v.
TALOFA, INC. dba TALOFA VIDEO,
Defendant.
High Court of
Trial Division
CA No. 62-97
[1] Under A.S.C.A. § 43.5202(3),
a communication published without malice is conditionally privileged when the
publisher reasonably believes that the defamatory matter communicated affects a
sufficiently important interest of the publisher and the recipient’s knowledge
of this information serves to lawfully protect the publisher’s interest.
[2] The conditional privilege
provided under A.S.C.A. § 43.5202(3) is lost if the publisher abuses the
privilege.
[3]
Article I, § 1 of the Revised Constitution of American Samoa has the same free
speech and press provisions as in the First Amendment to the United States
Constitution, under which there can be no liability without fault on the
publisher of defamatory matter injurious to a private person.
[4] The posting of a check only
to employees serves legitimate business purposes and is conditionally
privileged under A.S.C.A. § 43.5202(3), and the immunity from liability
continues when the check is publicly displayed unless the conditional privilege
is lost through malicious abuse, and malice is present when a publisher either
knows that the published matter is false and defamatory or acts in reckless
disregard as to its truth or falsity.
[5] A business loses its
conditional privilege as a publisher under A.S.C.A. § 43.5202(3) when it is not
necessary to publicly post a check to convey to employees an off-island bank
policy, and, without justification, fails to return the check to a hidden
position and ignores the consequences of the public display; such actions
manifest a reckless disregard of the truth or falsity of the defamatory
character of the publicly posted check.
[6] Where a publicly displayed
check clearly imparts that the idea that the person had passed a bad check, a criminal act, the
posted check is [2ASR3d153] libelous
while visible to the public, and is actionable per se without proof of actual
damages under the common law applicable in situations involving private
concerns of a defamed private person.
[7] Under A.S.C.A. § 43.0802(a),
a motion for new trial must be filed within 10 days after the announcement of
the judgment, and a late filing is not excused on the ground that the meaning
of the judgment was not made clear until later.
[8] Under A.S.C.A. § 43.0101,
the “costs” of a suit usually includes filing fees, process and other service
fees, and similar costs which are fixed by law and are necessarily paid to the
court or its officers, and a prevailing party is entitled to recover costs as a
matter of course, in the absence of a different provision by statute, court
rule, or court order.
[9] Recovery of attorney’s fees and recovery of
costs of suit are unrelated issues; in the absence of a contractual, statutory,
or other legal basis, attorney’s fees are not recoverable — the usual rule is
that each party bears its own burden of this expense.
[10] Although defamation law is relatively complex,
where the fact situation is simple, and the prospective damages are not
monetarily great, charging defamation plaintiffs an hourly rate, in place of
the usual one-third contingent fee arrangement in a tort action, can result in
fee calculations substantially overstated in value.
[11] Simply because a business is reasonably
successful, it is not necessarily appropriate to apply a “deep-pocket” theory
of recovery, and it is appropriate to consider that the injury to the
plaintiffs’ reputation and their consequential emotional distress is not
lasting.
Before
Counsel: For
Plaintiffs, Katopau T. Ainu`u
For Defendant, Aitofele T.
ORDER
DENYING EACH PARTY’S MOTION FOR RECONSIDERATION OR NEW TRIAL
Plaintiffs Ruta Fou (“Ruta”) and
Togaiia Fou (collectively “the Fous”) brought suit against defendant Table, Inc.
dba Talofa Video (“Talofa Video”) for defamation in connection with posting a
copy of the Fous’ check at Talofa Video’s place of business. The trial was held on October 24, 1997 with
counsel for both sides present. On
February 9, 1998, we held Talofa Video liable for defamation by libel and
awarded the Fous [2ASR3d154] $6,000
in damages, plus “actual costs of suit.”
On
February 19, 1998, Talofa Video timely moved for reconsideration or new
trial. This motion was heard on March 23, 1998. On March 2, 1998, the Fous’
counsel flied an affidavit setting forth $4,072.50 in attorney’s fees as the
Fous’ claim for “actual costs of suit.”
We advised the Fous’ counsel at the March 23 hearing that “actual costs
of suit” does not include attorney’s fees. On March 25, 1998, the Fous moved
for reconsideration or new trial on the issues of recovering their attorney’s
fees and the adequacy of the damages awarded to them.
Discussion
A. Talofa
Video’s Motion
Talofa Video essentially raises
three issues in its motion. First, it
maintains that two of the court’s factual findings are against the weight of
the evidence: (a) that the posted check was publicly displayed and (b) that the
posted check conveyed a bad check message.
Second, it claims that the posted check was a privileged
communication. Third, it argues that, in
any event, the posted check could not be libel per se, and the Fous must therefore prove special damages.
1. Fact
Findings
a. Public
Display
Talofa Video claims that the
check was continuously posted at a location outside of the view of anyone
except its employees. It attacks the
credibility of the Fous’ witness, the customer who testified that she saw the
check in plain view at Talofa Video’s store.
We found that by the action of one of Talofa Video’s employees, the
Fous’ check became visible to the general public as well as to Talofa Video’s
employees. We made this finding after
carefully weighing all the testimony, including the customer’s demeanor while
testifying, and other evidence. We are
not now persuaded in any degree to change this finding.
b. Bad
Check Message
Talofa Video insists that even
if an employee told the testifying customer that the check was unacceptable,[1] the
Fous’ check was not necessarily [2ASR3d155]
unacceptable as a bad check (a check passed without sufficient funds or without
an account). However, the customer, a storekeeper herself, testified that bad
checks are commonly posted by retail stores in
2.
Privilege
Originally, we summarily
concluded that the evidence did not present any genuine privilege issue. While Talofa Video did little, if anything, to
advance and develop the privilege issue during the trial, we will address it in
appropriate depth now.
Talofa Video asserts that the
posted check was a privileged communication under A.S.C.A. § 43.5202, which in
relevant part reads:
A privileged publication is one made:
(3) in a communication without malice to a person
interest[ed] therein by one who is also interested or by one who stands in such
relation to the person interested as to afford a reasonable ground for
supposing the motive for the communication [is] innocent or who is requested by
the person interested to give the information;
Talofa Video argues that it
posted the Fous’ check as a business management measure to inform its employees
of its policy not to accept checks drawn on banks in business outside of
[1-2] Under the concept
enunciated by § 43.5202(3), a communication published without malice is
conditionally privileged when the publisher reasonably believes that the
defamatory matter communicated affects a sufficiently important interest of the
publisher and the recipient’s knowledge of this information serves to lawfully
protect the publisher’s interest. See
Restatement
(Second) of Torts § 594 (1977). The common law used the conditional privilege
as a means of “balancing the interest of the defamed person in the protection
of his reputation against the interests of the publisher, of third persons and
of the public in having the publication take place.”
[3] The law
concerning conditional privilege abuse in cases of defamation of private
persons was dramatically impacted by Gertz v. Robert Welch, Inc., 418
U.S. 323, 94 S. Ct. 2997, 41 L.Ed.2d 789 (1974). Essentially, the Supreme Court held that
under the provisions protecting free speech and press in the First Amendment to
the United States Constitution, the states cannot impose liability without
fault on the publisher of defamatory matter injurious to a private person.
We conclude that the later
posting of the Fous’ check in public view was not privileged. Members of the public were not among the
particular recipients of information who needed to know Talofa Video’s
off-island check policy. The public’s
knowledge of a check conveying the appearances of a bad check did not protect
Talofa Video’s licit interests. See discussion in Restatement
(Second) of Torts Chapter 25, Topic 3, Special Note on
Conditional Privileges and the Constitutional Requirement of Fault.
[4] We agree, however, that
the initial posting of the Fous’s check to only Talofa Video’s employees served
its legitimate business purposes and was conditionally privileged at that point
under A.S.C.A. § 43.5202(3). Assuming
for discussion that the privilege continued when the check was publicly
displayed because the off-island check policy was still conveyed to the
employees, Talofa Video remained immune from liability unless the conditional
privilege was lost through malicious abuse.
Gertz defined malice as present when the publisher either
knows that the published matter is false and defamatory or acts in reckless
disregard as to its truth or falsity.
[5] It was not necessary to
post the check to convey Talofa Video’s off-island check policy to its
employees. The employees could have been
easily instructed on this policy by either an oral or written directive. The check could have been displayed with an
appended notation of this policy. Talofa
Video’s ill-advised action was manifested when the check became public
information. Talofa Video failed, without showing any justification, to return
the check to its hidden position and ignored the consequences of the public
display. In sum, at the very least,
Talofa Video acted in reckless disregard of the truth or falsity of the
defamatory character of the publicly posted check.
Therefore, we further conclude
that Talofa Video lost the benefit of any conditional privilege that may have
been afforded by A.S.C.A. § 43.5202(3) through its malicious conduct.
3.
Damages
[6] Talofa Video declares
that the posted check did not imply that Ruta had committed a criminal act and,
thus, the defamatory act, if any, was not libel per se. This argument is
without merit. While it was publicly
displayed, the posted check clearly imparted the idea that Ruta had passed a
bad check, a criminal
act under the laws of
Accordingly, Talofa Video’s
motion for reconsideration or new trial will be denied.
B. The Fous’ Motion
The Fous address two issues in
their motion. First, they assert that
the court erred because the Fous’ recovery did not include their attorney’s fees. Second, they claim that the $6,000 awarded as
damages for the harm to their reputation and their emotional distress was not
adequate compensation. A threshold
question on the timeliness of the Fous’ motion is also present.
1.
Timeliness of the Motion
[7] The Fous’ motion was
filed on March 25, 1998, 44 days after the court’s opinion and order was
entered on February 9, 1998. A motion
for a new trial must be filed within 10 days after the announcement of the
judgment. A.S.C.A. § 43.0802(a). The
Fous seek to excuse the late filing of their motion, claiming that the meaning
of the court’s award of “$6,000 in damages plus actual costs of suit” on
February 9 was not made clear to them until the hearing on Talofa Video’s
motion for reconsideration or new trial on March 23, 1998.
We will discuss this excuse
further and other aspects of the Fous’ motion below to edify the parties. However, we hold here that this excuse is [2ASR3d158] without merit, and that the
Fous’ motion was filed untimely. The Fous’ motion will, therefore, be denied on
this jurisdictional point alone.
2. Costs
of Suit and Attorney’s Fees
[8] “Costs of suit,” “court
costs,” and “costs” are exchangeable terms which are specific and narrow in
scope. Usual costs include filing fees, process
and other service fees, and similar costs which are fixed by law and are
necessarily paid to the court or its officers.
A.S.C.A. § 43.0101. A prevailing party is entitled to recover costs as a
matter of course, in the absence of a different provision by statute, court
rule, or court order. T.C.R.C.P. 54(d).
The modifier “actual” does not in any sense expand the scope either of
the meaning of these terms or of the recoupment of costs.
[9] Recovery
of attorney’s fees and recovery of costs of suit are separate and unrelated
issues. The usual rule on attorney’s
fees is that each party bears the burden of this expense. See Samoa v.
Gibbons, 3 A.S.R.2d 121, 123 (Trial Div. 1986). In the absence of a contractual, statutory,
or other legal basis, attorney’s fees are not recoverable. See Samoa
Products, Inc. v. Pereira, 3 A.S.R.2d 45, 46 (Trial Div. 1986); Black’s
Law Dictionary 312 (5th ed. 1979).
[10] The Fous’ counsel must
have known, or certainly should have known, these elemental precepts of costs
and attorney’s fees when he undertook the Fous’ representation.[2] [2ASR3d159]
3.
Adequacy of the Damages
[11] We have taken another
look at the $6,000 in damages that we initially awarded the Fous. We do not
agree with the Fous’ contention that this is an appropriate case for
application of a “deep-pocket” theory of recovery simply because Talofa Video
is a reasonably successful business. We
believe that the injury to the Fous’ reputation and their consequential
emotional distress is not lasting. The
$6,000 awarded is an adequate measure of the damages, both compensatory and
exemplary, and will not be modified.
Order
1. Talofa Video’s motion for reconsideration or new trial is denied
2. The Fous’ motion for reconsideration or new trial is also denied.
It is so Ordered.
**********
[1] Talofa Video also suggests that this employee’s
statement is inadmissible hearsay.
Talofa Video did not object to this evidence at the trial. Moreover, the
statement was not offered for the truth of the matter asserted and thus is not
hearsay. See T.C.R.Ev. 801(c).
[2] Attorney’s fees in this case are a matter of
agreement between the Fous and their counsel at this point. However, we have several criticisms about the
detailed statement of the attorney’s fees filed by Fous’ counsel for the
court’s review and approval.
We are
surprised that the Fous’ counsel has charged them attorney’s fees based on
hourly rates. Tort actions are generally
undertaken on a contingent fee arrangement providing the attorney a percentage
of the client’s recovery. One-third of
the recovery awarded after trial is the common standard.
When the
court is properly called upon to approve hourly fees, we usually apply a
standard of $100 per hour for out of court services and $125 per hour for in
court services. The Fous’ counsel is using a rate of $150 per hour for in court
services.
The Fous’
counsel states that he spent 2.3 hours drafting the complaint and summons, 2.9
hours drafting a request for admissions, .45 hour drafting a motion to set the
trial date and the hearing notice, 5.7 hours on legal research, and 10.95 hours
drafting a trial memorandum, a total of 22.3 hours on these matters among other
out of court services. Defamation law is relatively complex and has seen
significant change in recent years.
However, in this case, the fact situation is simple, and the prospective
damages were not monetarily great. We
think that even if counsel devoted this number of hours to these office
matters, the resulting fee calculations substantially overstate their value to
his clients.
The Fous’ counsel also states
that he spent 1.3 hours in court at two trial setting hearings, which took a
total of three minutes according to the clerk’s minutes. He further states that the trial required
4.65 hours, while the clerk’s minutes reflect that the trial lasted one hour
and 25 minutes, including a recess.
Counsel may spend some unproductive time traveling to and from court and
waiting in court to be heard on a matter.
However, ordinarily clients cannot be justifiably charged for this time. We do not think that attorney’s fees for in
court services are reasonably based on anywhere near 5.95 hours in this case.
The Fous’ counsel has charged
$4,072.50 for his services in this case. We think that the reasonable value of
those services is approximately $1,500 and certainly no more than $2,000.