Appeal and cross-appeal from a final judgment of the United States District Court for the Southern District of New York, Charles L. Brieant, Judge, holding defendant Prentice-Hall, Inc. liable for breach of contract and dismissing plaintiff's claim against defendant E.I. DuPont de Nemours & Co., Inc.
Waterman, Pierce and Winter, Circuit Judges. Waterman, Pierce, Circuit Judges, concurring.
Prentice-Hall, Inc. ("P-H") appeals from a judgment entered after a bench trial before Judge Brieant ordering it to pay damages of $24,250 plus pre-judgment interest to the plaintiff, Gerard Colby Zilg, for breach of contract. Zilg cross-appeals the judgment in favor of E.I. DuPont de Nemours & Co., Inc. ("DuPont Company") on his claim of tortious interference with contract. We reverse as to Zilg's breach of contract claim against P-H and affirm the judgment in favor of the DuPont Company.
Gerard Colby Zilg is the author of DuPont: Behind the Nylon Curtain, an historical account of the role of the DuPont family in American social, political and economic affairs. Early in 1972, after one partially successful and several unsuccessful efforts to find a publisher for his proposed book, Zilg's agent introduced him to Bram Cavin, a senior editor in P-H's Trade Book Division. Cavin expressed interest in the book, and he and Zilg submitted a formal proposal to John Kirk, P-H's Editor-in-Chief at that time. Kirk approved the proposal, which described the future book as
a thoroughly documented study of the major role the DuPont family has played in the development of modern America and its corporate and social institutions. After skimming lightly over the family's origins in France and its development of its gunpowder business up to and through the Civil War, the book will concentrate on the period after that conflict right down to the present day. The story -- essentially one of money and power -- is going to be told in human terms and in the lives of the members of the family and their actions. The family will be looked upon as a unit in its relations to the outside world. But it will also be shown to be, as many families frequently are, one torn by feuds and struggles over the money and the power.
As it passed through the editorial and corporate hierarchy, the proposal received a notation from P-H's publicity director that the book's potential for radio and television coverage was "slight to non-existent unless matter in [the] book is highly controversial and print [media] says so first."
P-H and Zilg executed a form contract which provided in relevant part:
3. The manuscript . . . will be delivered . . . by the AUTHOR to the PUBLISHER in final form and content acceptable to the PUBLISHER. . . .
4. When the manuscript has been accepted and approved for publication by the PUBLISHER . . . it will be published at the PUBLISHER'S own expense. . . .
12. The PUBLISHER shall have the right: (1) to publish the work in such style as it deems best suited to the sale of the work; (2) to fix or alter the prices at which the work shall be sold; (3) to determine the method and means of advertising, publicizing, and selling the work, the number and destination of free copies, and all other publishing details, including the number of copies to be printed, if from plates or type or by other process, date of publishing, form, style, size, type, paper to be used, and like details.
Zilg submitted the first half of his completed manuscript to Cavin in November, 1972, and the remainder a year later. Cavin authorized acceptance of the work on behalf of P-H, apparently without the participation of Peter Grenquist, who had become president of P-H's Trade Book Division sometime after execution of the contract but before submission of the manuscript. P-H's legal division scrutinized the manuscript for libelous content and concluded that, if a libel action were brought, P-H "would ultimately prevail" because the subject matter of the work was constitutionally privileged and the plaintiffs would have to prove actual malice. The division's opinion noted, however, that litigation against the DuPonts would be very costly.
A decision was made to accept the manuscript which was distributed to selected wholesalers, reviewers, and booksellers. Copies were also sent to the editorial director of the Book of the Month Club ("BOMC"). Although BOMC decided not to offer the book as a selection of its main club, a subsidiary, the Fortune Book Club, which appealed to a readership composed largely of business executives, did choose it as a selection.
A committee of various P-H department representatives, including the book's editor, met on March 28, 1974 to discuss production plans. The sales estimates of committee members varied from 12 to 15 thousand copies for the first year although by May two members were predicting sales of only 10 thousand. Estimates of from 15 to 20 thousand sales over a five year period were also made. Cavin, an ardent supporter of the book, made estimates of 20 to 25 thousand in the first year and 25 to 35 thousand over five years. The committee decided on a first printing of 15,000 copies at a retail price of $12.95 per copy. At a later meeting, the committee decided to devote roughly $15,000 to advertising.
Although the literary or scholarly merits of the book are not our concern, its nature, tone and marketability among various audiences are key facts in this litigation, for they bear upon the book's prospects for commercial success and illuminate the negative reactions which later set in at P-H. The book is a harshly critical portrait of the DuPont family and their role in American social, political and economic history. Indeed, it is a harshly critical portrait of that history itself. The reactions of readers and reviewers in the record indicate that the book is polarizing, the difference in viewpoint depending in no small measure upon the politics of the beholder. A significant number of readers regard the book as a strident caricature, drawing every conceivable inference against the DuPont family and firms with which members of the family were or are associated. One judge at BOMC, for example, described it as "300,000 words of pure spite." On the other hand, the book has a loyal band of admirers. It received a favorable review in many newspapers, including the New York Times Book Review section. Its comprehensiveness and the extensive research on which it was based were frequently noted. The book also has some appeal to another audience, namely readers with a taste for gossip about the rich and powerful, particularly readers in Delaware. Indeed, it was once first in non-fiction sales in that state.
In the American market, the book's appeal is somewhat limited by the fact that it is not a work critical of business on grounds that reform of capitalism is necessary in order to save it, a viewpoint with mainstream appeal. Rather, it presents a Marxist view of history. Also weighing against its overall marketability were its size (586 pages of text, 2 inches thick, three and one-half pounds), complexity (almost 200 family members with the surname DuPont and 170 years of American history) and price ($12.95 in 1974 dollars).
Prior to June, 1974, Grenquist appears not to have been aware of the nature and tone of the book, of the intensity of negative feeling it might arouse in some readers or of evidence of serious inaccuracies. He may have been reassured partly by Cavin's enthusiasm and partly by the book's selection by the Fortune Book Club. That selection itself remains something of a mystery since the Club's inside reader concluded it was "a bad book, politically crude and cheaply journalistic." However, instead of accepting his recommendation that it "be fed back to the author page by page," BOMC contracted with P-H to have it adopted by the Fortune Book Club.
In June, 1974, a chain of events was set in motion which apprised Grenquist of the negative aspects of Zilg's work. A member of the DuPont family obtained an advance copy of the manuscript from a bookseller and, predictably outraged, turned it over to the Public Affairs Department of the DuPont Company. Members of that department sought to locate individuals in P-H's management whom they knew personally in order to speak privately about the book, but to no avail. They advised the family member to do nothing before the book was published.
In July, the DuPont Company learned that the book had been accepted as a Fortune Book Club selection and decided to act before publication anyway. Harold Brown of DuPont ("DuPont-Brown") telephoned Vilma Bergane, a manager of Fortune Book Club, having received her name from the managing editor of Fortune Magazine. He told her that the book had been read by several persons, some of whom were attorneys, and that the book was "scurrilous" and "actionable." Bergane passed on a version of DuPont-Brown's remarks to F. Harry Brown, Editor-in-Chief of BOMC ("BOMC-Brown"). DuPont-Brown then told BOMC-Brown that DuPont family attorneys found the book abusive and that he was to try to locate someone at P-H with whom to discuss the book. He also told BOMC-Brown that the DuPont Company did not intend to throw its weight around. BOMC-Brown referred DuPont-Brown to Peter Grenquist at P-H.
Some days later, apparently in an effort to quash rumors or inaccurate messages to the contrary, DuPont-Brown phoned Grenquist to assure him that DuPont was not attempting to block publication of the book, initiate litigation, or even approach P-H in any kind of adversarial posture. One such rumor, allegedly passed on to Cavin by an editor at BOMC who does not remember the conversation, was that DuPont had gone to Fortune Magazine and threatened to pull all its advertising. Fortune, owned by Time, Inc., had no connection with the Fortune Book Club at this time.
Meanwhile, BOMC-Brown decided to look into the matter personally. Over the July 27-28 weekend, he "spent a horrible two days reading" the book and decided it was an unsuitable selection for the Fortune Book Club. He later stated he felt no pressure from the DuPont Company in reaching this decision. In view of the nature of the book and the Club's audience of business executives, his decision seems an inevitable result of his reading the book. BOMC immediately notified P-H of its decision not to distribute the book. The reason given was BOMC's belief that the book was malicious and had an objectionable tone.
P-H's own detailed examination of the manuscript may also have introduced or heightened skepticism on Grenquist's part. A toning down was found to be necessary even after the book was in page proof. Mistakes of fact, such as a statement that Irving S. Shapiro (DuPont's Chief Executive Officer) had served as an Assistant District Attorney in Queens County, New York, were discovered. More serious matters also came to light. The original manuscript attacked Judge Harold R. Medina for matters irrelevant to the DuPonts and in a fashion which the district court characterized as libelous. Zilg admitted at trial that there was no factual foundation for this attack. Some eyebrows at P-H may well have been raised when this passage was discovered and deleted, since it was not only unfounded but also irrelevant.
P-H continued to correct and tone down the book, hoping to reverse BOMC's decision not to offer it through the Fortune Book Club. A certain defensiveness also began to creep into P-H's attitude toward the book. On August 2, Grenquist circulated a memorandum which noted that questions had arisen regarding both the tone of the book and Zilg's approach and recommended that the adjective "polemical" henceforth be used because "the book is a polemical argument and no pretense is made that it is anything else." More importantly, he also cut the first printing from 15,000 ...