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
How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide post image

How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide

Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]

Author: Christopher D. Warren

Link to post with title - "How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide"
Gross Lease vs. Net Lease: Understanding the Key Differences post image

Gross Lease vs. Net Lease: Understanding the Key Differences

Commercial leases can take a variety of forms, which is often confusing for both landlords and tenants. Understanding the different types, especially the gross lease structure, is important when selecting the lease that best suits your needs. One key distinction between lease types is how rent is calculated and paid. This article addresses the two […]

Author: Robert L. Baker, Jr.

Link to post with title - "Gross Lease vs. Net Lease: Understanding the Key Differences"
What to Do If You Are Impacted by a Retailer Bankruptcy Part 2 post image

What to Do If You Are Impacted by a Retailer Bankruptcy Part 2

Over the past year, brick-and-mortar stores have closed their doors at a record pace. Fluctuating consumer preferences, the rise of online shopping platforms, and ongoing economic uncertainty continue to put pressure on the retail industry. When a retailer seeks bankruptcy protection, a myriad of other businesses are often impacted. Whether you are a supplier, customer, […]

Author: Brian D. Spector

Link to post with title - "What to Do If You Are Impacted by a Retailer Bankruptcy Part 2"
The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business post image

The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business

Since his inauguration two months ago, Donald Trump’s administration and the Congress it controls have indicated important upcoming policy changes. These changes will impact financial services policies and priorities. The changes will particularly affect cryptocurrency, as well as banking rules and regulations. Key Regulatory Changes in Cryptocurrency For example, in the burgeoning cryptocurrency business environment, […]

Author: Dan Brecher

Link to post with title - "The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business"
Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1 post image

Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1

The retail sector has experienced a wave of bankruptcy filings over the last year. Brick-and-mortar businesses in financial distress include big-name brands like Big Lots, Party City, The Container Store, and Vitamin Shoppe. When large retailers seek bankruptcy protection, they are not the only businesses impacted. Landlords can be particularly hard hit. While commercial landlords […]

Author: Brian D. Spector

Link to post with title - "Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1"

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.

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

Please select a category(s) below: