404 U.S. 898 (1971)

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U.S. Supreme Court

DUN & BRADSTREET, INC. v. C. R. GROVE , 404 U.S. 898 (1971)

404 U.S. 898

C. R. GROVE, Trustee, et al.
No. 71-206.

Supreme Court of the United States

October 19, 1971

On petition for writ of certiorari to the United States Court of Appeals for the Third Circuit.

The petition for writ of certiorari is denied.

Mr. Justice DOUGLAS, dissenting.

The petitioner, Dun & Bradstreet, Inc., publishes credit reports available by private subscription. Because Altoona Clay Products, Inc., was a sizable concern it became a subject of analysis by the petitioner. From time to time the petitioner issued confidential financial studies of Altoona which were requested by the subject's creditors and suppliers.

In early 's, employees discovered in the judgment index of Blair County, Pennsylvania, an unsatisfied entry of $60,000 against Altoona Clay Products Company, a predecessor and defunct enterprise which had been operated by those controlling the subject. On January 3, 1963, the petitioner issued an analysis concerning Altoona, noting this find, but failing to state that the unpaid judgment was against an entirely different firm, at least technically, so that its creditors and suppliers were led to believe that the outstanding liability was owed by Altoona. The error was retracted by Dun & Bradstreet, Inc., in April, 1963, but the respondent, a trustee in bankruptcy presiding over Altoona's estate, claims that the financial demise of its ward was worked during the interim misunderstanding.

After protracted litigation initiated in the District Court on diversity jurisdiction, involving a prior appeal and remand, a jury, applying Pennsylvania libel law, awarded $110,000 in 'general damages' to the trustee in bankruptcy. No special damages were found. The District Court, however, entered a judgment n. o. v. in favor of Dun & Bradstreet, Inc., on the ground that New York Times Co. v. Sullivan, 376 U.S. 254 (1964), pro-

Page 404 U.S. 898 , 899

scribed libel judgments under such circumstances of innocent error.

The respondent appealed this order to the Third Circuit Which reversed, reinstating the verdict and holding that 'the doctrine of New York Times Co. v. Sullivan does not extend to private credit reports, and that any allegations of defamation concerning such reports are properly subject to the libel laws of the several states.' The opinion issued by the Third Circuit distinguished New York Times on three grounds: (a) unlike Sullivan, the subject of these private reports, Altoona, had no access to the same medium to correct the error; (b) unlike the civil rights struggle, the confidential nature of these nonpublic reports fell outside the realm of public debate; and (c) unlike New York Times, the dispute here was factual in nature, not a difference of opinion. Grove v. Dun & Bradstreet, Inc., 438 F.2d 433 (CA 3 1971).

I would grant certiorari and hear argument on the question whether we should reverse the Third Circuit's holding, not because it misreads the New York Times case, but because libel and slander awards are no longer constitutionally permissible elements of American law.

It is clear that the First Amendment would proscribe any attempt to enact a federal libel law, notwithstanding the Alien and Sedition Act (1 Stat. 596) the contrary. [Footnote 1] I do not suppose that anyone considered at the time of its adoption whether the Fourteenth Amendment meant that state courts could no longer participate in libel and slander awards. But I have expressed the idea before that 'constitutional law is not frozen as of a particular [404 U.S. 898 , 900]

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