Opinion ID: 1234258
Heading Depth: 1
Heading Rank: 13

Heading: Error in Award of Damages

Text: Hernstadt raises several separate attacks on the award of damages. The jury awarded $675,000 in general damages; it awarded no special or exemplary damages, though it was instructed in all three areas. The first question raised is whether the award was improper because Allen failed to prove actual damages. In defamation actions, general damages are those which are awarded for loss of reputation, shame, mortification and hurt feelings. NRS 41.334. The parties agree that Allen's testimony was competent to establish his shame, mortification and hurt feelings. Allen testified that the broadcast in issue was one of the most humiliating experiences of his life. He described his reaction during the questioning as one of shock, stating that he was stunned, and in a chaotic state of mind. He felt that people viewed him as an embezzler or a bad check artist. A substantial amount of testimony was offered by Republican party leaders to establish damage to Allen's reputation. Virtually everyone conceded that Allen had little hope of winning the Republican gubernatorial nomination, but Allen had a growing and favorable political reputation within the party. There was testimony that the public would not quickly forget the bad publicity, that the story would likely resurface if Allen chose to run again for office, and that Allen had been politically assassinated. It is fair to conclude that Allen's reputation was damaged, and though Allen might previously have been in line for an appointive office, his potential was greatly diminished by the incident. [9] There was testimony that approximately 7,800 households (with an average of 2.7 members per household) were turned into the station for at least 5 minutes during the average quarter-hour of reported time. One viewer who had watched the show testified that she did not immediately recall whether the bounced check had been attributed to Allen's advertising agency. She stated that she believed Hernstadt had handled the matter poorly, that Allen had been presented poorly, and that as a result, she no longer considered Allen to be a viable candidate. A political consultant testified as an expert witness that in his opinion Allen's political reputation had suffered as a result of the broadcast, and that Allen's chance for an appointive office had been considerably lessened. Allen is entitled to recover general damages. He is entitled to compensation for his shame, humiliation and hurt feelings. Also, although Allen is not entitled to recover for loss of the election, we hold that he is entitled to recover damages for injury to his political reputation. See Southwestern Publishing Co. v. Horsey, 230 F.2d 319 (9th Cir.1956); Houston Printing Co. v. Hunter, 105 S.W.2d 312 (Tex.Civ.App. 1937), aff'd, 129 Tex. 652, 106 S.W.2d 1043 (Tex.1937); Jenkins v. Taylor, 4 S.W.2d 656 (Tex.Civ.App.1928). This view is consistent with the Restatement comment which extends slander per se to cover candidates for political office. Hernstadt claims that, assuming Allen did prove any general damages, the award of $675,000 was excessive and unconstitutional. The award represents approximately 1/10 of Hernstadt's net worth; this suggests that the jury intended to punish Hernstadt. He asks this court to disallow or reduce the award because it appears to have been given under the influence of passion or prejudice. NRCP 59(a)(6). Several courts have expressed concern that an award of substantial damages in cases of this kind may impinge on first amendment rights if compensatory damages are employed as a vehicle for punishing unpopular ideas. For that reason, a few jurisdictions have eliminated punitive damages altogether in defamation actions; others have imposed a stricter scrutiny in reviewing jury awards for actual damages. See Kidder v. Anderson, 345 So.2d 922 (La.App.1977), rev'd, 354 So.2d 1306 (La.1978), cert. denied, 439 U.S. 829, 99 S.Ct. 105, 58 L.Ed.2d 123 (1978); Stone v. Essex County Newspapers, Inc., 367 Mass. 849, 330 N.E.2d 161 (Mass.1975). The United States Supreme Court has not yet held presumed damages or punitive damages unconstitutional so long as actual malice is established and has in fact stated that an award need not be limited to out-of-pocket damages. The award must be supported by competent evidence, though not necessarily of the kind that assigns an actual dollar value to the injury. Gertz, above, 418 U.S. at 349-50, 94 S.Ct. at 3011-12. Some courts apparently have read Gertz as authorization to apply a traditionally deferential approach in reviewing defamation awards. See, R. Sack, above, at 356. We are of the opinion that in a public figure slander case against media defendants added scrutiny must be given to large compensatory damage awards because of their impact on free speech. As stated in Gertz: Juries [in defamation cases] may award substantial sums as compensation for supposed damage to reputation without any proof that such harm actually occurred. The largely uncontrolled discretion of juries to award damages where there is no loss unnecessarily compounds the potential of any system of liability for defamatory falsehood to inhibit the vigorous exercise of First Amendment freedoms. 418 U.S. 349, 94 S.Ct. at 3011-12. We find the potential for inhibiting the vigorous exercise of First Amendment freedom in this case because the damage award far exceeds any conceivable damage that might have been done to Allen's political reputation or damages suffered as a result of an humiliation or mental suffering brought about by the defamatory material presented in this case. The parties cite a variety of cases on the issue of damages. Hernstadt relies primarily on the Carol Burnett case ( Burnett v. National Enquirer, 7 Media L.Rptr. 1331) and Joseph Alioto case ( Alioto v. Cowles Communications, Inc ., above) to establish the excessiveness of damages in the immediate case. A jury awarded Carol Burnett $300,000 in compensatory damages, of which $299,750 were awarded for emotional distress. The trial judge reduced the compensatory damages to $50,000, but also added $750,000 in punitive damages. Joseph Alioto's suit was tried to the bench; he received general damages in the amount of $350,000. (The amount of the award was not reviewed on appeal.) Hernstadt argues that Allen was entitled, as a matter of law, to less than these plaintiffs received. We agree. Reduction of the Carol Burnett compensatory damages from $300,000 to $50,000 is very much in line with the views of this court. It is simply beyond the range of reason to conclude that Allen suffered $675,000 damage to his reputation and sensibilities. We conclude that the award is not supported by the evidence and therefore must have been given under the influence of passion or prejudice. We further conclude that an award of this kind and magnitude may constitute a threat to the exercise of free speech. For these reasons we hold that the sum of $50,000 is the maximum amount that could be reasonably awarded under these circumstances. Because damages are excessive the judgment will be set aside and a new trial will be ordered on the issue of damages, unless Allen files within fifteen days of the date of filing of this opinion a remittitur damna in which all amounts over $50,000 are remitted. In the event of such remission the judgment will be affirmed. See Miller v. Schnitzer, 78 Nev. 301, 371 P.2d 824 (1962). MANOUKIAN, C.J., MOWBRAY and GUNDERSON, JJ., and FONDI, District Judge, [10] concur.