Case Title: Direct Import Buyer's Ass'n v. KSL, Inc.

Citation: 572 P.2d 692

Docket Number: 

State: utah

Court: Utah Supreme Court

Date: 1977-11-22T00:00:00Z

Document:
572 P.2d 692 (1977) DIRECT IMPORT BUYER'S ASSOCIATION, Plaintiff and Appellant, v. K. S. L., INC., Defendant and Respondent. No. 14908. Supreme Court of Utah. November 22, 1977. *693 Kenneth M. Hisatake, Salt Lake City, for plaintiff and appellant. Ray R. Christensen, W. Clark Burt, Robert S. Campbell, Jr., Salt Lake City, for defendant and respondent. ELLETT, Chief Justice: The appellant brought suit against the respondent, a television station, for alleged falsehoods broadcast over the air whereby a product sold by appellant was stated to be less efficient as a gasoline saver than appellant claimed it to be. The product in question was known as an "Econo-jet" and was a carburetor needle with a hole in its center that allowed extra air to be introduced into the carburetor so that a leaner mixture of *694 gasoline was exploded in the cylinders of the automobile motor. While the words used cast doubt on the efficacy of the needle, they did not in any manner whatsoever reflect on the character, reputation, or want of skill on the part of appellant. They simply were to the effect that the claim made about the needle was not yet verified. In case of words falsely broadcast relating to the quality of an article that is made, produced, furnished, or sold by a person, no action will lie unless special damages are alleged, and no recovery can be had unless such special damages are proved.[1] Furthermore, the burden is on the plaintiff in such a case to prove that the product is not as represented by the defendant but is in fact as the plaintiff claims it to be.[2] Truth of the words spoken is always a defense, and in case of a broadcast of matters of public interest, there is a qualified privilege on the part of the media which will be defeated only in a case of malice. The amended complaint of the appellant alleged by way of damages the following: As to the proof of damages, the evidence showed that appellant sold several items other than the Econo-jets and that his net profit for the fiscal year prior to the broadcasts was $97.19. The first broadcast was made November 14, 1973, and the second one was made December 31, 1973. October, 1973, sales for the Econo-jet were $3,181. At the end of November, 1973 (after the first broadcast), the gross sales had increased to $36,581 and by the end of December, 1973, the record showed monthly cash sales of $52,368 plus additional receivables of $40,000. The sales for January, 1974, were $35,045. These figures do not show any loss of sales of the Econo-jets due to any disparagement because of the broadcasts; rather, they indicate that the broadcasts may have helped the cause along. The contents of the broadcasts are set forth and were in the form of news releases: As to the two broadcasts, testimony failed to show that any part of the statements were false, except as to the amount of sales actually made. Tony Kraatz, Product Manager for Direct Import Buyers' Association, testified and admitted that he had given Mr. Packer the wrong figure by guessing at the total sales volume during their conversation. The newscaster cannot be held liable for accurately reporting erroneous information when he believes the source to be reliable and truthful. A newsman has a duty to verify his facts, but that duty does not mean he must report only favorable information rather, he must report accurately and in good faith any facts that he reasonably believes to be based on truth. And it is immaterial whether the inferences or opinions reported are right or wrong.[3] In Ogden Bus Lines v. KSL, Inc.,[4] at p. 225 we said: The evidence shows that Mr. Packer made inquiries and extensive investigations to verify the truth of appellant's claims before releasing the story over the air. He sought the opinions of experts from several sources throughout the country and obtained test results on the Econo-jet needle. Some of the experts were skeptical and some found the needle didn't work as claimed. Some believed the theory plausible and expressed support for the device. Mr. Packer merely reported all these findings but did not at any time draw his own conclusions as to the truth or falsity of appellant's claims. Since there were no false statements made and since the statements were not *696 proved to be defamatory so as to be actionable under the law, it cannot be said that defamation of appellant's business exists. The record does not support a finding of actual malice in the case now before us, and in the absence of a showing of actual malice, it is within the power and duty of the court to rule as a matter of law that no malice existed.[5] The instant case first came before us in 1975 as an appeal from a summary judgment in respondent's favor.[6] We held that the summary judgment must be reversed because a jury question on malice existed. We also stated that proof of malice may be shown by "an improper motive such as a desire to do harm or that the defendant did not honestly believe his statements to be true or that the publication was excessive."[7] At the time that opinion was written, the claim made by appellant was defamation of character and the malice standard given was the proper standard to be used for defamation suits when the person being defamed was not a public official or a public figure. However, it is now clear that this case involves, not defamation of character, but defamation of a product of a business and the correct standard to be applied is that of actual malice. We, therefore, overrule that provision in the earlier case which indicates that actual malice would not be required under this particular set of facts. Appellant sought to prove malice by stating that respondent did not report information favorable to his position and by attempting to humiliate and discredit the inventor (not the appellant) of the Econojet with the ending comment, "And to top that the Utahn says he's close to a cure for cancer and the common cold." The evidence shows, however, that respondent reported a fairly balanced account of a controversial matter; that, in fact, he withheld several facts that were actually adverse to appellant's position as to the effectiveness of the Econo-jet needle. The fact that some expert opinions contradicted appellant's statements cannot support an inference that those statements were false. It merely points to the existence of a controversy upon which comment and criticism is proper.[8] Mr. Packer testified that the inventor of the Econo-jet told him the following: The foregoing testimony was uncontroverted and no objection was made to it at trial. It seems clear that not only did respondent report an accurate statement volunteered by the inventor, but he demonstrated his good faith when he elected to report the least damaging version of what could appear to be a rather overstated claim. No malice can be imputed to these remarks. Nothing in the way respondent verified or reported the story given him by appellant supports a claim of actual malice. Rather, it appears that respondent did as much as could reasonably be expected of any newsman to report accurately both sides of a controversial issue. *697 The issue that respondent's broadcast was the proximate cause of appellant's loss of sales has already been disposed of in the foregoing discussion. As to appellant's claim that it was prejudicial error to refuse admission of testimony on the issue of proximate cause, it need only be said here that the testimony complained of was later entered into the record when counsel rephrased the question. Appellant is not in a position to claim that prejudicial error was committed because its leading question was denied admission by the court, especially in light of the fact that it was later allowed into evidence when counsel properly framed the question. The ruling of the trial court in directing a verdict at the conclusion of the evidence was proper and the judgment is affirmed. Costs are awarded to respondent. CROCKETT, MAUGHAN, WILKINS and HALL, JJ., concur. [1] 50 Am.Jur.2d, Libel & Slander, Sec. 546; Diefenderfer v. Totman, 73 Wyo. 409, 280 P.2d 284 (1955); Restatement of Torts 2d, Sec. 624; Dooling v. Budget Publishing Co., 144 Mass. 258, 10 N.E. 809 (1887). [2] Restatement of Torts 2d, Sec. 634 b. [3] Ogden Bus Lines v. KSL, Inc., Utah, 551 P.2d 222, 225 (1976). [4] Id. [5] Id. [6] Direct Import Buyer's Association v. K.S.L., Inc., Utah, 538 P.2d 1040 (1975). [7] Id. at 1042. [8] Ogden Bus Lines, supra at 225.