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INSULL v. NEW YORK WORLD-TELEGRAM CORP.
April 8, 1959
SAMUEL INSULL, PLAINTIFF,
NEW YORK WORLD-TELEGRAM CORPORATION, A CORPORATION, ROY W. HOWARD, MEMPHIS PUBLISHING COMPANY, A CORPORATION, EDWARD J. MEEMAN, INDIANAPOLIS TIMES PUBLISHING COMPANY, A CORPORATION, WALTER LECKRONE, E.W. SCRIPPS COMPANY, A CORPORATION, LOUIS B. SELTZER, DICK THORNBURG, HERALD-POST PUBLISHING CO., A CORPORATION, EDWARD M. POOLEY, KNOXVILLE NEWS-SENTINEL PUBLISHING COMPANY, A CORPORATION, LOYE W. MILLER, PITTSBURGH PRESS COMPANY, A CORPORATION, WEIDMAN W. FORSTER, NEW MEXICO STATE TRIBUNE COMPANY, A CORPORATION, DAN BURROUGHS, CHARLES T. LUCEY, ARTHUR M. SCHLESINGER, JR., HOUGHTON MIFFLIN COMPANY, A CORPORATION, KENNETH E. TROMBLEY, AND HARPER & BROTHERS, A CORPORATION, DEFENDANTS.
The opinion of the court was delivered by: Miner, District Judge.
These are three actions to recover compensatory and punitive
damages for alleged libels published by ten corporate and twelve
individual defendants. They were originally filed as one action
in the Circuit Court of Cook County on December 30, 1957 (Law No.
57 C 18759), and subsequently removed to this Court by defendants
pursuant to 28 U.S.C. (1952 ed.) § 1441.
Plaintiff is an Illinois resident. No defendant is a resident
of Illinois. One corporate defendant (Houghton Mifflin Company)
is licensed to do business in Illinois, and service was had on
its registered agent in accordance with Section 111 of the
Illinois Business Corporation Act (Ill.Rev.Stat. (1957), c. 32,
§ 157.111).*fn1 All other defendants were served with
process at their respective places of residence under Section
16(1, 2) of the Illinois Civil Practice Act (Ill.Rev.Stat.
(1957), c. 110, § 16(1, 2)).*fn2
The complaint is in six counts. Counts 1 and 4 complain of an
alleged libel promulgated by New York World-Telegram Corporation,
a New York corporation and resident, and Roy W. Howard, a New
York resident-citizen and editor of "The New York World-Telegram
and The Sun" published by said corporation; Memphis Publishing
Company, a Delaware corporation operating in Memphis, Tennessee,
and Edward J. Meeman, a Tennessee resident-citizen and editor of
"The Memphis Press-Scimitar" published by said corporation;
Indianapolis Times Publishing Company, an Indiana corporation and
resident, and Walter Leckrone, an Indiana resident-citizen and
editor of "The Indianapolis Times" published by said corporation;
E.W. Scripps Company, an Ohio corporation and resident, Louis B.
Seltzer, an Ohio resident-citizen and editor of "The Cleveland
Press" published by said corporation, and Dick Thornburg, an Ohio
resident-citizen and editor of "The Cincinnati Post" published by
said corporation; Herald-Post Publishing Company, a Texas
corporation and resident, and Edward M. Pooley, a Texas
resident-citizen and editor of "The El Paso Herald-Post"
published by said corporation; Knoxville News-Sentinel Company,
a Tennessee corporation and resident, and Loye W. Miller, a
Tennessee resident-citizen and editor of "The Knoxville
News-Sentinel" published by said corporation; Pittsburgh Press
Company, a Pennsylvania corporation and resident, and Weidman W.
Forster, a Pennsylvania resident-citizen and editor of "The
Pittsburgh Press" published by said corporation; New Mexico State
Tribune Company, a New Mexico corporation and resident, and Dan
Burrows, a New Mexico resident-citizen and editor of "The
Albuquerque Tribune" published by said
corporation; and Charles T. Lucey, a Maryland resident-citizen
employed as a staff writer by the so-called Scripps-Howard
Newspaper Alliance of Washington, D.C.*fn3
Both counts refer to an article written by defendant Lucey
which appeared in the October 8, 1957, editions of the newspapers
published and edited by the Scripps-Howard defendants, the
pertinent excerpt being:
"Some of labor's entrenched leaders have been
getting away with racketeering practices of a kind
that sent the Samuel Insulls and Richard Whitneys to
jail when big business tycoons were cut down to size
in the 1930's".
Count 1 demands recompense for injury to plaintiff's "good
name, reputation, trade, business and occupation". Count 4 deals
with defamation of "the memory of plaintiff's father, all to the
great damage and injury of plaintiff."
The Scripps-Howard defendants have filed a motion to dismiss
the cause as to them for lack of jurisdiction over their persons.
In support, they have submitted affidavits by the defendant
(a) the state of incorporation and residence and the principal
place of business of each corporate defendant, none being within
(b) the place of printing of the newspaper published by each
corporate defendant, none being within Illinois;
(c) that any Illinois distribution of newspapers published by
each corporate defendant is always subsequent to distribution in
the city and state where printed;
(d) the number and destination of, and revenue from, copies of
each newspaper mailed or shipped into Illinois each day;
(e) that where copies are destined for newsstands or wholesale
distributors within Illinois, neither the corporate defendants
nor the newspapers published by them exercise any control or
supervision over the proprietors thereof;
(f) that payments from Illinois subscribers, newsstands and
wholesale distributors are received by mail at the places of
business of the respective corporate defendants;
(g) that no corporate defendant or newspaper published by it is
licensed or authorized to do business in Illinois, has a
registered agent in Illinois, maintains any office in Illinois or
is listed in any Illinois telephone or business directory;
(h) that no corporate defendant or newspaper published by it
employs as its agents any reporters, advertising solicitors or
other persons who are permanently located within Illinois;
(i) that no corporate defendant or newspaper published by it
owns or maintains any assets within Illinois in the nature of
realty or personalty and none has a bank account within Illinois;
(j) that no defendant affiant personally owns or operates any
business within Illinois, and that on and since December 30,
1957, each defendant affiant has resided in a state other than
(a) are operated in such a manner as their directors, officers,
managers or proprietors alone determine;
(b) are not the agents, employees or servants of any of the
(c) purchase from the Scripps-Howard corporate defendants, as
independent contractors for their own account, copies of
newspapers published by the said defendants;
(d) receive said newspapers by mail or rail from outside
(e) make payment for said newspapers by mail to the
Scripps-Howard defendants or their agents who are located outside
(f) make no newspaper purchases, either directly or indirectly,
from any of the Scripps-Howard defendants other than the one or
several of said defendants specifically identified in each
respective affidavit, or other than through an Illinois
(g) respectively sell said newspapers to newsstands or to
individual purchasers, and do not account to any of the
Scripps-Howard defendants for any of the proceeds and avails of
Said defendants have attached to their supporting brief three
tables, each showing by average number of copies, average revenue
and percentage of circulation the extent of Illinois distribution
of each of the newspapers published by the Scripps-Howard
corporate defendants. Table A demonstrates that Illinois
subscribers receive daily a minimum of 6 to a maximum of 37
copies of each newspaper, that the daily revenue averages a
minimum of 12 cents to a maximum of $4.44, and that the daily
Illinois circulation comprises a minimum of .006 1/2% to a
maximum of .03% of that for each newspaper. Table B, "Defendants'
Newspapers Mailed Daily to Independent Newsdealers in Illinois",
and Table C, "Defendants' Newspapers Mailed Daily to an
Independent Wholesaler in Illinois", demonstrate that Illinois
circulation by these methods is even more minimal.
Counts 2 and 5 demand judgment against Arthur M. Schlesinger,
Jr., alleged by the complaint to be a resident of Massachusetts,
and Houghton Mifflin Company, of Boston, Massachusetts.*fn7 The
complaint avers, and Houghton Mifflin Company does not deny, that
it is authorized to transact business in Illinois.
Both counts refer to a book, "The Crisis of the Old Order (The
Age of Roosevelt)", written by defendant Schlesinger and
published by defendant Houghton Mifflin Company in January, 1957.
Excerpts which plaintiff deems libelous are:
"Insull's ideas extended far beyond his own
utilities system. From his estate in Libertyville, he
dominated Chicago, bribing the state utilities
commission, affably encouraging the corruptions of
local politics, even building an opera house."
Chapter 15, page 120.
"If Kreuger, the Match King, was a gigantic thief,
what Titan — or even Tycoon — could be
trusted in the future? In Chicago, investors were
already haunting the offices of Samuel Insull,
demanding that he make good on his worthless stock.
Protected night and day by thirty-six personal
bodyguards, Insull, who believed in his own magic,
tried to save his crumbling estate through new loans
and new manipulations. But his fantastic
improvisation was slowly dematerializing before
everyone's eyes. When he abruptly departed for Europe
in 1932, having resigned his eighty-five
directorships, his sixty-five chairmanships, and his
eleven presidencies, the New York Times wrote, `Mr.
Insull fell, not because his ideals were wrong, but
because of his persistent optimism * * *
He stands withal as one of the foremost and greatest
builders of American industrial empires.'
"Yet by September it seemed possible that the great
industrial builder was guilty of more than optimism;
in the next months a Cook County grand jury indicted
him for embezzlement. Soon his lawyers were sending
him coded telegrams advising him to seek refuge
beyond extradition in Greece. The old man, sitting
disconsolately in European exile, could not
understand what had happened. `Why am I not more
popular in the United States?' he said. `What have I
done that every banker and business magnate has not
done in the course of business?' And Donald Richberg,
Insull's old enemy in Chicago, voiced the popular
verdict: `The true significance of the career of
Samuel Insull lies in the fact that his sins were not
exceptional, save in the sweep of his ambitions and
the extent of the injuries he inflicted.'" Chapter
26, pages 254-255.
Count 2 alleges injury to plaintiff's "good name, reputation,
trade, business and occupation", while Count 5 demands damages
for defamation of "the memory of plaintiff's father, all to the
great damage and injury of plaintiff."
Defendant Schlesinger has appeared specially and has moved to
dismiss the action as to him and to quash the return of summons
for lack of jurisdiction over his person.
Both Schlesinger defendants have further moved, pursuant to
Rule 12(b)(6) of the Federal Rules of Civil Procedure, 28
U.S.C.A.,*fn8 to dismiss Counts 2 and 5. In support, they have
filed affidavits of their attorney in an effort to show that, as a
matter of law, plaintiff could not have been libeled by anything
in the Schlesinger book, because plaintiff's name is, in fact,
"Samuel Insull, Jr.", not "Samuel Insull", and his sole
reputation is as "Samuel Insull, Jr."
Alternatively, the said defendants have moved under Rule 20,
Federal Rules of Civil Procedure,*fn9 to sever Counts 2 and 5
and proceed with them separately from the remainder of the
complaint. In support, said defendants state that the right to
relief alleged against them arises out of a totally independent
transaction or occurrence, and that it does not involve questions
of fact or law common to the rights to relief asserted by
plaintiff against the other defendants.
Counts 3 and 6 demand judgment against Kenneth E. Trombley,
alleged to reside in Maryland and work in Washington, D.C., and
Harper & Brothers, a New York corporation.*fn10 Both counts
specify as libelous identical excerpts from the book, "The Life
and Times of a Happy Liberal", written by defendant Trombley and
published by defendant Harper & Brothers in 1954:
"Cooke finished Lecture Number One with a final
blast at the `education' operations of the utilities.
He took particular note of a series of lectures given
regularly at the School of Commerce at Northwestern
University. A lecturer who had top billing there was
the President of the Chicago Edison Company, Samuel
Insull. He spoke on a subject he undoubtedly knew
well, the `Centralization of Power Supply.' If he
convinced the students of this story, he had better
luck than he had later with another story before a
grand jury; they gave him twenty years to write new
answers to their questions." Chapter IV, page 52.
As in the counts concerning the Scripps-Howard defendants and
the Schlesinger defendants, the first Trombley count (Count 3)
alleges injury to plaintiff by defamation of plaintiff, and the
second Trombley count (Count 6) alleges injury to plaintiff by
defamation of his father.
The Trombley defendants have appeared specially and have moved
to dismiss Counts 3 and 6 and to quash the return of service. As
grounds, they allege lack of jurisdiction over the person,
insufficiency of service of process, the bar of the Illinois
statute of limitations and failure to state a claim upon which
relief can be granted. In the alternative, and on the same
grounds, they have moved for summary judgment under Rule 56,
Federal Rules of Civil Procedure.
Affidavits in support of such motions have been submitted by
the chairman of the board of directors of defendant Harper &
Brothers. In substance, they affirm that defendant corporation:
(a) is a New York corporation not registered to do business in
(b) maintains no office or plant, and has no telephone listing
(c) owns property in Illinois only to the extent of books on
consignment with various Illinois jobbers and book stores;
(d) is a book publisher and distributes its books ...