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In a nationally watched case, a federal appeals court here has absolved Sam Donaldson and ABC’s “Prime Time Live” of having defamed a Chicago eye clinic seven years ago in connection with a highly critical investigative report, which all but accused the eye clinic of tampering with a cataract testing machine and suggested it made unnecessary surgeries on hundreds of elderly patients. The defendants were not “reckless” and, therefore, could not have defamed the “public figure” that was the target of their aired 15-minute report, according to the Oct. 27 opinion written by 7th U.S. Circuit Judge Richard Posner, even though they made no attempt to study the eye clinic’s winning of a summary judgment in an earlier lawsuit against a former employee and key ABC source for allegedly spreading false tampering accusations. J.H. Desnick, M.D. v. American Broadcasting Companies, Inc. No. 99-3715. According to Posner, the Desnick Eye Clinic simply failed to show that the broadcasters would have discovered any facts that would have altered its decision to air the program had it researched the clinic’s local lawsuit victory — or, for that matter, had they taken into account yet another multi-million dollar whistleblower suit brought against the clinic by its former employee, which ultimately failed due to a lack of standing. “Irrelevant” details, Posner quipped at one point in his opinion. However, in contrast, the judge noted that the supposedly defaming broadcast company had, with the help of “testers,” compiled enough evidence to justify its report, however “negligent” it might arguably have been put together. “Negligence is not the standard” to apply in such free speech scenarios, Posner concluded. In so ruling, the unanimous three-member panel sustained U.S. District Judge John A. Nordberg’s earlier dismissal of the eye clinic’s lawsuit on the ground there was insufficient evidence of “actual malice” to permit the case to go forward. Posner’s opinion will likely have national repercussions, said ABC’s lead attorney Michael M. Conway, a partner in Chicago’s Hopkins & Sutter, partly because the jurist more clearly articulated than ever before how the U.S. Supreme Court’s New York Times standard of “actual malice” means something more than “gross negligence” or “extreme carelessness.” But, the main impact of Posner’s opinion, Conway maintained, is its adoption of an “exclusionary” type rule commonly used by the courts to test whether excluded evidence at trial would have altered a jury’s verdict had it been included. “What Judge Posner said is that, even if a plaintiff in a defamation case argues that the media defendant failed to take into account some information — and that failure is arguably reckless — it is the plaintiff who has the burden of further showing that had the media defendant looked into that information, its understanding of the facts would have been different” and its subsequent actions would have been different. In this case, Conway noted that the eye clinic’s much ballyhooed prior courtroom victory was based on the defendant-employee’s lack of standing and that the employee’s subsequent failed whistleblower suit was due to a summary judgment arising out of an attorney’s failure to timely respond to a discovery request. “Knowledge of either of these cases would not have influenced ABC’s decision” to air the Desnick report, Conway concluded. Also apparently critical to applying this “clarifying” media defamation standard, was the panel’s view of the alleged “tampering” evidence amassed in the court files — or alleged lack of it. As related by Posner, the accusation of tampering was made originally by Paddy Kalish, an optometrist who had worked for the Desnick Eye Clinic for two years. Kalish later claimed that technicians employed by the clinic tampered — at the clinic’s direction — with an auto-refractor device to produce false diagnoses of cataract. The tampering was eventually described by Kalish in a videotaped interview with ABC’s Donaldson, although several test runs were required before false readings could be obtained. One key point made by the clinic’s attorneys in the course of litigation was that only a portion of this interview was included in the allegedly offending “PrimeTime Live” report. Nevertheless, Posner wrote, there was nothing in the record to this point that would suggest “recklessness” on ABC’s part. Indeed, Posner continued, Kalish’s accusation of tampering was “corroborated” by the fact that ABC’s investigation of the Desnick clinic turned up evidence of “unneeded surgery, alteration of patients’ records to show they needed cataract surgery when they didn’t, diagnoses by clinic surgeons of cataract in testers (ABC ‘undercover agents’) with normal eyesight, and statements by former employees of the clinic that almost everyone failed” the auto-refractor test. Posner conceded that these so-called “facts” have not yet been established in a court of law, because the trial judge dismissed the suit before determining their truth. “But, that is irrelevant,” the jurist opined. “All that matters is that ABC was not reckless in stating these as facts, facts establishing a pattern of herding elderly patients into unneeded cataract surgery, or in making the further charge that a diagnostic machine had been tampered with to produce false positives.” The eye clinic’s lead attorney, Steven F. Molo, a partner in Chicago’s Winston & Strawn, could not immediately be reached for comment.

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