Opinion
No. A06-1127, A06-1189.
Filed August 21, 2007.
Appeal from the District Court, Ramsey County, File No. C7-04-9920.
Patrick T. Tierney, Collins, Buckley, Sauntry Haugh, PLLP, (for respondents Tuan J. Pham, Mai Vu, and Capital Market (A06-1189)).
Michael C. Mahoney, Thomas Foster, Mahoney Foster, Ltd., (for plaintiff appellants Dean Do, Linda Vu and Tuan Pham (A06-1189)).
Thang Dinh Le, (pro se appellant (A06-1127)).
Tram Bui, (pro se appellant (A06-1127)).
Thanh Van Tran, (pro se appellant (A06-1127)).
Considered and decided by Stoneburner, Presiding Judge; Shumaker, Judge; and Dietzen, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2006).
UNPUBLISHED OPINION
In this consolidated appeal, the represented appellants challenge the denial of their post-trial motions and resulting judgment awarding respondents damages on their defamation and tortious interference with prospective advantage claims, arguing that (1) their statement that respondent is a Communist is protected free speech, and there was no evidence of actual malice; and (2) respondents failed to plead tortious interference with prospective advantage, and that the claim failed as a matter of law. The pro se appellants also challenge the award of damages on respondents' tortious interference with prospective advantage claim, arguing that the award was not supported by the evidence, and that the jury verdict was based on passion or prejudice. We affirm in part and reverse in part.
FACTS
Plaintiff-respondents Tuan Joseph Pham (respondent Pham) and Mai Vu (respondent Vu) are married and originally from Vietnam. Respondent Pham quit school at age 18 to join the army and fight against the Communists. When the Communists took control of North Vietnam, respondent Pham fled to the South and joined the South Vietnamese Army until the fall of Saigon in April 1975. He was then imprisoned by the Communist government for two years, and following his release in 1979, he began efforts to escape the country. Eventually, he organized a group of one hundred people who fled Vietnam to Indonesia. Respondents and their family then migrated to Rochester, Minnesota. In 1989, the respondents purchased a building on University Avenue in St. Paul and opened Capital Market, also a respondent in this action.
The Vietnamese Community of Minnesota (VCM) was incorporated in 1981 and represented the interests of newly-arrived Vietnamese refugees. Historically, the organization was controlled by elder members of the Vietnamese community who held high military positions in the former South Vietnamese Army. It currently represents the majority of the Vietnamese community in Minnesota.
In the late 1990's, younger members of the Vietnamese community were elected to leadership positions in the VCM. In 1998, respondent Pham's son, Alex Pham, was elected vice-president of the VCM. Respondent Pham was also actively involved in fundraising to construct the VCM's community center and acted as an advisor to its board of directors.
Unhappy with the changes in leadership, defendant-appellants Tuan Anh Pham (appellant Pham), Thang Dinh Le (Le), Linda Vu, Tram Bui, Thanh Van Tran, and others left VCM and formed a rival organization named the Vietnamese Community of Minnesota Board of Representatives (VCM-BR). The VCM-BR was incorporated in 2001, and Linda Vu became its second president.
In December 2003, respondent Pham learned that Bishop Hoang Van Tiem, the Catholic bishop for the Bui Chu diocese in Vietnam, would be visiting the United States. Respondent Pham invited Bishop Tiem to Minnesota and the bishop agreed to come, but because of existing difficulties between the Vietnamese Communist government and the Vatican, he needed to avoid any public support for South Vietnam — including being photographed or seen with the flag of South Vietnam. Respondent Pham agreed to the condition and served as Bishop Tiem's driver.
A luncheon was arranged for Bishop Tiem at a local Vietnamese restaurant, but at the last minute the location was changed to the Vietnam Community Center. Respondent Pham expressed concern to the organizer of the event that the bishop could not be seen or photographed with the South Vietnamese flag that flew over the center. The organizer promised to "take care of everything." When the bishop and respondent Pham approached by car, the bishop observed the South Vietnamese flag flying over the center. Respondent Pham went into the center and requested the flag be lowered, and the organizer complied.
Following the bishop's visit, some members of the Vietnamese community staged protests regarding the lowering of the flag. A "proclamation" was issued by a group entitled "Vietnamese Refugee Community of Minnesota," criticizing the organizer for ordering the South Vietnamese flag lowered. Appellant Le asked members of the community for information regarding any individuals involved in the bishop's visit. Appellant Dean Do provided Le with a 1999 letter (Minh letter) that his ex-wife Minh Pham, respondent Pham's daughter, wrote criticizing respondent Pham. But the letter was publicly disavowed by Minh Pham in 2000.
In January 2004, Le sent a letter to President Bush and other public officials (Bush letter), with a list of 51 "co-signatories," demanding that respondent Pham be removed from his presidential appointment as a board member of the Vietnam Educational Foundation (VEF), for "misconduct" and "moral turpitude." The Minh letter, which was attached to the Bush letter, accused respondent Pham of bribery, tax evasion, physical abuse, arson and extortion; and that he had poor character and was guilty of hypocrisy.
Later that same month, the represented appellants arranged a boycott of Capital Market, in which protestors held signs and chanted, "Down with the Vietnamese Communists," "Down with Tuan Pham," "Down with Vietnamese Nationals who acted as Communist Lackeys," and "Boycott the Thudo Market." Hundreds of flyers were circulated announcing further demonstrations and protests. The flyers and pamphlets denounced respondent Pham and others as Communists. At the boycott, protestors stated that Capital Market was a "communist fundraising enterprise," and members of the Vietnamese community were "ordered" not to shop there.
During an interview on a national Vietnamese radio station, appellant Linda Vu accused respondent Pham of being a member of a "Communist sleeper cell" in Minnesota, and that he was controlled by the Vietnamese Communist government. A proclamation dated February 2004, was circulated by appellant Le accusing him of supporting the "Ha Noi Communists" and labeling him a "Communist lackey."
Respondents commenced legal action against the 51 signatories of the Bush letter, which included the represented and pro se appellants, for defamation. During the litigation, respondents dismissed the majority of the co-signatories from the lawsuit on the ground that they had not reviewed the Bush letter before it was sent. The case proceeded with seven remaining defendants, six of whom are the subject of these consolidated appeals.
Prior to trial, the district court concluded that respondent Pham was a limited purpose public figure. At trial, respondent Pham testified that he was not a Communist, the Bush and Minh letters were false, and that appellants had defamed him and destroyed his reputation. Respondent Pham claimed that as a result of the boycott, he lost rental income of $33,000 and the gross income of his business decreased by over 50%. In August 2004, Capital Market was forced to close. Appellants testified that their statement that respondent Pham is a Communist was protected free speech and related to the lowering of the South Vietnamese flag.
Following trial, the jury returned a verdict in favor of respondent Pham for $477,000, consisting of $130,000 for past harm to reputation; $73,000 for past income loss; $150,000 for future harm to reputation; $54,000 for damage to future earnings; and $70,000 in punitive damages. The jury returned a verdict in favor of Capital Market for $216,000, consisting of $108,000 for past-income loss; $54,000 for damage to future-earning capacity; and $54,000 for intentional interference with prospective advantage. The jury awarded no damages to Mai Vu.
Appellants moved for a new trial and for amended findings. Following arguments, the district court filed its order granting appellants' motion to amend the verdict on respondent Pham's defamation claims reducing the total award to $350,000. The district court also reduced Capital Market's total award to $54,000.
The represented appellants and the pro se appellants filed separate appeals. Respondent Pham filed a notice of review. We consolidated the appeals for determination by the court.
DECISION I.
Appellants argue that the district court erred in denying their motion for amended findings and new trial regarding respondent's defamation claims. Appellants argue their statement that respondent Pham is a "Communist" is protected speech, and was not made with actual malice. Respondents argue that the district court erred in concluding that respondent Pham was a limited purpose public figure and reducing their damage awards for loss of past income and loss of future earning capacity.
We review a district court's decision to grant or deny a motion for a new trial for an abuse of discretion. Halla Nursery, Inc. v. Baumann-Furrie Co., 454 N.W.2d 905, 910 (Minn. 1990). Minn. R. Civ. P. 59.01 provides that a new trial may be granted for various reasons which include excessive or insufficient damages, errors of law occurring at the trial, and that the verdict is not justified by the evidence, or is contrary to law.
To successfully pursue a common-law defamation claim, a plaintiff must prove that the defendant made: (1) a false and defamatory statement about the plaintiff; (2) the statement was unprivileged published to a third party; and (3) the statement harmed the plaintiff's reputation in the community. Weinberger v. Maplewood Review, 668 N.W.2d 667, 673 (Minn. 2003). In 1964, the United States Supreme Court decided in New York Times Co. v. Sullivan, 376 U.S. 254, 84 S. Ct. 710, that the First Amendment to the United States Constitution limits the application of the state defamation laws. The Court recognized the need for "a federal rule that prohibits a public official from recovering damages for a defamatory falsehood relating to his official conduct unless he proves that the statement was made with `actual malice' — that is, with knowledge that it was false or with reckless disregard of whether it was false or not." Id. at 279-280, 84 S. Ct. at 726. The Court reasoned that the "actual malice" culpability requirement ensures that debate on public issues remains "uninhibited, robust, and wide-open." Id. at 270, 84 S. Ct. at 721. Three years later in Curtis Publ'g Co. v. Butts, 388 U.S. 130, 87 S. Ct. 1975 (1967), the Supreme Court determined "that the New York Times test should apply to criticism of `public figures' as well as `public officials.'" See Gertz v. Robert Welch, Inc., 418 U.S. 323, 336-337, 94 S. Ct. 2997, 3005 (1974).
The Court later determined that "in cases raising First Amendment issues . . . an appellate court has an obligation to `make an independent examination of the whole record' in order to make sure that `the judgment does not constitute a forbidden intrusion on the field of free expression.'" Bose Corp. v. Consumers Union of United States, Inc., 466 U.S. 485, 499, 104 S. Ct. 1949, 1958 (1984) (quoting New York Times, 376 U.S. at 284-86, 84 S. Ct. at 728-29). Therefore, "[t]he question whether the evidence in the record in a defamation case is sufficient to support a finding of actual malice is a question of law," which we review de novo. Harte-Hanks Commc'ns, Inc. v. Connaughton, 491 U.S. 657, 685, 109 S. Ct. 2678, 2694 (1989).
A. Opinion Statements
Appellants first argue that their allegedly defamatory statements were constitutionally protected political speech. Specifically, appellants claim that their statement that respondent Pham is a Communist was an opinion based on the fact that Pham had the flag lowered at the Vietnam Center.
Both parties rely on Milkovich v. Lorain Journal Co., 497 U.S. 1, 110 S. Ct. 2695 (1990), to support their respective arguments. In that case, Milkovich, a former high school wrestling coach, brought a defamation action against a newspaper and its reporter for publishing an article that implied that Milkovich lied under oath in a judicial proceeding. Appellants rely on the following language from Milkovich:
[W]e think Hepps stands for the proposition that a statement on matters of public concern must be provable as false before there can be liability under state defamation law. . . . Hepps ensures that a statement of opinion relating to matters of public concern which does not contain a provably false factual connotation will receive full constitutional protection.
Phila. Newspapers, Inc. v. Hepps, 475 U.S. 767, 777, 106 S. Ct. 1558, 1564 (1986) (holding that the common-law presumption that defamatory speech is false cannot stand when a plaintiff seeks damages against a media defendant for speech of public concern).
Id. at 19-20, 110 S. Ct. at 2706. But the Milkovich Court went on to conclude:
Thus, where a statement of "opinion" on a matter of public concern reasonably implies false and defamatory facts regarding public figures or officials, those individuals must show that such statements were made with knowledge of their false implications or with reckless disregard of their truth.
Id. at 20, 110 S. Ct. at 2706-07.
The Supreme Court reversed the dismissal of Milkovich's claim concluding that the connotation that he committed perjury is sufficiently factual to be susceptible of being proven true or false. In doing so, Milkovich held that a separate constitutional privilege for "opinion" was not required in addition to established safeguards regarding defamation to ensure freedom of expression guaranteed by the First Amendment. Put another way, if it is plain that the speaker is expressing a subjective view, such as an interpretation, a theory, conjecture, or surmise, rather than objectively verifiable facts, the statement is not actionable. Schlieman v. Gannett Minn. Broad., 637 N.W.2d 297, 308 (Minn.App. 2001).
In Marchant Inv. Mgmt. Co. v. St. Anthony West Neighborhood Org., Inc., 694 N.W.2d 92 (Minn.App. 2005), this court considered a defamation claim under Milkovich. We concluded that to determine whether a statement is actionable under Milkovich, consideration must be given to the broad context of the statement, the specific context and content of the statement, and whether the statement is sufficiently objective to be susceptible of being proved true or false. Id. at 96.
Generally, falsely accusing someone of collaborating or sympathizing with Communists is generally defamatory. See Gertz, 418 U.S. at 332 n. 4, 94 S. Ct. at 3003 n. 4 (stating that falsely labeling someone a "Leninist" or a "Communist-fronter" is generally considered defamatory); see also Rose v. Koch, 278 Minn. 235, 244-45, 154 N.W.2d 409, 417 (1967) (holding that a statement that plaintiff had collaborated with Communists and Communist-fronters was defamatory). In Rose, our state supremecourt noted that statements calling plaintiff a Communist collaborator and Communist-fronter were defamatory because they implied that the plaintiff collaborated with an enemy of the state during the Cold War.
Here, appellants argue that their statements went beyond respondent Pham's role in lowering the South Vietnamese flag, stating that he is a "Communist lackey" and a member of a "Communist sleeper cell" controlled by the Vietnamese communists; and that his business, Capital Market, is a "Communist fundraising enterprise." Thus, appellants' statements went beyond loose, figurative language, to specific statements that are "sufficiently factual to be proven true or false." Milkovich, 497 U.S. at 21, 110 S. Ct. at 2707. While the First Amendment protects a broad spectrum of speech, especially speech pertaining to politics and public issues, it is also true that "society has a pervasive and strong interest in preventing and redressing attacks upon reputation." Milkovich, 497 U.S. at 22, 110 S. Ct. at 2707-08 (quoting Rosenblatt v. Baer, 383 U.S. 75, 86, 86 S. Ct. 669, 676 (1966)). We conclude that appellants' statements that respondent Pham is a "Communist lackey controlled by the Vietnamese Communists" are not political speech protected by the First Amendment.
B. Actual Malice
Appellants next argue there was insufficient evidence of "actual malice" to support the jury verdict. Actual malice must be shown by clear and convincing evidence that the defendant made the statements with actual malice, that is, either knowing that they were false or with reckless disregard for whether they were true. Anderson v. Liberty Lobby, 477 U.S. 242, 257, 106 S. Ct. 2505, 2514-15 (1986). "Actual malice" can be established by evidence that the defendants engaged in "purposeful avoidance of the truth." Connaughton, 491 U.S. at 692, 109 S. Ct. at 2698.
Here, appellants admittedly had no evidence that Tuan Pham is a Communist. They argue that because lowering the South Vietnamese flag is such an outrage, it could only mean one thing — that Tuan Pham is a Communist sympathizer. But appellants failed to produce any evidence that respondent Pham is a Communist. Appellants admitted that at the time the statements were made that they knew respondent Pham's background in fighting Communism. Further, the Bush letter contained many statements that appellants admit were false and defamatory. The public retraction of the contents of the Minh letter should have alerted appellants to the letter's untruthfulness and implies a "purposeful avoidance of the truth" by appellants. See Connaughton, 491 U.S. at 692, 109 S. Ct. at 2696, 2698. Appellants statement that had Pham simply offered an apology for lowering the South Vietnamese flag that they would have ceased accusing him of conspiring with the Communists, undercuts their argument that they believed he was a Communist.
Finally, respondent Pham argues that the district court erred as a matter of law by concluding that he was a "limited purpose public figure." But at oral argument, respondent Pham conceded that his primary argument is that the statements were defamatory and were made with "actual malice." Because we agree, it is not necessary for us to address whether respondent Pham was a limited purpose public figure and, therefore, we decline to do so.
C. Damages
Respondents argue that the district court erred by granting appellants' motion to amend the special verdict and by reversing the jury's award of past income loss and loss of future earning capacity. We review the grant of a motion to amend a jury verdict for an abuse of that discretion. Damages for defamation include: (1) harm to plaintiff's reputation and standing in the community; (2) mental distress; (3) humiliation; (4) embarrassment; (5) physical disability; and (6) economic loss caused by the defamatory statement or communication. 4 Minnesota Practice, CIVJIG 50.55 (2006). A party asking for damages must prove the nature, duration, and consequences of his or her injury, and the jury may not decide damages based on speculation or guess. Canada v. McCarthy, 567 N.W.2d 496, 507 (Minn. 1997); 4A Minnesota Practice, CIVJIG 90.15 (2006).
The district court concluded that "there was no evidence presented" to show that Pham suffered a loss of either past income or future earning capacity and, therefore, reduced the jury verdict by $73,000 and $54,000, respectively. The district court found that:
The only evidence submitted as to Capital Market was the gross income that was shown on a monthly basis for the year 2003 and up until the Market was sold in 2004. There was no testimony regarding expenses, including but not limited to the cost of goods, labor costs or taxes, which would have to be subtracted from gross income. In this court's opinion, the evidence cannot reasonably sustain the allocation for past income loss or future earning capacity as it relates to Capital Market.
We agree.
No evidence was offered during trial specifying the amount of income respondent Pham received from Capital Market. While there is some evidence in the record that Pham lost rental income due to the defamatory statements, the evidence is not specific. Respondent Pham did not offer of business expenses, which is necessary to determine net income. On this record, the district court did not abuse its discretion. McCarthy, 567 N.W.2d at 507.
II.
Appellants argue that the district court erred in not dismissing respondent Capital Market's claim for tortious interference with prospective advantage on the grounds that respondents failed to plead the claim in their complaint and that the claim fails as a matter of law. Initially, appellants argue that respondent did not plead tortious interference with prospective advantage, that no amendment to the pleading was granted by the district court and, therefore, the claim must be dismissed.
Rule 15.02 allows amendments to the pleadings to conform to the evidence. See Minn. R. Civ. P. 15.02 (stating that when issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings). Consent to litigate an issue not raised in pleadings may be implied where a party does not object to evidence relating to the issue or puts in his own evidence relating to the issue. Folk v. Home Mut. Ins. Co., 336 N.W.2d 265, 267 (Minn. 1983); Shandorf v. Shandorf, 401 N.W.2d 439, 442 (Minn.App. 1987). But where evidence offered was pertinent to an issue already stated in the pleadings, the trial court may properly find that no new issue was impliedly litigated by consent. Schumann v. McGinn, 307 Minn. 446, 469, 240 N.W.2d 525, 538 (1976); Roberge v. Cambridge Coop. Creamery Co., 243 Minn. 230, 234, 67 N.W.2d 400, 403 (1954).
Capital Market presented testimony, without objection, that appellants made defamatory statements during the boycott of its business, resulting in the loss of customers and damage to its business. Respondent's claim for wrongful interference was the subject of a jury instruction and a question on the special verdict form that was presented to the jury without objection from appellant. On this record, we conclude that appellants implicitly consented to litigating the tortious interference claim. Consequently, we turn to the merits of Capital Market's claim for tortious interference with prospective advantage.
Minnesota recognizes a cause of action for interference with prospective advantage. United Wild Rice, Inc. v. Nelson, 313 N.W.2d 628, 632 (Minn. 1982); Wild v. Rarig, 302 Minn. 419, 442 n. 16, 234 N.W.2d 775, 790 n. 16 (1975). Minnesota has adopted the Restatement (Second) of Torts § 766B (1979) definition for interference with prospective advantage, which provides:
One who intentionally and improperly interferes with another's prospective contractual relation . . . is subject to liability to the other for the pecuniary harm resulting from the loss of the benefits of the relation, whether the interference consists of (a) inducing or otherwise causing a third person not to enter into or continue the prospective relation or (b) preventing the other from acquiring or continuing the prospective relation.
See United Wild Rice, 313 N.W.2d at 632-33.
Appellants argue that Capital Market's claim fails as a matter of law on the ground that it is duplicative of respondent's defamation claim. We agree. In Wild v. Rarig, the plaintiff brought a claim for breach of contract, interference with contract, and defamation. Our supreme court held, among other things, that a plaintiff's cause of action for tortious interference with prospective advantage was "essentially" part of his cause of action for defamation. 302 Minn. at 447, 234 N.W.2d at 793. The court reasoned that:
The defamation which is the means used to interfere with his business relationships action is the same defamation that Dr. Wild seeks to recover damages for under his defamation claim. It seems to us that, regardless of what the suit is labeled, the thing done to cause any damage to Dr. Wild eventually stems from and grew out of the defamation. Business interests may be impaired by false statements about the plaintiff which, because they adversely affect his reputation in the community, induce third persons not to enter into business relationships with him.
Id.
Like Rarig, Capital Market's claim of tortious interference is part of its defamation claim. Capital Market presented the same evidence, that is, the boycott of its business and the statements made by appellants at the boycott regarding its business, to support its claim for damages. Capital Market cannot recover the same damages under a tortious interference claim that it unsuccessfully sought to recover under its defamation claim. Specifically, the district concluded that there was insufficient evidence of damages to support Capital Market's claim for defamation. For the same reason, we conclude that there is insufficient evidence to support Capital Market's damage award for tortious interference with prospective advantage.
Further, Capital Market's tortious interference claim fails under our reading of NAACP v. Claiborne Hardware Co., 458 U.S. 886, 102 S. Ct. 3409 (1982). In Claiborne, white merchants who had been damaged as a result of a civil rights boycott brought a tortious-interference-with-business-relationships action against civil rights organizations and participants in the boycott. Id. at 889, 102 S. Ct. 3413. The Supreme Court reversed the lower court, holding that the boycott was constitutionally protected, and that individuals could only be held liable for damages resulting from violent activity. Claiborne concluded, among other things, that:
Civil liability may not be imposed merely because an individual belonged to a group, some members of which committed acts of violence. For liability to be imposed by reason of association alone, it is necessary to establish that the group itself possessed unlawful goals and that the individual held a specific intent to further those illegal aims.
Id. at 920, 102 S. Ct. at 3429.
In Claiborne, the purpose of the boycott was to secure compliance by both civic and business leaders with a lengthy list of demands for equality and racial justice. Id. at 889, 102 S. Ct. at 3413. We conclude that the protest against Capital Market was done for a lawful purpose. Appellants organized the boycott to encourage the public not to shop at Capital Market and to protest of respondent Pham's role in lowering the South Vietnamese flag at the community center. Their protest was political and aimed at obtaining an apology from respondent Pham and seeking his ouster from the VEF board. Thus, absent unlawful goals or any specific intent to further unlawful aims, appellants are not liable for Capital Market's business losses sustained as a result of appellants' organization of the boycott.
III.
Respondents argue that the statement of the case and statement of facts in pro se appellants' (Thang Dinh Le, Bui Tram, and Thanh van Tran) informal briefs and certain pages of the pro se appellants' appendix should be stricken from the record because they are not based on evidence introduced at trial. Generally, appellate courts cannot consider material outside the record on appeal. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988); see also Minn. R. Civ. App. P. 110.01 (defining record on appeal); see also AFSCME Council No. 14 v. Scott County, 530 N.W.2d 218, 222-23 (Minn.App. 1995) (stating that the court may selectively disregard improper references to evidence outside the record without striking the entire brief), review denied (Minn. May 16, June 14, 1995).
Here, the majority of the material cited by respondents is simply argument or references to material that can be found in the district court file. None of the material to which respondents object, is crucial to deciding the case. And we may selectively ignore the extraneous information. Therefore, we disregard discussion of extraneous events without striking large portions of appellants' pro se brief. Further, we have disregarded evidence not part of the district court record, but found in the appendix of the pro se appellants' brief.