The Volokh Conspiracy

Mostly law professors | Sometimes contrarian | Often libertarian | Always independent

Free Speech

Libel and Presumed Damages in the Internet Age

|

From Marcus v. Swanson, decided today by the Kansas Court of Appeals, in an opinion by Judge Gordon Atcheson, joined by Presiding Judge Stephen Hill:

In this case, we must apply defamation law crafted 40 years ago to a decidedly 21st century set of facts. A plastic surgeon [Swanson] asserted that a "review" a disgruntled former patient [Marcus] posted on an internet site falsely impugned his professional reputation. A jury sitting in Johnson County District Court agreed and entered a $15,000 verdict for the physician. The district court set aside the verdict because the physician, who continued to maintain a full schedule of patients, did not prove any actual harm to his reputation as a result of the post—a necessary component for a successful defamation claim under Kansas law.

Under the First Amendment, a state may allow prevailing plaintiffs to recover "presumed damages" even in the absence of specific proof of harm to reputation, especially when it comes to speech on matters of private concern. Generally speaking, this happens under the "libel per se" doctrine, which in most states allows plaintiffs to recover such presumed damages if the statements fall within some specific categories that are seen as especially harmful, including allegations of incompetence or misconduct in one's profession. (Note that the parties in this case agreed that this speech was on a matter of private concern, though the defendant could have argued that public consumer complaints are on matters of public concern, as many courts have indeed held.)

But Kansas law has rejected this principle as a matter of state law, see Gobin v. Globe Publishing Co. (Kan. 1982), and the majority held that this was binding here:

Basically, Dr. Swanson attempts to craft a rule that would permit a plaintiff to prevail on a defamation claim in some circumstances without showing actual harm. Under his approach, a plaintiff would have a judicial forum to prove the falsity of the challenged statements when the publisher acted with an evil purpose and could recover nominal actual damages and, perhaps, punitive damages. Such a formulation of defamation law would benefit Dr. Swanson in this case. More broadly, the rule would offer a path for name-clearing vindication in some cases and, in that way, would be similar to libel per se.

Rather than relying on the message communicated, as does libel per se, Dr. Swanson's rule would turn on the publisher's pernicious intent in choosing to communicate a defamation whatever its content. Despite Dr. Swanson's characterization otherwise, he has asked us to change Kansas defamation law, albeit in an intriguing way. Because common-law doctrine defines the scope of permissible defamation claims, we cannot simply cast aside what the Kansas Supreme Court has declared the law to be.

Dr. Swanson's point on appeal also implicitly suggests libel per se may serve a significant remedial purpose in defamation law, especially in the age of the internet. Anyone with a computer and access to the internet can reach an extraordinarily large audience with stunning immediacy and a degree of permanency that outstrips other means of publication. Those tools offer a soapbox and megaphone that reach millions—not just passersby on the town square or recipients of leaflets handed out in front of the state capitol or even readers of a full-page advertisement in the print edition of The New York Times such as the one that prompted the Sullivan case. That ability to communicate carries with it an extraordinary power to promote what may be frivolous or profound or good or malevolent.

In laboratory conditions, the marketplace of ideas is supposed to be self-regulating in the sense the intrinsically sound will drive out the unsound. But the marketplace doesn't necessarily function that way in the real world. Defamation law, in turn, provides a tailored remedy to persons besmirched in public forums, especially when simply putting out a counter-narrative may be an ineffective antidote for particularly corrosive falsehoods. That is, the marketplace sometimes works too slowly or not at all, and some statements about some people are so obviously wrongful, such as false representations demeaning them in their chosen occupations, that their very publication arguably should permit vindication in a judicial forum. But the law should not be so onerous as to stifle vigorous and even controversial debate on matters of public concern. Balancing those competing and undeniably valuable objectives typically falls to the courts in fashioning defamation law.

As this case illustrates, the internet has radically altered how the forces that drive the marketplace of ideas operate. Given the epochal change, some courts have closely examined whether and how libel per se may provide a needed check on those forces in certain circumstances. They have chosen to retain libel per se, at least in cases involving private parties and private matters…. [Other cases have rejected libel per se.] … We do not mean to offer some veiled suggestion Kansas defamation law should be revised and simply repeat our observations that things are quite different now than they were when Gobin was decided.

Regardless of those observations, we are bound to apply the common law as the Kansas Supreme Court has presently defined it. On that basis, we reject Dr. Swanson's argument that the jury's finding that Marcus acted maliciously in the traditional tort sense salvages the verdict in his favor without proof of any actual damage to his reputation.

Judge Sarah Warner dissented in part, concluding that "there was sufficient evidence presented at the trial to allow the defamation claim against Marcus to go to the jury":

Marcus left a Yelp post, including a one-star rating and a lengthy narrative, on Dr. Swanson's practitioner page and the page for his medical practice. The post stated that Dr. Swanson was a "monster" who was unlicensed and unprincipled and who had committed medical malpractice. The jury found Marcus' post to be defamatory—the information in the post was false and exposed Dr. Swanson to public contempt or ridicule or deprived him of the benefits of public confidence and social acceptance. The jury also found the post to be willful and malicious—Marcus intended to injure Dr. Swanson and did so without any reasonable justification or excuse. Though Marcus cross-appealed, she has not challenged these findings. We thus accept them as true.

The only question that remains is whether there was evidence that Marcus' Yelp post injured Dr. Swanson's reputation. After being instructed on this element of a defamation claim, the jury found Dr. Swanson had proven reputational injury and awarded him $15,000 in damages. The district court and the majority of this panel disagree with the jurors' assessment. But viewing the evidence in the light most favorable to Dr. Swanson, as our standard of review requires, I trust the jury's finding as one informed by the evidence, reasonable inferences, and common experience.

Dr. Swanson presented evidence at trial showing that Yelp is a review-aggregator platform. Yelp users leave reviews of businesses, along with a corresponding star-rating, with five stars being the highest rating and one star the lowest. The platform then highlights certain reviews as "recommended" commentary and deemphasizes other reviews that the platform does not recommend. Yelp also provides each business with a representative star-rating based on the users' submissions.

For whatever reason, Yelp highlighted Marcus' defamatory post as a "recommended" review. Neither Dr. Swanson nor Marcus provided any evidence about what criteria Yelp uses to determine whether a post will be recommended or not. But regardless of Yelp's internal criteria, Marcus testified that she posted her statement on Yelp because she wanted other people to see it. And after Yelp highlighted her review as recommended, Marcus refused to remove the post at Dr. Swanson's—and then his lawyer's—request. A reasonable inference from this testimony is that Marcus created her post, and then insisted that it remain, because she wanted to influence other people's views about Dr. Swanson and his medical practice.

Dr. Swanson testified that he was concerned enough by the post that he and his staff went through significant—though unsuccessful—efforts to remove it. This included "hundreds" of hours of his and his staff's time.

One of Dr. Swanson's patients testified that when she saw the Yelp post, she felt "concerned that it might have a negative effect on his practice" and talked with the doctor so "he knew it was out there." … It is true, as the majority points out, that—despite Marcus' post—this patient sought and received treatment from Dr. Swanson a second time. But her testimony regarding reputational harm did not focus on her decision to receive treatment; it concerned the post's impact on Dr. Swanson's overall Yelp presence….

Dr. Swanson also provided evidence about the effect of Marcus' post on his Yelp star-rating. He testified that before Marcus' post, his star-rating—essentially a snapshot of his aggregate business ranking—was 5 stars. But after Marcus' 1-star post, his star-rating dropped to 3.5 stars. Dr. Swanson testified that without Marcus' post, he would have a 5-star rating….

I find this evidence sufficient to demonstrate reputational injury. Marcus created her Yelp post intending for people to see and be influenced by it. She refused to remove the post when it was highlighted by the Yelp platform because she knew more people would see her post and be influenced by it. Dr. Swanson's patient reached out to him because she was concerned about the post's negative impact. This combination of evidence, without more, may have danced on the razor's edge of speculation. But Marcus' post also affected Dr. Swanson's reputation in a real, measurable sense: It reduced Dr. Swanson's Yelp star-rating from 5 to 3.5 stars. Though people might reasonably disagree about how all this evidence should be interpreted, it is sufficient—in my view—to support the jury's finding that the post harmed Dr. Swanson's reputation….

[T]he majority opinion notes the absence of evidence relating to the precise monetary impact of Marcus' post on Dr. Swanson's practice. But in doing so, the majority conflates reputational injury and economic loss. While Kansas law requires a person to show actual injury to prevail on a defamation claim, courts have never limited reputational injury to monetary losses—a reality the majority recognizes. In fact, Kansas law contemplates the opposite—that reputational injury can (and often does) include noneconomic harm [such as impairment of reputation and standing in the community, personal humiliation, and mental anguish and suffering] ….

There is no question that noneconomic injuries can be difficult to quantify, regardless of the type of claim or issues raised. But courts routinely entrust juries with this task, whether it be in assessing pain and suffering in personal-injury cases, reputational injury in defamation suits, or other noneconomic injuries such as emotional distress. And Marcus does not dispute the suitability of the jury's $15,000 damage award—a factual assessment to which appellate courts show great deference. She argues that Dr. Swanson's defamation claim fails as a matter of law, asserting there is no evidence to support the jury's finding that Marcus' Yelp post injured Dr. Swanson's reputation….

Here's the majority's response to Judge Warner's argument:

[The dissent's] discussion does no more than elaborate on Dr. Swanson's argument that it "stands to reason" Elysia Marcus' Yelp post must have diminished his professional reputation. The argument trades on speculation and assumption—not facts. The trial record and the dissent are bereft of colorable direct or circumstantial evidence supporting a diminution of reputation. The dissent, however, does backhandedly make a case for why presumed damages might reflect good policy in cases similar to this, allowing individuals falsely demeaned in their trade or profession to clear their names in district court proceedings without having to prove actual reputational harm. The dissent really rests on a call for restoring libel per se in at least some circumstances….

For all the trial record shows, visitors to the Yelp page may have routinely dismissed the post as a hysterical rant unworthy of credence or the work of a gallivanting internet troll randomly lobbing fake bombshells for his or her misguided amusement. And those skeptical visitors likewise would have discounted Dr. Swanson's aggregate rating of 3.5 stars as unrealistically low as a result of the unfounded negative review. Ultimately, the notion that somebody somewhere must have been adversely disposed toward Dr. Swanson because of the post cannot pass for evidence of actual reputational harm. If that were the law in Kansas, widespread publication of a falsehood alone would be sufficient without evidence of any diminution of reputation….

A loss of business (and the resulting economic harm) could be circumstantial proof of a reputational injury if the downturned came on the heels of the publication of a defamatory statement, particularly if the statement attacked the subject's professional abilities. Here, Dr. Swanson offered no evidence of the kind and apparently maintained a full practice notwithstanding Elysia Marcus' post.

We also pointed out that Kansas cases recognize other forms of circumstantial evidence, such as the physician who asserted he stopped receiving inquiries from recruiters inviting him to consider positions heading departments at major hospitals and was no longer asked to write or peer review articles for professional journals. Those lost career opportunities would suggest a loss of professional standing or reputation without necessarily entailing any direct economic harm. Here, again, Dr. Swanson offered no comparable evidence….

Against that backdrop and lack of evidence, we pointed out the jury's award of $15,000 appeared to be pulled out of the air. The seemingly random amount simply illustrated the weakness of verdict precisely because Dr. Swanson marshalled no evidence of an actual injury to his reputation. As the dissent says, adequate compensation for proved reputational harm may be difficult to quantify in dollars and cents, and a jury's award should be given the utmost respect. But an award rendered in the absence of evidence on a necessary element of the asserted legal claim cannot stand.

Dr. Swanson presented only guesses that the Yelp post must have harmed his reputation rather than direct or circumstantial evidence that it actually did so. Accordingly, we have done no more than our required duty in affirming the district court's ruling granting Elysia Marcus' motion for judgment as a matter of law.