defamatory communication

In 1968, Chicago police officer Richard Nuccio shot and killed a youth named Nelson. State authorities prosecuted Nuccio and obtained a conviction for second-degree murder. The Nelson family retained petitioner Elmer Gertz, a Chicago attorney, to represent them in civil litigation against Nuccio. Respondent Robert Welch, Inc., publishes American Opinion, a monthly magazine expressing the views of the John Birch Society. In March 1969, the magazine published an article titled "FRAME-UP: Richard Nuccio And The War On Police." The article accused Gertz of participating in a Communist conspiracy to discredit local law enforcement, described him as a "Leninist" and "Communist-fronter," and claimed he had been an officer of the National Lawyers Guild, which it portrayed as a Communist organization involved in planning attacks on Chicago police during the 1968 Democratic Convention. The article contained numerous inaccuracies, including the false implication that Gertz had a criminal record. Gertz had served as an officer of the National Lawyers Guild approximately fifteen years earlier but had no involvement in planning the 1968 demonstrations. He had never been a member of the Marxist League for Industrial Democracy or the Intercollegiate Socialist Society. The managing editor of American Opinion made no effort to verify the charges against Gertz before publication and appended an editorial introduction stating that the author had conducted extensive research. Gertz filed a diversity action for libel in the United States District Court for the Northern District of Illinois. The district court ruled that the statements constituted libel per se under Illinois law. After a trial, the jury awarded Gertz $50,000 in compensatory damages. The district court later entered judgment for the defendant notwithstanding the verdict, applying the New York Times standard. The Court of Appeals for the Seventh Circuit affirmed. The Supreme Court granted certiorari to review the application of constitutional standards to defamation of a private individual.

In July 1976, Dun & Bradstreet, a credit reporting agency that provides subscribers with confidential financial and related information about businesses under subscription agreements prohibiting further disclosure, sent a report to five subscribers stating that Greenmoss Builders, Inc., a construction contractor, had filed a voluntary petition for bankruptcy. The report was false and grossly misrepresented respondent's assets and liabilities because the petition had actually been filed by one of Greenmoss's former employees. On the same day, Greenmoss's president learned of the report while discussing the possibility of future financing with the company's bank, immediately called Dun & Bradstreet's regional office to explain the error, requested a correction, and asked for the names of the firms that had received the report so he could assure them of the company's solvency. Dun & Bradstreet promised to investigate but refused to divulge the names. After confirming the report was inaccurate, it issued a corrective notice on or about August 3, 1976, to the five subscribers stating that a former employee had filed for bankruptcy and that Greenmoss continued in business as usual. Greenmoss expressed dissatisfaction with the notice and again requested the subscriber names, which Dun & Bradstreet again refused to provide. Greenmoss then brought a defamation action in Vermont state court alleging injury to its reputation and seeking compensatory and punitive damages. At trial, evidence established that the error had been caused by a 17-year-old high school student paid to review Vermont bankruptcy pleadings who inadvertently attributed the petition to Greenmoss, and that Dun & Bradstreet did not attempt to verify the information with the company before reporting it despite routine practice to do so. The jury awarded Greenmoss $50,000 in compensatory damages and $300,000 in punitive damages. The trial court granted Dun & Bradstreet's motion for a new trial due to dissatisfaction with its charge to the jury. The Vermont Supreme Court reversed the trial court's grant of a new trial. The United States Supreme Court granted certiorari.