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Dubinsky v. United Airlines Master Executive Council

March 01, 1999

FREDERICK C. DUBINSKY AND ROGER HALL, PLAINTIFFS-APPELLANTS,
v.
UNITED AIRLINES MASTER EXECUTIVE COUNCIL, A COMPONENT OF THE AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, RANDOLPH BABBITT, HOWARD PIKE, HARLOW OSTEBOE, ALLAN L. HOLMES, RICHARD HURST, GERALD BALDWIN, STEPHEN WALLACH, B.F. ENGLEMAN, W.B. GEORGE, W.B. BURN, AND BRUCE RICHARDS, DEFENDANTS-APPELLEES



Appeal from the Circuit Court of Cook County No. 95 L 12013 Honorable Paddy H. McNamara, Judge Presiding.

The opinion of the court was delivered by: Justice O'mara Frossard

Plaintiffs Frederick Dubinsky and Roger Hall brought this action for defamation and false light invasion of privacy. Plaintiffs' allegations arise from several statements made by defendants which plaintiffs allege falsely accuse them of criminal conduct related to the employee purchase of United Airlines under an employee stock ownership plan (ESOP). Defendants filed a motion to dismiss pursuant to section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 1996)) asserting plaintiffs failed to state a claim upon which relief may be granted. The trial court entered an order dismissing 15 of the 18 counts in plaintiffs' complaint.

The trial court found that plaintiffs had no reasonable expectation of privacy and dismissed the false light claims alleged in counts II, IV, VI, VIII, X, XII, XIV, XVI and XVIII. The trial court dismissed defamation counts III and VII, finding the statements were reasonably capable of innocent construction and not actionable as defamatory per se. Count V, which is a republication of the letter at issue in count I, was dismissed on the basis that republication of a statement that is not actionable cannot give rise to liability. The court dismissed defamation counts IX and XI, finding these counts alleged republications that were "merely incidental" to the original publication. The court upheld counts I, XV and XVII, finding they each stated a cause of action for defamation. It is from this order that plaintiffs appeal, and defendants cross-appeal.

I. FACTS

On appeal, the remaining defendants include the Air Line Pilots Association (ALPA), Harlow Osteboe, Allan Holmes, Richard Hurst, Gerald Baldwin, Stephen Wallach, B.F. Engleman, W.B. George, W.B. Burn and Bruce Richards. ALPA is a labor union whose members are commercial pilots. The structure of ALPA is as follows: At the time of the incidents giving rise to this lawsuit, Osteboe was master chairman of the "United Airlines Master Executive Council" (UAL-MEC), the ALPA council for pilots employed by United Airlines (United); Holmes, Baldwin, Wallach, Engleman, George and Burn were officers of locals of the UAL-MEC and were members of the UAL-MEC; and Hurst and Richards were members of a local of the UAL-MEC.

In 1989, when plaintiff Dubinsky was chairman of the UAL-MEC, an unsuccessful attempt was made by employees of United to purchase the airline under the ESOP; in 1994, when plaintiff Hall was the chairman, the employee buy out was successful. It was the largest employee acquisition in the history of American business.

ALPA staff attorney Charles Goldstein was compensated with a fee substantially above his salary both in 1989 and in 1994, when the successful buy out occurred. Certain members of the UAL-MEC criticized the plaintiffs' role in facilitating the fee to Goldstein in several articles published and distributed to union members and in an oral statement made before several United Airlines piots and their wives. The law firm of Jenner & Block was retained to investigate the payment of the fee to Goldstein. The firm issued a report in September of 1994, concluding that neither plaintiff had committed any criminal act or violated any criminal law. Further, the report noted that although Goldstein received a $375,000 fee following the failed 1989 buy out attempt, he never received the $2 million fee agreed to by plaintiff Hall following the successful employee buy out in 1994.

On appeal, the issue is whether plaintiffs have adequately stated causes of action for defamation and false light invasion of privacy. Also at issue is whether the actual malice standard applies and whether certain counts of the complaint are precluded by the Uniform Single Publication Act (740 ILCS 165/1 (West 1996)).

II. ANALYSISA.

Standard of Review

In reviewing an order on a section 2-615 motion to dismiss, the court shall apply a de novo standard of review. Board of Library Trustees v. Cinco Construction, Inc., 276 Ill. App. 3d 417, 658 N.E.2d 473 (1995). For purposes of this motion to dismiss, the court must determine whether the complaint sufficiently states a cause of action; the merits of the case are not considered. Jespersen v. Minnesota Mining & Manufacturing Co., 288 Ill. App. 3d 889, 681 N.E.2d 67 (1997). All well-pleaded facts are taken as true and considered in the light most favorable to the plaintiffs. Rodgers v. Whitley, 282 Ill. App. 3d 741, 668 N.E.2d 1023 (1996). The complaint is to be construed liberally and should only be dismissed when it appears that the plaintiff could not recover under any set of facts. Illinois Graphics Co. v. Nickum, 159 Ill. 2d 469, 639 N.E.2d 1282 (1994).

A section 2-615 motion attacks only defects apparent on the face of the complaint and is based on the pleadings rather than the underlying facts. Urbaitis v. Commonwealth Edison, 143 Ill. 2d 458, 475, 575 N.E.2d 548 (1991). In the present case, plaintiffs have incorporated several exhibits into their complaint, including the letters and articles at issue here, which must be considered when analyzing the sufficiency of the pleading. We will address the sufficiency of each count on an individual basis.

B. Defamation

A statement is considered defamatory if it tends to cause such harm to the reputation of another that it lowers that person in the eyes of the community or deters third persons from associating with him or her. Restatement (Second) of Torts §559 (1977).

To prove a claim of defamation, a plaintiff must show that the defendant made a false statement concerning plaintiff, that there was an unprivileged publication of the defamatory statement to a third party by defendant and that plaintiff was damaged. Krasinski v. United Parcel Service, Inc., 124 Ill. 2d 483, 530 N.E.2d 468 (1988). Defamatory statements may be actionable per se or actionable per quod. A publication is defamatory per se if it is so obviously and naturally harmful to the person to whom it refers that a showing of special damages is unnecessary and extrinsic facts are not needed to explain it. Schaffer v. Zekman, 196 Ill. App. 3d 727, 731, 554 N.E.2d 988 (1990). A claim for defamation per quod requires the plaintiff to allege both extrinsic facts to establish that the statement is defamatory and special damages with particularity. Schaffer, 196 Ill. App. 3d at 731.

The complaint in the present case asserts claims for defamation per se. Illinois courts have recognized four categories of statements that are considered defamatory per se: (1) words that impute the commission of a crime; (2) words that impute infection with a loathsome communicable disease; (3) words that impute an inability to perform or a want of integrity in the discharge of duties of office or employment; or (4) words that prejudice a party, or impute lack of ability, in his or her trade, profession or business. Kolegas v. Heftel Broadcasting Corp., 154 Ill. 2d 1, 607 N.E.2d 201 (1992).

Under the innocent construction rule, even a statement that falls into one of these categories will not be found defamatory per se if it is "reasonably capable of an innocent construction." Kolegas, 154 Ill. 2d at 11. Whether a statement is reasonably capable of an innocent interpretation is a question of law for the court to decide. Kolegas, 154 Ill. 2d at 11. The Illinois Supreme Court delineated the innocent construction rule as follows:

"[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." Chapski v. Copley Press, 92 Ill. 2d 344, 352, 442 N.E.2d 195, 199 (1982).

If a statement is reasonably capable of a nondefamatory interpretation, given its context, it should be so construed; there is no balancing of reasonable constructions. Harte v. Chicago Council of Lawyers, 220 Ill. App. 3d 255, 260, 581 N.E.2d 275 (1991), citing Mittelman v. Witous, 135 Ill. 2d 220, 232, 552 N.E.2d 973 (1989). The Mittelman court noted that this tougher standard is warranted because of the presumption of damages in per se actions. Mittelman, 135 Ill. 2d at 234.

In analyzing a claim of defamation, we must further determine whether the alleged defamatory statement constitutes protected speech under the first amendment. In Milkovich v. Lorain Journal Co., 497 U.S. 1, 111 L. Ed. 2d 1, 110 S. Ct. 2695 (1990), the Supreme Court held that a statement will receive first amendment protection only if it "cannot be reasonably interpreted as stating actual facts" about the plaintiff. Milkovich, 497 U.S. at 20, 111 L. Ed. 2d at 19, 110 S. Ct. at 2706. The Milkovich Court noted that, in some cases, a statement which may be considered an "opinion" is based on specific, objectively verifiable facts. The Court rejected what it called "an artificial dichotomy between opinion and fact" and noted that expressions of opinion may often imply an assertion of objective fact and, in such cases, would be considered actionable. See Milkovich, 497 U.S. at 19, 111 L. Ed. 2d at 18, 110 S. Ct. at 2706. The Milkovich Court balanced the first amendment's guarantee of free, uninhibited Discussion with society's interest in preventing and redressing attacks upon reputation. Milkovich, 497 U.S. at 22, 111 L. Ed. 2d at 21, 110 S. Ct. at 2707-08.

The Illinois Supreme Court adopted the Milkovich test in Kolegas and recently applied it again in Bryson v. News America Publications, Inc., 174 Ill. 2d 77, 672 N.E.2d 1207 (1996). Whether a statement qualifies as constitutionally protected speech under the first amendment is a matter of law for the court to decide. Hopewell v. Vitullo, 299 Ill. App. 3d 513, 701 N.E.2d 99 (1998). However, whether the subject statement is actually true or false is a question of fact for the jury. Bryson, 174 Ill. 2d at 100.

Keeping these principles in mind, we now turn to whether plaintiffs have adequately stated a cause of action for defamation in counts I, III, VII, XV and XVII of their complaint. The counts that allege defamation per se include the following: the Hurst letter (count I); the Hurst "Sound Advice" article (count III); the Baldwin "Imperial Leader" article (count VII); the Baldwin "Scum Also Rises" newsletter (count XV); and the Richards statement (count XVII). Counts V, IX, XI, and XIII involve the republication of the above statements, which we will address below.

First, we turn to count I, the Hurst letter. The trial court found that count I stated a cause of action for defamation, was not subject to an innocent construction and contained objectively verifiable facts that could not be considered protected speech. Defendants argue the statements in the letter are not actionable because they are subject to a reasonable, nondefamatory interpretation.

The Hurst letter was written by defendant Hurst in August of 1994 and includes detailed accusations about plaintiffs' alleged wrongdoing in connection with the ESOP and related payments to attorney Goldstein. The letter was written prior to the release of the Jenner & Block report and states "I believe that Federal laws have been broken." In the letter, Hurst states that the Departments of Labor and Justice should review the situation and compares it to Watergate. He states that, "[under] Federal law Roger Hall, Rick Dubinsky and Chuck Goldstein could face prosecution, fines and imprisonment." Attached to the letter are excerpts from the Racketeer Influenced and Corrupt Organizations (RICO) Act (18 U.S.C. §1961 et seq. (1994 & Supp. 1996)), and a chart summarizing "possible racketeering charges" under the RICO Act, listing plaintiffs and Goldstein as possible defendants.

Taken in context, we do not find that these statements are reasonably capable of an innocent construction. The letter contains unambiguous statements attributing criminal activities to plaintiffs, and the letter was clearly intended to convey this message to its readers. Courts must interpret the allegedly defamatory words as they appear to have been used and according to the idea they were intended to convey to the reasonable reader. Bryson, 174 Ill. 2d at 93.

Defendants note that Hurst uses phrases such as "I believe," "I predict" and "it is my judgment" throughout the subject letter and argue that the statements are not facts but opinions. However, the use of such similar phrases is not sufficient to turn a factual assertion into constitutionally protected speech. In Owens v. CBS, Inc., 173 Ill. App. 3d 977, 527 N.E.2d 1296 (1988), a plaintiff was wrongly accused of mailing a threatening letter to then-President Reagan. The defendant stated she "believe[d]" plaintiff wrote the letter and she "thought maybe [plaintiff] had written" the letter. However, the court noted there was no authority to suggest that "accusation of criminal conduct ceases to become libelous simply because it has not been uttered with certainty." Owens, 173 Ill. App. 3d at 992. This issue has been squarely addressed by the Supreme Court in Milkovich: "[T]he statement, 'In my opinion Jones is a liar,' can cause as much damage to reputation as the statement, 'Jones is a liar.' *** '[It] would ...


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