Hickey v. Settlemier

917 P.2d 44 (1996)

141 Or. App. 103

James Joseph HICKEY, Respondent, v. Merthal SETTLEMIER, Appellant.

90-1082; CA A85719.

Court of Appeals of Oregon.

Argued and Submitted November 9, 1995.

Decided May 15, 1996.

Review Denied July 16, 1996.

*45 Thomas M. Christ, Portland, argued the cause for appellant. With him on the briefs was Mitchell, Lang & Smith.

Andrew P. Ositis, Salem, argued the cause and filed the brief for respondent.

Before DEITS, P.J., and De MUNIZ and HASELTON, JJ.

HASELTON, Judge.

Defendant Merthal Settlemier appeals from a judgment for plaintiff, James Hickey, following a jury trial in a "public figure" defamation action. We conclude that plaintiff failed to prove that defendant's statements were false. Accordingly, we reverse.

Plaintiff sold animals, under a license from the United States Agriculture Department, to hospitals and laboratories for use in medical research. He acquired the business in 1988 from his father, James Hickey, Sr., who owned and operated it until the USDA suspended his license. The business was the subject of USDA investigation,[1] nuisance actions, zoning variance opposition, and protest by animal welfare activists who charged that the kennel mistreated animals and bought and sold stolen pets. The controversy moved from local media to national television in 1990 *46 when the ABC television news program "20/20" broadcast a segment entitled "Pet Bandits." The program pertained, in part, to plaintiff's business and included an interview with defendant, plaintiff's neighbor.

In that interview, conducted by reporter Stone Phillips, defendant made the statements that are the subject of this defamation action:

"[Reporter]: * * * Meet Joseph Hickey [plaintiff]. His animal supply operation in Lebanon, Oregon, started by his father, is believed to be the biggest on the West Coast. Hickey is what's known as a `Class B' or `random source' dealer. He doesn't raise animals for research, he buys them from pounds, animal shelters and private owners. He'll pay $20 for cats, $50 for dogs, then sell them to research facilities for five to ten times that much. "* * * [M]ore than 300 people in central Oregon have complained that their pets were stolen and delivered to the Hickeys' operation. Many want it closed down, including Joseph Hickey's own godmother, Merthal Settlemier, who lives next door. "[Defendant]: And it was very disturbing to think that things were going on over there that I saw that would happen in this day and age to animals. Even though they're being used for research, it still is, to me, very inhuman. "[Reporter]: How would you describe the conditions over there for the animals? "[Defendant]: Well, the time I was over there, was three or four animals in a cage where there should be two. There was feces on the floor. Very warm day, no shade, no water. The food bowls were empty and the dogs were fighting each other. "[Reporter]: Have you heard gunshots? "[Defendant]: Yes, I have. Sometimes, it's once a week. Sometimes, it's maybe two times a week. Just this month, there was three gunshots early in the morning about nine o'clock. And we saw pools of blood where dogs could have died and .22 shells." (Emphasis supplied.)

Plaintiff filed suit,[2] alleging that defendant's statements were false and defamatory. After the trial court's entry of summary judgment for defendant was reversed on appeal,[3] the case went to trial in July 1994. At the close of plaintiff's evidence, defendant moved for a directed verdict and renewed that motion at the close of all evidence. The court denied those motions but, immediately preceding closing arguments, ruled that plaintiff was a public figure and that plaintiff was, therefore, required to prove "actual malice" by clear and convincing evidence. Defendant asked that the jury be instructed that plaintiff was required to prove actual malicei.e., that plaintiff must prove by clear and convincing evidence that defendant knew that her statements were false or had reckless disregard for their falsity.[4] However, *47 the court failed to instruct the jury on actual malice. Thereafter, the jury rendered a verdict for plaintiff, awarding compensatory damages of $100,000.

Defendant moved for judgment n.o.v. and alternatively for a new trial, arguing, inter alia, that the trial court erred in failing to give defendant's requested jury instruction on actual malice. The trial court explained that it had intended to give the instruction and that its failure to do so was inadvertent, not intentional. Nevertheless, the court denied the motions and entered judgment for plaintiff.

On appeal, defendant raises two assignments of error: (1) The court erred in denying her motion for a directed verdict because plaintiff failed to prove either falsity or actual malice, both of which were essential elements of his "public figure" defamation claim.[5] (2) The court erred in failing to give defendant's requested instruction on actual malice.

Defendant moved for directed verdict as follows:

"I would first say that as to those things which refer to the reference to feces, three or four animals in a cage, no shade, no water, food bowls empty and dogs were fighting, that there's been ample evidence of, that all of those matters are true, they are in fact true. "As to the statements about inhuman conditions, when we look at that particular word and the specific words that are used, it says, `it is still to me very inhuman,' that clearly expresses that she was giving her opinion about what she had seen based upon these other facts and based upon her observations when she in fact was over there. We combine that with the fact that her observations were in fact true, and what we have is nothing that's actionable based upon those statements. "The other thing that I would move on the, for a directed verdict on is the, if the Court has heard enough evidence on this issue for the public figure, a matter that Mr. Hickey is a public figure and that assuming that there will be an amendment to the complaint to properly allege, which I have no objection to, an amendment to allege all of the necessary elements of actual malice, there has been no proof of actual malice in this case[.]"[6]

In reviewing the denial of that motion, we must first address the appropriate standard of review. In general, denials of directed verdict motions are tested against the "any evidence" standard summarized in Brown v. J.C. Penney Co., 297 Or. 695, 705, 688 P.2d 811 (1984):

"Because plaintiff had verdict, we cannot set it aside unless we can affirmatively say that there is no evidence from which the jury could have found the facts necessary to establish the elements of plaintiff's cause of action. Or Const Art VII (Amend), § 3. We do not weigh the evidence; we consider the evidence, including inferences, in the light most favorable to plaintiff."[7]

Plaintiff contends that that "any evidence" standard governs our assessment of the sufficiency of his proof of both falsity and actual malice. Defendant does not dispute that the *48 "any evidence" standard may be applied to the jury's determination that her statements were false,[8] but asserts that we must test plaintiff's proof of actual malice against a more rigorous de novo standard of review:

"[I]n a public figure defamation case, the appellate court `must "make an independent examination of the whole record" * * * so as to assure [itself] the judgment does not constitute a forbidden intrusion on the field of free expression.' [New York Times Co. v. Sullivan, 376 US 254, 285, 84 SCt 710, 729, 11 LEd2d 686 (1964)], quoting Edwards v. South Carolina, 372 US 229, 235, 83 SCt 680, 9 LEd2d 697 (1963). Later, in Rosenbloom v. Metromedia, 403 US 29, 54, 91 SCt 1811, 29 LEd2d 296 (1971), the Court reaffirmed its commitment to heightened appellate review in this type of case: `The simple fact is that First Amendment questions of "constitutional fact" compel this court's de novo review.'"

We do not reach defendant's argument regarding the appropriate standard of judicial review of a jury's determination of actual malice because we conclude that plaintiff's proof of falsity was legally insufficient.

Defendant's allegedly false statements were, again, as follows:

"And it was very disturbing to think that things were going on over there that I saw that would happen in this day and age to animals. Even though they're being used for research, it still is, to me, very inhuman." "Well, the time I was over there, was three or four animals in a cage where there should be two. There was feces on the floor. Very warm day, no shade, no water. The food bowls were empty and the dogs were fighting each other." "Sometimes [I hear gunshots] once a week. Sometimes, it's maybe two times a week. Just this month, there was three gunshots early in the morning about nine o'clock. And we saw pools of blood where dogs could have died and .22 shells."

Defendant challenges the sufficiency of plaintiff's proof on two grounds: (1) Her first statement that "it still is, to me, very inhuman" was merely an expression of opinion and not a statement of fact and, thus, was not actionable as demonstrably true or false. (2) Although the latter two statements were statements of fact, there was no evidence that they were false.

We agree with defendant that her first statement was a nonactionable expression of opinion. Opinions, as "statements that cannot reasonably be interpreted as stating actual facts," are constitutionally protected. Milkovich v. Lorain Journal Co., 497 U.S. 1, 20, 110 S. Ct. 2695, 2706, 111 L. Ed. 2d 1 (1990) (citation omitted); see also Haas v. Painter, 62 Or.App. 719, 725, 662 P.2d 768, rev. den. 295 Or. 297, 668 P.2d 381 (1983). Nevertheless, when an "opinion" implies the existence of undisclosed defamatory facts, it is actionable. See Cushman v. Day, 43 Or.App. 123, 126, 602 P.2d 327 (1979), rev. den. 288 Or. 571 (1980); accord Restatement (Second) Torts § 566 (1965).[9]

Defendant counters, however, that the "undisclosed facts" exception is inapplicable *49 here because her opinion was "based upon her observations when she was in fact over there," and that those alleged eyewitness observationse.g., overcrowded cages, empty food bowls, empty water bowls, etc. were fully disclosed. We agree with defendant that there are no undisclosed facts implied in her description of conditions as "inhuman." Consequently, we conclude that that description was nonactionable opinion.

We proceed to the alleged falsity of the factual predicates of defendant's opinionthat is, the second and third statements set out above. Where, as here, plaintiff is a public figure,[10] the First Amendment imposes on plaintiff the burden of proving that the statements were false. Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767, 776, 106 S. Ct. 1558, 1563, 89 L. Ed. 2d 783 (1986). The axiom that "truth is an absolute defense" in defamation cases, Bahr v. Statesman Journal, 51 Or.App. 177, 180, 624 P.2d 664, rev. den. 291 Or. 118, 631 P.2d 341 (1981), is somewhat imprecise in cases involving public figures or issues of public concern. Rather, in such cases, falsity is an element of plaintiff's defamation case, because plaintiff has the burden of proving it. Philadelphia Newspapers, 475 U.S. at 776, 106 S. Ct. at 1563; see also Smolla, Law of Defamation, § 5.13[3], 5-31 to 5-32.

Under the "any evidence" standard of review, we consider whether we may "affirmatively say that there is no evidence from which the jury could have found" that defendant's statements were false. Brown, 297 Or. at 705, 688 P.2d at 817. In so doing, we examine the whole record, including evidence introduced by the defendant, in the light most favorable to plaintiff. Id.

Applying that standard, we conclude that plaintiff did not present any evidence from which the jury could have found defendant's statements to be false. It is uncontroverted that defendant did, in fact, visit the kennels once, in 1986, when they were operated by plaintiff's father. It is also uncontroverted that the conditions plaintiff described did, in fact, exist at certain times under both plaintiff's and his father's ownershipi.e., that there were "three or four animals in a cage where there should be two"; "feces on the floor"; "no shade, no water" on a "very warm day"; "food bowls empty"; and "dogs fighting each other." For example, plaintiff's father testified that "sometimes" the food bowls were empty; that "sometimes" the dogs fought; that he had "at times" as many as 142 dogs in 44 cages, which is more than three per cage; and that he cleaned the cages at most twice per day, which would logically support an observation that there were times when feces were on the floor.

Notwithstanding that undisputed evidence, plaintiff contends that there is evidence that "casts significant doubt that the defendant actually saw what she claimed to have seen." Thus, plaintiff's claim in that regard reduces to the proposition that, although the conditions defendant described existed at various times, they did not exist on the day in 1986 that she visited the kennels.

There is no evidence substantiating plaintiff's position. Plaintiff presented no evidence that the conditions defendant described did not exist on the day she visited the kennels. Indeed, although plaintiff's father specifically recollected defendant's visit, he did not dispute the accuracy of her eyewitness account of conditions existing on that day. Instead, plaintiff relied on testimony that those conditions did not always exist as permitting an inference that they did not exist on the day in question. Moreover, plaintiff presented testimony that, he argued, demonstrated that defendant had a motive to fabricate her observations.[11] Plaintiff argues that, from that evidence, the jury could infer that the conditions described were not present on the particular day of defendant's visit.

Plaintiff's proof was legally insufficient. Given defendant's testimony that the conditions she described did, in fact, exist on the day she visited the kennels in 1986 and plaintiff's acknowledgment that the conditions described *50 did sometimes exist, it was incumbent on plaintiff, as the party bearing the constitutional burden of proving falsity, to present evidence that the conditions described did not exist, or could not have existed, at the time of defendant's visit. Plaintiff's generalized evidence that the conditions defendant described existed only occasionally, even rarely, did not meet that burden. Instead, such undifferentiated, non-time-specific evidence merely permitted the jury to speculate as to whether certain conditions existed at any particular time. See Skeeters v. Skeeters, 237 Or. 204, 214-15, 389 P.2d 313 (1964) ("[T]he jury cannot be permitted to speculate, [but] can be allowed to draw reasonable inferences. * * * [P]laintiff has the burden to remove the cause from the realm of speculation and give it a basis in the proffered facts."); accord Law v. Kemp, 276 Or. 581, 586, 556 P.2d 109 (1976); Fugate v. Safeway Stores, Inc., 135 Or.App. 168, 171, 897 P.2d 328 (1995).

Similarly, plaintiff's evidence pertaining to defendant's purported motive to fabricate was insufficient, by itself, to demonstrate falsity. The possibility that a jury might disbelieve a material witness cannot, without other direct or circumstantial evidence, justify denying a directed verdict motion. As we said in Sivers v. R & F Capital Corp., 123 Or.App. 35, 41, 858 P.2d 895 (1993), rev. den. 318 Or. 351, 870 P.2d 220 (1994):

"Although a jury may disbelieve a witness based on demeanor, bias, motives, interest or inconsistent statements, there must be evidence, direct or circumstantial, from which the jury can reasonably [make its finding]."

Accord In re Taylor, 319 Or. 595, 607-08, 878 P.2d 1103 (1994) ("Even if we were to entirely disbelieve the accused's testimony, that disbelief would not be evidence to establish any contrary proposition."); State v. Simson, 308 Or. 102, 109, 775 P.2d 837 (1989) ("Mere disbelief of a witness's positive assertion of fact would not constitute evidence to support the finding of a contrary fact.").

Plaintiff's proof of the falsity of defendant's third statement, pertaining to gunshots, pools of blood, and .22 shells, is similarly insufficient. Plaintiff acknowledged using a .22 to shoot animals at least two or three times a month, sometimes more regularly, and did not contest the fact that defendant could have heard shots the month of the television interview. Other witnesses testified that, on occasion, a dog would get loose and would be shot where it was found.

Notwithstanding those admissions and corroborating evidence, plaintiff argues that defendant's statements gave rise to a false implication that plaintiff "unnecessarily" shot animals and that plaintiff's admissions "do not establish, as a matter of law, the truth or substantial truth" of that defamatory implication. As support for that proposition, plaintiff relies on our opinion in the prior appeal in this litigation, Hickey v. Settlemier, 116 Or.App. 436, 441, 841 P.2d 675 (1992), aff'd on other grounds 318 Or. 196, 864 P.2d 372 (1993) (Hickey I).

Plaintiff's reliance on Hickey I is misplaced because our comments there pertained to a materially different record. In Hickey I, the record that we considered included the following exchange between the "20/20" correspondent and defendant:

"[Correspondent]: And when the animals aren't suitable for research, Lethal Settlemier [sic] says they're shot. Have you heard gunshots? "[Defendant]: Yes, I have. Sometimes, it's once a week. Sometimes, it's maybe two times a week. Just this month, there was three gunshots early in the morning about nine o'clock. And we saw pools of blood where dogs could have died and .22 shells." (Emphasis supplied.)

On review of our decision in Hickey I, the Oregon Supreme Court held that the emphasized comments were inadmissible hearsay. 318 Or. at 206, 864 P.2d 372. Thus, on remand, those comments, which were necessary predicates of our "unnecessary shooting" implication analysis in Hickey I, 116 Or.App. at 441, 841 P.2d 675, were not before the jury. With the correspondent's hearsay so deleted, nothing in defendant's statements could be reasonably construed to imply that plaintiff unnecessarily shot animals.

*51 In conclusion, we may "affirmatively say that there is no evidence from which the jury could have found" defendant's second and third statements to be false. Brown, 297 Or. at 705, 688 P.2d 811. Accordingly, the trial court erred in denying defendant's motion for a directed verdict because of the insufficiency of plaintiff's proof of falsity.[12]

Reversed and remanded with instructions to enter judgment for defendant.

NOTES

[1] In November 1988, after plaintiff's acquisition of the business, the USDA filed a formal complaint alleging that plaintiff had violated the Animal Welfare Act. 7 U.S.C. §§ 2131-57 (1988); 9 CFR §§ 1.1-12.10 (1991). In January 1990, an administrative law judge issued an order imposing a civil penalty of $10,000 and suspending plaintiff's license for one year. Plaintiff appealed that decision to the Judicial Officer of the Department of Agriculture who, in 1991, substantially adopted the opinion of the administrative law judge. By 1991, plaintiff was no longer in business. In an unpublished decision, the Ninth Circuit Court of Appeals affirmed the decision of the Department of Agriculture. Hickey v. Dept. of Agriculture, 991 F.2d 803 (9th Cir.1993).

[2] Plaintiff also filed suit against ABC. In Hickey v. Capital Cities/ABC, Inc., 792 F. Supp. 1195 (D.Or.1992), aff'd. 999 F.2d 543 (9th Cir.1993), the court granted summary judgment for ABC, holding that the allegedly defamatory statements at issue in that case i.e., statements by ABC correspondentswere substantially true or embodied opinion protected by the First Amendment. Those statements differed from those that are the subject of this action.

[3] The trial court allowed summary judgment for defendant on the ground that a decision by a federal administrative law judge, see note 1 above, established the truth of the allegedly defamatory statements as a matter of law. The Oregon Supreme Court ultimately reversed that holding. Hickey v. Settlemier, 318 Or. 196, 201-02, 864 P.2d 372 (1993). In addition, the court ruled that a portion of the "20/20" videotape was inadmissible, as it contained hearsay by a television correspondent. Id. That portion was excised and not considered by the jury, and we do not consider it here.

[4] Plaintiff does not dispute that defendant's proposed instruction correctly stated the law. That instruction read:

"A published statement about a public figure or on a matter of public concern is privileged, even if false and defamatory, unless the publication was made with knowledge of the falsity of the communication [or] in reckless disregard for its truth or falsity. Reckless disregard means that the communication was made with a high degree of awareness of its probable falsity.

"Plaintiff has the burden of proving by clear and convincing evidence such knowledge of falsity or reckless disregard for the truth.

"In the absence of such proof, plaintiff cannot prevail."

The trial court's only reference to the concept of "actual malice" in the instructions was in its summary of plaintiff's amended complaint:

"It then alleges that the defendant made the statements knowing them to be false or with reckless disregard as to the truth or falsity."

After summarizing defendant's answer, the trial court admonished the jury that "you're not to take anything in that I've said in the pleadings as true unless it's either been admitted or proved by the evidence. The pleadings themselves are not evidence."

[5] Plaintiff does not contest the court's determination that, because of the public controversy surrounding the kennel's operations and its FDA tie-in, he was a "public figure" for purposes of this defamation action.

[6] Defendant also moved for directed verdict based on the argument that plaintiff presented no evidence showing that the allegedly defamatory statements were "of and concerning" plaintiff and not his father, the previous operator of the kennel. That argument is not raised on appeal.

[7] Article VII (amended), section 3, of the Oregon Constitution provides, in part:

"[N]o fact tried by a jury shall be otherwise reexamined in any court of this state, unless the court can affirmatively say there is no evidence to support the verdict."

[8] There is some conflict in federal case law as to whether falsity in public figure defamation cases must be proved by clear and convincing evidence and whether, as a matter of constitutional imperative, a reviewing court must test the sufficiency of a plaintiff's proof of falsity against a "clear and convincing" standard. See, e.g., Bressler v. Fortune Magazine, 971 F.2d 1226 (6th Cir.1992), cert. den. 507 U.S. 973, 113 S. Ct. 1416, 122 L. Ed. 2d 786 (1993) (Batchelder, J., dissenting); Buckley v. Littell, 539 F.2d 882, 889-90 (2d Cir. 1976), cert. den. 429 U.S. 1062, 97 S. Ct. 785, 50 L. Ed. 2d 777 (1977); Firestone v. Time, Inc., 460 F.2d 712, 722-23 (5th Cir.), cert. den. 409 U.S. 875, 93 S. Ct. 120, 34 L. Ed. 2d 127 (1972) (Bell, J., specially concurring); Goldwater v. Ginzburg, 414 F.2d 324, 341 (2d Cir.1969), cert. den. 396 U.S. 1049, 90 S. Ct. 701, 24 L. Ed. 2d 695 (1970); Robertson v. McCloskey, 666 F. Supp. 241, 248-50 (D.D.C.1987). The Supreme Court has declined to address that conflict. Harte-Hanks, Inc. v. Connaughton, 491 U.S. 657, 661 n. 2, 109 S. Ct. 2678, 2683 n. 2, 105 L. Ed. 2d 562 (1989); see generally Rodney A. Smolla, Law of Defamation, § 5.06, 5-8.1; § 12.09, 12-41 to 12-52 (1986 and 1995 supp).

[9] Restatement (Second) Torts § 566 provides:

"A defamatory communication may consist of a statement in the form of an opinion, but a statement of this nature is actionable only if it implies the allegation of undisclosed defamatory facts as the basis for the opinion."

[10] Again, plaintiff does not dispute on appeal that he was a "public figure." See n. 8 above.

[11] Plaintiff's evidence in that respect pertained to prior conflicts over the kennels and to defendant's alleged association with animal rights activists.

[12] Because of our disposition, we do not address defendant's alternative arguments that: (1) plaintiff's proof of actual malice was legally insufficient; and (2) the trial court erred in failing to give defendant's requested instruction on actual malice.