Croixland Properties Ltd. Partnership v. Corcoran

                        United States Court of Appeals


                     FOR THE DISTRICT OF COLUMBIA CIRCUIT


             Argued February 23, 1999    Decided April 13, 1999 


                                 No. 98-7097


                  Croixland Properties Limited Partnership, 

                      A Wisconsin Limited Partnership, 

                                  Appellant


                                      v.


                         Thomas J. Corcoran, et al., 

                                  Appellees


                Appeal from the United States District Court 

                        for the District of Columbia 

                               (No. 97cv02120)


     Robert H. Friebert argued the cause for appellant.  With 
him on the briefs were Robert P. Trout and John Thorpe 
Richards, Jr.

     Robert M. Adler argued the cause for appellees.  With him 
on the brief was Gary C. Adler.



     Before:  Williams, Randolph and Rogers, Circuit Judges.

     Opinion for the Court filed by Circuit Judge Rogers.

     Rogers, Circuit Judge:  In 1993, Croixland, the owner of a 
greyhound dog racing facility in Hudson, Wisconsin, entered 
into an agreement with three Indian tribes to sell the track 
and thereafter to manage jointly casino operations that the 
tribes would own.  A precondition to the agreement was the 
purchase of the facility land in trust by the Department of 
Interior under the Indian Regulatory Act, see 25 U.S.C. s 465 
(1994), and approval of gaming activities on that land under 
the Indian Gaming Regulatory Act, see 25 U.S.C. 
s 2719(b)(1)(A)(1994).  The Minnesota Area Director of the 
Department recommended approval of the tribes' application 
in the fall of 1994, but on July 14, 1995, the Deputy Assistant 
Secretary of Indian Affairs denied the application.  After 
learning in the course of other litigation about actions in 
Washington, D.C. taken by lobbyists for Indian tribes oppos-
ing the sale, Croixland sued the lobbyists for defamation and 
conspiracy to defame.1  The district court dismissed the 
complaint for failure to state a cause of action.  We reverse.

                                      I.


     This court reviews the dismissal of a complaint under 
Federal Rules of Civil Procedure 12(b)(6) de novo.  See 
Chandler v. District of Columbia Dep't of Corrections, 145 
F.3d 1355, 1360 (D.C. Cir. 1998).  We must accept the allega-
tions of the complaint as true, drawing all inferences in the 
plaintiff's favor, and will affirm "only if it is clear that no 
relief could be granted under any set of facts that could be 
proved consistent with the allegations."  Hishon v. King & 
Spalding, 467 U.S. 69, 73 (1984);  see also Harris v. Ladner, 
127 F.3d 1121, 1123 (D.C. Cir. 1997).

     To succeed on a defamation claim, the plaintiff must show:
__________
     1  For ease of reference we refer to appellees as "the lobbyists."  
Croixland sued Thomas J. Corcoran, Patrick E. O'Donnell, and 
Larry Kitto as defendants, but in their complaint refer to conduct 
by defendants and "other persons known and unknown."  See 
Comp. p 20.

     (1) that the defendant made a false and defamatory 
     statement concerning the plaintiff;  (2) that the defendant 
     published the statement without privilege to a third 
     party;  (3) that the defendant's fault in publishing the 
     statement amounted to at least negligence;  and (4) ei-
     ther that the statement was actionable as a matter of law 
     irrespective of special harm or that its publication caused 
     the plaintiff special harm.

Crowley v. North Am. Telecomm. Ass'n, 691 A.2d 1169, 1172 
n.2 (D.C. 1997) (quotations omitted);  see also Restatement 
(Second) of Torts s 558 (1976).2

     Croixland's complaint alleged that the lobbyists had con-
spired to convince decisionmakers in Washington, D.C. re-
viewing the tribes' application that Croixland had connections 
to organized crime.  See Compl. p 20.  Insofar as is relevant 
to this appeal, the complaint alleged that the lobbyists, "by 
publishing the defamatory statement that plaintiff [i.e., Croix-
land] was connected to organized crime, intended to injure 
plaintiff in its business reputation and to cause the Depart-
ment of Interior to deny approval of the proposed Hudson 
casino."  Id. p 29.  To this end, the lobbyists falsely stated, 
according to the complaint, that "a company named Delaware 
North was the owner of the Hudson greyhound facility, that 
Delaware North was connected to organized crime, and that 
approval of the Hudson casino would allow organized crime to 
be directly involved in Indian gaming."  Id. at p 20.  To 
support their false statements that Croixland was connected 
to organized crime, the lobbyists agreed to distribute an 
article appearing in the November 17, 1994, edition of the 
Wall Street Journal purporting to describe Delaware North's 

__________
     2  The lobbyists cite Caudle v. Thomason, 942 F. Supp. 635, 
638-39 (D.D.C. 1996), for the proposition that heightened pleading 
requirements apply in defamation cases.  In fact, as with any 
pleading, Croixland's complaint must allege the elements of the 
cause of action;  the Federal Rules of Civil Procedure impose no 
special pleading requirements for defamation as they do for a 
specified list of other matters.  See, e.g., Fed. R. Civ. P. 9.



ties to organized crime.3  Id.  One of the lobbyists--Scott 
Dacey, not one of the defendants--met with and gave the 
article to the Deputy Assistant Secretary of Indian Affairs.  
Id. p 22.  The complaint referred as well to a strategy by the 
lobbyists to get a story in the Washington Post about Dela-
ware North's relationship with tracks in Wisconsin.  Id. p 21.

     The complaint also alleged that a defamatory statement 
was made to Senator John McCain during a meeting in June 
1995, where the lobbyists stated that "the owners of the 
Hudson greyhound facility are connected to organized 
crime."4  Id. p 26;  see also id. p 23.  Senator McCain alleged-
ly told the lobbyists that he intended to ask the Justice 
Department to look into the Hudson casino application.  Id. 
p 26.  After the tribes' application was denied, the lobbyists 
sent Senator McCain a letter, reminding him of their meeting 
"regarding the proposed conversion of a dog track in Hudson, 
Wisconsin, to an Indian gaming casino which would bail out 
the dog track owner, Delaware North of Buffalo, New York," 
and thanking him for his "help with the Department of 
Justice." Id.  The letter stated that "[w]ithout your assis-
tance, we do not believe the BIA [Bureau of Indian Affairs] 
headquarters would have overturned its Minneapolis area 

__________
     3  The November 17, 1994 Wall Street Journal article by John 
R. Emshwiller, entitled "Sins of the Father?  Concession King's 
Son Fights Mob Stigma As He Builds Empire;  Delaware North's 
Businesses Appear Gangster-Free, But Regulators Wonder;  Host-
ing You at Yosemite," describes Delaware North as having "more 
than 200 operating units in 39 states and six countries."  The article 
reported that in 1972 the company (then known as Emprise Corpo-
ration) was convicted of conspiracy "to hide its ownership interest 
and the interests of two reputed mob figures in the Frontier Casino 
in Las Vegas."  Since then no such ties had been uncovered, due in 
part to the current owner's efforts, including hiring "former top 
federal law enforcement officials" to rid the company of any such 
ties.  The newspaper article noted, however, that state and federal 
regulators remained skeptical.

     4  At the time of the meeting, Senator McCain was chairman of 
the Senate Committee on Indian Affairs.  See Congressional Staff 
Directory (1995).


office on this matter."  Id.  In addition, the complaint alleged 
that the lobbyists repeated the defamatory statement that the 
owner of the Hudson facility was connected to organized 
crime.  Id. p 38.

     In dismissing the complaint, the district court focused on 
whether the alleged defamatory statements were "of and 
concerning" Croixland.  Croixland had alleged that it was 
defamed when the lobbyists reported to Department officials 
and others that the owner of the Hudson track had connec-
tions to organized crime, either directly or through Delaware 
North's ownership.  The lobbyists responded that they only 
made statements about Delaware North, and consequently no 
reasonable listener would think they were referring to Croix-
land.  The district court agreed with the lobbyists and ruled 
that because during the meeting with Senator McCain, in the 
subsequent letter to him, and in the newspaper article, there 
was no mention of Croixland by name and no indication that 
any listener understood that the references were to Croix-
land, the complaint failed to allege defamatory statements "of 
and concerning" Croixland.

     To satisfy the "of and concerning" element, it suffices that 
the statements at issue lead the listener to conclude that the 
speaker is referring to the plaintiff by description, even if the 
plaintiff is never named or is misnamed.  See, e.g., Peck v. 
Tribune Co., 214 U.S. 185, 188-90 (1909);  Washington Post 
Co. v. Kelly, 38 F.2d 151 (D.C. Cir. 1930);  Harmon v. Liss, 
116 A.2d 693, 695 (D.C. 1955);  see also Service Parking Corp. 
v. Washington Times Co., 92 F.2d 502, 504-05 (D.C. Cir. 
1937);  Caudle, 942 F. Supp. at 638;  W. Page Keeton et al., 
Prosser and Keeton on the Law of Torts s 111, at 783 (5th ed. 
1984);  Restatement (Second) of Torts s 564 (1977).  The 
complaint refers to statements that were not just about 
Delaware North as Delaware North but rather were about 
Delaware North in its alleged capacity as the owner the 
Hudson facility.  Insofar as Croixland was the true owner, 
even if never named, it could be defamed in its status as the 
owner.



     Grisanzio v. Rockford Newspapers, Inc., 477 N.E.2d 805 
(Ill. App. Ct. 1985), on which the lobbyists rely, is not to the 
contrary.  Grisanzio operated a restaurant in a building that 
was owned by Zammuto, who was reputed to be part of the 
mob.  After a newspaper reported Zammuto's mob connec-
tions, Grisanzio sued.  The court dismissed his complaint 
because he was never mentioned by name and a reader of the 
article would reasonably perceive the distinction between the 
operator of a restaurant and the owner of the building.  Id. at 
809-10.  By contrast, in the instant case, the alleged refer-
ences to "the owner of the Hudson track" afford no such 
distinction for the listener.5  So too, Carlucci v. Poughkeepsie 
Newspapers, Inc., 442 N.E.2d 442 (N.Y. 1982), is of no 
assistance to the lobbyists.  In that case the court rejected 
the notion that a reader learning that the 38-year-old owner 
of a grocery store had been arrested on gambling charges 
would perceive that statement to be "of and concerning" the 
corporation that in fact owned store, especially since a corpo-
ration cannot be arrested.  By contrast, given the conduct at 
issue and context of the statements in the instant case, the 
substitution of the name of one corporation, Delaware North, 
for another, Croixland, as "the owner of the Hudson facility," 
presents the possibility that a listener could perceive that the 
true owner is connected to organized crime.

     Consequently, there are two ways that Croixland's com-
plaint sufficiently pled the "of and concerning" element.  
First, the complaint alleged that the lobbyists linked Croix-
land to Delaware North and Delaware North to organized 
crime.  Even if the lobbyists misidentified the owner of the 
facility, it did not remove the taint to the true owner.  This is 
due in part to the fact that Delaware North managed and 
operated gambling enterprises in a number of states, see 
supra n.3, and assertions of its ownership did not rule out 
that it had a management agreement or affiliate relationship 

__________
     5  Furthermore, Illinois employs the rule of innocent construc-
tion, see Grisanzio, at 809, and the District of Columbia does not, 
see Ollman v. Evans, 750 F.2d 970, 980 n.18 (D.C. Cir. 1984) (in 
banc).



with Croixland that was consistent with Croixland's owner-
ship of the Hudson facility.  In any event, the assertion that 
"the owner" had mob connections sufficed to place in jeopar-
dy Croixland's opportunity with the tribes inasmuch as mob 
connections would doom the tribes' application pending in the 
Interior Department.

     Second, the complaint alleged that Croixland was defamed 
because statements were made about "the owner of the 
track" having connections to organized crime without refer-
ence to Delaware North.  It is undisputed, for purposes of 
the motion to dismiss, that Croixland is the owner of the 
Hudson track.  Compl. p 7.  Viewing the inferences most 
favorably to Croixland, a reference to "the owner of the 
track" could reasonably be understood to mean Croixland 
even if the listener did not know Croixland by name.  See 
Harmon v. Liss, 116 A.2d 693, 695 (D.C. 1955).  The defama-
tion would arise from the inference that the owner of the 
track is connected to organized crime where there is no 
ambiguity that a particular entity owns the track.  Drawing 
favorable inferences for the non-moving party, see Chandler, 
145 F.3d at 1360, and viewing the alleged remarks from the 
perspective of the listeners, see Kelly, 38 F.2d at 151, Caudle, 
942 F. Supp. at 638, it follows that, in the context of discus-
sions about a pending tribal application at the Interior De-
partment for the sale of Croixland's track, the lobbyists' 
defamatory statements could lead listeners such as Depart-
ment officials or the Chairman of the Senate Committee on 
Indian Affairs to believe that Croixland was connected in 
some manner to Delaware North or at least that whoever 
owned the Hudson track was connected to organized crime.

     Furthermore, even assuming that references to Delaware 
North as the owner of the Hudson track were not "of or 
concerning" Croixland, the complaint still was not properly 
dismissed.  Under Federal Rule of Civil Procedure 8(e), a 
complaint may contain alternative theories, and if one of the 
theories can survive a Rule 12(b)(6) motion, the district court 
cannot dismiss the complaint.6  Croixland's complaint includ-

__________
     6  "A party may set forth two or more statements of a claim.... 
[and] [w]hen two or more statements are made in the alternative 


ed an alternative theory, namely that defamatory statements 
were made directly about Croixland without reference to 
Delaware North.  This appears in paragraph 26 of the com-
plaint, referencing the meeting with Senator McCain, para-
graph 29, regarding the lobbyists' intent to injure Croixland's 
business reputation and cause the Department to deny ap-
proval of the proposed Hudson casino, and paragraph 38, 
concerning conspiracy, in which Croixland alleges numerous 
publications of the defamatory statement by the lobbyists 
that the owner of the Hudson facility had connections to 
organized crime.

     Accordingly, we reverse the order dismissing the complaint 
and remand the case for further proceedings.

__________
and one of them if made independently would be sufficient, the 
pleading is not made insufficient by the insufficiency of one or more 
of the alternative statements."  Fed. R. Civ. P. 8(e).