BILL ANALYSIS Ó SENATE JUDICIARY COMMITTEE Senator Hannah-Beth Jackson, Chair 2015-2016 Regular Session AB 998 (Wagner) Version: June 25, 2015 Hearing Date: July 14, 2015 Fiscal: No Urgency: No RD SUBJECT Civil law: libel: damages DESCRIPTION Existing law limits damages for libel and slander when a newspaper or radio broadcast issues a retraction. This bill would expand this "correction statute" by applying it to daily or weekly news publications, as defined. This bill also includes specified legislative findings. BACKGROUND Defamation is generally the communication of a false statement to someone other than the person defamed that harms the reputation of that person. Libel is a term that refers to a written defamation; rather, a published false statement that is injurious to a person's reputation. Inherently, there is a challenge in the area of defamation law to balance the need to protect reputation with the desire to safeguard expression. (Chemerinsky, Constitutional Law Principles and Policies (2011) 4th Edition, p. 1078.) At common law, it was conclusively presumed that general damages resulted from the publication of libel. "The practical result is that the jury may award not only nominal damages, but substantial sums in compensation of the supposed harm to the plaintiff's reputation, without any proof that it has in fact occurred." (Werner v. Southern California Associated Newspapers (1950) 35 Cal.2d 121, 126 citing Prosser, Torts, Sec. 92, p. 797.) In enacting Section 48a of the Civil Code, the California AB 998 (Wagner) Page 2 of ? Legislature made the public policy determination to allow for the limitation of general damages for libel where a specified retraction is published, in order to encourage a more active press by insulating newspapers from liability arising from erroneous published statements. Originally enacted in 1931 to limit the liability of newspapers, when the publication was made without malice through misinformation and mistake, and a retraction was demanded and published, the section has only been amended once since, in 1945, into its current form which provides that in any action for damages for the publication of a libel in a newspaper, or of a slander by radio (including both visual and sounds radio) broadcast, the plaintiff may recover no more than special damages unless a correction is demanded and is not published or broadcast, as provided. (See 6A Ca Jur Assault and Other Wilful Torts Sec. 230.) In other words, publishers have an opportunity to correct errors before being liable for defamation. As stated by the California Supreme Court in Werner v. Southern California Associated Newspapers (1950) 35 Cal.2d 121, 128: "In view of the complex and far-flung activities of the news services upon which newspapers and radio stations must largely rely and the necessity of publishing news while it is new, newspapers and radio stations may in good faith publicize items that are untrue but whose falsity they have neither the time nor the opportunity to ascertain." This bill would amend Section 48a to replace reference to "newspapers" with "daily or weekly publications" thereby expanding the opportunity to limit defamation damages for libelous statements through the issuance of retractions to other modern day mediums of news dissemination, such as online publications. CHANGES TO EXISTING LAW Existing law , article I, Section 2 of the California Constitution, provides that every person may freely speak, write and publish his or her sentiments on all subjects, being responsible for the abuse of this right. A law may not restrain or abridge liberty of speech or press. (Cal. Const., art. I, Sec. 2(a).) Existing law provides that, besides the personal rights mentioned or recognized in the Government Code, every person has, subject to the qualifications and restrictions provided by law, the right of protection from bodily restraint or harm, from AB 998 (Wagner) Page 3 of ? personal insult, from defamation, and from injury to his personal relations. (Civ. Code Sec. 43.) Existing law provides that defamation is effected by either of the following: (1) libel; or (2) slander. (Civ. Code Sec. 44.) Existing law defines "libel" as a false and unprivileged publication by writing, printing, picture, effigy, or other fixed representation to the eye, which exposes any person to hatred, contempt, ridicule, or obloquy, or which causes him to be shunned or avoided, or which has a tendency to injure him in his occupation. (Civ. Code Sec. 45.) Existing law further specifies that a libel which is defamatory of the plaintiff without the necessity of explanatory matter, such as an inducement, innuendo or other extrinsic fact, is "a libel on its face." Existing law provides that defamatory language that is not libelous on its face is not actionable unless the plaintiff alleges and proves that he has suffered special damage as a proximate result thereof, as specified. (Civ. Code Sec. 45a.) Existing law defines "slander" as a false and unprivileged publication, orally uttered, and also communications by radio or any mechanical or other means which: charges any person with a crime, or with having been indicted, convicted, or punished for crime; imputes in him the present existence of an infectious, contagious, or loathsome disease; tends directly to injure him in respect to his office, profession, trade or business, either by imputing to him general disqualification in those respects which the office or other occupation peculiarly requires, or by imputing something with reference to his office, profession, trade, or business that has a natural tendency to lessen its profits; imputes to him impotence or a want of chastity; or which, by natural consequence, causes actual damage. (Civ. Code Sec. 46.) Existing law provides that in any action for damages for the publication of a libel in a newspaper, or of a slander by radio broadcast, a plaintiff can recover no more than special damages unless a correction is demanded and not published or broadcast, as specified. Existing law requires that the plaintiff serve, within 20 days after knowledge of the publication or broadcast of the libelous statements, a written notice upon the publisher AB 998 (Wagner) Page 4 of ? or broadcaster, at the place of publication or broadcast, specifying the statements claimed to be libelous and demanding that they be corrected. (Civ. Code Sec. 48a(1).) Existing law provides that if a correction is demanded, as specified above, and not published or broadcast in substantially as conspicuous a manner in the newspaper or on the broadcasting station as the libelous statements were made, in a regular issue thereof published or broadcast within three weeks after service of the notice, the plaintiff can seek recovery of general, special, and exemplary damages, as specified, except that no exemplary damages can be recovered unless the plaintiff proves that the defendant made the publication or broadcast with actual malice (which cannot be inferred or presumed from the publication or broadcast) and only then in the discretion of the court or jury. (Civ. Code Sec. 48a(2); see Civ. Code Sec. 48a(4) for definitions of "general," "special" and "exemplary" damages, as well as "actual malice.") Existing law requires that any correction published or broadcast in substantially as conspicuous a manner in the newspaper or on the broadcasting station as the libelous statements, prior to receipt of a demand for correction, be of the same force and effect as though the correction had been published or broadcast within three weeks after a correction demand. (Civ. Code Sec. 48a(3).) This bill would replace references to "newspaper" with "daily or weekly news publication," as defined to mean a publication, either in print or electronic form, that contains news on matters of public concern and that publishes at least once a week. This bill would state the intent of the Legislature to ensure that weekly and online publications are afforded the same protection under Section 48a as is afforded to a daily newspaper to the extent that the weekly and online publications perform the same news-disseminating function as a daily newspaper. The bill would further state that the Legislature finds and declares that the rulings in Burnett v. National Enquirer, Inc. (1983) 144 Cal.App.3d 991 and Condit v. National Enquirer, Inc. (2002) 248 F.Supp.2d 945 do not fully recognize that the policy of Section 48a to protect enterprises engaged in the immediate dissemination of news on matters of public concern, insofar as time constraints do not reasonably permit such enterprises to AB 998 (Wagner) Page 5 of ? check sources for accuracy and stories for inadvertent errors, should extend to online publications and weekly newspapers, which publish breaking news on deadlines indistinguishable from daily newspapers. Lastly, the bill would specify that it is not the intent of the Legislature that Section 48a should apply to periodicals that publish at longer than weekly intervals, nor is it the intent of the Legislature that Section 48a should apply to casual postings on a social networking Internet Web site, chat room, electronic bulletin board, discussion group, online forum, or other related Internet Web site. COMMENT 1. Stated need for the bill According to the author, "California's Libel Retraction Statute requires that libel victims ask the publisher to correct or retract the libelous statement (and be denied) before the victim can sue for punitive damages. The current statute only applies to 'libel in a newspaper, or [?] slander by radio broadcast.' As a result, online publications identical to print ones are being sued directly without being asked for retraction and comment. This bill updates the California statute to include online publications to ensure that the law is applied fairly across all publications." 2. Bill would expand the protections of the retraction statute Section 48a of the Civil Code, California's "correction statute," provides an opportunity for "newspapers" and "radio broadcasters" (including both visual and sound radio broadcasters) to correct or retract a libelous or slanderous statement in order to limit the damages that could be recovered in a defamation action. Under this statute, a plaintiff is limited to recovery of special damages, unless he or she demands a correction and is refused by the defendant. "Special damages" are defined as "all damages which plaintiff alleges and proves that he has suffered in respect to his property, business, trade, profession or occupation, including such amounts of money as the plaintiff alleges and proves he has expended as a result of the alleged libel, and no other." If the correction is demanded and refused, the plaintiff can seek recovery of general damages (i.e. damages for loss of reputation, shame, mortification, and hurt feelings) and, where appropriate, exemplary, or punitive, damages (i.e. damages which may in the AB 998 (Wagner) Page 6 of ? discretion of the court or jury be recovered in addition to general or special damages for the sake of example and by way of punishing a defendant who has made a publication with actual malice). This bill seeks to expand the protections of the correction statute to daily or weekly publications, which the bill would define to mean "a publication, either in print or electronic form, that contains news on matters of public concern and that publishes at least once a week." As a practical matter, this would include not just traditional newspapers, but presumably would include online news outlets such as Huffington Post, CNN, Fox, MSNBC, online versions of newspapers, and others. It would also potentially capture weekly magazines, such as National Enquirer, that were previously excluded from the protection of the correction statute. Under current law, "[t]he essential question" for whether or not the correction applies to a particular type of print or written medium "is not whether a publication is properly denominated a magazine or by some other designation, but whether it ought to be characterized as a newspaper within contemplation of the statute, a question which must be answered in terms which justify an expanded barrier against damages for libel only in those instances in which the constraints of time, as a function of the requirements associated with production of the publication, dictate such results." (6A Cal. Jur. Assault and Other Wilful Torts Sec. 232, citing Burnett v. National Enquirer, Inc. (1983) 144 Cal.App.3d 991.) In Burnett v. National Enquirer, Inc., the Court of Appeal considered the question of whether a weekly publication that published slanderous statements about a famous personality was excluded from the protection afforded to "newspapers" under the correction statute. There, the court upheld the trial court's conclusion that the defendant publication was not a "newspaper" for purposes of the correction statute, based on the reasoning that the statute is limited to those who engage in the immediate dissemination of news. In contrast, the evidence indicated that the publication in question, the National Enquirer, provided little to no coverage of subjects such as politics, sports, or crime; that in general it did not make reference to time; and that the normal 'lead time' for its subject matter was one to three weeks" as opposed to "day to day" like a newspaper. (144 Cal.App.3d at 1000.) Accordingly, citing dicta in the California Supreme Court decision in Werner v. Southern California Associated Newspapers (1950) 35 Cal.2d 121 regarding the purpose of the statute, which "hing[es] on the inability of AB 998 (Wagner) Page 7 of ? newspapers to verify information while optimally disseminating news," the court determined that the National Enquirer should not be characterized as a "newspaper." (Id. at 1001.) Other courts have similarly refused to extend the protection of the correction statute to weekly publications, under the theory that longer "lead times" allow for an opportunity to uncover the truthfulness of a statement and that the legislative policy of Section 48a is limited to publications which engage in the immediate dissemination of news, where one cannot always check their sources for accuracy and their stories for inadvertent publication errors. For example, in Condit v. National Enquirer (2002) 248 F.Supp.2d 945, a case involving a libel action brought by a former congressman's wife against the National Enquirer, the federal district court noted that a news publication subject to the correction statute, Section 48a, "must function under such time constraints in its mode of operation that prevent accuracy checks or make it impractical to avoid inadvertent publication errors." (Id. at 955.) Using the factors employed in the Burnett case, the court concluded that the Enquirer's overall content established that its primary focus was not "'the very free and rapid dissemination of news (Section 48a) seeks to encourage.'" (Id. at 958-959, citing Field Research Corp. v. Superior Court (1969) 71 Cal.2d 110, 115 (emphasis added in Condit).) The court was unpersuaded by the fact that the Enquirer occasionally published significant breaking news, ultimately concluding that the Enquirer did not qualify as a newspaper under Section 48a, because the record did not establish that the Enquirer was under pressure to publish news as it happened, or "under circumstances where it cannot confirm the accuracy and reliability of its information and sources. Rather the Enquirer appears to 'have the advantage of greater leisure in which to ascertain the truth of allegations before publishing them.' [Citation omitted.]" (Id. at 959, 963.) That being said, it does not appear that any case, including Werner or Field Research, relied upon in Burnett and Condit, has "squarely addressed the question of whether only those media which cover news events are within the purview of section 48a. [. . . Werner] did not affirmatively conclude what the Legislature's purpose was in enacting the statute; only that the Legislature 'could' have had a reasonable basis for classifying newspapers and radio stations apart from others." (Kalpoe v. Superior Court, 222 Cal.App.4th 206, 215.) Indeed, in AB 998 (Wagner) Page 8 of ? upholding the constitutionality of correction statute under equal protection and due process grounds, Werner merely acknowledged that "[t]he Legislature may reasonably conclude that the public interest in the dissemination of news outweighs the possible injury to a plaintiff from the publication of a libel, and may properly encourage and protect news dissemination by relieving newspapers and radio stations from all but special damages resulting from defamation, upon the publication of a retraction." (Werner, 35 Cal.2d at 128.) This bill appears to now represent a public policy decision to further limit the remedies available to an injured party in order to expand the First Amendment protections for certain publishers who issue retractions of potentially slanderous statements under the correction statute, even where the publisher arguably had longer periods to verify the statements in the case of weekly publications. Significantly, the bill would specify in its legislative findings that the rulings in Burnett and Condit do not fully recognize that the policy of Section 48a to protect enterprises engaged in the immediate dissemination of news on matters of public concern, insofar as time constraints do not reasonably permit such enterprises to check sources for accuracy and stories for inadvertent errors, should extend to online publications and weekly newspapers, which publish breaking news on deadlines indistinguishable from daily newspapers. At the same time, the bill's legislative findings would specify that it is not the intent of the Legislature that Section 48a should apply to periodicals that publish at longer than weekly intervals, or to casual postings on a social networking Internet Web site, chat room, electronic bulletin board, discussion group, online forum, or other related Internet Web site. Support : California Newspaper Publishers Association Opposition : None Known HISTORY Source : Author Related Pending Legislation : None Known Prior Legislation : AB 2368 (Wagner, 2014) would have expanded AB 998 (Wagner) Page 9 of ? these libel provisions to additionally include libel in a periodical or other medium, either in print or electronic form. That bill died in the Assembly Judiciary Committee without a hearing. Prior Vote : Assembly Floor (Ayes 76, Noes 0) Assembly Judiciary Committee (Ayes 10, Noes 0) **************