The plaintiff testified that he was frustrated, distraught, upset, and distressed about the article and its effect on his family and friends, in that it revived the charges which he thought had been laid to rest two years previously and made him appear untruthful in professing his innocence of those charges. He also testified that he feared retribution against his family by clients who imagined themselves the victims of his alleged cooperation. (Marcone direct 49-61). This Court is not free to overturn the jury's apparent finding that this testimony was credible, regardless of the alleged inconsistencies in other matters of the plaintiff's testimony to which the defendant has pointed us. Credibility questions are for the jury. The plaintiff's testimony was buttressed by that of several witnesses who were acquainted with him at the time of the publication and who testified that he appeared upset by the article. (N.T. 6.70, 6.155, 6.165).
The plaintiff also presented testimony that he lost clients because of the article and other attorneys testified that they received clients who, as a result of the article, were concerned about being represented by the plaintiff. This testimony was admissible to show damage to the plaintiff's business reputation and its resulting effect on the plaintiff. See Meehan v. Snow, 494 F. Supp. 690, 696 (S.D. N.Y. 1980), rev'd on other grounds, 652 F.2d 274 (2d Cir. 1981). Witnesses also testified that the article affected their view of the plaintiff's reputation. (N.T. 6.96, 6.108, 6.158). The defendant presented a great deal of evidence in an attempt to show that the plaintiff's reputation was so poor that it could not have been damaged further by the defamatory article. This included evidence that the indictment had been widely reported, as had been the ties of the plaintiff to the "Castle" and to a motorcycle club reportedly involved in criminal activities. The defendant also presented reports that the plaintiff had been indicted for income tax evasion, the trial apparently ending in a hung jury (N.T. 3.147-51), reports that he was fined $200 for assault and battery on a police officer (N.T. 3.104-05), and reports that he had been fined twice for contempt of court. (N.T. 3.134-43). The first contempt citation was in 1966. The second was late in 1979, after the publication of the article at issue in this case, and the judge who imposed the fine severely criticized the plaintiff, according to a newspaper account of the indictment.
The defendant claims that the effect of this material was to destroy the plaintiff's reputation so thoroughly that no further damage to his reputation was possible at the time of publication. See Cardillo v. Doubleday & Co., Inc., 518 F.2d 638 (2d Cir. 1974) (habitual criminal is "libel proof"); Ray v. Time, Inc., 452 F. Supp. 618 (W.D. Tenn. 1978) (convicted assassin of Martin Luther King is "libel proof"). Although the evidence provided by the defendant showed that the plaintiff's reputation in the community may have been less than unblemished, there is no question that the plaintiff's reputation could have suffered from a false charge that he participated in a drug conspiracy. Accordingly, the Court does not believe that the plaintiff should have been precluded as a matter of law from offering testimony that the article damaged his reputation. See Buckley v. Littell, 539 F.2d 882, 889 (2d Cir. 1976), cert. denied, 429 U.S. 1062, 97 S. Ct. 785, 50 L. Ed. 2d 777 (1977) (Cardillo "libel proof" doctrine is a narrow, limited one). See also Wolston v. Readers Digest Assn., Inc., 443 U.S. 157, 169, 99 S. Ct. 2701, 2708, 61 L. Ed. 2d 450 (1979) (Court refuses to "declare 'open season' for all who [seek] to defame persons convicted of a crime").
The defendant contends that the plaintiff failed to provide sufficient evidence that special harm resulted from the publication of the libel, and that this requires entry of judgment against the plaintiff. As the Court stated in its earlier Memorandum, 533 F. Supp. at 358, 361, the defamatory statements at issue impute to the plaintiff the commission of an indictable crime, and they are therefore actionable as libel per se and do not require proof of special harm, that is, harm of a pecuniary nature. See Paul v. Davis, 424 U.S. 693, 697, 96 S. Ct. 1155, 1159, 47 L. Ed. 2d 405 (1976) ("Imputing criminal behavior to an individual is generally considered defamatory per se, and actionable without proof of special damages."); Altoona Clay Products, Inc. v. Dun & Bradstreet, Inc., 367 F.2d 625, 628 (3d Cir. 1966) (reserving the question whether all libels are actionable per se in Pennsylvania). See also Brown & Williamson Tobacco Corp. v. Jacobson, 713 F.2d 262, 267-68 (7th Cir. 1983) (noting two different meanings of libel per se, one referring to the need for extrinsic facts and the other assimilating the traditional categories of slander per se; Pennsylvania apparently adopts the latter approach).
Gertz does not require that a plaintiff prove special harm, that is, pecuniary loss, as the term has been defined in the Pennsylvania cases. Where liability is based solely on fault, Gertz requires proof by competent evidence of "actual injury", which includes "impairment of reputation in the community, personal humiliation, mental anguish and suffering." 418 U.S. at 348-50, 94 S. Ct. at 3012. See Time, Inc. v. Firestone, 424 U.S. at 459-60, 96 S. Ct. at 968 (affirming $100,000 award for the plaintiff's anxiety over defamatory article and her fear that it would adversely affect her young son; no claim for damage to reputation); Gertz II, 680 F.2d at 540 (affirming award of $100,000 for severe mental distress, anxiety, embarrassment, and injury to professional reputation). Gertz therefore does not eliminate the significance of classifying a libel as libel per se. Wachs v. Winter, 569 F. Supp. 1438, 1446 (E.D. N.Y. 1983); R. Sack, Libel, Slander and Related Problems 110-111 (1980). If a libel is libel per se, a plaintiff must prove only actual injury as broadly defined by Gertz; he need not prove special harm. Although the jury was instructed in this case that the plaintiff was required to prove special harm, this error could not have prejudiced the defendant, since it merely imposed an unnecessary burden upon the plaintiff, particularly in light of the jury's finding of actual malice.
Finally, since in this case the plaintiff proved that the defendant published the defamatory material with actual malice, he was not prevented by the Supreme Court's Gertz decision from recovering "presumed damages", that is, damages awarded in the absence of proof of injury as compensation for the injury presumed to be the normal result of a defamatory publication. Gertz II, 680 F.2d at 540. Since Pennsylvania law appears to provide for the recovery of such "presumed damages," Corabi, 441 Pa. at 473, 273 A.2d at 919-20, Montgomery, 363 Pa. at 267-68, 69 A.2d at 527, the finding of actual malice in this case appears to have absolved the plaintiff of the requirement that he have presented proof of actual injury. A finding that the plaintiff was entitled to "presumed damages" is not necessary to support the jury's award of compensatory damages, however, since, as stated above, the plaintiff provided sufficient competent evidence to support that award.
D. AMOUNT OF THE PUNITIVE DAMAGES AWARD
The defendant contends that the punitive damages award in this case of $537,500, almost eighteen times the compensatory damage award, is excessive because it bears no reasonable relationship to the compensatory damages awarded and reflects passion and prejudice on the part of the jury. At the time of trial it was clear that Pennsylvania law required punitive damages to be proportionate or reasonably related to the amount of compensatory damages, Chuy v. Philadelphia Eagles Football Club, 595 F.2d 1265, 1279 (3d Cir. 1979); Neal v. Carey Canadian Mines, Ltd., 548 F. Supp. 357, 377 (E.D. Pa. 1982), and the jury was so instructed. Several recent decisions of the Pennsylvania Superior Court have cast some doubt on whether the proportionality or reasonable relationship requirement is still a part of Pennsylvania law. See Rhoads v. Heberling, 306 Pa. Super. 35, 451 A.2d 1378 (1982) (no error where jury charge does not include reasonable relationship language); Feld v. Merriam, 314 Pa. Super. 414, 461 A.2d 225 (1983) (reasonable relationship required), petition for allowance of appeal granted, Pa. (September 2, 1983); Daley v. John Wanamaker, Inc., 317 Pa. Super. 348, 464 A.2d 355 (1983) (court does not explicitly take a position on the question). Since the jury instruction in this case included reasonable relationship language, the suggestion that Pennsylvania law no longer requires a reasonable relationship between punitive and compensatory damages does not present a ground for a new trial, since the charge was favorable to the defendant and could not have caused it prejudice.
Regardless of the current state of Pennsylvania law with respect to charging the jury that there must be a reasonable relationship of punitive damages to compensatory damages, Pennsylvania law clearly provides that a trial court has the authority to order a remittitur of damages when the trial judge is convinced that the damages are so excessive as to shock his sense of justice. Daley, Pa. Super. at , 464 A.2d at 357; See Murray v. Fairbanks Morse, 610 F.2d 149, 152-53 (3d Cir. 1979); Curtis Publishing Co. v. Butts, 351 F.2d 702, 717-19 (5th Cir. 1965), aff'd 388 U.S. 130, 87 S. Ct. 1975, 18 L. Ed. 2d 1094 (1967) (affirming remittitur of punitive damages from $3,000,000 to $400,000); Marder v. Conwed Corp., 75 F.R.D. 48 (E.D. Pa. 1977). A court must recognize, however, that the award of punitive damages is generally a matter within the province of the jury, and that the jury's award should not be disturbed unless it is so grossly excessive as to offend the conscience of the Court and to shock its sense of justice. Daley, Pa. Super. at , 464 A.2d at 358-59; Murray, 610 F.2d at 152-53.
The punitive damages award in this case was so grossly excessive as to shock the conscience of this Court. First, the award is almost eighteen times the compensatory damage award of $30,000, which compensatory damage award was, in the Court's view as well as the jury's, an adequate reflection of the harm inflicted by the defendant. Although, as heretofore pointed out, the Pennsylvania law appears to be in a state of change as to whether punitive damages must be proportionate or reasonably related to compensatory damages, the absence of any kind of reasonable relationship in this case is certainly a factor which the Court may take into consideration in determining that the award is excessive. In addition, there was no evidence that the defendant was engaged in sustained harmful activity against the plaintiff, which could require the imposition of a large award to insure that the conduct cease. The purpose of punitive damages is to punish wrongful conduct and to deter its repetition. There is no question that punitive damages of an amount less than $537,500 will sufficiently fulfill this purpose. The Court cannot agree with the defendant, however, that the entire punitive damages award must be stricken as the product of passion and prejudice. The defendant has not pointed to any basis, other than the amount of the award, for a finding that the jury was impassioned or prejudiced. Although the Court does feel the award was excessive, the excessiveness appears attributable to excessive outrage over the total lack of regard for the rights of the plaintiff which the defendant exhibited in this matter.
The Court is aware that it may not reduce a damages award simply because it may, as a factfinder, have awarded a different amount. Daley, Pa. Super. at , 464 A.2d at 359; Murray, 610 F.2d at 152. The Court's role is merely to insure that the award does not shock the sense of justice or offend the conscience. Based on the findings that the defendant engaged in outrageous conduct and published the article with knowledge of its falsity or reckless disregard of its truth or falsity and based on the other evidence in this case, a punitive damages award of $200,000 would not shock the Court's sense of justice. We note that this award would still be over six times the amount of the compensatory damages awarded. See Chuy, 595 F.2d at 1279 (affirming punitive award of six times the compensatory award); Montgomery v. Dennison, 363 Pa. at 269, 69 A.2d at 527-28 (affirming reduction of punitive award from $5,000 to $2,500); Burnett v. National Enquirer, Inc., 144 Cal. App. 3d 991, 193 Cal. Rptr. 206 (1983), petition for review denied, 52 U.S.L.W. 2236 (Cal. October 6, 1983) ($1.3 million jury award reduced to $750,000 by trial court and to $150,000 by appellate court).
The defendant's motion for a new trial will therefore be granted, unless the plaintiff shall, within twenty days of the date of the Order accompanying this Memorandum, file a remittitur for the amount of the punitive damages award in excess of $200,000. The amount of the compensatory damages award is to remain undisturbed. The defendant's motion for judgment notwithstanding the verdict will, for all of the reasons stated in this Memorandum, be denied. An Order follows.
AND NOW, this 17th day of November, 1983, upon consideration of the defendant's motion for judgment notwithstanding the verdict or, in the alternative, for a new trial, and the plaintiff's opposition thereto, for the reasons stated in this Court's Memorandum of November 17, 1983,
IT IS HEREBY ORDERED:
1. The defendant's motion for judgment notwithstanding the verdict is DENIED.
2. The defendant's motion for a new trial is GRANTED, unless the plaintiff shall, within twenty days of the date of this Order, state in a writing filed with the Clerk of the United States District Court for the Eastern District of Pennsylvania that he consents to a remittitur of the punitive damages awarded above the sum of $200,000; the award for compensatory damages in the amount of $30,000 to remain undisturbed. In the event the plaintiff files such a remittitur, the defendant's motion for a new trial is DENIED, and the judgment entered on July 19, 1982 is AMENDED so that "the sum of FIVE HUNDRED SIXTY-SEVEN THOUSAND FIVE HUNDRED DOLLARS ($567,500)" reads "the sum of TWO HUNDRED THIRTY THOUSAND DOLLARS ($230,000)", and the judgment shall read "IT IS ORDERED that judgment be and the same is hereby entered in favor of the plaintiff, FRANK J. MARCONE, and against the defendant, PENTHOUSE INTERNATIONAL, LTD., in the sum of TWO HUNDRED THIRTY THOUSAND DOLLARS ($230,000)."