Plaintiff, State Industries, Inc., alleges itself to be "the largest of the six major manufacturers in the water heater manufacturing industry." (First Amended Complaint ("Cplt.") Par.5). Defendant, Joseph Fandey, is a retired project manager for the United States Consumer Product Safety Commission. (Cplt. Par.3). Plaintiff is a Tennessee corporation with its principal place of business in the state of Tennessee (Cplt. Par.1), and Mr. Fandey is a citizen and resident of the state of New Mexico (Cplt. Par.2). State Industries, however, has chosen to sue Mr. Fandey in Illinois. In its single count complaint, State Industries alleges that Mr. Fandey intentionally defamed its business integrity in a national television broadcast.
According to the complaint, on September 17, 1996, American Broadcasting Company aired its weekly program, Primetime Live, on national network television. (Cplt. Par.10). The broadcast included a segment entitled "Unsafe at Home," a report of journalist Chris Wallace's investigation of fire accidents caused by gas water heaters, the gas water heater industry's reaction to the deaths and injuries caused by its products and its failure to effectuate a simple, cheap and available preventative remedy. (Cplt. Par.10-11). Plaintiff's complaint alleges and quotes the following, but only the following, excerpts from Mr. Fandey's remarks in the broadcast:
Wallace: Joseph Fandey, a former project manager for the Consumer Product's (sic) Safety Commission or CPSC, has seen the terrible damage these fires do. But he says the manufacturers have been unwilling to make their water heaters safer.
Fandey: They have developed, in me, an opinion that they really don't care about these people being burned up, and that the bucks they will make, will make it worth their while.
Wallace: That's really a terrible thing to say.
Fandey: Well, it's a worse thing for it to be a fact.
Wallace: Fandey, who retired from the CPSC two years ago, now testifies as an expert against the manufacturers. He says they made a bottom line decision that even at a few dollars a unit, it will cost more to fix the 60 million water heaters, now in people's homes, than to pay off in a few lawsuits.
Fandey: The awards that were being handed out against them were 5 to 10 to 15 million but there weren't that many awards. Economically it made sense to them, to let these kids burn up and take their chances in court. (Cplt. Par.11, collectively referred to in plaintiff's complaint as the "Statements").
Plaintiff alleges that "Fandey's publication of the Statements caused damage to State Industries in all fifty states including Illinois." (Cplt. Par.16). Plaintiff does not plead any special damages, but seeks "compensatory damages in excess of $50,000.00, punitive damages, and costs." (Cplt. at p. 4). Although plaintiff alleges that Mr. Fandey knew that his statements "were false, and/or acted with reckless disregard as to their truth or falsity" (Cplt. Par.15), it doesn't allege that the statements are, in fact, false.
Mr. Fandey brings this motion under 735 ILCS 5/2-615 to dismiss plaintiff's complaint because it is substantially insufficient in law. First, Mr. Fandey's statements do not name or refer to plaintiff. Thus, plaintiff must allege facts to support its claim that the alleged defamatory statements about the gas water heater industry were of and concerning State Industries, one of a number of water heater manufacturers. Even if the class of water heater manufacturers is small, no one could determine that the statements were about plaintiff without referring to facts extrinsic to the statements, rendering its attempt to fashion a claim of defamation per se into a claim of defamation per quod, which requires allegations of special damages, which plaintiff does not and cannot allege.
Second, the statements about which plaintiff complains are, on their face, statements of opinion and not of fact. Mr. Fandey's assertions that "they don't really care about these people being burned up" and "[e]conomically it made sense to them to let these kids burned up and take their chances in court" are incapable of being proved false. Such statements enjoy full First Amendment protection and are never actionable, even if special damages are alleged.
Alternatively, Mr. Fandey attaches a transcript of the entire Primetime Live segment, and moves to dismiss the complaint under 735 ILCS 5/2-619(a)(9). Should this Court find that the statements that plaintiff quotes in its complaint are not, on their face, statements of opinion, it is appropriate to then review those statements in context of other statements Mr. Fandey made during the segment to determine whether he stated facts on which he based the comments. In the context of the statements of fact that Mr. Fandey made during the broadcast, but which plaintiff chose to omit from its complaint, it is clear that his quoted statements are expressions of pure opinion based on statements of fact, and not actionable.
I. Plaintiff Does Not Adequately Allege that Mr. Fandey's statements
were "of and concerning" plaintiff.
A. The alleged defamatory statements do not identify State Industries and
cannot be reasonably understood to be directed at it.
When an allegedly defamatory statement does not name the plaintiff, then the plaintiff is required to specifically allege facts which, if proved, would establish that third parties "must have reasonably understood that the article was about the plaintiff and that the allegedly libelous expression related to" it. Bryson v. News America Publications, Inc., 174 Ill.2d 77, 672 N.E.2d 1207, 1218 (1996). Whether a statement is capable of being reasonably understood to refer to the plaintiff is a question of law. Aroonsakul v. Shannon, 279 Ill.App.3d 345, 350, 664 N.E.2d 1094, 1098 (2d Dist. 1996).
Nowhere in its complaint does State Industries allege that Mr. Fandey mentioned it by name in his allegedly defamatory remarks. Nowhere does State Industries allege that it was identified in the context of Mr. Fandey's statements, or anywhere in the context of the entire Primetime Live broadcast. And nowhere does State Industries allege any facts which, if proved, would establish that third parties would reasonably have understood that Mr. Fandey's remarks referred to it. Although State Industries alleges that it is one of "six major manufacturers in the water heater manufacturing industry" (Cplt. 5), Mr. Fandey did not even refer to water heater manufacturers, much less "major" manufacturers, but only to "they" and "them." (Cplt. 11). Indeed, given its arbitrary, non-descriptive, trade name, a reasonable third party would require information extrinsic to Mr. Fandey's utterances even to determine that State Industries is engaged in the manufacture of gas water heaters.
Plaintiff can't rely on the quoted portions of Mr. Wallace's introduction to Mr. Fandey's comments to argue that a reasonable third-party would construe those comments as targeting water heater manufacturers, much less specific water heater manufacturers, much less State Industries. In Aroonsakul v. Shannon, 279 Ill.App.3d 345, 664 N.E.2d 1094 (2d Dist. 1996), a local television station ran a series of broadcasts entitled "Alzheimer's Investigation" and "Medical Scam," expressly identifying the plaintiff and reporting on her questionable treatment of neurodegenerative diseases. In the broadcasts, a television journalist described the plaintiffs' practice as a "so-called cure" involving "injections of growth hormones, fertility drugs, and steroids." Id., at 1097. The journalist stated that "[d]octors who reviewed some of [the plaintiffs'] Parkinson's research say there's no evidence to substantiate her claims," and introduced the defendant, a doctor, who stated that "I look at a brochure like this and its just as outrageous as saying that toenail polish cures Parkinson's Disease, to me." The journalist then stated that "in her brochure, [the plaintiff] lists her patents for the treatment in an apparent att empt to legitimize her claim."
The court dismissed the plaintiff's claim against the defendant doctor. The court held that unless the defendant's statement, standing alone, could be connected to the plaintiff, it was not actionable. The court agreed with the defendant that "the of and concerning' requirement cannot be satisfied by coupling the defendant's statement with the surrounding material in the broadcast where the defendant has no control or editing authority over the broadcast." Id. at 1098. State Industries' claim, of course, is even weaker than the plaintiff's claim in Aroonsakul. Unlike that plaintiff, State Industries was not mentioned at all in the Primetime Live broadcast, either by Mr. Fandey, Mr. Wallace, or any other person int erviewed in the segment.
Plaintiff's claim also fails because Mr. Fandey's remarks can be innocently construed to refer to entities other than plaintiff. The innocent construction rule bars any claim of defamation where the defamatory statements may be construed to refer to persons other than the plaintiff. Chapski v. Copley Press, Inc., 92 Ill.2d 344, 442 N.E.2d 195 (1982). Under the innocent construction rule, a "written or oral statement is to be considered in context, with the words and implications therefrom given their natural and obvious meaning, [and] 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." Id., 92 Ill.2d at 352. The question of whether a statement can be innocently construed to refer to a party other than the plaintiff is a preliminary question of law to be resolved by the trial court. Rosner v. Field Enterprises, Inc., 205 Ill.App.3d 769, 804, 564 N.E.2d 131, 152 (1st Dist. 1990). In applying the innocent construction rule, "the words are to read stripped of innuendo, accorded their natural and obvious meaning and taken in their best possible sense." Vee See Const. Co., Inc. v. Jensen and Halstead, Ltd., 79 Ill.App.3d 1084, 1088, 399 N.E .2d 278, 281 (1st Dist. 1979) (citations omitted).
In Barry Harlem Corp. v. Kraff, 273 Ill.App.3d 388, 652 N.E.2d 1077 (1st Dist. 1995), the defendant published a commentary criticizing no-stitch cataract surgery which he distributed in his newsletter throughout the Chicago area, and which the plaintiff alleged was defamatory. The plaintiff alleged that it was the only ambulatory surgical center in the Chicago area that performed the no-stitch procedure, and the only center that advertised such surgery. notwithstanding those allegations, the Court held that the commentary did not so obviously refer to the plaintiff that it was injurious on its face, and therefore was not defamatory per se. Similarly, in Rosner, the defendant published an article detailing an investigation of automobile insurance fraud involving persons to which it referred as "The Accident Swindlers." Although the article didn't refer to the plaintiff or mention him by name, a photograph that accompanied the article displayed his name and specialty in the background, without picturing him. Despite the photograph, the court dismissed the complaint, holding that the article could reasonably be interpreted to refer to parties other than the plaintiff.
Mr. Fandey's remarks come even less close to identifying State Industries than the statements in Barry Harlem and Rosner came to identifying the plaintiffs there. Neither Mr. Fandey nor anyone else ever mentioned State Industries or suggested that it was a gas water heater manufacturer. He did not suggest that State Industries was one of the manufacturers who suffered the adverse jury awards or to whom it would make economic sense to risk further awards rather than remedy their defective products. His published remarks did not even mention gas water heater manufacturers. The comments simply referred to "they" and "them," and are not defamatory as to State Industries on their face.
Plaintiff's allegation that it is one of "six major manufacturers" of hot water heaters is a misguided attempt to satisfy the requirement that it plead facts to establish that the alleged defamatory statement was of and concerning it by bringing itself within Comment b to Restatement (Second), Torts 564A. That comment states that while it is impossible to set a limit as to the size of a group below which defamation of the group will constitute defamation of its individual members as a matter of law, the cases allowing an individual member of a defamed class to recover have usually involved groups of 25 or fewer. The arbitrary number of 25 holds no magic in Illinois, however, where individual members of smaller groups have failed to satisfy the "of and concerning" element by alleging that their group had been defamed. See, e.g., Barry Harlem Corp. v. Kraff, supra (statements criticizing a surgical procedure and related advertising in Chicago held not of and concerning the plaintiff even though it was the only party in the area that performed the procedure); Latimer v. Chicago Daily News, Inc., 330 Ill.App. 295, 71 N.E.2d 553 (1st Dist. 1947). Of course, Mr. Fandey's references to "they" and "them" was not limited to the "major manufacturers" of water heaters, whatever that means. Assuming arguendo that Mr. Fandey's comments can reasonably be interpreted to refer to water heater manufacturers, it would nevertheless be unreasonable to interpret his remarks as referring only to "major manufacturers."
B. Because the allegedly defamatory statements do not identify and cannot be reasonably understood to identify State Industries, the company must plead extrinsic facts to establish that it was defamed, rendering its claim, at best, defamation per quod and not actionable absent special damages.
As a matter of law "[a] statement which does not mention the plaintiff by name cannot be injurious to him or her on its face. Extrinsic facts and circumstances must be pled to establish that the publication is defamatory." Barry Harlem Corp. v. Kraff, 273 Ill.App.3d 388, 390, 652 N.E.2d 1077, 1080 (1st Dist. 1995). If "the defamatory character of the statement is not apparent on its face" and "extrinsic facts are required to explain its defamatory meaning," the statement is defamatory per quod. Boese v. Paramount Pictures Corp., 952 F.Supp. 550, 553 (N.D. Ill. 1996). Where the statement is defamatory per quod, "the material is not libel per se and consequently, special damages must be alleged with particularity." Colucci v. Chicago Crime Commission, 31 Ill.App.3d 802, 810-11, 334 N.E.2d 461, 468 (1st Dist. 1975). In all events, special damages must be pled when "[a]t most, [the statement] refers to a group of which plaintiff is a member." Schaffer v. Zekman, 196 Ill.App.3d 727, 554 N.E. 2d 988, 992 (1st Dist. 1990).
All that plaintiff alleges is that "Fandey's publication of the Statements caused damage to State Industries in all fifty states including Illinois." (Cplt. 16). That allegation is insufficient. See Taradash v. Aldelet/Scott-Fetzer Co., 260 Ill.App.3d 313, 628 N.E.2d 884 (1st Dist. 1993) (allegations that customers refused to deal with the plaintiff, that he was hindered from selling his product, and that he lost commissions and income were allegations of general economic loss and not special damages); Barry Harlem Corp. v. Kraff, supra, 652 N.E.2d at 1082 (allegation that the plaintiff "has lost patients who would have otherwise presented themselves for treatment at the [the plaintiff's business] but did not do so" failed to sufficiently allege special damages). Because State Industries does not and cannot allege special damages with particularity, its claim is not actionable.
II. Mr. Fandey's Statements Are, on Their Face, Statements of Pure Opinion and Are Not Actionable.
Even if Mr. Fandey's remarks cannot be innocently construed to refer to any party other than plaintiff, because the quoted remarks are clearly an expression of Mr. Fandey's opinion, the y are not actionable:
[U]nlike statements, the meanings of which may be innocently construed or which may be interpreted as relating to someone other than plaintiff, statements of opinion are never actionable, even if special damages are alleged.
Mittelman v. Witous, 135 Ill.2d 220, 245, 552 N.E.2d 973, 985 (1989), quoting Spelson v. CBS, Inc., 581 F.Supp. 1195, 1202 (N.D. Ill. 1984) (emphasis in original). See also Milkovich v. Lorain Journal Co., 497 U.S. 1, 110 S.Ct. 2695, 2706 (1990) ("[A] statement of opinion relating to matters of public concern which does not contain a provably false factual connotation will receive full constitutional protection."). "The court may additionally consider whether the statement has a precise core of meaning for which a consensus of understanding exists,' ..." Grutzmacher v. Chicago Sun Times, 22 Med. L. Rptr. 2398, 2400 (Cir. Ct. Cook Co., Ill. 1994). Under the innocent construction rule, language should be understood as a constitutionally protected expression of opinion if it is reasonable to do so. Chapski, 442 N.E. 2d at 199. Whether a statement is one of fact or opinion is a question of law. Owen v. Carr, 113 Ill.2d 273, 281, 497 N.E.2d 1145 (1986).
None of the statements about which plaintiff complains contains a provably false factual assertion. The first statement, that "they really don't care about these people being burned up, and that the bucks they will make, will make it worth their while" is not subject to proof. What possible evidence can State Industries put before a trier of fact to prove, as a matter of fact, that it really does care about people being burned up or that their profits don't make it worth its while not to care? on its face, Mr. Fandey's remark is the "loose, figurative, or hyperbolic language which would negate the impression that [he] was seriously maintaining" that State Industries made an actual express corporate decision to not care about people being burned and to profit by that decision. Quoted language from Milkovich v. Lorain Journal Co., 497 U.S. 1, 21, 110 S.Ct. 2695, 2707 (1990). The statements at issue here are anything but "precise," and plaintiff cannot seriously contend that a "consensus of understanding exists" as to their precise meaning, as required by Grutzmacher.
Mr. Fandey's second quoted statement is even further removed from the realm of factual assertion and defamation. His statement that "[t]he awards that were being handed out against them were 5 to 10 to 15 million but there weren't that many awards," while a provable fact, is simply not defamatory. Even if false, the statement that manufacturers of gas water heaters were not subject to "that many" large jury awards is "not obviously and naturally hurtful." Compare Audition Div., Ltd. v. Better Business Bureau of Metropolitan Chicago, Inc., 120 Ill.App.3d 254, 258, 458 N.E.2d 115, 119 (1st Dist. 1983). Mr. Fandey's statement that "[e]conomically it made sense to them, to let these kids burn up and take their chances in court," like his earlier statement, is fraught with rhetorical hyperbole and not actionable. See Vee See Const. Co., Inc. v. Jensen and Halstead, Ltd., 79 Ill.App.3d 1084, 1089, 399 N.E.2d 278, 281 (1st Dist. 1979) ("Opinions and judgments of a party may be harsh, critical or even abusive, yet still not subject the writer to liability.").
More importantly (and assuming arguendo that "them" and "their" must, standing alone, reasonably be understood to refer only to gas water manufacturers), Mr. Fandey's observation about what might make economic sense to them was offered in the context of his factual statement that they didn't suffer many adverse judgments. As such, the statement was a "pure opinion" -- "an expression of opinion by which the maker of a comment states the facts on which he bases his opinion of the plaintiff and then expresses a comment as to the plaintiff's conduct, qualifications or character." Boese v. Paramount Pictures Corp., 952 F.Supp. 550 , 555-56 (N.D. Ill. 1996).
As Illinois courts have recognized, the policy of protecting statements of opinion (as well as the "of and concerning" doctrine) reflects important first Amendment concerns. As noted in Flip Side, Inc. v. Chicago Tribune Co., 206 Ill.App.3d 641, 564 N.E.2d 1244, 1252-53 (1s t Dist. 1990):
[A] basic requirement of a defamation case . . . is that the story must be reasonably understood as describing actual facts about the plaintiff. The reasonably understood and the actual facts element are required because the first amendment freedoms need breathing space to survive, and as protection against encroachment upon rights protected by the first amendment.
This need for constitutional breathing space is heightened where, as here, the defendant's speech relates to matters of public importance. In Aroonsakul, the court stressed that "it is important to society that physicians be afforded an opportunity to express their opinions on debatable methods of treating patients." 664 N.E. 2d at 1100. The same principal certainly applies to Mr. Fandey who appeared in a broadcast warning the public about serious safety hazards. See Quantum Electronics Corp. v. Consumers Union of United States, Inc., 881 F. Supp. 753, 765 (D. R.I. 1995) ("consumer journalism..., especially where it relates to health and safety issues, involves a matter of particular concern to the public.").
III. Alternatively, Mr. Fandey's Statements Are, in the Context of the Unquoted Portions of His Interview, Statements of Pure Opinion and Not Actionable, and Plaintiff's Complaint Should Be Dismissed under 735 ILCS 5/2-619(a)(9).
Should this Court find that the statements about which plaintiff complains are not statements of pure opinion on their face, it should consider those statements in the context of other statements that Mr. Fandey made in the broadcast of his Primetime Live interview, but which plaintiff conveniently neglects to allege. Attached to this memorandum as Exhibit A is a transcript of the complete Primetime Live segment from which plaintiff lifted the quotes about which it now complains. As Exhibit A shows, in addition to the comments quoted by plaintiff, Mr. Fandey also stated the following facts during his Primetime Live interview:
People are immolated that they have no fingers, they have no toes, they have lost their genitals, facial features. I think the lucky ones die.
He went on to address a safety education program that gas water heater manufacturers initiated in response to the numerous injuries caused by their products:
As an information program, it's a good, it's a superior one, but it's not going to solve the problem, and we told them that.
The statements that "we [referring to the Consumer Product Safety Commission] told them that" their education campaign would not "solve the problem" and that "people are immolated" are assertions of fact subject to proof of truth or falsity. Coupled with the one factual statement that plaintiff deigns to quote, that the manufacturers have suffered only a handful of multi-million verdicts, Mr. Fandey's remarks that "they really don't care about people getting burned up" and that "[e]conomically it made sense to them, to let these kids burn up and take their chances in court," are statements of pure opinion based on stated facts. As already noted, such statements of pu re opinion are never actionable.
For the foregoing reasons, plaintiff's First Amended Complaint should be dismissed.