By Doug Pierce 

King & Ballow 

The new personal watercraft broke down multiple times in the four and half months after its purchase. Each time it did, the owner brought it back to the Mt. Hood, Oregon, dealership and the owner left hopeful her problems would be solved and the personal watercraft would run again. The watercraft suffered from multiple overheating problems which required its entire engine to be replaced after only 18 hours of use.  After multiple trips to the dealership and the installation of the new engine, the watercraft broke down yet again over Labor Day weekend. After once again taking it back to the dealership for repairs, the owner called a popular syndicated radio show whose host discusses consumer problems. After relaying the gist of her story to the show’s producers, the show invited the owner to call in and voice her grievances over the air. 

An accusation of lying 

The personal watercraft owner gave the host the background on the watercraft’s problems and told the host the watercraft was still at the dealership shop for repairs.  The owner claimed the dealer told her the watercraft was a “bad machine” and that he would buy it back, but in the end decided not to honor this promise. After hearing the owner had received neither money nor her watercraft back from the dealership, the host asked if she could get her watercraft back. The owner said she could and told the host the dealership claimed it had finally fixed the watercraft’s overheating problem by drilling and enlarging it. The host asked if the dealership had tested this new fix. The owner replied that she had called the dealership and asked just that - whether they had tested the new fix. Within two hours of asking this, the owner said the dealership called her back and said they tried it and it worked. On hearing this, the host replied “yeah, they’re just….they’re just lying to you.”

Later on in the program the host asked “will he admit it to us? Will they admit to us…they went back on their word?”  During the program the dealership was called and declined to give its side of the story. At the end of the broadcast segment, the host urged listeners to never buy the owner’s brand of personal watercraft and proclaimed over the air both the dealership and that this particular watercraft brand “sucked.” The dealership was not amused. The dealership sued the talk show host and radio station for defamation based on the radio host’s statements “they are just lying to you” and “[w]ill they admit to us they lied, they went back on their word.” The station asked the court to dismiss the lawsuit under the state of Oregon’s anti-SLAPP (“Strategic Lawsuit Against Public Participation”) statute. The state’s anti-SLAPP statute was designed to allow a dismissal of a “meritless” lawsuit early in the stages of litigation to avoid needless waste of money and stifling of free speech. Finding the lawsuit meritless under the anti-SLAPP statute, the Oregon federal district court dismissed the case. 

Investigation not required

The dealership appealed the ruling to the U.S. Court of Appeals. The appellate court stated the test in a defamation case is “whether a reasonable fact finder could conclude” the alleged defamatory statement “implies an assertion of objective fact.” If it does not, it is protected speech under the First Amendment.  The court first noted the word “lying” is not always defamatory because it “applies to a spectrum of untruths” including “white lies,” “partial truths” and “deception,” all of which could be expressions of opinion. Moreover the court held when public speakers statements reasonably rely on facts that may be false, they are not guilty of defamation. The court noted in a prior case it held political commentators are not guilty of defamation for making false statements if they reasonably rely on news reports in making those statements. “Unless defendants knew the news reports were probably false or had some obvious reason to doubt their accuracy,” the court held the commentators’ “reliance was protected by the First Amendment.”  The host relied on facts the owner gave him during their phone conversation and this reliance, stated the court, was reasonable.

The dealership attempted to counter this argument by asserting the owner’s statements on which the radio host relied were false, but the court stated it did not matter whether the statements were true or not, it only mattered whether the host’s reliance on them was reasonable. Although noting the dealership may have shown the owner’s statements were false, the court held the dealership had failed to show the host’s reliance on them was unreasonable. Accordingly, the court upheld the lower court’s dismissal of the case and held the host’s statements about lying were statements of opinion protected by the First Amendment. In making this decision the court noted the radio program had not investigated the owner’s claims prior to airing the program but stated “such investigation is not required in the context of a radio show that takes live calls on the air.” Applying a standard less than the “reasonable reliance” standard, the court noted, would be in itself unreasonable as it would require a speaker to determine whether every fact was true or false before stating his or her opinion.  In addition, the court held his “lying” statements did not imply a factual assertion. Finding the host “made at least two loose, hyperbolic statements” during the broadcast, one of them being the brand of the personal watercraft “sucked,” the court commented the “lying” statements would be the “type of obvious exaggeration generally employed” on the radio show hosts program. 

In light of this decision, radio and television show hosts are protected from defamation claims when making false statements, if the false statements are made while reasonably relying on statements of third parties. As this is something radio and television show hosts do on a daily basis, they are no doubt breathing easier.

Mr. Pierce is TAB's Legal Counsel