Appendix — Lawnwood Medical Center, Inc. v. Sadow

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APPENDIX A

DISTRICT COURT OF APPEAL OF

THE STATE OF FLORIDA

FOURTH DISTRICT

January Term 2010

LAWNWOOD MEDICAL CENTER INC.,

Appellant,

Vv.

SAMUEL H. SADOW, M.D.,

Appellee.

No. 4D08-1968.

[March 24, 2010]

FARMER, J.

A surgeon with staff privileges sued a hospital for

breach of contract, and later added a claim for slan-

der per se, seeking compensatory damages for both

claims, as well as punitive damages for the slander.

He alleged that the hospital had breached its con-

tract with its medical staff, the Medical Staff

Bylaws, by invalidly giving another surgeon exclu-

sive privileges for cardiovascular surgery. The

exclusive grant barred. him from such surgery even

though he had been approved for it by the hospital’s

credentialing committee and medical staff leader-

ship. The slander claim involved statements during

the litigation by senior executive officers of the hos-

pital that, among others, the doctor was not even

“qualified to perform surgery on a dog.”

2a

The jury found the hospital liable on the breach of

contract claim and fixed his total damages at

$2,817,000, reduced to $1,517,000 because he could

have mitigated his losses. In separate proceedings on

the slander per se claim, the jury found Lawnwood

liable for the slanders; that Lawnwood specifically

intended to harm him by its per se slanderous

statements; that, in fact, it had actually injured him

by the statements; and that he suffered no compen-

satory damages from the slanders but that he was

entitled to punitive damages of $5 million from the

hospital. After extensive hearings, the trial court de-

nied Lawnwood’s post trial motions for directed

verdict and a new trial or a remittitur of punitive

damages to a reduced sum.

In the appeal of the contract claim, Lawnwood re-

peats its trial court argument of statutory immunity

from liability to the surgeon. As to the claim of slan-

der per se, Lawnwood presents no appellate issues

regarding liability or entitlement to punitive dam-

ages. Instead it appeals solely the amount of

punitive damages, confining its argument to the con-

tention that $5,000,000 is excessive under the

United States Constitution. Before addressing these

two issues, we must first examine the evidence sup-

porting the verdicts.’

’ On appellate review the verdict in Dr. Sadow’s favor com-

pels us to accept his version of disputed issues of fact. See TXO

Prod. Corp. v. Alliance Resources Corp., 509 U.S. 443, 447

(1993) Gury verdict in favor of one party makes it appropriate

to accept that party’s version of disputed issues of fact); Helman

v. Seaboard Coast Line R.R. Co., 349 So.2d 1187 (Fla. 1977)

(not function of appellate court to reevaluate evidence and sub-

stitute its judgment for jury).

3a

A. Facts

1. The Background to Breach of Contract

Dr. Sadow is a graduate of the University of Chi-

cago Medical School. His residency was in general

thoracic and cardiac surgery at the Chicago Heart

and Lung Institute. That was followed by a 2-year

fellowship in cardiovascular and thoracic surgery at

Wayne State University in Detroit. He is board certi-

fied in cardiovascular, thoracic and vascular surgery.

He settled in south Florida in 1985, beginning his

practice on the staffs at hospitals located in Palm

Beach Gardens and Jupiter. Patients are typically

referred to surgeons of his specialty by cardiologists

and primary care physicians. Although he began do-

ing both general thoracic and cardiac surgery, in

time he concentrated on cardiovascular surgery

(CVS).’

He entered into a partnership with a Dr. Down-

ing. Over the years, he perceived that 60-70% of his

patients came by referrals from physicians in Martin

and St. Lucie counties. He thereupon opened offices

in Fort Pierce and Tequesta to handle what was be-

coming the principal part of his practice. He also

observed that a significant number of those patients

were indigent, some with only Medicaid benefits.

Lawnwood is a profit seeking corporation. It is

owned by Hospital Corporation of America, now

* This surgery is described as “high risk” or “open heart” sur-

gery. Typically it involves valve replacements, repairs with or

without coronary bypass grafts, left ventricular aneurysm re-

pairs, and thoracic aortic dissections and aneurysms.

Se

4a

known as HCA, based in Tennessee, whose stock is

held by investors. The corvoration’s senior executive

staff — Chief Executive Officer (CEO) and Chief Fi-

nancial Officer (CFO) — are not elected by the

medical staff but are instead appointed by corporate

directors. During the time of the events involved in

this lawsuit, none of these senior executives were

themselves physicians.

Lawnwood is the principal hospital in St. Lucie

County. Martin Memorial Hospital is the principal

hospital in Martin County, located in Stuart, just

south of Fort Pierce (St. Lucie County). At that time,

neither Lawnwood nor Martin Memorial were au-

thorized to offer cardiovascular surgery. Hence

cardiac surgical patients in these two counties were

referred by their cardiologists and primary care phy-

sicians to surgeons in Palm Beacn County for the

surgical procedure. In the late 1980’s Dr. Sadow be-

gan seeing increasing numbers of such referrals. He

undertook frequent trips to Lawnwood to examine

patients and assist referring physicians in assessing

their surgical needs.

In 1993 Lawnwood itself decided to seek state

governmental agency approval for authority to offer

CVS surgery. The hospital prepared an application

to the Florida Agency for Health Care Administra-

tion for a Certificate of Need (CON) to perform CVS.

Lawnwood’s application was opposed by a number

of hospitals in the south Florida region, including

Martin Memorial, JFK in Lake Worth, St. Mary’s

and Good Samaritan in West Palm Beach, Palm

Beach Gardens Hospital, and a Boynton Beach hos-

pital. The CEO of Lawnwood, Trezona, approached

5a

Dr. Sadow to assist the institution in the effort to ob-

tain the CON for cardiovascular surgery. At

Trezona’s request, Dr. Sadow worked closely with

him in preparing the application to the state agency,

supplying relevant information and strategy for

making the application meritorious.

In its application, Lawnwood explicitly relied on

Dr. Sadow’s credentials and experience as a board

certified cardiovascular surgeon and his written

commitment to practice CVS at Lawnwood when the

planned new facility for that purpose finally opened.

Accordingly Dr. Sadow planned relocating his prac-

tice to the area of Lawnwood, meanwhile ending his

partnership with Dr. Downing by mutual agreement.

He wrote letters on Lawnwood’s behalf. He trav-

eled to testify in favor of the CON application. He

spoke to various people and groups to generate sup-

port for the CON’s approval. He called attention to

the fact that a significant number of CVS patients in

the Lawnwood service area were indigent, and the-

reby secured the support of other groups serving the

indigent population to favor the application.

Dr. Sadow gave his support for the CON without

asking for any commitment that he be given exclu-

sive staff privileges to perform CVS if the CON was

approved. And during all of his efforts on Lawn-

wood’s behalf, it is clear that Lawnwood did nothing

to suggest that Dr. Sadow would be barred from any

CVS privileges. To the contrary, in every way Lawn-

wood fostered the expectation that Dr. Sadow would

become a member of the Lawnwood staff for CVS

when it became available.

6a

The process for approval took nearly three years.

It was not until midyear 1996 that Lawnwood’s CON

was finally approved. At about the same time, the

corporate owners of Lawnwood changed CEOs, ap-

pointing Cantrell as the new chief administrator.

With the approval in hand, Lawnwood and its new

CEO began work on designing and constructing new

facilities for CVS, which would not be completed un-

til 1999.

Several years before this approval, Lawnwood had

adopted a set of rules of governance for its Medical

Staff, as required by law.’ Under these Medical Staff

Bylaws, staff physicians had the right to elect, re-

tain, and remove medical staff officers, the members

of the Medical Executive Committee (MEC), and the

various department chairs and vice chairs. These

rules specified that the medical staff would recom-

mend which doctors should be allowed to practice in

which medical areas. They also provided that exclu-

sive privileges would be limited to only four specified

areas. Cardiovascular surgery was not a specialty

designated for exclusive privileges.

The Bylaws provided for a Credentialing Commit-

tee to recommend initial grants of staff privileges,

and a Re-credentialing Committee to recommend re-

newals of privileges previously granted. The medical

staff elects members of these committees in annual

elections. The committees make the initial decisions

on all applications for first-time grants of privileges

* § 395.0193, Fla. Stat. (1998) (each licensed facility shall

provide for peer review of physicians and shall develop written,

binding procedures by which such peer review shall be con-

ducted).

Ta

and renewals, and then forward their recommenda-

tions to the MEC.* The MEC in turn makes the final

recommendations and forwards them to the Board of

Trustees for approval.

The corporate entity operating Lawnwood is di-

rectly governed by a Board of Trustees with its own

separate bylaws. The Medical Staff Bylaws specified

that the Board of Trustees of the corporate entity

owning the Hospital could not “unreasonably with-

hold” approval of final credentialing recommenda-

tions of the MEC. In short, the Board of Trustees

agreed that it would approve recommendations by

the MEC as to privileges unless it could state a rea-

son with just cause.

The trial evidence as to Dr. Sadow’s competence

as a surgeon was substantial and unchallenged.

From the late 1980s through 1999, Dr. Sadow had

been doing an average of about 150 surgeries per

year at Palm Beach Gardens and Jupiter Hospitals,

the majority of which were high risk, open heart pro-

cedures. He demonstrated a constant mortality rate

in the area of 3-4%, which is low for these high risk

procedures. Moreover the evidence was that he had

been sued only once for medical malpractice, and

that suit had resulted in a verdict in his favor (which

this court declined to disturb on appeal).”

* The Medical Staff Bylaws provide that: “The Medical Ex-

ecutive Committee shall consist of the officers of the Medical

Staff, the Chairman of the Departments of Medicine and Sur-

gery, four (4) members elected at large from the Active Staff,

and the Past President of the Medical Staff.”

* Wiggins v. Sadow, 925 So.2d 1152 (Fla. 4th DCA 2006)

(jury verdict in favor of surgeon in medical malpractice action

8a

In April 1997 Dr. Sadow filed a formal application

for non-exclusive surgical privileges in general tho

racic surgery and CVS. There was never any

question of his competence, qualifications or experi-

ence to perform CVS. His was the only pending

application for CVS privileges. Cantre]] assured him

that his application would be formally approved by

the corporation. The Credentialing Committee and

the MEC approved his application. In January 1998

Lawnwood formally accepted the recommendations

and approved his application, but for general tho-

racic surgery only. Lawnwood refused to consider his

application for CVS, stating only that the new facil-

ity was as yet undeveloped.

Actually Cantrell and the corporate owners of

Lawnwood had privately decided by then that CVS

would be given only under an exclusive prant to a

single surgeon or group. They had also privately de-

cided that Dr. Sadow would not be considered for

CVS and would be limited solely to general thoracic

surgery, in spite of the fact that CVS was his area of

practice. In fact, Lawnwood decided that Dr. Sadow’s

not against manifest weight of evidence requiring new trial;

case simply presented disputed issues of fact resolved by jury;

surgeon lacerated patient’s renal vein during surgery because

of patient’s anatomical anomaly found in just 1-2% of popula-

tion; defense expert testified surgeon met standard of care

because many radiologists would not have recognized anomaly

from pre-surgery CT scan; not unreasonable that surgeon failed

to recognize it during surgery; plaintiffs expert conceded he

once failed to recognize same anomaly before surgery).

Qa

former partner, Dr. Downing, would be its only can-

didate for the CVS exclusive privilege.”

Dr. Sadow nevertheless filed new applications for

nonexclusive CVS privileges in March and April

1998. In June 1998 Cantrell acknowledged to Dr.

Sadow that the Board of Trustees wanted CVS privi-

leges to be given exclusively to a single provider. Dr.

Sadow tried to dissuade Lawnwood from such exclu-

sivity. He argued that it would be bad for patient

care; that patients and their cardiologists need read-

ily available sources in the area for second opinions

as to open heart surgery and its alternatives; that

competition between surgeons doing CVS benefits

the community and patients; and that in any case an

exclusive grant to a group normally rejecting Medi-

caid patients would be against the specific needs of

the Lawnwood indigent community — a subject that

had figured prominently in their CON application.

In early 1999 Lawnwood received a certificate of

occupancy for its new cardiac surgical facility. Once

again Dr. Sadow applied for CVS privileges. Once

again the MEC approved his application. Once again

the Board of Trustees denied it. Significantly,

Lawnwood stipulated at trial that its denial of CVS

privileges was not based on his competency or quali-

fications as a surgeon. After a protracted dispute

with its medical staff over the issue, Lawnwood ul-

timately contracted with Dr. Downing exclusively to

perform CVS at Lawnwood and refused to allow Dr.

Sadow to perform CVS.

"It should be noted that Lawnwood ultimately approved the

Downing group for exclusive privileyes in CVS before its facility

was finally opened.

10a

2. The Defamation

By August 1998 when Pentz became the next CEO

of Lawnwood, relations between the Board of Trus-

tees and the Medical Staff had become tense as a

result of the decision of the Board of Trustees to

override medical staff recommendations as to cre-

dentialing, specifically including CVS. Learning of

the intent to award CVS privileges exclusively to the

single surgeon/group, the MEC created a special

committee to determine whether CVS privileges

should be added to the Lawnwood list of exclusive

privileges. In July 1998 the MEC decided that CVS

should be open to all qualified staff surgeons at

Lawnwood and not limited to a single provider. Dr.

Sadow promptly filed another application for CVS.

In refusing to consider Dr. Sadow’s pending re-

quests for CVS privileges, the Board of Trustees

adopted a resolution barring further applications

from its current staff, an action pointedly directed at

Dr. Sadow. Pentz wrote the Staff Committees and

MEC that the search for candidates for CVS privi-

leges was now closed, while simultaneously telling

Dr. Downing to file his application with the Creden-

tials Committee. Pentz “tabled” Dr. Sadow’s. In fact

the burial of his application for CVS lasted for sev-

eral years, long after the new cardiac surgical facility

opened.

In late 1998 the MEC met ‘once again to consider

the CVS issue. Pentz attended the meeting and

sought to force the MEC to reject Dr. Sadow’s appli-

cation in accordance with the resolution of the Board

of Trustees. The Chair of the MEC repeatedly ruled

Pentz out of order, that Pentz was attempting to in-

lla

terfere on a matter of medical qualifications. Pentz

heatedly retorted that the Chair was obstructing the

CEO. The MEC again recommended that Dr. Sadow

be approved for CVS privileges.

Shortly thereafter, the Board of Trustees wrote

the MEC and the two credentialing committees that

it had granted Pentz the sole authority to contract

for exclusive CVS privileges and to negotiate with

Dr. Downing for that purpose. It added that the mo-

ratorium on CVS privileges had been modified to

that extent only and the committees should begin to

review and recommend Dr. Downing and his group.

Meanwhile the Board of Trustees requested its cor-

porate parent to investigate the physicians in charge

of the credentialing committees at Lawnwood, and

especially the Chair of the MEC, to determine

whether they had violated their “fiduciary duty” to

the stockholders of Lawnwood.

As provided in the Medical Staff Bylaws, in March

1999 the medical staff held its regular annual elec-

tions for staff officers, who ex officio determine the

compositions of the credentialing committees and the

MEC. The Chair of the MEC now became elected

President of the medical staff. The Board of Trustees

of Lawnwood responded to the election by passing an

emergency resolution removing all these newly

elected officers, department chairs and members of

the credentialing committees. In their place the

Board of Trustees appointed its own choices for all

these medical staff positions to govern the medical

staff until the next regularly scheduled election. The

Board of Trustees justified its unprecedented action

by asserting that a “crisis” existed, caused by an al-

leged failure of the medical staff to engage in “good

12a

faith peer review,” a failure to apply credentialing

standards properly, a failure to comply with applica-

ble federal and state law, and failure to comply with

the standards required by accrediting entities.

In response, the recently elected medical staff offi-

cers filed an action in the circuit court for an

injunction against the corporate action. They sought

an order requiring the Board of Trustees to rescind

its action and to reinstate the elected officers. They

specifically requested that the injunction require the

Board of Trustees to refrain from taking any action

restricting, reducing, or impeding the full exercise of

authority possessed by the Elected MEC under the

provisions of the Medical Staff Bylaws, from exercis-

ing or attempting to exercise any powers or authority

as Medical Staff Officers or members of the MEC;

and for the corporate appointees to relinquish their

respective offices to the Elected Officers and the

Elected MEC.

The circuit court held an evidentiary hearing on

the injunction and essentially granted all of the re-

lief sought.’ This court affirmed the injunction,

subject to a new hearing on the amount of the bond.”

While that injunction was on appeal, Dr. Sadow filed

the present action, initially claiming only breach of

contract.

As a result of the refusal of the Medical Staff to

submit to corporate control of credentialing decisions

" See Lloyd v. Lawnwood Med. Ctr., Inc., 2000 WL 309305

(Fla. 19th Cir. Feb. 16, 2000).

* See Lawnwood Med. Ctr., Inc. v. Lloyd, 773 So.2d 114 (Fla.

4th DCA 2000).

13a

at the hospital, Lawnwood convinced the Florida

Legislature to enact the “Hospital Governance Law”

applying only to hospitals in St. Lucie County. In

disregard of the contract with the medical staff that

had by then been in force for several years, the stat-

ute gave the Board of Trustees of Lawnwood full

authority to override credentialing decisions. The

Medical Staff officers sued for a declaratory judg-

ment that the statute unconstitutionally impaired

the contract between the Medical Staff and the cor-

poration. The trial judge agreed with the medical

staff and was affirmed on appeal. See Lawnwood

Med. Ctr., Inc. v. Seeger, 959 So.2d 1222 (Fla. Ist

DCA 2007). Lawnwood persisted in trying to salvage

its legislative victory, but the Florida Supreme Court

found the statute unconstitutional. See Lawnwood

Med. Ctr.. Inc. v. Seeger, 990 So.2d 503 (Fla. 2008).

While Dr. Sadow’s lawsuit was pending, in No-

vember 200° Lawnwood hired Dr. Pinon as a new

emergency room physician to staff Lawnwood’s

Walk-In Clinic in Fort Pierce, several blocks from

the hospital. A few weeks after he arrived, Lawn-

wood arranged for an “open house” reception at the

Clinic to introduce Dr. Pinon and its remodeled

Walk-In Clinic facilities to the community. The occa-

sion was held in the early evening hours after work.

Just a day or two before the open house, however,

another new CFO of Lawnwood, Dunwoody, then

made these statements to Dr. Pinon: that Dr. Sadow

was a bad doctor, that he had been suing the hospi-

tal, that he was not a good person, and that he was

not someone to whom he should refer patients.

At the open house, there were “a lot of people” at

the Clinic for the occasion. Some were patients, some

l4a

were referring physicians, and there were others. It

was on this occasion that Dr. Pinon met Dr. Sadow

for the first time. He had stepped into Pinon’s office

at the Walk-In Clinic during the reception, accompa-

nied by other physicians to introduce himself. At

that point, Pentz and Dunwoody (CEO and CFO) al-

so approached Dr. Pinon in the same area. Dr.

Sadow left, crossing paths with the two corporate of-

ficers.

Now inside the office having just encountered

Dr. Sadow leaving the area — Dunwoody stated to

Dr. Pinon: “this is part of the problem that we've dis-

cussed to [sic] you about ... Dr. Sadow and doctors in

the community.” Pinon responded that he was new

to the area and didn’t know the doctors in the com-

munity. Pentz and Dunwoody then referred to a book

containing a list of all the doctors in the community

and their photographs, saying it would reveal the

“problem doctors”.

A day or two later, Dunwoody, a Mr. Loveless, and

the office manager Ms. Robertson met with Dr. Pi-

non in his office. Dunwoody proceeded to show him a

book of staff physicians at Lawnwood. He placed a

dot next to the entry for “certain colleagues you

should not refer patients to,” one of whom he specifi-

cally recognized from the open house as Dr. Sadow.

Dr. Pinon responded that Dr. Sadow seemed to him

“like a really nice guy” and asked Dunwoody what

the problem was with him. Dunwoody responded

* Conspicuously, the evidence does not show Pentz correcting

or stopping Dunwoody from making these comments, but ap-

parently remaining silent while Dunwoody spoke about Sadow

and the “problem doctors”.

15a

that it was a long story but then made these state-

ments:

“Dr. Sadow was in partner[ship] with an-

other doctor who we gave an exclusive

contract to for open heart surgery. There was

some disagreement between Dr. Sadow and

his partner. He didn’t get the contract. And

now he is suing us. And he is not a good doc-

tor. He has had multiple lawsuits filed

against him. He is a bad person. And quite

frankly, Dr. Pinon, I would not send my dog

to him for surgery. And you, being from the

military, and tf you care about your patients,

you would do the same,’ quote unquote.” [e.s.]

Dr. Pinon confirmed that Dunwoody’s statements

were in the presence of Loveless and Robertson. Dr.

Pinon also made clear that he understood Dunwoody

to be speaking on behalf of the Lawnwood corpora-

tion.

Dr. Pinon testified, describing the comments’ im-

pact on him:

“When Mr. Dunwoody made those state-

ments, he was the chief financial officer of

Lawnwood Medical Center. In my mind it

would have been like a general telling me,

‘You are not to do this, this, and that.’ So I

had very mixed, confused feelings. I hadn’t

been here very long. So I was — I was — I

want to use the word appalled. I was con-

cerned because this was my first civilian job,

and I knew Lawnwood HCA, the corporation,

sub-corporations, was a very big corporation.

And I couldn’t — I couldn’t conceive that

16a

they would allow that type of action to hap-

”

pen.

Dr. Pinon admitted that he related Dunwoody’s

statements about the competency of Dr. Sadow to

other doctors. He testified that he repeated the

comments to Dr. Fromang, a urologist; Dr. Marshall,

a radiologist; Dr. Ramesh, a pulmonologist; Dr. Perry

Lloyd, a pulmonologist; and Dr. Shadani, a cardiolo-

gist. He further explained that he had been told the

same bad things about each of them; that a couple of

them who had been “fired” were also suing the hospi-

tal because of some issue that happened with the

medical staff, that these fired doctors were replaced

with other doctors appointed by the corporation, that

all of them were “bad doctors, troublemakers, and

that I had no business referring any patients to

them.” He said, “I have been told that they were just

as horrible and malicious, and as horrible as Dr. Sa-

dow.” He explained that “the dots” on the photos to

which he referred included the doctors just men-

tioned: Fromang, Nayyar, Lloyd, Marshall; that all

had lawsuits against the hospital, that all had been

treated the same way; and that Dunwoody’s state-

ments made all of that clear. Sometime later, Dr.

Pinon again asked CEO Pentz what was wrong with

Dr. Sadow. Pentz responded: “That is a closed case.

As long as I am CEO of this hospital, Dr. Sadow will

never practice cardiovascular surgery.”

At no time after the claim of slanders per se had

been brought to its attention by plaintiffs counsel

did Lawnwood ever offer a retraction. In its plead-

ings, Lawnwood denied that any such statements

had been made. By way of affirmative defense,

Lawnwood also pleaded that even if the statement

17a

about not sending a dog to Dr. Sadow had been spo-

ken, it was merely “rhetorical hyperbole”. At trial it

offered testimony that if the jury found that Dun-

woody had made the statements he was “just

kidding”, that the statements were “just an epithet”,

and that they were “not really anything” and should

be given little weight.

Dr. Sadow testified that he felt embarrassed, hu-

miliated and shamed by the slanders. He said that

every time he entered Lawnwood Hospital he was

reminded of them and could hardly escape thinking

about them. He explained that, as a result of the

credentialing dispute and the slanderous statements

of the Hospital, in time all his referrals from St. Lu-

cie and Martin counties “dried up” and eventually his

practice of open heart surgery came virtually to an

end in this area. He added that he was also in a con-

tentious divorce when these events were occurring.

Ultimately he was offered surgical positions in Chi-

cago and Tennessee, but he turned them down

because his young children resided primarily with

their mother here, and he did not want to live far

away from them.

At the close of the first phase of the trial, Dr. Sa-

dow’s counsel argued that Lawnwood’s slanders were

“outrageous and intentional”. He argued that: “No

doctor on the medical staff in good standing of the

hospital should be subjected to that type of treat-

ment by a member of the senior management team

of the hospital, speaking on behalf of that hospital.”

More specifically he argued that the surgery-on-a-

dog statement could not possibly be considered for-

givable hyperbole, “rhetorical or otherwise” because

it conveyed only one meaning: “It exposed Dr. Sadow

18a

to ridicule in his business and profession. And that

was the intent.”

At the close of the first phase of trial the Court in-

structed the Jury as to entitlement to punitive

damages for the slander per se claim that:

“Punitive damages are warranted if you find,

by clear and convincing evidence, that

Lawnwood’s primary purpose in making the

statement was to indulge ill will and hostil-

ity and intent to harm Dr. Sadow. If you find

for Dr. Sadow and against Lawnwood, and

you also find that clear and convincing evi-

dence shows that Robert Dunwoody was

personally guilty of an intentional miscon-

duct which was a substantial cause of loss,

injury or damage to Dr. Sadow, and that

such conduct would warrant an award of pu-

nitive damages against him, in accordance

with the standards that I have mentioned,

then in your discretion, you may determine

that punitive damages are warianted

against Lawnwood.”

The jury returned a verdict finding liability against

Lawnwood for the slanders per se. As to compensa-

tory damages for the defamations, it specified zero

damages as to each category, including nominal

damages. The jury found, nonetheless, that punitive

damages were warranted.

The evidence in the second phase of the trial was

devoted almost exclusively to the financial condition

of the corporate structure of Lawnwood. Dr. Sadow

offered evidence, not contradicted by Lawnwood, that

at the time of trial Lawnwood had a net worth ex-

19a

ceeding $100 million. Dr. Sadow’s financial expert

witness relied primarily on annual financial state-

ments of the corporation for the years preceding

trial. The expert testified that punitive damages

from $30-38 million would not financially destroy the

hospital. On its part, Lawnwood produced as its only

witness a Director of Public Relations and Marketing

who testified primarily as to new ethics training re-

cently started at the hospital.

In closing argument, Dr. Sadow’s counsel never

suggested a specific sum for punishment. He did

make clear, however, that he was not seeking the

amount his expert had suggested as the ceiling on

damages that would not ruin the corporation, the

figure of $30-38 million. He stressed several times

that he sought only an amount the Jury determined

would be sufficient to punish and deter, not a sum

that would financially destroy the institution.

He emphasized that the slanders were not limited

to a single statement, but included all the state-

ments described by Dr. Pinon. He added that the

slanderous statements were not solely about Dr. Sa-

dow but were actually directed at all physicians who

had sued the Hospital, who were described as being

‘just as bad as he was,” suggesting a pattern or prac-

tice on the part of Lawnwood.

He described the slanders as egregious, pointing

out they came from one of the most senior officers of

the corporation. He argued that the statements had

“a high probability of injury and damage” to Dr. Sa-

dow. He argued that Lawnwood’s slanders about its

own physicians were “improper, unethical and im-

moral” and had in fact damaged him.

20a

The trial Judge gave the Florida Standard Jury

Instruction on punitive damages, adapted to the is-

sues in the case.” The trial Judge also used the form

"* See Fla. Std. Jury Instr. (Civ.) MI 4.4 g.(1) and PD 1. Spe-

cifically, in phase 1 the Jury was instructed as follows:

In

“Punitive damages are warranted if you find, by clear and

convincing evidence, that Lawnwood’s primary purpose in

making the statement was to indulge ill will and hostility

and intent to harm Dr. Sadow. If you find for Dr. Sadow and

against Lawnwood, and you also find that clear and convinc-

ing evidence shows that Robert Dunwoody was personally

guilty of an intentional misconduct which was a substantial

cause of loss, injury or damage to Dr. Sadow, and that such

conduct would warrant an award of punitive damages

against him, in accordance with the standards that I have

mentioned, then in your discretion, you may determine that

punitive damages are warranted against Lawnwood. Inten-

tional misconduct means that Robert Dunwoody had actual

knowledge of the wrongfulness of the conduct and the high

probability that injury or damage to Dr. Sadow would result,

and despite that knowledge, intentionally pursue that course

of conduct resulting in injury or damage. Now, clear and

convincing evidence differs from the greater weight of the

evidence in that it is more compelling and persuasive.

Greater weight of the evidence means the more persuasive

and convincing force and effect of the entire evidence in the

case. In contrast, clear and convincing evidence is evidence

that is precise, lacking in confusion, and of such weight that

it produces a firm belief or conviction without hesitation

about the matter in issue.”

phase 2 it was instructed:

“Ladies and gentlemen of the jury, you will now determine

the amount of punitive damages, if any, to be assessed as

punishment and as a deterrent to others. This amount would

be in addition to the compensatory damages you have previ-

ously awarded. In making this determination, you should

consider the following: The nature, and degree of miscon-

duct, and the related circumstances including the following,

2la

of verdict contained in the standard instructions.

The Jury’s unanimous verdict was that Lawnwood

specifically intended to harm Dr. Sadow, that

Lawnwood had in fact harmed him by the slanders

per se. The Jury also found that in slandering Dr.

Sadow Lawnwood had not been motivated solely by

unreasonable financial gain. The Jury assessed puni-

tive damages against Lawnwood in the sum of

$5,000,000.

B. The Claim of Immunity from Contract Liability

Lawnwood’s claim of immunity is founded on

§ 395.0191(7)."’ It argues that the statute must be

whether the wrongful conduct was motivated solely by un-

reasonable financial gain; whether the unreasonably

dangerous nature of the conduct, together with the high like-

lihood of injury resulting from the conduct, was actually

known by Lawnwood; whether, at the time of the loss, injury

or damage to Dr. Sadow, Lawnwood had a specific intent to

harm Dr. Sadow and the conduct of Lawnwood did, in fact,

harm Dr. Sadow, and Lawnwood’s financial resources. How-

ever, you may not award an amount that would financially

destroy Lawnwood. You may, in your discretion, decline to

assess punitive damages. Your verdict on the issues raised

by the punitive damages claim of Dr. Sadow against Lawn

wood must be based on the evidence that has been received

during the trial of the first phase of this case, and on the

evidence that has been received in these proceedings, and on

the law which I have instructed you.”

' § 395.0191(7), Fla. Stat. (2009) (“There shall be no mone-

tary liability on the part of, and no cause of action for injunctive

relief or damages shall arise against, any licensed facility, its

governing board or governing board members, medical] staff, or

disciplinary board or against its agents, investigators, wit-

nesses, or employees, or against any other person, for any

action arising out of or related to carrying out the provisions of

this section, absent intentional fraud”).

22a

construed as written.” We agree with that ever-

present rule of statutory comprehension.

It is indeed the first principle of statutory inter-

pretation that the meaning of statutes is derived

primarily from the text employed by the Legisla-

ture.’ If the Legislature’s words are not ambiguous,

we accord them their plain meaning.” All parts of a

statute should be piven effect if possible, for the Leg

islature is presumed not to have enacted statutory

terms having no purpose. Thus we strive to avoid

reading statutes so that part of its terms have no ef-

fect.” As the court cautioned in Donato v. American

Telephone and Telegraph Company, 767 So.2d 1146

(Fla. 2000): “we are precluded from construing an

unambiguous statute in a way which would extend,

modify, or limit, its express terms or its reasonable

and obvious implications. To do so would be an abro-

gation of legislative power.” [e.s.| 767 So.2d at 1150

Arnold, Matheny & Eapan P.A, v. First Am. Holdings Ine

982 So.2d 628, 633 (Fla. 2008) (statutes must be construed by

looking primarily at the statutory language; if the language i:

clear and unambiguous, then the court has no further reason to

apply the rules of statutory construction)

McLaughlin v. State, 721 So.2d 1170, 1172 (Fla. 1998); St

Petersburg Bank & Trust Co. v. Hlamm, 414 So.2d 1071, 1073

(Fla. 1982)

* Golf Channel v. Jenkins, 752 So.2d 561, 564 (Fla. 2000),

Moonlit Waters Apts., Inc. v. Cauley, 666 So.2d 898, 900 (Fla

1996)

" Forsythe v. Longboat Key Beach Erosion Control Dist., 604

So.2d 452, 455 (Fla. 1992).

” State v. Goode, 830 So.2d 817, 824 (Fla. 2002)

23a

51.’" We conclude that Lawnwood’s construction of

the statutory immunity text would have us ignore an

explicit limitation as to its extent, thereby enlarging

the grant of immunity beyond its plain meaning.

The provisions of § 395.0191 lay down general

rules for hospitals in setting up procedures and

standards for staff membership and clinical privi

leges. The immunity of § $95.0191(7) is not a broad,

general grant immunizing every kind of hospital I

ability after granting clinical privileges. The plain

text confines its immunity only to “action|s] arising

out of or related to carrying out the provistons of this

section” {e.s.]. It is thus a specific, targeted, grant of

partial immunity extending only for its credentialing

. ‘ 1+

decisions.

Dr. Sadow did not allege or rely on any violation of

the statute. Instead he alleged and proved that, con

trary to its own Medical Staff Bylaws, Lawnwood

invalidly granted an outside surgeon exclusive CVS

' See also Fla, Dept. of Bus. and Prof'l Regulation, Div. of

Part Mutuel Wagering v. Inv. Corp. of Palm Beach, 747 So 2d

374, 382-83 (Fla. 1999) (same quote); //i/l v. State, 648 So 2d

901, 908 (Fla. 1996) (same quote)

" For this reason, we disagree with Lawnwood's able appel

late counsel that Feldman vo. Glucroft, 522 So.2d 798 (Fla. 1988)

and Noble v. Martin Memortal Hosp. Ass'n Inc., 710 So 2d 567

(Fla. 4th DCA 1997), support immunity in this case. In Feld

man the medical review board was obviously acting within the

scope of its authorized function relating to the standard of care

Noble involved a denial of all privileges, in contrast to the case

we confront today involving a simple breach of contract be

tween the hospital and one of its staff surgeons. See also Fla

Dept. of Enotl. Protection v. ContractPoint Florida Parks, LLC,

986 So.2d 1260 (Fla. 2008) (broad meaning of immunity in two

provisions limited by provisions in another)

24a

privileges, and used it to stop Dr. Sadow from per-

forming CVS. He showed that the Medical Staff

Bylaws, accepted and approved by the corporate

Board of Trustees, did not authorize exclusivity in

CVS. He proved that he had been repeatedly recom-

mended for CVS by the hospital’s own Credentialing

Committee and approved by the MEC. He proved

that Lawnwood’s refusal to accept the MEC approval

was not supported by “a valid reason under the cir-

cumstances”, the standard instructed by the trial

Judge. By giving one surgeon an unauthorized exclu-

sive and using that invalid action to bar Dr. Sadow

from CVS, he proved that Lawnwood was simply

guilty of breach of contract.”

Under the facts and circumstances proven at trial,

we agree with the trial judge that his claim for

breach of contract was not barred by the statutory

immunity provision. We therefore affirm on this is-

sue.

C. Punitive Damages

We now confront Lawnwood’s contention that the

amount of punitive damages is excessive under the

United States Constitution. In Engle v. Liggett

Group Inc., 945 So.2d 1246 (Fla. 2006), the court rec-

ognized that differing standards of review, one under

state law and another under federal law, may now

apply to punitive damages in Florida. But Lawnwood

does not here challenge the amount of punitive dam-

ages under Florida law-its sole contention is that the

'® See Hosp. Corp. of Lake Worth v. Romaguera, 511 So.2d

559, 560 (Fla. 4th DCA 1986) (contract between hospital and

physician affected by modification of bylaws).

25a

amount is excessive under federal law. We therefore

review the federal issue raised by Lawnwood under

its de novo standard of review.”

The federal law argued by Lawnwood is part of a

series of decisions by the United States Supreme

Court. It relies on two of those decisions, State Farm

Mutual Automobile Insurance Company v. Campbell,

538 U.S. 408 (2003) [State Farm], and BMW of North

America Inc. v. Gore, 517 U.S. 559 (1996) [BMW].

Lawnwood argues that BMW and State Farm both

hold that the Due Process Clause of the Fourteenth

Amendment categorically bars any punitive damages

exceeding a stated ratio with compensatory dam-

ages, usually 3:1 or 4:1. Dr. Sadow. responds that

Lawnwood is incorrect as to the scope of these hold-

ings. He contends that State Farm and BMW

actually disclaim applying the ratio to all punitive

damages awards, and that both decisions explicitly

hold that the ratio may not apply in cases involving

intentional and malicious conduct. We conclude that

TXO Production Corporation v. Alliance Resources

Corporation, 509 U.S. 443 (1993), would also seem

applicable. T7XO held that punitive damages of $10

million imposed for intentionally malicious miscon-

duct are not improper even though actual losses

were less than $20,000.

BMW was the first to apply a ratio as the proper

test of proportionality in a specific case. But the opi-

nion declared that proportionality is not always a

matter of numerical comparison between compensa-

tory and punitive damages:

*® See Cooper Indus., Inc. v. Leatherman Tool Group Inc., 532

U.S. 424 (2001); Engle, 945 So.2d at 1263.

26a

“we have consistently rejected the notion

that the constitutional line is marked by a

simple mathematical formula, even one that

compares actual and potential damages to

the punitive award. Indeed, low awards of

compensatory damages may properly support

a higher ratio than high compensatory

awards, if, for example, a particularly egre-

gious act has resulted in only a small amount

of economic damages. A higher ratio may

also be justified in cases in which the injury

is hard to detect or the monetary value of

noneconomic harm might have been difficult

to determine. It is appropriate, therefore, to

reiterate our rejection of a categorical ap-

proach. Once again ... we need not, and

indeed we cannot, draw a mathematical

bright line between the constitutionally ac-

ceptable and the constitutionally

unacceptable that would fit every case.” [e.s.]

517 U.S. at 582-83. The Court explained:

“In our federal system, States necessarily

have considerable flexibility in determining

the level of punitive damages that they will

allow in different classes of cases and in any

particular case. Most States that authorize

exemplary damages afford the jury similar

latitude, requiring only that the damages

awarded be reasonably necessary to vindi-

cate the State’s legitimate interests in

punishment and deterrence. Only when an

award can fairly be categorized as ‘grossly

excessive’ in relation to these interests does it

enter the zone of arbitrariness that violates

21a

the Due Process Clause of the Fourteenth

Amendment.” [e.s., ¢.o.]

517 U.S. at 569.

State Farm was the next case to apply a ratio but

repeated that: “We decline again to impose a bright-

line ratio which a punitive damages award cannot

exceed.” 538 U.S. at 425. The Court made clear that

“ratios greater than those we have previously upheld

may comport with due process where ‘a particularly

egregious act has resulted in only a small amount of

economic damages.’” [e.s.] 538 U.S. at 425. State

Farm underlined that “(t]he precise award in any

case ... must be based upon the facts and circum-

stances of the defendant’s conduct and the harm to

the plaintiff.” |e.s.] 538 U.S. at 425. States may vary

the level of punitive damages in disparate classes of

cases to reflect different policies.

In considering these cases, we understand that

the federal rule of a fixed ratio between punitive and

compensatory damages was intended to apply pri-

marily to the kind of “wrongdoing” involved in State

Farm and BMW. We read State Farm and BMW both

to recognize that nevertheless the States may specify

some unusually reprehensibie conduct for punitive

damages that need not be proportioned to compensa-

tory losses. The issue we face today is whether this

case is governed by State Farm and BMW or perhaps

instead by TXO where no ratio was used. We proceed

to that analysis.

TXO involved intentional wrongdoing. Alliance,

the owner of mineral rights on a 1,000 acre tract of

land with significant oil and gas deposits, sued TXO

for slander of title. Alliance had leased the oil and

28a

gas rights to TXO for substantial payments over a

period of years. Evidence showed that TXO sued Al-

liance to claim a cloud on title TXO knew to be

baseless. TXO had already obtained a quit claim

deed from the remote vendor whose former interest

it claimed had clouded the interest of Alliance. It had

also attempted to procure a false affidavit from a

witness. TXO sought to force Alliance into renegotia-

ting the lease to reduce royalty payments and

thereby enhance its own financial interests. The suit

resulted in a verdict awarding $19,000 in compensa-

tory damages and $10 million in punitive damages to

Alliance. TXO argued that the punitive damages

were 526 times greater than actual losses and there-

fore facially excessive under the Fourteenth

Amendment.

The Supreme Court first pointed out the great dif-

ficulty in comparing jury awards of punitive

damages: “Because no two cases are truly identical,

meaningful comparisons of such awards are difficult

to make.” 509 U.S. at 457. The Court emphasized a

policy of refusing to draw a single test applicable to

all awards. Instead it highlighted some of the factors

on which the state court relied in affirming the

award. In upholding the punitive damages, the criti-

cal factor was intentionally malicious conduct

causing harm. The Supreme Court also accepted the

State’s policy rationale that “punitive damages

should bear a reasonable relationship to the harm

that ts likely to occur from the defendant’s conduct as

well as to the harm that actually has occurred.” [e.s.}

509 U.S. at 459-60.

In TXO Justice Kennedy — who would 'ater be-

come the author of the majority opinion in State

29a

Farm — explained that he concurred with upholding

the substantial punitive damages award even though

it lacked proportionality with compensatory damages

because:

“TXO acted with malice. This was not a case

of negligence, strict liability, or respondeat

superior. TXO was found to have committed,

through its senior officers, the intentional

tort of slander of title. The evidence at trial

demonstrated that it acted ... ‘through a pat-

tern and practice of fraud, trickery and

deceit?’ and employed ‘unsavory and mali-

cious practices’ in the course of its business

dealings with respondent. ‘[T]he record

shows that this was not an isolated incident

on TXO’s part — a mere excess of zeal by

poorly supervised, low level employees —

but rather part of a pattern and practice by

TXO to defraud and coerce those in positions

of unequal bargaining power.’ “ [e.s.]

509 U.S. at 468-69. He agreed that:

“it was rational for the jury to place great

weight on the evidence of TXO’s deliberate,

wrongful conduct in determining that a sub-

stantial award was required in order to serve

the goals of punishment and deterrence. |

confess to feeling a certain degree of disquiet

in affirming this award, but the record, when

viewed as a whole, makes it probable that

the jury’s verdict was motivated by a legiti-

mate concern for punishing and deterring

TXO, rather than by bias, passion, or preju-

dice. There was ample evidence of willful and

30a

malicious conduct by TXO in this case; the

jury heard evidence concerning several prior

lawsuits filed against TXO accusing it of sim-

ilar misdeeds; and respondent’s attorneys

informed the jury of TXO’s vast financial re-

sources and argued that TXO would suffer

only as a result of a large judgment.” [e.s.]

509 U.S. at 469. Notably, when he became the au-

thor of the later majority opinion in State Farm,

Justice Kennedy’s opinion did not recede from, dis-

approve, or indicate in any way that T7XO was no

longer good law. In fact his State Farm opinion relied

on TXO to restate the holding that no simple

mathematical formula controls the issue of exces-

siveness for every case. 509 U.S. at 469.

TXO appears specially apt for the wrongdoing in

this case. In denying the motion to set aside the pu-

nitive damages, the trial judge described the

evidence as basically showing that Lawnwood set out

to destroy Dr. Sadow. Lawnwood engaged in a pat-

tern and practice of slandering any doctor conflicting

with hospital administration. Willfully and mali-

ciously destroying the reputation of respected

physicians and surgeons could reasonably be high on

any list of reasons for severe punishment of wrong-

doing. Indeed it could be thought worse than merely

slandering title to property. Here too it was rational

for the jury to find defendant had acted willfully and

with express malice to harm the plaintiff. T7XO sup-

ports considerable punishment without proportional-

ity for conduct willfully and maliciously harming the

plaintiff.

3la

These federal authorities also make clear that

state law and policy play a critical role in review of

punitive damages, so we must consider Florida’s ap-

plicable statutory and decisional law relating to

punitive damages and defamation. We point out that

Florida has codified specific policies for punitive

damages in civil litigation. By statute the general

Florida rule now provides that “an award of punitive

damages may not exceed the greater of ... three times

the amount of compensatory damages ... or ... the

sum of $500,000.” But in a significant exception to

this limiting ratio, the statute specifies:

“Where the fact finder determines that at the

time of injury the defendant had a specific

intent to harm the claimant and determines

that the defendant’s conduct did in fact harm

the claimant, there shall be no cap on puni-

tive damages.”” [e.s.]

Plainly this Florida statute eliminates mathematical

proportionality with compensatory damages as a

matter of state law and policy in cases of intention-

ally malicious harmful misconduct.”

" § 768.73(1)(a), Fla. Stat. (2009). See also § 768.73(4), Fla.

Stat. (2009) Gury may not be instructed as to these provisions).

In oral argument Lawnwood argued that the excess above

$500,000 should be remitted.

*” § 768.73(1\(c), Fla. Stat. (2009).

* See Owens-Corning Fiberglas Corp. v. Ballard, 749 So.2d

483, 489 n.9 (Fla. 1999) (“The Legislature has placed no cap on

punitive damages awards where the defendant specifically in-

tended to harm the plaintiff and the defendant’s conduct did in

fact harm the plaintiff’).

32a

Florida’s statutory law removing a ceiling on puni-

tive damages for intentionally malicious harm

suggests that any proportional ratio analysis re-

quired in negligence or business practices cases with

only modest monetary or financial loss, would be in-

congruent when the claim involves, as here, the

intentional infliction of malicious harm to an indi-

vidual. Under Florida law applying to intentionally

malicious harm, punitive damages is tied to unusu-

ally reprehensible misconduct, rather than some

ratio relating to compensable losses.

This statute gives all who would consider such

misconduct here clear warning that for intentional

and malicious harm they can lawfully be punished to

the extent of their personal ability to pay. It is ap-

parent to us that the statute’s provision allowing

punitive damages without proportionality for inten-

tional, malicious harm satisfies any BMW and State

Farm concern for fair notice. The Due Process Clause

is thus satisfied by this statute.

We further perceive that this Florida statute

would not apply to the conduct in State Farm and

BMW involving commercial policy and trade prac-

tices, with purely economic consequences of only

slight individual financial harm. The express dis-

claimer disavowing universal ratios in State Farm

and BMW implies that the State Farm and BMW ra-

tios are intended mainly for modestly reprehensible

business or commercial trade practices causing indi-

vidual damages limited in size, extent or amount.

Declining to apply the State Farm and BMW ratios

would not necessarily conflict if state law eliminates

proportional ratios in cases of unusual reprehensibil-

ity. The punitive damages in this case thus require

33a

us to examine the reprehensibility of Lawnwood’s

wrongdoing under Florida law.

1. Reprehensibility of Lawnwood’s Conduct

Under these federal cases, when punitive damages

are substantial the first issue is the enormity” factor:

whether the misconduct involves a high degree of

culpability and blameworthiness. The Court has in-

structed State courts to consider three guideposts:

(1) the degree of reprehensibility of the de-

fendant’s misconduct;

(2) the disparity between the actual or po-

tential harm suffered by the plaintiff and the

punitive damages award; and

(3) the difference between the punitive

damages awarded by the jury and the civil

penalties authorized or imposed in compara-

ble cases. [e.s.]

*“ See AMERICAN HERITAGE DICT. (Electronic Edition) (search

term enormity: “The quality of passing all moral bounds; exces-

sive wickedness or outrageousness. A monstrous offense or evil;

an outrage”); MERRIAM-WEBSTER UNABRIDGED DICT. (CD-ROM

ed.) (search term enormity: the quality or state of exceeding a

measure or rule, or of being immoderate, monstrous, or outra-

geous; as ‘the enormity of the offense’; a grave offense against

order, right, or decency”). Modern usage of the term enormity

misuses it to describe merely large in physical size. But the

BMW sense in which it is used obviously refers to the tradi-

tional meaning of the word.

34a

State Farm, 538 U.S. at 418; BMW, 517 U.S. at 575.

The first of these is explicitly the critical one and in

this case appears to be dispositive.”

Reprehensible, more blameworthy and enormity

are essential to an understanding of the Supreme

Court’s meaning. Although much civil litigation in-

volves misconduct, the reprehensibility required for

harsh punitive damages entails a high degree of cul-

pability. 517 US. at 580. To meet’ the

reprehensibility required for high punitive damages,

the Court implied that (as in TXO) the misconduct

should be intentional, perhaps be gravely deplorable,

deserving of severe condemnation, even threatening

basic interests of an individual beyond purely eco-

nomic loss. Conduct deserving the harshest punitive

damages would be odious. It would pass moral

bounds, be wicked or outrageous, and constitute a

grave offense against right or decency. The disap-

proval expressed by state law should be avowedly

strong and severe. We see that as the true meaning

of the Court’s enormity factor.

” The reprehensibility of defendant’s misconduct in a claim

for punitive damages is by far the most significant factor. BMW

said:

“[punitive] damages imposed on a defendant should reflect

‘the enormity of his offense.’ This principle reflects the ac-

cepted view that some wrongs are more blameworthy than

others. Thus, we have said that ‘nonviolent crimes are less

serious than crimes marked by violence or the threat of vio

lence.’ Similarly, ‘trickery and deceit, are more reprehensible

than negligence.” [e.s., c.o.]

517 U.S. at 575-76; State Farm, 538 U.S. at 419

35a

a. Defamation under Florida law

The wrongdoing here is slander per se. In Miami

Herald Publishing Company v. Ane, 458 So.2d 239,

241 (Fla. 1984), the court pointed out that “Florida’s

concern for individual reputation is reflected in arti-

cle I, section 4, of the Florida Constitution.” Florida

has thus singled out defamation per se for special

rules in civil tort litigation. In Montgomery v. Knox,

23 Fla. 595, 3 So. 211, 217 (1887), the court held that

statements defamatory per se are presumed harmful

as a matter of law. In Abraham v. Baldwin, 52 Fla.

151, 42 So. 591, 592 (1906), the court held that with

defamation per se “the law presumes malice in their

utterance” making it unnecessary to prove express

malice. In Layne v. Tribune Co., 108 Fla. 177, 146 So.

234, 239 (1933), the court pointed out that the law’s

condemnation of defamation per se “has been af-

firmed from earliest times,” explaining that “the

injurious character” of defamation per se “is a fact of

such common notoriety established by the general

consent of men, that the courts must of necessity take

judicial notice of its harmful effect.” |e.s.) 146 So. at

236. Layne went on to hold:

“Malice ... becomes therefore the gist of every

actionable libel. Without malice, either ex-

press or implied by law, no tort could result

from the publication of a defamatory state-

ment concerning another, however untrue it

might be. But the law always conclusively

implied malice and damage when false and

defamatory statements were deliberately

published without excuse.” [e.s., c.o.]

146 So. at 238-39.

36a

In Hartley & Parker v. Copeland, 51 So.2d 789

(Fla. 1951), and Commander v. Pedersen, 116 Fla.

148, 156 So. 337 (1934), the court held that general

damages are conclusively presumed to result from

defamation per se and that “special damages need

not be shown to sustain the action.” 156 So. at 341.

In Miami Herald Publishing Company v. Brown, 66

So.2d 679, 680-81 (Fla. 1953), the court made clear

that general damages for defamation per se are

“those which the law presumes must naturally, prox-

imately, and necessarily result from the publication

of the libelous matter. They arise by inference of law,

and are not required to be proved by evidence.”

Campbell v. Jacksonville Kennel Club, 66 So.2d 495

(Fla. 1953), agreed that damages are presumed to

result from defamation per se and need not be

proved.

The singular protection afforded by Florida law to

personal reputation in actions for defamations per se

is further seen by the fact that punitive damages

may be the primary relief in a cause of action for de

famation per se. Jones v. Greeley, 25 Fla. 629, 6 So.

448, 450 (1889), held that malice is an intrinsic part

of actions for defamation per se in order that the jury

may consider punitive damages. In Nodar v. Gal

breath, 462 So.2d 803 (Fla. 1984), the court added

that the express malice for punitive damages under

Klorida law is present where the evidence shows that

an intention to injure the plaintiff was the primary

motive for statements defamatory per se

” These state cases have consistently held that proof of h

ability for defamation per se especially when based as here

on a specific finding that the defamer acted with specific intent

37a

to injure the plaintilf is alone sufficient for the jury to con

sider punitive damages and that plaintiff need not show any

proof of monetary loss. Bobenhausen v. Cassat Ave. Mobile

Hlomes Inc., 344 So.2d 279 (Fla. lst DCA 1977), the court said

“We reject the argument that it is necessary before a

plaintiff recover punitive damages that the amount of pecu

niary loss be determined to a reasonable certainty. The

reneral rule is that in libel actions, even though no special

damayes may have been proven, a plaintiff may stil recover

punitive damages upon a showing that the publication was

made for malice or tll-will toward him.” |e.s., ¢.o.]

344 So.2d at 282. To the same effect is Saunders Hardware Fivn

and Ten, Inc. v. Low, 307 So.2d 893 (Fla. 3d DCA 1974), where

the court said

“we hereby adopt the general rule that where the defamation

complained of is actionable per se, punitive damages may be

awarded even though the amount of actual damapes is nei

ther found nor shown, for in such a case the requirement of a

showing of actual damages as a basis of an award of exem

plary damages is satisfied by the presumption of injury

which arises from a showing of lbel or slander that is ac

tionuble per se.”

307 So.2d at 894. In Matthews v. Deland State Bank, 334 So.2d

164 (Fla. Ist DCA 1976), the court followed the decision in

Saunders Hardware, holding that “lthe instruction piven by

the trial court on actual malice is defective in that it does not

fully inform the jury that the malice necessary for the award of

punitive damages can be deduced from the publication itself”

and that the trial court erred in instructing the jury that puni

tive damages could not be awarded unless an award of

compensatory damages was made. 334 So.2d at 166. The Elev

enth Circuit has so recopnized Florida law on punitive damayes

in actions for defamation per se as set forth above. unt vo. Lib

erty Lobby, 720 F.2d 631 (11th Cir.1983) (verdict for punitive

damages can be returned only if jury finds defendant acted

with type of ill will identified in Matthews ). There are no con

flicting decisions by any Florida appellate court

38a

The history of Florida law makes clear that that

liability alone for intentionally malicious defamation

per se will support substantial punishment in puni-

tive damages. This unique aspect sets defamation

per se apart from a comparable intentional tort —

one that rightly could be considered its twin. Both

fraud in the inducement and defamation per se de-

pend on intentionally false statements meant to

deceive and harm. But the critical distinction be-

tween them is that defamation harms persons and

reputation, while fraud affects property rights and

results only in financial loss. This difference plays an

important role in a recent decision of this court, not

cited by either party on appeal but referred to during

the trial.”

In Morgan Stanley & Company v. Coleman (Par-

ent) Holdings Inc., 955 So.2d 1124 (Fla. 4th DCA

2007), one party to a stock transaction sued the other

party, claiming fraud in the inducement. A jury

awarded both compensatory and punitive damages.

On appeal, we held that the evidence supporting the

compensatory damages was entirely insufficient and

that consequently no compensatory loss had been

proved. We rejected plaintiffs argument in support

of punitive damages, however, that no compensatory

* At one point Lawnwood sought to convince the trial judge

that even in cases involving slander per se plaintiff had to

prove a specific monetary amount of injury to have the jury

consider punitive damages. Ultimately, however, the hospital

withdrew the argument and recognized the many Florida cases

holding to the contrary. In this appeal, Lawnwood is consistent

with its ultimate position in the trial court, and has not re-

newed the argument.

39a

damages were necessary to support an entitlement

to punitive damages:

“It is fundamental that ‘[a]ctual damages and

the measure thereof are essential as a matter

of law in establishing a claim of fraud.’ ‘Dam-

age is of the very essence of an action for fraud

or deceit.’ Without proof of actual damage the

fraud is not actionable. Thus, to prevail in an

action for fraud, a plaintiff must prove its ac-

tual loss or injury from acting in reliance on

the false representation.

“Even if CPH established the fact of some un-

quantified damage ... a nominal damage

award ... is not enough to justify a punitive

damage award in a fraud case. Punitive dam-

ages for fraud cannot be based on nominal

damages alone. [e.s., ¢.o.]

955 So.2d at 1132. In short, a claim for punitive

damages from fraud in the inducement failed if no

amount of compensatory loss resulting from the

fraud was actually proved.

But when the claim is defamation per se, liability

itself creates a conclusive legal presumption of loss

or damage and is alone sufficient for the jury to con-

sider punitive damages. Commander, 156 So. at 341;

see also Bobenhausen v. Cassat Ave. Mobile Homes,

344 So.2d 279, 281 (Fla. lst DCA 1977), cert. dis-

charged, 363 So.2d 1065 (Fla. 1978) (malice is

presumed as a matter of law from the publication of

such words). Therefore a finding of liability for slan-

der per se, coupled with an express finding that the

slander was intended to injure plaintiff and did in

fact cause injury, authorizes the jury to consider and

40a

assess punitive damages without any finding of an

amount of compensatory damages. See Lundquist v.

Alewine, 397 So.2d 1148, 1150 (Fla. 5th DCA 1981)

(where defamation is actionable per se, punitive

damages may be awarded even though the amount of

actual damages is neither found nor shown); Saun-

ders Hardware Five and Ten v. Low, 307 So.2d 893

(Fla. 3d DCA 1975), cert. denied, 330 So.2d 21 (Fla.

1976) (same); Bobenhausen, 344 So.2d at 281 (in libel

per se even though no special damages proven,

plaintiff may still recover punitive damages upon a

showing that publication was made for malice or ill-

will toward him); see also Nodar, 462 So.2d 803 (ex-

press malice under Florida common law is present

where primary motive for defamation per se is

shown to be intent to injure plaintiff); Jones v. Gree-

ley, 25 Fla. 629, 6 So. 448, 450 (1889) (same).

To sum up, Florida’s unusually high protection of

personal reputation derives from the common con-

sent of humankind and has ancient roots. It is highly

valued by civilized people. Our state constitution and

common law powerfully support it. This is a value as

old as the Pentateuch and the Book of Exodus, and

its command as clear as the Decalogue: “Thou shall

not bear false witness against thy neighbor.” The

personal interest in one’s own good name and repu-

tation surpasses economics, business practices or

money. It is a fundamental part of personhood, of in-

dividual standing and one’s sense of worth. In short,

the wrongdoing underlying the punitive damages in

this case has Florida law’s most severe condemna-

tion, its highest blameworthiness, its most deserving

4la

culpability.” For slander per se, reprehensibility is at

its highest.

b. Comparison of economic injuries with defamation

In contrast to that vital personal interest here, the

conduct in State Farm and BMW seems almost triv-

ial. The minor economic injuries in those cases pale

into insignificance next to the calumnies proven

here. BMW is simpler, while the details of the State

Farm case are extensive, but their differences be-

come vivid when examined.

BMW ‘s conduct is nearly a trifle. The claim lay in

a manufacturer failing to tell a consumer about mi-

nor paint damage to a new automobile during transit

to the dealer, in which acid rain had tarnished the

* Florida is not alone in this regard. See Note, Punitive

Damages and Libei Law, 98 HARV. L. REV. 847, 854 n.43 (1985)

(“Some federal judges and state courts have expressly recog-

nized that the stenasrd for punitive damages in libel suits

differs from the one applied in other tort actions. |e.s.] ... Be-

cause most courts will grant punitive damages upon a showing

of actual malice, such damages have been assessed even in cas-

es in which actual damages were absent or merely nominal.

See, e.g., Goldwater v. Ginzburg, 414 F.2d 324, 340-41 (2d Cir.

1969), cert. denied, 396 U.S. 1049 (1970) (upholding award of $1

in actual damages and awards of $25,000 and $50,000 in puni-

tive damages); ... Newson v. Henry, 443 So.2d 817, 824 (Miss.

1983) (it is ‘not necessary to award actual damages as a pre-

requisite to awarding punitive damagefs]’); Snodgrass v.

Headco Indus., 640 S.W.2d 147, 157 (Mo. Ct. App. 1982) (up-

holding award of $1 in actual damages and $75,000 in punitive

damages); Newspaper Publishing Corp. v. Burke, 216 Va. 800,

805, 224 S.E.2d 132, 136 (1976) (remanding, on the basis of a

faulty actual malice instruction, a case in which the jury had

awarded no compensatory damages and $10,000 in punitive

damages)).”

42a

finish. The $600 cost of repainting represented 1.5%

of the sale price. As a matter of policy, BMW did not

disclose such presale repairs if less than 3% of the

MSRP. Some may think the policy wrong; others

may be left searching for the harm if the manufac-

turer corrects the blemish before delivery.

BMWs buyer sued for fraud, praying for $555,000,

including punitive damages. His evidence was the

repainting reduced the value of a new $40,000 car by

10%. The jury found $4,000 in cor pensatory dam-

ages and assessed $4 million in punitive damages for

the nondisclosure, finding “gross oppressive and ma-

licious” fraud. The finding was largely based on

BMW’s nationwide policy outside the State of Ala-

bama and case at hand. In post trial motions BMW

showed the policy was lawful in 25 of the States. The

Alabama supreme court reduced the punitive dam-

ages to $2 million and thus allowed the judgment to

stand.

The Supreme Court accepted the rationale that

BMW suppressed a material fact state law obligated

it to disclose. But the Court stressed that reasonable

people could disagree as to whether the nondisclo-

sure policy was even wrong. If reasonable people

could disagree whether conduct should be deemed

improper, its disapproval quotient must be very low

and reprehensibility small by any measure. Yet,

even as reduced by the state court, the Supreme

Court found the punitive damages “grossly excessive”

for the conduct in question. And in spite of the fact

that the business practice may have been deemed

actionable for state tort liability, the Court held it

lacked the high degree of culpability needed to war-

43a

rant more than a modest amount of punitive dam-

ages. 517 U.S. at 580.

State Farm concerned a liability insurance carrier

refusing to settle a wrongful death claim against its

insured during extensive litigation, with the insured

suffering a money judgment in excess of the policy

limits. During the litigation the carrier insisted on

disputing liability for the accident even though the

witnesses placed the blame on the insured in at-

tempting to pass other vehicles unsafely, causing the

collision. The carrier declined offers to settle within

policy limits, meanwhile assuring the insured that

their assets were safe from judgment. The carrier

took the case to trial and suffered a judgment well

above policy limits.

When the carrier refused supersedeas, the insured

handled the appeal and entered into a settlement

with the plaintiff. In time, the carrier paid the entire

excess judgment and expenses. Nevertheless, the in-

sured sued the carrier for bad faith, fraud and

infliction of emotional distress. Over the carrier’s ob-

jection, the trial court allowed evidence of its practice

over two decades of minimizing payouts in claims

handling in other states. The jury awarded actual

damages of $2.6 million and punitive damages of

$145 million. These were reduced to $1 million and

$25 million respectively.

After applying the BMW standards, State Farm

demolished any reprehensibility quotient with the

dismissive observation that its conduct merely “me-

ritled] no praise.” 538 U.S. at 419. If the worst thing

one can say about conduct is only that it merits no

praise, is it even blameworthy? The Court held that

44a

“a more modest punishment” would have satisfied

any legitimate state objectives in punishment for the

carrier’s conduct. 538 U.S. at 419-20. Here again, the

state court punishment was largely based on conduct

in other states in other cases, some of which was

lawful but none of which harmed the plaintiff.”

Obviously whatever trace of reprehensibility for

failure to settle a claim within policy limits was left

to be squeezed out of the carrier’s conduct is minor

by any objective culpability standard. Indeed the

carrier's conduct could reasonably be deemed ¢s

lacking any culpability at all, for the insured had al-

ready been made whole by the ultimate payment of

the entire judgment above policy limits and ex-

penses.””

” As the Court put it, “defendant should be punished for the

conduct that harmed the plaintiff, not for being an unsavory

individual or business.” 538 U.S. at 423. The Court held:

“The reprehensibility guidepost does not permit courts to ex-

pand the scope of the case so that a defendant may be

punished for any malfeasance, which in this case extended

for a 20-year period. In this case, because the Campbells

have shown no conduct by State Farm similar to that which

harmed them, the conduct that harmed them is the only

conduct relevant to the reprehensibility analysis.”

538 U.S. at 424.

* In BMW where the conduct was only “purely economic in

nature,” 517 U.S. at 576, the Court found such conduct unwor-

thy of anything more than token punishment beyond

compensatory damages. Id. State Farm made the same distinc-

tion: “[wle have instructed courts to determine the

reprehensibility of a defendant by considering whether: the

harm caused was physical as opposed to economic....” State

Farm made clear that if the harm was only economic, repre-

hensibility would turn on whether the tortious conduct:

45a

The conduct here is in stark contrast. The jury ob-

viously found Lawnwood’s offense despicable. To

repeat, the trial judge described the evidence as es-

sentially showing that Lawnwood set out to destroy

Dr. Sadow’s career in the « mmunity. The jury’s

finding of a specific intent to harm Dr. Sadow, to-

gether with its finding of actual harm, is the very

incarnation of both express and actual malice. It was

a purposeful act of malevolent destruction of the

reputation of one of its surgeons, done repeatedly as

a matter of policy.

A reasonable jury could conclude that repeatedly

defaming the skill and proficiency of a practicing

surgeon was likely to have significant and long-

lasting public and professional consequences.” It

could rationally have equated the slanders to feath-

ers loosed into the wind, with no one ever knowing

where they all landed or whom they touched. The ef-

fects could be seen as insidious and unknowable.”

The jury could deem this the very worst institutional

“evinced an indifference to or a reckless disregard of the

health or safety of others; the target of the conduct had f7-

nancial vulnerability; the conduct involved repeated actions

er was an isolated incident; and the harm was the result of

intentional malice, trickery, or deceit, or mere accident.”

538 U.S. at 419.

* Jurors could fairly find that when a hospital speaks about

the competency of a surgeon it speaks ex cathedra. As the pre-

eminent institution of health care within the community, a jury

could logically infer, a hospital’s perceptions of the competency

of its professionals should be taken as powerfully authoritative.

*’ TXO specifically approved consideration of harm “likely to

result” as a factor supporting substantial purtitive damages for

malicious harm. 509 U.S. at 459-60.

46a

wrongdoing conceivable — wicked enough for con-

siderable punishment with a _ strong corrective

impact on the defamer. Hence the applicable rule of

decision for this case is really from T'XO; extraordi-

nary wrongdoing justifies extraordinary civil

punishment without limiting ratios.

2. Proportionality

The United States Supreme Court has itself rec-

ognized a “compelling need for judicial redress of

libelous utterances” equal to the compelling interests

of the First Amendment.” The proportionality analy-

sis in the federal decisions requires us to insure only

that the reprehensibility of the wrongdoing — not

the amount of actual harm or loss — is equivalent to

the punishment. As we have also seen in Florida law,

when a claim involves harm resulting from the in-

tentionally malicious destruction of reputation,

reprehensibility is not a function of any dollar loss

involved.”

* See Gertz v. Robert Welch Inc., 418 U.S. 323, 347, 350,

(1974) (so long as liability is based on fault States may define

appropriate standard of liability for a publisher of defamatory

falsehood injurious to a private individual; award of punitive

damages must be based on actual malice); Bose Corp. v. Con-

sumers of United States Inc., 466 U.S. 485, (1984)

(constitutional rule of independent review of determination of

actual malice in defamation action recognized trial judge’s op-

portunity to observe demeanor of witnesses). There is no

question that the jury’s finding of clear and convincing evidence

of intentional falsity, harmful intent, and actual harm in this

case satisfies Gertz.

“ § 768.73(1)(c), Fla. Stat. (2009).

47a

Nothing in BMW and State Farm hints how an ar-

ithmetical ratio used in cases of purely economic

misconduct would function against this kind of pre-

meditated calumny and the considerable harm the

general consent of humankind recognizes is caused

by it.” Indeed this may be precisely the case the

Court had in mind in allowing exceptions to the ra-

tio: “low awards of compensatory damages may

properly support a higher ratio than high compensa-

tory awards, if, for example, a particularly egregious

act has resulted in only a small amount of economic

damages.” BMW, 517 U.S. at 582-83.

Given the obvious enormity of the offense, the

jurys role was to assess punishment powerful

enough to be felt and deter further actions of the

kind by one shown to be a repeat offender.” It was

” It is a significant harm we ourselves have previously rec-

ognized in a case of strikingly similar circumstances.

Substantial misconduct in the defamation of a physician was

the subject in Zambrano v. Devanesan, 484 So.2d 603 (Fla. 4th

DCA 1986), where in upholding an equally substantial award of

punitive damages we said that “punitive damages are to be

measured ‘by the enormity of the offense, entirely aside from

the measure of compensation of the injured plaintiff.” 484

So.2d at 609. This case is identical to Zambrano.

* See Owens-Corning Fiberglas Corp. v. Ballard, 749 So.2d

483, 486 (Fla. 1999) (under Florida law purpose of punitive

damages is not to further compensate plaintiff but to punish

defendant for wrongful conduct and deter similar misconduct

by it and other actors in the future); Ingram v. Pettit, 340 So.2d

922, 923-24 (Fla. 1976) (long established in Florida law that

‘availability of punitive damages reserved to cases where pri-

vate injuries partake of public wrongs, including intentional

infliction of harm); Zuckerman v. Robinson, 846 So.2d 1257,

1258 (Fla. 4th DCA 2003) (punitive damages are premised on

the enormity of the act resulting in the injury to the plaintiff).

48a

required to fix a sum of money large enough to equal

the reprehensibility of the wrongdoing and signifi-

cant enough to punish and deter this particular

actor. But this actor’s assets exceed its liabilities by

$100,000,000. A fine of $5,000,000 is thus only 5% of

its net worth, Such a small part — if a roll of quar-

ters symbolized net worth, just two of its coins —

might rationally be thought by some as inadequate

for a malicious defamer of such resources.”’

State Farm and BMW hold damages reasonable

when they “vindicate the State’s legitimate interests

in punishment and deterrence.” 517 U.S. at 568. The

Due Process Clause’s concern for excessiveness is

measured against the peculiar interests involved in

the case. When the tortfeasor has a $100,000,000

pile of unencumbered wealth, nothing in federal or

“ In response to Lawnwood's argument that it could not

have predicted the size of the punitive damages assessed by the

jury, Dr. Sadow calls our attention to a few cases involving de-

famation claims in the health care setting. See Reis v. Cedars

Med. Ctr., 1995 WL 865054 (Fla. 11th Cir. Ct. Nov. 1995)

($3,334,857 verdict for defamation); Profl Med. Educ., Inc. v.

Palm Beach Co. Health Care Dist., 2007 WL 2197752 (Fla. 15th

Cir. Ct. July 3, 2007) ($692,400 verdict for defamation, tortious

interference with business relations and civil conspiracy);

Scheer v. Entel Radiological Assoc., 1989 WL 527221 (Fla. 6th

Cir. Ct. Dec. 1989) ($1,856,927 verdict for plaintiff on defama-

tion and breach of contract counts). To those, we take special

note of our own decision in Zambrano v. Devanesan, 484 So.2d

603 (Fla. 4th DCA 1986) (affirming verdict of $700,000 in puni-

tive damages for defamatory per se falsehood of physician by

another staff physician). All of these cases arose in south Flor-

ida. All of them involve comparable parties and comparable

amounts, and surface similarities with this case. None of them

raise any concern suggesting excessiveness in the present case.

49a

Florida law” suggests that 5% of that pile is arbi-

trary or excessive for maliciously and intentionally

slandering a respected surgeon to destroy his profes-

sional reputation. The sum of $5,000,000 is legally

equal to the reprehensibility of the intentionally ma-

licious harm inflicted. That is the true application of

federal proportionality in this punitive damages

case. We conclude the jury’s verdict was not dispro-

portionate under federal law in:the intended sense.

D. Jury Instruction and Verdict Form

In closing we find we must disclose an error in the

jury instruction, Although the instruction and ver-

dict form used in this case did not affect the outcome

or our analysis on appellate review, we point out

that the instruction may have resulted in the jury’s

failure to find even nominal compensatory damages

for the slander per se.”

™“ Cooper Indus., Inc. v. Leatherman Tool Group Inc., 532

U.S. 424, 432 (2001); Engle, 945 So.2d at 1262.

” The court followed Standard Jury Instruction MI 4.4, say

ing:

If you find for Dr. Sadow, you shall consider the following

elements of damage: any injury to reputation or health and

any shame, humiliation, mental anguish, and hurt feelings

If you find for Dr. Sadow, but find that no damage has been

proved, you may award nominal damages. |e.s.|

Then the verdict form specified:

Question 6: What is the amount of compensatory damages, if

any, that Dr. Sadow has sustained as a result of slander by

Lawnwood for injury to Dr. Sadow’s reputation, health, and

shame, humiliation, mental anguish and hurt feelings?

A. experienced in the past: S$ |

50a

To repeat, Commander v. Pedersen, 116 Fla. 148,

156 So. 337, 341 (1934), held that “general damages

. are conclusively presumed to result “ in cases of de-

famation per se. [e.s.] See also Campbell ov.

Jacksonville Kennel Club, 66 So.2d 495 (Fla. 1953)

(words actionable per se import damage and general

damages are presumed to result and need not be

proved); Wagner Nugent Johnson Roth Romano

Erikson & Kupfer P.A. v. Flanagan, 629 So.2d 113,

116 n. 4 (Fla. 1994) (quoting RESTATEMENT (SECOND)

OF TORTS § 558: “one who is liable for a slander ac-

tionable per se ... is liable for at least nominal!

damages.”); Myers v. Jim Russo Prison Ministries

Inc., 3 So.3d 411 (Fla. 2d DCA 2009) (same); 19A

FLA. JUR. 2D Defamation and Privacy, § 133. If the

jury finds defendant liable for slander per se, it must

be instructed that nominal damages are deemed es-

tablished as a matter of law. It is error to instruct

instead that nominal damages may be awarded if

you wish to do so. Dr. Sadow’s trial counsel raised

this legal inconsistency in the verdict during post

verdict proceedings but ultimately decided not to

press the matter. Nonetheless on review we have

presumed that slanders per se caused at Jeast nomi-

nal damages.

B. to be experienced in the future: 4

C. present value of future damages: $

D. total): $ _

Question 7: If you find that Dr. Sadow has not proven any

amount of compensatory damages, then do you wish to

award nominal damages? And if so, in what amount? (if you

elect not to assess nominal damages, then enter 0). |e.s.)

Se

We have emphasized the parts we find troublesome.

5la

ky. Conclusion

After giving the exacting appellate review of this

‘ase required under the de novo standard of State

Farm and BMW, we conclude that the amount of pu-

nitive damages assessed conforms to applicable law

and is neither excessive nor arbitrary so as to exceed

federal Constitutional norms. Because the issue pre-

sented is of yvreat public importance as to the

imposition and assessment of punitive damages un-

der Florida law for cases involving intentionally

malicious, harmful defamation per se under TXO,

BMW and State Farm, we certify to the Florida Su

preme Court the following question:

Are punitive damages of $5,000,000 arbitrary

or excessive under the Federal Constitution

where the jury awarded no compensation be-

yond presumed nominal damayes but found

that defendant intentionally and maliciously

harmed plaintiff by slanders per se?

Affirmed.

CIKLIN, J. and LEBAN, MARK KING, Associate Judpe,

concur,

Appeal from the Circuit Court for the Nineteenth

Judicial Circuit, St. Lucie County; James Mideclis,

Judge; L.T. Case No, 561999CA001429BC.,

Arthur J. England Jr., Edward G. Guedes and

Kerri L. McNulty of Greenberg ‘Traurig, P.A., Miami,

and William A. Kebler of Banker Lopez Gassler,

P.A., St. Petersburg, for appellant.

52a

Major B. Harding, John Beranek and Ruth E. Va-

fek of Ausley & McMullen, Tallahassee, and Richard

H. Levenstein of Kramei Sewell Sopko & Levenstein,

Stuart, for appellee.

Not final until disposition of timely filed mo-

tion for rehearing.

53a

APPENDIX B

SUPREME COURT OF FLORIDA

LAWNWOOD MEDICAL CENTER, INC.,

Petitioner(s),

V

SAMUEL H. SADOW, M.D.,

Respondent(s).

No. SC10-715.

[April 27, 2010]

This cause having heretofore been submitted to

the Court on Certified Great Public Importance pur-

suant to Article V, Section 3(b), Florida Constitution

(1980), and Florida Rule of Appellate Procedure

9.030(a)(2)(A)\(v), and the Court having determined

that it should decline to exercise jurisdiction, it is or-

dered that the Petition for Review is denied.

No Motion for Rehearing will be entertained by

the Court. See Fla. R. App. P. 9.330(d)(2).

QUINCE, C.J., and PARIENTE, LEWIS, LABARGA, and

PERRY, JJ., concur.

54a

APPENDIX C

IN THE CIRCUIT COURT OF THE

NINETEENTH JUDICIAL CIRCUIT

IN AND FOR ST. LUCIE COUNTY, FLORIDA

SAMUEL H. SADOW, M.D.

Plaintiff, CASE NO:

561999CA001429BC

VS.

LAWNWOOD MEDICAL CENTER, INC.

d/b/a LAWNWOOD REGIONAL

MEDICAL CENTER, a Florida

corporation,

Defendant.

/

FINAL JUDGMENT

The Plaintiff, SAMUEL H. SADOW, brought this

action before the Court and the jury having rendered

its verdict and the Court being otherwise advised in

the premises, it is:

ADJUDGED that the Plaintiff, SAMUEL H.

SADOW * * * shall recover from the Defendant,

LAWN WOOD MEDICAL CENTER, INC. d/b/a

LAWN WOOD REGIONAL MEPICAL CENTER, a

Florida Corporation, * * * the sum of $6,517,000.00,

which shall bear interest at the legal rate of interest,

which is 11% per annum from October 10, 2007 until

paid, for which let execution issue. This Court re-

tains jurisdiction to enter further judgment for costs

and to enter any further orders as required by law.

55a

DONE and ORDERED in Chambers at Fort

Pierce, St. Lucie County, Florida, on this 28th day of

January, 2008.

sf |

Honorable James Midelis

Circuit Court Judge

56a

APPENDIX D

IN THE CIRCUIT COURT OF THE

NINETEENTH JUDICIAL CIRCUIT

IN AND FoR ST. LUCIE COUNTY, FLORIDA

SAMUEL H. SADOW, M.D.

Plaintiff, Case No.: 99-CA-1429 (BC)

VS.

LAWNWOOD MEDICAL CENTER, INC.

d/b/a LAWNWOOD REGIONAL

MEDICAL CENTER, a Florida

corporation,

Defendant.

/

Members of the jury, I shall now instruct you on

the law that you must follow in reaching your ver-

dict. It is your duty as jurors to decide the issues,

and only those issues, that I submit for your deter-

mination by your verdict. In reaching your verdict,

you should consider and weigh the evidence, decide

the disputed issues of fact, and apply the law on

which I shall instruct you, to facts as you find them

from the evidence.

The evidence in this case consists of the sworn tes-

timony of the witnesses, all exhibits received in

evidence, all facts that may be admitted or agreed to

by the parties, and any fact of which the court has

taken judicial notice.

In determining the facts, you may draw reason-

able inferences from the evidence. You may make

57a

deductions and reach conclusions which reason and

common sense lead you to draw from the facts shown

by the evidence in this case. But you should not

speculate on any matters outside the evidence.

In determining the believability of any witness

and the weight to be given the testimony of any wit-

ness, you may properly consider the demeanor of the

witness while testifying; the frankness or lack of

frankness of the witness; the intelligence of the wit-

ness; any interest the witness may have in the

outcome of the case; the means and opportunity the

witness had to know the facts about which the wit-

ness testified; the ability of the witness to remember

the matters about which the witness testified; and

the reasonableness of the testimony of the witness,

considered in the light of all the evidence in the case

and in the light of your own experience and common

sense.

You have heard opinion testimony from persons

referred to as expert witnesses. You may accept such

opinion testimony, reject it, or give it the weight you

think it deserves, considering the knowledge, skill,

experience, training, or education of the witness, the

reasons given by the witness for the opinion ex-

pressed, and all the other evidence in the case.

In this action, Dr. Sadow, as a member of the

medical staff, and LAWNWOOD entered into a writ-

ten contract described as the Medical Staff Bylaws. A

contract is an agreement establishing the parties’

rights and duties.

The duties of the Defendant under this contract

relate to the exclusive contract for the open-heart

surgery service, and Dr. Sadow’s request for in-

58a

creased clinical privileges, as contained in the Medi-

cal Staff Bylaws.

The issues for your determination on the claim of

Dr. Sadow is whether the Hospital failed to perform

its duties under the contract and, if so, whether that

failure to perform was a legal cause of the damages

sustained by Dr. Sadow.

* * *

The issues for your determination on the claim of

Dr. Sadow against the Hospital for defamation is

whether the Defendant through its Chief Financial

Officer, Robert Dunwoody, made any statement con-

cerning Dr. Sadow as Dr. Sadow contends; and, if so,

whether any statement tended to injure Dr. Sadow

in his business, reputation, or occupation.

If the greater weight of the evidence does not sup-

port the claim of Dr. Sadow on this issue, then your

verdict should be for LAWNWOOD. However, if the

greater weight of the evidence does support the claim

of Dr. Sadow on this issue, then you shall consider

the defense of rhetorical hyperbole.

Rhetorical hyperbole is an imaginative expression

or a vigorous epithet; a statement that cannot be

reasonably interpreted as stating actual facts about

an individual.

If the greater weight of the evidence does support

the claim of Dr. Sadow and does not support the de-

fense of rhetorical hyperbole, then your verdict

should be for Dr. Sadow, in the total amount of his

damages.

59a

Greater weight of the evidence means the more

persuasive and convincing force and effect of the en-

tire evidence in the case.

If you find for LAWNWOOD, you will not consider

the matter of damages. But, if you find for Dr. Sa-

dow, you should award Dr. Sadow an amount of

money that the greater weight of the evidence shows

will fairly and adequately compensate Dr. Sadow for

such damage as the greater weight of the evidence

shows was caused by the statement complained of. A

statement is a cause of damage if it directly and in

natural and continuous sequence produces or con-

tributes substantially to producing such damage.

If you find for Dr. Sadow, you shall consider the

following elements of damage:

Any injury to reputation or health and any shame,

humiliation, mental anguish, and hurt feelings ex-

perienced in the past or to be experienced in the

future. There is no exact standard for fixing the

compensation to be awarded on account of such ele-

ments of damage. Any award should be fair and just

in light of the evidence.

If you find for Dr. Sadow but find that no damage

has been proved, you may award nominal damages.

Nominal damages are damages of an inconsequential

amount which are awarded to vindicate a right

where a wrong is established but no damage is

proved.

If you find for Dr. Sadow and_ against

LAWNWOOD on defamation, you should consider, in

addition to any award of compensatory, nominal

damages, or no damages, whether punitive damages

60a

are warranted in the circumstances of this case as

punishment and as a deterrent to others.

The trial of the punitive damages issue is divided

into two stages. In this first stage, you will decide

whether the conduct of LAWNWOOD is such that

punitive damages are warranted. If you decide that

punitive damages are warranted, we will proceed to

the second stage during which the parties may pre-

sent additional evidence and argument on the issue

of the amount of punitive damages. I will then give

you additional instructions, after which you will de-

cide, in your discretion, the amount of punitive

damages to be assessed.

Punitive damages are warranted if you find by

clear and convincing evidence that LAWNWOOD’s

primary purpose in making the statement was to in-

dulge ill will, hostility, and an intent to harm Dr.

Sadow.

If you find for Dr. Sadow and_ against

LAWNWOOD, and you also find that clear and con-

vincing evidence shows that Robert Dunwoody was

personally guilty of intentional misconduct which

was a substantial cause of loss, injury, or damage to

Dr. Sadow and that such conduct would warrant an

award of punitive damages against him in accor-

dance with the standards that I have mentioned,

then in your discretion, you may determine that pu-

nitive damages are warranted against

LAWNWOOD.

Intentional misconduct means that Robert Dun-

woody had actual knowledge of the wrongfulness of

the conduct and the high probability that injury or

damage to Dr. Sadow would result and, despite that

6la

knowledge, intentionally pursued that course of con-

duct, resulting in injury or damage.

Clear and convincing evidence differs from the

greater weight of the evidence in that it is more

compelling and persuasive. Greater weight of the

evidence means the more persuasive and convincing

force and effect of the entire evidence in the case. In

contrast, clear and convincing evidence is evidence

that is precise, explicit, lacking in confusion, and of

such weight that it produces a firm belief or convic-

tion, without hesitation, about the matter in issue.

In reaching your verdict, you are not to be swayed

from the performance of your duty by prejudice,

sympathy or any other sentiment for or against any

party. Your verdict must be based on the evidence

that has been received and the law on which I have

instructed you.

Reaching a verdict is exclusively your job. I cannot

participate in that decision in any way. You should

not speculate about how I might evaluate the testi-

mony of any witness of any other evidence in this

case, and you should not think that I prefer one ver-

dict over another. Therefore, in reaching your

verdict, you should not consider anything that I have

said or done, except for my specific instructions to

you.

When you retire to the jury room, you should se-

lect one of your number to act as foreperson to

preside over your deliberations and sign your ver-

dict. Your verdict must be unanimous; that is, your

verdict must be agreed to by each of you.

You will be given a verdict form to fill out, which I

shall now read to you:

62a

[Read and explain verdict]

When you have agreed on your verdict, the fore-

person, acting for the jury, should date and sign the

appropriate form of verdict. You may now retire to

consider your verdict.

63a

APPENDIX E

(caption omitted)

VERDICT FORM

WE, the jury, return the following verdict:

1. Did Lawnwood breach the Medical Staff Bylaws

by denying Dr. Sadow’s request for increased privi-

leges in using an exclusive contract for the open-

heart surgery service?

YES V NO __

If “YES”, then answer Question 2. Otherwise, skip to

Question 5.

2. What is the amount of damages, if any, that Dr.

Sadow has sustained as a result of Lawnwood

breaching the Medical Staff Bylaws?

a. Past earnings $2,817,000

b. Future earnings $ 0

C. Present value of future

earnings $ 0

Add 2(a) and 2(c) only for Total $2,817,000

Answer Question 3.

3. Did Dr. Sadow fail to mitigate his damages by

means that were reasonably available to him?

YES _v NO __

If “YES”, then answer Question 4. If “NO”, then skip

to Question 5.

64a

4. What is the amount by which Dr. Sadow’s total

damages in Question 2 should be reduced because of

his failure to mitigate damages?

$1,300,000

Answer question 5.

5. Did Lawnwood slander Dr. Sadow’?

YES V NO

If “YES”, then answer Question 6. If “NO”, skip the

remaining Questions and sign this Verdict Form.

6. What is the amount of compensatory damages,

if any, that Dr. Sadow has sustained as a result of

slander by Lawnwood for injury to Dr. Sadow’s repu-

tation, health, and shame, humiliation, mental

anguish, and hurt feelings:

a) Experienced in the past: $ 0

b) To be experienced in the

future $ O

Cc) Present value of future

damages $ QO

d) Add 6(a) and (c) only for

total $___0

If you elect not to assess compensatory damages,

then enter $0.00 in 6(d) and continue to Question 7.

If you have awarded any amount of compensatory

damages, then skip to Question 8.

7. If you find that Dr. Sadow has not proven any

amount of compensatory damages, then do you wish

to award nominal damages, and, if so, in what

6ba

amount? (If you elect not to assess nominal damages,

then enter $0.00)

Answer Question 8

8. Under the circumstances of this case, state

whether punitive damages are warranted against

LAWNWOOD

YES NO

Please date and sign this Verdict form and return it

to the courtroom

SO SAY WE ALL, this 5 day of October, 2007

/s/

FOREPERSON

66a

APPENDIX F

(caption omitted)

AMOUNT OF PUNITIVE DAMAGES—

BIFURCATED TRIAL

The parties may now present additional evidence

related to whether punitive damages should be as-

sessed for the defamation by LAWNWOOD, and, if

so, in what amount. In the first phase of this trial,

you determined that LAWNWOOD breached a con-

tract with Dr. Sadow and awarded damages for that

breach. However, punitive damages may only be

awarded for the defamation and not for the breach of

contract. You should consider this additional evi-

dence along with the evidence already presented

regarding defamation, and you should decide any

disputed factual issues by the greater weight of the

evidence. Greater weight of the evidence means the

more persuasive and convincing force and effect of

the entire evidence in the case.

You will now determine the amount of punitive

damages, if any, to be assessed as punishment and

as a deterrent to others. This amount would be in

addition to the compensatory damages you have pre-

viously awarded. In making this determination, you

should consider the following:

(1) the nature, extent and degree of misconduct

and the related circumstances, including the follow-

ing:

- whether the wrongful conduct was motivated

solely by unreasonable financial gain;

67a

- whether the unreasonably dangerous nature of

the conduct, together with the high likelihood of

injury resulting from the conduct, was actually

known by LAWNWOOD;

- whether, at the time of the loss, injury, or dam-

age to Dr. Sadow, LAWNWOOD had a specific

intent to harm Dr. Sadow and the conduct of

LAWNWOOD did in fact harm Dr. Sadow; and

(2) LAWNWOOD’s financial resources.

However, you may not award an amount that

would financially destroy LAWNWOOD.

You may in your discretion decline to assess puni-

tive damages.

Your verdict on the issues raised by the punitive

damages claim of Dr. Sadow against LAWNWOOD

must be based on the evidence that has been re-

ceived during the trial of the first phase of this case

and on the evidence that has been received in these

proceedings and the law on which I have instructed

you. In reaching your verdict, you are not to be

swayed from the performance uf your duty by preju-

dice or sympathy for or against any party.

Your verdict must be unanimous, that is, your

verdict must be agreed to by each of you.

You will be given a form of verdict, which I shall

now read to you.

When you have agreed on your verdict, the fore-

man or forewoman, acting for the jury, should date

and sign the verdict. You may now retire to consider

your verdict.

68a

APPENDIX G

(caption omitted)

JURY VERDICT FORM —

PUNITIVE DAMAGES

WE, the jury, return the following verdict:

1. What is the total amount of punitive damages,

if any, which you find, by the greater weight of the

evidence, should be assessed against the Defendant?

(If you elect not to assess punitive damages against

Defendant, Lawnwood Regional Medical Center, you

should enter a zero as the amount of damages, and

sign and date the verdict form, if you enter any

amount, please answer questions 2 and 3)

$5,000,000

2. At the time of loss, injury, or damage to Dr. Sa-

dow, did Lawnwood have a specific intent to harm

Dr. Sadow and did the conduct of Lawnwood, in fact

harm Dr. Sadow?

YES V NO

3. Was the wrongful conduct of Lawnwood moti-

vated solely by unreasonable financial gain and was

the unreasonably dangerous nature of the conduct,

together with the high likelihood of injury resulting

from the conduct, actually known by Lawnwood?

¥ao NO _vV

SO SAY WE ALL, this 10 day of October, 2007.

/s/

FOREPERSON