The opinion of the court was delivered by: Kollar-kotelly, District Judge.
Plaintiff Julie Hyatt Steele ("Steele") brought suit against Newsweek
reporter Michael Isikoff ("Isikoff"), Newsweek Magazine ("Newsweek"), and
the Washington Post ("Washington Post") (collectively, "Defendants")
based on the Defendants' alleged failure to honor an agreement not to
reveal that Steele was a source of information Defendants published.
See, e.g., Am.Compl. ¶ 118. Steele's Amended Complaint addresses the
alleged misconduct of Isikoff in eight separate counts in which she
claims breach of contract (Counts I and II); promissory estoppel (Count
III); fraud (Count IV); negligent misrepresentation (Count V); unjust
enrichment (Count VI); intentional infliction of emotional distress
(Count VII); and breach of fiduciary duty/duty of confidentiality (Count
VIII). Steele also claims that Newsweek and the Washington Post are
vicariously liable under the doctrine of respondeat superior (Count IX),
that Newsweek is liable for negligently hiring and supervising Isikoff
(Count X), and that Steele is entitled to punitive damages (Count XI).
See id. ¶¶ 50-115.
Before the Court is Defendants' Motion to Dismiss in which they assert
that (1) the First Amendment bars all of Steele's claims collectively,
and (2) each of her claims fails individually as a matter of common law.
See Defs.' Mot. to Dismiss; Mem. in Supp. of Defs.' Mot. to Dismiss at
2-3 [hereinafter Defs.' Mem.]. The Court concludes that Steele's suit
cannot be completely dismissed on First Amendment grounds, but that each
of individual claims merits dismissal for failure to state a claim under
the applicable state law.
Steele is a citizen of the Commonwealth of Virginia, see Am.Compl.
¶ 3, and Isikoff is a resident of the District of Columbia, see id.
¶ 4. Newsweek, Inc., sued as Newsweek
Magazine, has offices in the District of Columbia and is wholly owned by
the Washington Post. See id. ¶ 5. Newsweek Magazine is an
unincorporated division of Newsweek, Inc., a New York corporation. See
Defs.' Mem. at 34-35. The Washington Post, sued as The Washington Post
Company, Inc., is incorporated in Delaware; its principal place of
business is the District of Columbia. See Am.Compl. ¶ 6. At all times
relevant to this case, Isikoff was an employee of Newsweek. See id.
During the course of his employment at Newsweek, Isikoff investigated
various stories about the private life of President William Jefferson
Clinton. Id. ¶ 7. In late 1997, Isikoff began working on a story
about an improper encounter between Kathleen Willey and the President
that allegedly occurred at the White House in November 1993.*fn1 See
id. ¶ 8. Steele alleges that Isikoff entered her life at the
direction of Kathleen Willey, Steele's longtime friend, when Willey
telephoned Steele to request that she talk to Isikoff about the alleged
encounter. See id. ¶ 9. Steele states that within minutes of her
conversation with Willey, Isikoff called her and requested driving
directions to her home. See id. ¶ 9. Steele gave the directions to
Isikoff and he arrived at her home shortly thereafter. See id. ¶¶ 9,
Prior to Isikoff's arrival at Steele's home, Willey purportedly called
Steele back to inform her of the nature of Isikoff's visit. See id.
¶ 10. Steele states that this conversation was tile first time that
Willey told her of the alleged sexual encounter between Willey and the
President. See id. ¶ 12. Steele further alleges that Willey gave
Steele a prepared story to tell Isikoff — that on the day of the
alleged encounter. Willey went from the White House to the commuter
train, and from the train station to Steele's home. See id. ¶ 11.
Steele also states that Willey asked her to tell Isikoff that Willey
appeared upset and humiliated after the encounter with the President, and
that she reported to Steele that the President had "groped" her. Id.
¶ 11. Steele asserts that she was uncomfortable with the prospect of
relaying information about which she had no first-hand knowledge. See
id. ¶ 13. Nonetheless, because Willey assured her that the
conversations would be off the record and because she was afraid that
Willey would be angry if she did not speak to Isikoff, Steele agreed to
confirm Willey's story. See id. ¶ 13.
Steele alleges that she and Isikoff discussed the nature of their
conversation and the manner in which he would use the information he
gained. See id. ¶¶ 15-18, 23-24. Steele states that she and Isikoff
agreed "explicitly and verbally" that her statements regarding Kathleen
Willey's encounter would be off the record. Id. ¶ 15. Steele claims
that she and Isikoff both understood that "off the record" meant that
Isikoff would take "her statements in confidence . . . and neither [her]
statements nor her name would be printed by Isikoff or Newsweek." Id.
¶¶ 16-17. Steele states that she would not have spoken to Isikoff at
all if he had not agreed that their conversations would be strictly off
the record. See id. ¶ 18. Steele further asserts that she and Isikoff
discussed the fact that he would call Steele first should he ever intend
to print a story about Willey's accusations. See id. ¶ 24.
In the hours immediately following Steele's July 31 conversation with
Isikoff Steele alleges that Isikoff and his editors decided that they
needed either Willey or Steele on the record. See id. ¶ 34. Steele
suggests that Isikoff and Newsweek made this decision because Steele had
recanted her story, leaving Isikoff without the two corroborating sources
that journalistic standards require in order to proceed with the story.
See id. ¶ 34. Later that same afternoon, Steele alleges that Isikoff
called her to inform her that her name and her statements would appear in
his story. See id. ¶ 36. During this conversation, Steel maintains
that she again told Isikoff that all of their conversations, including
the present one, were off the record. Isikoff allegedly responded that
the decision was "out of [his] hands" due to mounting pressure to print
the story. Id. ¶ 37. Newsweek and Isikoff published stories naming
Steele and reporting her statements to Isikoff on August 11, 1997, March
9, 1998, and March 30, 1998. See id. ¶ 38. In conjunction with the
articles, Isikoff made numerous television appearances and Newsweek
issued a press release repeating this information. See id. ¶¶ 38-39.
Steele further asserts that Isikoff falsely accused her of attempting to
sell her story to the tabloids. See id. ¶ 43.
Steele contends that Isikoff and Newsweek were well aware that by
publishing her name in connection with the scandals surrounding the
President's personal life, they were thrusting her into a public
spotlight in which she did not want to appear. See id. ¶¶ 41-43. In
addition, Steele claims that both Isikoff and Newsweek have profited by
publishing Steele's statements about the Willey story. See id. ¶ 40.
Seeking damages for injury to her reputation, embarrassment,
humiliation, loss of earning capacity, anguish, and severe emotional
distress, see id. ¶ 118, Steele filed the instant suit against
Isikoff, the Washington Post, and Newsweek. In Counts I and II (Breach of
Contract), Steele alleges that Isikoff breached two separate contracts by
publishing Steele's name in conjunction with the Willey story. Steele
asserts that the contracts formed when Isikoff agreed, on two separate
occasions, to protect her identity in exchange for information about the
Willey incident. Steele alleges in Count III (Promissory Estoppel) that
the Court should enforce Isikoff's promises that their conversations
would be "off the record" because Steele relied on those promises to her
detriment. Steele also charges Isikoff with fraud (Count IV), negligent
misrepresentation (Count V), unjust enrichment (Count VI), intentional
infliction of emotional distress (Count VII), and breach of fiduciary
duty (Count VIII). Finally, Steele contends that Newsweek and the
Washington Post are vicariously liable for Isikoffs acts, under the
theory of respondeat superior (Count IX) or negligent hiring and
supervision (Count X), and that she is entitled to punitive damages as a
result of Isikoff s and Newsweek's conduct (Count XI).
Defendants move to dismiss the amended complaint for failure to state a
claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure. A motion to dismiss should be granted only if the "plaintiff[
] can prove no set of facts in support of [its] claim which would entitle
[it] to relief." Kowal v. MCI Communications Corp., 16 F.3d 1271, 1276
(D.C.Cir. 1994) (citing Schuler v. United States, 617 F.2d 605, 608
(D.C.Cir. 1979)). When considering a motion to dismiss, the Court must
resolve all factual doubts in favor of the plaintiff and allow the
plaintiff the benefit of all inferences. See EEOC v. St. Francis Xavier
Parochial Sch., 117 F.3d 621, 624 (D.C.Cir. 1997).
Notwithstanding this liberal construction, "the court need not accept
inferences drawn by plaintiffs if such inferences are unsupported by the
facts set out in the complaint. Nor must the court accept legal
conclusions cast in the form of factual allegations." Kowal, 16 F.3d at
1276; see also Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92
L.Ed.2d 209 (1986).
A. Defendants' First Amendment Argument
Preliminarily, Defendants urge the Court to dismiss Plaintiff's entire
suit on First Amendment grounds. See Defs.' Mem. at 7-14. Specifically,
they assert that Steele's claims amount to nothing but a thinly disguised
effort to collect damages for defamation without meeting the
constitutional requirements of a defamation claim. See id. at 7-8.
Arguing that Hustler Magazine v. Falwell, 485 U.S. 46, 108 S.Ct. 876, 99
L.Ed.2d 41 (1988), and Cohen v. Cowles Media Co., 501 U.S. 663, 111
S.Ct. 2513, 115 L.Ed.2d 586 (1991), bar plaintiff's from obtaining
reputational damages from media defendants without proving defamation,
Defendants maintain that the damages Steele seeks all relate to her
reputation and that she has failed to put forth a defamation claim. See
Defs.' Mem. at 8-14. Therefore, Defendants conclude, the Court must
dismiss all of Steele's claims.
Defendants' portrayal of the applicable First Amendment jurisprudence
is accurate. In Hustler, the Supreme Court held that public figures may
not recover for harm to reputation under a claim of intentional
infliction of emotional distress without meeting the strict
constitutional requirements of a defamation claim. See Hustler Magazine,
485 U.S. at 56, 108 S.Ct. 876. In other words, even though the Hustler
plaintiff pled intentional infliction of emotional distress and not
defamation, the Court determined that the First Amendment requires
claimants to meet the constitutional defamation requirements in order to
obtain reputational damages, regardless of the claim under which such
damages are sought. See id. at 56, 108 S.Ct. 876 (reaffirming that
"[f]reedoms of expression require `breathing space'" and that such
breathing space is protected by the First Amendment limits on defamation
Three years after issuing the Hustler decision, the Supreme Court had
occasion to apply the Hustler reasoning in, Cohen, a case with many
apparent similarities to the
one at issue here.*fn2 The Cohen majority began by confirming that First
Amendment protections, iron-clad and far-reaching though they may be, do
not allow the media to break the law in its efforts to gather the news.
Specifically, the Court held that "generally applicable laws do not offend
the First Amendment simply because their enforcement against the press
has incidental effects on its ability to gather and report the news."
Cohen, 501 U.S. at 669, 111 S.Ct. 2513. The Court proceeded to determine
that the plaintiff's promissory estoppel claim was rooted in a "generally
applicable law" inoffensive to the First Amendment because the doctrine of
promissory estoppel does not "target or single out the press." Id. at
670, 111 S.Ct. 2513.
The Cohen Court also found that the restrictions outlined in Hustler
were not applicable in Cohen because the Cohen plaintiff had not
"attempt[ed] to use a promissory estoppel cause of action to avoid the
strict requirements for establishing a libel or defamation claim." Id. at
671, 111 S.Ct. 2513. The Court reached this conclusion upon determining
that the plaintiff sought damages "for breach of a promise that caused
him to lose his job and lowered his earning capacity," not "for injury to
his reputation or his state of mind." Id.
Viewed in tandem, Hustler and Cohen divide claims against the news
media by categorizing the damages sought. If a party seeks damages for
harm to reputation or state of mind, the suit can only proceed if that
party meets the constitutional requirements of a defamation claim. If a
party seeks damages for non-reputational harms, which include lost jobs
and diminished employment prospects, then the First Amendment does not
bar suit as long as the claims are brought under generally applicable
In the case before this Court, complete dismissal on First Amendment
grounds would be inappropriate because the character of Steele's damages
is not definite at this early stage. While Defendants urge the Court to
conclude that all of Steele's alleged harm is to her reputation, Steele's
amended complaint does not necessarily lead to such a conclusion. On the
contrary, Steele's pleadings carefully portray some of her harm as
analogous to that of the plaintiff in Cohen and therefore not restricted
by the Hustler decision. Specifically, while Steele does allege
reputational injury, she also argues that she has suffered occupational
harm as a result of Defendants' conduct.
Quite possibly, following discovery Defendants could demonstrate that
the damages Steele seeks are all for harm to her reputation. On a motion
to dismiss, however, the Court must accept the plaintiffs version of
events. Steele has alleged that she has suffered reputational and
non-reputational harm as a result of Defendants' conduct. To the extent
that her claims call for reputational damages, they are barred under the
First Amendment and therefore dismissed. To the extent that she seeks
damages for non-reputational harm, the claims survive Defendants'
constitutional challenge. In light of the Court's conclusions regarding
each of Steele's ...