Opinion ID: 4513070
Heading Depth: 1
Heading Rank: 2

Heading: The Public Figure Issue

Text: The First Amendment prohibits public officials or public figures from recovering damages for defamatory falsehoods concerning issues of public interest and concern unless they prove “that the statement was made with ‘actual malice’ -- that is, with knowledge that it was false or with reckless disregard of whether it was false or not.” New York Times Co. v. Sullivan, 376 U.S. 254, 279-80 (1964); see Curtis Publ’g Co. v. Butts, 388 U.S. 130, 164 (1967) (Warren, C.J., concurring) (extending the rule in New York Times to public figures, that is, persons “intimately involved in the resolution of important public questions or, by reason of their fame, shape events in areas of concern to society at large”). Thus, if Nelson Auto is a public figure, federal law requires that its Amended Complaint plead sufficient facts to support a plausible finding of actual malice. See, e.g., Biro v. Conde Nast, 807 -4- F.3d 541, 544-46 (2d Cir. 2015), cert. denied, 136 S. Ct. 2015 (2016). If it is a private individual rather than a public figure for these purposes, then Minnesota law provides the standard of defamation liability; “so long as they do not impose liability without fault, the States may define for themselves the appropriate standard of liability for a publisher or broadcaster of defamatory falsehood injurious to a private individual.” Gertz v. Robert Welch, Inc., 418 U.S. 323, 347 (1974). In Gertz, the Supreme Court noted that the public figure category is broader than persons who by reason of pervasive fame and notoriety become public figures for all purposes. “More commonly, an individual voluntarily injects himself or is drawn into a particular public controversy and thereby becomes a public figure for a limited range of issues.” Id. at 351. Whether Nelson Auto is a limited purpose public figure regarding the KARE 11 story is an issue of both federal and Minnesota law. As a matter of federal First Amendment law, the public figure question is given “a more meaningful context by looking to the nature and extent of an individual’s participation in the particular controversy giving rise to the defamation.” Id. at 352. The Supreme Court has not addressed whether the “private individual” category can include a for-profit corporation, depending upon its participation in the particular controversy giving rise to the alleged defamation.1 In Lundell Manufacturing Co. v. American Broadcasting Cos., we reinstated the jury verdict in favor of a corporate plaintiff defamed by a false news report that its garbage recycling 1 In affirming reversal of the district court’s finding of actual malice in Bose Corp. v. Consumers Union of U.S., Inc., the Supreme Court noted that the defamed corporate plaintiff “did not contest the conclusion that it was a public figure, or the applicability of the New York Times standard.” 466 U.S. 485, 492 (1984). In Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., “[n]either the parties nor the courts below have suggested that [the corporate defamation plaintiff] should be required to show actual malice to obtain a judgment and actual compensatory damages.” 472 U.S. 749, 781 (1985) (Brennan, J., dissenting). -5- machine “does not work.” 8 F.3d 351, 360, 364 (8th Cir. 1996), cert. denied, 520 U.S. 1186 (1997). We rejected the media defendant’s argument that New York Times requires proof of actual malice -- plaintiff did not inject itself into the county’s garbage disposal public controversy and therefore “Lundell’s status mirrors that” of the private individual plaintiff in Hutchinson v. Proxmire, 443 U.S. 111 (1979). Similarly, the broad argument that all corporations should be regarded as public figures was rejected in Bruno & Stillman, Inc. v. Globe Newspaper Co., 633 F.2d 583, 589-90 (1st Cir. 1980), a case cited favorably on another issue in Chafoulias v. Peterson, 668 N.W.2d 642, 652 (Minn. 2003). The Minnesota Supreme Court addressed the corporate public figure issue in Jadwin v. Minneapolis Star & Tribune Co., 367 N.W.2d 476 (Minn. 1985), a case in which an investment adviser and his incorporated bond fund alleged they had been libeled in an article published in the defendant newspaper’s business-financial section. The Court held that Jadwin, like the individual plaintiff in Hutchinson, was not a public figure under Gertz; applying Minnesota law, it held that he “may recover actual damages for a defamatory publication upon proof that the defendant knew or in the exercise of reasonable care should have known that the defamatory statement was false.” Id. at 486, 491. However, regarding the separate defamation claim by the incorporated bond fund, the Court concluded: We hold, therefore, that corporate plaintiffs in defamation actions must prove actual malice by media defendants when the defendants establish that the defamatory material concerns matters of legitimate public interest in the geographic area in which the defamatory material is published, either because of the nature of the business conducted or because the public has an especially strong interest in the investigation or disclosure of the commercial information at issue. Id. at 487-88. -6- In Northwest Airlines, Inc. v. Astraea Aviation Services, Inc., 111 F.3d 1386, 1393 (8th Cir. 1997), we broadly declared: “Minnesota law considers a corporation a public figure and requires it to show that a statement was made with actual malice to establish a defamation claim. See Jadwin v. Minneapolis Star & Tribune Co., 367 N.W.2d 476, 487 (Minn. 1985) (malice standard applies to heavily regulated corporation in securities industry).” In Porous Media Corp. v. Pall Corp., 173 F.3d 1109, 1116 (8th Cir. 1999), a libel action between competitors, we quoted that sentence in Northwest Airlines but replaced the parenthetical limiting the rule to heavily regulated industries with the statement that the libel plaintiff “is regulated by Minnesota . . . authorities.” We held that the corporate plaintiff was a limited purpose public figure under Minnesota law as interpreted in Northwest Airlines but was not a limited purpose public figure under the First Amendment as interpreted in Gertz and in Lundell. Id. at 1119-20. As the Minnesota Supreme Court noted in Jadwin, 367 N.W.2d at 488, 490, and as Gertz makes clear, Minnesota is free to categorize corporations as public figures that must prove actual malice even if federal law does not. We have some doubt whether the Minnesota Supreme Court would apply Porous Media’s categorical approach to the public figure question when the allegedly defamed corporate plaintiff is a small business located hundreds of miles from the metropolitan area where defamatory statements are published. Minnesota law would apparently apply a more restrictive definition of limited purpose public figure if the business were operated as a sole proprietorship. See Chafoulias, 668 N.W.2d at 651, citing Gertz, 418 U.S. at 352. However, unless the Minnesota Supreme Court revisits the issue, our interpretation of Minnesota law in Porous Media will remain controlling precedent in federal defamation cases based upon diversity jurisdiction. In this case, Nelson Auto, a corporate plaintiff, alleges that KARE 11 published defamatory false statements in a news story that “concern[ed] matters of legitimate -7- public interest in the geographic area in which the defamatory material is published,” Jadwin, 367 N.W.2d at 488, namely, criminal charges arising out of an investigation into whether Nelson Auto had overcharged Minnesota police departments using public monies to purchase police vehicles. Cf. Harlow v. State Dep’t of Human Servs., 883 N.W.2d 561, 572 (Minn. 2016). Thus, the district court did not err in applying Jadwin, as construed by this court in Northwest Airlines and Porous Media, to conclude that Nelson Auto is a public figure as a matter of Minnesota law.