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P. L. BLAKE v. GANNETT COMPANY

MAY 25, 1988

P. L. BLAKE
v.
GANNETT COMPANY, INC., GANNETT NEWS SERVICE, INC., AND MISSISSIPPI PUBLISHERS CORPORATION



EN BANC:

PRATHER, JUSTICE, FOR THE COURT:

P. L. Blake filed a complaint on December 7, 1984, in the Circuit Court of Hinds County, against Gannett Co., Inc., Gannett News Service, Inc. and Mississippi Publishers Corporation alleging libel and false light invasion of privacy. The action is brought as a result of articles written in the defendants' newspaper and newswire service concerning the Federal Farm Loan Program of the Farmers Home Administration.

After extensive discovery, the trial judge issued an opinion granting the defendants' motion for summary judgment, holding that the plaintiff was a limited purpose public figure who failed to show actual malice on the defendants' part to impose liability on them. In addition, the trial court held that the plaintiff had failed to produce evidence of falsity, and therefore, his libel and false light invasion of privacy actions failed. From this ruling for summary judgment, P. L. Blake appeals and assigns as error the following findings of the Hinds County Circuit Court:

 (1) AS A MATTER OF LAW, APPELLANT P. L. BLAKE IS A VORTEX PUBLIC FIGURE AND THUS HELD TO THE ACTUAL MALICE STANDARD OF PROOF; AND

 (2) NO GENUINE ISSUE OF MATERIAL FACT EXISTS REGARDING

 APPELLEES' KNOWLEDGE OF OR RECKLESS DISREGARD AS TO THE FALSITY OF THEIR STATEMENTS CONCERNING APPELLANT; AND

 (3) AS A MATTER OF LAW, THE PUBLISHED STATEMENTS CONCERNING APPELLANT AND HIS CORPORATIONS ARE NOT FALSE AND THEREFORE NOT LIBEL; AND

 (4) AS A MATTER OF LAW, APPELLANT'S CLAIM FOR FALSE LIGHT INVASION OF PRIVACY MUST FAIL WHERE BASED UPON THE SAME SET OF FACTS AS THE DISMISSED LIBEL CLAIM; AND

 (5) AS A MATTER OF LAW, PUBLICATION OCCURRED ON DECEMBER 4-6, 1983, AND APPELLANT'S SUIT IS THUS BARRED BY THE MISSISSIPPI STATUTE OF LIMITATIONS; AND

 I.

 A.

 On December 7, 1984, P. L. Blake (hereafter referred to as" Blake "), a Greenwood, Mississippi resident, filed suit in the Hinds County Court for libel and invasion of privacy against (1) Mississippi Publishers Corporation, (hereinafter MPC), the owner of the Jackson based newspaper, The Clarion Ledger, (2) Gannett News Service, Inc., (hereinafter GNS), a national newswire service headquartered in Arlington, Virginia, and (3) Gannett Co., Inc., (hereinafter GC), the parent corporation of MPC and GNS, which are wholly owned subsidiaries. The suit arose out of a series of newspaper articles written and distributed by Gannett News Service and published in The Clarion-Ledger.

 The articles published by GNS concerned the Farmers Home Administration (hereafter" FmHA "), a federal agency with state offices nationwide. The authors of the articles, Mark Rohner (" Rohner ") and Dennis Camire (" Camire "), both GNS investigative reporters, addressed the federal farm loan program and FmHA's alleged mismanagement of funds in approving loans for borrowers of substantial net worth.

 More specifically, the reporters focused on the FmHA farm loan program as administered within the State of Mississippi. Subsequently, GNS published a series of articles from December 4, 1983, to October 2, 1984. The series featured most of Mississippi's ten largest FmHA borrowers, including the DeWitt Corporation (" DeWitt ") owned by P. L. Blake. DeWitt owed FmHA $3.5 million dollars and was the fifth largest borrower in the state.

 Regressing in time, the origin of this series was a May

 1983 Congressional Hearing. At that hearing, Dennis Camire learned that federal auditors had recently criticized FmHA programs. Subsequently, GNS editors assigned Reporter Mark Rohner to work with Camire on a series of stories concerning agency practices. Rohner had worked as an agriculture reporter in the GNS Washington office since 1978.

 The reporters began their 1983 investigation by collecting a series of audits prepared by the Office of Inspector General of the United States Department of Agriculture. (USDA) These audits criticized FmHA for failing to heed agency regulations in making loans to wealthy borrowers.

 Although this audit was revealing concerning FmHA loans, the DeWitt file was not examined by the Government in the course of this selective audit.

 Shortly after the Congressional Hearings, Camire received from a Congressional office an article from The Greenwood, Mississippi Commonwealth concerning persons identified as the" most controversial "FmHA borrowers in LeFlore County. The article includes the name of P. L. Blake.

 Following up on this article, the reporters, using the Federal Freedom of Information Act, 5 U.S.C. 552 (a), obtained the FmHA's county loan file for Blake's company, DeWitt. The reporters used the county loan information to do further investigation into DeWitt's other business ventures in Mississippi and Texas.

 With all this information in hand, GNS reporters prepared a fourteen article series. Following the editing of these articles in Washington, GNS published the articles by sending them by wire to Gannett and non-Gannett organizations. The initial articles went out over the GNS wire on December 4-6, 1983.

 Therein, Blake complains on appeal about these particular articles:

 (1) On December 11, 1983, in The Clarion Ledqer/Jackson Daily News" The P. L. Blake empire has good credit in Washington, "a GNS article.

 (2) On January 12, 1984, The Clarion-Ledger published an editorial headlined" Hopeful Sign ". It concerned the FmHA series published in December, 1983. The editorial does not refer to Blake or any

 individual.

 (3) On January 20, 1984, GNS reprinted its series of articles in a special report entitled:" FmHA "The Golden Yoke." The series won some of the Nation's top awards for economic and agricultural reporting.

 (4) On March 3, 1984, The Clarion-Ledger published a GNS article "FmHA Investigating Greenwood borrower," based on the FmHA reaction to the initial GNS series.

 Before August 30, 1984, Blake did not complain to any of the defendants about any of these articles. On that day his counsel wrote a letter to the defendants identifying certain statements alleged to be false and defamatory. The defendants, GNS, responded on September 12, 1984. They maintained that the statements were true and that Blake's characterization of these statements were inaccurate. This suit was filed on December 7, 1984.

 B.

 The following is a composite of those facts of which Camire and Rohner were aware when they wrote the series and those facts which surfaced during discovery. Blake, who is the sole stockholder in DeWitt, bought the company some time prior to 1977. DeWitt, in turn, is the sole stockholder and owner of its subsidiary companies. By November, 1982, DeWitt's wholly owned subsidiaries were: PLB Grain Storage Corporation (PLB Grain) (a Texas grain elevator complex); Quiver River Plantation (Quiver) (a catfish farm); Cupid Corporation (Cupid) (a catfish processing plant); and, Delta Rice Farms (Delta Rice) (cropland farming).

 Tax returns indicate that, in 1977, DeWitt had total assets of $3,072,844 and, in 1983, DeWitt's listed assets were $42,436,529. DeWitt's 1982 Financial Statement shows income revenues from the grain storage enterprise of $6,065,160 and income revenues from crop production of $1,093,125. Also in 1982, DeWitt's stockholders' equity in PLB Grain was $8,344,189.

 DeWitt borrowed money from the FmHA from 1977 through the 1983-84 publication of the articles here at issue. The FmHA has many regulations governing loans to individual and corporate applicants. Crucial to this Court's inquiry are the following FmHA regulations. First, loan applicants must be "unable to obtain sufficient and suitable credit elsewhere"

 taking into account "all assets" of the corporation and its shareholders. See 7 CFR 1945.56(b)(1). *fn1 Second, corporate borrowers must apply to not fewer than five (5) "conventional lending" institutions before coming to the FmHA. Id. 1945.56(b)(2)(i)(A)(ii). Third, FmHA borrowers must sell all or part of "non-essential non-farm assets to meet a portion of the applicants' needs" . Id. 1945.56(b)(2)(i)(4). Finally, corporate borrowers must derive fifty percent (50%) of their gross incomes from farming. Id. 1945.54(a)(11).

 DeWitt's FmHA loan file contains the following information. On April 25, 1983, DeWitt was allowed to roll over $3.5 million in past due FmHA debts. Also in early 1983, DeWitt obtained an $850,000 production loan. The file also indicates that DeWitt could not obtain needed funds using its own resources. In 1983, four lenders refused to loan DeWitt money. However, the stated reason for two lenders' refusals was that they did not make agricultural production loans. Various Farm and Home Plans contained in the file indicate that DeWitt's net worth had grown from $25,000 in 1977 to $1,705,247 in 1982. A December 15, 1982, plan shows that DeWitt had no stock assets and projected no non-farm income. The file shows that, in 1983, DeWitt reported the organization of three of its four subsidiaries, omitting PLB Grain, which had been a wholly owned subsidiary of DeWitt since September 24, 1981.

 PLB Grain owned one of the largest, if not the largest, grain storage facilities in the United States. It had contracted with the Commodity Credit Corporation (CCC) to store 21.5 million bushels of grain. In order to receive the contract, PLB had indicated to the CCC that it had a net worth of at least $5 million. The surplus grain stored for must be unable to provide the required financing from their own resources or with credit obtained from pledging those resources to other lenders. . . .

 The government by PLB under the CCC contract became a national story on October 18, 1983. The controversy involved the quantity and quality of the grain stored by PLB Grain. Texas officials charged that the quality of the grain had deteriorated substantially. USDA officials claimed that it had not deteriorated. Later, in 1984, CCC determined that there were quality and quantity problems with the grain stored in PLB's elevators. State FmHA officials knew that Blake had an interest in a Texas grain storage facility, but did not know the exact nature of that interest. Information concerning PLB Grain was never included in FmHA loan applications.

 When Blake was interviewed by the two reporters, he told them that, at DeWitt, "We're still struggling our a---- off trying to make ends meet." However, DeWitt had accounts receivable in the amount of $1.6 million as the result of a loan to Blake and his wife. Also, at the end of 1982, DeWitt had securities and certificates of deposits valued at $390,000.

 Blake's position is that at the time he was requesting FmHA loans he did not know that he was not furnishing the FmHA with enough information. In fact, Blake stated, during an April 9, 1985, deposition, that it was not until that date that he became aware of certain FmHA requirements, including the requirement that borrowers sell or mortgage all assets not essential to a sound farming operation.

 II.

 DID THE CIRCUIT COURT ERR IN FINDING THAT P. L. BLAKE IS A VORTEX PUBLIC FIGURE AND THUS ...


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