Potential economic damages in Rolling Stone libel suit
Rolling Stone published a widely read article online in November that described a gang rape that allegedly occurred at a University of Virginia (UVA) fraternity house in 2012. The magazine retracted the article this week after a Columbia University journalism school report deemed the article “deeply flawed” for relying to heavily on a single source with an inconsistent story.
The leaders of the national fraternity said in a statement that the Rolling Stone apology and retraction “in no way address the material damage the story’s false allegations have made to these young men and their chapter.” They claim the fraternity members’ civil rights have been infringed, characters impugned, and their education disrupted.
A day after the UVA chapter announced its plan to litigate, the national fraternity said it also plans to “pursue its options.” The university cannot file a suit because government agencies may not sue for libel.
The damages
The Washington Post said media law experts believe the fraternity would face a challenging legal battle against Rolling Stone. The magazine would have to have been acting with ‘actual malice’, using information they knew was false or acting with reckless disregard for the truth. While defending their claim that their reputation has been unfairly damaged, media ethics and law professor Jane E. Kirtley cautions that their ‘dirty laundry’ will be examined as part of the discovery process.
Dave Heller, deputy director of the Media Law Resource Center, said libel suits can and are won against the press, and that “damages can be significant, averaging over $2 million.”
Damages are awarded to an aggrieved party in a defamation case as monetary compensation for loss of reputation. With the subjective nature of this calculation, it’s no surprise that opposing economic experts often disagree about the existence and extent of damages in defamation cases.
There are two types of damages that are potentially relevant in this case.
Actual Damages: These damages, also called compensatory damages, are often in the form of economic damages for lost earnings, but can also include the results of defamation such as mental anguish and humiliation.
If the fraternity chapter has independent legal existence and can show a loss of income from potential members or donors, then this type of economic damages would be relevant. “The frat would only be able to sue to recover money it can directly show was lost thanks to the magazine article, a sum that could total just a few thousand dollars in lost donations or membership dues.”
Punitive Damages: The purpose of these ‘exemplary damages’ is to punish the defendant, not to make the plaintiff ‘whole’ for damage they suffered. Punitive damages would only be relevant in this case if Rolling Stone were found to have acted with reckless disregard for the truth.
To collect substantial damages, the fraternity would need to sue as a group of individuals and prove that its revenue was significantly diminished as a result of the article being published. An economic expert would be needed to calculate lost profits or revenue.
CNN reports that libel suits are often threatened, but not often filed, because a plaintiff has to show financial harm.
“So if your Aunt Edna calls your a loser on Twitter, you’re going to have to spend money on an expert to explain to a jury how that actually damaged you financially.”
The National Review commented that it’s not exactly clear how the fraternity can sue for damages because they would be a group alleging that the article caused damage to them by faulting fictitious members of their fraternity. There aren’t any actual fraternity members who were individually defamed because they don’t exist.
Relevant reading
‘Calculating damages in a defamation case‘, by Amir Tikriti of Ohanian & Tikriti
An indepth analysis of potential plaintiffs in the Rolling Stone / UVA case by UCLA professor Eugene Volokh’
‘Calculating lost business profits‘ by Dwight Steward, Ph.D. of EmployStats
