>$10M Libel Verdicts: They’re Not Just for Johnny Depp
From Hoffmann v. Clark, in a unanimous opinion by Justice Matthew McDermott:
A jury awarded [“car tuning” company] Hoffmann Innovations, Inc., and its owner Jerry Hoffmann $11 million in compensatory and punitive damages against a fired employee, Scott Clark, and his new competing company [RealTuners] based mainly on defamatory statements that Clark made on social media, online forums, and in podcasts.
During the course of the litigation, the district court sanctioned Clark for violating a consent order that prevented both sides from making any statements about one another—particularly online statements—outside the litigation. But the court’s contempt orders and sanctions for Clark’s violations of the consent order didn’t stop Clark from continuing to disparage Hoffmann. After several failed attempts to secure compliance with increasing sanctions, the court struck Clark’s pleadings—most importantly, his answer and affirmative defenses. Without any defense pleaded to the petition’s claims, trial proceeded on the only outstanding issue: the amount of damages….
I omit the complicated details about the case’s procedural history and backstory, and turn to the court’s important holdings about damages (which will in the process also quickly summarize the libel):
The jury awarded damages in roughly the amounts Hoffmann requested. It awarded Hoffmann personally $500,000 from Clark and $500,000 from RealTuners for libel per se ($1 million total). The jury awarded Hoffmann Innovations $2,060,250 from Clark and the same amount from RealTuners ($4,120,500 total). The remaining compensatory damages were for Hoffmann Innovations against Scott Clark: $27,000 for breach of fiduciary duty, $102,500 for breach of contract, and $250,000 for civil extortion. The jury thus awarded a total of $5.5 million in compensatory damages. The jury also awarded punitive damages against Clark for $2 million and against RealTuners for $3.5 million. The total verdict came to $11 million. The district court also granted the plaintiffs’ request for common law attorney fees (awarded despite no contractual or statutory provision for such fees) for $210,743.21….
The Restatement offers a useful way of thinking about libel per se damages to reconcile our seemingly disparate treatments in cases. It describes special damages, which result from “the loss of something having economic or pecuniary value,” and general damages, which are “imposed for the purpose of compensating the plaintiff for the harm that the publication has caused to his reputation,” including emotional damages.
In a libel per se claim, general damages are the “presumed” damages. General damages must still relate to the actual harm caused by the publication, but the amount of damage to reputation is usually left in the jury’s discretion. Although plaintiffs aren’t required to prove special damages to recover for libel per se—because they may recover presumed general damages—plaintiffs must still prove special damages if they wish to recover special
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