Good Government Group of Seal Beach, Inc. v. Superior Court

586 P.2d 572, 22 Cal. 3d 672, 150 Cal. Rptr. 258, 4 Media L. Rep. (BNA) 2082, 1978 Cal. LEXIS 310

• Court: California Supreme Court
• Decided: November 27, 1978
• Docket: L.A. 30839
• Status: Published

Opinions

Opinion

MOSK, J.

The trial court denied defendants’ motion for summary judgment in an action for libel, and they seek a writ of mandate to compel the court to grant the motion.

At the time the allegedly libelous publication appeared, Thomas A. Hogard, real party in interest, was a councilman in the City of Seal Beach. The article was written by the vice president of a citizens’ organization known as the Good Government Group of Seal Beach, Inc. (Good Government), published in a local homeowners’ association newsletter in February 1971, and was also distributed to the general public as a flyer. It stated that Hogard and two other city councilmen, Fuhrman and Baum, referred to as “the combine,” had “extorted by blackmail” $100,000 from a development company. Hogard, charging the article was libelous, named the author of the article, the association, Good Government, and various others as defendants in his complaint.

At the time of publication, the municipality was in the throes of political turmoil and strife that was likely to ulcerate the most tranquil dispositions. Hogard served as a councilman from July 1970 until he was recalled in August 1971. In the months preceding publication, the city manager and city attorney had been discharged, recall petitions had been filed against Fuhrman, and notices of intention to circulate recall petitions against Hogard and Baum had been filed. The majority of the council refused to authorize the recall election of Fuhrman, and a mandate proceeding was instituted to compel it to do so. The council engaged an attorney to investigate the recall campaign, but the city treasurer refused to pay the attorney’s fees, and the council majority sought to file charges with the grand jury against the treasurer. One member of the council resigned, and a notice of recall was filed against the city clerk.

On October 30, 1970, the city revoked building permits previously issued to R & B Development Co. to construct an apartment project, on the ground that the permits were issued in error, were based upon incorrect information, and violated city ordinances. The city council enacted an ordinance imposing a temporary moratorium on construction in the area of the development pending completion of an environmental study, giving as its reasons that the project had not been properly investigated and no consideration had been given to its effect upon the environment. The developer filed suit against the city. On November 23, in an executive session of the city council held to discuss the lawsuit, Hogard, Fuhrman and Baum proposed that if the developer would agree to dismiss the suit and to pay the city $100,000, it should be permitted to proceed with its project in accordance with the plans previously filed. At that time Holden, a member of the city council, characterized this proposal as “outright extortion” and “blackmail.”

At a public meeting following the executive session, Baum announced the terms of the settlement and Holden stated, “I don’t like the idea of using a hatchet on people after you have made an agreement but I’ll vote for the matter in order to get the work started and stop the harassment.” No changes in the building plans were made and no environmental studies were conducted between the time the permits were revoked and their reinstatement pursuant to the agreement. As part of the settlement, the developer agreed to rent the apartments to married couples as well as single persons.¹

The article at issue charged Hogard, Fuhrman and Baum with “chicanery and machinations” with respect to their conduct in the recall of Fuhrman, described their conduct as “recalcitrant,” and warned that they would pay for their “infamy.”

The most damaging references to Hogard were contained in the following paragraph: “This is the same combine which extorted by blackmail $100,000 from the R & B Development Company. For its thirty pieces of silver the combine agreed to forgo its concern for the City’s ecology, pollution and strain on our sanitation system that Baum had so sanctimoniously raised during his campaign and in City Council meetings. For economical reasons the R & B Development Company submitted to the ‘holdup’ and agreed to drop its multi-million dollar suit against the City so that it could begin the construction of apartment buildings in the downtown section of the City.”

Hogard filed suit, charging that the statements in the article were false, that defendants knew they were untrue or acted with reckless disregard of whether or not they were false, that they intended the statements to be understood by the public as charging him with crime, and that the public so understood them. He alleged that as a result of the charges contained in the article, he was unable to find employment, was defeated in the recall election, and suffered nervous shock and strain. The complaint sought general damages in the amount of $500,000, special damages of $31,000, and punitive damages of $500,000.² Defendants moved for summary judgment, filing affidavits in support of their motion, setting forth the facts outlined above; Hogard filed counteraffidavits. As we have seen, the motion was denied by the trial court.³

In this proceeding, defendants do not assert that Hogard has ever committed extortion or blackmail, nor do they deny that the statements are libelous if they are viewed as charging the commission of such crimes; rather, they contend, the statements referring to extortion and blackmail, when viewed in the context of the article as a whole and the tense political situation which existed in the city at the time the article was published, could not have been viewed by a reader as literally charging Hogard with crime, but amounted merely to sharp criticism of his conduct, using figurative language. Moreover, they contend, even if, by giving the words used in the article a “strained and unintended interpretation” they may be read as literally charging Hogard with the commission of crimes, nevertheless their motion for summary judgment should have been granted because the affidavits offered by Hogard in opposition to the motion failed to show that the statements were made with actual malice, as that term is defined in New York Times Co. v. Sullivan (1964) 376 U.S. 254 [11 L.Ed.2d 686, 84 S.Ct. 710, 95 A.L.R.2d 1412].

We begin our analysis of these contentions with the decision in New York Times, which established the principles applicable to an action for libel brought by a public official. There, an elected official in Alabama alleged that he had been libeled by a newspaper advertisement which contained false statements regarding his official conduct. The Supreme Court reversed a judgment in his favor, holding that it violated the First and Fourteenth Amendments to the United States Constitution.

The court reasoned that the advertisement qualified for constitutional protection because it expressed a grievance regarding one of the major issues of the time, that erroneous statements are inevitable in free debate and must be protected if freedom of expression is to have “breathing space,” and that neither factual error nor defamatory content removes criticism of the conduct of a public official from the protection of the Constitution. It concluded that a public official may not recover damages for a defamatory falsehood relating to his official conduct unless he proves that the statement was made with actual malice. That term was defined as knowledge by the defendant that the statement was false or reckless disregard of whether it was false.

In light of this holding, the two major issues which we must decide are whether the statements complained of constituted false statements of fact, and whether a sufficient showing of malice was made to justify the conclusion that the issue must be decided by a jury.

In Gregory v. McDonnell Douglas Corp. (1976) 17 Cal.3d 596 [131 Cal.Rptr. 641, 552 P.2d 425], we discussed the difference between a statement of fact and a statement of opinion in an action for libel. There, the defendant corporation issued a bulletin in a labor dispute, stating that union officers were “apparently” willing to sacrifice the interests of the members of the union to further their personal ambitions.

We reasoned that “there is no such thing as a false idea” (Gertz v. Robert Welch, Inc. (1974) 418 U.S. 323, 339 [41 L.Ed.2d 789, 805, 94 S.Ct. 2997]), and that an essential element of an action for libel is a false statement of fact. An allegedly defamatory statement may constitute a fact in one context but an opinion in another, depending upon the nature and content of the communication taken as a whole. “Thus, where potentially defamatory statements are published in a public debate, a heated labor dispute, or in another setting in which the audience may anticipate efforts by the parties to persuade others to their positions by use of epithets, fiery rhetoric or hyperbole, language which generally might be considered as statements of fact may well assume the character of statements of opinion.” (17 Cal.3d at p. 601.)

Our conclusion was that the charges were neither factual in nature nor calculated to induce the audience to which they were addressed to conclude that they were factual, that they did not impute crimes or dishonesty to plaintiffs, and that they were of a kind typically generated in a spirited dispute in which the loyalties and subjective motives of rivals are attacked and defended.

In our analysis of the character of the article involved here, we note, first, that the words “recalcitrant,” “machinations,” “infamy,” and others of similar import represent statements of opinion as to Hogard’s conduct and, as such, they may not be made the basis for a libel action. These terms, as used in the article, may be “epithets, fiery rhetoric or hyperbole” but they are, to paraphrase Gregory, of a kind frequently generated in an acrimonious dispute in which the integrity and subjective motives of competitors are under attack. Since they amount to a characterization of the conduct of Hogard with regard to the matters described in the article, they are merely statements of opinion and not actionable.

But a conclusion is less certain with respect to the statements in the paragraph quoted above. As to those expression, we cannot accept the position of Hogard that they are clearly factual and charge him with committing extortion or blackmail, nor do we accede to defendants’ claim that they constitute opinion as a matter of law.

The article omits any reference to the fact that the $100,000 was paid by the developer to the city, thus it could be understood as charging that Hogard and his fellow councilmen personally pocketed the funds. On the other hand, the general tenor of the article, when viewed in the light of the political turmoil which pervaded the city at the time of its publication, and the placement of the offending paragraph in the middle of a lengthy and vehement denunciation of the alleged official misdeeds of “the combine” could be read to suggest that the references to “extortion” and “blackmail” did not charge Hogard with committing those crimes, but were only a caustic and strident characterization of Hogard’s public acts with reference to the developer’s project. The fact that the city had received the $100,000 payment in settlement of the dispute with the developer was public knowledge. Hogard himself had listed the exaction of the payment as one of his accomplishments in office in a statement circulated to local residents, and the suggestion in the article that the developer agreed to drop his lawsuit against the city is itself some indication that it was the city rather than “the combine” which benefited from the payment.

In our view the article is ambiguous, and we cannot as a matter of law characterize it as either stating a fact or an opinion. In these circumstances, it is for the jury to determine whether an ordinary reader would have understood the article as a factual assertion charging Hogard with crime, or whether the statements were generally understood as an opinion respecting his public conduct in regard to the development project.

This conclusion is not contrary to our statement in Gregory that the distinction between fact and opinion is a question of law; that remains the rule if the statement unambiguously constitutes either fact or opinion. Where, as here, however, the allegedly libelous remarks could have been understood by the average reader in either sense, the issue must be left to the jury’s determination. (Cf. Mellen v. Times-Mirror Co. (1914) 167 Cal. 587 [140 P. 277].)

Defendants rely upon Greenbelt Pub. Assn. v. Bresler (1970) 398 U.S. 6 [26 L.Ed.2d 6, 90 S.Ct. 1537], in which the use of the word “blackmail” was held not libelous as a matter of law. The defendants in that case published a weekly newspaper in which they reported that at a meeting of the city council several persons had characterized the conduct of a developer (concededly a public figure) as constituting “blackmail.” As reported in the articles, the developer had proposed that if the city would rezone certain land owned by him to high density, he would agree to the price offered by the city for another tract of land he owned, property which the city wished to acquire for a high school.

The developer claimed that the use of the word “blackmail” was libelous because the defendants knew that he had not committed such a crime. The high court, in reversing the trial court’s judgment in favor of the developer, held that, because the newspaper had published a full, fair and accurate account of the debates without distorting the report so as to extract the word “blackmail” from the context in which it was used, and because the developer’s proposal was accurately described, it was impossible to believe that a reader who reached the word “blackmail” in the article would not have understood that the criticism was directed at the developer’s public and wholly legal negotiating proposals.

“No reader,” stated the court, “could have thought that either the speakers at the meetings or the newspaper articles reporting their words were charging [the developer] with the commission of a criminal offense. [Fn. omitted.] On the contrary, even the most careless reader must have perceived that the word was no more than rhetorical hyperbole, a vigorous epithet used by those who considered [the developer’s] negotiating position extremely unreasonable. Indeed, the record is completely devoid of evidence that anyone in the city of Greenbelt or anywhere else thought [the developer] had been charged with a crime.” (398 U.S. at p. 14 [26 L.Ed.2d at p. 15].)

Here, unlike Greenbelt, the publication did not describe the background against which the remarks concerning the use of the terms “blackmail” and “extortion” were made. There was no mention of the compromise settlement under which R & B Development Co. agreed to pay the $100,000 to the city, nor any specific mention that the sum was paid to the city rather than to “the combine.” Therefore, unlike Greenbelt, we cannot say as a matter of law that the terms “blackmail” and “extortion” could not have been and were not understood as charging Hogard with crime.'

Although a triable issue of fact is presented as to whether the publication constituted a factual assertion that Hogard had committed extortion or blackmail, the question remains whether Hogard made a sufficient showing of malice to justify denial of defendants’ motion for summary judgment. As we have seen, the test of malice under New York Times is whether the defendant knew the statement was false or acted with reckless disregard of whether or not it was false.

Hogard’s position in this regard is simple: he argues that since defendants concede that they were aware prior to publication that Hogard had never committed extortion or blackmail, they published the defamatory statements with knowledge of falsity, and thus the test for malice set forth in New York Times is satisfied.

We disagree with this proposed simplistic formula. It is undisputed that negligence in the publication of a defamation is insufficient to meet the test of malice under New York Times. (Garrison v. Louisiana (1964) 379 U.S. 64, 78-79 [13 L.Ed.2d 125, 134-136, 85 S.Ct. 209]; Rosanova v. Playboy Enterprises, Inc. (S.D.Ga. 1976) 411 F.Supp. 440, 448.) If we were to accept Hogard’s contention, it would mean that a defendant who makes a statement which is ambiguous in the sense that it can reasonably be viewed as either fact or opinion, but who neither intends the statement to bear a factual meaning nor believes that it will be understood by the reader in that fashion, will be guilty of libel if a jury later determines that the article was understood in its factual, defamatory sense.

Such a holding would render a defendant liable for a defamatory statement negligently made and would create precisely the chilling effect on speech which the New York Times rule was designed to avoid. The Supreme Court made it clear there that the reason for its ruling requiring a showing of malice in libel actions involving the conduct of public officials is that otherwise “would-be critics of official conduct may be deterred from voicing their criticism, even though it is believed to be true and even though it is in fact true, because of doubt whether it can be proved in court or fear of the expense of having to do so.” Such a rule “dampens the vigor and limits the variety of public debate. It is inconsistent with the First and Fourteenth Amendments.” (376 U.S. at p. 279 [11 L.Ed.2d at p. 706].)

If Hogard was to prevail in his view, the result would be a hobbling of free speech by the continuing fear of liability for the use of inexact semantics. The First Amendment protects not only the expression of a political opinion but the choice of words used to convey that opinion.

It is clear that honest belief of the defendant is the touchstone of the privilege enunciated in New York Times, and that a statement is entitled to constitutional protection if the words used are ambiguous but the defendant honestly and without recklessness believes that they constitute an opinion or idea. We hold, therefore, that in order to find the requisite malice from the publication of ambiguous words which could constitute either fact or opinion, the jury must find not only that the words were reasonably understood in their defamatory, factual sense, but also that the defendant either deliberately cast his statements in an equivocal fashion in the hope of insinuating a defamatory import to the reader, or that he knew or acted in reckless disregard of whether his words would be interpreted by the average reader as defamatory statements of fact.

Our next inquiry is whether there was a sufficient showing in the present case to meet this standard. Defendants are correct in asserting that, because unnecessarily protracted litigation would have a chilling effect upon the exercise of First Amendment rights, speedy resolution of cases involving free speech is desirable. (Dombrowski v. Pfister (1965) 380 U.S. 479, 486-487 [14 L.Ed.2d 22, 28-29, 85 S.Ct. 116].) Therefore, summary judgment is a favored remedy, and upon such a motion the trial court must determine whether there is a sufficient showing of malice to warrant submission of that issue to the jury. (See, e.g., Bon Air Hotel, Inc. v. Time, Inc. (5th Cir. 1970) 426 F.2d 858, 864-865; Time, Inc. v. McLaney (5th Cir. 1969) 406 F.2d 565, 566; Oliver v. Village Voice, Inc. (S.D.N.Y. 1976) 417 F.Supp. 235, 237; see Belli v. Curtis Pub. Co. (1972) 25 Cal.App.3d 384, 389 [102 Cal.Rptr. 122].)

We believe Hogard has made a sufficient showing of malice to justify consideration of the issue by the jury if it finds that the article was reasonably understood as alleging that Hogard was guilty of crime.

Shortly after the publication of the article, Hogard wrote the association that some of the statements in the article, including the statement relating to extortion and blackmail, were “grossly libelous,” and he demanded a retraction. In the March issue of the association publication, a retraction was published, which stated, inter alia, “The use of the words ‘extorted’ and ‘blackmail’ were not intended to state or imply that any of the persons mentioned in the article had committed the crimes of ‘blackmail’ or ‘extortion.’ ” Following this disclosure, the publication printed the statement by Hogard, referred to above, regarding his exercise of “brinkmanship” and persuasion with reference to the R & B Development Co.’s project.⁴ According to Hogard’s declaration filed in opposition to the motion for summary judgment, after the retraction was published he observed the author of the original article and other members of Good Government distributing a flyer of the article as originally printed.

In our view, a jury could conclude from this evidence that at least some of the defendants were aware that the words used in the article could be interpreted as defamatory statements of fact instead of “allegorical language . . . voicing a vigorous political opinion, in strident tones,” as defendants claim.

Finally, defendants assert that Hogard is not entitled to punitive damages under section 3294 of the Civil Code⁵ because that provision is unconstitutional as applied to a libel action in which the New York Times privilege applies. (Citing Maheu v. Hughes Tool Company (C.D.Cal. 1974) 384 F.Supp. 166; but see Appleyard v. Transamerican Press, Inc. (4th Cir. 1976) 539 F.2d 1026.) This issue was not raised by defendants in their motion for summary judgment, and we need not reach it at this preliminary stage of the proceeding.

The peremptory writ of mandate is denied.

Tobriner, J., Clark, J., Richardson, J., and Manuel, J., concurred.

1 In January 1971, shortly before publication of the article, Hogard, in an attempt to persuade voters not to sign recall petitions against him, declared in a local publication that one of his accomplishments was the “brinkmanship” exercised to “persuade” R & B Development Co. to include married couples as tenants in the apartment complex. In addition, he stated that residents of the city should not be burdened with the additional cost of city services engendered by large apartment projects, and that a “renegotiated agreement” with the developer required it to pay $100,000 as an environmental reserve tax.

2 A second cause of action alleged that Hogard had sought a retraction, that defendants had published a retraction which did not include a correction of the use of the word “infamy” in the article, and that the use of that term was libelous. The complaint also contained a third cause of action for conspiracy to libel Hogard.

3 Defendants assert that their motion should have been granted because both they and Hogard agreed that there were no triable issues of fact. (Citing Burke Concrete Accessories, Inc. v. Superior Court (1970) 8 Cal.App.3d 773 [87 Cal.Rptr. 619].) They rely upon the circumstance that Hogard also filed a motion for summary judgment and assert that this motion amounted to an admission by him that there were no issues of fact to be' tried. Hogard’s motion was denied, but not on the merits. In any event, the trial court was not required to accept the characterization of the parties as to what matters constituted issues of fact or law. As we shall see, the court correctly concluded that summary judgment was inappropriate because there remain issues to be determined by a jury.

4 The article stated under the heading “Retraction”: “In its February 1971 issue of the College Park News, the College Park Homeowners Association printed an article entitled ‘How Much Can the Citizens of Seal Beach Stand?’ In this article it was stated, among other things:

“1. ‘This is the same combine which extorted by blackmail $100,000 from the R & B Development Company. . .

“2. ‘He had had (referring to former City Councilman Lloyd Gummere) his fill of the Hogard-Fuhrman-Baum-Robertson daily chicanery and machinations.’

“CPHA, its officers and directors and everyone connected with the publication and circulation of our February 1971 issue, hereby unequivocally retract the quoted excerpts from the above mentioned article. The use of the words ‘extorted’ and ‘blackmail’ were not intended to state or imply that any of the persons mentioned in the article had committed the crimes of ‘blackmail’ or ‘extortion.’

“In lieu of the first sentence retracted above, the following statement published by Seal Beach City Councilman Thomas R. Hogard in the January 14, 1971 issue of the Seal Beach-Leisure World ‘Penny-saver’ is substituted therefor:

“ ‘The prior administration (referring to the former City Council) made some agreements to the R & B Development Company. We nevertheless managed, with some “Brinkmanship” on our part, to “persuade” R & B to abandon . . . and \ . As an example a renegotiated agreement with R & B Development Company requires them to pay $100,000 . . ”

5 Section 3294 of the Civil Code provides, “In an action for the breach of an obligation not arising from contract, where the defendant has been guilty of oppression, fraud, or malice, express or implied, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.”