# Petition for Writ of Certiorari — Clay Communications, Inc. v. Sprouse

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1975
- **Citation:** 423 U.S. 882

## Text

INDEX

Page
SE SET Ann dace jit sense eeceedeedbachankee 2
PN 5 UCh & CW CNEKK A N95 64455 te Os eA EOE 4s 2
EE UIE bane a50 5 4s ngeainnsaenen benks codes 2
Constitutional Provisions Involved ................. 4
NE NE ID no hea idawcdacsihnnscstivecns 4
I. The Evidence Adduced at Trial .............. 6

II. The Opinion of the West Virginia Supreme
er MUNN cu Siva cd bav basa sineeun caus 13
Reasons for Granting the Writ .................... 16
| CT TL eee ee eee ee rT Tree 22

Appendix A—Opinion of the West Virginia Supreme
eG OE CEE dienk se bin cha Wnce awd eankeesewns la

Appendix B—Final Order of the West Virginia Su-
Ne SUE OE SED sacawenns a neenkocunues 55a

Appendix C—Final Order and iene of the Trial
CP Cok ndh ou buh Satan an eebancheaSedeseasens 57a

Appendix D—Order of the Trial Court Dated 12/9/70
and Letter Opinion of the Trial Court Dated
SE, on 5 C44 LA anne £4 RENAE aR 69a

Appendix E—Order of the Trial Court Dated 5/26/70
and Letter Opinion of the Trial Court Dated
EEO. Kc 5 Rca wan Baanduankduneas caeeeeeeeke 72a

Appendix F—Plaintiff’s Instructions Numbers 2a, 5,
7 and 10 and Petitioner’s Instructions Numbers
2 RA Se | Of ERG ee Cer y were er 75a

: EEE LAPIN EF OTTO BOLL AE BI ESE ELI IETS ERT ER IEE, SPE ARE GS,

Index Continued

CITATIONS
Page
CasES:
Associated Press v. Walker, 388 U.S. 130, 18 L.Ed.2d
BODE, BT ECE IBTG C19GT). oacnccccssccsscccces 14, 18
Barker v. The Traders Bank, 152 W.Va. 774, 166 S.E.
Oe 8 rr rerr erry rer et ee 5
Beckley Newspaper Corp. v. Hanks, 389 U.S. 81, 19
L.Ed.2d 248, 88 S.Ct. 197 (1967) ........... 14, 17, 21
Cantrell v. Forest City Publishing Co., 418 U.S. 909,
pre Re Be) ee rrr rer 14
Cox Broadcasting Corp. v. Cohn, — U.S. —, 43 L.Ed.
SE a ac CANA RANE Na 5945640500 00encey' 4
Curtis Publishing Co. v. Butts, 388 U.S. 130, 18 L.Ed.
2d 1094, 87 S.Ct. 1975 (1967) ...............-. 14, 18
Garrison vy. Louisiana, 379 U.S. 64, 13 L.Ed.2d 125,
Oe eA I CRD 3p kk cae ccanctcndeses ces 14, 17, 18
Gertz v. Robert Welch, Inc., 418 U.S. 323, 41 L.Ed.2d
2, Sear ror ore errr eye 14, 17, 18, 20

Greenbelt Cooperative Publishing Association, Inc. v.
Bresler, 398 U.S. 6, 26 L.Ed.2d 6, 90 S.Ct. 1537
PS BELG CURE EKRu Kea cctecebheces si san 14, 17, 19, 21

Hanks vy. Beckley Newspapers, 149 W.Va. 522, 142 S.E.

Be We Nai ss caWs Caees cas nhc les vonsie sees 5

Henry v. Collins, 380 U.S. 356, 13 L.Ed.2d 892, 85 S.Ct.
EE RG a aA SC esha wchhkadnboneswndeees 14

Monitor Patriot Co. v. Roy, 401 U.S. 265, 28 L.Ed.2d
Ee oe OR 8} errr err rr rrr rt 14, 16

New York Times v. Sullivan, 376 U.S. 254, 11 L.Ed.2d
686, 84 S.Ct. 710 (1964) ..............6. 14, 16, 19, 21

Ocala Star-Banner Co. v. Damron, 401 U.S. 295, 28
L.Ed.2d 57, 91 S.Ot. 628 (1971) ............66.. 14

Old Dominion Branch No. 476, Nat’l Assn. Ltr. Car-
riers v. Austin, 418 U.S. 294, 41 L.Ed.2d 745

RE etaak tier avbnseaNeakehasnabesss 14, 17, 18, 21
Rosenblatt v. Baer, 383 U.S. 75, 15 L.Ed.2d 597, 86
Be NE RAUES oc hte oeeceudenenss vesyteeuens’ 14

Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 29 L.Ed.
Oe BUG, Oh BAK TSE CPTI) ww. ccc cc cece ceeces 14

Index Continued ili

Page
Southwestern Publishing Co. v. Horsey, 230 F.2d 319
Ce a a 20
St. Amant v. Thompson, 390 U.S. 727, 20 L.Ed.2d 262,
ps ME WO 8k ob erin a 44 0U CK cee ccccc ke 14
Time, Inc. v. Hill, 385 U.S. 374, 17 L.Ed.2d 456, 87 S.Ct.
WE ECLOUENN Shakil sé Coen ek cho és a ccacn 14
Time v. Pape, 401 U.S, 279, 28 L.Ed.2a 45, 91 S.Ct. 633
CE ONG SA OhELEN AChE SAG Ga he GC hee e kaki ka 14

Oruer AuTHORITIEs:
Address of Justice Potter Stewart, ‘Or Of The Press,’’

Yale Law School, November 2, 1974 ............ 20
U.S. Constitution, First Amendment ............. 4,5, 14
U. S. Constitution, Fourteenth Amendment .......... 4,5
MI, PII Ws ed a Sh ais ce dale ck aconcixccne 2
eo Sn eae ee a 9
W.Va. Onde, §06-1-1 and Bo... ccc cece ce 5

IN THE

Supreme Court of the United States

OcToBER TERM, 1974

No.

CLay Communications, Inc., Petitioner
Vv.

JAMES M. Sprouse, Respondent

PETITION FOR A WRIT OF CERTIORARI TO THE
WEST VIRGINIA SUPREME COURT OF APPEALS

Petitioner, Clay Communications, Inc., publisher of
The Charleston Daily Mail, a daily newspaper pub-
lished in Charleston, West Virginia, respectfully prays
that a writ of certiorari issue to review the judgment
and opinion of the West Virginia Supreme Court of
Appeals entered on February 4, 1975, affirming a jury
verdict for $250,000 actual damages, reversing a jury
verdict for $500,000 punitive damages and remanding
the cause with directions to strike the punitive award
from the judgment below in favor of respondent (here-
after ‘‘plaintiff’’) in this libel action.

2

OPINIONS BELOW

The complete opinion of the West Virginia Supreme
Court of Appeals, printed in Appendix A hereto, is
reported in 211 S.E. 2d 674 (1975). The final order of
the West Virginia Supreme Court is attached hereto
as Appendix B. The order of the Circuit Court of
Fayette County, West Virginia, filed December 21,
1973, together with a Memorandum Opinion of said Cir-
cuit Court dated December 7, 1973, is attached hereto
as Appendix C. The order of said Circuit Court dated
December 9, 1970, together with a letter opinion of said
Circuit Court dated November 10, 1970 is attached
hereto as Appendix D. The order of said Circuit Court
dated May 26, 1970, together with a letter opinion of
said Circuit Court dated March 24, 1970, is attached
hereto as Append*x E. The instructions given and re-
fused by the trial . rt are contained in the Record of
Proceedings in the trial court at pages 857-894." The
instructions here complained of are attached hereto as
Appendix F.

JURISDICTION

The judgment of the Supreme Court of Appeals was
entered on February 4, 1975. The jurisdiction of this
Court is invoked pursuant to 28 U.S.C. § 1257.

QUESTIONS PRESENTED

1. Whether in a libel action by an unsuccessful guber-
natorial candidate against a newspaper that sup-
ported his successful opponent, publications may

1 Appendix references herein are by page number as ‘‘App. A,
p. la’’. References to the Record of Proceedings in the trial
court are by page number as ‘‘R. 1’’, References to errors assigned
by petitioner in the W. Va. Supreme Court of Appeals, although
designated R. , are to numbered pages of the Petition which is
the first document in the Record.

3

be held actionable without abridging First Amend-
ment freedoms on the ground that their headlines,
through use of such words as “bonanza,” ‘dis-
closed,’’ ‘‘clean-up,”’ “‘dummy corporation,’’ and
“land grab’’ intentionally conveyed a ‘“mislead-
ing’’ impression that the plaintiff had been guilty
of improper conduct, although the body of the
stories concededly contained no such assertion be-
yond quoting correctly plaintiff’s opponent in the
election, who used the words “land grab’? and
‘‘dummy corporation.”’

. Whether a publication, reporting accurately state-
ments made by the plaintiff’s opponent in the elec-
tion, may constitutionally be held actionable on
the ground the newspaper knew or was reckless
with respect to the falsity of the statements by the
oponent.

. Whether in the same action it was constitutionally
permissible for the jury in determining malice, and
the Court in sustaining its determination, to
accord weight to the inference that a motive of the
publication was to injure the plaintiff in his
candidacy for election or to assist his opponent.

. Whether the record as a whole, including any devi-
ation between the headlines and the body of the
stories and the instructions to the jury, is consti-
tutionally sufficient to sustain a finding that the
publications contained false and defamatory state-
ments of fact published with knowledge that they
were false or with a reckless disregard of whether
they were true or false.

. Whether the plaintiff’s uncorroborated testimony,
over objection, that he believed his campaign for

4

Governor was seriously damaged by the publica-
tions and that his reputation was damaged and that
he and his family suffered mental anguish as a re-
sult thereof, (although subsequently, and before
trial, he had been elected to the state’s highest
court) was constitutionally sufficient to sustain a
jury award of $250,000 as actual damages.

CONSTITUTIONAL PROVISIONS INVOLVED
Constitution of the United States

Amendment I: ‘‘Congress shall make no law...
abridging the freedom of speech, or of the press. . . .”’

Amendment XIV: ‘‘....[NJor shall any state de-
prive any person of life, liberty, or property, without
due process of law; nor dery to any person within its
jurisdiction the equal protection of the law.”’

STATEMENT OF THE CASE

Plaintiff, James M. Sprouse, since January 1973, a
Justice of the Supreme Court of Appeals of West
Virginia, but in 1968 the nominee of the Democratic
Party for Governor of that State, brought an action for
libel against petitioner based on publications contained
in petitioner’s Republican newspaper, The Charleston
Daily Mail, (hereafter the ‘‘ Daily Mail’’) on October
24 and 25, 1968. In the November, 1968 general elec-
tion, plaintiff lost the election to his Republican oppon-
ent, Arch A. Moore, Jr. The action for libel was insti-
tuted in Fayette County, West Virginia, on October 29,
1969, after an earlier action, based on the same publica-
tions, instituted on October 29, 1968, in Kanawha
County, West Virginia, where plaintiff then resided
and where the Daily Mail is published, had been dis-

5

missed on motion for failure to state a claim on which
relief could be granted.’

A trial which began in Fayette County, West Vir-
ginia, on July 25, 1973, culminated in a jury verdict for
$250,000 compensatory and $500,000 punitive damages.
In the trial court, petitioner objected on First Amend-
ment grounds to (a) the sufficiency of the evidence by
motions for a directed verdict (R. 576, 648-652) and
for judgment N.O.V. (R. 117-125), (b) admission of
plaintiff’s testimony that the publications damaged his
political campaign and, inferentially, lost him the elec-
tion (R. 445-453), (ec) the giving and reading to the
jury of plaintiff’s instructions number 2a (R. 681-683),
9 (R. 663-665), 7 (R. 666-669) and 10 (R. 673-675) and
(d) the refusal to give and read to the jury a portion
of petitioner’s instruction number 3 (R. 685), and peti-

2In the Cireuit Court of Fayette County petitioner moved to
dismiss this action for lack of venue and moved for Summary
Judgment on the grounds of res judicata. The denial of these
motions was unsuccessfully urged as error in the court below (R.
21, App. A, pp. 29a-36a). The opinion of the court below ignored
petitioner’s argument that the court’s reading of the West Virginia
venue statutes (W.Va. Code, § 56-1-1 and 2) in Hanks v. Beckley
Newspapers, 149 W.Va. 522, 142 S.E. 2d 747 (1965), to the effect
that any incorporated publisher could be sued for libel in any
county in which the newspaper is circulated, violates the First
and Fourteenth Amendments. It is clear that under the West
Virginia venue statutes, an unincorporated publisher can only
be sued for libel in the county where he resides, absent a venue
giving corporate defendant. The court below also held that in fu-
ture cases, but not in this case, dismissal of a prior action in the
manner done in this ease by the Circuit Court of Kanawha County
would constitute a final adjudication on the merits. Since the
same legal principle had been previously established by the court
below in Barker v. The Traders Bank, 152 W.Va. 774, 166 S.E.2d
331 (1969), petitioner may have been denied the ‘‘fundamental
fairness’? required by the Fourteenth Amendment. These issues

are not included in the Questions Presented or as Reasons for
Granting the Writ in this Petition.

6

tioner’s instructions number 6 (R. 687), 7 (R. 687-689),
14 (R. 693), 16 (R. 694-695) and 18 (R. 698-699).
These objections were renewed as points of error in
the Supreme Court of Appeals (R. 22-25), but are
either ignored in the Court’s opinion, summarily re-
jected in the opinion in n. 1 at App. A, pp. 5a-6a, or
rejected in the opinion at App. A, pp. 37a-40a.

I. THE EVIDENCE ADDUCED AT TRIAL

A. Background of the Publications and Participation of the
Moore Aides.

Early in his 1968 campaign for Governor of West
Virginia plaintiff made a public disclosure through the
media of what he said was his income and assets. A
front page story in the Democratic ‘‘Charlston Ga-
zette’’ on March 28, 1968, quoted plaintiff as deserib-
ing his assets as follows: ‘‘A house in Charleston,
value about $49,000, mortgage of $23,600 outstanding ;
farm, equipment and animals in Randolph County,
value about $15,000; lots in Nicholas County, Dunbar
and Florida, total value about $6,700; interest in forest
acreage, Pendleton County, $10,000; 60 shares Life
Insurance of Kentucky, $1,800; 250 shares Riverside
Nursing Home, $12,000; varying number of shares in
the name of each of his five (5) children, Massachusetts
Mutual Growth Fund for Edueation, $10,000 ...”’
(R. 461). (Emphasis supplied). Plaintiff testified
the story was correct as far as he knew (R. 463).

On or about October 14, 1968, two campaign aides
of Republican Candidate Arch A. Moore, Jr., met with
the Daily Mail’s Editor, Managing Editor and Political
Editor. (R. 555, 556). The Moore aides had documen-
tary evidence concerning plaintiff’s connection with
Selmet Properties, Inc., a New York corporation,

7

(hereinafter ‘‘Selmet’’) which indicated that plain-
tiff’s statement in March of 1968 that he “owned an
interest in forest acreage, Pendleton County, $10,000”
was misleading in that the value of the acreage was sub-
stantially understated, and that he did not own it di-
rectly, but through Selmet.

The two Moore aides were Norman Yost, a profes-
sional newspaperman, and William Loy, a West Vir-
ginia attorney who, before joining Moore’s staff, had
practiced law in the West Virginia judicial circuit
which included Pendleton County and who had lived
in the area since childhood. (R. 629, 630).

The Daily Mail employees with whom the Moore
aides met were Editor, Jack Maurice, Managing Editor,
Vint Jennings (now deceased) and Robert Mellace,
Political Editor. Maurice had been a working news-
paperman continuously since his college matriculation
in 1935 (R. 554). Mellace, except for three years in the
Army after his university matriculation in 1941, had
also continuously been a working newspaperman, first
serving as a reporter, columnist and Managing Editor
of the Morgantown, (W. Va.) Post, and since 1953, as
State Capitol Reporter and Political Reporter of the
Daily Mail (R. 373).

The documents and other information supplied the
Daily Mail by Loy related to plaintiff’s connection with
Selmet, which had been incorporated as a New York
corporation in 1965, and which, in 1966, had acquired
for $134,620 cash, 2,900 acres of land in Pendleton
County, West Virginia, adjacent to the Monongahela
National Forest and close to a large recreational com-
plex, the development of which had been authorized
by the U.S. Congress in September 1965. From out-
conveyances, Selmet had already received $182,796.75

OO SURESH Reape eRe aaireny- 7 meneR zm HGS NE Pete Hh gett gh MEMES UR ARES Reng

8

at the time of publication. The most recent outconvey-
ance by Selmet had been made only a short time before
publication, on October 2, 1968. This was a deed to
Nature Conservancy, Inc., for a recited sales price of
$81,364, which conveyance Loy said was for the ulti-
mate transfer to the U.S. Forest Service, a transfer
that was later made on June 9, 1969 (R. 843). Except
for his execution of some deeds as President of Selmet,
and his execution of an application to qualify this
foreign corporation to do business in West Virginia,
plaintiff made no other public disclosure of his interest
in Selmet before his press conference on October 25,
1968, the day after the Daily Mail publication of Octo-
ber 24, 1968 (R. 465).

The Daily Mail Editors were fully aware of the self
interest of the Moore aides, but as Mellace testified,
“*. .. 99% of stories like this are originated by some-
body in a political campaign”’ (R. 283).

The Daily Mail Editors decided that Mellace should
go to Elkins, West Virginia, the site of the West Vir-
ginia office of the U.S. Forest Service and to Pendleton
County, where the Selmet land was situated to investi-
gate the matter.

Mellace flew to Elkins on October 22, 1968, in a plane
owned and piloted by Daily Mail photographer, Chester
Hawes (R. 597). They were accompanied by William
Loy, who knew where the Selmet property was located
(R. 640). Another Moore aide, Sandy Latimer, met
Mellace, Hawes and Loy at the Elkins Airport and
drove Mellace to the places he wanted to go (R. 291-
292).

Mellace first visited the office of the U.S. Forest Serv-
ice, where he went in alone (R. 292) and talked for

9

about an hour and one-half (R. 301) with E. M. Olliver,
the senior officer in charge.

The Moore aides then drove Mellace and the Daily
Mail photographer to the location of Selmet’s remain-
ing acreage which was level and adjoined a highway.
Using the acreage recited in Selmet’s out conveyances,
Mellace calculated Selmet had valuable property re-
maining of more than 400 acres. Based on the sales
prices of similar property sold by Selmet and informa-
tion Mellace obtained from local residents, Mellace
believed that Selmet’s remaining acreage might be
worth as much as $400,000.

Abstracts of public records made by attorney Loy
and provided to Mellace demonstrated that Selmet had
violated West Virginia law by acquiring the 2,900 acres
and making several sales of real estate without quali-
fying to hold property and to do business in West Vir-
ginia (W. Va. Code, § 31-1-79).

On October 24, 1968, about an hour and a half before
the Daily Mail was on the streets, Mellace gave Moore
aide, Yost, a carbon copy of his story for distribution
to other newspapers (R. 363-365). A carbon copy was
also routinely made available to the Associated Press
(R. 561).

There is no evidence that the Moore aides did any-
thing more than supply Mellace with information, the
accuracy of none of which is disputed. There is no evi-
dence of a ‘“‘plan or scheme”? to discredit plaintiff
unless the evidence summarized under this subheading,
plus the fact that the Daily Mail is a Republican news-
paper, can be so characterized.

PRRere cesses RTE RITES REPO INE AMSA ERG EAM SGOT mE ak
. ? sa bl el Dae 7 nye ts

i0
B. The Publications.

The three Daily Mail publications at issue in this
ease were published in the Daily Mail of October 24,
1968 and October 25, 1968 and are reproduced in the
Appendix to the Opinion of the Supreme Court of
Appeals of West Virginia (Appendix A to this Peti-
tion).

Except for the headlines, all of which were written
at the ‘‘copy”’ or ‘‘news desk”’’ by one or more of sev-
eral ‘‘copy writers’’ under direction of a copy or news
editor (R. 560, 561), the three stories were written by
Robert Mellace.

The Daily Mail story of October 24, 1968 reported
that a New York corporation (Selmet) headed by
plaintiff stood to make a handsome profit dealing in
property located in Pendleton County, West Virginia,
close to a federally funded recreation complex. The
story told where the property was located, when and
from whom it was acquired, how much of the acreage
had been sold, how much of the acreage appeared to be
still owned by Selmet and other details concerning the
land dealings of Selmet and plaintiff’s involvement
with Selmet, all of which was learned by Mellace in his
investigation or furnished to Mellace by Loy. The
West Virginia Supreme Court concedes that this story
was factually accurate (App. A, p. 8a).

One of the stories in the Daily Mail of October 25,
1968 was about D. C. Harper and the ‘‘Seneca Rocks’”’.
While he was in the Pendleton County area, Mellace
and his party made a chance stop at the general store
operated by D. C. Harper. Mellace knew Harper. In

11

talking to him, Mellace learned that the U.S. Forest
Service had offered the Harper family $7,900 for the
‘Seneca Rocks’? which Harper said his faimly had
owned for approximately 200 years and which are a
great natural scenic attraction. Congress, in establish-
ing the ‘Recreation Area’? by Public Law 89-207,
named it the ‘‘Spruce-Knob-Seneea Rocks National
Recreational Area.’’ Mellace though it newsworthy
that the U.S. Forest Service would voluntarily pay
Selmet $81,364 for recently cut over hillside for a road
location, but would only offer the Harper’s $7,900 for
their famous Seneca Rocks. Mellace’s opinion was
vindicated later. In a condemnation proceeding the
Harpers were awarded $175,000 for the Seneca Rocks
(R. 270). The factual accuracy of the Mellace story is
conceded by the court below.

The other story in the Daily Mail of October 25, 1968
admittedly quotes, and quotes correctly, statements of
Arch A. Moore, Jr., plaintiff’s opponent in the West
Virginia gubernatorial election campaign.

The headlines of the stories were not written by either
Mellace or Maurice (R. 304, 307, 336-337, 340-341, 560-
561) and there is no evidence that the writer of any of
the headlines entertained any doubts about the truth
of the headlines. Mellace testified: ‘“‘No, I didn’t see
the headline before it went in the paper.”’ (R. 304).
The only evidence at the trial about the proper purpose
of headlines was the testimony of Daily Mail Editor,
J. D. Maurice (R. 561) that: “The primary function
of the headline in the Daily Mail, and I guess in most
newspapers, is to call the reader’s attention to, and give

Ee MERE WPI COGS HNL YET NOME, SR AMEE EN ISSO

12

some indication of, the content of the story which fol-
lows.”’
C. Damages.

Plaintiff alleged no pecuniary loss in his complaint,
but in his prayer for general damages, alleged that his
political career as a candidate for Governor was ‘‘dam-
aged beyond repair.”” (R. 10). At the trial plaintiff’s
only evidence of damages was his own uncorroborated
testimony that his political campaign was damaged, that
his reputation had been damaged, and that he and his
family had suffered mental anguish. Petitioner
objected to plaintiff being permitted to testify about
damage to his political campaign. The trial court ruled
that this evidence was admissible on the question of
general damages (R. 445-453).

In 1972 plaintiff was nominated as a Democratic
candidate for and subsequently was elected to the
Supreme Court of Appeals, receiving in the primary
and general election the highest vote of any candidate
(R. 840 E, 840 F).

The jury returned a verdict of $250,000 compensatory
and $500,000 punitive damages.

D. The Instructions.

While generally speaking the instructions given the
jury by the trial court paid lip service to New York
Times, this petitioner objected to some of them at the
trial and on appeal contended that the giving of these
instructions was error. (See n.1, App. A, pp. 5a-6a).
Plaintiff’s instruction No. 2a (R. 859) instructed the
jury that ‘‘libel’’ in the case of a nominee for public
office was a ‘‘false writing’’ published with a reckless
disregard of its falstiy ‘‘and which tends to injure the

13

reputation of the nominee ...”’ Plaintiff’s instruction
No. 5 said in effect that petitioner had no greater right
to speak critically of the plaintiff during a political
campaign than on any other occasion. Nowhere in any
of plaintiff’s instructions or in any of those of peti-
tioner which were given by the trial court was the jury
told that there had to be a ‘‘false statement of fact??
rather than just a false statement. Petitioner’s instrue-
tion No. 6, which the trial court refused to give and
which action the court below sustained, would have
told the jury that there had to be a false statement of
fact and that illwill or other bad motives were not
evidence of actual malice. While refusing the peti-
tioner’s instruction No. 6, the court gave plaintiff’s in-
struction No. 7 which instructed the jury that illwill
could be considered as evidence of actual malice. These
and other instructions complained of are set forth in
full in App. F, pp. 75a-79a.

. IL THE OPINION OF THE WEST VIRGINIA SUPREME COURT
OF APPEALS

On appeal, the Supreme Court of Appeals of West
Virginia, with Justice Sprouse and another of the
five members of the court disqualifying themselves,
affirmed the judgment insofar as it awarded $250,000 as
‘actual damages’’. In the view that “an award of
$250,000 actual damages is adequate for the purpose of
dissuading publishers from similar willful reckless con-
duct in the future’ and that ‘“‘an award of $750,000
would have a chilling effect upon the legitimate exer-
cise of First Amendment rights’’, the verdict and judg-
ment of $500,000 as punitive damages were set aside.

In sustaining the judgment awarding $250,000 as
“factual damages’’, the court below purported to recog-

ee BSE OTOL ELEN GN NR CH OEERE 2 AL OPEC PME REN
ee niin . onan -

14

nize that the plaintiff, as a candidate for governor com-
plaining of a publication as a libelous aspersion of his
integrity, was required by New York Times, and later
decisions of this Court * interpreting the First Amend-
ment, to prove a false and defamatory statement pub-
lished maliciously, t.e. with knowledge that it was false
or with a reckless disregard of whether it was false or
not. The court below considered that the publica-
tions ‘‘implied that enormous profits would inure to
Sprouse’s benefit as a result of ‘inside’ information
which Sprouse acquired through his Democratic Party
affiliation concerning plans of the United States Gov-
ernment to establish a national park at Seneca Rocks.”’
(App. A, p. 4a). Though none of the three stories

3 For brevity and ease of reading, we shall in this Petition refer
to past First Amendment decisions of this Court by their short-
hand names, i.e. New York Times, Garrison, Butts, Gertz, ete.
Decisions so referred to may include New York Times v. Sullivan,
376 U.S. 254, 11 L.Ed. 2¢ 686, 84 S.Ct. 710 (1964); Garrison v.
Louisiana, 379 U.S. 64, 13 L.Ed.2d 125, 85 S.Ct. 209 (1964) ; Henry
v. Collins, 380 U.S. 356, 13 L.Ed.2d 892, 85 S.Ct. 992 (1965);
Rosenblatt v. Baer, 383 U.S. 75, 15 L.Ed.2d 597, 86 S.Ct. 669
(1966) ; Time, Inc. v. Hill, 385 U.S. 374, 17 L.Ed.2d 456, 87 S.Ct.
534 (1967) Curtis Publishing Co. v. Butts, and Associated Press v.
Walker, 388 U.S. 130, 18 L.Ed.2d 1094 87 S.Ct. 1975 (1967);
Beckley Newspapers Corp. v. Hanks, 389 U.S. 81, 19 L.Ed.2d 248,
88 S.Ct. 197 (1967); St. Amant v. Thompson, 390 U.S. 727, 20
L.Ed.2d 262, 88 S.Ct. 1323 (1968); Greenbelt Cooperative Pub-
lishing Assn. v. Bresler, 398 U.S. 6, 26 L.Ed.2d 6, 90 S.Ct. 1537
(1970) ; Monitor Patriot Co. v. Roy, 401 U.S. 265, 28 L.Ed.2d 35, 91
S.Ct. 621 (1971); Time v. Pape, 401 U.S. 279, 28 L.Ed.2d 45, 91
S.Ct. 633 (1971) ; Ocala Star-Banner Co. v. Damron, 401 U.S. 295,
28 L.Ed.2d 57, 91 S.Ct. 628 (1971); Rosenbloom v. Metromedia,
Ine., 403 U.S. 29, 29 L.Ed.2d 296, 91 S.Ct. 1811 (1971); Gertz
v. Robert Welch, Inc., 418 U.S. 323, 41 L.Ed.2d 789, (1974); Old
Dominion Branch No. 476, Nat’l Assn. Ltr. Carriers vy. Austin,
418 U.S. 264, 41 L.Ed.2d 745 (1974) ; Cantrell v. Forest City Pub-
lishing Co., 418 U.S. 909, 42 L.Ed.2d 419 (1975) ; Cox Broadcast-
ing Corp. v. Cohn, — U.S. —, 43 L.Ed.2d 328 (1975).

15

published by petitioner stated that plaintiff had
acquired such ‘inside information’’, the court below
held the evidence sufficient to sustain a jury verdict of
malicious falsehood on essentially the following asserted
grounds:

(1) The stories were published pursuant to a plan
and purpose to injure the plaintiff’s gubernatorial
candidacy and to aid his Republican opponent (App.
A, pp. 25a, 26a, 40a) ;

(2) Given that plan and purpose, the use of “‘mis-
leading words in over-sized headlines’’, such as “land
grab’’, ‘‘dummy firm’’, ‘‘bonanza’’, ‘disclose’? and
“‘elean up’’, conveyed an intentionally false implica-
tion unsupported by the body of the publications (App.
A, pp. 7a, 8a) ;

(3) Given that plan and purpose, ‘‘the difference
between the fair implication of the headlines as opposed
to the supporting factual recitation of the stories is
evidence alone of malice, which absent evidence to the
contrary, supports the jury verdict”’ (App. A, pp. 25a-
27a) ; and

~~ (4) Given that plan and purpose, the petitioner
“did not publish the stories in question exclusively as
a news gathering agency”’ and was not, therefore en-
titled, as petitioner contends, to publish the statement
of plaintiff’s opponent in the election without subject-
ing it to ‘‘any test of truth”’. (App. pp. 18a, 19a, 25a-
27a, 40a).

Even the wholly accurate story published on October
25, 1968, under the headline ‘‘Fortune to Jim Sprouse
Pittance for Seneca”’ and the subheadline ‘Landmark ’s
Owners Plan Court Fight Against Deal’’ was held to

————— et si iadanintaiiliintea iariaamteinmemmea an eiito am icant

16

support ‘‘a jury conclusion that there was a deliberate
effort to imply that profit to Sprouse was acquired at
the expense of an honest farmer’’, and to have been
‘‘published with knowledge that it was false or mislead-
ing’’—though the contrast between payment to the
plaintiff’s company ond the offer to the owner of the
Seneca Rocks was plainly a fact that the petitioner
was constitutionally privileged to publish.

Finally, in sustaining the award of $250,000 in
‘actual dumages’’ the court below said:

“The job of determing such intangible and sub-
jective dp as personal humiliation, mental
anguish, and indignity has always been the exclu-
sive province of the jury subject to the gentle rule
that awards in these areas not be excessive. In
light of the amount of jury awards for pain and
suffering which are routinely sustained by appel-
late courts in tort actions involving physical in-
jury, and considering the rank and station in life
of the plaintiff at the time of publication, this
Court finds that the award of $250,000 actual dam-
ages were not excessive.’’ (App. A, p. 29a).

REASONS FOR GRANTING THE WRIT

The judgment of the Supreme Court of Appeals of
West Virginia sustaining the verdict and judgment of
$250,000 ‘‘actual damages”’ for libel abridges First
Amendment freedom in the area in which this Court has
said ‘‘the constitutional guarantee has its fullest and
most urgent application—the conduct of campaigns for
public office’. Monitor Patriot Co. at p. 272. Con-
ceiving the question presented to be one of ‘‘first
impression in the United States in light of New York
Times v. Sullivan”? (App. A, pp. 4a, 5a) and the case
‘‘unique in the annals of reported libel cases’’ (App.

17

A, p. Ta), the judgment fashions a novel test of lia-
bility in libel actions by an unsuccessful candidate
against a newspaper supporting his opponent. If the
judgment stands, its inevitable consequence will be a
litigious sequel to hotly contested elections that clearly
is repugnant to the Constitution. Both the principles
put forward by the court below and their application to
this record call for review and reversal by this Court,

1. In holding that there was sufficient evidence of
“actual malice’? to sustain liability for ‘‘misleading”’
headlines appearing above each of the three articles, the
court below aceorded decisive import to what it con-
ceived to be a plan and purpose on the part of the peti-
tioner and the opposing candidate for Governor to
injure the plaintiff's reputation and his chances of
election. This plan and purpose were accorded weight
in holding that the headlines were defamatory, in hold-
ing that the discrepancy between the headlines, [which
the court below characterizes as ‘‘misleading words...
rather than outright false statements” (App. A, p. 7a)],
and the “‘facts’’ in the body of the stories was sufficient
evidence of actual malice, and in denying any privilege
to print the statements of plaintiff’s opponent without
subjecting them to a test of truth. This was a repudia-
ion of the doctrine of this Court that an intent to
injure, as distinguished from intent to injure by pub-
lishing knowingly or recklessly false and defamatory
statement of fact, is insufficient to permit recovery in
libel. Garrison at p. 73, 74, Beckley Newspapers,
Greenbelt, Old Dominion, Gertz. The judgment totally
ignored the teaching of this Court that ‘rhetorical
hyperbole”’ is not constitutionally actionable (Green-
belt at p. 14) and that “Under the First Amendment
there is no such thing as a false idea. However pernici-

—————— acini iliac ind eeeladn aie nlanianiaaaemmicdmate ene ee me

18

ous an opinion’, we do not depend on courts for its
correction, ‘‘but on the competition of other ideas.’’
Gertz at p. 339.

No less significantly, the court below misread the
judgments of this Court in Butts and Walker, to ‘‘stand
for the proposition that when a newspaper departs
from an attempt to report the news objectively, the
fact of such departure can be considered by the jury
and an appellate court in determining whether there
was willful disregard of truth’’ (App. A, pp. 18a-20a).
These decisions, the court below thought, ‘‘stand for the
proposition that personal motives on the part of a news-
paper, or participation by a newspaper in a plan or
scheme to injure, is evidence of recklessness and willful
disregard for truth which may be considered with
other evidence on the question of actual malice’’. Since
there was no other evidence, motive and plan were the
determinative factors in themselves, in clear defiance
of this Court’s decision in Garrison at p. 73, and later
decisions, most recently Gertz and Old Dominion. In-
deed, the notion that it is appropriate for a court in
appraising liability for libel to differentiate between a
newspaper that publishes ‘‘exclusively as a news gather-
ing agency”’ and one that ‘‘departs from an attempt to
report the news objectively’? (App. A, p. 18a, 19a) re-
flects a misconception of the freedom of the press that
should not escape correction by this Court.

2. The court below sustained the jury verdict for
plaintiff in part on the headline terms ‘‘dummy firm,’’
‘land grab,’’ and the accompanying story accurately
reporting statements made by and attributed to Arch
A. Moore, Jr., plaintiff’s opponent in the 1968 guber-
natorial campaign (who was also at the time a member
of the U. 8. House of Representatives). The opponent

19

used the terms which were in the Daily Mail headline.
The court below also sustained the refusal of the trial
court to give petitioner’s proposed Instruction No. 7
(App. F, p. 78a) which would have instructed the jury
that the Daily Mail had no duty to subject Moore’s
statement to any test of truth.

Aside from the lack of evidence in this record to
show that the Daily Mail published Moore’s statements
on October 25, 1968, with the high degree of awareness
of probable falsity required for a finding of actual
malice or even subjected the Moore statements to any
test of truth, is it consistent with the First Amendment
to impose on the press a duty to censor a statement of
public officials and candidates for public office when a
newspaper reporter may not believe it to be true? Ts
a newspaper to sit in judgment as to whether a publie
official is expressing a falsehood or speaks with a reck-
less disregard of truth? New York Times and subse-
quent cases have not faced this specifie issue, the clos-
est analogy being Greenbelt. Because of the decision
below it is timely and important that this question be
considered by this Court. Such a duty to censor is
clearly contrary to the spirit of New York Times and
its progeny and to the First Amendment distinction
between freedom of speech and a free press. To re-
quire, at the risk of i:bel awards, that the press exer-
cise such a censorship role is incompatible with our
‘profound national commitment to the principle that
debate on public issues should be uninhibited, robust
and wide open.’”?’ New York Times at p. 270. Such a
requirement would, as a practical matter, make it im-
possible for the press even to ‘‘serve as a neutral forum
for debate, a ‘market place for ideas,’ a kind of Hyde
Park corner for the community,’’ itself a limited con-

ee ai aad at al Aidala lila oh) a bial BEMe bide ita 7 a Bde aden Bad

20

cept of press freedom which at least some members of
this Court reject.*

3. In holding that the award of $250,000 actual
damages is supported by the evidence, consisting as it
did of plaintiff’s uncorroborated testimony that his
political campaign was seriously damaged, that he and
his family had suffered mental anguish and that his
reputation had been injured, the court below decided
an important question of First Amendment law that
warrants the consideration of this Court. The full
implications of this Court’s opinion in Gertz on the
measure of ‘‘actual damages’’ in libel are significantly
tested by a case in which the gravamen of the plain-
tiff’s grievance, emotionally repeated by his counsel
at the trial (R. 747, 805, 806), is that he lost a guberna-
torial election, though he was subsequently elected to
the State’s highest court. Whether loss of the election
is an admissible item of ‘‘actual damage’’ given the
inevitably speculative question of cause and effect in
such an area [see Southwestern Publishing Co. v.
Horsey, 230 F.2d 319 (9th Cir. 1956)] is in itself an
important question warranting this Court’s review.
The analogy drawn by the court below (App. A, p. 29a)
to ‘‘the amount of jury awards for pain and suffering
which are routinely sustained by appellate courts in
tort actions involving physical injury’’ hardly reflects
the sensitivity to First Amendment values that this
Court reflected in discussing ‘‘actual damages’? in
Gertz.

The court below saw no question of constitutional
magnitude in the size of the Fayette County jury ver-

* Address of Justice Potter Stewart, ‘‘Or Of the Press’’, Yale
Law School, November 2, 1974.

21

dict, in admitting plaintiff’s testimony regarding dam-
age to his political campaign, or in giving plaintiff’s
Instruction 10,° even though plaintiff is a very popular
political figure in Fayette County, having carried it
over Moore in 1968 by a vote of 14,671 to 6,602 (R.
840-B).

4. The court below admits to a concern that its
decision ‘‘may ultimately result in self censorship by
newspapers.’’? (App. A, p. 24a).

This Court “has often recognized that in cases in-
volving free expression we have the obligation, not
only to formulate principles capable of general appli-
cation, but also to review the facts to insure that the
speech involved is not protected under federal law.”’
Old Dominion Branch at p. 282; New York Times at
pp. 284-285; Greenbelt at p. 11. ‘We must ‘make an
independent examination of the whole record,’ Ed-
wards v. South Carolina, 372 U.S. 229, 235, so as to
assure ourselves that the judgment does not constitute
a forbidden intrusion on the field of free expression. ”’
New York Times at p. 285.

A review of the record discloses that here, as in
Beckley Newspapers vy. Hanks, the West Virginia Su-
preme Court has failed to abide by the First Amend-
ment.

*Plaintiff’s instruction No. 10 (App. F, p. 76a) inferentially
Suggested to the jury that any award of actual damages not exceed-
ing the $1 million sued for would be proper.

a RT Or Me ata CERNE REIN ASSET NR HERE

22

CONCLUSION

If the constitutional guarantee of a free press is to
mean anything as against a State Supreme Court
which pays lip service to but ignores the decisions of
this Court, this case must be reviewed.

Respectfully submitted,

F. Pau CHAMBERS
CHARLES Q. GAGE
1601 Kanawha Valley Building
Charleston, West Virginia 25301
Attorneys for Petitioner
Of Counsel: es

JACKSON, Ketiy, Hott & O’ FARRELL
1601 Kanawha Valley Building
Charleston, West Virginia 25301

May 2, 1975

APPENDIX

“ wea LE PGELE TS PLR! LLOELO I LILIIROLE
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Say ge aE LLIN, PEPE CEL lea re

la

APPENDIX A
Decision of the West Virginia Supreme Court
Filed February 4, 1975

Justices Haden and Sprouse, deeming themselves dis-
qualified, did not participate in the consideration or
decision of this case.

No. 13463
James M, Sprouse
v.
Cray Communication, Inc.

Fayette County
Reversed in part,
affirmed in part,
remanded with
instructions.

NEELY JUSTICE

1. A candidate for political office is governed by the
same rules with regard to recovery for libel as a public
official and can sustain an action for libel only if he can
prove that: (1) the alleged libelous statements were false
or misleading; (2) the statements tended to defame the
plaintiff and reflect shame, contumely, and disgrace upon
him; (3) the statements were published with knowledge at
the time of publication that they were false or misleading
or were published with a reckless and willful disregard of
truth; and, (4) the publisher intended to injure the plain-
tiff through the knowing or reckless publication of the
alleged libelous material.

2. Where oversized headlines are published which
reasonably lead the average reader to an entirely different
conclusion than the facts recited in the body of the story,
and where the plaintiff can demonstrate that it was the

2a

intent of the publisher to use such misleading headlines to
create a false impression on the normal reader, the head-
lines may be considerd separately with regard to whether
a known falsehood was published.

3. Where a candidate for public office who is plaintiff in
a libel action can demonstrate an overall plan or scheme,
the object of which was to injure plaintiff through the pub-
lication of defamatory material, a deviation between the
clear purport of defamatory headlines and the remainder
of the news stories reciting facts not defamatory in nature,
is evidence of reckless and willful disregard for truth which
may be considered along with other evidence on the
question of actual malice by the jury, and may be consid-
ered by an appellate court in reviewing a jury judgment
under the First Amendment to the United States Consti-
tion as applied to the states by the Fourteenth Amendment.

4. In cases involving alleged libel of a candidate for
public office by a newspaper where the protections afforded
to the newspaper by the First Amendment to the United
States Constitution as applied to the states by the Four-
teenth Amendment must be jealously guarded, an award
of punitive damages will be sustained on appeal only when
it is determined that the jury’s award of actual damages
is inadequate to dissuade newspapers similarly situated
from engaging in like conduct in the future.

5. In all future cases the dismissal of an action under
Rule 12(b)(6) W.Va. RCP for failure to state a claim
upon which relief can be granted shall be a bar to the
prosecution of a new action grounded in substantially the
same set of facts, unless the lower court in the first action
specifically dismisses without prejudice; however, in the
ease sub judice a former dismissal in Kanawha County
under Rule 12(b)(6) did not operate as a bar to a sub-
sequent action in Fayette County because the record clearly

3a

reveals that the action, although dismissed, was not dis-
missed on the merits, showing that the court intended to
dismiss only the complaint.

6. Venue for alleged libel against a domestic corporation
is properly laid in any county in which the libel was pub-
lished regardless of the residence of the defendant and
this rule is not changed by W. Va. Code, 59-3-1 [1967].

7. Where a jury instruction is improperly refused, and
where it further appears to the appellate court that the
case was tried on the correct theory and that the sub-
stance of the refused instruction was adequately covered
in other instructions, and where it further conclusively
appears to the appellate court that the outcome of the
case would not have been affected by the giving of the
refused instruction, the error is harmless and the case will
not be reversed for refusal to give that instruction alone,

8. As a general rule a newspaper is protected by the
First Amendment to the United States Constitution as
applied to the states by the Fourteenth Amendment when
it publishes in good faith the statements of candidates for
office about their opponents, and in this regard a news-
paper is not required to make an independent investigation
of the truth of such assertions by opposition leaders; how-
ever, when it conclusively appears from the evidence that
the newspaper published the statements of an opposition
political leader as part of an overall plan or scheme to
injure a political candidate, knowing that the quoted state-
ments were false or misleading, and when it further appears
that the newspaper acted independently by publishing such
statement by an opposition leader under a headline libelous
per se authored by the defendant newspaper, the jury may
infer that the statement by the opposition leader was pub-
lished with actual malice, in which case the First Amend-
ment will not shield the defendant newspaper.

—_

ee EEA LILY PES NN TA AT HE NE INE NRT AP EER

4a

NEELY, Justice:

In the fall of 1968 James M. Sprouse was a practicing
attorney in Charleston, West Virginia, and the Demo-
cratic Party candidate for Governor of the State of West
Virginia. Approximately two weeks before the November
election the Charleston Daily Mail published a series of
articles implying that James M. Sprouse had engaged in
real estate transactions in Pendleton County, West
Virginia, of such a nature as to cast aspersions upon
Sprouse’s integrity. The articles implied that enormous
profits would inure to Sprouse’s benefit as a result of
‘‘inside’’ information which Sprouse acquired through his
Democratic Party affiliation concerning plans of the United
States Government to establish a national park at Seneca
Rocks in Pendleton County. A complete text of the articles
in question is reproduced in the appendix to this opinion
and it is suggested that the articles be read in their en-
tirety at this point in order fully to understand the appli-
cation of the intricate law of libel to the facts of this case.

The plaintiff, James M. Sprouse, recovered a jury award
in the Cireuit Court of Fayette County for $250,000 actual
damages and $500,000 punitive damages against Clay Com-
munications, Inc., owner of the Charleston Daily Mail, a
newspaper of general circulation in numerous West
Virginia counties. The defendant, Clay, strenuously
argued that under New York Times Co. v. Sullivan, 376
U.S. 254 (1964) and its progeny, the defendant is not liable
for the statements made about Sprouse even though they
were false because Sprouse did not prove actual malice,
as that term is judicially defined in the law of libel by
New York Times.

This appeal presents a question of first impression in the
United States with regard to the law of libel in light of
New York Times v. Sullivan, supra. The basic issue con-
cerns whether evidence indicating that a newspaper fore-
swore its role as an impartial reporter of facts and joined

5a

with political partisans in an overall plan or scheme to dis-
credit the character of a political candidate is relevant in
determining whether the newspaper acted in reckless and
willful disregard of the truth when it published grossly
exaggerated, defamatory headlines which were unsupported
by the factual recitations in the body of the story. This
Court holds that once an overall plan or scheme to injure
has been established, an unreasonable deviation between
headlines and the remainder of the presentation is in and
of itself evidence of actual malice, which, along with other
evidence, supports a jury verdict for libel.

In addition to defendant’s First Amendment defenses
including an allegation that the damages are excessive,
defendant also assigns myriad procedural errors among
which the Court considers three to be fairly raised. The
first assignment of error raises the question of whether
venue was properly laid in Fayette County; the second
assignment presents the question of whether a previous
action begun in Kanawha County alleging the same set
of facts and dismissed under Rule 12(b)(6) W.Va. ROP
was an effective bar to the present action in Fayette
County; and, the third assignment of error concerns the
failure of the trial court to give two jury instructions. }

1 The Court has considered in detail the following additional as-
signments of error raised by petitioner, namely, that the trial court
erred: (1) in overruling petitioner’s objection to plaintiff’s use
and display before the jury throughout the course of trial of
“‘placards’’ or ‘‘blowups’’ of the publications in question; (2) in
denying petitioner’s motion for a mistrial made at the conclusion
of the opening statement of counsel for plaintiff on the ground of
improper remarks by counsel; (3) in permitting the admission of
certain tangible and testimonial evidence; (4) in permitting coun-
sel for plaintiff to question witness Robert Mellace as a hostile
witness; (5) in giving and reading to the jury plaintiff’s instruc-
tions numbers 1, 2A, 3, 5, 7 as amended, 8B, 10, and 10A; (6) in
refusing petitioner’s instructions numbers 1, 2, 6, 10, 15, 16, 18, 20,
21, 22, 23, and 24 and part of 3; (7) in refusing to submit special
interrogatory ‘‘A’’ to the jury; (8) in permitting plaintiff’s coun-

RASA Bs PPE ORME TEI LION EEE CIEE AONE EEG SIIB LN

6a

This Court finds that there was no reversible error com-
mittted, and further finds that although the $750,000
damage award is excessive, the plaintiff proved libel in
this case. Accordingly, the judgment is reversed in part
and affirmed in part and the case is remanded to the Cireuit
Court of Fayette County with instructions to enter
judgment for $250,000 actual damages plus interest and
costs and to strike as a matter of law the award of
$500,000 punitive damages.

Under the mandate of New York Times v. Sullivan,
supra, it is incumbent upon an appellate court in de-
termining the validity of a libel judgment both to consider
the law and to make an independent evaluation of the
evidence to insure First Amendment protection to pub-
lishers. A candidate for political office is governed by the
same stringent rules with regard to recovery as a public
official. Monitor Patriot Co. v. Roy, 401 U.S. 265 (1970).
In order for a political candidate to recover for libel against
a newspaper it is necessary that the candidate prove actual
malice, i.e., prove either that the newspaper published
false or misleading defamatory statements knowing that
they were false or misleading, or that the newspaper pub-
lished such statements with a reckless and willful dis-
regard for their truth. Monitor Patriot Co. v. Roy,
supra.

In the law of libel the word ‘‘malice’’ has an entirely
different connotation from its general meaning in other
areas of tort law. Cantrell v. Forest City Publishing. 95
S.Ct. 465 (1974). In libel actions ‘‘malice’’ does not con-
note the mere dislike of one party for another or the intent

sel to exhibit to the jury during closing argument special inter-
rogatory “B’’; (9) in denying petitioner’s motion for a mistrial
made at conclusion of closing statement by counsel for plaintiff on
the ground of improper remarks by counsel. Upon consideration
the Court is of the opinion and does find that the assignments are
without sufficient merit to be considered fairly raised, and accord-
ingly the above assignments are summarily dismissed.

7a

of one party to injure another, It is acknowledged, for
example, that a political campaign necessarily involves
intent on the part of one political group to ‘‘injure’’ op-
position candidates by depriving them of elective office.
In libel law ‘‘malice’’ has a much narrower definition and
requires not only deliberate intent to injure, but also an
intent to injure through the publication of false or mis-
leading defamatory statements known by the publisher or
its agents to be false, or an intent to injure through pub-
lication of such defamatory statements with reckless and
willful disregard for their truth.

Consequently, in order for the evidence in this ease to
withstand appellate review it is necessary that the plain-
tiff, Sprouse, demonstrate that the defendant Daily Mail
knew that the defamatory material contained in the articles
it printed was false or for plaintiff to demonstrate that the
Daily Mail was reckless and willful in its indifference to
the truth of the printed material. In this regard the case
sub judice is unique in the annals of reported libel cases
because it primarily involves the deliberate use of mis-
leading words in oversized headlines rather than outright
false statements. For example, the use of the headline
words ‘“‘land grab,’’ ‘“‘dummy firm,”’ ‘*bonanza,’’ ‘‘dis-
closed,’’ and ‘‘cleanup”’ are not libel per se and are all
susceptible to varying interpretations, Obviously, the dis-
covery of a five dollar bill on the sidewalk by a vagabond
is a ‘‘bonanza,’’ while a similar discovery on the part of a
senior executive is not a ‘“‘bonanza.”’ However, there is
one headline over a story quoting plaintiff’s opponent,
Arch A. Moore, Jr., ‘‘Dummy Firm Seen Proving Corrup-
tion,’’ which is probably libel per se.

The defendant argues that most of the material published
was true in that: (1) Sprouse was the president of a
New York corporation; (2) the corporation was engaged
in land dealings in Pendleton County; (3) the corporation
was making profits; and (4) the owner of Seneca Rocks

ead De ee En a So

8a

was offered a small sum for his property. Consequently
the plaintiff’s cause of action must be grounded not in the
basic substance of the articles but rather in the dramatic
and misleading defamatory characterization of mundane
facts, primarily in headlines, which would lead the ordinary
reasonable mind to a false conclusion.

The evidence strongly supports a jury inference that
the defendant knew the conclusions to be drawn from the
headlines were false and further that the defendant
anticipated that these false conclusions would logically
follow from its presentation. The Court’s decision in
this case, therefore, concerns two separate questions re-
garding the headlines. First, the question must be re-
solved concerning whether the headlines taken alone can
be considered defamatory without regard to mitigating
material in the body of the story, and second, the question
must be resolved concerning whether the mere existence
of misleading headlines unsupported by the body of the
story is evidence of intent to injure through publication of
false, defamatory statements known a% the time of publi-
cation to be false.

The evidence in this case presents a problem which might
be better analyzed with reference to a hypothetical situa-
tion. Let us suppose that a public figure, John Doe, fre-
quently participated as a leader for a Boy Scout troop and
as a coach in a Little League baseball program. If those
facts are beyond dispute, is it nevertheless libel for a news-
paper to describe Mr. Doe’s participation in those pro-
grams under a headline ‘‘Doe’s Association with Young
Boys Seen as Suspect’’? The law appears to be that the
truth of the facts presented under the headline would not be
a defense to libel, because the obvious intent of the head-
line is to convey a suspicion of homosexuality which is
defamatory and an unreasonable inference from the
observed facts. Although such a headline is not libel
per se it would have the same effect as the simple state-

:

i 9a

ment ‘‘Doe is a homosexual’? which would be libel per se.
In the simple hypothetical ease, which is in all respects
parallel to the case sub judice, the existence of such a head-
line unsupported by facts leading to an inference of homo-
sexuality is evidence which may be considered by a jury
on the question of malice. While alone the inconsistency
between the headline and story would not be sufficient to
support a libel action, such inconsistency would be one
valid link in the chain of proof necessary to support a
claim of (1) a false statement, (2) defamatory in nature,
(3) known at the time of publication to be false, and (4)
published with an intent to injure. Obviously, in the
absence of other evidence demonstrating a plan or scheme
to injure, mere lack of reasonableness with regard to the
headline being a fair summary of the story, or even gross
negligence, would not sustain a cause of action by a ean-
didate for office. Gertz v. W elch, 418 U.S. 323 (1974).

In the case at bar the evidence disclosed that approxi-
mately two weeks before the publications in question,
William Loy, then campaign manager for Arch A. Moore,
Jr., Sprouse’s election opponent, and Norman Yost, media
manager for the Moore campaign, visited the office of the
Charleston Daily Mail with information that Sprouse had
engaged in land transactions in Pendleton County, West
Virginia, through a corporation known as Selmet Proper-
ties, Inc. Loy and Yost conveyed this information to Jack
Maurice, Robert Mellace, and Vineent J ennings, all editors
of the defendant newspaper. On October 22, 1968, accom-
panied by members of the Moore campaign staff, Mellace
went to the U. S. Forest Service office in Elkins, West
Virginia and spoke to the senior officer in charge. While
in Elkins, Mellace also spoke with the land officer who had
negotiated an acquisition of 1,385 acres from Selmet
Properties by Nature Conservance, Ine., a non-profit cor-
poration in Washington, D. C., organized to buy land which
federal agencies wish to acquire for public recreational
purposes. Nature Conservancy buys the land and later

—— ee CESARE DT TBM Mh RLOR, RE RIANA KNPC wen Bone Noten PENH) DES BOTY RN Panay

10a

sells it at a cost to the agencies when such agencies acquire
the necessary funds.

Mellace learned from his trip to Elkins that a corpora-
tion named Selmet Properties, Ine. was incorporated in the
State of New York February 25, 1965, by Jerome Gromet-
stein, a New York attorney. He further learned that the
principal office of the corporation was in New York City,
and that Selmet had purchased approximately 2,900 acres
of land in Pendleton County from Henry Regnery on March
12, 1966 for $134,620. Mellace then diseovered that
through June 7, 1966 Selmet had sold seven parcels of land
to various individuals, and had violated West Virginia law
by buying and selling land before Selmet qualified to hold
property and do business in West Virginia. Papers later
filed in the office of the West Virginia Secretary of State
on August 25, 1966, more than two years before publication,
qualifying Selmet to do business in West Virginia, were
signed by Sprouse as president of Selmet, and the principal
West Virginia office was then listed as 700 Terminal Build-
ing, Charleston, West Virginia, where Sprouse practiced
law.

Mellace went to the Pendleton County Courthouse and
determined that after Selmet sold 1,385 acres to Nature
Conservancy for $81,364, there appeared to remain 400 acres
from the original Regnery purchase. At the time of Mel-
lace’s investigation the total income of record derived by
Selmet from sales of the Regnery property was $182,796.25
or approximately $48,176.75 more than its purchase price
for the land. There is no evidence in the record that Mel-
lace did not honestly believe that there were still several
hundred acres left in the original tract, although at trial it
was demonstrated that only 87.09 acres actually remained.
The plaintiff was unable to negate the fact that subtraction
of the out conveyances of record from the total acreage
stated in the original Regnery tract deed appeared to leave
approximately 400 remaining acres, and therefore Mellace’s

lla

good faith belief in his calculations at the time of publication
was not called into question.

Consequently, in the defendant’s favor there was evidence
that the newspaper believed the following facts: (1) Selmet
Properties, Ine. was incorporated in New York State; (2)
the corporation had conducted several routine transactions
in West Virginia before qualifying to do business in the
State; (3) after qualifying to do business the corporation
had sold 1,385 acres of land to Nature Conservancy, Ine. for
$81,364; (4) at the time of publication the corporation had
made a profit of $48,176.75 of its initial investment; (5)
Sprouse was president of the corporation; and, (6) there
appeared to be several hundred acres of land still remaining
in the original tract.

In support of plaintiff’s case, however, the defendant
newspaper also knew; (1) Sprouse had never hidden his
participation in the corporation ;? (2) there was no “inside”?

? Testimony of plaintiff James M. Sprouse on cross-examination:
Q. Now, early in the campaign, Mr. Sprouse, I believe in
March, 1968, you made a public disclosure of what you said
was an itemization of your income during the years 1963 to
1966, an itemization of your assets, including real property,
stocks, and some personal property, even including an auto-
mobile; is that correct ?
A. I issued such a statement, sir, I don’t know the date.

(Defense counsel then read aloud the text of a news article printed
in the Charleston Gazette, a rival newspaper of the Daily Mail in
Charleston, which contained an extensive list of Spouse’s assets
and income, among which was included the item ‘interest in for-
estry acreage, Pendleton County, $10,000.’’)

Q. Now, would you not admit or agree with me on reflection,
and after the event, had you disclosed to the public in that re-
lease March of 1968, that you owned a certain percentage
of the shares of stock of Selmet Corporation which owned a
large tract of land in Pendleton County, which it had pur-
chased at a cost of $134,000, and that the corporation owed

— AD e GA, i atl Ee RS ORES ee eT a el eh
Ny sia res r

12a

information available to Sprouse which was not generally
available; (3) the corporation had qualified to do business
before engaging in any major transactions and was qualified
to do business at the time of publication; (4) out-of-state
firms frequently do legitimate business in West Virginia;
(5) Sprouse was in no way connected with or responsible
for the small offer made by the U.S. Government for the
purchase of Seneca Rocks from the local owner; and (6)
the remaining land owned by Selmet Properties was at least
five miles from the Seneca Rocks landmark which was pic-

the bank a certain sum of money, making the net value of the
value of your stock, a certain figure, that you would never
have had these news stories in this campaign?

A. No, sir, I don’t agree with you on that. I think no
matter what I had put, if I had put that same information,
the Daily Mail could have done the same hatchet job based
on that same information.

Q. But, you see, in this story you said you, James Sprouse,
had interest in forestry acreage in Pendleton County, value of
$10,000. Now, would not the ordinary person construe that
to mean that you, as an individual, owned some real property
which was primarily of value only for timber and that it would
be in your name on the property books, either alone or with co-
tenants? ?

A. I can’t say what the ordinary person would think, Mr.
Chambers. My intention was to give a fair disclosure of
what I owned there, and that’s what I tried to do. I think at
the time it was just about the value of the investment I had.

Q. Where did you publicly reveal your connection with
Selmet Corporation before it became public knowledge on
August 24, 1968?

A. In 1968?

Q. Yes.

A. When I registered—we registered with the Secretary of
State and my name was listed as an officer. I signed all of
these deeds as president. That was a public record. And when
I signed all of these deeds, this was a publie record. When I
applied for a loan at the bank and we told them what it was
for, everybody that wanted to know anything about it, obvi-
ously. I was proud of being associated with it. It wasn’t any-
thing I wanted to conceal.

3

13a

tured in the newspaper photograph under the caption
‘*Where Governor Candidate ‘Cleans 2-7"

On October 24 and 25, 1968, the Charleston Daily Mail
published a series of articles with very large headlines as
follows:

‘‘PENDLETON REALTY BONANZA
BY JIM SPROUSE DISCLOSED”

‘‘Cleanup of Nearly $500,000 in View”?

**Seneca Rocks Tourist Project Property
Enriching Candidate Sprouse’?

‘‘Sprouse Owns Choice Land Beside $30
Million U.S. Resort”?

In addition to the Daily Mail’s own commentary with re-
gard to the land transaction, the paper printed extensive
comments from Sprouse’s opponent, Arch A. Moore, Jr.,
casting aspersions on Sprouse’s honor and integrity. The
largest headline in this regard said:

3 This conclusion with regard to the evidence is either supported
in the body of the articles themselves or from testimony at trial.
Testimony of Robert Mellace :
Q. Getting back . . . the story says ‘‘cleans up’’, ‘‘ WHERE
GoveRNor CaNnpipate ‘CLEANS Up’ ”’, October 25th.

A. The headline.

Q. The headline over Seneca Rocks, where Sprouse cleans
up.

A. That is what it Says.

Q. It is over a picture of Seneca Rocks, isn’t it?

A. Yes.

Q. He [Sprouse] didn’t even own Seneca Rocks, did he?

A. I don’t think—Mr. Harper owned the Rocks, I think.

Q. Mr. Mellace, are you telling the Court and jury that

people reading ‘‘Wuere Governor CANpIDATE ‘ SLEANS Up’ ’’
would not think it referred to the picture?

A. The general area.

Q. The general area is 10 miles from Seneca Rocks.

A. That’s the general area,

l4a

‘““MOORE ASKS FEDERAL PROBE IN SPROUSE’S
LAND GRAB”’

followed in smaller headlines by a statement which was libel
per se:

‘**Dummy Firm’ Seen proving Corruption”’

In the October 25th edition of the Mail there appeared a
composite picture of Seneca Rocks with the large headline:

‘“‘WHERE GOVERNOR CANDIDATE ‘CLEANS UP’ ”’

below which appeared a picture of an obviously worthy
looking country gentleman and a story headlined ‘‘ Fortune
To Jim Sprouse But Pittance For Seneca’’ implying that
the gentleman in the picture was suffering financially as a
result of improprieties on the part of candidate Sprouse.
There is no evidence in the record offered by the defend-
ant that any member of the Daily Mail staff had reason to
believe that Sprouse was actually engaged in a fraudulent
transaction. Although to persons untrained in business,

* Testimony of Mr. Jack Maurice, one of the editors of defend-
ant newspaper, who reviewed the articles prior to publication :

Q. Now, Mr. Mellace [sic]—Mr. Maurice, you agree, do you
not, and you concluded after investigation, that there was no
advance or inside information that Judge Sprouse was the
beneficiary of in connection with the land purchase and sub-
sequent sales in the Pendleton land area?

A. We concluded that we had nothing to suggest that he
had any advance information.

Q. And you had nothing to suggest that that transaction,
the purchase and sale of real estate in Pendleton County was in
any way tainted with illegality or criminality of any kind;
that’s true, isn’t it?

A. That is true, sir.

Q. You don’t contend that?

A. No, sir.

Testimony of Mr. Robert Mellace, editor of defendant newspaper
and author of the articles complained of :

Q. As I understand it, Mr. Mellace, you don’t contend that
Judge Sprouse had inside, advance information on this prop-

erty, do you?
A. No, sir, I don’t contend that.

15a

the existence of an out-of-state corporation might appear to
be a “‘dummy firm,’’ the jury were entitled to infer from all
the evidence presented that the staff of the Daily Mail
deliberately characterized a legitimate corporation by the
pejorative term ‘‘dummy firm”? to conjure up the image of a
conduit for illegal money when the defendant knew for an
absolute certainty that the business was routine and legiti-
mate.

The parties have cited numerous cases concerning
whether headlines should be considered as an integral part
of the news story, DeHusson v. Hearst Corporation, 204 F.
2d 234 (7th Cir. 1953), Afro-American Publishing Co. v.
Jaffe, 366 F.2d 649 (D.C.Cir. 1966), or may be considered
separately on the issue of whether the statements in ques-
tion are defamatory. Empire Printing Co. v. Roden, 247 F.
2d 8 (9th Cir. 1957), Las Vegas Sun v. Franklin, 329 P.2d
867 (Nev. 1958). The Court is of the opinion that no clear-
cut rule has been established in this regard for headlines
which are not libel per se, and therefore, each case must be
considered on its facts. Generally where the headline is of
normal size and does not lead to a conclusion totally unsup-
ported in the body of the story, both headlines and story
should be considered together for their total impression.
However, where oversized headlines are published which
reasonably lead the average reader to an entirely different
conclusion than the facts recited in the body of the story,
and where the plaintiff can demonstrate that it was the
intent of the publisher to use such misleading headlines to

Q. You don’t contend, do you, Mr. Mellace, that way back
in February, 1965, when this corporation was formed by Mr.
Sprouse and a [former] classmate at Columbia [University
Law School], that it was done for the purpose of buying real
estate to sell to the U.S. Government? Do you contend that?

A. No, sir.

Q. Let me ask you something, Mr. Mellace: Do you contend
now that this corporation was formed or connected with any
Act of Congress passed in March, 1965?

A. No, sir.

ee RETR DERL Ser ene TEeR nae Ronee

16a

create a false impression on the normal reader, the head-
lines may be considered separately with regard to whether
a known falsehood was published. As the court said in
Afro-American Publishing Co. v. Jaffe, supra, at p. 655
‘‘[w]hat counts is not the painstaking parsing of a scholar
in his study, but how the newspaper article is viewed
through the eyes of a reader of average interest.’’

It is important that this entire case be viewed against a
background of events which occurred in West Virginia
during the late 1960’s when rather widespread corruption
was exposed in State government. This corruption ulti-
mately led to federal prison terms for numerous high-
ranking officials, including a former Governor and a former
Attorney General of West Virginia. Therefore, the public
was particularly sensitive to allegations of political graft.
The record sustains the jury inference that it was the intent
of the editors of the defendant newspaper to take advantage
of the climate of the times with regard to public sensitivity
concerning graft to further the ends of their own candidate,
Arch A. Moore, Jr. by impugning the integrity of the
plaintiff, Sprouse. °

5 Testimony of Robert Mellace, editor of defendant newspaper
and author of the news stories complained of :

Q. Did you come about it[the story of the land transactions]
originally by way of investigation?

A. No, I did not.

Q. As a matter of fact, did it not come from William Loy
and Norman Yost, who at that time were directors and man-
agers of the Republican campaign who came to your office
and gave you information they wanted to have published? That
is true, isn’t it?

A. They did come to my office. What their titles were, I
don’t know. I know both of them were working for Arch
Moore, and today continue to work for the Governor. I think
Yost was his publicity man and Mr. Loy was his campaign
director. Mr. Yost has a newspaper background and Mr. Loy,
a lawyer, worked in Washington with the Governor when he
was a congressman. That is true, they did come to me, yes,
sir.

17a

The Supreme Court of the United States has given very
little guidance with regard to a situation of this type. Re-

Regarding the state-wide circulation of the stories about Sprouse
to other newspapers, Mr. Mellace testfied as follows:

Q. Mr. Mellace, when you published this first story, rather
after this story was written and before it was published, did
you have occasion to show it to Mr. Yost ?

A. I showed Mr. Yost a carbon copy of it.

Q. That was before it was published ?

A. It was before it appeared in the Daily Mail, like, well, an
hour and a half.

Q. And he was one of the [Moore] campaign aides who
planted the story with your newspaper ?

A. He was one of those who suggested there might be a
story, yes, sir.

* * * * *

Q. And you gave it to him so he could get circulation by
sending it to other newspapers, didn’t you?

A. Well, yes. He asked us if it would be all right if he
called other newspapers. We told him it would be all right
if it was a paper that would not appear before the Daily
Mail. After it appeared in the Daily Mail, we didn’t care who
used it.

Q. You don’t normally and routinely do that, give Mr.
Yost the story Daily Mail writes for publication in other
papers, do you?

A. This was not a routine story.

* * * * *

Q. I am talking about routine practice, you don’t routinely
give Mr. Yost your publications to have him disseminate them?
A. This is the only time that has ever happened.

Testimony of Mr. Norman Yost, publicity director in the cam-
paign of Arch A. Moore, Jr., the plaintiff’s opponent in the
gubernatorial election, and one of the men who took information to
the defendant newspaper for publication :

Q. Mr. Yost, when did you first come about the information
that Judge Sprouse owned an interest in real estate in Pen-
dleton County ?

A. The first information came about eight weeks, possibly
ten weeks before the election in the form of rumor or of some-
body reporting this information.

Q. ... After vou received this information, did you have
oceasion to go to any newspaper and seek its publication?

A. This information, basically, was provided by Mr. Loy.

— 2 ie a ch ne TR cate eee ee ee a
aaa a a - :

18a

ported U.S. Supreme Court cases almost exclusively con-
cern newspapers operating as independent, news-gathering
agencies. The purpose of First Amendment protection for
newspapers as interpreted by the U.S. Supreme Court is to
engender wide-open, robust, and uninhibited political dis-
cussion. New York Times vy. Sullivan, supra. Therefore,
the Court holds that it is relevant to this case that the Daily
Mail did not publish the stories in question exclusively as a
news-gathering agency.

The cases of Curtis Publishing v. Butts, and its compan-
ion case, Associated Press v. Walker, 388 U.S. 130 (1967)

And when Mr. Loy had secured certain documents that he
felt were vital to the campaign, I did go to the Charleston
Daily Mail.

Q. Now, Mr. Yost, how many times did you personally visit
and speak with the editor or associate editor, or any officials
of the Daily Mail about publication of this story?

A. This particular story?

Q. Yes.

A. I had one conference in which Mr. Loy, Mr. Jennings,
Mr. Maurice, Mr. Mellace was present, and I believe that was
the only time I was there for this purpose or any connection
therewith.

Q. And when you received the story, what did you do with
that story?

A. ... I immediately called my staff together and asked
them to help me distribute this story throughout the State.

Q. Could you tell us what newspapers, and I see you didn’t
bring notes with you, but as best your memory can serve you,
can you tell us what newspapers carried this story that you
and your staff circulated?

A. ...I1 didn’t have a clip sheet at this time of the news-
papers that did, but I assume that we hit every afternoon
newspaper. That would be our purposes.

Q. And I take it, as an experienced news man, you knew
what newspapers to call to give the story to?

A. Yes, because a news story, it is something that has to be
delivered fresh. And if it is not fresh it is not news.

19a

stand for the proposition that when a newspaper departs
from an attempt to report the news objectively, the fact of
such departure can be considered by the jury and an appel-
late court in determining whether there was willful disre-
gard of truth. In Walker the Associated Press received
incorrect information from a correspondent who was pres-
ent at the scene of events and who gave every indication of
being trustworthy and competent. The Court reversed a
judgment in favor of General Walker and held that a pub-
lic figure may recover damages for defamatory falsehood
only on a showing of highly unreasonable conduct constitut-
ing an extreme departure from the standards of investiga-
tion and reporting ordinarily followed by responsible pub-
lishers. Therefore, the Supreme Court held that the As-
sociated Press was not liable for publishing an isolated de-
famatory dispatch concerning General Walker when it was
operating under acceptable standards of good journalism.
The issue in Walker, therefore, can be distinguished from
the issue presented in the case at bar in that in Walker
there was no evidence of participation by Associated Press
in a plan or scheme to injure Walker.

The facts in the case at bar are far closer to the facts of
Curtis Publishing where recovery was sustained by the
Supreme Court partially because of the publisher’s per-
sonal motives for printing the libel. In Curtis, a ease in-
volving a defamatory story about a football coach which
appeared in The Saturday Evening Post, the Supreme
Court sustained recovery by the plaintiff because the Post
had deviated from generally accepted standards of respon-
sible reporting in order to print a sensational story. Al-
though it was not demonstrated that the Post knew the
statements were false, the evidence disclosed that the Post
had published highly defamatory statements upon very un-
reliable evidence. As Mr. Justice Warren characterized the
facts in his concurring opinion:

“Apparently because of declining advertising reven-
ues, an editorial decision was made to ‘change the

2 meter RON EIEN Og Oe LE MRT IOS f SR
” stein i Been eee Pee ee ee i She “ ~

20a

image’ of the Saturday Evening Post with the hope that
circulation and advertising revenues would thereby be
increased. The starting point for this change of image
was an announcement that the magazine would embark
upon a program of ‘sophisticated muckraking,’ de-
signed to ‘provoke people, and make them mad.’ ”’

This Court recognizes that recent cases would appear to
withdraw from the standard of ‘highly unreasonable con-
duct’ enunciated by Curtis. Dicta in the recent opinion in
Gertz v. Welch, supra, indicates that mere deviation from
accepted standards of journalism alone will not support an
action for libel brought by a public figure. Nevertheless
when Walker and Curtis are read together they still stand
for the proposition that personal motives on the part of a
newspaper, or participation by a newspaper in a plan or
scheme to injure, is evidence of recklessness and willful dis-
regard for truth which may be considered along with other
evidence on the question of actual malice.

The information gathered by the Daily Mail reporters
contained no facts indicating that Sprouse had engaged in
anything other than a normal business transaction and
there was no evidence discovered by the defendant at the
time of publication of inside information as a result of
political affiliation. In summary, the testimony at trial
contained no evidence that the reporters of the Mail at the
time of publication believed there existed any impropriety
whatsoever.®

6 Testimony of Mr. Marvin N. Marshall, who at the time the
articles were printed was Land Staff Officer of the Monongahela
National Forest, and who was one of the federal officials to whom
Mr. Mellace spoke during his investigatory trip to Elkins:

Q. Did Mr. Mellace make any statements, or did he ask any
questions of you or of Mr. Olliver, in your presence, regarding
the transaction which is the subject of this lawsuit?

A. Yes, sir.

Q. What were those questions?

A. The questions concerned the amount of acreage in the
transaction, the amount of land that was left in the ownership
of Selmet Corporation, and values of the land.

—

;
j
:
:

| 21a

The conceptual difficulty in this case arises from the abil.
| ity of different people to draw varying inferences from ob-
servation of the same set of facts. For example, it is pos-
| sible for one person to observe a man running from a bank
and conclude that he is involved in a bank robbery and for
another person to observe the same act and conclude that
the man is late for an appointment. Much discussion in
politics and government concerns different conclusions de-
rived from observation of the same random facts. Accord-
ingly, great latitude must be given a newspaper to report
observed facts and to make legitimate, negligent, or even
grossly negligent inferences from those facts. Had the
Charleston Daily Mail confined itself to reporting the facts

Q. Do you know how many acres that tract consisted of?
That is, in the residual?

A. 87.09.

* * * * *

Q. Was there any discussion, either statements made or
questions asked by Mr. Mellace on that occasion regarding the
acreage still belonging to Selmet ?

A. Yes, sir.

Q. What were those, or what was that?

A. Mr. Mellace indicated there was larger acreage than that
residual, and I attempted to show him from our records that
there was less acreage than that, than that he indicated.

Q. Did you tell him what acreage was left?

A. I told him, in my opinion, it was less than 100 acres.

Q. Did he indicate to you . . . how many acres he thought
was left?

A. Approximately 400 acres.

Q. Now did you, sir, have a discussion with him as to the
value per acre, or otherwise, of the residual tract?

A. Yes, sir.

Q. What was that discussion ?

A. He indicated the values were around $1,000 an acre, and
I indicated that, in my opinion, having seen land sell in that
area, that it would be nearer $500 per acre.

* * * * *

Q. Now, insofar as-Mr. Mellace in his story, Mr. Olliver
[sie], I don’t find any place he quotes you, but insofar as it
quotes Mr. Olliver, or attributes statements to the Forest Serv-
ice, is this story basically accurate?

A. Not in my opinion.

_—_—

—— YR ee ms MELROSE LINER TOT IN Ne MM ene

22a

of the Pendleton County land transactions in temperate
terms, and, had it stated that further investigation might
prove this transaction suspect, the Mail would have been
protected under the First Amendment. Monitor Patriot
Company v. Roy, supra. Defendant would even have been
protected from liability for negligent misleading headlines,
but not from intentional misleading headlines.

Obviously, as the U.S. Supreme Court frequently notes,
there is great tension between (1) government by free dis-
cussion as assured by the First Amendment, and (2) the
protection of individuals from libel. Historically since New
York Times the clearest legal principle emerging from a
reading of libel cases is that each case must be considered
by an appellate court on its facts with a strong sympathy
toward protection of the robust political discussion contem-

Testimony of Mr. Robert Mellace:

Q. As a matter of fact, this company, even though it did
qualify after it began to sell properties, was licensed to do
business in the Office of the Secretary of State in the State of
West Virginia; you had that information didn’t you?

A. Yes.

Q. Bill Loy gave that to you?

A. Either that or I acquired it myself... .

Q. As far as the records of the Secretary of State are con-
cerned, nothing Judge Sprouse did concealed his identity or
connection with the Selmet Company, did it?

A. Not to my knowledge, no, sir.

Q. Insofar as your word ‘‘disclosed,’’ there was nothing to
suggest that Judge Sprouse in qualifying that company did
anything to submerge his identity in any fashion or character,
was there?

A. I completely accept responsibility, Rudy, for these head-
lines, but I did not write them.

* * * * a

Q. Mr. Mellace, absent any available knowledge and absent
any inside information, do you admit that this was a legitimate
real estate transaction . . .?

A. It was basically legitimate as far as I know, and I
never said otherwise.

SR eee

Stakes Sapa Eee

aia

SATE PUR? RUSE RTE LS Are NL peek: Ce Ll A es

23a

plated by the First Amendment. At some point, however,
cumulative evidence will show that the line of protection
is breached, and a jury. must be permitted to find malice,
unless we are to adopt the position, articulated by Mr. Jus-
tice Black and Mr. Justice Douglas, that proper application
of the First Amendment provides an absolute defense for
the press to all defamation actions.’

In the case at bar the defendant crossed the line. The
evidence supports a jury inference that the Mail went be-
yond drawing conclusions from observed facts and know-
ingly used the pretext of a legitimate business transaction
to lead the electorate to what it again knew to be a false
conclusion. Use of headline words such as ‘*bonanza,”’
‘‘disclosed,’’ and ‘‘cleanup,’’ demonstrate an intent on the
part of the newspaper to capitalize on the well known habit
of newspaper readers of reading only the headlines. The
defendant demonstrated that the headlines were written by
news staff other than the authors of the stories, but Cantrell
v. Forest City Publishing, supra, holds that once an overall
scheme of recklessness has been demonstrated, respondeat
superior applies in libel as well as other areas of tort law
and the publisher is liable for the acts of employees. The
defendant did not demonstrate that Mellace was ignorant
of the content of the headlines before they were published,
and the jury were entitled to infer that even if Mellace were
ignorant of misleading headlines before publication on the
24th, those headlines were effective notice of the problem of
irresponsible headlines which recurred in the publication of
similar misleading headlines on the 25th.

7™See: New York Times v. Sullivan, 376 U.S, 254 (1964), Black
concurring, at p. 293; Garrison v. Louisiana, 379 U.S. 64 ( 1964),
Black concurring, at p. 79, and Douglas concurring, at p. 80;
Rosenblatt v. Baer, 383 U.S. 75 (1966), Douglas concurring, at p.
88, and Black concurring and dissenting, at p. 94; Curtis Publish-

ing Co. v. Butts, 388 U.S. 130 (1967), Black concurring and dis-
senting, at p. 170.

24a

The story in the October 25th edition of the Mad in
which there appeared a picture of a worthy country gentle-
man, Mr. D. C. Harper, with the headline ‘‘ Fortune to Jim
Sprouse Pittance for Seneca’’ and the sub-headline ‘* Land-
mark’s Owners Plan Court Fight Against Deal,’’ supported
a jury conclusion that there was a deliberate effort to imply
that the profit to Sprouse was acquired at the expense of an
honest farmer, rather than in a wholly independent trans-
action. The Mail was unable to demonstrate that either Mel-
lace or any other member of its staff had reason to believe
at the time of publication that Mr. Harper in any way suf-
fered as a direct result of Selmet’s dealings with Nature
Conservancy, Inc. Therefore, the plaintiff proved that this
story was false or misleading, and that it was published with
knowledge that it was false or misleading.®

This Court is concerned that our decision in this case may
ultimately result in self-censorship by newspapers. Partic-
ularly in West Virginia, where a large portion of the State
is served by newspapers which lack substantial financial
assets, the threat of potential libel actions becomes repres-
sive, not only because of possible judgments but also because
of the inordinate legal expenses normally incurred in de-
fending a protracted libel suit. Therefore it should be em-
phasized that the Court sustains the jury’s finding of libel
in this case because the plaintiff proved that the newspaper

® Testimony of Mr. Robert Mellace:

Q. Now, I am asking you sir, isn’t it true that D.C. Harper
did not plan any court fight against any deal that this has
reference to?

A. Not to my knowledge.

Q. As a matter of fact, Mr. Mellace, that story or that head-
line was printed, ‘Landmark’s Owners Plan Court Fight
Against Deal,’ so that the common interpretation would be
that he was planning a court fight against Judge Sprouse,
wasn’t it?

A. Well, my interpretation of that was that he was planning
a fight against the U.S. Forest Service for not giving him
enough for his land. I never connected Mr. Harper with the
fight against Judge Sprouse’s firm.

25a

abdicated its traditional role of fairly reporting the news
and became a participant in a scheme or plan, the object of
which was to employ grossly exaggerated and patently un-
true assertions, embodied primarily in headlines, to destroy
the character of Sprouse.® it appears from the evidence that

* The testimony of Mr. Robert Mellace supports this conclusion.
Re: ‘‘Disclosed.’’

Q. Now, Mr. Mellace, the word “disclosure”? is used in your
news story. I speak specifically now, of the headline appear-
ing on October 24, 1968: ‘Pendleton Realty Bonanza by
Jim Sprouse Disclosed,’’

A. Yes, that is there.

* * * ~ .

Q. As far as the records of the Seeretary of State are con-
cerned, nothing Judge Sprouse did concealed his identity or
connection with that Selmet Company, did it?

A. Not to my knowledge, no, sir.

* * * ® *

Q. ‘‘Disclosure,’’ you would agree, suggests there was some-
thing to be disclosed that the public didn’t know about, isn’t
that true?

A. Yes, sir.

* * * * *

Q. Would you admit that there was no effort on behalf of
James M. Sprouse to conceal or submerge his identity up
until the time of the story?

A. I don’t know of any.

- * * * *

Re: ‘‘Land Grab.’’

Q. The story planted by the campaign, and that was the
story of October 24, 1965 [sic], and he called a press confer-
ence, and you printed and published a statement he made—I
am talking now about the story of October 25th, ‘‘ Pendleton
Land Grab.’’ In the headlines you used the words ‘‘Land
Grab’’?

A. The Daily Mail did.

« oe * oO *

Q. And ‘‘land grab,’’ Mr. Mellace, means, does it not, the
seizure of real estate or seizure of land illegally or under-
handed, does it not?

A. I don’t know, again these are not my words.

° a * ° *

PLEO HAT YO RTA SNORE HIE I AI MEN NL OUP UMN CEN
PUPS AERONN HOEM LE

26a

not only did the Mail work closely with the Moore campaign
staff to discover the details of the land transaction, but
also that it fully cooperated in disseminating the articles
to other newspapers for publication throughout the State.
Under those circumstances the difference between the fair

Q. You will agree, will you not, Mr. Mellace that this was not
a land grab? Was it?
A. In the sense that Jim stole land or grabbed it?
Q. Yes.
A. No, but, again, that is not my word.
a * * * *

Seen Dci RIAU abie Cs ata ies Gia talasid a hasniaaa

eS

Re:‘‘Dummy Firm.”’

Q. You published a sub-headline “Dummy Firm Seen
Proving Corruption.’’ Your newspaper published that?

A. Yes, sir. And, again, those are Governor Moore’s words.

Q. You agree, do you not, this was not a dummy firm by
any definition of the word?

Mr. Campers: ‘‘Objection. I think the evidence will
how whether it was or not. I don’t think the witness is
qualified to answer that question.’’

e * * * *

THe Court: ‘‘This objection is overruled. You can
answer the question.’’
* * * » *

A. My definition of a dummy firm or dummy corporation
would be one that was formed covertly to hide the identity of
officers doing business in that corporation, but I can’t make
any conclusion about why this corporation was formed.

I just know in my own mind that it was formed outside the
State of West Virginia and the only business it has done was
in the State of West Virginia. When it first started doing
business in West Virginia, it did not, as required by law, ;
register with the West Virginia Secretary of State.

Q. Mr. Mellace, I agree with you, it registered late, but when
it registered, it registered two years and one month before
this property was sold to Nature Conservancy, in August 1966,
and the property was sold in October, 1968.

A. Okay.

* e * *

Q. After it registered with the State of West Virginia it did
not violate laws in the State of West Virginia did it?

A. Not to my knowledge.

RSE ee By ER Satins WINS Macs oY

27a

implication of the headlines as opposed to the supporting
factual recitation of the stories is evidence alone of malice,
which absent evidence to the contrary, supports the jury
verdict.

Re: ‘‘Court Fight.’’

Q. Now, Mr. Mellace, if I might direct your attention to
another story on October 25th. We have here the intro-
duectory headline, ‘‘Landmark’s Owners Plan Court Fight
Against Deal.’’

A. That is what it says.

Q. Now, I am asking you, sir, isn’t it true that D.C. Harper
did not plan any court fight against any deal that this has
reference to?

A. Not to my knowledge.

Q. As a matter of fact, Mr. Mellace, that story or that head-
line was printed, ‘‘Landmark’s Owners Plan Court Fight
Against Deal.’’ so that the common interpretation would be
that he was planning a court fight against Judge Sprouse,
wasn’t it?

A. Well, my interpretation of that was that he was planning
a fight against the U.S. Forest Service for not giving him
enough for his land. I never connected Mr. Harper with the
fight against Judge Sprouse’s firm.

* * * * *-

Testimony of Mr. Wilson Smith, real estate broker from Elkins
who negotiated the sale of the original 2,900-acre Regnery tract
to Selmet:

Q. Mr. Smith,—you are familiar, I take it, with that area,
are you not?

A. Yes, sir.

* * * - is

Q. There is a headline there where ‘‘Governor Candidate
Cleans Up.’’ Does that property contain the Seneca Rocks?
[The news photograph that appeared in Daily Mail Story was
shown to witness] Is that Seneca Rocks on that property ?

A. No, sir.

Q. How far away is the property that you all purchased
from Seneca Rocks or from where ‘‘Governor Candidate Cleans
Up’’?

A. At least five miles—nine miles.

Q. And the Rocks had nothing to do with the property?

A. No, sir.

ee RH EE MORNE NAR Re EIEIO CET HOR UPS EMIT FDP

28a

II

The Court agrees with the defendant’s contention that
the jury award of $250,000 actual damages and $500,000
punitive damages is excessive. Under the recent U.S.
Supreme Court case of Gertz v. Welch, supra, it is permis-
sible for a plaintiff in the position of Sprouse to recover
punitive damages because of the high standard of proof re-
quired of a candidate for public office to sustain any action
for libel. As it is necessary for a candidate for office to
prove that false or misleading statements were published
with knowledge on the part of the publisher of their falsity
or with willful and reckless disregard of their truth, and
further to prove that they were published with a deliberate
intent to injure, punitive damages may be recovered .

However, regardless of the law of this State, it would
appear that the penumbra of protection of the First Amend-
ment is such that punitive damages may only be recovered
in cases where the award of actual damages is insufficient
to dissuade others in like circumstances from committing
similar acts in the future. The policy embodied in the
First Amendment of encouraging broad dissemination of
public information forecloses an award of punitive damages
which might jeopardize the existence of a newspaper when
such damages are unnecessary to protect the public from
similar conduct in the future or to make possible the vindi-
cation of plaintiff’s rights in the absence of demonstrable
actual damages. In the case at bar the Court is of the op-
inion that an award of $250,000 actual damges is adequate
for the purpose of dissuading publishers from similar will-
ful and reckless conduct in the future. In addition the
Court is persuaded that an award of $750,000 would have a
chilling effect upon the legitimate exercise of First Amend-
ment rights and would lead to the type of self-censorship
which it has been the object and purpose of the United
States Supreme Court to prevent since New York Times v.
Sullivan, supra.

a
:
rs
:

§
4
4

29a

In viewing all of the evidence the Court is of the opinion
that the plaintiff proved $250,000 in actual damages. The
ease of Gertz v. Welch specifically recognizes that actual
loss to a plaintiff in a libel action is difficult to prove in the
same mathematical way that medical expenses or lost earn-
ings can be proven in an ordinary tort action. Mr. Justice
Powell specifically says in Gertz, 418 U.S. at 350:

‘*Indeed, the more customary types of actual harm
inflicted by defamatory falsehood include impairment of
reputation and standing in the community, personal
humiliation, and mental anguish and suffering. Of
course, juries must be limited by appropriate instrue-
tions, and all awards must be supported by competent
evidence concerning the injury, although there need be
no evidence which assigns an actual dollar value to the

injury.’’

Under West Virginia law in an action to recover for an in-
tentional tort, as opposed to a negligent tort, a plaintiff is
entitled to have such elements as mental anguish, insult, in-
dignity, and humiliation considered by the jury in arriving
at an award for actual damages. Addair v. Huffman,
W.Va. , 195 §.E.2d 739 (1973).

The job of determining such intangible and subjective
damages as personal humiliation, mental anguish, and in-
dignity has always been the exclusive province of the jury
subject to the gentle rule that awards in these areas not be
excessive. In light of the amount of jury awards for pain
and suffering which are routinely sustained by appellate
courts in tort actions involving physical injury, and con-
sidering the rank and station in life of the plaintiff at the
time of publication, this Court finds that the award of $250,-
000 actual damages was not excessive.

Ii

The defendant in this action objected to venue in Fayette
County, West Virginia, on the grounds that W.Va Code,
59-3-1(¢) [1967] changed the law under which Hanks v.

a SPN SSE UCL LEA AI LEIES SD IPE SY AEN RIESE EIEN OR ELENA ANTNS GO

30a

Beckley Newspapers, 149 W.Va. 552, 142 S.E.2d 727 (1965),
was decided. Hanks held that an action against a news-
paper may be brought in any county in which the cause of
action, or any part of the cause of action arose, although
the defendant is not a resident of that county, if the defend-
ant, or if more than one defendant, one or more of the
defendants, is a corporation under W.Va. Code, 56-1-2
[1923]. The opinion indicated that a newspaper is ‘‘cir-
culated’’ in any county in which editions of the paper are
sold and accordingly a part of the cause of action can be
considered to have originated in any county where the news-
paper is circulated and the libel is published.

W.Va. Code, 59-3-1 [1967] is a statute concerning news-
papers and legal advertisements. Although in subsection
(c) the statute says: ‘‘ Notwithstandirg any other provision
of this Code or law to the contrary a qualified newspaper
shall for all purposes be considered to be published where
it is first placed in cireulation,’’ this Code section does not
define the word ‘‘cireulated’’ in a manner inconsistent with
the Hanks case. Subsection (c) refers to where a news-
paper is published as opposed to where a libel is published.
Although for purposes of legal advertisements a newspaper
is to be considered as ‘‘published’”’ only in the county in
which it is first placed in circulation, thus assuring that
local newspapers will receive adequate support in the form
of legal advertisements, that section in no way changes the
common law definition of where a libel is ‘‘published.’’ Ae-
cordingly we reaffirm our holding in the Hanks ease that
proper venue in an action against a newspaper publishing
corporation lies in any county in which the libel is published.

IV

The defendant asserts that this action in the Circuit
Court of Fayette County was barred ab initio by a previ-
ous dismissal of an action grounded on the same set of
facts and filed in the Cireuit Court of Kanawha County on
October 28, 1968, just three days after the publications in

3la

question appeared in the Daily Mail. In that initial suit
filed in Kanawha County, the defendants submitted a mo-
tion to dismiss on the grounds that plaintiff’s complaint
failed to state a claim upon which relief could be granted
pursuant to Rule 12(b)(6) W.Va. RCP. The motion was
granted by an order entered March 14, 1969, which stated:

“This court is of the opinion to and does hereby
sustain said motions to dismiss of the respective de-
fendants, and, it is, accordingly Orperep that said
action be, and the same is hereby, dismissed for the
reasons set forth in the letter memorandum of opin-
ion of this court dated March 11, 1969, copy of which
is hereby attached, and, it is further Orverep that said
letter memorandum of opinion dated March 11, 1969,
be and the same is hereby made a part of the record,
in this action, to all of which the plaintiff objects and
excepts.’’

It is interesting to note that the letter memorandum of
opinion accompanying this order also dismissed the action
in Kanawha County. But the letter opinion is basically a
critique of the complaint in all its allegations, one by one,
and wile the trial judge concluded that ‘‘the complaint
completely fails to allege even the substance of any matter
which might constitute a basis for this action,’’ the opinion
goes on to describe how a proper complaint for libel could
be drafted indicating the alleged libelous material must
set out in haec verba. The trial judge did not state that
there was no possible way for the plaintiff correctly to
amend the complaint, nor did he state that the dismissal
was with or without prejudice, nor did he expressly grant
the right to amend. This Court is of the opinion that the
trial judge in Kanawha County did not intend to dismiss
the action, but rather intended to dismiss only the com-
plaint. Therefore, while not necessary to the Court’s de-
cision, the Court believes that the peculiar facts of this
ease strengthen our holding that the Kanawha County
action should not operate as res judicata to the subsequent
action in Fayette County.

ere ll as a ee an Te

32a

The plaintiff did not sua sponte seek leave to file an
amended complaint, nor did he, by appeal or otherwise,
seek to have the final order dismissing the action set aside
or modified. Instead, on October 27, 1969, more than six
months after the final order dismissing the Kanawha
County action was entered, plaintiff filed the present suit
in the Cireuit Court of Fayette County alleging similar
facts. Following denial of defendant’s motion to dismiss
for lack of venue in Fayette County, defendant moved for
summary judgment setting forth the final Kanawha County
judgment as a bar. The Fayette County court denied this
motion and the defendant assigns the denial as error.

The issue presented is whether a 12(b)(6) dismissal for
failure to state a claim is a final appealable judgment on
the merits and, therefore, under the doctrine of res judi-
cata, a bar to a subsequent action grounded on substantially
the same facts.

West Virginia law has never squarely met this question,
and when it has met it obliquely the decisions stand in
direct conflict. On the one hand, there is a 1965 opinion
of this Court in U. S. Fidelity & Guaranty Co. v. Eades,
150 W.Va. 238, 144 S.E.2d 703 (1965) which states:

‘‘If a summary judgment is entered under Rule 56
R.C.P. it is a dismissal with prejudice; whereas, a
judgment sustaining a motion to dismiss under Rule
12(b) for the failure to state a claim upon which re-
could be granted is not a dismissal with preju-
ice,’’

On the other hand a 1969 decision, Barker v. The Traders
Bank, 152 W.Va. 774, 166 S.E.2d 331 (1969), provides:

‘«, , . it should be observed that a judgment of dis-
missal of an action under Rule 12(b) or a final sum-
mary judgment under Rule 56, rendered by a trial
court is not here reviewable upon certificate but can
be reviewed by this Court only upon appropriate ap-
pellate process.’’

=

33a

In addition, search for guidance on this subject in other
jurisdictions is equally unavailing as there is a nation-wide
split of authority concerning whether an involuntary dis-
missal under Rule 12(b)(6) constitutes a bar to a subse-
quent prosecution of a new action alleging similar facts.
The majority view and national trend favors the conclu-
sionary nature of a 12(b)(6) dismissal as a determination
on the merits. This view is based on the policy of protect-
ing defendants from irresponsible forum-shopping by
plaintiffs and on the policy of providing a definite end to
litigation without fear by the prevailing party that actions,
once dismissed, will be brought again. The rationale of
this view is supported by the liberal amendment provisions
of the Federal Rules which have been adopted by many
states, including West Virginia.

The majority rule rests upon the authority of Rule 41(b)
which says in part:

‘Unless the court in its order for dismissal other-
wise specifies, a dismissal under this subdivision and
any dismissal not provided for in this Rule, other than
a dismissal for lack of jurisdiction or for improper
venue, operates as an adjudication upon the merits.’

Consequently under the majority rule a dismissal pursuant
to a Rule 12(b)(6) motion falls within the contemplation
of the plain meaning of Rule 41(b).

Courts which follow the majority view hold that a final
judgment can be rendered on the pleadings alone. Olsen
v. Muskegon Piston Ring Co., 117 F.2d 163 (6th Cir, 1941).
For example, one court holding the majority view has
stated that in cases where a motion to dismiss a complaint
is sustained and the complaint is dismissed, and where the
plaintiff does not desire to amend, he should announce his
election to stand on his pleading, let a final order or judg-
ment be entered dismissing the action, and then appeal
from that order or judgment. Crutcher v. Joyce, 134 F.2d _—
809 (10th Cir. 1943). The rule of finality also applies when
leave to amend the complaint is granted but not acted upon

— % BOR RE DLE SI YO OTN YN RS IRAE ERE REIS OBIE, SPRL EAR gai
RIOR ERE PIE OTIS 28

34a

as well as when leave is not granted. Matthews v. Wolvin,
266 F.2d 722 (5th Cir. 1959). In the case of Fyfe v. Pan-
Atlantic S.S. Corp., 114 F.2d 72 (2nd Cir. 1940), the Court
capsulized the majority view in stating that ‘‘[u]nder
modern principles, failure to amend upon dismissal of a
complaint under circumstances where amendment was per-
missible should bar the institution of a second suit.’’

To the contrary, however, a significant, though shrink-
ing, number of jurisdictions follow the minority view which
permits a second suit despite defective pleading in the
original action. The policy underlying this position argues
that dismissal] for failure to state claim never reaches the
merits of a claim and, therefore, ought not to operate as
res judicata because a litigant deserves to have his case
decided on the merits.

For instance, in the case of Rost v. Kroke, 195 Minn. 219,
262 N.W. 450 (1935) judgment was entered and the com-
plaint dismissed pursuant to an order sustaining a de-
murrer to the complaint for failure to state a cause of
action. The complaint had alleged in the alternative facts
constituting a good cause of action and facts which did not.
The court held that the dismissal was not a bar to a sub-
sequent suit in which the defective pleading was corrected
by stating a good cause of action. Moreover, after a deci-
sion by a state court dismissing a complaint for failure to
state a cause of action because it invoked the doctrine of
res ipsa loquitur which was adjudged inapplicable, one
federal court operating under the Federal Rules held that
the dismissal was not res judicata as to plaintiff’s right to
maintain an action in federal court on the same cause of
action. Bruening v. El Dorado Refining Co., 53 F.Supp.
356 (W.D. Mo. 1943).

The minority view makes one concession to the majority
view in that it recognizes that if, in a prior action, leave
to amend is expressly granted and the privilege is specifi-
cally refused, then the prior action does become res judi-

—

35a

cata. Hacker v. Beck, 325 Mass. 594, 91 N.E.2d 832 (1950).
In the case at bar, however, leave to amend was not sought
and was not granted.

Having pondered at length both majority and minority
viewpoints, this Court is of the opinion that the majority
view, which maintains that prior dismissal under Rule
12(b) (6) is a final judgment unless the court specifically
dismisses without prejudice, is the better view and should
be adpoted in this State; however, the Court further holds
that it is only equitable to give our conclusion in this
regard exclusively prospective application due to the extra-
ordinary confusion in both this State and other jurisdic-
tions with regard to the issue. The law of West Virginia
was so unclear as to put the parties in the case at bar to
playing a needless ‘‘game of forfeits,’’ and furthermore,
there was no conclusive guidance on the matter available
from foreign jurisdictions, state or federal. In addition,
the trial judge clearly intended to dismiss only the
complaint and not the entire action.

This Court’s policy with regard to procedural irregulari-
ties which needlessly interfere with a disposition on the
merits was succinctly stated in the recent case of Rosier
v. Garron, W.Va. , 199 S.B.2d 50 (1973), where the
Court said:

**. . . [T]he distinction between procedural rules
and substantive rights is frequently illusory. How-
ever, to the extent possible, under modern concepts
of jurisprudence, legal contests should be devoid of
those sporting characteristics which gave law the
quality of a game of forfeits or trial by ambush.”’

This case raises, once again, the age-old conflict between
society’s need for predictability accomplished through
legal formalism versus society’s need to do justice in in-
dividual cases. Formality and order are values essential
to the stability of any legal system, yet, as was articulated
in detail in Rosier, supra, man’s fundamental sense of

—

FLEE AE IR PRL RE EY RE RAINS ono ge Sp eae

36a

justice constantly clashes with formalism when procedural
impediments undesignedly lead to an unreasonable result.
Results become logically insupportable when they are
based upon a law which is unintelligible.

The Court holds, therefore, that the future law in this
State with regard to dismissals under Rule 12(b) is that a
judgment dismissing an action under Rule 12(b)(6) for
failure to state a claim upon which relief can be granted,
and without reservation of any issue, shall be presumed
to be on the merits, unless the contrary appears in the
order, and the judgment shall have the same effect of res
judicata as though rendered after trial in a subsequent
action on the same claim. 1B Moore’s Federal Practice,
(2nd Ed. 1974), § 0.409. We further hold that a judgment
on the merits shall not require a determination of the con-
troversy after a trial or hearing on controverted facts.
It shall be sufficient that the record show that the parties
might have had their controversies determined according
to their respective rights if they had presented all their
evidence and the court had applied the law, Olsen v.
Muskegon Piston Ring Co., supra.

Me

The last of defendant’s assignments with which this
Court will deal are the alleged errors in the trial court’s
refusal to give defendant’s instruction No. 14 and No. 7.
Instruction 14 said:

‘“‘The court instructs the jury that the publications
complained of by plaintiff were published on October
24 and 25 of 1968 and that the question of libel,
falsity and actual malice must be determined as of the
time the various publications were published.”’

Obviously a newspaper under the First Amendment cannot
be held to a standard of omniscience and can be judged
with regard only to information which is available to the
newspaper at the time of publication. Therefore, the Court

37a

holds that it was error for the trial court to fail to give

instruction No. 14 but that the error was harmless in light
; of all of the other instructions which were given in the
| ease.

; It is clear from a reading of plaintiff’s instructions Nos.
3 1, 2a, 3, 7, and defendant’s instructions Nos. 3 and 5 that
4 the case was tried on the proper theory that a newspaper
4 is to be judged concerning actual malice with regard only
4 to information known by it at the time of publication. '”
q * PLAINTIFF’s INSTRUCTION No. 1

The Court instructs the jury that if you find by a preponderance

of the evidence that one or more of the publications identified as
Plaintiff's Exhibit’s Nos. 1 & 2 complained of constituted **libel’’,
as that term is defined for you in these instructions, and if you
further find by a preponderance of the evidence that the libelous
publication or publications were false in some material particular;
and if you. further find by clear and convineing evidence that the
libelous and false statements were published with actual malice, as
defined in these instructions, then your verdict may be for the
plaintiff, James M. Sprouse, and against the Charleston Mail
Association.
PLAINTIFF’s INSTRUCTION No. 2a

The Court instructs the jury that libel in a ease brought by a
nominee for public office may be defined as a false writing pub-
lished by the publisher with knowledge of its falsity, or false
publication published with reckless disregard of its falsity and
which tends to injure the reputation of the nominee, to throw eon-

aS RRS TOD AE NI aa PSTN lr ONE ncaa ee a Sh eh atee NY

; tumely or to reflect shame and disgrace upon him, or to hold him
; up as an object of scorn, ridicule, or contempt.

i PLAINTIFF’s INsTRUCTION No. 3

: The Court instructs the jury that the term “actual malice”
3 means that the defendant published false and defamatory state-
ments with knowledge that they were false or with a_ reckless
disregard of whether they were true or false.

PLAINTIFF’s INSTRUCTION No. 7

The Court instructs the jury that even though failure to investi-

gate, on the one hand, and mere ill will, bias spite or prejudice on
the other, standing alone, are insufficient to establish either a

- saree OPEL ERNE A fle Nis ALERT HAG
OEP IOS DESAI PEED SONS ~ oe VERT

=

In general, where it appears to this Court that the effect of
an improperly refused instruction is merely cumulative,

38a

knowledge of the falsity of, or a reckless disregard of the truth
or falsity of the materials used; however, such evidence, if any, of
motive, intent, may be considered for the purpose of establishing,
by cumulation and by appropriate inferences, the fact of a defend-
ant’s recklessness or of his knowledge of falsity. Goldwater v.
Ginzburg, 414 F.2d 324, 342.

DEFENDANT’s INSTRUCTION No. 3

The Court further instructs the jury that all of the news
stories and editorials published by the defendant, and complained
of by the plaintiff, were constitutionally protected and require a
verdict for defendant, unless:

First, one or more of the publications complained of constituted
‘*libel’’ as that term is defined for you in these instructions;

Second, the libelous publication or publications were false in
some material particular; and

Third, the libelous and false statements were published with
‘‘actual malice’’ as defined in these instructions;

The burden is upon the plaintiff to prove the first two of these
essential elements by a ‘‘ preponderance of the evidence’’ as that
phrase is defined in these instructions;

The burden of proof to be borne by plaintiff with respect to
the third essential element—actual malice—is more strict. The
plaintiff has the burden of proving actual malice by ‘‘clear and
convincing evidence’’.

The Court instructs the jury that by clear and convincing evi-
dence is meant more than a mere preponderance of evidence.
Clear and convincing evidence is that evidence which is so clear,
explicit, and unequivical [sic] as to leave no substantial doubt and
which is sufficiently strong to command the unhesitating assent of
every reasonable mind.

If you find that plaintiff has failed to establish any of these
three essential elements by the standard explained, it is your duty
to return a verdict for defendant.

DEFENDANT’sS INSTRUCTION No. 5

The Court instructs the jury that the term ‘‘actual malice,’’
which must be established by clear and convincing evidence to war-
rant a verdict for plaintiff, means that defendant published false
and defamatory statements with knowledge that they were false

39a

and that the theory of the case enunciated in the refused
instruction has been adequately covered by other instruc-
tions, and where it further conclusively appears that the
outcome of the case would not have been affected by the
giving of the refused instruction, this Court will not re-
verse for failure to give that instruction alone. Jackson
v. Cockill, 149 W.Va. 78, 138 S.F.2d 710 (1964) ; Morgan v.
Price, 151 W.Va. 158, 150 S.E.2d 897 (1966). The de-
fendant is entitled to a fair trial; it is not entitled to a
perfect trial because such a thing does not exist.

The defendant further argues that it was error to refuse
defendant’s instruction No. 7 which said:

‘*The Court instructs the jury that in considering the
news stories complained of which quote or attribute
Statements to Arch A. Moore, Jr., the Republican
nominee for Governor, there was no legal duty on the
part of defendant to subject Moore’s statements to any
test of truth; and that accordingly, since plaintiff has
presented no evidence from which you could find that
Moore’s statements were not accurately and fairly
reported, you may not return a verdict for plaintiff
against defendant based on statements of Moore pub-
lished by defendant, even though you may believe from
the evidence that Moore’s statements were libelous and
false and that he was aware of the falsity or acted
r a reckless disregard of whether they were true or

alse.

The Court holds that defendant’s instruction No. 7 is not
an accurate statement of the law as applied to the facts

of this case. Although in general a newspaper is not
liable for publishing in good faith statements of political

or with a reckless disregard of whether they were true or false.
Reckless disregard for the truth cannot be equated with negligence
or what a reasonable man would have said under the circumstances,

Reckless disregard for truth or falsity implies a high degree
of awareness of probable falsity. There must be clear and con-
vineing evidence permitting the conclusion that the defendant in
fact entertained serious doubts as to the truth of his false and
defamatory publication.

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candidates during an election campaign, the evidence in
this case demonstrates that the statements of Arch A.
Moore, Jr. were closely coordinated with the story gen-
erated by the defendant as part of an overall plan or
scheme, the purpose of which was to discredit plaintiff.
Although the defendant would not have been liable for
publication of the Moore statement if defendant were
unaware at the time of publication of the falsity of the
statement, the evidence in this case reasonably implies that
at the time of publication the Daily Mail knew that the
accusations made by Moore were false. Accordingly, in
order for defendant’s instruction No. 7 to have been given,
it would have been necessary for defendant to qualify it
by admitting that the defendant would be liable for the
Mocre statements if the jury concluded that defendant
published them with actual knowledge of their falsity or
with willful and reckless disregard for their truth. See,
generally: Greenbelt Cooperative Publishing Association,
Inc. v. Bresler, 398 U.S. 6 (1970). As the defendant did
not offer to amend the instruction to conform to the law,
the instruction was properly refused.

Therefore, for the reasons set forth in this opinio

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385608_1317%3A1. Public record. Not legal advice.