United States District Court, D. Colorado
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 ...