Opinion
Case No. 1:00-CV-756
August 21, 2001
For Plaintiff(s): Jon J. Schrotenboer.
For Defendant(s): Mark H. Verwys.
OPINION
Plaintiffs, Action Auto Glass and Visions Auto Glass, have sued Defendant, Auto Glass Specialists, alleging various state law claims, including defamation and violation of the Michigan Consumer Protection Act ("MCPA"), M.C.L. §§ 445.901 to .922, arising out of certain advertisements by Defendant implying that Plaintiffs' practice of waiving the insurance deductible from customers for automobile windshield replacements is fraudulent or otherwise unlawful and that Plaintiff Visions used defective materials. Defendant removed this case from the Kent County Circuit Court, alleging that it falls within the Court's diversity jurisdiction. Now before the Court is Plaintiffs' motion for summary judgment on Plaintiffs' MCPA and defamation claims alleged in Counts II and V of Plaintiffs' Complaint.
Facts
Plaintiffs and Defendant are competitors in the business of replacing windshields and other glass components in automobiles and other heavy equipment throughout the West Michigan area. Plaintiffs advertise their business by offering coupons which customers can use to offset all or part of an insurance deductible when having a windshield replaced. Plaintiffs enter into contracts with various insurance companies which establish the prices the insurance companies agree to pay Plaintiffs to replace windshields in various makes and models of automobiles, and these amounts cannot be altered by Plaintiffs. (Hylaridies Aff. ¶ 7, Pls.' Br. Supp. Ex. A; Mark LaBean Aff. ¶ 7, Pls.' Br. Supp. Ex. C.) It is undisputed that during August and September of 2000, Defendant placed an advertisement in The Grand Rapids Press and other West Michigan newspapers. The advertisement referred to some auto glass companies' practice of using coupons and stated, "If the glass company is to make a profit on a couponed job it must do one of three things: 1) Inflate the price to cover the coupon amount, 2) Cut corners on materials installation, or 3) Overbill the insurance company (also known as fraud)." (Pls.' Br. Supp. at 3.) Plaintiffs contend that Defendant's advertisement is false and misleading because it implies that Plaintiffs' coupon practices are fraudulent. The advertisement did not specifically mention Plaintiffs by name. At the time Defendant ran the advertisement, Defendant was not aware of any facts showing that Plaintiffs inflated the price charged for windshield installation to cover the coupon amount, cut corners on materials or installation, or over-billed insurance companies for couponed jobs. (Def.'s Resp. Pls.' 1st Request Admit No. 4, Pls.' Br. Supp. Ex. E.)
In Count II of their Complaint, Plaintiffs allege that Defendant violated the MCPA by disparaging Plaintiffs' goods, services, business, or reputation, by making false and misleading statements, and/or by failing to reveal a material fact, all of which suggested that Plaintiffs engage in insurance fraud as part of their coupon program. In Count V, Plaintiffs allege that Defendant defamed them in the advertisement by representing that Plaintiffs are members of a narrowly-defined class of businesses which engage in insurance fraud. Plaintiffs contend that they are entitled to summary judgment with regard to liability on both the MCPA and defamation claims because there is no genuine issue as to any material fact.
In Count III of the complaint, Plaintiffs allege that Defendant violated the MCPA with respect to Plaintiff Visions Auto Glass when it caused an advertisement to run in The Grand Rapids Press suggesting that Plaintiff Visions purchased two shipments of defective windshields that Defendant rejected. That claim is not before the Court in the instant motion.
Summary Judgment Standard
Summary judgment is appropriate if there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56. Material facts are facts which are defined by substantive law and are necessary to apply the law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510 (1986). A dispute is genuine if a reasonable jury could return judgment for the non-moving party. Id.
A moving party who does not have the burden of proof at trial may properly support a motion for summary judgment by showing the court that there is no evidence to support the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 324-25, 106 S.Ct. 2548, 2553-54 (1986). If the motion is so supported, the party opposing the motion must then demonstrate with "concrete evidence" that there is a genuine issue of material fact for trial. Id.; Frank v. D'Ambrosi, 4 F.3d 1378, 1384 (6th Cir. 1993). The court must draw all inferences in a light most favorable to the non-moving party, but may grant summary judgment when "the record taken as a whole could not lead a rational trier of fact to find for the non-moving party." Agristor Financial Corp. v. Van Sickle, 967 F.2d 233, 236 (6th Cir. 1992) (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356 (1986)).
Discussion
I. MCPA Claim
The MCPA prohibits certain "[u]nfair, unconscionable, or deceptive methods, acts or practices in the conduct of trade or commerce." M.C.L. § 445.903(1). Plaintiffs contend that Defendant's conduct violated §§ 3(1)(f), (i), and (s) of the MCPA by "[d]isparaging the goods, services, business, or reputation of another by false or misleading representation of fact," by "[m]aking false or misleading statements of fact concerning the reasons for, existence of, or amounts of, price reductions," and by "[f]ailing to reveal a material fact, the omission of which tends to mislead or deceive the consumer, and which fact could not reasonably be known by the consumer." M.C.L. §§ 445.903(1)(f), (i), and (s). "Trade or commerce" is defined as:
the conduct of a business providing goods, property, or service primarily for personal, family, or household purposes and includes the advertising, solicitation, offering for sale or rent, sale, lease, or distribution of a service or property, tangible or intangible, real, personal, or mixed, or any other article, or a business opportunity.
M.C.L. § 445.902(d). The intent of the MCPA is "to protect consumers in their purchases of goods which are primarily used for personal, family or household purposes." Noggles v. Battle Creek Wrecking, Inc., 153 Mich. App. 363, 367, 395 N.W.2d 322, 324 (1986).
This Court has held in a previous Opinion that Plaintiffs have standing, as competitors of Defendant, to assert a claim under the MCPA.See Action Auto Glass v. Auto Glass Specialists, 134 F. Supp.2d 897, 902-03 (W.D.Mich. 2001). In addition, the Court notes that there is no factual dispute that Defendant was engaged in trade or commerce.
The basis for Defendant's claimed violations of the MCPA is Defendant's statement in the advertisement that auto glass companies such as Plaintiffs that offer coupons must do one of three things to earn a profit: (1) inflate the price to cover the coupon amount; (2) cut corners on materials and installation; or (3) over-bill the insurance company (also known as fraud). In support of their claim that Defendant's statements in the advertisement violated the MCPA, Plaintiffs have submitted affidavits from Plaintiffs' officers showing that Plaintiffs do not engage in any of the conduct described in Defendant's advertisement. (Hylaridies Aff. ¶¶ 4-7; Stratton Aff. ¶¶ 4-7, Pls.' Br. Supp. Ex. B; Mark LaBean Aff. ¶¶ 4-7; Mike LaBean Aff. ¶¶ 4-7, Pls.' Br. Supp. Ex. D.) In addition, with regard to the assertion of insurance fraud, Plaintiffs have submitted a copy of a letter dated March 8, 2000, from Frank M. Fitzgerald, the Michigan Insurance Commissioner, to Ken Sudall of Plaintiff Visions Auto Glass, stating that the practice of using coupons would not be fraudulent if the auto glass company assumes the cost of the discount and does not pass it along to the insurance company in the form of an increased charge. (Letter of 3/8/00 from Fitzgerald to Sudall, Pls.' Br. Supp. Ex. G.)
Based upon the evidence in the record, the Court agrees with Plaintiffs that Defendant violated the MCPA because Defendant's advertisement disparaged Plaintiffs' "goods, services, business, or reputation" by use of false or misleading representations of fact, namely that Plaintiffs charge inflated prices, cut corners, or engage in fraud in order to make a profit when a coupon is used. M.C.L. § 445.903(1)(f). Similarly, Defendant violated the MCPA because it made false or misleading statements concerning the existence or reasons for price reduction and failed to reveal one or more material facts (that some companies such as Plaintiffs do not engage in the practices identified by Defendant or that coupons can be used without defrauding insurance companies), the omission of which would tend to lead consumers to believe that Plaintiffs engage in the activities described in the advertisement. M.C.L. § 445.903(1)(i), (s).
Defendant does not cite any specific reason precluding summary judgment for Plaintiffs on the MCPA claim. However, Defendant makes two arguments with respect to Plaintiffs' defamation claim that could also apply to the MCPA claim. First, Defendant argues that Plaintiffs have not shown that the statements in the advertisement had specific application to Plaintiffs because the advertisement was aimed at a group of businesses and did not mention Plaintiffs by name. Second, Defendant argues that Plaintiffs' self-serving denials that they engage in any of the activities identified in the advertisement are insufficient to show that there is no genuine issue of material fact. Defendants assert that Plaintiffs must provide documentary evidence to support their claims. With regard to the latter argument, the Court concludes that Plaintiffs have submitted sufficient evidence to show that Defendant's claims in the advertisement regarding companies such as Plaintiffs were false and/or misleading. The affidavits submitted by Plaintiffs, along with the letter from the Insurance Commissioner stating that the use of coupons in the manner employed by Plaintiffs is permissible, are sufficient to demonstrate that Defendant's statements were false or misleading. Defendant's assertion that Plaintiffs are required to submit documentary evidence to support their claims is based on a misconception of the allocation of burdens in a summary judgment motion. Plaintiffs, as the moving party, have presented evidence with regard to an issue on which they bear the burden of proof at trial. Notably, Defendant does not claim that the affidavits by Plaintiffs' officers are hearsay or would otherwise be inadmissible. Rather, Defendant seeks to hold Plaintiffs to a higher standard by requiring them to produce documentary evidence to support their contentions. However, as the moving parties, Plaintiffs have met their initial burden of proof by presenting evidence showing that there is no genuine issue of material fact. Under Celotex, Defendant, as the non-moving party, must set forth specific facts showing that there is an issue for trial. Celotex, 477 U.S. at 324-25, 106 S.Ct. at 2553-54. Rather than presenting evidence showing a genuine issue of material fact, Defendant has elected to attack the sufficiency of Plaintiffs' evidence. Because the Court has concluded that Plaintiffs' evidence is sufficient to meet their burden, Defendant's argument must be rejected.
The cases cited by Defendant in support of its claim that Plaintiffs must produce documentary evidence to support their claims,Roberson v. Occupational Health Centers of America, Inc., 220 Mich. App. 322, 559 N.W.2d 86 (1996) (per curiam), and McCart v. J Walter Thompson USA, Inc., 437 Mich. 109, 469 N.W.2d 284 (1991), are inapposite for two reasons. First, those cases both addressed summary disposition procedures under state rules, not summary judgment standards under Fed.R.Civ.P. 56. Second, those cases both dealt with the burden of the non-moving party in responding to a motion for summary disposition, such as Defendant in this case. See Roberson, 220 Mich. App. at 328-29, 559 N.W.2d at 88-89; McCart, 437 Mich. at 115, 469 N.W.2d at 287.
Defendant's other possible argument — that the advertisement did not specifically refer to Plaintiffs — is applicable to Plaintiffs' defamation claim under the group libel rule. See Mich. United Conservation Clubs v. CBS News, 665 F.2d 110, 112 (6th Cir. 1981) (applying Michigan law). However, the Court concludes that unlike a defamation claim, there is no requirement that a plaintiff show that a false or misleading statement was specifically directed at the plaintiff in order to establish a claim under the MCPA. The Court reaches this conclusion based upon the different purposes of a defamation claim and an MCPA claim. The focus of a defamation claim is the harm caused to the plaintiff and his reputation, whereas the focus of the MCPA is harm to consumers. Thus, under § 3(1)(f) of the MCPA, a defendant can be held liable for "[d]isparaging the goods, services, business, or reputation of another by false or misleading representation of fact", M.C.L. § 445.903(1)(f), without a showing that the defendant specifically intended to injure the plaintiff. The fact that a defendant disparaged the business or reputation of a class of competitors, possibly causing consumers to refrain from dealing with those competitors, is sufficient to establish liability under the MCPA. Therefore, the Court concludes that Plaintiffs are entitled to summary judgment on the MCPA claim.
II. Defamation Claim
To establish a claim for defamation, a plaintiff must prove:
(1) a false and defamatory statement concerning the plaintiff, (2) an unprivileged publication to a third party, (3) fault amounting at least to negligence on the part of the publisher, and (4) either actionability of the statement irrespective of special harm (defamation per se) or the existence of special harm caused by the publication (defamation per quod).Burden v. Elias Bros. Big Boy Rest., 240 Mich. App. 723, 726, 613 N.W.2d 378, 381 (2000) (per curiam). The Court will consider each of these elements separately to determine whether a genuine issue of material fact exists on this claim.
A. False and Defamatory Statement Concerning the Plaintiff
A plaintiff alleging defamation must prove that the defendant made a false and defamatory statement concerning the plaintiff. This element actually contains three separate requirements: (1) a false statement; (2) defamatory in nature; and (3) that referred to the plaintiff. Plaintiffs contend that they have demonstrated the falsity of the advertisement, at least as it pertains to Plaintiffs, because the affidavits of Plaintiffs' officers show that Plaintiffs do not engage in the conduct described in the advertisement. As noted above, the Court concludes that there is no issue of fact with respect to the falsity of the statements as applied to Plaintiffs because Defendant failed to present any evidence showing that Plaintiffs actually engage in one or more of the activities described in the advertisement.
Falsity alone is insufficient because the statement must also be defamatory. "A publication is defamatory if it tends to harm the reputation of another by lowering that person's estimation within the community or by deterring third persons from associating or dealing with that person." Heritage Optical Ctr., Inc. v. Levine, 137 Mich. App. 793, 797, 359 N.W.2d 210, 212 (1984). Certain statements are actionable per se. For example, "words charging the commission of a crime are defamatory per se, and hence, injury to the reputation of the person defamed is presumed to the extent that the failure to prove damages is not a ground for dismissal." Burden, 240 Mich. App. at 727-28, 613 N.W.2d at 381. Similarly, statements which denigrate the business reputation of another are defamatory per se. Heritage Optical Ctr., 137 Mich. at 797-98, 359 N.W.2d at 212-13. Under Michigan law, the court determines whether the statement is capable of defamatory meaning.Kevorkian v. Am. Med. Ass'n, 237 Mich. App. 1, 9, 602 N.W.2d 233, 238 (1999); Morganroth v. Whitall, 161 Mich. App. 785, 789, 411 N.W.2d 859, 862 (1987). If the words, as a matter of law, are not capable of defamatory meaning, the claim should be dismissed. Morganroth, 161 Mich. App. at 789-90, 411 N.W.2d at 862. If the words are capable of more than one meaning, one of which is defamatory, it is a question for the jury whether the statement was understood as being defamatory.Hodgins Kennels, Inc. v. Durbin, 170 Mich. App. 474, 481, 429 N.W.2d 189, 193 (1988) (per curiam), rev'd in part, 432 Mich. 894, 438 N.W.2d 247 (1989). In Bourreseau v. Detroit Evening Journal, 63 Mich. 425, 30 N.W. 376 (1886), the Michigan Supreme Court held that where an article is defamatory on its face such that there is no need for an explanation to determine its character, a court may instruct a jury as a matter of law that the article is defamatory. Id. at 433, 30 N.W. at 380. The court observed:
The true rule is that if there is any doubt as to the meaning of the publication, so that extrinsic evidence is needed to determine its character as to being actionable or non-actionable, it is then a question for the jury, under proper instructions from the court, to find its significance. If the article itself, standing alone, is plainly libelous, or manifestly wanting in any defamatory meaning, it is the duty of the court to so declare either way, and instruct the jury accordingly.Id. at 433, 30 N.W. at 379-80.
Plaintiffs, focusing solely on the statement relating to insurance fraud, argue that the advertisement is defamatory per se because it charges Plaintiffs with the commission of a crime. This argument is correct, at least with regard to the allegation of fraud, because fraud is a crime in Michigan. See M.C.L.A. § 750.218. Defendant contends that the advertisement cannot be considered defamatory per se for two reasons. First, Defendant argues that there was no accusation that Plaintiffs engaged in a crime because fraud can be civil or criminal and there is no indication as to whether Defendant was referring to criminal fraud. Second, Defendant points out that the advertisement cited three ways in which a coupon could be used, only one of which was fraudulent. The Court rejects Defendant's criminal/civil fraud distinction. Taking the advertisement as a whole, the Court concludes that a reasonable person would understand Defendant's statement to mean criminal fraud. The advertisement mentioned fraud in connection with over-billing insurance companies (insurance fraud), an act which most people would consider to be criminal in nature. Moreover, the statement in the advertisement that "[l]ast year in Minnesota the abuse of windshield coupons became so rampant that the state passed legislation to limit their value," reinforces the impression of wrongdoing or dishonesty typically associated with criminal fraud.
The Court finds Defendant's second argument somewhat more persuasive because the advertisement does not state that a company using coupons must engage in fraud, but only that engaging in fraud is one of three alternatives a company using coupons may choose to employ in order to make a profit on sales involving coupons. Although only one of the alternatives suggests criminal activity, neither Plaintiffs nor Defendant raised the issue of whether the other two alternatives — inflating the price to cover the coupon amount and cutting corners on materials and installation — may also be defamatory per se as injurious to Plaintiffs' business reputation. In fact, neither party addressed the issue of whether those statements are susceptible to a defamatory meaning. However, the Court finds those statements to be susceptible to two different interpretations. Those statements could be defamatory because they appear to suggest that Plaintiffs engaged in improper or unethical conduct by giving customers illusory discounts or performing substandard work. On the other hand, the Court believes that those statements could be interpreted simply as opinions or "boasting" by a competitor about its prices or the quality of its product or service without defamatory meaning. See Printing Mart-Morristown v. Sharp Elec. Corp., 116 N.J. 739, 767, 563 A.2d 31, 45-46 (N.J.Sup.Ct. 1989) (holding that statements by the plaintiff's competitor that it could beat the plaintiff's prices by $1,000 to $1,200 per quote, that the plaintiff was a "mere convenience" to a customer, and that the plaintiff had never been the lowest bidder were incapable of conveying a defamatory meaning). A statement of this sort, suggesting criminal activity among other alternatives that may or may not convey a defamatory meaning, would appear to create an issue of fact for the jury. See Nix v. Cox Enters., Inc., 247 Ga. App. 689, 695, 545 S.E.2d 319, 324 (2001) ("Where two constructions can be placed on the statements, one allowing the inference of criminal conduct or immoral conduct and the other not, this can be said to be ambiguous, requiring jury determination rather than a legal determination by the trial court."); cf. DeBonaventura v. Nationwide Mut. Ins. Co., No. 4098, 1977 WL 9541, at *2 (Del.Ch. Oct. 26, 1977) (holding that the meaning of statements by the defendant that the plaintiff's prices were "high" or "too high" was a question of fact requiring consideration of factors such as the quality of work performed, the quality of parts used in making repairs, and customer satisfaction with the plaintiff's work). Because the statements in the advertisement may be interpreted in different ways, the Court cannot say that the advertisement, as a whole, was defamatory as a matter of law. Therefore, this issue must be submitted to the jury.
As noted above, Plaintiffs must also show that the advertisement referred to Plaintiffs. The advertisement referred generally to auto glass replacement companies that offer discount coupons and not specifically to either Plaintiff. Under Michigan law, a member of a group may not maintain an action for libel based on statements directed at the group. Chapman v. Romney, 6 Mich. App. 36, 40, 148 N.W.2d 230, 232 (1967) (stating that "it is not enough for the complainant merely to plead that he is a member of a group allegedly defamed, particularly where the alleged slanderous statement specifically states that not all members of the group are included"). The court in Watson v. Detroit Journal Co., 143 Mich. 430, 107 N.W. 81 (1906), explained the reasoning for the limitation on group libel. In that case, two trading stamp companies brought a libel action against a newspaper based upon an article which labeled trading stamp businesses as "outlaws" and compared them to certain illegal businesses. The Michigan Supreme Court concluded that because the article was directed at a large group — trading stamp companies — and not individually at the plaintiffs, the statements were not actionable. Id. at 440, 107 N.W. at 85. The court explained its reasoning as follows:
Suppose a local paper published in a community having but four saloons should say that the saloon business was harmful to the young, was a producer of drunkenness, that its results were altogether bad, could it be said that such criticism would entitle each saloon keeper to maintain an action for libel? Or suppose in a community where there was but one football team a paper was to publish an article asserting that the game of football was a cruel and brutal sport, which was worthy of the severest condemnation; could it be said that this was a charge that each member of the team was cruel and brutal, for which he could successfully maintain a libel suit against the publisher? We think each of these questions must be answered in the negative. Trading stamp concerns are spoken of in the first article set out in the declaration of the plaintiff as `the get-rich-quick industry.' This refers to trading stamp concerns generally, and not to any particular trading stamp concern. In another article the business is spoken of as `the trading stamp fake.' This refers to the business generally, and not to any particular individual. In another article it is said: `Mr. Hunt appreciates the damage done to business by the trading stamp bloodsuckers.' This refers in general terms to the men engaged in the business, and not to any particular person engaged therein. We then have in this case a class of persons in Detroit engaged in the conduct of trading stamp concerns. A publication is made which does not refer to all of the persons engaged in that business in Detroit, but does refer generally to the trading stamp concerns of that city. We think the case stated will not sustain an action of libel.Id.
In Lins v. Evening News Association, 129 Mich. App. 419, 342 N.W.2d 573 (1983), the court applied a narrow exception to the group defamation rule where the group defamed is small and the "plaintiff's identity is readily ascertainable from the content of the publication." Id. at 427, 342 N.W.2d at 578. The plaintiffs in that case, officers of Teamsters Union Local 299, sued a newspaper alleging that they were defamed by statements in an article attacking the union leadership. The court of appeals agreed with the trial judge that statements in the article referring to local union members in general were not actionable but that statements referring to local union leadership, consisting of a small group of seven men, including a specific reference to one plaintiff, could be understood as referring to the plaintiffs. Id. at 428, 342 N.W.3d at 578.
The following discussion outlines the parameters of the exception:
Ordinarily, no action lies for the publication of a general condemnation concerning a large group or class of persons, simply because such a general condemnation could not reasonably be regarded as referring to each individual or any particular individual within the group. . . . But the size of the class, the nature or generality of the charge, and the extravagance of the accusation are all factors that can have a considerable bearing on whether or not the statement can be said to relate to the plaintiff to the extent of casting enough suspicion on the plaintiff to cause others to believe reasonably that the statement is probably applicable to the plaintiff.
It has been observed that there are in reality at least three separate types of derogatory or defamatory statements about groups.
There is in the first place the general statement — such as the derogatory statement that all lawyers are liars, or a disparaging statement about an entire minority racial group. Such statements are held not to be actionable by individual members of the group or class in the absence of evidence of special circumstances at the time of publication which reasonably give rise to the conclusion that there is particular reference to a particular member. But if the plaintiff is the only lawyer present, of for some other reason, the words are reasonably understood by the hearers or readers to be directed individually at him, the personal application may be made to appear.
Then there is the more specific statement of derogatory conduct about a rather definite number of persons. Here, there is much more likelihood that the statement can reasonably be believed to refer or probably refer to the plaintiff. Some courts seem to require that the statement be susceptible of the reasonable construction of applicability to each member of the group, or at least to the particular plaintiff. Others, and it would seem the preferable view, would be satisfied if a reasonable person would conclude that statement is probably applicable to the plaintiff. . . .
The third type of statement is the kind where only some members of a relatively small group — such as engineers of a particular company or 25 members of the staff — have been accused of specific or discreditable conduct. At one point in time, the statement was made that a right of action was uniformly denied because the statement could not reasonably be regarded as referring to each member of the group, and therefore the person or persons to whom it referred could not be identified. But most courts today would probably take into consideration the circumstances and decide each case on the basis of the magnitude of the suspicion cast on each person in the group. . . .
W. Prosser W. Keeton, The Law of Torts, § 111 (5th ed. 1984) (footnotes omitted).
This exception has also been applied in other Michigan cases in various circumstances. For example, in Ball v. White, 3 Mich. App. 579, 143 N.W.2d 188 (1966), the court held that a small group of employees of a contractor could maintain a libel action against the defendant, who wrote a letter to the contractor accusing the employees of stealing from a customer. The court stated that "[w]hen a small group, such as these employees, has been libeled, `the courts have been willing to permit the conclusion that the finger of defamation is pointed at each individual member.'" Id. at 583, 143 N.W.2d at 190 (quoting W. Prosser, The Law of Torts § 92 (2d ed. 1955)). The court concluded that the statements concerned the plaintiffs "[s]ince the plaintiffs' identities were readily ascertainable from the content of the letter." Id. at 584, 143 N.W.2d at 190. In Boehmer v. Detroit Free Press Co., 94 Mich. 7, 53 N.W. 822 (1892), the Michigan Supreme Court allowed the plaintiff, a highway commissioner of the township of Hamtramck, to maintain an action for libel based upon allegations in a newspaper article that the Hamtramck township board, of which the plaintiff was not a member, had granted a railroad franchise in exchange for "boodle", meaning money illegally paid for the franchise. The article mentioned, however, that the charter was signed by the plaintiff and others, although it did not allege that "boodle" was paid to any of the persons named in the article. The court held that it was "for the jury to say whether from the whole of the article the language used applied to plaintiff as well as to the township board." Id. at 10, 53 N.W. at 823.
In an early New York case, Ryckman v. Delavan, 25 Wend. 186, 1840 W.L. 3652 (N.Y. 1840), discussed by the Michigan Supreme Court in Watson, the court allowed a suit by the plaintiff, who was a partner in the business of a malthouse located on the "hill" in Albany, New York. The plaintiff's business was one of six malthouses located on the "hill." The plaintiff's claim arose out of an article which stated that all of the malthouses on the "hill" used stagnant and contaminated water on occasion. Although the court recognized that accusations against a class or group in society generally cannot support a libel claim, the statements in the publication were specific enough to allow an inference that the plaintiff was the person being defamed. The court held:
a declaration on libel cannot be adjudged insufficient, by reason of the accusation being directed against a class of society, unless it is manifest and unquestionable, that the charge is clearly made against a class of society or an order or body of men as such, and cannot possibly import any personal application tending to private injury. If to the common understanding of men, the description evidently points to several individuals, or if on the face of the declaration it appears that the words are capable of being so meant and understood, then the fact of a person being defamed under a description of office or of profession, common to himself and other individuals included in the same libel, cannot take away the right of private action.
1840 WL 3652 at *11.
Plaintiffs contend that in this case the advertisement was targeted at a sufficiently narrow class or group of businesses of which Plaintiffs are members. As support for the claim that the group of auto glass replacement companies using coupons is relatively small, Plaintiffs have submitted copies of pages from the Grand Rapids Yellow Pages telephone directory containing advertisements by auto glass companies. According to Plaintiffs, these advertisements show only that 5 of 39 repair companies that service the metro Grand Rapids area offer coupons. Defendant contends that the list of advertisers in the Yellow Pages is insufficient to demonstrate a small group for purposes of summary judgment because the submitted pages identify only those companies that have chosen to advertise in the Yellow Pages and do not indicate which companies use coupons (or discounts) as a marketing tool.
The Court, taking judicial notice of the 2001 Grand Rapids Yellow Pages, see In re McCarthy, 149 B.R. 162, 165 (Bankr.S.D.Cal. 1992), notes that several (more than 5) but less than all auto glass companies advertising in the Yellow Pages offer coupons or discounts to customers. Several companies allow up to a certain amount "off" or "cash back", while other companies' advertisements state "Free windshield repair (No cost to you with approved insurance coverage)" or "Insurance deductible? Ask about our special programs." In fact, it appears that fewer than half the auto glass companies offer coupons or discount programs similar to those offered by Plaintiffs, although the Court is unable to determine the precise number of companies that have such programs. However, the fact that the Court is unable to ascertain an exact number does not mean that the Court cannot conclude that the defamatory statements were reasonably capable of applying to Plaintiffs. In other words, it is unnecessary to determine the precise size of the group because the advertisement contained information from which it could be reasonably inferred that each and every auto glass installer that gave coupons was a target of the statements. The advertisement did not refer to all auto glass replacement companies, but rather only to those companies using coupons or discounts. One need only look in the Yellow Pages to determine whether a particular auto glass replacement company was targeted by Defendant's advertisement. The Court finds this case similar to Ryckman because the publication there targeted only those malthouses in a particular location, i.e., on the "hill," thus making the identities of the malthouses easily ascertainable. As the Michigan Supreme Court noted in Watson, the Ryckman court would have likely reached a different result had the publication in Ryckman referred to "the class generally known as maltsters" and "asserted that beer drinking was harmful, and that a community would be better off if it contained no maltsters."Watson, 143 Mich. at 439-40, 107 N.W. at 85.
The Court rejects Defendant's assertion that some companies advertising in the Yellow Pages might have coupon or discount programs not mentioned in their Yellow Pages advertisements. Those programs serve as a marketing tool which is of value only if made known to consumers. Thus, the Court finds it highly unlikely that companies with such programs would not highlight them in their Yellow Pages advertisements.
Although the Court finds that the statements in the advertisement could be understood as referring to Plaintiffs, the Court concludes that it would be improper to grant summary judgment on this issue. If a court determines that the allegedly defamatory statement is reasonably capable of referring to the plaintiff, the jury should determine whether the statement did, in fact, concern the plaintiff. Mich. United Conservation Clubs v. CBS News, 485 F. Supp. 893, 897 (W.D.Mich. 1980). Therefore, because genuine issues remain as to whether the advertisement was defamatory and whether it in fact referred to Plaintiffs, the Court will deny Plaintiffs' motion for summary judgment.
B. Unprivileged Publication to a Third Party
Defendant does not contend that the advertisement was privileged, nor is there any dispute that the advertisement, which appeared in at least one newspaper with a large circulation, was disseminated to a third party. Therefore, there is no issue of fact with regard to this element of Plaintiffs' claim.
C. Fault Amounting to at Least Negligence
Defendant contends, without citation to specific facts in the record, that it was not negligent in running the advertisement. The evidence before the Court shows that at the time it published the advertisement, Defendant did not have any information suggesting that Plaintiffs engaged in any of the conduct described in the advertisement. This evidence demonstrates at least negligence by Defendant. Thus, Plaintiffs have established a minimal level of culpability.
D. Actionability Irrespective of Special Harm
Plaintiffs assert that they have established this element because the accusation of fraud in the advertisement constitutes defamation per se. However, as indicated above, because fraud is only one of the possibilities suggested in the advertisement, the Court cannot conclude that the advertisement was defamatory per se. The issue of whether the statements in the advertisement were defamatory is a question for the jury.
Conclusion
The Court will grant Plaintiffs' motion with respect to the MCPA claim. The motion will be denied with respect to the defamation claim because the Court concludes that issues remain for the jury with regard to whether the statements in the advertisement were defamatory and in fact referred to Plaintiffs.
An Order consistent with this Opinion will be entered.
ORDER
In accordance with the Opinion filed this date,
IT IS HEREBY ORDERED that Plaintiffs' Motion for Summary Judgment on Counts II (Michigan Consumer Protection Act ("MCPA") claim) and V (defamation claim) of Plaintiffs' Complaint (docket no. 30) is GRANTED IN PART AND DENIED IN PART. The motion is granted with respect to the MCPA claim and denied with respect to the defamation claim because there remain genuine issues of material fact. The issues remaining for the jury on the defamation claim (without regard to damages) are whether the statements in the advertisement were defamatory and in fact referred to Plaintiffs.