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Castellani v. The Scranton Times, L.P.

Superior Court of Pennsylvania

April 26, 2017


         Appeal from the Order Entered March 23, 2012 In the Court of Common Pleas of Lackawanna County Civil Division at No(s): 2005-CV-69



          BOWES, J.

         This case is on remand from our Supreme Court.[1] In the prior panel decision, we set forth the procedural and factual history of this matter.[2] In order to avoid duplication of judicial resources while maintaining a cogent narrative, we repeat the salient facts.

         The present appeal by permission is from two interlocutory pretrial orders entered in this consolidated defamation action. On January 7, 2005, Randall A. Castellani and Joseph J. Corcoran (collectively the "Commissioners") filed this defamation lawsuit against Appellants, The Scranton Times, L.P. and one of its reporters, Jennifer Henn (collectively the "Scranton Times"). The action was based upon the January 12, 2004 publication by the Scranton Times of an article in both the Scranton Times and the Times-Tribune newspapers. The subject of the story involved an investigation by the Office of the Attorney General of Pennsylvania ("Attorney General") into corruption that purportedly had occurred at the Lackawanna County Prison. In 2003, the Attorney General convened a statewide investigating grand jury in connection with its probe. At that time, Mr. Castellani and Mr. Corcoran were Lackawanna County Commissioners as well as members of the Lackawanna County Prison Board, and, by virtue of those offices, had oversight of the Lackawanna County Prison. They were called to testify before the grand jury, and the article reported on their testimony before that body.

         The January 12, 2004 newspaper story consisted of eighteen paragraphs, and paragraphs two, three, and four of the article were the basis for the Commissioners' present defamation suit, commenced at docket number 2005-CV-69. The paragraphs, in numerical order as they appeared, outlined that: 1) the Commissioners testified before the statewide grand jury; 2) a source that was close to the investigation informed the Scranton Times that the Commissioners were considerably less than cooperative with the jurors and often responded to questions with vague and evasive statements; for example, the Commissioners could not recall or were unaware of the answer; 3) the jurors became irritated with the Commissioners since they were accustomed to hearing detailed information during the proceedings; 4) the jurors wanted to send the Commissioners from the courtroom; 5) when first questioned about his grand jury appearance, Mr. Castellani, while in the presence of his attorney, denied that he testified before the grand jury; 6) Mr. Castellani told the newspaper that the reporter had "the wrong guy;" 7) after the newspaper confirmed that Mr. Castellani had appeared before the grand jury, Mr. Castellani was questioned again and, in the presence of the lawyer, refused to comment on anything about the grand jury investigation, including his previous statement that he had not appeared before that body; 8) even though grand jury proceedings are closed to the public and prosecutors cannot discuss grand jury proceedings, witnesses are free to speak about their testimony; 9) Mr. Castellani was reminded that he was permitted to discuss his testimony, but he still refused to talk; 10) Mr. Corcoran could not be reached for comment; 11) the Attorney General was investigating the county prison due to the fact that it received information about alleged corruption there in a drug trafficking case, but the grand jury investigation had expanded into a probe of allegations as to improper use of inmate labor, sex for drugs schemes, financial mismanagement, and improper political activity; 12) as the majority commissioners for Lackawanna County, the Commissioners were largely responsible for running the prison, and the county's prison board acted only in an advisory capacity; 13) the prison board included the three county commissioners, the district attorney, the sheriff, the county controller, and president judge; 14) the grand jury recently subpoenaed additional witnesses and more prison financial records, and county officials were told to send a list of all vehicles owned or operated by the prison since 1995, as well as repair and maintenance records for those vehicles, including invoices for purchased parts; 15) the Times-Tribune was conducting its own investigation into prison operations and found that the prison administration was running an automobile body shop at the jail and that the administration had used inmate labor to work on vehicles, including those owned privately by prison guards and prison staff; 16) an interim warden was interviewed and stated that he had timely complied with the latest grand jury subpoena; 17) a previous grand jury subpoena secured information about the prison's canteen fund and the inmates' individual accounts from 1998; and 18) the Times-Tribune's investigation revealed that inmates, including felons convicted of charges such as embezzlement and fraud, were helping to administer the canteen and prison inmate accounts.

         The January 12, 2004 article immediately generated litigation before the statewide investigating grand jury. Judge Isaac S. Garb was the supervising judge of that body at the time. The Commissioners asked Judge Garb to sanction the newspaper because it violated the secrecy laws governing grand jury proceedings. That request was denied based upon the reasoning that the Commissioners lacked standing. The Commissioners then demanded that the Attorney General be sanctioned for revealing details of the Commissioners' appearance before the grand jury.

         After this second request was directed to him, Judge Garb appointed a special prosecutor, Terence P. Houck, Esquire, to determine whether the Attorney General improperly revealed information to the Scranton Times. The special prosecutor prepared a confidential report for Judge Garb. Judge Garb, in turn, authored a September 14, 2004 memorandum regarding the matter before him. In that document, Judge Garb stated that Mr. Houck "determined that there was no breach of secrecy by any Agent of the Attorney General's Office." Memorandum, Isaac S. Garb, 9/14/04, at 2. In his September 14, 2004 decision, Judge Garb concurred with Mr. Houck's assessment. Id. He also expressed his personal opinion regarding the veracity of the January 12, 2004 article. After he had reviewed Mr. Houck's report, the documents accompanying the report, and the transcript of the testimony of the Commissioners, Judge Garb opined:

The reports published in these newspapers are completely at variance with the transcript of the testimony of these witnesses. The newspaper reports provide that the witnesses were evasive in their answers, were non-cooperative, essentially "stonewalled" the Grand Jury in its inquiry and that the Grand Jurors became irate as a result of that demeanor on the witnesses [sic] part, and demanded that they be "thrown out" of the Grand Jury courtroom. None of those things happened. Obviously, if someone wished to leak the testimony of a witness to the Grand Jury that information relayed to the media would have reflected the testimony that actually occurred. The report of the testimony of the witnesses was totally at variance and not borne out by the record of the witnesses' testimony. Obviously, the source of the reporter's information was someone not privy to the Grand Jury proceedings and, therefore, not someone in the Office of the Attorney General.

Id. at 2. Judge Garb also opined:

The reports in these newspapers which purport to be a reflection of the testimony of Randall Castellani and Joseph Corcoran are totally at variance with the transcript of their testimony before the Grand Jury. The characterization of their testimony in the newspaper reports is belied by the record. Each witness testified unhesitatingly and with clarity. The witnesses were cooperative. Their testimony was not vague. At no time did the Grand Jurors become irate or indicate a readiness to throw the witnesses out of the Grand Jury room.

Id. at 3.

         Since the Scranton Times did not have a copy of the transcripts of either of the Commissioners' testimony, it could not determine if it concurred with Judge Garb's characterization of the transcripts. It published an article four days later, on September 18, 2004, that reported on both the results of Mr. Houck's probe and Judge Garb's memorandum. The September 18, 2004 story also contained three paragraphs about the contents of the January 12, 2004 article. In its first mention of the January 12, 2004 article, the September 18, 2004 publication stated that the subject matter of the Houck probe involved "a story in the Jan. 12 editions of The Scranton Times and The Tribune about Commissioner Randy A. Castellani and former Commissioner Joseph J. Corcoran's testimony before the grand jury." Paragraph four read, "Citing a source close to the investigation, the newspapers reported the commissioners often responded with vague, evasive answers that irritated the jurors, who were ready to 'yank each of them out of the witness chair.'" In paragraph eight, the article said, "'The newspaper's source has been contacted and says he absolutely stands by his account of the grand jury testimony, ' said Lawrence K. Beaupre, managing editor of the Times-Tribune newspapers."

The remainder of the September 18, 2004 article discussed 1) the Houck inquiry into the source of the grand jury leak; 2) the results of that probe; 3) summaries of Judge Garb's comments about the Commissioners' grand jury testimony; 4) actual quotations from Judge Garb's September 14, 2004 memorandum; 5) the nature of the allegations being explored by the grand jury; and 6) the reaction of Lawrence J. Moran, the Commissioners' attorney, to Judge Garb's memorandum. The September 18, 2004 article contained hearsay comments from Mr. Moran that implicitly revealed Judge Garb's opinion as to the falsity of the January 12, 2004 report:
Mr. Moran said Judge Garb's memorandum validated his clients' contention that either the source lied about the commissioners' testimony or the newspapers fabricated the story.
"Either way, on the basis of Judge Garb's memorandum and order, it seems that at a minimum the newspaper owes something to Mr. Corcoran and Mr. Castellani, " Mr. Moran said.
"That is, and on their behalf I demand, that the papers publish a front-page story retracting and apologizing to Mr. Corcoran and Mr. Castellani for the stories which have now been indisputably established to have been false."
He also called on the newspapers to identify their source, saying any promise of confidentiality would seem to be "no longer binding" based on Judge Garb's order.

         The Scranton Times, 1/12/04.

         On September 16, 2005, the Commissioners instituted a second action against the Scranton Times by writ of summons. In a complaint filed on March 15, 2010, the Commissioners claimed defamation premised upon the September 18, 2004 article. The Commissioners then petitioned to consolidate the defamation case involving the September 18, 2004 article with the already existing defamation lawsuit concerning the January 12, 2004 article. The Scranton Times opposed that request, arguing that consolidation would be prejudicial and was merely a calculated effort by the Commissioners to prove that the January 12, 2004 article was false by using Judge Garb's opinion as to its falsity, as outlined in the September 18, 2004 article. Consolidation was granted, and the defamation action regarding the September 18, 2004 article was joined at this action number.

         The Commissioners then presented a motion to the trial court asking that the Scranton Times be required to disclose the anonymous source for its January 12, 2004 article. That motion was granted, and the newspaper appealed. We reversed based upon application of the Pennsylvania Shield Law, 42 Pa.C.S. § 5942.[3] Castellani v. Scranton Times, L.P., 916 A.2d 648 (Pa.Super. 2007). Our Supreme Court affirmed our decision and rejected the Commissioners' request that the Court graft a "non-textual 'crime-fraud' exception to the Shield Law that would permit compelled disclosure of a newspaper's source if the communication between the newspaper reporter and the source itself constituted a criminal act." Castellani v. Scranton Times, L.P., 956 A.2d 937, 939 (Pa. 2008).

         While the parties were litigating whether the Scranton Times had to reveal its source, the parties sought access to materials from the investigating grand jury proceeding. Judge Garb had retired, and Judge Barry F. Feudale was appointed as the supervising judge. The parties' discovery requests were thus directed to Judge Feudale.

         The Commissioners asked Judge Feudale to: 1) furnish the parties with the transcript of Mr. Corcoran's testimony; (2) permit the Commissioners to furnish to the Scranton Times a copy of the transcript of Mr. Castellani's grand jury testimony that had previously been erroneously released by the prosecution at a preliminary hearing held for one of the defendants charged in connection with the corruption at the jail; and (3) disseminate Mr. Houck's report to the Commissioners but not to the Scranton Times.

         The Scranton Times also presented discovery requests to Judge Feudale and asked him for (1) copies of the transcripts of the Commissioners' grand jury testimony; (2) copies of Mr. Houck's report with accompanying investigative material; (3) permission to interview Mr. Houck, the jurors, and other people present in the grand jury room when the Commissioners testified; (4) copies of transcripts of any discourse among the Attorney General and the grand jurors about the Commissioners' testimony; and (5) copies of any transcripts wherein Judge Garb or Mr. Houck questioned the Attorney General's agents.

         On June 29, 2005, Judge Feudale issued a decision resolving all the discovery requests pending before him. After analyzing the demands and applicable law governing the secrecy of grand jury proceedings, he denied all discovery requests with the exception that he held that the Commissioners could furnish the Scranton Times with a copy of a previously-released transcript of Mr. Castellani's grand jury testimony. After resolving the issues that he had been asked to address, Judge Feudale, as had Judge Garb, gratuitously opined as to the falsity of the January 12, 2004 article. Judge Feudale echoed Judge Garb's assessment of the veracity of that article.

         In a sixteen-paragraph article that appeared on July 7, 2005, the Scranton Times reported on Judge Feudale's resolution of the discovery requests. The article also outlined that Judge Feudale criticized the January 12, 2004 story, and he stated that it had "no foundation in the record of testimony under dispute before the grand jury." The article reported that Judge Feudale had castigated the newspaper's request to obtain interviews of people present during the Commissioners' testimony before the grand jury by calling that request "absurd" and "beyond the pale." To apprise the reader of the facts necessary for an understanding of the July 7, 2005 article, said article stated in paragraph four:

Mr. Castellani and Mr. Corcoran claim they were defamed in a Jan. 12, 2004 article published by The Times-Tribune describing their testimony before the grand jury as vague and evasive. The article cited an anonymous source close to the investigation. The former commissioners claim the story is false. The newspaper stands by its report.

         In another paragraph, the July 7, 2005 story outlined that the editor of the newspaper believed that its reporting eventually would be vindicated.

         The July 7, 2005 article also noted that the trial judge supervising this consolidated defamation case had ordered the newspaper to reveal its secret source named in the January 12, 2004 story, and that Judge Feudale had praised that ruling. The July 7, 2005 article continued that Judge Feudale additionally said that "he would have gone further - he would have summoned former reporter Jennifer L. Henn and her editors and ordered them to reveal their source" or face contempt. Finally, the July 7, 2005 article outlined that the Commissioners' attorney was elated by Judge Feudale's remarks since they gave the Commissioners "tremendous momentum" in that Judge Feudale concluded that the Commissioners "had testified truthfully, candidly and completely."

         After the Supreme Court affirmed this Court's order vacating resolution of the trial court order mandating that the Scranton Times reveal its source for the January 12, 2004 article, matters resumed before the trial court. Countervailing motions for summary judgment were denied. The parties then asked the trial court to resolve certain evidentiary matters. The Commissioners sought permission to admit into evidence the full decision authored by Judge Garb on September 14, 2004, as well as the one penned by Judge Feudale on June 29, 2005. The Scranton Times opposed that requested relief. On June 8, 2011, the trial court concluded that those memoranda were inadmissible hearsay opining on a key issue at trial, i.e., the falsity of the January 12, 2004 newspaper article. Thus, it denied the Commissioners' request that the two judicial opinions be admitted into evidence at trial in this matter.

         The Commissioners were granted permission to file an interlocutory appeal from the June 8, 2011 ruling. On appeal, we affirmed, holding that "the Garb Opinion and the Feudale Opinion are incompetent evidence" and that "both Opinions are inadmissible in their entirety as separate documents at trial." Castellani v. The Scranton Times, L.P., 100 A.3d 304 (Pa.Super. 2014) (Castellani I) (unpublished memorandum at 52).

         On June 8, 2011, the trial court also resolved a pending issue of whether the September 18, 2004 article was admissible in connection with the jury's resolution of the merits of the defamation lawsuit as to the January 12, 2004 article. The trial court determined that the September 18, 2004 article constituted a republication of the first article, and was admissible pursuant to Weaver v. Lancaster Papers, Inc., 926 A.2d 899 (Pa. 2007). In Weaver, our Supreme Court held that the fact that a party republished the contents of the statement after being instructed that it was false constituted evidence that the party published the first false, defamatory statement with actual malice.[4]

          Applying Weaver, the trial court in this matter concluded that, even though Judge Garb's memorandum itself was inadmissible at trial, the full September 18, 2004 story, including those portions of that document outlining and quoting the jurist's infirm hearsay, was admissible as evidence of actual malice since the ...

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