Dun & Bradstreet, Inc. v. Greenmoss Builders
472 U.S. 749 (1985)
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Rule of Law:
The First Amendment does not require a private figure plaintiff to prove "actual malice" to recover presumed and punitive damages for a defamatory falsehood if the statement does not involve a matter of public concern. State common law standards for awarding such damages are permissible in these private-concern cases.
Facts:
- Dun & Bradstreet, a credit reporting agency, provides subscribers with confidential financial information about businesses.
- On July 26, 1976, Dun & Bradstreet sent a report to five subscribers.
- The report falsely stated that Greenmoss Builders, a construction contractor, had filed a voluntary petition for bankruptcy.
- The report grossly misrepresented Greenmoss Builders' assets and liabilities.
- The error occurred when a 17-year-old employee of Dun & Bradstreet inadvertently attributed a bankruptcy petition filed by a former employee of Greenmoss Builders to the company itself.
- Greenmoss Builders' president learned of the report from his bank and immediately contacted Dun & Bradstreet to correct the error and requested the names of the recipients.
- Dun & Bradstreet promised to investigate but refused to divulge the names of the subscribers who received the false report.
- After determining the report was false, Dun & Bradstreet issued a corrective notice, but Greenmoss Builders remained dissatisfied.
Procedural Posture:
- Greenmoss Builders, Inc. sued Dun & Bradstreet, Inc. in Vermont state trial court for defamation.
- A jury returned a verdict in favor of Greenmoss Builders, awarding $50,000 in compensatory/presumed damages and $300,000 in punitive damages.
- Dun & Bradstreet moved for a new trial, arguing the jury instructions violated the First Amendment rule from Gertz v. Robert Welch, Inc.
- The trial court granted the motion for a new trial.
- Greenmoss Builders (as appellant) appealed the new trial order to the Vermont Supreme Court.
- The Vermont Supreme Court reversed, holding that the Gertz protections are inapplicable to nonmedia defamation actions.
- The United States Supreme Court granted certiorari.
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Issue:
Does the First Amendment require a private plaintiff to show 'actual malice' to recover presumed and punitive damages for a defamatory statement that does not involve a matter of public concern?
Opinions:
Majority - Justice Powell (plurality)
No. The First Amendment's protections do not extend to shield defamatory statements on matters of purely private concern from state-law awards of presumed and punitive damages. The Court must balance the state's interest in compensating private individuals for reputational injury against the First Amendment interest in protecting the speech at issue. While the state's interest is strong and legitimate, speech on matters of purely private concern is of less First Amendment importance than speech on public issues, which lies at the heart of constitutional protection. Because the credit report here involved no public issue, was sent to only five subscribers, and was motivated by profit, the state's interest in providing effective remedies for defamation adequately supports allowing awards of presumed and punitive damages without a showing of 'actual malice.'
Concurring - Chief Justice Burger
No. Gertz v. Robert Welch, Inc. is limited to cases where the defamatory expression concerns a matter of general public importance, and the speech in this case relates to an essentially private concern. While agreeing with the plurality's reasoning on this point, Gertz itself was ill-conceived and should be overruled to allow states to return to their traditional common law for private defamation actions.
Concurring - Justice White
No. Gertz should not be applied in this case for two reasons: it should be overruled, and the defamatory publication does not deal with a matter of public importance. The balance struck in New York Times Co. v. Sullivan and Gertz was improvident, providing too much protection for false statements of fact at the expense of individual reputation. The common law rules for defamation should be retained for private plaintiffs, and the Gertz decision has made no measurable contribution to First Amendment values.
Dissenting - Justice Brennan
Yes. The Gertz rule restricting presumed and punitive damages absent a showing of actual malice should apply to all defamation cases, regardless of the public or private nature of the speech. The rationale of Gertz—that unrestrained presumed and punitive damages are a 'blunt instrument' that chills speech—is not limited to speech on public issues. Furthermore, the credit report at issue here, concerning the bankruptcy of a local business, is a matter of public concern as it involves economic information relevant to the community. Even if deemed private, this type of speech requires protection from the chilling effect of unpredictable and potentially enormous damage awards.
Analysis:
This decision carves out a significant exception to the rule established in Gertz v. Robert Welch, Inc., creating a two-tiered system for defamation cases involving private plaintiffs. By making the 'public concern' of the speech a threshold inquiry, the Court returned a significant portion of defamation law to state control. Following this case, if a court determines a defamatory statement is on a matter of private concern, the heightened 'actual malice' standard for presumed and punitive damages does not apply, making it easier for plaintiffs in such cases to recover. The decision's ambiguous definition of 'public concern' has led to subsequent litigation and judicial line-drawing.
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