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