Church of Scientology International v. Time Warner, Inc., et al./Supreme Court Petition for Writ of Certiorari

by Supreme Court of the United States.

SUPREME COURT OF THE UNITED STATES

534 U.S. 814

Church of Scientology International v. Time Warner, Inc., et al.

---

Supreme Court of the United States.
CHURCH OF SCIENTOLOGY INTERNATIONAL, Petitioner,
v.
TIME WARNER, INC., Time Inc. Magazine Company, and Richard Behar, Respondents.
No. 00-1683.
May 8, 2001.
On Petition for Writ of Certiorari to the United States Court of Appeals for the Second Circuit

Petition for Writ of Certiorari

Eric M. Lieberman, Counsel of Record, Rabinowitz, Boudin, Standard, Krinsky & Lieberman, P.C., 740 Broadway, 5th Floor, New York, New York 10003, (212) 254-1111, Burt Neuborne, New York University School of Law, 40 Washington Square South, New York, New York 10012, (212) 998-6172, Attorneys for Petitioner. Of Counsel: Raphael Golb, Rabinowitz, Boudin, Standard, Krinsky & Lieberman, P.C.

Note: Page i missing in original document

ruinous damage awards and the chilling effects of the danger of such awards, and despite the fact that the common law permits individuals to defend their reputations by seeking nominal damages premised on a finding of falsity?

PARTIES TO THE PROCEEDINGS BELOW

All parties appear in the caption of the case on the cover page.

CORPORATE DISCLOSURE STATEMENT (Rule 29.6)

Petitioner is a not-for-profit non-stock religious corporation. It has no parent or subsidiary corporations.

TABLE OF CONTENTS

Questions Presented For Review ... i

Parties to The Proceedings Below ... iii

Table of Authorities ... v

Opinions Below ... 1

Jurisdiction ... 2

Statement of the Case ... 2

Proceedings Below ... 2

Facts ... 4

Reasons for Granting the Writ ... 8

1. The Court of Appeals' Decision Creating a Constitutionally Mandated "Subsidiary Meaning Doctrine" Is Contrary to Masson v. New Yorker Magazine, 501 U.S. 496 (1991) ... 9

2. The Court of Appeals' Decision Creates a Safe Harbor for Biased Journalism and Deprives Defamation Plaintiffs of Their Rights to Jury Trial. ... 18

3. The Court Should Clarify That Sullivan Does Not Mandate Application of the Actual Malice Rule to Actions to Redeem Reputation by a Finding of Falsity and an Award of Nominal Damages ... 25

Conclusion ... 30

TABLE OF AUTHORITIES

Cases

Abell v. Cornwall Industrial Corp., 150 N.E. 132 (N.Y. 1925) ... 26

Anderson v. Liberty Lobby, 477 U.S. 242 (1986) ... i, 19

Branzburg v. Hayes, 408 U.S. 665 (1972) ... 14

Butler v. Gazette Co., 104 N.Y.S. 637 (3d Dept 1907) ... 26

Cochran v. Indianapolis Newspapers, Inc., 175 Ind. App. 548, 372 N.E.2d 1211 (1978) ... 19

Cordillo v. Doubleday & Co., 518 F.2d 638 (2d Cir. 1975) ... 14

Currier v. Western Newspapers, Inc., 175 Ariz. 290, 855 P.2d 1351 (1993) ... 20

Curtis Publishing Co. v. Butts, 388 U.S. 130 (1967) ... 13

Duffy v. Leading Edge Products, Inc., 44 F.3d 308 (5th Cir. 1995) ... 21

Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749 (1985) ... 13, 28

Dunn v. Air Line Pilots Association, 193 F.3d 1185 (11th Cir. 1999) ... 21

• vi Erie R. R. Co. v. Tompkins, 304 U.S. 64 (1938) ... 12

Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974) ... 13, 29

Goldwater v. Ginzburg, 414 F.2d 324 (2d Cir. 1969) ... 19

Harte-Hanks Communications, Inc. v. Connaughton, 491 U.S. 657 (1989) ... passim

Herbert v. Lando, 441 U.S. 153 (1979) ... 15, 27

Herbert v. Lando, 568 F.2d 974 (2d Cir. 1977), reversed, 441 U.S. 153 (1979) ... 14

Herbert v. Lando, 781 F.2d 298 (2d Cir. 1986), cert. denied, 476 U.S. 1182 (1986) ... passim

Herron v. King Broadcasting Co., 776 P.2d 98, 17 Media L. Rep. (BNA) 1289 (Wash. 1989) ... 21

Hinerman v. Daily Gazette Co., Inc., 188 W. Va. 157, 423 S.E.2d 560 (1992) ... 21

Liberty Lobby, Inc. v. Anderson, 746 F.2d 1563 (D.C. Cir. 1984) ... 10, 11, 12, 14

Masson v. New Yorker Magazine, 501 U.S. 496 (1991) ... 1, 4, 9

• vii Masson v. New Yorker Magazine, 895 F.2d 1535 (9th Cir. 1989) ... 16

Masson v. New Yorker Magazine, 960 F.2d 896 (9th Cir. 1992) ... 14

McDonald v. Smith, 472 U.S. 479 (1974) ... 13

McIntyre v. Ohio Elections Commission, 514 U.S. 334 (1995) ... 29

Milkovich v. Lorain Journal Co., 497 U.S. 1 (1990) ... 15

New York Times v. Sullivan, 376 U.S. 254 (1964) ... passim

Ollman v. Evans, 750 F.2d 970 (D.C. Cir. 1984) ... 14

Perk v. Reader's Digest Association, Inc., 931 F.2d 408 (6th Cir. 1991) ... 21

Rusciano & Son Corp. v. Mihalyfi, 1 N.Y.S.2d 787 (Sup. Ct. Bronx Co. 1938) ... 26

Shoen v. Shoen, 48 F.3d 412 (9th Cir. 1995) ... 21

Simmons Ford, Inc. v. Consumers Union, 516 F. Supp. 742 (S.D.N.Y. 1981) ... 14

Sprouse v. Clay Communications, Inc., 158 W. Va. 427, 211 S.E.2d 674 (1975) ... 19

St. Amant v. Thompson, 390 U.S. 727 (1968) ... 22, 24

Tavoulareas v. Piro, 759 F.2d 90 (D.C. Cir. 1985) (panel) ... 19, 20

Tavoulareas v. Piro, 759 F.2d 90 (D.C. Cir. 1985), 817 F.2d 762 (D.C. Cir. 1987) (en banc) ... 19, 20

Zator v. Buchel, 247 N.Y.S. 686 (3d Dept 1931) ... 26

STATUTES

28 U.S.C. § 1254(1) ... 2

§ 1332(a) ... 2

Fed. R. Civ. P. 54(b) ... 3

OTHER AUTHORITIES

David A. Anderson, Reputation, Compensation and Proof, 25 Wm. & Mary L. Rev. 747 (1984) ... 29

David A. Barret, Declaratory Judgments for Libel: A Better Alternative, 74 Calif. L. Rev.847 (1986) ... 28

Franklin, A Declaratory Judgment Alternative to Current Libel Law, 74 Cal. L. Rev. 809 (1986) ... 28-29

Marc Franklin, Good Names and Bad Law: A Critique of the Libel Law and a Proposal, 18 U.S.F.L. Rev. 1 (1983) ... 28

2 Harper, James & Gray, The Law of Torts (2d ed. 1986) ... 26

James H. Hulme, Vindicating Reputation: An Alternative to Damages as a Remedy for Defamation, 30 American U.L. Rev. 375 (1981) ... 28

Kevin L. Kite, Note: Incremental Identities: Libel-Proof Plaintiffs, Substantial Truth, and the Incremental Harm Doctrine, 73 N.Y.U. L. Rev. 529 (1998) ... 11

J. H. King, Jr., The Misbegotten Libel-Proof Plaintiff Doctrine and the "Gordian-Knot" Syndrome, 29 Hof. L. Rev. 343 (2000) ... 12, 17

Pierre N. Leval, The No-Money No-Fault Libel Suit, 101 Harv. L. Rev. 1287 (1988) ... 28

Frederick Pollock, The Law of Torts (1887) ... 26

R. Sack & S. Baron, Libel, Slander, and Related Doctrines (3d ed. Supp. 2000) ... 11

Ernest Seelman, The Law of Libel and Slander in the State of New York (1964) ... 26

Smolla, Law of Defamation (2d ed. 2000) ... 11

PETITION FOR WRIT OF CERTIORARI

The Church of Scientology International petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Second Circuit.

Opinions Below

The January 12, 2001 opinion of the United States Court of Appeals for the Second Circuit affirming the judgments of the United States District Court for the Southern District of New York dismissing the petitioner's complaint is reported at 238 F.3d 168 (App. A, infra, la-16a). The November 23, 1992 opinion of the district court dismissing portions of petitioner's complaint on the ground that such portions were not "of and concerning" petitioner is reported at 806 F. Supp. 1157 (App. B, infra, 17a-35a). The November 14, 1995 opinion of the district court granting partial summary judgment to defendants on the grounds of lack of actual malice with respect to three published statements, and denying summary judgment with respect to one additional statement, is reported at 903 F. Supp. 637 (App. C, infra, 36a-50a). The July 17, 1996 opinion of the district court granting summary judgment to defendants on the remaining statement on the basis of the so-called "subsidiary meaning" doctrine, is reported at 932 F. Supp. 589 (App. D, infra, 51a-66a). The August 27, 1997 opinion of the district court denying petitioner's motion to modify the judgment is unreported and available on Westlaw at 1997 WL 538912 (App. E, infra, 67a-78a). The September 8, 1998 opinion of the district court denying petitioner's motion to amend the complaint after judgment is unreported and available on *2 Westlaw at 1998 WL 575194 (App. F, infra, 79a-89a).

Jurisdiction

The judgment and opinion (App. A, infra, la-16a) of the court of appeals from which review is sought were entered on January 12, 2001. On March 13, 2001, Justice Ginsburg extended the time within which to file a petition for writ of certiorari to and including May 12, 2001. The jurisdiction of the Court to review the decision of the court of appeals is invoked under 28 U.S.C. § 1254(1).

Statement of the Case

Proceedings Below

The article that precipitated this libel action was published in Time Magazine on May 6, 1991. Petitioner Church of Scientology International ("CSI") filed its complaint on April 27, 1992, alleging six sets of false and defamatory statements. [FN1] Jurisdiction was founded upon 28 U.S.C. § 1332(a). CSI alleged that the author, respondent Richard Behar, was so intensely biased against CSI that he had either knowingly lied or had rendered himself purposefully ignorant of the truth of the charges, intentionally ignoring or suppressing any evidence that called them into question. See Harte-Hanks Communications, Inc. v. Connaughton, 491 U.S. 657, 682 (1989).

FN1. The six statements are set forth in the court of appeals' opinion at 2a-5a, infra. The four statements still at issue are summarized, infra, at 5-6.

The defendants ("Time") brought three successive motions, which cumulatively resulted in dismissal of all of CSI's claims. *3 On November 23, 1992, the district court dismissed claims based on two of the statements and portions of two others on the ground that they were not "of and concerning" CSI (App. B, infra). On November 14, 1995, the district court granted summary judgment with respect to three of the remaining statements on the basis of the "actual malice" doctrine of New York Times v. Sullivan, 376 U.S. 254 (1964), finding that both Behar's bias and prior negative public statements about CSI, even if false, served to protect Time from a finding of actual malice (App. C, infra). The court denied summary judgment on the actual malice issue with respect to a statement implying that CSI had raised funds by engaging in stock market scams on the Vancouver Stock Exchange. Time then urged the district court to dismiss the sole remaining Vancouver claim under the incremental harm doctrine. On July 17, 1996, the district court dismissed the claim under what it denominated the "subsidiary meaning doctrine" (which had not been briefed or argued) (App. D, infra). Because defendant Behar had filed counterclaims, the judgment of dismissal was not a final appealable order.
CSI moved to modify the judgment pursuant to Fed. R. Civ. P. 54(b). CSI argued that even if it were precluded by Sullivan from seeking substantial damages, it still could seek nominal damages and a determination of the falsity of defendants' statements to vindicate its reputation, a claim which it argued was fairly included within its complaint. On August 27, 1997, the district court denied CSI's motion as untimely, but left open the possibility that CSI could amend its complaint to raise the issue (App. E, infra, 77a, n.8). CSI then moved for leave to file an amended complaint. One year later, the district court denied CSFs motion, finding prejudicial delay and that the proposed amendment was futile on two grounds: (1) the amended complaint would not meet the amount in controversy requirement; and (2) a claim for nominal damages, like a claim for substantial damages, is subject to an actual malice defense under Sullivan (App. G, infra).
Behar then stipulated to dismiss his counterclaims, subject to a right to reinstate them if CSI's claims were revived on appeal. CSI appealed with respect to four of the statements upon which it originally sued. On January 12, 2001, the court of appeals affirmed (App. A, infra). The court did not reach the "of and concerning" issues, assuming for purposes of its decision that the entirety of the four sets of statements on appeal were "of and concerning" CSI. It held that CSI's claims with respect to three of the statements were precluded by the actual malice doctrine, and that the claim with respect to the remaining statement concerning the Vancouver Stock Exchange was properly dismissed under the so-called "subsidiary meaning doctrine." Without discussion, the court of appeals also held, on the merits, that CSI could not assert a claim for nominal damages or a declaration that the statements were false without also meeting the actual malice requirements necessary for an action for substantial damages.

Facts

This case arose out of defendants' publication in the May 6, 1991 issue of Time magazine of an eight page cover story entitled "The Thriving Cult of Greed and Power." The headline *5 on the cover of the issue reads: "Scientology: Cult of Greed. How the Growing Dianetics Empire Squeezes Millions From Believers Worldwide." The cover portrays CSI as a multi-tentacled, octopus-like exploding volcano. The article is a bitterly critical attack on the management and leadership of the Church of Scientology, asserting that Scientology "[i]n reality... is a hugely profitable global racket that survives by intimidating members and critics in a Mafia-like manner."
The article makes general charges that CSI's leadership operates in a "mafia-like," "terrorist" way to fleece credulous people of their money. Then it offers a series of specific examples of alleged misbehavior to illustrate and reinforce the general charges. Several of the specific allegations are particularly false and defamatory, including: (1) allegations that CSI's leadership directed one Steven Fishman, purportedly an ex-Scientologist, to murder his therapist and to commit suicide in order to cover up CSI's alleged involvement in a fraudulent plan to participate in class action recoveries by using forged stock certificates; and (2) allegations that CSI financially squeezed an unfortunate young man, Noah Lottick, until he was destitute, and then abandoned him to suicide.
Finally, the article includes a separate sidebar, signed by Behar and entitled, "Mining Money in Vancouver." The sidebar implies that CSI knowingly directed and profited from stock scams - amounting to theft - on the Vancouver Stock Exchange, including an unethical takeover purportedly masterminded by Michael Baybak, identified as a Scientologist whose firm was staffed with Scientologists. The Vancouver statements are different in an essential manner from the article *6 in general, which focuses, as its title indicates, on "How the Growing Dianetics Empire Squeezes Millions From Believers Worldwide" (emphasis added). The sidebar, in contrast, alleges that CSI engaged in a vast scam to "Min[e] Money in Vancouver" by defrauding the general public.
The ferocity of the article's attack on Scientology reflected its author's long-standing animus against the Church, an animus that was well known to the editors of Time. Five years earlier, Behar had authored a broadside in Forbes magazine entitled "The Prophet and Profits of Scientology," which asserted that CSI was simply a mechanism for transferring vast sums of money to L. Ron Hubbard, the founder of Scientology. Throughout the Forbes article, Behar refused to describe Scientology as a religion, instead placing each occurrence of the term "religion" within quotation marks.
Behar's aversion to CSI was further revealed in numerous admissions at deposition and in documents produced during discovery. Behar stated that even before he wrote about CSI or Scientology, he "knew in [his] mind that it was a cult." Before publishing the Forbes article, Behar thought it "irresponsible" for anyone to be involved in the Church because of the "nature of the beast." Behar described the Church as among "the worst and most exploitative of the cults," "right up there with evil groups like Nazi Party and KKK," "little more than a criminal network," "train[ing] people to lie," "America's most notorious cult" and, breathtakingly, "the greatest and most bizarre scam of the 20th century."
CSI presented substantial evidence that Behar's actions ingathering*7 purported facts for the article were driven by his animus. He consistently sought out derogatory information, carefully avoided talking to persons whom he feared might contradict his negative sources, and actively suppressed any information that might cast doubt on the truth of his allegations. For example, one of the specific incidents described by Behar was a swindle perpetrated by Fishman, who was convicted for fraudulently submitting altered stock certificates in order to participate in class action recoveries. When caught, Fishman claimed to be an ex-Scientologist and concocted an exculpatory story that CSI made him do it. To support his "defense," Fishman paid another individual to impersonate a church official and make a taped telephone call directing Fishman to terminate the scam, murder his lawyer, and commit suicide. Behar reported the essence of the Fishman story as true, despite Behar's knowledge that the FBI had uncovered Fishman's attempted frame-up of CSI, that the assistant United States Attorney had branded Fishman's story a fabrication, and that the effort to frame CSI had collapsed when Fishman pleaded guilty to an obstruction of justice charge based upon his false attempt to frame CSI, and was sentenced to federal prison. [FN2]

FN2. In the version of the story Behar reported, the instruction was for Fishman to kill himself and his hypnotist-psychiatrist, instead of his lawyer. Fishman claimed this was a second instruction, issued after the conviction. Behar chose to report Fishman's claim without consulting the United States Attorney or the FBI about the purported second instruction, which the FBI also had investigated and found to have been fabricated, and without mentioning the conviction for obstruction of justice based upon the first falsely alleged "instruction."

Reasons for Granting the Writ

The court of appeals' opinion extends the scope of First Amendment protection to false and defamatory statements in ways well beyond and contrary to the jurisprudence of the Court. First, by adhering to, expanding and constitutionalizing the so-called "subsidiary meaning doctrine," a legal theory invented by the Second Circuit and adopted by no other circuit, the court of appeals permits the media to make knowingly or recklessly false statements with impunity, so long as the statements can be classified as a subset of a larger "overall view." The only limitation the court of appeals would place on such a practice is that the writer's statement of his "overall view" itself be nonactionable, even if the reason is application of the actual malice doctrine, rather than truth. Thus, according to the court of appeals, a false and defamatory statement made with actual malice is protected by the First Amendment if a court concludes that the statement is "subsidiary in meaning" to a false and defamatory "overall view" expressed without actual malice.
Second, by adopting the district court's rationale that an author's bias is strong evidence of his lack of constitutional actual malice, a legal theory contrary to decisions of the Court, other circuits, and state supreme courts, the court of appeals encourages irresponsible journalistic jeremiads, rather than the search for truth which lies at the core of the rule of New York Times v. Sullivan, 376 U.S. 254 (1964).
Finally, by insisting on adherence to the actual malice requirement even where a defamation plaintiff agrees to seek *9 not substantial damages but merely a reputation-restoring judicial determination that defamatory statements are false, the court of appeals prevents a form of reputational vindication that would be consistent with the common law origins and history of the tort of defamation, as well as with the purpose and rationale of Sullivan, and which several judges and scholars have strongly advocated.

1. The Court of Appeals' Decision Creating a Constitutionally Mandated "Subsidiary Meaning Doctrine" Is Contrary to Mass on v. New Yorker Magazine, 501 U.S. 496 (1991)

The court of appeals held that dismissal of the Vancouver claim was compelled under what it characterized as the "subsidiary meaning" doctrine, despite the district court's specific conclusion that the Vancouver statement was actionable under Sullivan. The court reasoned that since the "overall view" of the article was a sweeping indictment of CSI as a monument to greed and intimidation, the Vancouver statement was merely a "subsidiary" repetition of the general charge, and was therefore protected by the First Amendment under Herbert v. Lando, 781 F.2d 298, 312 (2d Cir. 1986) (Lando II), cert. denied, 476 U.S. 1182 (1986).
The "subsidiary meaning" doctrine, like the earlier "libel-proof and "incremental harm" doctrines, is the invention of the Second Circuit; it has not been adopted by any other circuit or state appellate court. It was first applied, not as a formal "doctrine" but as a "ground of decision," in Lando II, under circumstances that were different from and far more benign *10 than those in the instant case. In this case, the court of appeals has expanded the language of Lando II and elevated it into a constitutionally mandated "doctrine." In creating this so-called doctrine, however, the court of appeals has defined and applied it in a manner indistinguishable from the incremental harm doctrine, which the Court, in Masson, held was not constitutionally mandated, and the libel-proof doctrine so trenchantly criticized in Liberty Lobby, Inc. v. Anderson, 746 F.2d 1563, 1568-69 (D.C. Cir. 1984) (Scalia, J.), vacated on other grounds, 477 U.S. 242 (1986).
As the court of appeals acknowledged, Masson explicitly held that the First Amendment does not compel adoption of the incremental harm doctrine. But "subsidiary meaning," argued the court of appeals, is so different from "incremental harm" that the First Amendment compels one, but not the other. Such a holding raises doctrinal hair-splitting to an art form. As the Second Circuit itself acknowledged in Lando II, "Some may view our holding [on "subsidiary meaning"] as a variation of the 'libel-proof' doctrine...," 781 F.2d at 311, n. 10. Indeed. Like the incremental harm ^[1] and libel-proof doctrines, ^[2] the new theory attempts to eliminate claims based on statements that, in a court's view, are no worse, or add little of substance to, other *12 statements that, for one reason or another, are nonactionable. In this case, the doctrines clearly overlap, for the Vancouver statement is in fact not logically subsidiary to the other, nonactionable statements; rather, it is substantially incremental to (and perhaps worse than) those statements. The court of appeals, however, by positing a broad "overall view," avoids using the term associated with the doctrine rejected in Masson.

All three "doctrines" are of dubious merit,^[3] for they rest on the premise that reputation is monolithic and "stands or falls on its entirety." Liberty Lobby, 746 F.2d at 1568 (Scalia, J.). They are particularly pernicious where, as here, the otherwise actionable statement is deemed "subsidiary" or "incremental" to another statement whose truth cannot be judicially determined because of application of the actual malice doctrine. Id. In such instances, the prior existence in the public record of false defamatory statements about a plaintiff - in this case a church of a new religion subject to misunderstanding, suspicion, and prejudice - not only may serve to protect an author, under the actual malice doctrine, who repeats such statements, but also, in a self-fulfilling manner, may further protect that author if he makes knowingly false "incremental" or "subsidiary" allegations about that plaintiff. If, however, a plaintiff were permitted to prove that the new statements are *13 false, the truthfulness of the nonactionable statements would also be called into question, assisting him in preserving his reputation.

Masson leaves it to the states to decide whether to adopt libel norms that are more protective than Sullivan. It should not matter whether the extension of Sullivan is effected by the "incremental harm doctrine," the "subsidiary meaning doctrine," the "libel-proof plaintiff doctrine," or some other invention of the court of appeals. Under Masson, all such efforts are matters of state law. Intentional falsehoods made with actual malice may be held nonactionable by the states (although no state has done so). There is, however, no federal common law of libel; federal judges lack the power to expand the qualified Sullivan privilege to statements made with actual malice. Erie R. R. Co, v. Tompkins, 304 U.S. 64 (1938).
Masson is but the most recent of a series of cases in which the Court has refused to extend constitutional limitations on state libel law beyond those already established by Sullivan and its immediate progeny. In Sullivan itself, the Court declined to grant First Amendment to protect conscious falsehoods. 376 U.S. at 279-82. See also Gertz v. Robert Welch, Inc., 418 U.S. 323, 340 (1974) (Powell, J.). While the Court extended the qualified First Amendment privilege to statements about public figures in Curtis Publishing Co. v. Butts, 388 U.S. 130, 155 (1967), it has refused to extend it to statements about private figures, except with respect to punitive damages and even then only when the statements concern public issues. Gertz, 418 U.S. at 342; Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749, 761 (1985).
Ever since Sullivan, however, counsel for media defendants have argued that the qualified privilege recognized in Sullivan does not go far enough. Proposals to extend First Amendment protection beyond Sullivan have included abolishing the tort of libel entirely;^[4] recognizing an absolute privilege for certain significant speech ^[5] or for reporting newsworthy views; ^[6] providing virtually absolute protection for the expression of opinion;^[7] and insulating statements made with actual malice when they involve a "libel-proof plaintiff, cause only "incremental harm," or carry a mere "subsidiary meaning."

Although some courts, principally the Second Circuit, have occasionally agreed with media counsel, ^[8] the Court has rejected efforts to expand First Amendment protection beyond the contours defined in Sullivan. In both Gertz and Dun & Bradstreet, as noted above, the Court refused to displace state *15 law in private-figure libel actions. In McDonald v. Smith, the Court refused to recognize an absolute First Amendment privilege insulating consciously false statements addressed to public officials. In Herbert v. Lando, 441 U.S. 153 (1979) (Lando I), the Court rejected an effort to block discovery necessary to establish actual malice. In Milkovich v. Lorain Journal Co., 497 U.S. 1 (1990), the Court rejected an attempt to create absolute immunity for statements couched as opinion. Finally, in Masson, the Court held that the First Amendment does not compel adoption of the incremental harm doctrine.

The court of appeals' insistence that the First Amendment requires application of a "subsidiary meaning doctrine" to dismiss libel claims founded on purportedly "subsidiary" statements made with actual malice thus fundamentally misconceives and misapplies the Court's jurisprudence. The court of appeals rested its decisions on its prior opinion in Lando II, which it insisted "is still the law of this Circuit" (App. A, infra, 15a), despite Masson.^[9] But Lando II did not go nearly as far as the decision in this case; to the extent that it compels the result here, it cannot be maintained after Masson.
Lando II involved eleven statements repeating a discrete factual allegation: that the plaintiff in that case - Colonel Herbert - lied about reporting war crimes to his superiors in *16 Vietnam and that his removal from command, therefore, was for other reasons. Nine of the statements were not actionable under Sullivan. The Lando II court dismissed the claims based on the two remaining statements because, although false, they merely provided evidentiary support for the specific, closely related factual allegations made in the nonactionable statements. ^[10]The court cautioned, "We do not intend by our holding to permit defamation defendants to freely embellish their stories with falsehoods while remaining free from liability." 781 F.2d at 312. ^[11]

With that caution, the holding in Lando II may well be characterized, as it was by Judge Kozinski, as "quite unexceptional" because the two remaining statements "merely implfied] the identical view" as the nine nonactionable statements. Masson v. New Yorker Magazine, 895 F.2d 1535, 1565-66 (9th Cir. 1989) (Kozinski, J., dissenting). As Judge Kozinski warned, "This is a far cry from saying... that any statement in a publication cannot be defamatory if the publication already contains a statement that is equally *17 defamatory but unactionable...." Id.
The court of appeals in this case, however, applied Lando II in precisely the manner against which Judge Kozinski - and, indeed, Lando II itself - warned. Unlike in Lando II, the Time article makes a sweeping indictment of CSI as an institution rife with greed and intimidation, and supports the general indictment with a series of free-standing, specific factual allegations. The Vancouver statements do not repeat previous allegations, nor do they "merely lend weight to the sting from the nonactionable portions," as did the statements at issue in Lando II. J.H. King, Jr., The Misbegotten Libel-Proof Plaintiff Doctrine and the "Gordian-Knot" Syndrome, 29 Hof. L. Rev. 343, 389-90 (2000). Indeed, they are unique, in suggesting that CSI preys on the general public, as opposed to "believers worldwide"; accordingly they are set forth in a separate sidebar. Unlike the two closely related collateral statements at issue in Lando II, it is impossible to assert that the Vancouver sidebar does not further damage CSI's reputation. Under the court of appeals' decision in this case, the presence of any extremely broad "overall view" that happens to be nonactionable will create a constitutionally protected license to lie about the specifics, since the specific allegations will be deemed "subsidiary" to the "overall view." Certiorari should be granted to insure that this Court's decision in Masson is not undermined and effectively overruled by such a rule.

2. The Court of Appeals' Decision Creates a Safe Harbor for Biased Journalism and Deprives Defamation Plaintiffs of Their Rights to Jury Trial.

In affirming the district court's order granting partial summary judgment, the court of appeals approved the district court's holding that Behar's anti-Scientology bias "and even his exaggerations, enhances, rather than diminishes, the likelihood that" his defamatory statements were made without actual malice. (App. A, lOa). This astonishing conclusion is unwarranted by Sullivan, conflicts with post-Sullivan decisions, is not compelled by the First Amendment, and is contrary to the purposes the First Amendment is intended to serve. Sullivan's crucial distinction between unintentional falsehoods and knowing or reckless falsehoods (i.e., between error and misconduct) is subverted if bias becomes a means of rebutting a claim of actual malice. Sullivan teaches that the First Amendment protects the search for truth in the free market place of ideas. The courts below, in creating a strong presumption that an author's bias shields him from liability for defamatory statements, turn Sullivan on its head. Their holdings, rather than encouraging the search for truth, provide a safe harbor for biased journalism, in sharp conflict with Harte-Hanks Communications v. Connaughton, 49l U.S. 657, 667-68, 692 (1989).
While, under certain circumstances, it might be a permissible inference that an author's bias shows that he actually believed in the truth of the false statements he wrote, such bias also supports the inference that the author knowingly misrepresented the truth, or recklessly avoided or disregarded *19 it. Since "the drawing of legitimate inferences from the facts are jury functions, not those of a judge," especially on a motion for summary judgment, Anderson v. Liberty Lobby, 477 U.S. 242, 255 (1986), the question of which way an author's bias cuts ordinarily is a jury question. Harte-Hanks, 491 U.S. at 667-68. Moreover, an author's bias, when, as here, it was known to his editors, can hardly serve to shield the publication itself from liability.
The question of the meaning and weight to be given to a libel defendant's ill will or bad motives in determining actual malice under Sullivan has been the subject of substantial disagreement and controversy in the state and lower federal courts, and itself cries out for plenary review and resolution by the Court. The conflicting viewpoints were set forth in the panel and en banc decisions in Tavoulareas v. Piro, 759 F.2d 90 (D.C. Cir. 1985) (panel), 817 F.2d 762, 795 (D.C. Cir. 1987) (en banc). The panel held that common law malice is almost always admissible "evidence" of actual malice "because it provides a motive for knowing or reckless falsehood." 759 F.2d at 117 (emphasis in original). ^[12] To the panel, it was "beyond *20 question that one who is seeking to harm the subject of a story ... is more likely to publish recklessly than one without such motive." 759 F.2d at 118. The en banc majority was more cautious. While it recognized the relevance of evidence of ill will, it feared that such evidence, standing alone, might be unduly prejudicial and in any event would be insufficient to meet the clear and convincing evidentiary standard of Sullivan. It acknowledged, however, that "under some circumstances, the probative value of ill-will evidence" requires its admission, but only when "combined with other, more substantial evidence of a defendant's bad faith." 817 F.2d at 795.

In Harte-Hanks the Court addressed the question, but did not decisively resolve the conflict. It held that evidence of ill will or motive "bear[s]... relation to the actual malice inquiry," but warned against placing "too much reliance on such factors" in the absence of corroborating evidence, 491 U.S. at 668, which it found to exist in that case. Id. at 692. Subsequent decisions in the state and federal courts reflect the continuing uncertainty and conflict over the question.^[13]Indeed, several federal circuits, in clear disregard of Harte-Hanks and in direct conflict with post-Hanks state supreme court decisions and with other federal circuits, ^[14]recently have held that evidence of ill will has no relevance to determinations of actual malice.^[15] In none of these cases, however, nor in either opinion in Tavoulareas, did any court suggest what the court of appeals held in this case: that ill will or bias should be considered as strong evidence of an absence of actual malice, justifying summary judgment on behalf of a defendant except where a plaintiff can demonstrate a countervailing "extreme departure from standard investigative techniques" (App. A, infra, lOa) (emphasis added). The court of appeals' legal standard is its own invention, is unsupported by any precedent, and is contrary to Harte-Hanks, which clearly approves use of such evidence to support a triable inference of the existence of actual malice, not a strong legal presumption that actual malice is absent. See id., 491 U.S. at 668 ("a plaintiff is entitled to prove the defendant's state of mind").

In this case, in addition to showing Behar's ill will, CSI presented abundant and powerful evidence in opposition to Time's summary judgment motion "to permit the conclusion that defendant in fact entertained serious doubts as to the truth of his publication." St. Amant v. Thompson, 390 U.S. 727, 731 (1968). Most dramatic was the evidence concerning the statements about Steven Fishman, who was convicted of engineering a class action stock scam. The article stated that "Scientology denies any tie to the Fishman scam" but then reported that this denial was "strongly disputed by both Fishman and his longtime psychiatrist," Uwe Gertz (Id). The article further reported that Fishman and Geertz "laim that when arrested, Fishman was ordered by the Church to kill Geertz" and then to commit suicide. (Id,) The article plainly suggested that CSI's denials were false. ^[16]

Omitted from the article was the fact that Fishman was in jail not only for his stock scam, but also because he had pleaded guilty to obstruction of justice for his efforts to blame the Church for his fraudulent scam by concocting threats on his life, purportedly made by the Church. Specifically, Behar knew that Fishman had attempted to frame CSI by paying an accomplice, who pretended to be acting on behalf of CSI and phoned Fishman with concocted threats and the concocted order to kill his lawyer and commit suicide. (Fishman taped the staged conversation, but the FBI discovered his plot.) Thus, contrary to the implication of the article, not only was CSI clearly not involved in the class action scam, but Behar knew that Fishman pleaded guilty to obstruction of justice for trying to implicate the Church in threats on the lives of Fishman and his lawyer. Amazingly, the article never even mentioned that fact. The court of appeals based its affirmance principally on the fact that Behar had interviewed Robert Dondero, the Assistant United States Attorney who prosecuted Fishman, and Geertz (App. A, 11 a), purportedly thus demonstrating that Behar's bias did not prevent him from conducting a meaningful investigation. But the court silently ignored the undisputed evidence that even though Behar interviewed Dondero, what Dondero told him was that CSI was not involved in the scam; that Dondero stated in open court at Fishman's sentencing hearing that Fishman had created the story of the instruction to commit murder and suicide out of whole cloth; that Behar failed to read significant portions of the transcript of that sentencing hearing or to interview or read the affidavits of the FBI agents who investigated the allegations of both "instructions"; and that Behar had learned, but chose to ignore, that Geertz had been taken in by other lies of Fishman, including that Fishman knew of three individuals who allegedly had been murdered by the Church.^[17] Thus, the very facts upon which the court of appeals relied provide strong inferences from which a jury properly could conclude that Behar "in fact entertained serious doubts as to the truth of his publication," St. Amant, 390 U.S. at 731, that, due to his preconceived animus, he conducted a selective investigation which "was a product of deliberate decision not to acquire knowledge of facts that might confirm the probable falsity of [his] charges," Harte-Hanks, 491 at 692, and that even when there were "obvious reasons to doubt the veracity of the informant or the accuracy of his reports" (id. at 688), Behar included the false statements.

The court of appeals' decision thus flies in the face of Liberty Lobby, where the Court held that juries, not judges, must resolve conflicting factual inferences, and Harte-Hanks, where the Court found that sufficient evidence of actual malice could be found from the newspaper's bias as well as its failure to interview a key witness, its disregard of statements by other witnesses, and its failure to review audiotapes and other *25 evidence. By permitting Behar and Time to escape a jury trial on the basis that as a matter of law Behar's bias sufficiently negates actual malice to justify denial to CSI of its right to a jury trial on that issue, the court of appeals invites irresponsible false speech without protecting the core speech values that lie at the core of Sullivan.

3. The Court Should Clarify That Sullivan Does Not Mandate Application of the Actual Malice Rule to Actions to Redeem Reputation by a Finding of Falsity and an Award of Nominal Damages ^[18]

Sullivan holds that the First Amendment prevents a state from awarding substantial damages against defendants who speak falsely but in good faith. Nothing in Sullivan, however, suggests that the First Amendment conflicts with a plaintiff's independent right, long recognized by the common law, to seek nominal damages as a means of establishing that the charges leveled against it are false; indeed, the very rationale of Sullivan supports the continued recognition of that right. Where, as here, reputation and public discourse are endangered by falsehood, the availability of nominal damages functions as a guardian of truth. The court of appeals' holding misconceives Sullivan by making the issue of truth or falsity a hostage to the availability of substantial damages.
At common law, even where substantial libel damages were unavailable or denied, courts nevertheless awarded nominal damages to permit a plaintiff to vindicate reputation through a declaration of falsity.^[19]

New York's experience is illustrative:

A verdict for any amount for the plaintiff of necessity determines the falsity of the article as applied to the plaintiff, and clearly vindicates her reputation. Butler v. Gazette Co., 104 N.Y.S. 637, 642 (3d Dept 1907).^[20]

The common law recognized an important distinction between awarding substantial damages in libel cases, and utilizing nominal damages as a means to vindicate reputation. A plaintiffs interest in reputational vindication survives a determination that substantial damages are unavailable. Money, even a great deal of money, is often less effective in repairing a tarnished reputation than a judicial declaration that the charges have been proven false. While Sullivan displaced aspects of the common law, it did so only where robust speech might be chilled by a fear of ruinous damage liability, as occurred in Sullivan itself. Its holding was directed to protect against such awards, not to bar a determination of falsity supported by nominal damages. The opinion opens by questioning "the extent to which the constitutional protections for speech and press limit a State's power to award damages in a libel action brought by a public official," and closes with the holding "that the Constitution delimits a State's power to award damages for libel..." 376 U.S. at 256, 283 (emphasis added). Other statements confirm the monetary focus of the Court's concern.^[21]

There is no risk of ruinous damages in a nominal damage case, and hence there is no reason to displace the common law remedy of nominal damages by imposing a requirement of actual malice.^[22] Freed from the risk of ruinous damage recovery, there is no reason to shield a defendant from defending the truth of damaging allegations, See Leval, The No-Money No-Fault Libel Suit, 101 Harv. L. Rev. 1287, 1289 (1988) ("The purpose of the malice requirement was not to protect falsity from exposure, but to protect the press from intimidation or annihilation by money judgments."). Justice White expressly stated his view that the common law's recognition of a reputation-clearing award of nominal damages survives Sullivan. See Dun & Bradstreet, 472 U.S. at 772 (White, J., concurring) ("Nothing in the central rationale behind New York Times demands an absolute immunity from suits to establish the falsity of a defamatory misstatement about the public figure where the plaintiff cannot make out a jury case of actual malice"). See also Franklin, A Declaratory Judgment Alternative to Current Libel Law, 74 Cal. L, Rev. 809 (1986).

Thus, the rule established in Sullivan shields defendants from the potentially ruinous effects of substantial damage awards, and there is simply no conflict between the First Amendment and the availability of nominal damages. What is more, the truth-telling purposes underlying the free speech clause are themselves reinforced by the availability of damages in common law libel.^[23]

As the Court made plain in Gertz, "there is no constitutional value in false statements of fact. Neither the intentional lie nor the careless error materially advances society's interest in 'uninhibited, robust and wide-open' debate on public issues." 418 U.S. at 340 (quoting Sullivan, 376 U.S. at 270). The absence of constitutional worth for falsehoods provides the state with a compelling interest in providing a plaintiff with a forum to rebut false defamatory speech. See, e.g., Mclntyre v. Ohio Elections Comm'n, 514 U.S. 334, 349 (1995) (state's interest in preventing libel and false statements "carries special weight during election campaigns when false statements, if credited, may have serious adverse consequences for the public at large").

The free speech clause, by preventing libel damage rules that chill robust speech, ultimately seeks to assure that false speech will be proven false through the public discourse on which democracy depends. Thus, once speakers are insulated from substantial damages for good faith errors, the First Amendment is advanced, not retarded, by granting the target of a false charge an opportunity to set the record straight through an award of nominal damages. To allow demonstrable falsehoods to go unchallenged merely because the First Amendment makes substantial damages unavailable would risk distortion of robust public discourse.

CONCLUSION

For the reasons stated, the petition for writ of certiorari should be granted.

---

1. The incremental harm doctrine was invented in Simmons Ford, Inc. v. Consumers Union, 516 F. Supp. 742 (S.D.N.Y. 1981), and was favorably noted in Lando, 781 F.2d at 311. It was rejected as a "bad idea" by Judge Scalia in Liberty Lobby, 746 F.2d at 1568-69, and by Judge Kozinski in Masson v. New Yorker Magazine, 960 F.2d 896, 898 (9th Cir. 1992).
2. The libel-proof plaintiff doctrine immunizes false defamatory statements about a person whose reputation for the trait in question is already so bad that additional statements purportedly cannot make it worse. It is self-fulfilling in that prior false defamatory statements in the public record are used to protect new knowingly false statements about the same public figure, potentially ad infinitum. It was scathingly criticized by then-Judge Scalia in Liberty Lobby, Inc., 746 F.2d at 1568-69.
3. The libel-proof, incremental harm, and related doctrines are subjected to searching criticism because they are "based on faulty premises," "obfuscate the elements of defamation loss," and create "defamation untermenschen," in J. H. King, Jr., The Misbegotten Libel-Proof Plaintiff Doctrine and the "Gordian-Knot" Syndrome, 29 Hof. L. Rev. 343, 34546 (2000).
4. Justices Black and Douglas argued that the very concept of libel was inconsistent with the First Amendment. New York Times v. Sullivan, 376 U.S. at 295-96.
5. See e.g., McDonald v. Smith, 472 U.S. 479 (1974).
6. Branzburg v. Hayes, 408 U.S. 665 (1972).
7. See Oilman v. Evans, 750 F.2d 970 (D.C. Cir. 1984).
8. See, e.g., Cordillo v. Doubleday & Co., 518 F.2d 638, 639 (2d Cir. 1975) (libel-proof doctrine compelled by First Amendment); Herbert v. Lando, 568 F.2d 974 (2d Cir. 1977) (prohibiting discovery into editorial processes relevant to actual malice issue), reversed, 441 U.S. 153 (1979) (Lando I); Herbert v. Lando, 781 F.2d 298, 311 (2d Cir. 1986) (Lando II) (suggesting that incremental harm doctrine compelled by First Amendment).
9. Lando is a thin reed, indeed, for the court of appeals to rest upon, given that the Court twice has explicitly disapproved of the Second Circuit's efforts to expand the scope of Sullivan in that case, in Lando I (reversing the Circuit's holding prohibiting discovery of actual malice) and in Masson (rejecting the incremental harm doctrine suggested in Lando II).
10. The first of the two statements at issue was that another officer "had no sons" in the military and therefore, contrary to what Herbert had alleged, had no reason to protect his sons' careers by lying about Herbert's failure to report war crimes; the second was that Herbert never told other officers that he had reported war crimes to his superiors.
11. The court elaborated, "We would have a very different case if a statement, otherwise actionable, implied that Herbert ... had lied on some significant matter unrelated to the truth of statements determined not to be actionable." Id. at 312, n. 12.
12. The panel pointed to such cases as Goldwater v. Ginzburg, 414 F.2d 324, 342 (2d Cir. 1969) ("evidence of ... motive and intent" may help establish actual malice); Cochran v. Indianapolis Newspapers, Inc., 175 Ind.App. 548, 560, 372 N.E.2d 1211, 1220 (1978) (ill will "relevant and admissible as evidence in the determination of whether defendant possessed a state of mind conducive to reckless disregard of falsity"); and Sprouse v. Clay Communications, Inc., 158 W.Va. 427, 211 S.E.2d 674, 688 (1975) ( "personal motive ... is evidence of recklessness and willful disregard of truth which may be considered along with other evidence on the question of actual malice").
13. Compare, e.g., cases cited in notes 18 and 19, infra.
14. State supreme courts decisions include Currier v. Western Newspapers, Inc., 175 Ariz. 290, 294, 855 P.2d 1351, 1355(1993) (jury question existed as to whether defendant "intended to build his reputation as a journalist by destroying [plaintiff]," because "ill will may be circumstantial evidence of actual malice" and "evidence concerning motive is relevant to actual malice") (citing Harte-Hanks, 491 U.S. at 667- 668); Hinerman v. Daily Gazette Co., Inc., 188 W.Va. 157, 170, 423 S.E.2d 560, 573 (1992) ("partisanship, ill will towards the subject of a libel, and other 'malicious' motives may be considered by the jury in their determination of whether a subjective realization that the statement was false or... published recklessly, existed at the time the statement was published"); and Herron v. King Broadcasting Co., 776 P.2d 98, 106-07, 17 Media L. Rep. (BNA) 1289, 1296 (Wash. 1989) (summary judgment for defendant reversed because evidence of reporter's hostility "bolstered] the inference that [he] might have been reckless regarding his statements, and supported] the conclusion that [plaintiff] succeeded in offering sufficient evidence of malice to go to the jury"). Federal circuit decisions include Duffy v. Leading Edge Products, Inc., 44 F.3d 308, 315 n. 10 (5th Cir. 1995) ("Although we recognize that proof of ill will or animosity is not required to show actual malice, evidence of ulterior motive can often bolster an inference of actual malice") (internal citation omitted) (emphasis in original), and Perk v. Reader's Digest Ass'n, Inc., 931 F.2d 408, 411 (6th Cir. 1991) (the defendant's motive is "circumstantial evidence which, when combined with other evidence, may amount to malice").
15. See, e.g., Dunn v. Air Line Pilots Ass'n, 193 F.3d 1185, 1198 n.17 (11th Cir. 1999) ("Ill-will, improper motive or personal animosity plays no role in determining whether a defendant acted with 'actual malice"') (emphasis added); Shoen v. Shoen, 48 F.3d 412, 417 (9th Cir. 1995) (since ill will "cannot, without more, establish actual malice," evidence concerning defendant's "attitude towards plaintiffs" was "not clearly relevant").
16. This section of the article fell under an earlier opening which stated: "To gain influence and lure richer, more sophisticated followers, Scientology has lately resorted to a wide array of front groups and financial scams. Among them:"
17. Geertz, purportedly believing Fishman, reported the alleged murders to the FBI, which investigated them. As Dondero told the court that sentenced Fishman, no such murders took place. Behar failed to interview the FBI agents with respect to this lie as well.
18. The court of appeals rejected CSI's argument on this point on the merits, holding that a public figure plaintiff must prove actual malice even to recover nominal damages. App. A, 16a, n.3. As CSI argued below, the claim was inherent in CSI's original complaint, and the district court, at the least, had supplementary jurisdiction over it.
19. See, e.g., 2 Harper, James & Gray, The Law of Torts § 5.30 at 251 (2d ed. 1986) ("The action for defamation performs a vindicatory function...."); Frederick Pollock, The Law of Torts 204 (1887) ("Reputation and honor are no less precious to good men than bodily safety and freedom. In some cases they may be dearer than life itself. This is needful for the peace and well-being of a civili zed commonwealth that the law should protect the reputation as well as the person of the citizen").
20. See also Abellv. Cornwall Industrial Corp., 150 N.E. 132, 134 (N.Y. 1925); Kusciano & Son Corp. v. Mihalyfi, 1 N.Y.S.2d 787 (Sup. Ct. Bronx Co. 1938); Zatorv.Buchel, 247N.Y.S.686(3dDept 1931). See generally Ernest Seehnan, The Law of Libel and Slander in the State of New York 447 (1964) (nominal damage award appropriate "[w]here the plaintiff merely asks for vindication").
21. See id. at 277 ("The fear of damage awards... [may be]... inhibiting"); id. at 279-80 ("The constitutional guarantees require, we think, a federal rule that prohibits a public official from recovering damages for a defamatory falsehood... unless he proves... 'actual malice"') (emphasis added).
22. FN26. Time's argument below that the First Amendment and Sullivan protect it not only from "ruinous" damage awards in the absence of actual malice, but also from the burden and expense of defending common law libel tort actions, was rejected in Herbert v. Lando, 441 U.S. 153, 175-77 (1979).
23. For a sampling of the abundant literature calling for greater attention to the truth protective function of the law of libel, see e.g., Pierre N. Leval, The No-Money No-Fault Libel Suit, supra; James H. Hulme, Vindicating Reputation: An Alternative to Damages as a Remedy for Defamation, 30 American U.L. Rev. 375 (1981); David A. Barret, Declaratory Judgments for Libel: A Better Alternative, 74 Calif. L. Rev. 847 (1986); Marc Franklin, Good Names and Bad Law: A Critique of the Libel Law and a Proposal, 18 U.S.F.L. Rev. 1 (1983); Franklin, A Declaratory Judgment Alternative, supra; David A. Anderson, Reputation, Compensation and Proof, 25 Wm & Mary L. Rev. 747 (1984).