# Amicus Curiae Brief — Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 1985
- **Citation:** 472 U.S. 749

## Text

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ILE D

IN THE

Supreme Court of the United States

OCTOBER TERM, 1983

DUN & BRADSTREET, INC.,
Petitioner,
V.

GREENMOSS BUILDERS, INC.,
Respondent.

On Writ of Certiorari to the
Supreme Court of the State of Vermont

BRIEF OF THE WASHINGTON POST,
AMICUS CURIAE, IN SUPPORT OF REVERSAL

DAVID E. KENDALL

KEVIN T. BAINE *
WILLIAMS & CONNOLLY
839 17th Street, N.W.
Washington, D.C. 20006
(202) 331-5000

Attorneys for Amicus Curiae
* Counsel of Record

WILSON - Epes PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

AVAILABLE COPY ©

TABLE OF CONTENTS

TABLE OF AUTHORITIES ..............-...-------s0ees---0---00000-"

INTEREST OF THE AMICUS ...............------------------0--00--+

SUMMARY OF ARGUMENT ..... sorentinnennetnteniatinieie

PN) |,

I.

II.

ITI.

GERTZ v. ROBERT WELCH, INC. LEFT
OPEN THE QUESTION WHETHER PUNI-
TIVE AND PRESUMED DAMAGES MAY BE
AWARDED IN A DEFAMATION CASE........

PUNITIVE AND PRESUMED DAMAGES
FOR DEFAMATION VIOLATE THE FIRST
AND FOURTEENTH AMENDMENTS ............

THE JUDGMENT IN THIS CASE SHOULD
BE REVERSED ON THE GROUND THAT
DUN & BRADSTREET IS ENTITLED TO
THE MINIMUM PROTECTION IT HAS
ABEEED FOR ....2...222.-2.---0---cccecccecccse-neecnseneseracersoee

TV. CONCLUSION ....-......---.-.---.0cr-ccecereceeosevecneenseees

Page

ii
TABLE OF AUTHORITIES

Cases: Page

AAFCO Heating & Air Conditioning Co. v. North-
west Publications, Inc., 162 Ind. App. 671, 321
N.E.2d 580 (1974), cert. denied, 424 U.S. 913

) | SRE oou Se 23
Beckley Newspapers Corp. Vv. Hanks, 389 U.S. 81

) | ee 23
A.H. Belo Corp. v. Rayzor, 644 S.W.2d 71 (Tex.

FS ee 14
Buckley v. Littell, 589 F.2d 822 (2d Cir. 1976),

cert. denied, 429 U.S. 1062 (1977) ...............--........ 6
Burnett v. National Enquirer, Inc., 7 Media L. Rep.

[BNA] 1821 (Cal. Super. 1981) -......................... 14
Burnett v. National Enquirer, Inc., 144 Cal. App.3d

ee 14
Cantrell v. Forest City Publishing Co., 419 U.S.

| eer 23
Cox Broadcasting Corp. v. Cohn, 420 U.S. 469

CRITI cncisntenstnintscnnetsimicnsmmen 22
Curtis Publishing Co. v. Butts, 388 U.S. 130

) | EEE ES ee 11, 18

Davis Vv. Schuchat, 510 F.2d 731 (D.C. Cir. 1975).. 6
Edghill vy. Municipal Publications, Inc., No. 2371

(Pa. Ct. Common Pleas, May Term 1972) ........... 15
Electrical Workers v. Foust, 442 U.S. 42 (1979)... 10
Garrison V. Louisiana, 379 U.S. 64 (1964) _............. 21

Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974) ....passim
Green V. Alton Telegraph Printing Co., 107 II.

App. 755, 438 N.E.2d 203 (1982) ........................ 13
Greenbelt Cooperative Publishing Ass’n V. Bresler,

SED TLE. © CID cccccisccssscetntnnscnsnsimnenteiiieiaiaaasidammanae 23
Grosjean V. American Press Co., 297 U.S. 233

COD cecaveccereninsentintiinntenentnnitniemnm 22
Hall v. May Dept. Stores, 292 Or. 131, 637 P.2d 126

CID ccecsevecnssiismsipnasatneniisaiameasiainaisesea 20
Henry Vv. Collins, 380 U.S. 356 (1965) .....0. 23

International Security Group, Inc. v. The Outlet
Co., No. 79-CI-10293 (Dist. Ct., 224th Jud. Dist.,
) gg tN ee 16

iii
TABLE OF AUTHORITIES—Continued

Page

Keyishian v. Board of Regents, 385 U.S. 589
i sderiataemusacmtcnanes 18, 19

Landmark Communications, Inc. v. Virginia, 435
EEE AS Se 22
Letter Carriers v. Austin, 418 U.S. 264 (1974) ........ 23

Maheu V. Hughes Tool Co., 384 F. Supp. 166 (C.D.

Cal. 1974), rev’d in part and aff'd in part, 569
i srrsenscenncesoncnee 6, 19

McCoy v. The Hearst Corp., Civ. No. 49915 (Cal.
ee AE ) 12

McHale v. Lake Charles American Press, 390 So.2d

556 (La. App. 1980), cert. denied, 452 U.S. 941
ENE SST EE 20
Mills v. Alabama, 384 U.S. 214 (1966) .................... 21, 22

Minneapolis Star v. Minnesota Commissioner of

Revenue, U.S. , 103 S.Ct. 1865 (1983) .. 22
New York Times Co. v. Sullivan, 376 U.S. 254

a. ccttammemnsonneaes passim
Postill v. Booth Newspapers, 325 N.W.2d 511

ET 13

Pring Vv. Penthouse, International, Ltd., 695 F.2d
488 (10th Cir. 1982), cert. denied, —— USS.

——= 108 S.Ct. 8112 (1988) .................................. 13
Rogers V. Doubleday, 644 S.W.2d 833 (Tex. App.
a sscunesescnsevonce i 15
Rosenblatt v. Baer, 383 U.S. 75 (1966) —........0000000.... 23
Rosenbloom vy. Metromedia, Inc., 403 U.S. 29
SES LT TLL passim
Smith v. Wade, —— U.S. ——, 103 S. Ct. 1625,
I ecemnnened 6, 9, 10, 23
Speiser V. Randall, 357 U.S. 513 (1958) —....000000... 10
Sprague v. Walter, No. 3644 (Pa. Ct. Common
Pleas, April Term 1973) ..................... oD 15

Sprouse v. Clay Communications, Inc., 211 S.E. 2d
674 (W. Va.), cert. denied, 423 U.S. 882 (1975).. 19, 20
Stone Vv. Essex County Newspapers, Inc., 367 Mass.

849, 380 N.E.2d 161 (1975) .................................. 20
Sunward Corp. v. Dun & Bradstreet, Inc., Civil Ac-
tion No. 82-K-147 (D. Colo.) ..................2...22..0....-- 1¢

iv

TABLE OF AUTHORITIES—Continued

Page

Tasket v. KING Broadcasting Co., 86 Wash. 2d 439,

I iiaticiccencstsectcthchicceiineiiescnciidialiaaaiiiin 20

Tavoulareas V. The Washington Post Company, 567

A « f« 6 4 Sn 15

Thornhill v. Alabama, 310 U.S. 88 (1940) ............... 21

Walker v. Colorado Springs Sun, Inc., 188 Colo.,

86, 538 P.2d 450, cert. denied, 423 U.S. 1025
ERTS ETERS ARN ae ee eS Ow AD 23
Rules:

Rules of the Supreme Court of the United States
SLES ares aoe Soe Pe RR Ne Bier eat 1
i 2

United States Constitution:
EE Te TR TT passim
Fourteenth Amendment .....................-- 22 --eeenneenee eee gal 1
Miscellaneous:
Restatement (Second) of Torts § 621, comment d
GIT siisscneicenenietscndeneeisancilisaiiasscitaiianicintacnsiaaniiiiaieaill diladiaiiadilaals 6

Lewis, New York Times v. Sullivan Reconsidered:
Time To Return to “The Central Meaning Of
The First Amendment’, 83 Colum. L. Rev. 603
(RSET apres NRey one AUST Pees en 12
“How Libel Suit Sapped the Crusading Spirit of a
Small Newspaper,” The Wall Street Journal,
I Te CII scccitcittonscesinintiuissnteasamaneneitaiadiasdiliti 17

™~

IN THE

Supreme Court of the United States

OCTOBER TERM, 1983

No. 838-18

DUN & BRADSTREET, INC.,
Petitioner,
Vv.

GREENMOSS BUILDERS, INC.,

Respondent.

On Writ of Certiorari to the
Supreme Court of the State of Vermont

BRIEF OF THE WASHINGTON POST,
AMICUS CURIAE, IN SUPPORT OF REVERSAL

The Washington Post submits this brief as amicus
curtae in support of petitioner’s claim that the pre-
sumed and punitive damage awards against it violate
the First and Fourteenth Amendments to the Consti-
tution. All parties to this action have given their
written consent to the filing of this brief pursuant to
Rule 36.2 of the Rules of this Court. Copies of the
letters of consent have been filed with the clerk.

INTEREST OF THE AMICUS

Amicus curiae, The Washington Post, publishes a
newspaper of general circulation in the Washington,
D.C. metropolitan area.’ It has been, and is, involved
in a number of libel cases in which punitive and pre-
sumed damages are sought, and one case in which
a plaintiff’s verdict (including punitive damages) was
returned. (The trial judge entered judgment notwith-
standing the verdict in the Post’s favor, and the case
is on appeal. See p. 14, infra.) Because of its in-
volvement in libel litigation in which punitive and
presumed damages are sought, the Post has an inter-
est in the development of the legal principles govern-
ing such claims.

SUMMARY OF ARGUMENT

Both the Vermont Supreme Court and the peti-
tioner in this case have assumed that punitive and
presumed damages may be awarded against the press
upon a showing of “actual malice” under New York
Times Co. v. Sullivan, 376 U.S. 254 (1964), and pro-
ceeded to pose the question whether nonmedia defend-
ants are entitled to the same protection. In fact,
neither Gertz v. Robert Welch, Inc., 418 U.S. 323
(1974), nor any other decision of this Court, estab-

1 The Post is a division of the Washington Post Company,
which has the following subsidiaries or affiliates (excluding
wholly owned subsidiaries): Bowater Mersey Company Ltd.,
Robinson Terminal Warehouse Corp., Los Angeles Times-
Washington Post News Service, International Herald Tribune,
S.A., Bear Island Paper Company (a limited partnership),
The Detroit Cellular Telephone Company (a general partner-
ship), and The Washington-Baltimore Cellular Telephone
Company (a general partnership). This disclosure is made
pursuant to Rule 28.1 of the Rules of this Court.

3

lishes a firm rule for punitive or presumed damages
against the press. Gertz did not hold, or state by way
of dictum, that punitive or presumed damages may
be awarded against any defendant upon a showing
of actual malice. Indeed, there was no separate puni-
tive damage award at all in Gertz, and the case pre-
sented no occasion for the Court to decide whether
punitive damages may ever be awarded against the
press or any other defendant.

Gertz, in short, left open the question sien
punitive or presumed damages may ever be awarded
in a defamation case against the press or against a
member of the public. The issue in this case, then, is
not simply whether there is a basis for distinguishing
between media and nonmedia defendants. The issue
is whether Dun & Bradstreet, a company that pub-
lished certain financial and credit information about
another company, is entitled to the minimum protec-
tion it has asked for—namely, the requirement that
actual malice be shown before punitive and presumed
damages are awarded against it. Amicus agrees that
to deny Dun & Bradstreet that minimum protection,
and to uphold punitive damages on the facts of this
case, would violate the First Amendment.

Dun & Bradstreet has not asked for protection be-
yond the actual malice standard, and there is there-
fore no occasion for the Court to consider whether,
and under what circumstances, additional protection
may be appropriate. It is amicus’ position, however,
that in an appropriate case this Court should hold
that punitive and presumed damages may never be
awarded in a defamation action. Punitive damages
generally, and the unique remedy of presumed dam-
ages in defamation cases, are anomalies of the law.
Committed largely to the uncontrolled discretion of

4

juries, these awards often bear no relationship to ac-
tual harm done. They can be used to punish unpopu-
lar defendants; they encourage unnecessary litiga-
tion; and they chill desirable as well as undesirable
conduct.

In Gertz the Court expressly recognized that these
concerns have special force in defamation cases. The
Court stated further that the states have “no substan-
tial interest in securing for [defamation] plaintiffs
... gratuitous awards of money damages far in ex-
cess of any actual injury.” 418 U.S. at 349. The
logic of Gertz and of the First Amendment itself
points ineluctably to the conclusion that punitive and
presumed damages may never be awarded in defama-
tion cases.

Recent judicial experience with punitive damages
in defamation cases underscores the appropriateness
of such a ruling. Massive punitive damage awards of
over a million dollars have become commonplace. The
fear of these devastating verdicts has chilled the ex-
ercise of First Amendment freedoms and threatened
the very existence of media outlets ill-equipped to
absorb them.

This case does not require the Court to decide
whether punitive or presumed damages may ever be
awarded against a media or normedia defendant, nor
does it require the Court to decide whether there are
some categories of cases in which punitive damages
are inappropriate. The Court need only decide
whether Dun & Bradstreet is entitled to the minimum
protection it has sought in the case—the actual mal-
ice standard. The Court should decide that question
in the affirmative, and leave the remaining questions
concerning punitive and presumed damages to a case
in which they are squarely presented and fully
briefed.

5

ARGUMENT

I. GERTZ v. ROBERT WELCH, INC. LEFT OPEN THE
QUESTION WHETHER PUNITIVE AND PRE-
SUMED DAMAGES MAY BE AWARDED IN A
DEFAMATION CASE

The Vermont Supreme Court saw the “critical is-
sue” in this case as whether the “qualified protections
afforded the media in ‘private’ defamation actions, as
set forth in Gertz, [should] be extended to actions in-
volving nonmedia defendants.” J. App. 37. Like-
wise, the petitioner has framed the issue before the
Court as “whether the First Amendment’s limitations
on the award of presumed and punitive damages for
libel, first enunciated in Gertz v. Robert Welch, Inc.,

. . apply to ‘nonmedia’ defendants.” Petition i.
This framing of the issue is inadequate. It supposes
that the Court has already “enunciated” a rule for
media defendants, and that the only remaining ques-
tion is whether nonmedia defendants are entitled to
the same rule. There is no settled rule, however:
Gertz did not resolve the question whether punitive
or presumed damages may ever be awarded against a
media defendant. This case therefore cannot be de-
cided simply by asking whether there is a basis for
distinguishing between media and nonmedia defend-
ants.

Gertz did not hold that presumed and punitive dam-
ages may be awarded against a media defendant in
favor of a private libel plaintiff upon a showing of
actual malice—that is, knowledge of falsity or reck-
less disregard for the truth. New York Times Co.
v. Sullivan, 376 U.S. 254, 280 (1964). Nor did the
Court in Gertz make that pronouncement by way of
dictum. It noted only that presumed and punitive
damages cannot be recovered by a private libel plain-
tiff when the private plaintiff has not even shown

6

actual malice under New York Times: “the States
may not permit recovery of presumed or punitive
damages, at least when liability is not based on a
showing of knowledge of falsity or reckless disregard
for the truth.” 418 U.S. at 349. That is all the Court
had to decide to resolve the damage issue in Gertz,
for the district court and court of appeals agreed
there was no showing of actual malice in Gertz, and
this Court did not disturb that finding. Whether a
private (or public) figure libel plaintiff can recover
presumed or punitive damages when actual malice is
proven is a question that was not before the Court in
Gertz and which preperly was not decided.

Although many lower courts have found in Gertz’s
double negative the implication that punitive dam-
ages are permitted upon a showing of actual malice,
they recognize that the Court has left this question
open. See, e.g., Maheu v. Hughes Tool Co., 569 F.2d
459, 478 (9th Cir. 1978) ; Buckley v. Littell, 539 F.2d
822, 897 (2d Cir. 1976), cert. denied, 429 U.S. 1062
(1977) ; Davis v. Schuchat, 510 F.2d 731 (D.C. Cir.
1975); Restatement (Second) of Torts § 621, com-
ment d (1977). This Court itself seems implicitly to
have acknowledged that the question remains open,
at least with respect to public figure plaintiffs, when
in Smith v. Wade, —— U.S. ——, 103 S.Ct. 1625,
1639 n.19 (1983), it declined to “intimate [a] view
on any First Amendment issues” raised by such
opinions.

Gertz would hardly have been an appropriate case
in which to resolve all issues pertaining to punitive
and presumed damages in defamation cases. The
parties did not brief the issue of punitive or pre-
sumed damages, and there was no separate award of
punitive damages in the case.

7

In Gertz, the Court rejected the view of the plural-
ity in Rosenbloom v. Metromedia, Inc., 403 U.S. 29
(1971), that even a private figure must show actual
malice in challenging a publication on a matter of
public interest. A private individual, the Court held,
is required by the Constitution only to prove fault
by the publisher. That decided the basic issue before
the Court, but the Court did not stop there. It recog-
nized that the logic of its decision, while dictating a
lower standard of liability for private figures, also
required limitations on the types of damages recov-
erable in libel actions—specifically, presumed dam-
ages and punitive damages. The Court opted for a
less rigorous standard of liability for private indi-
viduals “in recognition of the strong and legitimate
state interest in compensating private individuals for
injury to reputation.” 418 U.S. at 348-49. The Court
added, however:

But this countervailing state interest extends no
further than compensation for actual injury. For
the reasons stated below, we hold that the States
may not permit recovery of presumed or puni-
tive damages, at least when liability is not based
on a showing of knowledge of falsity or reckless
disregard for the truth.

Id. at 349 (emphasis added).

The Court was careful not to state that presumed
and punitive damages may be recovered when liability
is based on a showing of actual malice; it simply
stated that at least when, as in Gertz, there is no
proof of actual malice, there can be no presumed or
punitive damages. The ‘Court, in short, cautioned
that the rationale for permitting the recovery of ac-
tual damages upon a showing of fault did not extend

8

to the recovery of presumed and punitive damages.
But the Court did not purport to define what circum-
stances, if any, would warrant the imposition of pre-
sumed or punitive damages.

While Gertz cannot be read to resolve the question
whether punitive and presumed damages may be re-
covered, the reasoning of the Court’s opinion suggests
strongly that punitive and presumed damages shouid
never be awarded. On the subject of presumed dam-
ages, the Court said:

The largely uncontrolled discretion of juries to
award damages where there is no loss unneces-
sarily compounds the potential of any system of
liability for defamatory falsehood to inhibit the
vigorous exercise of First Amendment freedoms.
Additionally, the doctrine of presumed damages
invites juries to punish unpopular opinion rather
than to compensate individuals for injury sus-
tained by the publication of a false fact. More to
the point, the States have no substantial interest
in securing for plaintiffs such as this petitioner
gratuitous awards of money damages far in ex-
cess of any actual injury.

418 U.S. at 349.

The Court’s concern about the impact of punitive
damages upon freedom of expression was made
equally clear:

We also find no justification for allowing awards
of punitive damages against publishers and
broadcasters held liable under state-defined
standards of liability for defamation. In most
jurisdictions jury discretion over the amounts
awarded is limited only by the gentle rule that
they not be excessive. Consequently, juries assess
punitive damages in wholly unpredictable

9

amounts bearing no necessary relation to the ac-
tual harm caused. And they remain free to use
their discretion selectively to punish expressions
of unpopular views. Like the doctrine of pre-
sumed damages, jury discretion to award puni-
tive damages unnecessarily exacerbates the dan-
ger of media self-censorship, but, unlike the for-
mer rule, punitive damages are wholly irrelevant
to the State interest that justifies a negligence
standard for private defamation actions. They
are not compensation for injury. Instead they
are private fines levied by civil juries to punish
reprehensible conduct and to deter its future oc-
currence.

418 U.S. at 350.

The dangers of presumed and punitive damages
could not have been stated more clearly. Both inhibit
the vigorous exercise of First Amendment freedoms
by permitting recovery of massive damage awards un-
related to actual injury. Both invite juries to pun-
ish unpopular speakers and the expression of unpop-
ular views. Indeed, punitive damages in defamation
cases are expressly designed to punish the exercise
of free speech. There is certainly a serious question
whether damage awards fraught with these dangers
can be squared with the Constitutional guarantees of
free speech and free press.

It. PUNITIVE AND PRESUMED DAMAGES FOR DEF-
AMATION VIOLATE THE FIRST AND FOUR-
TEENTH AMENDMENTS

Punitive damages are a disfavored anomaly in any
context. They are unfaithful to the “fundamental
premise of our legal system . . . that damages are
awarded to compensate the victim.” Smith v. Wade,

10

103 S.Ct. at 1641 (Rehnquist, J., dissenting). They
can be used to punish unpopular defendants. Id.; see
Electrical Workers v. Foust, 442 U.S. 42, 50-51 n.14
(1979). Because they are unpredictable and often
enormous, they encourage wanecessary litigation as a
means to gratuitous jackpots. And the threat of ex-
pensive litigation and arbitrary awards can chill not
only undesirable but also “desirable conduct.” Smith
v. Wade, 103 S.Ct. at 1642 (Rehnquist, J., dissenting).

These concerns have special force in the area of
free speech. It is a keystone of First Amendment
jurisprudence that speech must not be “chilled” be-
cause of our “profound national commitment to...
uninhibited, robust, and wide-open” debate. New
York Times Co. v. Sullivan, 376 U.S. at 270. Yet the
very purpose, and the undeniable effect, of punitive
damage awards in defamation cases is to punish and
deter speech. Punitive damages and the First Amend-
ment are thus fundamentally at cross-purposes.

It is no answer to this conflict to say that punitive
damage awards will deter only unprotected speech:
“any system that punishes certain speech is likely to
induce self-censorship by those who would otherwise
exercise their Constitutional freedom.” Rosenbloom
v. Metromedia, 403 U.S. at 64-65 (Harlan, J., dis-
senting). Those with lawful messages to convey
“steer far wider of the unlawful zone” because the
magnitude of the penalty attached to ynprotected
speech is so uncertain and potentially so great.
Speiser v. Randall, 357 U.S. 518, 526 (1958); see
Rosenbloom, 403 U.S. at 82 (Marshall, J., dissenting)
(“the size of the potential judgment that may be ren-
dered against the press must be the most significant
factor in producing self-censorship”). In awarding

11

punitive damages, courts necessarily endorse the chill-
ing of First Amendment liberties.

As noted above, this Court in Gertz expressly rec-
ognized the chilling effect of punitive and presumed
damage awards in defamation cases. See pp. 8-9,
supra. And Gertz is only the most recent of a num-
ber of opinions in which the Justices of this Court
have noted that these awards are constitutionally sus-
pect. In New York Times Co. v. Sullivan, the Court
commented that “the pall of fear and timidity im-
posed [by large damage awards] .. . is an atmos-
phere in which the First Amendment freedoms can-
not survive.” 376 U.S. at 278. Justice Black wrote
in concurrence that “huge verdicts . . . threaten the
very existence” oi a virile press. Jd. at 294. In
Rosenbloom, Justice Harlan abandoned his earlier
conclusion in Curtis Publishing Co. v. Butts, 388 U.S.
130 (1967) (plurality opinion), that the First
Amendment does not in any way limit punitive dam-
ages. With the cautionary remark that “matters are
in flux,” 403 U.S. at 72 n.3, Justice Harlan wrote
that he now thought the Constitution imposed “at a
minimum” two limits on punitive damage awards:
there must be proof that “the speaker acted out of
express malice,” and punitive awards must “bear a
reasonable and purposeful relationship to the actual
harm done.” Jd. at 78, 77 (dissenting opinion; ma-
jority did not address question of punitive damages)
(emphasis added). Justice Marshall and Justice Stew-
art concluded in Rosenbloom that any award of puni-
tive or presumed damages in a defamation case is un-
constitutional, because “the fear of the extensive
awards that may be given . . . must necessarily pro-
duce the impingement on freedom of the press rec-

12

ognized in New York Times.” Id. at 83 (dissenting
opinion ).

Justices Marshall and Stewart later joined the
Court’s opinion in Gertz. Indeed, the votes of these
two Justices, who had previously rejected punitive
and presumed damages altogether, were essential to
the majority in Gertz. The opinion they joined does
not contradict their earlier views. The Court’s state-
ments in Gertz are no more than tentatively worded
dicta which “leave open the possibility that punitive
damages may in time be found too intimidating to
free expression to be allowed at all.” Lewis, New
York Times v. Sullivan Reconsidered: Time To Re-
turn to “The Central Meaning Of The s"irst Amend-
ment”, 83 Colum. L. Rev. 603, 617 (1983).

Justice Harlan, noting that the law with respect to
punitive damages is “in flux,” emphasized twice in
Rosenbloom the importance of “further judicial ex-
perience in this area” before any authoritative rule
could be stated. 403 U.S. at 74, 77. By now the
lessons of experience are clear: in the past few years,
the fear that punitive damage awards could be used
to censor the press has become a reality. When Gertz
was decided in 1974, massive damage awards against
the press were virtually unheard of. Today, they have
become commonplace.

@ In April 1979 a jury returned a verdict of
$4.5 million, including $1.5 million in punitive
damages, against the San Francisco Examiner
and its reporters. The plaintiffs, two policemen
and a prosecutor, had complained of a series of
articles describing their role in securing the con-
viction of a youth on a murder charge. McCoy
vy. The Hearst Corp., Civ. No. 49915 (Cal. Ct.
App., 1st App. Dist., Div. 4). An appeal is pend-
ing.

13

® In May 1980 a jury awarded a county sheriff
$200,000 in compensatory damages and $500,000
in punitive damages against a small local news-
paper, the Ann Arbor News, based on articles
which accused the sheriff of improprieties includ-
ing death threats against one of his deputies,
brutality against private citizens, and the mis-
appropriation of public funds. The verdict was
reversed on appeal on the ground that the evi-
dence could not support a finding of actual mal-
ice. Postill v. Booth Newspapers, 325 N.W.2d
511 (Mich. App. 1982).

© In June 1980 The Alton (Illinois) Telegraph,
a respected publication with a circulation of
38,000 and net worth of about $3 million, was
ordered to pay $9.2 million, including $2.5 mil-
lion in punitive damages, to a local builder be-
cause two of its reporters had written a memo-
randum to a U.S. Justice Department investiga-
tor passing on a tip that the builder was receiv-
ing money from the Mafia in the form of bank
loans. Green v. Alton Telegraph Printing Co.,
107 Ill. App. 755, 488 N.E.2d 203 (1982).

© In February 1981 a federal court jury in Wyo-
ming awarded the astounding sum of $26.5 mil-
lion—$1.5 million in compensatory damages and
$25 million in punitive damages—to a former
beauty pageant winner who complained she was
defamed by a fictional article in Penthouse mag-
azine. This judgment was reduced by the trial
court to $14 million, and reversed by the Court
of Appeals on the ground that Penthouse’s fic-
tional article could not reasonably be understood
as describing any actual facts about the plaintiff.
Pring v. Penthouse, International, Ltd., 695 F.2d
438 (10th Cir. 1982), cert. denied, —— U.S.
——, 103 S.Ct. 3112 (1983).

14

®@ In March 1981 a California jury awarded
$300,000 in compensatory damages and $1.3 mil-
lion in punitives to Carol Burnett, who com-
plained that the National Enquirer falsely re-
ported she had engaged in ijoud and boisterous
behavior in a Washington, D.C. restaurant.
Burnett v. National Enquirer, Inc., 7 Media L.
Rep. [BNA] 1321 (Cal. Super. 1981). The ver-
dict was remitted by the trial court to $800,000
and reduced on appeal to $200,000. Burnett v.
National Enquirer, Inc., 144 Cal.App.3d 991, 193
Cal. Rptr. 205 (1983). A further appeal is
pending.

@ A Texas jury returned a verdict of $1 million
in compensatory damages and $1 million in puni-
tive damages against the publisher of the Dallas
Morning News in a case brought by a benefactor
of a state university who was involved in a con-
troversy over the firing of several faculty mem-
bers and the resignation of the president. The
plaintiff had alleged that his comments on the
controversy were falsely characterized as threats
against university officials. The judgment was
reversed by a court of appeals on the ground that
the allegedly defamatory statements were either
true or protected statements of opinion, and on
the further ground that there was no evidence of
actual malice. A. H. Belo Corp. v. Rayzor, 644
S.W.2d 71 (Tex. App. 1982).

® In July 1982 a Washington Post story that
Mobil President William Tavoulareas had “set
up” his son in a ship management firm resulted
in a $2 million jury verdict, including $1.8 mil-
lion in punitive damages, against the Post. Judg-
ment notwithstanding the verdict was subse-
quently entered in the Post’s favor on the ground
that there was no evidence of actual malice.

15

Tavoulareas v. The Washington Post Company,
567 F. Supp. 651 (D.D.C. 1983). Plaintiff’s ap-
peal is pending.

© A verdict of zero compensatory damages and
$2.5 million punitive damages was entered
against an author and publisher whose book mis-
takenly asserted that the plaintiff had been in-
dicted three times for the unauthorized practice
of optometry. The author had confused plaintiff
with his brother. Rogers v. Doubleday, 644 S.W.
2d 833 (Tex. App. 1982). The case is on appeal
before the Texas Supreme Court.

© In May 1983 a judge entered a verdict of $2
million in compensatory damages and $5 million
in punitive damages in favor of an Atlantic City
hotel owner who claimed that an article in Phila-
delphia Magazine falsely characterized him as a
drug dealer. Edghill v. Municipal Publications,
Inc., No. 2371 (Pa. Ct. Common Pleas, May
Term 1972). Defendant’s motion to recuse the
trial judge is pending on appeal.

® In June 1983 a jury awarded $4.5 million, in-
cluding $3 million in punitive damages, to a for-
mer Philadelphia district attorney, Richard
Sprague, for an article in the Philadelphia In-
quirer raising questions about the propriety of
Sprague’s participation in a homicide case involv-
ing the son of his close friend, a former state
police commissioner. Sprague v. Walter, No.
3644 (Pa. Ct. Common Pleas, April Term 1973).
The Jnquirer’s motion for a new trial is pending.

@ In September 1983 a Texas jury awarded
$600,000 in compensatory damages and $1 mil-
lion in punitive damages against a television
station which reported that a company in the
business of armorplating civilian vehicles for

16

sale principally in Central America was under
investigation by the Bureau of Alcohol, Tobacco,
and Firearms for smuggling guns. International
Security Group, Inc. v. The Outlet Co., No. 79-
CI-10293 (Dist. Ct., 224th Jud. Dist., Bexar Co.).

® Recently, a federal court jury in Colorado
awarded $3.8 million in presumed damages to a
company whose sales and employees were under-
stated in a financial report prepared by the peti-
tioner in this case, Dun & Bradstreet. Sunward
Corp. v. Dun & Bradstreet, Inc., Civil Action No.
82-K-147 (D. Colo.).

To be sure, many of these awards are reduced or
set aside entirely by the trial court or the court of
appeals. But that does not mitigate their chilling ef-
fect. Indeed, the high rate with which these huge
awards are set aside bears out the view that juries
award punitive damages to punish unpopular views
or publications, with indifference to the values of free
speech and free press, and disregard for even the
minimum requirements of the law.

One case dramatically illustrates that the prospect
of securing a reversal or reduction in a punitive dam-
age award is small comfort to a small newspaper
faced with a huge jury verdict. The $9.2 million
judgment against The Alton Telegraph forced the
newspaper into bankruptcy and compelled it to settle
the case before the appeal it had prepared could be
heard. That appeal may well have been meritorious:
it raised the issues whether the complaint, filed seven
years after the allegedly defamatory memorandum
was sent, was barred by the statute of limitations;
whether the memorandum was the legal cause of the
plaintiff’s alleged damages; and whether the memo-
randum, which had been sent to the Justice Depart-

17

ment, was protected by the qualified common law
privilege to report allegations of wrongdoing to law
enforcement officials. Although these arguments may
well have prevailed on appeal, the Telegraph simply
could not afford to pursue them, and chose instead to
settle the case for $1.4 million in order to save itself
from extinction. “(How Libel Suit Sapped the Crusad-
ing Spirit of a Small Newspaper,” The Wall Street
Journal, September 29, 1983, at 1.

Today, The Alton Telegraph still feels the chilling
effect of its libel judgment. Its editor, publisher and

partial owner, Steven A. Cousley, told a Wall Street
Journal reporter:

We are like a tight end who hears footsteps
everytime he runs to catch a pass. . . . Wouldn’t
you be gun-shy if you nearly lost your liveli-
hood and your home?
Id. According to The Wall Street Journal story, the
Alton Telegraph

appears to be shying away from important
stories. When someone called recently with a tip
about misconduct in a sheriff’s office, Steven
Cousley decided against investigating. ‘Let some-
one else stick their neck out this time,’ a reporter
heard him tell an editor. (Asked about the re-
mark, Mr. Cousley says, ‘I probably said that.’)

Id. at 22.

The huge damage awards that juries have returned
in recent defamation cases have unquestionably dis-
couraged the “uninhibited, robust, and wide-open”
inquiry and debate that New York Times Co. v. Sulli-
van was intended to foster. 376 U.S. at 270. These
awards can threaten the very existence of some pub-

7 and they dampen the enthusiasm and vigor
of all.

18

Whether or not a newspaper can survive a suc-
cession of such judgments, the pall of fear and
timidity imposed upon those who would give voice
to public criticism is an atmosphere in which the
First Amendment freedoms cannot survive.

Id. at 278.

Particularly in the light of experience in recent
years, the question must be posed: what legitimate
state interest can justify punitive and presumed dam-
ages awards that have the undeniable effect, and in
the case of punitives the express purpose, of chilling
freedom of speech and of the press? On this point
the language of Gertz is unequivocal. The states have
“no substantial interest in securing for [defamation]
plaintiffs . . . gratuitous awards of money damages
far in excess of any actual injury.” 418 U.S. at 349
(emphasis added). The only “legitimate State inter-
est” in authorizing juries to award damages for def-
amation is “the compensation of individuals.” Jd. at
341. See also id. at 348-49; Rosenbloom, 403 U.S.
at 66 (Harlan, J. dissenting) (“the legitimate func-
tion of libel law must be understood as that of com-
pensating individuals for actual, measurable harm’’) ;
Curtis Publishing Co. v. Butts, 388 U.S. at 153. And
punitive damages are “wholly irrelevant” to that
state interest. Gertz, 418 U.S. at 350.

Because of the impact on protected speech of any
remedy for unprotected speech, state remedies “must
reach no farther than is necessary to protect the le-
gitimate interest involved.” Gertz, 418 U.S. at 349;
see Keyishian v. Board of Regents, 385 U.S. 589, 602-
04 (1967). It is plain, indeed tautological, that per-
mitting recovery of proven actual damages adequately
protects the state’s legitimate interest in compensa-
tion. Punitive and presumed damages are unneces-

19

sary to protect that interest and are therefore un-
constitutional.

Even if the deterrence of unprotected speech were
a “legitimate function of libel law,” Rosenbloom, 403
U.S. at 66 (Harlan, J., dissenting)—and no opinion
of this Court suggests that it is—unprotected defam-
atory speech is effectively and sufficiently deterred by
“the very possibility of having to engage in litigation,
an expensive and protracted process,’ Rosenbloom,
403 U.S. at 52, and by the threat of compensatory
damage awards. Thus in Sprouse v. Clay Communi-
cations, Inc., 211 S.E. 2d 674, 692 (W. Va.), cert.
denied, 423 U.S. 882 (1975), the West Virginia Su-
preme Court of Appeals rejected punitive damages on
the ground that actual damages were “adequate for
the purpose of dissuading publishers from similar
willful and reckless conduct in the future.” See also
Maheu v. Hughes Tool Co., 384 F.Supp. 166, 170-71
(C.D.Cal. 1974), rev’d in part and aff'd in part, 569
F.2d 459 (9th Cir. 1978). Assuming, arguendo, that
there could be a legitimate state interest in providing
an additional measure of punishment or deterrence in
some cases, the present system of punitive damage
awards is intolerable because punitive damages, “lim-
ited only by the gentle rule that they not be exces-
sive,’ Gertz, 418 U.S. at 350, are not narrowly tai-
lored to promoting that interest. See, e.g., Keyishian
v. Board of Regents, 385 U.S. at 602-04. Punitive
damages are unpredictable in amount and often dis-
proportionate to any harm actually done or reasonably
foreseen. The largely uncontrolled discretion of juries
to award punitive damages itself renders them un-
suitable instruments to control unprotected speech,
because the terror they inspire chills protected speech
as well.

20

In the final analysis, damage awards whose very
purpose is to punish speech have no place in a
system that values and protects freedom of speech—
and punitive and presumed damage awards which
threaten the vigor and, in some cases, the very ex-
istence of the press, cannot be reconciled with a sys-
tem that values and protects freedom of the press.
Punitive and presumed damages, in short, cannot be
squared with the First Amendment.’

Ill. THE JUDGMENT IN THIS CASE SHOULD BE RE-
VERSED ON THE GROUND THAT DUN & BRAD-
STREET IS ENTITLED TO THE MINIMUM PRO-
TECTION IT HAS ASKED FOR

There are, amicus submits, a number of open ques-
tions concerning the availability of punitive and pre-

2 Three states have held that the First and Fourteenth
Amendments bar punitive damages for libel plaintiffs who
recover acequate compensatory damages. Sprouse v. Clay
Communications, Inc., 211 S.E.2d at 692; McHale v. Lake
Charles American Press, 390 So.2d 556 (La. App. 1980), cert.
denied, 452 U.S. 941 (1981); Stone v. Essex County News-
papers, Inc., 367 Mass. 849, 859-60, 330 N.E.2d 161, 169
(1975). The Supreme Judicial Court of Massachusetts rested
its holding on both state and federal constitutional grounds:

We reject the allowance of yunitive damages in this
Commonwealth in any defamation action, on any state of
proof, whether based on negligence, or reckless or wilful
conduct. We so hold in recognition that the possibility
of excessive and unbridled jury verdicts, grounded on
punitive assessments, may impermissibly chill the exer-
cise of First Amendment rights by promoting apprehen-
sive self-censorship.

367 Mass. at 859-60, 330 N.E.2d at 169.

At least two states have held that punitive damages in
libel cases are barred by the free speech and free press guar-
antees of their own constitutions. Hall v. May Department
Stores, 292 Or. 181, 687 P.2d 126 (1981); Tasket v. KING
Broadcasting Co., 86 Wash. 2d 439, 546 P.2d 81 (1976).

21

sumed damages in libel cases, but they need not and
should not all be resolved in this case. As the fore-
going discussion demonstrates, there is a serious ques-
tion whether punitive and presumed damages should
ever be allowed in a defamation case. If they were to
be approved under any circumstances, there would
certainly arise the troubling question whether they
should ever be permitted against speech that touches
upon public affairs or matters of public interest.*

* This Court has often said that speech concerning public
affairs and public issues is at the core of the First Amend-
ment’s protection. See, e.g., Mills v. Alabama, 384 U.S. 214,
218 (1966) (“a major purpose of [the First] Amendment was
to protect the free discussion of governmental affairs”) ;
Garrison V. Louisiana, 379 U.S. 64, 74-75 (1964) (“[S]peech
concerning public affairs is more than self-expression; it is
the essence of self-government.”); New York Times Co. Vv.
Sullivan, 376 U.S. at 270 (“debate on public issues should be
uninhibited, robust, and wide-open”). And the Court has em-
phasized that “[f]reedom of discussion, if it would fulfill its
historic function in this nation, must embrace all issues about
which information is needed or appropriate to enable the
members of society to cope with the exigencies of their pe-
riod.” Thornhill v. Alabama, 310 U.S. 88, 102 (1940). In
Rosenbloom v. Metromedia, a plurality of this Covrt con-
cluded that publications on matters of public interest and con-
cern should receive the benefit of the New York Times stand-
ard for recovery of compensatory damages. The Court re-
jected that view in Gertz, because it abridged to an unac-
ceptable degree the state’s interest in providing “a legal rem-
edy for defamatory falsehood injurious to the reputation of a
private individual.” 418 U.S. at 346. But that interest in
compensating individuals who are defamed cannot justify an
award of punitive damages. Nor can any state interest jus-
tify a damage award intended to punish speech on a matter
of public interest and concern.

In Gertz the Court expressed concern about calling upon
judges to determine “which publications address issues of

22

There may be a question, as the Petition for Certio-
rari puts it, whether there is a basis for distinguish-
ing between the press and the rest of the public when
it comes to punitive damages.* There may also be a
question whether, if punitive damages were to be
allowed, proof in addition to knowledge of falsity or

‘general or public interest’ and which do not.” 418 U.S. at
846. The line may be difficult (and in some contexts danger-
ous) to draw, and that difficulty may be an additional reason
to prohibit punitive damages altogether.

¢ As this Court recently emphasized, the explicit guarantee
of freedom of the press was important to the Framers. Min-
neapolis Star v. Minnesota Commissioner of Revenue,
U.S. ——, 103 S. Ct. 1365, 1871 (1983). In tha. case and
many others, the Court has emphasized the special role that
the press plays in informing the public and guaranteeing that
government is responsive to the public’s will. See, e.g., Land-
mark Communications, Inc. v. Virginia, 435 U.S. 829, 840
(1978) ; Cox Broadcasting Corp. v. Cohn, 420 U.S. 469, 491-92.
(1975) ; Mills v. Alabama, 384 U.S. at 219; Grosjean v. Amer-
ican Press Co., 297 U.S. 233, 250 (1936). That is not to say
that members of the public, who enjoy the protection of the
free speech provision of the First Amendment, should not enjoy
full protection against punitive and presumed damage awards
for defamation. Certainly there could be no basis for dis-
tinguishing between the established press and the lonely
pamphleteer in defining the media for purposes of defamation
law. Moreover, any line between media and nonmedia de-
fendants in defamation cases would be a troubling and poten-
tially mischievous one, which could effectively limit the diver-
sity of viewpoints and information available to the public.
Dun & Bradstreet apparent'y does not argue for media status,
but as its own information business illustrates, information
that is of insufficient general interest to warrant publication
in the mass media may still be of vital importance to a small

.ment of the public.

23

reckless disregard for the truth should be required—
namely, ill will, spite or hatred.°

The Court need not resolve these issues in this case.
Dun & Bradstreet, a company that published certain
financial and credit information about another com-
pany, seeks the protection of the actual malice stand-
ard to the extent that punitive and presumed damages
are at issue. Surely it is entitled to no less protection
than that, and the Court should so hold. Punitive

5 In Smith v. Wade, the Court expressly declined to intimate
any view on the First Amendment issues raised by decisions
permitting punitive damage awards in favor of a public offi-
cial or public figure upon the showing of actual malice re-
quired for the recovery of compensatory damages. 103 S. Ct.
at 1639 n.19. In his Rosenbloom dissent, Justice Harlan ex-
pressed the view that punitive damages should not be per-
mitted unless “the plaintiff has proved that the speaker acted
out of express malice.” 403 U.S. at 77 (emphasis added).
Such proof—that the speaker was motivated by ill will or
personal animus—is quite different from proof of “actual
malice” under New York Times. See, e.g., Letter Carriers v.
Austin, 418 U.S. 264, 281-82 (1974); Greenbelt Cooperative
Publishing Ass’n Vv. Bresler, 398 U.S. 6 (1970); Beckley
Newspapers Corp. V. Hanks, 389 U.S. 81, 82 (1967) ; Rosen-
blatt v. Baer, 383 U.S. 75, 84 (1966); Henry v. Collins, 380
U.S. 356 (1965). Requiring such proof of bad motive would
comport with “the common-law standard of ‘malice’ generally
required under state tort law to support an award of punitive
damages.” Cantrell v. Forest City Publishing Co., 419 U.S. 245,
252 (1974), and might provide some additional protection
against unwarranted punitive damage awards. Two states have
held that punitive damages are barred by their constitutions
unless there is proof that the publisher acted with actual hatred
or ill will. AAFCO Heating & Air Conditioning Co. v. North-
west Publications, Inc., 162 Ind. App. 671, 321 N.E.2d 580
(1974), cert. denied, 424 U.S. 918 (1976); Walker v. Colo-
rado Springs Sun, Inc., 188 Colo. 86, 538 P.2d 450, cert. de-
nied, 423 U.S. 1025 (1975).

24

damages for defamatory falsehoods should never be
permitted upon facts of the sort deemed sufficient by
the Vermont Supreme Court in this case—that Dun
& Bradstreet’s employee “inadvertently” mistook the
bankruptcy of a former Greenmoss employee for the
bankruptcy of Greenmoss itself, and thai Dun &
Bradstreet failed to adhere to its routine practice of
prepublication verification. J. App. 35. That may be
evidence of negligence, but not evidence that war-
rants the imposition of punitive damages under any
standard compatible with the First Amendment. The
Court should hold that Dun & Bradstreet is at least
entitled to the minimum protection against punitive
and presumed damages it has asked for—namely, the
actual malice standard of New York Times—and it
should leave the remaining questions concerning puni-
tive and presumed damages to a case in which they
are squarely presented and fully briefed.

IV. CONCLUSION

For the foregoing reasons, the judgment of the Su-
preme Court of Vermont should be reversed.

Respectfully submitted,

Davip E. KENDALL

KEVIN T. BAINE
WILLIAMS & CONNOLLY
839 17th Street, N.W.
Washington, D.C. 20006
(202) 331-5000

Attorneys for Amicus Curiae

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0018%3A05. Public record. Not legal advice.