Pan Am Systems, Inc. v. Atlantic Northeast Rails & Ports, Inc.

United States Court of Appeals
For the First Circuit

No. 14-2118

PAN AM SYSTEMS, INC.; SPRINGFIELD TERMINAL RAILWAY COMPANY;
DAVID ANDREW FINK,

Plaintiffs, Appellants,

v.

ATLANTIC NORTHEAST RAILS AND PORTS, INC.; CHALMERS HARDENBERG,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE

[Hon. Nancy Torresen, U.S. District Judge]

Before

Howard, Chief Judge,
Thompson and Barron, Circuit Judges.

Thad B. Zmistowski, with whom Jonathan A. Pottle and Eaton
Peabody were on brief, for appellants.
Russell B. Pierce, Jr., with whom Norman, Hanson & DeTroy,
LLC was on brief, for appellees.

October 9, 2015
 THOMPSON, Circuit Judge.

Overview

Today's appeal centers on a district judge's decision

kicking out this battle-scarred defamation case on summary

judgment. By way of introduction, plaintiffs are David Andrew

Fink, Pan Am Systems, Inc., and Springfield Terminal Railway

Company. Fink is the former President and CEO of Pan Am, the

parent corporation of Springfield. Defendants are Chalmers

Hardenbergh and Atlantic Northeast Rails & Ports, Inc. ("ANR&P,"

for short). Hardenbergh is a writer and editor at ANR&P, a trade

newsletter and e-bulletin covering the railroad industry. So

defendants are — both sides tell us — "media defendants" for all

purposes relevant to this case. Saving certain details for later,

we quickly sketch the main contours of the parties' dispute.

Basically, plaintiffs are upset because they think four

ANR&P articles — published between December 2009 and March 2011 —

contained false and defamatory statements. Discussing a train

derailment on a Springfield-owned rail line, the first article —

after relying on reports in leading newspapers — quoted a state

official as saying the accident was "'perfectly predictable'"

because the "'railroad system'" was "'horrendously dilapidated.'"

The next article said Springfield neither stationed a crew at a

certain locale nor provided five-day-a-week service on a certain

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line — despite "promis[ing]" to do both. Touching on Pan Am's

"haz-mat service," the third article — relying on an email from an

unnamed source — claimed Springfield "'loses' cars on a consistent

ongoing basis, including one car 'lost' for over 60 days." And

finally, the last article said Pan Am's owner had "removed" Fink

"from management," though some of ANR&P's sources did not know

whether Fink had "definitely left" or whether the owner "came to

New England to administer the coup de grace," but sources did

express the hope that Fink's successor — Fink's son, it turns out

— "might have more freedom either to spend more money on

railroading, or put the existing money into different [and one

would hope more productive] places." (Brackets in original.)

Fed up with these write-ups, plaintiffs sued defendants

in diversity, alleging (as relevant here) defamation. According

to Maine law — which the parties agree applies to this litigation

— liability for defamation exists if there is

(a) a false and defamatory statement
concerning another;
(b) an unprivileged publication to a third
party;
(c) fault amounting at least to negligence on
the part of the publisher; and
(d) either actionability of the statement
irrespective of special harm or the existence
of special harm caused by the publication.

Lester v. Powers, 596 A.2d 65, 69 (Me. 1991) (quoting Restatement

(Second) of Torts § 558 — which we will call "RST" from now on).

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 Defendants moved to dismiss the complaint for failing to

state a claim, arguing (among other things) that plaintiffs had

insufficiently pled falsity and fault — defamation elements (a) and

(c), respectively. See Fed. R. Civ. P. 12(b)(6). Acting on the

motion, the judge dismissed the complaint without prejudice,

granting plaintiffs a chance to replead to fix these problems.

The judge also ruled that defendants should be considered "media

defendants" and that the complained-about speech involved "matters

of public concern" (more on the quoted concepts later).

Taking their cue from the judge's order, plaintiffs

seasonably filed an expanded complaint. Worried that a fight over

the fault element might require them to divulge confidential

sources and threaten their First-Amendment interests, defendants

proposed — and the district court accepted — having the parties do

discovery on all issues except fault, followed by summary judgment

on those issues, followed by discovery on fault if needed. See

Bruno & Stillman, Inc. v. Globe Newspaper Co., 633 F.2d 583, 597-

98 (1st Cir. 1980) (discussing how bifurcated discovery like this

can protect a defendant's journalistic sources). After the first

discovery phase, defendants moved for summary judgment,

maintaining that they had published nothing defamatory or false.

See Fed. R. Civ. P. 56(a). Plaintiffs opposed the motion,

naturally. But the judge granted the motion, concluding (in a

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nutshell) that none of the offending statements were actionable in

defamation.

Plaintiffs now appeal, making the big-picture argument

that the troublesome passages in the offending articles — dealing

with the derailment, promises, lost cars, and Fink's departure —

are capable of defamatory readings and are provably false. Wrong,

and wrong again, defendants fire back. But, for reasons to appear

shortly, we think plaintiffs are right about the lost-car comments.

And so we reverse only on that issue.

Let us be perfectly clear, though. Our reversal on the

lost-car comments does not mean that those comments may proceed to

trial. After all, our analysis here concerns only part of the

defamation inquiry — whether the battled-over statements are

capable of a defamatory meaning and whether they are provably

false. There remains the question whether defendants were at

fault. To show fault, plaintiffs will need to show at the very

least that defendants were negligent — and they may need to show

that defendants acted with actual malice. See N.Y. Times Co. v.

Sullivan, 376 U.S. 254, 279-80 (1964) (holding that a public figure

suing for defamation must show that the defendant acted with actual

malice). Because the judge bifurcated discovery, she left the

fault issue for another day. And so we must do the same.

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 Guiding Legal Principles

Summary Judgment

We give fresh review to the judge's summary-judgment

ruling, drawing all reasonable inferences in favor of plaintiffs

(the motion's opponents). See, e.g., Collazo-Rosado v. Univ. of

P.R., 765 F.3d 86, 92 (1st Cir. 2014). And we will affirm only if

no genuine issues of material fact muddle the dispute and only if

defendants (the motion's proponents) merit judgment as a matter of

law. See, e.g., id.

Two other things worth noting: First, to get the ruling

flipped, plaintiffs must offer us "more than arguments woven from

the gossamer strands of speculation and surmise." RTR Techs.,

Inc. v. Helming, 707 F.3d 84, 93 (1st Cir. 2013). And second, we

can affirm the ruling on any ground apparent in the record, even

one not relied on by the judge. See, e.g., Collazo-Rosado, 765

F.3d at 92.

Defamation

Modern defamation law is a complex mixture of common-

law rules and constitutional doctrines. See, e.g., Levinsky's,

Inc. v. Wal-Mart Stores, Inc., 127 F.3d 122, 132 (1st Cir. 1997).

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And working one's way through it all can be dizzying. But work

our way we must. So off we go.

(a)
Common-Law Rules

Starting with Maine law, we see (and this is a paraphrase

of what we said earlier) that a defamation cause of action "arises

from (1) the defendant's unprivileged publication to a third party

(2) of a false statement pertaining to the plaintiff (3) through

fault amounting at least to negligence, (4) as long as the

statement either is defamatory per se or causes special harm."1

See Garrett v. Tandy Corp., 295 F.3d 94, 103 (1st Cir. 2002)

(citing Rippett v. Bemis, 672 A.2d 82, 86 (Me. 1996)). A statement

is defamatory if it tends to harm the reputation of another either

by lowering the esteem in which he is held or by discouraging

others from associating with him. See, e.g., Bakal v. Weare, 583

A.2d 1028, 1029 (Me. 1990) (relying on RST § 559). Because for-

profit corporations have "business reputation[s]," they too can be

defamed. See RST § 561 cmt. b; see also id. § 561(a) (explaining

that "[o]ne who publishes a defamatory matter" concerning a for-

profit corporation can be liable "if . . . the matter tends to

prejudice [the corporation] in the conduct of its business or to

deter others from dealing with it"); see generally Vahlsing

1 Elements (3) and (4) are not at issue here.
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Christina Corp. v. Stanley, 487 A.2d 264, 265-66 (Me. 1985)

(dealing with a defamation action brought by a corporation and its

president). And keep in mind that one who repeats a defamatory

statement may be as liable as the original defamer. See RST § 578.

Whether a statement is capable of a defamatory meaning

is a threshold question for the court. See Bakal, 583 A.2d at

1030 (citing, among other authorities, RST § 614). To discern

meaning, a court must draw from the context of the statement and

not interpret words "in the most negative . . . way" imaginable.

Id. (citing RST § 563 cmt. d for the in-context point); see also

Veilleux v. Nat'l Broad. Co., 206 F.3d 92, 108 (1st Cir. 2000).

This "is not a question of the intent of the speaker, or author,

or even of the understanding of the plaintiff, but of the

understanding of those to whom the words are addressed . . . ."

Picard v. Brennan, 307 A.2d 833, 835 (Me. 1973) (quoting Chapman

v. Gannett, 171 A. 397, 398 (Me. 1934)). But if the court concludes

that the statement can reasonably carry both a defamatory and

nondefamatory meaning, it is up to a jury to decide whether the

statement was in fact understood as defamatory by its recipients.

See, e.g., Schoff v. York Cty., 761 A.2d 869, 871 n.2 (Me. 2000)

(citing RST § 614).

Truth is a complete defense, of course. The Maine

courts' direction on this is crystal clear: so long as the

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offending statement turns out to be true, the defendant is free

from liability, regardless of how much the statement may have hurt

the plaintiff's public reputation. See, e.g., Picard, 307 A.2d at

834–35. Critically too, a statement need not be 100% true to be

protected — if it is "substantially true," a defendant is safe.

See McCullough v. Visiting Nurse Serv. of S. Me., Inc., 691 A.2d

1201, 1204 (Me. 1997); see also RST § 581A cmt. f (stressing that

"[s]light inaccuracies of expression are immaterial provided that

the defamatory charge is true in substance"). The question is

whether the "allegedly false facts" about a plaintiff are "variants

of the true" and so do not "paint him in a worse light." Haynes

v. Alfred A. Knopf, Inc., 8 F.3d 1222, 1229 (7th Cir. 1993)

(Posner, C.J.); see also McCullough, 691 A.2d at 1204 (deeming the

contested statement — that plaintiff was fired "for 'several

incidents' when, in fact, she was only terminated for two

incidents" — nonactionable because it was "substantially true even

though it may not be technically accurate," adding that "[t]o a

reasonable person," the comment "is no more damaging to her

reputation than an accurate statement would have been"); Picard,

307 A.2d at 836 (holding that the difference between the defamatory

statement (that a person was "fired") and the truth (that he had

voluntarily resigned) could not cause a reasonable member of the

public to think less of plaintiff).

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 (b)
Constitutional Doctrines

On the constitutional side, the Supreme Court — reading

the First Amendment (made binding on the states through the

Fourteenth) — "has hedged about defamation suits" with lots of

"safeguards designed to protect a vigorous market in ideas and

opinions." Desnick v. Am. Broad. Co., 44 F.3d 1345, 1355 (7th

Cir. 1995) (Posner, C.J.); see also Gray v. St. Martin's Press,

Inc., 221 F.3d 243, 248 (1st Cir. 2000). We mention only two.

Because truth can set a defendant free, so to speak, it

follows that defamatory statements are not punishable unless they

are capable of being proved true or false. Which brings us to

opinions. Because they express the speaker's subjective views

(rather than implying that he possesses objectively testable

facts), they are First-Amendment protected — not so, obviously, if

they imply "false assertion[s] of fact." See Milkovich v. Lorain

Journal Co., 497 U.S. 1, 19 (1990); cf. generally RST § 566

(stressing that an opinion statement is punishable "only if it

implies the allegation of undisclosed defamatory facts as the basis

for the opinion"). Likewise, statements of "rhetorical hyperbole"

are not punishable. And neither are statements using words "in a

loose, figurative sense."2 See Old Dominion Branch No. 496, Nat'l

2 Retail-giant Wal-Mart can call a competitor's store "trashy,"
even if the store is not actually "filthy" — "[t]he word 'trashy'
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Ass'n of Letter Carriers v. Austin, 418 U.S. 264, 284-85 (1974);

see also Gray, 221 F.3d at 248. Understand, though, that simply

saying "'I think'" will not shield a defendant from liability,

particularly when what is allegedly "'thought'" is (or suggests)

a fact-proposition. See Gray, 221 F.3d at 248. But courts are

"likely" to stamp as "opinion" statements involving "expressions

of personal judgment, especially as the judgments become more vague

and subjective in character." Id.; see also Levinsky's, 127 F.3d

at 129 (commenting that "[t]he vaguer a term, or the more meanings

it reasonably can convey, the less likely it is to be actionable").

Also and importantly, where truth was once just an

affirmative defense, nowadays — thanks to the Supreme Court — if

misstatements involve issues of public concern, plaintiffs must

shoulder the burden of showing that the comments are false. See

Veilleux, 206 F.3d at 108; see also Phil. Newspapers, Inc. v.

Hepps, 475 U.S. 767, 776 (1986). This includes, of course, a

showing that the statements at issue are not substantially true —

is a chameleon that continuously changes colors and shades of
meaning" (it can mean unkempt or sleazy, for example); it "is loose
language that cannot be objectively verified," and so is not
actionable. See Levinsky's, 127 F.3d at 129-30. And the Boston
Globe can describe plaintiff's production of "The Phantom of the
Opera" (not the one created by Andrew Lloyd Webber) as "fake" and
"phony" — these "adjectives admit of numerous interpretations,"
meaning they are "unprovable" and so not actionable. See Phantom
Touring, Inc. v. Affiliated Publ'ns, 953 F.2d 724, 728 (1st Cir.
1992).
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or, to remove the negative, that the statements are materially

false. See Veilleux, 206 F.3d at 108-11 (indicating that a

statement that is not substantially true is materially false, and

vice versa); see generally Masson v. New Yorker Magazine, Inc.,

501 U.S. 496, 517 (1991) (emphasizing that "[m]inor inaccuracies

do not amount to falsity so long as the substance, the gist, the

sting, of the libelous charge be justified" (internal quotation

marks omitted)). To qualify as a matter of public concern, the

speech (based on the content, form, and context) must touch on

issues in which the public (even a small slice of the public) might

be interested, as distinct, say, from purely personal squabbles.

See, e.g., Levinsky's, 127 F.3d at 132.

Analyzing the Offending Statements

Train Derailment

Relying on articles appearing in the Nashua Telegraph

and Manchester Union Leader (two well-respected New Hampshire

newspapers), defendants published a story in December 2009 about

a train derailment occurring on tracks owned by Springfield.

Headlined "ST: COAL DERAILMENT*," the piece began like this (heads

up — the Fink mentioned in the article is plaintiff Fink's son):

17 November, Nashua. THE LOADED [Springfield]
BOW COAL TRAIN DERAILED SEVEN CARS of an 87–
car train near Bridge Street at about 11 AM.
Three turned over, with coal spilling out.

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 David Fink, [Springfield's] president,
arrived on the scene in the afternoon. He
said preliminary investigation showed that one
of the truck sides (a truck contains axles,
springs, and other equipment for suspension)
had fallen off one of the cars. That caused
a chain reaction among several subsequent
cars. Asked whether he thought there was a
problem with the tracks, Fink said, "We're
looking at everything, but we don't think so"
because of the evidence with the truck. An
investigation into the cause of the derailment
would likely go on for about a month because
of metal that needs to be tested and other
factors.

Crews were expected to realign the four
upright cars and move them that same day. Most
of the train—an estimated 74 cars—continued on
to the Merrimack Station power plant in Bow
without a problem. {Karen Lovett in Nashua
Telegraph 18.Nov.09}

The piece continued (reader alert — plaintiffs complain about the

Peter Burling quotes):

Shows need for track investment?

Peter Burling, chair of the New Hampshire Rail
Transit Authority, blamed [Springfield] for
the accident. "What has happened here is a
perfectly predictable accident—but it's hard
to describe it as an accident, since the
probabilities were so clear it was going to
take place. The only thing we didn't know is
when and where."

Burling said the accident, occurring on
a stretch of line with a speed limit of under
10 miles per hour for large freight trains,
made a track upgrade which might have been
provided had the state won funding for
passenger service to Concord [see 09#10A] more
important. "A horrendously dilapidated

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 railroad system has caused a slow-moving coal
train to fall off the tracks."

"The point is not to say 'I told you so,'
but to say this is why we feel it is so
important to get this line upgraded, and to
maintain it for passenger and freight
operations. We believe there are institutions
of the federal government that can move to
carry this along. I'm going to Washington in
[the] next couple of weeks to have further
discussions about the issue." {David Brooks
in Nashua Telegraph 18.Nov.09}

And the article ended with these words (remember — the Fink here

is plaintiff Fink's son):

Fink Response

Any number of reasons could explain why the
cars jumped the track, including equipment
failure, Fink said on 19 November, responding
to Burling's remarks. "I don't know what
(Burling) is basing that on. I don't think he
has any knowledge on it."

Specialists from Pan Am's mechanical,
engineering and operations departments will
comb the wreckage and analyze the train's
"black box" in the days ahead, Fink said.
Piecing together what happened will take time.
Fink drew comparisons to an airplane crash
investigation, saying multiple factors had to
be considered before reaching a conclusion.

As for the tracks, an automated dynamics
car had recently inspected the line and found
no problems. "I guess Mr. Burling is more
knowledgeable than the automated dynamics
car," Fink said. "I don't know where he gets
his information."

Pan Am's investigation team is working
with two Federal Railroad Administration
inspectors. Spokesperson Robert Kulat said it
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 could take up to a year before the FRA releases
their findings. {Derrick Perkins in
Manchester Union Leader 20.Nov.09}

Later, as an attachment to his affidavit in this case,

David Nagy, Springfield's director of safety and rail security

submitted a report saying a railcar owned by a different rail

company was "a major contributing cause of" the accident.

According to the report, the car's age and poor condition prevented

it from properly travelling along the track.

Before going on, we note the obvious: Burling's comments

came hard on the accident's heels, at a time when even Fink's son

conceded that Pan Am was "looking at everything" as a possible

cause, though Pan Am "d[id]n't think" the problem was track-

related. And far from being one-sided, defendants' piece provided

a full overview of the derailment investigation — told from various

perspectives — and even included Pan Am's official response

doubting the correctness of Burling's remarks.

Now on to the parties' arguments.

Convinced that the phrase "railroad system" encompasses

only tracks (which Springfield is responsible for), not tracks and

trains, plaintiffs insist that the Burling quotes are defamatory

and untrue because another company's railcar — not Springfield's

tracks — caused the derailment. Defendants counter that the

disputed comments are incapable of a defamatory interpretation,

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because they are simply Burling's subjective thoughts, expressed

in nonactionable hyperbole. Also, their argument continues, the

comments address a matter of public concern, and plaintiffs have

not met their burden of showing that the remarks are materially

false.

For our part, we need not decide who is right on the

defamatory-meaning issue. And that is because even assuming (in

plaintiff's favor) that Burling's remarks are capable of a

defamatory reading — that Springfield's tracks caused the accident

— defendants cannot be on the hook because (as they argue) the

speech deals with an issue of public concern and plaintiffs have

not shown the speech (even if false) is materially false.3 We

explain.

3 Defendants argue that plaintiffs did not preserve any challenge
to the judge's public-concern ruling. Their theory is that while
plaintiffs argued against a public-concern finding at the motion-
to-dismiss stage, they did not ask the judge to revisit her public-
concern ruling at the summary-judgment phase. Adopting a belt-
and-suspenders strategy, defendants also argue that a prior
litigation collaterally estops plaintiffs from suggesting the
speech is not of public concern. We by-pass these complicated
questions, because even assuming (favorably to plaintiffs) that
there are no preservation or collateral-estoppel problems, we
easily conclude that the fought-over speech addresses matters of
public concern.
Another quick point. Suggesting that the record is not
sufficiently developed for us to decide the public-concern
question, plaintiffs ask for a remand so the parties can conduct
discovery on that issue. But their request comes far too late:
defendants squarely relied on the judge's earlier public-concern
ruling in their summary-judgment papers, yet plaintiffs never
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 Examining the speech's content, form, and context (as we

must), we note that the targeted comments deal with the safety,

efficiency, and viability of plaintiffs' railway system — a system

that is part of a highly regulated industry, what with all the

federal laws on safety, see 49 U.S.C. §§ 20101-21311, public

funding, see 49 U.S.C. §§ 22101-22706, and oversight, see 49 U.S.C.

§§ 103, 701-727. And it should go without saying (though we say

it anyway) that the public cares deeply about the safety,

efficiency, and viability of railways — something plaintiffs do

not contest. Also, don't forget that the speech appeared in a

public newsletter, helping to educate the community and possibly

ignite public discourse on topics citizens are interested in.4

asked for discovery either in their objection or in a motion after
the judge awarded defendants summary judgment.
4 As the Supreme Court explained in a different context:
Railroads have from the very outset been
regarded as public highways, and the right and
the duty of the government to regulate in a
reasonable and proper manner the conduct and
business of railroad corporations have been
founded upon that fact. . . . The companies
hold a public franchise, and governmental
supervision is therefore valid. They are
organized for the public interests and to
subserve primarily the public good and
convenience.

Wis., Minn., & Pac. R.R. Co. v. Jacobson, 179 U.S. 287, 296-97
(1900).
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 Looking for a way out, plaintiffs basically insist that

our saying that this speech implicates a public concern would make

any statement about a railroad a matter of public concern. But

the charge is off base, because — as we just explained — our ruling

today flows from a specific examination of the content, form, and

context of the precise speech at issue here. And because the

speech falls within the area of public concern, plaintiffs must

now prove that the disputed statements are not only false but

materially false. Veilleux, 206 F.3d at 108; see also Hepps, 475

U.S. at 776.

But this they have not done. Again, plaintiffs adamantly

insist that the derailment's true cause was a badly corroded

railcar owned by another company. For support, they rely on an

internal report that said only that the railcar was "a major

contributing cause" of the accident. Conspicuous by its absence,

however, is any suggestion there that the car was the accident's

sole cause — and that means this document is far too thin a reed

to support plaintiffs' material-falsity charge.5 See generally

Tobin v. Fed. Express Corp., 775 F.3d 448, 452 (1st Cir. 2014)

5 Plaintiffs talk up an affidavit by Springfield's Nagy which
states that federal officials inspected the tracks "just prior to
the derailment" (to quote plaintiffs' brief) and found no defects.
That inspection occurred about three weeks before the derailment,
however, which tells us nothing about the track's condition when
the derailment happened.
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(emphasizing that "[s]peculation about mere possibilities, without

more, is not enough to stave off summary judgment"); Geshke v.

Crocs, Inc., 740 F.3d 74, 80 (1st Cir. 2014) (stressing that

unsubstantiated conclusions cannot block summary judgment).

Sure, there is some difference between saying the tracks caused

the derailment (which is how plaintiffs read Burling's remarks)

and saying a railcar was "a major contributing cause" — and so the

tracks were not the only cause. But even assuming the difference

in those two statements about the role of the tracks suggests

falsity, plaintiffs point to nothing in the summary-judgment

record indicating that their reputations would be improved at all

by a more precise explanation of the cause. Cf. generally

Veilleux, 206 F.3d at 111 (concluding "that whatever inaccuracies

existed were [in]sufficiently material to establish defamation").

Consequently we affirm summary judgment on this article.

Promises

In 1985, New England Southern Railroad Company signed a

lease with Pan Am to operate a section of Pan Am's tracks between

Manchester and Concord (two of the Granite State's bigger cities).6

Fourteen years later, in June 2009, Pan Am asked the Surface

6 Among other things, "operate" means that New England Southern
could provide rail service to customers "located on or served by"
the line as of the lease's effective date.
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Transportation Board ("STB," from here on) for permission to end

New England Southern's operating rights (over time, the bond

between Pan Am and New England Southern became frayed over "payment

of invoices and the condition" of the tracks, apparently). An

agency within the U.S. Department of Transportation, the STB grants

requests like Pan Am's "only if [it] finds that the present or

future public convenience and necessity require[s] or permit[s]

the . . . discontinuance." See 49 U.S.C. § 10903(d).

Explaining that it wanted to operate the line itself,

Pan Am submitted an affidavit from Richard Miller, the assistant

to Pan Am's vice president of transportation. Pertinently,

Miller's affidavit said that "[i]n order to provide service" to

rail-line "customers on a consistent basis one crew will be

required on a five day per week basis," with the "plan[]" being

"to headquarter a crew in Concord, New Hampshire." Pan Am's

application relied on Miller's affidavit to back up its claim that

its plan would serve the "public convenience and necessity" — yet

the application said (in language not found in the affidavit) that

Pan Am would place a crew in Concord if customer demand justified

that action. Here is the application's money quote:

Once Pan Am service is restored to the Subject
Line, Pan Am will assign a crew to be
headquartered in Concord, New Hampshire to
work a five day per week schedule providing
service to the four major customers and a few
smaller customers on the Subject Line as long
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 as traffic levels support such service, which
is an increase from the approximately two day
per week service currently provided to
Manchester, New Hampshire, with the increased
revenue earned by Pan Am justifying the
increased service to transfer cars to and from
[New England Southern]. . . .

New England Southern weighed in, expressing concerns

about whether Pan Am would provide adequate service along the line.

The New Hampshire Department of Transportation ("NHDOT," for

convenience) weighed in too, asking the STB to require Pan Am to

"interchange" at a specific rail yard in Concord.7

The STB later granted Pan Am's application in April 2010,

saying:

Pan Am claims that it is committed to working
with [New England Southern] to achieve a
smooth transition of operations once the Lease
is terminated, and that it is intent on
providing service on a consistent basis that
will meet and exceed the service needs and
demands of this growing region of New
Hampshire. To this end, Pan Am states that:
(1) it will operate one crew on a 5–day–a–week
basis; [and] (2) the crew will be
headquartered in Concord, where approximately
1,700 cars were interchanged with [New England
Southern] in 2006 . . . .

7 As best we can tell, "interchange" — in railway lingo — refers
to "the practice of railroads conveying freight cars . . . from
other companies over their lines" at specified junction points.
See Wikipedia, "Interchange (freight rail),"
https://en.wikipedia.org/wiki/Interchange_(freight_rail) (last
visited Sept. 9, 2015).
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 "Pan Am has a statutory obligation to provide adequate

service," the STB noted, and "states that it is intent on providing

service on a consistent basis that will meet and exceed the service

needs and demands of the affected area." Given this concatenation

of circumstances, the STB denied the NHDOT's request for a

condition requiring Pan Am to establish an interchange at the

specific Concord yard. "We will hold Pan Am to its assurances,"

the STB added. And "[i]n the event [Pan Am] fails to live up to

its statutory obligation to provide adequate service, we will

promptly consider requests for appropriate corrective action."

A month later, in May 2010, defendants published an

article on the STB's decision, noting among other things that "Pan

Am promises" to "'operate one crew on a 5-day-a-week basis,'" with

"'the crew . . . headquartered in Concord,'" and that "the STB

declined to condition the [lease's] discontinuance," though the

STB said it would "'hold Pan Am to its assurances.'" Then came

the offending article, in December 2010, the pertinent part of

which we now quote (attention — plaintiffs grouse about the

comments from Peter Dearness):

Better interchange would mean more customers.

Despite [Springfield's] promise to locate a
crew in Concord and switch customers five days
a week [citing to the May 2010 article],
[Peter] Dearness [New England Southern's
owner] reported that [Springfield] has done
neither. It is now providing a switch one day
- 22 -
 a week. He believed that to serve major
customers Blue Seal and Ciment Quebec,
[Springfield] had to switch at least three
times a week, which is "what I provided before
I left."

Plaintiffs do not argue that this passage is defamatory

because Pan Am actually stationed a crew in Concord, five days a

week. Rather, they protest that they never promised to provide

that service and that the passage is provably false to boot.

Defendants, for their part, focus their energies on selling the

idea that the speech involved matters of public concern and was

not materially false. And they have the better of this argument.

As for public concern, the subject article addresses the

adequacy of Pan Am's services, and as we noted before, whether a

railway provides adequate service is clearly of concern to the

public. As for material falsity, the word "promise" is the

sticking point, apparently. To plaintiffs' way of thinking,

defendants' piece — with the word "promise" front and center —

implies that Pan Am made a firm commitment that it later broke.

Recall, however, that Pan Am's Miller did tell the STB (via

affidavit) that his company "planned to headquarter a crew in

Concord" and that "one crew will be required on a five day per

week basis." (Emphasis ours.) Miller did not qualify his sworn

statement by saying Pan Am might do neither. Just think about

that for a second — an authorized Pan Am honcho told the STB under

- 23 -
oath and without qualification that Pan Am planned to locate a

crew in Concord, five days a week.

Yes, Pan Am did put a qualifying phrase — "as long as

traffic levels support such service" — in the application. Yet

the STB still called what Pan Am said "assurances" — "assurances"

that Pan Am "will . . . headquarter[]" a crew in Concord, five

days a week. Plaintiffs have no beef with the STB's "assurances"

tag. And since an "assurance" is a "promise,"8 there is no falsity

— let alone a material one — when it comes to this statement. So

we affirm the entry summary judgment on this article.

"Lost" Railcars

Jones Chemical, Inc. — known as JCI — is (as its names

suggests) a chemical company. Springfield delivers cars carrying

chlorine to JCI's New Hampshire facility. In May 2007, Springfield

raised its chlorine-delivery prices, adding special handling

charges too. About four years later, in March 2011, defendants

reported on how all this affected JCI. Entitled "PAN AM: HAZ–MAT

SERVICE*," the article's offending part said this (ellipses and

brackets in original):

Quality of rail service

In addition to price and the need for special
trains, JCI has had difficulty with

8 See Oxford English Dictionary Online,
http://www.oed.com/view/Entry/12057 (last visited Sept. 9, 2015).
- 24 -
 consistency of service, according to another
source. It requires switching of at least four
cars a week.

The railroad "loses" cars on a consistent
ongoing basis, including one car "lost" for
over 60 days . . . even though certain DHS and
DOT statutes require carriers to release [TIH]
cars within 48 hours. {e-mails to ANR&P
2.Mar.11}.

TIH stands for toxic inhalation hazard. The quotes are from an

email to ANR&P. Defendants kept the sender's name out of the

article.

After plaintiffs filed this lawsuit, Hardenbergh

contacted the sender and got a response from the sender's lawyer

saying the car "lost" for over 60 days "was not a TIH car."

Defendants then published a clarification explaining that the

source "was not referring to lost TIH cars."

Plaintiffs claim defendants defamed them by telling

readers that they consistently lose cars carrying TIH, including

one car for over 60 days — a charge, defendants add, that is flat-

out false. Looking to parry this attack, defendants claim the

sentence is too cryptic to convey anything specific enough to be

considered a verifiable statement of fact.9 And, defendants add,

9 "Obviously," defendants told the judge, the word "loses" "was
not intended to suggest that the railroad permanently 'loses cars,'
within the wide ambit of connotation of the verb 'to lose.'"
"[T]he idea," defendants stressed, "is not that [p]laintiffs
- 25 -
assuming that argument does not carry the day, they should still

win because the gist of the sentence is true. This time, however,

plaintiffs come out on top.

For one thing, the statement is capable of being read in

a defamatory way. Just consider the following: Federal law

requires rail carriers (like Springfield) to "forward" hazardous

materials (like TIH materials) every 48 hours until they reach

their final destination. See 49 C.F.R. § 174.14. Federal law

also requires rail carriers (like Springfield) to have "procedures

in place to determine the location and shipping information for

each railcar under its physical custody and control that contains

[hazardous materials]." See 49 C.F.R. § 1580.103(b). And

defendants do not deny that their readers readily know what a big

deal it is for a rail carrier to act like a scofflaw when it comes

to hazardous materials. So we do not doubt that having defendants

accuse them of losing track of TIH cars (even temporally) — a

readily verifiable charge, supposedly based on specific events —

certainly lowers plaintiffs' standing in the community.

On top of that, the summary-judgment evidence (taken in

the light most favorable to plaintiffs) shows the statement —

dealing with public safety, a quintessential issue of public

literally lose cars, but that [p]laintiffs had difficulty tracking
where certain cars may be at any given time on the system."
- 26 -
concern, as we explained earlier — is materially false. According

to an affidavit by Doug Steward, Springfield's superintendent for

transportation, Springfield uses a computerized monitoring program

to track all TIH-carrying railcars, ensuring the cars "are fully

accounted for." And Springfield never "lose[s] TIH or other

railcars on a consistent and ongoing basis," Steward emphasized.

Federal agencies — the Federal Railroad Administration and the

Transportation Security Administration — routinely audit

Springfield, he added, to evaluate Springfield's compliance with

federal law. Yet no agency, he stressed, has ever accused

Springfield of losing TIH or other railcars, or of violating any

federal laws in shipping cars to JCI.10

10 Defendants take shots at an exhibit attached to Steward's
affidavit, calling it "a cryptic set of unclear documents" — e.g.,
"a one-page undated and illegible screen shot and a two-page
waybill for an empty car" dated two years after the offending
comment. Steward, though, based his affidavit not just on his
review of the documents but on his personal knowledge. And
defendants complaints do not suggest that the statements we've
highlighted fall outside his personal knowledge as the officer
responsible for "management and oversight on tracking rail cars
moving on [plaintiffs'] rail system" — "including TIH rail cars"
— "to ensure they are full[y] accounted for and are not lost or go
missing." Defendants' complaints about Steward's affidavit may
perhaps be pressed via a pretrial motion or before a jury, if the
case goes to trial.
One other thing. Defendants submitted an affidavit by
Dearness (New England Southern's owner) saying that "TIH cars often
sat several days in the Concord Yard" and that the "bunching" of
railcars (including TIH cars) probably gave rise to "technical[]
. . . violation[s] of the 48-hour rule on occasion." Dearness's
affidavit does not say that plaintiffs lost track of any cars, let
- 27 -
 All that is left to do then is compare the challenged

defamatory comment (that plaintiffs lose TIH cars en route to JCI,

including one for over 60 days in violation of federal law) with

what we take as true at this stage of the case (that plaintiffs

never lost railcars carrying hazardous materials, even

temporarily). And having done this, we conclude that a sensible

juror could find that a more precise explication of the TIH issue

would have improved plaintiffs' public reputation — meaning we

must vacate the grant of summary judgment on this article.

Fink's Departure

Up until 2006, Fink was both president and CEO of Pan Am

and president and CEO of the Pan Am group of railroad entities

(the "Pan Am group," for easy reading). That year, at his request,

his son became president of the Pan Am group, though Fink stayed

on as president and CEO of Pan Am and CEO of the Pan Am group.

Unfortunately, father and son did not share the same

operational philosophy. Things came to a head in 2011, when Tim

Mellon, Pan Am's principal owner, decided that the dual-leadership

situation "was no longer working." Mellon gave Fink two options:

take back total control of Pan Am's railroad operations or

alone the ones sitting in the Concord Yard. Nor does it state
that an agency actually cited plaintiffs for losing cars. Again,
defendants might perhaps pursue these Dearness-based arguments in
a pretrial motion or before a jury, if a trial is in the offing.
- 28 -
surrender power to his son. Fink chose the latter, writing Mellon

in March 2011:

Subject to your acceptance of the conditions
proposed below regarding severance, this
letter is submitted to confirm the resignation
of my employment, effective at the close of
business today, from all positions held with
Pan Am Systems, Inc., and its subsidiary
companies, including my positions as an
officer and director of those companies. With
regard to severance compensation I would agree
to resign under the following conditions:
[conditions redacted]

A few days later, defendants published an article about

Fink's departure. Headlined "PAN AM: A NEW DAWN?*," the piece

started out this way (FYI — the article uses "Fink pere" to refer

to defendant Fink (David Andrew Fink) and "Fink fils" to refer to

defendant Fink's son11):

9 March, Nashua, NH–North Billerica MA. PAN
AM OWNER TIM MELLON REMOVED DAVE FINK PERE
from management of the company, according to
four separate sources: one MBTA, one union,
one Maine source, and one from other railroad
management in New England. Sources differ on
what precipitated the action, whether Fink is
formally removed or is only on a "leave of
absence", and whether Mellon came to New
England to administer the coup de grace or did
it by telephone, but all agree that David
Andrew Fink, the head of Pam Am Systems, is no
longer in charge. . . .

11"Pere" means "father" and "fils" means "son." See Oxford English
Dictionary Online, http://www.oed.com/view/Entry/140661 (last
visited Sept. 9, 2015); Oxford English Dictionary Online,
http://www.oed.com/view/Entry/70268 (last visited Sept. 9, 2015).
- 29 -
"One source," the article added, stated that "'[t]he old man will

still run things.' Another source said that Fink fils is now the

head of both the railroad and the holding company." "If Fink pere

has definitely left," the article said, wrapping up, then some

sources "thought that young Fink might have more freedom either to

spend more money on railroading, or put the existing money into

different [and one would hope more productive] places." (Brackets

in original.)

The parties fight hard over whether this article is

capable of conveying a defamatory meaning and whether the

statements are about matters of public concern. As plaintiffs

tell it, one can easily infer — given quotes like "removed . . .

from management," "coup de grace," and spending money "more

productive[ly]" — that Mellon removed Fink for performance

reasons. And the point of the speech, they add, was to spotlight

an internal employment issue, not to raise a matter of public

concern. As defendants see it, though, the article is not

actionable because a statement that a person was fired — without

more — is not defamatory. See Picard, 307 A.2d at 835. And —

given quotes like "[s]ources differ on what precipitated the

action" — one would have to torture the story's text to conclude

that Mellon fired Fink for a specific reason, or so defendants

want us to rule. Also, they contend, the speech focuses on the

- 30 -
corporate shakeup at a major railway company, which is a matter of

concern to the public.

Once again, we need not take sides on the defamatory-

meaning question. Even assuming (favorably to plaintiffs) that

the article communicates the message that Mellon removed Fink for

performance reasons and that such a message may be defamatory,

defendants cannot be liable because (so far as the summary-judgment

record shows) the disputed statements relate to public concerns

and are not false in any material sense.

Starting with the public-concern issue, despite

defendants' best effort to pass Fink's departure off as involving

a purely private matter (his employment status), the speech at

issue implicates railway safety, efficiency, and viability. We

say that because the article talked about how his leaving might

cause Pan Am "either to spend more money on railroading, or put

the existing money into different [and one would hope more

productive] places." And a discussion about leadership change

tied to railroad improvement is firmly within the sphere of matters

of public concern.

Turning then to material falsity, we point out what

Fink's affidavit makes plain. The father/son leadership structure

was a no-go, given their different views on how best to run the

business. And Mellon had had enough. So to end the dysfunction,

- 31 -
Mellon delivered what defendants called the "coup de grace" (which

can mean an action "that settles or puts an end to something"12),

essentially telling Fink — according to Fink — either you take

charge or let your son take charge, but no more power-sharing.

His hand forced by Mellon's "directive" (another quote from Fink's

affidavit) the elder Fink "agree[d] to resign" (a quote from Fink's

letter to Mellon). Now perhaps there is a difference between

saying Mellon "removed" Fink for performance reasons (which is how

plaintiffs read the article) and saying Fink left following a

Mellon "directive" to either retake the reins of power or give

them up forever — a directive issued to end the corporate problems

caused by the father/son infighting (which is how plaintiffs

describe Fink's departure). But even assuming any difference

suggests falsity, plaintiffs identify nothing in the summary-

judgment record showing their reputations would be changed for the

better by a more fulsome account of Fink's leaving. Cf. generally

McCullough, 691 A.2d at 1204 (finding no defamation liability where

the challenged statement was no more damaging to plaintiff's

reputation than a more accurate statement would have been). So we

affirm the summary-judgment ruling on this article too.

12 See Oxford English Dictionary Online,
http://www.oed.com/view/Entry/43112 (last visited Sept. 9, 2015)
- 32 -
 Final Words

Our work over, we reverse the grant of summary judgment

on the TIH article and affirm in all other respects. The parties

shall bear their own costs.

So ordered.

- 33 -