Court Opinion

ID: 9547446
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:47:33.71226+00
Date Added: 2024-06-11T15:17:45.128982
License: Public Domain

ROBERTS, J.,
concurring in part, dissenting in part.
I concur with the majority’s analysis under the state constitution that Article I, section 8 provides no greater protection to media defendants as compared to other defendants. I also agree that Wadsworth is not a “public figure” for purposes of the federal constitutional analysis. I dissent, however, with regard to the Bank of Oregon. The bank meets the requirements of a “public figure” as that term has developed in federal dafamation jurisprudence.
The United States Supreme Court has held that media defendants enjoy a conditional constitutional immunity from liability for publication of defamatory falsehoods. New York Times Co. v. Sullivan, 376 US 254, 84 S Ct 710, 11 L Ed 2d 686 (1964). The conditional immunity applies if the defamatory statements concern public officials, New York Times Co., or public figures, Gertz v. Robert Welch, Inc., 418 US 323, 94 S Ct 2997, 41L Ed 2d 789 (1974). In such cases, the plaintiffs must prove that the defaming defendants acted with malice. The federal Supreme Court has established the law of public and private plaintiffs with reference to individuals. It has not yet addressed the status of corporate plaintiffs. Lower federal courts, state courts and commentators have addressed the topic, however, and their analysis is compelling.
In Coronada Credit Union v. KOAT Television, 99 NM 233, 656 P2d 896 (1982), the credit union was found to be a public figure because it was chartered by law to serve members of the public, it was regulated by state and federal law, and its financial condition, the topic around which the defamation centered, was a matter of concern to the public. Coronado relied on a discussion of a corporation’s status in the context of defamation by Sack, Libel, Slander, and Related Problems § V. 3.1.9. at 208 (1980):
“It seems clear * * * that any publicly held corporation is a *448‘public figure’ for purposes of commentary about its corporate affairs. When a corporation ‘goes public’ by publicly offering its securities, it has taken a specific, voluntary action, the known result of which will be mandatory increased public scrutiny. The necessary consequence is publicity.
“It is consistent with both First Amendment policy and the aims of federal and state securities laws for commentary about such corporations to be encouraged and protected. Corporations subject to regulation by state or federal authorities are similarly ‘public,’ again inviting public scrutiny by voluntarily entering such businesses. And corporations that have the requisite level of dealings with government agencies may be ‘public figures’ for that reason alone. (Emphasis in original.) (Footnotes omitted.)
American Ben. Life Ins. Co. v. McIntyre, 375 So 2d 239 (Ala 1979) (per curiam), held an insurance company to be a public figure with the following analyis:
“We hold that an insurance company such as American Benefit is for purposes of our libel laws a ‘public figure.’ It cannot be successfully argued that a corporation whose dealings are subject to close regulation by our state government, and, indeed, whose very existence as an entity is owing to that government, does not invite attention and comment from the news media. The insurance business has long been held to be clothed with the public interest, * * * and the power and influence of such a business over society cannot be ignored.” 375 So 2d at 242. (Citation omitted.)
A commentator has examined the question of where corporations fit in the public vs private plaintiff analysis. She advocates the position that
“the corporate defamation plaintiff more nearly resembles the public figure than its private counterpart. A corporation is inherently less vulnerable to reputational injury than an individual and can utilize political and commercial speech to build its image and discredit its detractors. In addition, a corporation has voluntarily assumed the unique trappings of the corporate business form and, through the more public and formalized character of its inception and operation, has assumed the risks of free debate.” Fetzer, The Corporate Defamation Plaintiff as First Amendment “Public Figure”: Nailing the Jellyfish, 68 Iowa L Rev 35, 49 (1982). (Footnotes omitted.)
This author examined a 1908 Kansas decision, the *449one cited in New York Times Co. v. Sullivan, supra, as the source of the public figure/private individual distinction. Coleman v. MacLennan, 78 Kan 711, 98 P 281 (1908), contains dictum indicating the scope of the public figure analysis. The case indicates that the analysis extends “to all officers and agents of government — municipal, state and national; to the management of all public institutions — educational, charitable and penal; to the conduct of all corporate enterprises affected with a public interest — transportation, banking, insurance, and to innumerable other subjects involving the public welfare.” 78 Kan at 734.
Not surprisingly, a large insurance company with stocks traded on the New York Stock Exchange was held to be a public figure. Reliance Insurance Co. v. Barron’s, 442 F Supp 1341 (SDNY 1977). The court stated: “By its very nature as a large publicly held, government-regulated corporation, and additionally because of its voluntary decision to make a public stock offering, Insurance has, in fact, thrust itself into the public eye.” 442 F Supp at 1349.
Martin Marietta Corp. v. Evening Star Newspaper, 417 F Supp 947 (D DC 1976), applied the malice standard in a suit brought by the corporate plaintiff. The court found the corporation to be a public figure either in a limited sense because of the public controversy with which the corporation became involved, or in a broad sense because corporations are, for the most part, not deserving of the protections defamation law was meant to afford. First, the court analyzed Rosenbloom v. Metromedia, 403 US 29, 91 S Ct 1811, 29 L Ed 2d 296 (1971), a plurality opinion later rejected by a majority opinion in Gertz v. Robert Welch, Inc., supra. Rosenbloom held that a plaintiff who is neither a public official nor a public figure could nonetheless be required to prove malicious defamation on the part of a media defendant if the falsehoods concerned an issue of public importance.
Rosenbloom’s shift in focus from the public character of the plaintiff to the public character of the issue was cut short in Gertz v. Robert Welch, Inc., supra. Gertz involved a private plaintiff. The media defendant attempted to apply the Rosenbloom analysis to bring itself within the conditional constitutional privilege for matters of public interest. Gertz rejected this approach, reasoning that the reputation of private individuals requires a greater degree of protection than
*450the reputation of public figures. This is because public figures have greater access to the media and are better equipped to counteract false statements. Public figures also have voluntarily placed themselves into public issues. One consequence of such exposure is increased risk of injury from defamatory falsehoods. Gertz describes individuals as public figures as follows:
“Hypothetically, it may be possible for someone to become a public figure through no purposeful action of his own, but the instances of truly involuntary public figures must be exceedingly rare. For the most part those who attain this status have assumed roles of especial prominence in the affairs of society. Some occupy positions of such persuasive power and influence that they are deemed public figures for all purposes. More commonly, those classed as public figures have thrust themselves to the forefront of particular public controversies in order to influence the resolution of the issues involved. In either event, they invite attention and comment.” 418 US at 345.
It should be noted that the majority uses Gertz’s reference to the rarity of “involuntary” public figures in support for its argument that the Bank of Oregon is not a public figure. Under my analysis, a corporation is considered a public figure because of its voluntarily assumed corporate activity.
The Gertz court found that the assumptions attributed to public figures are not justified with regard to private individuals.
“[The private individual] has not accepted public office or assumed an ‘influential role in ordering society.’ * * * He has relinquished no part of his interest in the protection of his own good name, and consequently he has a more compelling call on the courts for redress of injury inflicted by defamatory falsehood. Thus, private individuals are not only more vulnerable to injury than public officials and public figures; they are also more deserving of recovery.” 418 US at 345. (Citation omitted.)
Martin Marietta concluded that Gertz did not apply to corporations and Rosenbloom was still controlling. The inquiry then became whether the falsehoods concerned a matter of public interest. The court found that they did and applied the malice standard.
In some respects, the Martin Marietta analysis is *451unsound. Attempting to define a “matter of public interest” is a notoriously slippery undertaking that leads the court into the questionable practice of measuring the public worth of a particular publication. Its reliance on Rosenbloom to rekindle the dying embers of the “public interest” standard is not persuasive. Nonetheless, Martin Marietta accurately distills the focus of the Gertz test:
“[T]he ‘public figure’ standards set out in Gertz are designed to ascertain whether a person, through his activities, has lost claim to his private life. It makes no sense to apply these standards to a corporation, which, regardless of its activities, never has a private life to lose.” 417 F Supp at 955.
There are certain characteristics of corporations which provide an objective standard by which to categorize the public or private nature of the enterprise. The degree of government regulation imposed on a corporation is perhaps the single most important determinant. As government regulation increases, so does the corporation’s overall exposure to public scrutiny. Exposure comes in the form of disclosure and reporting requirements, administrative inspections and audits, and compliance with rules and regulations of public record for conducting business. Often, extensively regulated corporations deal in such essential commodities as transportation, finance and insurance. Their efficient management cannot be a matter solely of private institutional concern.
Not all corporations would fit this “public figure” model. Corporations subject only to the regulations established by state law for corporate existence would not become public figures by virtue of such minimum regulation alone.
The resolution of more difficult cases lying between these two extremes may await further refinement and need not be considered here. Banking is a pervasively regulated business in which public scrutiny is the norm. Defendants’ article questioned the integrity of certain financial transactions of plaintiff bank, a topic of which public review is anticipated. I would hold the Bank of Oregon to the requirement to prove malicious defamation, and, with regard to this plaintiff, affirm the trial court.