Determination
69
Minnesota
News Council
In the Matter of the Complaint of
Medtronic, Inc. against the Minneapolis Star and Tribune
Appearing at the hearing for grievant Medtronic, lnc.,
were B. Kristine Johnson, vice president of corporate affairs, and Raymond
J. Dittrich, vice president and general counsel. Other Medtronic representatives
present were William E. Drake, vice president, deputy general counsel
and secretary; Celia K. Barnes, director of public relations; and James
G. Foster, vice president, Medtronic Blood Systems. Appearing for the
Minneapolis Star and Tribune were Tim J. McGuire, managing editor, Robert
J. White, editorial editor, and Lou Gelfand, readers' representative.
Background: In its Sunday edition for October
26, 1986, on the front page, the Minneapolis Star and Tribune carried
a story headlined "Medtronic accused of using stolen heart-valve plans."
The story began:
"Minnesota's Medtronic Inc. used the stolen
trade secrets of another company in developing a mechanical heart
valve that provided $25 million in revenue last year, according to
allegations in court documents."
The second paragraph stated, "A small Twin Cities
medical-devices company has said in a court case that it believes
an official of a Medtronic subsidiary used its secrets ...." The third
paragraph began: "And an attorney for the company, Medical Inc., testified
in court proceedings in June that the FBI found Medical Inc. documents
in the possession of Medtronic." The newspaper article reported that
Medtronic would not comment whether it had used Medical Inc.'s secrets,
but instead said it has fully cooperated in the FBI investigation.
The story continued at considerable length on the
inside pages and included the statement that "[a]ccording to an FBI
affidavit, one Medical Inc. book of manufacturing specifications allegedly
was transformed into a Medtronic book ...." The inside pages were
devoted primarily, however, to Robert Kaster, who had formerly been
employed by both Medical Inc. and Medtronic and then had formed his
own heart valve company and who, it was alleged, had stolen trade
secrets from both Medical and Medtronic. The article also said that
"the FBI has looked into Medtronic documents as part of its investigation
of Kaster and his company, although the main focus remains on Kaster."
Medtronic claims the newspaper article is inaccurate,
unfair and misleading. It claims the article implies that Medtronic
was the target of an FBI investigation involving use of stolen trade
secrets, and that Medtronic had been sued for use of stolen secrets.
In fact, claims Medtronic, the FBI was investigating Kaster and his
company, not Medtronic. Furthermore, says Medtronic, its role in the
investigation was simply turning over documents requested by the grand
jury investigating Kaster. No Medical Inc. documents were found in
Medtronic's possession, says Medtronic, nor had it used any of its
competitor's secrets. The FBI affidavit mentioned in the newspaper
article contained no allegation against Medtronic. Further, Medtronic
points out, the references in the article to a court case refer to
litigation involving Angicor (Kaster's company), Medical Inc., and
the University of Minnesota. Medtronic was never a party to that litigation.
The Minneapolis Star and Tribune claims its story
was fair and accurate. It says it relied not only on court documents
but on confidential sources. Further, it points out that in preparation
for the story, the reporter submitted seven written questions to Medtronic,
but that Medtronic chose to answer the questions evasively instead
of responding with what it claimed the facts to be.
After the article was published, Medtronic's CEO
sent a letter to the editor in which the allegations of the story
were "flatly and completely" denied, and the newspaper was asked to
print a front page apology. The letter was never published because,
although the newspaper was willing to publish the letter, the editor
refused to negotiate its editing. Medtronic, as the second part of
its grievance, claims it was unfair for the newspaper not to publish
its letter.
Discussion: The FBI affidavit referred to
in the newspaper article does not state, as the article says it does,
that a Medical Inc. specifications book had been transformed into
a Medtronic book. The article's reference to the affidavit was simply
wrong. If the reporter was relying on other unidentified sources,
the article should have so stated.
But more troubling, we think, is the generally misleading
character of the article. The article's prominent placement on the
front page of the Sunday edition, its startling headline ("Medtronic
accused . . ."), its content referring to an unidentified undated
court case, to an FBI investigation, and to grand jury subpoenas,
all lead the reader to believe this was a late-breaking story revealing
likely wrongdoing by Medtronic. In fact, the article was dealing with
relatively old news, and news only peripherally involving Medtronic.
The court case, in which Medtronic's competitor expressed a belief
that Medtronic had used its secrets, was between Medical Inc. and
Kaster, to which Medtronic was not a party, and was contained in a
3-year-old affidavit submitted in that case in 1983. If the article
is read in its entirety, the bulk of which appears on the inside pages
(including a photograph of Kaster and quotes from his attorney), it
appears that the article is mostly about accusations against Kaster.
But the headline and lead paragraphs of the article give the misleading
impression that it is Medtronic that is in trouble.
Seven questions were submitted by the reporter to
Medtronic. The first question, typical of the others, was:
"According to a transcript of proceedings
in the University of Minnesota-Medical Inc. case, dated June 19, 1986,
the FBI found that Medtronic had copies of Medical Inc. trade secrets.
Medical Inc. has said it "believes" that Medtronic used Medical Inc.
secrets to speed up development of its heart valve. Any comment?"
Medtronic's answer was: "As a matter of policy, Medtronic
does not comment about our competition." Medtronic was free, of course,
to say "no comment," and perhaps hope thereby to avoid involvement
in what it felt was not its problem; but, if Medtronic did not wish
to explain, it could have at least responded with a denial of the
allegations rather than wait to issue its denial in a subsequent letter
to the editor. Indeed, Medtronic's lack of candor may have led the
reporter to give some credence to the allegations. We note, in passing,
that the June 1986 court proceedings referred to in the reporter's
question involved only an assertion made by Medical Inc.'s attorney
in a post-trial motion, where the attorney was offering to show that
a witness would testify that while Kaster was at Medtronic, Medtronic
had some documents the same as or similar to Medical-originated documents.
The heart valve industry is very complex and highly
competitive, and, as the newspaper article observes, "employees jump
from company to company, carrying valuable information in their heads."
This much is clear: a year earlier the FBI had begun an investigation
of allegations by an Angicor employee that Kaster had stolen trade
secrets from both Medical and Medtronic for use in his own company.
Because Kaster had formerly worked for both Medical and Medtronic,
it was understandable that Medtronic would be mentioned in the newspaper
article. Unfortunately, the article's headline and lead paragraphs
gave the misleading impression that Medtronic rather than Kaster was
being accused of improper activities.
In fairness, we think it should have been made clear
throughout the story that the subject of the FBI investigation was
not Medtronic, but Kaster, and that Medtronic had played only a supporting,
cooperative role in this investigation. The article should have identified
the private litigation, placed it in a proper time frame, and made
it clear that Medtronic was not a party to that litigation.
Medtronic, concerned about its reputation, submitted
a strongly worded letter to the editor denying the allegations in
the news story. The editor agreed to publish the letter, agreeing
its length and clarity were appropriate, but reserved the right, in
accordance with the newspaper's established policy, to make minor
stylistic changes. Medtronic asked that it be told what these editing
changes would be so that it could agree or disagree to the changes.
The newspaper refused. The News Council believes that the Star and
Tribune acted correctly in refusing to submit its editing of the letter
to the sender for approval or disapproval. The editing function must
reside with the newspaper editor. To make the editing function a subject
of negotiations would be for the newspaper to abdicate its responsibilities.
As to the complaint that the newspaper article and
headline were inaccurate, unfair and misleading, the grievance is
sustained.
As to the complaint that the newspaper improperly
placed editing restrictions on the proposed letter to the editor,
the grievance is denied.
Concurring: Chucker, Dornfeld, Falkman, Larson,
Orwoll, Ryan, Simonett, Stone, Sundin, Swain, and Tanick
Dissenting: Ashmore and Casey - Medtronic's
presentation was impressive, the charts were informative and the speakers
well qualified and prepared, but the company failed to make a convincing
case that the Minneapolis Star and Tribune did anything substantially
wrong in the preparation and presentation of the article in question.
The Star and Tribune's handling of the article could have been better,
but its shortcomings are not sufficient to sustain a grievance.
The FBI's Talbot's assertion that Medical Inc. was
or was not the source of documents found at Medtronic was not clearly
established by either side. It is arguable that the Star and Tribune
should have attributed its conclusion on the matter to an unnamed
source, but this alone is hardly sufficient to sustain a grievance.
The article would have been better had the time frame been better
established, but three years is not a long time in the world of litigation.
Had Medtronic chosen to engage in reasonable communication with the
Star and Tribune, these items would, at worst, have resulted in a
correction or clarification the day after publication.
Most important, Medtronic had the opportunity to
substantially improve the public's knowledge of this entire situation
and consciously chose not to. Legal documents are generally created
not to inform the public but to advance the cause of a particular
plaintiff or defendant. They can be misleading, taken by themselves.
The Star and Tribune allowed for that fact and asked Medtronic to
help clarify the situation. Medtronic declined.
Had Medtronic been as candid with the Star and Tribune
as it was in the News Council hearing, there might not have been a
complaint. We also strongly disagree with the majority determination
that front-page placement contributed to what it perceives as unfairness.
This determination suggests that the same information on an inside
page would have been "less unfair," and undermines the majority's
contention that the article's content is unfair and inaccurate.
June 19, 1987
Read
Determination 70
Back
to Main Determination Index
Want
to comment? Send a message
to the News Council.
