System Under Fire : Libel Battle: From Courts to Lawbooks

Times Staff Writers

Gen. William C. Westmoreland has withdrawn from the battle, with nothing more to show for his $120-million libel suit against CBS than a statement that the network never thought him unpatriotic.

But the battlefield of libel law is still swarming with combatants. Westmoreland's suit against CBS, along with former Israeli Defense Minister Ariel Sharon's unsuccessful action against Time magazine, are only the most prominent of a flurry of libel cases on court dockets. From major public figures to obscure local leaders, the unhappy subjects of news reports are going to court in mounting numbers.

And as the right to a free press collides with public officials' right to defend their reputations, both the news media and aggrieved public officials are expressing extreme dissatisfaction with the current state of libel law.

Public Vindication

Lawyers representing public officials complain that the law makes it almost impossible for their clients to win. Substantial damages are almost never awarded even if a plaintiff manages to prove libel, according to these lawyers, who say their clients file suit anyway because they see the courts as their best hope of public vindication when news organizations refuse to admit mistakes.

On the other side, lawyers supporting the news media say a wave of suits that they see as largely meritless harassment has discouraged vigilant and aggressive reporting of public affairs. This is particularly true, they say, of smaller news organizations, which simply cannot afford to fight a constant stream of libel actions, let alone absorb big damage awards.

"The burdens of defending a suit remain a powerful disincentive to the kind of adventuresome and forthright journalism that the public has a right to expect from the media," Harvard Law Prof. Laurence H. Tribe says.

High Costs Cited

Both sides agree on at least one point: Libel suits cost too much--an estimated $8 million in legal fees and other expenses, in the case of Westmoreland vs. CBS.

"Hardly anyone has anything good to say about the present system," says Michael P. McDonald, general counsel to the American Legal Foundation in Washington, sponsor of a new group supporting libel plaintiffs. "We're locked into a system that's costly for both the plaintiff and the defendant."

The system dates back to 1964, when the Supreme Court for the first time applied the Constitution's guarantees of free speech to an area of the law that historically had been left to the states. In New York Times vs. Sullivan, the justices sought to give the press more freedom to report critically about official conduct, while still leaving public officials a way to clear their names if their reputations were damaged by false statements.

Only when a statement was made with what the law defines as "actual malice"--that is with knowledge that it is false or with a "reckless disregard" for the truth--can a public official successfully sue for libel, the court held. In subsequent cases the court applied that test to actions brought by "public figures," as well as by officials.

Despite the formidable standards of proof borne by plaintiffs, Mutual Insurance Co. Ltd. of Bermuda, a major insurer of newspapers, reports that between 1966 and 1981 the number of suits against its clients tripled. Larry Worrall, president and general counsel of Media Professionals Insurance Inc., another major libel insurer, estimates that 25% to 35% more libel suits have been filed against his clients during the last five years.

"There was a time when we would go for a year without a suit at some of our larger clients," Worrall said. "Now at these organizations we usually have five or 10 all the time."

Far-Ranging Nature

Westmoreland and Sharon easily capture headlines, but a sampling of other cases underscores the far-ranging nature of libel actions today:

--An overweight policeman in Maine sued a local newspaper--unsuccessfully--for publishing his photo to illustrate an editorial urging that public safety officers be required to be physically fit.

--Developer Donald Trump sued the Chicago Tribune and its architecture critic for $500 million over a column that called Trump's plan to build the world's tallest building in New York "one of the silliest things anyone could inflict on New York." The suit has not come to trial.

--Businessman Harold Campbell sued the writer of a letter to the editor of the Bethlehem, Pa., Globe-Times for suggesting that "corruption" contributed to the zoning variance that he obtained to stage a 1978 circus performance in nearby Hanover, his hometown. It took three years for the case to come to trial and one hour for a jury to rule against Campbell.

As in the Pennsylvania case, defendants usually prevail. According to the Libel Defense Resource Center in New York, a group supported by news organizations, media defendants now are losing about 54% of the cases that go to trial, and the average initial jury award for damages is more than $2 million. But appeals courts, finding that trial judges and juries frequently misinterpret the law, are reversing 68% of the judgments against the media. No million-dollar award has yet been fully affirmed on appeal; the average affirmed award is only $60,000.

Insurance Rates Up

But the process of obtaining such results is increasingly expensive. Frank McCulloch, former executive editor at the McClatchy newspapers--which publish, among others, the Sacramento Bee--said his company's legal bills have quintupled in the last six years. And those kinds of expenses are driving libel insurance rates upward.

Worrall's insurance company is raising premiums 50% to 100% next year. Arthur B. Hansen, general counsel emeritus at Mutual, said his company has raised fees 150% in recent years and next year will require most clients to pay 20% of any litigation in addition to the deductible fee, a tactic that he hopes will frighten his clients into greater caution.

The danger, some press supporters say, is that news outlets, particularly smaller ones that are intimidated by increasing libel litigation, will fail to perform the duty envisioned for them by the Constitution: serving as the public's watchdog over its affairs. Irvin Lieberman, president of a family-owned publishing company in Chester County, Pa., says that after nine libel suits in nine years he has "eliminated investigative work at my newspapers" and stays "away from stories that are controversial. My papers now are bland."

The Alton Telegraph in Illinois, circulation 38,000, was forced into reorganization under the federal Bankruptcy Code in 1982 after a jury charged it $9.2 million--a sum later reduced--for a story it never printed.

Query Proved Incorrect

Two Telegraph reporters had sent a query about alleged improprieties at a local bank to federal investigators. Although the paper dropped the story when the query proved incorrect, the federal investigation that it triggered turned up other problems at the bank, and a prominent contractor caught up in the investigation sued the paper for libel. The paper, forced to drop its appeal because it could not afford a $10-million bond demanded for the fight, instead filed for bankruptcy.

Eugene Patterson, chief executive officer of the St. Petersberg Times in Florida, says his prospering regional newspaper has not shied away from controversial stories. "But I think a silence has been cast over the smaller newsrooms of America that can't afford the cost of defending against libel actions," he adds.

Not all journalists are so alarmed. A. M. Rosenthal, editor of the New York Times, said: "I don't want to be Pollyannaish , but I don't see any great disaster pending. I can see a problem, but we are big boys, and we take care of problems."

McDonald, of the American Legal Foundation, even believes that more libel suits will have a positive effect on the press by encouraging responsible reporting. "I still don't believe that serious investigative journalism is being deterred," he said.

Intimidation Seen

But many journalists fear that some libel suits are filed simply to intimidate the press into silence. An example sometimes cited is a suit brought against the Sacramento Bee by Sen. Paul Laxalt (R-Nev.) over a November, 1983, story alleging that illegal "skimming"--the hiding of taxable gaming revenue--had occurred 12 years ago at a casino Laxalt owned.

A few days before the suit was filed, but after being contacted by Laxalt and his New York lawyer, CBS and ABC television executives postponed airing critical news reports on the same subject. Network executives denied that they were pressured into postponing the reports, but Bee lawyers charge otherwise and have filed a countersuit charging that Laxalt's suit is intended, in one editor's words, "to intimidate other newspapers, magazines and broadcast organizations and to deter them from pursuing the story."

Similarly, Sharon made little secret that he wanted to use his $50-million libel suit to teach Time magazine a lesson and to undo the political damage he suffered when the magazine accused him of culpability in the Beirut massacre of Palestinian refugees by Lebanese Christians. And after the jury found that Time's story was false, the former defense minister's attorneys freely said they were less concerned about the legal results of the case, which Sharon ultimately lost because the jury failed to find malice.

Tried to Make Point

Political motivations also played a role in Westmoreland's suit against CBS, which had aired a documentary charging he misrepresented enemy troop strengths during the Vietnam War. The Capital Legal Foundation, a conservative, Washington-based legal group, defended the general without charge, and Dan M. Burt, the foundation's president and Westmoreland's attorney, says he took the case in part to make a point about the press.

"The issue in this case is whether the biggest media organization in the world is held accountable for what it says and what it does," Burt told one newspaper reporter on the eve of his trial. CBS, he told another, is "trying to replace God."

William F. Thomas, executive vice president and editor of the Los Angeles Times, believes that people are more willing to sue today because the press "has more strength and power than ever before, including the power to damage reputations." This new influence, Thomas said, stems from the evolution of one-newspaper cities, the linking of newspapers into chains and the rise of television.

Others blame rising libel litigation on the increasingly adversarial relationship between the press and the political figures it covers, a distrust aggravated by the confrontations between the news media and the Richard M. Nixon Administration. Some say the press also has become more arrogant and reckless, particularly after the euphoria of uncovering Watergate.

Little Alternative

And many who consider the press at times more reckless--including many journalists--say the Sullivan decision itself was a catalyst because some reporters wrongly thought it gave them virtual legal immunity when writing about political figures.

For public officials who want to clear their names, critics of the news media say there is little alternative to a libel suit.

"One reason people go to court is that much of the media appears loathe to admit mistakes and make retractions," said McDonald of the American Legal Foundation. Media lawyers, he contends, often encourage news organizations not to retract or settle, preferring instead to take their chances in court under the favorable legal standards established by Times vs. Sullivan.

With dissatisfaction so widespread, proposals for reform of the libel law are proliferating almost as fast as libel cases themselves.

Some in the press want still wider latitude. Gene Roberts, executive editor of the Philadelphia Inquirer, says the possibility that libel litigation could inhibit robust public debate is a greater threat than an occasionally reckless press. "In the public arena," he said, "everybody should be able to say what they want. In the end, the public will have to sort out from the cacophony of voice what it wants to believe."

Adequate Access

Ira Glasser, executive director of the American Civil Liberties Union, believes libel suits should be barred for public officials or others for statements about official conduct or matters of public concern--whether or not such statements are proved knowingly or recklessly false. Such absolute press immunity was exactly what three members of the court that rendered the New York Times vs. Sullivan decision wanted.

Glasser says most public officials have adequate access to the news media to answer their critics through their own statements, interviews, news conferences or even letters to the editor. "That's the remedy that's contemplated in a democratic society," Glasser said.

But many media executives do not want absolute immunity from libel suits. "There has to be recourse for those who feel wronged," said Larry Grossman, president of NBC News. "There has to be some accountability."

And outside the media, some authorities seek more restrictions on the press--not fewer.

Bruce E. Fein, a constitutional scholar at the American Enterprise Institute, argues that the current standard of "actual malice" presents an "almost insurmountable barrier" for public officials whose reputations are wrongfully damaged--a barrier that can discourage participation in public service. He proposes that public figures only have to show negligence to prevail in libel actions.

Under one much-discussed proposal for reform, by Stanford University Law Prof. Marc A. Franklin, no punitive damages would be allowed and all plaintiffs, public or private, would be required to show "actual malice" to collect compensatory damages. But those who wanted to restore their reputations without seeking damages could seek a declaratory judgment in court that they had been defamed by a false statement, with no need to prove malice or even negligence. In any libel action, the losing party would be required to pay the legal fees of the winner.

Critics worry that Franklin's proposal would allow judges or juries just to adjudicate truth or falsity even when there was no malice or negligence. Establishing "official truth" is dangerous in a democratic society, they warn, and an accuracy tribunal would create a hornet's nest of petty litigation.

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