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
Reputational Risk and Legal Exposure: Why New Jersey Businesses Must Manage Them Together post image

Reputational Risk and Legal Exposure: Why New Jersey Businesses Must Manage Them Together

New Jersey businesses must manage legal and reputational risk together because modern disputes play out on two fronts at once: the legal proceeding itself and the court of public opinion, where customers, employees, investors, and business partners often reach conclusions long before a judge or jury has had the opportunity to evaluate the facts. Success […]

Author: Sean M. Pena

Link to post with title - "Reputational Risk and Legal Exposure: Why New Jersey Businesses Must Manage Them Together"
Eviction Is Not Always the End: Understanding Post-Possession Rent Claims in New Jersey and New York post image

Eviction Is Not Always the End: Understanding Post-Possession Rent Claims in New Jersey and New York

No. An eviction does not automatically end a tenant’s obligation to pay rent. Post-eviction rent claims are common because recovering possession resolves who has the right to occupy the premises, but it does not extinguish the tenant’s contractual obligations under the lease. Whether unpaid or future rent remains owed depends on three factors: the lease’s […]

Author: Donald M. Pepe

Link to post with title - "Eviction Is Not Always the End: Understanding Post-Possession Rent Claims in New Jersey and New York"
Company Dissolved? Legal and Financial Consequences to Expect post image

Company Dissolved? Legal and Financial Consequences to Expect

A company is dissolved; legally, it ceases to exist. Accordingly, dissolution results in significant legal and financial consequences.  It is a process that must be properly managed to avoid continuing liability. The Corporate Dissolution Process Corporate dissolution is the legal process of formally closing a corporation, paying its debts and distributing the remaining assets. Most […]

Author: Jay McDaniel

Link to post with title - "Company Dissolved? Legal and Financial Consequences to Expect"
The Legal Implications of Signing a Triple Net Lease post image

The Legal Implications of Signing a Triple Net Lease

A triple net lease is a commercial lease in which the tenant pays the property’s real estate taxes, insurance, and maintenance costs, known as the three nets, in addition to base rent. They are most often used in freestanding retail and office buildings and in large single-tenant industrial properties, with terms that typically run 10 […]

Author: Donald M. Pepe

Link to post with title - "The Legal Implications of Signing a Triple Net Lease"
When to Settle and When to Fight: A Litigator's Framework post image

When to Settle and When to Fight: A Litigator's Framework

Every lawsuit comes with a cost, and knowing when to settle a lawsuit is one of the most consequential decisions a business owner will face. Experienced litigators understand how to minimize cost and obtain certainty for their clients. For many business owners, the decision is viewed almost entirely through a financial lens: What will it cost […]

Author: Sean M. Pena

Link to post with title - "When to Settle and When to Fight: A Litigator's Framework"
Types of Business Law Services Companies Actually Use post image

Types of Business Law Services Companies Actually Use

Business law services are legal services that help companies form, operate, transact, protect assets, manage risk, and resolve disputes. The phrase can sound broad because it is broad. A company may need help with entity formation one month, contract review the next, a commercial lease after that, and a business dispute later in the year. […]

Author: Scarinci Hollenbeck, LLC

Link to post with title - "Types of Business Law Services Companies Actually Use"

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!