Opinion ID: 2999611
Heading Depth: 2
Heading Rank: 1

Heading: Actual Malice: Counts 2-4

Text: Reinke concedes that it cannot prevail on its defamation claims without first showing that the Union acted with actual malice. See Linn v. United Plant Guard Workers of Am., 383 U.S. 53, 61 (1966) (holding as preempted all defamation actions in labor disputes except those published with actual malice). Actual malice, or “New York Times malice,” requires that the party making a defamatory statement do so “ ‘with knowledge that it was false or with reckless disregard of whether it was false or not.’ ” Old Dominion Branch, No. 496 Nat. Assn. of Letter Carriers v. Austin, 418 U.S. 264, 281 (1974) (quoting New York Times Co. v. Sullivan, 376 U.S. 254, 280 (1964)). Reinke argues that the Union acted with reckless disregard for the truth when it asserted that Reinke cheated its employees out of benefits. The question for us is not whether a reasonable person would have found it prudent to accuse Reinke of cheating, but whether there is “sufficient evidence to permit the conclusion that the [Union] in fact entertained serious doubts as to the truth of [its] publication,” St. Amant v. Thompson, 390 U.S. 727, 731 (1968), or whether there is sufficient evidence to show that the Union had a “ ‘high degree of awareness of . . . probable falsity,’ ” Harte-Hanks Commc’ns, Inc. v. Connaughton, 491 U.S. 657, 667 (1989) (quoting Garrison v. Louisiana, 379 U.S. 64, 74 (1964)). The evidence must be sufficient to “support a reasonable jury finding . . . that the plaintiff has shown actual malice by clear and convincing evidence.” Saenz v. Playboy Enters., Inc., 841 F.2d 1309, 1317 (7th Cir. 1988) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255-56 (1986)). 1 Count 1 was voluntarily dismissed prior to summary judgment. 6 No. 05-3555 Reinke relies on a number of pieces of circumstantial evidence to support its case: the Union’s reliance on a mere preliminary report that was qualified and based upon incomplete records; the Union’s deviation from normal practices (the Union had not previously picketed on the basis of preliminary reports); the Union’s refusal to stop picketing after Reinke’s auditor determined the company had paid all it was obliged to; the Union’s refusal to stop picketing in the face of Reinke’s offer to pay all disputed funds; the Union’s use of the term “cheating” instead of “under contribution”; and, finally, the Union’s ill will toward Reinke. Reinke is entitled to prove state of mind with circumstantial evidence like that listed above, but “courts must be careful not to place too much reliance on such factors.” Id. at 668. Our review of the record as a whole leads us to the conclusion that there is insufficient evidence to allow a finder of fact to conclude the Union acted with actual malice.2 The Union’s reliance on the preliminary report does not evidence actual malice. While preliminary in nature, and stamped “QUALIFIED,” there is nothing in the record to suggest any facially obvious errors in its accuracy. To the contrary, the auditors stated their belief that their examination provided a “reasonable basis” for the conclusion. Moreover, the Union knew the Fund thought it was a reliable enough source for initiating a lawsuit. Reliance on a report expressly noting it is incomplete because of the absence of certain records might, in other circumstances, help support a finding of actual malice. But in this case the absence of the records was attributed by the 2 Accordingly, we need not consider the other dispute between the parties as to this issue; namely, whether the Union’s allegation of cheating is an actionable defamatory statement. No. 05-3555 7 preliminary report to Reinke’s lack of cooperation. Thus, the missing records reinforce the inference of impropriety on Reinke’s part rather than detract from it. We cannot describe reliance on that report as evidence of a reckless disregard of the truth. The Union’s disinterest in Reinke’s audit and other efforts to prove that Reinke did not cheat also do not bring us closer to sufficient evidence of actual malice. Yes, the Union refused to consider the opinion arrived at by Reinke’s auditor, but that does not evidence a “purposeful avoidance of the truth.” Harte-Hanks, 491 U.S. at 692. Auditing reports are prepared by licensed professionals for a reason: they involve complex calculations and procedures the untrained person cannot perform. The only information in these reports that matters to most people is the bottom line—whether or not Reinke is short on its payments. The Fund’s auditor said Reinke owed money and Reinke’s auditor said the opposite. A battle of experts like this tends to show a good faith dispute, not actual malice. Nor do we find significant the Union’s refusal to stop picketing in the face of Reinke’s offer to pay the disputed funds. Even putting aside the fact that this offer was qualified by Reinke’s reservation to contest the matter in court, offering to pay the funds cures alleged cheating in the same way that a bank robber’s offer to give the money back dispels the need for a criminal prosecution. By the time an offer of restitution is made the alleged cheating (or bank robbery) has occurred and paying the money back will not make it go away. To put it another way, the Union could have construed the offer of payment as evidence of a guilty conscience just as easily as it could consider it to be evidence of Reinke’s innocence. Finally, the Union’s deviation from its previous practice and its ill will toward Reinke are just more pieces of circumstantial evidence, insufficient without something 8 No. 05-3555 more concrete, to show actual malice. See Harte-Hanks, 491 U.S. at 665 (explaining that a “plaintiff must prove more than an extreme departure from professional standards and that a [defendant’s] motive . . . [cannot] provide a sufficient basis for finding actual malice”). And the Union’s use of the term “cheating” instead of a more innocuous term like “failure to contribute,” or “undercontribution,” is also not sufficient alone, or in combination with Reinke’s other evidence, to show actual malice. Many innocent explanations may exist when a company lapses in its obligation to pay welfare benefits, but it does not show actual malice for a union not to give the company the benefit of the doubt. After all, the relationship between organized labor and employers is marked by “intemperate” and “abusive” language, where “epithets such as ‘scab,’ ‘unfair,’ and ‘liar’ are commonplace.” Linn, 383 U.S. at 60. Our review of the record, taking the facts in the light most favorable to Reinke, and viewing them through the prism of the higher clear and convincing evidence standard, leads us to conclude that there exists no genuine issue of material fact as to actual malice on the part of the Union.