Texas Beef Group, Cactus Growers Inc.,plaintiff-Appellant v. Oprah Winfrey Harpo Productions Incorporated Howard Lyman King World Productions, Incorporated, Paul F. Engler Cactus Feeders, Inc. v. Oprah Winfrey, Oprah Winfrey Harpo Productions Incorporation Howard Lyman King World Productions, Incorporated

Citation: 201 F.3d 680Docket: 98-10391

Court: Court of Appeals for the Fifth Circuit; February 8, 2000; Federal Appellate Court

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The case involves Texas cattle ranchers who sued Oprah Winfrey, her show’s producers, and guest Howard Lyman for allegedly depicting American beef as unsafe, following the British panic over 'Mad Cow Disease' (BSE) and its link to a new variant of Creutzfeldt-Jakob Disease (CJD). The plaintiffs claimed violations of the Texas False Disparagement of Perishable Food Products Act and sought damages for business disparagement, defamation, negligence, and negligence per se after experiencing significant losses in the beef market post-broadcast. The district court dismissed most claims, allowing only the business disparagement claim, which the jury ultimately rejected. The appellate court affirmed the dismissal, agreeing that no knowingly false statements were made by the defendants. The court noted the context of the panic in Britain over BSE and the subsequent media coverage, including a feature on the Oprah Winfrey Show titled "Dangerous Food," which was part of a broader discussion on food safety rather than solely focused on BSE.

Kelley organized preparation for the 'Dangerous Food' episode of the Oprah Winfrey Show, assigning his production team to investigate 'Mad Cow Disease.' Researcher Andrea Wishom interviewed experts and found that major health organizations believed 'Mad Cow Disease' was unlikely to occur in the U.S. However, she encountered conflicting views from Lyman, who warned of a potential epidemic. The show, taped on April 11, 1996, featured discussions on new-variant CJD, its symptoms, impact, and preventive measures against BSE in the U.S. Lyman made statements deemed misleading by experts Drs. Weber and Hueston, who provided factual counterarguments about the U.S. response to BSE and the absence of reported cases. 

Post-taping, Kelley significantly edited the segment, reducing Dr. Hueston's contributions to just 37 seconds and omitting critical points from Dr. Weber and other experts, including assurances about the safety of American beef. The edited episode aired on April 16, 1996, after which the Texas Panhandle cattle market experienced a sharp decline, with prices dropping from approximately $61.90 to the mid-50's per hundredweight, and a decrease in sales volume. This downturn persisted for about eleven weeks.

The decline in cattle prices following the 'Dangerous Food' broadcast on the Oprah Winfrey Show had significant repercussions for national fed cattle markets. Commodities trader W. Winfred Moore, II, noted that fear generated by the show led to a $1.50 per hundred weight drop in live cattle futures prices, reaching the market's limit-down within an hour of the broadcast, resulting in the closure of the live cattle market for the day. Agricultural economist Dr. Wayne D. Purcell testified that the cash fed cattle market experienced a "significant and rather dramatic shock" during the week of April 16, 1996, with effects lasting into mid-1996.

In response to complaints from cattlemen regarding the show's impact, Oprah Winfrey invited Dr. Weber and a cattle rancher to a follow-up show to address concerns about the broadcast. Dr. Weber reiterated the voluntary and anticipated ban on ruminant-to-ruminant feeding, clarified the limited practice of such feeding, and reassured viewers that there had been no reported cases of BSE in the U.S. The president of the National Cattlemen's Beef Association expressed gratitude to Winfrey for allowing the truth about animal-based protein supplements and BSE to be presented.

On May 28, 1996, Paul F. Engler and Cactus Feeders, Inc. initiated legal action against Winfrey, Harpo Productions, and others, including Cannan Communications, Inc. A motion to non-suit Cannan was filed shortly after, and on June 6, the trial court granted this motion. Following Cannan's removal, the remaining defendants filed a notice of removal to federal court, arguing that the non-suit effectively dismissed Cannan from the plaintiffs' amended complaint. Plaintiffs contended the non-suit applied only to the original complaint and challenged the claim of fraudulent joinder. The district court determined that the non-suit was valid for the first amended complaint and noted that the plaintiffs did not attempt to rejoin Cannan in any federal court pleadings.

The trial proceeded before a jury, during which the defendants moved for judgment as a matter of law at the conclusion of the plaintiffs' case-in-chief. The district court granted this motion concerning the plaintiffs' claim under the False Disparagement of Perishable Food Products Act, citing several reasons: the statute's applicability to live 'fed cattle' was questioned, the court doubted whether the plaintiffs’ cattle had 'perished' or 'decayed beyond marketability' as required, and there was insufficient evidence to show the defendants knowingly disseminated false information.

Consequently, only the plaintiffs' business disparagement claim was submitted to the jury, which was instructed that to succeed, the plaintiffs must demonstrate: (1) a false, disparaging statement was published by the defendant; (2) the statement referred specifically to the plaintiff's property; (3) the statement was made with knowledge of its falsity or with reckless disregard for the truth, or with malice; and (4) the statement caused specific damage to the plaintiff's business interests. The court clarified that the disparaging statement must refer to an ascertainable business owned by the plaintiff, and mere innuendo or presumption was insufficient.

The jury was asked if a specific defendant published such a statement regarding the cattle of a specific plaintiff, but the plaintiffs objected to the requirement of the statement being 'of and concerning' the plaintiff. The court overruled this objection, and the jury ultimately answered 'no' to the question posed. Following these adverse rulings, the cattlemen appealed.

Regarding jurisdiction, the cattlemen contended that the district court lacked diversity jurisdiction. The appellate court reviews de novo the denial of a motion to remand, emphasizing that a party removing a case must establish subject matter jurisdiction at the time of removal. Even if removal was improper due to a lack of diversity at the outset, the federal court may maintain jurisdiction if diversity existed when the trial began and at the time of judgment, aligning with principles of finality and efficiency.

Caterpillar is central to the case at hand. The cattlemen argue that their motion to non-suit Cannan, which was filed prior to the first amended state court complaint but granted afterward, dismissed Cannan only from the original complaint, making him a non-diverse party in the amended suit upon removal. This argument hinges on a complex interpretation of Texas procedural law. Even if the district court incorrectly determined that Cannan was not a party at the time of removal, this aligns with the precedent set in Caterpillar. In that case, the district court mistakenly denied a remand motion, causing the case to continue in federal court. After settlement between the intervening plaintiff and the non-diverse defendant, diversity was established. The Supreme Court emphasized that considerations of finality, efficiency, and judicial economy favored not remanding the case when the original jurisdictional defect did not persist through judgment. 

The cattlemen's attempt to differentiate their situation from Caterpillar is unconvincing. While they note that the non-diverse defendant in Caterpillar withdrew voluntarily, they had the option to amend their complaint in federal court to rejoin Cannan and could have moved for remand again. The district court's decision on remand did not prevent such amendments, yet the cattlemen chose not to pursue rejoining Cannan and instead indicated a preference for federal court. Consequently, Cannan’s absence is attributed to the cattlemen's own choices, and the case proceeded to trial with complete diversity. Although the broader implications of Caterpillar remain somewhat uncertain, this case clearly falls within its rationale.

The False Disparagement of Perishable Food Products Act was enacted in 1995 in response to the Alar apple incident. Under this Act, individuals can be held liable for damages to producers of perishable food products if they knowingly spread false information suggesting the product is unsafe for consumption. The Act defines "perishable food product" as one that decays beyond marketability within a limited timeframe. When evaluating the truthfulness of the information, the trier of fact must assess whether it was based on reliable scientific inquiry or data. This litigation marks one of the first applications of the Act, focusing on whether the appellants' live cattle qualify as a protected "perishable food product" and whether the appellees knowingly disseminated false information about them. The district court concluded that the fed cattle did not decay beyond marketability and ruled that the appellees did not knowingly spread false information about beef, but this specific issue is not addressed in the current context.

The court reviews a district court's grant of judgment as a matter of law de novo, using the same legal standard and considering all evidence favorably to the non-movant. A judgment is appropriate if no reasonable jury could find in favor of the non-movant, based on the lack of a legally sufficient evidentiary basis. The critical issue is whether the appellees knowingly disseminated false information suggesting that American beef is unsafe for consumption, with the highest legal standard requiring proof of knowledge of the falsity. First Amendment protections apply to opinions as long as they are grounded in factual bases. 

The case revolves around statements made by Howard Lyman during the Oprah Winfrey Show, which the cattlemen claim were false and inflammatory. Lyman’s assertion that 'Mad Cow Disease' could make AIDS seem mild, and his claim that the U.S. was inadequately addressing BSE, are cited as falsehoods. However, Lyman’s statements were based on factual premises that were true at the time, specifically the existence of ruminant-to-ruminant feeding practices in the U.S. Despite the hyperbolic nature of his comparison, the court emphasizes that exaggeration does not constitute defamation. The opinions expressed by Lyman regarding the U.S. government's response to BSE were sincerely held and supported by facts, especially given that a mandatory feeding ban was implemented shortly after the show aired. The court concurs with the district court's finding that the cattlemen did not meet their burden of establishing a genuine issue of material fact regarding liability.

Lyman's opinions, though emphatically expressed, are grounded in truthful facts and are protected under the First Amendment, as they do not contain provably false factual connotations. Defamation law should not suppress truthful expressions. A public comment from Dr. Hueston, which was edited out, highlighted the value of Lyman's opinions in American discourse. The evidence does not support that Lyman's views were knowingly false. Winfrey and Harpo Productions cannot be held liable for editing the 'Dangerous Food' episode, as similar claims have previously been rejected. The editing process, which was necessary to fit the broadcast time, did not misrepresent Dr. Weber's responses, and factual inaccuracies were not introduced. The cattlemen's argument that the show failed to favorably represent the Mad Cow issue is insufficient for liability, given that the factual content remained accurate.

Regarding business disparagement, the cattlemen challenged the jury instructions related to the requirement that the disparaging statements must refer specifically to their cattle rather than beef in general. However, they did not raise sufficiently specific objections during the trial to preserve these issues for appeal, thereby waiving their right to challenge the instructions. The court may review for plain error, which requires clear evidence of an error that affected substantial rights and the fairness of the proceedings.

The cattlemen's failure to make a specific objection and propose an alternative instruction on the business disparagement issue resulted in the waiver of their claim regarding the jury charge. Their vague objection did not meet the requirements outlined in Fed. R. Civ. P. 51, and their lack of a concrete alternative instruction further solidified this waiver. The court found no plain error in the district court's charge, as the failure to correct it did not significantly impact the fairness of the proceedings. Jurisdiction was deemed proper despite the cattlemen's procedural actions that facilitated removal to federal court, even if the district court's denial to remand was initially incorrect. The cattlemen's case related to the 'Dangerous Food' segment of the Oprah Winfrey Show presented an early opportunity to interpret food disparagement statutes; however, their insufficient evidence rendered a thorough examination of the statute unnecessary. The court affirmed the district court's decisions, including the dismissal of other claims such as common law defamation and negligence, which the appellants did not contest on appeal.

Texas case law regarding motions to non-suit is inconsistent. While such motions are considered ministerial acts, their signing affects appellate timelines. Notably, no Texas court has determined that a motion to non-suit is effective immediately upon filing, as highlighted in Harris County Appraisal Dist. v. Wittig. However, the Texas Supreme Court's decision in Greenberg v. Brookshire granted immediate effect to a non-suit motion under similar circumstances, and despite subsequent clarifications in cases like Farmer and Wittig, Greenberg's precedent remains largely intact. 

In the context of the False Disparagement of Perishable Food Products Act, Circuit Judge Edith H. Jones expresses concern over the district court's interpretation, arguing that plaintiffs should not be required to prove that their products decay "beyond marketability" to qualify for coverage under the Act. The Act allows for liability if false information is disseminated regarding the safety of perishable food products. The case centers on whether live cattle qualify as a "perishable food product." Evidence presented indicated that cattle must be sold at marketable weight to avoid loss in value, as they begin to depreciate after reaching that weight. The district court ruled that live cattle do not decay "beyond marketability," as they can still be sold for other purposes, which Judge Jones argues undermines the statute’s intent to protect perishable products.

The Act encompasses fed cattle, contrary to the appellees' interpretation which suggests it does not cover live cattle. The statute defines a perishable food product as one from agriculture or aquaculture that decays beyond marketability within a limited timeframe. "Agriculture" includes raising livestock, and fed cattle qualify as a perishable food product. The district court's ruling misinterprets this aspect, neglecting that beef is categorized as a perishable agricultural product. The inclusion of aquaculture in the statute further supports the argument that cattle-raising, integral to Texas's economy, is covered by the Act.

Legislative history indicates the Act aims to ensure claims regarding the safety of perishable meat are factually based and to protect perishable agricultural products. The cattlemen's evidence demonstrated that live cattle depreciate in value over time, similar to how fruit rots, which supports their claim under the Act. The district court's view that a product must decay beyond marketability to qualify under the Act is flawed, as it might suggest that any product with residual marketability cannot be deemed perishable, undermining the legislative intent. This misinterpretation could jeopardize claims of other agricultural producers. Furthermore, the requirement for producers to prove their products decayed beyond marketability places an undue burden on them, affecting their ability to recover damages under the Act. The appellees' argument focused on a minimal price decrease and lack of unsold cattle, which the district court accepted, leading to the dismissal of the cattlemen's claims.

Food disparagement acts, also known as "Veggie Libel Laws," are intended to prevent the dissemination of false information that could harm the market for perishable food products. These laws provide protection specifically for products that are directly derived from agriculture and aquaculture, distinguishing them from highly processed foods. The legislature aimed to protect fresh food producers while offering clarity on the definition of perishable products, which should be straightforward for both publishers and producers to understand.

The Act protects the market for perishable products rather than individual producers, meaning that while a producer's ability to recover damages may be limited, the product itself remains shielded from false statements. The determination of whether cattle qualify as a "perishable food product" is a legal question that courts must resolve through statutory construction, focusing on whether a product can decay beyond marketability rather than whether it actually has decayed. 

The excerpt notes a disagreement with the district court judge regarding the interpretation of the law. It highlights that cattle, placed in feedlots for a specific period, must be sold quickly to avoid price declines, contrasting this with apples, which can be stored longer before becoming unmarketable. Additionally, the excerpt references the concept of availability cascades, which describes how public perceptions can be shaped and reinforced through discourse, impacting the effectiveness of food disparagement laws.