United Medical Laboratories, Inc. v. Columbia Broadcasting System, Inc.

258 F. Supp. 735, 1966 U.S. Dist. LEXIS 6750
District Court, D. Oregon·Decided September 8, 1966·No. Civ. 65-318·Published·Cited by 6 cases

Opinions

OPINION

KILKENNY, District Judge:

Plaintiff charges the defendants with maliciously publishing false and defamatory statements related to plaintiff by means of radio, television and the press. Substantial special, compensatory and punitive damages are claimed. Previously, the Court quashed the service of process on defendants Morris Schaeffer and Victor Buhler. United Medical Laboratories, Inc. v. Columbia Broadcasting System, Inc., et al., 256 F.Supp. 570 (D.Or.1966).

The cause is before the Court on the motion of the remaining defendants to dismiss.

All of the broadcast material is before the Court and in the course of the hearing on the motion to dismiss, the Court actually viewed the telecasts. The parties have indicated that all relevant and material matters with reference to plaintiff’s claim are now before the Court.

Plaintiff is an Oregon corporation operating a clinical testing laboratory. It tests and analyzes biological specimens and samples, which it receives by mail from physicians and pharmaceutical companies throughout the United States. Defendant McMullen is head of the Fact Finding Unit of defendant Columbia Broadcasting System, Inc. (CBS). Shaeffer is head of the Bureau of Laboratories of the New York City Department of Health. Cronkite is the featured news commentator on “CBS Evening News,” a nightly television broadcast. Buhler is President of the College of American Pathologists.

Defendants participated in the telecasts “CBS Evening News with Walter Cronkite” on the evenings of June 22nd, 23rd and 24th, 1965, and in the broadcasts of “The World Tonight” on June 22nd and 23rd. Defendants also caused the publication of a news release on June 23rd, describing the disclosures made on the telecast of the night before.

Before the programs and news release were published on June 23rd, plaintiff demanded, by telephone, that CBS retract the alleged implications of statements during the June 22nd programs. CBS took no such action. Later on June 23rd, CBS contacted plaintiff through its affiliate, KOIN-TV, requesting pictures of plaintiff’s operations and an interview with its employees, with a view toward publishing these as a part of the June 24th edition of “CBS Evening News.” Pictures were taken by KOIN-TV personnel, and an interview with one of plaintiff’s employees was recorded. These materials were sent to CBS on June 24th, but did not appear orí the June 24th programs, and have not appeared since.

Plaintiff claims that the broadcasts of June 22nd and June 23rd were seen and heard by persons within and without Oregon. These persons, and the persons and organizations who received the news release, are said to have understood the matter therein to refer to plaintiff. Plaintiff claims that its business damage as a result of these publications totals $500,000.00, that it has lost $100,000.00 worth of physicians’ accounts, and that [738] it is entitled to exemplary damages in the sum of $500,000.00.

The broadcasts publicized the results of a five-month investigation by Jay McMullen and the CBS News Fact Finding Unit. Under the name of a “cooperating physician” in New York City, letters were sent to 43 mail-order laboratories outside New York State, in 33 cities in 14 states (not including Oregon, as a map displayed on one of the broadcasts showed.) Thirteen of these did not reply; thirteen others, according to McMullen, “said that most of the tests required could not be handled accurately through the mails * * * and suggested that these tests be done locally in New York City.” Seventeen, or 39%, sent the equipment and mailing containers requested in the letters, indicating their willingness to conduct one or more of the six routine laboratory experiments described. Specimens were prepared and packaged in the containers and immediately airmailed back. Samples of each specimen were also sent to four control laboratories in New York City. Comparison of the findings formed the basis of the “Special Report.” The results, in substance, were as follows:

1. Bacterial specimen — Salmonella, Group D: 100% of the mail-order laboratories tested failed to identify it as a Salmonella of any kind. Group D Salmonella includes an organism capable of causing typhoid fever.
2. Prothrombin Time Test — how quickly does blood clot?: the control laboratories found that the blood specimen submitted was in a normal range. The mail-order laboratories which reported said that the clotting time was between 50 and 53% below normal.
3. Acid Phosphatase Test — control laboratories said the specimen was normal: of the mail-order laboratories tested, 25% said it was abnormal.
4. Blood Sugar — found by control laboratories to be abnormally high in blood sugar, an indication of diabetes; 4 mail-order laboratories said it was normal; the reports of 71% of the mail-order laboratories replying varied from the control laboratories’ reports by from 20% to 104%.
5. Complete blood count and urinalysis — the medical experts agreed that the reports of the mail-order laboratories showed “a disturbing variation” from the reports of the hospital control laboratories.

Of five New York City laboratories subsequently tested, and one of the control laboratoriés, all failed the “Salmonella Group D” test.

These disclosures were made on the Cronkite broadcast of June 22nd and repeated on “The World Tonight” later that evening. The next evening, both programs were devoted to a single laboratory that had failed the same test, a “hormone assay” on urine, 12 times, and to the unethical practices in which CBS research indicated the laboratory’s owners were involved. The third telecast discussed the implications of the findings. The news release of June 23rd summarized the first telecast.

Plaintiff contends that slogans flashed across the television images during the first telecast, stating the percentage of error among the mail-order laboratories tested, did not limit the reference to only those laboratories which participated in the survey, e. g., “Mail Order Laboratories 100% Wrong.” The dialogue set forth in the Addenum is representative of the materials and includes all references that conceivably could be construed as relating inferentially to United Medical Laboratories.

CONTENTIONS

I. Were the “references” published clearly limited to parties explicitly identified, or identified as participants in the CBS tests?

On the telecast of June 22nd, Cronkite noted the widespread reliance by doctors on mail-order tests. Giving short shrift to the view that such reliance is often necessary because of the deficiencies of local laboratories, he said that “for some small town doctors the inducement may be partly convenience." (Emphasis supplied.) This, coupled with the dra[739] matic statement that “anyone” can engage in such a business without fear of federal interference, the two statements being sandwiched around a charge that some mail-order laboratories advertise “cut rate service,” conveys the impression that the practice may often be neither necessary nor greatly advantageous . in the treatment of patients.

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United Medical Laboratories, Inc. v. Columbia Broadcasting System, Inc., 258 F. Supp. 735, 1966 U.S. Dist. LEXIS 6750 (D. Or. 1966).

258 F. Supp. 735 (United Medical Laboratories, Inc. v. Columbia Broadcasting System, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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