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KARL v. DONALDSON

December 23, 1999

THOMAS J. KARL, ESQ.,
v.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION.



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

MEMORANDUM

In a lawsuit that could only have been filed in late twentieth-century America, a newly minted millionaire has filed this defamation action against the producer of a seven-and-a-half minute satirical videotape that in fifty-nine film clips spoofs the transaction in which the plaintiff acquired his riches. In order to test the legal viability of plaintiff's claim, as defendant invites us to do, we must view the video with care against the screen of its public exhibition.

I. Background

A. Facts*fn1

It was at this dinner that the allegedly defamatory videotape was first shown. Karl claims that he was defamed when the videotape narrator's statement, "RTC's General Counsel, Tom Karl, exercised his modest severance package", was heard over footage from Raising Arizona showing an Old West-style bank robbery. In addition, Karl claims that DLJ caused further copies of the videotape to be distributed, that they were then forwarded to employees of DLJ and TRC, and that the video has therefore likely been shown on one or more occasions unknown to Karl, further defaming him.

B. Procedural Posture

The instant complaint, alleging diversity-based defamation, was filed on June 23, 1999, and DLJ moved to dismiss it on August 18, 1999. Following Karl's opposition, the parties filed reply and sur-reply briefs. Among the many issues that divided the parties, Karl questioned the propriety of considering, in the context of a Fed.R.Civ.P. 12(b)(6) motion, the videotape itself, a copy of which DLJ had supplied with its motion to dismiss, and offered doubts about the authenticity of the tape that DLJ supplied to us. There also seemed to be an Erie Klaxon question of whether California or Pennsylvania law applies here. In order to aid in the resolution of this matter, on November 5, 1999 we afforded the parties leave to conduct discovery limited to the issue of the tape's authenticity, and we provided notice to the parties that we would convert the motion to dismiss to a motion for summary judgment on the limited question of the contents of the videotape. See Fed.R.Civ.P. 12(b). We also required that the parties stipulate to the identity of the various film and television clips used in the videotape and granted leave to them to file memoranda of law on the choice of law issue.

The parties provided us with a stipulation as to the identity of the film clips, and have stated that the videotape DLJ supplied to us is, in fact, a duplicate of that shown at the dinner.*fn2 We also granted Karl leave to file an amended complaint,*fn3 which he did on November 30, 1999, and have allowed the parties to supplement their pleadings on the motion to dismiss to address any new issues that the amended complaint arguably implicated.

We now consider DLJ's motion to dismiss under Fed.R.Civ.P. 12(b)(6), partially converted to a motion for summary judgment for the limited purpose of examining the allegedly defamatory videotape.*fn4

II. Legal Analysis*fn5

A. Choice of Law

As discussed above, we invited the parties to supply memoranda of law concerning the law applicable in this case. Though there was no dispute that Pennsylvania choice of law rules*fn6 will govern here, see Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941), neither party was willing to commit to the application of either Pennsylvania or California law. DLJ argues, after adumbrating the defamation law of both states, that there is no conflict between the law of the two jurisdictions. Karl argues that given the nature of Pennsylvania choice of law rules, a decision on choice of law would be "premature" on this "undeveloped record," Mem. of Law of Pl. Regarding the Substantive Law to be Applied in This Case at 1.*fn7 Because the parties do not ...


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