Texas Beef Group v. Winfrey

Texas Beef Group
v.
Winfrey

201 F.3d 680

United States Court of Appeals,
Fifth Circuit

February 9, 2000

PER CURIAM:

At issue in this case is whether The Oprah Winfrey Show and one of its guests knowingly and falsely depicted American beef as unsafe in the wake of the British panic over "Mad Cow Disease." The district court doubted that fed cattle are protected by Texas's equivalent of a "Veggie Libel Law," See Tex. Civ. Prac. & Rem. § 96.001 et seq. The court alternately held that no knowingly false statements were made by the appellees. We affirm on the latter ground only and affirm the court's other rulings.

I. INTRODUCTION

In early 1996, a new variant of Creutzfeldt-Jakob Disease ("CJD") was diagnosed in Britain. CJD, a form of Transmissible Spongiform Encephalopathy, is a fatal disease that affects the human brain. On March 20, 1996, the British Ministry of Health announced that scientists had linked the consumption of beef infected with Bovine Spongiform Encephalopathy ("BSE") with this new CJD variant. BSE, or "Mad Cow Disease," had been detected in British cattle as early as 1986.

The postulated link between the consumption of beef and CJD caused panic in Britain. News media in the United States ran numerous stories on the subject. Articles appeared in, inter alia, the New York Times, The Wall Street Journal, and Newsweek. Dateline, a popular, "prime time" television news program, broadcast a report on the subject. Another report, and the subject of this suit, was aired on the "Dangerous Food" broadcast of the Oprah Winfrey Show.

Asserting that the beef market suffered substantial losses following the broadcast, several Texas cattle ranchers sued Oprah Winfrey, the producers and distributors of the Oprah Winfrey Show, and Howard Lyman, a guest on the show, in Texas state court. The cattlemen alleged violations of the Texas False Disparagement of Perishable Food Products Act, Tex. Civ. Prac. & Rem. §§ 96.001-.004 ("the Act"), and damages arising from the common-law torts of business disparagement, defamation, negligence, and negligence per se. The cattlemen's suit was removed to federal court. At the close of the cattlemen's case-in-chief, the district court culled the majority of the pending claims, saving only the business disparagement cause of action. This claim was rejected by the jury, and the cattlemen have appealed. Although we differ with the district court's reasoning on certain issues, we affirm.

II. FACTUAL BACKGROUND
A. The "Dangerous Food" Show

Three weeks before the taping of the "Dangerous Food" show, Andrea Wishom, a researcher for the Oprah Winfrey Show, conducted research and interviewed individuals who were knowledgeable about CJD and "Mad Cow Disease." During her research, Wishom discovered that the Center for Disease Control, the U.S. Department of Agriculture, and several professors and researchers felt that "Mad Cow Disease" could not occur in the United States. In telephone conversations, however, Wishom learned that Lyman believed "Mad Cow Disease" could produce an epidemic in this country worse than AIDS. Wishom spoke with each potential guest on the telephone, discussed her research with Kelley and summarized research for Winfrey's use during preparation and taping of the show.

On April 11, 1996, the "Dangerous Food" episode of the Oprah Winfrey Show was taped in Chicago, Illinois. Guests on the show included Lyman, Dr. Gary Weber,⁴ Dr. Will Hueston,⁵ Linda Marler, Dr. James Miller,⁶ and Beryl Rimmer. During the taping, Winfrey discussed several topics with her guests, including the discovery of new-variant CJD in Britain, the gruesome symptoms of the disease, the impact of the disease on the families of those stricken, the threat of the disease in the United States, and the steps being taken by cattlemen and the U.S. Department of Agriculture to prevent an outbreak of BSE in this country. Over the course of the taping, Lyman made several statements regarding the threat of BSE in the United States that Drs. Weber and Hueston found misleading. The experts responded to these statements with facts designed to show the cautious response that the United States had taken to the threat of BSE. They explained the extensive animal testing and oversight used to discover and prevent the spread of BSE in United States cattle. They noted that these procedures had been in place for nearly a decade and that no case of BSE had ever been reported in the United States. They also pointed out that cattlemen voluntarily banned on ruminant-to-ruminant feeding while the Department of Agriculture considered a mandatory ban on the practice.

After the taping, Kelley edited extensively to pare down the "Mad Cow Disease" segment for broadcast. From approximately eight minutes of Dr. Hueston's statements recorded during the taping, only 37 seconds remained in the broadcast. As instructed by Winfrey and senior supervising producer Alice McGee, editor James Kelley cut out "the redundancies" in Dr. Weber's and Dr. Hueston's interviews. These "redundancies" included portions of the following: (1) Dr. Weber's references to the voluntary ban on ruminant-to-ruminant feeding, (2) Dr. Weber's explanation of what ruminant-to-ruminant feeding entailed, (3) Dr. Weber's distinctions between Britain's approach to BSE and the United States's more careful approach, (4) Dr. Weber's response to an audience member's question concerning the examination of cattle before slaughter, and (5) most of Dr. Hueston's comments, including a description of the safeguards against slaughter-house processing of sick cattle. Also edited out was Lyman's admission that American beef is safe. None of Dr. Miller's statements appeared in the show as broadcast. The edited show was broadcast on April 16, 1996.

B. The Oprah Crash

Following the April 16, 1996, broadcast of the "Dangerous Food" program, the fed cattle market in the Texas Panhandle dropped drastically. In the week before the show aired, finished cattle sold for approximately $61.90 per hundred weight. After the show, the price of finished cattle dropped as low as the mid-50's; the volume of sales also went down. The cattlemen assert that the depression continued for approximately eleven weeks.

III. PROCEDURAL HISTORY

At the close of the plaintiffs' case-in-chief, the defendants moved for judgment as a matter of law on all of the pending claims. The district court granted the motion only with respect to the plaintiffs' claim under the False Disparagement of Perishable Food Products Act. The district court rested its decision on several bases. First, the district court questioned the applicability of the statute to live "fed cattle." Second, the court disputed whether the plaintiffs' cattle "perished" or "decayed beyond marketability" as required for statutory protection. Alternatively, the district court ruled that the case was not cognizable under the Act because insufficient proof had been offered tending to show the defendants had knowingly disseminated false information.

The district court submitted only the plaintiffs' business disparagement claim to the jury. The jury was charged as follows:

To recover on a claim of business disparagement, a plaintiff must prove the following:

(1) That the Defendant published a false, disparaging statement;

(2) That the statement was "of and concerning" a Plaintiff's specific property;

(3) That the statement was made with knowledge of the falsity of the disparaging statement or with reckless disregard concerning its falsity, or with spite, ill will, and evil motive, or intending to interfere in the economic interests of the Plaintiff in an unprivileged fashion; and

(4) That the disparaging statement played a substantial and direct part in inducing specific damage to the business interests of the Plaintiff in question.

For the statement to be "of and concerning" a Plaintiff's specific business property, the disparaging words must refer to an ascertained or ascertainable business, and it must be the Plaintiff's. The law does not allow the jury to connect the allegedly disparaging statements to a Plaintiff on innuendo or presumption alone. While it is not necessary that the publication have mentioned a Plaintiff by name, the facts and circumstances must be such that they point to the Plaintiff as the person concerning whom the alleged disparaging statements are made. Every listener does not have to understand the alleged disparaging statements to refer to the individual Plaintiff as long as there are some who reasonably do.

The question submitted to the jury asked,

Did a below-named Defendant publish a false, disparaging statement that was of and concerning the cattle of a below-named Plaintiff as those terms have been defined for you?

The plaintiffs objected to "insertion of the 'of and concerning' requirement" in the jury charge. The district court overruled the objection, and the jury returned an answer of "no" to the proffered question. From the district court's adverse rulings and judgment, the cattlemen timely appealed to this court.

IV. ANALYSIS

False Disparagement of Perishable Food Products Act

In 1995, the Texas legislature passed the Act, following closely on the heels of the Alar apple scare.

Under the Act, a person may be held liable for damages sustained by the producer of a perishable food product if that person knowingly disseminates false information to the public stating or implying that the producer's product is not safe for public consumption. A "perishable food product" is defined by the Act as "a food product of agriculture or aquaculture that is sold or distributed in a form that will perish or decay beyond marketability within a limited period of time." Tex. Civ. Prac. & Rem. § 96.001. When considering the falsity of the disseminated information, the trier of fact is instructed to determine "whether the information was based on reasonable and reliable scientific inquiry, facts, or data." Tex. Civ. Prac. & Rem. § 96.003. This litigation represents one of the first applications of the Act. At trial, the parties disputed whether appellants' live cattle are a "perishable food product" protected under the Act and whether, in any event, the appellees knowingly disseminated false information about live cattle. Although the district court found that, on the facts before it, the fed cattle did not "decay beyond marketability" and thus did not fall within the statute's coverage, we do not reach that issue here. The court alternatively held that the appellees did not knowingly disseminate false information about beef.

The critical issue here is whether the appellees knowingly disseminated false information tending to show that American beef is not fit for public consumption. Tex. Civ. Prac. & Rem. § 96.002(a). The requirement of knowledge that the information is false is the highest standard available in the law. It is unnecessary to import First Amendment free speech protections in further embroidery of this already-stringent standard, except to note that the expression of opinions as well as facts is constitutionally protected so long as a factual basis underlies the opinion. There is little doubt that Howard Lyman and the Winfrey show employees melodramatized the "Mad Cow Disease" scare and discussion of the question "Can it happen here?" Perhaps most important, from the audience's viewpoint, was not the give-and-take between the glib Lyman and the dry Drs. Weber and Hueston, but Ms. Winfrey's exclamation that she was "stopped cold from eating another burger." When Ms. Winfrey speaks, America listens. But her statement is neither actionable nor claimed to be so. Instead, two false statements by Lyman and misleading editing are relied upon to carry the cattlemen's difficult burden. Like the district court, we hold they have not sustained their burden of articulating a genuine issue of material fact concerning liability under the Act.

Branding Lyman an extremist, the cattlemen cite two of his inflammatory statements during the April 16 Oprah Winfrey Show. First, the cattlemen challenge as patently false Lyman's assertion that "Mad Cow Disease" could make AIDS look like the common cold. Second, they maintain that Lyman falsely accused the United States of treating BSE as a public relations issue, as Great Britain did, and failing to take any "substantial" measures to prevent a BSE outbreak in this country. At the time of the show's broadcast, the factual basis for Lyman's opinions--the continued existence of ruminant-to-ruminant feeding in the United States--was truthful. The feeding practice continued to a limited extent, despite a voluntary ban; Dr. Weber admitted as much. Based on this fact, Lyman held the belief that "Mad Cow Disease" could exist or be discovered in this country and could endanger the lives of those eating American beef. His statement comparing Mad Cow Disease to AIDS was hyperbolic, and Winfrey highlighted the statement as "extreme" during the show's broadcast. As this court noted in Peter Scalamandre & Sons, Inc. v. Kaufman, 113 F.3d 556, 562 (5th Cir.1997), "exaggeration does not equal defamation." Lyman's statements comparing the United States' cattlemen's and government's reaction to BSE to that in Great Britain and bewailing the failure to take any "substantial steps" to prevent a BSE outbreak in this country were a sincerely held opinion supported by the factual premise that only a mandatory ban on ruminant-to-ruminant feeding would disperse with the danger. The FDA imposed such a ban, with the approval of the cattle industry, only months after the Oprah Winfrey Show.

Lyman's opinions, though strongly stated, were based on truthful, established fact, and are not actionable under the First Amendment. Neither of Lyman's statements contained a provably false factual connotation, and both were based on factually accurate premises. Most telling is Dr. Hueston's public comment about Howard Lyman, edited out of the final version of the show, which acknowledged that Lyman's ability to display his opinions is what makes America great and "keeps us the best." On the evidence presented, no reasonable juror could have held that Lyman's views were knowingly false.

Likewise, Winfrey and Harpo Productions may not be held liable for the editing of the "Dangerous Food" show. While the editor of the "Dangerous Food" show was instructed to cut out the redundancies in the unedited interviews, he was also required to cut the piece to fit into a smaller time frame for the ultimate broadcast. Although the show's producer undeniably spliced questions and answers, the editing did not misrepresent Dr. Weber's responses. Moreover, through Lyman himself, the show introduced viewers to the voluntary ban on ruminant-to-ruminant feeding. The editing omitted factual explanations, such as the precise differences between cattle feeding and inspection practices in the United States and Great Britain. On the broadcast, however, Drs. Weber and Hueston disputed Lyman's arguments, described the steps the United States had taken to prevent the influx of BSE, and presented cogent arguments concerning the relative safety of United States beef.

The cattlemen's evidence regarding the editing of the "Dangerous Food" broadcast falls far short of satisfying the Act's standard for liability. Stripped to its essentials, the cattlemen's complaint is that the "Dangerous Food" show did not present the Mad Cow issue in the light most favorable to United States beef. This argument cannot prevail. So long as the factual underpinnings remained accurate, as they did here, the editing did not give rise to an inference that knowingly false information was being disseminated.

V. CONCLUSION

The cattlemen's procedural maneuvering enabled removal by the appellees and avoided a Texas state court trial. Though we assume that the district court improperly denied the cattlemen's motion to remand, jurisdiction was properly vested in the district court by the time of trial and judgment. Because a finding that the district court lacked jurisdiction would result in an inefficient loss of judicial economy, Caterpillar allows a finding of jurisdiction regardless of the assumed lack of diversity at the time of removal. The cattlemen's failure to rejoin Cannan as a non-diverse party prior to trial prevented this loss of efficiency and vested the district court with diversity jurisdiction.

The cattlemen's complaints regarding the "Dangerous Food" broadcast of the Oprah Winfrey Show presented one of the first opportunities to interpret a food disparagement statute. The insufficiency of the cattlemen's evidence, however, renders unnecessary a complete inquiry into the Act's scope. Finally, this court can find no plain error in the district court's instructions regarding the business disparagement claim.

AFFIRMED.

EDITH H. JONES, Circuit Judge, concurring:

While I acknowledge that our court's opinion may assume without deciding the applicability of the False Disparagement of Perishable Food Products Act, I have become convinced that the district court's interpretation of the Act was wrong. Plaintiffs suing under the Act should not have to prove, as a threshold to coverage, that their particular products may decay "beyond marketability" within a limited period of time. The purpose of the statute's definition is to distinguish perishable from processed food products, not to eliminate protection for some of the farmers and ranchers for whom the statute was intended. The statute contains several high hurdles to liability; this is not one of them.

The district court found that live cattle do not decay "beyond marketability" because they may still be sold for uses other than USDA prime beef--e.g., hamburger or dog food. This interpretation, however, would seem to vitiate the applicability of the statute to food products that were undoubtedly intended to fall within the protective reach of the Act. For example, bananas are undoubtedly a food product that will decay over time. Yet, bananas with brown spots have uses beyond consumption as fresh bananas--e.g., when processed in banana bread and certain non-food uses. The Act, properly construed, does reach fed cattle.

The appellees' interpretation that the Act was not intended to cover live cattle is inconsistent with the statute's language and legislative history. A perishable food product is "a food product of agriculture or aquaculture that is sold or distributed in a form that will perish or decay beyond marketability within a limited period of time." Tex. Civ. Prac. & Rem. § 96.001. First, the statute places no limit on the term "agriculture," which the dictionary defines as "the science or art of cultivating the soil, harvesting crops, and raising livestock." Webster's Third New International Dict. (1981). Raising cattle, an agrarian occupation, is within the language of the statute; fed cattle are "beef on the hoof," hence, a food product. Moreover, beef is "a food product of agriculture" and is "distributed in a form" that is perishable. The district court's denial of coverage to live fed cattle overlooks this aspect of the statutory definition. Reinforcing coverage of fed cattle is the fact that the statute covers aquaculture, presumably including the cultivation of oysters, shrimp, or catfish. An act designed to protect production of aquatic animals for food, a relatively new Texas industry, could not have meant to exclude cattle-raising, which is intimately bound with Texas's history and current economy.

Even if the cattlemen had to show that their cattle would "decay beyond marketability," I believe, contrary to the district court, they did do so. The evidence adduced at trial demonstrates that live cattle appear to decay steadily in value from their optimum date of sale (perish beyond marketability) just as an apple hanging from a tree might rot. That the decay occurs pre- slaughter does not detract from the protections of the statute. An apple will rot on the tree as easily as it will rot in the grocer's produce section.

I respectfully differ with the excellent district court judge on this matter.

⁴ Dr. Weber holds a Ph.D. in Animal Science. Dr. Weber represents the National Cattlemen's Beef Association.

⁵ Dr. Hueston, representing the U.S. Department of Agriculture, is a leading expert on "BSE."

⁶ Dr. Miller is a physician with experience treating individuals afflicted with CJD. He was the treating physician for Linda Marler's mother-in-law. Marler was also a guest on the "Dangerous Food" show.