Justices Let Stand Record $3-Million Libel Judgment

The Supreme Court Monday let stand the largest libel award in American history, a $3-million judgment against CBS Inc. and a Chicago television newsman who falsely accused a tobacco firm of employing a secret strategy to lure young people into smoking.

The verdict against CBS and newsman Walter Jacobson was four times larger than any libel award ever approved by the federal appellate courts, according to the Libel Defense Resource Center in New York.

The federal appeals courts repeatedly have proven to be the last and best line of defense for news organizations facing large libel verdicts. In 1964, the Supreme Court prohibited libel awards except in instances in which the press demonstrated “actual malice” or a “reckless disregard” for the truth in its reporting.

Since then, although juries have often voted big judgments against the media, federal appeals courts have intervened to either throw out the verdicts or greatly reduce the damage awards.

“This is a record-setting award in all respects, and we are depressed as hell,” said Henry R. Kaufman, general counsel for the Libel Defense Resource Center in New York. By breaking the “million-dollar barrier,” the ruling will probably encourage other federal courts to let large judgments against news organizations stand.

However, a lawyer for the Brown & Williamson Tobacco Corp. said that the ruling “says only that a mugger ought to get punished.”

Attorney Martin London, who won the libel verdict, said that the jury and the appeals court judges in Chicago voted the $1 million in presumed damages and the $2.05 million in punitive damages against Jacobson and CBS because he was “arrogant and defiant” in refusing to acknowledge a clear error.

“This was a sneering denunciation of the company,” London said. When asked to correct its false report of an advertising campaign aimed at youth, the TV station rebroadcast the original Jacobson report, he said.

Finger in ‘Other Eye’

“They stuck a finger in our other eye, and that’s when we decided to file suit,” London, a New York lawyer, said.

Other lawyers representing the press conceded that the heart of the problem in many cases is that the jurors perceive the news organizations as biased and arrogant.

“Much as we hate to admit it, people have a lot of hostility to the news media, and it shows up in these verdicts,” said Jane Kirtley, executive director of the Reporters Committee for Freedom of the Press in Washington.

The case arose in November, 1981, when Jacobson broadcast a three-part commentary on cigarettes and the tobacco industry. The highly visible and often controversial Chicago newsman is a news anchor and a commentator on CBS-owned WBBM-TV.

Cited ‘Confidential’ Data

In his third commentary, he accused Viceroy of turning to “slicksters on Madison Avenue” to come up with ads that would hook youths on smoking. In citing a “confidential report” from the federal government, Jacobson said that Viceroy’s strategy called for promoting cigarettes “as an initiation into the adult world . . . as an illicit pleasure, a basic symbol of the growing-up maturity process.”

Viceroy denied this charge, Jacobson said. But he concluded: “They’re not slicksters. They’re liars.”

In fact, the ad strategy that Jacobson referred to had been suggested by consultants for Brown & Williamson--the makers of Viceroy--but the company rejected the advice and fired the ad firm. The strategy was cited in a confidential Federal Trade Commission report, but a researcher for Jacobson was told by a Brown & Williams executive that the plan had not been adopted and was not reflected in any ads.

In all, Jacobson’s commentary was broadcast four times by WBBM and reached an estimated audience of 2.5 million, according to court documents.

Judge Cuts Jury’s Award

After a 1982 trial, a jury concluded that the tobacco company had been libeled, and it slapped CBS and Jacobson with more than $5 million in damages. A federal trial judge reduced the amount to $2.05 million because he found no evidence of an actual injury to the firm. Last year, the U.S. 7th Circuit Court of Appeals in Chicago not only upheld the trial judge’s award but raised the amount by $1 million.

CBS and other media groups appealed to the Supreme Court, contending that such a large damage award threatens the ability of the press to tackle controversial subjects. In its 1964 ruling in New York Times vs. Sullivan, the high court said that the nation can have a “robust” press only if news organization are protected from the threat of crushing libel awards.

But, without comment or a dissenting vote, the justices rejected further appeals in the current case (CBS vs. Brown & Williamson, 87-1354).

Airport Picketing Case

In other actions, the court:

--Let stand an appeals court ruling allowing “peaceful picketing” in the St. Louis airport (St. Louis vs. Jamison, 87-943). Last year, the justices rejected a Los Angeles ordinance that prohibited “First Amendment activities” in the international airport, ruling that it was too broad and all-encompassing. St. Louis officials said they wanted to stop a disgruntled former employee from protesting in the airport hallways, but the lower courts said the employee had a constitutional right to demonstrate his displeasure.

--Agreed to decide whether international airlines may limit their liability to crash victims to $75,000 (Chan vs. KAL, 87-1055). Relatives of 18 passengers killed when a Korean Air Lines 747 was shot down by a Soviet fighter in 1983 contend that the $75,000 limit set by the Warsaw Convention should be voided because KAL printed these ticket conditions in smaller type than required.

Two libel experts express disappointment at the Supreme Court’s refusal to consider appeals of the CBS libel award. Calendar, Page 1.