Falgoust v. Wal-Mart Stores Inc

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 98-30412
Summary Calendar

GLENN FALGOUST and ANGELA FALGOUST

Plaintiffs-Appellants,

versus

WAL-MART STORES, INC. ET AL.,

Defendant-Appellee.

Appeal from the United States District Court
for the Middle District of Louisiana
(96-CV-484-B-M1)
April 12, 1999

Before HIGGINBOTHAM, JONES, and DENNIS, Circuit Judges.

PER CURIAM:*

Appellant Glenn Falgoust is a self-described “outspoken critic

of Wal-Mart’s” expansion into small towns. His negative views

toward Wal-Mart apparently stem from his experience operating a

White’s Auto store in Donaldsonville, Louisiana which he asserts he

was forced to sell because Wal-Mart opened a store in the same

town. He has appeared in radio and television interviews,

newspaper articles, and public appearances criticizing Wal-Mart

expansion. He and his wife, co-appellant Angela Falgoust, even

formed a consulting business, entitled “Wal-Mess,” to prevent Wal-

Mart expansion into small communities. During one television

interview, appellant appeared on “60 Minutes” and condemned Wal-

Mart for having an adverse effect on his home town of

*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this
opinion should not be published and is not precedent except for the
limited circumstances set forth in 5TH CIR. R. 47.5.4.
Donaldsonville, Louisiana.

To counteract the appellants’ negative campaign, Wal-Mart

spokespersons also made public appearances, including television

and newspaper interviews, on the subject of Wal-Mart expansion. In

one such television interview, broadcasted from Lancaster,

Pennsylvania entitled “12:30 Live,” Wal-Mart’s Director of

Community Relations, Robert Cheyne, defended Wal-Mart from the

disapproving “60 Minutes” broadcast that featured Falgoust. Based

on comments made by Cheyne during that interview, the Falgousts

sued Wal-Mart claiming that Cheyne defamed them. In addition,

appellants assert that various acts by Wal-Mart constituted unfair

trade practices in violation of Louisiana law. The magistrate

judge granted each of Wal-Mart’s partial motions for summary

judgment and dismissed all of appellants’ claims.

STANDARD OF REVIEW

This court reviews the grant of summary judgment de novo.

Summary judgment is proper if “the pleadings, depositions, answers

to interrogatories, and admissions on file, together with any

affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to judgment as

a matter of law.” Fed. R. Civ. P. 56(c); see also Celotex Corp. v.

Citrate, 477 U.S. 317, 322-24, 106 S. Ct. 2548, 2252-53 (1986).

Under this standard, all fact questions must be viewed in the light

most favorable to the non moving party, and questions of law are

reviewed de novo. See Hassan v. Lubbock Indep. Sch. Dist., 55

F.3d 1075, 1079 (5th Cir. 1995).

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 DISCUSSION

1. Louisiana Unfair Trade Practices Act

Appellants initially argue that the magistrate judge erred in

dismissing their claim under the Louisiana Unfair Trade Practices

Act (the “Act”). The Act provides that “[u]nfair methods of

competition and unfair or deceptive acts or practices in the

conduct of any trade or commerce” are unlawful. La. Rev. Stat.

Ann. § 51:1405(A) (West 1987). Following the lead of Louisiana

appellate courts, we have held that the Act limits private suits

“to consumers and business competitors.” Gardes Directional

Drilling v. U.S. Turnkey Exploration Co., 98 F.3d 860, 867-68 (5th

Cir. 1996); Delta Truck & Tractor, Inc. v. J.I. Case Co., 975 F.2d

1192, 1205 (5th Cir. 1992).

The appellants argue that they are and were direct competitors

with Wal-Mart.1 We disagree. Appellants first claim that their

tire store directly competed with Wal-Mart. The record clearly

demonstrates, however, that by the time the alleged deceptive and

unfair trade practices occurred, the appellants were no longer

involved in the tire business. Thus, they were not competitors of

Wal-Mart.

Appellants also contend that they are current competitors with

Wal-Mart because they operate a consulting business opposing Wal-

Mart expansion. We disagree. Appellants run a consulting business

aimed at battling Wal-Mart expansion while Wal-Mart runs an

1
Appellants do not assert that they qualify as “consumers,” so we
address only whether they were “competitors” of Wal-Mart.

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international chain of retail stores. The parties are not

“[p]ersons endeavoring to do the same thing and each offering to

perform the act, furnish the merchandise, or render the service

better or cheaper than his rival.” Black’s Law Dictionary 284 (6th

ed. 1990). Since the parties are not competitors, the Act does not

grant appellants a private right of action. See Gardes Directional

Drilling, 98 F.3d at 868. Therefore, the magistrate judge’s grant

of summary judgment was correct.

2. Defamation

Next, appellants argue that Cheyne defamed them by making the

following comments on the “12:30 Live” program:

You’ve got to understand, 60 Minutes is investigative
journalism. They have an opinion before they produce the
show, and they’re going to go out and shoot enough film
to support their position. They did an excellent job of
that. I simply believe that their position was entirely
wrong, not based on fact, and unfortunately, having
viewed much of the film, for example with our Vice-
President Tom Saye, was very, very biased. One of the
most critical parts of that entire show that offended all
of us at Wal-Mart was the reference to this little town
in Louisiana . . . Donaldsonville. I have letters from
the Mayor and leading citizens of Donaldsonville that
were written to CBS after that program, refuting all of
their claims that Donaldsonville is a dying town. The
leading gentlemen on that program, Glenn Falgoust, what
they didn’t tell you on 60 Minutes, is he wasn’t driven
out of business, he sold his business at a significant
profit. They failed to mention that. They failed to
mention that businesses today have increased 50% in the
last 20 years in that city of Donaldsonville. They shot
the Mayor of Donaldsonville with a tape, he supported
Wal-Mart strength in that town. CBS refused or at least
declined to use that portion. You can take pictures of
Washington, D.C., Chicago, Detroit, possibly in this
county, that will make it look poor. It’s exactly what
they did.

Although appellants do not specify on appeal precisely which

remarks defamed them, they contend that Cheyne’s rebuttal of the 60

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Minutes broadcast harmed their ability to function as consultants.

Injury, however, is just one of several factors that must be proven

to succeed in a defamation action. Louisiana plaintiffs must also

show that the defendant published defamatory words that were

communicated to some person, that the alleged defamatory remarks

were false, and the speaker acted with actual malice (in the case

of public figures). See Cangelosi v. Schwegmann Bros. Giant Super

Mkts., 390 So.2d 196, 198 (La. 1980). Since appellants are limited

public figures,2 summary judgment should be granted for the

defendant unless the plaintiffs have proven by clear and convincing

evidence that a genuine issue of actual malice exists.3 See Romero

v. Thomson Newspapers (Wisconsin), Inc., 648 So.2d 866, 869 (La.

1995). Proving actual malice is a difficult burden, especially

since proof that the defendant published false statements is not,

by itself, sufficient to demonstrate actual malice. See Kaufman,

113 F.3d at 560; Bose Corp. v. Consumers Union of United States,

Inc., 466 U.S. 485, 511, 104 S. Ct. 1949, 1965 (1984). “As long as

a defendant does not act knowing his statement is false or with

reckless disregard of its truth, actual malice will not be

2
The appellants do not contest their status as “limited public
figures.” That they meets all of the qualifications is irrefutable
since they have “thrust themselves to the forefront of particular public
controversies in order to influence the resolution of the issues
involved.” Gertz v. Robert Welch, Inc., 418 U.S. 323, 345, 94 S. Ct.
2997, 3009 (1974).
3
“Actual malice” exists when the speaker realizes his statement was
false or speaks with reckless disregard of whether it was false. See
New York Times Co. v. Sullivan, 376 U.S. 254, 279-80, 84 S. Ct. 710, 726
(1964); Peter Scalamandre & Sons, Inc. v. Kaufman, 113 F.3d 556, 560
(5th Cir. 1997).

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present.” Kaufman, 113 F.3d at 561.

Although portions of Cheyne’s comments were technically

inaccurate, appellants have failed to show that he made the

statements knowing of their falsity or with reckless disregard for

the truth. For instance, Cheyne stated that, “what they didn’t

tell you on 60 Minutes, is [Falgoust] wasn’t driven out of

business, he sold his business at a significant profit.” The

“talking points,” however, from which Cheyne based his remarks,

shows what he intended to say: “the new owner of the tire store

which Mr. Falgoust sold, is we understand, doing just fine and

making a profit.” Appellant has produced no clear and convincing

record evidence demonstrating that Cheyne intended to mislead his

audience or acted with “actual malice.” Rather, a comparison of

the two statements and the record shows that he made an honest

error.

Moreover, Cheyne’s comments are not defamatory vis-a-vis the

appellants because a third party watching the “12:30 Live” program

would not “have reasonably understood the communication, taken in

context, as intended in a defamatory sense.” Davis v. Borskey, 660

So.2d 17, 22 (La. 1995). Cheyne’s remarks were not about the

appellants--he referred to the lack of objectivity demonstrated by

“60 Minutes” and its bias in reporting the events in

Donaldsonville. Cheyne merely referred to the Falgousts’ sale of

their tire business as an example in which “60 Minutes” failed to

report accurately on Wal-Mart’s impact. Even if the comment was

inaccurate, it was not intended to defame the appellants, nor did

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Cheyne’s remarks accuse the appellants of being untruthful or

expose them to public ridicule. See id. Thus, their defamation

claim fails.

Appellants refer to other alleged defamatory statements,

but as these referred to the town of Donaldsonville, appellants

state no claim on their own behalf.

CONCLUSION

Finding no reversible error, the magistrate judge’s order

granting summary judgment for appellee Wal-Mart Stores,

Incorporated is AFFIRMED.

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