Opinion ID: 487723
Heading Depth: 2
Heading Rank: 1

Heading: Defamation and Falsity

Text: 66 The theme of the November 30, 1979 article was set forth in its headline and lead sentence: that William Tavoulareas set up Peter as a partner in a business managing Mobil-owned ships. Peter, the article reported, had in 1974 been a 24-year-old, $14,000 per year shipping clerk with the Lemos firm, but with the help of Mobil five years later owned 45 percent of a newly formed shipping management firm, Atlas Maritime Co. [T]he overall thrust of the article was that William Tavoulareas improperly set up his son in business and made sure the business would prosper. Reply Brief for Appellant at 21-22; see Brief for Appellant at 70; 567 F.Supp. at 660. 67 Tavoulareas advances several possible defamatory interpretations of this set up allegation. 15 His primary contention, and one adopted by the dissent, Dissent at 820-21, is that [t]he November 30 article was reasonably understood to mean that plaintiff misused Mobil assets by engineering the entire Mobil-Samarco-Atlas arrangement for the benefit of his son, to the detriment of Mobil shareholders. 16 Brief for Appellant at 26 (emphasis added). The District Court squarely rejected as untenable that construction of the article. 567 F.Supp. at 660. We agree. 17 68 In a libel case, it is the role of the court to determine whether the challenged statement is capable of bearing a particular meaning and whether that meaning is defamatory. Restatement (Second) Of Torts Sec. 614(i), at 311 (1977); see McBride v. Merrell Dow and Pharmaceuticals, Inc., 717 F.2d 1460, 1463 (D.C.Cir.1983). In making this determination, a court is to consider both the words themselves and the entire context in which the statement occurs. See Ollman v. Evans, 750 F.2d 970, 982-83 (D.C.Cir.1984) (en banc), cert. denied, 471 U.S. 1127, 105 S.Ct. 2662, 86 L.Ed.2d 278 (1985). The jury's proper function, in turn, is to determine whether a statement, held by the court to be capable of a defamatory meaning, was in fact attributed such a meaning by its readers. Restatement (Second) Of Torts Sec. 614(2). 69 The statement that a father set up his son in business would ordinarily mean to a reasonable reader that the father provided the son with the means or opportunity by which the latter could assume a position of responsibility in a business venture or commercial firm. See Webster's Third New International Dictionary 2079 (unabridged ed. 1981). In our view, when the term set up is employed in a familial context, it implies that one family member provided an opportunity to another family member on the basis of kinship, not merit. Accordingly, we hold that the article, as a matter of law, can reasonably be interpreted as capable of bearing a defamatory meaning, namely that Tavoulareas, as president of Mobil, made it possible for Peter to become a partner in Atlas and then helped to ensure that the business would prosper because Peter was his son. This, in our view, is the normal, everyday reading of the article. The headline and lead sentence, generally reliable indicators of an article's content, clearly convey this meaning. 18 This meaning is defamatory in that it accuses Tavoulareas of nepotism--furthering his son's business career--which might tend[ ] to injure [him] in his trade, profession or community standing, or lower him in the estimation of the community. Afro-American Publishing Co. v. Jaffe, 366 F.2d 649, 654 (D.C.Cir.1966) (footnote omitted). 70 As we have observed, Tavoulareas' proffered interpretation is much broader. He (and the dissent) contend that the article is capable of bearing the interpretation that Tavoulareas set up the entire Mobil-Sarmarco-Atlas relationship to benefit Peter. Thus, before passing to a consideration of the falsity vel non of the set up allegation, we first consider this asserted, much different, broader reading. For the reasons that follow, we reject Tavoulareas' construction and interpret the language according to its common usage. As did Judge Gasch, we hold as a matter of law that the article is incapable of bearing the interpretation Tavoulareas advances. 19 71 As the District Court correctly observed, the Post 's allegation that Tavoulareas set up his son in Atlas is entirely different from the claim that the Post asserted that the creation of the entire Mobil-Samarco-Atlas relationship was a nepotistic act. 567 F.Supp. at 660 & n. 16. The article clearly says the former, not the latter. The article simply will not reasonably bear Tavoulareas' interpretation, as evidenced by his failure to cite anything in the article itself to support this reading. See Brief for Appellant at 25-29; Reply Brief for Appellant at 16. 20 Indeed, the article discussed at length Mobil's legitimate business reasons for participating in Samarco, namely its anticipation of Saudi flag preference requirements and favorable Saudi financing. paragraphs 38-44, 51. 72 The dissent ignores the specifics of the article, complaining instead that [t]he entire discussion of the legitimate business reasons in the Post article is perjorative. Dissent at 821. In our view, the dissent's reliance on the tone of the article is entirely misplaced. The article expressly buttressed the credibility of Mobil's stated business reasons for joining Samarco. The story specifically reports that the other non-Saudi partner in Samarco, Fairfield-Maxwell, joined on the basis of the same anticipated benefits. p 43. Needless to say, Fairfield-Maxwell had no interest in participating in Samarco to benefit Peter. Rather, as the article itself reported, Fairfield-Maxwell was of the view that Peter's involvement in Atlas, although nepotistic, would not preclude the successful and profitable operation of Samarco. p 27. We cannot accept the dissent's tortured attempt to discern some dark, hidden meaning in the article when the plain words of the piece explicitly rebut that meaning. 21 73 Tavoulareas relies heavily on internal unpublished Post memoranda to establish the meaning of the article. This will not do. Nothing in law or common sense supports saddling a libel defendant with civil liability for a defamatory implication nowhere to be found in the published article itself. 22 In addition to the internal memoranda, the dissent cites two other items of extrinsic evidence as relevant to a determination of the article's meaning. 23 First, much is made of the public interpretation of the Post article. Dissent at 819 n. 25. Assuming arguendo that such evidence bears on our legal determination, the items earmarked by the dissent are utterly incapable of supporting Tavoulareas' interpretation; if anything, these items support our interpretation of the article. 24 Second, the dissent pounces upon a single passage from the Post 's closing argument at trial and attempts by that maneuver to characterize the Post as in fact accepting Tavoulareas' interpretation of the article. See Dissent at 822-23. 25 This is grasping at straws. From the time the article was published to its appearance before this court en banc, the Post has steadfastly interpreted the article as saying that Peter was set up in Atlas, not that the entire Mobil-Samarco-Atlas arrangement was set up for Peter. 26 This is hardly surprising, for as we have held as a matter of law, the article is incapable of bearing Tavoulareas' and the dissent's distorted interpretation. Because the piece is capable, however, of bearing the narrower but nonetheless defamatory meaning that Tavoulareas set up his son in Atlas, we proceed to consider the truth or falsity of this allegation. 74 Tavoulareas, it should be noted, would pretermit entirely our consideration of truth or falsity, maintaining that the court should not consider the question in reviewing the jury verdict in his favor. Brief for Appellant at 17a-17b. We emphatically disagree. 27 Tavoulareas was required to prove falsity at trial in order to prevail. Philadelphia Newspapers, 106 S.Ct. at 1563; Garrison v. Louisiana, 379 U.S. 64, 74, 85 S.Ct. 209, 215-16, 13 L.Ed.2d 125 (1964). Moreover, the defendants never conceded this bedrock element of plaintiff's case; quite to the contrary, they have adamantly maintained throughout these proceedings that the evidence of the story's truth (or substantial truth) precludes any reasonable inference of actual malice. See 567 F.Supp. at 654 n. 9; Brief for Appellees at 18. In turn, Tavoulareas himself has relied on evidence of falsity in his effort on appeal to establish actual malice, see, e.g., Brief for Appellant at 54, and the District Court found the evidence of the story's truth highly relevant to its decision to grant j.n.o.v. on the issue of actual malice. See 567 F.Supp. at 659-61. More fundamentally, the truth or falsity of allegedly defamatory speech must be considered if we are properly to balance the individual interest in vindicating a reputation that is wrongly sullied, Brief for Appellant at 17c (emphasis added), against the community's interest in free speech. See Philadelphia Newspapers, 106 S.Ct. 1558. We reject the extravagant suggestion that we ignore evidence of truth in reviewing the reasonableness of the jury's finding that the Post article was unprotected by the First Amendment.
75 The undisputed evidence at trial, including plaintiff's own testimony, precludes any reasonable inference that the central allegation of the challenged article--that Tavoulareas set up Peter in Atlas--was false. Tavoulareas repeatedly testified at trial that by December 1973 he knew that Peter's supervisor at Lemos, Comnas, was planning to leave Lemos and form a joint venture company. Tr. at 1275-76, 1293, 1433, 1635, 1647. According to his own testimony, Tavoulareas also knew by late 1973 that Comnas had offered Peter a partnership position in that venture. Tr. at 1293; see also Tr. at 1278, 1455. 28 What is more, Tavoulareas testified that he thought it likely that Comnas made the offer to Peter not because of Peter's modest qualifications as a young and inexperienced junior executive but in order to make sure he got business from Mobil. Tr. at 1648; see also Tr. at 1295-96, 1455, 1516; cf. Tr. at 1656 (testimony of Tavoulareas that as of 1974 Peter was young and needed more training in shipping business); Tr. at 3080 (uncontradicted testimony of Kousi, a Samarco director, to same effect). 76 In the spring of 1974, with Tavoulareas fully aware that Comnas was trying to curry favor with him by offering Peter a share of Comnas' venture, Tr. at 1516, Tavoulareas flew to London to ask Comnas if [Comnas] was interested in taking over the management of Samarco's ships. RE at 2443-46; see also RE at 2344-45, Tr. at 1534 (I [Tavoulareas] more than anybody else was responsible for bringing [Comnas] into [the management of Samarco's ships] ...); Tr. at 1289-91, 3423, 3349. But cf. Dissent at 826-27 (recounting evidence that Comnas was recruited by Mobil as a corporate entity, including actions of its chairman, Rawleigh Warner, rather than by Tavoulareas, notwithstanding Tavoulareas' own uncontradicted testimony). 29 Thereupon, Comnas created Atlas to manage Samarco's ships, and Peter--until then an assistant at Lemos--joined Atlas as a part owner. RE at 2421-22, 2426-28; 3141. By itself, the undisputed fact that Tavoulareas personally recruited Comnas to manage Samarco's ships (ultimately through the vehicle of Atlas Maritime) shortly after learning that Peter had an outstanding offer from Comnas goes far toward justifying the charge that Tavoulareas set up his son in Atlas. See 567 F.Supp. at 659 (finding that Tavoulareas' 1977 SEC testimony, describing this sequence of events, provided Tyler with a sufficient basis for [his set up] allegation). 77 But that is not all. The record abounds with uncontradicted evidence of nepotism in favor of Peter. The record unmistakably reveals that Tavoulareas remained personally involved in the Samarco-Atlas arrangement after Peter left Lemos and took on his partnership position at Atlas. In August 1974, only days after Peter joined Atlas as a partner, Tavoulareas took Peter--without Comnas--to Geneva to meet the Alirezas. Tr. at 1305-06. This father-and-son trip to Geneva commenced after Tavoulareas sent a memorandum to Paul Wolf[e] to tell him [Tavoulareas] would no longer be involved with anything as to Atlas and Samarco and thus to bypass him on all Atlas matters beyond Wolfe's authority in favor of Rawleigh Warner, Mobil's chairman. RE at 2440; see RE at 2339; see also Tr. at 1332-33, 1464-65; cf. RE at 2344 (Mobil's pre-publication letter sent to Tyler claiming that [f]rom the date Peter Tavoulareas joined Atlas, Mr. Tavoulareas divorced himself from involvement in matters involving business transactions between Mobil and/or SAMARCO with Atlas.) At a luncheon gathering in Geneva, Tavoulareas and a Mobil subordinate engaged in substantive discussions with the Alirezas regarding the tentative Samarco-Atlas contract. During that conversation, Tavoulareas and his Mobil colleague argued in favor of Atlas' position that Atlas should be independent of Samarco and that its compensation should include both a minimum fee and an equity interest in the ships it managed. Tr. at 1712. See generally RE at 2587-2590 (Peter's written summary of the meeting). Although the Alirezas were of the view that Samarco should have clean cut control of the management group[,] ... [t]his course of action was opposed by ... Mobil and Mobil's pro-Atlas position on this fundamental issue prevailed. RE at 2587. 78 Thereafter, Tavoulareas' personal involvement in building up Atlas, with Peter then an equity partner in the firm, continued unabated. In November 1974, at a social gathering in Saudi Arabia, Tavoulareas attempted to convince Ahmed Alireza to accept Atlas' position on the final sticking point between Samarco and Atlas over the terms of the latter's compensation. Tr. at 1312-13, 1725-27. Based on his conversation with Alireza, Tavoulareas recommended to Comnas and Peter that they accept Alireza's counter-offer. Tr. at 1312-13, 1725-27. Atlas accepted Tavoulareas' advice, and the Samarco-Atlas deal was subsequently consummated. 79 Having helped Atlas secure its management agreement with Samarco, Tavoulareas then--by his own testimony--personally participated in the series of events whereby Comnas in short order resigned from Atlas, with Peter becoming its 75 percent owner. According to uncontradicted testimony, the decision to discharge Comnas was made in April 1975 30 at a meeting of high-level Mobil officials in Tavoulareas' own office at Mobil headquarters. Not only was Tavoulareas present for this meeting, but he participated fully in the discussion leading directly to Comnas' removal. Indeed, the meeting commenced with Tavoulareas as the highest ranking Mobil officer present, without Mobil's chairman, Mr. Warner, who only later joined the ongoing conclave. Tr. at 1185-87, 1331-33, 1534. 31 Far from divorcing himself from this matter, Tavoulareas, according to Mr. Warner's uncontradicted testimony, stated in that critical meeting: 80 I more than anybody else was responsible for bringing [Comnas] into this and I think that I should be involved in helping to handle the situation. 81 Tr. at 1534. 82 A few days later, Tavoulareas flew to London from New York with two Mobil subordinates to explain to Comnas that we weren't satisfied with [his] services. Tr. at 1333. After one of Tavoulareas' subordinates met with Comnas to find out what terms he would agree to for leaving, Tr. at 1195, Comnas asked to meet with Tavoulareas. Tr. at 1336-37; see also Tr. at 3349. Tavoulareas reviewed a draft agreement of terms for Comnas' departure and then met with Comnas. Tr. at 1336-37. At Mobil's unilateral insistence, made without even notifying or consulting its other partners in Samarco, Comnas left Atlas immediately thereafter. Tr. at 1190. 83 In addition to the trial testimony of Tavoulareas and his witnesses, Mobil's own answers to Tyler's written questions prior to the article's publication expressly conceded that Tavoulareas personally participated in the arrangements made when G. Comnas departed from Atlas ... to the extent of assuring a settlement that was fair and equitable. RE at 2345. It is also beyond dispute that as part of the settlement resulting in Comnas' resignation Mobil agreed to put Comnas on its payroll as a consultant. 32 84 Tavoulareas also played a pivotal role in helping Atlas not only to survive but to prosper after Comnas left, when Atlas thereby became the firm of Peter and his youthful colleague from Lemos, Ares Emmanuel. Tr. at 1835; see also RE at 2053, 2435. Tavoulareas personally participated in Mobil's internal deliberations that resulted in the decision to make Harmon Hoffmann, a senior and highly respected Mobil executive, available to Atlas as an interim manager. See Tr. at 1193, 2848-49; cf. RE at 2345. Furthermore, Tavoulareas was personally and directly involved in persuading the Alirezas to retain Atlas as Samarco's independent management firm upon Comnas' departure. Tavoulareas flew to Saudi Arabia and personally informed the Alirezas of Mobil's discharge of Comnas, Tr. at 3286-88. Subsequently, the Alirezas took the position that the Samarco-Atlas contract was terminated by virtue of Comnas' departure, Tr. at 3292, and that to continue collaboration, Atlas would have to assign partial control of its stock and management to Samarco. Tr. at 3292-93; see also Tr. at 1867, 2602, 3441. The Alirezas later withdrew these demands antithetical to Atlas (and Peter) only after Tavoulareas and one of his subordinates flew once again to Jeddah and assured Ahmed Alireza that the Samarco-Atlas contract remained valid, Tr. at 3294, 3298-99, 3302, and that Mobil would support the needs of [Atlas]. Tr. at 3304. 85 Given this plentiful, undisputed evidence of Tavoulareas' personal involvement in the establishment and operation of Atlas to Peter's manifest benefit, we conclude that no reasonable jury could, on this record, find that the set up allegation was false. 33
86 Although the central thrust of the story was not proven false at trial, it is still possible that the story contains defamatory falsehoods. Cf. Afro-American Publishing, 366 F.2d at 655 ([T]he defamer may be [all] the more successful when he baits the hook with truth.). But cf. Restatement (Second) Of Torts Sec. 581A comment f, at 237 (Slight inaccuracies of expression are immaterial provided that the defamatory charge is true in substance.). We must, in consequence, carefully consider both the veracity and defamatory character of the three challenged statements in the Post article besides the fundamental set up charge. 34 87 Tavoulareas first seeks to premise liability on statements in the article creating the impression that there was a direct link between Mobil and Atlas. Brief for Appellant at 25. Given the overwhelming proof at trial of precisely such a link, this argument collapses at the outset. To recap briefly, it is undisputed that Mobil recruited Comnas to form Atlas; that Mobil argued--successfully--in favor of Atlas' position with the other Samarco partners on several critical occasions; that Mobil removed Comnas as head of Atlas without consulting its Samarco partners; and that Mobil made a senior Mobil executive available to Atlas as an interim replacement for Comnas. Furthermore, it is beyond cavil that Mobil provided office space and direct financial assistance to Atlas and that Atlas managed the ships that Mobil bareboat chartered to Samarco. See, e.g., Tr. at 1142-48. Thus, even if the Post article failed to make clear the formal, corporate relationship between Mobil, Samarco, and Atlas, but see paragraphs 6, 58-59, 74, the defendants cannot in reason and in law be held liable for accurately reporting the direct link that undisputedly did exist between Mobil and Atlas. 88 Tavoulareas also challenges the allegation at the end of the article that when Comnas left Atlas, Tavoulareas dispatched one of his senior shipping executives, Herman [sic] F. Hoffmann, to London to help run Atlas. p 82. Tavoulareas does not contest the fact that Mobil indeed sent Hoffmann to London on that very mission. Rather, he contends that the Post published a defamatory falsehood by suggesting that he personally ordered a Mobil executive to London to bail out his son's company. Reply Brief for Appellant at 14 (emphasis added). As we have seen, Tavoulareas does not and could not dispute the Post 's allegation that he played a personal role in arranging Comnas' departure from Atlas. Moreover, the article was also undisputedly correct in reporting that Comnas' removal made it  'natural for Mobil to step forward' ... 'to maintain quality management of [Samarco's] operations.'  paragraphs 83-84 (quoting Kousi as well as Mobil's own statement). Nor is it contested, as noted above, that Tavoulareas personally participated in the Mobil discussions in which it was decided that Hoffmann would replace Comnas. Tr. at 1193. Nevertheless, Tavoulareas asserts that the jury could reasonably have found the dispatch allegation to be actionable. 89 Testimony was presented at trial that Paul Wolfe, Tavoulareas' subordinate at Mobil, actually made the decision to dispatch Hoffmann to Atlas. Tr. at 1098, 1440. Thus, viewing as we do the evidence most favorably to plaintiff, the dispatch allegation was false to the extent it overstated Tavoulareas' role in Mobil's sending Hoffmann to replace Comnas. The potentially defamatory inference that could be drawn from this falsehood is that Tavoulareas had not recused himself from Atlas matters despite a possible conflict of interest. But we have already held this implication not to be actionable in light of the overwhelming, undisputed evidence of Tavoulareas' personal, continual, and active involvement in Atlas' matters in ways that uncontestably redounded directly to Peter's benefit. Since the only derogatory implication of the dispatch statement is undisputedly correct, it is not actionable. See, e.g., Herbert v. Lando, 781 F.2d 298, 312 (2d Cir.) (To hold actionable a statement whose ultimate defamatory implications are themselves not actionable, we believe, would be a classic case of the tail wagging the dog.), cert. denied, --- U.S. ----, 106 S.Ct. 2916, 91 L.Ed.2d 545 (1986); Skrocki v. Stahl, 14 Cal.App. 1, 6, 110 P. 957 (1910) (It was sufficient if the gist or sting of the libelous charge was justified, and immaterial variances and defects of proof upon minor matters are to be disregarded if the substance of the charge be justified); Restatement (Second) Of Torts Sec. 581A comment f, at 237. 35 90 Third, and finally, plaintiff vigorously contests the article's assertion that he personally urged Comnas to accept Peter as a partner in Atlas. paragraphs 23, 52. The jury reasonably could have concluded that this charge, communicated to Tyler by Comnas, was false. See Tr. at 1293-94, 1296-97, 1425, 1433. And, because the personally urged allegation goes beyond the general charge that Tavoulareas set up his son and suggests that Tavoulareas actively pressured Comnas to hire Peter rather than merely rewarded Comnas for doing Peter a favor, see supra note 17, the jury may reasonably have found that this specific allegation carries with it an independent defamatory implication capable of causing a separate harm to plaintiff's reputation. We thus turn to the issue of actual malice.