No. 12389 INTHE SUPREME COURT OF THE STATE OF MONTANA 1973

WADE V. LEWIS, 

### SR., and ELKHORN MINING COMPANY, a Montana Corporation, Plaintiff and Respondent,

READER'S DIGEST ASSOCIATION INC., a Corporationand theHEARST CORPORATION, a Corporation, Defendants and Petitioners.

ORIGINAL PROCEEDING: Counsel of Record: For Petitioners: Loble, Picotte, Loble, Pauly 6 Sternhagen, Helena,

Montana. Peter Pauly argued, Helena, Montana. Gough, Booth, Shanahan and Johnson, Helena, Montana. Ronald F. Waterman argued, Helena, Montana. ForRespondent: Bolkovatz, Romine and Bell, Helena, Montana. JohnF. Bellargued, Helena, Montana.

Submitted: May 29, 1973

Decided: 

### JUL

## 18

### 1973 Filed: 

### JUL181973PER CURIAM: This is an original declaratory judgment action filed 

### 1of the MonW&Rules of upon certification to this Court by the Hon. James F. Battin, the United States District Judge presiding in CivilAction No. 2033 in the United States District Court for the District of Montana, Butte Division, entitled "WadeV. Lewis, Sr. and Elkhorn Mining Company, a Montana corporation, Plaintiffs,vs. Reader's DigestAssociation, Inc., a corporation,and The Hearst Corporation,a corporation,Defendants." In that quit in federal court there is a controlling question of Montana law as to which there is a substantial ground for difference of opinion, adjudication of which by this Court will materially advance ultimate termination of the federal litigation. The question for determination,as stated by Judge 

### at tin in his Certificate of Facts and Issues is: "Ina libel action,doesMontana adopt the 'single' or 'multi' statepublication rule for purposes of determining the situs and time of the tort, where the defendants accomplish a multi-state circulation of their publication but other than such circulation have no contacts with this state"? The facts giving rise to this issue are set forth in Judge Battin's Certification of Facts and Issues, which we will summarize: Plaintiff Lewis is a resident of Boulder,Montana. Plaintiff Elkhorn Mining Company operates a "health" mine located

near the City of Boulder, Jefferson County,Montana. Themine is said to be a cure for sufferers of arthritis and other diseases. In theAugust 1969 issue of Good Housekeeping,a publication of defendant Hearst Corporation,an articlewas printed, entitled: "WhatYou Should Know About Arthritis Quacks1'.The article contained a paragraph reading: "Promotersof quack 'cures1have become unspeakably bold. In Boulder, Montana, there is an abandoned uraniummine whose glowing advertisements lure thousands each year to soak up radon, a radioactivegas in hopes of relieving their pain. TheAMA has called this type of treatment not only useless,but potentially dangerous. Nevertheless, when news accounts reported that the famous heart-transplantpioneer, Dr. Christian Barnard, had arthritis in his hands, themine owners actually sent him a brochure and invited him to take the cure!" The January 1970 issue of defendant Reader's Digest magazine printed a condensed version of the Good Housekeeping article. The third paragraph of thatversion was identical to theparagraph set forth above. The January 1970 issue of Reader's Digest was purchased by or delivered to nearly one-half of the families residing in Montana, and a substantial but unknown number of theAugust 1969 issue of Good Housekeeping was likewise so purchased or delivered. Contending they were libeled by publication and republication of the paragraph heretofore quoted,plaintiffs brought suit for $30,575.83, "direct,immediate and provable damages"; and for $200,000 punitive and exemplary damages. Both defendantHearst Corporation and defendantReader's DigestAssociation, Inc. are incorporated in Delaware and each has itsprincipal office in the State of New York. Neither corporation is qualified to do business inMontana nor has any office in this state. The only contactsdefendants have with Montana are through subscription and wholesale distribution of itsmagazines to individuals and local or independent national distributors inMontana. TheAugust 1969 issue of Good Housekeeping containing the alleged libelous paragraph was printed at Kokomo, Indiana. The January 1970 issue of ~eaderk Digest, sold or distributed inMontana,was printed at Dayton, Ohio. Defendants have filed motions in the federal court action to dismiss plaintiffs' libel action for lack of jurisdiction. The federal district court "isconvinced that defendants' jurisdictionalmotion will be disposed of only by the answer of the Montana Supreme Court to the question" certified to it in the instantproceeding. In certifying the question to this Court, the federaldistrict court stated thematter in this fashion: "Thequestion dealswith whether or not the defendants in this case are subject to the jurisdiction of [theMontana federal court] because 

## * * * The cause of action [is] 

## * * * onewhich arises out of, or results from the activities of the defendant within the forum

## * * *' Brecht v. RMK-BRJ, 24 St. Reptr. 761, 763 (Dist. of Mont., 1967); L. B. Reeder Contractors of Arizona v. Higgins Industries, Inc., 265 ~.2d 768 (9th Cir. 1959);Rule 4(e)

## , Federal Rules of Civil Procedure;and Rule 4B(1), Montana Rules of Civil Procedure. If Montana followswhat is defined below as the multi-publication rule, the cause of action in this case arose upon the arrival and sale of the defendants' periodicals in Montana. If,on the other hand, Montana followswhat is defined below as the single publication rule, one cause of action arose upon the firstpublication or printing of the articles, and no other cause of action can arise out of the publication of the articles." Whether Montana is to follow the singlepublication or multi-publication rule is one of first impression in this state. The United States District Court has set out a legal definition of the two rules: "SinglePublication: 'A singlepublication occurs in cases of multi-state circulation of periodicals where the cause of action for libel is absolutely complete at the time of the firstpublication; subsequent appearances or distribution of the periodicals are of no consequence whatsoever to the creation or existence of a cause of action but are only relevant in computing damages.' Insullv. New York, World Telegram Corporation, 273 F.2d 166, 171 (7thCir. 1959)

# ." "Multi-Publication: 'Themultiple publication rule is that each time a libelous article is brought to the attention of a third person a newpublication has occurred;

## * * * each publication is a separate actionable tort; and 

## * * * each time a 

## * * * magazine containing libelousmaterial is sold or distributed, a new publication has occurred and a fresh tort has been committed,which, defenses aside, is actionable.' HartmanJtv. Time, Inc., 166 F.2d 127, 132

(3rdCir. 1947). " The origin of the multi-publication rule is the common law. The King v. Carlisle, 1 Chitty 451, 18 Eng. Common Law Reports 248; The Duke of Brunswick v. Harmer, 14 Q.B. 185, 117 Eng. Rep. 75. This rule is the view of theAmerican Law Institute (Restatement,Torts, § 578,Comment b.) and there are several United States jurisdictions inwhich it is still the last word of the courts. Prosser,Law of Torts, 4th ed. p. 769, footnote 91, cites Staubv. Van Benthuysen, 36 La. Ann. 467; Renfro Drug Co. v. Lawson, 138 Texas 434, 160 S.W.2d 246; Louisville Press Co. v. ~e$bll~, 105 Ky. 365, 49 S.W. 15;Holden

v. American News Co., 52 F.Supp. 24,dismissed 144 F.2d 249; Hartmanv. American News Co., 69 F.Supp. 736,affirmed 171 F.2d 581. However,with the advent of mass printing and interstate circulation of newspapers, magazines and periodicals, etc., some courts became increasingly concerned with problems such as the multiplicity of actions and applioation of the statute of limitations to libel actions. See: Ogden 

### v, Association of United StatesArmy, 177 F.Supp. 498;Mattox v. News Syndicate Co., 176 F.2d 897, cert. den. 338 U.S. 858, 94 L,Ed. 525, 70 S.Ct.

The singlepublication rule,which originated in New York, as stated in 50Am Jur.2d,Libel and Slander, § 153: 

## " * * * evolved as a practical means of protecting the forum against multiplicity of suits and indefinite tolling of the statute of limitations,and where a publication has an impact inmore than one state,a question of conflict of laws arises as to whether and to what extent the 'multiplepublication'rule or the 'singlepublication' rule governs." Despite the numerical weight of authority following the singlepublication rule,we consider it unsound. Conceived

as a judge-made rule to serve the interests of judicial administrationand expediency, it nevertheless iswrong in principle and in practice creates far graver problems than it solves. The underlying purpose of libel laws is to furnish a

means of redress fordefamation. Every person is entitled to enjoy his reputationunimpaired by false and defamatory remarks. An action for libel or slander is based upon a violation of this right which exposes a person to hatred, contempt, ridicule, or obloquy, or which causes him to be shunned or avoided, or which has a tendency to injure him inhis occupation. Section 64-201 et seq., R.C.M. 1947; 50

### Am Jur 2d,Libel and Slander, S1. In a libel action the interest protected is that of reputation. Thus,before there canbe tort liability the defamation must have been communicated to someoneother than the person defamed. This element of communication is given the technical

name of "publication". Every sale or delivery of the defamatory article is a distinctpublication, causing injury to thedefamed person, and a separate basis for a cause of action. Prosser, Law of Torts, 8113; 1 Harper and James, The Law of Torts, 85.15. Where the publication has an impact in many states, as in the present case, involving nationally circulatedmagazines,

a question arises concerning which state law governs. Applying the usual conflict of laws rule governing torts, i.e. that the law of the place of injury controls,presents practical difficulties in actions involving a multi-state tort, since it is very possible the plaintiff was "injured"in several states. The singlepublication rule,however, does not solve this problem. Hartmann v. Time, 166 F.2d 127;Anno. 58 ALR2d 650. Generallyin cases of multi-state libel, the greatestharm to a person's reputation will occur in the state of domicile. To promote the underlying purpose of libel laws some courts have seen fit to apply the law of the plaintiff's domicile. This is a better rule than thatwhich would restrict the plaintiff to the place of printing. Dale System, Inc. V. Time, Inc., 116 F.Supp. 527; Fouts v. Fawcett Publications, 116 F.Supp. 535;Hazlitt v. Fawcett Publications, 116 F.Supp. 538. This rulehas the positive effect of restricting forum shopping by the plaintiff cited

as a problem with multi-publication rule. In addition, it would prevent thepublishing company from choosing as a place of printing a statewith favorable libel laws. Another problem often confronted by the courts when applying the multi-publication rule is that of an indefinite tolling of the statuteof limitations. This evolves if it can be said that every time the defamation is communicated to a third party

a separate cause of action arises. But a rule holding that the period of limitation begins to run from the time of the first printing may unduly leave the plaintiff unprotected. An unscrupulouspublishermight print a defamatory article about a Montanan and distributea few copies in New York; the plaintiff might well feel that the time and expense involved would not warrant the filing of an action; then after theperiod of limitation ends the publisher could flood Montana and the rest of the country with the article without fear of liability. See ~ominiak v, National Enquirer, 439 Pa. 222, 266 A.2d 626. The singlepublication rule has not solved this problem nor has it set a specific time for the statute of limitations to begin running. Rather, the courtshave set forthvarious holdings differing from state to state for the time the publication is said to begin. Anno. 42AIR3d 807.The single publication rule has been used in several states to setvenue and jurisdiction at the place of printing. If this rulewere adopted as the law in this state the plaintiff, a Montana corporation,conducting its business solely in this state,would be limited tomaintaining its suit in Kokomo, Indiana,or Dayton, Ohio, the jurisdictionwhere the magazines were printed. The expense of bringing such suit would effectively eliminate redress as a practicalmatter for a plaintiff residing in a distant state such as Montana. Defendants contend adoption of the multiple publication rulewould subject them to a multitude of suits in every state and this will have a "chilling effect" upon the FirstAmendment's freedom of the press. We have taken into account those considerations. We remain unconvinced that adoption of the multistate publication rule will inhibit the zeal with which national periodicals disseminate their ideas. We believe that any protection given the press under the FirstAmendment of the United States Constitution must be balanced against a citizen's right to protect his reputation and good name in the community in which he resides against printing and publication of false defamatory statements. Montana's new Constitution affirms this principle. Art. 11, Sec. 7, 1972Montana Constitution. Theprinciple of res judicata in conjunction with state and federal rules of civilprocedure requiring plaintiffs to include in one action all causes based onpublicationsmade by the defendant prior to the time of suit,perhaps offers the best method of resolving the problem of multiple suits. Much has been said in the briefs concerning the infringement upon freedom of the press if themulti-publication rule is adopted. Historically, the freepress amendment is construed to

mean freedom from three major types of restraint: censorship,licensing, and seditious libel,which is defamation of the government. Firstamerica Dev. Corp. v. Daytona Beach N.J. Corp, (Fla. 1966) 196 So.2d 97. The United States Supreme Court has repeatedly stated that freedom of speech and press does not permit the publication of libels. Chaplinsky

### v. New Hampshire, 315 U.S. 568, 62 S.Ct. 766, 86 L.ed 1031; Beauharnais v. Illinois, 343 U.S. 250, 72 S.Ct. 725, 96 L.ed 919, (reh.den. 343 U.S. 988, 72 S.Ct. 1070, 96 L.ed 1375);Rothv. United States, 354 U.S. 476, 77 S.Ct. 1304, 1 L ed 2d 1498, (reh. den. 355 U.S. 852, 78 S.Ct. 8, 2 Led 2d 60). Freedom of speech, expression, and press was intended to assure the unfettered interchange of ideas for the bringing about of political and social changesdesired by the people. Roth 

### v. United States, 354 U.S. 476, 77 S.Ct. 1304, 1 L ed 2d 1498. Itwas not designed to confer specialprivileges upon persons engaged in the publishing business. Barber v,Time, Inc., 159 S.W.2d 291, 348 Mo. 1199; Dupont Engineering Co. v. Nashville Banner Pub. Co. 13 F.2d 186. If we were to hold that a libel action could be brought only in the state in which these nationalmagazines were printed, the advantage of the press

over the public would be unconscionable. Defendants contend the reasoning supporting the multiple publication rule has been outdated by technological changes in the printing field. They contend modern typesetting machines and rapid steam printing presses havemade itpossible to reproduce a number of copies of a single publication far beyond any number within the realm of contemplation a century ago. Expanding a magazine to nationwide circulationmay be conducive to a true freepress. The widespread circulation of defendants'magazines suggests that their existence is predicatedupon a nationalmarket. But such a magazine cannot exercise that rightwithout observing corresponding responsibilities. Freedom of the press was never intended to permit a business, whose publication isprepared for a national audience, to be free from suit in all states but that of printing. Curtis Publishing Companyv. Golino, 383 F.2d 586. For these reasonswe adopt the multi-publication rule.IN THE SUPREME COURT OF THE STATE OF MONTANA

No. 12389

WADEV. LEWIS, SR.., and ELKHORN MINING COMPANY, a Montana Corporation, Plaintiff and Respondent,

# F

-' 

### .dd VS. READER'S DIGESTASSOCIATION INC., a Corporation and the HEARST CORPORATION, ,I &*A FW4C d CbEWlgOFSUPRLU~IE: CQ&~ Defendants and Petitioners. S~TE OF~o&t~sur

ORDERAMENDING OPINION

PER CURIAM: IT IS ORDERED that the above-captioned opinion be amended in the followingmanner: In the firstparagraph on page 2, the second line which reads "pursuant to the provisions of Rule 1 of the Montana Rules of Appellate Civil Procedure" should be changed to read "pursuantto the provisions of Rule 1of the Rules 

### of the Montana Supreme Court". DATED this 24th day of July, 1973.