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BUCKLEY v. MCGRAW-HILL

September 30, 1991

CHRISTOPHER BUCKLEY, PLAINTIFF,
v.
MCGRAW-HILL, INC., D/B/A BUSINESS WEEK, DEFENDANT.



The opinion of the court was delivered by: Diamond, District Judge.

[EDITOR'S NOTE:  THIS PAGE CONTAINED  AND  ARE NOT AN
OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

OPINION

Christopher Buckley has filed a diversity suit against McGraw Hill, Inc., a New York corporation which owns and publishes Business Week magazine. Buckley alleges that an August, 1986 article published in Business Week contained statements or implications that were false and defamatory. He alleges that the statements were deliberately designed to convey the impression that he was incapable and incompetent to perform in the position for which he was hired at Allegheny International ("AI"), that his father, the former Chief Executive Officer of AI, had created the position for him to enable him to live in unearned luxury, and that his being employed by AI created a damaging conflict of interest. Buckley also alleges that the statements placed him in a false light in the eyes of the public.

Business Week has moved for summary judgment. For the reasons that follow, the motion for summary judgment will be granted.

Background

Business Week's cover story in its August 11, 1986 edition was entitled "Big Trouble at Allegheny." (See Exhibit A, attached to this opinion). The article focused on what it termed the "questionable management practices" at AI. Much of the article concerned the activities of AI's then Chief Executive Officer, Robert Buckley, Christopher Buckley's father. The portions of the article at issue in the present lawsuit discussed AI's employment of Christopher Buckley at a company-owned hotel, the Dover.

Buckley challenges a number of statements and alleged implications contained in the August, 1986 article. The article included the following statements:

  Sons and daughters of senior [AI] executives were placed on
  the payroll — including one of the chairman's sons, who was
  appointed manager of a Manhattan hotel that AI owned. He was
  then allowed to live in the hotel's penthouse, which had been
  renovated with marble bathrooms, elaborate paneling, and
  other luxuries at a cost of more than $1 million.
  The company paid nearly $6 million for a Manhattan hotel;
  Buckley's son became its manager, although his qualifications
  were minimal. [This statement was contained in a highlighted
  box titled "Did Conflicts of Interest Cloud Executive
  Judgment?"]
  AI is straining to escape from a series of ill-fated real
  estate ventures. One of these, the Dover Hotel in midtown
  Manhattan, has raised apparent conflict of interest
  questions. AI originally purchased the hotel for $5.7 million
  in 1982, planning to convert it into a time-sharing
  residence. That plan proved to be unrealistic when AI
  belatedly learned what heavy sums it would have to pay rent
  control tenants to move out. So the company began renovating
  the building for use as a hotel, starting with the penthouse,
  where it spent more than $1 million dollars installing marble
  bathrooms and an elaborate rooftop greenhouse. The first
  resident of the refurbished penthouse: Buckley's son
  Christopher. Even though former executives say that
  Christopher had no hotel experience, Buckley installed him as
  manager of the Dover. Christopher declined to comment. . . .

Buckley contends in his complaint that the statements about him in connection with his employment at the Dover, independently and cumulatively, are false and defamatory when given their plain and natural meaning in the context of the article. He asserts that the August, 1986 article constituted an extreme departure from the standards of investigative reporting ordinarily adhered to by responsible reporters, editors, and publishers. Buckley alleges that Business Week published the article in a negligent manner, with reckless disregard for the truth or falsity of its statements, and with malice.

Business Week has moved for summary judgment on the ground that Buckley has failed to make a showing sufficient to establish essential elements of his prima facie case, including defamatory content, falsity, and fault. We heard arguments on this motion on May 22, 1991.

Discussion

In a diversity case, a federal court applies the choice of law rules of the state where the court is sitting. Klaxon Company v. Stentor Electric Manufacturing Company, 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941). Under the choice of law rules of Pennsylvania, courts engage in a two-part inquiry. First, it must be determined whether the laws of the states with an interest in the case conflict. If they do, it must be determined which state has the greater interest in the particular question at issue. Myers v. Commercial Union Assurance Companies, 506 Pa. 492, 496, 485 A.2d 1113, 1116 (1984). The conflict is resolved through an analysis of the policies and interests underlying the particular issue before the court. 506 Pa. at 496, 485 A.2d at 1115, citing Griffith v. United Airlines, 416 Pa. 1, 203 A.2d 796 (1964).

The two states with a particular interest in this case are Pennsylvania and New York. These states appear to differ on the appropriate standard of fault which would apply under the facts of this case. As we conclude below, this case involves a private figure who seeks to recover for statements about a matter of public concern. Under New York law, private figures may recover against media defendants for statements about a matter arguably within the sphere of legitimate public concern only on a showing that the publisher acted in a grossly irresponsible manner. Chapadeau v. Utica Observer-Dispatch, 38 N.Y.2d 196, 379 N.Y.S.2d 61, 64, 341 N.E.2d 569, 571 (1975). The Pennsylvania Superior Court has held that a private figure in Pennsylvania may recover damages for defamation upon a showing of mere negligence. See Rutt v. Bethlehems' Globe Publishing Co., 335 Pa. Super. 163, 484 A.2d 72, 83 (1984).*fn1 Because New York and Pennsylvania courts differ on the applicable standard of fault, we must apply the law of the state with the greater interest in this case.

The question of whether Pennsylvania or New York has a greater interest in this case is a close one. The Pennsylvania courts provide little guidance because they apparently have not applied Pennsylvania choice of law rules to resolve a ...


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