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March 26, 1981

Milton A. RUDIN, Plaintiff,

The opinion of the court was delivered by: LASKER

Dow Jones & Company, Inc. ("Dow") is the publisher of "Barron's Business and Financial Weekly" ("Barron's"), a weekly publication containing news and information of particular interest to the business and financial community. On November 27, 1978, in its regular column "Up & Down Wall Street," Barron's commented on the purchase of stock in the Great Lakes Dredge and Dock Company by a group including Frank Sinatra, Jr., his attorney Milton Rudin and three others:

"A GAMBLING stock it isn't, But then, Great Lakes Dredge and Dock would scarcely be mistaken for a Vegas casino. As for Atlantic City, we suspect that the closest the company would come to that spa is if perchance one of its dredges were working offshore. So why would Frank Sinatra and a group of four others, including his attorney, Milton Rudin (who not long ago joined Sinatra in buying a huge stake in Del Webb and eventually gaining a board seat before disposing of their stock this year to Ramada Inns), plunk down a cool $ 2.8 million to buy 107,500 shares, or slightly over 5% of the outstanding stock, of Great Lakes?
The 13D filed with the SEC by Sinatra & Friends avers that the stock was purchased for "investment purposes.' The folks at Great Lakes Dredge can't shed any more light on the matter, either. They report that business is good, profits are at record levels and the backlog is high. But as to why old Blue Eyes et al acquired the block of stock, an executive declares, "We've no idea whatsoever.' Our efforts to reach the singer and others were to no avail. One thing we do know. Say what you want about Great Lakes Dredge, a fine old company with a respectable record, show biz it's not."

 (Barron's, November 27, 1978, p. 37).

 Rudin wrote to Barron's in response to this item on January 2, 1979. His letter was published by Barron's on January 15, 1979 in the column "Barron's Mailbag" which consists of letters to the editor. Barron's caption for the letter, appearing in printface slightly larger than the printface of the contents of the letters and in all capitals, was "SINATRA'S MOUTHPIECE." The letter was published as follows:

To the Editor:
I have finally found time to deal with trivia; I am referring to the article which appeared in the Nov. 27 issue of your publication concerning the purchase by Harvey Silbert, Frank Sinatra, Jerry Weintraub and myself of over 100,000 shares of Great Lakes Dredge & Dock Co.
Your article seems to indicate that neither Mr. Sinatra and I, nor the other individuals joining us in filing as "a group,' have a limited amount of intelligence. Obviously, you are of the view that we can only understand gambling stocks or securities of companies involved in the entertainment industry.
But it astounds me that your staff, writing for a publication that claims that it reports accurately on matters relating to investments, did not have intelligence to understand why we purchased Great Lakes. In addition to being unintelligent, they are evidently very lazy.
If your writer had examined the 13D filed with the SEC, he would have noted that initial purchases were made by Mr. Sinatra and myself at a cost basis of approximately $ 22 a share. Also, the subsequent purchases were made under $ 30 a share.
On the basis of $ 22 a share, and noting that Great Lakes paid a dividend of $ 2.50 a share in 1978, your reporter, if he completed sixth grade education, should have been able to note that we are getting a 10% return on our investment.
We bought the stock prior to the announcement that Great Lakes' earnings would be approximately $ 7 a share. Because we don't read Barron's, I guess we very stupidly invested in this stock, which at present price levels is yielding about 7% per annum and selling at a modest multiple of five times earnings.
Beverly Hills, Calif."

 On January 16, 1979 Rudin's law firm sent a telegram to Barron's stating inter alia that the caption "SINATRA'S MOUTHPIECE" was a defamatory reference to Rudin in that it impugned his professional integrity and competence. The telegram also contained a demand that Barron's print an appropriate retraction. On January 22, 1979, the "Barron's Mailbag" column began with the following editorial statement:

"Milton Rudin, an attorney who represents Frank Sinatra, has objected to our referring to him as "Sinatra's mouthpiece' in last week's Mailbag column. We meant to cast no aspersions on Mr. Rudin. ...

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