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Appeals court upholds dismissal of ABC libel suit

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  1. Libel and Privacy

    NMU         MINNESOTA         Libel         May 3, 2002    

Appeals court upholds dismissal of ABC libel suit

  • A Minnesota hotel owner had sued the network for airing an attorney’s accusation that he knew hotel guests were sexually harassing female employees but did nothing about it.

A Minnesota trial court correctly dismissed a libel lawsuit against ABC and an attorney who criticized a hotel owner on the network’s “PrimeTime Live” program, the state Court of Appeals ruled on April 30.

Gus Chafoulias, the hotel owner, is a limited-purpose public figure and failed to present evidence that ABC and attorney Lori Peterson made statements on the show with actual malice, the appeals court ruled.

The 1997 “PrimeTime Live” segment, called “The VIP Floor,” detailed sexual harassment lawsuits brought by five former employees at the Radisson Plaza Hotel that Chafoulias owned in Rochester, Minn. The lawsuits alleged that Chafoulias knew guests from the United Arab Emirates were sexually harassing and abusing the female employees, but he did nothing.

The show included footage of Peterson, the women’s attorney, saying: “Chafoulias knew. Chafoulias has known for years that these women were being attacked, harassed, raped.”

Chafoulias sued ABC and Peterson in 1998 for defamation, alleging that Peterson’s statement was aired with actual malice, meaning ABC and Peterson knew the statement was false or acted with reckless disregard for the truth.

In upholding the trial court’s dismissal of the case, the appeals court ruled that Chafoulias was a limited-purpose public figure because he assumed a purposeful or prominent role in a public controversy, and Peterson’s statement was related to the controversy.

Chafoulias argued that there was no public controversy, only media attention and a trial. But the appeals court ruled that there was significant public debate about the sexual harassment of women by Arab men in Rochester before Peterson sued on behalf of the women hotel employees.

Peterson did not act with actual malice because she interviewed accusers and witnesses, confirmed their stories, tried to verify allegations and believed the truth of the allegations, the court ruled.

Likewise, ABC did not act with actual malice in broadcasting Peterson’s statement because the network “conducted a lengthy investigation and came to believe that Peterson’s statement was corroborated and at least arguably true,” the opinion says.

The court did not rule on ABC’s claim that the show was privileged as a fair and accurate report of federal harassment lawsuits. But in a stinging footnote, the court stated that the show would be unlikely to enjoy the privilege because “The VIP Floor” was edited “to create a factually accurate but rhetorically and breathlessly inflammatory narrative.”

“Nothing about the segment gives the impression of fair, objective, or balanced reporting,” the footnote says. “But bad journalism is not the same as reckless disregard of the truth.”

(Chafoulias v. Peterson; Media counsel: Thomas W. Tinkham and Dean C. Eyler, Dorsey & Whitney LLP, Minneapolis) MD

© 2002 The Reporters Committee for Freedom of the Press

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