Schuler v. McGraw-Hill Companies, Inc.

989 F. Supp. 1377, 25 Media L. Rep. (BNA) 2409, 1997 U.S. Dist. LEXIS 22483, 1997 WL 809755
CourtDistrict Court, D. New Mexico
DecidedJune 11, 1997
DocketCiv. 96-292 SC/RLP
StatusPublished
Cited by5 cases

This text of 989 F. Supp. 1377 (Schuler v. McGraw-Hill Companies, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. New Mexico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schuler v. McGraw-Hill Companies, Inc., 989 F. Supp. 1377, 25 Media L. Rep. (BNA) 2409, 1997 U.S. Dist. LEXIS 22483, 1997 WL 809755 (D.N.M. 1997).

Opinion

MEMORANDUM OPINION AND ORDER

CAMPOS, Senior District Judge.

THIS MATTER comes before the Court on Defendants’ Motion to Dismiss, filed January 6, 1997. The Court, having considered the motion and memoranda submitted by the parties, and being apprised of the applicable law, finds that the motion is well taken. I shall grant the motion for the reasons set forth below.

I. BACKGROUND

This lawsuit arises out of an article published in Business Week magazine. Plaintiff avers various claims, including defamation, invasion of privacy, interference with business relations, intentional infliction of emotional distress, and prima facie tort. In a Memorandum Opinion and Order filed in October 1996, I denied Plaintiffs Motion to Remand, and I directed Plaintiff to file an amended complaint in order to provide Defendants a more definite statement of her defamation claim. Plaintiff filed her First Amended Complaint, and Defendants now seek dismissal of that complaint for its alleged failure to state a claim upon which relief can be granted.

II. DEFENDANTS’ MOTION TO DISMISS

A. Legal Standard

Granting a motion to dismiss for failure to state a claim is “ ‘a harsh remedy which must be cautiously studied, not only to effectuate the spirit of the liberal rules of pleading but also to protect the interests of justice.’ ” Ramirez v. Oklahoma Dept. of Mental Health, 41 F.3d 584, 586-87 (10th Cir.1994) (quoting Morgan v. City of Rawlins, 792 F.2d 975, 978 (10th Cir.1986)). When ruling on a 12(b)(6) motion, I must construe the plaintiffs complaint liberally. Swanson v. Busier, 750 F.2d *1383 810, 813 (10th Cir.1984). All of the well-pleaded allegations in the complaint must be accepted as true. Albright v. Oliver, 510 U.S. 266, 114 S.Ct. 807, 810, 127 L.Ed.2d 114 (1994). Conclusory allegations, however, need not be taken as true. Swanson, 750 F.2d at 813. All reasonable inferences must be indulged in favor of the plaintiff. Weatherhead v. Globe International, Inc., 832 F.2d 1226, 1228 (10th Cir.1987). A claim may be dismissed only when “no relief could be granted under any set of facts that could be proved consistent with the allegations.” Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984).

B. Facts

The facts, for the purposes of the motion to dismiss, are as follows. In September 1994, Business Week ran an article entitled “Did the Amex Turn a Blind Eye to a ‘Showcase’ Stock?” The article’s subtitle stated, “[t]he bizarre Printron case shows the exchange too often ignores the most glaring signs of trouble.” The article recounts a chapter in the story of the American Stock Exchange’s (“the Amex”) listing of small companies on the Emerging Company Marketplace (“ECM”). In particular, the article focuses on Printron, Inc., an Albuquerque-based company. Prior to the time the article was published, Plaintiff had been the CEO of Printron.

The article refers to Plaintiff’s status as a transsexual and it treats certain aspects of her life when she was a man known as John Huminik, Jr. The article also examines Plaintiff’s involvement in two lawsuits filed against her by the Securities and Exchange Commission (“SEC”). One of the lawsuits was filed against Plaintiff in the mid-1970s when she was John Huminik; the other was filed against Plaintiff in 1991 when she was Eleanor Schuler, that is, after her sex change. Both lawsuits were resolved by injunctions barring Plaintiff from committing future securities law violations. In both eases, Plaintiff neither admitted nor denied the allegations against her; however, she signed consent decrees agreeing to entry of the permanent injunctions.

After Printron was listed on the ECM, the value of its stock plummeted from fourteen dollars ($14.00) per share to twenty-two cents ($.22) per share. The article criticizes the Amex for failing to screen companies properly before listing them on the ECM. In addition, the article criticizes Printron for failing to reveal to investors Plaintiff’s involvement in the SEC lawsuit filed against her when she was a man. The article raises the question of why Schuler received such lenient treatment in the 1991 lawsuit, and the article speculates that perhaps the SEC did not know that Huminik and Schuler were the same person.

C. Discussion

1. Defamation

In general, a plaintiff must prove the following elements in order to prevail on a defamation claim: 1) the defendant published a defamatory communication; 2) the communication contained a false statement of fact; 3) the communication was concerning the plaintiff; and 4) the communication proximately caused actual injury to the plaintiff’s reputation. N.M. UJI § 13-1002 (1997). In addition, a plaintiff must prove a certain level of culpability on the part of the defendant. The level of culpability that the plaintiff must prove depends upon whether the plaintiff is considered a public figure. The question of whether a person is a public figure is a question of law for the court. Marchiondo v. Brown, 98 N.M. 394, 399, 649 P.2d 462 (1982).

If the plaintiff is a public figure, she must prove that the defendant acted with actual malice when publishing the defamatory communication. New York Times Co. v. Sullivan, 376 U.S. 254, 279-80, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964). That is, a public figure must prove that the defendant knew the statement was false, or that the defendant acted with reckless disregard for the truth or falsity of the statement. Id. 376 U.S. at 280. By contrast, an ordinary negligence standard of proof apples to a private defamation plaintiff. Newberry v. Allied Stores, Inc., 108 N.M. 424, 429, 773 P.2d 1231, 1236 (1989). Thus, a private defamation plaintiff need only prove that the defendant *1384 negligently failed to recognize the falsity of the statement.

Plaintiff alleges that she was a public figure from 1966 to 1979. She claims, however, to have been a “private figure” at all times relevant to this action. The Supreme Court has expressly declined to decide “whether or when an individual who was once a public figure may lose that status by the passage of time.” Wolston v. Reader’s Digest Ass’n, Inc., 443 U.S. 157, 166 n. 7, 99 S.Ct. 2701, 61 L.Ed.2d 450 (1979). In any event, it is not necessary for me to decide the issue.

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989 F. Supp. 1377, 25 Media L. Rep. (BNA) 2409, 1997 U.S. Dist. LEXIS 22483, 1997 WL 809755, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schuler-v-mcgraw-hill-companies-inc-nmd-1997.