U.S. Supreme Court

DUN & BRADSTREET, INC. v. GREENMOSS BUILDERS,

472 U.S. 749 (1985)

I

Petitioner credit reporting agency . . . sent a report to five subscribers indicating that respondent, a construction contractor, had filed a voluntary petition for bankruptcy. This report was false and grossly misrepresented respondent's assets and liabilities. . . .

Vermont State Court

Greenmoss Builders sued Dun & Bradstreet for libel in Vermont State Court. The Jury awarded $50,000 in compensatory damages and $300,000 in punitive damages, but the judge decided to allow a retrial because the instructions he had given to the jury may not have followed the requirements set forth in Gertz v. Robert Welch, i.e., that

"the States may not permit recovery of presumed or punitive damages, at least when liability is not based on a showing of knowledge of falsity or reckless disregard for the truth"

 

Vermont Supreme Court

Them Vermont Supreme Court reversed. It held that

"that as a matter of federal constitutional law, the media protections outlined in Gertz are inapplicable to nonmedia defamation actions."

 

 

 

II

 

. . . the trial court's conclusion that the instructions did not satisfy Gertz was correct, and the Vermont Supreme Court's determination that Gertz was inapplicable was necessary to its decision that the trial court erred in granting the motion for a new trial. We therefore must consider whether Gertz applies to the case before us.

 

III

In New York Times Co. v. Sullivan .the court noted that

"freedom of expression upon public questions is secured by the First Amendment," id., at 269 (emphasis added), and that "debate on public issues should be uninhibited, robust, and wide-open," id., at 270 (emphasis added), the Court held that a public official cannot recover damages for defamatory falsehood unless he proves that the false statement was made with "`actual malice' - that is, with knowledge that it was false or with reckless disregard of whether it was false or not . . .

But in Gertz v. Robert Welch

we held that the fact that expression concerned a public issue did not by itself entitle the libel defendant to the constitutional protections of New York Times. . . . In libel actions brought by private persons we found the competing interests different. Largely because private persons have not voluntarily exposed themselves to increased risk of injury from defamatory statements and because they generally lack effective opportunities for rebutting such statements, id., at 345, we found that the State possessed a "strong and legitimate . . . interest in compensating private individuals for injury to reputation." Id., at 348-349. Balancing this stronger state interest against the same First Amendment interest at stake in New York Times, we held that a State could not allow recovery of presumed and punitive damages absent a showing of "actual malice." Nothing in our opinion, [472 U.S. 749, 757]   however, indicated that this same balance would be struck regardless of the type of speech involved.

 

IV

We have never considered whether the Gertz balance obtains when the defamatory statements involve no issue of public concern. To make this determination, we must employ the approach approved in Gertz and balance the State's interest in compensating private individuals for injury to their reputation against the First Amendment interest in protecting this type of expression. This state interest is identical to the one weighed in Gertz. There we found that it was "strong and legitimate." 418 U.S., at 348 . A State should not lightly be required to abandon it . . .

The First Amendment interest, on the other hand, is less important than the one weighed in Gertz. We have long recognized that not all speech is of equal First Amendment importance. 5 It is speech on "`matters of public concern'" [472 U.S. 749, 759]   that is "at the heart of the First Amendment's protection." . . .

In contrast, speech on matters of purely private concern is of less First Amendment concern . . .

 

Main Holding

In light of the reduced constitutional value of speech involving no matters of public concern, we hold that the state interest adequately supports awards of presumed and punitive damages - even absent a showing of  "  actual malice."

 

V

The only remaining issue is whether petitioner's credit report involved a matter of public concern. In a related context, we have held that "[w]hether . . . speech addresses a matter of public concern must be determined by [the expression's] content, form, and context . . . as revealed by the whole record." Connick v. Myers, supra, at 147-148. [472 U.S. 749, 762]   These factors indicate that petitioner's credit report concerns no public issue. 8 It was speech solely in the individual interest of the speaker and its specific business audience. Cf. Central Hudson Gas & Elec. Corp. v. Public Service Comm'n of New York, 447 U.S. 557, 561 (1980). This particular interest warrants no special protection when - as in this case - the speech is wholly false and clearly damaging to the victim's business reputation.

 

VI

We conclude that permitting recovery of presumed and punitive damages in defamation cases absent a showing of "  actual malice"   does not violate the First Amendment when the defamatory statements do not involve matters of public concern.

For further analysis see: "Bringing the Dun & Bradstreet decision into perspective" by Slade Metcalf.

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The concurring and dissenting opinions in this case are especially interesting--particularly in regards to whether the New York Times actual malice standard applies to non-media libel defendants as well as libel defendants. A brief summary of these positions is worthwhile.

 

Chief Justice Burger, concurring in the Judgment.

 

Gertz v. Robert Welch held that a private plaintiff must demonstrate that the defendant acted negligently in publishing a defamatory false statement before he could recover compensatory damages. He must prove that the statement was made with actual malice before he could recover "presumed" or "punitive" damages.

Justice Burger agrees with the main opinion in this case that Gertz was not applicable when the plaintiff was a private figure and when the statement does not address a matter of public concern.

However, Burger believes that

Gertz was ill-conceived, and therefore agree with JUSTICE WHITE that Gertz should be overruled. I also agree generally with JUSTICE WHITE'S observations concerning New York Times Co. v. Sullivan. New York Times, however, equates "reckless disregard of the truth" with malice; this should permit a jury instruction that malice may be found if the defendant is shown to have published defamatory material which, in the exercise of reasonable care, would have been revealed as untrue. But since the Court has not applied the literal language of New York Times in this way, I agree with JUSTICE WHITE that it should be reexamined. The great rights guaranteed by the First Amendment carry with them certain responsibilities as well.

Consideration of these issues inevitably recalls an aphorism of journalism that "too much checking on the facts has ruined many a good news story." [472 U.S. 749, 765]  

 

Justice White, concurring in Judgment

Justice White also believes that Gertz should be overruled. But like Burger, he states that the protections in Gertz should not apply to a case where the defamatory statement does not deal with a matter of public importance.

Justice White also wrote a long critique in which he expressed regrets for supporting New York Times v. Sullivan. He said that the actual malice standard set forth in New York Times did not give a defamed plaintiff adequate opportunity to vindicate his name. He proposed a two-part system to replace the current system. First, the court would determine whether the defamatory statement was true or false. If it was false, then it would determine whether the statement was made with actual malice. Nominal damages would be rewarded if the Plaintiff proved the statement was false but could not muster proof of actual malice. Punitive and presumed damages would not be allowed unless the Plaintiff showed actual malice. Even then, they would have to be limited so as not to discourage the press from robust reporting.

Most importantly, he said that libel law should give the same protections to both media and non-media defendants.

Wisely, in my view, JUSTICE POWELL does not rest his application of a different rule here on a distinction drawn between media and nonmedia defendants. On that issue, I agree with JUSTICE BRENNAN that the First Amendment gives no more protection to the press in defamation suits than it does to others exercising their freedom of speech. None of our cases affords such a distinction; to the contrary, the Court has rejected it at every turn. 4 It should be rejected again, particularly in this context, since it makes no sense to give the most protection to those publishers who reach the most readers and therefore pollute the channels of communication with the most misinformation and do the most damage to private reputation.

 

Footnote 4 justifies White's position:

[ Footnote 4 ] We explained in Branzburg v. Hayes, 408 U.S. 665 (1972) that "the informative function asserted by representatives of the organized press" to justify greater privileges under the First Amendment was also "performed by lecturers, political pollsters, novelists, academic researchers, and dramatists." Id., at 705. From its inception, without discussing the issue, we have applied the rule of New York Times to nonmedia defendants. See New York Times, 376 U.S., at 254 , n., 286; Henry v. Collins, 380 U.S. 356 (1965); Garrison v. Louisiana, 379 U.S. 64 (1964). And this Court has made plain that the organized press has a monopoly neither on the First Amendment nor on the ability to enlighten. First National Bank of Boston v. Bellotti, 435 U.S. 765, 782 (1978) See also Pell v. Procunier, 417 U.S. 817 (1974) (press has no independent First Amendment right of access to prisons). Cf. Buckley v. Valeo, 424 U.S. 1, 48 -49 (1976) (the idea that government can restrict the speech of some elements of society to enhance the relative voice of others is "wholly foreign" to the First Amendment).

 

 

JUSTICE BRENNAN, JUSTICE MARSHALL, JUSTICE BLACKMUN, AND JUSTICE STEVENS dissenting.

 

The four Justices summarize what this case is about.:

 

The question presented here is narrow. Neither the parties nor the courts below have suggested that respondent Greenmoss Builders should be required to show actual malice to obtain a judgment and actual compensatory damages. Nor do the parties question the requirement of Gertz that respondent must show fault to obtain a judgment and actual damages. The only question presented is whether a jury award of presumed and punitive damages based on less than a showing of actual malice is constitutionally permissible. Gertz provides a forthright negative answer. To preserve the jury verdict in this case, therefore, the opinions of JUSTICE POWELL and JUSTICE WHITE have cut away the protective mantle of Gertz.

 

The dissenters believe:

The credit reporting at issue here surely involves a subject matter of sufficient public concern to require the comprehensive protections of Gertz. Were this speech appropriately characterized as a matter of only private concern, moreover, the elimination of the Gertz restrictions on presumed and punitive damages would still violate basic First Amendment requirements. . .

Even if not at "the essence of self-government," Garrison v. Louisiana, 379 U.S. 64, 74 -75 (1964), the expression at issue in this case is important to both our public discourse and our private welfare. That its motivation might be the economic interest of the speaker or listeners does not diminish its First Amendment value. See Consolidated Edison Co. [472 U.S. 749, 795]   v. Public Service Comm'n of New York, 447 U.S. 530 (1980). Whether or not such speech is sufficiently central to First Amendment values to require actual malice as a standard of liability, this speech certainly falls within the range of speech that Gertz sought to protect from the chill of unrestrained presumed and punitive damages awards. 18  

Of course, the commercial context of Dun & Bradstreet's reports is relevant to the constitutional analysis insofar as it implicates the strong state interest "in protecting consumers and regulating commercial transactions," Ohralik v. Ohio State Bar Assn., 436 U.S. 447, 460 (1978). Cf. Bolger v. Young Drug Products Corp., 463 U.S. 60, 81 (1983) (STEVENS, J., concurring in judgment). The special harms caused by inaccurate credit reports, the lack of public sophistication about or access to such reports, and the fact that such reports by and large contain statements that are fairly readily susceptible of verification, all may justify appropriate [472 U.S. 749, 796]   regulation designed to prevent the social losses caused by false credit reports. 19 And in the libel context, the States' regulatory interest in protecting reputation is served by rules permitting recovery for actual compensatory damages upon a showing of fault. Any further interest in deterring potential defamation through case-by-case judicial imposition of presumed and punitive damages awards on less than a showing of actual malice simply exacts too high a toll on First Amendment values. Accordingly, Greenmoss Builders should be permitted to recover for any actual damage it can show resulted from Dun & Bradstreet's negligently false credit report, but should be required to show actual malice to receive presumed or punitive damages.

 

Most importantly, the dissenters believe that there should be no distinction between media and non-media defendants:

Relying on the analysis of the Vermont Supreme Court, respondent urged that this pruning be accomplished by restricting the applicability of Gertz to cases in which the defendant is a "media" entity. Such a distinction is irreconcilable with the fundamental First Amendment principle that "[t]he inherent worth of . . . speech in terms of its capacity for informing the public does not depend upon the identity of its source, whether corporation, association, union, or individual." First National Bank of Boston v. Bellotti, [472 U.S. 749, 782]   435 U.S. 765, 777 (1978). First Amendment difficulties lurk in the definitional questions such an approach would generate. 6 And the distinction would likely be born an anachronism. 7   [472 U.S. 749, 783]   Perhaps most importantly, the argument that Gertz should be limited to the media misapprehends our cases. We protect the press to ensure the vitality of First Amendment guarantees. 8 This solicitude implies no endorsement of the principle that speakers other than the press deserve lesser First Amendment protection. "In the realm of protected speech, the legislature is constitutionally disqualified from dictating . . . the speakers who may address a public issue." First National Bank of Boston v. Bellotti, supra, at 784-785. See Bridges v. California, 314 U.S. 252, 277 -278 (1941).

The free speech guarantee gives each citizen an equal right to self-expression and to participation in self-government. See, e. g., Carey v. Brown, 447 U.S. 455, 459 -463 (1980); Police Department of Chicago v. Mosley, 408 U.S. 92 (1972); Cohen v. California, 403 U.S. 15, 24 (1971); Whitney v. California, 274 U.S. 357, 375 -377 (1927) (Brandeis, J., concurring). This guarantee also protects the rights of listeners to "the widest possible dissemination of information from diverse and antagonistic sources." Associated Press v. United States, 326 U.S. 1, 20 (1945). 9 Accordingly, at least six [472 U.S. 749, 784]   Members of this Court (the four who join this opinion and JUSTICE WHITE and THE CHIEF JUSTICE) agree today that, in the context of defamation law, the rights of the institutional media are no greater and no less than those enjoyed by other individuals or organizations engaged in the same activities. See ante, at 773 (opinion concurring in judgment). 10  

 

Actually, to claim that 6 Justices agree that media and non-media defendants enjoy equal protection under libel laws might be a bit of an exaggeration since Chief Justice did not address this issue in his opinion. However, it is clear that five of the Justices believed that there should be no distinction. Thus, it would appear from this case that it was settled once and for all that both media and non-media defendants should be treated the same. However, this was soon thrown into doubt in Philadelphia Newspapers v. Hepps and Milkovich v. Lorain Journal Co.

 

 

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