J.H. Desnick, M.D., Eye Services, Limited Mark A. Glazer and George v. Simon v. American Broadcasting Companies, Incorporated Jon Entine and Sam Donaldson

Citation: 44 F.3d 1345Docket: 94-2399

Court: Court of Appeals for the Seventh Circuit; January 9, 1995; Federal Appellate Court

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The plaintiffs, comprising the Desnick Eye Center, Dr. J.H. Desnick, and ophthalmic surgeons Mark A. Glazer and George V. Simon, appeal the dismissal of their lawsuit against American Broadcasting Companies, Inc. and individuals involved in the production of a critical segment of PrimeTime Live. The suit alleges trespass, defamation, and other torts stemming from the segment, which negatively portrayed the clinic's practices. Federal jurisdiction is established through diversity of citizenship, primarily applying Illinois law.

The dismissal was based on a failure to state a claim, as per the district court's ruling. The factual background reveals that in March 1993, Entine contacted Dr. Desnick, assuring him that the segment would cover multiple cataract practices and would not involve undercover methods, leading Desnick to allow ABC to film at the clinic. However, unbeknownst to him, ABC had sent individuals with hidden cameras to various Desnick Eye Center locations to pose as patients and record examinations, resulting in the secret videotaping of Glazer and Simon. The allegations in the complaint are considered true at this procedural stage, although they may not ultimately be substantiated.

On June 10, Donaldson introduced a segment focusing on Dr. James Desnick, referred to as a "big cutter" who allegedly performed unnecessary cataract surgeries for financial gain. The segment included brief interviews with four patients of the Desnick Eye Center; one patient expressed satisfaction, while three others voiced discontent, with one remarking on the potential for unnecessary procedures. 

The investigation featured seven test patients, revealing that two patients under 65 were deemed ineligible for Medicare and told they did not need surgery, while four others were incorrectly advised to undergo the procedure. A hired ophthalmology professor later evaluated these patients, concluding that surgery was unnecessary for at least one, indicating that performing surgery would approach malpractice.

An ophthalmic surgeon, who declined a position at the center, reported being unable to select patients for surgery. He claimed another doctor indicated that rejected patients immediately proceeded to surgery. A former marketing executive alleged that Desnick exploited vulnerable individuals, including those with Alzheimer's. 

Patient testimonies highlighted serious medical oversights, such as a missed melanoma diagnosis and severe complications following unnecessary surgery, including an eye rupture. A former employee accused Desnick of altering medical records to justify surgeries by misrepresenting patients' vision test results and instructing staff to use the same pen color to facilitate these alterations.

The segment also addressed the use of a potentially rigged auto-refractor machine for testing glare symptoms. An optometrist who worked at the clinic described witnessing routine tampering of the machine for older patients. Despite Desnick obtaining a defamation judgment against this optometrist, other former employees corroborated claims of rigging.

Furthermore, the Illinois Medical Board has initiated proceedings against Desnick for multiple counts of malpractice and deception. The segment culminated in an ambush interview where Donaldson confronted Desnick with accusations regarding record alterations and rigged tests, but Desnick did not respond to the inquiries.

Plaintiffs' claims are categorized into two classes: defamation related to the broadcast and allegations about how ABC and Entine obtained the information for the broadcast. The defamation claim centers on assertions that the glare machine was tampered with, affecting three plaintiffs. They do not allege other defamatory content in the broadcast, nor do they claim copyright infringement or false light from the unauthorized use of the Desnick videotape. However, they assert that the videotape was obtained fraudulently.

Under Illinois law, the district judge determined that Glazer and Simon could not prove defamation because viewers would not interpret the tampering charge as implicating them. While earlier cases applied the 'innocent construction' rule, modern interpretations focus on whether the audience would likely think the statement referred to the plaintiff. The determination of whether viewers would make such an inference is a legal question for the judge, subject to plenary appellate review.

The broadcast implies that Glazer and Simon are involved in tampering with the glare machine, especially since it follows their inquiries about glare to test patients. Although the inference is not absolute, it is probable enough to support their lawsuit. The broadcast suggests that tampering occurs in cases involving elderly patients treated by Glazer and Simon, and there is an insinuation that any doctor associated with the Desnick Eye Center is unethical. While it is stated that technicians are responsible for tampering, this could imply that the doctors are complicit, which supports the defamation claim regarding both Glazer and Simon as well as the Desnick Eye Center.

The judge ruled that the defamation claim was unsuccessful because the allegation of tampering with the glare machine did not add any significant damage to the plaintiffs' reputations beyond the other unchallenged statements made in the broadcast. If a false accusation does not cause additional harm to a plaintiff's reputation, especially when the truth would have already significantly damaged their reputation, there is no basis for a remedy. This principle, known as "substantial truth," maintains that a false accusation closely related to true but damaging facts does not provide grounds for defamation. An example from the case of Haynes illustrates this, where the defendant's claim about job loss due to drinking was deemed not substantially different from the truth. The court noted that in Haynes, the case was resolved on summary judgment after full discovery, indicating that reasonable jurors could not find significant incremental harm. In contrast, the current case lacked discovery; thus, dismissal was warranted only if it was evident from the broadcast that the plaintiffs could not have been harmed by the tampering allegation. The plaintiffs did not dispute the broadcast's other serious claims, which were not proven or admitted, highlighting the difficulty in proving defamation and asserting that failure to challenge a statement does not equate to an admission of its truth.

The excerpt analyzes allegations against Desnick Eye Center, focusing on the severity and implications of the charge related to tampering with an ophthalmic machine, which could mislead patients into believing they have cataracts. While other charges, like altering patient records, may be disputable or justifiable as corrections, the machine tampering is particularly egregious and cannot be easily dismissed at this stage of the case. The text also outlines claims against the defendants regarding their methods to create a broadcast segment, including trespass, invasion of privacy, violations of electronic surveillance laws, and fraud in gaining access to the Center. It emphasizes that trespass requires consent, which cannot be implied if it is obtained through misrepresentation. The Desnick Eye Center would not have allowed entry if it had known the true intent of the test patients. However, some legal precedents suggest that consent obtained through fraud may still be considered valid in certain contexts, raising questions about the balance between ethical journalism and property rights.

Consent to entry onto property can be legally effective even if the entrant has deceitful intentions that would lead the property owner to withdraw consent if known. This principle extends beyond trespass to other legal contexts, such as sexual consent obtained through fraud. For example, if a man pays a woman with a counterfeit bill to obtain sexual consent, he is not guilty of battery, despite the lack of true consent. However, concealing a venereal disease in sexual encounters can transform consent into battery. Similarly, seduction through false promises does not constitute rape, while sexual acts under false pretenses of medical treatment are generally viewed as battery.

In cases of trespass, consent is not a valid defense if the entrant misrepresents their purpose, such as a fake meter reader or a competitor posing as a customer to steal trade secrets. Distinguishing between different fraudulent scenarios involves examining the interests protected by the relevant torts: battery protects personal inviolability while trespass protects property inviolability. The distinction is complicated by the presence of fraud in all cases, but the nuanced differences lie in the victims' intentions regarding the interaction with the deceiver. The lines between these classifications are not clear-cut and reflect longstanding legal traditions rather than strict legal principles.

There was no trespass in this case as the test patients entered open offices offering ophthalmic services, videotaping professional interactions without disrupting activities. Unlike prior cases involving false pretenses where entry disrupted privacy or involved intimate details, the testers recorded their own conversations with physicians, not eavesdropping or violating doctor-patient privilege. The absence of theft, disruption, or invasion of privacy indicates no legally protected interest was infringed. Comparisons are drawn to undercover activities where evidence gathering does not constitute trespass, as in housing discrimination cases. The misleading entry by the testers did not interfere with property ownership or possession, and the potential impact of signage prohibiting such entry is left unresolved for future consideration.

Claims of infringement of the right of privacy and illegal wiretapping were largely addressed. The right of privacy involves the interests of concealing intimate personal facts and preventing intrusion into private activities, such as phone conversations. However, no intimate personal facts of the plaintiffs were disclosed, and the recorded conversations were solely with testers. 

Federal and state wiretapping laws allow one party to record conversations unless intended to commit a crime or tort. The defendants did not send testers to the Desnick Eye Center with criminal intent; their goal was to investigate whether physicians would recommend cataract surgery. The allegation that the program could be tortious was acknowledged, but the defendants’ actions were not meant to defame the plaintiffs or injure the Center. The public exposure of misconduct related to Medicare fraud does not constitute an 'injurious act' under the Wisconsin statute.

The allegation of fraud pertains to the defendants’ entry into the Chicago office under false pretenses, claiming that the broadcast would be fair and balanced, and that no ambush or undercover tactics would be employed. While these promises could suggest a breach of contract, the plaintiffs voluntarily dismissed their breach of contract claim to allow an appeal on the fraud issue. Thus, the current focus is solely on the fraud allegation.

Illinois law does not recognize a remedy for fraudulent promises or promissory fraud unless it is part of a broader scheme to defraud. This distinction creates uncertainty in the legal landscape, as Illinois courts acknowledge the difficulty in differentiating between mere promissory fraud and a broader scheme. Some cases imply that the exception for schemes has become overly expansive, while others are hesitant to apply it. The law reflects a reluctance to allow suits based solely on fraudulent promises, as this could blur the lines between breach of contract and fraud, potentially leading to unmerited punitive damages.

In the context of a federal diversity suit, the court emphasizes the need to maintain the meaning of "scheme" in Illinois law. Promissory fraud should only be actionable if it is particularly egregious or part of a larger pattern of deception that induces reasonable reliance. In the case at hand, the alleged fraud involves investigative journalists who made vague promises that were not realistically expected to induce reliance. The plaintiff, Desnick, is portrayed as a savvy professional who would not require legal protections against such ordinary journalistic tactics. The court concludes that the alleged fraud did not cause harm, as Desnick's actions would not have changed even if the journalists had been honest, and thus, the claims lack merit.

Claims regarding the production of a television program segment, as opposed to its content, are subject to First Amendment protections against defamation suits. The Supreme Court has established safeguards for defamation claims to promote a free exchange of ideas, particularly in the context of competitive, sensationalist media. Investigative reporting, despite its often aggressive and potentially defamatory nature, is a vital component of this media landscape and deserves these protections regardless of the nature of the tort alleged. If the broadcast does not contain actionable defamation and does not infringe established rights during its production, there is no legal recourse for the targets of such reporting, even if the methods employed are questionable. While there may be potential defamation claims to explore, the plaintiffs have not demonstrated any violation of their rights related to the production of the broadcast segment, aside from a possibly abandoned contract claim. The ruling is partially affirmed and partially reversed, with further instructions for proceeding.