472 U.S. 749 (1985)
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.1
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.2 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.3
Dun & Bradstreet promised to investigate but refused to divulge the names.4 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.5 Greenmoss expressed dissatisfaction with the notice and again requested the subscriber names, which Dun & Bradstreet again refused to provide.6
Greenmoss then brought a defamation action in Vermont state court alleging injury to its reputation and seeking compensatory and punitive damages.7 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.8 The jury awarded Greenmoss $50,000 in compensatory damages and $300,000 in punitive damages.9
The trial court granted Dun & Bradstreet's motion for a new trial due to dissatisfaction with its charge to the jury.10 The Vermont Supreme Court reversed the trial court's grant of a new trial.11 The United States Supreme Court granted certiorari.12
Whether the First Amendment requires a plaintiff to show actual malice to recover presumed and punitive damages in a defamation action when the statements at issue do not involve matters of public concern?13
In Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974), the Court held that the First Amendment prohibits awards of presumed and punitive damages in defamation actions brought by private individuals when liability is not based on a showing of knowledge of falsity or reckless disregard for the truth.14 The Court reasoned that the state interest in compensating private individuals for injury to reputation does not extend to presumed or punitive damages, which are not compensation for actual injury.15 This holding applied in the context of speech involving matters of public concern.16 Speech on matters of purely private concern receives less First Amendment protection.17 It lies at the periphery of constitutional concern.18 This allows the strong state interest in compensating injury to reputation to support presumed and punitive damages without actual malice.19
No. The facts establish that the credit report at issue did not involve a matter of public concern.20
In July 1976, Dun & Bradstreet sent a false report to five subscribers stating that Greenmoss Builders had filed for bankruptcy, when the petition had actually been filed by a former employee and the report grossly misrepresented the company's assets and liabilities. The report was transmitted under subscription agreements that barred further disclosure, rendering it a confidential communication between the agency and its subscribers.21
Greenmoss's president learned of the error from the bank, requested a correction and the names of recipients, and received only a corrective notice after Dun & Bradstreet confirmed the inaccuracy. The company remained dissatisfied because the agency refused to identify the subscribers.22 Trial evidence showed the error originated with a 17-year-old employee who failed to verify the information despite the agency's routine practice of doing so.
The jury awarded Greenmoss $50,000 in compensatory damages and $300,000 in punitive damages. Because the speech was solely in the individual interest of the speaker and its business audience, motivated by profit, limited in circulation, and objectively verifiable, it does not implicate the core First Amendment values that justified the Gertz restrictions.23 The state interest in protecting reputation therefore supports the damages award without a showing of actual malice.24
The judgment of the Vermont Supreme Court is affirmed.25
Related opinions on this issue
Justice White concurs in the judgment.26 He continues to believe that Gertz v. Robert Welch, Inc. was wrongly decided.27 He would overrule Gertz and allow the states to apply their own rules of defamation law to cases involving private individuals and matters not of public concern.28
In this case, the defamatory statements did not involve matters of public concern.29 The credit report was a private communication between a credit reporting agency and its subscribers.30 The state has a strong interest in protecting the reputation of its citizens from defamatory statements that do not involve matters of public concern.31
The First Amendment does not require the application of the New York Times actual malice standard in such cases.32
Chief Justice Burger agrees that Gertz is limited to circumstances in which the alleged defamatory expression concerns a matter of general public importance.33 The expression in question here relates to a matter of essentially private concern.34 He therefore agrees that Gertz is inapplicable in this case.35
He continues to believe, however, that Gertz was ill-conceived and should be overruled.36 He agrees generally with Justice White that New York Times Co. v. Sullivan should be reexamined.37
Joined by Justices Marshall, Blackmun, And Stevens
Justice Brennan dissents, arguing that the Court creates an exception to the Gertz rule for cases involving matters not of public concern.38 This exception is inconsistent with the principles underlying Gertz.39 The distinction between matters of public concern and matters not of public concern is difficult to draw.40
The credit report in this case concerned respondent's filing for bankruptcy.41 Whether this is a matter of public concern is not clear.42 The report was sent to five subscribers, but the information could be of interest to others who do business with respondent.43
The First Amendment requires that the New York Times actual malice standard be applied to all defamation actions unless the plaintiff is a private individual and the defamatory statements involve matters of public concern.44 Gertz strikes the proper balance that the Court upsets today.45