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Pan Am Systems Inc. v. Hardenbergh

United States District Court, District of Maine

October 1, 2014

PAN AM SYSTEMS INC., SPRINGFIELD TERMINAL RAILWAY COMPANY, and DAVID ANDREW FINK, Plaintiffs,
v.
CHALMERS HARDENBERGH and ATLANTIC NORTHEAST RAILS AND PORTS, Defendants.

Plaintiff PAN AM SYSTEMS INC represented by JONATHAN ANDREW POTTLE EATON PEABODY, THAD B. ZMISTOWSKI EATON PEABODY

Plaintiff SPRINGFIELD TERMINAL RAILWAY COMPANY represented by JONATHAN ANDREW POTTLE THAD B. ZMISTOWSKI

Plaintiff DAVID ANDREW FINK represented by JONATHAN ANDREW POTTLE, THAD B. ZMISTOWSKI

Defendant CHALMERS HARDENBERGH represented by RUSSELL PIERCE NORMAN, HANSON & DETROY BENJAMIN S. PIPER PRETI, FLAHERTY LLP ONE CITY CENTER, SIGMUND D. SCHUTZ PRETI, FLAHERTY, BELIVEAU, & PACHIOS, LLP

Defendant CM HARDENBERG PA represented by BENJAMIN S. PIPER, SIGMUND D. SCHUTZ

Defendant ATLANTIC NORTHEAST RAILS AND PORTS represented by RUSSELL PIERCE, BENJAMIN S. PIPER, SIGMUND D. SCHUTZ

AMENDED ORDER ON DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT [1]

Nancy Torresen United States District Judge

The Plaintiffs, Pan Am Systems, Inc., Springfield Terminal Railway Company, and David Andrew Fink, bring claims for defamation and false light against Defendants Atlantic Northeast Rails & Ports and Chalmers Hardenbergh. The Plaintiffs also seek punitive damages. Before the Court is the Defendants’ motion (ECF No. 65) seeking summary judgment on all the Plaintiffs’ claims. For the reasons that follow, the Court GRANTS the Defendants’ motion.

THE PARTIES

Pan Am Systems, Inc. (“Pan Am”) is a railroad company with substantial operations in New England. David Andrew Fink[2] served as Pan Am’s president and CEO during most times relevant to this suit. Springfield Terminal Railway Company (“Springfield Terminal” or “ST”) is Pan Am’s subsidiary.

Atlantic Northeast Rails & Ports (“ANR&P”) produces an eponymous trade newsletter about the railroad industry. Chalmers Hardenbergh is ANR&P’s editor and publisher.

The Plaintiffs claim that four articles written and published by the Defendants defamed them and placed Fink in a false light. Because each article presents a different factual background, the Court will present the facts in the Discussion section of this opinion.

PROCEDURAL HISTORY

The Plaintiffs initiated this suit in September of 2011 when they filed their original complaint (ECF No. 1). There, the Plaintiffs alleged the Defendants had defamed them in six different articles. Compl. 3-5. The Defendants moved to dismiss the Complaint for failure to state a claim, arguing the Plaintiffs had failed to allege falsity or fault and that five of the six statements in question were not capable of conveying a defamatory meaning as a matter of law. Defs.’ Mot. to Dismiss (ECF No. 14). The Court granted the motion and dismissed the Plaintiffs’ claims without prejudice. Order of May 14, 2012 (ECF No. 20). In its order, the Court determined that, for First Amendment purposes, the Defendants should be treated as “media defendants” and all the speech at issue implicated “matters of public concern.” Order of May 14, 2012 at 7-10. The Court held that the issue of whether the Plaintiffs should be treated as “public figures” was not yet ripe for decision. Id. at 10-11.

The Plaintiffs subsequently filed an expanded Amended Complaint (ECF No. 25) based on the same six articles. A standard scheduling order issued (ECF No. 27), and the Defendants objected (ECF No. 31). Concerned that inquiry into the fault element of defamation would require them to reveal confidential sources and threaten First Amendment interests, the Defendants proposed bifurcating discovery according to a procedure laid out by the First Circuit in Bruno & Stillman, Inc. v. Globe Newspaper Co., 633 F.2d 583 (1st Cir. 1980). The Court referred the issue to Magistrate Judge John H. Rich III, who issued an order (ECF No. 42) largely adopting the Defendants’ proposal. The Magistrate Judge’s order contemplated that the parties would proceed by engaging in discovery on all issues other than fault, followed by summary judgment motion work on those issues, followed by further discovery if necessary.

After the first phase of discovery, the Defendants filed the motion for summary judgment (ECF No. 65) currently before the Court. In their opposition to the Defendants’ motion (ECF No. 69), the Plaintiffs represented that they are no longer pressing their claim with respect to two of the six statements identified in their complaints, one from an article published on October 22, 2010 and the other from an article published on November 3, 2010.[3] They continue to assert their claims with respect to the four remaining articles.

LEGAL STANDARD

The Court may grant a motion for summary judgment brought under Federal Rule of Civil Procedure 56 where the movant shows that “there is no genuine dispute as to any material fact” and that it "is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). “ ‘A “genuine” issue is one that could be resolved in favor of either party, and a “material fact” is one that has the potential of affecting the outcome of the case.’ ” Jakobiec v. Merrill Lynch Life Ins. Co., 711 F.3d 217, 223 (1st Cir. 2013) (quoting Calero-Cerezo v. U.S. Dep't of Justice, 355 F.3d 6, 19 (1st Cir. 2004).

In deciding a motion for summary judgment, the Court construes the record in the light most favorable to the nonmovant and resolves all reasonable inferences in its favor. See Jakobiec, 711 F.3d at 223. The Court may not weigh the evidence or make credibility determinations and must set aside “conclusory allegations, improbable inferences, and unsupported speculation.” Pina v. Children's Place, 740 F.3d 785, 788 (1st Cir. 2014) (quoting Medina-Rivera v. MVM, Inc., 713 F.3d 132, 134 (1st Cir. 2013)). The motion should be denied if the nonmoving party's evidence is strong enough “to support a verdict in her favor.” Sensing v. Outback Steakhouse of Fla., LLC, 575 F.3d 145, 153 (1st Cir. 2009) (quoting Calero-Cerezo, 355 F.3d at 19).

Procedures like summary judgment take on added urgency in suits that have the “potential of . . . chilling constitutionally protected speech.” Guilford Transp. Indus., Inc. v. Wilner, 760 A.2d 580, 582, 592 (D.C. Cir. 2000) (citing Washington Post Co. v. Keogh, 385 F.2d 965, 968 (D.C. Cir. 1966). In such cases, “ ‘[t]he threat of being put to the defense of a lawsuit . . . may be as chilling to the exercise of First Amendment freedoms as fear of the outcome of the lawsuit itself.’ ” Guilford, 760 A.2d at 592 (quoting and affirming oral order entered by lower court).

DISCUSSION I. Count I: Defamation

A. The Governing Law

1. The Maine Common Law

Under Maine law, the tort of defamation consists of:

(1) a false and defamatory statement concerning another;
(2) an unprivileged publication to a third party;
(3) fault amounting at least to negligence on the part of the publisher;[4]
(4) either actionability of the statement irrespective of special harm or the existence of special harm caused by the publication.

Rippett v. Bemis, 672 A.2d 82, 86 (Me. 1996) (quoting Lester v. Powers, 596 A.2d 65, 69 (Me. 1991). Relevant here, the common law rule provides that “one who repeats or otherwise republishes defamatory matter is subject to liability as if he had originally published it.” Restatement (Second) of Torts § 578 (1977).

As discussed above, Magistrate Judge Rich issued a bifurcated discovery order in October of 2012, which postponed discovery on the fault element because it might require the Defendants to reveal confidential sources. The Defendants now move for summary judgment on the grounds that the Plaintiffs cannot establish that the statements at issue are defamatory or false and that two of the statements at issue are protected by the fair report privilege.

If the fair report privilege does apply, as the Defendants contend, the Court would still have to determine whether the Defendants abused the privilege, an inquiry that requires examining the issue of fault. See Restatement (Second) of Torts §§ 600, 611 (common law fair report privilege is conditional, and can be defeated by showing the defendant knew the matter to be false or acted in reckless disregard as to its truth or falsity); Yohe v. Nugent, 321 F.3d 35, 42-45 (1st Cir. 2003) (Massachusetts’s fair report privilege is conditional, not absolute, and can be defeated by showing at least some types of malice). Accordingly, the issues of whether Maine law provides for a fair report privilege and whether any of the Defendants’ statements are protected by it are not yet ripe for decision. The Court proceeds to the Defendants’ remaining arguments for summary judgment, which implicate the first element of defamation and the publication component of the second element of defamation.

2. Interaction of Maine Common Law and First Amendment Law

As the Court explained in an earlier order in this case:

Over the last fifty years, the Supreme Court has imposed various constitutional restrictions on common law defamation actions. The Court, concerned about the chilling effect of defamation actions on free speech, has sought to ensure robust public debate on areas of public concern.

Pan Am. Sys., Inc. v. Hardenbergh, 871 F.Supp.2d 6, 11 (D. Me. 2012). Relevant to this motion, the First Amendment limits how state courts may define what is “defamatory, ” see, e.g., Greenbelt Coop. Publ’g Ass’n, Inc. v. Bresler, 398 U.S. 6, 12-13 (1970), and requires a plaintiff bringing a defamation claim against a media defendant (such as ANR&P and Hardenbergh) to prove the falsity of the defendant’s statement. Gertz v. Robert Welch, Inc., 418 U.S. 323, 347 (1974).

Given defamation’s common law roots and constitutional overlay, this Court must adhere to both the holdings of the Law Court applying Maine law and the holdings of the Supreme Court and the First Circuit applying First Amendment law. See ...


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