Bertrand v. Rick Mullin & the Iowa Democratic Party, 12–0649.

• Decision Date: 16 May 2014
• Docket Number: No. 12–0649.,12–0649.
• Citation: 846 N.W.2d 884
• Parties: Rick BERTRAND, Appellant, v. Rick MULLIN and The Iowa Democratic Party, Appellees.
• Court: Iowa Supreme Court

846 N.W.2d 884

Rick BERTRAND, Appellant,

v.Rick MULLIN and The Iowa Democratic Party, Appellees.

No. 12–0649.

Supreme Court of Iowa.

May 16, 2014.

Jeana L. Goosmann and Emilee Boyle Gehling of Goosmann Law Firm, PLC, Sioux City, for appellant.

Mark McCormick of Belin McCormick, P.C., Des Moines, for appellees.

CADY, Chief Justice.

In this appeal and cross-appeal, we must decide whether a political campaign advertisement aired on television constituted actionable defamation. The district court overruled a motion for directed verdict at trial, and a jury returned a verdict for the plaintiff. Both parties appealed and raised a variety of claims of error. On our review, we conclude the verdict cannot stand because the action was not supported by sufficient evidence of actual malice. We reverse the judgment of the district court and dismiss the case.

I. Background Facts and Prior Proceedings.

Rick Bertrand and Rick Mullin were candidates for the Iowa Senate from Sioux City and Woodbury County in the 2010 general election. Bertrand ran as a Republican, and Mullin ran as a Democrat. Mullin was a former chair of the Woodbury County Democratic Party.

Bertrand owned a number of businesses and real estate in the Pearl Street district of Sioux City. From 1999 until 2009, however, he worked as a salesperson and later as district manager for Takeda Pharmaceuticals (Takeda), a large multinational pharmaceutical company. Bertrand worked in the metabolic division of the company, which produced and marketed the diabetes drug Actos. Bertrand did not own stock in Takeda, and his local business interests were unrelated to the pharmaceutical industry.

Another division of Takeda sold a tablet called Rozerem, a prescription sleep aid. Bertrand, however, never personally sold the drug.

In October 2010, Bertrand ran a campaign advertisement on television called “Running from the Past.” The advertisement focused on certain current policy positions of Mullin and compared them to positions Mullin took as Woodbury County Democratic Chair. The advertisement made Mullin angry and offended him. Additionally, his internal polling revealed the advertisement was causing him to lose support. His campaign manager told him: “Bertrand hit you hard. Hit him back harder.”

Opposition research conducted on behalf of Mullin revealed a Los Angeles Times article about the disclosure by a consumer group of a Food and Drug Administration (FDA) report that expressed concern over the sale of Actos by Takeda. The article reported the FDA had found 388 patients were hospitalized for heart failure after taking Actos. Research also revealed the FDA had criticized the marketing of Rozerem by Takeda, particularly an advertisement that made it appear that Rozerem was being marketed to children. Finally, research uncovered an article from the Morning Herald in Sydney, Australia, which reported a consumer advocacy group had declared Takeda “the most unethical drug company in the world.”

This research was used as the basis for a television advertisement ultimately run by Mullin in response to the “Running from the Past” advertisement by Bertrand. Mullin and several Iowa Democratic Party staff members discussed the themes and content of the advertisement between October 15 and 17. Mullin initially had significant misgivings about the script. He disliked the proposed tone of the script and found it to be at odds with the positive tenor he believed characterized his campaign. Mullin said:

I really don't like this new ad at all—it isn't me and it is totally inconsistent with the beautiful print pieces we've been mailing out by the thousands. It also devalues the great TV spot we are already running.

Can't we find a way to be derisive/dismissive of Bertrand's negative attack and then pivot to our positive message? I really don't like the positioning of me in this, and it buys into Bertrand's frame. Let's bust out of his frame and keep positive.

In a later email, Mullin introduced a rewrite of the script as being “less vile.” Eventually, Mullin approved the script.

The advertisement—titled “Secrets”—formed the basis for this lawsuit. It first aired on television on October 17. The audio portion of “Secrets” contained the following statements:

Rick Bertrand said he would run a positive campaign but now he is falsely attacking Rick Mullin. Why?

Because Bertrand doesn't want you to know he put his profits ahead of children's health.

Bertrand was a sales agent for a big drug company that was rated the most unethical company in the world. The FDA singled out Bertrand's company for marketing a dangerous sleep drug to children.

Rick Bertrand. Broken promises. A record of deceit.

At the bottom of the screen during one shot was a written image, which stated in bold capital letters, “BERTRAND'S COMPANY MARKETED SLEEP DRUG TO CHILDREN.”

The statements in the advertisement cited to newspaper articles, which also flashed across the television screen. The sources cited for the statements made in the advertisement focused on Takeda. There was no mention of the local companies owned by Bertrand. Mullin admitted he did not know if Bertrand had ever sold Rozerem or marketed dangerous drugs to children at the time the advertisement aired. When he approved the script, he said he liked the “ ‘profiting at the expense of children’ line.” A friend of Mullin confided in a later email to the Iowa Democratic Party staff, “I guess I thought Bertrand had at least sold the drug in question” and acknowledged “Secrets” was a “pretty flimsy attack.”

Bertrand and Mullin engaged in a public debate at a forum sponsored by the Home Builders Association on October 21. At the debate, Bertrand called the “Secrets” advertisement false and demanded Mullin stop airing it. The next day, on October 22, Bertrand filed a lawsuit against Mullin in district court seeking injunctive relief and monetary damages based on defamation. Mullin viewed the lawsuit as a political tactic by Bertrand and did not stop airing the commercial. Mullin last ran the advertisement on October 31, two days before the election on November 2. Bertrand won the election by 222 votes.

The defamation action proceeded to trial. Bertrand identified ten statements in the advertisement he considered defamatory. These statements included nearly every spoken statement from the advertisement and one written statement, as well as statements from the advertisement that were repeated in mailed advertising. Bertrand alleged a broad array of damages, including emotional distress from harassing phone calls, vandalism of a construction site of one of his businesses, ill-treatment on the campaign trail, and economic losses.

The trial court refused to submit Bertrand's claim for punitive damages to the jury. It found he failed to present clear and convincing evidence that Mullin intentionally acted unreasonably.

At the same time, Mullin claimed Bertrand failed to introduce clear and convincing evidence the allegedly defamatory statements were false and made with actual malice. The trial court found eight of the ten allegedly defamatory statements were not defamatory as a matter of law. However, the court submitted two statements from the advertisement to the jury under the claim for defamation. The first statement was: “The FDA singled out Bertrand's company for the marketing of dangerous drugs to children.” The second statement was: “BERTRAND'S COMPANY MARKETED SLEEP DRUG TO CHILDREN.” The district court found “a reasonable jury [could] find that these statements imply a false fact, namely that Rick Bertrand personally sold a dangerous sleep drug to children, or that he owns a company that sold a dangerous sleep drug to children.”

The jury returned a verdict of $31,000 against Mullin and $200,000 against the Iowa Democratic Party. In response to a motion for judgment notwithstanding the verdict (JNOV), the trial court found no reasonable juror could conclude Takeda was Bertrand's company. It reasoned no reasonable viewer could ignore the statement that Bertrand had been a Takeda sales agent, which immediately preceded the “Bertrand's company” line in the advertisement. Consequently, the court concluded it should have granted a directed verdict for Mullin and the Iowa Democratic Party regarding the alleged implication that Bertrand owned a company that sold Rozerem.

However, the district court concluded a reasonable juror could have believed that the content of the statement by Mullin was that Bertrand personally sold Rozerem. The district court reasoned “the language and juxtaposition of the phrases” allowed a reasonable jury to conclude the advertisement implied Bertrand personally sold Rozerem. The district court rejected Mullin's argument that “Secrets” was simply a “guilt by association” advertisement. It reasoned that even if Mullin expressed a legitimate point, a reasonable person hearing the statement could infer that the person personally sold the product. The court stated: “If somebody states that John is a car salesman at A & B car dealership and that A & B sells Fords, it is reasonable to infer that John sells Fords, regardless of what other models A & B actually sells.” Additionally, the district court found sufficient evidence to support a finding of actual malice. Primarily, it reasoned that Bertrand's public denial of the implication that he sold the drug, followed by the filing of his defamation lawsuit the next day, alerted Mullin of the false implication. It then reasoned that the subsequent actions of Mullin and the Iowa Democratic Party in failing to pull the advertisement showed they purposefully avoided the false implication and recklessly disregarded the truth as they continued to broadcast the advertisement. Therefore, the district court denied the motion for JNOV.

On appeal, Mullin contends the district court erred by failing to grant his motion for JNOV. As a part of his arguments, he asserts Bertrand failed to...