Dismissal of Washington lobbyist’s libel suit against book author upheld on appeal

From the Fall 2000 issue of The News Media & The Law, page 19.

A federal circuit court dismissed a Washington lobbyist’s lawsuit that claimed an author and her publisher defamed him. The U.S. Circuit Court of Appeals in Boston (1st Cir.) ruled that three disputed statements by Susan Trento in her book, “The Power House: Robert Keith Gray and the Selling of Access and Influence in Washington,” were opinion and another statement was not made with actual malice.

Gray, a special assistant in the Eisenhower administration, worked as a lobbyist for Hill and Knowlton, a Washington public relations firm, between 1961 and 1981. Gray formed his own lobbying firm in 1981 and sold it five years later to his old public relations firm. He also served briefly as a member of the Hill and Knowlton board of directors.

Susan Trento is an author of several books, including one on CIA officer John Paisley and another on airline disasters. “The Power House” described Gray’s career and showed the influence lobbyists have on the federal government. Gray alleged eight statements from the book defamed him. The book made headlines in 1992 during President Bush’s reelection campaign because it claimed Bush had an affair.

In his appeal, Gray challenged the dismissal of only four alleged defamatory statements and the lower court’s exercise of the reporter’s privilege. At trial, a jury found Gray did not prove the other four statements were defamatory.

In the first of the three statements ruled to be opinion by the district court, an unnamed executive with Gray’s firm alleged that Gray’s access to President Reagan and others was often “faked.” The court examined the contextual meaning of the word “fake” and ruled that here it meant Gray exaggerated his closeness to Reagan. Gray served as a deputy campaign manager for Reagan.

“This is just the kind of subjective judgment that is only minimally about ‘what happened’ but expresses instead a vague and subjective characterization of what happened,” the court ruled. “As we read the case law, the statement is protected opinion.”

Trento wrote in her book that other lobbyists claimed Gray’s firm failed because it offered little substance. Gray disputed whether or not his firm “failed.” However, because the book offered financial information detailing that Gray’s firm was sold at a substantial profit, the court said that Trento only meant Gray’s dream of owning the world’s largest communication firm failed. This also was opinion.

In the third statement, a CIA source suggested that CIA Director William Casey asked Gray to take on controversial clients — such as the governments of Libya and Angola — to spy on them. The court ruled first that such a suggestion could have a defamatory meaning, despite Trento’s argument that spying for one’s country was “laudable,” not defamatory. The court stated Trento speculated about why Gray took on controversial clients.

“The test [for opinions], admittedly a very crude one, is whether the statement is properly understood as purely speculation or, alternatively, implies that the speaker or writer has concrete facts that confirm or underpin the truth of the speculation. The former is protected as opinion; the latter is taken as an indirect assertion of truth,” the court reasoned in holding the statement as opinion.

Trento also quoted a former vice president of Gray’s firm saying there was “a degree of venality” on Gray’s part, and “an awful lot . . . of overcharging.” Gray argued he was not a public figure for purposes of this statement, and that even if he was, the statement was so recklessly made as to be said with actual malice. Gray alleged Trento’s reporting was reckless because the person she quoted had a beef with Gray and had little knowledge of the accounting end of the firm. Gray also pointed out that Trento failed to interview or quote others who would have disputed the claims.

The court decided that Gray was a limited-purpose public figure due to the then widespread interest in lobbyists’ influence on the national government. Because he was a public figure for issues involving lobbying, Gray had to prove actual malice; that the allegedly defamatory statements were knowingly made to be false, or in reckless disregard of the truth.

The court next indicated that Trento’s reporting on this statement did not rise to the level of recklessness sufficient for a finding of actual malice.

“Prejudice or limited knowledge on the part of a source may suggest caution but does not preclude reliance . . . Trento already had multiple sources and was under no obligation to exhaust every possible witness before winding up her investigation. Even assuming she was careless and reached a mistaken conclusion, that is not enough for actual malice.”

In its next ruling, the court refused to overturn a trial court ruling that under the New Hampshire reporter’s privilege Trento need not disclose a source of a quote from the book. Revealing the source would serve no purpose, the court stated, because the jury decided the statement was not false or defamatory and Trento did not make the statement with actual malice.