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August 19, 1985


The opinion of the court was delivered by: SWEET


Defendants Larry C. Flynt ("Flynt"), Hustler Magazine, Inc. ("Hustler") and Flynt Distributing Company, Inc. ("FDC") have moved once again for summary judgment under Fed.R.Civ.P. 56(b) dismissing the libel claims of plaintiff Robert C. Guccione ("Guccione"). Flynt has also moved to dismiss under Fed.R.Civ.P. 12(b) for lack of personal jurisdiction. For the reasons discussed below, the motions are denied.

This libel action has been the subject of the prior opinions of the court of April 27 and June 1, 1984 and February 1, 1985, familiarity with which is assumed. The complaint arises out of an article entitled "What a Ham" published in the November 1983 issue of Hustler about Guccione (the "Article"), the text of which is reprinted in the court's opinion of June 1, 1984. At issue is the phrase "[c]onsidering that he is married and also has a live-in girlfriend, Kathy Keeton . . . ." Guccione maintains that he was divorced before the Article was published and that consequently the statement is false and libelous, since it accuses him of the crime of adultery.

 The defendants now move for summary judgment on grounds presented to the court before, namely that Guccione has failed to create a triable issue on the question of actual malice and that the statement does not constitute libel because it is substantially true. In addition, Flynt once again moves to dismiss for lack of personal jurisdiction.

 The June 1, 1984 opinion, concluded that despite the lack of direct evidence as to the state of Hustler's knowledge concerning Guccione's marital status at the time of the publication of the Article, "sufficient facts. . . . have been adduced to create a triable factual issue on the question of malice." The facts which created a triable issue as to malice consisted of evidence of longstanding animosity between the parties, prior examples of derogatory comments about Guccione in Hustler, and evidence presented in earlier litigation between the parties to the effect that Guccione was divorced from his father wife.

 Now that discovery has been completed, the defendants assert that Guccione has not been able to present any evidence which raises a genuine issue of fact which would entitle them to place the case before a jury, and that as a matter of law he will be unable to meet his burden of proving by clear and convincing evidence that the Article was published with actual malice. In response, Guccione contends that the discovery that has taken place during the past year has not altered the facts in any manner that would affect the prior conclusion.

 Although the intervening discovery has still failed to produce any direct evidence of actual malice, the circumstantial evidence discussed above is sufficient to create a triable issue for the jury as to the existence of actual malice. In Yiamouyiannis v. Consumers U. of United States, 619 F.2d 932 (2d Cir. 1980), the Second Circuit set out the standards to be applied by trial courts in evaluating a motion for summary judgment on the "actual malice" issue:

In a case where the defendant has moved for summary judgment on the issue of actual malice and the plaintiff claims that there remain material factual disputes, the court decides the materiality of the disputed facts by accepting the plaintiff's version and analyzing the actual malice standard. The standard requires a clear and convincing showing, which may be by circumstantial evidence, of defendant's actual state of mind - either subjective awareness of probable falsity or actual intent to publish falsely. Therefore, a judge in denying a defendant's summary judgment motion must conclude that, based on the evidence asserted in the plaintiff's affidavits, "a reasonable jury could find malice with convincing clarity." Nader v. de Toledano, [408 A.2d 31, 49 (D.C. 1979)] (emphasis in original).

 619 F.2d at 940. See also Herbert v. Lando, 596 F. Supp. 1178, 1188 (S.D.N.Y. 1984). In the case at hand, the circumstantial evidence submitted by Guccione as to the testimony in the earlier trial about the divorce, the state of relations existing between the parties, and the degree of investigation undertaken by the defendants, merit submission to the jury of the issue of whether or not the Article was published with actual malice. Although each of these factors might not be sufficient in itself to establish the existence of actual malice, see, e.g., Hotchner v. Castillo-Pyche, 551 F.2d 910, 914 (2d Cir. 1977) (evidence of animosity does not by itself prove actual malice); St. Amant v. Thompson, 390 U.S. 727, 733, 20 L. Ed. 2d 262, 88 S. Ct. 1323 (1968) ("Failure to investigate does not in itself establish bad faith.") and the degree to which evidence of ill will is at all relevant to the issue of actual malice remains unclear, see, e.g., Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 52 n.18, 29 L. Ed. 2d 296, 91 S. Ct. 1811 (1971), taken together the proffer is enough to require denial of the motion for summary judgment without prejudice to a contrary determination after the evidence has been adduced.

 The defendants also contend that they are entitled to summary judgment on the grounds that the Article is substantially true, an argument that was specifically rejected in the June 1, 1984 opinion. They have failed to present any evidence which would justify altering this prior conclusion. As to the argument that the argument that the Article is constitutionally protected opinion because it was an editorial commentary, the mere fact that the statement in issue was made in the context of an editorial does not shield the author from liability. See Cianci v. New York Times Publishing Co., 639 F.2d 54, 61 (2d Cir. 1980). The statement is one of fact, not of opinion, despite its inclusion in an article laden with the author's opinion.

 FDC has moved for summary judgment on the grounds that Guccione has failed to present evidence that it had knowledge of the Article prior to its publication and that it acted with actual malice in distributing the Article. In support, FDC has presented uncontested affidavits from FDC officials denying any knowledge of the Article and has presented evidence of its business practices that it claims shows that it would be impossible for a national distributor to have prepublication knowledge of what is contained in the periodicals it distributes. Guccione contends, however, that the knowledge of various FDC officials and the usual business practices of distributors is irrelevant in this case because Flynt himself had prepublication awareness of and involvement in the Article and Flynt is a high level employee of FDC.

 Although FDC and Flynt claim that Flynt was not an officer or director of FDC in November 1983, Guccione claims that Flynt was president of FDC at the time the Article was written and there is at the very least an issue of fact as to his position with FDC at the time the issue was published. In support, Guccione relies on a letter allegedly signed by Flynt as president of FDC in July of 1983, a Dun & Bradstreet report on FDC as of July 13, 1983 which identifies Flynt as the chief executive, an FDC financial statement which suggested that Flynt was a high level employee of FDC after September 1983, and a letter on FDC's stationery dated January 15, 1984 which allegedly is signed by Flynt as president of FDC, as well as a reference to Flynt as FDC's president on the Magazine and Bookseller's National Distributors Directors.

 FDC has presented affidavits and evidence which contest the accuracy of all of Guccione's evidence, and also contends that the evidence presented by Guccione is unauthenticated and inadmissible hearsay. While the admissibility at trial of most of Guccione's evidence as to Flynt's role in FDC at the relevant time remains uncertain, the letters allegedly signed by Flynt represent a proffer of non-hearsay evidence sufficient to present an issue of fact as to Flynt's connection with FDC at the relevant time. *fn1"

 Finally, Flynt has once again moved to dismiss the complaint as to him for lack of personal jurisdiction. The April 27, 1984 opinion held that "[o]n the basis of the record before it, the court cannot determine whether Flynt transacts business as an individual in New York." The motion was denied to permit discovery on the nature of his contacts with New York. Flynt has now renewed the motion and presented evidence of his lack of involvement with New York. In response, Guccione does not address the ...

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