Judge Leisure's Opinion and Order
(issued July 16, 1996)

United States District Court
Southern District of New York

INTERNATIONAL,                  )
Plaintiff,                      )
                                )   92  Civ.  3024  (PKL)
-against-                       )
BEHAR                           )
   Defendants                   )


           750 Lexington Avenue
        New York, New York  10022

   Jonathan W. Lubell; Esq., of counsel

         Attorneys for Plaintiff

              80 Pine Street
         New York, New Tork 10005

   Floyd Abrams, Esq., of counsel
   Dean Ringel, Esq., of counsel
   David G. Januszowski, Esq., of counsel
   James R. Oswald, Esq., of counsel

         Attorneys for defendants

LEISURE, District Judge:

Defendants moved for summary judgement in this libel action, which the Court granted in part and denied in part. See Church of Scientology Int'l v Time Warner, Inc., 903 F. Supp. 637 (S.D.N.Y. 1995). Defendants then moved for reargument and reconsideration, arguing that the Court should have granted summary judgement in full because the sole remaining statement sued upon in non-actionable based on the incremental harm doctrine. After reargument, and upon reconsideration, for the reasons stated below, the Court grants summary judgement as to the sole remaining statement in the case and dismisses the case in its entirety.


In 1992, Time magazine published a 10 page, 7500 word article entitled "Scientology: The Cult of Greed" (the "Article"). The Article was highly critical of Scientology, and included such statements as:

The Church of Scientology International ("CSI") filed a complaint for libel against defendants, challenged as false and defamatory several statements from the Article. The Statements, numbered by the Court but otherwise as set forth in the complaint, are as follows:

  1. "[T]he Church ... survives by intimidating members and critics in a Mafia-like manner."

  2. "Scientology is quite likely the most ruthless, the most classically terroristic ... cult the country has ever seen."

  3. "Those who criticize the church -- journalists, lawyers and even judges -- often find themselves framed for fictional crimes, beaten up or threatened with death."

  4. "Occasionally a Scientologist's business antics land him in jail. Last August a former devotee named Steven Fishman began serving a five year prison term in Florida. His crime: stealing blank stock confirmation slips from his employer, a major brokerage house, to use as proof that he owned stock entitling him to join dozens of successful class action lawsuits. Fishman made roughly $1 million this way from 1983 to 1988 and spent as much as 30% of the loot on Scientology books and tapes. Scientology denies any tie to the Fishman scam, a claim strongly disputed by both Fishman and his longtime psychiatrist, Uwe Geertz, a prominent Florida hypnotist. Both men claim that when arrested, Fishman was ordered by the Church to kill Geertz and then do an 'EOC' or end of cycle, which is Church jargon for suicide."

  5. "One source of funds for the Los Angeles- based church is the notorious, self-regulated stock exchange in Vancouver, British Columbia, often called the scam capital of the world."

  6. "Baybak, 49, who runs a public relations company staffed with Scientologists, apparently has no ethics problem with engineering a hostile takeover of a firm he is hired to promote."

  7. "What these guys do is take over companies hype the stock, sell their shares, and then there's nothing left..." "'They stole this mans property.'" [Referring to William Jordan.]

  8. "THE LOTTICKS LOST THEIR SON, Noah, who jumped from a Manhattan hotel clutching $171, virtually the only money he had not yet turned over to Scientology. His parents blame the church and would like to sue but are frightened by the organization's ruthlessness."

  9. "His death inspired his father Edward, a physician, to start his own investigation of the church. 'We thought Scientology was something like Dale Carnegie.' Lottick says. 'I now believe it's a school for psychopaths. Their so-called therapies are manipulations. They take the best and the brightest people and destroy them.'"

  10. "It was too late. 'From Noah's friends at Dianetics' read the card that accompanied a bouquet of flowers at Lottick's funeral. Yet no Scientology staff members bothered to show up "

  11. "The next month the Rowes flew to Glendale, Calif., where they were shuttled daily from a local hotel to a Dianetics center. 'We thought they were brilliant people because they seemed to know so much about us,' recalls Dee. 'Then we realized our hotel room must have been bugged.' After bolting from the center, $23,000 poorer, the Rowes say, they were chased repeatedly by Scientologists on foot and in cars."

  12. "In a court filing, one of the cult's many entities -- the Church of Spiritual Technology -- listed $503 million in income just for 1987."

By Opinion and Order dates November 23, 1992, this Court granted defendants' motion to dismiss plaintiff's claims regarding certain statements in the complaint, on the the grounds that they could not be read as referring to plaintiff. See Church of Scientology Int'l v. Time Warner, Inc., 806 F Supp. 1157 (S.D.N.Y. 1992). Specifically, the Court found that parts of paragraph 4 and paragraphs 6, 7, 11, and 12 above do not allege statements that could reasonably be considered to be of and concerning CSI.

By Opinion and Order dated November 15, 1995, this Court granted summary judgement for defendants as to paragraphs 1-4 and 8-10 above on the grounds that no reasonable jury could find that these statements were published with malice. See Church of Scientology Int'l v. Time Warner, Inc., 903 D. Supp. 637 (S.D.N.Y. 1995). Thus the only statement remaining in the case in paragraph 5 above. Defendants moved for reargument of the motion for summary judgement on the grounds that the Court overlooked their argument that the claim regarding paragraph 5 above should be dismissed based on the incremental harm doctrine. The Court granted the motion for reargument and accepted further briefing on the question of summary judgement as to paragraph 5 above based on the doctrine of incremental harm.


I.   Distinctions Between the Libel-Proof Plaintiff, Incremental Harm, and Subsidiary Meaning Doctrines

There are three relevant related doctrines under which courts have granted judgement to defendants in libel suits: (1) the libel-proof plaintiff doctrine, (2) the incremental harm doctrine, and (3) the subsidiary meaning doctrine. Because these separate doctrines have not always been distinguished, and because the terms are not used consistently, some definition of the doctrines for purposes of this Opinion is in order.

The libel-proof plaintiff doctrine reasons that when a particular plaintiff's reputation for a particular trait is sufficiently bad, further statements regarding that trait, even if false and made with malice, are not actionable because, as a matter of law, the plaintiff cannot be damaged in his reputation as to that trait. See, e.g., Guccione v. Hustler Magazine, Inc., 800 F.2d 298, 303 (2d Cir. 1986) holding that plaintiff's reputation regarding adultery rendered him libel proof as to allegations of adultery, even though allegation related to a time period when plaintiff was no longer married, and hence was no longer committing adultery), cert denied, 479 U.S. 1091 (1987); Cardillo v. Doubleday & Co., Inc., 518 F.2d 638, 639-40 (2nd Cir. 1975) (holding that plaintiff, a habitual criminal, was libel proof as to allegations of criminal activity at issue, because his existing reputation created by past indictments and convictions could not be worsened by the alleged false statements).

The incremental harm doctrine reasons that when unchallenged or non-actionable parts of a particular publications are damaging, another statement, though maliciously false, might be non-actionable on the grounds that it causes no harm beyond the harm caused by the remainder of the publication. See Masson v. New Yorkers Magazine, Inc., 501 U.S. 496, 522 (1991); Simmons Ford, Inc. v. Consumers Union of US., Inc., 516 F. Supp. 742, 750 (S.D.N.Y. 1981) (Weinfeld, J.) ("Given the abysmal performance and safety evaluations detailed in the article, plaintiffs could not expect to gain more than nominal damages based on the addition to the article of the misstatement relating to federal safety standards.") The incremental harm doctrine "thus measures the incremental harm inflicted by the challenged statements beyond harm imposed by the rest of the publication. If that harm is determined to be nominal or nonexistent, the statements are dismissed as not actionable." Herbert vs Lando, 781 F.2d 298, 311 (2nd Cir.), cert denied, 476 U.S. 1182 (1986).

The subsidiary meaning doctrine reasons that where a maliciously false statement implies the same ultimate conclusions as that of the remainder of the publication, which has been published without actual malice, a plaintiff cannot "base his defamation action solely on inaccuracies contained within statements subsidiary to these larger views." Id. Thus, having determined that those conclusions of the publication, and determined that those conclusions were not published with actual malice, a court must grant summary judgement for the defendant where the minor inaccuracies sued upon are subsidiary to one or more larger views which is non-actionable. See Jay Framson, Note, The First Cut is the Deepest, but the Second May be Actionable: Masson v. New Yorker Magazine, Inc. and the Incremental Harm Doctrine, 25 Loy. L.A. L. Rev. 1483, 1516 n.233, 1517 n.237 (1992).

II.   Application of the Three Doctrines

A.   The Libel Proof Plaintiff Doctrine

Dismissal based on the libel-proof plaintiff doctrine is not appropriate at this stage of the litigation, because it requires the Court to make factual findings regarding plaintiff's reputation for a particular trait. In addition, the doctrine has been persuasively criticized by then-Judge Scalia's opinion in Liberty Lobby, Inc. vs Anderson, 746 F.2d 1565, 1568 (D.C. Cir. 1984) ("To begin with, we cannot envision how a court would go about determining that someones reputaion had already been 'irreparably' damaged -- i.e., that no new reader could be reached by the freshest libel." (emphasis in original)), vacated on other grounds, 477 U.S. 242 (1986)

B.   The Incremental Harm Doctrine

The proposition that the incremental harm doctrine is grounded in the First Amendment has been rejected by the Supreme Court in Masson v. New Yorker Magazine, Inc., 501 U.S. at 523. In addition, the doctrine requires a court to measure the harm flowing from the challenged statement as compared to the harm flowing from the rest of the the publication, see id., and the parties have not yet conducted discovery on the issue of damages.

Because the Court finds, as a corollary to the actual malice requirement of the First Amendment to the United States Constitution; that the subsidiary meaning doctrine bars suit on statements the implication of which, if itself published, is not actionable, see infra Part II.C, the Court need not reach the questions of whether the incremental harm doctrine bars recovery as a matter of state law.

C.   The Subsidiary Meaning Doctrine

In contrast to the incremental harm doctrine, the subsidiary meaning doctrine has not been rejected by the Supreme Court, and thus, under Herbert v. Lando, 781 F.2d 298 (2d Cir.), cert. denied, 476 U.S. 1182 (1986), is still the law in this Circuit. See also Masson v. New Yorker Magazine, Inc., 895 F.2d 1535, 1565-66 (9th Cir. 1989) (Kozinki, J. dissenting) (stating that the subsidiary meaning doctrine set forth in Herbert is "very different" from the "stillborn" incremental harm doctrine, "and quite unexceptional"), rev'd, 501 U.S. 496 (1991); Liberty Lobby Inc., 746 F.2d at 1468 n.6 (Scalia, J.) ("[A]t some point the erroneous attribution of incremental evidence of a character flaw of a particular type which is in any event amply established by the facts is not derogatory."). In addition, unlike the incremental harm doctrine, the subsidiary meaning doctrine does bear on the First Amendment issue of actual malice, because if a minor inaccuracy could be grounds for libel, where the ultimate conclusion which the inaccuracy supports could not be because it is published without actual malice, the protection afforded to freedom of speech by the requirement that a plaintiff prove actual malice would be undermined. See Erin Daly, The Incremental Harm Doctrine: Is There Life After Masson?, 46 Ark. L. Rev 371, 385-86 (1993) (arguing that if one statement were privileged as based on court documents, and another minor statement could be sued upon, the privilege would be undermined). Compare Masson, 501 U.S. at 523 ("the questions of incremental harm does not bear upon whether a defendant has published a statement with knowledge of falsity or reckless disregard of whether it is false or not.")

Accordingly, the Court must determine whether paragraph 5 above is subsidiary to the non-actionable views published in the remainder of the Article. See Herbert, 781 F.2d at 312 ("[W]e hold that if the appellees' published view that Herbert lied about reporting war crimes was not actionable, other statements -- even those that might be found to have been published with actual malice -- should not be actionable if they merely imply the same view, and are simply an outgrowth of and subsidiary to those claims upon which it has been held there can be no recovery."). This determination need not be based on statements proven, or conceded, to be true, see id., but may be based on statements that are either unchallenged, see Simmons Ford, Inc., 516 F. Supp. at 750 (considering the challenged statement in light if the meaning conveyed by the remainder of the article), or non-actionable, see Herbert, 781 F. 2d at 312 (holding that where implication of challenged statement is non-actionable under subsidiary meaning doctrine). See Erin Daly, Incremental Harm Doctrine: Is there Life After Masson?, 46 Ark. L. Rev. 371, 385-86 (1993).

As demonstrated by the quotations set forth in the Background section of this Opinion and Order, the Article, "Scientology: Cult of Greed" asserts, among other things, that Scientology, rather than being a bona fide religion, is in fact organized for the purpose of making money by means legitimate and illegitimate. The Article details various alleged schemes that the church allegedly uses to increase its revenues, including charging ever increasing fees to its members, deceiving non-members through the use of front groups, manipulating securities and currency markets through the use on inside information, and evading taxes. It also criticizes the church on various other subjects, including the validity of its belief system, the harmfulness of its methods of counseling, and its tactics of combatting critics. These statements were either not challenged by plaintiff or were held to be non-actionable by the Court on the grounds that not reasonable jury could find that they were published with actual malice. The sole statement still at issue in the case ("one source of funds for the Los Angeles-based church is the notorious, self regulated stock exchange in Vancouver, British Columbia, often called the scam capital of the world.") merely implies that the same view which this Court has held to be non-actionable as not made with actual malice: that Scientology's purpose is making money by means legitimate and illegitimate. Accordingly, the claim based on this statement must be dismissed as subsidiary to a non-actionable view expressed in the Article.


For the reasons stated above, upon reconsideration, the court HEREBY GRANTS summary judgement for the defendants on the sole remaining statement sued upon. The action is dismissed.

SO ORDERED   New York NY   July 16th 1996