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Gray v. St. Martin's Press, Inc.

Court: Court of Appeals for the First Circuit
Date filed: 2000-08-02
Citations: 221 F.3d 243
Copy Citations
27 Citing Cases

          United States Court of Appeals
                      For the First Circuit


No. 99-1891
No. 99-1892

                          ROBERT K. GRAY,

               Plaintiff, Appellant/Cross-Appellee,

                                v.

          ST. MARTIN'S PRESS, INC. and SUSAN TRENTO,

              Defendants, Appellees/Cross-Appellants.



         APPEALS FROM THE UNITED STATES DISTRICT COURT

                 FOR THE DISTRICT OF NEW HAMPSHIRE

        [Hon. Steven J. McAuliffe, U.S. District Judge]


                              Before

                      Boudin, Stahl and Lynch,

                          Circuit Judges.



     James E. Higgins with whom Elizabeth A. Bailey and Sheehan
Phinney Bass & Green, P.A. were on consolidated brief for
plaintiff.
     John C. Lankenau with whom Robert D. Balin, Jeffrey H. Blum,
Davis Wright Tremaine LLP, William L. Chapman, James P. Basset
and Orr & Reno, P.A. were on consolidated brief for defendants.
                              August 2, 2000




           BOUDIN, Circuit Judge.          Robert K. Gray was for many

years active in Republican politics and a leading figure in

public   relations      in   Washington,       D.C.   He    served    in   the

Eisenhower administration in various roles (e.g., Secretary to

the   Cabinet),    worked    in   the   1980    Reagan-Bush     presidential

campaign and served between 1961 and 1981 as the head of the

Washington office of, and eventually as vice chairman of, Hill

and Knowlton, a major public relations and lobbying firm.                   He

founded his own firm in 1981, sold it to Hill and Knowlton in

1986, and served for a period as a member of the board of

directors and chairman of a division of the latter.

           In July 1992, St. Martin's Press, Inc., published a

book by Susan Trento, entitled The Power House:                 Robert Keith

Gray and the Selling of Access and Influence in Washington.

Focusing on Gray's career, the book sought to show the influence

of    powerful    and   well-connected     lobbyists       on   the   federal

government.      In June 1995, Gray brought suit both against St.

Martin's Press and Trento in the federal district court in New

Hampshire, claiming that eight separate statements made in the



                                    -2-
book were defamatory.       The eight statements are set forth in an

appendix to this opinion.

            After two years of discovery, St. Martin's Press moved

for summary judgment.        On March 5, 1998, the district court

granted partial summary judgment to St. Martin's Press, ruling

that three of the eight statements--(designated (b), (f), and

(h))--were non-actionable statements of opinion. More discovery

was   conducted    and    both   defendants   filed   a    second   summary

judgment motion.     On May 19, 1999, the district court ruled that

Gray was a "limited purpose public figure," requiring Gray to

show "actual malice" in order to prevail.             The district court

granted summary judgment for defendants as to one statement

(statement (c)), finding that there was no basis for the jury to

find actual malice.

            The trial on the remaining four statements began on

June 7, 1999.       On June 22, 1999, the jury returned special

verdicts in favor of St. Martin's and Trento.             As to each of the

four remaining statements in issue ((a), (d), (e), and (g)), the

jury found that Gray had not proved that the defendants had

published    to   third   parties   statements   that      were   false   and

defamatory as to Gray; separately, the jury found that Gray

failed to prove actual malice by either defendant as to any of

the four statements.


                                    -3-
         Gray has now appealed.        In this court he contests the

dismissal before trial of four of the statements, a discovery

ruling upholding a claim of privilege asserted by Trento that

pertains to one of the statements considered by the jury, and

the denial before trial of a motion by Gray to amend his

complaint to add twenty additional statements to the eight

already charged.    We consider the issues in this order, applying

the standard of review pertinent to the issue in question.

         Under state law, defendants in this case would be

liable for damages for libel if, as a result of the failure to

exercise reasonable care, they published false and defamatory

facts about the plaintiff to a third party, assuming that no

valid privilege applies. 1     Independent Mechanical Contractors,

Inc. v. Gordon T. Burke & Sons, Inc., 138 N.H. 110, 118 (N.H.

1993); The Gazette, Inc. v. Harris, 229 Va. 1, 8, 15 (1985),

cert. denied, 472 U.S. 1032 (1985).       See generally Restatement

(Second) of Torts § 558 (1977).     However, the Supreme Court has

read the First Amendment, made binding on the states through the

Fourteenth,   to   impose   additional   limitations   in   defamation



    1The district court initially applied New Hampshire law in
ruling on the defendants' motions for summary judgment, but just
before trial was persuaded that Virginia law applies to this
case. The parties to this appeal do not contend that any issue
on this appeal turns on differences between New Hampshire and
Virginia law.

                                 -4-
cases, whether or not they are also part of state law.                Two of

these limitations are significant in this case--one dealing with

scienter and the other with opinion.

            Pertinently, the Court has held that a "public figure"

may recover only if the false and defamatory statement was made

with "actual malice," meaning (in the Supreme Court's non-

literal usage) either that defendant knew that the statement was

false or showed a "reckless disregard" as to its truth or

falsity.     New York Times Co. v. Sullivan, 376 U.S. 254, 279-80

(1964); see also Gertz v. Robert Welch, Inc., 418 U.S. 323, 335-

37 (1974).    A "public figure" may be one of such fame as to be

so in all contexts (e.g., the President) or a "limited-purpose

public figure" as to a particular episode or subject; in the

latter   case,   only   the   statements     about   the   person    in   that

context require a showing of actual malice.             Gertz, 418 U.S. at

351-52; Pendleton v. City of Haverhill, 156 F.3d 57, 67 & n.7

(1st Cir. 1998).

            The Court has also held that only statements that

present or imply the existence of facts that can be proven true

or false are actionable under state defamation law.                 Milkovich

v. Lorain Journal Co., 497 U.S. 1, 18-20 (1990).             But to say "I

think" is not enough to turn fact into opinion, Milkovich, 497

U.S.   at   18-19,   where    what   is    supposedly   "thought"     is,   or


                                     -5-
implies, a proposition of fact,       id.; Levinsky's v.   Wal-Mart

Stores, Inc., 127 F.3d 122, 127 (1st Cir. 1997).       Rather, the

cases are likely to protect a statement as "opinion" where it

involves expressions of personal judgment, especially as the

judgments become more vague and subjective in character.        See

Levinsky's, 127 F.3d at 130 (store was "trashy").          As Chief

Judge Posner put the matter in Haynes v. Alfred A. Knopf, Inc.,

8 F.3d 1222, 1227 (7th Cir. 1993):

          [I]f it is plain that the speaker is
          expressing    a    subjective    view,   an
          interpretation, a theory, conjecture, or
          surmise, rather than claiming to be in
          possession of objectively verifiable facts,
          the statement is not actionable.

          On this appeal, Gray first questions the district

court's March 5, 1998, ruling that statements (b), (f), and (h)

are not actionable because they are not factual statements

capable of being proven false.       The determination was made on

summary judgment and in any event the courts treat the issue of

labeling a statement as verifiable fact or as opinion as one

ordinarily decided by judges as a matter of law.     Bose Corp. v.

Consumers Union of United States, Inc., 466 U.S. 485, 510-11

(1984).   Thus from either vantage, our review is de novo.    As it

happens, we agree with the district court's reasoning as well as

its result and so treat this issue briefly.



                               -6-
            Statement (b) is the view, attributed to an unnamed

Gray and Company senior executive, that Gray's "closeness to the

President [Reagan] and others was often faked.                 'He completely

faked his closeness with a number of senior administration

officials.'"      There     are   various     vantages      from    which     the

statement could be attacked as false (e.g., that no such view

was expressed by the unnamed executive), but the bite here is in

the claim that "closeness" was "faked" and Gray's position is

that he could show at trial that he was quite close to President

Reagan and other senior officials and was not "faking" these

relationships.

            Whether    calling    something    a   "fake"      is   or   is   not

protected    opinion    depends    very    much    on   what   is   meant     and

therefore on context.        To say that a dollar bill is a fake

would, in most situations (but perhaps not all), be taken to

mean that it was a counterfeit; and to say that the defendant

was   knowingly   passing    a    fake    dollar   bill   would     surely     be

actionable, if false.       At the other extreme, where there were

two productions of      Phantom of the Opera, and the defendant

called one of them "fake" and "phony," this court held that the

adjectives were subjective aesthetic judgments protected as

opinion.    Phantom Touring, Inc. v. Affiliated Publications, 953

F.2d 724, 728 (1st Cir.), cert. denied, 504 U.S. 974 (1992).


                                    -7-
            In this case, Gray might have a claim if defendants had

said that Gray claimed to know President Reagan or other high

officials but did not in fact know them; whether or not he knew

them is an objective fact.           However, the book made quite clear

that Gray did have contacts at the highest levels; the word

"fake"   was   used    to    imply     that   Gray   was    exaggerating    his

"closeness."     This is just the kind of subjective judgment that

is only minimally about "what happened" but expresses instead a

vague and subjective characterization of what happened.                   As we

read the case law, the statement is protected opinion.

            Statement       (f)   is    in    essence      several    different

statements: in it Trento asserted that a number of Washington

lobbyists said that Gray and Company "ultimately failed because

it offered very little real substance."               Gray’s quarrel is not

with the claim that lobbyists (quite possibly competitors) had

expressed such views but with the assertions that the company

had "failed" and offered "little real substance."                    The latter

judgment,    where    the    product    is    an   intangible   service    like

lobbying and criteria for success are debatable, is surely one

of opinion so we direct our attention to the charge that Gray

and Company "failed."

            If the book had said or even implied that Gray and

Company went bankrupt or did not make a profit, these would be


                                       -8-
statements of fact that could be proved true or false.          Instead,

the book made clear that in 1986 Gray sold his company to JWT

Group, Inc., which made the company part of its subsidiary, Hill

and Knowlton, for about $16 million, of which Gray himself got

at least $9 million (the purchase price had been $21 million but

the   buyer    withheld   about   $4.6   million   to   cover   possible

liabilities). Gray does not dispute that the figures are given

in the book and those figures make clear that Gray’s company did

not fail in any absolute sense.

              Indeed, in explaining that Gray and Company "failed,"

Trento said that the sale was "profitable" but it "shattered"

Gray’s dream of owning the world’s largest public communications

firm.   Gray does not challenge the latter statement; recall that

he left Hill and Knowlton to found Gray and Company as an

independent enterprise to compete with Hill and Knowlton.           Some

might think it a success, rather than a failure, that his former

employer found him competitive and competent enough to buy him

out for millions and place him on its board of directors; but

what is "success" in a situation like this one is very much a

matter of opinion.

          The next statement, designated (h), reads as follows:

          Robert Crowley believed that "Casey may have
          asked Gray to take on these controversial
          clients--for the very purpose of spying on
          them." If that were so it would explain why

                                   -9-
          Gray considered countries like Libya, and
          took clients like Angola.

Robert Crowley was a former senior CIA official and William

Casey was the CIA director in the early to mid-1980s.       Once

again, Gray does not dispute that Crowley may have so believed

but he does challenge the balance of the statements.

          Interestingly, the first disputed proposition--that

Casey may have asked Gray to spy--is not necessarily protected

as to defendants even if they were merely describing Crowley’s

view.   The reason, which is one of policy rather than strict

logic, is that it would otherwise be too easy for a writer or

publisher to defame freely by repeating the defamation of others

and defending it as simply an accurate report of what someone

else had said.   Cianci v. New Times Publ'g Co., 639 F.2d 54, 60-

61 (2d Cir. 1980) (Friendly, J.); Cepeda v. Cowles Magazines &

Broad., Inc., 328 F.2d 869, 871 (9th Cir.), cert. denied, 379

U.S. 844 (1964); Restatement (Second) of Torts § 578.   Thus, the

first issue is whether Crowley’s speculation is actionable once

it is attributed to the defendants.

          Statement (h), by its terms, links the possible purpose

to spy to Casey, not Gray; but the second sentence, seemingly a

separate speculation by defendants, suggests that Gray may have

acted on this request.    Defendants say that to spy for one’s

country is laudable, not defamatory.     Whether a statement is

                              -10-
capable of a defamatory meaning is an issue of law for the

court, Restatement (Second) of Torts § 614(1); Harkaway v.

Boston Herald Traveler Corp., 418 F.2d 56, 58 (1st Cir. 1969),

and thus one we would review de novo; but the factfinder must

ultimately     decide    whether      a       statement        like    the    one   here,

reasonably     capable   of    both       a    defamatory       and    non-defamatory

meaning, was in fact understood as defamatory by its recipients.2

           We think that the statement's implication of spying on

clients is capable of bearing a defamatory meaning--it could

easily harm Gray in dealing with clients--and that a reasonable

jury could have found the statement in question defamatory.                           See

Restatement     (Second)      of   Torts        §    559      ("A    communication     is

defamatory if it 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."); Thomson,

119 N.H. at 373 (to be defamatory, a statement "must tend to

lower    the   plaintiff    in     the        esteem     of    any    substantial     and

respectable     group,     even    though           it   may    be    quite    a    small


     2
     Restatement (Second) of Torts § 614(2) & cmt. d ("The jury
determines whether a communication, capable of a defamatory
meaning, was so understood by its recipient."); Perk v. Vector
Resources Group, Ltd., 253 Va. 310, 316 (1997) (statement must
be sufficiently defamatory on its face before it is sent to the
jury); Thomson v. Cash, 119 N.H. 371, 374 (1979) ("Because the
words are susceptible of more than one meaning, whether they
were used in the defamatory sense is a question of fact for the
jury.").

                                         -11-
minority")    (internal   quotation       marks   omitted);   Carwile     v.

Richmond Newspapers, Inc., 196 Va. 1, 8 (1954) (a statement

"which imputes to a business or professional man conduct which

tends to injure him in his business or profession" is actionable

as libel per se).

            To determine if the Crowley statement is shielded

because it is conditional ("may have") is a more difficult

question.     Here, the statement may be protected "opinion" not

because it is vague or judgmental but because it is speculative.

The test, admittedly a very crude one, is whether the statement

is properly understood as purely speculation or, alternatively,

implies that the speaker or writer has concrete facts that

confirm or underpin the truth of the speculation.                 Levin v.

McPhee, 119 F.3d 189, 197 (2d Cir. 1997); Restatement (Second)

of Torts § 566, comment (c) at 173.          The former is protected as

opinion; the latter is taken as an indirect assertion of truth.

            Like the district judge, we see nothing that suggests

that Crowley or the defendants were relying upon undisclosed

facts.   Crowley’s own view is couched as a belief as to what

"may have" happened.      The defendants add a further supporting

fact   that   Gray   "considered   countries      like   Libya,   and   took

clients like Angola"; but Gray does not dispute that this is so,

and where the underlying facts are disclosed, it becomes even


                                   -12-
more clear that the writer or publisher is merely speculating

("if so") about the inference.   Restatement (Second) of Torts §

566, at 174 ill. 5 ("A says to B about C, a city official:     'He

and his wife took a trip on city business a month ago and he

added her expenses in as a part of his own.'     B responds:   'If

he did that he is really a thief.'    B's expression of opinion

does not assert by implication any defamatory facts, and he is

not liable to C for defamation.").

         The last statement of the four statements disposed of

before trial--statement (c)--quotes a former "Gray and Company

senior vice president" as saying that "there’s a degree of

venality on the part of [Gray] and lack of integrity which

always took me aback" and "very little real basic principle and

an awful lot, to me, of over charging."   During discovery, the

defendants produced a transcript of Trento's interview with

Barry Zorthian, a former Senior Vice President at Gray and

Company, as the source of this statement.    The district court

granted summary judgment as to this statement because it found

that Gray was a limited-purpose public figure with respect to

lobbying and that no reasonable jury could find that the charge

was made by the defendants with actual malice.

         On appeal, Gray first disputes the limited-purpose

public figure label.   This is treated as an issue of law to be


                              -13-
resolved by the district judge and reviewed de novo by us.

Pendleton v. City of Haverhill, 156 F.3d 57, 68 (1st Cir. 1998).

We agree with the district court that, prior to and continuing

up to the book’s publication--which (to avoid bootstrapping) is

the   pertinent    time   frame,   Bruno   &   Stillman,   Inc.   v.   Globe

Newspaper, Inc., 633 F.2d 583, 591 (1st Cir. 1980)--a public

controversy existed as to the methods and influence of lobbyists

in Washington.      This was amply evidenced by materials submitted

to the district court showing that from the early 1980s onward

there has been a tide of concern and criticism about Washington

lobbying.

              The record also shows that Gray was a central figure

in this controversy, being identified as one of the best-known

of    the   high-level    Washington   public    relations   experts,     an

emblematic figure, and a self-professed defender against attacks

on lobbying.      Indeed, Gray’s lobbying and in particular billing

practices were themselves the subject of comment and criticism

in mainstream publications like Time, Newsweek, the Washington

Post and the New Republic.         This does not show that he behaved

improperly as a lobbyist or overbilled his clients.                It does

mean that, in the complex equation for liability laid down by

the Supreme Court, Gray needed to show actual malice by clear




                                   -14-
and convincing evidence. Gertz, 418 U.S. at 351-52; Pendleton,

156 F.3d at 67 & n.7.3

          In most cases, as in this one, the plaintiff does not

have any evidence of actual malice in the literal sense but, as

already noted, recklessness suffices.   New York Times, 376 U.S.

at 279-80; Masson v. New Yorker Magazine, Inc., 501 U.S. 496,

510 (1991).     Recklessness is a jury issue so long as the

plaintiff at the summary judgment stage produces evidence that

would allow a reasonable jury to find the defendants reckless by

clear and convincing evidence.   Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 257 (1986).   Recklessness, in this context, can be

shown by proving "that the defendant actually had a 'high degree

of awareness of . . . probably falsity,'" Harte-Hanks Communs.,

Inc. v. Connaughton, 491 U.S. 657, 688 (1989) (quoting Garrison

v. Louisiana, 379 U.S. 64, 74 (1964)), but mere negligence in

conducting an investigation or weighing the evidence is not

enough.   Harte-Hanks Communs., 491 U.S. at 688; Masson, 501 U.S.

at 510.




    3Gray also argues that the statements were not "germane" to
any controversy over lobbyists and that he was not a limited-
purpose public figure by 1992 when the book was published. We
think that the statements are germane to the controversy over
lobbying, and the record shows numerous articles concerning
Gray, his company, and Hill and Knowlton published between 1986
and 1992.

                               -15-
              The defendants assert, and the plaintiff does not

dispute,       that    actual      malice    in    this   case     must    be   shown

separately as to each defendant.                   But cf. Cantrell v. Forest

City    Publ'g    Co.,       419   U.S.     245,   253    (1974)    (referring     to

vicarious liability).              With respect to Trento, she relied not

only on Zorthian but also on several other sources.                       They, too,

had connections with Gray and Company and their statements

tended    to    back    up    Zorthian’s      position.          Against   Trento's

multiple sources, Gray counters that Zorthian had an axe to

grind (he had parted ways with Gray and later sued him); that

few of Trento’s sources had much knowledge of the billing side

of Gray’s business; and that Trento failed to publish one other

source's statement that he had "never heard" about charges of

overbilling or to interview others who would have denied such

overcharging.

              There is no point in our going through this evidence

piece    by    piece    since      we   agree      with   the   district    court's

assessment.       Prejudice or limited knowledge on the part of a

source may suggest caution but does not preclude reliance; the

fact that one witness had "never heard" about the charges counts

for little; and while refusing to seek out decisive witnesses

may be a mark of recklessness in some circumstances, Trento

already had multiple sources and was under no obligation to


                                          -16-
exhaust    every     possible    witness     before     winding    up   her

investigation.      Even assuming she was careless and reached a

mistaken conclusion, that is not enough for actual malice.

           Less need be said about St. Martin’s.              It apparently

had some doubts about the rigor of Trento’s book proposal.              But

the proposal was followed by more than two years of research and

there is no evidence that St. Martin's employees doubted the

accuracy of Trento’s final product.               It is true that Gray

protested to St. Martin’s prior to publication that some of the

statements were untrue.         However, apart from the fact that in

this   original     protest   statement     (c)   was   not   specifically

identified     as   false,    simple    denials   by    the   subject   are

commonplace and, absent more, are normally not enough to premise

a finding of actual malice.        Edwards v. National Audubon Soc'y,

Inc., 556 F.2d 113, 120-21 (2d Cir.), cert. denied, 434 U.S.

1002 (1977).

           Gray's next claim of error on appeal is that the

district court erred in upholding a claim of press privilege

during the discovery process.          Specifically, Trento declined to

reveal the name of her confidential source for statement (g),

which reads: "One Gray and Company executive in a position to

know said that Gray and Company was making payments to [Duke]

Zeller."     According to the book, Duke Zeller had previously


                                   -17-
worked for Gray and at the time in question was the Director of

Communications for the Teamsters Union, a lucrative client of

Gray's company.           The apparent implication is that Gray made

secret payments to Zeller in order to retain the Teamsters

account.

            The magistrate judge, later sustained by the district

judge,    upheld       Trento's       objection     on   the   grounds      that    New

Hampshire recognized a qualified confidential source privilege

for reporters,         State v.       Siel, 122 N.H. 254, 259-60 (1982);

Downing    v.    Monitor    Publ'g       Co.,   Inc.,    120    N.H.    383,     386-87

(1980), that one requirement to overcome the privilege was to

show that the applicant had made all reasonable efforts to

obtain    the     identity       of    the    confidential      source      by    other

reasonable       means,    and    that       this   requirement       had   not    been

satisfied by Gray.           On appeal, Gray argues that the district

court misread New Hampshire privilege law, which both sides now

assume to govern the question, and that in any event it was

error to find that Gray had not satisfied the requirement.

            New Hampshire law on the privilege in question, an

issue for de novo review, is not a model of clarity; and, while

the "failure to satisfy" finding would be reversed only for

clear    error    or    abuse     of    discretion,      we    have    some    initial

sympathy for Gray's claim that he did all he could to satisfy


                                         -18-
the requirement of exhausting other means.            And if Gray were

found to have exhausted all reasonable means of identifying the

source and Trento still refused to reveal her source, Gray would

have been entitled to a presumption that         no source existed.

Downing, 120 N.H. at 387.    This could have helped Gray persuade

the jury that Trento acted with actual malice in making the

payoff charge.

          The problem for Gray is that however the matter stood

at the time of the privilege ruling, the jury returned a verdict

as to statement (g) that rested on two alternative grounds:           one

was lack of actual malice but the other was Gray's failure (in

the jury's view) to prove that the statement was false and

defamatory.    Defendants say that the verdict thus rested safely

on a ground independent of the no-malice finding.           Gray, who has

not independently attacked the jury's alternative ground, has

not provided any very cogent answer to this claim, beyond saying

rather tersely that if the privilege had been overridden, Trento

had still baulked, and the jury been told that therefore it

could presume that the source did not exist, then the jury might

have thought the statement false.

          It is hard to see why this is so. Obviously, there was

far   better   direct   evidence    available--such    as    Gray's   own

testimony--as to whether the payoff occurred; indeed, on this


                                   -19-
issue the source's statement was inadmissible hearsay as to the

truth of the charge.     Nor is there all that much basis to doubt

that some source did exist, whether reliable or otherwise;

Trento produced redacted notes of her conversation with the

source and Gray himself got some mileage out of an argument that

this portion of Trento's interview was not taped like the rest

of the interview with the confidential source.

             Gray also says that while Trento preserved the claim

of privilege, St. Martin's never asserted the privilege so the

district court had to have erred in upholding the claim as it

did.   St. Martin's agrees that it did not assert the privilege

but argues, as it did in the district court, that it did not

know the name of the source and therefore needed no privilege in

order to withhold it.        Gray responds that in previous court

papers St. Martin's never affirmatively stated that it had not

been told the name of the confidential source.         But Gray himself

does   not   allege   that   St.   Martin's   does   actually   know   the

identity of the source, and without evidence to contradict St.

Martin's assertion in its brief that it does not know the

identity of the source, Gray's argument does not undermine St.

Martin's commonsense position.

             Gray's final argument on appeal, properly placed last,

is that the district court erred in refusing to grant Gray leave


                                   -20-
to amend his complaint to add 20 additional statements from the

book now alleged to be defamatory.      As earlier noted, the

complaint was filed in June 1995; and the motion to amend was

made three years later, after extensive proceedings including

discovery.   The district court found the motion untimely and

unduly prejudicial.

         We find no abuse of discretion.      Grant v. News Group

Boston, Inc., 55 F.3d 1, 5 (1st Cir. 1995).   It is enough to say

that although leave to amend is to be "freely given," Fed. R.

Civ. P. 15(a), Gray had the book for six years before he moved

to amend and at the outset of the litigation could have easily

decided which charges he believed to be false.       The district

court amply explained its reasons for finding that under the

circumstances there was undue delay and prejudice.

         The judgment is affirmed. The conditional cross-appeal

filed by St. Martin's Press and Susan Trento is dismissed as

moot.




                             -21-
                ADDENDUM



a.   "As others were cleaning out their
     desks, looking for jobs, briefing
     their successors, and preparing to
     leave the White House, Gray was busy
     dictating his memoirs to his White
     House secretary."   The Power House,
     p. 53.

b.   "A senior Gray and Company executive
     insisted that Gray's closeness to the
     President and others was often faked.
     'He completely faked his closeness
     with    a     number    of     senior
     administration   officials.'"     The
     Power House, p. 156.

c.   "'I   think  there's   a   degree   of
     venality on the part of Bob and lack
     of integrity which always took me
     aback. A lot of it he would justify
     as being a businessman, but there was
     very little real basic principle and
     an  awful   lot,  to   me,   of   over
     charging.'" The Power House, p. 165.

d.   "'. . . at Gray and Company he [Mr.
     Gray]    stage-managed    impressive-
     sounding calls.    A reporter would
     walk in and he would instruct his
     executive assistant to come in and
     announce that there was a call from
     the White House. Totally fabricated.
     Absolutely.   They would come in and
     they would say, 'Mr. Gray, Mr. Meese
     is on the phone,' and he would pick
     up a dead line or a line that was set
     up by the executive assistant, carry
     on a conversation of four or five
     short rapid sentences as though he
     was in constant communication and
     hang up.   And then, of course, the
     reporters, dazzled, would then report

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     that a White House phone call came
     in,' explained one Gray and Company
     executive." The Power House, p. 167-
     8.

e.   "And the Gray and Company employees
     in Spain were to be convinced that
     the office was used as a money
     laundering operation for the Reagan
     administration's private intelligence
     network." The Power House, p. 273.

f.   "In the end, several Washington
     lobbyists feel that Gray and Company
     ultimately failed because it offered
     very little real substance."     The
     Power House, p. 323.

g.   "One Gray and Company executive in a
     position to know said that Gray and
     Company  was   making  payments   to
     Zeller." The Power House, p. 202.

h.   "Robert Crowley believed that 'Casey
     may have asked Gray to take on these
     controversial clients--for the very
     purpose of spying on them.' If that
     were so it would explain why Gray
     considered countries like Libya, and
     took clients like Angola." The Power
     House, p. 260.




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