Kentucky Kingdom Amusement v. Belo Kentucky, 2002-SC-0693-DG.

• Decision Date: 25 August 2005
• Docket Number: No. 2003-SC-0634-DG.,No. 2002-SC-0693-DG.,No. 2002-SC-0697-DG.,2002-SC-0693-DG.,2002-SC-0697-DG.,2003-SC-0634-DG.
• Citation: 179 S.W.3d 785
• Parties: KENTUCKY KINGDOM AMUSEMENT COMPANY (f/k/a Kentucky Kingdom, Inc.), Appellant/Cross-Appellee, v. BELO KENTUCKY, INC., d/b/a WHAS-TV (f/k/a Journal Broadcasting of Kentucky, Inc. d/b/a WHAS-TV), Appellee/Cross-Appellant.
• Court: United States State Supreme Court — District of Kentucky

Page 785

179 S.W.3d 785

KENTUCKY KINGDOM AMUSEMENT COMPANY (f/k/a Kentucky Kingdom, Inc.), Appellant/Cross-Appellee, v. BELO KENTUCKY, INC., d/b/a WHAS-TV (f/k/a Journal Broadcasting of Kentucky, Inc. d/b/a WHAS-TV), Appellee/Cross-Appellant.

No. 2002-SC-0693-DG.

No. 2002-SC-0697-DG.

No. 2003-SC-0634-DG.

Supreme Court of Kentucky.

August 25, 2005.

Rehearing Denied January 19, 2006.

COPYRIGHT MATERIAL OMITTED

Gaylee W. Gillim, Eric L. Ison, Melissa Norman Bork, Greenbaum, Doll & McDonald, Edmund Karem, Sitlinger, McGlincy, Steiner, Theiler & Karem, Ann B. Oldfather, Lea A. Player, Oldfather & Morris, Louisville, Counsel for Appellant/Cross-Appellee.

John L. Tate, Bethany A. Breetz, Stites & Harbison, Louisville, Thomas Leatherbury, Lisa E. Bowlin, Vinson & Elkins, Dallas, TX, Counsel for Appellee/Cross-Appellant.

WINTERSHEIMER, Justice.

This appeal and cross-appeal are from an opinion of the Court of Appeals that reversed a judgment based on a jury verdict in a defamation action brought by Kentucky Kingdom against WHAS-TV. The jury originally returned a $3,975,000 verdict in the plaintiff's favor, but the $1 million award for damage to Kentucky Kingdom's reputation was set aside by the trial judge.

A number of issues relating to a defamation action brought by a public figure against a news media defendant are presented. They include: the proper appellate standard of review of the findings by a jury regarding "falsity" and "actual malice"; whether the individual defamatory statements are supported by the evidence; whether a single telecast, although not defamatory, may become so when combined with other telecasts; whether "professional journalistic standards" evidence is relevant and admissible; whether a corporate plaintiff may recover for both lost profits and injury to reputation; whether the jury must be instructed on the meaning of "false" and the evidentiary standard by which the plaintiff may recover punitive damages.

On July 26, 1994, five passengers were injured when two cars collided in the dark during the operation of Kentucky Kingdom's indoor steel roller coaster known as the "Starchaser." The Starchaser was a major ride attraction at the amusement park. It had been in operation at various parks for more than twenty years since its manufacture. A then 7-year-old passenger suffered the most serious injury, a lacerated liver. The collision and investigation attracted immediate and continuing news coverage from WHAS-TV and a number of Louisville area television and radio stations as well as from the print media.

The collision occurred after a Starchaser operator discovered that two cars had climbed the initial lift chain at the same time and were speeding down the track very close together. The operator activated an emergency stop button, but the cars were sharing an area of the track between two automatic brake points. When the lead car stopped at the next brake point, the second car, which was not slowed by a brake, struck the rear of the lead car, injuring passengers in both cars.

WHAS-TV broadcasted several reports in 1994 and 1996 regarding the accident and Kentucky Kingdom alleged that three statements made during those reports were libelous. First, after interviewing a passenger in one of the cars who stated: "I mean everybody should know about how dangerous this ride is," WHAS-TV's reporter stated: "State inspectors also think the ride is too dangerous." The second defamatory statement occurred during a story about the expected reopening of the Starchaser and referred to the ride as "the roller coaster ride that malfunctioned earlier this week." Kentucky Kingdom claims that the third defamation occurred several years later when, describing evidence in a lawsuit filed on behalf of the injured passenger, WHAS-TV libelously reported, "Kentucky Kingdom removed a key component of the ride."

In the trial of the defamation action, Kentucky Kingdom introduced evidence which in its opinion showed that all three of these statements were false and that WHAS-TV had made the statements knowing they were false or with reckless disregard as to whether they were false. The trial judge instructed the jury that it could find liability for the specific statements and/or the telecasts in which statements were made, "taken as a whole." The jury actually found that each of the statements and each series of telecasts taken as a whole were defamatory. The damages award was not broken down so as to indicate specific damages for specific statements or telecasts.

The jury awarded Kentucky Kingdom $100,000 for lost profits in 1994; $375,000 for lost profits in 1996; one million dollars for damages to reputation; and $2.5 million in punitive damages. The trial judge granted a judgment notwithstanding the verdict with respect to the reputation damages, determining that any such loss beyond loss of profits was necessarily speculative. WHAS-TV appealed on various issues of liability, instructions and damages. Kentucky Kingdom cross-appealed in order to regain its one million dollars for injury to reputation. The Court of Appeals reversed and remanded for a new trial.

The Court of Appeals determined that the evidence clearly and convincingly established actual malice regarding the "too dangerous" comment. It was not convinced that WHAS-TV had acted with actual malice regarding the statements "the ride that malfunctioned" and "removed a key component." Because the damages award did not differentiate between the claim that was judged valid and those considered unsupported, the Court of Appeals directed that a new trial was required. The panel also held that Kentucky Kingdom could recover general damages for injury to its reputation in addition to special damages for lost profits. However, it determined that a new trial would be necessary to determine such damages because the amount awarded by the jury did not itemize sufficiently proven claims and those which were insufficient.

The Court of Appeals offered guidance to the trial judge on remand. First, it determined that Kentucky Kingdom's journalism-ethics expert was properly allowed to testify that WHAS-TV had violated professional standards. Next, the Court of Appeals advised that the "telecast taken as a whole" instructions were not presumptively erroneous because a single telecast, while not defamatory, could become so when combined with other telecasts. It also believed that Kentucky Kingdom had established its lost profits with reasonable certainty through its accountant's analysis of lost attendance and diminished profits.

The Court of Appeals agreed with WHAS-TV that the jury should be instructed that the comments or telecasts only had to be "substantially true." It found that including language from KRS 411.061 in the punitive damages instruction was superfluous. Finally, the Court of Appeals concluded that proof of actual malice so as to permit recovery at all would necessarily constitute proof sufficient to support an award of punitive damages. This Court accepted discretionary review.

I. Standard of Review

The constitutional standard of review applicable to a defamation case relates only to the findings of actual malice and not to other parts of the verdict. There is no constitutional requirement for a heightened review of the determination by the jury that the statements at issue are false or defamatory.

Section 8 of the Kentucky Constitution, "Freedom of speech and of the press," provides in relevant part as follows:

Every person may freely and fully speak, write and print on any subject, being responsible for abuse of that liberty.

It is Kentucky law, consonant with the federal First Amendment, which governs the right to recover for defamation. Ball v. E.W. Scripps Co., 801 S.W.2d 684 (Ky.1990), cert. denied, 499 U.S. 976, 111 S.Ct. 1622, 113 L.Ed.2d 719 (1991). The constitutional requirement is that actual malice must be shown by clear and convincing evidence. The determination by the jury as to this aspect is independently reviewed.

Ball, supra, illustrates that the only part of the record on which this Court conducted an independent review was on the question of actual malice. This Court recognized in Ball that a court reviewing disputed facts on which a jury had already decided that actual malice existed, must accept the verdict of the jury. The Court stated:

We accept the jury's finding as to disputed facts when there is supporting evidence because we claim no superior ability to divine the truth by reason of judicial office, and we question the good judgment of any judge who thinks he has such special powers.

Ball, 801 S.W.2d at 688.

In Bose Corp. v. Consumers Union of U.S., Inc., 466 U.S. 485, 104 S.Ct. 1949, 80 L.Ed.2d 502 (1984), it was the finding of actual malice that the United States Supreme Court subjected to a standard of constitutional review. The U.S. Supreme Court did not disturb the use of the clearly erroneous standard of review on a finding of falsity. See also Bartimo v. Horsemen's Benevolent & Protective Ass'n., 771 F.2d 894 (5th Cir.1985). Bose, supra, indicated that in reviewing whether actual malice existed, the Court must examine the evidence and independently determine whether the judgment is supported by clear and convincing proof of actual malice. The finding of actual malice is subject to independent review by an appellate court. Not all findings of fact in an actual malice matter are subject to de novo review. As observed in Bose:

Indeed, it is not actually necessary to review the `entire record' to fulfill the function of independent appellate review on the actual-malice question; rather, only those portions of the record which relate to the actual-malice determination must be independently assessed.

466 U.S. at 514, 104 S.Ct. 1949, 1967 FN 31.

Similarly, the U.S. Supreme Court in Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 111 S.Ct. 2419, 115 L.Ed.2d 447 (1991), recognized that the falsity...