Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-04-03040/USCOURTS-ca8-04-03040-0/pdf.json

Nature of Suit Code: 320
Nature of Suit: Assault, Libel, and Slander
Cause of Action: 

---

1

The Honorable Paul A. Magnuson, United States District Judge for the District

of Minnesota.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 04-3040

___________

Aviation Charter, Inc., *

*

Appellant, *

* Appeal from the United States

v. * District Court for the

* District of Minnesota.

Aviation Research Group/US; *

Joseph Moeggenberg, *

*

Appellees. *

___________

Submitted: March 17, 2005

Filed: July 21, 2005

___________

Before WOLLMAN, GIBSON, and COLLOTON, Circuit Judges.

___________

WOLLMAN, Circuit Judge.

Aviation Charter, Inc. (Aviation Charter), appeals from the district court’s1

grant of summary judgment to Aviation Research Group/US (ARGUS) on Aviation

Charter’s claims of defamation and alleged violations of the Minnesota Deceptive

Trade Practices Act (MDTPA), Minn. Stat. § 325D.44(8), and the Lanham Act, 15

U.S.C. § 1125(a)(2). We affirm. 

Appellate Case: 04-3040 Page: 1 Date Filed: 07/21/2005 Entry ID: 1930857
2

Because the only complete copy of ARGUS’s report on Aviation Charter in

the record on appeal is dated June 12, 2003, we refer to that version of the report. 

-2-

I.

ARGUS publishes and sells safety ratings of air charter service providers. It

bases its ratings on a methodology called the Charter Evaluation and Qualifications

(CHEQ) system, which has “three major components: Historical Safety Ratings,

Current Aircraft and Pilot Data, and On-Site Safety Audits.” June 12, 2003, CHEQ

Report on Aviation Charter (CHEQ Report) at 2.2

 ARGUS maintains that it: 

. . . conducts in-depth research into multiple public databases to uncover

accidents, incidents, enforcement actions, and certification data relating

to the operator. Records that are discovered are assigned a score based

on the official cause, violation, or other data on record. Older records

have less impact on the score and are omitted after ten years. The total

of all found records results in a Historical Safety Record score, with the

higher score reflecting a greater number of negative events.

Id. Carriers are grouped into four classes of operation based on the number of aircraft

they operate. Id. ARGUS assigns carriers one of four ratings: Does Not Qualify

(DNQ), Silver, Gold, and Platinum. Id. The Silver rating is assigned to “[t]hose

operators with CHEQ scores within one standard deviation of the median score for

their class of operation.” Id. The DNQ rating is the lowest possible rating.

ARGUS provides its rating and supporting documentation in a written report.

Each report contains a disclaimer providing, in relevant part, that:

The data contained in this report has been obtained from the U.S.

Federal Aviation Administration and the National Transportation Safety

Board under the Freedom of Information Act, as well as through primary

research techniques. The data contained in this report is of an advisory

nature only. Although significant effort has been made to verify that the

data is true and correct, [ARGUS] does not warrant that this data is

Appellate Case: 04-3040 Page: 2 Date Filed: 07/21/2005 Entry ID: 1930857
-3-

complete or without errors. . . . [ARGUS] is not the official source of

this data, so users are encouraged to verify the data through official

sources prior to drawing any conclusions or basing decisions on this

data. 

 

Id.

 

 In 2001, ARGUS assigned a DNQ rating to Aviation Charter. The following

year, Senator Paul Wellstone and seven others died in an Aviation Charter crash (the

Wellstone crash). Following the Wellstone crash, the Minneapolis Star Tribune

published an article entitled “Wellstone charter firm got poor safety evaluation.” The

Star Tribune article referred to ARGUS’s report on Aviation Charter and quoted

ARGUS’s president, Joe Moeggenberg. 

The article also contained a section entitled “Company’s response.” That

section quoted Aviation Charter’s owners, Roger and Shirley Wikner, who

maintained that ARGUS’s report “contained inaccuracies about Aviation Charter’s

fleet of aircraft.” The Wikners also noted in the article that Hynes and Associates,

Inc. (Hynes), an aviation auditing firm, had recently conducted a positive audit of

Aviation Charter. The article quoted Hynes’s safety auditor as being “very

impressed” with Aviation Charter’s management and operations and mentioned that

Hynes had recently sent a letter to the Wikners stating that “you and your staff have

been, and still are, providing safe and high-quality air transportation services to the

public.”

The Star Tribune article reported that Richard Conry, the captain of the plane

lost in the Wellstone crash, “had a felony fraud conviction on his record that Aviation

Charter said it did not know about,” and that Conry had “exaggerated his flying

experience when he applied to Aviation Charter.” The article noted that “[a]viation

experts have speculated that Conry and Michael Guess, his relatively inexperienced

Appellate Case: 04-3040 Page: 3 Date Filed: 07/21/2005 Entry ID: 1930857
-4-

co-pilot, may have lost control of the twin turboprop Beechcraft King Air A100 by

flying too slowly in their approach to Eveleth-Virginia Municipal Airport.”

After the Star Tribune article was published, Aviation Charter contacted

ARGUS and inquired about the basis of its rating. Aviation Charter concluded that

ARGUS’s rating system was fundamentally flawed and, when ARGUS refused to

retract its rating, Aviation Charter initiated this lawsuit. On ARGUS’s motion for

summary judgment, the district court concluded that Aviation Charter could not

demonstrate that ARGUS’s statements were published with actual malice and that the

statements were not actionable under the MDTPA or the Lanham Act. Aviation

Charter appealed.

II.

We review de novo the district court’s grant of summary judgment. Tolen v.

Ashcroft, 377 F.3d 879, 882 (8th Cir. 2004). Summary judgment is proper if there

are no disputed issues of material fact and the moving party is entitled to judgment

as a matter of law. Fed. R. Civ. P. 56(c); Employers Mut. Cas. Co. v. Wendland, 351

F.3d 890, 893 (8th Cir. 2003). We view the evidence and the inferences that may

reasonably be drawn from the evidence in the light most favorable to the nonmoving

party. Enter. Bank v. Magna Bank, 92 F.3d 743, 747 (8th Cir. 1996). We review the

district court’s interpretation of Minnesota law de novo. Toney v. WCCO Television,

Midwest Cable and Satellite, Inc., 85 F.3d 383, 386 (8th Cir. 1996).

A.

A statement is defamatory under Minnesota law if it is communicated to a third

party, is false, and tends to harm the plaintiff’s reputation in the community. Graning

v. Sherburne County, 172 F.3d 611, 617 (8th Cir. 1999) (citing Stuempges v. Parke,

Davis & Co., 297 N.W.2d 252, 255 (Minn. 1980)). It is well recognized in Minnesota

that the First Amendment absolutely protects opinion that lacks “a provably false

statement of fact.” McClure v. American Family Mut. Ins. Co., 223 F.3d 845, 853

Appellate Case: 04-3040 Page: 4 Date Filed: 07/21/2005 Entry ID: 1930857
-5-

(8th Cir. 2000) (quoting Hunter v. Hartman, 545 N.W.2d 699, 706 (Minn. Ct. App.

1996)). Statements about matters of public concern that are not capable of being

proven true or false and statements that reasonably cannot be interpreted as stating

facts are protected from defamation actions by the First Amendment. Fox Sports Net

North, L.L.C. v. Minnesota Twins Partnership, 319 F.3d 329, 336-37 (8th Cir. 2003)

(citing McGrath v. TCF Bank Sav., FSB, 502 N.W.2d 801, 808 (Minn. Ct. App.

1993)). In analyzing a defamation claim, we must consider the context within which

the statement was made. Id. at 337 (citing Hunt v. Univ. of Minnesota, 465 N.W.2d

88, 94 (Minn. Ct. App. 1991)). Cf. Schlieman v. Gannett Minnesota Broadcasting,

Inc., 637 N.W.2d 297, 304 (Minn. Ct. App. 2001) (“Context is critical to meaning

because a false statement that is defamatory on its face may not be defamatory when

read in context.” (citation omitted)); Jadwin v. Minneapolis Star and Tribune Co., 390

N.W.2d 437, 443 (Minn. Ct. App. 1986).

Aviation Charter challenges ARGUS’s adverse safety rating and seven

statements in the Star Tribune article:

1. More than a year before the [Wellstone crash], a national research

firm was warning its customers about safety concerns it had with

[Aviation Charter].

2. [ARGUS], which sells data and analysis on charter firms to

corporations and other organizations, in 2001 gave Aviation Charter a

“Does Not Qualify” or “DNQ” rating, the lowest of the company’s four

safety ratings.

3. Among the 875 air charter firms across the country that have been

rated by [ARGUS], 66, or about 8 percent, currently have the DNQ

rating.

4. The DNQ rating warns clients that Aviation Charter does not meet

the firm’s safety standards. In an interview, [Moeggenberg] said his

Appellate Case: 04-3040 Page: 5 Date Filed: 07/21/2005 Entry ID: 1930857
3

Although the district court focused more narrowly on “ARGUS’s safety rating

of Aviation Charter,” D. Ct. Order of July 10, 2004, at 8, that rating only has

meaning relative to the ratings assigned to other carriers in the same class of

operation as Aviation Charter. 

-6-

firm’s 77-page report on Aviation Charter shows “a history of problems”

including a fatal crash in 1977.

5. Of the nine Minnesota charter operators rated by [ARGUS] eight

received a “Silver,” or acceptable, designation. Aviation Charter

received the only Does Not Qualify rating.

6. The [ARGUS] rating system also takes note of FAA enforcement

actions. Aviation Charter, its affiliated companies, pilots and planes

drew 15 enforcement actions dating to 1991. 

7. [G]iven the size of company—24 planes for Aviation

Charter—“that’s a lot [of enforcement actions],” Moeggenberg said.

We begin by parsing the seven allegedly defamatory statements. With three

exceptions—the “report on Aviation Charter shows ‘a history of problems’”;

“Aviation Charter, its affiliated companies, pilots and planes drew 15 enforcement

actions dating to 1991”; and Aviation Charter had “a lot [of enforcement

actions]”—the excerpts from the Star Tribune article are wholly derivative of the

uncontested fact that ARGUS assigned Aviation Charter an unfavorable safety rating.

Accordingly, the bulk of Aviation Charter’s defamation allegations arising from the

Star Tribune article are subsumed by Aviation Charter’s challenge to ARGUS’s

rating. That rating can be summarized by the comparison, implicit in ARGUS’s

rating, that “Aviation Charter, relative to other carriers of its size, has an unfavorable

safety record.”3

 If this comparison is not defamatory then none of the derivative

statements in the Star Tribune article is defamatory.

Appellate Case: 04-3040 Page: 6 Date Filed: 07/21/2005 Entry ID: 1930857
4

Although it is unclear whether the term “enforcement actions” originated with

ARGUS or was construed by the Star Tribune reporter, we assume for purposes of

our analysis that the term came from ARGUS.

5

The one exception stems from an August 18, 1994, violation. See Appellees’

Appendix at 61. We are unable to determine from our reading of the Enforcement

Information System (EIS) details pertaining to this violation whether the FAA action

was an administrative action or a legal enforcement action. Such a determination is

not material to our analysis, however, because it is clear that ARGUS incorrectly

-7-

1.

We turn first to the statements not derivative of ARGUS’s rating. The only

interpretive analysis we need apply to Moeggenberg’s statement that the report on

Aviation Charter showed a history of problems is to determine whether more than one

past event cited in ARGUS’s report could fairly be characterized as a problem.

ARGUS’s report referred to the following incidents involving Aviation Charter

aircraft that occurred prior to the Wellstone crash: (1) a 1997 crash that killed two and

injured one; (2) a 1995 unauthorized flight by an intoxicated student pilot; and (3)

several in-flight emergencies resulting from equipment malfunction. We believe that

each of these concerns could fairly be characterized as a problem. Accordingly,

Moeggenberg’s contention that Aviation Charter had a history of problems is not a

false statement. 

The Star Tribune article asserted that ARGUS’s report indicated that Aviation

Charter drew fifteen Federal Aviation Administration (FAA) enforcement actions.4

 Aviation Charter contends that this statement is false because the details cited from

the FAA’s Enforcement Information System (EIS) refer to administrative actions, not

enforcement actions. The FAA makes a clear distinction between “legal enforcement

actions” and “administration actions,” see 14 C.F.R. § 13.11 (2005), and it is evident

from ARGUS’s report that, with one exception, the EIS details fell into the latter

category. See Appellees’ Appendix at 58-71 (containing EIS details that refer to

administrative actions, letters of correction, and warning notices).5

 Accordingly, it

Appellate Case: 04-3040 Page: 7 Date Filed: 07/21/2005 Entry ID: 1930857
characterized a substantial number of administrative actions as enforcement actions.

6

Aviation Charter also contends that ARGUS’s reference to fifteen actions is

numerically erroneous. Aviation Charter cites as evidence an excerpt from a February

27, 2003, copy of ARGUS’s report, which indicates that Aviation Charter had

received only eleven EIS notices. Because neither party has submitted a copy of the

report that was printed contemporaneous with the Star Tribune article, we are unable

to determine from the record the number of EIS notices that Aviation Charter had

received at the time that the article was written. It is sufficient for our purposes that

ARGUS incorrectly characterized a number of administrative actions as enforcement

actions.

-8-

was technically incorrect for ARGUS to characterize the EIS details as enforcement

actions. Nonetheless, the statement in context was not defamatory. The Star Tribune

article, in the sentence immediately following the improper characterization, noted

that “[m]ost [of the FAA violations] were minor or administrative matters and none

resulted in a fine.” The technical misuse of the term “enforcement action” was thus

cured by the subsequent description of the notices as administrative matters.

Moreover, any potential harm caused by the improper characterization was

overshadowed by at least three other eye-catching observations highlighted in the

Star Tribune article: (1) the pilot of the aircraft that crashed apparently had a felony

fraud conviction and had misrepresented his experience; (2) the crash may have been

caused by a lack of experience by the pilot and co-pilot; and (3) according to

ARGUS, Aviation Charter had a poor safety record relative to other carriers of its size

(which, as we discuss below, was not defamatory). In light of the context in which

the statement was made, we conclude as a matter of law that Moeggenberg’s use of

the term “enforcement actions” could not have tended to harm Aviation Charter’s

reputation in the community.6

 We reach the same conclusion as to Moeggenberg’s

comment that Aviation Charter had “a lot” of enforcement actions for a company of

its size.

Appellate Case: 04-3040 Page: 8 Date Filed: 07/21/2005 Entry ID: 1930857
-9-

2.

We have characterized the balance of Aviation Charter’s defamation claim as

derivative of ARGUS’s comparison that “Aviation Charter, relative to other carriers

of its size, has an unfavorable safety record.” We must examine whether this

comparison is “sufficiently factual to be susceptible of being proved true or false.”

Milkovich v. Lorain Journal Co., 497 U.S. 1, 21 (1990). If ARGUS had offered a

wholly subjective basis for its conclusion, or even no basis whatsoever, then the

comparison would likely have lacked objectively verifiable criteria. ARGUS,

however, asserted that its comparative rating was derived from “multiple public

databases to uncover accidents, incidents, enforcement actions, and certification data

relating to the operator.” CHEQ Report at 2. Nonetheless, although ARGUS’s

comparison relies in part on objectively verifiable data, the interpretation of those

data was ultimately a subjective assessment, not an objectively verifiable fact.

ARGUS’s description of its process illustrates the subjective component of its

assessment:

[Incidents] are rated on a scale of 1-10. ARGUS has trained its analysts

to follow general guidelines for the type of incident and severity of the

action. The analysts then make independent judgments based on the

information in the database regarding the report. They review the facts

in the documents and can “hyper link” to the specific regulation that was

violated. If they believe that a drastic variation from the computer

assigned score is warranted, the three analysts can caucus and discuss

the incident and draw on outside scores if necessary. The individual

“scores” for each incident are then weighted so that the scores in the

most recent 36 months are more significant than those that occurred

more than three years ago. The weighted scores are added together and

compared to like-sized carriers.

ARGUS Brief at 11-12. ARGUS chose which underlying data to prioritize,

performed a subjective review of those data, and defined “safety” relative to its own

methodology. 

Appellate Case: 04-3040 Page: 9 Date Filed: 07/21/2005 Entry ID: 1930857
-10-

In Milkovich, the seminal Supreme Court precedent on the analysis of opinion

under defamation law, the Court considered a lawsuit brought by a former high

school wrestling coach against a newspaper and reporter stemming from a column in

the newspaper that implied that the coach had lied under oath in a judicial proceeding.

497 U.S. at 3. Although the Court declined to establish “an additional separate

constitutional privilege for ‘opinion,’” it observed that the dispositive question was

“whether a reasonable factfinder could conclude that the statements in the

[newspaper] column imply an assertion that petitioner Milkovich perjured himself in

a judicial proceeding.” Id. at 21. The Court noted that “the connotation that

[Milkovich] committed perjury is sufficiently factual to be susceptible of being

proved true or false.” Id. It observed that “[u]nlike a subjective assertion the averred

defamatory language is an articulation of an objectively verifiable event.” Id.

(quoting Scott v. News-Herald, 496 N.E.2d 699, 707 (Ohio 1986)).

Unlike the reporter’s assertion in Milkovich, ARGUS’s interpretation of the

public database information available on Aviation Charter is not “sufficiently factual

to be susceptible of being proved true or false.” Id. It is a subjective interpretation

of multiple objective data points leading to a subjective conclusion about aviation

safety. Cf. Haynes v. Alfred A. Knopf, Inc., 8 F.3d 1222, 1227 (7th Cir. 1993) (“A

statement of fact is not shielded from an action for defamation by being prefaced with

the words ‘in my opinion,’ but if it is plain that the speaker is expressing a subjective

view, an interpretation, a theory, conjecture, or surmise, rather than claiming to be in

possession of objectively verifiable facts, the statement is not actionable.”). Because

ARGUS’s comparative rating is not “a provably false statement of fact,” McClure,

223 F.3d at 853, Aviation Charter’s defamation claim fails with respect to that rating

and the derivative statements in the Star Tribune article.

 

Appellate Case: 04-3040 Page: 10 Date Filed: 07/21/2005 Entry ID: 1930857
-11-

B.

Aviation Charter asserts that ARGUS violated the Lanham Act because

ARGUS’s statements to the Star Tribune were made to advertise the fact that ARGUS

was in the business of rating carriers like Aviation Charter. The Lanham Act requires

that a false statement, in order to be actionable, must be made in commercial

advertising or promotion. See Group Health Plan, Inc. v. Philip Morris, Inc., 68 F.

Supp.2d 1064, 1069 (D. Minn. 1999). For a statement to constitute commercial

advertising or promotion, it must be made, inter alia, by a defendant who is in

commercial competition with the plaintiff. Id. The district court correctly found that

Aviation Charter’s Lanham Act action failed because ARGUS was not in commercial

competition with Aviation Charter. 

C.

The district court concluded that Aviation Charter’s MDTPA action, like its

Lanham Act action, failed because ARGUS was not in competition with Aviation

Charter. As ARGUS concedes, however, the district court erred in so holding

because the MDTPA provides that “a complainant need not prove competition

between the parties.” Minn. Stat. § 325D.44, subd. 2. 

The MDTPA provides that a person engages in a deceptive trade practice when,

inter alia, the person “disparages the goods, services, or business of another by false

or misleading representation of fact.” Id. at subd. 1 ¶ 8. As set forth above,

ARGUS’s statement that Aviation Charter had fifteen FAA enforcement actions was

false. Accordingly, that statement would violate the MDTPA if it disparaged

Aviation Charter. We conclude, however, that Aviation Charter cannot demonstrate

that the statement disparaged its business, given the full context of the Star Tribune

article. Cf., supra, part II(A)(2) (applying same analysis to Aviation Charter’s

defamation claim with respect to ARGUS’s statement that Aviation Charter had

fifteen FAA enforcement actions).

Appellate Case: 04-3040 Page: 11 Date Filed: 07/21/2005 Entry ID: 1930857
-12-

III.

The district court’s grant of summary judgment is affirmed.

______________________________

Appellate Case: 04-3040 Page: 12 Date Filed: 07/21/2005 Entry ID: 1930857