filed: September 16, 1976; As Amended October 12, 1976.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA D.C. Civil Action No. 75-620
Van Dusen, Gibbons and Rosenn, Circuit Judges.
This case concerns the attempt of a lawyer to secure redress from West Publishing Company ("West"), a publisher of judicial opinions, for an allegedly defamatory footnote contained in a judge's opinion which West published without change. The United States District Court for the Eastern District of Pennsylvania dismissed the complaint. Lowenschuss v. West Publishing Company, 402 F. Supp. 1212 (E.D. Pa. 1975). We affirm.
To place the alleged defamation in context, a brief exposition of the facts follows. Plaintiff Fred Lowenschuss is an active attorney at law "bearing an excellent reputation." Lowenschuss v. West Publishing Company, supra, 402 F. Supp. at 1213. As sole trustee of a private pension fund and on its behalf, he purchased shares of the Great Atlantic & Pacific Tea Company ("A&P") after learning of a tender offer for the stock. Shortly after he had placed his order for the stock, Lowenschuss discovered that A&P management intended to oppose the offer. He attempted to cancel the purchase order, but was unsuccessful because the order had already been executed.
Subsequently, the United States District Court for the Southern District of New York issued a preliminary injunction prohibiting consummation of the tender offer. Lowenschuss immediately filed suit in the Eastern District of Pennsylvania on behalf of himself and a class of similarly situated investors charging breach of contract and violations of the securities laws in connection with the aborted tender offer. The case was transferred to the Southern District of New York and assigned to Judge Kevin T. Duffy who was presiding over the case involving the offeror and A&P's management. Judge Duffy dismissed Lowenschuss' complaint in Lowenschuss v. Kane, 367 F. Supp. 911 (S.D. N.Y. 1973).
Unfortunately, the judge did not confine himself simply to dismissing the complaint. Rather, while he stated that he was making no finding as to the sequence of events, he intimated that Lowenschuss may have purchased the shares of A&P stock after learning of the opposition to the tender offer solely for the purpose of qualifying to bring the class action and with knowledge that the target company was bringing a legal action to enjoin the tender offer transaction. The controversial footnote 1 of Judge Duffy's opinion, 367 F. Supp. at 913, reads in its entirety:
It should be of some interest to the appropriate body of the Pennsylvania Bar whether the plaintiff, a lawyer, truly purchased these shares as an investment for his pension plan or merely as a vehicle for this litigation in which counsel fees are sought.
After the opinion was filed, counsel for Lowenschuss wrote to Judge Duffy requesting that he withhold dissemination of his opinion until he had considered Lowenschuss' petition for rehearing. The subsequent petition contained affidavits from Lowenschuss and from his securities broker, in addition to the time-stamped stock purchase order, as evidence that the purchase occurred before Lowenschuss had learned of the opposition to the tender offer. Judge Duffy remained adamant, however, and in a statement endorsing his original opinion, characterized the footnote as "merely meant as a suggestion to the appropriate body to make whatever findings and conclusions they may deem necessary." The judge further stated that he was "not condemning the plaintiff here - by the footnote in the opinion I merely seek to awaken the Bar to make its own findings."*fn1
In order to ensure that the Bar was awakened, Judge Duffy forwarded a copy of his opinion to the Disciplinary Board of the Supreme Court of Pennsylvania. Within a short time, the Board informed the judge and Lowenschuss that Lowenschuss had "not been guilty of unprofessional conduct in violation of the Code of Professional Responsibility." Lowenschuss' vindication was more apparent than real. As the offending footnote was not thereupon excised from the opinion, it appeared intact in Commerce Clearing House's Trade Cases and in West's Federal Supplement.
Lowenschuss prevailed upon Commerce Clearing House to insert the following editorial remarks in its report of the case:
Note: In connection with Footnote 1 . . . on November 20, 1973, the Disciplinary Board of the Supreme Court of Pennsylvania, acting pursuant to the request of the Honorable Kevin Thomas Duffy and after full investigation and review reached the final determination that Fred Lowenschuss, Esq. was not guilty of unprofessional conduct in violation of the code of professional responsibility. - CCH
Lowenschuss importuned West to include a similar addendum in its bound volumes of 367 Federal Supplement. West consulted Judge Duffy, who was unwilling to delete his footnote notwithstanding the subsequent developments exonerating Lowenschuss. West thereupon felt obliged to publish the opinion as originally written and without editorial comment, as is its unvarying practice. Judge Duffy's refusal to cooperate in clearing Lowenschuss' professional reputation thus ...