United States District Court, D. Colorado
January 11, 2011
BROKER'S CHOICE OF AMERICA, INC. and TYRONE M. CLARK, Plaintiffs,
NBC UNIVERSAL, INC., GENERAL ELECTRIC CO., CHRIS HANSEN, STEVEN FOX ECKERT, and MARIE THERESA AMOREBIETA, Defendants
Brokers' Choice of America, Inc., Tyrone M. Clark,
Plaintiffs: Thomas Edward Downey, Jr., LEAD ATTORNEY, Downey
& Murray, P.C., Englewood, CO; John J. Walsh, Joshua E.
Abraham, Carter Ledyard & Milburn LLP, New York, NY.
Universal, Inc., General Electric Co., Chris Hansen, Steven
Fox Eckert, Marie Theresa Amorebieta, Defendants: Hilary C.
Lane, LEAD ATTORNEY, NBC Universal Inc., New York, NY; Gayle
C. Sproul, Levine Sullivan Koch & Schulz, LLP-Philadelphia,
Philadelphia, PA; Thomas B. Kelley, Levine Sullivan Koch &
Schulz, LLP-Denver, Denver, CO.
GRANTING DEFENDANTS' MOTION TO DISMISS PLAINTIFFS'
M. ARGUELLO, United States District Judge.
matter is before the Court on Defendants' Motion to
Dismiss Amended Complaint (Doc. # 49). The case involves an
NBC Dateline program concerning questionable
practices of insurance annuity salesmen.
Broker's Choice of America, Inc. (" BCA" )
operates as an Independent Marketing Organization ("
IMO" ) in the insurance industry. (Doc. # 39 at ¶
17.) IMOs enter into agreements with insurance companies to
market their insurance products. IMOs then recruit and make
these insurance products available to independent licensed
insurance agents who, in turn, market these products to
consumers. ( Id. ) BCA was founded by Plaintiff
Tyrone M. Clark (" Clark" ). During the relevant
period, Clark was the majority owner of BCA and served as
BCA's CEO. ( Id., ¶ 18.)
NBC Universal (" NBCU" ) produced a television
report (" Report" ) broadcast on Dateline
NBC (" Dateline " ), which focused on
the predatory sales tactics used in the sale of
equity-indexed annuities (" EIAs" ) to senior
citizens. (Doc. # 49 at 9.) The Report included a segment
about training sessions for insurance agents marketed by BCA
under the name Annuity University (" AU" ). (Doc. #
39 at ¶ 20.) AU is a two-day training session BCA offers
to insurance agents on the sale of annuities. ( Id.,
¶ 24.) AU seminars are taught by Clark in Centennial,
Colorado, in a building owned by a Clark-owned company and
leased exclusively to BCA. ( Id., ¶ 21.) In
order to register with BCA for an AU seminar, participants
must be licensed insurance agents, i.e., AU seminars
are not open to the general public. ( Id., ¶
Dateline is a weekly television broadcast produced
by NBCU and broadcast on NBC affiliated television stations.
( Id., ¶ 31.) In 2007, Dateline began
an investigation into the tactics used by insurance agents
selling EIAs to senior citizens. (Doc. # 49 at 12.) Defendant
Chris Hansen headed the investigation. ( Id. ) As
part of its investigation, Dateline arranged for
volunteers in Arizona and Alabama to pose as potential
customers of insurance agents. These volunteers were equipped
with hidden cameras to record the agents' sales pitches.
(Doc. # 39, ¶ 52.) During the sales pitches, the
insurance agents failed to disclose the risks associated with
EIAs, including the substantial penalties for withdrawing the
funds before their maturity dates. ( Id., ¶
annuities are insurance products and the return on
fixed-indexed annuities is tied to various securities
indexes, the Alabama Department of Insurance ("
ALDOI" ) and the Alabama Securities Commission ("
ASC" ) were interested in regulating the sale and
marketing of fixed-indexed annuities. ( Id., ¶
47.) ALDOI and ASC formed a joint task force with the Alabama
Attorney General's Office (" AAG's office"
) with the intent to " work together in investigating
and prosecuting improper annuities sales practices." (
Id., ¶ 48.) The joint task force was named the
Alabama Annuities Task Force (" AATF" ). (
Id., ¶ 49.) The purpose of the AATF was to
" work jointly on investigations of annuity sales,
particularly as they apply to the suitability of the products
sold to Alabama consumers." ( Id., ¶ 50.)
Subsequently, AATF and Dateline investigated whether
misleading, abusive, and criminal annuity sales practices
were being conducted in Alabama. ( Id., ¶
¶ 51-52.) Dateline and the AATF officials
decided their investigation should include the training of
insurance agents in marketing annuities. ( Id.,
THE DATELINE INVESTIGATION
October of 2007, Dateline producers Steven Fox
Eckert and Marie Theresa Amorbieta registered for a two-day
session at AU held on October 25 and 26, 2007. (Doc. # 39,
¶ 58.) ALDOI issued Alabama insurance producer licenses
to Eckert and Amorebieta with the agreement that they not
sell insurance products with these licenses and that they
return the licenses immediately after surveilling and
gathering evidence about the AU class. ( Id., ¶
57.) BCA checked the licensing status of Eckert and
Amorebieta and admitted them to the BCA premises to attend
AU. ( Id., ¶ 59.) Eckert and Amorbieta attended
and recorded the classes. Some of the recorded footage was
included within the Report which aired on April 13, 2008. (
Id., ¶ ¶ 60-61, 72.)
initiated this action on March 31, 2009. (Doc. # 1.) In their
original Complaint, Plaintiffs asserted the following claims
against Defendants: defamation, trespass, fraud, intrusion,
and violation of 42 U.S.C. § 1983. On June 1, 2009,
Defendants filed a Motion to Dismiss for failure to state
claims upon which relief could be granted. (Doc. # 10.) On
October 22, 2009, the Court granted the Motion to Dismiss,
without prejudice. (Doc. # 38.) On November 20, 2009,
Plaintiffs filed an Amended Complaint and Jury Demand. (Doc.
# 39.) The primary differences between the factual
allegations in the original Complaint and those in the
Amended Complaint are that the Amended Complaint includes
statements from a sales training seminar in March 2007 (the
" March 2007 Seminar" ) and Plaintiffs'
original claims for trespass, fraud and intrusion are no
longer alleged, i.e., Plaintiffs now alleges only
two claims for relief -- defamation and violation of 42
U.S.C. § 1983. For purposes of this order, the Court
assumes, as asserted by Plaintiffs, that the March 2007
Seminar " includes discussions of the same topics
presented at all Annuity University classes," including
the October 2007 Seminar covered in the Report, and that it
" provides in substance the true context of the snippets
selected by Dateline. . . . " (Doc. # 39,
December 22, 2009, Defendants filed a Motion to Dismiss the
Amended Complaint, again asserting that Plaintiffs failed to
state claims upon which relief can be granted. (Doc. # 49.)
On January 21, 2010, Plaintiffs filed an Amended Brief in
Opposition to Defendants' Motion to Dismiss the Amended
Complaint. (Doc. # 61.) On February 5, 2010, Defendants filed
a Response to Plaintiffs' Amended Brief. (Doc. # 64.)
STANDARD OF REVIEW
reviewing the sufficiency of a complaint assumes the truth of
all well pleaded facts in the complaint, and draws all
reasonable inferences therefrom in the light most favorable
to the plaintiffs. Teigen v. Renfrow, 511 F.3d 1072,
1078 (10th Cir. 2007). In order to defeat a motion to dismiss
under Rule 12(b)(6), Plaintiffs must demonstrate that the
Amended Complaint alleges " enough facts to state a
claim to relief that is plausible on its face." Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 547, 127 S.Ct.
1955, 167 L.Ed.2d 929 (2007); see also Ashcroft
v. Iqbal, 129 S.Ct. 1937, 1960, 173 L.Ed.2d 868 (2009).
Plaintiffs need not prove their case at this point; rather,
they need only allege a plausible claim for relief. Their
" factual allegations must be enough to raise a right to
relief above the speculative level." Twombly,
550 U.S. at 555.
assert two claims in their Amended Complaint: (1) defamation,
based on clips of the October 2007 Seminar that were used out
of context; and (2) violation of 42 U.S.C. § 1983,
grounded in the theory that Dateline's
partnership with the state of Alabama transformed
Dateline into a state actor.
tort of defamation exists to redress and compensate
individuals who have suffered serious harm to their
reputations due to the careless or malicious communications
of others. Milkovich v. Lorain J. Co., 497 U.S. 1,
11, 110 S.Ct. 2695, 111 L.Ed.2d 1 (1990); Keohane v.
Stewart, 882 P.2d 1293, 1297 (Colo. 1994). A claim for
defamation requires that the plaintiff prove, by a
preponderance of the evidence, that the defendant published a
defamatory statement. If a public figure or a matter of
public concern is involved, a heightened burden applies and
plaintiff is required to prove a statement's falsity by
clear and convincing evidence rather than a preponderance.
See Philadelphia Newspapers, Inc. v. Hepps,
475 U.S. 767, 775, 106 S.Ct. 1558, 89 L.Ed.2d 783 (1986);
Smiley's Too, Inc. v. Denver Post Corp., 935
P.2d 39, 41 (Colo.App. 1996). This heightened burden requires
a plaintiff to demonstrate that the statements were made with
actual malice, i.e., with knowledge that the
statements were false or made with reckless disregard as to
their truth or falsity. New York Times v. Sullivan,
376 U.S. 254, 285-86, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964);
see also Lockett v. Garrett, 1 P.3d 206,
210 (Colo.App. 1997). Actual malice can be shown if the
defendant entertained serious doubts as to the truth of the
statement or acted with a high degree of awareness of its
probable falsity. Lewis v. McGraw-Hill Broad. Co.,
832 P.2d 1118, 1123 (Colo.App. 1992). Under Colorado law,
absolute truth is not required. Instead, a defendant need
only show substantial truth, i.e., that " the
substance, the gist, the sting of the matter is true."
Gomba v. McLaughlin, 180 Colo. 232, 236, 504 P.2d
337 (Colo. 1972).
Court previously held that the Dateline Report was
an issue of public concern. It dismissed Plaintiffs'
defamation claim because Plaintiffs failed to provide "
non-conclusory factual allegations to support their claim for
relief," and failed to allege sufficient facts
demonstrating that Clark's statements in Defendants'
Report were taken out of context and presented in a false
light. (Doc. # 38 at 3-6.)
Amended Complaint, Plaintiffs attempt to provide context for
the October 2007 Seminar by referencing statements made at a
March 2007 Seminar. Plaintiffs' new allegations
elaborate upon allegations made in the original Complaint, in
particular, that the AU seminar included information about
technical aspects of annuities, annuity regulations, and
common misunderstandings about annuities and annuity
contracts. Plaintiffs allege that the statements contained in
the preview to the broadcast or the broadcast itself are
" false characterizations."
Court considers each statement in turn:
Statement # 1.
first minutes of the program, the host made the following
Hansen: Join us in a ground-breaking hidden-camera
investigation, as we go behind the scenes to uncover the
techniques they use: inside sales meetings -- where we catch
the questionable pitches; inside training sessions-- where we
discover agents being taught to scare seniors; and finally,
inside seniors' homes to reveal the tricks some agents
use to puff their credentials to make a sale.
(Doc. # 39, ¶ 73.)
contend that Statement # 1 as presented in the context of the
Report is defamatory because it implies that Clark teaches
insurance agents to scare seniors when selling annuities.
(Doc. # 39, ¶ 74.) They explain that Clark does not
teach " scare tactics," rather, he addresses a
legitimate and important aspect of financial management for
seniors. (Doc. # 39, ¶ 75.) Plaintiffs explain that
Clark instructs insurance agents how to identify potentially
frightening or disturbing issues to determine the "
suitability of insurance products." ( Id. )
on the other hand, assert that Plaintiffs fail to offer any
factual allegations to support their assertions that Clark
does not teach scare tactics. Thus, Defendants argue
Plaintiffs have failed to show a lack of substantial truth.
admits that he tells attendees of his seminars that he raises
issues with potential purchasers that " disturb the hell
out of them" and that he " brings out the stuff
that--where they can't sleep at night." (Doc. # 39,
¶ 88.) Clark also teaches insurance agents that the
value they " bring to the table is when you disturb
them; when you uncover problems that are lurking in their
mind." (Doc. # 39, ¶ 90.) Given Plaintiffs' own
words, the Court finds that the gist of the characterization
of the seminar as teaching " scare" tactics is
substantially true. The Court finds that Plaintiffs fail to
sufficiently plead facts demonstrating the falsity of
Defendants' Report with respect to Statement # 1.
Statement # 2
next note the following Dateline voiceovers:
Hansen: We've seen some of the tactics insurance agents
use to sell seniors. The agents seem awfully slick. How did
they get so good? You are about to witness something few
people have ever seen -- a school where, authorities say,
insurance salesman are being taught questionable tools of the
Statement # 3
Hansen: These training sessions are only open to licensed
insurance agents. We don't know whether these salesman
we've met so far studied here, but the State of Alabama
agreed to help us investigate by issuing insurance licenses
to two Dateline producers, so we could attend -- and bring
along our hidden cameras.
(Doc. # 39, ¶ ¶ 78-79.)
claim that Statement # 2 implies a link between the salesmen
shown at the sting house in Alabama and AU and that Statement
# 3 omits details of an alleged collusion between
Dateline and ALDOI. (Doc. # 39, ¶ ¶
76-79.) However, Plaintiffs' allegations ignore the
express disclaimer in Statement # 3 that Dateline
did not know whether these salesman had attended AU.
regard to Statement # 3, because Defendants merely observed a
fact, namely that the State of Alabama agreed to help with
their investigation, the statement is substantially true.
Plaintiffs allege Dateline should have explained the
details of the alleged collusion with the State of Alabama,
but such an omission, the Court notes, does not render the
statement false or defamatory. Accordingly, the Court finds
that Plaintiffs fail to sufficiently plead facts
demonstrating the falsity of Defendants' Report with
respect to Statement ## 2 and 3.
Statement # 4
next note the following Dateline voiceover, combined
with hidden camera footage of Clark:
(Hidden Camera). Clark: Annuities are not liquid? That is
Hansen: This is the man in charge of 'Annuity
University' --Tyrone Clark, the self proclaimed king of
annuity sales. Annuities are legitimate investments for some
people, and Clark is a strong advocate for them. He says
they're safe and have no risk, which are selling points
especially appealing to seniors.
(Hidden camera). Clark: What I sell is peace of mind . . . .
(Doc. # 39, ¶ ¶ 80-82.)
allege that Clark's own statements from the March 2007
Seminar are not a sales technique based on deception and
scare tactics. Plaintiffs assert that Clark explains that
annuities shift the risks of short term economic volatility
from the annuity owner to the insurance company; annuities
are not subject to volatility risks in various investment
options; and consumers who do not want to risk their money
should go to a safer environment. (Doc. # 39, ¶ ¶
83-84.) Plaintiffs do not dispute that Clark stated that he
sells " peace of mind." ( Id., ¶ 84.)
Accordingly, under the doctrine of " substantial
truth," the Court finds that the gist of Dateline's
characterization that Clark associates " peace of
mind" with lack of risk in his sales seminar is
Statement # 5
next address the following description in the
Dateline program of a Massachusetts investigation
Hansen: But what else is Tyrone Clark teaching? In 2002, the
State of Massachusetts accused Clark and his companies of a
'dishonest scheme to deceive, coerce and frighten the
elderly.' Part of the evidence was the training manual in
which Clark tells agents to sell to seniors by assuming
they're selling to a 12-year-old' and by hitting
their 'fear, anger or greed buttons.' Clark settled
that case without admitting any wrongdoing. And, now, his
company says it's become 'an industry leader' in
promoting ethical conduct. But watch what our hidden cameras
found, and see if you agree. Remember those scare tactics?
( Id., ¶ 86.)
respect to Statement # 5, Plaintiffs allege that
Dateline fails to explain that Massachusetts did not
prove those allegations and that it rapidly terminated its
claim by settlement. ( Id., ¶ ¶ 86-87.)
The Court notes that Dateline expressly acknowledges
the settlement without admission of wrongdoing. As such, the
Court finds Statement # 5 to be substantially true.
Statement # 6
next point to the hidden camera comments by Clark, which were
combined with Dateline's own commentary:
(Hidden Camera). Clark: And I am bringing these things up
that disturb the hell out of them.
Hansen: For Tyrone Clark, disturbing people seems to be
Annuity Sales 101.
Clark: I bring out the stuff that -- where they can't
sleep at night.
(Doc. # 39, ¶ 88.)
contend Clark's statements are defamatory because they
were displayed out of context. Plaintiffs contend that the
context supplied by Dateline meant and was
understood by those watching the Report to mean that Clark
teaches scare tactics. ( Id., ¶ 89.) They
explain that Clark does not mislead seniors into purchasing
annuities by means of scare tactics. Rather, Clark's
statements from the March 2007 Seminar describe how a "
good agent" makes prospective clients aware of problems
by uncovering issues they will regard as important but have
not considered, or have not realized. ( Id., ¶
assert that Plaintiffs' allegations confirm that
Clark's goal is to teach agents scare tactics and, thus,
the Report with regard to this statement is substantially
true. (Doc. # 49 at 32.) As discussed above with regard to
Statement # 1, Clark admits that he raises issues that "
disturb the hell out of them," and that he "
bring[s] out the stuff that -- where they can't sleep at
night." (Doc. # 39, ¶ 88.) Clark also urges his
attendees to prey on the concerns seniors may have about
losing their money to nursing homes. Clark states, "
[t]he value you bring to the table is when you disturb them;
when you uncover problems that are lurking in their
mind." ( Id., ¶ 90.) Accordingly, the
Court finds the gist of the characterization in Statement # 6
that Clark teaches " scare tactics" to be
Statement # 7
next allegedly defamatory statement cited by Plaintiffs is a
Dateline voiceover, followed by another clip of
Hansen: And how do you make them worry? One way is to suggest
their money may not be safe, even in a bank, by telling a
potential client something like this.
Clark: FDIC is insolvent. FDIC only has $1.37 per every $100
(Doc. # 39, ¶ 92.)
allege this is defamatory because " [a]t no point in his
discussion of bank accounts and FDIC insurance did Clark
instruct attendees to state that their customer's
'money may not be safe even in a bank.'" (
Id., ¶ 94.) Plaintiffs explain that Clark's
words about the FDIC were merely an observation on the state
of the federal insurance deposit fund and were meant to
contrast the reserve requirements of the FDIC. (
Id., ¶ 99.) In support of their allegations,
Plaintiffs offer statements made by the chairman of the FDIC
in March 2009, and a Wall Street Journal report about the
solvency of the FDIC. ( Id., ¶ 95.)
assert that Plaintiffs offer no new allegations that alter
the plain meaning of Clark's statement that the FDIC is
insolvent. (Doc. # 49 at 33.)
Court finds the statements offered by Plaintiffs relay facts
about the impact of the financial crisis on the FDIC, and do
not alter the substantial truth of Dateline's
Report. The Dateline Report shows that Clark
questions the solvency of banks by stating the FDIC is
insolvent. Furthermore, Clark instructs agents to contrast
the solvency of banks and the FDIC to the security of the
insurance industry in order to raise doubts in seniors'
minds about whether their money is safe in a bank. (Doc. #
39, ¶ 96.) Thus, the gist of the characterization of
Statement # 7 is substantially true.
Statement # 8
next statement cited by Plaintiffs is another Dateline
voiceover followed by a clip of Clark:
Hansen: Another way is to mention a senior's natural fear
of nursing homes.
(Hidden Camera). Clark: I help my clients to protect their
life savings from the nursing home and Medicaid seizure of
their assets. See, that is scary, and it should be scary.
( Id., ¶ 100.)
contend that Statement # 8 is defamatory because Clark does
not teach agents to prey on seniors' " natural fear
of nursing homes." Plaintiffs explain that Clark
discusses the financial implications of nursing homes, a
discussion which helps seniors effectively plan their
finances. ( Id., ¶ ¶ 102-103.) They
contend that mere mentioning of senior financial planning
cannot be considered a " scare tactic" and, thus,
this statement is defamatory. ( Id. )
assert that the allegations do not render false the statement
in the Report that Clark " mentions senior's natural
fear of nursing homes." The Court agrees. Clark
expressly states that the loss of life savings and Medicaid
seizures are " scary" and " should be
scary." Accordingly, the Court finds Statement # 8 is
Statement # 9
next reference a series of voiceover and hidden camera
combination clips featuring Clark and Attorney General Lori
Hansen: The next step? Promise people easy access to their
money. Even though, with some exceptions, annuities lock up
most of your money for a specified number of years, listen to
the sales pitch Tyrone Clark suggests . . . .
Statement # 10
Hansen: We ask Minnesota Attorney General Lori Swanson to
watch what our hidden cameras had captured.
Hansen: How would you characterize what this man has said?
Lori Swanson: I think that he is not telling the truth when
he tells those agents that an annuity is the most liquid
place a senior citizen can put their money. It is simply not
(Doc. # 39, ¶ ¶ 105-106.)
advance four theories regarding how these statements were
defamatory. First, Plaintiffs allege the statements made by
Dateline and Attorney General Swanson are false and
taken out of context with Clark's statement. (
Id., ¶ ¶ 105-107.) Second, Plaintiffs
allege that Dateline does not explain how much of
the hidden camera footage Attorney General Swanson had
watched. ( Id., ¶ 106.) Third, they allege that
Clark does not actually say that an annuity is " the
most liquid place a senior citizen can put their money."
(Doc. # 39, ¶ 107.) Fourth, they allege that Clark
advises attendees that annuities are not a proper financial
strategy for people who want to routinely withdraw funds. (
Id., ¶ 108.)
assert that Clark meant that annuity products are not a
proper financial strategy for people who want continual
access to their funds, that a bank or a money market would be
a more suitable place to hold funds, and that funds in
annuities have more options for accessing money than other
financial instruments. ( Id., ¶ 110.)
argue Plaintiffs' explanation does not alter the plain
meaning of Clark's statement that there are more choices
to access money from an annuity than from any other financial
instrument. (Doc. # 49 at 36.) Clark's statement from the
March 2007 Seminar, " when it truly comes to liquidity
options take any other financial instrument . . . . we have
more ways to access the money than any other financial
instrument," supports Attorney General Swanson's
statements that Clark tells insurance agents that an annuity
is the most liquid place a senior can put their money. (Doc.
# 39, ¶ 109.) Like Dateline's other
characterizations of Clark's own words, the Court finds
the characterization of Statement ## 9 & 10 to be
Statement # 11
next reference a segment of the Report describing a book
titled " Alligator Proofing Your Estate" marketed
Hansen: At Annuity University, this ad says you can be the
author of a book called 'Alligator Proofing Your
Estate.' Apparently, agents like the idea of pretending
to be authors, because Dateline found copies of the
same 'Alligator' book supposedly co-written by
Jeffrey D. Lazarus, Steven Delott, and Ronald and Robert
(Doc. # 39, ¶ 111.)
allege this statement is defamatory because at no point do
insurance agents pretend to be authors of the "
Alligator book." ( Id. at ¶ 111.)
Plaintiffs explain that an agent did, in fact, author a
personal chapter of the book, while the rest of the
book's chapters were written by an expert. ( Id.
) They also contend that Clark does not teach attendees of
the AU seminar to represent themselves as authors of portions
of books they have not written. ( Id. at ¶
113.) Rather, Plaintiffs contend that Clark instructs agents
to build their credibility by " joining organizations,
speaking in churches and writing articles" and that they
" start their own late-night radio broadcast discussing
financial planning to further establish local
credibility." ( Id. )
it is undisputed that Defendants correctly identified several
agents listed separately as co-authors of the same book.
Thus, the Court finds the gist of Statement # 11 to be
next point to two statements made in the preview to
Dateline's Report, which was aired on NBC's
Today Show. First, Plaintiffs' argue the
Dateline voiceover, " Are some agents being
coached on how to mislead people when they sell
annuities?" was defamatory. (Doc. # 39, ¶ ¶
67.) The voiceover aired while showing images of Clark
speaking at the October 2007 Seminar. ( Id. )
allege this is defamatory because Clark does not teach
insurance agents at the seminars scare tactics; rather, he
teaches insurance agents how to be honest with prospective
clients. (Doc. # 39, ¶ ¶ 69-70.) Plaintiffs explain
that a central theme at Clark's seminars is that
insurance agents should always be honest with prospective
clients because honesty attracts customers and establishes
trust. ( Id. )
as discussed above, given many of the statements Clark
undisputedly made at the October 2007 Seminar and the March
2007 Seminar, the Court finds that the rhetorical question
posed by Dateline, to the extent it suggests Clark
coaches agents how to mislead people, is substantially true.
Plaintiffs contend that the preview displayed a picture of
the " Alligator Proofing Your Estate" book, in
which the voiceover claimed the book was marketed at AU, and
claimed that, for a fee, a salesman could be listed as the
exclusive author of the ghost-written book. ( Id.,
allege this is defamatory because the edition of the book
displayed has not been marketed at AU for more than five
years, was co-authored by a named qualified estate planning
expert along with an agent, and is not " ghost
written." ( Id. )
Court finds that the way the book is presented, as conveyed
in the Dateline preview, suggests that insurance
agents had much more involvement than they actually had in
writing the book. The Court concludes the gist of the
preview's characterization of the book as a marketing
device that misleadingly bolsters an agent's credibility
is substantially true.
the Court finds that Plaintiffs have failed to meet their
burden to plead facts, rather than conclusions, that show
that the Dateline Report placed the at-issue
excerpts in a false light.
CLAIM FOR VIOLATION OF 42 U.S.C. § 1983
also allege their constitutional rights were violated and
seek damages pursuant to 42 U.S.C. § 1983. Plaintiffs
allege Defendants, acting under the " color of state
law" by virtue of their alleged interactions with the
State of Alabama, violated Plaintiffs' rights under the
Fourth and Fourteenth Amendments to the Constitution,
including a violation of their right to be free from
unreasonable search and seizures, invasion of their right to
privacy and a claim for stigmatization. To state a claim
under 42 U.S.C. § 1983, a plaintiff must allege: (1) the
deprivation of rights by the exercise of some right or
privilege created by the state or by a rule of conduct
imposed by the state or by a person for whom the state is
responsible and; (2) the party charged with the deprivation
must be a person who may fairly be said to be a state actor.
Johnson v. Rodrigues, 293 F.3d 1196, 1202 (10th Cir.
2002) (quoting Lugar v. Edmondson Oil Co., Inc., 457
U.S. 922, 937, 102 S.Ct. 2744, 73 L.Ed.2d 482 (1982)).
Defendants are private parties, Plaintiffs contend the facts
of this case support a finding that Defendants were state
actors. In order to find that a private party is a "
state actor" for purposes of invoking the application of
42 U.S.C. § 1983, the facts must indicate that "
the state is responsible for the specific conduct of which
the plaintiff complains" and substantial involvement
between the state and private officials in carrying out the
deprivation of plaintiff's constitutional rights.
Brentwood Acad. v. Tenn. Secondary Sch. Athletic
Ass'n, 531 U.S. 288, 295, 121 S.Ct. 924, 148 L.Ed.2d
807 (2001); Berger v. Hanlon, 129 F.3d 505 (9th Cir.
1997), vacated and remanded by, 526 U.S. 808, 119
S.Ct. 1706, 143 L.Ed.2d 978 (1999), judgment reinstated
by 188 F.3d 1155 (9th Cir. 1999).
entity will not be considered a state actor unless there are
sufficient facts to demonstrate joint action and a shared
purpose between state authorities and the media entity.
Anderson v. Suiters, 499 F.3d 1228, 1234 (10th Cir.
2007). In Anderson, the plaintiff filed a §
1983 action against a television reporter, a company owned
television station, and a police officer (the " media
defendants" ) for violation of her constitutional right
to privacy. The plaintiff alleged her estranged husband raped
and videotaped her while she was unconscious. Id. at
1231. The plaintiff gave the videotape to a police officer
with the agreement that the tape would remain confidential
and be used only for law enforcement purposes. Id.
The police officer then authorized the media defendants to
record and display the videotape's contents on the air,
solely for the purposes of showing a " head shot"
of the husband. The plaintiff alleged that the police officer
called her on the telephone, on behalf of the media
defendants, to encourage her to speak with the media
defendants. Id. The police officer then put the
television reporter on the telephone to speak with the
plaintiff. The plaintiff further alleged that the media
defendants then aired more of the videotape than originally
authorized by the police officer. Id. at 1233. She
alleged a working relationship between the media defendants
and the police officer, such that the media defendants were
Tenth Circuit rejected the plaintiff's argument that the
media defendants were state actors. Id. The court
held that the plaintiff failed to show facts that
demonstrated a shared purpose by the police officer and the
media defendants that violated plaintiff's constitutional
rights. Id. In evaluating the complaint, the court
stated that " [a]t most, the parties had their own
separate goals: [the police officer] wanted to appear on
camera, and the media defendants wanted exclusive access to
the investigation." Id. It further noted that,
according to the complaint, the television station, and not
the police officer " retained editorial control over the
use of the videotape." Id.
instant case, Plaintiffs assert that the best evidence
demonstrating joint action under the " color of state
law" between the Defendants and the State of Alabama is
the actual agreements signed by Eckert, Amorebieta and ALDOI.
(Doc. # 61 at 28.) The signed agreements demonstrate that
Eckert and Amorbieta received insurance licenses from the
State of Alabama for the purposes of an investigation with
clear instruction that the licenses be returned at the
conclusion of the investigation. (Doc. # 39-4.) Plaintiffs
allege that the State of Alabama sponsored the
Defendants' unlawful actions in a series of coordinated
activity. (Doc. # 39, ¶ ¶ 131-132.) They also
allege Leon Capuano, an Alabama attorney, posed as a
potential customer at the Alabama sting house and was a
social acquaintance of Joseph Borg, Director of the ASC. (
Id., ¶ 52.) Plaintiffs allege Joseph Borg's
recommendation that Leon Capuano pose as " a
volunteer" at the Alabama sting house further supports
their claim of unlawful state action. ( Id. )
it is undisputed that, without the insurance licenses issued
to Defendants by ALDOI, Defendants would not have been
allowed to attend the October 2007 Seminar, it is also
undisputed that Alabama state officers did not attend or
record the October 2007 Seminar. The written agreements do
not show a joint relationship between the State of Alabama
and the Defendants. In fact, the written agreements between
Eckert and Amorbieta and ALDOI consist of only the following
[Defendant] has received a Producer License from the State
Department of Insurance to be used solely for the purpose of
an investigation. It is the understanding and agreement of
[Defendant] that [he/she] will immediately relinquish this
license when the investigation is concluded.
(Doc. # 39-4.)
purported relationship between Capuano and Borg does not
demonstrate that state officials were involved in the
production of the Report. Similar to the defendants in
Anderson, the Defendants in the instant case and
ALDOI had " their own separate goals" :
Dateline's goal was to obtain footage for use in
its Report and Alabama authorities hoped to learn more about
predatory practices toward seniors. (Doc. # 39, ¶ ¶
47-51.) Moreover, Plaintiffs do not allege that the Alabama
authorities had editorial control over the use of the
material recorded by Defendants at the October 2007 Seminar
or that it had any authority over the content aired in
Dateline's Report. Even assuming the truth of
Plaintiff's allegations, the Alabama authorities and
Dateline did not engage in behavior that would be
considered to be joint action in the production and airing of
the Report. Further, there is no allegation that the
Defendants did anything at the command of the Alabama
authorities that they would not have done in the ordinary
course of their own reporting. Cf., Berger v.
Hanlon, 129 F.3d 505 (9th Cir. 1997), vacated and
remanded by, 526 U.S. 808, 119 S.Ct. 1706, 143 L.Ed.2d
978 (1999), judgment reinstated by 188 F.3d 1155
(9th Cir. 1999) (media defendants were " state
actors" when they participated with federal officers in
the execution of a search warrant " and executed the
search in a manner designed to enhance its entertainment,
rather that its law enforcement value." Government
officers also had control over the extent of footage the
media defendants broadcasted and the officers were "
joint participants" in shaping the contents of
defendant's broadcast.); and Frederick v. The
Biography Channel, 683 F.Supp.2d 798, 801 (N.D.Ill.
2010) (media film crew had a formal contractual agreement
linking the media defendants to the city. City's police
department took a proactive role in ensuring plaintiff was
made available to a film crew during and after her arrest.)
The Court finds that Plaintiffs have failed to allege
sufficient facts showing state action on the part of these
private party Defendants.
have failed to allege facts demonstrating that the State of
Alabama and Defendants were joint participants in creating
the broadcast Report. The issuance of insurance licenses by
the State of Alabama which enabled Defendants to gain access
into the October 2007 Seminar is insufficient proof to
sustain a claim of state action, pursuant to 42 U.S.C. §
1983, against these non-governmental defendants.
WHETHER THE COURT SHOULD DISMISS WITH OR WITHOUT
summarize, then, Plaintiffs' Amended Complaint fails to
state plausible claims under Federal Rule of Civil Procedure
12(b)(6). Accordingly, it must be dismissed. The question is
whether to dismiss with or without prejudice. Given the
extensive allegations in the Amended Complaint, the Court
finds it would be futile to allow Plaintiffs another
opportunity to plead claims of either defamation or violation
of § 1983. Another complaint, for example, would not
alter the Court's conclusion that the statements
contained in the Report are substantially true. Accordingly,
the Court finds it appropriate to dismiss with prejudice.
See Brereton v. Bountiful City Corp., 434
F.3d 1213, 1219 (10th Cir. 2006) (" A dismissal with
prejudice is appropriate where a complaint fails to state a
claim under Rule 12(b)(6) and granting leave to amend would
be futile." ) (citing Grossman v. Novell, Inc.,
120 F.3d 1112, 1126 (10th Cir. 1997)).
Court finds that Defendants' broadcast was substantially
true and, thus, was not a defamatory portrayal of the
at-issue statements. Thus, Plaintiffs' defamation claim
fails. Plaintiffs' § 1983 claim fails because they
have not adequately alleged that Defendants were state
actors. Accordingly, it is ORDERED that:
o Defendants' Motion to Dismiss Amended Complaint (Doc. #
49) is GRANTED.
o This case is DISMISSED WITH PREJUDICE.
The description/background of this case is
derived from Plaintiffs' Amended Complaint (Doc. # 39)
and Defendants' Motion to Dismiss (Doc. # 49).
The Court recognizes Plaintiffs have not
been afforded an opportunity through discovery to obtain a
copy of Defendants' camera footage of the October 2007
Seminar statements. However, the Amended Complaint quotes
Clark's statements from the March 2007 Seminar.
Plaintiffs allege the statements from the March 2007 Seminar
are substantially the same statements Clark would have made
in the October 2007 Seminar and provide the true context of
Clark's October statements featured in Defendants'
Report. For purposes of this Order, the Court assumes that
the statements made in the March 2007 Seminar are
substantially the same as those made in the October 2007
Seminar. (Doc. # 39, ¶ 65.)
" Every person who, under color of any
statute, ordinance, regulation, custom, or usage, of any
State . . . . subjects, or causes to be subjected, any
citizen of the United States or other person within the
jurisdiction thereof to the deprivation of any rights,
privileges, or immunities secured by the Constitution and
laws, shall be liable to the party injured in an action at
law, suit in equity, or other proper proceeding for redress .
. . ." 42 U.S.C. § 1983.