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STEELE v. ISIKOFF

September 6, 2000

JULIE HIATT STEELE, PLAINTIFF,
V.
MICHAEL ISIKOFF, NEWSWEEK MAGAZINE, AND THE WASHINGTON POST COMPANY, INC., DEFENDANTS.



The opinion of the court was delivered by: Kollar-kotelly, District Judge.

MEMORANDUM OPINION

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.

I. BACKGROUND

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, 14.

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.

According to Steele, Isikoff called her on July 28 and 29, 1997, in an attempt to reach Willey. See id. ¶¶ 25-26. During the latter call, Steele claims that Isikoff told her that he was under pressure to print the Willey story. See id. ¶ 26. Steele requested a personal meeting with Isikoff before the story was printed. See id. ¶ 26. After a series of phone conversations in which it became clear that Steele and Isikoff could not meet in person, Steele agreed to discuss the matter with him over the phone on the morning of July 31, 1997. See id. ¶¶ 26-28. Steele alleges that she and Isikoff "explicitly and verbally agreed" that the conversation on the morning of July 31, 1997 would be off the record. Id. ¶ 29. During the July 31 conversation, Steele told Isikoff that she had lied to him when she recounted Willey's story regarding her alleged encounter with the President. See id. ¶ 30. Steele explained that in actuality she had no knowledge of an encounter between Willey and the President at any time. See id. ¶ 30. Steele ended the conversation with Isikoff with the purported mutual understanding that Newsweek "no longer had a story to print." Id. ¶ 31-32.

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).

II. DISCUSSION

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 claims).

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 laws.

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 ...


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