Court Opinion

ID: 9692679
Source: CourtListenerOpinion
Date Created: 2023-08-25 16:00:26.622736+00
Date Added: 2024-06-11T18:19:14.680065
License: Public Domain

OPINION
SHORT, Judge.
Cowles Media Company, d/b/a Minneapolis Star and Tribune (Tribune) and Northwest Publications, Inc. (Dispatch), appeal the trial court’s judgment awarding Cohen $200,000 in compensatory damages and $500,000 in punitive damages. This action arises out of the newspapers’ publication of Cohen’s name after reporters employed by the newspapers had promised Cohen that his name would not be published. The trial court concluded that the first amendment did not bar Cohen’s breach of contract and misrepresentation claims and submitted those claims to the jury. The jury returned a verdict in favor of Cohen. The trial court denied the newspapers’ alternative motions for judgment notwithstanding the verdict and a new trial. On *252appeal, the newspapers argue that the trial court erred in (1) ignoring the protection afforded the press by the first amendment, (2) instructing the jury with respect to Cohen’s contract claim, (3) submitting the issue of fraud to the jury, (4) submitting the issue of punitive damages to the jury, and (5) admitting irrelevant and prejudicial evidence regarding other Tribune publications. We affirm the judgment on the breach of contract claim, but reverse as to the claims for misrepresentation and punitive damages.
FACTS
In the fall of 1983, respondent Dan Cohen was the director of public relations for an advertising agency. That agency was handling the advertising for the campaign of Wheelock Whitney, the Independent Republican (IR) gubernatorial candidate. Cohen was a long-time and well-known IR supporter. One week before the gubernatorial elections, Gary Flakne, a former IR legislator and county attorney, unearthed documents which demonstrated that the Democratic-Farmer-Labor (DFL) candidate for lieutenant governor, Marlene Johnson, had been arrested in 1969 for unlawful assembly (that charge was later dropped) and arrested and convicted of petty theft in 1970 (that conviction was vacated in 1971). Flakne scheduled a meeting with several IR supporters for October 27 to discuss release of these documents to the media. Cohen attended this meeting.
At the meeting, the group decided that Cohen should be the person to release the documents because he had the best rapport with the local media. The group further discussed and agreed that Cohen should retain anonymity in releasing the information. Cohen immediately contacted four journalists: Lori Sturdevant of the Tribune; Bill Salisbury of the Dispatch; Gerry Nelson of the Associated Press; and David Nimmer of WCCO Television. He reached all but Nimmer by telephone and said:
I have some material which may or may not relate to the upcoming statewide election. And assuming that we can reach an agreement as to the basis on which I would provide this material to you, I will provide it.
All three reporters agreed to meet with him.
Later that morning, Cohen met separately with Sturdevant and Salisbury in the State Capitol building news office. He made the following proposal to each reporter.
I have some documents which may or may not relate to a candidate in the upcoming election, and if you will give me a promise of confidentiality, that is that I will be treated as an anonymous source, that my name will not appear in any material in connection with this, and that you will also agree that you’re not going to pursue with me a question of who my source is, then I will furnish you with the documents.
Sturdevant promptly and unequivocally agreed to Cohen’s proposal. Cohen then gave her copies of the documents, and she allegedly said, “This is the sort of thing that I’d like to have you bring by again if you ever have anything like it.” Sturde-vant then asked Cohen if she had this information on an exclusive basis. Cohen said “No.” Sturdevant did not protest or express any dissatisfaction with this nonexclusive arrangement.
Salisbury also agreed immediately to Cohen’s proposal regarding anonymity. After reviewing the papers Cohen had given him, Salisbury described them as “political dynamite.” The issue of exclusivity was never discussed between Cohen and Salisbury.
Cohen then met separately with Nelson and Nimmer. The same proposal was made to each reporter and was accepted by each. After securing the promise of confidentiality, Cohen delivered the documents.
Thereafter, Cohen returned to work and informed his supervisor that he had supplied the documents to the media. Cohen testified that his supervisor had no reaction as to his disclosure. The supervisor, however, testified at trial that he was upset by what he believed were Cohen’s unscrupulous practices.
*253Sturdevant immediately reported the information she had received from Cohen to her supervisor. The Tribune editors assigned four or five reporters to follow up on the story and to contact members of the two gubernatorial campaigns. A reporter, who was directed to verify the authenticity of the court records, discovered Gary Flakne’s name on the list of persons having recently reviewed the records. The reporter contacted Flakne and asked Flakne for whom he had obtained those documents. Flakne told the reporter that he had obtained the documents for Cohen.
The Tribune editor who had the ultimate say in whether to run the story convened a “huddle” sometime around 3:00 p.m. to discuss the handling of the information. That group decided that if the Tribune did not run the story, the paper could be accused of suppressing information damaging to the DFL party. They also discussed simply publishing the information on the arrest and conviction and honoring the promise to Cohen. The group considered it unsatisfactory to describe the source as a Whitney supporter, a Whitney campaign member, or a prominent Independent Republican. The Tribune had never before dishonored a reporter-source agreement.
Sturdevant, who was not a part of the “huddle” and had no other input into whether the story was reported, was asked by her editors to see whether Cohen would release the Tribune from its promise of anonymity. Sturdevant expressed her adamant objection to dishonoring the promise to Cohen and she demanded that her name not appear on the article should it be published. She nevertheless agreed to write the article and to ask Cohen to release the Tribune from its promise. She telephoned Cohen two or three times, but each time Cohen refused to agree to have his name published. Finally, the Tribune decided to run the story disclosing Cohen’s identity. Sturdevant then contacted Cohen to inform him of the situation and he said if his name was to be published, he wanted to make the following statement:
The voters of this state are entitled to know that kind of information. Every day Perpich and Johnson failed to reveal it to them, they were living a lie.
On October 28, 1982, the Tribune ran an article appearing on the bottom half of the front page, entitled “Marlene Johnson Arrests Disclosed by Whitney Ally.” Pursuant to Sturdevant’s demand, the article was attributed to “Staff Writer.” The article disclosed Johnson’s arrests and conviction, and named Cohen as the source of the information. The article also revealed that Cohen was employed by the agency handling the advertising for the IR gubernatorial campaign. The article did not mention Sturdevant’s promise of anonymity to Cohen.
In contrast to the manner in which the Tribune handled the matter, the Dispatch editors did not engage in involved deliberations before deciding to disclose Cohen’s identity. Salisbury also objected to dishonoring his promise to Cohen. However, he did not object to his name appearing on the article. The Dispatch ran an article similar to the Tribune’s in both Dispatch editions on October 28. The articles appeared in the local news sections, disclosed the convictions and arrests, and identified Cohen as the source. This occasion was the first time that the Dispatch had dishonored a reporter’s promise to keep a source confidential. While the articles stated that Cohen asked that his name not be used, they failed to disclose that a Dispatch reporter had promised to keep Cohen’s name confidential. Unlike the Tribune article, however, the Dispatch articles did not mention the name of Cohen’s employer.
The Associated Press honored its reporter’s promise to Cohen by stating that court documents relating to the arrests and conviction “were slipped to reporters.” WCCO-TV also honored its reporter’s promise by deciding not to broadcast the story at all.
Later in the day on October 28, after learning that Cohen’s name and employment had been published in connection with the story, Cohen’s employer confronted him and a heated discussion ensued. According to Cohen, that discussion ended with his being fired. According to Cohen’s employ*254er, Cohen resigned. The newspapers do not now dispute that Cohen was fired or otherwise forced to resign as a result of the story.
On October 29, the Tribune published a column criticizing Cohen for his self-righteousness and unfair campaign tactics. On October 30, the Tribune ran an editorial cartoon depicting a trick-or-treater outfitted as a garbage can knocking on the door of the DFL headquarters. The garbage can was labeled “Last minute campaign smears,” and governor Rudy Perpich was opening the door, stating, “It’s Dan Cohen.”
Sometime during the week beginning October 31, Flakne wrote to the editor of the Dispatch criticizing both newspapers for their breach of the reporter-source agreement with Cohen. On November 7, four days after the election, the Dispatch printed Flakne’s letter on its editorial page. That same day, the Tribune ran a more edited version of Flakne’s letter along with an article explaining why the newspaper had overridden its reporter’s promise to Cohen.
Cohen subsequently commenced this breach of contract and misrepresentation action, seeking both compensatory and punitive damages. The jury found that both newspapers had entered into binding contracts with Cohen and that they breached those contracts. The jury further found that both newspapers made material misrepresentations of fact to Cohen. The jury awarded Cohen $200,000 in compensatory damages and $500,000 in punitive damages.
The newspapers alternatively moved for judgment notwithstanding the verdict or a new trial, alleging numerous trial court errors. The trial court denied these motions and entered judgment. The Tribune and the Dispatch separately appealed the judgment, and we consolidated the appeals.
ISSUES
I.Did the trial court err in concluding that the first amendment does not bar an action for breach of contract against the newspapers for their disclosure of Cohen’s name, even though such disclosure was truthful and newsworthy?
II. Did the trial court err in instructing the jury with respect to Cohen’s contract claim?
III. Did the trial court err in denying the newspapers’ motions for judgment notwithstanding the verdict on the misrepresentation claim?
IV. Did the trial court err in submitting the issue of punitive damages to the jury?
V. Did the trial court commit reversible error in admitting other Tribune publications into evidence?
ANALYSIS
I.
The trial court correctly concluded that the first amendment does not bar Cohen’s contract claim. There is no state action, the alleged first amendment rights do not outweigh the governmental interests, and the newspapers knowingly waived their first amendment rights.
A. State Action
We believe that there is no state action present in this case to trigger first amendment scrutiny. The first amendment prohibits the government from making laws “abridging the freedom of speech, or of the press.” U.S. Const. Amend. I. The first amendment bars only government action that restricts free speech or press freedom. Public Utilities Commission of District of Columbia v. Pollak, 343 U.S. 451, 461, 72 S.Ct. 813, 820, 96 L.Ed. 1068 (1952).
The United States Supreme Court has repeatedly held in a variety of contexts that the neutral application of state laws is not state action. See Tulsa Professional Collection Services, Inc. v. Pope, 485 U.S. 478, -, 108 S.Ct. 1340, 1345, 99 L.Ed.2d 565 (1988) (private use of state sanctioned private remedies or procedures does not rise to level of state action); Flagg Brothers, Inc. v. Brooks, 436 U.S. 149, 163, 98 S.Ct. 1729, 1737, 56 L.Ed.2d 185 (1978) (action pursuant to state law is not state *255action); Evans v. Abney, 396 U.S. 435, 446, 90 S.Ct. 628, 634, 24 L.Ed.2d 634 (1970) (operation of neutral and nondiscriminatory state trust laws does not constitute state action). The decisions of other federal courts are in accord. See Peters v. United States, 694 F.2d 687, 697 (Fed.Cir.1982) (modification of contract to which government is a party is not state action); Warren v. Government National Mortgage Association, 611 F.2d 1229, 1234 (8th Cir.1980) (extrajudicial foreclosure pursuant to power of sale terms of the deed of trust performed in accordance with state law is not state action), cert. denied, 449 U.S. 847, 101 S.Ct. 133, 66 L.Ed.2d 57 (1980); Doe v. Keane, 658 F.Supp. 216, 220-21 (W.D.Mich.1987) (exercise of a choice allowed by state law, where initiative comes from private actor and not from state, cannot make private act a state act); Price v. International Union, United Automobile Aerospace & Agricultural Implement Workers of America, 621 F.Supp. 1243, 1250 (D.Conn.1985) (court intervention is possible in any suit on a contract and does not in itself constitute state action merely because free speech may be curtailed); International Society for Krishna Consciousness, Inc. v. Reber, 454 F.Supp. 1385, 1388-89 (C.D.Cal.1978) (use of state trespass laws to enforce private property rights is not state action). Only when private parties make use of state procedures with the overt, significant assistance of state officials, has the United States Supreme Court found state action to be present. See Lugar v. Edmondson Oil Co., 457 U.S. 922, 937, 102 S.Ct. 2744, 2753, 73 L.Ed.2d 482 (1982).
We do not doubt that court action can constitute state action in some circumstances. In Shelley v. Kraemer, 334 U.S. 1, 68 S.Ct. 836, 92 L.Ed. 1161 (1948), the Supreme Court held state enforcement of a racially restrictive covenant was state action prohibited by the fourteenth amendment. In that case, third parties, aided by the courts, were preventing the sale of real property by enforcing racially restrictive covenants. Id. at 18, 68 S.Ct. at 844. Under these circumstances, the state courts’ conduct was “active intervention.” Id. at 19, 68 S.Ct. at 845. By actively perpetuating the denial of black people’s property rights, the courts were defeating the basic objective of the fourteenth amendment.
Although the language of Shelley is expansive, we believe it does not stand for the proposition that application of neutral common law rules is always state- action. The Supreme Court held in Evans, for example, that “the operation of neutral and nondiscriminatory state trust laws”- did not constitute state action for purposes of the fourteenth amendment. 396 U.S. at 446, 90 S.Ct. at 634. In Evans, the alleged state action was the application of neutral rules of construction designed to determine the intent of the testator. The Court held that such action does not violate the fourteenth amendment. Id.
Thus, the issue this court faces is whether the application of neutral principles of contract law to a promise not to publish the source of information is state action which triggers first amendment scrutiny. We believe the rule in Evans more closely fits our situation, and therefore hold no state action is present. The court here was not engaging in “active intervention” at the request of third parties, as was the case in Shelley. Rather, the parties themselves made the agreement without involvement by the state. The enforcement of the contract is not impermissible state involvement in the denial of a constitutional right. Rather, the state is enforcing an agreement between private parties who have bargained for the content of published information. In these circumstances, the parties’ agreement, even with ultimate state enforcement, is not deserving of first amendment scrutiny.
The Supreme Court held in New York Times v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964), that application of state defamation law to a newspaper was state action. Id. at 265, 84 S.Ct. at 718. We believe the rule in New York Times has little relevance to an action brought under contract law. Defamation law inherently limits the content of speech. Speech which meets the elements of the defamation tort and the malice requirements of New York Times may be sane-*256tioned by damage awards enforced by the courts. Contract law is, we believe, fundamentally different. The rules of contract law do not sanction any particular speech. The parties themselves chose the speech or conduct they wished to be the subject matter of the contract. An award of contract damages, therefore, does not sanction the words or conduct themselves, but rather the failure to honor a promise. Because the action of the court is not suppression of speech, it is not state action of the type at issue in New York Times. Thus, we conclude that the application of neutral contract principles to a private party’s agreement to suppress speech is not state action, and does not require first amendment scrutiny.
B. Weighing of Competing Interests
Assuming that this civil contract suit may nonetheless constitute state action, the first amendment still did not relieve the newspapers of the obligation they had to honor the terms of their contract with Cohen. The United States Supreme Court has adopted a balancing test to determine whether official action which has adverse or chilling effects on speech violates the first amendment. Minneapolis Star & Tribune Co. v. Minnesota Commissioner of Revenue, 460 U.S. 575, 582, 103 S.Ct. 1365, 1370, 75 L.Ed.2d 295 (1983); Branzburg v. Hayes, 408 U.S. 665, 680-81, 92 S.Ct. 2646, 2656-57, 33 L.Ed.2d 626 (1972). A burden on first amendment rights is justified only if necessary to achieve an overriding governmental interest. Minneapolis Star & Tribune Co., 460 U.S. at 582, 103 S.Ct. at 1370.
The Supreme Court has found a variety of permissible burdens on the press. For example, the first amendment does not invalidate the application of civil or criminal laws to members of the press despite the burden on press freedom which their application may impose. Branzburg, 408 U.S. at 682-83, 92 S.Ct. at 2657-58. Newspapers have no special immunity from the application of general laws, nor do they have a special privilege to invade the rights and liberties of others. Id.; Associated Press v. NLRB, 301 U.S. 103, 132, 57 S.Ct. 650, 655, 81 L.Ed. 953 (1937); Galella v. Onassis, 487 F.2d 986, 995 (2nd Cir.1973). News organizations are not exempt from federal labor laws, see Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 192-93, 66 S.Ct. 494, 497-98, 90 L.Ed. 614 (1946), or from nondiscriminatory forms of general taxation. Grosjean v. American Press Co., 297 U.S. 233, 250, 56 S.Ct. 444, 449, 80 L.Ed. 660 (1936). State and federal governments can subject newspapers to generally applicable economic regulations without violating the first amendment. Minneapolis Star & Tribune Co., 460 U.S. at 581, 103 S.Ct. at 1369.
The press also is not free to publish with impunity everything it desires to publish, nor does it have a constitutional guarantee of access to information not available to the public generally. Branzburg, 408 U.S. at 683-84, 92 S.Ct. at 2657-58. Consequently, the first amendment permits the media’s access to grand jury proceedings, judicial conferences, meetings of other official bodies in executive sessions, disaster scenes, or criminal trials to be restricted in some circumstances. Id. at 684-85, 92 S.Ct. at 2658-59. See also Nixon v. Warner Communications, Inc., 435 U.S. 589, 609, 98 S.Ct. 1306, 1318, 55 L.Ed.2d 570 (1978) (first amendment generally grants press no greater right to information about trial than that of the general public).
It is apparent from these and other federal cases that news organizations cannot rely on the first amendment to shield themselves from criminal or civil liability simply because the acts giving rise to such liability were taken while in pursuit of newsworthy information. It is even more apparent that news organizations are not exempt from liability when they breach contracts entered into for the very purpose of gathering the news.
The governmental interest in allowing the civil damage award in the instant case outweighs the intrusion on press freedom. The government has an interest in protecting the expectations of a person *257who freely enters into a contract in reliance on the court’s power to remedy any damage he or she might suffer should the other party fail to perform.
The protection of contractual rights has been found to be a compelling state interest in another context. See Duluth Lumber & Plywood Co. v. Delta Development, Inc., 281 N.W.2d 377, 381-83 (Minn.1979) (holding state has compelling interest in applying its contract law to a civil dispute involving the Chippewa Tribe). The United States Supreme Court has implicitly found the protection of contractual rights to be a sufficient governmental interest to outweigh first amendment rights. Snepp v. United States, 444 U.S. 507, 100 S.Ct. 763, 62 L.Ed.2d 704 (1980) (per curiam) (where both majority and dissenting opinions agreed contractual remedies were appropriate to enforce a contract to suppress speech).
We find no reason to provide less protection to the reasonable expectations of a newspaper informant than we would to any other party to whom the newspaper makes a promise. Surely, the newspapers would not suggest they are immune to ordinary commercial contracts for goods and services. Yet the newspapers maintain that an agreement with a news source is exempt from the law of contracts. We disagree. The agreement to provide information, like any other service, is an appropriate subject matter for the law of contracts.
Balanced against the clear interest of the state to impartially protect the sanctity of contracts is the alleged burden contract law places upon the press. The newspapers argue the newsworthiness of Cohen’s name is enough to outweigh the state’s interest in enforcing the contract. We disagree. The newspapers had an interest in providing information relating to the credibility and motivations of the source, but not necessarily in providing Cohen’s name. Reporting that the source was aligned with the IR party in some manner would have satisfied the need to describe the source.
The newspapers argue that the government has no interest in allowing a civil damage award because the contract itself is invalid. The newspapers claim that only the journalist, and not the source, has a right to enforce a confidentiality agreement. The newspapers have failed to cite any case law which suggests that a source has no right to enforce a confidentiality agreement. In fact, leading authority implies that the source’s wish to remain confidential is an important factor to consider in determining whether to compel release of information. Indeed, the only case we have found which discusses breach of contract suggests that a source may bring an action against a publisher for breaking a promise of confidentiality. See Huskey v. National Broadcasting Co., 632 F.Supp. 1282, 1292 n. 15 (N.D.Ill.1986).
The newspapers also argue that the governmental interest in allowing a civil damages suit is minimal because reporters’ promises are ethical, not legal obligations, and court intervention in such cases is inappropriate. We disagree. The specter of a large damage award is a much more effective incentive for a publisher to honor a promise of confidentiality than the fear of criticism from other members of the press. Indeed, any such fear of professional criticism in this case was apparently insufficient to convince appellants to abide by their promises.
We are not convinced that the public’s access to information is restricted by our decision to allow a contract damage award in this case. Were we not to enforce the newspapers’ promises of confidentiality, confidential sources would have no legal recourse against unscrupulous reporters or editors. Ultimately, news sources could dry up, resulting in less newsworthy information to publish. Our decision enhances the legislatively expressed interest in protecting confidential news sources in order to promote the free flow of information to the media and, ultimately, to the public. See Minn.Stat. § 595.022 (1988).
Our decision also does not intrude into the editorial process itself, and does not limit the right to publish information lawfully obtained without a promise of confi*258dentiality. Cf. Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241, 258, 94 S.Ct. 2831, 2839, 41 L.Ed.2d 730 (1974) (suggesting government cannot regulate editorial processes). In this case, the newspapers, through their reporters, voluntarily agreed not tq publish Cohen’s name in return for other publishable information. Damages were awarded not merely because the newspapers published Cohen’s name but because by doing so, they violated their contracts with him. We do not think it an undue burden to require the press to keep its promises.
C. Waiver
A constitutional right cannot be waived except in clear and compelling circumstances. Curtis Publishing Co. v. Butts, 388 U.S. 130, 145, 87 S.Ct. 1975, 1986, 18 L.Ed.2d 1094 (1967). First amendment rights may be waived “where the facts and circumstances surrounding the waiver make it clear that the party foregoing its rights has done so of its own volition, with full understanding of the consequences of its waiver.” Erie Telecommunications, Inc. v. City of Erie, Pennsylvania, 853 F.2d 1084, 1096 (3rd Cir.1988). Under the circumstances in this case, we conclude that the newspapers effectively waived any first amendment rights they may have had to publish Cohen’s name as the source of the documents relating to Johnson. The two people pledging confidentiality in the instant case were both seasoned reporters who had given such pledges on a regular basis for many years prior to this incident. They also knew Cohen’s status as an active and prominent Independent Republican, and thus knew that his name could be of public interest. Therefore, they understood that they were waiving the right to publish a potentially newsworthy item in return for obtaining another potentially newsworthy item from Cohen.
The newspapers also argue that the waivers were not knowing and voluntary because the reporters did not know the information they were about to receive would be such as to make Cohen seem petty and unscrupulous for having released it. Some form of this argument, however, could be used in every confidential source situation because the reporter never knows exactly what information he or she will get when the promise is made. Furthermore, in this case, the reporters must have anticipated Cohen was to give them damaging information about a DFL candidate because he said that the information might relate to a political candidate. The reporters’ waivers are not any less knowing or voluntary merely because they did not know exactly what information they would receive.
It is significant that the waiver in this ease was not extracted by the state. Rather, the waiver was part of a negotiated agreement between experienced reporters and an experienced political operative. Under these circumstances, the newspapers’ waivers do not deserve as much protection as would a criminal defendant pleading guilty to a crime or waiving trial by jury. It also is significant that the alleged state action here was not intended to suppress a viewpoint. It was merely a content-neutral enforcement of an agreement between private parties of equal bargaining power.
II.
The Dispatch argues the trial court erred in failing to instruct the jury that there can be no contract where one party does not disclose all material facts which he knows the other party does not know and which the other party would need to know to make an informed decision under the circumstances. A party is entitled to a jury instruction only when the party presents evidence supporting its theory of recovery. Lhotka v. Larson, 307 Minn. 121, 125 n. 7, 238 N.W.2d 870, 874 n. 7 (1976). Here, Salisbury stated that Cohen did not deceive or mislead him in any way. He also stated he was well aware that Cohen was active in the IR party and was a Whitney supporter. Finally, Salisbury did not even consider whether the information was to be exclusive, and he did not ask Cohen about it. Given the lack of evidence of any fraudulent inducement, the *259trial court properly refused to submit the proposed jury instructions.
The Tribune argues that the information provided by Cohen was so insignificant that it fails as consideration when compared with the much more valuable promise of confidentiality. As Cohen’s expert journalist witness testified, however, such deals are common in the industry and there is no way journalists can know exactly how valuable information will be before the return promise of confidentiality is given. Furthermore, both Salisbury and Stur-devant felt that the information about Johnson was in fact important, thus undercutting any failure of consideration argument. The documents Cohen supplied were sufficient consideration.
The Tribune also claims the contract is unenforceable because the subject matter of the contract is the deceptive manipulation of the electoral process. The newspapers rely on 17 C.J.S. Contracts § 218 (1963), which states: “Contracts which impair or tend to impair the integrity of public elections are against public policy.” This provision, however, contemplates contracts such as those where payment is contingent upon the use of influence to secure another’s election or where the candidate is a party to the contract. Because Cohen made no payment to the newspapers and exacted no promise that the newspapers would use their influence or otherwise attempt to secure Whitney’s election, the contract did not involve wrongful manipulation of the electoral process.
Finally, the newspapers argue that a promise of confidentiality is not enforceable because it is part of an “agreement that by its terms is not to be performed within one year from the making thereof.” See Minn.Stat. § 513.01(1) (1988). The statute of frauds does not apply, however, where one party can and does fully perform within the year. Langan v. Iverson, 78 Minn. 299, 302, 80 N.W. 1051, 1052 (1899). The statute is thus inapplicable because Cohen fully performed his obligations upon delivery of the documents.
III.
The newspapers argue that the trial court erred in failing to grant judgment notwithstanding the verdict on the misrepresentation claim. The standard to be applied in determining the propriety of granting a motion for a judgment notwithstanding the verdict is whether there is any competent evidence reasonably tending to support the verdict. Bisher v. Homart Development Co., 328 N.W.2d 731, 733 (Minn.1983) (quoting Seidl v. Trollhaugen, Inc., 305 Minn. 506, 507, 232 N.W.2d 236, 239 (1975)). The trial court must accept the view of the evidence most favorable to the verdict and admit every inference reasonably to be drawn from that evidence. Id. When the facts are undisputed and reasonable minds can draw but one conclusion, the question becomes one of law for the court. Kramer v. Kramer, 282 Minn. 58, 65, 162 N.W.2d 708, 713 (1968). We find in the instant case that there was no misrepresentation as a matter of law, and the trial court erred in failing to grant the newspapers’ motion for judgment notwithstanding the verdict on the misrepresentation claim.
To be actionable, a misrepresentation must misrepresent a present or past fact. Dollar Travel Agency, Inc. v. Northwest Airlines, Inc., 354 N.W.2d 880, 883 (Minn.Ct.App.1984). Simply because a party in the future fails to perform does not mean that there was any misrepresentation at the time the contract was made. Id. However, if the party, when entering into the contract, never had any intent to perform the contract, then the act of entering into a contract with no intent to perform constitutes a misrepresentation. Wood v. Schlagel, 375 N.W.2d 561, 564 (Minn.Ct.App.1985).
Cohen concedes the reporters themselves intended to perform the contracts and that they did not commit misrepresentations. He claims, however, that the editors never intended to perform the contracts and that the intent not to perform should thus be deemed to have been present at the inception of the contracts, *260when the reporters made the promises. Cohen relies on Guy T. Bisbee Co. v. Granite City Investing Corp., 159 Minn. 238, 244, 199 N.W. 14, 16 (1924), for the proposition that an intent not to perform at the inception of a contract can be inferred where the period of time between the making of the promise and its repudiation is short, and there is no change in circumstances. Cohen’s reliance on Bisbee is misplaced.
In Bisbee, there was other circumstantial evidence to suggest that the tortfeasor did not intend to keep the promise at the time the promise was made. Thus, the court was faced with an evidentiary problem in that, although the party may have indeed intended not to perform, there was no direct evidence of this intent. Recognizing that direct evidence of intent is often unavailable, the court held that under the circumstances outlined in that case, an intent not to perform could be inferred from the fact that the breach took place soon after the contracts were formed. Id. at 243-44, 199 N.W. at 16. In this case, however, because there is direct evidence of both the reporters’ and editors’ intentions, resort to inferences is unnecessary and inappropriate.
Cohen alternatively relies on Swanson v. Domning, 251 Minn. 110, 117, 86 N.W.2d 716, 721 (1957), which held that where a principal becomes aware that an agent has made untrue representations of fact, regardless of whether the agent himself knew the representations were untrue, the principal may not retain the benefits of that transaction and at the same time escape liability for the untrue representations by which the benefits were obtained. Swanson does not apply here, however, because the agents themselves made no misrepresentations, either innocently or knowingly.
Cohen also argues that his misrepresentation claim is based on the reporters’ concealment of the fact that they had no authority to bind the newspapers. We find no evidence to support this theory. An omission of a material fact may give rise to a cause of action for misrepresentation if one party has special access to the facts and the other does not, or if omitting the fact is misleading. Sit v. T & M Properties, 408 N.W.2d 182, 186 (Minn.Ct.App.1987). In this case, however, there was no evidence the reporters who promised confidentiality had special access to the newspapers’ written policy regarding confidentiality. The evidence showed they were unaware of it. Further, there was no evidence that the omission of fact was misleading. The actual practice of the newspapers was to abide by their reporters’ promises of confidentiality. In fact, no witness could recall a prior instance when the promise of a reporter was vetoed by an editor. Seasoned reporters believed they had authority to bind the newspapers. Based on past practice, we believe they did have such authority. Because it was the newspapers’ practice to honor their reporters’ promises of confidentiality, the reporters did not by omission misrepresent their authority.
Under these circumstances, the trial court erred in failing to grant the newspapers’ motion for judgment notwithstanding the verdict on the misrepresentation claim. There was no evidence of material misrepresentations or omissions. Accordingly, we reverse on this issue. Because the newspapers engaged in no independent tort, punitive damages are unavailable, see Haagenson v. National Farmers Union Property & Casualty Co., 277 N.W.2d 648, 652 (Minn.1979), and the trial court’s award of punitive damages must be set aside.
IV.
Because there were no misrepresentations, Cohen may recover only compensatory damages resulting from the breaches of contracts. The nonpunitive damages were awarded to compensate Cohen for loss of his job. The newspapers claim these are consequential or special damages, i.e., damages not contemplated by the parties when entering into the contracts, and therefore are not recoverable in a breach of contract action.
Minnesota follows the rule of Hadley v. Baxendale, 9 Ex. 341, 156 Eng.Rep. 145 *261(1854), which holds that damages recoverable in contract actions are those which arise naturally from the breach or those which can be supposed to have been contemplated by the parties when the contract was formed. Lesmeister v. Dilly, 330 N.W.2d 95, 103 (Minn.1983). Whether damages naturally arose from the breach (reasonably foreseeable as a probable consequence) or were contemplated by the parties is a question of fact which depends upon the nature of the contract and the circumstances surrounding its execution. Franklin Manufacturing Co. v. Union Pacific Railroad Co., 311 Minn. 296, 298-99, 248 N.W.2d 324, 326 (1976).
When asked why he wanted anonymity, Cohen testified:
I feared retribution, I feared retaliation that could be damaging to me personally, that could damage my wife and daughters, that could damage the campaign, by a powerful media, by powerful politicians, for revealing the truth.
He also stated:
I think that were my identity revealed because I was the messenger of ill tidings that the public, my employer, the press, the world at large, would heap opprobrium on my head.
Even if Cohen himself did not fear specifically for the loss of his job, a Dispatch editor and an expert journalist witness both testified that confidential sources often seek confidentiality exactly because they are afraid they might lose their jobs. The expert witness testified that editors are or should be well aware of the reasonable consequences, including loss of employment, which could occur if the confidences are revealed. The evidence was sufficient to support the finding that the loss of Cohen’s employment was reasonably foreseeable. Cohen’s job loss therefore is in the nature of general, as opposed to consequential, damages and is recoverable in contract.
V.
The Tribune argues that the trial court erred in admitting a number of Tribune newspaper articles. The trial court has discretion in its determinations as to the relevance and prejudicial effect of evidence. State v. Lee, 282 N.W.2d 896, 901 (Minn.1979). The admission of inadmissible evidence requires a new trial only if the error is prejudicial. See Fewell v. Tappan, 223 Minn. 483, 497, 27 N.W.2d 648, 656 (1947).
The challenged newspaper articles fall roughly into three categories. First, a number of the articles were written with the use of confidential sources, whose identities were newsworthy according to Tribune witnesses. Despite the newsworthiness of these sources’ identities, the Tribune never revealed their identities. Second, some articles used confidential sources despite the fact that the Tribune did not have an “exclusive” on the information from the sources. This evidence was offered to rebut the claim that Cohen’s identity was revealed because he failed to give the Tribune an “exclusive.” Finally, Cohen offered the garbage can editorial cartoon and two column articles to show that the Tribune was acting with willful indifference to his rights, and was continuing to disparage him while failing to disclose its own breach of promise. This evidence of the Tribune’s failure to act evenhandedly was offered to rebut claims that the Tribune had to publish Cohen’s identity to give its readers a fair picture.
We conclude that the trial court was well within its discretion in determining that the offered newspaper articles were relevant and more probative than prejudicial. See Minn.R.Evid. 403. The Tribune has failed to show that the trial court clearly abused its discretion in admitting the articles.
The Tribune also argues that the closing argument for Cohen was so inflammatory that a new trial is required. We disagree. A major focus of the newspapers’ trial strategy was to portray Cohen as a scurrilous and dishonest politicker. In light of these attacks on Cohen’s character, comments on the newspapers’ ignoble motivations are not unduly prejudicial. The trial court gave a lengthy curative instruction designed to neutralize the strong arguments made by counsel on all sides. Fur*262ther, the closing argument at issue was based on admissible evidence or reasonable inferences drawn from the evidence. Under these circumstances, the trial court’s refusal to order a new trial based on inflammatory arguments was not an abuse of discretion. See Connolly v. Nicollet Hotel, 258 Minn. 405, 420, 104 N.W.2d 721, 732 (1960).
DECISION
The trial court’s judgment determining that the newspapers are jointly and severally liable for $200,000 in compensatory damages as a result of their breaches of contract is affirmed. The trial court erred, however, in failing to set aside the misrepresentation claim because there was no evidence that the newspapers made material misrepresentations or omissions. Because the newspapers engaged in no independent tort, the trial court’s judgment awarding punitive damages to Cohen is reversed.
Affirmed in part and reversed in part.