JOURNAL-GAZETTE COMPANY, INC.,
    Appellant (Defendant below),

    v.

BANDIDO'S, INC.,
    Appellee (Plaintiff below).

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)    Supreme Court No.
)    57S03-9709-CV-00495
)
)    Court of Appeals No.
)    57A03-9407-CV-248
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)

    In grappling with the right to freedom of speech provided by the First Amendment versus the right of individuals to be protected from attacks upon their reputations, the Court of Appeals

determined that Bandido's failed to prove by clear and convincing evidence that the Fort Wayne Journal-Gazette newspaper published a subheadline with actual malice. While we agree with the Court of Appeals's conclusion, we write to hold that the actual malice standard of proof required in defamation cases involving matters of public or general concern applies not only to public figures, but to private individuals as well.

    Bandido's is a Mexican-style restaurant with three locations in Fort Wayne Indiana, and one in Lima, Ohio. On September 13, 1988, the Allen County Board of Public Health conducted a health inspection of the north-side Bandido's in Fort Wayne. In the report, the inspector identified several violations and made the following relevant remarks: “Evidence of flies, roaches and rodents noted. Advise exterminator to do a full clean out of premise. Rodent droppings noted only in restroom.” (R. at 631.) Immediately thereafter, Mr. Schindler, the owner of Bandido's, received a letter from the Fort Wayne - Allen County Board of Public Health advising him of a hearing to determine whether the restaurant permit should be revoked. On October 3, the day before the hearing, another inspector visited the restaurant for the sole purpose of gathering information for the hearing. At this time, the inspector did not find any evidence of rodents. On October 4, without permitting Mr. Schindler to speak, the Board of Public Health revoked Bandido's permit and closed the restaurant. In a letter dated October 5, 1988, to Mr. Schindler, Dr. Irmscher, the Commissioner for the Board of Public Health, stated that “This permit was revoked after a full and complete hearing and review of all food inspections for 1988.” (R. at 1155.)

    The article was published on October 6, 1998, and the headline read:See footnote 2

While the story itself was accurate, the subheadline inaccurately used the word “rats.” The health board never discovered rats at Bandido's and the word “rats” never appeared in the article. The next day, Mr. Schindler advised the Journal-Gazette of the mistake and asked for an immediate retraction. On October 7, 1988, the Journal-Gazette published another article in which it noted the mistake and apologized.See footnote 3 The next day, Robert Wright, Bandido's attorney, wrote the Journal-Gazette and the Journal-Gazette's attorney a letter expressing his and Mr. Schindler's satisfaction with the article and the apology that appeared in the story, and his belief that the correction would hopefully reduce the damages suffered by Mr. Schindler. Shortly after this letter was written, Mr. Schindler retained a new lawyer. On October 18, 1988, Robert Connolly, Bandido's new attorney, sent the Journal- Gazette a letter indicating that the October 7, 1988, follow-up story was insufficient because the headline made no reference to a retraction. This letter requested the Journal-Gazette to print a headline retraction the same size as the original story and in the same location. The Journal-Gazette did not comply with this request and consequently Bandido's filed a defamation suit on November

21, 1988.

    The trial court concluded that there was no genuine issue of material fact with respect to the element of actual malice and granted summary judgment in favor of the Journal-Gazette. On appeal, the Court of Appeals determined that there were facts in dispute and conflicting inferences on the issue of actual malice, reversed the trial court's decision, and remanded for a trial on the merits. Bandido's, Inc. v. Journal-Gazette Co., 575 N.E.2d 324 (Ind. Ct. App. 1991), transfer denied. At the conclusion of trial, the jury awarded Bandido's $985,000 in damages. The Journal-Gazette appealed and the Court of Appeals reversed the trial court, finding that there was not clear and convincing proof of actual malice. Journal-Gazette Co. v. Bandido's, Inc., 672 N.E.2d 969 (Ind. Ct. App. 1996).

    We will provide additional facts when necessary.

    Bandido's defamation suit against the Journal-Gazette implicates the First Amendment to the United States Constitution. The First Amendment secures freedom of the press.See footnote 4 It “was fashioned

to assure unfettered interchange of ideas for the bringing about of political and social changes desired by the people.”See footnote 5 New York Times Co. v. Sullivan, 376 U.S. 254, 269 (1964) (quoting Roth v. United States, 354 U.S. 476, 484 (1957)). There is a “national commitment to the principle that debate on public issues should be uninhibited, robust, and wide-open.” Id. at 270-71. The First Amendment has particularly protected the press because it is the means through which the public is informed of government actions and other matters of public interest. However, the rights under the First Amendment are not absolute, for they must be weighed against other societal interests. For example, because society has a strong interest in protecting attacks upon individual reputation, the law of defamation was created. A defamatory communication is defined as one that “tends so to harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him.”See footnote 6 Doe v. Methodist Hospital, 690 N.E.2d 681, 686 (Ind. 1997) (quoting Restatement (Second) of Torts § 559 (1977)); see Near East Side Community Org. v. Hair, 555 N.E.2d 1324, 1330 (Ind. Ct. App. 1990); Cochran v. Indianapolis Newspapers, Inc., 175 Ind.App. 548, 553, 372 N.E.2d 1211, 1217 (1978).

    Three years later, observing that there had been a “general problem of reconciling the law of

defamation with the First Amendment,” the Supreme Court reconsidered its decision in Rosenbloom. Gertz v. Robert Welch, Inc., 418 U.S. 323, 333 (1974). In doing so, the Supreme Court determined “that the state interest in compensating injury to the reputation of private individuals requires that a different rule should obtain with respect to them.” Id. at 343. Consequently, the Supreme Court changed its position and decided that a negligence standard would be imposed for defamation suits brought by private individuals in federal court, but left it up to States to define for themselves the appropriate standard of liability for defamatory statements made about a private individual. Id. at 347.

    The Indiana Court of Appeals defined the standard it would apply for defamation of private individuals in Aafco Heating & Air Conditioning Co. v. Northwest Publications, Inc., 162 Ind. App. 671, 321 N.E.2d 580 (1974), cert. denied, 424 U.S. 913 (1975). In Aafco, the Court of Appeals decided to continue with the Rosenbloom approach of applying the New York Times actual malice standard for matters of general or public concern, irrespective of whether the allegedly defamed plaintiff was a public or private individual. Although it has been over two decades since this approach was adopted by the Court of Appeals, this is our first opportunity to address the standard of liability required for private individuals claiming defamation.

    Today, we expressly adopt the Aafco approach establishing an actual malice standard in

matters of public or general concern for private individual plaintiffs.See footnote 7 For nearly twenty-three years the law in Indiana has been that both private individuals and public figures must prove actual malice in order to recover in a defamation suit. As we have commented on numerous occasions, we place a high value on adherence to precedent as a primary instrument in providing the people of our state a predictable body of law.See footnote 8 Because we find no pressing reason to change the law, we affirm Aafco to be the law in Indiana.

    Our decision to uphold Aafco is also based on our strong commitment to protecting the freedom of speech and expression provided in the First Amendment to the United States Constitution. Such commitment, we believe, should persist irrespective of the status of an alleged defamed plaintiff.

Aafco, 321 N.E.2d at 587 (quoting Rosenbloom, 403 U.S. at 43). The Indiana Court of Appeals properly noted that applying a negligence standard to private individuals and an actual malice standard to public figures “assumes that society has a greater interest in protecting 'private' reputation than safeguarding the community standing and repute of 'public officials' and 'public figures.'” Such an assumption does not exist in Indiana in matters of public or general concern where “[t]he reputations of public figures and public officials merit the same quantum of protection as those of private citizens.” Id. at 587.

    Second, we believe that in most instances there is little disparity in the ability of private versus public individuals to obtain access “to the channels of effective communication” in order to “counteract false statements.” But see Gertz, 418 U.S. at 344 (stating that public figures can more easily rebut false statements due to increased access to communication channels).
    Only rarely will a public official or public figure have attained sufficient prominence to commend media attention which will provide a meaningful chance to rebut and defend against defamatory falsehood. Even in the rare case where an adequate opportunity for reply is afforded, it is unlikely that the rebuttal statements will receive the same degree of public attention as the published defamation. It would appear that the proper solution for any lack of access on the part of all citizens, whether “public” or “private” is not the expansion of the right to sue for defamation, but rather the passage of state laws creating a limited right to respond to defamatory falsehoods.

Aafco, 321 N.E.2d at 587 (footnote omitted).

    We acknowledge the appeal of the arguments made in Gertz and think that the news media bear a heavy moral responsibility not to invade the private lives of private citizens with respect to their private affairs. And when they do, they not only damage their own reputations, but undermine support for their First Amendment protections. But, moral responsibility is not in this context identical to legal liability. In our view, imposing legal liability only when the news media engage in conduct with actual malice in matters of public or general concern protects the rights and values embodied in the First Amendment to the fullest extent. A negligence standard in matters of public

or general concern for private individuals likely would require the news media to censor stories of public or general concern or avoid publication of controversial articles. See Aafco, 321 N.E.2d at 588. This is because a negligence standard would permit private individuals to obtain favorable judgments on the basis that the news media failed to use reasonable care. “The uncertainty attendant upon a reasonable care standard would charge the press with 'the intolerable burden of guessing how a jury might assess the reasonableness of steps taken by it to verify the accuracy of every reference to a name, picture or portrait.'” Id. at 588 (quoting Time, 385 U.S. at 389). Such a rule would curtail the freedom of the press and undermine our attempt to protect speech that relates to matters of public or general concern.See footnote 9

    For all of the foregoing reasons, we adopt the rule in Aafco and hold it to be the law in Indiana.

    In exploring the parameters of public figure status, the United States Supreme Court established two classes of public figures: general-purpose and limited-purpose public figures. Gertz, 418 U.S. at 352. “General purpose public figures are those individuals who 'achieve such pervasive fame or notoriety that [they] become[] a public figure for all purposes and in all contexts.'” Trotter v. Jack Anderson Enters., Inc., 818 F.2d 431, 433 (5th Cir. 1987) (quoting Gertz, 418 U.S. at 351 (both alterations in original)). Consequently, “[a]bsent clear evidence of general fame or notoriety in the community, and pervasive involvement in the affairs of society, an individual should not be deemed a public personality for all aspects of his life.” Gertz, 418 U.S. at 352. In the case of limited purpose public figures, they achieve their status by “thrust[ing] themselves to the forefront of particular public controversies in order to influence the resolution of the issues involved.” Id. at 345.
    Whether an individual is a public figure is a question of law for the court to resolve. Rosenblatt v. Baer, 383 U.S. 75, 88 (1966). In the present case, there was no dispute as to Bandido's status. The trial court instructed the jury that Bandido's was a limited-purpose public figure, and Bandido lodged no objection to this characterization.See footnote 10 Given that no objection was made, we find this instruction to be binding on Bandido's and sufficient to establish its status as a limited-purpose public figure. See Groves v. First Nat'l Bank of Valparaiso, 518 N.E.2d 819, 824 (Ind. Ct. App. 1988) (finding that an instruction to which no objection was made becomes the law

of the case).

    Moreover, even had Bandido's sought to contest its status as a limited-purpose public figure, we conclude that the authority on this issue cuts squarely against such a challenge. Restaurants and other establishments that actively advertise and seek commercial patronage have been routinely held to be public figures, at least for the limited purpose of consumer reporting on their goods and services. See, e.g., Steaks Unlimited, Inc. v. Deaner, 623 F.2d 264, 272 (3d Cir. 1980); Quantum Elec. v. Consumers Union of United States, 881 F. Supp 753, 764 (D.R.I. 1995); S&W Seafoods Co. v. Jacor Broad. of Atlanta, 390 S.E.2d 228, 230 (Ga. App. 1989); Greer v. Columbus Monthly Publ'g Co., 448 N.E.2d 157, 162 (Ohio Ct. App. 1982). Hence, while Bandido's may not necessarily have been a public figure before the health department closed the restaurant, we find that it certainly became a public figure for the limited purpose of issues concerning the health department's report and the circumstances giving rise to the closing of the restaurant.
    

    Bandido's contends that the Court of Appeals exceeded the proper standard of review in determining that there was insufficient evidence to support the jury verdict that the Journal-Gazette published the incorrect subheadline with actual malice. Additionally, Bandido's suggests that the “applicable appellate standard of review in a libel case is whether the evidence and reasonable inferences drawn therefrom support the verdict.” Appellee's Br. at 2. The Journal-Gazette contends

that the appellate court should undertake an independent and searching review of the record to determine whether Bandido's has met its burden of proof. We agree with the Journal-Gazette.See footnote 11

    In New York Times, the United States Supreme Court determined that because proof of actual malice was required for libel actions brought by public official plaintiffs, effective judicial administration required review of the entire record to determine whether the evidence could constitutionally support a judgment. 376 U.S. at 285. Additionally, the Court made the following comments:

    This Court's duty is not limited to the elaboration of constitutional principles; we must also in proper cases review the evidence to make certain that those principles have been constitutionally applied. This is such a case, particularly since the question is one of alleged trespass across “the line between speech unconditionally guaranteed and speech which may legitimately be regulated.” In cases where that line must be drawn, the rule is that we “examine for ourselves the statements in issue and the circumstances under which they were made to see . . . whether they are of a character which the principles of the First Amendment, as adopted by the Due Process Clause of the Fourteenth Amendment, protect.” We must “make an independent examination of the whole record,” so as to assure ourselves that the judgment does not constitute a forbidden intrusion on the field of free expression.

    
Id. (omission in original) (citations omitted). In Rosenbloom, the Court emphasized that it “has an 'obligation to test challenged judgments against the guarantees of the First and Fourteenth Amendments,' and in doing so '[it] cannot avoid making an independent constitutional judgment on the facts of the case.'” Rosenbloom, 403 U.S. at 54 (quoting Jacobellis v. Ohio, 378 U.S. 184, 190 (1964) (alteration added)). “The simple fact is that First Amendment questions of 'constitutional

fact' compel this Court's de novo review.” Id.; see also Bose Corp. v. Consumers Union of United States, Inc., 466 U.S. 485, 499 (1984) (quoting New York Times, 376 U.S., at 284-86, and citing NAACP v. Claiborne Hardware, Co., 458 U.S. 886, 933-34 (1982); Greenbelt Cooperative Publ'g Ass'n v. Bresler, 398 U.S. 6, 11 (1970); St. Amant, 390 U.S. at 732-33) (In cases raising First Amendment issues, “an appellate court has an obligation to 'make an independent examination of the whole record.'”).

    In justifying the use of an independent examination, the Supreme Court stated that “the rule of independent review assigns to judges a constitutional responsibility that cannot be delegated to the trier of fact, whether the factfinding function be performed in the particular case by a jury or by a trial judge.” Bose Corp., 466 U.S. at 501.
        The requirement of independent appellate review reiterated in New York Times Co. v. Sullivan is a rule of federal constitutional law. It emerged from the exigency of deciding concrete cases; it is law in its purest form under our common law heritage. It reflects a deeply held conviction that judges _ and particularly Members of this Court _ must exercise such review in order to preserve the precious liberties established and ordained by the Constitution. The question whether the evidence in the record in a defamation case is of the convincing clarity required to strip the utterance of First Amendment protection is not merely a question for the trier of fact. Judges, as expositors of the Constitution, must independently decide whether the evidence in the record is sufficient to cross the constitutional threshold that bars the entry of any judgment that is not supported by clear and convincing proof of “actual malice.”

Bose Corp., 466 U.S. at 510-11. This principle was recently reaffirmed by a unanimous Court in Hurley v. Irish-American Gay, Lesbian & Bisexual Group of Boston, Inc., 515 U.S. 557, 567 (1995).

    In the final part of our analysis, we must review the evidence to determine whether there was sufficient evidence to support a finding of actual malice. We hold that the evidence was insufficient.

    Actual malice must be shown by clear and convincing evidence. Heeb v. Smith, 613 N.E.2d 416, 419 (Ind. Ct. App. 1993) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986)); see Rosenbloom, 403 U.S. at 52. Actual malice exists when the defendant publishes a defamatory statement “with knowledge that it was false or with reckless disregard of whether it was false or not.” New York Times, 376 U.S. at 279-80; see Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 510 (1991); Harte-Hanks Communications, Inc. v. Connaughton, 491 U.S. 657, 659 (1989); Gertz, 418 U.S. at 342; Rosenbloom, 403 U.S. at 52; Curtis Publ'g Co., 388 U.S. at 134. “[R]eckless conduct is not measured by whether a reasonably prudent man would have published, or would have investigated before publishing.” St. Amant, 390 U.S. at 731. To demonstrate reckless disregard, “[t]here must be sufficient evidence to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of his publication,” id., or proof that the false publication was made with a “high degree of awareness of their probable falsity,” Garrison v. Louisiana, 379

U.S. 64, 74 (1964); see Masson, 501 U.S. at 510; Harte-Hanks Communications, 491 U.S. at 668. Hence, a defendant's actual state of mind is a critical factor in the analysis. See Herbert v. Lando, 441 U.S. 153, 160 (1979); see also Woods v. Evansville Press Co., 791 F.2d 480, 485 (7th Cir. 1986); Long v. Arcell, 618 F.2d 1145, 1147 (5th Cir. 1980). A defendant's state of mind is a subjective fact and may be shown by indirect or circumstantial evidence. See Zerangue v. TSP Newspapers, 814 F.2d 1066, 1070 (5th Cir. 1987) (citing Herbert v. Lando, 441 U.S. 153, 165 (1979)); Harte-Hanks Communications, 491 U.S. at 668.

    The question of whether there is sufficient evidence to support a finding of actual malice is a question of law to be determined by the court. See Harte-Hanks Communications, 491 U.S. at 685 (citing Bose Corp., 466 U.S. at 510-11). This rule is premised on two important considerations: (1) the “national commitment to the free exchange of ideas, as enshrined in the First Amendment;” and (2) the recognition that “'[j]udges as expositors of the Constitution' have a duty to 'independently decide whether the evidence in the record is sufficient to cross the constitutional threshold that bars the entry of any judgment that is not supported by clear and convincing proof of “actual malice.”'” Id. at 686 (quoting Bose Corp., 466 U.S. at 511 (alteration in original)). We discussed supra in Part III the need to conduct an examination of “the factual record in full.” Id. at 688. In an independent review, each piece of evidence may be considered cumulatively. See id. at 689.

    Bandido's contends that there were five significant pieces of evidence indicating that the Journal-Gazette published the inaccurate newspaper subheadline with actual malice: (1) printing a subheadline using the word “rats”; (2) a warning provided by the Allen Superior Court when it ruled

“that public disclosure of the inspection reports might result in improper inferences or interpretations as to the seriousness of the violations noted;” (3) job evaluations of two Journal-Gazette employees; (4) the Journal-Gazette's failure to publish a retraction in accordance with Ind. Code § 34-4-15-1; and (5) the subheadline appeared in the first and final editions of the Journal-Gazette, but not in the second edition. We review each piece of evidence to determine whether any of these items alone shows by clear and convincing evidence that the Journal-Gazette acted with actual malice or whether the evidence cumulatively suggests actual malice.

    It is a question of law for the court to decide whether a statement considered in its entirety is capable of possessing a defamatory meaning or implication. Woods, 791 F.2d at 486 (citing Rose v. Indianapolis Newspapers, Inc., 213 F.2d 227, 229 (7th Cir. 1954)). If a statement is susceptible to both defamatory and non-defamatory meanings, the matter of interpretation should be left to the jury. Id. In order to impose liability for defamation, the United States Constitution requires a false statement of fact. Heeb, 613 N.E.2d at 421 (citing Hustler Magazine v. Falwell, 485 U.S. 46 (1988)); see Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767, 776 (1986) (noting that a statement on matters of public concern must be provable as false before there can be liability under state defamation law). “[T]he statement is not considered false unless it 'would have a different effect on the mind of the reader from that which the pleaded truth would have produced.'” Masson, 501 U.S. at 517 (quoting R. Sack, Libel, Slander, and Related Problems 138 (1980)); see Heeb, 613 N.E.2d at 421 (citing AIDS Counseling & Testing Centers v. Group W Television, Inc., 903 F.2d

1000 (4th Cir. 1990)) (“The test for determining whether a statement is substantially true is whether any inaccuracies caused the statement to produce a different effect on the audience than would have been produced had the literal truth been spoken.”); Cochran, 372 N.E.2d at 1217 (“In determining whether a defamatory meaning is possible, the test is the effect which the article is fairly calculated to produce and impression it would naturally engender in the mind of the average person.”); McIlvain v. Jacobs, 794 S.W.2d 14, 16 (Tex. 1990) (Substantial truth is an absolute defense in defamation actions and the test is “whether the alleged defamatory statement was more damaging to [plaintiff's] reputation, in the mind of the average listener, than a truthful statement would have been.”).

    Our first inquiry is to decide whether the subheadline and the article should be read together or independently in order to determine whether the subheadline was defamatory.

    Both Bandido's and the Journal-Gazette rely on Sprouse v. Clay Communication, Inc., 211 S.E.2d 674 (W.Va. 1975), as authority for the determination of whether the subheadline and the article should be read together or separately. In Sprouse, the court made the following statements:

    Generally where the headline is of normal size and does not lead to a conclusion totally unsupported in the body of the story, both headlines and story should be considered together for their total impression. However, where oversized headlines

are published which reasonably lead the average reader to an entirely different conclusion than the facts recited in the body of the story, and where the plaintiff can demonstrate that it was the intent of the publisher to use such misleading headlines to create a false impression on the normal reader, the headlines may be considered separately with regard to whether a known falsehood was published.

Id. at 686 (emphasis added).

The Sprouse court viewed the headline independently of the article but emphasized that its reason for doing so was “because the plaintiff proved that the newspaper abdicated its traditional role of fairly reporting the news and became a participant in a scheme or plan, the object of which was to employ grossly exaggerated and patently untrue assertions, embodied primarily in headlines, to destroy the character of Sprouse.” Id. at 691. In this case, there is no evidence that the Journal-Gazette engaged in such conduct.

     “The majority of jurisdictions support the rule that headlines are to be construed in conjunction with their accompanying articles.” Molin v. Trentonian, 687 A.2d 1022, 1024 (N.J. Super. Ct. App. Div. 1997) (citing cases). However, there are some jurisdictions which hold that a newspaper headline alone is libelous. See, e.g., Las Vegas Sun, Inc. v. Franklin, 329 P.2d 867, 870 (Nev. 1958) (Because the “public frequently reads only the headline,” the headline may be construed apart from its accompanying article.). Some minority jurisdictions have adopted what is known as the “fair index” rule. See Burgess v. Reformer Publ'g Corp., 508 A.2d 1359, 1363 (Vt. 1986); Schermerhorn v. Rosenberg, 426 N.Y.S.2d 274, 283 (N.Y. App. Div. 1980); Hein v. Lacy, 616 P.2d 277, 286 (Kan. 1980); Bray v. Providence Journal Co., 220 A.2d 531, 535 (R.I. 1966). Under the

fair index rule:
    “If the headline is a fair index of an accurate article, it is not actionable. If it is not a fair index [_ does not fairly indicate the substance of the matter to which it refers _] then the headline must be examined independently to determine whether it is actionable under general principles of libel.”

Burgess, 508 A.2d at 1363 (quoting Schermerhorn, 426 N.Y.S.2d at 283 (alteration in original)). In deciding to follow the fair index rule, the Burgess court remarked that it “cannot ignore the fact that 'many people in a hurried and busy society are headline readers,'” id. (quoting Cross v. Guy Ganett Publ'g Co., 121 A.2d 355, 358 (Me. 1956)), and that “[a]lthough 'the defamatory meaning of the headline may be dispelled by a reading of the entire article . . . , [a] headline is often all that is read by the casual reader and therefore separately carries a potential for injury as great as any other false publication,'” id. (quoting Schermerhorn, 426 N.Y.S.2d at 283 (second alteration in original));See footnote 12 see Reardon v. News-Journal Co., 164 A.2d 263, 265 (Del. 1960) (“[T]he sting of a libel may sometimes be contained in a word or sentence used in a headline to the body of the article, even though the facts are correctly set forth in the body.”).

     The headline in this case read: “Health Board Shuts Doors of Bandido's” and the subheadline read: “Inspectors find rats, roaches at local eatery.”See footnote 13 One interpretation, and perhaps the most logical, of the subheadline is that Bandido's was shut down because the health board found rats and roaches (or bugs) at the restaurant. The article which has been deemed to be accurate states that the restaurant was closed “because of health violations including evidence of insects and rodents.” The article goes on to mention some of the significant violations cited by the health board. The subheadline clearly creates the impression that Bandido's was closed solely because of the

discovery of ratsSee footnote 14 and roaches (or bugs) and in addition, conjures up a depiction of the restaurant which is not entirely accurate.See footnote 15 As such, we are hard pressed to conclude that the subheadline was a fair index of the story. Consequently, we examine the subheadline independently to determine whether the subheadline is defamatory and actionable under libel principles.See footnote 16

    During trial, Bandido's contended that if the headline had used the words “evidence of rodent droppings” instead of “rats,” there would be no dispute and the impact would not have been nearly the same.See footnote 17 (R. at 1346.) During the direct examination of June Remley, author of the article and

not the subheadline, Bandido's had the witness agree that the word “rat” connotates dirtiness, filth, pestilence, disease, infection, and plague.See footnote 18 (R. at 1609.)See footnote 19 We would agree that the word “rat” connotes such ideas and find that the definition of rat supports such a belief. However, we do not agree that use of the word “rat” is so distasteful that it created an impression that was so different than would have been created had the Journal-Gazette used the words “evidence of rodents” or “evidence of rodent droppings.” See Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 517 (1991) (providing that a “false” statement will have a different effect on the reader's mind).

    One might say that the word “rat” is common usage for the more proper term “rodent” or that “rat” is often used in colloquial speech to refer to “rodent.”See footnote 20 See Simonson v. United Press Int'l, Inc., 654 F.2d 478, 481, 482 (7th Cir. 1981) (determining that “'rape' as defined by common usage is incorporated into second-degree sexual assault under Wisconsin law” and the publications “were in no manner made false by substituting the word in common usage for an exact legalism”) (footnote omitted); Orr v. Argus-Press Co., 586 F.2d 1108, 1112 (6th Cir. 1978) (conceding that

while use of the “word 'swindle' may imply more serious wrongdoing than was involved . . . , the word is frequently used in colloquial speech as a substitute for 'defraud'”).

    Clearly, if the subheadline had read “investigators find evidence of rodents,” the average reader would infer that there were rodents in the restaurant.See footnote 21 Ordinarily, only two types of rodents are perceived as habitating in a restaurant _ rats and mice. Thus, if the subheadline had used the words “evidence of rodents” and the average reader inferred from this that the restaurant contained rodents, then the average reader would just as likely conclude that there must be either mice or rats in the restaurant.See footnote 22 We doubt that the use of the word “mice” in the subheadline would have been less damaging than use of the word “rats.”See footnote 23 Additionally, we believe that had the Journal-Gazette

used the word “rodents” in the subheadline, it would have created substantially the same effect on a reader as was created with use of the word “rats.”See footnote 24 Either way, readers would have perceived Bandido's as an unsanitary, dirty restaurant. See, e.g., Woodcock v. Journal Publ'g Co., 646 A.2d 92, 106 (Conn. 1994) (“[T]he absolute truth _ that [the developer] was a business associate of other members of the plaintiff's family, rather than of the plaintiff herself _ would have had the same effect on the reader as the inaccurate subheadlines” in that “[e]ither way, the reader would have perceived that the plaintiff had a conflict of interest.”); Zerangue, 814 F.2d at 1074 (In citing to numerous cases where a publisher had printed an inaccurate but substantially true article, the court determined that the “common thread” running through the cases was that while the defendant newspaper reported the substance of the criminal proceedings, the defendant erred in the use of legal terminology and that the average person would likely characterize the mistakes as a “technicality”

and if the story had been free of error, the plaintiffs “would have been exposed to roughly the same amount of community opprobrium.”). While admittedly the word “rat” conjures up more bad connotations than “mice” does (or “rodents” for that matter), the sting of this inaccuracy was sufficiently similar to the gist of the truth _ Bandido's was closed and the inspectors did find evidence of rodents and evidence of rodent droppings in the restrooms. See Chapin v. Knight- Ridder, Inc., 993 F.2d 1087, 1092 (4th Cir. 1993) (“The falsity of a statement and the defamatory 'sting' of the publication must coincide_that is, where the alleged defamatory 'sting' arises from substantially true facts, the plaintiff may not rely on minor or irrelevant inaccuracies to state a claim for libel.”). In this respect, we believe the inaccuracy did not create a falsehood, but rather was substantially true.

    Whatever distinction one might draw between a rat and rodent, we believe the difference “fits easily within the breathing space that gives life to the First Amendment.” Bose Corp., 466 U.S. at 513. Even if we were to assume that the inaccuracy conceded to by the Journal-Gazette created a falsehood, “[s]ome degree of abuse is inseparable from the proper use of everything; and in no instance is this more true than in that of the press.” Gertz, 418 U.S. at 340. “The First Amendment requires that we protect some falsehood in order to protect speech that matters.” Id. at 341. “'[T]o insure the ascertainment and publication of the truth about public affairs, it is essential that the First Amendment protect some erroneous publications as well as true ones.'” Rosenbloom, 403 U.S. at 51-52 (quoting St. Amant, 390 U.S. at 732 (alteration in original)).

    All that being said, we do not rest our decision in this case on the basis that the subheadline

was substantially true. See St. Amant, 390 U.S. at 730-31 (“'Reckless disregard,' it is true, cannot be fully encompassed in one infallible definition. Inevitably its outer limits will be marked out through case-by-case adjudication, as is true with so many legal standards for judging concrete cases, whether the standard is provided by the Constitution, statutes, or case law.”). For this reason, we examine the evidence which Bandido's contends proves that the Journal-Gazette published the subheadline with actual malice.

    Bandido's most compelling piece of evidence that the Journal-Gazette acted with actual malice is the Journal-Gazette's use of the word “rats” instead of “rodents” in the subheadline. Bandido's contends that because the word “rats” does not appear in the article, the mere fact that the word “rats” was erroneously used in the subheadline was more than an extreme departure from normal professional standards and in fact is indicative of actual malice.See footnote 25 We disagree with Bandido's.See footnote 26

    During trial, Sheila Pinkley, the author of the headline, testified that she thought the headline was accurate.See footnote 27 She stated, “Well, at the time I thought it was accurate. A rat is a rodent. Um, if

I would have just said rodent, that would have been accurate. So, to me, a rodent suggested rat. And it, that is why I wrote the word 'rat.'” (R. at 2478.) There was no other evidence reflecting Pinckley's state of mind or whether she “entertained serious doubts as to the truth of the headline” or had a “high degree of awareness” of the headline's probable falsity. Our research has revealed several cases in which courts have determined that use of an inaccurate word as a result of a misconception or poor interpretation is not actual malice. We find the following cases particularly instructive.

    In Time, Inc. v. Pape, 401 U.S. 279 (1971), a news magazine reported on the Commission on Civil Rights Report entitled “Justice.” A part of the Commission's Report described an alleged incident of police brutality. When the magazine published an article, it quoted the summary of the complaint but left out the word “alleged.” This created the impression that the facts described in the Commission's Report were indeed true. Id. at 282-83. The detective who was the target of the police brutality complaint filed a libel suit. The author of the article testified that he knew the meanings of the words “alleged” and “complaint” and the researcher testified that she was aware of the omission of the word “alleged” in the article, but believed the article to have been true as written. Id. at 283. The Supreme Court determined that under the totality of the circumstances, the failure to mention that the incident described in the Commission's Report was based on an allegation was not a “falsification” sufficient to sustain a jury finding of “actual malice.”See footnote 28 Id. at 289. The Court

continued by stating that “Time's omission of the word 'alleged' amounted to the adoption of one of a number of possible rational interpretations of a document that bristled with ambiguities. The deliberate choice of such an interpretation, though arguably reflecting a misconception, was not enough to create a jury issue of 'malice' under New York Times.” Id. at 290. “We have held that if 'the freedoms of expression are to have the breathing space that they need . . . to survive,' misstatements of this kind must have the protection of the First and Fourteenth Amendments.” Id. at 292 (quoting New York Times, 376 U.S. at 271-72) (internal quotation marks omitted).
    
    In Bose Corp. v. Consumers Union of United States, Inc., an engineer for a consumer product testing organization prepared a report on a loudspeaker system suggesting that instruments had a tendency to “wander about the room.” 466 U.S. at 493. At trial, it became clear that what the engineer really perceived was that the sound wandered “along the wall,” although the engineer refused to admit that there was any inaccuracy in his description.See footnote 29 The trial court concluded that it

was impossible “to believe that [the engineer] interprets a commonplace word such as 'about' to mean anything other than its plain ordinary meaning.” Id. at 487. Relying on Time, Inc., v. Pape, the Bose Court determined that the engineer's “choice of such language, though reflecting a misconception, does not place the speech beyond the outer limits of the First Amendment's broad protective umbrella.” Id. at 513. The Court additionally stated that this case “represents the sort of inaccuracy that is commonplace in the forum of robust debate to which the New York Times rule applies.” Id.; see Chester, 553 N.E.2d at 140 (A negligent interpretation of public records or misconstruction of a statement from a person interviewed falls short of the constitutional requirement of actual malice.).

The circumstances in Schwartz v. Worral Publications, Inc., 610 A.2d 425 (N.J. Super. Ct. App. Div. 1992),See footnote 30 are somewhat similar to the circumstances of the case at hand. In Schwartz, a reporter wrote a story on the investigation of a school board association. After completing the story, the reporter left it with the copy editor and then left town. The copy editor found the article to be confusing and after reading it several times, thought he “knew what [the writer] was trying to say.” Id. at 427. The editor revised the article in the mistaken belief that the attorney of the school board association was the target of the investigation. The editor provided the following explanation:
        I was under the assumption that because there was a local angle, that the reason the story was being written was that the local person was the gist of the story

. . . . I was confused. So in my confusion, I saw a local person; and I assumed that oh, this local person must be the primary focus of the story and I was trying to simplify it.

Id. The editor never spoke with the writer during the editing process even though there was opportunity to do so and also did not have access to the information upon which the writer relied in drafting the story. The court determined that a review of the record revealed “no indication that anyone at [the newspaper] knew that the facts being published were false.” Id. at 429. Additionally, the court commented that while the record “would justify a finding of an irresponsible and uncaring attitude on [the newspaper's] part,” id., this was not the same as reckless disregard, since there must be clear and convincing proof that the statements were published with a “high degree of awareness of their probable falsity,” or with “serious doubts as to the truth of [the] publication,” id. at 430 (citations omitted) (alteration in original).See footnote 31

    In Woodcock v. Journal Publishing Co., 646 A.2d 92, 98 (Conn. 1994), a newspaper printed an inaccurate subheadline. The subheadline read: “Developer claims Woodcock aim to aid business associate.” Id. at 95. The author of the article admitted that this statement was inaccurate, but that he did not write the subheadline. He also testified that “the author of the subheadlines could

conclude that they were accurate because of the reference in the story to . . . business connections with the Woodcock family.” Id. at 98. The court concluded that “[b]ecause the record fails to reveal anything that would have caused the author of the subheadlines to '[entertain] serious doubts as to the truth of [the subheadlines]'; we cannot say that it has been demonstrated with convincing clarity that the subheadlines were prepared or printed with actual malice.” Id. (citation omitted) (second and third alterations in original). Additionally, the court commented that the “most that can be said of the inaccurate subheadlines is that the defendants were negligent in their preparation and publication.” Id. “'[A] merely negligent misstatement of fact about a public official retains the constitutional protection afforded free expression.'” Id. (quoting Holbrook v. Casazza, 528 A.2d 774, 779 (Conn. 1987)).

    We similarly believe that while the Journal-Gazette may have exhibited an “irresponsible and uncaring attitude” in meeting its goal of accuracy, the evidence did not demonstrate awareness of the inaccuracy in the subheadline. Pinkley (author of the headline) testified that she spent “ten minutes tops” reading the article prior to writing the headline. She stated that “[w]hen I wrote the headline, I considered them to be accurate.” (R. at 24-25.) “I looked at the words rodent droppings and I came up with rats.” (R. at 25.) This evidence indicates nothing more than a misconception. Bill Leonard who was Pinkley's supervisor and responsible for checking the accuracy of her work testified that when editing the story, he did not read it line by line, word for word. He relied on the copy editor, Pinkley, to do those kinds of edits. Leonard also testified that “[t]here was nothing on this story that told me that I should, you know, that we were doing anything wrong in terms of the accuracy or anything. As far as I knew the story was accurate and the headline was accurate.” (R.

at 42-53.) Leonard also said that he did not observe that the word “rats” did not appear in the story. (R. at 58.) This evidence, while clearly indicating that the Journal-Gazette was careless and negligent, was not indicative of actual malice. Additionally, the article and headline was read by at least three other employees before being published and there is no evidence suggesting that any of these employees had serious doubts about the accuracy of the subheadline or that they were aware that the word “rats” did not appear in the story. While the chances of this mistake occurring after five people had reviewed the story suggests serious quality control concerns, it alone is not sufficient to support a finding of actual malice.See footnote 32 See Chester, 553 N.E.2d at 140 (“'The publisher who maintains a standard of care designed to avoid knowing or reckless falsehood must be accorded sufficient assurance that those factual errors which nonetheless occur will not expose him to indeterminate liability.'”) (quoting Aafco, 321 N.E.2d at 591).

    Bandido's contends that the Journal-Gazette's failure to heed Judge Sheldon's warning about the dangers inherent in misinterpreting the inspection reports suggests that the Journal-Gazette acted with actual malice. Our review of the record indicates that Bandido's has misinterpreted Judge Sheldon's findings of fact and conclusions of law.

    Prior to 1988, inspection reports prepared by the Board of Health were not accessible by the general public in Fort Wayne-Allen County. In order to obtain access to the Food Establishment Inspection Reports, the Journal-Gazette filed a lawsuit against the Board of Health arguing that the reports were public records to which the newspaper was entitled. Journal-Gazette Co.. v. Fort Wayne-Allen County Bd. of Pub. Health, No. 02D01-CT-8802-302 (Allen Sup. Ct. filed Feb. 26, 1988). On March 1, 1988, Judge Sheldon conducted a hearing in connection with the Journal- Gazette's application for a Preliminary Injunction and Order of Mandate requesting the Board of Health to disclose certain public records. The court ordered the Fort Wayne - Allen County Board of Public Health to disclose all records dealing with the inspection of Allen County restaurants and food establishments because such records were public records within the meaning of Ind. Code § 5- 14-3-1 et. seq. (R. at 1702.) The court made the following relevant findings which Bandido's interprets as a warning:

    There is no question in the Court's mind that the Defendant, Fort Wayne - Allen County Board of Public Health, in denying disclosure, acted in good faith and pursued an established policy it had adopted many years ago. Nearly all its concerns,

which it suggested were the basis for its policy, were reasonable. For example, there is a possibility that public disclosure of the inspection reports might result in improper inferences or interpretations as to the seriousness of the violations noted. However, such policy considerations clearly fall outside the exceptions to disclosure authorized in Section 4 of the Access to Public Records Act.

(R. at 1702.) (emphasis in original). We view these findings to be neither a warning nor the opinion of the court, but instead a recitation of the Board of Public Health's policy reason for not disclosing its inspection reports. Even if were to assume for the sake of argument that this was a warning to the Journal-Gazette, such warning reveals nothing with respect to the newspaper's state of mind when the headline was published. Indeed, Pinkley testified that she never participated in any discussions at the Journal-Gazette relating to the standard of care to be used when dealing with matters concerning restaurants and Board of Public Health inspection reports. Craig Klugman, a news editor, testified that Pinkley was never given any directions or precautions to be taken when dealing with Board of Public Health inspection reports of restaurants. The record also indicates that Leonard was never advised of any limitations, or cautions, that the Journal-Gazette allegedly received from Judge Sheldon. Leonard also testified that he did not give the story more careful consideration than any other story and did not take special precautions to insure that the word “rats” appeared in the story. Cf. McDowell v. Paiewonsky, 769 F.2d 942, 951 (3d Cir. 1985) (Where among other things, plaintiff claimed actual malice existed because “several people apparently warned defendant to check his facts before making his broadcasts,” the court stated that defendant's “failure to verify his facts may have been negligent, but does not rise to the level of actual malice.”) (emphasis added). Similarly, even if the court's statements can be construed as a warning, the Journal-Gazette's failure to check more thoroughly the accuracy of its headline did not rise to the

requisite level of actual malice.

    Bandido's also contends that job evaluations of Pinkley and Leonard indicate that the newspaper acted with actual malice. At trial, Bandido's introduced the job evaluations of both Pinkley and Leonard. A job evaluation of Pinkley provided the following relevant information:

    While you can write an excellent feature headline, news headlines remain your weak area. You are prone to overuse cliches, and the tone of some headlines comes uncomfortably close to slang (“folks” should be used rarely, for instance). Bill has worked with you on these points and reports some improvement, but your headline performance lacks consistency. There have been instances when you've produced inaccurate heads _ and this is something we just can't have. For instance, on a story about the Boeing jet that lost part of its roof over the Pacific, you referred to a jet “crash.” That flight did not crash. You are very responsive to redoing a head when you are asked, but you need to work on accuracy and tone in the next review period. Please don't lose your lovely touch for feature heads, however _ especially the heads you give to newsmaker stories. Those heads are superb examples of good headline writing.

(R. at 1625.) A performance review of Leonard was also introduced at trial because of its

reference to Pinkley. The following statements are relevant:

    You have done good work in the past year in the development of several of the new copy editors. Now its time to concentrate on Sheila [Pinkley], giving her one-on-one feedback sessions at least three times a week. She has potential and needs a guiding hand, particularly in headline writing. Despite all the successes in the headline area, there are still headlines that are vague, off-target or inappropriate.[See footnote 33 ] Sometimes those heads appear when you are in slot; more often they appear on your days off. . . .

    Bandido's contends that this circumstantial evidence reflecting Pinkley's difficulties in writing accurate headlines suggests that the newspaper acted with actual malice when it allowed the headline to be printed. Although not stated in Bandido's brief, we assume based upon the direct examination of Leonard at trial, Bandido's argument is that Leonard acted with actual malice by failing to check more thoroughly Pinkley's work. In other words, since Leonard was at least aware of Pinkley's alleged problem with writing inaccurate headlines,See footnote 34 Bandido's contends that Leonard was on notice and should have taken more care in reviewing her work, rather just relying on Pinkley to do her job.

    We disagree with Bandido's that this circumstantial evidence rises to the level of actual malice. In Washington Post Co. v. Keogh, 365 F.2d 965, 971 (D.C. Cir. 1966), an allegedly defamed politician filed an affidavit containing a series of excerpts from various magazine and newspaper articles attempting to demonstrate that the author's “'reputation for accuracy and veracity' was such 'that mere reliance upon his word is grossly negligent and reckless.'” Id. at 969. The newspaper employees filed affidavits indicating there was no evidence causing them to suspect the information contained in the article to be false. Id. The court found the unimpeached newspaper employee depositions dispositive that no genuine issue of facts existed that the article was published with actual knowledge of falsity. Additionally, the court stated that

    Bandido's argues that the Journal-Gazette's failure to retract the subheadline in the manner prescribed by Ind. Code § 34-4-15-1(1988)See footnote 35 suggests the Journal-Gazette acted with actual malice.

The Court of Appeals appropriately noted that Indiana's retraction statute does not place a duty upon the Journal-Gazette to publish a retraction, but only permits a mitigation of damages if the Journal-Gazette had opted to print a retraction in accordance with the specification required in Ind. Code § 34-4-15-1. The Journal-Gazette did in fact publish an article correcting its inaccurate headline and apologized for its mistake. Although the correction did not meet the standards of the Indiana retraction statute, we do not find such failure dispositive of the issue of actual malice.

    In New York Times, 376 U.S. at 286, after stating that the failure to retract is “not adequate evidence of malice for constitutional purposes,” the Court left open the question of “[w]hether or not a failure to retract may ever constitute such evidence.” Since New York Times, some courts have determined that the failure to retract is not sufficient proof of actual malice whereas other courts have found that a retraction negates proof of actual malice. See Zerangue, 814 F.2d at 1071 (“[R]eadiness to retract tends to negate 'actual malice.'”); Hoffman v. Washington Post Co., 433 F. Supp. 600, 604 (D.D.C. 1977) (Publication of a retraction of the indisputably inaccurate statement is “significant and tends to negate any inference of actual malice.”), aff'd, 578 F.2d 442 (D.C. Cir. 1978); Trans World Accounts, Inc. v. Associated Press, 425 F. Supp. 814, 823 n.6 (N.D. Cal. 1977) (Publication of a retraction “may create a large obstacle to plaintiff's efforts to prove actual malice.”); Gonzales v. Hearst Corp. 930 S.W.2d 275, 277 (Tex. Ct. App. 1996) (“Refusal to print a retraction is evidence of an action after the publication, but it can lend support to a claim that reckless disregard of knowledge existed at the time of publication.”) (emphasis in original).

    Lastly, Bandido's argues that the fact that the inaccurate subheadline appeared in the first edition, was removed from the second edition, and then revised and added back into the third edition is proof of actual malice.

    We attach no significance to the deletion of the subheadline in the second edition. Publishing the subheadline in all editions would be more probative of malice. In any event, Leonard testified that he was unaware of who made the decision to delete the subheadline from the second edition.See footnote 37

with actual malice and hereby reverse the judgment of the trial court.

SELBY, J., concurs.
BOEHM, J., concurs with separate opinion.
SHEPARD, C.J., dissents with separate opinion in which DICKSON, J., concurs.
DICKSON, J., dissents with separate opinion in which SHEPARD, C.J., concurs.