Monday, February 21, 2005

Compensating for Reckless Reporting

Ian Ayres

Pop-quiz: What is the only for-profit business that can recklessly injure someone without having to pay tort damages?

Answer: The news media.

The law immunizes the media from defamation damages if they recklessly misrepresent facts about a public figure – even if that public figure is truly injured by the misrepresentation.

Some people might feel that regardless of the law they have a moral duty to compensate people who are injured by their negligence. But guess how many dollars the news media voluntarily paid to people that they injured.

Now it is true that timely retractions often mitigate the injury of misrepresentions – but don’t kid yourself. If a newspaper recklessly prints that a restaurant has a rat infection or that someone is a suspected child molestor, the timely retraction does not make the person whole (people who didn’t hear about the retraction or question its accuracy are likely to stay clear).

Many people will argue that the production of news is special. A newspaper only captures a fraction of the social benefits that it creates – so that we can’t expect it to pay its full costs. But the same is true of car manufacturers and we don’t give them a free ride. [Indeed, why don’t we also immunize the newspaper delivery truck if it negligently injures someone while it is disseminating the news]. It’s fine for the government to subsidize the public good of news. But there’s not a reason in the world that this should be done on the backs of individuals who are harmed.

But it turns out that the immunizing 1st Amendment rule laid in New York Times v. Sullivan is contractible. That’s right citizens are free to contract for compensation if they’re harmed by news media misrepresentations.

Imagine what would what would happen if news sources responded to interview requests with the following email:
I would be happy to be interviewed. But I am concerned about the ability of the
print media to harm people by negligent misrepresentations of fact without
compensating them for their injury. I therefore propose the following contract
that I've offered in the past:

Agreement to Compensate for Negligent Misrepresentation

In this agreement:
______ shall be referred to as “the reporter”;
______ shall be referred to as “the publication”; and
______ shall be referred to as “the source.”

In return for the participation of the source as an interviewee, the publication promises to compensate anyone who is damaged by a factual misrepresentation printed in an article that expressly quotes the source. Compensation for factual
misrepresentations is to be measured by the dollar amount required to make the
damaged person whole, but in no event shall be less than $100. Damages might be
mitigated by timely retractions of the misrepresentation. Any one explicitly
named in the article is an express third party beneficiary of this contract and
thereby has a right to directly sue the publication if it breaches its promise
to compensate. The publication and the source intend for this to be a legally
binding agreement. The reporter in agreeing to this contract on behalf of the
publication represents that the reporter has actual and apparent authority to
enter into this contract on behalf of the publication.

To accept this contractual offer (and thereby create a legally binding contract between the publication and the source), please reply to this email with a subject line that states “On behalf of the publication, I accept the Agreement to Compensate for
Negligent Misrepresentation.”
This simple contract would protect anyone who was named in an article quoting the source. Of course, if you’re the only source that offers this contract, the newspaper is going to worry that you will be an overly sensitive, high-maintenance, pain in the ass and will avoid you with a ten-foot pole. I know I’ve offered this contract and you should hear the shock and indignation in the voice of the reporters.

This is un-American. It would cripple newspapers.

Okay, the news media may have a constitutional right to print reckless misrepresentations without paying compensation, but you and I don’t have to cooperate with the enterprise. Imagine how sources might react if every interview began with the reporter’s disclaimer: I can recklessly misrepresent facts about you without any legal duty to compensate you.”

Would you eagerly participate?

And let’s be clear, contracting for compensation is clearly constitutional. If it is constitutional for Michael Jackson to sell an interview for an unconditional payment, it is constitutional for me to sell an interview for a conditional payment to cover my costs of injury from falsehood.

Indeed, it would be a very strange that free speech prohibited people from opting to stand behind the truthfulness of their statements. It would further the first marketplace of ideas because listeners could give more credence to reporters who promised to pay if the negligently misrepresented the truth.

And even though the earlier contract is between sources and reporters, a similar contract could be created by newspaper subscribers and newspapers – again promising to compensate people who are injured by negligent misrepresentations.

If just one sources demands misrepresentation compensation, she is just a weirdo who is refusing to be interviewed. But if a larger group of sources decided it was immoral to assist in the production of a for-profit product that refused to be legal accountable for their negligence, who knows what might transpire.


By offering the contract, do you flatter yourself a little with the implication that you're a public figure? ;)

Private figures are already able to recover for reckless defamation, correct?

Dan, the contract doesn't just commit the other party to paying damages if it defames the interviewee. It protects anyone harmed by an article in which the interviewee is quoted. Read it again.

There was an interesting libel case decided by a jury here in Massachusetts in the last couple of days. A MA state trial judge was suing the Boston Herald for libel, and the jury found in favor of the judge. The case may be overturned on appeal, but if it is, it would be a shame. I suspect that much of the jury's decision in favor of the judge was the Herald's obvious "piling on" in its stories condemning the judge. Once or twice might be excused, but it was quite clear that the Herald had something of a vendetta against the judge. Which can only be rationalized by them (the Herald) wanting to sell more papers.

I have long been of the view that defamation law chills the media in my home country of Australia (where Prof. Ayers' contract would not be necessary) - the reality of defamation is that it is a reason for the media, especially small independent media, to fear the wealthy. An interesting, and very recent, empirical study purports to confirm my anecdotally based belief. See Dent, Chris and Kenyon, Andrew T., "Defamation Law's Chilling Effect: A Comparative Content Analysis of Australian and US Newspapers" available on SSRN

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