which the Plaintiffs would not have provided had they not been mislead. (Complaint at PP 20-23, 26, 66-67.) After Entine's visit to the Chicago Desnick Eye Center, the Plaintiffs allegedly learned that "undercover" patients, at the direction of Entine, were sent to THE Desnick Eye Center's Wisconsin and Indiana offices with concealed cameras and recording devices. (Complaint at PP 27-31.) Finally, Plaintiffs state that Defendants used the materials they obtained through their misrepresentations to supplement a broadcast which indicated that certain Eye Services' employees had "rigged" auto-refractor machines to convince healthy patients that they needed cataract surgery. (Complaint at PP 35, 38-40.) As the Plaintiffs have pled a scheme to defraud with sufficient particularity, Count V cannot be dismissed on that basis.
Defendants assert that, even if the Plaintiffs have sufficiently pled a scheme to defraud, the Court must still dismiss Count V because Plaintiffs have failed to sufficiently plead damages resulting from the reliance on the misrepresentations. In a fraud case, "a plaintiff must show that, had it not been for the fraud, he would have been spared an injury and thus been better off." Midwest Commerce Banking v. Elkhart City Centre, 4 F.3d 521, 524 (7th Cir. 1993) (citing Stromberger v. 3M Co., 990 F.2d 974, 976-79 (7th Cir. 1993)).
If this Court compares the situation the Plaintiffs would have been in had there been no fraud to the situation the Plaintiffs found themselves in after the alleged fraud, it is evident that any injury the Plaintiffs allegedly suffered was not caused by the fraud. Eye Services states that the false statements made by Entine induced Eye Services to cooperate with Entine allowing Entine to videotape the interior of the Desnick Eye Center's Chicago Office, to interview doctors, to videotape live cataract surgery and to view Eye Center's informational videotape used for patient education. (Complaint at PP 22-25, 66-67.) As a result of its reliance on Defendants' misrepresentations, Eye Services claims that it was "deprived of its privacy and right to control access to its personnel and premises." Id. at 69. Since Eye Services had total control over what it told and showed Entine during Entine's visit to the Desnick Eye Center in Chicago, the Court presumes that Eye Services is claiming that, due to its reliance on Entine's misrepresentations, it was deprived of its privacy and right to control access to its personnel and premises at the Indiana and Wisconsin offices. With regard to the deprivation of privacy and right to control access at the Indiana and Wisconsin offices, Plaintiffs cannot show that, had it not been for the fraud, they would not have suffered the alleged injury. Plaintiffs cannot claim that, in reliance on Entine's misrepresentations, they had conversations with and performed eye examinations in Indiana and Wisconsin on "undercover" patients who carried video and tape recording equipment. Entine requested interviews and filming in Chicago.
Contrary to Plaintiffs assertion, Europlast Ltd. v. Oak Switch Systems, Inc., 10 F.3d 1266 at 1272-73 (7th Cir. 1993) is distinguishable. In Europlast, a seller of computer keyboards brought an action against the buyer for fraudulent misrepresentation. The seller alleged that the buyer fraudulently misrepresented its interest in acquiring the seller in order to induce the seller to turn over its financial statements. Id. According to the seller, the buyer used the seller's confidential financial information to determine whether it should start its own plastic molding division and to comparison shop for a less expensive plastic parts supplier. Id. at 1272. The Seventh Circuit held that a sufficient nexus existed between the buyer's false statement that it was interested in acquiring the seller and the seller's loss of the buyer's business. Id. The seller in Europlast would not have divulged its confidential financial information if the buyer had not falsely represented its interest in acquiring the seller's business. Unlike Europlast, this Court does not find that Plaintiffs would have denied the "undercover" patients access to the Wisconsin and Indiana offices if Entine had not falsely represented that the PrimeTime Live segment would be a fair and objective report which did not use "ambush" journalism techniques.
Count VI - Breach of Contract
According to the Plaintiffs, Entine offered to make an agreement with Eye Services such that, if Eye Services cooperated with the preparation of the PrimeTime Live segment, the program would not focus exclusively on the Desnick Eye Center and would not use "undercover" surveillance techniques or "ambush" journalism. (Complaint at P 71.) Dr. Desnick accepted Entine's offer and cooperated with Entine and his crew for the preparation of the PrimeTime Live segment by allowing the Defendants to videotape the interior of the Desnick Eye Center's Chicago Office, to interview doctors, to videotape live cataract surgery and to view Eye Center's informational videotape used for patient education. Id. at P 72. Plaintiffs allege that the Defendants breached their agreement by focusing the show exclusively on Desnick Eye Center and by using "undercover" surveillance techniques and as a result of the breach, Eye Services has lost patients, profits and revenue. Id. at 74.
Defendants assert that this Court must dismiss Count VI because the Plaintiffs cannot show that their damages were caused by the Defendants' alleged breach. According to the Defendants, if the Plaintiffs' had never furnished any information to Entine in exchange for his promise not to focus the program on the Desnick Eye Center and not to use "undercover" surveillance techniques, the damages would have been the same. Yet, even assuming lost profits, patients and revenues were not a result of the breach, this Court cannot dismiss Count VI. As the Seventh Circuit noted in Stromberger v. 3M Co., 990 F.2d 974, 976 (7th Cir. 1993), the victim of a breach of contract is entitled to nominal damages, even if the plaintiff was not injured by the breach, because the breach itself is the wrong.
Count VII - Defamation
Finally, Defendants argue that two factors compel this Court to dismiss Plaintiffs' defamation claim. First, Defendants assert that the part of the program relating to the "rigging" of the auto-refractor which is the subject of Plaintiffs' Complaint says nothing about either Doctor Simon or Doctor Glazer. (Complaint at P 38, 76-77.)
Thus, the Defendants conclude that Plaintiffs Simon and Glazer have not sufficiently pled that the alleged false and defamatory statements are "of and concerning" them.
In Chapski v. Copley Press, 92 Ill. 2d 344, 442 N.E.2d 195, 198-99, 65 Ill. Dec. 884 (1982), the Illinois Supreme Court modified the innocent construction rule and held that,
[A] written or oral statement is to be considered in context, with the words and the implications therefrom given their natural and obvious meaning; if, as so construed, the statement may reasonably be innocently interpreted or reasonably be interpreted as referring to someone other than the plaintiff, it cannot be actionable per se.
Whether a statement is reasonably susceptible to an innocent construction is a question of law to be decided by the trial court. Homerin v. Mid-Illinois News Papers, 245 Ill. App. 3d 402, 614 N.E.2d 496, 498, 185 Ill. Dec. 362 (3rd Dist. 1993).
Plaintiffs argue that the innocent construction rule does not compel dismissal because, when the statements alleged in paragraph 38 of the Complaint are viewed in the context of the program, the statements cannot reasonably be interpreted as referring to individuals other than Dr. Simon and Dr. Glazer. Immediately prior to the segment regarding the "rigging" of the auto-refractor, the program depicts both Dr. Glazer and Dr. Simon discussing glare problems with "undercover" patients and Sam Donaldson reviewing a letter from Desnick Eye Center's chief surgeon which asserts that surgery was necessary in all of the test cases. (Transcript of PrimeTime Live at 7-8.)
The Court notes that Dr. Simon is only shown asking "undercover" patients whether they "ever notice any glare or bluriness when [they're] driving or difficulty with the signs?" Id. at 8. Thus, even when the program's depiction of Dr. Simon is viewed in context with the defamatory and false passage alleged in paragraph 38, the Court holds that accusation regarding the "rigging" of the auto-refractor can reasonably be interpreted as referring to individuals other than Dr. Simon.
In contrast to Dr. Simon, the program shows Dr. Glazer not only discussing glare with "undercover" patients but recommending cataract surgery even though an independent doctor suggested that surgery for at least one of these patients was unnecessary. Thus, this Court finds that the alleged defamatory and false statements regarding the "rigging" of the auto-refractor cannot reasonably be interpreted to refer to individuals other than Dr. Glazer.
In addition to the innocent construction rule, Defendants argue that the incremental harm doctrine compels dismissal of Plaintiffs defamation claim. In Langston v. Eagle Publishing Co., 719 S.W.2d 612, 622 (Tex. Ct. App. 1986), the court explained the incremental harm doctrine as follows:
The libel-proof doctrine has also developed along a second path, called the "incremental" approach, which requires the court to evaluate the defendant's communication in its entirety and to consider the effects of the challenged portion of the communication on the plaintiff's reputation in the context of the entire communication. . . . The incremental approach comes into play when the plaintiff only challenges a small or tangential part of an overwhelmingly negative communication.
Id. at 622. The Defendants argue that the Plaintiffs challenge a single portion of the program, that concerning the "rigging" of the auto-refractors, and if the challenged portion was eliminated, the program would be as damaging to the Plaintiffs' reputation. In addition to accusations regarding the "rigging" of the auto-refractor, the program noted that the physicians at Eye Services recommended cataract surgery even when (1) the surgery would not be appropriate under federal guidelines, (2) the surgery is unnecessary, and (3) the surgery would not be beneficial to the patient in light of other vision problems." (PrimeTime Live Transcript at 4-5, 7, 9.) The program also noted that Dr. Desnick regularly changes patients' records and that physicians at Eye Services diagnosed four of the five test patients, who were older than sixty-five and eligible for medicare, as needing cataract surgery even though an independent expert stated the surgery was unnecessary. Id. at 5, 6-7.
Plaintiffs argue that the doctrine of incremental harm has not been recognized by Illinois courts and thus should not be applied in the present case. This Court disagrees. First, this Court notes that, although the Supreme Court, in Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 115 L. Ed. 2d 447, 111 S. Ct. 2419, 2436 (1991) held that the incremental harm doctrine was not compelled by the First Amendment, it recognized that "state tort law doctrines of injury, causation, and damages calculation might allow a defendant to press the argument that the statements did not result in any incremental harm to the plaintiff's reputation."
In Haynes v. Alfred A. Knopf, Inc., 8 F.3d 1222, 1224 (7th Cir. 1993), plaintiff brought a libel suit against the author and publisher of a book. The plaintiff confined his libel claim to three statements in the book: (1) that the plaintiff left his children alone at night when he was supposed to be watching them, (2) that he lost jobs because of his drinking, and (3) that he spent money on a car which he should have used to buy shoes for his children. Id. at 1226. Applying Illinois law, the Seventh granted judgement in favor of the Defendants because the book's depiction of the plaintiff was substantially true and because even without the contested statements, the book would have been equally damaging. Id. at 1228. The Haynes court stated,
The rule of substantial truth is based on a recognition that falsehoods which do no incremental damage to the plaintiff's reputation do not injure the only interest that the law of defamation protects. A news report that contains a false statement is actionable "only when 'significantly greater opprobrium' results from the report containing the falsehood than would result from the report without the falsehood." Herron v. King Broadcasting Co., [112 Wash. 2d 762, 776 P.2d 98, 102-05 (1989).] . . . Falsehoods that do not harm the plaintiff's reputation more than a full recital of the true facts about him would do are thus not actionable.
Id. (emphasis in original)
Accepting all of the Plaintiffs' allegations in their Complaint as true, this Court finds that the Plaintiffs only claim that one short passage of the program, that concerning the "rigging" of auto-refractors, was false and defamatory. See, Complaint at P 38. Even if the Defendants had eliminated this passage, the program's depiction of Eye Services and its physicians would have been just as negative. Consequently, this Court concludes that as "significantly greater opprobrium" would not result from the actual program with the alleged false and defamatory statements than from a program without the challenged statements regarding the rigging of the auto-refractor, dismissal of the Plaintiffs' defamation claim is appropriate.
For the foregoing reasons the Defendants' Motion to Dismiss is granted with regard to Counts I, II, III, IV, V and VII and denied with regard to Count VI.
JOHN A. NORDBERG
United States District Judge
DATED: March 29, 1994