Paul Anjoorian, et al., Appellants, vs. Minneapolis Department of Public Safety, et al., Respondents, Star Tribune, a division of Cowles Media Company, a Delaware corporation, et al., Respondents.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).

STATE OF MINNESOTA

IN COURT OF APPEALS

CX-97-242

Paul Anjoorian, et al.,

Appellants,

vs.

Minneapolis Department of Public Safety, et al.,

Respondents,

Star Tribune, a division of Cowles Media Company, a Delaware corporation, et al.,

Respondents.

Filed August 26, 1997

Affirmed in part, reversed in part, and remanded.

Peterson, Judge

Ramsey County District Court

File No. C5955615

Leland S. Watson, 836 Norwest Midland Building, 402 South Second Avenue, Minneapolis, MN 55401 (for appellants)

Joseph S. Friedberg, 250 Second Avenue South, No.205, Minneapolis, MN 55401 (for appellants)

Peter H. Watson, 1960 Fifth Street Towers, 150 South Fifth Street, Minneapolis, MN 55402 (for appellants)

Hubert H. Humphrey III, Attorney General, David T. Schultz, Assistant Attorney General, 1100 NCL Tower, 445 Minnesota Street, St. Paul, MN 55101 (for respondent State of Minnesota )

John P. Borger, Mark J. Carpenter, Faegre & Benson, P.A., 2200 Norwest Center, 90 South 7th Street, Minneapolis, MN 55402 (for respondent Star Tribune)

Considered and decided by Peterson, Presiding Judge, Toussaint, Chief Judge, and Amundson, Judge.

U N P U B L I S H E D O P I N I O N

PETERSON, Judge

In this appeal from a summary judgment, appellants argue that the Gambling Enforcement Division of the Minnesota Department of Public Safety violated the Minnesota Government Data Practices Act and that the Star Tribune defamed them. We affirm in part, reverse in part, and remand.

FACTS

Appellants were shareholders in Creative Games Technology, Inc. (CGTI), a Minnesota corporation that leased video gaming equipment to casinos in Minnesota. Under 1991 Minn. Laws ch.336, art. 2, § 9, (codified at Minn. Stat. § 299L.07), CGTI was required to apply to the Gambling Enforcement Division (GED) of the Minnesota Department of Public Safety for a license to continue leasing gaming equipment. After an investigation, GED agents Dan Laurila and John Willems recommended that CGTI be denied a license on grounds that "issuing a license to persons known to associate with persons associated to * * * organized crime is not conducive to the effective regulation and control of gambling."

While CGTI's license investigation was taking place, a separate criminal investigation was undertaken by GED agents and law enforcement officers as part of a multi-agency "Task Force on Indian Gaming," which had as its mission the investigation and prosecution of a variety of crimes that might be committed by participants in Minnesota's new, expanding Indian gaming industry.

In August 1992, Gamma International, Inc., then a separate entity unrelated to CGTI, applied to the GED for a license to lease gaming equipment. In November 1992, Gamma purchased CGTI, dissolved the Minnesota corporation, and reincorporated CGTI in Delaware as a subsidiary of Gamma. As a result of this transaction, appellants became stockholders in Gamma. After the purchase, CGTI's license application was withdrawn, and Gamma's license application was still pending. In April 1993, the GED informed Gamma that it was at risk of failing to meet the licensing standards under Minn. Stat. 299L.07 because of its ownership of CGTI, which had possible connections with persons linked to organized crime. The GED informed Gamma that if appellants chose to divest themselves of ownership in Gamma, there would be no other impediments to Gamma's licensure.

Until this point, appellants were unaware of any problems the GED had with CGTI's license application or of any reason why Gamma's license would be affected by its owning CGTI. To find out what the problems were, appellants sent their attorney to meet with Laurila and Willems. Appellants' attorney asked to see any documents the GED had concerning appellants, but the GED refused because the attorney represented appellants individually rather than Gamma, the license applicant. After Gamma's president authorized appellants' attorney to receive this information, the GED gave appellants' counsel an oral summary of its reasons for the impending license denial.

In December 1993, the Star Tribune newspaper made a written request under the Minnesota Government Data Practices Act (MGDPA) for information regarding several closed GED license investigations, including the investigation of CGTI. After consulting with counsel to confirm the public status of the requested documents, the GED released the investigation materials to the Star Tribune.

On May 29, 1994, the Star Tribune published several articles under the headline "Mafia associates had ties to 5 casinos." These articles described apparent connections between appellants and persons known to associate with members of organized crime families.

D E C I S I O N

On appeal from summary judgment, this court must review the record to determine whether there are any genuine issues of material fact to be decided, and whether the trial court erred in applying the law. Offerdahl v. University of Minn. Hosps. & Clinics, 426 N.W.2d 425, 427 (Minn. 1988). When reviewing a summary judgment, we must view the evidence in a light most favorable to the nonmoving party. Id. Summary judgment is appropriate when the nonmoving party relies upon general statements of fact and fails to show that specific facts exist that create a genuine issue for trial. Hunt v. IBM Mid. Am. Employees Fed. Credit Union, 384 N.W.2d 853, 855 (Minn. 1986).

We need not defer to a trial court's decision on a purely legal issue. Frost-Benco Elec. Ass'n v. Minnesota Pub. Utils. Comm'n, 358 N.W.2d 639, 642 (Minn. 1984). The construction of a statute is a question of law subject to de novo review on appeal. Hibbing Educ. Ass'n v. Public Employment Relations Bd., 369 N.W.2d 527, 529 (Minn.1985).

Data Practices Act

The MGDPA "regulates the collection, creation, storage, maintenance, dissemination, and access to government data." Minn. Stat. § 13.01, subd. 3 (1996). It establishes a presumption that government data are accessible to the public unless there is a federal law, a state statute, or a temporary classification of data that makes the data not public. Id. The burden is on the public body resisting disclosure to identify the law that prevents disclosure. Minn. Stat. § 13.03, subd.3 (1996).

Minn. Stat. § 13.82, subd.5 (1996), states:

[I]nvestigative data collected or created by a law enforcement agency in order to prepare a case against a person, whether known or unknown, for the commission of a crime or other offense for which the agency has primary investigative responsibility is confidential or protected nonpublic while the investigation is active. Inactive investigative data is public unless the release of data would jeopardize another ongoing investigation or would reveal the identity of individuals protected under subdivision 10. * * * An investigation becomes inactive upon * * * (a) a decision by the agency or appropriate prosecutorial authority not to pursue the case * * *.

The district court determined that the data released to the Star Tribune by the GED were "law enforcement data" under section 13.82 that "became public once the license applicant was granted its license, and no further legal action was contemplated." Therefore, the district court concluded, release of the data to the Star Tribune was permitted by section 13.82. Appellants contend that the district court erred in concluding that the data released to the Star Tribune were inactive law enforcement data under Minn. Stat. § 13.82 because the data became part of the separate, multi-agency, criminal investigation undertaken by GED agents and law enforcement officers, and that investigation was still active when the data were released. Because the investigation was still active, appellants conclude that the data were confidential and should not have been released to the Star Tribune.

We conclude that Minn. Stat. § 13.82 does not apply to the license investigation data the GED gave to the Star Tribune. Under Minn. Stat. § 13.82, subd. 5, "law enforcement data" is limited to data

collected or created by a law enforcement agency in order to prepare a case against a person * * * for the commission of a crime or other offense.

The data released to the Star Tribune were collected by the GED for the purpose of licensing under the leasing of gaming equipment. The data were collected to determine whether "the applicant will conduct the business in a manner that will not adversely affect the public health, welfare, and safety or be detrimental to the effective regulation and control of gambling." Minn. Stat. § 299L.07, subd. 3 (1996). The data were not collected by the GED to prepare a case against a person for the commission of a crime or civil wrong. Although the data gathered by the GED as part of its licensing process may have also become part of a separate criminal investigation file, the classification of the data in the criminal investigation file does not change the classification of the data in the GED's license investigation file. See Minn. Stat. § 13.03, subd. 4(d) (1996) ("If a state agency * * * disseminates data to another state agency, * * * a classification provided for by law in the hands of the entity receiving the data does not affect the classification of the data in the hands of the entity that disseminates the data.") The data under the control of the GED are not law enforcement data.

Appellants argue in the alternative that if the data are not confidential law enforcement data under Minn. Stat. § 13.82, they are public data under the presumption in Minn. Stat. § 13.01, subd. 3, that all government data are accessible to the public unless a federal law, state law, or temporary classification makes the data not public. Because the data are public, appellants contend, the GED violated Minn. Stat. § 13.04, subd. 3 (1996), when it failed to disclose the data upon the request of their attorney.

The state argues that appellants did not make this argument in the district court and, therefore, may not make it for the first time on appeal. We conclude that the argument was raised in appellants' complaint, which describes their attorney's request to see all public and private data, and alleges that

[t]he failure and/or refusal of Brownell, Laurila and Willems to show plaintiffs' legal representative the requested data was a violation of Minn. Stat. § 13.04, subd. 3.

Furthermore, appellants argued to the district court in their memorandum in opposition to the summary judgment motion that the failure of Laurila and Willems to show their attorney data concerning them constitutes a violation of Minn. Stat. § 13.04, subd. 3.

We also conclude, however, that we cannot address appellants' argument because the GED argued before the district court that the data it released are classified as "civil investigative data" under Minn. Stat. § 13.39 (1996), and the district court, after determining that the data are law enforcement data, did not address the GED's argument. If the data are civil investigative data under Minn. Stat. § 13.39, the Minn. Stat. § 13.01, subd. 3, presumption does not apply. See Minn. Stat. § 13.39, subd. 2 (classification of civil investigative data). Therefore, we reverse the summary judgment on appellants' MGDPA claim and remand to permit the district court to consider the GED's argument that the data are civil investigative data. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (reviewing court must generally consider only issues that record shows were presented and considered by trial court in deciding matter before it).

Defamation

Appellants argue that because they put forward sufficient evidence to establish their defamation claim, the district court improperly granted summary judgment to the Star Tribune. The district court concluded that the Star Tribune stories were substantially truthful and could not sustain a case of defamation by implication. We agree.

A plaintiff suing in defamation is required to plead and prove that: (1) the defendant published a statement of fact; (2) the statement was false; (3) the statement concerns the plaintiff; and (4) the statement tends to harm the plaintiff's reputation and to lower him or her in the estimation of the community. Foley v. WCCO Television, Inc., 449 N.W.2d 497, 500 (Minn. App. 1989), review denied (Minn. Feb. 9, 1990). "Truth, however, is a complete defense, and true statements, however disparaging, are not actionable." Stuempges v. Parke Davis & Co., 297 N.W.2d 252, 255 (Minn. 1980).

The substantial truth "doctrine extends First Amendment protection to statements that are _substantially true_ - that is, _supportable interpretation_ of ambiguous underlying situations." Hunter v. Hartman, 545 N.W.2d 699, 707 (Minn. App. 1996) (citing Moldea v. New York Times Co., 22 F.3d at 310, 317 (D.C. Cir. 1994)), review denied (Minn. June 19, 1996). Under the substantial truth doctrine, a commentator who advocates one of several feasible interpretations of an event is not liable in defamation simply because other interpretations exist. Id.

Consequently, remarks on a subject lending itself to multiple interpretations cannot be the basis of a successful defamation action because as a matter of law no threshold showing of "falsity" is possible in such circumstances.

Id., (citing Bose Corp. v. Consumers Union, 466 U.S. 485, 512-13, 1043 S. Ct. 1949, 1966 (1984)).

Furthermore, "[n]ewspapers have a qualified privilege when making a fair and accurate report of public records." Jadwin v. Minneapolis Star & Tribune Co., 390 N.W.2d 437, 440 (Minn. App. 1986), (citing Time, Inc. v. Firestone, 424 U.S. 448, 455-57, 96 S. Ct. 958, 965-66 (1976)).

Based upon our examination of the newspaper articles and the GED's records, we conclude that as a matter of law the statements the Star Tribune made concerning the appellants were "substantially true" and constituted a "supportable interpretation" of an ambiguous underlying situation. See Hunter, 545 N.W.2d at 707 (explaining substantial truth doctrine). Because the statements in the article were "substantially true," inaccuracies of expression or detail are immaterial. Jadwin, 390 N.W.2d at 441.

Furthermore, statements made by the Star Tribune referring to "ties," "links," "connections," and "associations" between appellants and persons with histories of involvement in organized crime were based upon the GED records. The Star Tribune published these statements in reliance upon the records. Therefore, we also conclude that the statements were privileged as a fair and accurate report of GED documents provided to the Star Tribune under the MGDPA.

Appellants also argue that while the Star Tribune articles may not have been defamatory on their face, they were capable of having an implied defamatory meaning. We disagree. Defamation by implication occurs when a defendant: (1) juxtaposes a series of facts so as to imply a defamatory connection between them, or (2) creates a defamatory implication by omitting facts, such that he may be held responsible for the defamatory implication unless it qualifies as an opinion, even though the particular facts are correct. Diesen v. Hessburg, 455 N.W.2d 446, 450 (Minn. 1990).

The Diesen rationale is inapplicable. Diesen turned on the existence of known facts that, if reported, could have changed the defamatory implication of the article. In this case, there is no evidence of additional material facts knowingly omitted by the Star Tribune that could have removed the allegedly defamatory tone of the articles. Therefore, a defamation by implication claim cannot be sustained.

The grant of summary judgment on claims against the Star Tribune is affirmed.

Affirmed in part, reversed in part, and remanded.