In 1983, petitioner Harte-Hanks Communications, Inc., published the Journal News, a newspaper in Hamilton, Ohio, that endorsed the reelection of incumbent municipal judge James Dolan. Respondent Daniel Connaughton was the Democratic candidate challenging Dolan in the November 8 election. A grand jury was investigating bribery allegations against Billy Joe New, the director of court services, who had resigned and been arrested. On September 17, 1983, Connaughton conducted a tape-recorded interview at his home with Patsy Stephens and her sister Alice Thompson regarding New's handling of cases. Stephens later passed a lie detector test arranged by Connaughton, after which he filed a complaint leading to New's indictment and conviction.
Late in October 1983, Alice Thompson contacted the Journal News through New's lawyer and gave a tape-recorded interview on October 27 in which she alleged that Connaughton had offered her and Stephens jobs, a trip to Florida, a restaurant for their parents, and other benefits in exchange for their help in the investigation and to keep the matter quiet. The newspaper's editorial director and a reporter interviewed Connaughton on October 31 for 55 minutes, during which he denied making any promises or quid pro quo offers but acknowledged some speculative discussions about jobs and trips. The Journal News did not interview Stephens, who had been present at the September meeting, nor did it listen to the tapes of that interview despite Connaughton making them available. On November 1, the newspaper published a front-page article reporting Thompson's allegations under the headline "Bribery case witness claims jobs, trip offered."
Connaughton filed a diversity action in the United States District Court for the Southern District of Ohio alleging defamation. After a four-week trial featuring six days of testimony, three taped interviews, and 56 exhibits, the jury returned special verdicts finding by a preponderance that the article was defamatory and false and by clear and convincing evidence that it was published with actual malice. The jury awarded Connaughton $5,000 in compensatory damages and $195,000 in punitive damages. The district court denied the newspaper's motions for judgment notwithstanding the verdict and for a new trial. The Court of Appeals for the Sixth Circuit affirmed the judgment after conducting its own review of the record. The Supreme Court granted certiorari to examine the sufficiency of the evidence and the standard of review applied below.
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