Gutter v. Dow Jones, Inc.
490 N.E.2d 898, 56 A.L.R. 4th 1153, 22 Ohio St. 3d 286 (1986)
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Rule of Law:
A newspaper publisher is not liable to a general reader for financial losses incurred due to a non-defamatory, negligent misrepresentation of fact in a news article, as the publisher does not owe a duty of care to its vast, indeterminate readership.
Facts:
- A general circulation newspaper published a news article containing a non-defamatory factual error about a securities investment.
- A subscriber or reader of the newspaper read the article.
- Relying on the inaccurate information in the article, the reader chose to make a securities investment.
- The reader suffered a financial loss on the investment due to a market decline, a loss which was prompted by reliance on the incorrect information.
Procedural Posture:
- A reader filed a complaint against a newspaper publisher in a state trial court, alleging negligent misrepresentation.
- The trial court granted the newspaper's motion to dismiss the complaint for failure to state a claim upon which relief could be granted.
- The reader, as appellant, appealed the dismissal to the intermediate court of appeals.
- The court of appeals reversed the trial court's judgment, allowing the case to proceed.
- The newspaper publisher, as appellant, then appealed that decision to the state's highest court for review.
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Issue:
Is a general circulation newspaper liable to one of its readers for a non-defamatory negligent misrepresentation of fact in a news article that the reader relies upon in making a securities investment, resulting in a financial loss?
Opinions:
Majority - Celebrezze, C.J.
No. A general circulation newspaper is not liable to a reader for a non-defamatory negligent misrepresentation. The court held that while the tort of negligent misrepresentation exists for professionals supplying information, it is limited to liability towards a specific, limited class of persons for whom the information is intended. A newspaper's general readership constitutes 'all the world,' not a limited and foreseeable class. Furthermore, imposing such liability would create an unacceptable 'chilling effect' on the press, contrary to the public policy and First Amendment principles that favor the untrammeled dissemination of knowledge. The court reasoned that the potential for unlimited liability would deter newspapers from publishing timely financial news, which would ultimately harm the public interest.
Analysis:
This decision solidifies a significant protection for the press, extending a shield from liability beyond defamation to include negligent factual errors causing financial harm. It establishes a high bar for plaintiffs alleging negligent misrepresentation against mass media, requiring them to show a special relationship far beyond that of a general reader. By prioritizing the free flow of information over individual financial losses from reliance on news reports, the ruling reinforces the idea that the press must be free to report without the fear of 'crushing' liability to an indeterminate class of people for unintentional errors. This case significantly curtails the application of the tort of negligent misrepresentation to mass publishers.
