Jury must entertain ‘serious’ doubts

From the Spring 2001 issue of The News Media & The Law, page 23.

The Nevada Supreme Court overturned a $3.1 million jury verdict against the publisher of a book about a Las Vegas casino mogul on Jan. 29.

The case turned on the trial judge’s failure to include a single word in his instructions to the jury: “serious.”

The court held that a trial court incorrectly instructed the jury on the issue of actual malice, but also held that the fair report privilege did not extend to an unofficial, non-public Scotland Yard report. The court also upheld the trial court’s dismissal of the case against the book’s author because he was not involved with the allegedly libelous advertisement for the book.

John L. Smith authored “Running Scared: The Life and Treacherous Times of Las Vegas Casino King Steve Wynn,” an unauthorized biography of Stephen A. Wynn, a Las Vegas businessman in the casino industry. Announcing the imminent publication of the book in a trade magazine, the publisher, Barricade Books, Inc., declared that the book had “details why a confidential Scotland Yard report called Wynn a front man for the Genovese family.” The Genovese family is believed to be involved in organized crime.

Wynn sued Smith, Barricade Books, and Barricade’s principal, Lyle Stuart. Smith moved for summary judgment, claiming he was not directly involved with the advertisement. The trial court granted him summary judgment.

A jury found that Barricade Books and Stuart were liable for defamation of Wynn for $3.1 million.

Several media outlets and organizations, including The New York Times and Playboy Enterprises, argued in a friend-of-the-court brief that the fair report privilege — which allows comment on official reports and government actions if the comment is accurate and complete or a fair abridgement — protected the defendants from liability. The media argued that many stories based on confidential government documents leaked to the press would be spiked unless the fair report privilege was applied to the statements on the Scotland Yard report.

The court refused to apply the privilege because the report was not already before the public. “Allowing the privilege to cover confidential reports would bring to light information that the government had no intention of releasing, and which could be used as a powerful tool for injury,” the court wrote.

The court decided, however, that the jury instruction on actual malice was erroneous because it defined “reckless disregard for the truth” as where a publisher entertains “doubt” as to the veracity of the statement. Nevada Supreme Court and U.S. Supreme Court cases require that a reckless disregard for the truth requires that the publisher entertain “serious doubt” as to the statement’s veracity.

The court here also allowed the jury on remand to determine whether the statement was an opinion or a fact. Statements of opinion are not actionable, but statements of fact may be.

The appellate court also upheld the summary judgment against Smith, even though Smith provided his publisher with the Scotland Yard report on which the advertisement statement was based.

The court also refused to award Smith attorneys’ fees because, it said, the trial court did not abuse its discretion by refusing the demand. — DB