Waicker v. Scranton Times Ltd. Partnership

THIEME, Judge. “A word is not a crystal, transparent and unchanged, it is in the skin of a living thought and may vary greatly in color ⁶²⁴ and content according to the circumstances and the time in which it is used.” 1 Appellant Gary W. Waicker appeals from summary judgment rendered against him by the Circuit Court for Baltimore City (Heller, J., presiding) in the defamation action he filed against appellee, Scranton Times Limited Partnership, which publishes the Baltimore edition of the City Paper. In this case we must decide, as a matter of law, whether a real estate investor is a limited purpose public figure and, if so, whether a media defendant who printed allegedly defamatory statements did so with actual malice (knowing the statements were false or making statements with reckless disregard for the truth). We find that Waicker was a limited purpose public figure and that the City Paper did not print statements concerning him with actual malice. Accordingly, we shall affirm the judgment of the trial court.

This defamation suit arose from statements made in an article appearing in the City Paper on 5 April 1995. The article was entitled “Blockbuster” and concerned the business practices of Gary W. Waicker and his companies, Investment Realty Specialists, Cavalier Realty, and Monopoly Realty. Waicker does not dispute many of the facts that formed the basis of the article. First, Waicker’s businesses purchased and sold real estate primarily in the Patterson Park and Belair-Edison communities in Baltimore City.

Second, Waicker’s businesses often purchased property and then sold the same property a short time later at a profit. 2 Third, if the new purchaser was an out-of-town investor, Waicker’s businesses often managed the property which it had just sold. ⁶²⁵ Finally, it is undisputed that since the late 1970’s Waicker’s practices received attention in the community and the local media. Reporters for the City Paper and Deirdre Shesgreen and Van Smith, the authors of the article at issue, interviewed members of local community organizations 3 456789and people who purchased property from Waicker’s companies. Waicker refused the reporters’ request for an interview. Based on these interviews, the article concluded that Waicker “targets” a particular neighborhood by purchasing properties, and then “rents out some houses and sells others to investors and manages the property for them.” According to the City Paper article, Waicker sold property by promising potential investors the new tenants would be Section 8 tenants.

Section 8 is the federal rent subsidy program for the poor. Under this program, tenants who could not normally afford to rent property receive monthly supplements which enable them to live in higher rent properties. It is desirable for landlords to rent to Section 8 tenants because the government pays a ⁶²⁶ portion of the tenant’s rent every month. This assures landlords of at least partial payment of rent.

Vincent Quaiye, director of the St. Ambrose Housing Aid Center (a nonprofit group that works on housing issues) was cited in the article as saying that Waicker’s business tactics sparked the beginning of a pattern of decline for a neighborhood: when people saw their neighbors moving and selling to absentee landlords or investors, they got worried and were more willing to sell. Waieker profited on this fear, according to the article’s sources, by offering cash to homeowners to sell their houses at deflated prices. A large sign outside his office in BelairEdison read: WE PAY CASH FOR HOUSES-FAST CASH. According to Ed Rutkowski, the director of Patterson Park Neighborhoods Initiative, a neighborhood revitalization project, Waicker’s practices were “almost single-handedly responsible for the destruction of East Baltimore.” The article also drew an analogy between Waicker’s practices and the despicable “blockbusting” tactics of the 1950’s and 1960’s.

Blockbusting exploited racial bigotry in the following manner.' A person or company would purchase one home in an all-white neighborhood. After moving an African-American tenant into the newly purchased home, the landlord would try to convince the remaining neighbors to sell by telling them the value of their property would decrease significantly because Of the influx to the neighborhood of African-Americans. This practice is now prohibited by Md.Code Ann., Bus. Occ. & Prof., § 17-608 (1995 Repl.Vol. & Supp.1996).

Waieker brought suit in the Circuit Court for Baltimore City, alleging that the following paragraphs of the article were defamatory: If Waieker was following the footsteps of the blockbusters, the next step would be to move in a tenant who would worry other neighbors. And although it is hard to prove definitively that Waieker tries to find the poorest, loudest, and ⁶²⁷ most irresponsible tenants he can to move into a new block, those who monitor his activities believe it is the way he operates. No one believes Waicker is practicing the same blatant blockbusting tactics that others did in past decades. But at best, critics say, Waicker makes a handsome profit by convincing sellers, sometimes with scare tactics, that their houses are worth less than the true market value, and then persuade buyers to pay more than they should; in that process, he leaves neighborhoods to deal with the loss of home ownership and leads some unsophisticated investors into deep financial trouble.

At worst, his critics say, Waicker uses this exploitive practice to make property values in certain neighborhoods plummet — in a manner that is sometimes strikingly similar to the blockbusting of past decades. Durkin is more certain of Waicker’s attempts to drive down property values. “It is definitely a mode of operating,” she says. “He puts lousy tenants in and hangs back and waits for a few more homeowners to drop and makes $15,000 a pop.” That combination — fewer homeowners, lax investors, deteriorating property, and a demographic shift — can send a neighborhood into a spiral, Qualye says. He and others believe that once a neighborhood begins to decline, Waicker exploits the situation further. Through advertisements and other methods, Qualye says, Waicker plays on the fears of those who worry that their neighborhood is changing racially or economically — and that therefore their property value will drop.

(Qualye was only one of many community housing activists to make the connection between Waicker and subtle blockbusting.) ⁶²⁸ And by using what some have deemed predatory methods and scare tactics to get properties below-market prices, Waicker tends to spread panic in communities and accelerate racial and economic change. He plays on the fears of neighborhood homeowners that the property values will drop and that any demographic shift will bring crime, violence, and other social ills. After the close of discovery, Waicker moved for partial summary judgment on the grounds that the use of the term “blockbuster” and the representations made by the City Paper regarding his business practices were defamatory, and that the newspaper printed the statements knowing they were false or in reckless disregard for their falsity. Scranton Times filed a cross-motion for summary judgment as to the entire action.

After a hearing, Judge Ellen Heller, in a memorandum and order, denied Waicker’s Motion for Summary Judgment and granted Scranton Times’s Motion for Summary Judgment. Even drawing all inferences in the light most favorable to Waicker, Judge Heller found that he was a limited public figure and that the record did not indicate actual malice, i.e., that the statements were made with knowledge of their falsity or in reckless disregard for the truth. Waicker presents the following issue for our review. I. Whether the trial court erred in granting Scranton Limited Partnership’s Motion for Summary Judgment on Waicker’s claim for defamation.

For the reasons stated below, we shall answer “no” and affirm the decision of the trial court. Discussion The standard of review when dealing with a motion for summary judgment is whether the trial court was legally correct. Heat & Power v. Air Products, 320 Md. 584, 591 , 578 A.2d 1202 (1990). Maryland Rule 2-501 reads in pertinent part: ⁶²⁹ (a) Motion. — Any party may file at any time a motion for summary judgment on all or part of an action on the ground that there is no genuine dispute as to any material fact and that the party is entitled to judgment as a matter of law.

The motion shall be supported by affidavit if filed before the day on which the adverse party’s initial pleading or motion is filed. Our review of the propriety of the trial court’s granting of summary judgment focuses on whether there was a dispute as to a material fact and, if not, whether the moving party was entitled to judgment as a matter of law. See e.g. Bagwell v. Peninsula Regional Medical, 106 Md.App. 470 , 665 A.2d 297 (1995), cert. denied, 341 Md. 172 , 669 A.2d 1360 (1996).

A material fact is one the resolution of which will somehow affect the outcome of the case. King v. Bankerd, 303 Md. 98 , 492 A.2d 608 (1985). In reviewing the record we must resolve all reasonable inferences in favor of the nonmoving party. Dobbins v. Washington Suburban Sanitary Comm., 338 Md. 341 , 658 A.2d 675 (1995).

We first must determine whether Waicker is a private plaintiff or a public figure, because “[w]hen the speech is of public concern and the plaintiff is a public official or public figure, the Constitution clearly requires the plaintiff to surmount a much higher barrier before recovering damages from a media defendant than is [necessary with a private plaintiff].” Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767, 775 , 106 S.Ct. 1558, 1563 , 89 L.Ed.2d 783 (1986). Whether a plaintiff is a public figure is solely an issue of law. Embrey v. Holly, 48 Md.App. 571 , 429 A.2d 251 (1981), rev’d on other grounds, 293 Md. 128 , 442 A.2d 966 (1982); Fitzgerald v. Penthouse Int’l Ltd., 691 F.2d 666, 669-70 (4th Cir.1982), cert. denied, 460 U.S. 1024 , 103 S.Ct. 1277 , 75 L.Ed.2d 497 (1983). Appellate courts make a de novo review of the entire record when making the determination.

Id. The designation of plaintiffs as public figures may rest on two alternative bases: individuals may achieve such pervasive fame or notoriety that they become public figures for all ⁶³⁰ purposes and in all concepts; or individuals may voluntarily inject themselves or be drawn into a particular public controversy and thereby become public figures for a limited range of issues. Saint Luke Evangelical Church, Inc. v. Smith, 74 Md.App. 353, 366-67 , 537 A.2d 1196 (1988), rev’d on other grounds, 318 Md. 337 , 568 A.2d 35 (1990) (quoting Gertz v. Robert Welch, Inc., 418 U.S. 323, 351 , 94 S.Ct. 2997, 3012-13 , 41 L.Ed.2d 789 (1974)); Jenoff v. Hearst Corp., 644 F.2d 1004 (4th Cir.1981) (applying Maryland law). The former is referred to as a general public figure while the latter is referred to as a limited public figure.

An example of a general public figure is a famous entertainer or athlete. Waicker clearly did not have the pervasive fame or notoriety to be a general public figure. Our determination is therefore whether he was a limited public figure or a private plaintiff. A court undertakes a two-part inquiry to determine whether a person is a limited public -figure: (1) was there a particular public controversy that gave rise to the alleged defamation; and, if so, (2) was the nature and extent of the plaintiff’s participation in that particular controversy sufficient to justify public figure status?

See Clyburn v. News World Communications, Inc., 903 F.2d 29, 31 (D.C.Cir.1990); Lawrence Tribe, American Constitutional Law § 12-13 at 880-81 (2d ed. 1988). A public controversy is a dispute that attracts special attention because its ramifications will be felt by persons who are not direct participants. Foretich v. Capital Cities/ABC, Inc., 37 F.3d 1541, 1554 (4th Cir.1994). Public controversies have “foreseeable and substantial ramifications for non-participants.” Waldbaum v. Fairchild Publications, Inc., 627 F.2d 1287, 1296-97 (D.C.Cir.), cert. denied, 449 U.S. 898 , 101 S.Ct. 266 , 66 L.Ed.2d 128 (1980).

The mere fact that a private concern or disagreement generates news coverage does not mean it is a public controversy, see Time v. Firestone, 424 U.S. 448, 459 , 96 S.Ct. 958, 967-68 , 47 L.Ed.2d 154 (1976); a public controversy is more than a controversy in which the public is interested. Id. ⁶³¹ In the instant case, real estate speculation and specifically the business practices of Waicker have been the subject of newspaper articles and editorials from the late 1970’s to the present. One week prior to the publication of the article at issue in this case, The Baltimore Sun ran an article on the subject. Moreover, Waicker’s purchase and sale of real estate directly affected the value of the property of community members who were not participants in Waicker’s real estate transactions.

We have no doubt that real estate speculation in these two Baltimore communities was a public controversy. Because we find that a public controversy existed, we move to the second stage of the analysis: whether the nature and extent of the plaintiff’s participation in that particular controversy was sufficient to justify public figure status. Courts have analyzed the following factors when determining whether an individual is a public figure with respect to an identified public controversy: (1) whether the individual had access to channels of effective communication; (2) whether the individual voluntarily assumed a role of special prominence in public controversy; (3) whether the individual sought to influence resolution or outcome of controversy; (4) whether controversy existed prior to publication of defamatory statements; and (5) whether the individual retained public figure status at the time of alleged defamation. Fitzgerald, 691 F.2d at 668 ; see generally, A.S. Abell Co. v. Barnes, 258 Md. 56, 67-68 , 265 A.2d 207 (1970), cert. denied, 403 U.S. 921 , 91 S.Ct. 2224 , 29 L.Ed.2d 700 (1971).

In the instant case, the trial court found that Waicker was a limited public figure with respect to issues involving the purchase and sale of real estate in Baltimore City. Based upon our independent review of the record, we agree. The first factor is whether the individual had access to channels of effective communication. The rationale for this factor is that when the plaintiff has access to the media, the “public controversy can be aired without the need for litigation and that rebuttal of offending speech is preferable to recourse to the courts.” Reuber v. Food Chemical News, Inc., 925 F.2d ⁶³² 703, 708-09 (4th Cir.), cert. denied, 501 U.S. 1212 , 111 S.Ct. 2814 , 115 L.Ed.2d 986 (1991) (citing Gertz, 418 U.S. at 344 , 94 S.Ct. at 3009 ).

In Reuber, the Court of Appeals for the Fourth Circuit, in finding the plaintiff a public figure, considered that the plaintiff had been interviewed on at least one occasion. In this case, Waicker has sought extensive media attention. Waicker has been interviewed for newspaper articles since he first became involved with real estate in the late 1970’s. One article featured in The News American on 30 September 1979, entitled “A local investor: At 26, the ‘New Breed’ Touch,” featured a large photograph of Waicker, sporting a wide grin.

In the article, Waicker was quoted as saying: “Anytime anybody makes a profit today, it’s a dirty word. We’re not all trouble makers and abusers. I’m not one of those rabblerousers.... I think in this kind of story there is a good guy and a bad guy.

I’m a good guy.” In a 14 September 1980 Baltimore Sun article entitled “Patterson Park real estate conflict simmers: Is it speculation or progress?” Waicker described himself as a “harbinger of better living standards in Patterson Park and of progress in Baltimore housing in general.” A picture of Waicker smiling broadly was again prominently, exhibited over his quote: “[P]eople are just jealous.” Furthermore, Waicker was quoted recently in the 3 April 1995 Baltimore Sun article entitled, “Belair-Edison’s efforts fail to stop flight to suburbs.” 4 ⁶³³ Waicker also served as the president and vice president of the Property Owners Association of Greater Baltimore. In those positions, Waicker had the opportunity to influence many decisions made regarding real estate in Baltimore City. Waicker had access to channels of communication. He put himself in a position to influence political decision and he used the media to refute criticism and portray himself as an honest businessman in order to further his business endeavors.

Waicker cannot seek