Media Law Advisory

May 2006

Ohio Supreme Court Affirms Analysis Supporting $860,000 Award for Public Records Act Violations

By Thomas B. Allen

In a 4-3 decision, the Ohio Supreme Court in Kish v. City of Akron, 109 Ohio St.3d 162, 2006-Ohio-1244, recently confirmed that the City of Akron could be held liable for more than $860,000 in damages for violating Ohio’s Public Records Act.

Two unionized employees of the City of Akron’s Plans and Permit Division were upset about a compensatory time-off policy used in their division.  They claimed that the policy used in their division was not authorized by the city or by their union.  The division’s policy permitted flexible time off on an hour-for-hour basis.  After the employees challenged the policy, the city ceased using the policy, and stated that it would not reimburse employees for unused comp time.

The two employees then sued the city in federal court seeking unpaid comp time.  During trial, the employees apparently uncovered the fact that the city had destroyed the employee’s comp time records (480 records for one employee, and 380 records for the second).  Applying Ohio’s statutory damages of $1,000 per record destroyed, a jury awarded the first employee $480,000, and the second employee $380,000.

The city appealed the decision.  The Federal Appeals Court asked the Ohio Supreme Court to define “record,” and to clarify what a “violation” was for purposes of Ohio’s Public Records Act.  The city argued that the term “record” in this case should refer to the “compilations” of the individual times sheets, so that the comp time records compiled for the employees would each be only one record.  The employees countered that each time sheet was one record, so they should be entitled to $1,000 for every time sheet destroyed.

The Ohio Supreme Court adopted the employees’ position.  It reasoned that time sheets of government employees were records, so each document destroyed was one “record” destroyed.

The city then argued that the acts of destroying each record were not distinct violations. The city suggested a case-by-case inquiry was required to determine what a “violation” was.  The court rejected this argument as unworkable.  The court reasoned that it would not allow an entity to perform a wholesale destruction of many documents at one time so as to avoid separate penalties for each document destroyed.

This decision highlights the potentially severe penalties that can be imposed on public entities who fail to strictly follow the mandates of Ohio’s Public Records Act.  Even the most innocuous acts, such as disposing of old time sheets, can result in massive penalties if an entity does not have, and follow, a proper records retention policy.


‘Sex Offender’ TV Caption Found Not to Defame Diocese Official

By Kevin T. Shook

The Court of Appeals of Michigan recently affirmed a trial court finding that a TV caption below the image of a Catholic Diocese spokesperson that read “Convicted Sex Offender” did not defame the spokesperson.  The principle issue in the case was whether a reasonable viewer would have concluded that the words “sex offender” actually applied to the spokesperson.  The Court of Appeals agreed with the trial court that a reasonable viewer would not have reached this conclusion.

The defendant in the case operates WLNS-TV in Lansing, Mich.  On May 20, 2003, the defendant did a feature story on the Lansing Catholic Diocese’s decision to hire a convicted sex offender named Danny Graves.  The plaintiff in the case, Michael Diebold, appeared in the feature as a spokesperson for the Diocese. 

The court affirmed dismissal of the case, stating that the entire feature must be reviewed and taken in context.  In reaching this decision, the court noted that the news feature began with the plaintiff explaining the Diocese’s position regarding the hiring of Graves.  The sex offender tag only appeared briefly below the plaintiff’s image and then remained on the screen for the rest of the broadcast, which cut to an image of Graves in a prisoner’s jumpsuit.  The court found that a reasonable viewer would conclude that the tag applied only to Graves and appeared prematurely in the broadcast below Diebold’s image.

The Michigan court’s decision provides good precedent for cases involving the interpretation of a caption in a television broadcast.  Diebold v. Young (April 6, 2006), Mich. App. No. 259520, 2006 Mich. App. LEXIS 1061.


Ohio Supreme Court Creates Executive Privilege for Governor Records

By Jill P. Meyer

Finding it “for the benefit of the Public,” the Ohio Supreme Court recently created a new exception to the Ohio Public Records Act.  Last month, the court created a qualified executive privilege that allows the government to withhold from public disclosure communications with the governor that “were made for the purpose of fostering informed and sound gubernatorial deliberations, policymaking, and decision making.”  State ex rel. Dann v. Taft

The case was filed by a member of the Ohio Senate who had requested from the governor “copies of all weekly memoranda or other periodic reports required by statute or office procedure or practice from former Bureau of Workers’ Compensation Administrator and CEO James Conrad to the Office of Governor from the years 1998-2005,” as well as weekly reports from that same time period submitted to the governor by James Samuel, the governor’s executive assistant who had acted as the liaison between the Governor and the BWC.  The requests came on the heels of newspaper reports breaking the already infamous “Coingate” scandal:  questionable rare coin investments that produced “significant loss” in the BWC’s employer-contribution fund.  Senator Dann said he wanted the records “to obtain more detailed information regarding the Governor’s awareness of the investment practices.”  In response, Governor Taft produced copies of the requested Conrad records from August 2004 to June 2005, but refused to produce them for anytime prior to August 2004, and refused to produce any of the Samuel records.  The Governor claimed that the records were “protected by the executive privilege” and by the “deliberative process privilege.”

The Ohio Supreme Court considered the following issue:  “Whether the Governor of Ohio may claim an executive privilege to prevent disclosure of documents provided to the Governor by staff members or other executive-branch officials.”  Wading through the history of public records and privileges, the court started its lengthy analysis with the proposition that Ohio’s Public Records Act “is construed liberally in favor of broad access, and any doubt is resolved in favor of disclosure of public records.”  Because no precedent existed in Ohio for this executive privilege, the court then looked to the federal “deliberative-process privilege” and the “presidential-communications privilege,” to which the Governor asserted the Ohio executive privilege should be analogous.  The court quoted the United States Supreme Court for the rationale of creating an executive privilege for the Commander in Chief:  “Because a President’s communications and activities encompass a vastly wider range of sensitive material than would be true of any ordinary individual, it is necessary in the public interest to afford Presidential confidentiality the greatest protection consistent with the fair administration of justice. The privilege can be said to derive from the supremacy of each branch within its own assigned area of constitutional duties.  Certain powers and privileges flow from the nature of enumerated powers; the protection of the confidentiality of Presidential communications has similar constitutional underpinnings.”  In full agreement, the Ohio Supreme Court held that the “rationale applies with equal force to the chief executive official of a state.” 

The court also reviewed other states’ considerations of an executive privilege and Ohio’s other governmental privileges in shaping the new privilege, however, and found that, despite the importance of an executive privilege, the privilege is not an absolute privilege.  “The people of Ohio have a public interest in ensuring that their governor can operate in a frank, open, and candid environment in which information and conflicting ideas, thoughts, and opinions may be vigorously presented to the governor without concern that unwanted consequences will follow from public dissemination. It is for the benefit of the public that we recognize this qualified privilege and not for the benefit of the individuals who hold, or will hold, the office of governor of the state of Ohio.”  Instead, it is a qualified privilege, whereby “a governor’s initial assertion that a communication is within the scope of this privilege is not conclusive.  It is ultimately the role of the courts to determine, on a case-by-case basis, whether the public’s interest in affording its governor an umbrella of confidentiality is outweighed by a need for disclosure.” 

The court mandated a three-step process to determine whether the executive privilege applies:  1) the governor formally asserts the privilege, which creates a presumption that the documents are confidential and protected from public disclosure;  and then 2) the “party seeking disclosure must demonstrate a particularized need for disclosure” to overcome the presumption.  If both steps are met, 3) the governor must submit the records to the court for an in camera review.  Upon that private review, the court will 1) decide whether the communications were, indeed, “made for the purpose of fostering informed and sound deliberations, policymaking and decisionmaking” and 2) “balance the requester’s need for disclosure against the public’s interest in ensuring informed and unhindered gubernatorial decisionmaking.”  The qualified privilege will be overcome only when the balance tilts in favor of disclosure. 

The court admonished “that executive privilege should not be lightly invoked” and sent the parties back to comply with the newly developed three-step process.  As of this writing, no decision has been rendered as to whether the new executive privilege protects the documents requested by Senator Dann from public view.


Impact and Effect of Voluntary Direct-To-Consumer Television Advertising Guidelines For Pharmaceuticals

By Stephen M. Gracey

It has been five months since the voluntary direct-to-consumer television advertising guidelines, announced by PhRMA in August 2005, went into effect starting January 1, 2006.  The guidelines were established to improve the “inherent educational value of advertisements” as stated by PhRMA President and CEO Billy Tauzin in PhRMA’s August 2, 2005, press release.  The guidelines exceed current FDA regulations and place greater emphasis on educating consumers about diseases and conditions.  As state in PhRMA’s press release, the following are some of the central principles of the guidelines:

In response to the guidelines and industry and public criticism of direct-to-consumer television advertising, many pharmaceutical companies voluntarily imposed moratoriums of various lengths for new product direct-to-consumer television advertising, which many thought would cause a decrease in the ever-increasing number of this form of advertising.

But in the first two months of 2006, direct-to-consumer television advertising spending has increased from the amount spent for the same time period during previous years.  According to a May 11, 2006, report written by Jim Edwards of Brandweek, which cites statistics compiled by Nielsen Monitor-Plus, in January and February of 2006, pharmaceutical companies spent $680 million in direct-to-consumer advertising.  This was an 11% increase from January and February of 2005.   Although there was an increase in spending after the PhRMA guidelines went into effect, the majority of the increase in spending appears to have been directed toward disease and condition awareness television advertisements.  If the spending on this form of advertisements continues at the current rate, it will substantially eclipse the amount spent in previous years.  Even though it does not appear that the PhRMA guidelines are as of yet decreasing the amount of television advertising by pharmaceutical companies as many previously believed would occur, the guidelines do appear to be increasing the use of television advertisements to educate consumers about diseases and conditions and in doing so are improving the “inherent educational value of advertisements.”


FTC Outlines Recommended Changes in Marketing Food Products to Children

By Bridget H. Papalia

On May 2, 2006, the Federal Trade Commission and the Department for Health and Human Services issued a report outlining steps the food industry can take to address issues of childhood obesity.  Specifically, the report focused on how the food industry can make changes in their advertising that will promote responsible marketing to children. 

The report offers only recommendations, and does not impose any actual requirements.  However, the issuance of the report signifies an increasing effort by the FTC to address marketing standards of the food industry with regard to children.  In short, the FTC is urging higher levels of industry self-regulation.  If the industry does not succeed, it will most likely be subjected to government regulation.  Thus, proactive and meaningful steps to demonstrate appropriate corporate responsibility should be taken.

The report makes several recommendations, some of which address imposing nutritional minimums and others that address the promotions and advertising and packaging used by companies to attract children.  For example, the report suggested that the packaging of products should help consumers control portion sizes and calories, and the information on the package should help consumers identify lower-calorie and more nutritious foods.  The FTC also recommended that companies review and revise their marketing practices to ensure that the products they market to children meet certain nutritional guidelines.  In addition, the FTC suggested that companies use their marketing capabilities to educate consumers about nutrition and fitness. The FTC also asked that food companies recognize which demographic segment of their consumers suffers the most from childhood obesity and to market educational and nutritional promotions to these consumers. 

In sum, the recommendations take the first step of asking the industry to take the responsibility for advertising the products it puts on the shelf.  These suggestions are directed at advertising the food products that will attract children with clear and non-misrepresentative or non-misleading statements regarding the nutritional quality of the product.  In addition, the FTC takes a  second step.  The report not only addresses the marketing of the company’s actual products it sells, but also urges the industry to undertake responsible initiatives that will teach good nutrition and health practices to children in general.

Some companies have adopted written marketing guidelines to assist them in developing sound marketing practices in the area of children and food.  Of course, these guidelines can also be advertised by the company to demonstrate their commitment to address the issue.  But these guidelines also provide the company with a rubric for evaluating its marketing initiatives and assisting the company in making measurable steps in this area.   Establishing such guidelines – and living by them – may not preclude the advancement of government regulation with regard to advertising for children, but, at a minimum, it will enable the company to be prepared when or if that day arrives.


Defamation Law In The Employment Setting

By Lynsie Todd Gaddis

The Qualified Privilege for Intracorporate Communications

It is public policy in most states that courts do not want to create a chilling effect on communications between employers and employees about their fellow employee’s conduct in the workplace.  Most states generally hold that, when a plaintiff sues for libel or slander based upon communications in the work place, there is a qualified privilege for statements or reports about the plaintiff that have been made in good faith.  The gist of this qualified privilege is that these intracorporate communications are vital to the operation of a successful business, and employees and employers should not fear liability for reporting in good faith a fellow employee’s actions. 

A Look at Kentucky Decisions

Kentucky courts consistently recognize that intracorporate communications are subject to a qualified privilege in defamation actions.  Kentucky courts come to this conclusion by rationalizing that there is no “publication” when employees and employers are not sharing this information to third parties.  This rationale dovetails into the basic principle that, absent publication, there can be no libel. 

In Caslin v. General Electric Company, the plaintiff was a patent attorney who was subject to written performance appraisals.  For his first three years of employment at General Electric Company, the plaintiff received rave reviews.  However, during this fourth year of employment with GE, he was given a rating of four on a scale of nine and deemed “below average – not promotable.”  The plaintiff was not happy about this report.  He immediately filed a libel action against the author of the report and the author’s immediate supervisor.  The Court of Appeals of Kentucky held that these reports were intracorporate communications that were necessary to the functioning of the company, determined these communications were subject to the qualified privilege, and upheld the summary judgment dismissing plaintiff’s libel action. 

In Wyant v. SCM Corporation, the plaintiff was a branch manager of the defendant corporation.  An internal report by the Plaintiff’s credit manager was circulated stating that the plaintiff managed his store through “intimidation, sarcasm, and fear.”  The plaintiff filed a libel action and alleged that this statement damaged his reputation and led to his ultimate termination.  Because the report had only been circulated within the defendant corporation, the court held that it was a necessary communication within the employing company.  The court held that it was not published, because it was not circulated to any outside party.  Without publication, the court determined that the basic elements of libel were not met and affirmed the directed verdict in favor of the defendant corporation.

The court in Landrum v. Braun is the most recent Kentucky decision applying the intracorporate privilege.  The court explained the public policy behind this qualified privilege by reiterating that it is necessary to have this qualified privilege so that everyday business can be carried out without the threat of suit. 

A Look at Ohio Law - An Important Caveat

Ohio courts have also embraced the qualified privilege for intracorporate communications.  In Hanly v. Riverside Methodist Hospitals, a nursing assistant alleged to hospital supervisors that the plaintiff had groped her in the elevator.  After an investigation, the plaintiff was terminated and the hospital supervisors conducted several meetings with hospital employees.  During these meetings, the staff was notified that the two employees had been suspended, and the hospital supervisors took the opportunity to review its policy on sexual harassment to the remaining employees.  The plaintiff sued the hospital for libel regarding the report and for disclosing details surrounding his termination at this staff meeting.  The Court of Appeals of Ohio determined that the statements made to the plaintiff’s fellow employees did not exceed the scope of the intracorporate communication privilege and affirmed summary judgment in favor of the defendant. 

Gray v. Allison Division, General Motors Corp. is an important case that demonstrates the caveat involved with a qualified privilege.  Unlike an absolute privilege, a qualified privilege can be overcome by the showing of actual malice.  Thus, even if a defendant can prove that the communication was made within the confines of the office and concerned a common business interest, plaintiff can still prevail if there is evidence of actual malice.

In Gray, the plaintiff learned that he was being laid off from General Motors as part of a general layoff and proceeded to place raw shell casings on the conveyor belt for the rest of the day in order to sabotage the productivity of the conveyor line.  After being caught doing this, he was first suspended and then discharged.  The plaintiff’s libel and slander action in a Cuyahoga County Court followed.  The court overruled defendant’s directed verdict motion, and the jury ultimately awarded the plaintiff $100 in compensatory damages and $40,000 in punitive damages.  On appeal, the Court of Appeals of Ohio applied the qualified privilege involving intracorporate communications and held that communications between an employer and employee concerning the conduct of another employee, if made in good faith, are within the doctrine of qualified privilege.  However, the court went on to hold that a reasonable jury could have found that the defendant corporation acted with actual malice when making the communications.  As such, the Court of Appeals ultimately affirmed the jury verdict in favor of the plaintiff.

Conclusion

It is necessary to have a qualified privilege for intracorporate communications.  It is vital for employees and employers to freely discuss in good faith the actions or alleged actions of their co-workers without the fear of being sued for libel or slander in return.  Good faith is the key element to this analysis.  Although courts liberally apply the qualified privilege for intracorporate communications, the plaintiff can still prevail if there is evidence of actual malice.


Estimated Profit: Images of Concert Posters in Biography is Fair Use

By Joseph A. Tomain

Bill Graham Archives, the legacy organization of fabled rock promoter Bill Graham, sued publishers for copyright infringement based on the inclusion of seven images in a 480-page biography, Grateful Dead: The Illustrated Trip.  The Second Circuit Court of Appeals affirmed summary judgment for the publishers based on the fair use exception to the Copyright Act, Bill Graham Archives v. Dorling Kindersley Ltd., 2006 U.S. App. Lexis 11593 (2d Cir. May 9, 2006).

In October 2003, Dorling Kindersley (“DK”) published a biography on the Grateful Dead.  As suggested by the title, the book is largely pictorial, and is organized chronologically covering the 30-year history of the Grateful Dead.  Most pages are a collage of various images, graphics, and accompanying explanatory text.  Prior to publication, DK sought permission from Bill Graham Archives to use seven images of concert posters and tickets from shows at the Fillmore, but no agreement was reached.  Similarly, post-publication licensing fee negotiations did not result in an agreement.  Bill Graham Archives sued DK for copyright infringement under the U.S. Copyright Act.  DK successfully defended this suit under the fair use exception to the Copyright Act.

Under the fair use exception, courts consider four factors to determine whether use of a copyrighted material is non-infringing.  The four factors are: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for, or value of the copyrighted work.

The first factor weighed in favor of DK.  The “transformative” nature is the most important consideration when analyzing the purpose and character of the use.  Here, DK reduced the size of the images for use in its book, combined them with a timeline, text, and original artwork, and used only seven of plaintiff’s images in a 480-page book making them an inconsequential portion.  Thus, the transformative nature clearly weighed in favor of DK.  Additionally, courts often afford fair use protection to biographies using copyrighted material.

The court gave the second factor limited weight.  Typically, use of artistic images such as the concert posters weighs in favor of the copyright holder because of their creative nature.  But, the court found that this factor is of limited usefulness when the artistic images are transformed.  As discussed above, the images were transformed to enhance the biographical nature of the book.  Thus, even though the nature of the copyrighted work weighed in favor of Bill Graham Archives, the court gave this factor limited weight in light of the transformative nature of the use.

The third factor weighed in favor DK, even though the entire concert posters were reproduced.  The court noted that the reduced size of the reproductions, as well as the facts that they were scattered throughout the lengthy book and combined with other images and text made the amount and substantiality factor weigh in favor of DK.

Finally, the parties agreed that the use of the images in the book did not affect the primary market of the posters.  Bill Graham Archives argued that the use could affect its potential to develop derivative markets. The court rejected this argument, again relying on the transformative nature of the book: “A copyright holder cannot prevent others from entering fair use markets merely by developing or licensing a market for parody, news reporting, educational or other transformative uses of its own creative work.”  Thus, the fourth factor weighed in favor of DK.

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