Smith v. McDonald

• Decision Date: 25 August 1988
• Docket Number: Civ. No. C-81-475-G.
• Citation: 713 F. Supp. 871
• Court: U.S. District Court — Middle District of North Carolina
• Parties: David I. SMITH, Plaintiff, v. Robert McDONALD, Defendants.

713 F. Supp. 871

David I. SMITH, Plaintiff, v. Robert McDONALD, Defendants.

Civ. No. C-81-475-G.

United States District Court, M.D. North Carolina, Greensboro Division.

August 25, 1988.

William A. Eagles and B.F. Wood, Graham, N.C., for plaintiff.

William Woodward Webb, Raleigh, N.C., for defendant.

MEMORANDUM OPINION

BULLOCK, District Judge.

At the trial of this libel case in May 1988 the jury awarded the Plaintiff $50,000.00 in compensatory damages and $150,000.00 in punitive damages. The Defendant has moved for judgment notwithstanding the verdict, for a new trial, and for remittitur of the damages to a nominal sum. The court finds that there was sufficient evidence to support the verdict and that the amount of damages is not excessive. Accordingly, all motions will be denied and judgment will be entered on the jury's verdict.

Background

This case arises out of two letters which Robert McDonald wrote to President Reagan and other officials opposing David Smith's proposed nomination to the position of United States Attorney for the Middle District of North Carolina. These letters, dated December 1, 1980, and February 13, 1981, respectively, charged Smith with numerous instances of misconduct and urged his rejection in no uncertain terms. Smith did not receive the nomination, and he filed this action for libel in state court in July 1981. McDonald removed the suit to this court on the basis of diversity.

Because McDonald's statements occurred in communications to the President concerning a public figure, his motion for judgment on the pleadings raised novel issues regarding the nature and extent of the privilege provided by the Petition Clause of the first amendment. Rejecting Defendant's contention that the communications were absolutely privileged, this court held that the Petition Clause confers a qualified privilege equivalent to those under the Speech and Press Clauses as interpreted in New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed. 2d 686 (1964); this decision was affirmed by the Fourth Circuit Court of Appeals and by the United States Supreme Court. Smith v. McDonald, 562 F.Supp. 829 (M.D. N.C.1983), aff'd, 737 F.2d 427 (4th Cir. 1984), aff'd sub nom. McDonald v. Smith, 472 U.S. 479, 105 S.Ct. 2787, 86 L.Ed.2d 384 (1985). Thus, the major issues at the trial concerned the truth or falsity of McDonald's statements and whether they were made "with knowledge that they were false or with reckless disregard of whether they were false or not." New York Times, 376 U.S. at 280, 84 S.Ct. at 726.

Before submitting these issues to the jury, however, the court was required to distinguish the letters' actionable statements of fact from their constitutionallyprotected statements of opinion. See Potomac Valve & Fitting, Inc. v. Crawford Fitting Co., 829 F.2d 1280, 1285 n. 12 (4th Cir.1987) (opinion designation a question of law). Although much in the letters was undeniably opinion, these opinions were interspersed with admittedly factual statements. Rather than having the jury pass on the letters as a whole, the court applied the Potomac Valve criteria and directed the jury's attention to specific statements of fact.¹ To obtain the most precise statement of the jury's findings and to preserve the clearest record for appellate purposes, each factual assertion was quoted in a separate issue. The jury was instructed to consider individually each assertion's truth or falsity and, if the jury found a statement untrue, to decide whether it was made with New York Times malice.

Ten such issues, supplemented by two issues concerning compensatory and punitive damages, were submitted to the jury.² The jury found that eight of the statements were false and were made with knowledge of or reckless disregard for their falsity. One statement was found to be true, and one statement was found to be false but made without malice. On the basis of the eight false and malicious statements, the jury awarded Smith $50,000.00 in compensatory damages and $150,000.00 in punitive damages.

McDonald now attacks the verdict as against the weight of the evidence, influenced by passion and prejudice, and excessive in the damages awarded. As to the eight statements found to be libelous, he argues that the evidence showed that four of these statements were true or substantially true, and that three additional statements were made without malice. He contends that the one remaining statement was a non-actionable expression of opinion. Finally, he asserts that the compensatory damage award is unsupported by the evidence and that the punitive damage award is grossly excessive. In support of the latter contention McDonald submitted a brief affidavit outlining his current financial status.

DISCUSSION

I. The Motion for Judgment N.O.V.

Recognizing that a single actionable statement would support a verdict against him, McDonald challenges the jury's findings on each of the eight libelous issues/statements. Although there is merit to a number of his arguments, the court need not address all of them in detail because there was sufficient evidence to support the verdict on at least three of the statements, submitted as issues numbered 1, 2, and 10. Since these three libels are also among the most damaging assertions in the letters, the motion for a j.n.o.v. must be denied.

Issues numbered 1 and 10 involve McDonald's allegation that at a hearing in a case involving McDonald's business, in which David Smith had at one time represented the opposing party, United States Magistrate Herman A. Smith termed David Smith's conduct "the most reprehensible conduct of any attorney to come before me in my twenty-five years on the bench." This alleged quote was repeated in each of the letters, hence the separate issues.

The Plaintiff's major evidence regarding these issues was the testimony of Magistrate Smith himself, who flatly denied making the statement. Magistrate Smith further testified that he saw no unethical behavior and had no occasion to reprimand David Smith regarding that particular case. The Plaintiff also presented the testimony of John Patterson, David Smith's co-counsel in the case, who testified that he observed no unethical behavior from attorney Smith and received no complaints regarding his conduct.

Unable to produce a transcript or a recording of the hearing, McDonald testified that he was present and that Magistrate Smith's words were "the attorneys for the plaintiff were guilty of the most reprehensible conduct I've seen in twenty-five years." Although David Smith was just one of the plaintiff's attorneys and had withdrawn from the case approximately two years before this particular hearing, McDonald testified that he felt David Smith was the most guilty party among the plaintiff's attorneys. McDonald also submitted copies of a recommendation entered by Magistrate Smith in January 1977 and of a dismissal order entered by the district judge in July 1977 which detailed discovery abuses, highlighted orders which were not obeyed, and imposed a $1,000.00 sanction on the plaintiff in that case.

McDonald also presented the testimony of Michael Lewis, his lawyer at the hearing. McDonald had given Lewis's name, address, and telephone number as a reference in his first letter. Lewis recalled that Magistrate Smith had found that interrogatories were not answered, that orders were not obeyed, and that deposition testimony was inaccurate. He also recalled that Magistrate Smith had said that the case was an embarrassment to the judicial system. Most importantly, however, Lewis could not recall Magistrate Smith making the quote at issue.

McDonald's own evidence thus falls short of proving the truth of his allegations and leaves questions as to McDonald's state of mind in communicating an erroneous version of the hearing. When Magistrate Smith's testimony is considered, a reasonable juror could have found, as these jurors did, clear and convincing evidence that McDonald maliciously made a false statement.

Accepting that discovery orders were not complied with, leading to the eventual dismissal of the case and sanctioning of the Plaintiff, those facts fall far short of a judicial officer terming an attorney's conduct "the most reprehensible" he has seen in twenty-five years. The source and the words used make this a particularly damaging accusation; if Magistrate Smith did not make the statement, McDonald, who was present at the hearing, had no basis for embellishing upon the truth by misquoting the magistrate. The jury obviously believed Magistrate Smith's denial, and the circumstantial evidence is more than sufficient to support a finding of malice. See St. Amant v. Thompson, 390 U.S. 727, 732, 88 S.Ct. 1323, 1326, 20 L.Ed.2d 262 (1968) (reciting circumstances which support a finding of malice); Hunt v. Liberty Lobby, 720 F.2d 631, 643-45 (11th Cir.1983) (discussing additional circumstances).

McDonald lost a similar credibility battle with respect to issue number 2. This issue concerned David Smith's alleged "fixing" of a DUI charge on behalf of Carl Staley, who, according to McDonald's letter, later received a permanent leg injury from an accident which occurred while Staley was intoxicated. Carl Staley and David Smith testified that Smith never represented Staley on a DUI charge, much less "fixed" one. Although Staley was involved in a 1975 automobile accident, he stated that he had no permanent injury and was not intoxicated at the time.

In contrast, McDonald testified that the "three witnesses" to the "fixing" were himself, his wife, and his former wife. McDonald stated that Staley had related the "fixing" incident to McDonald's former wife in 1975, and repeated it to McDonald and his wife, Catherine, over a business lunch. Catherine McDonald's testimony supported McDonald's version of events. Staley admitted that he had eaten lunch with the McDonalds, but denied that he had ever told them or anyone else that David...