Court Opinion

ID: 6350777
Source: CourtListenerOpinion
Date Created: 2022-06-17 14:03:00.767825+00
Date Added: 2024-06-11T09:15:33.087036
License: Public Domain

IN THE SUPREME COURT OF IOWA

                                 No. 19–2086

               Submitted April 20, 2022—Filed June 17, 2022

JERRY HOFFMANN and HOFFMANN INNOVATIONS, INC., d/b/a DIY
AUTOTUNE,

      Appellees,

vs.

SCOTT CLARK and REALTUNERS, LLC,

      Appellants.

      On review from the Iowa Court of Appeals.

      Appeal from the Iowa District Court for Pottawattamie County,

Susan Christensen and Margaret Reyes, Judges.

      Defendants seek further review of a court of appeals ruling affirming the

jury’s verdict on libel-per-se damages and punitive damages. DECISION OF

COURT OF APPEALS AFFIRMED IN PART AND VACATED IN PART;

DISTRICT COURT JUDGMENT AFFIRMED IN PART, REVERSED IN PART,

AND REMANDED.
                                        2

      McDermott, J., delivered the opinion of the court in which all participating

justices joined. Christensen, C.J., took no part in the consideration or decision

of the case.

      Matthew G. Sease (argued) and Kylie E. Crawford (until withdrawal) of

Sease & Wadding, Des Moines, for appellants.

      Seth N. Katz (argued) of Shepherd Law, LLC, Atlanta, Georgia, and Robert

M. Livingston of Stuart Tinley Law Firm, LLP, Council Bluffs, for appellees.
                                        3

McDERMOTT, Justice.

      A jury awarded 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 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.

      Clark and his business appealed the $11 million verdict, arguing

principally that the district court erred in striking their pleadings and that the

verdict was excessive. We transferred the case to the court of appeals, which

affirmed the district court’s judgment. Clark and his business sought further

review, which we granted.

                                        I.

      Jerry Hoffmann is the CEO and part-owner of Hoffmann Innovations, Inc.,

a Georgia-based corporation that does business as DIY AutoTune. The company

provides products and training for do-it-yourself “car tuning,” a general term
                                        4

that refers to modifications to improve the appearance, performance, or handling

of a vehicle from its original design. Hoffmann Innovations during times relevant

to this case employed around twenty people. Clark was hired based on his

acknowledged car tuning abilities. At Hoffmann Innovations, he conducted

tuning classes for Hoffmann’s customers on how to use Hoffmann’s highest-end

products, all in an effort to “create an army” of tuning enthusiasts who knew

how to use the company’s offerings. Clark also performed engine tuning for

Hoffmann Innovations’ sponsored racers. Clark signed a noncompete agreement

with Hoffmann Innovations that prevented him from owning or managing any

competing entity for two years after ending employment and that prevented him

from disclosing any of Hoffmann Innovations’ confidential business information

or trade secrets.

      Hoffmann fired Clark in August 2016, about a year and a half into Clark’s

tenure   with   Hoffmann    Innovations,    citing   workplace   misconduct    and

insubordination. Hoffmann claimed that Clark had conducted secret training

classes using Hoffmann Innovations’ products and materials and kept the profits

for himself. Hoffmann recorded the phone call when he fired Clark. During the

call, Clark requested a severance package and suggested that if he didn’t receive

one, he might make a “social media stink.” About seven months after he was

fired, Clark created his own entity, RealTuners, LLC, which would compete with

Hoffmann Innovations’ tuning classes.

      In July 2017, Hoffmann and Hoffmann Innovations sued Clark and

RealTuners for defamation, civil extortion, breach of the employee duty of loyalty,
                                          5

breach of contract, and unjust enrichment. Clark’s and RealTuner’s answer

denied these claims; asserted an affirmative defense that the statements were

truthful;   counterclaimed    for   defamation,   intentional   interference   with

prospective business advantage, and invasion of privacy (false light); and

requested an injunction.

      About six months into the lawsuit, the parties jointly moved for the court

to enter a consent order—an order from the court based on the voluntary

agreement of the parties to be bound—in an attempt to prevent further harm to

either side should one make defamatory statements about the other. By its

terms, the order prevented either party

      from making any disparaging or critical statements, express or
      implied, regardless of truth or falsity, in any form, written or
      oral (including but not limited to emails and online
      statements/postings), about an adverse Party to this case, to anyone
      (other than counsel and the Court). This applies to all statements
      about the Parties, including but not limited to about their
      businesses, owners and employees, their capabilities, their services,
      their reputation, their products, their methods of operation and
      business practices, their customers, their policies and/or business
      partners.

The consent order also prevented the parties from providing a platform for third

parties to make disparaging comments about the other party and from filing any

new complaints against each other. And finally, the order instructed that if they

were asked by a third party about the other’s abilities, products, employees, or

services, they would respond, “I cannot comment. The Parties are involved in

litigation.” The order stated that a violation of its terms may result in sanctions,

including reasonable attorney fees.
                                         6

      Starting within about two months of the court’s entry of the consent order,

Hoffmann and Hoffmann Innovations started bringing separate motions for

sanctions against Clark and RealTuners for violations of the consent order—

twelve in total over the next year. Most of the motions alleged that Clark or

RealTuners made disparaging statements on Facebook about Hoffmann

personally, Hoffmann Innovations’ products, Hoffmann Innovations’ business

practices, and even the judges assigned to the case. One day after Hoffmann and

Hoffmann Innovations’ second motion for sanctions, Clark’s attorney moved to

withdraw from the case, citing a breakdown in the attorney–client relationship.

The court of appeals opinion in this case provides a detailed summary of each of

the motions for sanctions. Hoffmann v. Clark, No. 19-2086, 2021 WL 1907746,

at *3–11 (Iowa Ct. App. May 12, 2021).

      Clark proceeded pro se for a time, representing himself on about a

half-dozen motions for sanctions and several contempt proceedings for violating

the district court’s orders. A pattern developed in which Clark would agree at a

sanctions hearing to stop posting comments in violation of the consent order,

and then shortly thereafter would post on social media or racing industry forums

that Hoffmann Innovations’ products were faulty or that Hoffmann was paying

people to lie about the products. Some of Clark’s more egregious violations over

the year include the following:

      •   Filing a petition for civil protection against Hoffmann in Iowa claiming
          that Clark and his fiancée feared Hoffmann (who lived in Georgia); a
          filing that the district court suggested contained falsified evidence.
                                         7

      •   Referring to Hoffmann Innovations’ products and stating, “Nothing
          sucks worse than shooting the dice on a $1200 box except when tech
          support is ordered to lie to you about the problem.”

      •   Selling “Free RealTuners” t-shirts online and stating about the
          litigation, “The other parties all are involved in this because they are
          actively communicating with my customers in an effort to steer
          business away from us. All of those businesses accept royalties from
          diy [Hoffmann Innovations] sales and all were aware of product
          problems but kept quiet in order to keep royalties flowing. . . . According
          to what Jerry Hoffmann has told me while employed there.”

      •   Stating that “[t]his is a story about big money trying to silence a whistle
          blower. Do you know what can happen when your fuel injectors are
          locked open on a running engine? A couple people discovered the hard
          way and I’ll be talking about that.”

      •   Making statements suggesting that the judge had been paid by
          Hoffmann’s lawyers to rule against him.

      •   Posting a link to the district court judge’s personal Facebook page and
          referring to her as a “social media starlet.”

      After Hoffmann’s fourth motion for sanctions and after the court had held

two other hearings for sanctions, the court sanctioned Clark by striking his

answer and counterclaims. With his answer and counterclaims struck,

Hoffmann’s allegations in the petition were deemed admitted, and the only

remaining issue for trial was Hoffmann’s and Hoffmann Innovations’ damages.

      The district court also ruled that Clark had committed a bevy of discovery

violations for refusing to turn over social media information from his personal,

business, and two alias accounts. The district court held Clark in contempt at

least six times. He was repeatedly fined and, several times, even sentenced to jail

for his contempt: once for thirty days, once for an indefinite term until he

complied with discovery, and once for sixty days. Indeed, Clark failed to appear
                                        8

at a hearing because he feared incarceration. He stated that he needed to leave

Iowa and posted online that it was “because some shady judges, lawyers, and a

hyper-wealthy stalker who believes Jesus told him to kill me, are winning.” This

caused the court to issue a warrant for his arrest. Clark never paid any of the

fines or attorney fees for his court-ordered sanctions.

      Before trial, the plaintiffs submitted with their proposed jury instructions

a list of “undisputed facts for trial” from the facts in the petition. Over an

objection from Clark’s new lawyer at trial, the district court read these facts to

the jury and later provided them to the jury with the jury instructions. Hoffmann

also filed, and the court granted, a motion in limine to prevent Clark from

presenting any evidence of a defense, any misconduct by the plaintiffs, any of

his own damages, any statements about the parties’ wealth or success, and the

fact that his answer and counterclaim were struck.

      The district court held a three-day jury trial. Clark’s lawyer attended, but

Clark didn’t attend any part of it. Hoffmann testified at trial about Clark’s

conduct and the impact it had both on him personally and on Hoffmann

Innovations’ business. Hoffmann testified that he was seeking damages to his

company’s reputation for $4.5 million, which he based on the company’s growth

rate in the years immediately before Clark had started defaming him. But

Hoffmann clarified on cross-examination that his $4.5 million damages

calculation was based on gross revenues and not lost profits. Neither Hoffmann

nor Clark introduced Hoffmann’s tax returns to show profits and losses.

Hoffmann testified that there were “countless customers that would post on
                                        9

Facebook” saying “they would never buy from [Hoffmann] again” and that they

“used to buy from [Hoffmann] all the time and [they] never will again.” He said

he lost business relationships, giving an example of one in particular that

Hoffmann believed would have created $250,000 in additional revenue, 40% of

which would have been profit. Hoffmann also testified that, because of Clark’s

postings falsely accusing him of manufacturing dangerous products (including

products that could catch fire) and of placing profits ahead of product safety, his

employees were consistently diverted from their regular duties to responding to

customer product returns.

      Hoffmann also requested $1 million for damage to his personal reputation.

When asked how he arrived at that number, Hoffmann responded, “That’s a hard

number to come up with in some sense; right? I mean, how much do you value

your reputation?” Continuing, he answered, “What’s your name worth, and how

do you put a number on that? I don’t know. I had a—I had a good name.”

      Clark’s attorney attempted to question Hoffmann about a felony

conviction, illegal drug use, Clark’s favorable statements about Hoffmann’s

products, whether Hoffmann Innovations’ products had ever failed, and whether

Hoffmann ever tried to “strike back” at Clark. The court prevented Clark’s

cross-examination on these issues after objections from Hoffmann’s counsel

based on Hoffmann’s motion in limine on these subjects. Clark’s attorney was

permitted to ask Hoffmann whether his products ever started a fire or whether

customers complained about the products starting a fire, and Hoffmann

responded “no” to both questions. Hoffmann also conceded on cross-
                                      10

examination that there were at least some people who didn’t believe Clark’s

statements.

      Hoffmann’s wife also testified about the effect Clark’s conduct had on her

husband, including the violations of the consent order. Clark presented no

evidence to rebut Hoffmann’s damages claims aside from his attempts to

question Hoffmann about a felony conviction or Hoffmann’s allegedly faulty

products.

      The court granted Hoffmann’s motion for a directed verdict for each cause

of action and instructed the jury to decide only the question of damages. The

court also permitted a spoliation instruction based on evidence that Clark had

failed to turn over requested discovery materials. 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.
                                         11

      On appeal, Clark and RealTuners argue that the district court abused its

discretion by striking their answer and counterclaims, reading the one hundred

admitted facts to the jury, restricting their ability to introduce evidence to refute

Hoffmann’s damages, refusing to grant a new trial or remittitur for an excessive

verdict, and awarding common law attorney fees. Clark also argues that there

was insufficient evidence for the jury’s calculations of damages for civil extortion

and libel per se in particular.

      The court of appeals affirmed the district court on each issue presented.

Clark and RealTuners requested further review of the court of appeals ruling,

which we granted.

                                         II.

      We have the discretion to choose which issues we decide on further review.

Iowa R. App. P. 6.1103(1)(d). We will address the issue of whether the libel per

se and punitive damage awards were excessive and, if so, whether a new trial or

remittitur is the appropriate remedy. The court of appeals decision stands as the

final judgment on all other issues raised on appeal. See Holmes v. Pomeroy, 959

N.W.2d 387, 389 (Iowa 2021).

                                         A.

      Defamation generally comes in two types: libel and slander. Libel is a

defamatory statement expressed in writing or some other fixed medium. Bauer

v. Brinkman, 958 N.W.2d 194, 198 (Iowa 2021). Slander is a defamatory

statement expressed in spoken words. Id. Libel claims come in two types: libel

per quod and libel per se. Libel per quod requires an audience to “refer to facts
                                         12

or circumstances beyond the words actually used to establish the defamation.”

Johnson v. Nickerson, 542 N.W.2d 506, 510 (Iowa 1996). For libel per quod, the

defamatory nature of the statement isn’t immediately apparent and requires

some other fact to reveal it. See id. A plaintiff in a libel per quod action bears the

burden to prove that they suffered some sort of reputational damage from the

statement. Bierman v. Weier, 826 N.W.2d 436, 444 (Iowa 2013).

      Libel per se, on the other hand, refers to statements “of such a nature,

whether true or not, that the court can presume as a matter of law that their

publication will have libelous effect.” Vinson v. Linn-Mar Cmty. Sch. Dist.,

360 N.W.2d 108, 116 (Iowa 1984). These are statements that, on their face, have

an obvious defamatory character. For example, publishing “Doe is an embezzler”

might be an example of libel per se. See Brown v. First Nat’l Bank of Mason City,

193 N.W.2d 547, 551–53 (Iowa 1972). Statements that are libelous per se “have

‘a natural tendency to provoke the plaintiff to wrath or expose him to public

hatred, contempt, or ridicule, or to deprive him of the benefit of public confidence

or social intercourse.’ ” Schlegel v. Ottumwa Courier, 585 N.W.2d 217, 222 (Iowa

1998) (quoting Johnson, 542 N.W.2d at 510).

      Plaintiffs are not required to prove damages for defamation per se. Rees v.

O’Malley, 461 N.W.2d 833, 839 (Iowa 1990). Defamation per se is thus “an oddity

of tort law” because it “allows recovery of purportedly compensatory damages

without evidence of actual loss.” Gertz v. Robert Welch, Inc., 418 U.S. 323, 349

(1974).
                                        13

      In Bierman v. Weier, the defendants argued that we should require

plaintiffs in all defamation cases to prove falsity, fault, and damages to

reputation based on “the rise of the Internet and electronic publishing.” 826

N.W.2d at 448. We declined to do so, finding “libel per se remains a useful rule

in an area where it is often difficult for a plaintiff to prove actual damages.” Id.

at 454. We noted that “[i]n our present-day world, accusations can be spread

quickly and inexpensively,” and thus “libel per se plays a useful role in helping

to keep our social interactions from becoming ever more coarse and personally

destructive.” Id. at 455.

      While we presume damages and will impose no burden on the plaintiff to

prove damages for libel per se, we’ve also stated that “evidence of reputation and

extent of publication is necessary so that a jury can determine the extent of

injury.” Rees, 461 N.W.2d at 839 (emphasis added). In Rees v. O’Malley, we

approvingly cited a published court of appeals decision that found “damages may

not be awarded based upon the defamatory material alone and no other

evidence” and must rest on evidence such as the nature of the plaintiff’s

reputation prior to the defamation and the extent of publication of the

defamatory statements. Id. (citing Kelly v. Iowa State Educ. Ass’n, 372 N.W.2d

288, 300 (Iowa Ct. App. 1985)); accord Lara v. Thomas, 512 N.W.2d 777, 786

(Iowa 1994). Further back our own court, in Brown v. First National Bank of

Mason City, said that recovery under a claim for libel per se “is limited to those

damages which were a natural and probable consequence of the original libel or
                                       14

its repetition or republication.” 193 N.W.2d at 555; accord Wilson v. IBP, Inc.,

558 N.W.2d 132, 140 (Iowa 1996) (en banc).

      Yet our cases also include statements that might seem to suggest no such

requirement for any evidence of the nature or extent of publication or harm. In

Schlegel v. Ottumwa Courier, we stated that “the jury is allowed to award

substantial damages without the necessity of the plaintiff proving actual damage

to reputation” and that “damage to reputation is conclusively presumed from the

publication of the libel.” 585 N.W.2d at 222 (emphasis added). Commentators

have noted the law in this area is confusing and courts have muddied the waters

by blending terms. See 2 Rodney A. Smolla, Law of Defamation § 7:1, Westlaw

(2d ed. updated May 2022) [hereinafter Law of Defamation]; Julie C. Sipe,

“Old Stinking, Old Nasty, Old Itchy Old Toad”: Defamation Law, Warts and All (A

Call for Reform), 41 Ind. L. Rev. 137, 152 (2008) (“Whether a case involves libel

or slander, per se or per quod, there is at least one more conundrum in

defamation law: when may damages be presumed?”).

      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. Restatement (Second) of Torts § 621

cmt. a (Am. L. Inst. 1977) [hereinafter Restatement]; see also id. § 569 cmt. c

(discussing constitutional requirements related to special damages).
                                       15

      In a libel per se claim, general damages are the “presumed” damages. See

id. § 621 cmt. a. 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. Tathwell v. City of Cedar Rapids, 97 N.W. 96, 97 (Iowa 1903).

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 damages. Vojak v.

Jensen, 161 N.W.2d 100, 107 (Iowa 1968) (“General damages are presumed and

special damages need not be shown when a publication is libelous per se.”),

abrogated on other grounds by Barreca v. Nickolas, 683 N.W.2d 111, 119 & n.5

(Iowa 2004); Simons v. Harris, 245 N.W. 875, 876 (Iowa 1932) (“The language

shown to have been used is slanderous per se, which means it is slanderous

without proof of special damages.”). Put another way, special damages are not

presumed damages, nor are they a necessary element of recovery for libel per se.

                                        B.

      Having clarified the proof required for the different species of libel per se

damages, we analyze whether the amounts awarded by the jury were excessive.

“When we review claims for excessive damages, ‘we view the evidence in the light

most favorable to the plaintiff.’ ” Stender v. Blessum, 897 N.W.2d 491, 501 (Iowa

2017) (quoting Kuta v. Newberg, 600 N.W.2d 280, 284 (Iowa 1999)).

“In determining whether the damage award is excessive, we must abide by the

principle that each case depends upon its own facts, and precedents are of little

value.” Rees, 461 N.W.2d at 840. We review the trial court’s decision upholding
                                          16

a verdict using an abuse of discretion standard since “the trial court had the

advantage of seeing and hearing the evidence.” Stender, 897 N.W.2d at 501.

      We come to a claim of an excessive award disinclined to disturb the jury’s

verdict and will only intervene if we find it “flagrantly excessive or inadequate,”

“so out of reason as to shock the conscience or sense of justice,” “a result of

passion, prejudice or other ulterior motive,” or “lacking in evidentiary support.”

Rees, 461 N.W.2d at 839 (quoting Olsen v. Drahos, 229 N.W.2d 741, 742 (Iowa

1975)). Determination of damages “is peculiarly within the discretion of the jury,”

but “this discretion is not unlimited.” Brause v. Brause, 177 N.W. 65, 68 (Iowa

1920).

      On the award of damages to Hoffmann Innovations, Hoffmann described

what are special damages to the business in arriving at his $4.5 million

calculation. But Hoffmann acknowledged on cross-examination that the number

largely reflected lost revenue—not lost profits. The jury nonetheless awarded

Hoffmann Innovations $4.1 million, or 91% of the gross revenue calculation that

Hoffmann proposed. Yet Hoffmann only provided one example of a business

relationship that he allegedly lost because of Clark’s defamatory statements, and

he said his company’s profit margin was 40% of the $250,000 estimated revenue

from that relationship, or $100,000. He didn’t offer the company’s tax returns,

any profit-and-loss statements, or any other similar type of proof to prove the

claimed damages. On Hoffmann Innovations’ overall profit margin, all we have is

Hoffmann’s testimony that Hoffmann Innovations sold a “low-margin product

. . . so we had to sell a lot of them.”
                                        17

      The appropriate measure of special damages—“the loss of something

having economic or pecuniary value,” as the Restatement describes them—is lost

profits and not lost revenue. Restatement § 621 cmt. a; see Ballard v.

Amana Soc’y, Inc., 526 N.W.2d 558, 560–61 (Iowa 1995) (per curiam). Other than

Hoffmann’s testimony about profits lost on this one particular client, evidence of

Hoffmann Innovations’ damages in this record is exceedingly sparse. Hoffmann

testified that several employees needed to be shifted from their regular tasks to

responding to customer complaints that flowed from Clark’s defamatory

statements, but he offered no evidence about the value of these services. We may

alter a judgment that “lacks evidential support.” Claus v. Whyle, 526 N.W.2d

519, 525 (Iowa 1994) (emphasis omitted). Awarding Hoffmann Innovations

damages based on lost revenue—as the jury did—results in a damage award that

exceeds the amount that the company would have profited had Clark never

published a defamatory statement. We find the verdict as to Hoffmann

Innovations’ damages flagrantly excessive on this record.

      The libel per se damages awarded to Hoffmann personally present a

different story. Again, with libel per se, “the jury is allowed to award substantial

damages without the necessity of the plaintiff proving actual damage to

reputation.” Schlegel, 585 N.W.2d at 222. Yet even though we don’t impose

normal standards of proof, we have said that the damages must be “the natural

and probable consequences of” the statements. Rees, 461 N.W.2d at 839–40. In

other words, there must be some connection between the actual or potential

harm to the plaintiff and the damages awarded. We have also said there must be
                                       18

proof of the plaintiff’s good reputation and of dissemination of the defamatory

statements. Id.

      In Lara v. Thomas, we determined that a verdict of $10,000 in general

damages and $7,500 in punitive damages was not excessive. 512 N.W.2d at 786.

The plaintiff sought damages for “injury to her reputation, feelings, humiliation,

and mental anguish.” Id. She offered evidence of “her good reputation, good work

record, and the extent of publication.” Id. Similarly, in Wilson v. IBP, Inc., we

upheld $4,000 in compensatory damages for slander. 558 N.W.2d at 140. We

held that the plaintiff had proved these damages based on evidence of the

plaintiff’s reputation prior to the statements and the plaintiff’s testimony of

emotional damage from the defamatory statements. Id.

      In Rees, we set aside as excessive a $250,000 verdict against an attorney

who publicly accused the plaintiff of committing extortion and ordered a new

trial. 461 N.W.2d at 840. There was no evidence that the plaintiff’s reputation

was injured or that he suffered any significant emotional distress. Id.

      Yet we decided Rees in 1990, before the means of instantaneous and

large-scale distribution that Clark used to defame Hoffmann—social media and

podcasts—came into existence. As one commentator has observed, “Given the

ease of defaming another person through the social media, it is arguable that a

remedy for defamation through presumed damages is more necessary now than

ever, even if plaintiffs are not able to provide evidence of actual harm to

reputation in a given case.” Mike Steenson, Presumed Damages in Defamation

Law, 40 Wm. Mitchell L. Rev. 1492, 1540 (2014). In Bierman v. Weier, we were
                                        19

asked to decide whether libel per se had a continuing role to play in our legal

system. 826 N.W.2d at 454–55. Noting technological changes that had altered

the defamation landscape, we held that it did:

             This case illustrates why retaining libel per se for private
      plaintiff/private concern/nonmedia defendants may be appropriate.
      In our present-day world, accusations can be spread quickly and
      inexpensively, through self-publishing of a book or otherwise. A
      generation or two ago, it is entirely plausible that if Scott had
      decided to write a memoir about his life, it would have stayed by his
      typewriter and never been copied or distributed. Now, however, for
      a relatively modest price, it is possible to print 250 copies of a
      professional-looking book alleging that one’s ex-wife is a victim of
      child abuse from her father. We think libel per se plays a useful role
      in helping to keep our social interactions from becoming ever more
      coarse and personally destructive.

Id. at 455. We specifically rejected the argument that the internet “has rendered

libel per se obsolete because the targets of defamation can respond quickly at

minimal cost.” Id. at 454. We explained that we were “not persuaded . . . that the

Internet’s ability to restore reputations matches its ability to destroy them.” Id.

      This case involves defamation over a period of years. Scott Clark used five

different Facebook accounts, two under aliases. Clark disseminated his false

statements over social media and podcasts to tens of thousands of people. He

said that Hoffmann was dishonest and engaged in bribery. He falsely reported

that Hoffmann knowingly sold dangerous products out of greed.

      Clark engaged in bad faith conduct, threatening repeatedly to harm

Hoffmann unless Hoffmann paid him off. Clark posted a video depicting

Hoffmann as Adolf Hitler. Hoffmann also had to watch his reputation be “torn

apart online” while being limited in how he could respond because of the consent

decree. Hoffmann took years to develop his reputation. As a result of what Clark
                                               20

put him through, Hoffmann was “stressed to the max.” He had trouble sleeping.

This was “overwhelming” and “consuming.”

       In considering whether an award of presumed damages for libel per se is

within the range of reasonableness as a natural and probable (although not

necessarily proven) consequence of the defendant’s conduct in this case, several

questions help to focus our inquiry: (1) What was the prior reputation of the

plaintiff? (2) Did the plaintiff suffer emotional distress? (3) What type of

defamatory statements were made? (4) How many defamatory statements were

made? (5) How widely were they disseminated?1 (6) Over what period of time were

they made and disseminated? (7) Were they ever retracted? (8) Was there

evidence of bad faith?2

       The answers to these questions support the very substantial damages that

the jury awarded to Hoffmann personally. Hoffmann proved that he had built up

his reputation in the car tuning industry over many years. He proved that he

suffered emotional harm. He proved that there had been repeated statements to

the effect that Hoffmann was a fraudster and a thief disseminated over various

media and under various personae over a period of years. Clark never showed

contrition for his intentional, bad-faith, abusive conduct. To the contrary, he

called in more fire.

         1See Eshelman v. Puma Biotech., Inc., 2 F.4th 276, 284 (4th Cir. 2021) (“Where North

Carolina courts have awarded million-dollar damages awards for defamation, there has been
little doubt that the defamatory statements were widely publicized.”).
       2SeeMacDonald v. Jacobs, 201 A.3d 1253, 1260 (N.H. 2019) (allowing an enhanced award
of compensatory damages when the defendant acted with “ill will, hatred, hostility, or evil motive”
(quoting Munson v. Raudonis, 387 A.2d 1174, 1177 (N.H. 1978))).
                                        21

      In Smith v. Iowa State University of Science & Technology, we considered a

challenge to a jury’s $500,000 award for noneconomic damages—damages that

can’t readily be measured in money—on a defendant’s claim for intentional

infliction of emotional distress. 851 N.W.2d 1, 31–33 (Iowa 2014). We found the

damages were within “the range of reasonableness” and declined to disturb the

jury’s verdict. Id. at 33. Smith, although not a defamation case, offers a frame of

reference. In this case, we likewise find it within the range of reasonableness to

sustain a significant damages award for an intentional, long-term, bad-faith

campaign of per se falsehoods that caused emotional harm. “Presumed damages

are by no means merely nominal. They may at times be quite substantial.”

Law of Defamation § 9:17; see, e.g., Clark v. Clark, 867 S.E.2d 743, 757 (N.C. Ct.

App. 2021) (upholding a $1 million award of presumed damages). We hold that

the jury’s libel per se damages award to Hoffmann totaling $1 million is not

excessive.

      Finally, as to Clark’s challenge to the punitive damages award, we’re

reminded that punitive damages “must bear some relationship to actual

damages, but there is no formula by which this ‘relationship’ may be

determined.” McCarthy v. J. P. Cullen & Son Corp., 199 N.W.2d 362, 369 (Iowa

1972); see Wolf v. Wolf, 690 N.W.2d 887, 895 (Iowa 2005) (“[C]ourts must ensure

that the measure of punishment is both reasonable and proportionate to the

amount of harm to the plaintiff and to the general damages recovered.” (quoting

State Farm Mut. Auto. Ins. v. Campbell, 538 U.S. 408, 426 (2003))). Since we’ve

already found the jury’s compensatory damages award to Hoffmann Innovations
                                         22

excessive, and punitive damages must be tied to compensatory damages, we find

the punitive damages award was also excessive. The trial court abused its

discretion in finding these damages not excessive.

                                         C.

      A new trial is thus warranted in this case, but we also possess “inherent

power to order a remittitur as a condition to avoid a new trial.” WSH Props., L.L.C.

v. Daniels, 761 N.W.2d 45, 52 (Iowa 2008). Remittitur is an appropriate remedy

when: “(1) the jury’s damage award was not justified by the evidence before it;

(2) the jury failed to respond to the evidence; or (3) the wrong measure of damages

was applied.” Id. (citations omitted). “If the verdicts are the result of passion and

prejudice a new trial should be granted, but if they are merely excessive because

not supported by sufficient evidence . . . justice may be effectuated by ordering

a remittitur of the excess as a condition for avoiding a new trial.” Id. at 49–50

(quoting Schmitt v. Jenkins Truck Lines, Inc., 170 N.W.2d 632, 659 (Iowa 1969)).

In granting remittitur, we reduce the award “ ‘to the maximum amount proved’

under the record.” Jasper v. H. Nizam, Inc., 764 N.W.2d 751, 777 (Iowa 2009)

(quoting Knickerbocker v. First Nat’l Bank of Oelwein (In re Knickerbocker),

827 F.2d 281, 289 n.6 (8th Cir. 1987)).

      On the damages awarded to Hoffmann Innovations, as described above,

the jury appears to have used the wrong measure of damages by accepting

almost all of Hoffmann’s proposed damages figure that used lost revenue instead

of lost profits. Hoffmann only provided evidence of one client that Hoffmann

Innovations lost because of Clark’s defamation, resulting in a loss of about
                                         23

$100,000 in net profits. We thus order a remittitur on the jury’s libel per se

award, reducing the $2,060,250 awards against both Clark and RealTuners to

$100,000    total,   or   $50,000   against     each.   We   leave   undisturbed   the

compensatory damages awarded to Hoffmann Innovations against Scott Clark of

$27,000 for breach of fiduciary duty, $102,500 for breach of contract, and

$250,000 for civil extortion, and the district court’s attorney fee award of

$210,743.21.

      Because we’ve ordered a remittitur on the damages for libel per se for

Hoffmann Innovations—a large portion of the damages awarded in this case—

remittitur is also appropriate for punitive damages. See, e.g., Wilson, 558 N.W.2d

at 148 (ordering remittitur of punitive damages from $15 million to $2 million in

light of the defendant’s culpability and the deterrent effect of punitive damages).

The jury awarded punitive damages against Clark for $2 million and against

RealTuners for $3.5 million. Having now reduced the total compensatory

damages from $5,500,000 to $1,479,500—a reduction to 26.9% of the original

award—we believe it appropriate to keep the jury’s original ratio of

compensatory-to-punitive damages by ordering remittitur of punitive damages

by this amount. We therefore order remittitur of punitive damages against Clark

personally from $2 million to $538,000 and against RealTuners from $3.5 million

to $941,500.

                                         III.

      If a remittitur is ordered, the plaintiff must choose “between consenting to

a reduced, modified or increased judgment amount or proceeding to a new trial.”
                                         24

Iowa R. Civ. P. 1.1010(2). At oral argument before this court, Hoffmann’s lawyer

stated that his client preferred remittitur over a new trial, but didn’t propose a

particular remittitur amount. In any event, Hoffmann and Hoffmann Innovations

must now accept or reject these remittitur conditions under Iowa Rule of Civil

Procedure 1.1010(2). If the plaintiffs refuse or fail to accept these remitted

judgment amounts, the district court must set aside the verdict and order a new

trial on damages. Id. r. 1.1010(2)(b).

      DECISION OF COURT OF APPEALS AFFIRMED IN PART AND

VACATED IN PART; DISTRICT COURT JUDGMENT AFFIRMED IN PART,

REVERSED IN PART, AND REMANDED.

      All justices concur except Christensen, C.J., who takes no part.