Stanfill Dealt Setback in Suit Against Fox : Ex-Chief Is a Public Figure, Court Rules

A judge ruled Thursday that Dennis C. Stanfill, former chairman and chief executive of 20th Century Fox Film Corp., is a public figure and therefore has the added burden of proving malice if he is to collect any damages in his defamation action against the company and former owner Marvin Davis.

Los Angeles County Superior Court Judge Eli Chernow said he based his decision simply on Stanfill’s former position as head of a firm that nationally was “among the largest and most visible public corporations” in the entertainment industry.

The defamation action is part of Stanfill’s $50-million suit alleging breach of contract and wrongful termination of employment. His complaint alleges that he was forced out of the Hollywood studio in June, 1981.

Jury Selection Next Week

Davis, then the new controlling shareholder, countermanded his chief executive’s firing of Fox Television Chairman Harris L. Katleman over alleged expense account irregularities.

Pretrial motions have occupied nine court days, and the trial will not get to the jury selection phase before next week. A lead attorney for the studio, William E. McDaniels of the Washington firm of Williams & Connolly, told the court Thursday that he has “rarely been in a case that had as many complicated issues.” Chernow agreed.

Stanfill reportedly has turned down some offers to settle the case out of court. His chief attorney, Marshall Grossman, told reporters the case involves “very important matters of business ethics that should be aired in public and tried.”

Stanfill’s defamation action is based on a Fox press release of July 15, 1981, which was issued in response to inquiries from The Times about questioned expense account vouchers submitted by Katleman.

The lawsuit alleges that the press release was false and defamatory to Stanfill in stating that Fox’s board and its audit committee had determined “that the questionable matters were not material and that no company action was warranted.” Such a statement demeans Stanfill’s abilities as an executive, it claims. The suit said that, in fact, “both determined (the questioned vouchers) were material and that company action was warranted.”

When the issue was argued Thursday in court, defense attorneys did not comment on the allegation of falsity.

Chernow indicated that even assuming the Fox statement was false, it might not constitute defamation in itself. His later ruling that Stanfill is a public figure would add the burden, for recovery of damages, of proving that any defamatory act was made with malice.

The U.S. Supreme Court has held that public figures “may recover for injury to reputation only on clear and convincing proof that the defamatory falsehood was made with knowledge of its falsity or with reckless disregard for the truth.”

Testimony of Stanfill’s personal public relations counsel, Rupert Allen, was cited by both sides in arguments about whether the former Fox chief is a public figure.

Linda Gach, a Stanfill attorney, read portions of the Allen deposition to show that, after helping with Stanfill’s statement when he resigned, his public relations duties have involved only such matters as “generating interest” of the media in social or charitable events in which Stanfill and his wife, Terry, are active, and in the 1984 novel written by their daughter, Francesca.

All three Stanfills have been attending the daily court sessions, sitting in the spectator seats.

Defense attorney Howard Squadron held that Stanfill’s announcement through Allen of his resignation “triggered” the publicity that engendered events involved in the lawsuit.

But Chernow stressed that his ruling that Stanfill is a public figure transcended his generation of publicity for himself and Fox. In fact, the judge said, “I suspect it contributed to the success of the company under his leadership.”