Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Damages in Defamation Suits Restricted by NJ Supreme Court Ruling

Author: Joel N. Kreizman

Date: June 12, 2015

Key Contacts

Back

The Supreme Court of New Jersey recently held that plaintiffs in a defamation suit couldn’t recover both actual and presumed damages.

The Supreme Court of New Jersey recently held that plaintiffs in a defamation suit couldn’t recover both actual and presumed damages. The case is NuWave Investment Corp. v. Hyman Beck & Co.

The Facts of the Case

Plaintiffs Troy Buckner and John Ryan, who served as principles of NuWave Investment Corporation (NuWave) filed a New Jersey defamation suit against First Advantage Litigation Consulting, LLC, formerly BackTrack Reports, Inc. (BackTrack), regarding the content of background investigative reports prepared for clients considering investment opportunities. The reports on Buckner, Ryan and NuWave included many statements attributed to Hyman Beck & Company (Hyman Beck) and its employees, Alexander Hyman and Richard DeFalco, all of whom were also named as defendants in the suit.

The plaintiffs’ initial complaint asserted various causes of action, including trade libel and defamation, against all defendants. Summary judgment proceedings and dismissals left only the defamation claim against BackTrack for trial. The jury found BackTrack liable and awarded the following amounts as “presumed damages”: $1 million (NuWave), $150,000 (Buckner); $50,000 (Ryan). The jury further determined that NuWave suffered $1.406 million in “actual damages” as a proximate result of BackTrack’s defamatory statements, but neither Buckner nor Ryan suffered actual damages.

>On appeal, the Appellate Division agreed with the trial court that the challenged statements were largely defamatory, but determined that a jury cannot award both presumed nominal damages and other “actual damages.” Its decision largely relied on W.J.A. v. D.A., 210 N.J. 229 (2012), a decision entered while the appeal was pending in which the New Jersey Supreme Court confirmed the limited role of presumed damages.

The Court’s Decision – Damages in Defamation Suits

The New Jersey Supreme Court upheld the Appellate Division’s decision. As explained by the court, “Presumed damages is a procedural device that allows a defamation case to go to the jury in the absence of proof of actual damages. If the jury finds the statement defamatory, without proof of actual damages, only nominal damages can be awarded. Presumed damages may not be awarded in any higher amount.

In reaching its decision, the court clarified the distinctions between actual, punitive, and nominal damages with regard to defamation suits. As explained by the panel:

Actual damages can include harm caused by “impairment to reputation and standing in the community,” along with personal humiliation, mental anguish, and suffering to the extent that they flow from the reputational injury. All compensatory damages, whether considered special or general, depend on showings of actual harm, demonstrated through competent evidence, and may not include a damage award presumed by the jury. By way of contrast, “nominal” damages, including those that may be presumed, are not to be awarded as compensation and are not appropriate when compensatory damages are otherwise available to the plaintiff.

Because the court deemed it was “unclear whether the entirety of the jury award was influenced by the inadequate instruction on the proper roles of the various categories of damages and the circumstances under which they are available to plaintiffs,” it remanded the case for a new trial on damages.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Section 363 Sales in Bankruptcy: What Businesses, Lenders, and Buyers Need to Know post image

Section 363 Sales in Bankruptcy: What Businesses, Lenders, and Buyers Need to Know

When a company enters Chapter 11 bankruptcy, many assume the process will culminate in a lengthy reorganization plan. However, distressed businesses are increasingly being sold through a different mechanism — a sale under Section 363 of the United States Bankruptcy Code. A Section 363 sale allows a company, as a debtor-in-possession in bankruptcy, to sell […]

Author: John D. Giampolo

Link to post with title - "Section 363 Sales in Bankruptcy: What Businesses, Lenders, and Buyers Need to Know"
Zoning Laws Explained: What You Need to Know Before Buying Property post image

Zoning Laws Explained: What You Need to Know Before Buying Property

Before buying property, it is critical to determine whether local zoning laws may affect your plans. If you plan to redevelop the property, you will want to confirm that local zoning regulations permit development as intended. If acquiring property that is already developed, you must verify that the use is permitted in the underlying zoning […]

Author: Wendy Rubinstein Quiroga

Link to post with title - "Zoning Laws Explained: What You Need to Know Before Buying Property"
Special Needs Trusts in New Jersey: Planning for Your Loved One’s Future post image

Special Needs Trusts in New Jersey: Planning for Your Loved One’s Future

For parents of a child with a disability, estate planning raises concerns that go well beyond deciding who will inherit their assets. Parents may spend years making sure their child has the right care, services, and support. Eventually, they must also confront a difficult question: Who will take over when they can no longer do […]

Author: George McGowan

Link to post with title - "Special Needs Trusts in New Jersey: Planning for Your Loved One’s Future"
What Every Real Estate Investor Should Know Before Buying a Rental Property post image

What Every Real Estate Investor Should Know Before Buying a Rental Property

Before buying a New Jersey rental property, an investor should verify realistic operating numbers, the property’s legal and regulatory status, lead-based paint and flood compliance, the existing leases and tenant protections, and the right ownership structure. A rental property is more than a piece of real estate; it is an operating business subject to legal, […]

Author: Donald M. Pepe

Link to post with title - "What Every Real Estate Investor Should Know Before Buying a Rental Property"
Can You Change an Irrevocable Trust in New Jersey? post image

Can You Change an Irrevocable Trust in New Jersey?

In New Jersey, an irrevocable trust can sometimes be modified even though its name suggests otherwise, and one of the primary tools for doing so is a process called decanting. Whether decanting is available depends on the specific terms of the trust and the discretion given to the trustee. Key takeaways: New Jersey has no […]

Author: Marc J. Comer

Link to post with title - "Can You Change an Irrevocable Trust in New Jersey?"
How Intellectual Property Valuation Will Impact Business Transactions post image

How Intellectual Property Valuation Will Impact Business Transactions

Intellectual property valuation determines the monetary value of a business’s IP assets, and it drives outcomes in licensing deals, joint ventures, mergers and acquisitions, financing, and ownership disputes. The most valuable assets of a business are often the things that cannot be seen or touched: a proprietary process, a copyrighted work, brand recognition, or the […]

Author: Jay McDaniel

Link to post with title - "How Intellectual Property Valuation Will Impact Business Transactions"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. Message frequency may vary. You can reply STOP to opt-out of further messaging.
“If you would like to submit a file, please email it directly to info@sh-law.com.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!