CEOs 2 – Media 0

A ground-breaking court decision came out this week involving media coverage of Canadian business executives. The Toronto Star lost a ~$1.5 million libel case to a businessman from Haileybury, Ontario, a town 100 miles north of North Bay. It is a jury verdict, which makes it unique in a way as most notable libel trials always seem to be before a judge. This is the Star’s second major libel loss in the past couple of years, having gone almost two decades without a black eye in this area.

This is an unbelieveably large sum for libel, as the big prior court awards (Leenan and Myers) had been in the $500k-$700k range; they were doctors btw. It is good news, however, as a $50,000 judgment in 1985 might have made sense, but if CEOs are earning seven figure comp, those 20 year-old damage award figures are no longer relevant nor appropriate.

Here is the case outline, at least from the Star’s standpoint:

HAILEYBURY, ONT.–A jury has awarded nearly $1.5 million in damages against the Star, finding that the newspaper libelled a wealthy Northern Ontario businessman when it published an article about his controversial plans to expand his personal golf course.

The jury of three men and three women, drawn from the area surrounding this town 160 kilometres north of North Bay, last night awarded $400,000 in general damages to Peter Grant and $50,000 to his company, Grant Forest Products Inc., a major local employer.

The jury also awarded Grant $25,000 in aggravated damages and $1 million in punitive damages. Superior Court Justice Paul Rivard had instructed the jury that punitive damages were meant to deter others from outrageous or reprehensible conduct.

Grant’s lawyer, Peter Downard, said outside court that “the verdict speaks for itself.” He declined further comment.

Earlier yesterday, Downard told the jury that the Star, as a major newspaper, must be punished for “abusing its power” to defame a very private man.

“This is a case about holding big media accountable to the law,” Downard said in his final arguments at the libel trial.

Grant and his company sued the Star over a June 23, 2001 article headlined “Cottagers teed off over golf course; Long-time Harris backer awaits Tory nod on plan.”

They say it falsely implied that Grant was exploiting his ties to the then-Mike Harris provincial government to try to manipulate the approval process for his proposed golf-course expansion on Twin Lakes, near here.

But lawyer Paul Schabas, arguing for the Star, told the jury that the article by senior writer Bill Schiller is a fair and accurate account of a matter of broad public interest.

Grant’s plans to buy 10.5 hectares of Crown land and expand by 10 times the size of his Frog’s Breath golf course sparked strong opposition from neighbouring cottagers worried about its environmental impact, he said. It was later approved in 2004.

“What we have here is an angry man with deep pockets trying to muzzle” perfectly accurate and legitimate reporting, Schabas said.

He said Grant repeatedly rebuffed Schiller’s attempts to get his side of the story and in fact threatened to sue before the article was even published.

Schiller took pains to consult 180 documents and interview many people involved in the controversy, Schabas said.

The article never went so far as to say that Grant in fact exerted political pressure on the process – because Schiller had no proof of that – but simply reflected cottagers’ “honestly held opinions,” Schabas said.

These are the take-aways from a layman’s perspective:

– lawyers always tell plaintiffs to avoid juries for a libel trial as this part of the law is always seen to be too complex for a jury to understand, or else the jury won’t have sympathy for a successful professional with hurt feelings; I find it interesting that a businessman had the confidence to trust his neighbours to come up with a decision in this case.
– the jury obviously didn’t buy the notion that a journalist can write a negative piece about someone even if it’s “a fair and accurate account of a matter of broad public interest”; after all, who says it’s fair?? And, more importantly, who decides what’s in the “broad public interest”? A journalist might think it was fair, or of interest, but the jury doesn’t have to.
– that the situation sparked “sparked strong opposition” was claimed to be proof that the topic warranted coverage; apparently not.
– even though the Star “attempted” to get the Plaintiff’s side of the story, the jury didn’t care. This might be the most important part of the decision, in fact. Just because a newspaper wants to print a story about you doesn’t mean you have to speak to them. One has every right to seek privacy, and the mere fact that the Star tried to speak to the Plaintiff didn’t sway the jury that he gave away his right to privacy and fair treatment just because he wouldn’t agree to an interview.
– the journalist claimed to have done tremendous amounts of research and many interviews, but it still didn’t sway the jury that the piece was fair or accurate.
– the Star tried to use the traditional approach of: “that’s what my source told me”, and “I believe he honestly believed it”. The fact that the people they interviewed “honestly believed” that the businessman in question was using his influence to increase the size of his golf course didn’t save their bacon; the jury didn’t think the fact that some in the community “thought” the businessman was pulling political strings removed the Star’s duty to get the facts right.
– you have to find it ironic that Torstar is referring to Mr. Grant’s “deep pockets”, when they’re the ones spending millions in legal bills each year to deal with the daily cut and thrust of producing newspapers.
– Give Superior Court Justice Paul Rivard credit for instructing the jury “that punitive damages were meant to deter others from outrageous or reprehensible conduct” (All single source libellists will have to be on guard now, TT.)
– The Plaintiff’s lawyer obviously tapped into the local mistrust of the media if he thought he could use a line like the Star must be punished for “abusing its power”.

While Blakes will undoubtedly appeal the ruling on behalf of their client, this will hopefully send shockwaves through the libel bar, and those insurance companies that still provide the media with libel insurance. How much is a person’s reputation worth? Even if the awards are reduced on appeal, the message has been sent.

The price of a business person’s reputation just went up. Bravo for that.

MRM