OPINION
Defendants Hustler Magazine, Inc. (“HMI”) and Flynt Distributing Company, Inc. (“FDC”) have brought a motion,‘pursuant to Rules 50(b) and 59(b), Fed.R.Civ.P., for judgment notwithstanding the verdict, or, in the alternative, for a new trial. Judgment was entered on October 17, 1985 following the bifurcated trial of this libel action brought by Robert Guccione (“Guccione”), among other things, the publisher of Penthouse, Inc. The jury awarded Guccione $1.00 in compensatory damages and a total of $1.6 million in punitive damages of which $900,000 was assessed against HMI and $600,000 against FDC. For the reasons set forth below, the defendants’ motions will be denied.
I. Framework of the Litigation
This diversity action was initially brought by Guccione and Penthouse, Inc., alleging defamation, invasion of privacy and copyright infringement for the publication of a photograph and article in the November, 1983 issue of Hustler maga *316 zine, a national magazine with an avid readership. The defendants named in the complaint were Larry Flynt (“Flynt”), HMI and FDC. This action is one of several actions filed by Guccione in response to unfavorable publications which have appeared in Hustler, the most significant action being a libel suit in Ohio in which a jury verdict was rendered against Flynt and HMI in the amount of $40 million. This verdict was affirmed with respect to the liability of Flynt' and HMI while reversed as to the damages.
The course of the instant litigation has been mapped by the earlier opinions dated April 17, 1984, June 1, 1984, February 1, 1985, August 16, 1985, and September 17, 1985. During this pretrial period, the complaint against Flynt was dismissed for lack of personal jurisdiction in New York and the causes of action for invasion of privacy and copyright infringement were dismissed. The defendants also sought to dismiss the libel claim in two motions for summary judgment in which they asserted the absence of actual malice and the substantial truth of the publication., The summary judgment motions, brought respectively at the inception and conclusion of discovery, were each denied.
The trial was conducted during two weeks in September, 1985 at which time further motions were asserted and briefed on a daily basis. As noted above, judgment was entered against the defendants for a total of $1.6 million in punitive damages. Following the trial, the parties have contested the execution of judgment, and execution has been stayed to permit the defendants to pursue post trial and appellate remedies upon the posting of a bond in the reduced amount of $400,000. According to the defendants, a greater bond would have destroyed their ability to continue operations. The amount of the bond has been the subject of continuing discovery. Finally, the defendants brought the present motions which were submitted after oral argument on November 22, 1985.
A considerable amount of time, energy, and money has been expended by counsel by both sides to bring this grudge match to, this court. Their ingenuity and skill has required an equivalent effort by the court to obtain a resolution. Contrary to some recent libel actions in this court, the issues presented are not of commanding public interest but rather highly personal.
II. The Libelous Statement and Applicable Standards
The short article in Hustler contained the following false statement which forms the basis for this libel action: “Considering he is married and has a live-in girlfriend, Kathy Keeton, ... we wonder if he [Guccione] would let either of them pose nude with a man.” This statement was false when published in November, 1983 since it is uncontested that Guccione obtained a divorce from his wife in 1979 and has not subsequently remarried.
A) Libel Per Se
As determined at trial, the above statement includes a specific accusation that Guccione was engaged in an adulterous relationship since the reference to a “live-in girlfriend” implies a sexual relationship outside of marriage. As such, the false statement lies within that category of libel
per se
as defined under New York law. Libel
per se
provides a unique right of action for those statements that “tend[ ] to expose the plaintiff to public contempt, ridicule, aversion or disgrace, or include an evil opinion of him in the minds of right-thinking persons, and to deprive him of their friendly intercourse in society.”
Rinaldi v. Holt, Rinehart & Winston, Inc.,
The defendants urge that, while adultery is an indictable crime, such an offense is so commonplace and so infrequently enforced that it should not be considered a crime for the purposes of libel law. This argument, however, finds no support from the applicable New York authorities.
See Matherson v. Marchello,
B) Public Figures
As explained in the June 1, 1984 opinion, Guccione was found to be a public figure in his libel suit in Ohio and therefore would be collaterally estopped from claiming otherwise here. Since he has also conceded that he is a public figure, there is no question that he must meet the stringent standard of proving actual malice to recover for the false statement.
New York Times Co. v. Sullivan,
III. Judicial Review of Actual Malice
The First Amendment concerns present in this libel action alter the usual presumptions adopted when considering a motion for judgment notwithstanding the verdict. Just as an appellate court has an obligation to make an independent review of the trial record to ensure that there has been no unconstitutional intrusion on free expression,
Bose Corp. v. Consumers Union of U.S., Inc.,
A. Evidence Admitted at Trial
At trial Guccione presented evidence which tended to demonstrate both components of the actual malice standard: that the defendants, actually knew that the statement was false and alternatively that the defendants published the statement in reckless disregard of its truth or falsity.
The evidence established that Flynt, the publisher of HMI, had created the article which contained the libelous statement. The article appeared in the “Bits and Pieces” section of the magazine and by deposition testimony, Bruce Helford, the editor responsible for the “Bits and Pieces” section, testified that Flynt had given him the article at an editorial meeting with instructions to include it in the November, 1983 issue of Hustler. Flynt testified that he wrote all of the article with the exception of certain changes that were made by the editorial and legal department. The legal department personnel who reviewed the article included David Kahn (“Kahn”), *318 general counsel for HMI and Neil Adelman (“Adelman”), assistant general counsel.
Helford testified that at the time when the article was first handed to him by Flynt, he was unsure whether it could be included in the November issue since that issue had already been laid out and prepared for publication. He stated that after being told. by the production department that the article could be included, the preparation of the article was done in a “big rush” and was finished within one day. Helford and another editor, Richard Lewis, testified that HMI had a policy of verifying information published in the magazine and that they employed four people in the HMI research department who checked the accuracy of proposed articles. However, the article containing the false statement was never forwarded to the research department for verification.
Helford, while he prepared the article for proper publication format, did not have any input with regard to the substance of the article. Helford did testify that he attended a meeting with Flynt and Kahn in which Kahn suggested alterations in the text. Both Kahn and Adelman testified that they reviewed the article and proposed changes in several sentences of the article.
There was no testimony to indicate that the single statement at issue in this case was ever discussed by Flynt, Kahn and Adelman in the course of revising the article. Thus, there was no direct testimony that these participants considered the implications or veracity of the statement. On one intermediate draft of the article, the statement was underlined which indicates that it was reviewed by someone, however, there was no testimony which revealed any significance to the underlining.
Each of the three involved in the drafting —Flynt, Kahn and Adelman — asserted that they believed at the time they wrote the article that Guccione was married to Muriel Guccione and that he was living with Kathy Keeton, thus claiming a good faith belief in the statement. Flynt stated that he had read articles in magazines which stated that Guccione was married. He also testified that he was friends with Irwin Billman and Jim Goode, two former executives of Penthouse Magazine who were employees of Guccione. Flynt asserted that these men had informed.him that Guccione was married and never told him about any divorce. According to Flynt’s testimony, his discussions with Goode extended for about one week and during these conversations Goode informed him that Guccione was promiscuous. As explained by Lewis, an HMI editor, Flynt’s discussions with Goode were undertaken in early 1983 pursuant to Flynt’s desire to publish an investigative article examining Guccione’s business and personal life. This proposal was apparently abandoned after Goode told Flynt that while willing to provide sources and information, he was not interested in writing the article.
Flynt’s testimony setting forth the sources for his statement was undermined by inconsistent answers given in response to pretrial interrogatories. At that time, Flynt did not mention any of these particular sources but instead responded that the facts regarding Guccione’s marital status and girlfriend were “common knowledge in the news magazine industry and most likely in the general public.” Adelman and Kahn testified that their understanding of Guccione’s marital status was based on unspecified discussions and articles. Kahn did testify that he had read an interview given by Guccione in which he recalled that Guccione stated he had been living with Keeton for ten or fifteen years. Circumstantial evidence in support of the professed beliefs of Flynt, Kahn and Adelman was provided by the testimony of Guccione. He admitted that he had lived openly with Keeton since 1966, that he spoke to the press about his relationship, and therefore he considered that their relationship was known to the public.
On the other hand, circumstantial evidence was presented to demonstrate that Flynt, Kahn and Adelman were actually aware of Guccione’s divorce from his wife in 1979 and therefore aware of the falsity of the statement. In 1980, a prior libel *319 action brought by Guccione against Flynt was tried in Ohio State Court. During this trial, Guccione testified that he had obtained a divorce from his former wife Muriel Guccione. The Ohio proceedings were televised, and Flynt was present in Ohio during the trial. Although there was no direct testimony that Flynt saw Guccione’s testimony, such an inference could fairly have been reached by the jury.
Following the trial in Ohio, the local counsel for Flynt and HMI took the deposition of Muriel Guccione on December 18, 1980. At this deposition she also stated at the beginning of her testimony that she was divorced from Guccione. There was no direct evidence that any of the defendants’ attorneys who attended this deposition, including Duncan Darrow who has provided continuing outside counsel to HMI, communicated any knowledge about Guccione’s divorce to Flynt, Adelman and Kahn. Nevertheless, the record of this proceeding, together with the rest of the Ohio trial record, was available in the HMI legal department headed by Adelman and Kahn. These men admitted that they had read parts of the trial record in preparation for the filing of appeals from the Ohio jury verdict against Flynt. Thus it would be possible to infer their actual knowledge of the testimony given by Guccione and his former wife. This inference with regard to Adelman’s state of mind is buttressed by his testimony that he had a strong interest in Guccione and generally was attentive to any information regarding Guccione’s activities.
The evidence cited above was probative of whether or not the defendants actually knew of the falsity of their statement. There was additional evidence to support the jury verdict based on the other standard for actual malice, that of reckless disregard for the truth or falsity of the statement. Prior deposition testimony of Flynt and prior publications of HMI were admitted to demonstrate that the statement was published with reckless disregard.
The prior publications of HMI indicated the ill will between the parties. Over a nine year period, Flynt was responsible for several publications in Hustler which demonstrated his hostility towards Guccione. These publications included references to Guccione as having a sex change operation, having a venereal disease and engaging in homosexual acts. One of these publications was the subject of the libel suit in Ohio in which a verdict was rendered against Flynt and HMI. HMI also published derogatory depictions of Keeton during the time period of her relationship with Guccione.
In addition to the tangible evidence of Flynt’s hostile publications directed against Guccione, there was additional evidence of Flynt’s subjective disregard for the truth of statements published by him. In deposition testimony given in another case, but closely related to the time period in which the libelous statement was published, Flynt responded: “I don’t care” and “I didn’t care” when questioned about a publisher’s rights to print false statements. In that deposition, which was read to the jury here, the following colloquy also occurred:
Q: Do you think with respect to adults you can say anything you want about their private sexual activities, whether it’s real or fancied or not?
A: Yes.
Q: No matter how horrible it may be to the average ordinary person?
A: Yes.
Q: And you think you can do that in a magazine and get away with it, don’t you?
A: Yes.
These admissions by an agent of the defendants, together with the lack of any specific source for the article, the animosity towards Guccione, and the rush to print the article within one day, were together probative of whether the statement was published in reckless disregard of its truth or falsity.
B. Admissibility of Evidence
Defendants objected to the introduction of evidence of prior publications relating to Keeton and Guccione and to the use of *320 prior deposition testimony of Flynt on cross-examination. Each of these objections is unfounded.
The previously published excerpts in HMI relating to Keeton were relevant to this litigation since they displayed the close attention and interest of HMI in the relationship between Guccione and Keeton, a relationship that was the subject of the libelous statement. Despite their offensive nature, the relevance of these excerpts was not outweighed by any prejudice. Indeed it was just the offensive nature of these publications which were similar to others, which gave rise to the implication of the defendant’s motive to publish false statements.
In deposition testimony which was used to cross-examine Flynt, several statements were admitted that tended to demonstrate Flynt’s own disregard for the truth or falsity of the material in his publications. Also admitted was prior deposition testimony in which Flynt claimed to have bribed a judge. While the defendants object. on the basis that Flynt was not competent during those depositions by virtue of a manic-depressive condition, no finding of incompetence was ever made by the courts in which that deposition testimony was originally proffered.
The prior deposition testimony was properly admitted both on the basis of attacking the credibility of the witness Flynt, Fed.R.Evid. § 608(b), and as a prior admission by a representative of a party opponent. Fed.R.Evid. § 801(d)(2)(D). The time period of the prior statements was closely related to publication at issue here. The content of the statements was relevant in casting doubt on the credibility of Flynt’s assertions that the instant publication was made in good faith and more generally with regard to this particular executives’ subjective intent with regard to publishing at that time period. Furthermore, these statements were made by Flynt within the scope of his authority as chief executive of both HMI and FDC and therefore are admissible as admissions by the defendants.
See Meschino v. International Telephone & Telegraph Corp.,
C. Sufficiency of the Evidence
The evidence outlined above is sufficient to establish with convincing clarity that the defamatory statement was published by HMI and FDC with actual malice. A determination of actual malice requires the finding that the defendants published the statement either with actual knowledge of its falsity or in reckless disregard of its probable falsity. See New York Times Co. v. Sullivan, supra.
While the defendants’ subjective awareness of the truth or falsity is central to the question of actual
malice, St. Amant v. Thompson,
*321 While the executive officers and editors of HMI and FDC firmly testified to their belief in the truth of the libelous statement, circumstantial evidence to the contrary has been stated to indicate their awareness of Guecione’s affairs in general as well as access to the particular statements of his true marital status in the Ohio litigation and their expressed motivations. On the basis of this circumstantial evidence, the jury could have found that Flynt, Adelman or Kahn actually knew about Guccione’s divorce.
The evidence of the defendants’ recklessness is more direct and for that reason stronger. The evidence regarding Flynt’s malicious ill-will towards Guccione was properly admitted as one facet of the circumstantial evidence against the defendants relevant to a finding of reckless disregard for the truth. While “neither negligence nor failure to investigate, on the one hand, nor ill-will, bias, spite nor prejudice, on the other, standing alone, [are] sufficient to establish either a knowledge of the falsity of, or a reckless disregard of, the truth or falsity of the materials used ...[,] evidence of negligence, of motive and of intent may be adduced for the purpose of establishing, by cumulation and by appropriate inferences, the fact of a defendant’s recklessness or of his knowledge of falsity.”
Goldwater v. Ginzberg,
Hostility, of course, is not itself a sufficient basis for establishing constitutional malice in a First Amendment case since such an inference might result in liability based on the stridency of the statements rather than the reckless absence of factual support. Thus, the Supreme Court has cautioned against any definition of actual malice which blurs the distinction between hostility and knowing or reckless falsity as to the publication at issue.
See Rosenbloom v. Metromedia, Inc.,
. The majority opinion in
Tavoulareas
concluded that the defendant’s predetermined bias or ill will against the plaintiff should be considered appropriate evidence of a reckless disregard for the truth. The court recognized that while ill will does not constitute an element of actual malice, it is nevertheless relevant as tending to prove an element of the standards for constitutional malice. Even without embracing the entire reach of the majority’s opinion, the evidence of ill will by those of HMI and FDC was appropriately admitted. Unlike that case, here there were no fine shadings of opinion to be considered, no need to characterize the publisher’s policy of hard-hitting investigative journalism, nor to consider whether an ambitious young journalist may be more prone to false reporting.
See Tavoulareas, supra,
*322
In addition, there was no need to consider whether the defendants were permitted an appropriate range of editorial discretion,
see Time, Inc. v. Pape,
Finally, the evidence presented regarding HMI’s failure to engage in any confirmation or investigation of Guccione’s marital status under the circumstances corroborated other evidence of the defendants' reckless disregard for the truth or falsity of the publication. Generally, of course, in the absence of any duty, the failure to investigate does not in itself establish bad faith.
St. Amant, supra,
The present case is distinguished from the case law setting forth the elements of actual malice as a constitutional standard because of the unusual character of Flynt’s recklessness and hostility towards Guccione. Due to evidence establishing that Flynt himself wrote the article with actual malice, the verdict is equally applicable to FDC in view of Flynt’s relationship as the sole shareholder and chief executive for the company. Since there was adequate evidence on which the jury could reasonably find actual malice with convincing clarity, the liability verdict will not be overturned.
IV. Substantial Truth
HMI and FDC further assert that the court’s instructions on the issue of substantial truth were improper in view of Guccione’s concession that he lived with Keeton in an adulterous relationship from 1966 to the present. Substantial truth is an affirmative defense provided by New York law which provides that the omission or misstatement of “relatively minor details in an otherwise basically accurate account is not actionable.”
Rinaldi, supra,
The doctrine of substantial truth was adequately reflected by the instructions submitted to the jury:
Guccione must also establish that the statement was false. If the statement is true or substantially true, it cannot be libelous. It’s not necessary of course that a statement be literally true. The test is whether the statement, as it was published, had a different effect on the mind of the reader than the actual literal truth. The facts which are offered to support a claim of substantial truth must be as broad as the alleged libel. Therefore, you have to determine the scope of the alleged libel before you can determine whether or not the statement was substantially true.
*323 Put another way, if you determine that the libel in question should be read as accusing Guccione of committing adultery only in 1983, the fact that Guccione might have committed adultery at another time is not going to make the statement substantially true. However, if you determine that the libel should only be read as accusing Guccione more generally of being an adulterer, you can then consider the evidence of Guccione’s prior actions in relation to this issue of substantial truth.
(Tr. 1077-78). These instructions directed the jury to determine the scope of the alleged libelous statement and compare with the facts presented to determine whether the statement had a different effect on the mind of the reader than the actual literal truth. Thus the jury was squarely presented with the alternative of interpreting the defamatory statement as a general accusation of adultery or a specific accusation of committing adultery in 1983 at the time the statement was made. The opposing parties stressed each interpretation in their summations, and it was appropriately left for the jury whether the scope of the libelous statement was co-extensive with Guccione’s previous adulterous relationship.
HMI and FDC, however, urge that the court erred by failing also to instruct the jury to compare the “gist” or “sting” of the libelous statement with that of a true statement.
See Westmoreland v. CBS,
No. 82 Civ. 7913 (S.D.N.Y.1985). Such an instruction would have been inappropriate because the statement constituted libel
per se.
As noted above, this special category of libel under New York law is reserved for those statements which are presumed by law to expose a person to public contempt or ridicule. Since the doctrine of libel
per se
is applicable to this publication, it would have been inappropriate to instruct the jury to weigh the “sting” or “gist” of the statement in order to determine whether the defendants’ liability had been established. The existence of “sting” or damage is a conclusive presumption under the libel
per se
doctrine,
see Davis v. Ross,
V. Libel-proof Defendant
HMI and FDC assert, relying on
Cardillo v. Doubleday & Co., Inc.,
Since the
Cardillo
libel proof doctrine has been “confined to its basic factual context,”
Buckley v. Littell,
The court’s indication in
Cardillo
that an action should not be permitted if a plaintiff will only recover nominal damages is difficult to reconcile in light of other rulings by the Circuit. An action for nominal damages cannot be casually discounted since it is accompanied by the vindication of a jury verdict.
See Buckley, supra,
The defendants also seek to align this case within the rulings in this Circuit espousing the incremental or subsidiary harm variations of the libel proof doctrine.
See Herbert v. Lando,
In Herbert, the Court of Appeals reviewed eleven allegedly libelous statements and concluded that with regard to nine of these statements there was not sufficient evidence of actual malice. While the evidence of actual malice regarding the other two statements was sufficient to survive a motion for summary judgment, the Court also directed the dismissal of the other two statements. The Court held that false statements “should not be actionable if they merely imply the same view, and are simply an outgrowth of and subsidiary” to statements which were not made with actual malice. Herbert, supra, at 312; Since the overall nonactionable' charge in the article that plaintiff had lied about reporting war crimes, fully subsumed the actionable statements regarding this same issue, the Court concluded that a libel suit based on the subsidiary statements should be dismissed.
The Simmons Ford case involved an earlier application of this same principle. In that case, an article was published which severely criticized the performance and characteristics of an electric car. The article also falsely stated that the car was not in compliance with certain federal safety regulations. The libel action was dismissed on the basis that there was an ample basis to justify the broad conclusion asserted in the publication that the car was unacceptable and, therefore, the false statement could not have caused any incremental harm. Thus, this case stands for the proposition that when, within an otherwise non-actionable publication, the harm of a single statement is nominal or nonexistent, the statement should be dismissed as non-actionable.
The rulings in Herbert and Simmons Ford are inapplicable to the present case since there was no evidence from this publication regarding any prior publications of nonactionable charges of adultery against Guccione which would encompass the false statement at issue here. Moreover, while the Simmons Ford holding is premised on a finding of nominal damages, that holding does not control this action in which the false statement constituted libel per se. As discussed above, such actions may be maintained in spite of the nominal potential recovery.
VI. Punitive Damages
As mentioned above, the jury awarded the minimum $1.00 in actual damages, but in addition imposed $1.6 million in punitive damages against HMI and FDC. The defendants argue that these awards of $900,000 and $600,000 respectively are unsupportable as a matter of law. The stan
*325
dards for awarding punitive and compensatory damages for state tort claims are provided by state law,
Shu-Tao Lin v. McDonnell Douglas Corp.,
Under New York law, punitive damages need not be proportionally related to the actual harm suffered by the plaintiff.
Hartford Accident & Indemnity Co. v. Village of Hempstead,
In reviewing a punitive award, this court must keep judgments within reasonable bounds and set aside those awards that shock the conscience of the court.
Aldrich v. Thomson McKinnon Securities, Inc.,
With due regard for these considerations, the present judgments of $900,000 and $600,000 do not shock the conscience of the court given the evidence presented and the exercise of free speech involved. Defendants have repeatedly focused on the disparity between the actual and punitive damages in this case but ignore another basis — the
mala fides
or common law malicious intent of the defendant — which is an appropriate guideline for the award of punitive damages.
See Nellis v. Miller, supra,
Finally, the jury verdicts are reasonably related to the wealth of the defendants. Contemporaneous tax returns demonstrated net incomes for HMI and FDC which were greater than $7 million and $8 million dollars respectively. The net worth of defendants in 1983 was also shown to be substantial. While the defendants argued that these figures were artificially inflated values, the returns provided an adequate basis for imposing the punishment determined by the jury.
VII. Prejudicial Conduct of Counsel
Defendants vehemently protest what they view as the prejudicial trial con *326 duct of plaintiffs counsel. HMI and FDC request that both the liability and damages verdicts be set aside due to the prejudice resulting from statements made by opposing counsel.
The court is sensitive to the difficulties posed by the imposing and harsh style of plaintiff’s counsel, made more strident by the absolute lack of cordiality between the parties and their frequent litigation. To correct the occasional excesses of counsel, the court cautioned against improper statements and instructed the jury to disregard incompetent or irrelevant evidence. The difficulty of attaining the proper decorum was of course also due to the often unprintable subject matter of this case.
While the relevance of the prior articles which HMI had published outweighed their prejudicial input, they nevertheless introduced pictorial and descriptive accounts of homosexual acts, sexually transmitted diseases and other graphic sexual matters. Many of the harsh statements made by plaintiff’s counsel derived directly from these exceedingly unpleasant factual circumstances of the case. Therefore, it cannot be said that counsel dealt “altogether too much into matters and considerations outside the record which were obviously intended to prejudice the [defendants] in the eyes of the jury....”
Koufakis v. Carvel,
Similarly, the references by Guccione’s counsel to the testimony of defense witnesses seem when taken out of context to indicate misconduct. Yet the characterization of these witnesses as liars was issued only after counsel had referred to the circumstantial evidence supporting the characterization and not simply as a technique to instill prejudice.
Cf. Koufakis, supra,
Conclusion
Defendants’ motion for judgment n.o.v. or in the alternative for a new trial is denied.
IT IS SO ORDERED.