Court Upsets Libel Ruling Against Washington Post

A federal appeals court on Friday rejected a $2-million libel judgment against the Washington Post, and ruled that a newspaper’s policy of encouraging “high-impact investigative stories of wrongdoing” does not show that it acts with “actual malice” toward public figures.

The 7-1 decision reverses a 1985 opinion, which surprised the press by concluding that an “adversarial stance” taken by a newspaper and its reporters toward the subject of a story tended to prove it would recklessly print lies.

“It would be sadly ironic for judges in our adversarial system to conclude that the mere taking of an adversarial stance is antithetical to a truthful presention of the facts,” the appeals court said.

“The First Amendment forbids penalizing the press for encouraging its reporters to expose wrongdoing by public corporations and public figures,” the court added.

Friday’s decision is the fourth verdict in a long-running battle between the Post and former Mobil Oil Corp. President William Tavoulareas.

In 1979, the Post printed a story that said the Mobil executive had “set up” his son in a multimillion-dollar shipping business that operated “Mobil-owned ships under exclusive, no-bid contracts.”

Tavoulareas’ son, Peter, a “24-year-old shipping clerk in 1974, making $14,000 a year,” rose within five years to “own 45% of Atlas Maritime Co., which operates 17 ships worldwide,” the paper reported.

By his own account, Tavoulareas was then an outspoken advocate for the oil industry in its attempts to ward off government regulation.

Tavoulareas sued the Post, charging that he was defamed by the story’s implication that he has “misused Mobil’s assets” to benefit his son. After a trial, which featured testimony about the reporter’s effort to “get” an oil company president, a jury awarded Tavoulareas $2.05 million in compensatory and punitive damages.

But the judge who presided at the trial threw out this award in 1983, concluding there was not “clear and convincing evidence” that the newspaper acted with “actual malice” toward the subject.

Two years later, a 2-1 appeals panel ruling reinstated the award. The opinion by Judges George MacKinnon and Antonin Scalia, now a U.S. Supreme Court justice, said that the reporter “knowingly adopted an adversarial stance toward Tavoulareas.” Moreover, the paper encouraged “hard-hitting investigative journalism,” the opinion continued, and these factors suggest that any errors in the stories arose from a “reckless disregard” for the truth.

Friday’s ruling by the entire District of Columbia Court of Appeals found, first, that the Post’s story was “substantially true.”

‘Evidence of Nepotism’

“The record abounds with uncontradicted evidence of nepotism in favor of Peter,” said the opinion written by Judges Kenneth Starr and J. Skelly Wright.

Then, the judges dismissed the notion that a vigorous pursuit of such sensitive stories reflected a cavalier attitude about the truth.

Here, the reporter “included most of the information furnished by Mobil” and “suppressed no information that would have proved the article incorrect,” the court said.

MacKinnon dissented from the ruling. Scalia left this panel to join the Supreme Court.

Post Executive Editor Benjamin Bradlee said he was “obviously very pleased” by the decision.

Boisfeuillet Jones Jr., Post vice president and counsel, said: “We are pleased that the full court carefully reviewed the entire record and found nothing to support the jury’s verdict of falsity or bad faith.”

Broad Leeway Seen

Attorneys representing news organizations applauded the ruling for giving reporters a broad leeway in pursuing sensitive stories.

Floyd Abrams, a New York lawyer who frequently defends news organizations in libel actions, said the 1985 ruling was “a deeply troubling and terribly threatening decision” for the news media because it “condemned journalistic tactics as disreputable which are in fact honorable and essential.”

“You can see the peril in libel law today when you see all the risk, cost and pressure brought about by this case over a story that was basically true,” he added.

Ruling Called Significant

Jane Kirtley, executive director of the Reporters Committee for Freedom of the Press in Washington, said the decision was significant because “it specifically rejects the notion that because you are a hard-driving reporter, you are acting with actual malice.”

Not ‘a Dead Notion’

“But you can’t say that’s a dead notion,” Kirtley added. “After all, Scalia is now on the Supreme Court.”

Attorneys for Tavoulareas and Mobil had no immediate comment on the ruling, saying they wanted to read it thoroughly before deciding whether to appeal to the Supreme Court.

During his confirmation hearings, Scalia said he would not participate in any case which he heard while on the appeals court.