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FRAM v. YELLOW CAB CO.

July 26, 1974

Adolph FRAM, Plaintiff,
v.
YELLOW CAB COMPANY OF PITTSBURGH, a corporation, Defendant


Scalera, District Judge.


The opinion of the court was delivered by: SCALERA

I

 This is a diversity action brought by Adolph Fram, who, at the time of the filing of the complaint, was president of the Peoples Cab Company of Pittsburgh, against the Yellow Cab Company of Pittsburgh for an alleged defamation which occurred on the July 23, 1970 televising of the news program "Newsroom" broadcast over Pittsburgh's public television station WQED. *fn1" The allegedly slanderous remarks were made on the program by defendant's counsel, David J. Armstrong, in an interview with John Roberts, a member of WQED's "Newsroom" staff. At the request of Armstrong or defendant, Yellow Cab, Armstrong appeared on behalf of the defendant *fn2" on "Newsroom" in order to respond to some of the comments made by Fram, who had appeared on the preceding night's edition, July 22, 1970, of "Newsroom. " *fn3"

 Defendant has filed a motion for summary judgment, Rule 56 of Federal Rules of Civil Procedure. Affidavits and briefs have been submitted. Plaintiff attached a copy of the "Newsroom" transcript of July 23, 1970 to his complaint. Order, records and opinions of the Pennsylvania Public Utility Commission, the Superior Court of Pennsylvania, and the City Council of Pittsburgh have been appended to Armstrong's affidavit.

 II

 In order to understand the context in which the claimed defamatory remarks were made by Armstrong on the July 23, 1970 televising of "Newsroom," a history of the relevant dates and events in this taxicab controversy involving Peoples Cab, Yellow Cab, and the Pennsylvania P.U.C. is essential. The plaintiff himself recognizes that a controversy has existed for many years between Peoples Cab, led by Fram, and Yellow Cab. Deposition, pp. 184-186. In this regard, the parties have supplied the court with copies of many records which document the history of this taxicab controversy. Using these papers, which include orders entered by the P.U.C., the opinions of the Pennsylvania Superior Court, the records of this court, and the hearings before City Council, the court has assembled the following history to illuminate the action sub judice :

 A. The Peoples Cab Company and the Pennsylvania Public Utility Commission

 Proceeding with the investigation of Peoples Cab, the Commission on February 13, 1968 held a hearing in Pittsburgh at which a P.U.C. examiner presided. The testimony taken at this hearing indicated that Peoples Cab was in violation of the prior Superior Court ruling of January 21, 1958 and that Peoples' operational practices were violating Rule 15, Part IV of the P.U.C.'s Supplemental Taxicab Regulations. *fn5"

 On April 25, 1968, another hearing was held in Harrisburg by the P.U.C. At this hearing, the Chairman of the P.U.C., George I. Bloom, appeared as a witness, so Bloom recused himself completely from this investigation. Bloom denied that he had ever told Fram or Peoples Cab that their leasing plan would not have to comply with Rule 15; rather, Bloom testified that he told Fram that his plan of leasing taxis to his drivers and calling them independent contractors was illegal and a violation of the P.U.C.'s regulation. *fn6" (P.U.C. Investigation Docket No. 92, p. 2.)

 Following the hearings and investigation, the Commission in its order of May 27, 1969 found: (1) that Peoples Cab was in violation of Part IV, § 15 of the P.U.C.'s Supplemental Taxicab Regulations and the state's public utility law by its leasing operation system; *fn7" (2) Peoples Cab to be in violation of the Commission's prior order and the Superior Court's prior order of January 21, 1958 (185 Pa.Super. 628, 137 A.2d 873), in that the testimony showed that Peoples was again permitting its drivers to choose their own working hours and their working territories solely on the basis of an individual driver's personal decision. The P.U.C. then concluded its order by rescinding Peoples' certificate of public convenience effective July 28, 1969, unless prior thereto Peoples revised its operations so as to correct the two violations. (P.U.C. Investigation Docket No. 92, p. 5-6.)

  On December 11, 1969, the Superior Court at 216 Pa.Super. 18, 260 A.2d 490, specifically affirmed the findings of the P.U.C. stating, "Certainly, Peoples' mode of operation in flagrant disregard and defiance of the earlier order constituted willful disobedience of both the Commission and this Court. Peoples, in effect, sought to arrogate to itself powers and privileges specifically denied it in the earlier case." 260 A.2d at 492.

 With reference to the P.U.C.'s finding on the leasing arrangement, the Superior Court decided that it need not rule upon it: "While the Commission's opinion indicates disapproval of the plan, it appears clear that the actual order entered is based solely on Peoples' failure to regulate and supervise its drivers. Whether the Commission would maintain the same opinion as to the lease plan if this feature were removed from it, however, is not a matter for speculation by us at this time." 260 A.2d at 492.

 B. Yellow Cab's Fare Increase

 On September 12, 1969, Yellow Cab filed an application for a fare increase with the P.U.C.

 Approximately two weeks later, on September 29, 1969, Fram, on behalf of Peoples Cab, filed a complaint at C. 18809 on the Commission's Complaint Docket, asking that the Yellow Cab fare increase be deferred until after public hearings.

 Meanwhile, the Commission on the very same day had determined on the basis of the financial and other data filed by Yellow Cab with the application not to suspend the application for Yellow Cab's increased rates, thereby, permitting the fare hike to become effective on October 12, 1969.

 On the 15th of October, 1969, Fram appeared before Pittsburgh City Council to request it to petition the P.U.C. for a public hearing on Yellow Cab's approved fare increase.

 After several postponements, on July 22, 1970 in Pittsburgh, a hearing was held by the P.U.C. on People's complaint against Yellow Cab. The Commission noted that in this type of rate proceeding, the burden is on the respondent, Yellow Cab, to sustain the rate increase. Peoples Cab, the complainant, appeared at the hearing with counsel and requested a continuance of the hearing so that Peoples could examine the financial and supporting data filed by Yellow Cab in support of its fare increase. The Commission's examiner denied Peoples the continuance because Peoples had had an opportunity for over ten months to examine the Commission's files and prepare its case.

 On the evening of July 22, 1970, plaintiff Fram, as the spokesman for Peoples Cab, appeared on "Newsroom" and was interviewed by WQED's John Roberts and Bill Banks, both regular members of "Newsroom" staff. In the course of Fram's interview, he freely and vigorously criticized the P.U.C. and Yellow Cab Company. Fram alleged that Yellow Cab's form of self-insurance was inadequate to cover its fleet of cabs and that the P.U.C. had been trying for twenty-one years to put Peoples Cab out of business so that Yellow Cab could enjoy a monopoly on the taxicab business in the Pittsburgh area. In general, Fram's comments denounced Yellow Cab as a company whose only concern was its increased profits and that Yellow Cab, because of its monopoly on taxicab service in Pittsburgh, would soon charge the public exorbitant fares. *fn8"

 JOHN ROBERTS INTERVIEW OF DAVID ARMSTRONG, ATTORNEY FOR YELLOW CAB COMPANY, SHOWN ON WQED -- JULY 23, 1970

 John Roberts:

 Last night, if you were in Newsroom, you saw a man whose name is Adolph Fram. Mr. Adolph Fram is the President of the Peoples Cab Co. He appeared in Newsroom and answered charges which were made by the Public Utility Commission here in Pennsylvania. The P.U.C. and among other things, the P.U.C. thinks that Peoples license should be revoked because they are violating things.

 (An excerpt from the video tape made the previous evening, July 22, 1970, is then shown.)

 The following is the portion of the tape shown on July 23, 1970:

 Adolph Fram:

 This is just a sham to cover up the real battle.

 John Roberts:

 Sham, by whom, the P.U.C.?

 Adolph Fram:

 By both the P.U.C. and the Yellow Cab Company in order to provide rate increases to the Yellow Cab. Co.

 John Roberts:

 Well, isn't the P.U.C. supposed to operate in the interest of the Public? How? How?

 Adolph Fram:

 I don't know. I don't know. Why, when one of the other utilities. Duquesne Light, Equitable Gas or the Telephone Company desires to raise their rates 3% or 5%, is there much hullabaloo? But when the Yellow Cab Co. wants to raise its rates by 33 1/3%, no one knows about it; and on October 12, this is exactly what happened to the City of Pittsburgh. I addressed Council, City Council, on October 15, three days later and not one member of the City Council, not one member of the nine, even knew that the Yellow Cab Co. had raised its rates by 33 1/3%.

 (End video tape)

 John Roberts:

 Well, that was a video tape of the late broadcast of what Adolph Fram, President of Peoples Cab had to say last night. And, in the Newsroom tonight, I would say at his request, at least Yellow Cab's request, is David Armstrong, the attorney, legal counsel, for Yellow Cab, who said that he would like an opportunity to reply to some of the things said by Mr. Fram. So, welcome to the Newsroom, David Armstrong, and please reply.

 David Armstrong:

 Thank you. I would like to say at the outset that the impression that's created, at least to me, by Mr. Fram's remarks and his testimony yesterday at the Hearing is that there is a application pending now for an increase; and that's not true. The increase being referred to actually went into effect in October of 1969. It was applied for by Yellow Cab in September of 69, studied by the P.U.C., and it was approved in October. And at this late date, Mr. Fram, as president of Peoples Cab, now takes it upon himself to raise this question. Some of the other things that he mentioned last evening that I would like to correct the record on, although I can't correct it on all of them, there isn't that much time, but a few of the high points, for example, concern insurance. He stated or implied that Yellow. . . .

 John Roberts:

 We have a video tape of that. I don't mean to interrupt you, but let's really get his direct quote, verbatim, and go to video tape. Bill Banks asked Mr. Fram about the question of insurance protection and Fram had this to say:

 (Video tape then shown)

 The following is that portion of the tape shown as this spot.

 Bill Banks:

 One of the subjects that the Commissioners didn't permit you to go into day and you told me later which was very important was the insurance setup that Yellow Cab has.

 Adolph Fram:

 Right. The Yellow Cab Company is self-insured and I think it's dangerous because that isn't adequate. The amount that they have isn't adequate to cover the Yellow Cab Company's 400 and some taxicabs.

 John Roberts:

 Mr. Fram, you make it sound as if the P.U.C. is out to get the Peoples Cab.

 Adolph Fram:

 Right. The P.U.C. has been trying for 21 years to put the Peoples Cab Co. out of business . . .

 Stein:

 Why?

 Adolph Fram:

 So that the Yellow Cab Company can regain its monopoly. I don't know why. All we do is fight. It's their fight against us. And what we do is try to resist to the best of our ability. Now if the cab company is put out of business, Peoples Cab, and Yellow is permitted to regain its monopoly, you won't pay $8.50 to ride from the Airport to Oakland, as presently. Incidentally, our rates did not change. Our rates are $6.50. There is a $2.00 differential now. But, if Yellow regains its monopoly, the people of the City of Pittsburgh will pay $15.00 from the Airport to the City.

 (End video ...


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