Desnick v. American Broadcasting Companies, Inc.

POSNER, Chief Judge. The plaintiffs--an ophthalmic clinic known as the "Desnick Eye Center" after its owner, Dr. Desnick, and two ophthalmic surgeons employed by the clinic, Glazer and Simon--appeal from the dismissal of their suit against the ABC television network, a producer of the ABC program PrimeTime Live named Entine, and the program's star reporter, Donaldson. The suit is for trespass, defamation, and other torts arising out of the production and broadcast of a program segment of PrimeTime Live that was highly critical of the Desnick Eye Center. Federal jurisdiction is based primarily on diversity of citizenship (though there is one federal claim), with Illinois law, and to a lesser extent Wisconsin and Indiana law, supplying the substantive rules on which decision is to be based. The suit was dismissed for failure to state a claim. . . . The record before us is limited to the complaint and to a transcript, admitted to be accurate, of the complained-about segment.

In March of 1993 Entine telephoned Dr. Desnick and told him that PrimeTime Live wanted to do a broadcast segment on large cataract practices. The Desnick Eye Center has 25 offices in four midwestern states and performs more than 10,000 cataract operations a year, mostly on elderly persons whose cataract surgery is paid for by Medicare. The complaint alleges--and in the posture of the case we must take the allegations to be true, though of course they may not be--that Entine told Desnick that the segment would not be about just one cataract practice, that it would not involve "ambush" interviews or "undercover" surveillance, and that it would be "fair and balanced." Thus reassured, Desnick permitted an ABC crew to videotape the Desnick Eye Center's main premises in Chicago, to film a cataract operation "live," and to interview doctors, technicians, and patients. Desnick also gave Entine a videotape explaining the Desnick Eye Center's services.

Unbeknownst to Desnick, Entine had dispatched persons equipped with concealed cameras to offices of the Desnick Eye Center in Wisconsin and Indiana. Posing as patients, these persons--seven in all--requested eye examinations. Plaintiffs Glazer and Simon are among the employees of the Desnick Eye Center who were secretly videotaped examining these "test patients."

The program aired on June 10. Donaldson introduces the segment by saying, "We begin tonight with the story of a so-called 'big cutter,' Dr. James Desnick. . . . In our undercover investigation of the big cutter you'll meet tonight, we turned up evidence that he may also be a big charger, doing unnecessary cataract surgery for the money." Brief interviews with four patients of the Desnick Eye Center follow. One of the patients is satisfied ("I was blessed"); the other three are not--one of them says, "If you got three eyes, he'll get three eyes." Donaldson then reports on the experiences of the seven test patients. The two who were under 65 and thus not eligible for Medicare reimbursement were told they didn't need cataract surgery. Four of the other five were told they did. Glazer and Simon are shown recommending cataract surgery to them. Donaldson tells the viewer that PrimeTime Live has hired a professor of ophthalmology to examine the test patients who had been told they needed cataract surgery, and the professor tells the viewer that they didn't need it--with regard to one he says, "I think it would be near malpractice to do surgery on him." Later in the segment he denies that this could just be an honest difference of opinion between professionals.

An ophthalmic surgeon is interviewed who had turned down a job at the Desnick Eye Center because he would not have been "able to screen who I was going to operate on." He claims to have been told by one of the doctors at the Center (not Glazer or Simon) that "as soon as I reject them [i.e., turn down a patient for cataract surgery], they're going in the next room to get surgery." A former marketing executive for the Center says Desnick took advantage of "people who had Alzheimer's, people who did not know what planet they were on, people whose quality of life wouldn't change one iota by having cataract surgery done." Two patients are interviewed who report miserable experiences with the Center--one claiming that the doctors there had failed to spot an easily visible melanoma, another that as a result of unnecessary cataract surgery her "eye ruptured," producing "running pus." A former employee tells the viewer that Dr. Desnick alters patients' medical records to show they need cataract surgery--for example, changing the record of one patient's vision test from 20/30 to 20/80--and that he instructs all members of his staff to use pens of the same color in order to facilitate the alteration of patients' records.

One symptom of cataracts is that lights of normal brightness produce glare. Glazer is shown telling a patient, "You know, you're getting glare. I would say we could do significantly better [with an operation]." And Simon is shown asking two patients, "Do you ever notice any glare or blurriness when you're driving, or difficulty with the signs?" Both say no, and immediately Donaldson tells the viewer that "the Desnick Center uses a very interesting machine, called an auto-refractor, to determine whether there are glare problems." Donaldson demonstrates the machine, then says that "Paddy Kalish is an optometrist who says that when he worked at the Desnick clinic from 1987 to 1990, the machine was regularly rigged. He says he watched a technician tamper with the machine, this way"--and then Kalish gives a demonstration, adding, "This happened routinely for all the older patients that came in for the eye exams." Donaldson reveals that Dr. Desnick has obtained a judgment against Kalish for defamation, but adds that "Kalish is not the only one to tell us the machine may have been rigged. PrimeTime talked to four other former Desnick employees who say almost everyone failed the glare test." . . .

The plaintiffs' claims fall into two distinct classes. The first arises from the broadcast itself, the second from the means by which ABC and Entine obtained the information that they used in the broadcast. The first is a class of one. The broadcast is alleged to have defamed the three plaintiffs by charging that the glare machine is tampered with. No other aspect of the broadcast is claimed to be tortious. The defendants used excerpts from the Desnick videotape in the broadcast, and the plaintiffs say that this was done without Dr. Desnick's permission. But they do not claim that in showing the videotape without authorization the defendants infringed copyright, cast the plaintiffs in a false light, or otherwise invaded a right, although they do claim that the defendants had obtained the videotape fraudulently (a claim in the second class). And they do not claim that any of the other charges in the broadcast that are critical of them, such as that they perform unnecessary surgery or that Dr. Desnick tampers with patients' medical records, are false. . . .

To enter upon another's land without consent is a trespass. The force of this rule has, it is true, been diluted somewhat by concepts of privilege and of implied consent. But there is no journalists' privilege to trespass. Prahl v. Brosamle. . .; Le Mistral, Inc. v. Columbia Broadcasting System. . . And there can be no implied consent in any nonfictitious sense of the term when express consent is procured by a misrepresentation or a misleading omission. The Desnick Eye Center would not have agreed to the entry of the test patients into its offices had it known they wanted eye examinations only in order to gather material for a television expose of the Center and that they were going to make secret videotapes of the examinations. Yet some cases, illustrated by Martin v. Fidelity & Casualty Co., . . . deem consent effective even though it was procured by fraud. There must be something to this surprising result. Without it a restaurant critic could not conceal his identity when he ordered a meal, or a browser pretend to be interested in merchandise that he could not afford to buy. Dinner guests would be trespassers if they were false friends who never would have been invited had the host known their true character, and a consumer who in an effort to bargain down an automobile dealer falsely claimed to be able to buy the same car elsewhere at a lower price would be a trespasser in the dealer's showroom. Some of these might be classified as privileged trespasses, designed to promote competition. Others might be thought justified by some kind of implied consent--the restaurant critic for example might point by way of analogy to the use of the "fair use" defense by book reviewers charged with copyright infringement and argue that the restaurant industry as a whole would be injured if restaurants could exclude critics. But most such efforts at rationalization would be little better than evasions. The fact is that consent to an entry is often given legal effect even though the entrant has intentions that if known to the owner of the property would cause him for perfectly understandable and generally ethical or at least lawful reasons to revoke his consent.

The law's willingness to give effect to consent procured by fraud is not limited to the tort of trespass. The Restatement gives the example of a man who obtains consent to sexual intercourse by promising a woman $ 100, yet (unbeknownst to her, of course) he pays her with a counterfeit bill and intended to do so from the start. The man is not guilty of battery, even though unconsented-to sexual intercourse is a battery. Restatement (Second) of Torts § 892B. . .. Yet we know that to conceal the fact that one has a venereal disease transforms "consensual" intercourse into battery. Crowell v. Crowell. . .. Seduction, standardly effected by false promises of love, is not rape, Pletnikoff v. State. . .; intercourse under the pretense of rendering medical or psychiatric treatment is, at least in most states. . . .. It certainly is battery. . . . Trespass presents close parallels. If a homeowner opens his door to a purported meter reader who is in fact nothing of the sort--just a busybody curious about the interior of the home--the homeowner's consent to his entry is not a defense to a suit for trespass. . . .And likewise if a competitor gained entry to a business firm's premises posing as a customer but in fact hoping to steal the firm's trade secrets. . . .

How to distinguish the two classes of case--the seducer from the medical impersonator, the restaurant critic from the meter-reader impersonator? The answer can have nothing to do with fraud; there is fraud in all the cases. It has to do with the interest that the torts in question, battery and trespass, protect. The one protects the inviolability of the person, the other the inviolability of the person's property. The woman who is seduced wants to have sex with her seducer, and the restaurant owner wants to have customers. The woman who is victimized by the medical impersonator has no desire to have sex with her doctor; she wants medical treatment. And the homeowner victimized by the phony meter reader does not want strangers in his house unless they have authorized service functions. The dealer's objection to the customer who claims falsely to have a lower price from a competing dealer is not to the physical presence of the customer, but to the fraud that he is trying to perpetuate. The lines are not bright--they are not even inevitable. They are the traces of the old forms of action, which have resulted in a multitude of artificial distinctions in modern law. But that is nothing new.

There was no invasion in the present case of any of the specific interests that the tort of trespass seeks to protect. The test patients entered offices that were open to anyone expressing a desire for ophthalmic services and videotaped physicians engaged in professional, not personal, communications with strangers (the testers themselves). The activities of the offices were not disrupted, as in People v. Segal. . .another case of gaining entry by false pretenses. See also Le Mistral, Inc. v. Columbia Broadcasting System,. . .. Nor was there any "inva[sion of] a person's private space," Haynes v. Alfred A. Knopf, Inc., . . ., as in our hypothetical meterreader case, as in the famous case of De May v. Roberts,. . . (where a doctor, called to the plaintiff's home to deliver her baby, brought along with him a friend who was curious to see a birth but was not a medical doctor, and represented the friend to be his medical assistant), as in one of its numerous modern counterparts, Miller v. National Broadcasting Co., . . ., and as in Dietemann v. Time, Inc.,. . ., on which the plaintiffs in our case rely. Dietemann involved a home. True, the portion invaded was an office, where the plaintiff performed quack healing of nonexistent ailments. The parallel to this case is plain enough, but there is a difference. Dietemann was not in business, and did not advertise his services or charge for them. His quackery was private.

No embarrassingly intimate details of anybody's life were publicized in the present case. There was no eavesdropping on a private conversation; the testers recorded their own conversations with the Desnick Eye Center's physicians. There was no violation of the doctor-patient privilege. There was no theft, or intent to steal, trade secrets; no disruption of decorum, of peace and quiet; no noisy or distracting demonstrations. Had the testers been undercover FBI agents, there would have been no violation of the Fourth Amendment, because there would have been no invasion of a legally protected interest in property or privacy. United States v. White,. . .; Lewis v. United States,. . .; Forster v. County of Santa Barbara. . .; Northside Realty Associates, Inc. v. United States,. . . . "Testers" who pose as prospective home buyers in order to gather evidence of housing discrimination are not trespassers even if they are private persons not acting under color of law. . . . The situation of the defendants' "testers" is analogous. Like testers seeking evidence of violation of antidiscrimination laws, the defendants' test patients gained entry into the plaintiffs' premises by misrepresenting their purposes (more precisely by a misleading omission to disclose those purposes). But the entry was not invasive in the sense of infringing the kind of interest of the plaintiffs that the law of trespass protects; it was not an interference with the ownership or possession of land. We need not consider what if any difference it would make if the plaintiffs had festooned the premises with signs forbidding the entry of testers or other snoops. Perhaps none, see United States v. Centennial Builders, Inc.,. . ., but that is an issue for another day.

What we have said largely disposes of two other claims--infringement of the right of privacy, and illegal wiretapping. The right of privacy embraces several distinct interests, but the only ones conceivably involved here are the closely related interests in concealing intimate personal facts and in preventing intrusion into legitimately private activities, such as phone conversations. Haynes v. Alfred A. Knopf, Inc.,. . .; Zinda v. Louisiana Pacific Corp.,. . .; Doe v. Methodist Hospital. . . . As we have said already, no intimate personal facts concerning the two individual plaintiffs (remember that Dr. Desnick himself is not a plaintiff) were revealed; and the only conversations that were recorded were conversations with the testers themselves. Thomas v. Pearl. . . .

The federal and state wiretapping statutes that the plaintiffs invoke allow one party to a conversation to record the conversation unless his purpose in doing so is to commit a crime or a tort or (in the case of the state, but not the federal, law) to do "other injurious acts." 18 U.S.C. § 2511 (2)(d); Wis. Stat. § 968.31(2)(c); Thomas v. Pearl. . .; State v. Waste Management of Wisconsin, Inc.,. . .. The defendants did not order the camera-armed testers into the Desnick Eye Center's premises in order to commit a crime or tort. Maybe the program as it was eventually broadcast was tortious, for we have said that the defamation count was dismissed prematurely. But there is no suggestion that the defendants sent the testers into the Wisconsin and Illinois offices for the purpose of defaming the plaintiffs by charging tampering with the glare machine. The purpose, by the plaintiffs' own account, was to see whether the Center's physicians would recommend cataract surgery on the testers. By the same token it was not to injure the Desnick Eye Center, unless the public exposure of misconduct is an "injurious act" within the meaning of the Wisconsin statute. Telling the world the truth about a Medicare fraud is hardly what the framers of the statute could have had in mind in forbidding a person to record his own conversations if he was trying to commit an "injurious act.". . .

Last is the charge of fraud in the defendants' gaining entry to the Chicago office and being permitted while there to interview staff and film a cataract operation, and in their obtaining the Desnick Eye Center's informational videotape. The alleged fraud consists of a series of false promises by the defendants--that the broadcast segment would be fair and balanced and that the defendants would not use "ambush" interviews or undercover surveillance tactics in making the segment. Since the promises were given in exchange for Desnick's permission to do things calculated to enhance the value of the broadcast segment, they were, one might have thought, supported by consideration and thus a basis for a breach of contract suit. That we need not decide. The plaintiffs had a claim for breach of contract in their complaint and it survived the motion to dismiss, but they voluntarily dismissed the claim so that there would be a final judgment from which they could appeal. The only issue before us is fraud.

Unlike most states nowadays, Illinois does not provide a remedy for fraudulent promises ("promissory fraud")-- unless they are part of a "scheme" to defraud. Willis v. Atkins,. . .; Stamatakis Industries, Inc. v. King. . .; Bower v. Jones. . . . The distinction between a mere promissory fraud and a scheme of promissory fraud is elusive, and has caused, to say the least, considerable uncertainty, as even the Illinois cases acknowledge. E.g., Stamatakis Industries, Inc. v. King. . .; Vance Pearson, Inc. v. Alexander, . . .. Some cases suggest that the exception has swallowed the rule. . . .; Lovejoy Electronics, Inc. v. O'Berto. . .; Price v. Highland Community Bank. . .. Others seem unwilling to apply the exception. . . .

The distinction certainly is unsatisfactory, but it reflects an understandable ambivalence, albeit one shared by few other states, about allowing suits to be based on nothing more than an allegation of a fraudulent promise. There is a risk of turning every breach of contract suit into a fraud suit, of circumventing the limitation that the doctrine of consideration is supposed however ineptly to place on making all promises legally enforceable, and of thwarting the rule that denies the award of punitive damages for breach of contract. A great many promises belong to the realm of puffery, bragging, "mere words," and casual bonhomie, rather than to that of serious commitment. They are not intended to and ordinarily do not induce reliance; a healthy skepticism is a better protection against being fooled by them than the costly remedies of the law. In any event it is not our proper role as a federal court in a diversity suit to read "scheme" out of Illinois law; we must give it some meaning. Our best interpretation is that promissory fraud is actionable only if it either is particularly egregious or, what may amount to the same thing, it is embedded in a larger pattern of deceptions or enticements that reasonably induces reliance and against which the law ought to provide a remedy.

We cannot view the fraud alleged in this case in that light. Investigative journalists well known for ruthlessness promise to wear kid gloves. They break their promise, as any person of normal sophistication would expect. If that is "fraud," it is the kind against which potential victims can easily arm themselves by maintaining a minimum of skepticism about journalistic goals and methods. Desnick, needless to say, was no tyro, or child, or otherwise a member of a vulnerable group. He is a successful professional and entrepreneur. No legal remedies to protect him from what happened are required, or by Illinois provided. It would be different if the false promises were stations on the way to taking Desnick to the cleaners. An elaborate artifice of fraud is the central meaning of a scheme to defraud through false promises. The only scheme here was a scheme to expose publicly any bad practices that the investigative team discovered, and that is not a fraudulent scheme.

Anyway we cannot see how the plaintiffs could have been harmed by the false promises. We may assume that had the defendants been honest, Desnick would have refused to admit the ABC crew to the Chicago premises or given Entine the videotape. But none of the negative parts of the broadcast segment were supplied by the visit to the Chicago premises or came out of the informational videotape, and Desnick could not have prevented the ambush interview or the undercover surveillance. The socalled fraud was harmless.

One further point about the claims concerning the making of the program segment, as distinct from the content of the segment itself, needs to be made. The Supreme Court in the name of the First Amendment has hedged about defamation suits, even when not brought by public figures, with many safeguards designed to protect a vigorous market in ideas and opinions. Today's "tabloid" style investigative television reportage, conducted by networks desperate for viewers in an increasingly competitive television market (see Capital Cities/ABC, Inc. v. FCC. . ., constitutes--although it is often shrill, one-sided, and offensive, and sometimes defamatory--an important part of that market. It is entitled to all the safeguards with which the Supreme Court has surrounded liability for defamation. And it is entitled to them regardless of the name of the tort, see, e.g., Hustler Magazine, Inc. v. Falwell. . ., and, we add, regardless of whether the tort suit is aimed at the content of the broadcast or the production of the broadcast. If the broadcast itself does not contain actionable defamation, and no established rights are invaded in the process of creating it (for the media have no general immunity from tort or contract liability, Cohen v. Cowles Media Co. . ..; Le Mistral, Inc. v. Columbia Broadcasting System. . .), then the target has no legal remedy even if the investigatory tactics used by the network are surreptitious, confrontational, unscrupulous, and ungentlemanly. In this case, there may have been--it is too early to tell--an actionable defamation, and if so the plaintiffs have a remedy. But none of their established rights under either state law or the federal wiretapping law was infringed by the making, as opposed to the dissemination, of the broadcast segment of which they complain, with the possible and possibly abandoned exception of contract law.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.