Schlegel v. Ottumwa Courier

The Ottumwa Courier (the Courier) (defendant) incorrectly reported that Richard Schlegel II, a prominent local attorney, had declared bankruptcy. The following edition included a correction and apology. Schlegel sued the Courier for defamation in Iowa state court. Schlegel testified about how he was affected by the inaccurate report, and his wife testified that Schlegel had become angrier, had no sense of humor, and suffered from physical symptoms. Other witnesses testified that they read the bankruptcy notice and did not see the correction, but admitted they eventually discovered Schlegel had not declared bankruptcy. The jury awarded Schlegel $230,000 in compensatory damages. The Courier filed a motion for judgment notwithstanding the verdict (JNOV) and a motion for a new trial. The district court held that the compensatory damages were excessive, set the award aside, and granted the motion for new trial. The district court found that although Schlegel provided evidence the publication upset him, he offered no proof of harm to his reputation or law practice. The district court also found that Schlegel did not show he had a good reputation before the publication. Overall, the district court held that the jury’s compensatory damage award was so clearly unsupported by the evidence that it shocked the conscience, and that the award could be presumed to be improperly based on passion or prejudice. Schlegel appealed the decision to set aside the award. The Courier cross-appealed, arguing the district court erred in not granting the motion for JNOV.