$165 million WND suit

The $165 million lawsuit filed against WND and two freelance writers who wrote a comprehensive series exposing Al Gore's record of corruption in Tennessee during the 2000 presidential campaign would smash any judgment that has ever held up in such a court proceeding.

WND was named as defendant in the action, along with the two journalists who wrote a series of 18 investigative reports during the 2000 presidential race, most of them documenting allegations of corruption involving then-Vice President Gore and others in Gore's home state.

Some Tennessee observers believe the series had such impact that it was responsible for Gore losing the state ? and thus the presidential election. Had Gore won his home state, the disputed Florida vote would have been meaningless and Gore would have had enough electoral votes to become president.

The lawsuit stems from the reports, which ran from September to December 2000, that included information about a Savannah, Tenn., auto dealer, friend of Al Gore and Democrat activist named Clark Jones.

Jones, who raised more than $100,000 for Gore's presidential campaign, alleges personal embarrassment and humiliation from the articles, which said he reportedly intervened in a Tennessee Bureau of Investigation probe into narcotics trafficking in Hardin County in 1999. The car dealer also alleges the articles implicated him in the 1980 arson of his own business, the Jones Motor Company, and also pegged him as a suspected drug dealer.

In his lawsuit against WND, Jones is demanding the record-breaking $165 million in damages.

According to public records, the highest final award that ever resulted in a U.S. media libel, privacy or related case was a $58 million decision in the lawsuit by a prosecutor in Texas against a television station that broadcast a report accusing him of taking bribes in drunken driving cases, and even that was "settled" for an undisclosed amount before appeal.

A WND survey of such damage cases, claims and awards also found a jury verdict of $222.7 million for Texas securities firm MMAR Group Inc. against the Wall Street Journal, which reported on alleged investigations into MMAR's dealings with client money. But that one was reduced to $22.7 million by the judge, and later erased altogether when it became known the plaintiff withheld evidence from the defendant during the trial.

A lawyer for reporters Charles C. Thompson II and Tony Hays has submitted a request to the state Supreme Court seeking permission to have the high court review what is described as a conflict between the state law and the U.S. Constitution.

The action was filed by Savannah, Tenn., businessman and Democratic Party activist Clark Jones against WorldNetDaily.com, Thompson, Hays and others after the stories Thompson and Hays researched and wrote were posted on WND.

The general responsibilities for reporters and those who distribute news commonly are held to be the same whether the medium is a page of printed newspaper, a nightly television broadcast, or a web page, according to one of the top experts in the field. However, there are some portions of the case law involving the Internet that are still being stabilized by precedent.

For example, according to Eric P. Robinson, a staff attorney with the Media Law Resource Center, a new California state Supreme Court ruling means that if a newspaper publishes a libelous letter-to-the-editor on newsprint, it can be held liable, but if that same corporation only "publishes" that same libelous letter in an online edition, only the original writer of the letter is liable.

Such issues are not new, he said, because the industry and the legal system have had to deal with innovations in medium before, and "apply old rules to new circumstances," Robinson told WND.

And he said the new Internet "division" of the "publishing" industry has developed so quickly, the ground rules and standards still are being developed.

His organization, which compiles annual reports on libel and defamation cases and results, now also compiles a special list of cases involving those who write and post Internet reports.

Some laws are written to apply "across the board," he said. "It doesn't matter what the medium is. It could be the New York Times, or a flyer on people's windshields." But with the Internet, some "standards" still are being developed.

The California ruling regarding liability for third-party material is such a case, he said. And while a California state court ruling isn't controlling outside of the state, it will be a very influential opinion, he suggested.

The huge judgment in Texas resulted in a jury verdict for the Texas brokerage firm MMAR Group Inc. from Wall Street Journal's parent company, Dow Jones & Co. However, the judge ruled that excessive and reduced it to $22.7 million, then when it was revealed by a former employee that MMAR executives had hidden or destroyed internal tape recordings that could have supported the printed reports on irregular brokerage actions, the remainder of the award was dismissed.

The MLRC actually compiles two "Top Ten" lists: one for trial awards in such cases, and the second for final awards, after appeals and any other followup action. The top 10 trial judgments ranged from the $222.7 million down to $40 million for No. 2 and $24 million for No. 10.

But the list of final results topped out at $58 million for the Feazell case down to $2.9 million for No. 10.

And even the "final results" didn't reflect the numbers on the checks that ultimately were distributed. For example, a final award in a 1990 case involving libel resulted in a $29 million final award, but the case was settled prior to appeal for $8.5 million. And another 1990 case against the Philadelphia Newspapers had a final award of $24 million, which was settled for an "estimated" $20 million. Another case against a Cleveland newspaper also had a final award of $13.5 million but was settled for an unknown amount.

Those cases, also, all involved the traditional media, such as printed newspapers, or broadcast programs, and no Internet news services. In that area, the MLRC's third list for mainly "bloggers" and other Internet organizations showed "final results" generally no more than $3 million for plaintiffs if they were ultimately successful.

The MLRC said the first case against a blogger ? of which it was aware ? that went to trial and resulted in a liability was Banks V. Milum, in which attorney Rafe Banks III sued political activist David Milum in Georgia for statements on Milum's local political website. Some of the postings alleged Banks delivered bribes from drug dealers to a judge, and after a four-day trial and six hours of deliberations, the jury awarded Banks $50,000 in compensation but no punitive damages.

In one case that was settled for an undisclosed sum, the Council on American-Islamic Relations sued Virginia Beach, Va., resident Andrew Whitehead over his website comments that alleged the group was funded by and supported terrorists.

The MLRC also discussed the case of a Florida woman awarded $11.3 million in a defamation claim against a Louisiana woman who used the Internet to post messages accusing her of being a "crook" and "fraud."

Lyrissa Lidsky, a University of Florida law professor whose expertise is in this area, noted that the woman who won the award, Sue Scheff of Weston, Fla., insisted on pursuing Carey Bock of Mandeville, La., even though there was no chance that Bock would be able to pay, since she'd lost her home and was evacuated during Hurricane Katrina.

The two had had a dispute over Scheff's services to Bock in withdrawing her twin sons from a boarding school in Costa Rica, according to report in USA Today.

Multiple Internet libel cases have been thrown out of courts in several states based on the federal Communications Decency Act.

A case in Wisconsin where a radio talk-show host posted and responded to a listener's e-mail on his blog, and removed it when he found it contained factual errors, was settled for $5,000.

One case was found involving jail time. In Washington state, a man was sent to jail in 2002 after he refused to comply with a judge's order to remove from his website names and addresses of managers of a senior citizens' residence. He spent 111 days in jail, but the state Supreme Court ultimately ruled that his reporting of events at the residences was not "surveillance" so court orders against him were an abuse of discretion. However, the man still faces charges for violating other orders and failing to appear in court. He's assumed to be in hiding.

Other Internet cases WND documented include:

New York lawyer Jeffrey Liddle won a $1 million jury verdict for Philip Spartis after another lawyer who wanted to solicit clients to bring actions against Spartis posted false allegations about him on a website. The verdict included $600,000 in punitive damages and $400,000 in compensatory damages.
In a North Dakota case documented by National Law Journal, the state supreme court affirmed a $3 million libel award to a university professor, John Wagner, from a former student, Glenda Miskin. The student had been expelled for using the school's e-mail system to send harassing and sexually explicit message to the professor, who followed up with a lawsuit alleging she then posted slanderous statements on her website.
Former Clinton white House aide Sidney Blumenthal had sued Matt Drudge and his Drudge Report for $30 million following reports that spousal abuse allegations had been documented. However, Blumenthal dropped the action and agreed to pay Drudge's attorneys after nearly four years of procedural moves in court. At the time, Drudge told his readers that his part of the agreement was that he would not counter sue.

The MLRC "bloggers" list of about five dozen cases noted only two cases with monetary judgments. Other cases all were dismissed, discontinued or remain pending. For example:

In Arkansas, a sheriff's detective from Saline County sued Gary Ballard, the operator of philmask.com, over a Benton Courier article republished on the site regarding allegations by Ballard's wife that the detective, Sgt. Sandy Romano, threatened her. The October case seeks to shut down the website. No monetary amount was cited.
In California, the owner of Chicks Sporting Goods sued James M. Kuziw for defamation over statements made on his MySpace page. The case has just appeared and responses haven't been filed yet. No monetary amount was cited.
A case that was filed by porn actress Christy Lake against porn-industry blog lukeford.com owner Luke Ford when he posted pictures he described as showing her having sex with a dog was dismissed.
Celebrity manager Jeff Ward sued Ford and other contributors to the lukeford.net porn-industry blog for allegedly libelous comments about Ward. Ford defaulted, but later filed a motion to set aside the default and the parties settled.
In Colorado, where there was a criminal libel statute, a college student had his computer confiscated after a college professor complained to police that the student mocked him on his website called The Howling Pig. No criminal charges were filed, however, and the city of Greeley ultimately paid the student $17,000 in a settlement of a lawsuit he filed over the confiscation.
A Boulder County, Colo., investigation also was launched into the creation of a MySpace web page that purported to profile a woman, although it had not been created by her. The profile was named "Dirty Whore" and featured photos taken from the woman's legitimate website.
A lawsuit remains pending in federal court in Connecticut by Joel Bell, a manager for professional athletes, after he claimed he was disparaged on the draftcity.com website. The site closed down when the claims were made.
A lawsuit by a New York doctor was filed against a man who posted a website about the physician after his wife won a malpractice settlement with him, and a hearing is scheduled on a motion to dismiss.
A confidential settlement was reached when the mayor of Smyrna, Del., allowed his step-daughter to use his computer to post information about town councilman Patrick Cahill and his wife, which they alleged was libelous. However, the court dismissed claims against other anonymous bloggers because the statements "were no more than unfounded and unconvincing opinion."
A Florida city manager sued a blogger for statements posted about him that he alleged caused his dismissal from his job and kept him from getting another similar post, and the action is pending.
A ministry called Ligonier Ministries sued a blog, then dropped the case, after critical comments were posted.
A Florida high school teacher sued a student over sexual comments and a photograph posted on the student's MySpace profile page, and the case is pending.
A complaint by a Georgia law firm against unidentified websites that allegedly published "false and malicious communications" about the company was dismissed.
An Ohio journalist who was sued for criticizing a company promoting e-mail marketing settled the case for $64.

The organization's latest annual assessment of media trials, including traditional media organizations, also showed that in the most recent reporting period during 2005 there were 14 trials, and the media won seven and lost seven.

The organization has looked at 531 trial verdicts from 1980 through 2005, and media defendants have won 214, with the average damage award $2.9 million.

But again, only a handful have involved Internet news sites.

Plaintiffs ultimately won and got to keep the entire trial damage award in only 18.7 percent of the cases that went to trial and verdict. Excluding cases that settled, the average damage award ultimately reached $1.4 million, the report said. Damage awards for the most recent year averaged only $369,000, the report said.

"Media defendants go to trial less and win at trial more ? the statistics on trials of libel, privacy and related claims against media defendants are clear on those two trends since 1980," said MLRC Executive Director Sandra Baron. "This is good news for those who understand the threat posed to free speech and press from the enormous time and expense of these kinds of lawsuits."

The organization was set up in 1980 as a nonprofit by leading media groups to monitor developments and promote First Amendment issues.

Another report, this one presented to the Association for Education in Journalism and Mass Communication in August, also addressed the issue of defamation and libel claims against Internet sources.

The AEJMC study addressed the "chilling" effect of lawsuits or the threats of lawsuits against a wide range of media, but mostly in the traditional print and broadcast forms ? not the Internet medium.

That study noted an "explosion" of media libel actions in the 1980s and early 1990s which has since declined in both number of actions and size of awards.

But that report said the "chilling" effect remains because of individual judgments, such as the $58 million awarded to Vic Feazell, former district attorney for McLennan County, Texas, against Dallas television station WFAA. He alleged he was libeled in a report which had accused him of taking bribes to settle drunken-driving charges. A settlement later was announced.

A jury also had awarded $34 million to Richard A. Sprague, a former assistant district attorney, from The Philadelphia Inquirer. In that case a reporter who had been convicted of illegal wiretapping had promised to "get" the prosecutor and wrote a series of stories and editorials about him.

That report also noted Philip Morris Cos., Inc., once filed a $10 billion libel suit
against the American Broadcasting Cos., Inc., for a story on ABC-TV
claiming the tobacco industry spiked cigarettes with extra nicotine
so smokers would get addicted, thus increasing tobacco sales. R.J. Reynolds Tobacco Co. filed a similar action and both were settled out of court. Michael Jackson at one point sought $100 million from "Hard Copy" and others for a story about a 27-minute videotape allegedly showing him engaging in sex with a child.

The Boston Celtics also sought $100 million from The Wall Street Journal for a story in which several physicians indicated star Reggie Lewis could have died from cocaine abuse, rather than a heart condition.

WND case headed for state Supreme Court

Hays, one of the two reporters, told WND that the issue now being presented to the Tennesssee Supreme Court developed over his choice not to reveal a confidential source used in assembling the reports. The trial level court then cited state law that assembles a "privilege" rule for reporters, but creates an exemption for any "allegedly defamatory" information.

That would mean a reporter, who like Hays declined to reveal a source in a case where anyone was alleging any defamation, would essentially give up their defense.

"What our lawyer has put in his application to the Tennessee Supreme Court is that that provision is unconstitutional," Hays told WND. "The U.S. Constitution requires that no law shall be made that will impede a free press."

The Tennessee limitation could be interpreted as impeding a free press, Hays said.

The state law says reporters "shall not be required by a court, a grand jury, the general assembly, or any administrative body, to disclose ? any information or the source of any information procured for publication or broadcast." But it also says that section doesn't apply "with respect to the source of any allegedly defamatory information in any case where the defendant in a civil action for defamation asserts a defense based on the source of such information."

That essentially means the fact that the information is true cannot be used in a defense in such cases, unless the source also is revealed.

Larry Parrish, a media lawyer who is defending WND in the case, is handling the news site's case separately, and he is preparing a presentation to the Supreme Court, too.

The news site's issues are not identical to the reporters' issues.

For example, the state court of appeals "out of the blue and without any evidence" described the two reporters as "agents" of WND, even though that's been a disputed statement from the beginning of the case, Parrish said. In fact, WND only became aware of the writers after the articles already were completed, officials said.

The source issue affects WND in that the trial level judge ruled there would be no truth defense unless the source was revealed, and he failed to discriminate between the reporter, who had the source's name, and WND, which didn't have it.

Parrish also noted the court orders thus far have included statements made as fact that still haven't been determined by a jury. For example, a court order described the articles as having been "published" with "extensive notoriety" and were "prima facie defamatory."

"It would be impossible to conceive a more contested fact in the trial court (than the reference to defamation)," the news site's lawyer said. "But, more importantly, this contested fact has not been decided in any way or by any proceeding in the trial court."

Joseph Farah, founder and editor of WND, is appalled at the court rulings thus far in Tennessee ? as well as the lack of attention by First Amendment activists, journalistic colleagues and the national media establishment to what is arguably the biggest defamation case in the country's history.

"It's not WorldNetDaily on trial in Tennessee, it's the First Amendment," said Farah. "Where in heaven's name have the American Civil Liberties Union and the the big media been for the last six years as our little company carries the full load of responsiblity for defending something as basic to our country's founding principles as freedom of the press?"

Farah continued: "Not only is this a huge defamation case in terms of possible judgments, it is also huge because it involves critical reporting about the 2000 presidential election. Politically protected speech and reporting doesn't get much more basic than that."

Also named in the suit were five John Does and five Jane Does, as well as the Center for Public Integrity in Washington, D.C., WSIB-AM in Selmer, Tenn., the Decatur County Chronicle, WTVF Newschannel 5 in Nashville, the Savannah Snitch, the Savannah Journal, Larry Brinton, a commentator for WTVF, H.J. Maxedon of Selmer and Rebecca Hagelin, at the time WND's vice president for communication.

Help WND fight landmark 1st Amendment legal battle

WorldNetDaily?s only recourse in this lawsuit is to fight every step of the way in its pursuit of truth. If you would like to help offset the enormous legal costs involved in defending against this attack on the First Amendment, you may make a donation online to WND's Legal Defense Fund, or by calling WND toll-free at 1-800-4WNDCOM (1-800-496-3266), or by mailing a check ? made payable to WorldNetDaily Legal Defense Fund ? to:

WorldNetDaily.com, Inc.

P.O. Box 1627

Medford, OR 97501

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MEMPHIS, Tenn. – An 8-year-old, $165 million defamation case against WND springing from a series of stories about then-presidential candidate Al Gore has been settled.

The terms of the out-of-court agreement with auto dealer Clark Jones are confidential. The settlement averts the need for a trial in Tennessee that was scheduled for next month.

Below is the text of the settlement statement jointly drafted by all parties in the lawsuit. Both sides agreed to limit comment on the lawsuit to this statement:

"A lawsuit for libel, defamation, false light and conspiracy was filed by Clark Jones of Savannah, Tennessee against WorldNetDaily.com, Tony Hays and Charles H. Thompson II arising out of a press release issued by WorldNetDaily.com on September 18, 2000, and articles dated September 20, October 8, November 24 and December 5, 2000, written by Tony Hays and Charles H. Thompson, II, posted on WorldNetDaily.com's website.

"The original news release by WorldNetDaily.com of September 18, 2000, and the article by Hays and Thompson of September 20, 2000, contained statements attributed to named sources, which statements cast Clark Jones in a light which, if untrue, defamed him by asserting that the named persons said that he had interfered with a criminal investigation, had been a 'subject' of a criminal investigation, was listed on law enforcement computers as a 'dope dealer,' and implied that he had ties to others involved in alleged criminal activity. These statements were repeated in the subsequently written articles and funds solicitations posted on WorldNetDaily.com's website. Clark Jones emphatically denied the truth of these statements, denied any criminal activity and called upon the publisher and authors to retract them.

"Discovery has revealed to WorldNetDaily.com that no witness verifies the truth of what the witnesses are reported by authors to have stated. Additionally, no document has been discovered that provides any verification that the statements written were true.

"Factual discovery in the litigation and response from Freedom of Information Act requests to law enforcement agencies confirm Clark Jones' assertion that his name has never been on law enforcement computers, that he has not been the subject of any criminal investigation nor has he interfered with any investigation as stated in the articles. Discovery has also revealed that the sources named in the publications have stated under oath that statements attributed to them in the articles were either not made by them, were misquoted by the authors, were misconstrued, or the statements were taken out of context.

"WorldNetDaily.com and its editors never intended any harm to Clark Jones and regret whatever harm occurred. WorldNetDaily.com has no verified information by which to question Mr. Jones' honesty and integrity, and having met him, has no claim or reason to question his honesty and integrity. WorldNetDaily.com wishes him well."