultation with Bellows, Cohen deleted a portion of paragraph fifteen
and made certain other stylistic alterations. Cohen then left the article with Ross Evans, instructing him to check with Gruenstein the accuracy of a modifying phrase she had added and to implement a Bellows suggestion that a good description of the regulations pertaining to entertainment of Defense Department personnel be inserted early in the article. Evans performed these tasks that evening.
Bellows arrived at the Star early in the morning on October 31 to perform his usual tasks of preparing the promotion blurbs for the top of the front page. He and Epstein had agreed the preceding afternoon that if the Gruenstein article was ready, it would run on the front page of the October 31 paper. Finding the story on page one of the planned first edition, Bellows prepared the promotion blurb "Stag Parties Attended by Pentagon Officials."
The story then ran in the first and second editions.
At approximately twelve noon on the 31st George Bunker, Chairman of the Board of Martin Marietta, telephoned Epstein, a personal friend, and objected to the Gruenstein article. Although there is conflicting deposition testimony by the principals as to certain aspects of the conversation, both agree that Bunker informed Epstein that the entire article was false, that a libel suit was being considered, and that employees of Martin Marietta would not do business in the fashion reported by Gruenstein. Epstein recalls Bunker to have added, after his denial, that if he ever found out that Martin Marietta employees were involved with the party he would fire several hundred of them. Bunker claims that in response to an initial statement that the article was incorrect, Epstein stated that there may be some problem with the date but that the rest of the story was correct. Bunker then claims to have answered that it was not just the date, but the whole story was wrong.
At the time Bunker phoned Epstein, two editions of the Star had not yet been printed. The press run for the third edition began at 1:00 p.m. and the run for the fourth began at 2:45 p.m. The Star maintains that under its printing procedures, substantive changes could not have been made after 12:00 noon and 1:30 p.m. for each edition, respectively. In the face of Bunker's call and the impending deadlines, Epstein contacted Cohen and asked whether she still believed in the article. Upon learning that Bunker's objections were general, rather than specific, and apparently based on second-hand information, she expressed continuing confidence in the story. Epstein then decided not to kill the article in the remaining editions. This decision was concurred in by Bellows and Robert Nelson, house counsel.
Shortly after she spoke with Epstein, Cohen received a call from Gruenstein about another story. Cohen mentioned Bunker's call, but did not really press for a detailed response. Later that afternoon, following a call from Paul Porter, plaintiff's counsel, Epstein decided to order a thorough check of Gruenstein's investigation. Epstein also informed plaintiff that it would print any further denials it wished to make, but the offer was declined.
Plaintiff filed this action on November 4, 1975. It simultaneously issued a press release announcing the event. Several papers, including the Star, carried the release.
Applicability of the Malice Standard
Recent decisions by the Supreme Court have established that mass media defendants, such as the Star, enjoy a conditional constitutional immunity from liability for publication of defamatory falsehoods. In New York Times Co. v. Sullivan, 376 U.S. 254, 11 L. Ed. 2d 686, 84 S. Ct. 710 (1964), the Court held that the first amendment provides the press with special protection from libel actions brought by public officials. In order to preserve the press' freedom to engage in uninhibited discussion of public issues, the Court ruled that a newspaper could not be held liable for a false story about a public official unless the plaintiff proved with "convincing clarity" that the publication was made with "actual malice." Id. at 279-80, 285-86. Shortly thereafter, in Curtis Publishing Co. v. Butts, 388 U.S. 130, 18 L. Ed. 2d 1094, 87 S. Ct. 1975 (1967), the Court found that the protection provided in New York Times extended to cases brought by "public figures." Id. at 155. In Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 29 L. Ed. 2d 296, 91 S. Ct. 1811 (1971), a plurality determined that the privilege applied where the publication concerned matters of general or public interest, regardless of the plaintiff's status. Id. at 43 (Brennan, J.). The majority opinion in Gertz v. Robert Welch, Inc., 418 U.S. 323, 41 L. Ed. 2d 789, 94 S. Ct. 2997 (1974), indicated that the general rule announced in Metromedia was inappropriate for those cases where the reputations of natural persons were placed in jeopardy. When a natural person brings a libel suit, the court held, the malice standard of New York Times does not apply unless the plaintiff is a public figure for the range of issues discussed in the allegedly defamatory statement. Id. at 343, 345-46. As is more fully explained below, the court finds that where a libel action is brought by a corporation, the rule announced in Metromedia remains the proper standard for determining the applicability of the New York Times malice standard.
Viewing the instant record in the light most favorable to plaintiff, the court concludes that plaintiff must prove actual malice because all reasonable jurors would agree that the October 31 article discussed issues of legitimate public importance, or, in the alternative, because all reasonable jurors would agree that Martin Marietta Corporation is a public figure under the standard set out in Gertz v. Robert Welch, Inc., supra. The court has taken an especially hard look at the facts and attempted in all instances where plaintiff contends issues to exist to assess the genuineness of the conflict. The use of summary judgment to terminate litigation in this fashion prevents all but the strongest libel cases from proceeding to trial, thereby advancing the first amendment policy of shielding the press from harassment. Washington Post Co. v. Keogh, 125 U.S. App. D.C. 32, 365 F.2d 965, 968 (D.C. Cir. 1966), cert. denied, 385 U.S. 1011, 17 L. Ed. 2d 548, 87 S. Ct. 708 (1967); Buchanan v. Associated Press, 398 F. Supp. 1196 (D.D.C. 1975); see Wasserman v. Time, Inc., 138 U.S. App. D.C. 7, 424 F.2d 920, 922 (D.C. Cir. 1970) (Wright, J., concurring).
Applicability to Corporate Plaintiffs
In Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 29 L. Ed. 2d 296, 91 S. Ct. 1811 (1971), Justice Brennan's plurality opinion eschewed any distinction between libel actions brought by public plaintiffs and those brought by private plaintiffs for purposes of applying the malice standard. Justice Brennan reasoned that such a distinction was not justified by the first amendment, which guarantees free debate of public issues, without regard to the individuals associated with those issues. Id. at 43. Thus, he stated, "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." Id.
Justice Brennan's position was rejected by a majority of the Court in Gertz v. Robert Welch, Inc., 418 U.S. 323, 41 L. Ed. 2d 789, 94 S. Ct. 2997 (1974), because it took into consideration only society's interest in having a press free from the shackles of self-censorship while failing to protect society's strong and legitimate interest in preserving the reputations of private individuals. Id. at 341; see Time, Inc. v. Firestone, 424 U.S. 448, 96 S. Ct. 958, 965, 47 L. Ed. 2d 154 (1976). It is quite clear from the Court's opinion, however, that the values considered important enough to merit accommodation with interests protected by the first amendment are associated solely with natural persons, and that corporations, while legal persons for some purposes, possess none of the attributes the Court sought to protect. Justice Powell's detailed explanation of the personal values deserving deference from the first amendment leaves no doubt that corporations must be excluded from the Gertz holding.
The legitimate state interest underlying the law of libel is the compensation of individuals for the harm inflicted on them by defamatory falsehood. We would not lightly require the State to abandon this purpose, for, as Mr. Justice Stewart has reminded us, the individual's right to the protection of his own good name
"reflects no more than our basic concept of the essential dignity and worth of every human being -- a concept at the root of any decent system of ordered liberty. The protection of private personality, like the protection of life itself, is left primarily to the individual States under the Ninth and Tenth Amendments. But this does not mean that the right is entitled to any less recognition by this Court as a basic of our constitutional system."
418 U.S. at 341 (citation omitted).
The law of libel has long reflected the distinction between corporate and human plaintiffs by limiting corporate recovery to actual damages in the form of lost profits. As stated by a court in this district, "Although a corporation may maintain an action for libel, it has no personal reputation and may be libeled only by imputation about its financial soundness or business ethics." Golden Palace, Inc. v. National Broadcasting Company, Inc., 386 F. Supp. 107 (D.D.C. 1974) (emphasis added); see Prosser, Torts § 111 at 745 (4th ed. 1971). This traditional doctrine does no more than recognize the obvious fact that a libel action brought on behalf of a corporation does not involve "the essential dignity and worth of every human being" and, thus, is not "at the root of any decent system of ordered liberty." Consequently, a corporate libel action is not "a basic of our constitutional system," and need not force the first amendment to yield as far as it would in a private libel action.
Even natural persons lose the protection afforded in Gertz, when, by assuming positions of public importance, they sacrifice their private lives. See 418 U.S. at 344-45, 94 S. Ct. 2997, 41 L. Ed. 2d 789. Corporations, which do not possess private lives to begin with, must similarly be denied full protection from libel. Stated another way, the "public figure" standards set out in Gertz are designed to ascertain whether a person, through his activities, has lost claim to his private life. It makes no sense to apply these standards to a corporation, which, regardless of its activities, never has a private life to lose.
The conclusion that the type of private controversies the Court sought to protect in Gertz were those of a highly personal nature, and not the type which could be associated with corporate activity is strengthened by the recently decided Time, Inc. v. Firestone, 424 U.S. 448, 96 S. Ct. 958, 47 L. Ed. 2d 154 (1976). The Court there held that publication of details concerning Mrs. Firestone's divorce could not be shielded by the malice standard because that very personal action was not a legitimate subject of public debate and was known to the general public only because society demanded that Mrs. Firestone go to court to dissolve the marriage. No event in the life of a corporation involves such sacred personal events as marriage and divorce.
It is, of course, true, that corporations suffer from defamatory publications and are afforded limited relief by the states. Thus, it remains for the court to determine how to accommodate the state's interests in protecting corporate reputation with the fundamental interests embodied in the first amendment. As stated above, corporations are similar to public figures in that neither have private lives. It would be possible to hold, then, that the malice standard applies to any libel action brought by a corporate plaintiff. However, such a holding would not be entirely just, since implicit in the public figure concept is the conclusion that society is somehow interested in the plaintiff and his activities. The court is of the opinion that corporations can be afforded a similar protection by following the plurality rule in Metromedia, that the malice standard applies only where issues of legitimate public concern are discussed. This approach grants some deference to the values underlying corporate libel actions grounded in state law, while at the same time resulting in only a minor encroachment on the first amendment, which was designed primarily to defend the market place of ideas. It is, therefore, the holding of this court that actual malice must be proven with convincing clarity in any libel action brought by a corporation against a mass media defendant, if the defendant establishes that the publication in issue concerned matters of legitimate public interest.
Applying the standard to the instant case, the court concludes that Martin Marietta must prove that the Star published the October 31 article with actual malice. The article, and the series of which it was a part, concerned the use of various forms of entertainment by defense contractors to influence the award of defense contracts. Surely, these are matters of legitimate public interest. Further, the alleged activities involved possible violations of an Executive Order and Defense Department Regulations, thus making them a legitimate public concern, per se. Plaintiff argues that the article was not about defense contractor activities but about a private party given by friends of an Air Force official. It may or may not be true that this party was wholly private in nature, but that is not the issue here. The article characterized the party as defense contractor sponsored entertainment, thereby placing it in the context of a public controversy.
Application of the Public Figure Standard
In the preceding section of this Memorandum, the court concluded that corporations are excluded from the zone of protection carved out by the majority opinion in Gertz v. Robert Welch, Inc., 418 U.S. 323, 41 L. Ed. 2d 789, 94 S. Ct. 2997 (1974), and that it is not necessary to apply to corporations the standards set out in the opinion for determining whether a libel plaintiff is a public figure. If, however, higher courts, which have yet to consider the problem, should find it necessary to fit corporate plaintiffs into this ill-fitting mold, this court concludes that Martin Marietta is a public figure for the purposes of the instant action and, consequently, must prove actual malice.
In Gertz, the Court delineated two categories of public figures: public figures for all purposes and public figures for a limited range of issues. The Court stated,
For the most part, those who attain [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.