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Newspaper loses libel suit, but jury finds no harm

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  1. Libel and Privacy

    News Media Update         PENNSYLVANIA         Libel    

Newspaper loses libel suit, but jury finds no harm

  • A jury in a federal trial found The New York Times liable for defaming a Philadelphia business, but since the libel had not caused any “actual harm,” no damages were awarded.

March 24, 2004 — The New York Times was found by a federal jury Monday to have “intentionally, recklessly or negligently” defaming a Philadelphia business, but was not ordered to pay any damages because no “actual harm” had occurred.

Media observers say the decision was a victory for the Times, which didn’t have to pay Franklin Prescriptions, Inc. a single cent. But that doesn’t mean the lawsuit wasn’t costly.

“I suspect it was in the six figures,” said attorney Elizabeth K. Ainslie, who represented the Times but declined to give an exact cost. “It was an expensive and difficult case to try.”

Franklin claimed it was defamed by the Times in an Oct. 25, 2000, article titled “A Web Bazaar Turns Into a Pharmaceutical Free-for-All.” The article included a graphic depiction of Franklin’s Web site, which, according to attorney George Bochetto, suggested that Franklin was guilty of the wrongdoing mentioned in the article. The company was never directly mentioned in the actual story.

The Times published a list of “safety tips” alongside the Franklin graphic, telling readers to be wary of pharmaceutical company Web sites that don’t include an address or phone number. Franklin’s Web site does list both those things, according to Bochetto, but the graphic showed a portion of the site in which the contact information could not be seen.

Ainslie argued that Franklin offered no evidence that the article harmed its business. The firm’s financial statements show that sales increased at a rate of $100,000 per year following the Times article, she said.

The jury decided the article “contained a defamatory implication,” which readers would comprehend and associate with Franklin, and that the implication was “substantially false,” according to the March 23 Legal Intelligencer.

However, the jury also found that Franklin had not shown any “actual harm that was substantially caused by the article,” and therefore was not entitled to damages, the Intelligencer reported.

“I was gratified that they found no actual harm,” Ainslie said, adding that as a basis for liability, an award would have been unconstitutional.

Judge Cynthia M. Rufe of U.S. District Court in Philadelphia presided over the trial.

(Franklin Prescriptions, Inc. v. The New York Times Co.; Media Counsel: Elizabeth K. Ainslie, Schnader Harrison Segal & Lewis, Philadelphia) AB

Editor’s note:  This piece incorrectly stated that the jury found defendant The New York Times “guilty” of defaming the plaintiff.  The jury found defendant The New York Times not liable for defamation, and the court entered judgment in favor of The New York Times.   

© 2004 The Reporters Committee for Freedom of the Press

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