Opinion ID: 162749
Heading Depth: 1
Heading Rank: 2

Heading: Utah Defamation Law

Text: 9 Seeking de novo review of the district court's interpretation and application of Utah law, Fields v. Farmers Ins. Co., 18 F.3d 831, 833 (10th Cir.1994), 3 CTI contends the court erred when it collapsed the separate causes of action for slander and libel into a single, undifferentiated claim and, then, dismissed its complaint solely alleging libel. To arrest the growth of this hydra, CTI offers us Seegmiller v. KSL, Inc., which, it insists, expressly endorsed the very distinctions between libel per se and slander per se it advances in this appeal. 626 P.2d 968 (Utah 1981). 10 Seegmiller, however, was an action to redress the alleged defamatory words spoken by an investigative television reporter, that is, slander, in which the Utah Supreme Court had to decide the degree of fault which a `private figure' must prove in a defamation action against a media defendant and whether the defendant is entitled to the benefit of a conditional privilege permitting comment on a matter of public interest. Id. at 969. In that endeavor, the court quoted Utah Code Ann. § 45-2-10, the legislative directive for privileged broadcasts. 4 Id. at 977 n. 7. In the same footnote, the Seegmiller court wondered what the Legislature had in mind when it used the words `libelous, slanderous or defamatory per se,' and cited William Prosser, Law of Torts § 112 (4th ed. 1971), and a Colorado case to support its reminder that [t]he concepts of slander per se and libel per se are distinct and the term `per se' has different meanings depending on context. Id. Thus, although Seegmiller has since provided the decisional ground for cases involving privilege, its utility here is marginal. See, e.g., Van Dyke v. KUTV, 663 P.2d 52, 56 (Utah 1983) (college official investigated for sexual harassment occupied a position that invited public scrutiny, shielding the reporter's comments with a qualified privilege). 11 Instead, this case easily aligns with the progenitor of Utah's common law of libel, Nichols v. Daily Reporter Co., 30 Utah 74, 83 P. 573 (1905). 5 There, Mr. Nichols, a candidate for office in the Salt Lake City Typographical Union and delegate to the national convention, sued the Daily Reporter for printing and publishing a card which stated, on one side, Vote for Honest Jake Bosch for Delegate, and, on the other, Explanatory Mr. C.A. Nichols owes the Daily Reporter Co. a balance of $34.25 for printing done in 1894. Draw your own conclusions and vote for Mr. Nichols, if you think he is not able to pay this debt. Id. at 573. The meaning of these words, Mr. Nichols alleged, was clear: unable to pay his debts, unworthy of credit, this typographer was not to be trusted; all statements of contempt and ridicule which damaged him in his reputation, good repute, and credit. Id. Because Mr. Nichols claimed the publication was false and defamatory on its face, he did not allege special damages. 12 Writing on a clean slate, 6 the Utah Supreme Court stated: 13 It, of course, is conceded that written derogatory or disparaging words which impute to a person the commission of a crime, or degradation of character, or which have a tendency to injuriously affect him in his office or trust, profession, trade, calling or business, or which tend to degrade him in society, or expose him to public hatred, contempt, or ridicule, are libelous and actionable. It also is the well-recognized rule that when the words are libelous per se, it is not necessary to allege or prove special damages, for malice and damage are implied; but where they are not libelous per se, special damages must be averred and proven to warrant a recovery. 14 Id. at 574. Hence, the correct test to determine whether a publication is libelous per se is when language is used concerning a person or his affairs which from its nature necessarily must, or presumably will, as its natural and proximate consequence, occasion him pecuniary loss. Id. (emphasis added). The presumption of damage inheres to the words of the writing itself. Without this presumption, special damages to the plaintiff's reputation must be alleged and proved to have been the actual and natural result of the language used. Id. (emphasis added). 7 15 Although cited in a later Utah case for libel, 8 Nichols lay dormant for sixty years, 9 until it surfaced again in Western States Title Ins. Co. v. Warnock, 18 Utah 2d 70, 415 P.2d 316 (1966), an action for libel and slander, which concluded, first, a document disparaging another's title was not libelous per se; and, second, statements made to opposing counsel in the course of a lawsuit were not slanderous. Id. at 318. 10 Baum v. Gillman, 667 P.2d 41, 43 (Utah 1983), inexorably fused the two claims, citing Nichols for the test for defamation, 11 to conclude Gillman's verbal statements about Baum's sour cherry business did not impute criminal conduct, loathsome disease, conduct incompatible with the exercise of a lawful business or unchastity, and, thus, supported no action for either per se or per quod defamation. Id. at 43. Relying on Allred v. Cook, 590 P.2d at 322 ([t]he only damage which could come to the plaintiff would be that the defendants had fired him from his position, and the plaintiff makes no such contention in his complaint), the Baum court emphasized the statements must damage plaintiff in a current business endeavor or pursuit. Statements which may only be injurious to some future happening do not give rise to a cause of action for either per se or per quod defamation. 667 P.2d at 43. Special damages, then, must be specific, actual, and non-speculative. 16 In our de novo review, [t]o determine whether the complaint states a claim upon which relief can be granted, we must examine the complaint in light of the substantive law of [Utah] because this case arises under diversity jurisdiction. Weatherhead v. Globe Int'l, Inc., 832 F.2d 1226, 1228 (10th Cir.1987). Thus, viewing the district court's interspersion of libel and slander law from this historical perspective, we are constrained to conclude it incorrectly amalgamated the causes of action. In the end, however, the court correctly held that no statement, on its face, bore the presumption of damage, and, while perhaps two of the statements were false or grossly distorted if extrinsic information is referenced for libel per quod, CTI at , CTI failed to plead and prove special damages as required by Nichols and its mutations. 12 17 For example, Bloomberg's statement (Statement 1) that CTI sold 11.1 million shares of its stock at 72% discount to its market price, may be rendered libelous per quod with the introduction of specific, extraneous facts to establish not all of the 11.1 million shares were, in fact, sold on February 29, 2000, the final day of the private placement when the market price was $9.875, the basis for the 72% discount rate statement. 13 Similarly, Statement 3 reporting CTI's struggle to sell the imaging systems may also be false with the introduction of evidence of its effort to obtain FDA approval before launching its product on the domestic market. Even with the allegation that [a] significant portion of this loss of market capitalization was directly and proximately caused by Bloomberg's publication of the defamatory matter, neither statement becomes libelous per quod. CTI then alleged the loss of market capitalization exceeded $100 million, a number that bears no resemblance to the actual capitalization figures of the complaint. Further, the alleged negative impact on CTI's business dealings with third parties cannot rescue CTI's generalized allegation of special damages. 18 In assessing whether CTI's complaint alone is legally sufficient to state a claim for which relief may be granted, Sutton v. Utah State Sch. for the Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir.1999), we fully recognize the district court embedded a correct articulation of Utah law in its disposition, citing both the statute and West v. Thomson Newspapers, 872 P.2d 999 (Utah 1994). Section 45-2-2(1) defines libel: 19 Libel means a malicious defamation, expressed either by printing or by signs or pictures or the like, tending to blacken the memory of one who is dead, or to impeach the honesty, integrity, virtue or reputation, or publish the natural defects of one who is alive, and thereby to expose him to public hatred, contempt or ridicule. 20 Utah Code Ann. § 45-2-2(1). Under West an action for libel by the mayor of a small Utah town against a newspaper which published three columns alleged to be defamatory, the court noted [t]he term `defamation' encompasses both libel and slander. 872 P.2d at 1007 n. 12. The primary distinction between libel and slander is the nature of the publication. Id. To state such a claim for defamation, plaintiff must show that defendants published the statements concerning him, that the statements were false, defamatory, and not subject to any privilege, that the statements were published with the requisite degree of fault, and that their publication resulted in damage. Id. at 1007-08. Because our de novo review, based on the statute and Utah cases, concludes that Bloomberg's statements did not bear the requisite malicious injury to reputation in the absence of a precise statement of the damages sustained, we affirm the district court.