Court upholds verdict, but finds damages based on improper expert testimony

From the Summer 2000 issue of The News Media & The Law, page 35.

The state Supreme Court partially upheld a jury verdict against The (Wilmington) News Journal on May 3, finding that the determination of liability was supported by the facts presented to the jury.

However, the court ruled that the $2.6 million in actual damages awarded to a doctor were based on expert testimony “that lacked an admissible foundation,” but also found that the jury was unfairly restricted by the judge’s decision that they could not consider the wealth of Gannett, the newspaper’s parent company, in determining punitive damages.

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Pamela Kane’s doctor recommended in April 1992 that she undergo a hysterectomy to remove a fibroid tumor “sitting in her cervix.” The doctor, Margo Kanaga, also recommended that Kane seek a second opinion before agreeing to the operation.

But during an emergency room visit a few weeks later prompted by heavy bleeding experienced by Kane, a doctor was able to remove the tumor with forceps, avoiding the need for a hysterectomy or any invasive surgery.

Kane filed a complaint with the county medical society, and approached a health reporter with the The (Wilmington) News Journal about doing a story on what she considered a doctor’s recommendation of unnecessary surgery for financial gain.

The News Journal decided to run a story without waiting for a decision by the medical society. Under the headline “Patient feels betrayed: says proposed hysterectomy wasn’t needed,” the article reported that Kane’s complaint accused Kanaga of committing “a serious breach of the standard of care a patient has the right to expect.” Kanaga declined to discuss the case with the newspaper.

The medical society cleared Kanaga of any wrongdoing eight weeks later, finding that a hysterectomy was “one of several appropriate therapies” for Kane’s condition.

Kanaga sued the newspaper, Harriman, and Kane in December 1992, and the newspaper asked the court to dismiss the case, primarily because the story constituted “fair comment” on a public controversy before an official body.

The court dismissed the claim, but the dismissal was overturned by the state Supreme Court. The high court found that a jury must decide if the ‘fair comment’ privilege applied, and noted that it should not apply if the report was found to contain false statements of fact, rather than opinions. The case went back to trial.

In January 1998, a state Superior Court jury in Wilmington awarded Kanaga more than $2.6 million in actual damages and an additional $250,000 in punitive damages against Harriman and Gannett, who asked the Supreme Court to overturn the jury verdict. A separate award was entered against Kane, but she did not appeal.

In May 2000, the Supreme Court rejected Gannett’s argument that the claim was based on statements of opinion based on true facts, which cannot support a libel verdict. The court held that the issue of whether the article was fact or opinion was a question that was properly left to a jury.

“Taken as a whole, the article conveys the impression that Dr. Kanaga recommended unnecessary surgery for financial gain. The reporting of Kane’s complaint to the Medical Society was prefaced by a headline depicting the patient as feeling betrayed by her physician — an obvious violation of the duty owed by a physician to a patient,” the court held.

The court also noted that Kane’s use of the term “incredulously” to describe the emergency room doctor’s view of Kanaga’s actions were disputed by the emergency room doctor, and that medical records attached to Kane’s complaint, which the reporter possessed prior to the publication of the article, “differed in several key respects from Kane’s complaint.”

The court also decided that a reasonable jury could conclude that publishing the article without waiting for a decision by the medical board “evidenced journalistic irresponsibility.” The court noted that the story “did not involve a plane crash or other immediate news event,” yet the newspaper chose to present a “highly charged, biased, one-sided version of events.”

The court rejected Gannett’s argument that the article was fair comment on an official proceeding because of the complaint filed with the medical board. The court found that the issue had already been decided four years earlier when Kanaga had appealed the dismissal of the case before trial, which the Supreme Court then reversed.

However, the court found that the jury award for actual damages was based on speculation and inadmissible expert testimony, and that the jury should have been able to consider Gannett’s wealth in determining punitive damages. Both damage awards were therefore overturned, and the case was sent back for a new trial solely on the issue of damages.

One judge dissented, finding that the court’s decision will have a “chilling effect” on free speech. Noting that the disputed comments represented Kane’s opinions based on disclosed facts, Judge William Chandler said that “a libel action cannot lie against a speaker for expressing an opinion that does not imply false, defamatory facts.”