NEW JERSEY STEEL CORPORATION v. LUTIN (2002)

Judgment, Supreme Court, New York County (Louis York, J.), entered August 27, 2001, in a libel action, awarding plaintiff New Jersey Steel Corporation (NJSC) compensatory and punitive damages in the principal amounts of $2 million and $20 million, respectively, and plaintiff Von Roll Holding Ltd. (Von Roll) compensatory damages in the principal amount of $500,000, unanimously modified, on the law, to reduce the compensatory damage awards in favor of each plaintiff to one dollar, and, on the facts, to vacate the award of punitive damages in favor of NJSC, and the matter remanded for a new trial on the issue of punitive damages in favor of NJSC, and otherwise affirmed, without costs, unless NJSC, within 20 days of service of a copy of this order, stipulates to reduce the award of punitive damages to $2 million, and to the entry of an amended judgment in accordance therewith.

 Clear and convincing evidence supports the verdict finding that the offending letter, asserting that plaintiffs had ongoing relationships with organized crime, were themselves involved in racketeering activities and were on the verge of financial collapse, and sent to Von Roll's lending bank and shareholder, institutional investors and a financial news reporter, were false, defamatory and made with actual malice.   Such evidence shows that at the time he wrote the offending letter defendant knew that whatever “relationship” plaintiffs previously had with the company of a purported organized crime figure, or with companies related to that company, had ended, and that defendant had only a few months before expressed a positive view of NJSC's financial circumstances to one of its customers.   Evidence of other attempts by defendant to harm plaintiffs was properly admitted as relevant to the issue of actual malice and were not given undue weight (see Harte-Hanks Communications v. Connaughton, 491 U.S. 657, 668, 109 S.Ct. 2678, 105 L.Ed.2d 562).   We modify to award plaintiffs only nominal compensatory damages absent any evidence as to their actual damages (cf.   Gatz v. Otis Ford, 274 A.D.2d 449, 450, 711 N.Y.S.2d 467).   The $20 million award of punitive damages is excessive to the extent indicated (see Liberman v. Riverside Mem. Chapel, 225 A.D.2d 283, 292-293, 650 N.Y.S.2d 194;  cf.   105 E. Second St. Assocs. v. Bobrow, 175 A.D.2d 746, 747, 573 N.Y.S.2d 503;  BMW of N. Am. v. Gore, 517 U.S. 559, 581, 116 S.Ct. 1589, 134 L.Ed.2d 809, n. 34;  Marcus v. Bressler, 277 A.D.2d 108, 110, 716 N.Y.S.2d 395).   We have considered defendant's other arguments and find them unavailing.