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Libel - A way out of the libel litigation nightmare

Author: Edward Seaton
Published: April 01, 1998
Last Updated: May 20, 1999
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Libel

A way out of the libel litigation nightmare

Proposed Uniform Correction or Clarification of Defamation Act offers relief to the defamed and publishers: a face-saving way to get a correction and limits on awards

By Edward Seaton

With nearly 30 years of experience as an editor and newspaper owner, I live on a daily basis with the fear of the big libel suit. Libel remains a serious problem to those of us who publish and edit newspapers:

  • In 1997, a Texas securities firm won a $223 million jury award against The Wall Street Journal. A judge since has reduced the award to $22.7 million in actual damages and $20,000 punitive damages.
  • In this decade, there have been jury awards of $58 million against The Dallas Morning News, $34 million against The Philadelphia Inquirer, $29 million against Harte-Hanks, $18 million against Capital Cities, $16 million against a California weekly and $13.5 million against The Plain Dealer, Cleveland. All these cases were later settled for undisclosed figures except the California weekly case. Its owner went bankrupt trying to keep up with his legal bills.
  • Three years ago a New York weekly got the $2.1 million judgment against it overturned by an appeals court, but too late to save the paper. In the two-and-one-half year appeals process, the court froze most of the owner’s assets, and the plaintiffs’ lawyer used official-looking letters to tell advertisers not to pay their bills and not to advertise in the paper. The owner had no libel insurance.
  • Libel awards were made against newspapers in 1996 in five states (Missouri, Georgia, Arkansas, Indiana, and Iowa) in cases that went to trial. The Iowa case was a $2,380,000 judgment against The Ottumwa (Iowa) Courier. It has been appealed.
  • There is a similar history for broadcasters, starting with a $10 million Florida jury award against ABC News in 1996.
Four years ago, the National Conference of Commissioners on Uniform State Laws recommended that state legislatures enact the Uniform Correction or Clarification of Defamation Act. I believe this Act is a positive step forward, not only for newspapers and their credibility with the public, but also for businesses, those who feel they have been defamed by the press, and the public.

Speaking as an editor and owner, if the Uniform Correction Act is adopted in my state, I’m going to be able to sleep better at night. If we do make an error, I’ll be able to focus on getting the story right rather than the punishment that may come for printing it. I’ll be able to restore the victim’s reputation rather than worry that a correction attempting to do so will be introduced in a later libel suit as a dangerous admission of error.

The Act puts the focus on getting the story right, on fixing the problem rather than on punishment for having published a defamation. It benefits the public because under present law, there is often a disincentive to correct. News organizations routinely are advised against making a correction because if they admit the error they increase the plaintiff’s chance of proving the claim in a subsequent libel trial. While most of us correct quickly in a black-and-white case of defamation, it is the gray cases where we are advised to consider that the correction may seriously hurt us in court.

The Uniform Correction Act takes the guess work out of the requirements for requesting or publishing a correction, compared to present retraction statutes in many states. In one state, Ohio, refusing to print a requested correction of a false statement is a criminal offense. Eight states make an exception under their retraction statutes when the plaintiff is a candidate for public office. Two-thirds of the 31 statutes apply only to media cases — often not including the wire services. The current retraction statutes’ procedures vary so much and are so confusing and inconsistent that they encourage plaintiffs to shop around for the most attractive state in which to file a suit.

Under the Uniform Act, a request to correct has to be made within 90 days of the original publication in question and the correction must be published within 45 days after the request. And, the Act requires a person seeking a correction to disclose any information material to the alleged defamation. If these requirements are not met, then the plaintiff is limited only to out-of-pocket costs even if the correction is not published. A defendant also would be able to limit damages with a later correction any time before trial, but is required to pay the plaintiff’s legal fees up to the time of the correction.

Many of us in ASNE view the Correction Act as a piece of ASNE’s larger project to improve newspaper credibility. The prompt correcting of mistakes encouraged by the Act will help our credibility as well as benefit the general public as a result of more timely restoration of damaged reputations.

Because the Act creates a significant incentive for the media to correct errors so the plaintiff’s lost reputation can be restored, I believe it can play a role in fostering credibility. Unlike other injuries, lost reputation can be repaired by correction or clarification of the information that is defamatory.

Thirty-one states have retraction statutes. More than half of these limit recovery in libel actions, where there is no proof of malice, to "actual damages" — damages for both out-of-pocket costs and loss of reputation. (See sidebar.)

The Uniform Act, by contrast, limits damages to provable economic loss (out-of-pocket costs), if a timely correction is made. Period. Even if malice is proved, the correction takes both punitive and loss-of-reputation damages out of the equation.

In summary, the Uniform Corrections Act removes disincentives for correction and clarification; instead it encourages them. Defendants are subject to neither punitive nor loss-of-reputation damages if a timely and adequate correction or clarification is published when appropriate. The Act still allows the plaintiff to recover out-of-pocket monetary damages for any actual economic loss. It provides an incentive for the media to set the record straight, enables plaintiffs to obtain a quick redress of mistakes by the media, and provides for compensation to a plaintiff when uncorrectable economic loss has occurred. The ultimate result should be a steep reduction in the number of libel suits brought, and major savings in time and money to those who bring them and the news organizations that must defend them. Libel insurance premiums also should come down significantly.

In truth, under current law, plaintiffs go through protracted litigation that lasts years with all parties incurring substantial legal fees and plaintiffs ultimately seldom recovering large damages. Libel suits today are expensive to litigate and difficult to win, but plaintiffs continue to bring them because, in the absence of a published correction, there is no other way to protect themselves from injurious false statements.

This is not solely or primarily a media law, however. The Uniform Act was developed by the Conference of Commissioners as a good-government measure. The National Conference on Uniform State Laws is funded by the states, made up of legal experts appointed by the states and exists to propose uniform laws where it deems appropriate. Its best-known accomplishments are the Uniform Commercial Code, the Uniform Transfer to Minors Act, the Uniform Interstate Family Support Act (child support enforcement). It has had some success in improving the law where the law needs improvement, but less success in getting universal laws adopted by all the states.

The Uniform Correction Act has been adopted by one state already — North Dakota — and proposed in one way or another in seven others and the District of Columbia. It is my hope that it will be adopted state by state.

The Uniform Act has been endorsed by the House of Delegates of the American Bar Association — composed of plaintiffs’ and defendants’ attorneys alike — and the Associated Press Managing Editors as well as the Uniform Law Commissioners.

I believe that business and industry have a strong interest in seeing the Act adopted. Defamation claims made against non-media employers by current and former employees account for a very significant portion of all libel and slander actions filed. Back in the 1980s, before the current flood of employment practices litigation, such claims accounted for nearly one-third of the cases filed. Today I am certain the percentage is substantially higher.

In the coming year, ASNE will provide leadership, persistence and information in this effort, but in the final analysis the state press associations are the key element for pushing the Uniform Act where it seems appropriate. I hope the state Chambers of Commerce and the National Conference of State Legislatures also will take a lead in pushing the Uniform Act.

Seaton, vice president of ASNE, is editor-in-chief of The Manhattan (Kan.) Mercury.


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