decided as amended october 6 1969.: September 15, 1969.
Freedman, Seitz and Aldisert, Circuit Judges.
George Rosenbloom (plaintiff) brought an action for libel in the district court based on diversity of citizenship against Metromedia, Inc. (defendant), alleging that certain radio broadcasts in October of 1963 by WIP, a radio station in Philadelphia managed and controlled by defendant, injured his reputation. The case was tried to a jury, and, after defendant's motions for a directed verdict and for binding instructions were denied, a verdict was returned in favor of the plaintiff for $25,000 in compensatory damages and $750,000 in punitive damages. The district judge reduced the punitive award to $250,000 on remittitur, which was accepted by plaintiff, but denied defendant's alternative motions for judgment n.o.v. or a new trial. 289 F. Supp. 737 (E.D.Pa.1968). Defendant appeals.
In the spring of 1963, plaintiff became a distributor in and around the Philadelphia, Pennsylvania area of nudist magazines published by Outdoor American Company. In the fall of 1963, acting upon complaints concerning obscene magazine and books sales in the city, Captain Clarence Ferguson of the Philadelphia Police Department's Special Investigations Squad carried out first an investigation and then, after October 1, 1963, a series of arrests in connection with the investigation. A raid was made on plaintiff's home and warehouse, his magazines were confiscated, and he was arrested.
The first series of allegedly defamatory radio broadcasts dealing with the raids were made on October 4 and 5 as part of the regular newscasts on the hour and half hour. The first such broadcast was that of October 4, 1963, at 6:00 p.m.:
"City Cracks Down on Smut Merchants
"The Special Investigations Squad raided the home of George Rosenbloom in the 1800 block of Vesta Street this afternoon. Police confiscated 1000 allegedly obscene books at Rosenbloom's home and arrested him on charges of possession of obscene literature. The Special Investigations Squad also raided a barn in the 20 Hundred block of Welsh Road near Bustleton Avenue and confiscated 3000 obscene books. Captain Ferguson says he believes they have hit the supply of a main distributor of obscene material in Philadelphia."
This news report was repeated as part of later news broadcasts some seven times with substantially the same text. The variations involved the use of the word "reportedly" for "allegedly," the use of "the Police believe" for "Captain Ferguson says he believes" in the third sentence, the insertion of the word "allegedly" before "obscene books" in the second sentence, and the substitution in the last broadcast of the phrase "smutty periodicals" for the reference to "obscene books." Apparently, the only alleged libel in the first series was in the failure to use the word "allegedly" in certain places in the quoted broadcast.
The second series of allegedly defamatory broadcasts occurred on October 21, 25 and November 1, again as part of the regular news broadcasts on the hour and half hour. They consisted of reports of a law suit brought by plaintiff and two publishers to enjoin the allegedly illegal arrests and defamatory statements. The first of this series was broadcast October 21 at 8:30 a.m.:
"Federal District Judge Joseph S. Lord, Third, will hear arguments today from two publishers and a distributor * * * all seeking an injunction against Philadelphia Police Commissioner Howard Leary * * * District Attorney James C. Crumlish, Jr. * * * a local television station and a newspaper * * * ordering them to lay off the smut literature racket.
"The girlie-book peddlers say the police crackdown and continued reference to their borderline literature as smut or filth is hurting their business. Judge Lord refused to issue a temporary injunction when he was first approached. Today he'll decide the issue. It will set a precedent * * * and if the injunction is not granted * * * it could signal an even more intense effort to rid the city of pornography."
Succeeding reports were in a similar vein. All made reference to "smut" and/or "girlie-books" and implied that the distributor and the two publishers wanted to stop all obscenity raids throughout the city, even as against literature that was in fact pornographic and even though plaintiffs had nothing to do with its distribution. The implication was not justified since plaintiffs had only sought to prevent alleged police harassment of them alone and asserted that their publications were not obscene. In one such broadcast "allegedly" was omitted before "smut distributors". At no time did the broadcasts mention the names of the distributor and publishers involved in the lawsuit. Although defendant contends to the contrary, we shall accept the district court's conclusion that certain of the statements in the two series were defamatory as a matter of Pennsylvania law and, in the circumstances, created a jury issue under such law.
Defendant's principal contentions on appeal are that the district court erred in refusing to hold that the action was controlled by the federal constitutional standard of "actual malice" as defined in New York Times Co. v. Sullivan*fn1 and that when so ...