Schuler v. McGraw-Hill (USA)

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Eleanor Schuler sued BusinessWeek alleging defamation and other torts relating to defendants’ publication in Business Week magazine in September 1994 of an article entitled “Did the Amex Turn a Blind Eye to a ‘Showcase’ Stock?”. The article was subtitled, “The Bizarre Printron Case Shows the Exchange Too Often Ignores the Most Glaring Signs of Trouble,” and it discusses the American Stock Exchange’s (“Amex”) listing of small companies on its Emerging Company Marketplace (“ECM”). The article focuses on Printron, Inc., an Albuquerque company of which plaintiff had been chairman and chief executive officer. As it relates to plaintiff, the district court aptly summarized the article as follows:

The article refers to Plaintiff’s status as a transsexual and it treats certain aspects of her life when she was a man known as John Huminik, Jr. The article also examines Plaintiff’s involvement in two lawsuits filed against her by the Securities and Exchange Commission (“SEC”). One of the lawsuits was filed against Plaintiff in the mid-1970s when she was John Huminik; the other was filed against Plaintiff in 1991 when she was Eleanor Schuler, that is, after her sex change. Both lawsuits were resolved by injunctions barring Plaintiff from committing future securities law violations. In both cases, Plaintiff neither admitted nor denied the allegations against her; however, she signed consent decrees agreeing to entry of the permanent injunctions.

After Printron was listed on the ECM, the value of its stock plummeted from fourteen dollars ($14.00) per share to twenty-two cents ($.22) per share. The article criticizes the Amex for failing to screen companies properly before listing them on the ECM. In addition, the article criticizes Printron for failing to reveal to investors Plaintiff’s involvement in the SEC lawsuit filed against her when she was a man. The article raises the question of why Schuler received such lenient treatment in the 1991 lawsuit, and the article speculates that perhaps the SEC did not know that Huminik and Schuler were the same person.

Schuler filed this action asserting claims for defamation; invasion of privacy through false light, publication of private facts and intrusion; intentional infliction of emotional distress; interference with contractual and prospective business relations; and prima facie tort. She contends generally that the article defamed her by stating or implying that she was dishonest and deceptive, that he underwent his sex change to conceal his past, and that he concealed his sex change and prior SEC problems from the Amex, investors and the SEC.  The trial court concluded that the article did not include any false statements of fact on which to base the defamation or false light claims. The court rejected his claim for publication of private facts because his sex and name change had previously been discussed in magazine and newspaper articles. It concluded that because the article did not contain defamatory falsehoods or other indication of outrageous conduct, Schuler did not state a claim for intentional infliction of emotional distress. The court also held that because his interference with business relations claims were premised on his claims for defamation, invasion of privacy and infliction of emotional distress which had failed, these claims should fail as well. Finally, the court concluded that plaintiff abandoned his intrusion and prima facie tort claims, and in any event, his allegations did not state valid claims. The U.S. Court of Appeals for the Tenth Circuit affirmed in 1998.

The case is similar to the case of Essay Anne Vanderbilt, in which Caleb Hannan disclosed Vanderbilt’s sex change in connection with Vanderbilt’s sketchiness.

A Gender Variance Who’s Who_ Eleanor Schuler (1936 – ) chemical engineer, spy, entrepreneur.

Schuler v. McGraw-Hill, 145 F.3d 1346 – CourtListener.

John Huminik’s Sex Change Has Made Eleanor Schuler the Spy Who Came Out of the Closet _ People.