Faigin v. Kelly & Carucci
Case Date: 07/19/1999
Court: United States Court of Appeals
Docket No: 98-1589
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For the First Circuit No. 98-1589 A.J. FAIGIN, Plaintiff, Appellant, v. JAMES E. KELLY AND VIC CARUCCI, Defendants, Appellees. APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE [Hon. Shane Devine, Senior U.S. District Judge] Before Selya, Boudin and Lipez, Circuit Judges. A.J. Faigin, pro se ipso, for appellant. Steven M. Gordon, with whom Lucy J. Karl, Shaheen & Gordon, P.A., and Linda Steinman were on brief, for appellee Kelly. July 19, 1999 SELYA, Circuit Judge. This is a tale of an American icon. Jim Kelly attained great celebrity during an illustrious professional football career. By his own admission, however, he did not handle his newfound fame and fortune as well as he handled a pigskin. Looking back, Kelly believed that his adjustment had been retarded by a cluster of agents who put their own financial interests ahead of his. Eventually, Kelly rid himself of these subalterns and made different arrangements. When he thereafter penned his autobiography, he made no bones about his contempt for his former mentors. One of these advisers, plaintiff-appellant A.J. Faigin, took umbrage and sued both Kelly and Vic Carucci, the journalist who assisted Kelly in writing the book. In due season, the nisi prius court granted Carucci's motion for summary judgment, but denied Kelly's parallel motion. Faigin's case against Kelly was tried to a jury over a 19-day span and resulted in a defendant's verdict. Faigin appeals. Deterrating no reversible error, we affirm. I. BACKGROUND We divide our canvass of background events into three segments. First, we sketch the contours of the association between Kelly and Faigin. Next, we discuss the book that Kelly wrote with Carucci's help. Third, we limn the travel of the case. A. The Relationship. In 1980, Faigin joined Greg Lustig and Ken Weinberger in forming what they conceived as a "full-service sports management" enterprise. This mini-conglomerate included three separate corporations that collectively offered tax, accounting, financial, and marketing services to professional athletes. Although these entities seemingly overlapped in practice, the founders' game plan was to furnish contract negotiation services through Lustig Pro Sports, Inc. (LPS); to furnish financial and investment advice through Consultants' Development Group, Inc. (CDG); and to use the third entity, known as Lustig Group (L-Group), as an investment vehicle. Lustig and Faigin also formed a law firm, Lustig & Faigin Co., LPA (L&F), to provide legal representation to athletes and to the three corporations. Faigin had an interest in each of these entities: he had capital invested in LPS and served as its president; he was a shareholder, director, and officer of both CDG and L-Group; and he a was a principal in L & F. In 1983, Kelly capped a star-studded collegiate career as the quarterback of the University of Miami Hurricanes. Faigin recruited him that spring and Kelly signed contracts with LPS and CDG. Both the National Football League (the NFL) and the United States Football League (the USFL) drafted him in the first round. Kelly opted for the fledgling USFL. LPS negotiated a contract for him with the Houston Gamblers and CDG assembled and managed his investment portfolio. After the USFL folded in 1986, LPS helped Kelly secure a contract with the Buffalo Bills of the NFL a deal that, at the time, was thought to be the most lucrative in the league's history. In 1987, Faigin and Lustig came to a rancorous parting of the ways. Faigin sent Kelly an audiotape describing the split and explaining that he no longer could work with Lustig because he feared for his own reputation. In this regard, Faigin noted that Lustig's investment advice and other business decisions were largely self-serving, and that LPS's clients, Kelly included, had been improperly billed. Kelly's investigation into these charges lent him no comfort and, in 1988, he severed his ties with his former agents. A new set of advisers took the helm. B. The Book. Carucci agreed to help Kelly write his autobiography, and the tome, entitled "Armed and Dangerous," was published in 1992. For the most part, the account (written in the first-person singular, despite Carucci's collaboration) lumped Faigin, Lustig, and Weinberger together. The passages relating to them were relatively brief. We reprint below the statements that sparked the instant action: The draft began at eight o'clock in the morning. I was in Akron, Ohio, where my agents at the time Greg Lustig, A.J. Faigin and Ken Weinberger were based. (I wanted to use another word besides "agents" here, but that's better left for the lawsuit that is currently pending in Texas. My mother always said if you don't have anything good to say about somebody, don't say anything at all.) * * * I learned my lesson the hard way about whom to trust and whom not to trust in business. I had had complete faith in my first agents, Greg Lustig and A.J. Faigin. . . . Then Danny and the Trevino brothers started taking a closer look at my business affairs. And the more they looked, the more they didn't like what they found. Finally, I saw the light. In 1988, I fired Lustig and Faigin and put my brother [Danny] and the Trevinos in charge of all my business dealings. Then I filed a major lawsuit against my former agents, as well as the former owners of the Gamblers for defaulting on the payment of my signing bonus. Fortunately, I was able to catch the problem before it was too late, which made me luckier than a lot of other pro athletes. When you come out of college, you're so trusting, so vulnerable when it comes to finding people to handle your money. I'm just glad that I had a brother and a couple of close friends who cared enough to slap me upside the head and get my attention. The funny thing is, my mother never liked Lustig from Day One. There was something about him that told her he couldn't be trusted. I should have followed Mom's intuition. Jim Kelly and Vic Carucci, Armed and Dangerous 57, 159-60 (1992). C. Travel of the Case. Invoking diversity jurisdiction, 28 U.S.C. 1332(a), Faigin initiated a libel action against Kelly and Carucci in New Hampshire's federal district court. Extensive pretrial discovery ensued. In the course of the proceedings, the district court, for reasons to which we shall return, granted summary judgment in Carucci's favor. Faigin's case against Kelly was tried to a jury. The court permitted Kelly and Faigin to argue competing views of the gist of the disputed passages. For his part, Kelly maintained both that his comments were not defamatory (but indicated merely that he had "lost trust in his agents generally") and that they were true. Faigin disagreed. He argued that the statements falsely implied that he was dismissed for unlawful conduct, thus damaging his reputation and jeopardizing his career. The court submitted the case on special interrogatories. See Fed. R. Civ. P. 49(a). In response to the first question, the jury concluded that the relevant passages contained defamatory statements, i.e. implications of fact that tended to harm Faigin's reputation. The second question went to the statements' objective truth. It read: "Based on a preponderance of the evidence, do you find that the defamatory statements or implications of fact in the defendant's book were false?" The jury found that Faigin had failed to prove falsity and, pursuant to the court's instructions, returned a take-nothing verdict. This appeal followed. Faigin, who was represented by experienced counsel below, proceeds pro se in this court. He assigns error to a plethora of rulings. Many of his arguments so clearly lack persuasive force that we reject them out of hand. In this opinion, we examine only the residuum of Faigin's asseverational array. II. ANALYSIS We start our trek through the issues by scrutinizing the summary judgment ruling. Moving to the trial, we next consider Faigin's sufficiency-of-the-evidence challenge and his insistence that the district court improperly declined to apply collateral estoppel to his behoof. We then survey a number of evidentiary issues and proceed from there to ponder an alleged discovery violation and the lower court's denial of Faigin's request to mount a rebuttal. We conclude by addressing the jury instructions. A. The Entry of Summary Judgment. Faigin asserts that the trial court erred in granting Carucci an exit visa under the aegis of Fed. R. Civ. P. 56. See, e.g., Garside v. Osco Drug, Inc., 895 F.2d 46, 48-49 (1st Cir. 1990) (explicating summary judgment standard). We explain briefly why we regard this assertion as moot. In this diversity case, New Hampshire law supplies the substantive rules of decision. See Fitzgerald v. Expressway Sewerage Constr., Inc., ___ F.3d ___, ___ (1st Cir. 1999) [No. 98- 1473, slip op. at 5]; Blinzler v. Marriott Int'l, Inc., 81 F.3d 1148, 1151 (1st Cir. 1996). To prove defamation under New Hampshire law, a plaintiff ordinarily must establish that the "defendant failed to exercise reasonable care in publishing, without a valid privilege, a false and defamatory statement of fact about the plaintiff to a third party." Independent Mechanical Contractors, Inc. v. Gordon T. Burke & Sons, Inc., 635 A.2d 487, 492 (N.H. 1993), citing Restatement (Second) of Torts 558 (1977). A statement 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." Restatement (Second) of Torts 559 (1977). Consequently, a libel plaintiff customarily bears the burden of proving that the defendant (1) lacked due care (2) in publishing a false statement of fact (3) which was defamatory in nature. Most rules admit of exceptions, and this rule is no different. The Supreme Court has made it pellucid that the First Amendment demands that a defamation plaintiff who is a "public figure" must show more than mere negligence. See Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 510 (1991); New York Times Co. v. Sullivan, 376 U.S. 254, 283 (1964). Rather, as a condition precedent to recovery, such a plaintiff must prove by clear and convincing evidence that the defendant published the defamatory statement with actual malice, that is, that the defendant knew that the statement was false or, at least, recklessly disregarded its want of veracity. See Masson, 501 U.S. at 510; Pendleton v. City of Haverhill, 156 F.3d 57, 65 (1st Cir. 1998). In this case, the district court concluded that Faigin was a limited-purpose public figure. See Faigin v. Kelly, 978 F. Supp. 420, 428 (D.N.H. 1997). This meant that Faigin had the responsibility of proving actual malice in order to recover for defamation. See id. at 428-29. Because Faigin had adduced no evidence that Carucci (who functioned principally as a scrivener) either knew that the challenged statements were false or recklessly disregarded their truthfulness, see id. at 429, the district court granted Carucci's motion for brevis disposition. In this venue, Faigin maintains that the trial court erred in characterizing him as a limited-purpose public figure. The argument that he presents is substantial, and the answer to the question is not free from doubt. In the last analysis, however, we have no occasion to probe the point. At trial, the jury found specially that Faigin did not prove that the allegedly defamatory statements were false. Objective falsity is not only an element of a defamation action, but also is logically antecedent to questions bearing upon negligence or state of mind. Thus, this special finding, which we conclude was supportable, see infra Part II(B), itself sufficed to thwart Faigin's lawsuit and rendered the presence or absence of malice irrelevant. See Restatement (Second) of Torts 581A, comment h (1977) (explaining that "it is immaterial if the person who publishes the statement believes it is false if it turns out to be true"). It follows inexorably that, inasmuch as Faigin's status as a public figure vel non bore exclusively on the state-of-mind requirement, the jury's finding on falsity moots the public figure inquiry. B. Sufficiency of the Evidence. Faigin contends that the evidence adduced at trial was insufficient as a matter of law to sustain the verdict. The principal problem with this contention is that Faigin neglected to make a motion for judgment as a matter of law at the close of all the evidence. See Fed. R. Civ. P. 50(a). He then compounded his lapse by abjuring any motion for judgment notwithstanding the verdict. See Fed. R. Civ. P. 50(b). When a litigant has foregone a timely motion for judgment as a matter of law, the court of appeals normally will not consider the legal sufficiency of the evidence. See Hammond v. T.J. Litle & Co., 82 F.3d 1166, 1171 (1st Cir. 1996); La Amiga del Pueblo, Inc. v. Robles, 937 F.2d 689, 691 (1st Cir. 1991); Jusino v. Zayas, 875 F.2d 986, 991 (1st Cir. 1989). We say "normally" because, even in the absence of such a motion, the court of appeals retains a modicum of residual discretion to inquire whether the record reflects an absolute dearth of evidentiary support for the jury's verdict. See La Amiga del Pueblo, 937 F.2d at 691. Here, however, such an inquiry quickly reveals that the evidence is not so lopsided as to bring this seldom-invoked discretion into play. To the contrary, the evidence that contradicts Faigin's claim of objective falsity seems more than ample. We add a coda. To the extent that Faigin contends that the verdict was against the weight of the evidence, his failure to file a motion for new trial, see Fed. R. Civ. P. 59(a), ensnares him in the toils of a similar and equally lethal procedural default. See La Amiga del Pueblo, 937 F.2d at 691 (explaining that if the verdict-loser has not made a timely motion for a new trial, "the court of appeals will not thereafter review the weight of the evidence undergirding the adverse verdict"). C. Collateral Estoppel. Faigin complains bitterly about the district court's refusal to give preclusive effect to a sanctions order issued in the aftermath of previous litigation between the protagonists. We set the stage. In 1989, Kelly sued Lustig, Faigin, Weinberger, and numerous others in the United States District Court for the Southern District of Texas. As it pertained to Faigin, the complaint alleged in substance that he had played an active role in misleading Kelly about certain investments. Kelly settled some claims against some defendants and dropped other defendants because of their penury. In 1994, under pressure to comply with long-overdue discovery requests, he voluntarily dismissed his claims against Faigin without prejudice. Faigin then moved for sanctions, claiming that Kelly had knowingly brought and maintained a groundless case against him without performing the investigation required under Fed. R. Civ. P. 11. The Texas court found that Kelly had adduced no evidence to show that Faigin was involved in the investment decisions that formed the centerpiece of the litigation; determined that Kelly knew (or should have known) that his allegations against Faigin were therefore frivolous; and ordered Kelly to pay $11,000 in sanctions. See Kelly v. Lustig, No. H-89-1931, slip op. (S.D. Tex. Aug. 12, 1994) (the Sanctions Order). After he had initiated the instant case, Faigin asked the district court to treat the Sanctions Order as conclusive evidence that Kelly knew the statements made in Armed and Dangerous were false vis- |