Case Name: In the Matter of Attorneys Fees in: Grant E. Storms, plaintiff, v. Action Wisconsin Inc. and Christopher Ott, defendants; James R. Donohoo, Appellant, v. Action Wisconsin, Inc. and Christopher Ott, Respondents-Petitioners
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 2008-06-05
Citations: 309 Wis. 2d 704
Docket Number: No. 2006AP396
Parties: In the Matter of Attorneys Fees in: Grant E. Storms, plaintiff, v. Action Wisconsin Inc. and Christopher Ott, defendants. James R. Donohoo, Appellant, v. Action Wisconsin, Inc. and Christopher Ott, Respondents-Petitioners.
Judges: Roggensack, J., dissents.
Reporter: Wisconsin Reports Second
Volume: 309
Pages: 704–786

Head Matter:
In the Matter of Attorneys Fees in: Grant E. Storms, plaintiff, v. Action Wisconsin Inc. and Christopher Ott, defendants. James R. Donohoo, Appellant, v. Action Wisconsin, Inc. and Christopher Ott, Respondents-Petitioners.
Supreme Court
No. 2006AP396.
Oral argument January 15, 2008.
—Decided June 5, 2008.
2008 WI 56
(Also reported in 750 N.W.2d 739.)
Roggensack, J., dissents.
PROSSER and ZiegleR, JJ., join.
For the respondents-petitioners there were briefs by Lester A. Pines, Tamara B. Packard, and Cullen Weston Pines & Bach LLP, Madison, and oral argument by Tamara B. Packard and Lester A. Pines.
For the appellant there was a brief by James R. Donohoo and James Donohoo Law Office, Milwaukee, and oral argument by James R. Donohoo.
Motion for reconsideration dismissed July 30, 2008.

Opinion:
ANN WALSH BRADLEY, J.
¶ 1. The petitioners, Action Wisconsin, Inc., and Christopher Ott, seek review of an unpublished court of appeals decision reversing a circuit court judgment that required attorney James R. Donohoo to pay costs and attorney fees for filing and maintaining a defamation lawsuit that was frivolous. The defamation lawsuit was commenced in response to a press release issued by Action Wisconsin.
¶ 2. Two statements in the press release formed the basis of the defamation lawsuit. One statement indicated that at an "International Conference on Homo-Fascism" a "speaker made sounds like gunfire as if he were shooting gay people . . . ." The other statement referenced the presence of a state senator at the conference and noted that the senate leadership would be appalled to find a colleague "in the audience for a speech apparently advocating the murder of his own constituents."
¶ 3. Action Wisconsin contends that the court of appeals should be reversed for two reasons: First, the court of appeals incorrectly concluded that the circuit court erred in determining that the lawsuit was frivolous. Second, the court of appeals committed error in sua sponte reviewing the circuit court's summary judgment decision on the merits of the case when that decision had not been appealed.
¶ 4. We conclude that the circuit court did not err in determining that the defamation suit was frivolously commenced and continued under Wis. Stat. § 802.05 and 814.025 (2003-04). It determined that Donohoo had failed to conduct a reasonable inquiry before commencing the lawsuit and that there was no basis in fact or law that would support Donohoo's claim that Action Wisconsin's statements were made with actual malice. In this regard, we conclude that the court of appeals committed error when it reversed the circuit court's determinations.
¶ 5. However, we conclude that the court of appeals did not commit error in addressing the circuit court's summary judgment decision. The court of appeals did not sua sponte reverse a grant of summary judgment that was never appealed. Rather, it addressed the summary judgment decision only to the extent that it was necessary to address the substantive issues of the case in order to review the circuit court's determinations of frivolousness.
¶ 6. Accordingly, because we conclude the circuit court did not err in determining that the defamation suit was commenced and continued frivolously, we reverse the court of appeals.
I-H
¶ 7. The basic facts of this case are not complex and not in dispute. They are essentially set forth in the audio recording and transcript of a speech of the plaintiff, Grant E. Storms, and in the press release of Action Wisconsin describing the speech.
¶ 8. Storms is the pastor of a church in Louisiana. He hosts a talk show on a New Orleans radio station, and he has appeared on radio shows hosted by others in Louisiana, on a nationally broadcast radio show, and on Internet radio shows. Storms considers himself a Christian activist, and he has engaged in protest activities "against the homosexual agenda."
¶ 9. In October 2003, Wisconsin Christians United hosted a conference in Milwaukee titled "International Conference on Homo-Fascism." Storms was invited to speak at the conference. During his speech, Storms described his efforts to curb the "homosexual movement," and admonished his audience to take an active role in such an effort.
¶ 10. During the speech Storms drew an analogy between the homosexual movement and the Philistine army in the story of Jonathan and his armor bearer. Storms described Jonathan, an Israelite, leaving his army's encampment without permission from Saul, the leader of the Israelites, and confronting the Philistines with his armor bearer.
¶ 11. Several passages from Storms' speech are of particular importance here. He warned his audience of the strength of the homosexual movement, in part based on its unity.
There's an uncanny unity in solidarity amongst the homosexuals. . They're solidified. They're single minded. Don't underestimate them.
He further warned of the movement's contempt and hatred.
They are a scornful people. They hate us. They have contempt for us... . We need to understand that. Don't think you're going to tiptoe out there and say hey, repent. They will want to kill you.
¶ 12. In describing the conflict between his movement and the homosexual movement, Storms indicated that one side or the other must prevail, and that coexistence was not possible:
They are a stubborn people and they don't care. They want to trample us.... Here it is. It's us or them. There's no in between. There's no having this peaceful co-existence. They have to eliminate us and the Word of God if they want to succeed. It's almost like communism and capitalism. It's going to be one or the other. You can't have both. You can't peacefully co-exist.
Storms stated that the alternative to succeeding was being crushed, silenced, killed, or imprisoned.
Either we're going to succeed or they're going to succeed. Whether it's going to be a homosexual, anti-God nation, or it's going to be a nation that stands for God and says that that thing is sin. It can't be both. Won't be both. Something's going to happen. Either they'll crush us and have laws and silence us and kill the ones that won't be silenced or imprison the ones that won't be silent, or the church or the Lord Jesus Christ will rise up and say this is a Christian nation. This is the way it will remain. Go back in the closet.
¶ 13. In drawing the analogy between the story of Jonathán and his armor bearer and the subject matter of the conference, Storms described the homosexual movement as a Philistine army that wants to eliminate those like Storms and his audience. He compared contemporary Christians to the Israelites resting under a pomegranate tree, rather than battling the Philistine army.
There is a Philistine Army out there, it's called the homosexual movement. Whether you can see it or not, understand it or not, they want to eliminate us. This is no time to be under a pomegranate tree.... They [the Israelites] were a bunch of Tiny Tims tiptoeing through the tulips. And that is the church today unfortunately. When we're supposed to be out to battle, when we're supposed to be battling the enemy, we're under some stinking pomegranate tree shaking in our boots. That's where the church is. The church is hiding. The Christians are hiding.
^Storms told his audience that he no longer listens to such Christians: "I just don't listen to Christians anymore. They will try to talk you out of going and beating up the Philistine Army on your own."
¶ 14. Storms lamented the lack of progress for his cause in legislatures and in courts. He indicated that for 20 years efforts have been made to influence bad legislators and convince wicked judges, but that now it was time to begin "taking it to the streets."
You know I'm sick of appealing all this stuff. Why do good people have to go to these stinking wicked judges and beg them to please do the right thing. No forget the appeals. Forget the petition. We've been petitioning for 20 years. Signing petitions for 20 years, making phone calls for 20 years. We've been begging bad legislators and bad judges to try to do the good thing. Enough is enough. My friend. Just start taking it to the streets.
¶ 15. In telling the story of Jonathan and the armor bearer, Storms related the part of the story in which Jonathan kills the Philistines. Storms then shouted "Let's go through the drive-thru at McDonald's" and "get the rest."
Wheeew! Come on. Let's go. God has delivered them all into our hands. Hallelujah! Boom, boom, boom, boom, boom. There's twenty. Whew. Ca-Ching. Yes. Glory. Glory to God. Let's go through the drive-thru at McDonald's and come back and get the rest.
¶ 16. Action Wisconsin responded to the speech. It describes itself as an organization dedicated to advancing and protecting the civil rights of lesbian, gay, bisexual and transgender people. At all times relevant to this case, Christopher Ott was the executive director of Action Wisconsin and Timothy O'Brien was president of the Action Wisconsin board of directors. As executive director, Ott reported directly to O'Brien, and as president, O'Brien was an authorized spokesperson for Action Wisconsin.
¶ 17. Action Wisconsin learned that a state senator had attended the conference and Storms' speech. Because the senator's attendance concerned O'Brien, he obtained audio recordings of the conference speakers, which were available for sale on the Wisconsin Christians United website.
¶ 18. O'Brien listened to all of the speeches from the conference, and he listened to Storms' speech in its entirety. In an affidavit, O'Brien stated that he was shocked by the violent imagery and "derogatory and false statements about gay and lesbian people and the gay and lesbian community" in Storms' speech. He explained that he was disturbed in particular by "Storms' claims that gay and lesbian people wanted to kill members of Storms' audience, and what I understood to be corresponding suggestions that members of his audience kill gay and lesbian people." O'Brien thought it "obvious that [Storms] was drawing a parallel between the Philistines who were slain, literally, by the Israelites, and gay and lesbian people, who, completing the analogy, should be literally killed . . ."
¶ 19. At O'Brien's request, Ott and Joshua Freker, another member of Action Wisconsin's staff, listened to portions of the speeches from the conference. They agreed with O'Brien's interpretation of Storms' speech.
¶ 20. Action Wisconsin issued a press release in response to the speech. Two statements from the press release are the subject of this lawsuit. First, referring to Storms, the press release stated that a "speaker made sounds like gunfire as if he were shooting gay people, saying, 'God has delivered them into our hands . . . Boom boom boom . . . there's twenty! Ca-ching! Glory, glory to God.'" Second, in reference to the state senator in attendance, the press release stated that "[w]e trust that Senator Panzer will be as appalled as we were to find one of her colleagues in the audience for a speech apparently advocating the murder of his own constituents." It then quoted several passages from Storms' and others' conference speeches.
¶ 21. Attorney Donohoo, acting on Storms' behalf, sent a letter to O'Brien stating that the two statements in the press release were false and defamatory. The letter requested that Action Wisconsin retract the statements and remove the press release from its website. When Action Wisconsin did not respond, Donohoo sent a second letter stating that Storms had authorized him to file a complaint for defamation.
¶ 22. Receiving no response to the second letter, Donohoo filed such a complaint on behalf of Storms against Action Wisconsin and Ott. Prior to filing the suit, Donohoo listened to and analyzed Storms' speech. He concluded that "no person listening to the speech could have reasonably interpreted [the] speech to mean that [Storms] was re-enacting the shooting of gay people, or that [Storms] was advocating the murder of gay people." Sometime after filing suit, Donohoo had two of his law clerks and two other people review the speech. These people told Donohoo that they did not believe someone listening to the speech could conclude that Storms was advocating the murder of gay people.
¶ 23. Action Wisconsin answered the complaint and filed a motion for costs and attorney fees pursuant to Wis. Stat. § 802.05 and 814.025. At the same time, counsel for Action Wisconsin sent a letter to Donohoo outlining why it thought the lawsuit was frivolous. The letter set forth the legal standards for frivolousness and defamation. It explained that Storms would have to show actual malice and advised that there was no reasonable basis in law or fact to support such a claim. Additionally, the letter indicated that it appeared that Donohoo failed to engage in a reasonable inquiry before filing the lawsuit.
¶ 24. Action Wisconsin took Storms' deposition. Shortly after, its counsel again wrote to Donohoo outlining why it thought the lawsuit was frivolous. He urged Donohoo to dismiss the case and in exchange "we will not seek sanctions for this frivolous lawsuit." Beyond the reasons offered in Action Wisconsin's first letter, the second letter set forth in detail the parts of the speech that supported its interpretation.
¶ 25. Donohoo did not answer either of the letters. Counsel for Action Wisconsin filed a motion for summary judgment, after which Donohoo conducted discovery. Donohoo then filed a motion for summary judgment on Storms' behalf. The circuit court determined that Storms had failed to show that Action Wisconsin's statements were false, stating that Action Wisconsin's interpretation of the speech was "not unreasonable" and that Storms' interpretation was "strained and inconsistent with the speech as a whole." It further determined that Storms had failed to present evidence that Action Wisconsin had acted with actual malice.
¶ 26. Accordingly, the circuit court granted Action Wisconsin's motion for summary judgment, denied Storms' motion for summary judgment, and dismissed the case. That decision was never appealed.
¶ 27. After the summary judgment decision, Donohoo filed a motion for reconsideration of the summary judgment decision on behalf of Storms. Action Wisconsin submitted supporting materials for its motion for costs and fees, asserting that the lawsuit was frivolous. The circuit court denied the motion for reconsideration, stating that the motion "essentially rear- gues the motions for summary judgment" and "misstates the decision" of the court.
¶ 28. The court granted Action Wisconsin's motion for costs and attorney fees pursuant to § 802.05 and 814.025. It determined that prior to the filing of the lawsuit, Donohoo knew or should have known that neither the facts nor the law supported the claim of actual malice, which would have to be shown by clear and convincing evidence. It concluded that Donohoo had failed to conduct a reasonable inquiry into the claim before filing the lawsuit.
¶ 29. In addition, the circuit court stated that Donohoo continued the lawsuit even though he knew or should have known that the claim was brought "without any reasonable basis in law or equity." The court explained that Action Wisconsin had put Donohoo on notice that there was no support for the assertion that Action Wisconsin acted with actual malice. However, Donohoo ignored the warnings, and failed to explain how he proposed to show actual malice. The court determined that the failure to conduct an adequate investigation and the failure to respond to Action Wisconsin's letters detailing the law forced Action Wisconsin "to expend considerable resources in defense." The circuit court concluded that Donohoo "merely dropped his paper 'into the hopper' of the legal system and required this Court and defendants to undertake the necessary factual and legal investigation."
¶ 30. Donohoo appealed. The majority of the court of appeals determined that Donohoo engaged in a reasonable inquiry into the facts and the law and that there were disputed issues of material fact regarding whether there was actual malice. Donohoo v. Action Wisconsin, Inc., No. 2006AP396, unpublished slip op. and order, ¶ 31-32 (Wis. Ct. App. May 30, 2007). It therefore concluded that the circuit court erred in determining that Donohoo commenced and continued a frivolous action under § 802.05 and 814.025 and reversed. Id., ¶ 33. Action Wisconsin petitioned for review.
¶ 31. In this case we address a circuit courts determinations that an attorney commenced and continued a frivolous action under Wis. Stat. § 802.05 and 814.025. Under section 802.05(1)(a), an attorney's signature on a pleading, motion or other paper certifies the attorney's belief, "formed after reasonable inquiry, the pleading, motion or other paper is well-grounded in fact and is warranted by existing law or a good faith argument for the extension, modification or reversed of existing law."
¶ 32. Section 814.025(3)(b) provides that a circuit court may determine that an attorney commences or continues a frivolous action if the attorney "knew, or should have known, that the action . was without any reasonable basis in law or equity and could not be supported by a good faith argument for an extension, modification or reversal of existing law."
¶ 33. This court has articulated two standards of review for circuit court determinations of frivolousness, one regarding commencing frivolous actions and one regarding continuing frivolous actions.
¶ 34. This court has determined that "[w]hen made pursuant to Wis. Stat. § 802.05, our review of a circuit court's decision that an action was commenced frivolously is deferential." Jandrt v. Jerome Foods, Inc., 227 Wis. 2d 531, 548, 597 N.W.2d 744 (1999). According to this deferential standard, the nature and extent of investigation undertaken prior to filing a suit are issues of fact, and a circuit court's determinations on such questions will be upheld unless clearly erroneous. Id. The determination of how much investigation should have been done is a question that is within the circuit court's discretion. Id. A discretionary decision by the circuit court will be sustained where the court "examined the relevant facts, applied a proper standard of law and, using a demonstrated rational process, reached a conclusion that a reasonable judge could reach." Id. at 549 (citing Loy v. Bunderson, 107 Wis. 2d 400, 414-15, 320 N.W.2d 175 (1982)).
¶ 35. We have explained that reviewing a circuit court's determination under § 814.025 that an action was continued frivolously involves a mixed question of law and fact. Id. at 562. We stated that what an indi vidual or attorney knew or should have known is a question of fact that will be sustained unless clearly erroneous. Id. at 563. Whether the circuit court's determinations of fact support a conclusion that a lawsuit was continued frivolously, however, is a question of law that this court reviews independently of the determinations rendered by the circuit court or court of appeals. Id.
HH I — I HH
¶ 36. This case is about a circuit court's determinations that a lawsuit was frivolously commenced and continued. In essence, it is about actual malice— whether the circuit court erroneously exercised its discretion in determining that there was no basis in fact or law that would support Donohoo's claim that Action Wisconsin's statements were made with actual malice.
¶ 37. Because the underlying question concerns the defamation lawsuit filed by Donohoo on behalf of Storms we turn initially to an examination of defamation law. In a common law defamation cause of action that does not involve a public figure, there are only three elements:
(1) a false statement; (2) communicated by speech, conduct or in writing to a person other than the person defamed; and, (3) the communication is unprivileged and tends to harm one's reputation so as to lower him or her in the estimation of the community or to deter third persons from associating or dealing with him or her.
Torgerson v. Journal/Sentinel. Inc., 210 Wis. 2d 524, 534, 563 N.W.2d 472 (1997); see Wis JI—Civil 2500.
¶ 38. This defamation lawsuit, however, involves a public figure. The United States Supreme Court has determined that the First and Fourteenth Amendments to the federal constitution require that defamation plaintiffs who are public figures must also prove by clear and convincing evidence another element, actual malice. Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 510 (1991) (citing New York Times Co. v. Sullivan, 376 U.S. 254, 279-80 (1964)). Actual malice does not involve bad intent or ill-will, and therefore differs from the vernacular understanding of malice. Torgerson, 210 Wis. 2d at 536. Rather, actual malice requires that the allegedly defamatory statement be made with "knowledge that it was false or with reckless disregard of whether it was false or not." Sullivan, 376 U.S. at 280.
¶ 39. Reckless disregard for the truth is not measured by what the reasonably prudent person would publish or investigate prior to publishing. Instead it is a subjective standard. Torgerson, 210 Wis. 2d at 542. It requires showing that the false statement was made "with a high degree of awareness of... probable falsity," Garrison v. Louisiana, 379 U.S. 64, 74 (1964), or that the defendant "in fact entertained serious doubts as to the truth of his publication." St. Amant v. Thompson, 390 U.S. 727, 731 (1968).
¶ 40. The Supreme Court has recognized that such a demanding standard "may permit recovery in fewer situations than would a rule that publishers must satisfy the standard of the reasonable man or the prudent publisher." Id. However, it has emphasized that the importance of open debate regarding public affairs and the conduct of public figures is so great that "neither the defense of truth nor the standard of ordinary care would protect against self-censorship and thus adequately implement First Amendment policies." Id. at 732.
¶ 41. The parties agree that Storms is a public figure, and that to succeed in a defamation suit he would have to show actual malice. The dispute here is focused on the element of actual malice.
A
¶ 42. The circuit court determined that prior to commencing the lawsuit Donohoo knew or should have known that a cause of action for defamation would require showing actual malice by clear and convincing evidence and that Donohoo knew or should have known that the law did not support such a claim. It further determined that in light of the straightforward facts of the case and the law of defamation, Donohoo failed to conduct a reasonable inquiry into the claim prior to filing.
¶ 43. Donohoo argues that the circuit court erred in its determination that the law did not support the claim that Action Wisconsin acted with actual malice. The cornerstone of his argument is based on his review of the speech prior to commencing the lawsuit and his conclusion that no one "could have reasonably interpreted it to have advocated the murder of gay people." When the entire speech is examined, he contends, it is "inconceivable" that Action Wisconsin believed that Storms advocated murdering gay people or that he made sounds as if shooting gay people. Donohoo maintains that because it is inconceivable Action Wisconsin believed thát Storms advocated murdering gay people, it must have had serious doubts about the truth of the statements in the press release.
¶ 44. He asserts that Action Wisconsin's interpretation of Storms' speech as advocating the murder of gay people is the result of selecting sentences from the speech and cobbling them together to support its conclusion. Donohoo adduces altogether different passages from the speech in support of another interpretation. He maintains that the following aspects of the speech demonstrate that Action Wisconsin's interpretation is unreasonable and thus serve as a basis for proving actual malice:
• The theme of Storms' speech was that "[y]ou alone, with God's help, can make a difference, no matter what the odds."
• The discussion of "taking it to the streets" was meant to contrast with efforts such as petitions, phone calls, and "begging" legislators and judges. "Taking it to the streets" refers to things like Storms' own efforts to make a difference by videotaping Southern Decadence, sending the video to public officials, sharing the Gospel with homosexuals, and staging protests.
• Tempering Storms' "tak[e] it to the streets" message were admonitions to not be "spiritually reckless" and to do what was in their hearts if it was not sin.
• Storms drew a parallel between the Philistines and the homosexual movement in terms of their characteristics — "solidarity, scornfulness, and stubbornness."
• The term that Storms used throughout the speech was the "homosexual movement," and the homosexual movement was the analogue to the Philistine army, not individual homosexuals.
• When Storms made his "boom, boom, boom" sounds, they were not meant to sound like explosions or gunfire, but were made to enliven the passage and "capture the imagination of the listeners." Similarly, the reference to the drive-through at McDonald's merely illustrated Jonathan and his armor bearer taking a break while God worked.
These aspects of the speech, Donohoo argues, demonstrate that Action Wisconsin's interpretation is "inconceivable" and that the only reasonable interpretation is that Storms did not advocate the murder of homosexuals.
¶ 45. There is no dispute about what words were spoken at Storms' speech. Rather, the dispute concerns whether Action Wisconsin's interpretation of the speech is a reasonable interpretation of ambiguous statements. If it is, then Donohoo as a matter of law cannot meet his burden of showing actual malice. In essence, Donohoo argues that if his is the only reasonable interpretation of the speech, then there is a basis for the actual malice claim. Thus, Donohoo is arguing that a factual inference can be made about whether Action Wisconsin entertained serious doubts as to the truth of their statements on the ground that Action Wisconsin's interpretation is unreasonable.
¶ 46. However, as Donohoo recognized during oral argument the determination of whether there is a single reasonable interpretation of the speech or whether the speech is ambiguous is a question of law. In Torgerson, for example, this court determined that the defendant newspaper was entitled to summary judgment in a defamation case because letters from the state Ethics Board were ambiguous. The court determined that the defendant's characterization of the letters was "a rational interpretation of ambiguous statements contained in those letters." 210 Wis. 2d at 546. It concluded that the deliberate choice of that interpretation over another interpretation could not constitute evidence of actual malice, even if the interpretation was provably false. Id. at 545.
¶ 47. While we do not doubt that Donohoo's is a reasonable interpretation, we cannot agree that it is the only reasonable interpretation. His choice of passages from the speech is no less selective than Action Wisconsin's. He has simply emphasized different passages, namely, those that do not have violent imagery.
¶ 48. Donohoo fails to address many of the passages emphasized by Action Wisconsin to illustrate the violent tone of the speech. Storms warned his listeners that "[t]hey'll want to kill you," "they don't care," "they want to trample us," "[i]t's us or them," "[t]hey have to eliminate us," and "[t]here's no having this peaceful co-existence." He described how "they" have violent, oppressive, and murderous potential: "they'll crush us and have laws and silence us and kill the ones that won't be silent...." He expressly warned against listening to those that "will try to talk you out of going and beating up the Philistine army on your own." When Storms' exclamation of "boom, boom, boom, boom, boom" is considered in light of such violent descriptions, Action Wisconsin's interpretation is reasonable.
¶ 49. In addition to being selective, the facets of the speech Donohoo emphasizes do not show that Action Wisconsin's interpretation is unreasonable. Therefore they fail to provide a basis for the claim of actual malice, that is, that Action Wisconsin made a statement with "knowledge that it was false or with reckless disregard of whether it was false or not." Sullivan, 376 U.S. at 279-80. We consider them in turn.
¶ 50. Regarding his first assertion, Donohoo is correct that the theme of Storms' speech was that "you alone, with God's help, can make a difference, no matter what the odds." That, however, says nothing about what sorts of things one might do to make a difference, despite long odds.
¶ 51. The next aspect of the speech Donohoo adduces is that Storms' examples of "taking it to the streets" include videotaping, sharing the gospel, and staging a protest. However, Storms is explicit that taking it to the streets is not limited to such activities. He states:
Give me a bombshell, give me a bomb oh God. Give me something Lord that's going to shake the city, and shake the state, and shake this nation....
Do what's in your heart. He's with you. Some of you right now. You have these wild, crazy things you won't even tell anybody about. You have this plan and you can't get away from it. The Lord put that there. The Lord put it there. Go do it.
The speech is open to many interpretations of what these "bombs" and "wild, crazy things" could include.
¶ 52. Donohoo's assertion that Storms admonished listeners not to be spiritually reckless and not to sin is also unpersuasive and also fails to show that Action Wisconsin's interpretation is unreasonable. It is unclear what Storms meant by the admonition. In one passage he states: "Listen to your heart. Whatever is in your heart. Do it. He's with you. It's not sin. That's the way I look at it. And the wilder the better in my opinion."
¶ 53. The next claim Donohoo makes is that Storms drew parallels between the Philistine army and the homosexual movement on the basis of shared characteristics. However, Donohoo has failed to offer any explanation for why basing the comparison on such characteristics shows that Storms did not advocate treating the homosexual movement like Jonathan treated the Philistine army.
¶ 54. Donohoo claims also that Storms carefully referred to the "homosexual movement" rather than individual homosexuals. This, too, fails to show that Action Wisconsin's interpretation is unreasonable. Dono-hoo is incorrect that Storms refers only to the "homosexual movement." Our review of the speech indicates that Storms does refer to "homosexuals." For example, in describing the strength of Storms' opponent, he warns of the "uncanny unity and solidarity amongst the homosexuals." Similarly, in encouraging his audience to act on their frustrations he states that "if you're frustrated about seeing the homosexuals taking over our nation, that's a good thing."
¶ 55. Lastly, it is plausible that when Storms made the "boom, boom, boom, boom, boom" sounds he did not intend it to sound like gun shots, and it is plausible that his remarks about the McDonald's drive-through were intended to be about Jonathan taking a rest. However, that is not the only reasonable interpretation. It is also reasonable to conclude that Storms intended his listeners to imagine the story in a modern setting, with modern weapons (guns), modern rest facilities (McDonald's), and a modern opponent (the homosexual movement).
¶ 56. Thus, while Donohoo has proffered a reasonable alternative interpretation, he has not demonstrated that Action Wisconsin's interpretation is unreasonable. Rather, he has simply emphasized different passages. Both Donohoo's interpretation and Action Wisconsin's interpretation are reasonable. That is, the speech is ambiguous.
¶ 57. Because the speech is ambiguous, the reasonable alternative interpretation of Storms' speech that Donohoo provides does not permit an inference of actual malice. Action Wisconsin's statements were based on one of at least two rational interpretations. There is ample case law for the proposition that actual malice cannot be inferred from the choice of one rational interpretation over another.
¶ 58. Time, Inc. v. Pape involved an article describing incidents of police brutality. 401 U.S. 279, 281-82 (1971). The article was based upon a government report, and quoted the summary of a civil complaint contained in the report. However, it removed the word "alleged" from the summary of the complaint, and did not explain that the quote came from an unproven complaint. Id. at 282.
¶ 59. The Supreme Court determined the omission of the word "alleged" was in essence adopting "one of a number of possible rational interpretations of a document that bristled with ambiguities." Id. at 290. The Court concluded that such a choice did not demonstrate actual malice, even though it may have reflected a misconception. Id. In Masson v. New Yorker Magazine, the Supreme Court explained that the "protection for rational interpretation serves First Amendment principles by allowing an author the interpretive license that is necessary when relying upon ambiguous sources." 501 U.S. 496, 519 (1991).
¶ 60. This court addressed the issue of choosing between rational interpretations in Torgerson. That case involved a newspaper article stating that the plaintiff, who served in the Office of Commissioner of Insurance and had an interest in a title insurance agency, had ignored letters by the state Ethics Board as "warnings" to "stay out" of title insurance matters. 210 Wis. 2d at 545. Prior articles by the same journalist had described the same letters as "guidelines and limitations" that would "limit" contact with such matters. Id. at 544-45. Citing Time, Inc. v. Pape and Masson, this court determined that the letters were ambiguous, and that the deliberate choice between different interpretations did not show actual malice.
¶ 61. The same reasoning applies in the present case. Storms' speech is ambiguous, and Action Wisconsin has chosen one rational interpretation. As a matter of law, that choice does not demonstrate actual malice. Thus, Donohoo's assertion that Action Wisconsin's interpretation demonstrates actual malice is incorrect.
¶ 62. In addition to his argument that Action Wisconsin's interpretation is unreasonable, Donohoo cites the following as factual evidence of actual malice prior to his filing the complaint:
• Storms did not explicitly state that he advocated murdering gay people.
• Action Wisconsin did not attempt to contact Storms before issuing its press release, and it did not respond to the requests for retraction.
• The language in the press release is of a "serious nature" and showed ill-will toward Storms.
• The press release appeared calculated to advance Action Wisconsin's political agenda.
¶ 63. These facts are not in dispute. However, they fail to demonstrate a reasonable factual or legal basis for actual malice, and Donohoo makes no argument based in equity. The fact that there is no language in the speech explicitly stating that members of the audience ought to murder homosexuals says nothing about whether Action Wisconsin was reckless in its interpretation of the speech.
v f' 64. Further, Donohoo has offered no explanation and proffered no case law showing why the facts that Action Wisconsin did not attempt to contact Storms before issuing its press release and did not respond to retraction requests are evidence of actual malice.
¶ 65. Donohoo's position is also contrary to this court's decision in Van Straten v. Milwaukee Journal Newspaper-Publisher, 151 Wis. 2d 905, 447 N.W.2d 105 (1989). In that case we determined that the repeated publication of a statement after being informed that the statement was false did not constitute actual malice so long as the speaker believed it to be true. Id. at 917-18.
¶ 66. Donohoo is correct that the statements in the press release are of a serious nature. However, even assuming that Donohoo is correct that Action Wisconsin's press release evinces ill-will toward Storms, he fails to explain how such ill-will shows actual malice. Courts have made clear that actual malice does not mean bad intent, ill-will, or animus. Masson, 501 U.S. at 510-11; Torgerson, 210 Wis. 2d at 536.
¶ 67. He maintains that such ill-will could provide motivation for Action Wisconsin to "twist" Storms' speech. Placing a greater burden on ideological opponents, however, is contrary to the principles that underwrite the actual malice standard in the first instance. Donohoo's argument is also contrary to the Seventh Circuit's determination that "facial expression, content of speech and body language" that demonstrated a strongly negative disposition to the subject of a statement did not support a claim of actual malice. Underwager v. Salter, 22 F.3d 730, 736 (7th Cir. 1994).
¶ 68. Donohoo's assertion that actual malice is evinced by the fact that the press release appeared calculated to further Action Wisconsin's political agenda is similarly unpersuasive. The seminal defamation case, New York Times v. Sullivan, involved political speech. 376 U.S. 254. To maintain that where a statement furthers one's political views there is evidence of actual malice would undermine the véry protections that justify the actual malice requirement in the first instance.
¶ 69. Having set forth the above facts and law, we turn to the circuit court's decision that Donohoo commenced this action frivolously. The amount of investigation that Donohoo should have done prior to filing is a determination that is within the circuit court's discretion. Jandrt, 227 Wis. 2d at 548. We will uphold this determination unless it is clearly erroneous. Id.
¶ 70. The circuit court examined the relevant facts of the case, and it determined that they were not complex. It also examined the law on defamation and determined that the legal issues involved in the lawsuit were not complex. Further, the court reasoned that Donohoo had sufficient time to research the relevant law. It explained that while Donohoo's interpretation of the speech was reasonable, it was less reasonable than Action Wisconsin's. The court determined that the filings Donohoo made on behalf of Storms did not present a plausible view of the law or an argument to extend or modify the law.
¶ 71. The court examined the relevant facts, applied the proper standards of law, and using a demonstrated rational process reached a conclusion that a reasonable judge could make. In light of the time and lack of complexity of the issues, the court determined that Donohoo had failed to conduct a reasonable inquiry prior to filing the suit. This determination is hot clearly erroneous. Additionally, consistent with legal authority, the circuit court concluded that there was no basis in fact or law that would support a claim that Action Wisconsin's statements were made with actual malice. Accordingly, we conclude that the circuit court's determination was not an erroneous exercise of its discretion.
B
¶ 72. In addition to its determination that Dono-hoo commenced the lawsuit frivolously, the circuit court determined that Donohoo continued the lawsuit even though he knew or should have known that the claim was brought "without any reasonable basis in law or equity." Wis. Stat. § 814.205(3)(b). The determination of what an attorney knew or should have known "is a factual question, and the circuit court's findings of fact will not be reversed by an appellate court unless the findings are clearly erroneous. Jandrt, 227 Wis. 2d at 563. Here, the court explained that Action Wisconsin's letters to Donohoo put him on notice that there was no support for the element of actual malice, but that Donohoo ignored the warnings and failed to explain how he proposed to show actual malice.
¶ 73. Donohoo maintains that the circuit court erred in its determination for several reasons. First, he asserts that Action Wisconsin's interpretation is unreasonable. For the reasons outlined in the previous section, this argument is unpersuasive.
¶ 74. In addition, Donohoo argues that the following undisputed facts show that Action Wisconsin acted with actual malice:
• Two members of Action Wisconsin did not listen to the entire speech before issuing the press release.
• Action Wisconsin did not consider contacting law enforcement upon hearing Storms' speech.
Donohoo fails to provide a legal basis for these arguments.
¶ 75. There is no dispute that Ott and Freker did not listen to Storms' speech in its entirety before the press release was issued. The court of appeals relied on Curtis Publishing Co. v. Butts, 388 U.S. 130 (1967) to support the view that such failure evinces actual malice.
¶ 76. Butts involved a libel action against a magazine for publishing allegations that a college football coach was involved in game-fixing. Id. at 135. The sole source of the story was a person known by the publisher to be on probation for writing bad checks, none of the magazine personnel reviewed the source's notes, another person who was with the source when the source heard the story was not consulted, and there was no attempt by any in the organization to screen the films of allegedly fixed games. Id. at 157. The court determined that such evidence could support a determination of actual malice.
¶ 77. The current case bears no resemblance to Butts. Here, the president of Action Wisconsin's board of directors, O'Brien, listened to the entire speech and was disturbed by what he heard. He then consulted with Ott and Freker, and they confirmed that speech contained the statements that O'Brien described. Together they decided on the response. This is entirely unlike the situation in Butts, where no one made any effort to confirm the claims of a known unreliable source.
¶ 78. Even if there was a failure of Action Wisconsin to investigate prior to issuing its press release, "mere proof of failure to investigate the accuracy of a statement, without more, cannot establish the reckless disregard for the truth necessary for proving actual malice." Erdmann v. SF Broad. Of Green Bay, Inc., 229 Wis. 2d 156, 170, 599 N.W.2d 1 (Ct. App. 1999)(citing Gertz v. Robert Welch, Inc., 418 U.S. 323, 332 (1974)). For the reasons provided in the previous section, the other arguments Donohoo adduces fail to provide the something more required to establish actual malice.
¶ 79. Donohoo's argument that Ott and Freker did not think about contacting police regarding Storms' speech, illustrating that "they did not honestly believe that Storms had advocated the murder of gays in his speech," is similarly unpersuasive. Research into the relevant law would have dissuaded Donohoo from this argument.
¶ 80. Brandenberg v. Ohio involved a conviction under a statute prohibiting advocacy of violent political reform for a speech which included the language "if our President, our Congress, our Supreme Court, continues to suppress the white, Caucasian race, it's possible that there might have to be some revengeance taken." 395 U.S. 444, 446 (1969). The Supreme Court determined that the First Amendment protects the advocacy of violence that falls short of incitement to imminent lawless action. Id. at 447. Action Wisconsin has not claimed that Storms' speech incited imminent lawless action.
¶ 81. Accordingly, we determine that the circuit court did not err in concluding that Donohoo continued the lawsuit frivolously. The circuit court explained that Action Wisconsin's letters put Donohoo on notice regarding frivolousness. Further, the facts adduced by Donohoo as evidence of actual malice are not supported by the law, and Donohoo makes no argument based in equity. Thus, the circuit court's factual determination that Donohoo knew or should have known that the lawsuit had no basis in law or equity is not clearly erroneous. Under § 814.025, this factual determination supports the circuit court's conclusion that Donohoo continued the lawsuit frivolously.
IV
¶ 82. Action Wisconsin also argues that the court of appeals erred in reviewing, sua sponte, the circuit court's summary judgment decision on the merits of the case when that decision had not been appealed. It argues that there were no issues of disputed fact with respect to the defamation claim, and that the questions on appeal concerned legal conclusions based upon undisputed facts.
¶ 83. To address this issue requires that we examine three questions. The first concerns whether the court of appeals erred in addressing the substantive issues of the case. Those issues were decided by the circuit court on summary judgment, but were not before the court of appeals insofar as summary judgment was not appealed. This court has addressed the question before. Jandrt involved questions about sanctions for frivolousness in a case where the underlying suit was voluntarily dismissed. 227 Wis. 2d at 538-39. The court was required to address the merits of the underlying claim to address the frivolousness issue. Id. at 572-73.
¶ 84. A similar issue arose in Lassa v. Rongstad, 2006 WI 105, 294 Wis. 2d 187, 718 N.W.2d 673. That case involved discovery and contempt sanctions levied against the defendant in a defamation case where the defendant was asserting a constitutional privilege against disclosures sought by the plaintiff. Id., ¶ 1. The merits of the underlying case were settled. The lead opinion determined that the court had to get to the issues of privilege in order to reach the question of whether the sanctions were appropriate, on the ground that the privilege was a defense against the sanctions. Id., ¶ 33.
¶ 85. Similarly, whether frivolous sanctions were proper in the present case turns on whether the underlying suit was frivolous. It was therefore proper for the court of appeals to address that issue despite the fact that summary judgment was not appealed.
¶ 86. The second question is whether the court of appeals erred by reversing the circuit court's summary judgment order. Action Wisconsin asserts that the court of appeals "ignored the finality of the . summary judgment decision" and "took jurisdiction of the issue." As we explain in footnote 4 above, the court of appeals reversed the judgment and order of the circuit court. This would appear to include the part of the order denying Donohoo's motion for reconsideration. The text of the opinion makes clear, however, that the court of appeals reversed only the grant of sanctions. Donohoo concedes that the denial of the motion for reconsideration was not reversed.
¶ 87. The third question concerns whether there remain any disputed questions of material fact to be resolved with respect to the defamation issue. The parties agreed at oral argument that there were no factual disputes on the issue. We agree that all of the disputes regarding the defamation claim are legal in nature. Thus, we conclude that although the court of appeals was incorrect in determining that there were disputed facts, it did not err in addressing the facts underlying the circuit court's summary judgment decision. Rather, it addressed the summary judgment decision only to the extent that it was necessary to address the substantive issues of the case in order to review the circuit court's determinations of frivolousness.
V
¶ 88. In sum, we conclude that the circuit court did not err in determining that the defamation suit was frivolously commenced and continued under Wis. Stat. § 802.05 and 814.025. It determined that Donohoo had failed to conduct a reasonable inquiry before commencing the lawsuit and that there was no basis in fact or law that would support Donohoo's claim that Action Wisconsin's statements were made with actual malice. In this regard, we conclude that the court of appeals committed error when it reversed the circuit court's determinations.
¶ 89. However, we conclude that the court of appeals did not commit error in addressing the circuit court's summary judgment decision. The court of appeals did not sua sponte reverse a grant of summary judgment that was never appealed. Rather, it addressed the summary judgment decision only to the extent that it was necessary to address the substantive issues of the case in order to review the circuit court's determination of frivolousness.
¶ 90. Accordingly, because we conclude that the circuit court did not err in determining that the defamation suit was commenced and continued frivolously, we reverse the court of appeals.
By the Court. — The decision of the court of appeals is reversed.
See Donohoo v. Action Wisconsin, Inc., No. 2006AP396, unpublished slip op. and order (Wis. Ct. App. May 30, 2007)(re-versing judgment and order of the circuit court for Milwaukee County, Patricia D. McMahon, Judge).
All references to the Wisconsin Statutes are to the 2003-04 version unless otherwise noted.
Effective July 1, 2005, Wis. Stat. § 802.05 and 814.025 (2003-04) were repealed, and Wis. Stat. § (Rule) 802.05 (2005-06) was recreated. Supreme Court Order 03-06, 2005 WI 38, 278 Wis. 2d xiii. The new rule is procedural and there is a presumption that it applies retroactively, including to motions for frivolousness where the conduct that is the subject of such a motion occurs before the effective date of the new rule, but where the motion is filed after the effective date of the new rule. Trinity Petroleum, Inc. v. Scott Oil Co., 2007 WI 88, ¶ 52, 302 Wis. 2d 299, 735 N.W.2d 1. The parties agree that this case is controlled by § 802.05 and 814.025 (2003-04). Action Wisconsin's motion for costs and attorney fees based on frivolousness was filed before the effective date of § (Rule) 802.05 (2005-06).
In fall and winter of 2003, Action Wisconsin publicly opposed state legislation and an amendment to the state constitution explicitly reserving marriage for opposite-gender couples and prohibiting the recognition of marriages not composed of an opposite-gender couple. See Wis. Const, art. XIII, § 13 ("Only a marriage between one man and one woman shall be valid or recognized as a marriage in this state. A legal status identical or substantially similar to that of marriage for unmarried individuals shall not be valid or recognized in this state.")
Donohoo's notice of appeal indicated that he was appealing both the order awarding costs and attorney fees to Action Wisconsin and the order denying the motion for reconsideration. The mandate line of the court of appeals opinion states simply "judgment and order reversed." However, the text of the court of appeals opinion explains that the case "is not about whether the trial court correctly decided the summary judgment issue," slip op., ¶ 9, and explicitly reverses only the order granting Action Wisconsin's motion seeking attorney fees, slip op., ¶ 33. Further, Donohoo concedes that there was no appeal of the summary judgment determination and that the issue before this court is limited to frivolousness. Thus, we do not address the order denying the motion for reconsideration except insofar as it is relevant to the issue of frivolousness.
Wisconsin Stat. § 802.05 provides in relevant part:
Every pleading, motion or other paper of a party represented by an attorney shall contain the name . of the attorney . . . and shall be subscribed with the handwritten signature of at least one attorney of record in the individual's name. . . The signature of an attorney or party constitutes a certificate that the attorney or party has read the pleading, motion or other paper; that to the best of the attorney's or party's knowledge, information and belief, formed after reasonable inquiry, the pleading, motion or other paper is well-grounded in fact and is warranted by existing law or a good faith argument for the extension, modification or reversal of existing law; and that the pleading, motion or other paper is not used for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. . If the court determines that an attorney or party failed to read or make the determinations required under this subsection before signing any petition, motion or other paper, the court may, upon motion or upon its own initiative, impose an appropriate sanction on the person who signed the pleading, motion or other paper, or on a represented party, or on both. The sanction may include an order to pay to the other party the amount of reasonable expenses incurred by that party because of the filing of the pleading, motion or other paper, including reasonable attorney fees.
Wisconsin Stat. § 814.025 provides in relevant part:
Costs upon frivolous claims and counterclaims.
(1) If an action or special proceeding commenced or continued by a plaintiff or a counterclaim, defense or cross complaint commenced, used or continued by a defendant is found, at any time during the proceedings or upon judgment, to be frivolous by the court, the court shall award to the successful party costs determined under s. 814.04 and reasonable attorney fees.
(3) In order to find an action, special proceeding, counterclaim, defense or cross complaint to he frivolous under sub. (1), the court must find one or more of the following:
(b) The party or the party's attorney knew, or should have known, that the action, special proceeding, counterclaim, defense or cross complaint was without any reasonable basis in law or equity and could not be supported by a good faith argument for an extension, modification or reversal of existing law.
We note that the repeal of § 802.05 and 814.025 (2003-04) and recreation § (Rule) 802.05 (2005-06) may call into question the existence of different standards of review for commencing and continuing frivolous claims. This is particularly so insofar as § (Rule) 802.05 is patterned after federal rule of civil procedure 11. See Trinity Petroleum, Inc. v. Scott Oil, Co., 2007 WI 88, ¶ 49, 302 Wis. 2d 299, 735 N.W.2d 1. Federal courts review the imposition of sanctions undér Rule 11 for erroneous exercise of discretion. Mars Steel Corp. v. Cont'l Bank N.A., 880 F.2d 928, 933 (7th Cir. 1989).
The court of appeals in the present case listed four elements, following other court of appeals decisions and the Restatement (Second) of Torts § 558 (1981): (a) a false and defamatory statement concerning another; (b) an unprivileged publication to a third party; (c) fault amounting at least to negligence on the part of the publisher; and (d) either action-ability of the statement irrespective of special harm or the existence of special harm caused by the publication. Slip op., ¶ 15; slip op., ¶ 40 (Curley, J., dissenting); see Van Straten v. Milwaukee Journal Newspaper-Publisher, 151 Wis. 2d 905, 912, 447 N.W.2d 105 (Ct. App. 1989).
As this court noted in Torgerson v. Journal/Sentinel, Inc., if the two sets of elements are at all different, such distinctions are not important in the present case. 210 Wis. 2d 524, 535 n. 9, 563 N.W.2d 472 (1997).
The dissent focuses much of its attention on another element of a defamation claim, namely, whether Action Wisconsin's statements have defamatory meaning, such that they tend to "diminish the esteem, respect, goodwill or confidence in which the plaintiff is held, or to excite adverse, derogatory or unpleasant feelings or opinions against him." Dissent, ¶ 116 (quoting Starobin v. Northridge Lakes Dev. Co., 94 Wis. 2d 1, 10, 287 N.W.2d 747). It points out that Donohoo, the court of appeals, and three members of this court have determined that the statement is defamatory.
The parties, however, neither dispute nor examine whether the statements are capable of defamatory meaning because it is irrelevant to the issue at hand. The only element that is at issue here is actual malice. The dissent's discussion appears to obfuscate the real issue.
To assist the reader, a copy of the transcript of Storms' speech is attached as an appendix to this opinion. The tran script and a compact disk recording of the speech were attached by Attorney Donohoo to Storms' brief in opposition to Action Wisconsin's motion for summary judgment.
The dissent asserts that whether Action Wisconsin's statements were false "remains a fact question for the jury," and that a reasonable jury could determine that the statements were false. Dissent, ¶ 114. A reasonable jury could therefore also determine that the statements were true according to the dissent's view.
However, Attorney Donohoo's primary argument is that the statements were so obviously false that Action Wisconsin must have acted with actual malice. His contention appears to be at odds with the dissent's view. The dissent's assertion implicitly acknowledges that a reasonable attorney, and hence Attorney Donohoo, should have known that he could not prove actual malice, and thus that the suit was frivolous. How could he show that Action Wisconsin knew the statements were false or acted in reckless disregard of the truth if the underlying premise — the falsity — is so uncertain that it presents a question of fact for the jury?
The dissent maintains that a reasonable attorney could believe that Action Wisconsin's statements were made with actual malice "because the statement was part of Action Wisconsin's attempt to promote one side of a highly charged political issue." Dissent, ¶ 122. The effect of the dissent's view is to make it easier to find actual malice in cases of speech regarding contentious political issues. Such issues, however, are where First Amendment protections are at their apex. Buckley v. Valeo, 424 U.S. 1, 14 (1976).