Amicus Curiae Brief — Pacific Mutual Life Insurance v. Haslip
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PACIFIC MUTUAL LIFE INSURANCE CoapfPAN r,
. Petitioner,
CLEOPATRA HASLIP, CYNTHIA CRAIG, ALMA M. CALHOUN
and EDDIE HARGROVE,
Respondents.
On Writ of Certiorari to the
Supreme Court of Alabama
BRIEF OF AMICI CURIAE
CBS INC., CAPITAL CITIES/ABC, INC.,,
DOW JONES & COMPANY, INC., THE HEARST
CORPORATION, KNIGHT-RIDDER, INC., NATIONAL
BROADCASTING COMPANY, INC., REUTERS
INFORMATION SERVICES INC., THE TIME INC.
MAGAZINE COMPANY, TRIBUNE COMPANY,
UNITED PRESS INTERNATIONAL, INC.,
THE WASHINGTON POST, WESTINGHOUSE
BROADCASTING COMPANY, INC., THE AMERICAN
SOCIETY OF NEWSPAPER EDITORS, ASSOCIATION
OF AMERICAN PUBLISHERS, MAGAZINE
PUBLISHERS OF AMERICA, INC., NATIONAL
ASSOCIATION OF BROADCASTERS,
RADIO-TELEVISION NEWS DIRECTORS ASSOCIATION,
REPORTERS COMMITTEE FOR FREEDOM
OF THE PRESS,
AND THE SOCIETY OF PROFESSIONAL JOURNALISTS,
IN SUPPORT OF PETITIONERS
Of Counsel: P. CAMERON DEVORE *
DOUGLAS P. JACOBS MARSHALL J. NELSON
CBS Inc. DONALD S. KUNZE
51 West 52nd Street DAVIS WRIGHT TREMAINE
New York, New York 10019 2600 Century Square
Attorney for CBS Inc. 1501 Fourth Avenue
Seattle, WA 98101-1688
(206) 622-3150
(Additional Of Counsel Counsel for Amici Curiae
listed inside cover) * Counsel of Record
WILSON - EPes PrinTING Co., Inc. - 789-0096 - WASHINGTON, D.C. 20001
BEST AVAILABLE COP)
STEVEN SADICARIO
Capital Cities/ ABC, Inc.
47 West 66th Street
New York, New York 10023
Attorney for Capital Cities/
ABC, Ine.
RICHARD J. TOFEL
Dow Jones & Company, Inc.
200 Liberty Street
New York, New York 10281
Attorney for
Dow Jones & Company, Inc.
VICTOR F. GANZI
ROBFRT J. HAWLEY
The Hearst Corporation
959 Eighth Avenue
New York, New York 10019
Attorneys for
The Hearst Corporation
JOHN C. FONTAINE
Knight-Ridder, Inc.
One Herald Plaza
Miami, Florida 33132
Attorney for
Knight-Ridder, Inc.
SANDRA S. BARON
National Broadcasting
Company, Inc.
30 Rockefeller Plaza
New York, New York 10112
Attorney for National
Broadcasting Company, Inc.
CONSTANCE A. HEYMANN
Reuters Information
Services Inc.
1700 Broadway
New York, New York 10019
Attorney for Reuters
Information Services Inc.
HARRY M. JOHNSTON III
The Time Inc. Magazine
Company
1271 Avenue of the Americas
New York, New York 10020
Attorney for The Time Inc.
Magazine Company
Davip D. HILLER
Tribune Company
435 N. Michigan .
Chicago, Illinois 60611
Attorney for Tribune Company
JAMES L. ARNOLD
United Press International, Inc.
9990 Lehigh Way, Third Floor
Fairfax, Virginia 22030
Attorney for United Press
International, Inc.
BARBARA PERCIVAL
The Washington Post
1150 - 15th Street, N.W.
Washington, D.C. 20071
Ativrney for
The Washington Post
MARTIN P. MESSINGER
MARK H. CHARLES
Wstinghouse Broadcasting
Company, Inc.
888 Seventh Avenue, 39th Floor
New York, New York 10106
Attorneys for Westinghouse
Broadcasting Company, Inc.
RICHARD M. SCHMIDT, JR.
CoHN & MARKS
1333 New Hampshire Ave.
Suite 600
Washington, D.C. 20036
Attorney for
American Society of
Newspaper Editors
R. BRUCE RICH
WEIL, GOTSITAL & MANGES
767 Fifth Avenue
New York, New York 10153
Attorney for
Association of
American Publishers
TINA A. RAVITZ
Vice President and Chief Counsel
Newsweek, Inc.
444 Madison Avenue
New York, New York 10022
Attorney for Magazine
Publishers of America, Inc.
HENRY L. BAUMANN
STEVEN A. BOOKSHESTER
National Association
of Broadcasters
1771 N Street, N.W.
Washington, D.C. 20036
Attorneys for National
Association of Broadcasters
JANE E. KIRTLEY
Executive Director
Reporters Committee for
Freedom of the Press
Suite 504
1735 Eye St., N.W.
Washington, D.C. 20006
Attorney for Reporters
Committee for Freedom
of the Press
BRUCE W. SANFORD
BAKER & HOSTETLER
1050 Connecticut Ave., N.W.
Washington, D.C. 10006
Attorney for The Society
of Professional Journalists
J. LAURENT SCHARFF
REED SMITH SHAW & McCLAy
1200 18th Street, N.W.
Washington, D.C. 20036
Attorney for Radio-Television
News Directors Association
TABLE OF CONTENTS
STATEMENT OF INTEREST |.
SUMMARY OF ARGUMENT |W.
tt ET RSP ee
I. THE EXPERIENCE OF MEDIA DEFEND-
II.
ITI.
ANTS IN LIBEL CASES HIGHLIGHTS THE
DANGERS OF UNRESTRAINED PUNITIVE
DAMAGE AWARDS .............
A. Punitive Damage Awards in Libel Cases
Have Increased Despite Constitutional Limits
Imposed by the Court ......0..
B. Punitive Damages Have Been Arbitrarily
Assessed Against Unpopular Defendants ___.
C. The “Prize” of Unrestrained Punitive Dam-
age Awards Has Encouraged Expensive and
Unnecessary Litigation 0.00000.
PUNITIVE DAMAGES ARE UNNECESSARY
AND INEFFECTIVE IN SERVING THEIR
THEORETICAL PURPOSES 000.
THE AWARD OF PUNITIVE DAMAGES AND
THE METHOD BY WHICH THEY ARE IM-
POSED VIOLATES DUE PROCESS RE-
QUIRED UNDER BOTH THE FIRST AND
FOURTEENTH AMENDMENTS ........0...
A. The First Amendment Requires the Highest
Due Process Where Punishment or Suppres-
sion of Speech Is Threatened ........................
B. The Award of Punitive Damages Fails to
Satisfy Even Minimum Standards of Due
RT RR ret a
C. The Award of Punitive Damages in Libel
Cases Fails to Satisfy Heightened Due
Process Standards Required by the First
Amendment ............... esumaeaed és
11
12
17
17
18
22
ii
TABLE OF CONTENTS—Continued
Page
D. Standardless and "eferential Appellate Re-
view of Punitive Damage Awards Cannot
Satisfy Constitutional Requirements ............ 24
CIT sectcccinsscttiititinnieniitesdinta att alae 26
APPENDIX A: Identity of Individual Amici .............. la
iff
TABLE OF AUTHORITIES
CASES: Page
Aetna Life Insurance Co. v. Lavoie, 475 U.S. 813
ID cia secbtihetinnilith its snnileniniiehiababesiadebliltinnanencdbisibens 3
Bankers Life and Casualty Co. v. Crenshaw, 486
ee I bch Sciaiciciciaheccaibbideiabeeniansbadidite’ 3, 20
Bantam Books, Inc. v. Sullivan, 872 U.S. 58
ID ciessinicasciientnnneeibtcenieitelahaithaseinecinnititnsialceniadnitcciicatinteiditiaden 4,18
Bose Corp. v. Consumers Union of United States,
Inc., 466 U.S. 485 (1984) ..........-..-..2----------00000e- 19, 24, 25
Breun v. Flynt, 726 F.2d 245 (5th Cir. ), cert. de-
nied, 469 U.S. 888 (1984) ....2....2.22.....2-eeeeeeeeeeeeeee 24
Brown & Williamson Tobacco Corp. v. Jacobson,
713 F.2d 262 (7th Cir. 1983). Silecnctihlnciiloah 22
Brown & Williamson Tobacco Corp. v. Jacobson,
827 F.2d 1119 (7th Cir. 1987), cert. denied,
485 U.S. 998 (1988) -.......--......22.--2.eeeeeeceeeeeeeeeeeeeees 9, 24
Browning-Ferris Industries of Vermont, Inc. v.
Kelco Disposal, Inc., 109 S. Ct. 2909 (1989) .....3, 19, 20
Buckley v. Littell, 589 F.2d 882 (2d Cir. 1976),
cert. denied, 429 U.S. 1062 (1977) ...................... 6, 22
Curtis Publishing Co. v. Butts, 388 U.S. 130
(|. ESE ERC a ve eee 4
Davis v. Schuchat, 510 F.2d 781 (D.C. Cir. 1975) .. 22
Douglass v. Hustler Magazine, Inc., 769 F.2d 1128
(7th Cir. 1985), cert. denied, 475 U.S. 1094
CII sicccensecsininsncninsntnntapesncnnenecnennennmnnnensmnnesipieashes 24
Dun & Bradstreet, Inc. v. Greenmoss Builders,
Inc., 472 U.S. 749 (1985) .........--------00---000--2ee-e-eeeeee passim
Electrical Workers v. Foust, 442 U.S. 42 (1979) .... 12
Fay v. Parker, 58 N.H. 342 (1872) .................-..-.--- 16
The Florida Star v. B.J.F., 109 S. Ct. 2603 (1989) .. 21
Freedman v. Maryland, 380 U.S. 51 (1965)............. 19, 24
George v. International Society for Krishna Con-
sciousness, 262 Cal. Rptr. 217 (Cal. App.1989).. 7-8
Gertz v. Robert Welch, Inc., 418 U.S. 828 (1974) ....passim
Gitlow v. New York, 268 U.S. 652 (1925) ..............--- 17
Guccione v. Hustler Magazine, 800 F.2d 298 (2d
Cir. 1986), cert. denied, 479 U.S. 1091 (1987)... 8
Harte Hanks Communications, Inc. v. Connaugh-
ton, 109 S. Ct. 2678 (1989) .................---------- 15, 19, 22, 24
tv
TABLE OF AUTHORITIES—Continued
Killibrew v. Abbot Laboratories, 359 So.2d 1275 ae
(La. 1978) .......... i aiinectecstins 16
Kingsley Books, Inc. v. Brown, 354 U.S. 4386
RS a SRT Ue ele eS ae 18
Lerman v. Flynt Distributing Co., 745 F.2d 128
(2d Cir. 1984), cert. denied, 471 U.S. 1045
GNI <ovnsdinacdpinsinhbhentamniinnaiian eco Baie 8
Lovell v. Griffin, 308 U.S. 444 (1988)... 18
Maheu v. Hughes Tool Co., 569 F.2d 459 (9th Cir.
ee ES ee 22
Maki v. Aluminum Bldg, Products, 73 Wash.2d 23,
436 P.2d 186 (1968) 202 16
McCoy v. Hearst Corp., 174 Cal. App. 3d 892, 220
Cal. Rptr. 848 (1985) 0 9
Miller v. Kingsley, 194 Neb. 128, 280 N.W.2d 472
fo ee ee eke) a ee 16
Monitor Patriot Co. v. Roy, 401 U.S. 265 (1971)... 24
NAACP v. Claiborne Hardware Co., 458 U.S. 886
ee ER SS ae 19
Near v. Minnesota, 288 U.S. 697 (1981).............. 17, 18, 23
Newport v. Fact Concerts, Inc., 458 U.S. 247
BREE aa Mn ae ESE, eee; Tg 12
Newton v. National Broadcasting Co., 677 F. Supp.
8, FR ee eet LN mee eee 8
New York Times Co. v. Sullivan, 376 U.S. 254
NR STS ae passim
New York Times Co. v. United States, 408 U.S.
Se ee ee 18
Organization for a Better Austin v. Keefe, 402 U.S.
RR ee OEE Re ee ee ee 18
Pacific Mutual Life Ins. Co. v. Haslip, 558 So.2d
ede, EERE Fe ree S| Ae 10
Philadelphia Newspapers, Inc. v. Hepps, 475 U.S.
767 (1986) ........... < 18
Police Department v. Mosley, 408 U.S. 92 (1972). 19
Pring v. Penthouse International, 695 F.2d 488
(10th Cir. 1982), cert. denied, 462 U.S. 1182
GD dihd lidicdclanachahdienhiititis aiitieigte i 8) 8
Rosenbloom v. Metromedia, Inc., 402 U.S. 29
(1971) . 4,5
Vv
TABLE OF AUTHORITIES—Continued
Page
Shuttlesworth v. Birmingham, 394 U.S. 147
EE SE a ee ae Cee 19
Smith v. Wade, 461 U.S. 30 (1983) -................ 4, 11, 16, 21
Southeastern Promotions, Ltd. v. Conrad, 420 U.S.
EET SS LE See ae eee eee 19
Speiser v. Randall, 357 U.S. 518 (1957) ................... 18
Sprague v. The Philadelphia Inquirer, New York
Times, May $1, 1990 at 1, col. 2 (Pa. Ct. Com.
GS SS SP 7
Sprouse v. Clay Communication, Inc., 158 W. Va.
427, 211 S.E.2d 674, cert. denied, 423 U.S. 991
FE ae ee ae ee 7
Srivastava v. Harte Hanks Communications, Inc.,
Communications Daily, May 7, 1990 (Tex. Ct.
Com. P1., formal judgment pending) ..................... 7
Stone v. Essex County Newspapers, Inc., 367 Mass.
849, 8330 N.E.2d 161 (1975) -......00022eeee ee 6, 7
Taskett v. King Broadcasting Co., 86 Wash.2d 439,
BD Be Oe TD rc seccccesestctececctecntccctenseccececernccsense 7
United States v. Carolene Products Co., 304 U.S.
EE ae oe © Coe 18
Vratsenes v. New Hampshire Auto, Inc., 112 N.H.
71, 289 A.2d 66 (1972) .....222. nee Sie) 16
Wheeler v. Green, 286 Or. 99, 598 P.2d 777 (1979).. 6
Young v. American Mini Theaters, 427 U.S. 50
(1976). CNS ae A Oe ae ee 18
CONSTITUTIONAL PROVISIONS:
U.S. Const. amend. I ....................-..c0.--0--.ececcececsseesesseees passim
U.S. Const. amend. IV... 2.2... eect eee een 4
U.S. Const. amend. V ooo... cece cece eee enone 4
U.S. Const. amend. VI .....22...22..2 eee eee eee eee eee 4
U.S. Const. amend. VIII 00.2... eee 3
U.S. Const. amend. XIV .....2.02....222---.22cceceneeneeeceeeeeeeee passim
OTHER AUTHORITIES:
Curley, “ ‘Chilling Effect’ How Libel Suit Sapped
the Crusading Spir:t of a Small Newspaper,”
Wall St. J., Sept. 29, 1983 at 1, col. 1 0... 7
vi
TABLE OF AUTHORITIES—Continued
Page
Franklin, Sving Media for Libel; A Litigation
Beis, TOE Bi. TOG Gi FO nciccceeteics. cccess ssc 6
Goodale, Centuries of Libel Erased by Times v.
Sullivan, 191 N.Y.L.J. 49 (1984) .......................... 9
Jeffries, A Comment on the Constitutionality of
Punitive Damages, 72 Va. L. Rev. 139 (1986) .... 4
Libel Defense Resource Center Bulletin No. 21
OR FR a ene 6
Libel Defense Resource Center, Recent Trends iin
Libel Damage Awards Against the Media, Libel
Defense Resource Center Bulletin No. 18 (De-
cember 15. 1986) ...... Pe Sete ane RIS Be RES enon 6
Libel Defense Resource Center Bulletin No. 1’
| EERE SE ap 6
Massing, The Libel Chill: How Cold Is It Out
There?, Colum. Journalism Rev. at 31 (May/
June, 1985) as 7
Note, The Constitutionality of Punitive Damages
in Libel Actions, 45 Fordham L. Rev. 1382
' ll — Sa TENDS OR IESE ED ENE OO ED | 7
Note, Punitive Damages and Libel Law, 98 Harv.
A | RES one eee Ne 8, 13, 15
Report, Committee on Communications Law, Puni-
tive Damages in Libel Actions, 42 Record of
Assoc. of Bar of City of New York 20 (Jan./
a alana teat eaeacelebaia 6
Restatement (Second) of Torts § 908 (2) (1977) . 15
Sack & Tofel, First Steps Down the Road Not
Taken: Emerging Limitations on Libel Damages,
OD is. Secs es, CI EMI Sissi <i sessentiscessensatarantoncrs 9,15
Van Alstyne, First Amendment Limitations on
Recovery from the Press, 25 Wm. & Mary L.
Rev. 793 (1984) ............ DI ie a ee ie ea — 2
Wheeler, The Constitutional Case for Reforming
Punitive Damages Procedures, 69 Va. L. Rev.
I ee
IN THE
Supreme Court of the United States
OCTOBER TERM, 1989
No. 89-1279
Paciric MUTUAL LIFE INSURANCE COMPANY,
Petitioner,
Ws
CLEOPATRA HASLIP, CYNTHIA CRAIG, ALMA M. CALHOUN
and EDDIE HARGROVE,
Respondents.
On Writ of Certiorari to the
Supreme Court of Alabama
BRIEF OF AMICT CURIAE
CBS INC., CAPITAL CITIES ABC, INC.
DOW JONES & COMPANY, INC., THE HEARST
CORPORATION, KNIGHT-RIDDER, INC., N ATIONAL
BROADCASTING COMPANY, INC., REUTERS
INFORMATION SERVICES INC., THE TIME INC.
MAGAZINE COMPANY, TRIBUNE COMPANY,
UNITED PRESS INTERNATIONAL, INC.
THE WASHINGTON POST, WESTINGHOUSE
BROADCASTING COMPANY, INC., THE AMERIC AN
SOCIETY OF NEWSPAPER EDITORS, ASSOC [ATION
OF AMERICAN PUBLISHERS, MAGAZINE
PUBLISHERS OF AMERICA, INC., NATIONAL
ASSOCIATION OF BROADCASTERS,
RADIO-TELEVISION NEWS DIRECTORS ASSOCI ATION,
REPORTERS COMMITTEE FOR FREEDOM
OF THE PRESS,
AND THE SOCIETY OF PROFESSIONAL JOURNALISTS,
IN SUPPORT OF PETITIONERS
9
—
STATEMENT OF INTEREST
This brief is submitted on behalf of nineteen amici
curiae who include broadcasters, news services, publishers,
and associations of working journalists and writers.* As
members of the media, these amici operate under the
constant threat of libel claims, almost all of which seek
punitive damages. In recent years, both the frequency
and amount of these awards have increased at an alarm-
ing rate.
The threat of punitive damage awards now affects the
nation’s media at all levels, from national news organiza-
tions to the smallest local newspapers and broadcasters,
and interferes with their vital role in the reporting and
discussion of public affairs. At a minimum, therefore,
these amici support the due process limitations urged by
the petitioner in this case.
However, these amici also believe that punitive dam-
ages awards in libel cases involving matters of public
concern are irreconcilable with the requirements of the
First Amendment. They therefore urge the Court to
recognize that its decision in the present case may also
have an impact in cases arising from discussion of pub-
lic aftairs, where mere limitations on punitive damage
awards may not be adequate to protect First Amend-
ment values,
SUMMARY OF ARGUMENT
The libel decisions of this Court have examined the
problem of unrestrained punitive damage awards at
length, and the Court has imposed constitutional limita-
tions on the award of such damages arising from speech
involving matters of public concern. These restraints, al-
though framed under the First Amendment, are essen-
tially due process concerns, and their reasoning has been
applied by the Court in non-libel cases as well. They
* Written consent of both parties has been filed with the Clerk of
the Court, as required by Supreme Court Rule 36.
3
serve as a valuable touchstone for addressing constitu-
tional limitations on punitive damages in general.
In any kind of case, the availability of unrestrained
punitive damages encourages unnecessary lititation, per-
mits arbitrary punishment of unpopular defendants, and
often deters conduct that is lawful, socially beneficial, and
even constitutionally protected. When balanced against
the ineffectiveness of such awards in serving even their
own theoretical purposes, the harm caused by the threat
of punitive damages far outweighs any arguable benefit.
Such an arbitrary system of punishment offends funda-
mental principles of due process. When it is employed
by juries to punish unpopular speech and speakers, it
violates the First Amendment as well. The First Amend-
ment requires that any form of government action that
threatens to punish or suppress speech must meet the
highest standards of due process. The unrestrained
award of punitive damages fails to satisfy even the mini-
mum stardards required by the Fourteenth Amendment
and is inherently inconsistent with the requirements of
the First Amendment.
ARGUMENT
I. THE EXPERIENCE OF MEDIA DEFENDANTS IN
LIBEL CASES HIGHLIGHTS THE DANGERS O}
UNRESTRAINED PUNITIVE DAMAGE AWARDS.
A. Punitive Damage Awards in Libel Cases Have In-
creased Despite Constitutional Limits Imposed by
the Court.
Well before the recent challenges to punitive damages
on Eighth and Fourteenth Amendment grounds,’ this
Court recognized the danger posed by punitive damages
under the First Amendment. In fact, the problem ot un-
restrained damage awards has been a constant theme in
1 See Browning-Ferris Industries of Vermont ]
posal, Inc., 109 S. Ct. 2909 (1989); Bankers Lite a 7
». Crensham, 486 U.S. 71 (1988); Aetna Life 1 .
Lavoie, 475 U.S. 813 (1986).
4
this Court’s efforts to reconcile the common law of libel
with competing First Amendment limitations.
In New York Times Co. v. Sullivan, 376 U.S. 254, 278
(1964), the Court recognized that the threat of unre-
strained punitive damages raises severe constitutional
problems as “a form of regulation that creates hazards
to protected freedoms markedly greater than those that
attend reliance on the criminal law.” (quoting Bantam
Books, Inc. v. Sullivan, 372 U.S. 58 (1963) ).°
In Curtis Publishing Co. v. Butts, 388 U.S. 130 (1967),
and again in Rosenbloom v. Metromedia, Inc., 403 U.S.
29 (1971), the discussion of punitive damage awards
occupied much of the Court’s attention. Justice Harlan,
originally supporting punitive damages in Butts, ex-
pressly retreated from that position in Rosenbloom and
concluded:
I would hold unconstitutional, in a private libel case,
jury authority to award punitive damages which is
unconfined by the requirement that these awards
bear a reasonable and purposeful relationship to the
actual harm done.
~ The Court observed:
A person charged with violation of this [criminal libel] statute
enjoys ordinary criminal-law safeguards such as the require-
ments of an indictment and of proof beyond a reasonabie doubt.
These safeguards are not available to the defendant in a civil
action .... And since there is no double-jeopardy limitation
applicable to civil lawsuits, this is not the only judgment that
may be awarded .. . for the same publications.
376 U.S. at 277: see also Smith v. Wade, 461 U.S. 30, 59 (1983)
(Rehnquist, J., dissenting) (“although punitive damages are ‘quasi-
criminal,’ .. . their imposition is unaccompanied by the types of
safeguards present in criminal proceedings”); Jeffries, A Comment
on the Constiiutionality of Punitive Damages, 72 Va. L. Rev. 139,
152-53 (1986); Wheeler, T? Constitutional Case for Re forming
Punitive Damages Procedures, 69 Va. L. Rev. 269, 322-33 (1983)
(suggesting application of Fourth, Fifth and Sixth Amendments
to punitive damages proceedings).
5
403 U.S. at 77 ‘Harlan, J., dissenting). In a separate
opinion, Justices Marshall and Stewart concluded that
punitive damages should be prohibited altogether in such
cases... These dissenting opinions became the foundation
for the majority opinion in Gertz v. Robert Welch, Ine.,
418 U.S. 223 (1974), where the Court concluded:
(P]unitive damages are wholly irrelevant to the
state interest that justifies a negligence standard for
private defamation actions. They are not compensa-
tion for injury. Instead, they are private fines levied
by civil juries....
Id. at 350.
Most recently, in Dun & Bradstreet, Inc. v. Greenmoss
Builders, Inc., 472 U.S. 749 (1985), four members of the
Court joined in an opinion reasserting the objections to
punitive awards discussed in Rosenbloom and Gertz,
stressing the “largely uncontrolled discretion” of juries
to assess damages “in wholly unpredictable amounts
bearing no necessary relation to the actual harm caused”
«s a rationale for the limitations imposed in Gertz. Id.
* 402 U.S. at 82-83 (Marshall, J., dissenting) :
[Punitive damages] serve the same function as criminal
penalties and are in effect private fines. Unlike criminal penal-
ties, however, punitive damages are not awarded within dis-
cernible limits but can be awarded in almost any amount.
Since there is not even an attempt to offset any palpable loss
and since these damages are the direct product of the ancient
theory of unlimited jury discretion, the only limit placed on
the jury in awarding punitive damages is that the damages
not be “excessive,” and in some jurisdictions that they bear
some relationship to the amount of compensatory damages
awarded. {Citation omitted.| The manner in which unlimited
discretion may be exercised is plainly unpredictable.
1Sre Dun & Rradstrect, Ine. v. Greenmoss Builders, Ine., 472
U.S. 749, 779 (1985) (Brennan, J., dissenting) (“Justice Harlan’s
perception formed the cornerstone of the Court’s analysis in
Gertz.’”’).
6
at 778 (Brennan, J., dissenting) (quoting Gertz, 418
U.S. at 350).
Each of these cases, including Dun & Bradstreet, af-
firmed the need for constitutional limits on the availabil-
ity of libel damages to protect discussion of public affairs,
with the Court in Gertz holding simply:
(T]hat the states may not permit recovery of pre-
sumed or punitive damages, at least when liability
is not based on a showing of knowledge of falsity or
reckless disregard for the truth.
418 US. at 349.
Despite these stated concerns and limitations, both the
amount and frequency of punitive damage awards against
the media in libel cases have continued to rise. During
the 1980’s multi-million dollar verdicts against libel de-
fendants became almost commonplace.’ Many awards
were overturned or reduced on appeal; many were ques-
tioned on constitutional grounds by courts and commenta-
tors alike;" but these facts are cold comfort to the pub-
*One study reported thet, between 1980 and 1984, approximately
60° of libel verdicts against media defendants included an award
of punitive damages (compared to less than 10° for non-libel
cases involving money damages). The average punitive award was
reported as substantially in excess of $2,500,000, and punitive dam-
ages accounted for approximately 80° of the total amount of
damages awarded. See Libel Defense Resource Center, Recent
Trends in Libel Damage Awaids Against the Media, Libel Defense
Resource Center Bulletin No. 18 at 58-63 (December 15, 1986).
See also, Libel Defense Resource Center Bulletin No. 21 (Octeber
31, 1989) ; Libel Defense Resource Center Bulletin No. 11 (Novem-
ber 14, 1984); Franklin, Suing Media for Libel; A_ Litigation
Study, 1981 A.B.A. Res. J. 795, 829; Report, Committee on Com-
munications Law, Punitive Damages in Libel Actions, 42 Record of
Assoc. of Bar of City of New York 20, 39-40 (Jan./Feb. 1987).
® See Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472
U.S. 749, 793-94 (1985) (Brennan, J. dissenting); see also Buckley
v. Littell, 539 F.2d 882 (2d Cir. 1976), cert. denied, 429 U.S. 1062
(1977) Wheeler v. Green, 286 Or. 99, 593 P.2d 777 (1979); Stone
7
lishers and broadcasters who may be forced to meet pro-
hibitive bond requirements and to endure expensive ap-
peals before constitutional safeguards are properly ap-
plied.’
The trend toward ever-higher and increasingly irra-
tional punitive awards continues. In Sprague v. The
Philadelphia Inquirer, New York Times, May 3, 1990
at 1, col. 2 (Pa. Ct. Com. Pl.. May 3, 1990), a jury
awarded $31.5 million in punitive damages against the
Philadelphia Inquirer in a libel action. This was the
second time the case was sent to a jury. On the first
occasion, a different jury imposed a punitive award of
“only” $4 million (a difference of $27.5 million) on the
same set of facts. The challenged articles concerned the
plaintiff's investigation of a homicide in his capacity as
chief of homicide for the Philadelphia District Attor-
ney’s office. Similarly, in Srivastava v. Harte Hanks
Communications, Inc., Communications Daily, May 7,
1990 (Tex. Ct. Com. Pl., formal judgment pending), a
jury awarded the plaintiff $17.5 million in punitive dam-
ages in a libel action against a local television station.
In George v. International Society for Krishna Conscious-
v. Esser County Newspapers, Inc., 367 Mass. 849, 330 N.E.2d 161
(1975): Taskett v. King Broadcasting Co., 86 Wash.2d 439, 546
P.2d 81 (1976); Sprouse v. Clay Communication, Inc., 158 W. Va.
427, 211 S.BE.2d 674, cert. denied, 423 U.S. 991 (1975); see also
Wheeler, supra note 2; Note, Punitive Damages and Libel Law,
98 Harv. L. Rev. 847 (1985).
7 This fact was shown dramatically in the case of the Alton
Telegraph, a small Mlinois newspaper, which suffered a $9.2 million
libel verdict, including $2.5 million punitive damages. The com-
pany, valued at only $3 million ultimately settled for $1.4 million
after it was unable to raise the bond required for an appeal on
the merits. See Curley, “ ‘Chilling Effect’ How Libel Suit Sapped
the Crusading Spirit of a Small Newspaper,” Wall St. J., Sept. 29,
1983, at 1, col. 1, See also, Massing, The Libel Chill: How Coid
Is It Out Tiieve?, Colum. Journalism Rev., at 31 (May June, 1985) ;
Note, The Constitutionality of Punitive Damages in Libel Actions,
45 Fordham L. Rev. 1382, 1384 (1977).
. 8
ness, 262 Cal. Rptr. 217 (Cal. App. 1989), a jury awarded
$32 million in punitive damages for, among other things,
a libel claim based on a press release. In Newton v. Na-
tional Broadcasting Co., 677 F. Supp. 1066 (D. Nev.
1987), currently on appeal before the Ninth Circuit, a
Las Vegas jury awarded $5 million in punitive damages
against NBC in a libel action brought by entertainer
Wayne Newton. It appears that juries are feeling no
particular restraints, constitutional or otherwise, in award-
ing punitive damages in libel cases.
B. Punitive Damages Have Been Arbitrarily Assessed
Against Unpopular Defendants.
In theory, punitive damages are intended to punish
and to deter specific conduct that society finds out-
rageous or reprehensible.* In practice, however, juries
often use this uncontrolled weapon to punish defendants
not for what they have done, but for who they are. It
is no mere coincidence that defendants such as Hustler
and Penthouse magazines have suffered punitive dam-
age verdicts in the eight-figure range more than once.®
Far more troubling is the number of these megaver-
dicts that are being imposed in cases arising out of com-
mentary on public affairs and the six- and seven-figure
punitive awards imposed on news media defendants al-
most as a matter of course, once the jury finds for the
‘See Note, Punitive Damages and Libel Law, 98 Harv. L. Rev.
R47, 849 (1985); Wheeler, The Constitutional Case for Reforming
Punitive Damages Procedures, 69 Va. L. Rev. 269, 282 (1983).
” See, e.g., Guecione v. Hustler Magazine, 800 F.2d 298 (2d Cir.
1986), cert. denied, 479 U.S. 1091 (1987) ($37,000,000); Lerman
ve Flynt Distributing Co., 745 F.2d 123 (2d Cir. 1984), cert denied,
471 U.S. 1015 (1985) ($33,000,000); Pring v. Penthouse Inter-
national, 695 F.2d 438 (10th Cir. 1982); cert. denied, 462 U.S.
1132 (1983) ($25,000,000).
7
i9 See notes 5-7 and accompanying text, supra.
9
plaintiff on the question of liability.‘ Professor Van
Alsytyne, commenting on this disturbing pattern, ob-
served: “{J]uries may tend to find whatever they are
told is necessary for them to find if they thoroughly dis-
like the publisher, his publication, his general practice,
or his business... .’’ Van Alstyne, First Amendment
Limitations on Recovery from the Press, 25 Wm. & Mary
L. Rev. 793, 795-96 (1984) .*-
It may be that libel juries are merely reflecting a gen-
eral shift of attitude on the subject of damages—that
“(jljuries in all forms of tort litigation are finding for
individual plaintiffs with less attention to the arguments
of corporate defendants and greater inclination te award
staggering damages than ever before.”” Goodale, Centuries
of Libel Erased by Times v. Sullivan, 191 N.Y.LJ. 49
(1984). The jury in the present case may have awarded
punitive damages out of sympathy for the plaintiff—a
sense that “someone should pay” for what she endured,
regardless of the culpability of the particular defendant.
This sense of frustration and anger may be a natural
human reaction, but it is not a rational basis for assess-
ing punitive damages, and unchecked, it leads to arbi-
trary and irrational results."*
11 See, e.g., Brown & Williamson Tobacco Corp. v. Jacobson, 827
F.2d 1119 (7th Cir. 1987), cert. denied, 485 U.S. 998 (1988).
12 Professor Van Alstyne also noted the possibility that attempts
to restrict awards under the actual malice rule may have had the
opposite impact on jurors:
[A] juror might suppose that if recklessness must be proved
and if recklessness also entitles the defendant to consideration
of punitive damages, then absent some exceptional reasons, the
juror ought assuredly and quite routinely award punitive dam-
ages ....
Van Alstyne, 25 Wm. & Mary L. Rev. at 797.
13 See Sack & “Tofel, First Steps Down the Road Net Taken:
Emerging Limitations on Libel Damages, 90 Dick. L. Rev. 609, 613-
15 (1989) (discussing jury verdict in McCoy v. Hearst Corp., 174
Cal. App. 3d 892, 220 Cal. Rptr. 848 (1985), which awarded iden-
10
When the defendant’s conduct toward the plaintiff does
become an issue, the jury is almost always invited to
“send a message” that the defendant—often a large cor-
poration—cannot ignore. Unfortunately, there is very
little guidance at that point to insure that the message
is warranted by the defendant’s conduct, and not merely
by the jurors’ distaste for the defendant’s size, financial
net worth, or even by regional prejudices.
As Justice Douglas reminded in his dissent in Gertz,
the influence of emotion and prejudice is not confined to
juries: “Discussion of public affairs is often marked
by highly charged emotions, and jurymen, not unlike us
all, are subject to those emotions.” Gertz v. Robert
Welch, Inc., 418 U.S. 323, 359 (1974). Excessive damage
awards may also reflect, in part, “localized judicial dis-
taste for certain publishers” and judges’ “‘understandable,
but constitutionally improper, distaste for the defendant’s
publication.”” Van Alstyne, 25 Wm. & Mary L. Rev. at
801, 808.
In short, the danger of punitive (Amages is not merely
that they are unrestrained; it is that they are, by defini-
tion, a court-sanctioned invitation to punish the defend-
ant. And as long as punitive damages remain available
as a Weapon in civil cases, there will be the temptation
to punish for the wrong reasons. Restraining the amownt
of damages or the procedures under which they are
awarded will not remove the temptation. Jurors and
judges alike may simply find whatever they are told they
need to find to justify the result, if the desire to award
damages is great enough.
tical amounts of $1,000,600 “compensatory” and $520,000 punitive
damages to each of three different plaintiffs and apportioned the
awards with similar symmetry against a newspaper, its reporter,
and a freelance writer). See also notes 5-7 and accompanying text,
supra. In the present case, on the other hand, one respondent
appears to have received the entire punitive award, while the other
three were restricted to compensatory damages. Pacific Mut Life
Ins. Co. v. Haslip, 553 So.2d 537, 539 (Ala. 1989).
11
C. The “Prize” of Unrestrained Punitive Damage
Awards Has Encouraged Expensive and Unneces-
sary Litigation.
The prospect of virtually unlimited punitive damage
awards against large corporations can and does change
the character of litigation. The punitive damage lawsuit
is not controlled by practical concerns of fair compensa-
tion for real loss suffered or a realistic assessment of
its costs. Too often, it becomes an expensive, time-con-
suming, and wasteful exercise in litigation tactics—a
high-stakes gamble on the jury’s emotions, with a prize
limited only by the defendant’s net worth. And because
the stakes are perceived to be so high, the defense of a
punitive damages case may also take on the inflated char-
acter of a multi-million dollar dispute, whether justified
or not.
This lottery mentality, especially prevalent in libel
cases, can lead to protracted and expensive litigation in
virtually any kind of case where the defendant’s at-
titude, size, or wealth can be made an issue. And, as
the experience with libel cases demonstrates, the promise
of unrestrained awards can subvert even the most care-
fully-drawn system for compensating actual injury and
convert it to an emotional appeal to jury passion and
prejudice. The end result is an irrational system in
which the costs—“the encouragement of unnecessary liti-
gation and the chilling of desirable conduct”—far out-
weigh the alleged benefits of punitive damages. Smith
v. Wade, 461 U.S. 30, 59 (1983) (Rehnquist, J., dis-
senting).
In the area of libel law, the “desirable conduct” chilled
by the prospect of punitive damages is constitutionally
protected conduct—free speech on matters of public con-
cern. The need to protect this First Amendment inter-
est has been the driving force behind restrictions im-
posed by this Court in libel cases, but the Court’s atten-
tion has been focused on restricting liability, not dam-
12
ages.'* Although the Court’s reasoning in these cases has
addressed the chilling effect of unrestricted and unpre-
dictable damage awards on First Amendment freedoms,"
and although these arguments have been applied to re-
strict punitive damages in non-libel cases,'® the Court has
not yet imposed these restrictions directly on the award
of libel damages. The result is a standing invitation for
libel plaintiffs to navigate whatever rules and semantic
hurdies may be necessary to gain the prize of unlimited
punitive damages. The recent examples discussed above "
suggest that plaintiffs and their lawyers are accepting
this invitation with disturbing frequency and substan-
tial monetary success.
II. PUNITIVE DAMAGES ARE UNNECESSARY AND
INEFFECTIVE IN SERVING THEIR THEORETI-
CAL PURPOSES.
The traditional common-law justifications offered for
punitive damages are: (1! providing compensation in
cases where undercompensation of harm is likely, (2)
14 Even in Gertz v. Robert Welch, Inc., 418 U.S. 323, 349-50
(1974), which purported to restrict libel damages to “compensation
for actual injury,” the possibility of punitive damages where actual
malice could be shown was only noted in passing. There was no
discussion of what further limitations might be constitutionally
required in such a case. More recently, in Dun & Bradstrect, Tne.
v. Greenmoss Builders, Inc., 472 U.S. at T7i (White, J.. concur-
ring), Justice White criticized the Court’s single-minded focus on
the liability issue and suggested instead that presumed and punitive
damages might have been restricted or prohibited altogether, as an
alternative means of First Amendment protection.
1° See, notes 2-4 and accompanying text, «pra.
16 See, e.g., Electrical Workers v«. Foust, 442 U.S. 42, 48-52 (1979
(union’s breach of duty of fair representation); Newport v. Fact
Concerts, Inc., 4538 U.S. 247, 270-71 (1681) (municipal liability
under § 1983). See also, Dun & Bradstreet, 472 U.S. at 780 n.4
(Brennan, J., dissenting).
17 See notes 5-7 and accompanying text, svpra.
13
deterrence of future undesirable conduct, and (3) punish-
ment or retribution for past reprehensible conduct. See
Note, Punitive Damages and Libel Law, 98 Harv. L.
Rev. 847, 850 (1985); see also Gertz, 418 U.S. at 849-
50; Dun & Bradstreet, 472 U.S. at 760-61.
In the context of libel awards, the Court has recog-
nized that, with the possible exception of purely private
libel cases,’* punitive damages do not serve “|t]|he legiti-
mate state interest underlying the law of libel |,-2.¢.,] the
compensation of individuals for the harm inflicted on
them by defamatory falsehood.” Gertz, 418 U.S. at 341.
Punitive damages “are wholly unrelated to thjis| state
interest” because they “are not compensation for injury.”
Id. at 350.”
Even in non-speech cases, it is highly doubtful whether
punitive damages serve their own declared purposes. The
‘“undercompensation” rationale is a logical outgrowth of
early common law limitations on actual damages. See
Wheeler, supra note 2 at 304-05. Modern damages the-
ories are far more expansive—courts no longer rely on
restrictive definitions of “actual damages.” Under re-
laxed standards of proof, they now allow compensation
for virtually every conceivable form of injury. See Gertz,
418 U.S. at 350 (“actual injury is not limited to out-of-
pocket loss” and “include[s] impairment of reputation
and standing in the community, personal humilitation,
In Dun & Bradstreet, 472 U.S. 749, the Court upheld an award
of punitive damages in what the piurality opinion characterized as
a “purely private” libel case involving no matters of public interest.
However, one of the three Justices making up the plurality was
Justice O'Connor, who has since declared her strong concern that
the award of uncontrolled punitive damages may be unconstitu-
tional. See text accompanying notes 30-31, infra.
'' The related doctrine of presumed damages is also essentially
punitive, inviting juries “to punish unpopular opinion rather than
» compensate” and to grant “gratuitous awards of money damages
far in excess of any actual injury,” a result in which “the States
have no substantial interest.” Id. at 349.
14
and mental anguish and suffering”); see a!so Wheeler,
supra note 2 at 305, 310. Given this expansive reading
of actual damages in libel cases, the compensatory justi-
fication for punitive damages in such cases is no .onger
valid.
It is equally doubtful whether punitive damages are
effective as a deterrent to future wrongful conduct:
The theory of deterrence assumes that the person to
be deterred rationally weighs the benefits and costs
‘ineluding the possible punitive sanctions discounted
by the probability of their being imposed) likely to
flow from the contemplated conduct.
Id. at 306. This theoretical Lalancing process depends
on the potential defendant’s ability to accurately predict
the amount and the likelihood of those costs; deterrence
is effeccive only when costs are both certain to be imposed
and optimal in amount, that is, sufficient to deter the
targeted conduct without also deterring beneficial con-
duct. Id. at 306-09.
in prac‘ice, however, the imposition of punitive dam-
ages falls totally outside this theoretical framework. In
a statutory scheme, legislatures at least have the oppor-
tunity to consider such questions and to attempt defini-
tions of both conduct and punishment that will approxi-
mate these goals. In the courtroom, however, juries are
invited to assess punitive damages without any considera-
tion of, much less confinement to, the amount strictly
necessary to deter on/y unprotected conduct. There is no
certainty as to whether such damages will be imposed or
in what amounts. This unpredictability alone undercuts
the theoretical goal of deterrence.”
“It might be argued that strict application of the standards
defining such intentional torts as fraud reduces the unpredictability
of punitive damage awards, but the media’s experience with the
carefully defined “actual malice” standard refutes this assumption.
Actual malice may make liability more difficult to establish, but
“courts still lack a way of judging in First Amendment terms the
15
Finally, especially in the libel context, punitive dam-
ages do not effectively serve the purpose of punishment
or retribution. “The state has a legitimate interest in
retribution only when the wrongdoer has chosen to com-
mit a morally reprehensible act, knowing that it would
likely cause harm to another individual.” Note, 98 Harv.
L. Rev. at 859; see also Wheeler, supra note 2 at 311. In
most libel cases, punitive damages are awarded without
regard to these considerations, despite use of the term
actual ‘‘malice.”’
_ Even when the actual malice rule is properly applied
it dees not necessarily reach the issue of whether the
defendant’s conduct is truly “outrageous” and prompted
by the “evil motives” normally required to be shown be-
fore punitive damages may be awarded.*! The require-
ment of actual malice in libel cases is a tool for defining
the standard of liability, not the level of damages. It
focuses only on the defendant’s attitude toward the facets,
and not m the defendant’s attitude toward the plaintiff
or ary intent to do harm. See, e.g., Harte Hanks Com-
munications, fue. v. Connaughton, 109 S. Ct. 2678, 2684-
85 (1989); Note, 98 Harv. L. Rev. at 854. It is possible
therefore, to have a technical finding of “actual mal-
ice’ as defined by New York Times where there is ab-
solutely no evidence of “malicious” conduct in the com-
mon sense of the word. The jury may then be invited to
award punitive damages without any further restrictions.
proj .iety of the amount of an award, however stupendous, once
the liability hurdle has been surmounted.” Sack & Tofel, First Stepe
Down the Read Not Taken: Emerging Limitations on Libel Dam-
ages, 90 Dick. L. Rev. 609, 616 (1986) (footnote omitted). Once a
jury finds actual malice, its discretion to award punitive damages
may remain virtually unbridled. Potential defendants still mav or
mzy not face heavy damage awards depending on how the jury
reacts to their choice of language. ,
“! See Restatement (Second) Of Torts §908(2) (1977) (imposi-
tion of punitive damages is premised on outrageous conduct arising
out of the defendant's evil motives).
16
In summary, awards of punitive damages against
speech on matters of public concern do not “further the
state interest in providing remedies for defamation by
ensuring that those remedies are effective.” Dun & Brad-
street, 472 U.S. at 761. They do not effectively deter,
punish, or compensate for injury from unprotected
speech. Instead, these damages overcompensate plaintiffs
(often dramatically) at the constitutionally impermis-
sible expense of deterring and punishing protected
speech.
These costs associated with punitive damages arise
outside the First Amendment context as well. See, e.9.,
Smith v. Wade, 461 U.S. at 59-60 (Rehnquist, J., dis-
senting) (“The alleged deterrence achieved by punitive
damages is likely outweighed by the costs—such as the
encouragement of unnecessary litigation and the chilling
of desirable conduct ....”). As a result, the highest
courts of several states have rejected punitive damages
as fundamentally unsound in principle.“
“2 See Killibrew v. Abbott Laboratories, 359 So.2d 1275 (La.
1978) (“punitive damages are not allowable unless . . . a statute
expressly authorizes the imposition of such a penalty”); Miller v.
Kingsley, 194 Neb. 123, 230 N.W.2d 472 (1972) (“It is a funda-
mental rule of law in this state that punitive, vindictive or exemp-
lary damages are not allowed. The measure of recovery in all civil
cases is compensation for injury sustained.”); Vratsenes v. New
Hampshire Auto, Inc., 112 N.H. 71, 289 A.2d 66 (1972) (“The
idea [of punitive damages] is wrong. It is a monstrous heresy.’ ”’
quoting Fay v. Parker, 53 N.H. 342, 382 (1872)): Maki v. Alnu-
minum Bldg. Products, 73 Wash.2d 23, 4836 P.2d 186 (1968) | “From
[1871] to the present day, this court has held that the doctrine
of punitive dam«ges is unsound in principle.”).
17
Ill. THE AWARD OF PUNITIVE DAMAGES AND THE
METHOD BY WHICH THEY ARE IMPOSED VIO-
LATES DUE PROCESS REQUIRED UNDER BOTH
THE FIRST AND FOURTEENTH AMENDMENTS.
A. The First Amendment Requires the Highest Stand-
ards of Due Process Where Punishment or Suppres-
sion of Speech Is Threatened.
While the basic issue before the Court is whether un-
restrained punitive damage awards violate due process
requirements of the Fourteenth Amendment, much of the
Court’s discussion of punitive damages to date has cen-
tered on limitations mandated by the First Amendment.
This fact may tempt some to dismiss the relevance of
these earlier decisions by categorizing them narrowly as
“free speech” cases, but on closer review it is clear that
the reasoning of these cases can be asserted with equal
conviction under the Due Process Clause of the Four-
teenth Amendment. In fact, in summarizing the constitu-
tional objections to punitive damages in the libel context,
the dissent in Dun & Bradstreet was framed largely in
the language of due process.** Further, as this Court
stated in Gillow v. New York, 268 U.S. 652, 666 (1925),
“freedom of speech and of the press—which are pro-
tected by the Ist Amendment from abridgement by Con-
gress—are among the fundamental personal rights and
‘liberties’ protected by the due process clause of the 14th
Amendment from impairment by the states.” See also,
Near v. Minnesota, 283 U.S. 697, 707 (1931).
In one sense, the only difference between punitive dam-
ages in a libel action and in any other case is the fact
that in the former the conduct being punished and de-
terred is speech. The difference, of course, is significant.
The Court has long recognized that any form of state
regulation that restricts free speech demands heightened
“3 See Dun & Bradstreet, 472 U.S. at 778-79 (Brennan, J., dissent-
ing); see also, notes 19-20 and accompanying text, supra.
18
scrutiny of due process concerns.** The general principle
was summarized in Speiser v. Randall, 357 U.S. 513, 520
(1957):
When we deal with the complex of strands in the
web of freedoms which make up free speech, the
operation and effect of the method by which speech
is sought to be restrained must be subjected to close
analysis and critical judgment in the light of the
particular circumstances to which it is applied.
Id. at 520 (emphasis added).
This principle is reflected in various rules enunciated
by the Court to ensure that any form of government re-
straint on speech does not reach beyond the permitted
bounds to impinge on protected speech. For example:
* In all cases, the burden is on the government to
establish that the restraint of speech is justified
under the appropriate standard.*°
* In cases of doubt, the balance must be struck in
favor of protecting speech.*"
* Encompassing both the prior rules, speech is pre-
sumed protected until proven otherwise with con-
vineing clarity.**
“4 See Young v. American Mini Theatres, 427 U.S. 50, 76 (1976)
(Powell, J., concurring); New York Times Co. v. United States,
403 U.S. 713 (1971); United States v. Car e Products Co., 304
U.S. 144, 152 n.4 (1988); Lovell v. Griffin, 303 U.S. 444 (1938).
The award of libel damages is such a “form of state regulation”
subject to the rule. See, New York Times v. Sullivan, 372 US.
at 278.
°° E.g., Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767, 777
(1986) (and cases cited therein); New York Times Co. v. United
States, 403 U.S. 713, 714 (197t) ; Organization for a Better Austin
v. Keefe, 402 U.S. 415, 419 (1971); Speiser v. Ranauall, 357 U.S.
513, 526 (1957); Kingsley Books, Inc. v. Brown, 354 U.S. 436,
441-42 (1953).
26 E.q., Hepps, 475 U.S. at 776-78; Gertz, 418 U.S. at 341.
7B .g., New York Times Co. v. United States, 4038 U.S. at 714;
Bantam Books, Inc. v. Sullivan, 3272 U.S. 58, 70 (1963) (and cases
cited therein) ; see Near v. Minnesota, 283 U.S. at 715-17.
19
* Those empowered to restrain speech must do so
only under narrowly drawn standards to avoid
arbitrary and discriminatory content-based ac-
tion.**
* Courts must independently review judgments that
threaten protected speech.”
These are all essentially due process considerations,
focused on “the method by which [burdens on speech] are
imposed. . . .” See Browning-Ferris, 109 S. Ct. at 2924
(O’Connor, J., concurring). In most cases, they are sub-
sumed under the First Amendment analysis, but they re-
main due process concerns nonetheless,*® and when ap-
plied to the award of punitive damages in libel cases, they
closely parallel the concerns expressed by members of the
Court in Browning-Ferris and other recent cases.
B. The Award of Punitive Damages Fails to Satisfy
Even Minimum Standards of Due Process.
The precise limits that should apply under the Due
Process Clause to any award of punitive damages are
fully discussed in the briefs of the parties and other
amici. For purposes of this discussion, it is enough to
simply note what members of the Court have said in
recent opinions addressing the issue.
In Browning-Ferris Industries of Vermont, Inc. v.
Kelco Disposal, Inc., 109 S. Ct. 2909 (1989), Justice
23 E.g., Southeastern Promotions Ltd. v. Conrad, 420 U.S. 546
(1975) (and cases cited therein); Shuttlesworth v. Birmingham,
394 U.S. 147, 150-51 (1969).
29 F.q., Harte Hanks Communications, Inc. v. Connaughton, 109
S. Ct. 2678. 2680-81 (1989); Bose Corp. v. Consumers Union of
United States, Inc., 466 U.S. 485, 498-511 (1984); NAACP v.
Claiborne Hardware Co., 458 U.S. 886, 915-16 & n.50 (1982); New
York Times Co. v. Sullivan, 376 U.S. 254, 284-86 (1964).
8° See c.g., Police Dept. v. Mosley, 408 U.S. 92 (1972); Freedman
v. Maryland, 380 U.S. 51 (1965).
20
Blackmun, writing for the Court, acknowledged existing
authority for the view “that the Due Process Clause
places outer limits on the size of a civil damage award
made pursuant to a statutory scheme,” but deferrec
consideration of the question of “whether due process
acts as a check on undue jury discretion to award puni-
tive damages in the absence of any express statutory
limit,” because the issue had not been adequately raised
in the lower courts. Id.
Justice Brennan, joined by Justice Marshall, addressed
the majority’s recognition of due process limitations on
statutory penalties by noting that the guidance given
juries in determining punitive damage awards “‘is
scarcely better than no guidance at all,” and admonish-
ing the Court to:
look longer and harder at an award of punitive
damages based on suci. skeletal guidance than [it]
would at one situated within a range of penalties as
to which responsible officiais had deliberated and
then agreed.
Id. at 2923 (Brennan, J., concurring).
Justice O’Connor, joined by Justice Stevens, voiced
concern over “skyrocketing” punitive damages awards un-
limited by any set of objective standards, and cited her
earlier position in Bankers Life and Casualty Co. v.
Crenshaw, 486 U.S. 71, 89 +1988), in which she, joined
by Justice Scalia, observed that “[t|his grant of wholly
standardless discretion to determine the severity of pun-
ishment appears inconsistent with due process.” Brown-
ing-Ferris, 109 S. Ct. at 2924 ‘O'Connor, J., concurring
in part and dissenting in part).
As previously noted, these same due process concerns,
heightened by their First Amendment setting, led four
members of the Court in Dun & Bradstreet to dissent
from the award of punitive damages, even in the context
of purely private speech. Justice Brennan, joined by three
21,
other dissenters, also noted that the objections to punitive
damages are not confined to First Amendment cases. See
Dun & Bradstreet, 472 U.S. at 780 n.4. See also Smith
v. Wade, 461 U.S. 30, 59 (1983) (Rehnquist, J., dis-
senting).
More recently, in The Florida Star v. B.J.F., 109 S.
Ct. 2603, 2607 n.5 (1989), Justice White, joined by
Justice O’Connor and the Chief Justice, expressed con-
cern about the constitutionality of punitive damages in a
non-iibel ‘but First Amendment) context:
The Court does not address the distinct constitutional
questions raised by the award of punitive damages
in this case. . . . That award is more troublesome
than the compensatory award discussed above.
‘White, J., dissenting) (citations omitted).
From these various opinions, it appears that most mem-
bers of the Court recognize the need for some constraints
on the imposition of punitive damages in civil cases and,
at a minimum, that these may include some form of ob-
jective standards to guide and limit the discretion of
jurors in deciding whether to award punitive damages,
and in what amounts.
The partiapants in this brief urge the Court to con-
sider also whether any standards, procedural or other-
wise, will adequately address the heightened need for due
process protection where speech is the subject of such
punitive measures. The unfortunate experience in libel
cases has been that mere words, rules, and standards, no
matter how carefully defined, are not enough to deter
jurors and judges alike from exercising the power to
punish unpopular speech and speakers with staggering
punitive awards. It may well be that punitive damages
are inherently “too blunt a regulatory instrument to
satisfy . . . First Amendment principle{s]. .. .” Dun
& Bradstreet, 472 U.S. at 778 (Brennan, J., dissenting).
22
C. The Award of Punitive Damages in Libel Cases
Fails to Satisfy Heightened Due Process Standards
Required by the First Amendment.
The danger punitive damages pose to protected speech
was thoroughly explored in Geriz v. Robert Welch, Inc.,
418 U.S. 323 (1974). The condemnation of such dam-
ages in that case would be enough, standing alone, to
declare unconstitutional any punitive award in a libel
case involving matters of public interest, were It no: for
the Court’s qualifying language, “‘at least when liability
‘s not based on a showing of knowledge of falsity or reck-
less disregard for the truth.” 418 U.S. at 349.
This language has been interpreted by some lower
courts as a ruling that punitive damages flow automat-
‘cally where New York Times actual malice can be
shown." But the Court in Gertz did not discuss the re-
lationship, if any, between a finding of actual malice and
the award of punitive damages. The issue was left open
and the holding simply confined to “the private defama-
tion plaintiff who establishes liability under a less de-
manding standard than that stated by New York Times.
418 U.S. at 350. In fact, as noted above,” the require-
ment of “actual malice” in libel cases does not even
address the questions of malice or evil motive in the com-
mon meaning normally required to support a punitive
damage award. See Harte Hanks Communications v. Con-
noughton, 109 S. Ct. at 2685. Even minimal due process
would require a more rational connection between such
41 See, e., Brown & Williamson Tviaceo Corp. v. Jacobsen, 713
F.2d 262, 2733 ‘7th Cir. 1983). Other courts have been less hasty
to assume this conclusion, but have centinved to uphold punitive
awards, in some cases because of their uncertainty. See Maheu rv.
Hughes Tool Co., 569 F.2d 459, 478 (9th Cir. 1977); Buckley v.
Littell, 5389 F.2d 8&2, 997 (2d Cir. 1976); Davis vr. Schuchat, 510
F.2d 731, 737 «D.C. Cir. 1970).
32 See notes 20-21 and acc mpanying text, supra
23
punishment and the purpose it supposedly serves. In
libel cases, that connection may not exist at all.
According to the Court in Gertz, the legitimate state
interest underlying the law of libel “extends no further
than compensation for actual injury,” 418 U.S. at 348-49,
and “punitive damages are wholly irrelevant to th{/at]
state interest,” id. at 350. Therefore, the justification for
punitive damages in such libel cases must be assessed on
its own merits; it does not flow automatically from the
rationale for compensatory damages.
For First Amendment purposes, punitive damages must
be viewed independently, as a form of government action
that seeks to punish and to deter speech. As such, they
must be subjected to the same careful scrutiny and
heightened due process considerations that would be re-
quired of any statutory scheme that attempted to accom-
plish the same ends. See New York Times Co. v. Sulli-
van, 376 U.S. at 277 (“What a state may not constitu-
tionally bring about by means of a criminal statute is
likewise beyond the reach of its civil law of libel.”).
Viewed in this perspective, it is clear that the award of
punitive damages in libel cases, at least those involving
matters of public interest, fails utterly to satisfy the
heightened due process mandated by the First Amend-
ment.
First, the declared purpose to deter future speech is
fundamentally at odds with the purposes of the First
Amendment *e encourage free and open debate and to
prevent self-censorship. See Gertz, 418 U.S. at 350; See
also Near v. Minnesota, 283 U.S. 697, 713-20 (1931).
Second, punitive damages are awarded without nar-
rowly-drawn standards and by juries who are given broad
discretion to punish unpopular speech and speakers. Even
if theoretical standards could be imposed, the process re-
mains one of punishment based on the content of speech.
Third, the award of punitive damages, even in con-
cept, fails to provide the “breathing space” required in
24
discussion of public affairs. Even under the most care-
ful standards, it is impossible to ensure that the future
speech intended to be deterred will be only speech that
is unprotected by the First Amendment. Such broad-
based restraints in a statutory scheme would be clearly
unconstitutional. See Freedman v. Maryland, 380 U.S.
51 (1965).
In short, although it may be theoretically possible to
formulate standards and procedures that would ensure
punishment of only unprotected speech, the constitutional
defects in the whole concept of punitive damages cannot
be addressed simply by careful drafting. The intent to
restrain future speech and the inherent discretion granted
to juries under any such standards are fundamentally
at odds with the First Amendment.
D. Standardless and Deferential Appellate Review of
Punitive Damage Awards Cannot Satisfy Consti-
tutional Requirements.
Despite the long-standing requirement of independent
appellate review to protect against any judgment that
threatens First Amendment rights, see, e.g., New York
Times Co., 376 U.S. at 284-86; Bose, 466 U.S. at 498-
511, all too often appellate courts have refused to disturb
judgments of punitive damages in libel cases unless
“monstrously excessive” or so large as to “shock the
judicial conscience.” “” In the First Amendment context,
such elusive standards of review afford too little protec-
tion against abuse and are inconsistent with appellate
courts’ duty to “ ‘independently decide whether the evi-
dence in the record is sufficient to cross the constitu-
‘’ See Gertz, 418 U.S. at 350; Biown & Williamson tv. Jacobson,
8°7 F.2d at 1142 (multi-million dollar punitive damage award up-
held because jury was not “mere putty in the hands of the plain-
tiff’); Douglass v. Hustler Magazine, Inc., 769 F.2d 1128, 1143-44
(7th Cir. 1985), cert. denied, 475 US. 1091 (1986); Braun ev.
Flynt, 726 F.2d 245, 257 (bth Cir.), cert. denied, 469 U.S. 883
(1984).
25
tional threshold’” marked by the First Amendment.
Harte Hanks Communications v. Connaughton, 109 S.
Ct. at 2695 (quoting Bose, 466 U.S. at 511).
The Court in Bose explained that a jury’s application
of First Amendment princip’es:
is unlikely to be neutral with respect to the content
of speech and holds a real danger of becoming an
instrument for the suppression of those ‘vehement,
caustic, and sometimes unpleasantiy sharp attacks
... Which must be protected if the guarantees of the
First and Fourteenth Amendments are to prevail.
466 U.S. at 510 (quoting Monitor Patriot Co. v. Roy,
401 U.S. 265, 277 (1971) and New York Times Co., 376
U.S. at 270). The threat of unrestrained damages equally
jeopardizes First Amendment interests, Dun & Brad-
street, 472 U.S. at 770 (White, J., concurring), and the
appellate court’s duty under Bose to protect against the
entry of any judgment that encroaches upon protected
speech logically extends to judgments of punitive dam-
ages as well. See Bose, 466 U.S. at 511.
Whether the conduct at issue warrants the imposition
of enormous civil fines meant to deter speech in the
future is a determination that cannot be reviewed solely
for whether a jury acted out of “passion and prejudice,”
or whether the amount is “excessive,” or even whether it
bears some “rational relationship” to harm caused in the
past. The First Amendment requires far more precise
limits. So long as juries retain discretion to punish and
deter speech, even appellate courts cannot effectively pro-
tect against unconstitutional excess in the award of
damages.
26
CONCLUSION
The harm caused by punitive damage awards—the
threat to First Amendment and other sezietal values, the
encouragement of unnecessary litigation, and above all,
harm to the integrity of fundamental concepts of due
process—when weighted against the theoretical justifica-
tions offered in the defense of such awards, leads to the
conclusion that punitive damages are a remedy that so-
ciety cannot afford and the Constitution does not permit.
Of Counsel: P. CAMERON DEVORE *
DOUGLAS P. JACOBS MARSHALL J. NELSON
CBS Ine. DONALD S. KUNZE
51 West 52nd Street DAVIS WRIGHT TREMAINE
New York, New York 10019 2600 Century Square
1501 Fourth Avenue
Attorne “CBS Ine. ; f
ET ae Seattle, WA 98101-1688
(206) 622-3150
Counsel for Amici Curiae
* Counsel of Record
STEVEN SADICARIO
Capital Cities/A8C, Inc.
AT West 66th Street
New York, New York 10023
Attorney for Capital Cities/
ABC, Inc.
RICHARD J. TOFEL
Dow Jones & Company, Inc.
200 Liberty Street
New York, New York 10281
Attorney for
Dow Jones & Company, Inc.
Victor F. GANZI
ROBERT J. HAWLEY
The Hearst Corporation
959 Eighth Avenue
New York, New York 10019
Attorneys for
The Hearst Corporation
JOUN C. FONTAINE
Knight-Ridder, Inc.
One Herald Plaza
Miami, Florida 33132
Attorney for
Knight-Ridder, Inc.
SANDRA S. BARON
National Broadcasting
Company, Inc.
20 Rockefeller Plaza
New York, New York 10112
Attorney for National
Broadcasting Company, Inc.
CONSTANCE A. HEYMANN
Reuters Information
Services Inc.
1700 Broadway
New York, New York 10019
Attorney for Reuters
Information Services Ine.
HARRY M. JOHNSTON III
The Time Inc. Magazine
Company
1271 Avenue of the Americas
New York, New York 10020
Attorney for The Time Ine.
Magazine Compary
DAVID D. HILLER
Tribune Company
435 N. Michigan
Chicago, [Illinois 60611
Attorney for Tribune Company
JAMES L. ARNOLD
United Press International, Inc.
9990 Lehigh Way, Third Floor
Fairfax, Virginia 22030
Attorney for United Press
International, Inc.
BARBARA PERCIVAL
The Washington Post
1150 - 15th Street, N.W.
Washington, D.C. 20071
Attorney for
ihe Washington Post
MARTIN P. MESSINGER
MARK H. CHARLES
Westinghouse Broadcasting
Company, Inc.
888 Seventh Avenue, 39th Floor
New York, New York 10106
Attorneys for Westinghouse
Broadcasting Company, Inc.
RICHARD M. SCHMIDT, JR.
COUN & MARKS
1333 New Hampshire Ave.
Suite 600
Washington, D.C. 20036
Attorney for
American Society of
Newspaper Editors
R. BRUCE RICH
WEIL, GOTSHAL & MANGES
767 Fifth Avenue
New York, New York 10153
Attorney for
Association of
American Publishers
TINA A. RAVITZ
Vice President and Chief Counsel
Newsweek, Inc.
444 Madison Avenue
New York, New York 10022
Attorney for Magazine
Publishers ef America, Inc.
Henry L. BAUMANN
STEVEN A. BOOKSHESTER
National Association
of Broadcasters
1771 N Street, N.W.
Washington, D.C. 20036
Attorneys for National
Association of Broadcasters
JANE E. KIR1uY
Executive Director
Reporters Committee for
Freedom of the Press
Suite 504
1735 Eve St., N.W.
Washington, D.C. 20006
Attorney for Reporters
Committee for Freedom
of the Press
28
Bruce W. SANFORD
BAKER & HOSTETLER
1050 Connecticut Ave., N.W.
Washington, D.C. 10006
Attorney for The Society
of Professional Journalists
J. LAURENT SCHARFF
REED SMITH Suaw & McCCLay
1200 18th Street, N.W.
Washington, D.C. 20036
Attorney for Radio-Television
News Directors Association
APPENDIX
la
APPENDIX
Identity of Individual Amici
CBS Ine. is the owner of television and radio broad-
casting stations and the operator of national television
and radio networks.
Capita! Cities’ ABC, Ine., through its subsidiaries,
owns national radio and television networks, television
and radio stations, daily and weekly newspapers, and
other publications, all of which are engaged in the gath-
ering and dissemination of news to the public.
Dow Jones & Company, Inc. publishes, inter alia, The
Wall Street Journal, the largest circulation daily news-
paper in the country, as well as Barron’s National Busi-
ness and Financial Weekly, the Dow Jones News Serv-
ices and, through its Ottaway Newspapers, Inc. subsid-
iary, newspapers in 29 communities in 13 states.
The Hearst Corporation is a diversified privately held
communications company. It publishes numerous nation-
ally distributed consumer magazines, daily and non-daily
newspapers, business publications and hard-cover and
soft-cover books. It also owns and operates a leading
features syndicate and several television and radio broad-
cast stations.
Knight-Ridder, Ine., is an international information
and communications company engaged in newspaper pub-
lishing, business and news and information services, elec-
tronic retrieval services, news, graphics and photo serv-
ices, cable television, and newsprint production. The
Miami-based company publishes 29 daily newspapers.
Its various information services reach more than 100
million people in 129 countries.
National Broadcasting Company, Inc., itself and its
subsidiaries, own and operate a national television net-
work and television stations, all of which - engaged
in the gathering and dissemination of news tov. vublie.
2a
Reuters Information Services Inc. is the primary North
American operating company of Reuters Holdings PLC,
the international news and financial information organ-
ization. Reuters supplies information to both business
subscribers and to the news media. It obtains its infor-
mation from approximately 160 exchanges and over-the-
counter markets, from data contributed directly by more
than 3,715 subscribers in 82 countries and from a net-
work of some 1,270 journalists and photographers.
The Time Inc. Magazine Company is the largest pub-
lisher of general circulation magazines in the United
States. It publishes Time, Fortune, Sports Illustrated,
People, Money, and Life.
Tribune Company is a communications company own-
ing The Chicago Tribune, The New York Daily News,
the Orlando Sentinel, the Fort Lauderdale News ond
Sun-Sentinel, the Escondido (CA) Times-Advocate, the
Palo Alto Times-Tribune, the Newport News, Virginia
Daily Press, and The Times Herald, and television sta-
tions in Chicago, New York, Los Angeles, Denver, At-
lanta and New Orleans.
United Press International, Ine. generates and com-
piles news and information reports and produces photo-
graphs on a worldwide basis, all of which are trans-
mitted for sale primarily to media industry subscribers
such as newspapers and radio and television broadcasters.
It maintains 200 offices and bureaus in 90 countries,
staffed by 1,500 full-time employees and 4,000 contribut-
ing correspondents.
The Washington Post is a newspaper published in the
Washington, D.C. area with a daily circulation of 773,000
and a Sunday circulation of 1,126,000.
Westinghouse Broadcasting Company, Ince. through its
subsidiaries owns and operates five network affiliated
television stations and 20 radio stations, including four
all-news radio stations. It is also a producer and dis-
tributor of broadcast and cable programming.
8a
The American Society of Newspaper Editors is a na-
tionwide professional organization of more than 950 per-
sons who hold positions as directing editors of daily news-
papers throughout the United States. The purposes of the
Society, which was founded over 50 years ago, include
ongoing efforts to improve the manner in which the jour-
nalism profession carries out its responsibilities in pro-
viding an unfettered and effective press in the service of
the American people.
The Association of American Publishers, Inc. is the
major national association in the United States of pub-
lishers of general books, text books and educational ma-
terials. Its more than 200 members include most of the
major commercial book publishers in the United States
and many smaller or non-profit publishers including uni-
versity presses and scholarly associations.
Magazine Publishers of America, Inc. is a national
trade association including in its present membership 218
domestic magazine publishers who publish 756 magazines
sold at newsstands and by subscription. MPA members
provide broad coverage of domestic and international
news in weekly and biweekly publications, and publish
weekly, biweekly and monthly publications covering liter-
ature, religion, law, political affairs, science, agriculture,
industry and many other interests, avocations and past-
times of the American people.
The National Association of Broadeasters, organized
in 1922, is a nonprofit incorporated trade association
which serves and represents America’s radio and tele-
vision stations and all the major networks. NAB’s mem-
bers cover, produce and broadcast the news to the Amer-
ican people. NAB seeks to preserve and enhance its
members’ ability to freely disseminate information con-
cerning the activities of government and other matters
of public concern.
Radio-Television News Directors Association is a pro-
fessional association of electronic journalists. The As-
4a
sociation has more than 2,500 members who gather, edit
and disseminate news and other public affairs informa-
tion carried by the national broadcast and cable net-
works, local radio and television broadcast stations, and
cable television systems.
The Reporters Committee for Freedom of the Press is
a voluntary, unincorporated association of news reporters
and editors dedicated to protecting the First Amendment
interests of the news media. The Reporters Committee
has appeared in virtually every recent Supreme Court
ease involving the First Amendment rights of reporters
to gather and disseminate news and information. It has
provided representation, information, legal guidance, or
research in virtually every major press freedom case
litigated since 1970.
The Society of Professional Journalists is a voluntary,
not-for-profit organization of nearly 20,000 members. The
Society is the largest and oldest organization of journal-
ists in the United States, representing every branch and
rank of print and broadcast journalism.
ee
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.