Antitrust Law Daily Wrap Up, ADVERTISING NEWS: Supreme Court asked to review ruling that political ad was not defamatory, (Aug 19, 2014)

By John W. Arden, J.D., LL.M.

Iowa State Senator Rick Bertrand has asked the U.S. Supreme Court to review a ruling by the Iowa Supreme Court that a televised campaign ad run by opponent Rick Mullin—implying that Bertrand marketed a sleep drug to children—was not defamatory. In his petition for certiorari, Bertrand questions whether the state high court applied an “unreasonably high legal standard” when finding a lack of sufficient evidence of actual malice (Bertrand v. Mullin, Dkt. No. 14-190, August 14, 2014).

During the 2010 election campaign, Mullin aired a commercial, entitled “Secrets,” stating that “Bertrand was a sales agent for a big drug company that was rated the most unethical company in the world” and “The FDA singled out Bertrand’s company for marketing a dangerous sleep drug to children.” A written statement imaged in the commercial said “BERTRAND’S COMPANY MARKETED SLEEP DRUG TO CHILDREN.”

Soon after the commercial aired, Bertrand brought a state court action against Mullin and the Iowa Democratic Party (IDP) for defamation. He claimed that 10 statements in the commercial were defamatory and alleged a broad array of damages. The court submitted only two statements to the jury: (1) “The FDA singled out Bertrand’s company for the marketing of dangerous drugs to children” and (2) “BERTRAND’S COMPANY MARKETED SLEEP DRUG TO CHILDREN.” The jury found in favor of Bertrand and returned a verdict of $31,000 against Mullin and of $200,000 against the Democratic Party. The trial court found sufficient evidence of actual malice, holding that Bertrand’s public denial that he personally sold the drug, together with the filing of the lawsuit, alerted Mullin of the false implication.

On appeal to the Iowa Supreme Court, Mullin argued that the trial court erred by failing to grant his motion for judgment notwithstanding the verdict, since Bertrand failed to establish clear and convincing evidence of actual malice. Betrand claimed that actual malice was supported by evidence that (1) Mullin and the IDP knew the implication of the commercial was false, since they did not know which division of the large pharmaceutical company sold the cited drug; (2) Mullin and the IDP knew or should have known that the commercial was false; (3) Mullin and the IDP had ill will against Bertrand based on his own campaign commercial; (4) the purpose of the commercial was to lessen electoral support for Bertrand; and (5) the commercial continued to air after Mullin was informed of its falsity.

Overturning the jury verdict, the Iowa Supreme Court held that there was insufficient evidence to support a finding of actual malice. The evidence demonstrated that Mullin and the IDP lacked actual knowledge that Bertrand did not sell the drug at issue. Consequently, the state high court considered whether the implied statement was made with reckless disregard for its truth or falsity.

The state high court ruled that Mullin and the IDP did not create the commercial with reckless disregard for the truth or falsity of the implied statement because (1) the general background story regarding the drug was not false, expressions of doubt are not evidence of actual malice; (2) a public forum where Bertrand denied selling the drug was not a suitable environment to alert Mullin of the ad’s error; and (3) actual malice cannot be demonstrated through ill will.

The petition for review argued that the Iowa Supreme Court applied an unreasonably high standard for defamation; the U.S. Supreme Court should clarify the standard as it relates to defamation by implication cases; the Iowa Supreme Court erred in finding a lack of sufficient evidence that respondents had actual knowledge that the commercial’s implication was false; and the Iowa Supreme Court erred in not finding reckless disregard of a false implication.

Attorneys: Jeana L. Goosmann (Goosmann Law Firm, PLC)

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