Doubleday & Co., Inc. v. Rogers

• Decision Date: 11 July 1984
• Docket Number: No. C-1793,C-1793
• Citation: 674 S.W.2d 751
• Parties: 10 Media L. Rep. 2173 DOUBLEDAY & COMPANY, INC. et al., Petitioners, v. Dr. N. Jay ROGERS, Respondent.
• Court: Texas Supreme Court

Page 751

674 S.W.2d 751

10 Media L. Rep. 2173

DOUBLEDAY & COMPANY, INC. et al., Petitioners, v. Dr. N. Jay ROGERS, Respondent.

No. C-1793.

Supreme Court of Texas.

July 11, 1984.

Rehearing Denied Sept. 19, 1984.

Orgain, Bell & Tucker, John G. Tucker, Beaumont, Robert J. Hearon, Jr., Austin, Robert M. Callagy, New York City, Harvey Katz, Washington, D.C., for petitioners.

Mehaffy, Weber, Keith & Gonsoulin, Robert Q. Keith, Johnson City, Charles A. Wright, Austin, Carl A. Parker, Port Arthur, for respondent.

BARROW, Justice.

This is a libel suit brought by respondent, Dr. N. Jay Rogers, against petitioners, Harvey Katz and Doubleday & Co., Inc. Katz authored and Doubleday published a book entitled Shadow on the Alamo, which admittedly contained a libel regarding Dr. Rogers. The jury found that the statement inquired about was made with malice. The jury further found that Dr. Rogers had suffered no actual damage from the publication, but that exemplary damages of $2,500,000 should be assessed. The trial court, because of the "zero" actual damage finding, rendered a take-nothing judgment. The court of appeals reversed the trial court judgment and rendered judgment for Dr. Rogers against Katz and Doubleday jointly and severally for $2,500,000 in exemplary damages. 644 S.W.2d 833. We reverse the judgment of the court of appeals and affirm the trial court judgment.

In April of 1971, Katz, a journalist and licensed attorney, received a financial grant from the Fund for Investigative Journalism to go to Texas to investigate a bribery and stock scandal that allegedly involved the Sharpstown State Bank and several public officials. For several weeks during the sixty-second session of the Texas Legislature, Katz posed as a legislative aide of a state representative. During this period, Katz became closely associated with a group of representatives known as the "Dirty Thirty," which was waging a political fight against the leadership of the House of Representatives. As a result of these experiences, Katz determined to write a book about the alleged "corruption of high public officials in Texas" and the fight against it by the "Dirty Thirty." His agent persuaded an editor of Doubleday that the proposed book was publishable and salable. Doubleday's editorial committee The book does not assert that Dr. Rogers or any of his brothers played any role whatsoever in the events surrounding the Sharpstown controversy or the legislative fight in the sixty-second session. Their names are simply "dropped" as purported business associates of strong supporters of two Texas political leaders. After reference to the Rogers brothers in this relationship, a footnote states:

entered into a contract with Katz to publish the proposed book.

Nate Rogers was appointed to the state Optometry Board by John Connally, despite Rogers' three indictments for practicing without a license.

It is conceded by petitioners that this statement is false. Although Nate Rogers, the respondent herein, has served on the Optometry Board, he has never been indicted for practicing without a license. Dr. Rogers' brother, Sol Rogers, has been so accused, but has never been appointed to the Optometry Board.

The proposed book was first submitted to Doubleday in manuscript form in two parts as it was written by Katz. Each part was submitted to Doubleday's editor in charge of this book, and, because of the critical nature of the work, it was in turn submitted to Doubleday's counsel for legal examination. At the time the original manuscript was turned over to Doubleday's attorney, the footnote referred to Sol Rogers rather than to Nate Rogers. Doubleday's lawyer recognized the potentially libelous nature of the assertion. He wrote Doubleday's editor in charge of the proposed book, in part, as follows: "The statements that Sol Rogers had been indicted three times for practicing without a license and has been appointed to the State Optometry Board should be substantiated. On this point the substantiation which is recommended throughout this letter is of prime importance."

At a subsequent meeting with Doubleday's editor and its legal counsel, Katz was instructed to confirm the footnote's allegations or drop the note. Katz cited as his source a report contained in a House Journal. The 1949 House Journal states that Sol Rogers had been three times charged with practicing optometry without a license. See H.J. of Tex., 51st Leg., Reg. Sess. 4200-02 (1949). Some months later Katz submitted his final manuscript to Doubleday. In this draft, he had changed the first name in the footnote from "Sol" to "Nate."

It was stipulated before trial that Dr. Nate Rogers is and, at the time the book was published, was a public official of the State of Texas. In addition to his service on the Optometry Board, Dr. Rogers has conducted other public activities. Most notably, the Rogers brothers led a long fight in the Texas Legislature and in the courts against the Texas Optometric Association. This struggle essentially was over who would be legally permitted to prescribe glasses and the right to advertise. The Rogers brothers prevailed and have been very successful professionally through the Texas State Optical Company.

Since it was stipulated that Dr. Rogers was a public official, all parties recognize that the correct rule for liability is stated in New York Times Co. v. Sullivan, 376 U.S. 254, 279-80, 84 S.Ct. 710, 726, 11 L.Ed.2d 686 (1964), as follows:

[The first amendment] prohibits a public official from recovering damages for a defamatory falsehood relating to his official conduct unless he proves that the statement was made with "actual malice"--that is, with knowledge that it was false or with reckless disregard of whether it was false or not.

This case presents two broad issues for decision. First, assuming that the published statement is libelous, does Texas law permit recovery of exemplary damages when the jury finds that no actual harm resulted? Second, does the record contain clear and convincing evidence to support a finding that the statement in question was actuated by constitutional malice? We address these questions in order.

I. PUNITIVE DAMAGES

Under Texas law, punitive damages are not recoverable as a general rule in the Dr. Rogers acknowledges the rule, but he urges that it should not prevent his recovery in the case at bar. He asserts that the correct rule is that the plaintiff does not have to be awarded actual damages to receive exemplary damages; rather, he must merely show himself entitled to recover actual damages. Dr. Rogers relies on Fort Worth Elevators Co. v. Russell, 123 Tex. 128, 70 S.W.2d 397, 409 (1934). In a libel case, he contends, the plaintiff shows himself entitled to actual damages simply by proof that the defendant published a libel concerning the plaintiff. This, he says, is due to the conclusive presumption of general damages in a libel case. See Guisti v. Galveston Tribune, 105 Tex. 497, 150 S.W. 874, 876 (1912); Denton Publishing Co. v. Boyd, 448 S.W.2d 145, 147 (Tex.Civ.App.--Fort Worth 1969), aff'd, 460 S.W.2d 881 (Tex.1970). Therefore, he urges that proof that Doubleday published a libel about him entitled Dr. Rogers to exemplary damages as found by the jury. Apparently, the court of appeals' decision was based upon this logic.

absence of actual damages. The rule was most recently reaffirmed by this court in City Products Corp. v. Berman, 610 S.W.2d 446, 450 (Tex.1980). See also Fort Worth Elevators Co. v. Russell, 123 Tex. 128, 70 S.W.2d 397, 409 (1934); Girard v. Moore, 86 Tex. 675, 26 S.W. 945, 946 (1894); Garza v. San Antonio Light, 531 S.W.2d 926, 930 (Tex.Civ.App.--Corpus Christi 1975, writ ref'd n.r.e.); Anderson v. Alcus, 42 S.W.2d 294, 296 (Tex.Civ.App.--Beaumont 1931, no writ); Flournoy v. Story, 37 S.W.2d 272, 273 (Tex.Civ.App.--Fort Worth 1930, no writ).

A reading of the Russell case reveals that it does not help Dr. Rogers. The rule announced was clearly intended to apply to the unique situation created by the statutory bar to recovery of actual damages from an employer covered by worker's compensation. Even in that situation, the plaintiff is required to prove the existence and amount of actual damages to support a recovery of exemplary damages. Indeed, the court, in the same paragraph that contains the rule relied on by Dr. Rogers, declared: "The rule in Texas is that exemplary damages cannot be recovered unless the plaintiff is shown to have sustained actual loss or injury. There can be no exemplary damages in the absence of a recovery of actual damages. A verdict of nominal damages is not sufficient." Russell, 123 Tex. 128, 70 S.W.2d at 409.

Far from showing actual loss or injury, Dr. Rogers was found to have suffered no injury. Dr. Rogers asserted a claim for actual damages based on his testimony as to his mental anguish and embarrassment over the libelous statement, and the trial court instructed the jury that it could presume damages without proof. There was no objection to this submission; nor has any complaint been made of the jury finding of no actual damage.

The Texas cases are unanimous in holding that recovery of actual damages is prerequisite to receipt of exemplary damages. However, Dr. Rogers advances a policy argument for creation of an exception in this case. He argues that otherwise, there will be no means of punishment available as a deterrent to libel in a situation in which the libeled plaintiff's reputation has not been--perhaps could not have been--damaged.

We do not find it desirable to carve out of the settled rule an exception for libel cases. We fully recognize and appreciate the concern over the broad protection granted the media by the New York Times Co. v. Sullivan test. However, in adopting this strict test for liability, the Supreme Court recognized "a profound national commitment to the principle that debate on public issues should be uninhibited, robust, and wide-open and...