Holden v. PIONEER BROADCASTING CO.

O’CONNELL, J.

This is an action to recover damages for an alleged libelous statement made by defendants during a television broadcast. The defendant company is the owner of the television station; the individual defendants are the news director and announcer respectively.

The complaint alleges “[t]hat on or about the 30th day of January, 1959, on a certain news broadcast over said television station, Defendants, and each of them, did broadcast and publish a certain photograph of said restaurant operated by Plaintiff and accompanied by words uttered and published by the Grand Jury '* * * for the County of Multnomah * * The grand jury report referred to a “deplorable situation” involving runaway girls who, it was reported, were being given-aid and assistance. by the operators of plaintiff’s restaurant and that “these girls- soon: find themselves engaged in prostitution and similar vices.” The complaint further alleges that these utterances were false and libelous and that they were made.“willfully, maliciously and wrongfully.” Special, general and punitive damages were alleged in the complaint. Defendants moved to strike the allegations of general and punitive damages on the ground that the complaint did not allege that defendants intended to defame plaintiff, or that defendants refused to publish a- requested retraction of a non-intentional libel, the pleading and proof of which are conditions precedent to recovery of such damages under ORS 30.155 to 30.175. The trial court granted defendants’ motion and, plaintiff failing to plead further, judgment was entered for defendants, from which plaintiff appeals.

The statutes material to this appeal are as follows:

“ORS 30.155 Damages recoverable for defamation by radio, television, motion pictures, newspaper or printed periodical. Except as provided in ORS 30.160, in an action for damages on account of a defamatory statement published or broadcast in a newspaper, magazine, other printed periodical, or by radio, television or motion pictures, the plaintiff may recover any general and special damages which, by competent evidence, he can prove to have suffered as a direct and proximate result of.the publication of the defamatory statement.”

“ORS 30.160 When general damages allowed. (1) In an action for damages on account of a defamatory statement published or broadcast in a newspaper, magazine, other printed periodical, or by radio, television or motion pictures, the plaintiff shall not recover general damages unless:

“(a) A correction or retraction is demanded but not published as provided in ORS 30.165; or

“(b) The plaintiff proves by a preponderance of the evidence that the defendant actually intended to defame the plaintiff.

“(2) Where the plaintiff is entitled to recover general damages, the publication of a correction or retraction may be considered in mitigation of damages.”

“ORS 30.165 Publication of correction or retraction upon demand. (1) The demand for correction or retraction shall be in writing, signed by the defamed person or his attorney and be delivered to the publisher of the defamatory statement, either personally or by registered mail at the publisher’s place of business or residence within 20 days after the defamed person receives actual knowledge of the defamatory statement. The demand shall specify which statements are false and defamatory and request that they be corrected or retracted. The demand may also refer to the sources from which the true facts may be ascertained with accuracy.

“ (2) The publisher of the defamatory statement shall have not more than two weeks after receipt of the demand for correction or retraction in which to investigate the demand; and, after mailing such investigation, he shall publish the correction or retraction in:

“(a) The first issue thereafter published, in the case of newspapers, magazines or other printed periodicals.

“ (b) The first broadcast or telecast thereafter made, in the case of radio or television stations.

“(c) The first public exhibition thereafter made, in the case of motion picture theatres.

“(3) The correction or retraction shall consist of a statement by the publisher substantially to the effect that the defamatory statements previously made are not factually supported and that the publisher regrets the original publication thereof.

“(4) The correction or retraction shall be published in substantially as conspicuous a manner as the defamatory statement.”

We construe ORS 30.155-30.175 as requiring plaintiff to plead and prove, as a condition precedent to recovery, defendants’ intent to defame or, in the absence of such intent, the failure to retract upon demand. Hall v. Kelly, 61 Ga App 694, 7 SE2d 290 (1940); Frye, Libel and Slander — Damages—Constitutionality of Statute Limiting Recovery of General Damages in Libel Actions, 36 Or L Rev 70, 77 (1956). Cf., Oregon Liquor Control Comm’n. v. Anderson Food Markets, Inc., 160 Or 646, 87 P2d 206 (1939); Smith v. Laflar, 137 Or 230, 2 P2d 18 (1931); Annotation, 130 ALR 440 (1941). We also construe the statute to be applicable to actions brought against the individual agents and employees of the owner or operator of the designated types of news media, if the defamatory publication is made in the course of the employment. Pridonoff v. Balokovich, 36 Cal2d 788, 228 P2d 6 (1951).

Plaintiff contends that the foregoing statutes, in purporting to eliminate the right of a defamed person to recover general damages for an inadvertent libel when a retraction is made, are unconstitutional under Article I, §§ 8,10, and 20 of the Oregon Constitution,^① and under the due process and equal protection clauses of the fourteenth amendment to the federal constitution.

The constitutionality of statutes of a similar nature has been passed upon in other states. In a majority of the cases in which the question has been raised the courts have held, or stated in dicta, that the denial of the remedy of general damages for defamation is unconstitutional. The contrary view is taken in Allen v. Pioneer Press Co., 40 Minn 117, 41 NW 936 (1889) and Werner v. Southern California Associated Newspapers, 35 Cal2d 121, 216 P2d 825, 13 ALR2d 277 (1950), appeal dismissed, 340 US 910, 71 S Ct 290, 95 L Ed 657 (1951). The cases are collected in 13 ALR2d 277.

The retraction statutes in the several states vary in the extent to which they remove the defamed person’s remedy,^② but the constitutional attack upon these statutes has been essentially the same as that urged by plaintiff in the case at bar, it ‘being contended that the denial of a remedy by way of general damages is repugnant to the due process and equal protection clauses of the fourteenth amendment and repugnant to the sections of the state constitutions declaring that persons abusing the right of freedom of expression shall be responsible (e.g., Art. I, § 8, Oregon Constitution) and repugnant to the sections guaranteeing a remedy for defamation (e.g., Art. I, § 10, Oregon Constitution) .

Plaintiff’s central point of attack is based upon the guarantee in Art. I, § 10, Oregon Constitution, that “every man shall have remedy by due course of law for injury done him in his person, property or reputation.” It is contended that retraction is not a substitute for the remedy of general damages and that, therefore, the constitution is violated. This and the other constitutional objections raised by plaintiff are carefully analyzed in two excellent opinions; one by Mr. Justice Traynor in Werner v. Southern California Associated Newspapers, supra, and the other by Mr. Justice Mitchell in Allen v. Pioneer Press Co., supra. Although the statutes and constitutional provisions dealt with in the Werner and Allen cases are not precisely the same as ours, the 'basic constitutional problems presented are the same.^③ We agree with the courts’ analysis in these cases and adopt it as dispositive of the case at bar.

It is not necessary to repeat what was there expressed. In the Werner case the court held that the enactment of the California retraction statute (Civil Code § 48a) was the result of a legislative determination and choice based upon the resolution of considerations of certain matters of policy which were within the province of the legislature. The statutory scheme enacted in ORS 30.160-30.170 is the result of similar considerations. Unless it is clear that the legislature exceeded the constitutional bounds within which it has the power to exercise its policy making functions we must hold this legislative choice to be valid.

Were we to hold that the legislature cannot constitutionally modify the remedies available to a person who contends that he has been defamed we would, in effect, freeze the law of defamation in the form in which it existed at the time our constitution was adopted. And, logically, such a holding would congeal the remedies for all actions, whether arising out of the law of defamation or any other area of the law. The effect would be to preclude the legislature from modifying the fault principle in tort law, at least to the extent that it would affect the remedy of a plaintiff. Thus, the legislature would be powerless to effect a change in the law were it to decide that the interests of the state would be better served if the principle of absolute liability as a theory of tort liability in a particular type of case (or in all cases) should be abolished, or if it were to decide that in a particular situation liability should be limited to cases in which defendant intended to cause the harm; in other words, that liability for negligent or ultrahazardous conduct would be abrogated. In this connection it will be noted that ORS 30.160-30.170, in effect, simply changes the law of defamation, as it relates to a certain class of persons, by eliminating absolute liability and liability for negligence in preparing and publishing a defamatory statement (unless defendant refuses to retract). Liability is restricted to cases of intentional conduct where the defendant intends to defame the plaintiff. We repeat, if the legislature cannot modify the fault principle in defamation cases it cannot modify it in other areas of tort liability. To require such a conclusion would impose a stricture upon our law which could not have been contemplated in the adoption of our constitution.

In the past this court has recognized that the legislature may limit the remedy previously available to one injured by a tort-feasor. We have held that the legislature can take away the remedy for negligent injury in actions brought by an automobile guest against his host. Perozzi v. Ganiere, 149 Or 330, 40 P2d 1009 (1935). The same result obtains under the federal constitution, Silver v. Silver, 280 US 117, 50 S Ct 57, 74 L Ed 221, 65 ALR 939 (1929).

In the latter case the court said that “the Constitution does not forbid the creation of new rights, or the abolition of old ones recognized by the common law, to attain a permissible legislative object.” (280 US 122). Article I, §10 of the Oregon Constitution was similarly construed in Noonan v. City of Portland, 161 Or 213, 88 P2d 808 (1939). In that case the court sustained a charter provision exempting the city from damage or loss to a person or property suffered by reason of the defective condition of any sidewalk, as against a claim that the charter provision contravened Article I, § 10. A remedy was reserved against the negligent city officer and the property owner. The court, speaking through Mr. Justice Eossman, said:

“Article I, § 10, Oregon Constitution, was not intended to give anyone a vested right in the law either statutory or common; nor was it intended to render the law static. Notwithstanding similar constitutional provisions in other states, the courts have sustained statutes which eliminated the husband’s common law liability for the torts of his wife and which placed the wife upon an economic level with her husband. They have likewise sustained statutes which have abolished actions for alienation of affections, actions for breach of promise, etc.” 161 Or 249.

See also, Smith v. Smith, 205 Or 286, 287 P2d 572 (1955).

The plaintiff argues that guest statutes and other statutes restricting or wholly abrogating remedies in certain types of cases (alienation of affection, seduction, breach of contract to marry) deal with the remedies of persons who have 'the attributes of a volunteer and, therefore, such statutes can be distinguished from legislation such as ORS 30.160-30.170 where the person suing has not chosen to expose himself to the harm visited upon him. The distinction is not substantial in this context. We cannot believe that the constitutional provisions relied upon were intended to preclude legislative change in tort remedies unless the injured person was in some sense a “volunteer.” If there is substance in the suggested distinction, there is no reason to conclude that the legislature did not weigh it when considering the advisability of enacting ORS 30.160-30.170.

If the legislature can limit a person’s remedy to cases in which there has been an intentional defamation, which we believe that it can, then of course it can take a less drastic step and absolve a defendant from liability for general damages resulting from the non-intentional preparation and publication of harmful statements, upon the condition that he publish a requested retraction.

Assuming that the legislature does not have the power to deprive a person of an existing remedy, it would be conceded by plaintiff that the form of the remedy could be changed if the substitute was a substantial equivalent of that which was taken. But plaintiff argues that a remedy by way of retraction is not the substantial equivalent of money damages. The contrary view has been taken by others. In Allen v. Pioneer Press Co., 40 Minn 117, 41 NW 936, 938 (1889), the court said:

“* * * Now, as far as vindication of character or reputation is concerned, it stands to reason that a full and frank retraction of the false charge, especially if published as widely and substantially to the same readers as was the libel, is usually in fact a more complete redress than a judgment for damages. Indeed, where there has been perfect good faith, and an entire absence of improper motives, in the publication of a libel, and no special or pecuniary injury has resulted, an action for damages, brought after such a full and frank retraction and apology, is in a majority of cases purely speculative.”

It is argued that our constitution, in preserving remedies through “due course of law,” assures the injured person a remedy by court action if he should elect to pursue it and that, therefore, the constitution renders invalid the remedy by way of retraction even though it be conceded that such a remedy is more effective than a judgment for damages in assuaging the harm suffered by the plaintiff. This puts a stringent interpretation on Art. I, § 10. Conceding, for the purpose of answering this point, that retraction is not a remedy by “due course of law,” the fact remains that the injured plaintiff does have a remedy by “due course of law” under ORS 30.155-80.160 if he is intentionally defamed. Unless it can be said that liability for injury to reputation resulting from negligent conduct or from conduct wholly without fault must be preserved under our constitution, there is no need to inquire whether retraction is an adequate remedy; there would be a remedy by due course of law available to those who are intentionally defamed, and the right of retraction would simply be an additional remedy which the legislature could provide or withhold as it deems wise. But even if the right to retraction was the sole remedy available to a person defamed, that remedy would he by due course of law. The term “due course of law” need not be given a limited meaning, requiring some form of judicial procedure to test the effective-mess of the retraction in rehabilitating the plaintiff’s reputation in a particular case.

Implicit in the argument that court surveillance must be available to assess damages is the assumption that, whereas the remedy by way of retraction may prove inadequate in a particular case, the remedy in the form of money damages can be adjusted by a judicial tribunal to equate the dollar recovery to the harm suffered by the person defamed. The harm to a plaintiff is likely to be irreparable either by way of money recovery or through retraction. It is a pure speculation to say that the one remedy is more reparable than the other. As already indicated, there is a respectable view that retraction is a more effective remedy than a judgment for money damages. The legislature may have arrived at the same conclusion in substituting retraction for general damages. The legislature may also have considered that in each case the benefit to the plaintiff from a retraction would be equated to the harm as closely as money damages fixed by a court. It cannot be said that the legislature had no foundation for concluding that retraction was an adequate substitute for general damages.

There are also other policy considerations involved in the choice. In Werner v. Southern California Associated Newspapers, supra, 35 Cal2d at 126, the court said:

“There are at least two bases on which the Legislature could reasonably conclude that the retraction provisions of section 48a provide a reasonable substitute for general damages in. actions for defamation against newspapers and radio stations, namely, the danger of excessive recoveries of general damages in libel actions and the public interest in the free dissemination of news.

“General damages are allowed for ‘loss of reputation, shame, mortification and hurt feelings,’ (Civ. Code, §48a), but the extent of such injuries is difficult to determine. At common law it was conclusively presumed that general damages resulted from the publication of a 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.’ (Prosser, Torts, § 92, p. 797.) The Legislature could reasonably conclude that recovery of damages without proof of injury constitutes an evil.”

We hold that ORS 30.150 through 30.175 does not constitute an unconstitutional deprivation of the remedy for defamation.

Plaintiff’s argument that the retraction statute creates an unlawful classification in violation of the equal protection clauses of the federal and the Oregon constitutions is adequately answered in the Werner case.

Plaintiff next contends that the trial court erred in granting defendants’ motion to strike from plaintiff’s complaint the allegations relating to punitive damages.

Defendants’ argue that the trial court’s order can be sustained on either one of two grounds: (1) that the Oregon retraction statutes (ORS 30.150 to 30.175) contain no mention of punitive damages, which, it is argued, reflects the legislative design to eliminate the doctrine of punitive damages from this class of cases; or (2) that, conceding that the statutes do not bar the recovery of punitive damages, in the proper case, the complaint in the instant ease did not contain sufficient allegations to sustain a recovery of punitive damages.

We are of the opinion that defendants’ second ground is well taken. It is not necessary, therefore, to decide1 whether our'retraction statutes permit the recovery of punitive damages. The allegations in the complaint do not purport to charge defendants with the intent to defame plaintiff. The recitation that the “utterances and publication were made by defendants willfully, maliciously and wrongfully” is not to be construed as an allegation that defendants knew that the charges were false or that defendants were motivated by ill will in making the alleged defamatory statement. The allegation that the statement was made “willfully, maliciously and wrongfully” is a mere conclusion of the pleader. The allegation is not sufficient to charge malice in fact.^④

One point relied upon in the dissent requires comment; The dissent argues, that the deprivation of the remedy in the present case is as objectionable from a constitutional standpoint as legislation purporting to fix a certain price per acre as “just compensation” in eminent domain cases. The analogy is not apposite. Certainly it would be beyond the constitutional power of the legislature to fix a single recovery in dollars for all parcels of land condemned irrespective of the value of each parcel. But the damage resulting from the taking of property is admittedly a money damage and Obviously the recovery must be measured in each case according to a certain number of dollars. The harm for which “general damages” purports to be the remedy in defamation cases is of a different sort. By definition “general damages” as distinct from “special damages” are those which are not measurable by proof of specific pecuniary loss'. The remedy of general damages purports to compensate the plaintiff for a harm to his reputation — a harm which is not measurable in a money loss and which is not mitigated by a money judgment except to the extent that the entry of the judgment communicates the message that the words printed were false. The remedy afforded through retraction would seem to come closer to providing an effective means of repairing the harm resulting from the defamation. There is no comparable available remedy in eminent domain eases because there is no legally protected interest in the landowner other than the pecuniary interest represented by the market value of the land. The condemnee has no right to regain his land. Compensation, not reparation, is the function of condemnation awards; from the nature of such cases it is impossible to restore the status quo ante. But in defamation cases there is a choice of remedies and it is not for the courts to decree that the defamer must “purchase” the reputation of his victim to the extent of the harm which the defamer has caused him (assuming that it could be ascertained) rather than make reparation by way of publishing a satisfactory retraction. Retraction being an available and apparently effective remedy in defamation oases, it was within the power of the legislature to provide for its use. It would be reasonable for the legislature to assume that the greater the libel the greater the effect that a retraction would have in rehabilitating the plaintiff. Thus the remedy automatically adjusts itself to the harm.- The fact that such remedy or such adjustment is not perfect does not prohibit the legislature from making it the exclusive remedy in the class of cases covered by the statute. If the legislatively designed remedy is an effective remedy, there is nothing in -the constitution requiring that the guaranty of a “remedy” by “due course of law” for injuries to.reputation shall take the form of a judicial adjustment of the remedy in each case.

The judgment of the lower court is affirmed.

① “Section 8. Freedom of speech and press. No law shall be passed restraining the free expression of opinion, or restricting the right to speak, write, or print freely on any subject whatever; but every person shall be responsible for the abuse of this right."

“Section 10. Administration of justice. No court shall be secret, but justice shall be administered, openly and without purchase, completely and without delay, and every man shall have remedy by due course of law for injury done him in his person, property, or reputation.”

“Section 20. Equality of privileges and immunities of citizens. No law shall be passed granting to any citizen or class of citizens privileges, or immunities, which, upon the same terms, shall not equally belong to all citizens.”

② See a summary of the various statutes in Note, Developments In the Law of Defamation, 69 Harv L Rev 875, 941 (1956). See also, Leflar, Legal Remedies for Defamation, 6 Ark L Rev 423, 437 (1952).

③ The Minnesota statute dealt with in the Allen ease required the publisher to prove good faith. This was interpreted to require the publisher to be free from negligence. Thorson v. Albert Lea Publishing Co., 190 Minn 200, 215 NW 177, 90 ALR 1169 (1933). The fact that a retraction statute does not place upon the publisher the burden of proving good faith or freedom from negligence does not, in our opinion, render a retraction statute unconstitutional.

The California statute in question in the Werner case was interpreted as allowing retraction to limit recovery to special damages even where the defamation was malicious or reckless. It is not necessary for us to decide whether we would uphold a statute of this type.

④ Glenn v. Gibson, 75 Cal App2d 649, 171 P2d 118 (1946); Jackson v. Underwriters’ Report, Inc., 21 Cal App2d 591, 69 P2d 878 (1937); Locke v. Mitchell, 7 Cal2d 599, 61 P2d 922 (1936); Taylor v. Lewis, 132 Cal App 381, 22 P2d 569 (1933). Cf., Butler v. Freyman, 216 Mo App 636, 269 SW 523 (1924).