Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Chafoulias v. Peterson

August 14, 2003

GUS A. CHAFOULIAS, APPELLANT,
v.
LORI C. PETERSON, RESPONDENT, AMERICAN BROADCASTING COMPANIES, INC., A DELAWARE CORPORATION, RESPONDENT.



SYLLABUS BY THE COURT

1. Where material facts concerning a defamation plaintiff's limited purpose public figure status are in dispute, the district court may conduct an evidentiary hearing to decide those disputes by specific findings of fact, which will then be subject to appellate review under a clearly erroneous standard.

2. Summary judgment in favor of a media defendant in a defamation action was appropriate where the undisputed facts established that the defamation plaintiff was a limited purpose public figure as to that defendant and there was no evidence of actual malice.

3. Summary judgment in favor of an individual defendant in a defamation action was not appropriate where genuine issues of material fact existed concerning whether that defendant caused the public controversy and whether the plaintiff voluntarily injected himself into that controversy.

The opinion of the court was delivered by: Hanson, Justice.

Affirmed in part, reversed in part, and remanded.

Heard, considered, and decided by the court en banc.

OPINION

Appellant Gus A. Chafoulias brings this defamation action against respondent media company ABC, Inc., and respondent attorney Lori C. Peterson, alleging that ABC published a defamatory statement made by Peterson. We review the decision of the district court, affirmed by the court of appeals, that Chafoulias was a limited purpose public figure on the date of the publication and that respondents are therefore entitled to summary judgment because a reasonable jury could not conclude by clear and convincing evidence that either ABC or Peterson acted with actual malice. We affirm as to ABC but reverse and remand as to Peterson.

Chafoulias is a Rochester businessman and community leader who has achieved success as a local real estate developer. Chafoulias' development projects include the Radisson Plaza Hotel, a 212-room hotel that employs about 185 people. Because of the hotel's proximity to the internationally recognized Mayo Clinic, the Radisson regularly hosts both national and international guests. Chafoulias claims that he was not actively involved in the management of the Radisson. Activities at the hotel provide the context for the allegedly defamatory statement made by Peterson.

Between 1993 and 1995, five female Radisson employees complained to Radisson management that they were being subjected to sexual harassment and aggression by certain male Arab hotel guests. The five women scheduled a meeting with Chafoulias on May 17, 1995, to talk about their concerns, but the meeting was cancelled. The women eventually quit.

After the cancelled meeting, the hotel retained a law firm to investigate the allegations of harassment. The law firm conducted an investigation and concluded that many of the women's complaints were well founded and that Radisson management was aware that a problem existed with regard to the treatment of women by some Arab guests. The law firm recommended that the hotel hire a public relations firm to provide a media strategy and that the hotel prepare a written policy describing unacceptable guest conduct and a written anti-harassment policy for employees "which clearly states that the hotel will not tolerate harassment by guests, and sets forth the procedures available to employees who have complaints regarding improper conduct by guests."

In mid-1995, the five former employees retained Peterson to pursue federal sexual harassment claims against Chafoulias. On August 1, 1995, Peterson wrote Chafoulias that she had been retained by the women, that the women were alleging sexual misconduct in the workplace by some guests, and that "[a]t this point we are considering all appropriate measures to remedy the circumstances brought about by * * * your managers' lack of care and judgment in response to such misconduct."

The hotel agreed to mediate Peterson's threatened claims on April 23, 1996. Several days before the scheduled mediation, Peterson distributed "Wanted" posters at public locations in Rochester. The posters featured pictures of two Arab men, identified by name, stated "$1,000 REWARD for the apprehension of these men" and asked, "Have you been sexually harassed or assaulted by an Arab man? Do you know someone who has?" The "Wanted" posters contained this legend at the bottom: "If you have any information, please contact us at: Lori Peterson & Associates." There is evidence that Peterson attempted to have the "Wanted" posters published by the Rochester Post-Bulletin as an advertisement, but the Post-Bulletin declined because questions asked in the posters "may be perceived as racist."

On April 30, 1996, Twin Cities television station KSTP broadcast the first part of a two-part series, titled "Justice For All," on the issue of alleged sexual harassment of Rochester women by Arab men. The series alleged that several women had been subjected to sexual harassment and abuse by Arab visitors to Rochester and that little had been done by authorities to arrest and prosecute the offenders. That same day, the Rochester Post-Bulletin carried a story headlined "Women claim harassment by Arab men" which quoted Peterson talking about the federal lawsuit. Two other related articles—"Cultural clash can produce problems" and "Attorney built reputation on high-profile harassment cases"—also ran in the April 30, 1996, edition of the Rochester Post-Bulletin.

Media coverage continued in May. On May 2, 1996, the Rochester Post-Bulletin published an article titled "Authorities focus on all assaults against women." In this article, a county attorney and police sergeant reacted to the KSTP-TV series, admonished readers to focus on "the [general] problem of sexual and physical assault on women," and reported that "criminal charges have been filed against four Arab men in connection with the sexual assaults in Rochester." On May 3, 1996, the Rochester Post-Bulletin published an article titled "Punish those who are guilty, Arabs say," in which members of the Arab community voiced concern that the media's reports of alleged sexual harassment reinforced negative stereotypes.

On June 7, 1996, Peterson filed federal lawsuits on behalf of her clients against Chafoulias.*fn1 The suits alleged that from 1993 to 1995, the women were subjected to sexual harassment and aggression by male Arab hotel guests; that the harassment included abusive and derogatory language, unwelcome sexual commentaries, physical contacts of a sexual nature and a rape; that Chafoulias, as employer, was responsible for the actions of his managers and employees in ignoring, condoning, and contributing to the illegal acts of the hotel guests; and that Chafoulias himself knew about the offensive conduct but failed to notify the police or take other meaningful action.

The filing of these lawsuits was reported in Minneapolis' Star Tribune newspaper on June 8, 1996. The Radisson Plaza responded to that article by issuing a press release on June 13, 1996, which stated in part:

The Rochester Radisson Plaza Hotel takes allegations of harassment very seriously, and hotel management will not tolerate harassment in any form. The hotel has a rigorous harassment policy in place, and appropriate corrective or disciplinary actions are taken in situations in which the policy is found to have been violated. In addition, the hotel adopted several additional written policies that were distributed to all employees and subsequently discussed in training sessions. The hotel also developed a new policy regarding Radisson's Expectations of Conduct by Guests, which was translated into various languages.

On June 15, 1996, the Rochester Post-Bulletin published an article outlining the Radisson's code of conduct and sexual harassment policy titled "Radisson says it has firm policy on harassment."

About the time the suits were filed, David Page, a producer at ABC, learned about the former employees' lawsuits against Chafoulias in a conversation he initiated with Peterson. Working with Brian Ross, an investigative correspondent, Page began researching the allegations of harassment for a news report. In 1996, Page and Ross traveled once to Texas and twice to Minnesota to interview the federal-lawsuit plaintiffs and other key persons, including Peterson. In their affidavits, Page and Ross state that, after interviewing about 80 people and amassing and reviewing documents, they came to believe that Peterson's allegations were true—that the harassment had occurred and that Chafoulias knew of it.

Page and Ross invited Chafoulias to "present [his] position on this matter in [his] own words" on camera. A letter from Page to Chafoulias dated September 18, 1996, documents that Page spoke with Chafoulias on the telephone in the summer of 1996 and scheduled an on-camera interview that Chafoulias later canceled. In October 1996, when Ross and Page were in Rochester, they and their crew encountered Chafoulias on the street and conducted a brief interview. After the street interview, on June 17, 1997, Page wrote to Chafoulias, again requesting an "in-depth interview." Chafoulias responded to this letter, declining to be interviewed and submitting that "[t]he real story is [Peterson's] familiar tactic" of making threats to go to the press to encourage settlement.

Page produced a story for ABC's program PrimeTime Live entitled "The VIP Floor" which aired on August 6, 1997. Segments of interviews with Peterson and Chafoulias were included in the broadcast. The basis for this defamation case against Peterson and ABC is that Peterson defamed Chafoulias when ABC broadcast her statement that "Chafoulias knew. Chafoulias has known for years that these women were being attacked, harassed, raped."

In mid-May 1998, three weeks after the federal lawsuits were settled, Rochester television station KTTC broadcast an interview of Chafoulias. In an affidavit, Chafoulias explains that he acceded to KTTC's requests to an interview because "[t]he PrimeTime Live broadcast hurt my reputation, hurt business that I have a role in, and hurt me personally and deeply. I understood that the KTTC interview would provide an opportunity to help rehabilitate myself and my reputation and I did it for that reason." In this interview, Chafoulias defended his position in the harassment suit, thanked the community for its support and reaffirmed his commitment to Rochester.

On August 13, 1998, Chafoulias brought this defamation action against Peterson and ABC. The district court conducted a pretrial evidentiary hearing on the question of whether Chafoulias should be regarded as a limited purpose public figure. The court concluded that Chafoulias was a limited purpose public figure on the date of the broadcast and that he would have to prove at trial that Peterson and ABC acted with actual malice. Both Peterson and ABC moved for summary judgment, and the district court granted both motions, determining that the evidence was such that a reasonable jury could not find by clear and convincing evidence that either Peterson or ABC acted with actual malice.

The court of appeals affirmed. Chafoulias v. Peterson, 642 N.W.2d 764, 779 (Minn. App. 2002). The court upheld the district court's conclusion that Chafoulias was a limited purpose public figure on the date of the broadcast, stating that Chafoulias "actively and voluntarily injected himself into the dispute over sexual harassment in an effort to influence the outcome of the controversy," and agreed with the district court's grant of summary judgment to both Peterson and ABC. Id. at 773, 774-79.

On appeal to this court, Chafoulias argues that he was a private figure on the day of the broadcast and that he need only establish by a preponderance of the evidence that Peterson and ABC knew, or in the exercise of reasonable care should have known, that Peterson's statement was false. See Jadwin v. Minneapolis Star & Tribune Co., 367 N.W.2d 476, 491 (Minn. 1985).

Peterson and ABC argue that Chafoulias was properly characterized as a limited purpose public figure and that summary judgment was thus appropriate because the record does not provide clear and convincing evidence of either Peterson's or ABC's actual malice.

For reasons we will discuss below, the legal analysis of these issues must be conducted separately for ABC and for Peterson. We agree with the district court and court of appeals that Chafoulias must be regarded as a limited purpose public figure as to ABC and that he failed to provide clear and convincing evidence that ABC acted with actual malice. As to Peterson, however, we conclude that there are genuine issues of material fact on the questions of whether Peterson's conduct created the "public controversy" and, in that context, whether Chafoulias voluntarily injected himself into that public controversy. Those issues must be decided by the district court and supported by written findings of fact before we can determine whether Peterson is disqualified by her conduct from relying on the limited purpose public figure privilege to obtain the additional constitutional protection of the actual malice standard.

I.

We will first discuss the privilege that attaches to speech directed to a limited purpose public figure and the procedure the district court should follow to determine whether that privilege exists in a given case.

The United States Supreme Court decided the landmark case of New York Times Company v. Sullivan, 376 U.S. 254, 279-80, 285-86 (1964), which held that the privilege that attached to certain speech under the First Amendment of the federal constitution applied to comments concerning "public officials," so that such an official would be required to show actual malice with convincing clarity in order to recover damages for defamation. The Court extended New York Times' actual malice standard to "public figures" in Curtis Publishing Company v. Butts, 388 U.S. 130, 155 (1967). Finally, in Gertz v. Robert Welch, Inc., 418 U.S. 323, 351 (1974), the Court clarified that the actual malice standard also applied to limited purpose public figures.

The Gertz Court explained that two factors justify applying the actual malice standard to public officials and public figures. First, "public officials and public figures usually enjoy significantly greater access to the channels of effective communication and hence have a more realistic opportunity to counteract false statements then [sic] private individuals normally enjoy. Private individuals are therefore more vulnerable to injury, and the state interest in protecting them is correspondingly greater." Id. at 344 (footnote omitted). Second, "[t]hose classed as public figures *á*á* have assumed roles of especial prominence in the affairs of society *á*á* [and] invite attention and comment." Id. Gertz held that "an individual [who] voluntarily injects himself or is drawn into a particular controversy *á*á* thereby becomes a public figure for a limited range of issues." Id. at 351.

It is generally assumed that the question of the availability of the public figure privilege is a question of law for the court to decide. The United States Supreme Court has stated clearly that the question of "public official" privilege "is for the judge in the first instance to determine." Rosenblatt v. Baer, 383 U.S. 75, 88 (1966). Although the Court has not explicitly stated that the same is true for the "public figure" privilege, the Court has approached the issue as one of law. See, e.g., Wolston v. Reader's Digest Association, Inc., 443 U.S. 157, 167-69 (1979); Gertz, 418 U.S. at 352. See also 1 Rodney A. Smolla, Law of Defamation, §§ 2:116-2:218 (2d ed. 2003). We have likewise viewed the question of the public figure privilege as one of law and have also stated that we review such a legal determination de novo. Britton v. Koep, 470 N.W.2d 518, 520 (Minn. 1991); Jadwin, 367 N.W.2d at 483.

The treatment of the public figure privilege as a question of law is relatively straightforward where the material facts concerning public figure status are not in dispute. But where the facts concerning a person's limited purpose public figure status are in dispute, the role of the court is not as clear. Preliminary questions of considerable importance concerning that role are: (1) Does the classification of the public figure privilege issue as one of "law" modify the traditional roles of the district court and the appellate courts with respect to contested issues of historical fact material to the existence of the privilege? (2) If so, must this court then act as the ultimate fact finder on those contested issues of fact? (3) If not, and if the fact finding function remains with the district court, must the district court make written findings of fact, and what is the standard of review that this court should apply to the district court's findings?

The parties do not specifically address these questions. Chafoulias recognizes that the privilege has been classified as a "legal issue" but then relies on traditional summary judgment standards that would require viewing the evidence in the light most favorable to him and preclude the pretrial resolution of genuine issues of material fact. ABC counters that "[w]hether a person is a public figure is a pure question of constitutional law, which this court reviews de novo." Peterson simply argues the facts.

The Restatement (Second) of Torts, § 580A. cmt. c (1977), classifies the question of whether a plaintiff is a "public figure" as "one of law, not of fact," but recognizes that "the facts on which the determination is to be made may be in dispute and therefore subject to the determination of the fact finder." That comment does not identify who that "fact finder" should be, but that issue is specifically addressed in Restatement (Second) of Torts, § 619 cmt. a (1977), which discusses the respective functions of the court and jury in connection with the determination of privileges. The comment states:

Whether a privilege exists at all is a question for the court. This requires the court to determine whether the circumstances under which the publication was made were such as * * * to make the publication privileged. * * * If the facts are in dispute, the jury is called upon to consider the evidence and pass upon the issues thus raised. It is for the court, however, to decide whether the facts found by the jury made the publication privileged or to instruct the jury as to what facts they must find in order to hold the publication privileged.

(Emphasis added.) See also Smolla, Law of Defamation, at §§ 2:120-2:121 ("In some cases it may be the judge's conviction that a relatively brief evidentiary hearing may be sufficient to clarify any ambiguities in the paper record, permitting the trial judge to rule on the public figure issue in advance of the trial. * * * At other times, of course, the circumstances may be such that nothing at all will be saved by such a hearing, in which case, if material issues of fact are in dispute, the public figure issue must simply be carried forward with the trial.").

Even if the "factual disputes are not to be left to the jury at trial, but should be resolved by the trial court prior to trial, after an evidentiary hearing solely on this issue, if necessary," as suggested by a sister court in Bay View Packing Co. v. Taft, 543 N.W.2d 522, 530 (Wis. App. 1995), this would not mean that the traditional roles of district court and the appellate courts relating to fact finding would be modified. Traditionally, the district court would support its legal conclusion with specific findings on contested issues of historical fact material to that conclusion. 2 David F. Herr & Roger S. Haydock, Minnesota Practice-Civil Rules Ann. § 52.3 (1998). And an appellate court would not disregard the district court's findings of fact on contested issues of fact and make its own findings but would review the district court's findings for clear error. Minn. R. Civ. P. 52.01; see also State, Lake Minnetonka Conservation Dist. v. Horner, 617 N.W.2d 789, 795 (Minn. 2000) (quoting State v. Lee, 585 N.W.2d 378, 383 (Minn. 1998)).

Because the decisions of the United States Supreme Court do not prescribe the procedure a state court must use to resolve contested issues of fact while determining the existence of a constitutional privilege as a question of law, we conclude that the federal constitution permits a state court to use traditional methods for resolving fact disputes that are material to the existence of a privilege. That could include submission to a jury for special interrogatory verdicts or under specific instruction as to the elements of the privilege.*fn2 Alternatively, it could include pretrial ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.