author: Fuchsberg, J. Chief Judge Cooke

text:
    In the Matter of Manhattan Pizza Hut, Inc., et al., Appellants, v New York State Human Rights Appeal Board et al., Respondents.
    Argued October 7, 1980;
    decided December 18, 1980

      POINTS OF COUNSEL

      Patrick M. Murphy, Jr., for appellants.
    I. The construction and application of the term “marital status” was unreasonable and not in accordance with the legislative intent of section 296 of the Executive Law. (Matter of Reyes v Dumpson, 40 NY2d 725; Sprogis v United Airlines, 444 F2d 1194, 404 US 991; Matter of New York Times Co. v City of New York Comm. on Human Rights, 41 NY2d 345.) II. An employer acting pursuant to a “no relative” employment policy does not violate section 296 of the Executive Law. (Tuck v McGraw-Hill, Inc., 421 F Supp 39; Espinoza v Thoma, 580 F2d 346; Yuhas v Libbey-Owens-Ford Co., 562 F2d 496; Keckeisen v Independent School Dist. 612, 509 F2d 1062; Lewis v Spencer, 490 F2d 93; Southwestern Community Action Council v Community Servs. Admin., 462 F Supp 289.) III. Should the court find appellant violated section 296 of the Executive Law, then this matter should be remanded in the interest of justice. (Matter of Police Dept. of City of N. Y. v New York State Human Rights Appeal Bd., 65 AD2d 538.) IV. The division’s decision in awarding damages for back pay and compensatory damages is erroneous as a matter of law. (Milage v Woodward, 186 NY 252; Papaioannou v Sirocco Supper Club, 75 Misc 2d 1001; State Div. of Human Rights v Board of Educ., 59 AD2d 1048; 121-129 Broadway Realty v New York State Div. of Human Rights, 48 AD2d 975, 49 AD2d 422.)

      Sara Toll East and Ann Thacher Anderson for State Division of Human Rights, respondent.
    I. An employer who discriminates against an employee because he or she is married to another employee violates the marital status amendment to the Human Rights Law. (Rees v Teachers’ Retirement Bd. of City of N. Y., 247 NY 372; Matter of General Reinsurance Corp. v Pink, 269 NY 347; New York State Div. of Human Rights v New York-Pennsylvania Professional Baseball League, 36 AD2d 364, 29 NY2d 921; Matter of Sanbonmatsu v Boyer, 45 AD2d 249, 39 NY2d 914; Regional Tr. Serv. v State Div. of Human Rights, 43 AD2d 815; Union Free School Dist. No. 6 of Towns of Islip & Smithtown v New York State Human Rights Appeal Bd., 35 NY2d 371; Southwestern Community Action Council v Community Servs. Admin., 462 F Supp 289.) II. The record supports the division’s finding that Pizza Hut’s nepotism rule, as applied, was discriminatory and was not justified by business necessity. (Matter of Sanbonmatsu v Boyer, 39 NY2d 914; New York State Div. of Human Rights v New York-Pennsylvania Professional Baseball League, 36 AD2d 364, 29 NY2d 921.) III. There is no necessity for and Pizza Hut is not entitled to a remand to present more evidence. (Matter of Sanbonmatsu v Boyer, 45 AD2d 249, 39 NY2d 914.) IV. The award of back pay and compensatory damages was fair and reasonable. (State Div. of Human Rights v Board of Educ., 59 AD2d 1048; District 1199 Nat. Union of Hosp. & Health Care Employees, RWDSU, AFL-CIO v State Div. of Human Rights, 58 AD2d 793; Broadway Realty v New York State Div. of Human Rights, 48 AD2d 975; State Div. of Human Rights v Great Atlantic & Pacific Tea Co., 46 AD2d 1001; State Div. of Human Rights v Clarence Precision Mach. & Tool, Div. of Willick Inds., 60 AD2d 977.)
   OPINION OF THE COURT

Fuchsberg, J.

The issue, one of first impression in this court, is whether an amendment to the Human Rights Law (Executive Law, § 296), which adds discrimination attributable to an individual’s “marital status” to its roll of interdicted employment practices, is violated by an employer’s anti-nepotism rule. Entitled “employment policy”, the rule, promulgated in a bulletin by the employer, Manhattan Pizza Hut, Inc., operator of a nationwide chain of fast food restaurants, would forbid an employee from working under the supervision of a relative, a term announced to include a spouse, a parent, a sibling or an offspring.

The appeal which raises this question arrives in the following factual and procedural context: Carol S. Dammann had been employed for about four years under the direct supervision of her husband, Harold Dammann, a manager of one of the Pizza Hut establishments, when, at the instance of Andrew Halatyn, a new area general manager who, seemingly sweeping with his new brush, decided to enforce his company’s no-relatives policy. As a consequence, Ms. Dammann’s employment was terminated. The sole focus ,of the complaint she subsequently filed with the State Human Rights Division against Pizza Hut and Mr. Halatyn was discrimination by reason of “marital status”. Following a public hearing, the division upheld her position and issued an order restoring her to her former job and awarding back pay and compensatory damages. The order having been affirmed by the Human Rights Appeal Board, Pizza Hut and Mr. Halatyn, pursuant to section 298 of the Executive Law sought review in the Appellate Division, which, in turn, confirmed the order.

On the present appeal, as in the tribunals below, the dispute between the parties centers on the meaning of the phrase “marital status”. Here, as there, the parties urge opposing interpretations of the term “marital status”, giving rise to a new class of cases the amendment was designed to protect from discriminatory treatment.

Pizza Hut submits the phrase denotes the particular relation an individual bears to the marital state rather than to a particular marital partner. In that perspective, one’s “marital status” would be that phase of his or her personal lifestyle which is classifiable, for instance, as single, married, separated, divorced or widowed. As applied, this would mean that it would be unlawful for an employer to base a decision to hire or fire or otherwise distinguish among its employees because they answer to one of these descriptions, rather than another. In contrast, it would not prevent the employer from doing so because of who the spouse of the employee is or what that spouse does.

The Human Rights Division’s position, on the other hand, is that “marital status” looks beyond the individual’s conjugal state to embrace the identity or situation of the individual’s spouse. Its more expansive definition would widen the scope of the phrase to encompass not only the individual but also the particular circumstances which condition that individual’s spousal relationships. Whatever might be said for or against the wisdom behind a statute which articulated either of these views, for the ensuing reasons, our analysis of the amendment and its legislative history leads us to the conclusion that the position of the employer is correct.

Before we undertake our analysis, we note that our task is not complicated by any evidence that the company’s policy, though facially neutral, results in discrimination because of a disparate impact on a particular group of persons (cf. Matter of Sanbonmatsu v Boyer, 39 NY2d 914, affg 45 AD2d 249; State Div. of Human Rights v Kilian Mfg. Corp., 35 NY2d 201, app dsmd 420 US 915; Dothard v Rawlinson, 433 US 321). Nor are we here confronted by evidence of uneven application (cf. Matter of Sanbonmatsu v Boyer, 39 NY2d 914, affg 45 AD2d 249, supra).

This said, we now call upon the obvious and fundamental rule of construction that words of common usage are to be given their ordinary meaning (Matter of Common Council of City of Gloversville v Town Bd. of Town of Johnstown, 37 AD2d 459, revd on other grounds 32 NY2d 1; see, also, McKinney’s Cons Laws of NY, Book 1, Statutes, § 94). So tested, the plain and ordinary meaning of “marital status” is the social condition enjoyed by an individual by reason of his or her having participated or failed to participate in a marriage. Illuminated another way, when one is queried about one’s “marital status”, the usual and complete answer would be expected to be a choice among “married”, “single”, etc., but would not be expected to include an identification of one’s present or former spouse and certainly not the spouse’s occupation.

But we need not rest on this general rule of construction alone. The memorandum attached to the bill as it was passed by the Legislature is in accord. It informs us that its purpose “is to extend the jurisdiction of the New York State Division of Human Rights to complaints of discrimination resulting * * * from the status of divorced, separated, widowed or single persons, or from other status related to marriage” (NY Legis Ann, 1975, p 65). This enumeration of what kind of status is intended by “marital status” leaves nothing to the imagination. Each of the categories it uses to illustrate “marital status” — “divorced, separated, widowed or single” — indisputably emphasizes the individual’s status and not that of any present or former partner who, in any particular circumstance and at any given time (by dint of remarriage, for instance), may very well have a different status from that of his or her former spouse.

And the final disjunctive phrase, “from other status related to marriage”, makes for a classical case in which to apply the principles of ejusdem generis. An interpretive device fashioned to save draftsmen from undertaking the hazard of spelling out in advance every contingency to which a statute would have been intended to apply (see People v Klose, 18 NY2d 141, 145), that doctrine yet imposes the understanding that general phraseology will be taken to have been “limited * * * by the specific words which precede it” (People v Illardo, 48 NY2d 408, 416). Applied here, it means that the statute in effect says that employers may no longer decide whether to hire, fire, or promote someone because he or she is single, married, divorced, separated or the like. Had the Legislature desired to enlarge the scope of its proscription to prohibit discrimination based on an individual’s marital relationships — rather than simply on an individual’s marital status — surely it would have said so.

Confirmation of our reading of the legislative intent is also to be found in what the statute and its history omits as well as what it includes. The importance of the business and labor management concerns it seeks to serve belies the likelihood that the Legislature would have struck a blow at antinepotism policies with nary a word, in or out of the statute, to express or explain its intention, whether for the guidance of the Human Rights Division or, for that matter, for the information of the sophisticated employers who surely would have wanted their opinions heard.

The point becomes especially clear when we regard the benefits which their supporters see in antinepotism rules. As they put it, the thrust of such practices is to avoid favoritism, be it actual or apparent or conscious or unconscious, when two close relatives work together, all the more so in a supervisor-supervisee capacity. Possibilities for conflict in such circumstances of course come readily to mind: e.g., evaluation of a supervisee’s performance, exercise of discretion in enforcing work rules, allocation of work assignments, settlement of disputes among employees, recommendations for promotions. Indeed, an easy illustration may be found in this very case: Mr. Halatyn, operating within the company chain of command, as area general manager, instructed the husband here, as store unit manager, to notify his wife that she would be terminated because of the anti-nepotism rule; Mr. Dammann having failed to do so for a month, Mr. Halatyn had to take the matter into his own hands. Moreover, as could be pointed out with at least some cogency, even where a supervisor makes prodigious and even successful efforts to be evenhanded, the perception that he or she may have been influenced by a close relationship with a supervisee may tend to undermine morale and efficiency (see Keckeisen v Independent School Dist., 509 F2d 1062, 1066). There is nothing to indicate that considerations other than these were behind Pizza Hut’s rule. When issued, it was accompanied by a simple statement that its purpose was “[t]o prohibit employment relationships which can cause problems for the Company or for individuals”.

As against these perfectly rational motivations, the dissent’s fear that antinepotism rules will discourage marriage and encourage divorce, and thus undermine the freedom of persons to marry, seems, to say the least, farfetched. Indeed, some with a practical bent might think that the pressures of employment supervision by one spouse or other close relative over another, if anything, would add rather than detract from the normal tensions of an already close and somewhat consuming relationship. In any event, given the societal, religious, romantic and practical support arrayed behind the marriage institution, it is inconceivable that it would not withstand the fact that some employers believe close relatives are not the preferred choice for supervisors of one another. Moreover, in an age when sociological statistical studies abound, it is not without significance that no empirical proof to demonstrate that the claimed institutional effect is real was ever presented to the Human Rights Division.

Now, given the parameters of the term “marital status” as used in our statute, there remains only the application of its meaning to the facts before us. There is no proof that Carol Dammann was discharged because she was married. So far as the record shows, had Ms. Dammann been married to a person other than to a supervisor employed in the same “pizza hut”, she would not have been discharged. The company’s policy simply implemented its conviction that the employment of relatives where one would exercise supervisory authority over the other was undesirable. In sum, the disqualification of the complainant was not for being married, but for being married to her supervisor.

Hence, we hold that Ms. Dammann was not discriminated against on the basis of marital status within the intendment of section 296 of the Executive Law. It follows that the order of the Appellate Division should be reversed and the order of the State Human Rights Appeal Board annulled.

Chief Judge Cooke

(dissenting). Section 296 of the Executive Law prohibits employment discrimination based on “marital status.” Because appellant’s “anti-nepotism” rule discriminates against married persons in supervisor-supervisee relationships solely on the basis of their status as married persons, I dissent and vote to affirm the order of the Appellate Division.

Appellant, Manhattan Pizza Hut, Inc., a nationwide restaurant chain, has a stated policy of not permitting an employee to supervise his or her “relative.” The company’s definition of relative includes a spouse. The majority, in annulling the State Human Rights Appeal Board’s determination that the rule violates section 296 (subd 1, par [a]), focuses on the business concerns that presumably motivated Pizza Hut to promulgate its rule. In doing so, the majority overlooks the important discriminatory aspect of the rule. Certainly the mixture of close personal relationships and the supervisor-supervisee role may create friction between the persons involved and resentment among co-workers. The addition of “marital status” to the categories of proscribed discrimination under section 296 (L 1975, ch 803, § 1) did not declare concern about such potential conflicts to be unfounded. The amendment did, however, place bounds on the methods that could be used to limit or prevent such conflicts.

The rule implemented by Pizza Hut does not directly address the problem of employee conflicts based on close personal relationships between supervisors and those supervised. It does not prohibit managerial personnel and other employees from establishing close personal relationships, but instead looks only to the marital status of the persons involved. If the employees are married, one partner may be transferred or terminated. If they are not married, but instead are merely living together, engaged, or otherwise involved with each other’s personal lives, the blanket prohibition does not apply. Indeed, if the discharged employee in this case and her husband had divorced, Pizza Hut’s rule would have allowed her to continue in her position at the restaurant supervised by her husband. Contrary to the majority’s assertion, this is more than merely a burden placed upon certain marital relationships based on the individuals involved. The rule directly affects marital status itself and is ipso facto triggered by marriage, not by conflict.

This discrimination has two deleterious effects. First, it may discourage persons in such situations from marrying, or encourage them to divorce. Second, it may hinder one spouse from obtaining employment. Although neither effect may be particularly pronounced in a large urban area with a wide choice of prospective employers, such rules could create real hardships in smaller communities where one employer dominates the job market. This pressure to choose between marriage and employment undermines the well-established protected status of marriage. “The freedom to marry has long been recognized as one of the vital personal rights essential to the orderly pursuit of happiness by free men” (Loving v Virginia, 388 US 1, 12). This interference with the choice to marry has prompted the highest courts of two States to reject reasoning similar to that of the majority here in striking down antinepotism rules (Kraft, Inc. v State of Minnesota, — Minn —, 284 NW2d 386 [Minn] ; Washington Water Power Co. v Washington State Human Rights Comm., 91 Wn 2d 62).

Only if such discrimination could be justified as a bona fide occupational qualification could it be permitted under section 296 (City of Schenectady v State Div. of Human Rights, 37 NY2d 421; New York State Div. of Human Rights v New York-Pennsylvania Professional Baseball League, 36 AD2d 364, affd 29 NY2d 921). Pizza Hut has established no such justification, since the rule fails to squarely address the problem it was ostensibly designed to meet — conflicts between employees’ personal lives and job responsibilities.

In light of the failings of Pizza Hut’s policy, this court should not strain the language of section 296 (subd 1, par [a]) to give employers a green light to discriminate on the basis of marriage. An employer should be free to prevent personal relationships between supervisors and other employees from disrupting the work environment through rules focused on such a problem, not by unwarranted interference with a protected status. In any event, an employer should not be allowed to institute a policy of arbitrary discrimination against only some of the employees whose relationships might pose a conflict, based solely on their status as married persons.

The holding of the majority eliminates the very protection from discrimination, because of marriage, that a husband and wife are entitled to under the statute.

Judges Jasen, Gabrielli, Jones, Wachtler and Meyer concur with Judge Fuchsberg; Chief Judge Cooke dissents and votes to affirm in a separate opinion.

Order reversed, with costs, and the order of the State Human Rights Appeal Board annulled.

      . As amended, section 296 of the Executive Law provides: “1. It shall be an unlawful discriminatory practice: (a) For an employer or licensing agency, because of the age, race, creed, color, national origin, sex, or disability, or marital status of any individual, to refuse to hire or employ or to bar or to discharge from employment such individual, or to discriminate against such individual in compensation or in terms, conditions or privileges of employment” (emphasis added).

      . In pertinent part, the text of the policy statement is as follows:
      “I. Employee [s] are not permitted to work in a position where their supervisor or their supervisor’s supervisor is a relative.
      “II. The term ‘relative’ shall apply, but not be limited to, the following relationships, whether established by blood, marriage, or other legal actions: Father, Mother, Brother, Sister, Husband, Wife, Son, Daughter, Grandfather, Grandmother, Grandson, Granddaughter.
      “III. Where such situations exist through promotion, transfer or marriage, action will be taken to transfer or to terminate one of the employees within a two (2) month period after the relationship is determined or established. No capable and conscientious employee should be terminated if a transfer is possible.”

      . Although Mr. Halatyn apparently had taken no steps to effect an intracompany transfer of Ms. Dammann under paragraph III of the rule, he soon after informed her that he had misinterpreted company policy and volunteered this alternative to termination. However, she rejected the offer on the ground that, though her scale of pay would not he lowered, considerations of seniority would make it less likely that she would win ultimate promotion at the new store than at the old one. In any event, nothing turns on these added facts, especially since the Human Eights Division has no authority to control irregular application or enforcement of an employment policy unless it involves discrimination on proscribed statutory grounds, which, as we shall see, was not the case here.

      . Since we thus hold that the employer’s policy, even as applied to spouses, does not run afoul of the statutory injunction agaitist marital status discrimination, the result is not altered by the fact that the employer in the past had not enforced its policy against Ms. Dammann.


source: Caselaw Access Project

author: Meyer, J.

license: Public Domain

text:
    Norden Restaurant Corporation, Respondent, v Sons of the Revolution in the State of New York, Appellant.
    Argued November 21, 1980;
    decided December 22, 1980

      POINTS OF COUNSEL

      William T. Livingston, III, for appellant.
    I. The court is requested to enforce the contract between the parties. (Backer Mgt. Corp. v Acme Quilting Co., 46 NY2d 211; Breed v Insurance Co. of North Amer., 46 NY2d 351; Sen-row Concession v Shelton Props., 10 NY2d 320; Spencer v VDO Instruments, 232 F Supp 735, 352 F2d 784; Janos v Peck, 21 AD2d 529, 15 NY2d 509; Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395; Dell Pub. Co. v Stanley Pub., 9 NY2d 126.) II. By accepting the benefit of the contract, plaintiff is estopped from disputing defendant’s ownership of the Fraunces Tavern name. (Farnsworth v Boro Oil & Gas Co., 216 NY 40; Tilyou v Reynolds, 108 NY 558; Hyatt v Dale Tile Mfg. Co., 106 NY 651, 125 US 46; Vernam v Smith, 15 NY 327; Lordi v County of Nassau, 20 AD2d 658; Stogop Realty Co. v Marie Antoinette Hotel Co., 217 App Div 555; Lenasa Realty Corp. v Liberty Public Market, 136 Mise 276; Distillerie Flli Ramazzotti, S.p.A. v Banfi Prods. Corp., 52 Mise 2d 593, 27 AD2d 905; Laurer Brewing Co. v Ehresman, 127 App Div 486; New York Trust Co. v Believe It Or Not, 12 Mise 2d 736.) III. The doctrine of “secondary meaning” has no application in this case. (Union Carbide Corp. v Ever-Ready, Inc., 531 F2d 366; Dell Pub. Co. v Stanley Pub., 9 NY2d 126; Geo. Washington Mint v Washington Mint, 349 F Supp 255; Pike v Ruby Foo’s Den of Md., 116 F Supp 336, 232 F2d 683; Golden City Rest. v Pike, 246 F2d 684; Allied Maintenance Corp. v Allied Mechanical Trades, 42 NY2d 538; Matter of Playland Holding Corp. v Playland Center, 1 NY2d 300.)

      Joseph D. De Salvo for respondent.
    I. The decision below is not affected by the lease agreement between the parties. (Pollard v Meyer, 61 AD2d 766.) II. Appellant’s argument relevant to estoppel is inapt and inapplicable. (Vernam v Smith, 15 NY 327; Tilyou v Reynolds, 108 NY 558; Distillerie Flli Ramazzotti, S.p.A. v Banfi Prods. Corp., 52 Misc 2d 593; New York Trust Co. v Believe It Or Not, 12 Misc 2d 736; Beer Nuts v King Nut Co., 477 F2d 326; Professional Golfers Assn. of Amer. v Bankers Life & Cas. Co., 514 F2d 665; Heaton Distr. Co. v Union Tank Car Co., 387 F2d 477; Stogop Realty Co. v Marie Antoinette Hotel Co., 217 App Div 555; Mark Realty Corp. v Hirsch, 180 App Div 549; Glen & Hall Mfg. Co. v Hall, 61 NY 226.) III. The court below properly applied the doctrine of secondary meaning by reason of the fact that the service mark “Fraunces Tavern” is not arbitrary or “inherently distinctive”. (President & Trustees of Colby Coll. v Colby College-New Hampshire, 374 F Supp 1141; Wyatt Earp Enterprises v Sackman, Inc., 157 F Supp 621; Volkswagenwerk AG. v Richard, 492 F2d 474; American Heritage Life Ins. Co. v Heritage Life Ins. Co., 494 F2d 3; United Drug Co. v Rectanus Co., 248 US 90.) IV. The subsequent grant of the certificate of registration for the service mark “Fraunces Tavern” for restaurant purposes makes summary judgment impossible.
   OPINION OF THE COURT

Meyer, J.

The sole question before us on this appeal is whether Special Term properly denied defendant’s motion for summary judgment on its third counterclaim, in which defendant sought to enjoin plaintiff “from using the name Fraunces Tavern, from using any name other than Fraunces Tavern Restaurant”. We hold that defendant is entitled to such injunctive relief.

Defendant owns the building at 54 Pearl Street in the Borough of Manhattan which has been known since the eighteenth century as “Fraunces Tavern”. The building has been designated a national landmark and is primarily known as the site where then General George Washington bade farewell to his officers at the close of the Revolutionary War.

The plaintiff is the tenant under a lease executed in 1977 which entitles it, subject to numerous restrictions, to conduct a restaurant business on the premises. Plaintiff asserts that the Norden family has conducted a restaurant business on the leased premises for over 40 years and that because of the lengthy association of their restaurant business with the name “Fraunces Tavern” that name has become synonymous with their restaurant and that they, therefore, have acquired the exclusive right to use the name.

This assertion is belied by several provisions of the lease to which they consented in 1977. Specifically, paragraph 3.04 of the lease provides as follows: “The business conducted by Tenant in the premises is only to be conducted under the name ‘Fraunces Tavern Restaurant’ or such other name as Landlord shall from time to time approve in writing pursuant to the request of Tenant.” Perhaps the clearest recognition of defendant’s ownership of the “Fraunces Tavern” appellation is contained in paragraph 40.01, which provided: “The right to use the name ‘Fraunces Tavern Restaurant’ in connection with Tenant’s business shall be limited to the restaurant business conducted in the premises and to no other business or location, and such right shall terminate upon the expiration or earlier termination of this Lease.”

Having recognized defendant’s ownership of the name “Fraunces Tavern Restaurant”, and having accepted the licensed use of the name upon the terms dictated by the defendant, plaintiff cannot now assert ownership of it as against defendant (see Stogop Realty Co. v Marie Antoinette Hotel Co., 217 App Div 555).

Nor is the plaintiff’s claim of ownership advanced by the fact that even as it negotiated the 1977 lease, it applied to the United States Patent and Trademark Office for registration of the name “Fraunces Tavern” as a service mark and subsequently obtained such registration. It is well established that registration is not dispositive of the common-law rights of ownership of the trade-mark (see Turner v HMH Pub. Co., 380 F2d 224, 228; United States Jaycees v San Francisco Jr. Chamber of Commerce, 354 F Supp 61, 70, affd 513 F2d 1226), but merely grants the registrant the procedural advantage of establishing prima facie ownership. The probative value of that registration is but slight in light of the facts that plaintiff applied for the service mark at a time when it was conceding in negotiation that defendant owned the name “Fraunces Tavern Restaurant”, and that the provisions of the lease negotiated clearly establish defendant’s ownership of the name.

Defendant was entitled to summary judgment on its third counterclaim. The order of the Appellate Division insofar as appealed from should, therefore, be reversed and the certified question answered in the negative.

Chief Judge Cooke and Judges Jasen, Gabrielli, Jones, Wachtler and Fuchsberg concur.

Order, insofar as appealed from, reversed, with costs, summary judgment granted to defendant on the third counterclaim, and question certified answered in the negative.

       The only issue briefed before us is whether the order denying defendant’s motion for summary judgment on the third counterclaim was proper. Accordingly, we do not consider the propriety of so much of the Special Term order as denied defendant’s motion addressed to the second and fourth causes of action stated in plaintiff’s complaint.


author:
Jones, J.
      Gabrielli, J.

text:
    Janet O’Connell, Respondent, v Eastern Savings Bank, Appellant.
    Argued November 19, 1980;
    decided December 22, 1980

      POINTS OF COUNSEL

      William E. Kelly and Gerald E. Singleton for appellant.
    I. Appellant and its employees lacked authority to waive the underwriting requirements for the issuance of the policy in suit. (Leamy v Berkshire Life Ins. Co., 39 NY2d 271; Vander Veer v Continental Cas. Co., 34 NY2d 50; Process Plants Corp. v Beneficial Nat. Life Ins. Co., 53 AD2d 214, 42 NY2d 928; Wageman v Metropolitan Life Ins. Co., 24 AD2d 67, 18 NY2d 777; Davison v Klaess, 280 NY 252; Alsens Amer. Portland Cement Works v Degnon Contr. Co., 222 NY 34; Pash v Wagner, 2 Misc 2d 822; Kapplow v Abelard Schuman, Ltd., 21 Misc 2d 306; Municipal Metallic Bed Mfg. Corp. v Dobbs, 253 NY 313; National Conversion Corp. v Cedar Bldg. Corp., 23 NY2d 621.) II. Respondent may not recover upon an unpleaded legal theory. (Winter & Giordano Landscape Contr. Corp. v Colaizzo, 17 Misc 2d 450; Lamphere v Lang, 213 NY 585; Rector, Churchwar

      dens & Vestrymen of Church of Holy Trinity v Melish, 4 AD2d 256; Wright v Delafield, 25 NY 266; Davison v Klaess, 280 NY 252; Peet v Locke, 28 Misc 2d 824; Safeguard Ins. Co. v Baldauf, 20 Misc 2d 667; Oswego Falls Corp. v City of Fulton, 148 Misc 170; Shapiro v Caggiano, 4 AD2d 687; Irving Trust Co. v Park & Tilford Import Corp., 250 App Div 570; Ginns v Towle, 361 F2d 798.) III. Prejudicial errors in the admission of evidence and in Trial Term’s charge to the jury prevented the jury from properly assessing the case and require a new trial. (Barrett v State Mut. Life Assur. Co., 58 AD2d 320, 44 NY2d 872; Smirlock Realty v Title Guar. Co., 70 AD2d 455; Simpson v Phoenix Mut. Life Ins. Co., 24 NY2d 262; Myers v Equitable Life Assur. Soc. of U. S., 60 AD2d 942.)

      John J. Donohue for respondent.
    I. Appellant bank had authority under the law to waive the defense of material misrepresentation. II. Appellant was aware of the claim of waiver by respondent prior to trial and therefore was not surprised or prejudiced. III. Appellant, Eastern Savings Bank, and its employee, Harold Hartmann, had the authority to waive and did so. IV. Trial court did not permit errors in admission of evidence and in refusing certain requests to charge by appellant.
   OPINION OF THE COURT

Jones, J.

Inasmuch as the statute vests exclusive authority to approve the issuance of savings bank life insurance policies in the Savings Bank Life Insurance Fund, a defense to payment under such a policy based on a material misrepresentation as to the applicant’s health made in the application is not vitiated by proof that an officer of the savings bank to which the application was addressed had knowledge of the true facts.

In this action on a savings bank life insurance policy the named beneficiary seeks to recover the benefits of that policy due on the death of the insured. Ten months prior to his death the decedent applied to Eastern Savings Bank for a $30,000 policy of insurance on his life. The application was completed and signed in the presence of an assistant vice-president of the bank, the manager of its life insurance department. In his application the decedent represented, among other things, that he had never been treated for high blood pressure and that he had not had a physical examination or consulted a physician within the preceding five years except for a premarital Wasserman test. On the basis of the evidence received at the trial the court found that in fact the decedent had suffered for years from hypertension, had consulted at least one physician and was under care for elevated blood pressure and that his response that he did not have high blood pressure was a material misrepresentation as a matter of law.

It was plaintiff’s contention, nonetheless, that there had been a waiver of the misrepresentation inasmuch as the assistant vice-president of the bank and manager of its life insurance department had knowledge that the decedent suffered from high blood pressure. Over appropriate protest of the bank duly registered, the trial court instructed the jury to return a verdict for the bank unless they found that the bank had waived its defense because its officer at the time he filled out the application had knowledge of the applicant’s high blood pressure. The jury returned a verdict for plaintiff, and the Appellate Division affirmed, two Justices dissenting. There must be a reversal.

The legal and financial arrangements for the issuance of savings bank life insurance are sui generis (Banking Law, art 6-A). While applications for policies of life insurance are made to the life insurance department of an individual savings bank and the policies are written in the name of individual banks, the Savings Bank Life Insurance Fund, a body corporate in the banking department (Banking Law, § 270) has authority and responsibility for supervising the issuance of all policies. It prepares the standard forms of applications and of policies and all forms for record keeping; it determines premium rates and fees and loan tables; it prescribes the standards of health or acceptability of the applicant for insurance. The fund is charged with responsibility for underwriting all policies of insurance issued by savings banks in New York State (Banking Law, §§270, 271). Beyond all that, and it is determinative for present purposes, the statute expressly provides that “no policy or contract shall be delivered or issued for delivery except with the approval of the fund” (§271). Thus, although the savings bank life insurance department of the individual savings bank is authorized to “decline particular classes of risks or reject any particular application” for life insurance (Banking Law, § 263) it has no authority or power to accept an application or to approve the issuance of a policy; no authority to waive requirements with respect to the issuance of a policy may be implied from the only authority vested in the bank with respect to applications, namely to reject them. Unlike other life insurance enterprises, neither the Savings Bank Life Insurance Fund nor the life insurance departments of the individual savings banks operate through soliciting agents. The statutory scheme is tight. There is no basis in law for the conclusion on which the majority at the Appellate Division grounded its determination, namely that defendant bank was functioning in this instance as agent of the Savings Bank Life Insurance Fund. The relationships among the life insurance department, the individual savings bank and the fund are prescribed by statute, and the distribution of authority and responsibility set forth in the statute is inconsistent with any principal-agent relationship. Nor is there evidentiary proof in this record to support a factual determination that such a relationship existed. In these circumstances, knowledge of an officer of the Eastern Savings Bank cannot be imputed to the fund, and no waiver by the fund can be erected on any knowledge of the manager of the life insurance department of the Eastern Savings Bank.

Accordingly, the order of the Appellate Division should be reversed, with costs. This case was submitted to the jury on an erroneous legal theory and its verdict must be set aside. Because the trial court concluded, and correctly, that the decedent’s misrepresentation was material as a matter of law and because the record contains no proof on the basis of which there could be found to have been a waiver of that misrepresentation by the Savings Bank Life Insurance Fund, the complaint should be dismissed.

Gabrielli, J.

(dissenting). The majority creates a significant, and what I consider to be an unfounded exception to the law of life insurance. In general, written misrepresentations in an application for insurance will be waived by the insurer, and may not be a ground for denying coverage, if the correct information was orally conveyed to the insurer or its agent. However, in the instant case the majority circumvents that principle by holding that the bank officer with whom an insurance buyer deals is not an agent for the insurer within the framework of savings bank life insurance. This determination misconceives the fundamental importance of the relationship between the bank and the Savings Bank Life Insurance Fund in regard to the case before us, and opens a substantial gap in the law protecting the insurance buying public.

The majority’s holding is grounded upon a determination that the distribution of authority and responsibility set forth in the Banking Law is inconsistent with any principal-agent relationship between the defendant bank and the Savings Bank Life Insurance Fund. Although it is clear that final approval of the applications rests with the fund, it is undisputed that the fund does not deal directly with the insurance buyer, but instead relies upon the bank and its officers to be its interface with the customer and also its spokesman. For purposes of this case, the relationship between the fund and the bank is indistinguishable from the relationship between an insurance company and its agent, because in both instances the insurance buyer communicates only with a spokesman for the insurer, and that spokesman in turn acts as a conduit for information flowing between the customer and the ultimate insurer. As the interface between the buyer and the fund, the bank must be expected to convey to the fund all pertinent information communicated by the buyer. Indeed, even the most sophisticated buyer could only expect that anything which he reveals to the bank will have a direct bearing on his prospects for securing insurance. This is particularly true in view of the fact that the application used in the instant case did not contain a clause informing the buyer that no information concerning any matter which is a subject of inquiry in the application shall be considered as known to the insurer unless stated within the application itself (see Wageman v Metropolitan Life Ins. Co., 24 AD2d 67, affd 18 NY2d 777).

The error in the majority’s analysis is that it permits savings banks to act as insurance agents without assuming the responsibility and liability of agents. The insurance buying public is seriously harmed by this development because a purchaser of savings bank life insurance may no longer rely upon the representations of the bank with whom he deals, or the bank’s acquiescence in inaccurate information placed on the application where correct information is orally conveyed. In the present case it is not unlikely that plaintiff would have procured other coverage at a rate reflecting his medical condition if he had reason to suspect that his oral communication of his condition to the bank officer with whom he dealt would not be conveyed to the fund, and that the fund’s lack of information would later serve as a basis for denying payment to plaintiff’s intended beneficiary. Furthermore, because the majority has determined that the bank is not the agent of the fund, nor a conduit for information to it, a logical extension of the majority opinion compels the conclusion that even an express misrepresentation made by the bank to the buyer would be irrevelant in determining whether coverage must be provided. This also is an untenable result.

Accordingly, for the foregoing reasons, the order of the Appellate Division should be affirmed.

Judges Jasen, Wachtler and Meyer concur with Judge Jones; Judge Gabrielli dissents and votes to affirm in a separate opinion in which Chief Judge Cooke and Judge Fuchsberg concur.

Order reversed, with costs, and the complaint dismissed.


author: Gabrielli, J. Jones, J.

text:
    Mahmut Karaduman, Respondent, v Newsday, Inc., et al., Appellants.
    Argued October 16, 1980;
    decided November 25, 1980

      POINTS OF COUNSEL

      Andrew L. Hughes, Nina Shreve and Mitchell R. Berger for appellants.
    I. A republisher of material of public concern is not “grossly irresponsible” when there is no reason to doubt the accuracy of the material published. (Chapadeau v Utica Observer-Dispatch, 38 NY2d 196; Rinaldi v Holt, Rinehart & Winston, 42 NY2d 369, 434 US 969; Gertz v Robert Welch, Inc., 418 US 323; Schneph v New York Post Corp., 16 NY2d 1011; Droner v Schapp, 34 AD2d 823; Trails West v Wolff, 32 NY2d 207; Wolston v Reader’s Digest Assn., 429 F Supp 167, 578 F2d 427; Edwards v National Audubon Soc., 556 F2d 113, cert den. sub nom. Edwards v New York Times Co., 434 US 1002; Cammaroto v Anson, 70 AD2d 649.) II. An original publisher, who is not responsible for subsequent republication by others, is entitled to summary judgment. (Trails West v Wolff, 32 NY2d 207; Shapiro v Health Ins. Plan of Greater N. Y., 7 NY2d 56; Macy v New York World-Tel. Corp., 2 NY2d 416; Bradford v Pette, 204 Misc 308, 285 App Div 960.)

      Thomas R. Newman, Mark L. Rosen and Leon Began for respondent.
    I. The court below correctly applied the Chapea deau standard and found that questions of fact exist as to: (1) the extent of defendants’ involvement in the publication of the libelous book, (2) the scope and extent of the individual and corporate defendants’ joint publishing efforts, (3) the reliability of the investigators and the accuracy of the investigation, (4) the reasons why the alleged sources have denied the statements attributed to them, and (5) the gross irresponsibility of all defendants. (Dodd v Harper Bros., 3 AD2d 548, 4 NY2d 958; Russo v Advance Pub., 33 AD2d 1025; Nunnlay v New Yorker Staats-Zeitung Corp., 111 App Div 482; Gregoire v Putnam’s Sons, 298 NY 119; Rinaldi v Holt, Rinehart & Winston, 42 NY2d 369, 434 US 969; Schneph v New York Post Corp., 16 NY2d 1011.) II. The accuracy of the libelous statements in the book and the reliability of defendants’ sources present issues of fact that required the denial of defendants’ motion for summary judgment. (Falk v Goodman, 7 NY2d 87; Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395; Nestle-rode v Federal Ins. Co., 66 AD2d 504; St. Paul Ind. Park v New York State Urban Dev. Corp., 63 AD2d 822; Glick & Dolleck v Tri-Pac Export Corp., 22 NY2d 439; Chapadeau v Utica Observer-Dispatch, 38 NY2d 196; Greenberg v CBS, Inc., 69 AD2d 693; Curtis Pub. Co. v Butts, 388 US 130.)
   OPINION OF THE COURT

Gabrielli, J.

In the instant libel action, we are called upon to consider a number of novel and interesting questions regarding the liability of the various actors who, it is claimed, participated in their respective capacities in the republication in book form of an allegedly false and defamatory series of newspaper articles.

Between February 1 and March 4, 1973, Newsday, a widely circulated Long Island newspaper, published a series of articles entitled “The Heroin Trail” tracing the primary supply routes of the narcotics trade from its origins in Asia and Europe to its ultimate destination in the United States. The series of articles, which was primarily the product of a 13-month investigation conducted by a three-man team of Newsday reporters, received a great deal of public acclaim and was eventually awarded a Pulitzer Prize as “a distinguished example of meritorious public service by a newspaper”. Although more than 300 individuals were named in the articles as participants in the international heroin smuggling trade, there is no indication that Newsday was ever called upon to respond to charges of defamation as a result of its publication of the series.

In June of 1974, the New American Library (NAL) republished “The Heroin Trail” in book form pursuant to its March 11, 1973 agreement with Newsday. Under this agreement, one Donald Forst, who had worked on the series in his capacity as a managing editor for Newsday, was “loaned” to NAL to assist that organization in its preparation of the book.

On or about April 10, 1975, following the publication of the book, plaintiff commenced the instant libel action, naming as defendants Newsday, NAL, Forst and the three investigative reporters who had authored the original series of articles. Plaintiff, a Turkish national who had been named in “The Heroin Trail” as a specialist “in smuggling by the Black Sea route”, alleged that the printed accusation against him was false and that his reputation as a legitimate businessman in his homeland had been grievously injured as a result of the defamatory statements about him.

Plaintiff’s first cause of action, which was based solely upon the original publication of the accusation in Newsday, was promptly dismissed on the ground that it was time-barred under the applicable Statute of Limitations (CPLR 215, subd 3). No appeal from this ruling was perfected, and its correctness is not disputed in the present appeal. The second and third causes of action, which were predicated exclusively upon the republication of the accusation in book form, however, were treated as timely, and, consequently, plaintiff was afforded a full opportunity to depose defendants in an effort to obtain evidence to support his claim.

Following the completion of these discovery procedures, all six named defendants moved for summary judgment, arguing that plaintiff had failed to adduce evidence sufficient to defeat their qualified privilege as journalists under the standards articulated in Chapadeau v Utica Observer Dispatch (38 NY2d 196). In support of their motion, defendants submitted a number of affidavits by those involved in the research and publication of “The Heroin Trail” detailing the elaborate procedures that had been followed internally in an effort to ensure the accuracy of the story. The affidavits submitted by the three reporters indicated, in addition, that the information concerning plaintiff’s participation in the heroin smuggling industry was derived from their personal contact with several sources, including one Galip Tabernas, a retired inspector in charge of the Turkish State Narcotics Organization in northern Turkey and Istanbul, one Omer Aygun, Chief of the Homicide Squad for the Istanbul Police, and one Orhan Erbug, Director General of the Turkish National Police. Finally, the three reporters also asserted in their affidavits that their participation in the production of the newspaper series had come to an end with the publication of “The Heroin Trail” in Newsday and that they had not been involved in any way in the republication of the series in book form by NAL. Accordingly, they argued, they could not be held liable for any injury to plaintiff, if such there be, arising from NAL’s separate acts in republishing the series.

Plaintiff vigorously opposed the motion for summary judgment, submitting in support of his position three affidavits by Tabernas, Aygun and Erbug, respectively, in which each denied having made any disparaging comments about plaintiff concerning his purported involvement in the international heroin trade. Indeed, all three stated that plaintiff was a well-respected Turkish businessman of excellent local repute. Relying primarily upon these affidavits, plaintiff argued that there existed a triable question of fact as to whether defendants had > acted in a “grossly irresponsible” manner in republishing the accusations against him in the 1974 NAL edition of “The Heroin Trial” and that, consequently, summary judgment should not be granted.

Special Term ruled in favor of defendants and dismissed the complaint, finding that “ [t] he widespread praise accorded the publication of the original newspaper articles and the absence of any legal action after such publication is sufficient to disprove a claim of gross irresponsibility”. The Appellate Division reversed and reinstated plaintiff’s second and third causes of action against the six defendants, reasoning that the existing evidence raised sufficient doubt concerning defendants’ “good faith” in republishing the accusations to warrant a full trial of plaintiff’s allegations. For reasons that follow, we now unanimously reverse the order of the Appellate Division insofar as it reinstated the causes of action against Forst, NAL and the three Newsday reporters and hold that summary judgment in favor of each of these five defendants was properly granted at Special Term. In addition, three of the members of our court are of the opinion that the causes of action asserted against defendant Newsday also should be dismissed. Our reasons follow.

Preliminarily, we note that there is no dispute in the present appeal regarding the proper standard to be applied in determining defendants’ liability for the allegedly defamatory statements. Although plaintiff is a “private” individual, the subject matter of the articles in issue is unquestionably a matter “within the sphere of legitimate public concern” (Chapadeau v Utica Observer-Dispatch, 38 NY2d 196, 199, supra). Accordingly, the statements, even if false, cannot lead to liability unless it is proven by a fair preponderance of the evidence that its publishers “acted in a grossly irresponsible manner without due consideration for the standards of information gathering and dissemination ordinarily followed by responsible parties” (id., at p 199). As a matter of equal importance, it must be stressed that defendants may be held answerable in libel in the instant case only if their conduct is found to be “grossly irresponsible” in relation to the 1974 republication of “The Heroin Trail” in book form. Any injury which defendants may have caused plaintiff as a direct result of their participation in the original publication of the articles by Newsday is now beyond judicial remedy, since plaintiff failed to institute suit on the basis of such injury within the one-year period prescribed in CPLR 215 (subd 3). Additionally, it is well established as a matter of substantive law that the five defendants who actually were responsible for the initial publication of “The Heroin Trail” in serial form cannot be held personally liable for injuries arising from its subsequent republication in book form absent a showing that they approved or participated in some other manner in the activities of the third-party republisher. This is so because the law of our State does not render the original publisher of a defamatory statement automatically liable for subsequent republications of the statement by others (Macy v New York World-Tel. Corp., 2 NY2d 416, 422; Raines v New York Press Co., 92 Hun 515; see 1 Seelman, The Law of Libel and Slander in the State of New York, par 149, p 187; 35 NY Jur, Libel and Slander, § 156, pp 66-67).

With these principles in mind, we turn our attention to the specific questions of liability presented in the instant appeal.

I

In his pleadings, plaintiff purported to assert a separate cause of action against the three Newsday reporters who authored the original version of “The Heroin Trail” on the basis of their alleged involvement in the republication of that series by NAL in book form. Upon defendants’ motion for summary judgment, however, plaintiff failed to produce any evidence whatsoever to support his allegation that the reporters “published, participated in, authored [or] permitted” the publication of the book. Notably, the motion for summary judgment was made only after plaintiff was given a full opportunity to depose defendants and to discover any additional information which defendants might possess that would tend to support his claim against the reporters.

Inasmuch as the record is barren of any concrete evidence of the reporters’ involvement in the republication of the newspaper series, we conclude that the causes of action against them must be dismissed. Even if we assume, as we must upon this motion for summary judgment (see Glick & Dolleck v Tri-Pac Export Corp., 22 NY2d 439), that plaintiff’s affidavits are an accurate reflection of the facts, we could go no further on the present record than to conclude that the three reporters published the alleged defamatory statements about plaintiff in Newsday knowing that the information had not been confirmed by the purported sources, Labernas, Aygun and Erbug. Although such a conclusion might be sufficient to establish a triable issue of fact regarding the reporters’ allegedly “irresponsible” conduct with respect to the original publication of the article in question, it could not, in itself, support the continuance of a cause of action based solely upon the 1974 republication of the article.

II

We further conclude that there must be a dismissal with respect to the cause of action asserted against defendant Donald Forst, the managing editor who worked with the reporters on the production of the original series and who was later “loaned” by Newsday to NAL to assist in the publication of the book. Forst, unlike the reporters, was unquestionably involved in the 1974 recasting of the newspaper series into book form and is therefore indisputably subject to a suit based upon that separate publication. Nevertheless, he may not ultimately be held liable for his individual conduct in relation to the publication of the book unless it can be shown by a fair preponderance of the evidence that he personally “acted in a grossly irresponsible manner without due consideration for the standards of information gathering and dissemination ordinarily followed by responsible parties” (Chapadeau v Utica Observer-Dispatch, 38 NY2d 196, 199, supra).

We hold that, under the circumstances of this case, the test of “gross irresponsibility” cannot be met by a bare showing that defendant Forst edited the work of three reporters who, it is argued, fabricated information and cited nonexistent sources in support of their charges. As is indicated by the motion papers, Forst worked out of the New York City office of the newspaper. His role with respect to the original series of articles was primarily to receive material which had been prepared by the reporters and to make whatever editorial suggestions or corrections he deemed appropriate before returning the copy to the authors. Significantly, there is no indication on the record that Forst had any reason to question the integrity of the reporters or to suspect the veracity of the material with which he was supplied. Indeed, there is not the slightest suggestion that Forst’s own behavior was anything but responsible and in accord with accepted journalistic practices.

Absent some showing that Forst personally had reason to doubt the truthfulness of the statements in the articles, we find it difficult to understand how he could be held “grossly irresponsible” in assisting NAL to prepare the articles for republication in book form (see, also, James v Gannett Co., 40 NY2d 415, 424). Of course, we cannot base liability upon the mere fact of. Forst’s professional association with the three reporters who allegedly misrepresented their sources, since to do so would be to resurrect the kind of liability without fault that was expressly rejected in Gertz v Robert Welsh, Inc. (418 US 323). If there is to be any liability at all on the part of defendant Forst, it must be because Forst himself knowingly engaged or acquiesced in the type of misconduct which may lead to libel damages under the standard articulated in Chapadeau v Utica Observer-Dispatch (38 NY2d 196, supra).

Moreover, we decline to hold that the present existence of triable questions concerning the integrity of the reporters is, without more, sufficient to give rise to an inference of culpability on the part of their editor and to impose upon the editor the burden of demonstrating his own freedom from “guilty knowledge” concerning the accuracy of the statements alleged to be libelous by proving that he took independent steps to verify the statements. Newspapers, like any other organization, must operate through the delegation of responsibilities and chores to workers at the appropriate level of the organizational hierarchy. If a newspaper is to function with a modicum of efficiency and perform its important task of carrying information to its readers, its editors must feel reasonably free to rely upon the trustworthiness and integrity of their reporters, at least in the absence of any indication that the reporters in question are not to be trusted. A rule which, absent proof to the contrary, would permit an inference against an editor to be drawn upon a simple showing that his reporters had been “grossly irresponsible” on a single occasion would indirectly impose upon editors the burden of duplicating their reporters’ work and rechecking with specificity all of their sources in order to establish a defense to libel claims arising from the potential misconduct of the reporters. Such a result would be completely unacceptable, since it would require a far higher degree of care than has previously been required in our case law (see James v Gannett Co., 40 NY2d 415, supra) and would, more seriously, operate to dampen the free exercise of the rights guaranteed by the First Amendment.

We do not believe that this conclusion imposes an insuperable or unfair burden upon plaintiffs who seek to hold the editorial and managerial staff of a newspaper personally liable for the publication of defamatory material. Where the reporters have acted irresponsibly, an editor or managerial employee might be held personally liable, for example, upon a showing by concrete proof that he knew or had reason to know that his reporter or his reporter’s sources were unreliable or subject to question. Similarly, proof that the procedures used by the newspaper in checking its stories were generally slipshod or careless could perhaps support an inference that the particular editor or manager personally “acted in a grossly irresponsible manner” in allowing a statement to be published without making further inquiries about its accuracy. Evidence of such concrete facts is readily obtainable through the normal channels of discovery, and, if such facts exist, a motion by the defendant editor for summary judgment could easily be defeated through the submission by the plaintiff of objective proof in the form of affidavits and depositions (see, also, Oakes, Proof of Actual Malice in Defamation Actions: An Unsolved Dilemma, 7 Hofstra L Rev 655, 655-666). In light of the availability we can perceive no sound reason to accept bare speculations or inferences concerning an editor’s subjective awareness of his reporter’s alleged dishonesty as substitutes for specific proof of the editor’s own “grossly irresponsible” conduct.

Here, no such specific proof was offered. The claim against defendant Forst was based solely upon the charge that he had edited the work of the three reporters who allegedly falsified the statements concerning plaintiff. There was no evidence that Forst was actually aware of any wrongdoing on the part of his reporters, and, furthermore, there is not the slightest suggestion that Forst possessed information which should have alerted him to investigate the work of his reporters before approving the publication of their articles, either in the original serial version or in the subsequently issued book. Thus, as a matter of law, his conduct cannot upon this record be considered “grossly irresponsible”, and he is therefore entitled to summary judgment.

In reaching this conclusion, we have not overlooked recent hints by the Supreme Court that the issue of a defendants culpability in libel suits such as this “does not readily lend itself to summary disposition” (Hutchinson v Proximire, 443 US 111, 120, n 9; see Wolston v Reader’s Digest Assn., 443 US 157, 161, n 3; cf. Herbert v Lando, 441 US 153). We note, however, that questions concerning the sufficiency of a party’s submissions to defeat a motion for summary judgment are principally a matter of State procedural law, and the analysis which the Supreme Court may use in denying a motion for summary judment under the Federal Rules of Civil Procedure may differ substantially from the analysis that we would use under our own procedural statutes (cf. Trails West v Wolff, 32 NY2d 207, 221). Moreover, the remarks of the Supreme Court upon which plaintiff relies are not persuasive in the present context, since the language in question was addressed to those situations in which the plaintiff is required to prove “actual malice” under the standard enunciated in New York Times Co. v Sullivan (376 US 254). Under that most exacting standard, the plaintiff is required to demonstrate the subjective state of mind of the defendant before he will be permitted to recover in libel (see St. Arman v Thompson, 390 US 727, 731). In the instant case, however, the plaintiff is a “private person” obliged to demonstrate only that defendant Forst “acted in a grossly irresponsible manner without due consideration for the [ordinary] standards” of sound journalism (Chapadeau v Utica Observer-Dispatch, 38 NY2d 196, 199, supra). Inasmuch as this standard is capable of being met by wholly objective proof, without the need to resort to an exploration of the defendant’s subjective mental state, we see no reason to deprive the defendant of the ordinary remedy of summary judgment when an insufficient showing has been made in opposition to the motion. Indeed, we must not be reluctant to apply the ordinary rules governing summary judgment in libel cases such as this, since “[t]he threat of being put to the defense of a lawsuit * * * may be as chilling to the exercise of First Amendment freedoms as fear of the outcome of the lawsuit itself” (Washington Post Co. v Keogh, 365 F2d 965, 968, cert den 385 US 1011; see Ingber, Defamation: A Conflict Between Reason and Decency, 65 Va L Rev 785, 833-834).

Ill

Having disposed of the issues involving the personal liability of the four individual defendants, we turn now to a consideration of the legal obligations of defendant News-day. Initially, we note that we must decline plaintiff’s invitation to hold Newsday potentially liable by simple application of the doctrine of respondeat superior. That common-law doctrine merely provides a theoretical means for transferring the liability of an employee to his employer and imposing upon the latter financial responsibility for the legally cognizable culpable conduct of the former (see, generally, Prosser, Torts [4th ed], 69, pp 458-459). Given this principle, it is manifest that there can be no vicarious liability on the part of the employer if the employee himself is not liable, except perhaps in certain unusual circumstances not here present.

We have already determined that none of the four Newsday employees who were named as defendants in the instant action may be cast in damages for libel on the basis of their alleged participation in the republication of “The Heroin Trail” by NAL. It follows that the suit against Newsday cannot be maintained solely on the theory that it is vicariously liable, since there is no primary liability upon which such a claim of vicarious liability might rest. To be sure, Newsday might possibly have been answerable under the doctrine of respondeat superior had plaintiff commenced a timely action to recover for the allegedly tortious conduct of Newsday’s three reporters in. publishing the original series of articles. Inasmuch as the reporters’ liability for this publication was effectively extinguished when the Statute of Limitations on plaintiff’s cause of action in libel expired, however, any vicarious liability that Newsday might have had in consequence of its employees’ alleged misconduct must similarly be deemed extinguished. In short, given the posture in which this case is presented, Newsday may be found liable only if it is determined that it “acted in a grossly irresponsible manner” in its own right when it participated in the republication of “The Heroin Trail” in 1974.

Of course, it is difficult to conceive of a corporate entity such as Newsday “acting in a grossly irresponsible manner” in its own right, since a corporation is merely a legal fiction which can act and make decisions only through its employees and agents. Consequently, it may be theoretically tempting in this case simply to imput the “guilty knowledge” of the three reporters who allegedly fabricated their sources directly to their corporate employer for purposes of evaluating Newsday’s culpability, notwithstanding that there is no legal liability on the part of the reporters which could be transferred to Newsday under traditional principles of respondeat superior. Indeed, were we to apply conventional principles of agency law to the facts in this case, we might well hold Newsday chargeable as principal with the purported knowledge of its agents, the reporters, that the published statements concerning plaintiff had not been verified by Labernas, Aygun and Erbug (see, generally, 3 NY Jur 2d, Agency, § 259). Under such an analysis, we could not dismiss the suit against Newsday upon the instant summary judgment motion, since that corporate entity would be deemed to have possessed the “guilty knowledge” of its employees when it participated in the 1974 republication of “The Heroin Trail” and might therefore be treated as liable for its own “grossly irresponsible” conduct in connection with the book.

We find such a simplistic analysis to be unacceptable in this context, however, for we believe that abstract legal concepts such as the imputation of knowledge or personal animus should be applied only with extreme caution in libel cases such as this, where liability may result only if there is a finding of actual fault on the part of the defendant (Gertz v Robert Welsh, Inc., 418 US 323, supra). We begin with the premise that the original publication of “The Heroin Trail” was a separate tort, which must be distinguished for purposes of analysis from Newsday’s subsequent decision to participate in the 1974 republishing venture. It may well be that the knowledge of Newsday’s reporters should be attributed to the corporation for purposes of assigning liability for the initial publication of the articles, since Newsday, as a corporate owner of a newspaper, is expected to bear the risks attendant upon that enterprise, including the risk of injuries to individual reputations which may be caused by the “grossly irresponsible” conduct of its reporters (see, e.g., Corrigan v Bobbs-Merrill Co., 228 NY 58). It is quite another matter, however, to impute the “guilty knowledge” of the reporters to their corporate employer when the employer embarks upon a business venture such as licensing a republication of the articles by a third party, a venture which is conceptually unrelated to its functions as a newspaper publisher. In such situations, there is no sound reason, either in policy or in logic, to impute the knowledge of its reporters to the corporate entity; instead, it is the mental state of the corporate agents at the managerial level who participated in the decision to embark upon the separate business venture which is relevant for the purpose of assigning fault to the corporate entity. If such agents had knowledge or even notice that material to be republished was untrustworthy, it would be reasonable to impute their knowledge to the corporation and to impose liability upon the corporation for their careless conduct in licensing republication without further inquiry. If, on the other hand, the managerial staff of the newspaper acted in innocence and without any inkling of dishonesty on the part of the reporters, it is difficult to comprehend how the newspaper could be held “grossly irresponsible” solely on the basis of misconduct by reporters of which the management of the newspaper was unaware.

Indeed, in this context, the theory of imputed knowledge discussed above is really only a legalistic sleight of hand which operates to convert conduct that is actually blameless into conduct that may be considered culpable for purposes of assigning liability. In the law of agency, from which the concept of imputed knowledge is borrowed, we treat the principal as though he possessed all of the knowledge of his agent on the abstract assumption that the faithful agent will ordinarily perform his duties in a proper manner and will keep his principal informed of all matters pertinent to his business (see, e.g., Henry v Allen, 151 NY 1). We impute the knowledge of the agent to the principal, however, even where the underlying assumption is not borne out in reality, because we believe that the risks of the agent’s deceit should be shouldered by the principal who has employed him and cloaked him with authority to receive information. While these principles seem sound in the commercial setting, we think that a closer analysis must be applied before they are imported wholesale into the law of libel.

Since the decision of the Supreme Court in New York Times Co. v Sullivan (376 US 254, supra), courts have been required to balance society’s interest in protecting individual reputations against the strong public interest in the free flow of information. In fact, judicial solicitude for this latter interest has led to the conclusion that the individual must occasionally bear the risk of injury to reputation arising from false and defamatory statements so that those who would disseminate facts and ideas are not unreasonably deterred (Gertz v Robert Welsh, Inc., 418 US 323, supra). Before we may impute the knowledge of the reporters in this case to their employer and thereby impose upon the employer the risk of its agents’ alleged dishonesty, we must determine whether the result would unduly impair the exercise of protected First Amendment rights.

Once again, our decision in this regard must be made with an eye toward the realities governing the operation of the institutional press. When the management of Newsday made the decision to permit NAL to republish “The Heroin Trail” in book form, it had no realistic choice but to assume that its carefully designed internal procedures for ensuring accuracy had been effective, at least in the absence of some fact “that would arouse the suspicions of a careful publisher or that would give cause for further inquiry” (James v Gannett Co., 40 NY2d 415, 424, supra). Indeed our standard of “gross irresponsibility” demands no more than that a publisher utilize methods of verification that are reasonably calculated to produce accurate copy (see Chapadeau v Utica Observer-Dispatch, 38 NY2d 196, supra). Were we to premise liability for a corporate decision to permit republication of its articles solely upon the imputation of the reporters’ allegedly “guilty knowledge”, we would, in effect, be imposing upon the management of newspapers the intolerable burden of rechecking every reporter’s assertions and retracing every source before proceeding with such a decision. Inasmuch as such a rule would clearly pose an unacceptable barrier to the free flow of ideas, we are constrained to reject it. Instead, we conclude that the interest of society in protecting the reputation of individuals may be adequately served by a rule which imposes liability for a newspaper’s corporate decision to license republication only when it is shown that the corporate agents who participated in the decision “acted in a grossly irresponsible manner” by ignoring or failing unreasonably to become aware of facts that would alert a careful publisher to refrain from acting without further inquiry.

Applying this standard to the instant case, we conclude that Newsday was entitled to have the cause of action against it dismissed upon its motion for summary judgment. The evidence offered by plaintiff in opposition to the motion consisted solely of affidavits which tended to indicate that the reporters who authored the story had acted improperly. Such evidence, however, is not sufficient to withstand a motion for summary judgment in a case such as this absent some indication that the corporate agents who made the decision to republish had reason to suspect the integrity of the reporters or the veracity of the statements they authored.

IV

Finally, we hold that the cause of action asserted against NAL, the book publisher, should also have been dismissed. This court held in Rinaldi v Holt, Rinehart & Winston (42 NY2d 369, 383), that a company or concern which simply republishes a work is entitled to place its reliance upon the research of the original publisher, absent a showing that the republisher “had, or should have had, substantial reasons to question the accuracy of the articles or the bona fides of [the] reporter”. Here, of course, no such showing was made. To the contrary, in view of the widespread acclaim that “The Heroin Trail” received and the absence of any prior litigation in connection with its first publication, it would appear that NAL was entirely justified in assuming without further inquiry that the series was accurate.

It is argued that the reasoning in Rinaldi, which involved a claim of libel by a public official, should not be applied in a case such as this, where the rights of a private individual are at stake. This contention is premised upon the difference in the standards that are applied to evaluate the conduct of the defendant when the plaintiff is a public official, as distinguished from a private individual (compare New York Times Co. v Sullivan 376 US 254, supra, with Gertz v Robert Welsh, Inc., 418 US 323, supra). We conclude, however, that the difference in standards relied upon by plaintiff is not a sufficient ground for eliminating entirely the qualified privilege articulated in Rinaldi in all cases involving private plaintiffs.

The holding in Rinaldi stands for the proposition that a republisher is qualifiedly privileged to rely upon the research of the original publisher in making its own decision whether to reprint the material in question. The difference between the “actual malice” standard utilized in cases involving public officials and the “gross irresponsibility” standard utilized in cases involving private plaintiffs is relevant only in determining the degree of fault that must be established in order to defeat the privilege. The existence of the privilege, however, remains a constant, regardless of the status of the plaintiff against whom it is invoked. Thus, in Rinaldi, the existence of cqnsiderable controversy about the republished material was, as a matter of law, insufficient to defeat the qualified privilege possessed by the republisher under the “actual malice” standard that was applicable in that case. In contrast, in a case such as this involving the lesser “gross irresponsibility” standard, the existence of such controversy might well be sufficient to create a triable question of fact as to whether the defendant should be held liable, notwithstanding the otherwise privileged character of its conduct. Even under the less stringent “gross irresponsibility” standard, however, the existence of the privilege alone is enough to support a grant of summary judgment in favor of the defendant in the absence of some circumstance that would justify an inference of fault.

Here, plaintiff has failed to demonstrate the presence of such a circumstance. There is absolutely no evidence in the record that NAL had cause to doubt the veracity of the statements in question or the integrity of the reporters who gathered the underlying facts. Although plaintiff has agued that NAL’s activities should be deemed to be “tainted” because it is owned by the same parent corporation that owns Newsday, we cannot agree that the existence of this distant corporate relationship is, without more, an adequate ground for defeating the republisher’s privilege. NAL is thus entitled to summary judgment upon its motion.

Accordingly, pursuant to the majority disposition herein, the order of the Appellate Division should be modified by reversing so much thereof as reinstated the causes of action against defendants Greene, Payne, Royce, Forst and the New American Library and by dismissing those causes of action, with costs to those defendants against plaintiff, and, as so modified, affirmed, with costs to plaintiff against defendant Newsday. The question certified should be answered in the negative.

OPINION OF THE COURT

Jones, J.

We are in agreement with the other members of the court that this action should be dismissed as to Greene, Payne and Royce, the three reporters, as to Forst, the managing editor, and as to the New American Library and accordingly concur in all but Part III of Judge Gabrielli’s opinion. We cannot, however, accept the analysis in Part III of that opinion by which the three Judges who join therein would dismiss the action against Newsday, Inc.

The proper analysis, in our view, begins with consideration of the liability to which Newsday, Inc., would have been subject in consequence of the initial publication of the series of newspaper articles had the bar of the Statute of Limitations not intervened. As stated in Judge Gabrielli’s opinion, the denials of Labernas, Aygun and Erbug that they had made any disparaging comments about plaintiff concerning his purported involvement in the international heroin trade to any of the three reporters on whose investigative activities the series was based constitute a showing of facts sufficient to have required a trial regarding the reporters’ allegedly “irresponsible” conduct with respect to the original publication of the material (at p 538). That the three reporters might be found to have “acted in a grossly irresponsible manner without due consideration for the standards of information gathering and dissemination ordinarily followed by responsible parties” (Chapadeau v Utica Observer-Dispatch, 38 NY2d 196, 199) would have exposed both the reporters individually and the corporation to possible liability to plaintiff. Any liability of the corporation, however, would not have stemmed from or in any way been dependent on the legal liability of the reporters as individuals; it would have been grounded in the actions of the employees, whatever legal liability for such actions the law might have imposed on the reporters individually. The actions of the reporter's as employees of the corporation acting within the scope of their employment would be deemed by the law to be the actions of the corporation, and the liability, if any, of the corporation would have been based on such corporate activities.

A corporation as a legal but inanimate entity acts through its corporate personnel. All liability of a corporation in defamation necessarily is based on the conduct of some corporate officer, employee or agent. So here the liability now asserted by plaintiff against Newsday arising out of the republication of the news series in pocketbook form is necessarily predicated on the actions of the three reporters (see Cantrell v Forest City Pub. Co., 419 US 245, 253). Any publication, whenever made, by the corporation must be judged in the light of all relevant corporate activity. If gross irresponsibility there were in the investigative stages, such fact would carry forward to all publication of material based thereon.

Liability of both corporation and reporters with respect to tne nrst publication is now foreclosed by the one-year Statute of Limitations. The reporters individually have no liability with respect to the second publication — of the pocketbook — because they had no part in it. In its answer Newsday, however, admitted that it had participated in the publication of the pocketbook, “The Heroin Trail”, and its counsel have never claimed otherwise. Its liability, if any there ultimately proves to be, will stem from that fact, accompained by its prior allegedly grossly irresponsible investigative actions. Its legal position, therefore, is precisely the same as if claims with respect to the publication of the newspaper series were not time-barred or as if there had never been a newspaper series and the publication of the pocketbook were the first publication.

We are not dealing with concepts of vicarious liability or of secondary indemnification, but of direct corporate responsibility. We know of no authority in the law of defamation, and none is cited in Judge Gabrielli’s opinion, which has heretofore excused a corporation from liability for allegedly libelous publication on the ground that action with respect to that publication is barred against the individual participating corporate personnel.

Simply stated, the tender of evidentiary proof in admissible form submitted by plaintiff on Newsday’s motion for summary judgment is sufficient to require a trial with respect to the corporate liability of Newsday on the ground that Newsday acted in a grossly irresponsible manner in republishing material as to which the investigative activities of its corporate personnel may have been grossly irresponsible.

Accordingly, the order of the Appellate Division to the extent that it reinstated the causes of action against News-day should be affirmed.

Chief Judge Cooke and Judges Jasen, Jones, Wachtler, Fuchsberg and Meyer concur with Judge Gabrielli in Parts I, II and IV of his opinion.

Judges Jasen, Jones, Fuchsberg and Meyer concur with Judge Jones, differing with Part III of the opinion by Judge Gabrielli.

Judge Gabrielli dissents in part and votes to reverse for the reasons stated in Part III of his opinion in which Chief Judge Cooke and Judge Wachtler also concur.

Order modified, with costs to defendants Greene, Payne, Royce, Forst and the New American Library against plaintiff, in accordance with the opinion by Judge Gabrielli and the opinion by Judge Jones, and, as so modified, affirmed, with costs to plaintiff against defendant Newsday. Question certified answered in the negative.

      . Defendants declined to identify their other sources by name. Inasmuch as defendants have explicitly disclaimed any reliance upon the existence of their unnamed sources in the instant motion for summary judgment, however, we have no occasion to consider whether a claim that the information underlying a newspaper article was supplied by unidentified sources can ever support a grant of summary judgment in favor of the defendants in a libel action under the standard of “gross irresponsibility” delineated in Chapadeau v Utica Observer-Dispatch (38 NY2d 196, supra; cf. Herbert v Lando, 441 US 153).

      . This is not to suggest that the three Newsday reporters could not have been found legally responsible for the republication had plaintiif been able to demonstrate that they participated in the original publication with knowledge or a reasonable expectation that republication was likely (see Campo v Paar, 18 AD2d 364, 367-368; see, generally, Bassell v Elmore, 48 NY 561; Restatement, Torts 2d, § 576, subd [c] ).

      . The views expressed in Part III of this opinion concerning the liability of defendant Newsday are shared by Chief Judge Cooke, Judge Gabbielli and Judge Wachtleb. Judges Jasen, Fuchsbebg and Meyeb concur in the separate majority opinion on this point authored by Judge Jones.

      . In support of his contention that a newspaper may be held answerable in libel for the tortious conduct of its reporters, plaintiff relies exclusively upon the decision of the Supreme Court in Cantrell v Forest City Pub. Co. (419 US 245, 253). While we have no present quarrel with this general proposition, we think it necessary to point out that Cantrell is not supportive of plaintiff’s position, since in that case the defendant did not object to the trial court’s jury instruction that liability could be based on the theory of respondeat superior and the Supreme Court therefore had no occasion to consider the propriety of the instruction (id., at pp 253-254, n 6).