Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc.

1985-06-26

Headline: Court allows punitive and presumed damages for false private credit reports, upholding state awards and making it easier for businesses harmed by nonpublic defamatory reports to recover.

Holding: The Court held that the First Amendment does not bar awards of presumed and punitive damages for defamatory statements that do not involve matters of public concern, and affirmed the Vermont Supreme Court's judgment.

Real World Impact:

Allows presumed and punitive damages for false private speech not involving public concern.
Makes credit reporting firms liable for large damages for false reports to limited subscribers.
Leaves room for states to protect reputations against private, damaging statements.

Topics: defamation, credit reports, First Amendment limits, punitive damages, private reputation

Summary

Background

A credit reporting company sent a false report to five subscribers saying a local construction contractor had filed for bankruptcy. The error was traced to a 17‑year‑old employee who misread a filing. The contractor asked for corrections and the names of the subscribers; the company issued a corrective notice but refused to name recipients. A jury awarded $50,000 in compensatory (presumed) damages and $300,000 in punitive damages. The trial court granted a new trial because jury instructions failed to define "actual malice," and the Vermont Supreme Court reversed.

Reasoning

The core question was whether the Gertz rule — requiring proof of "actual malice" before presumed or punitive damages may be awarded when First Amendment interests are at stake — applies when the speech is not about a public matter. The Court balanced the State’s strong interest in protecting private reputation against the lesser First Amendment interest in private commercial reports. Because the credit report was sent confidentially to a small, business audience and did not concern a public issue, the Court held that permitting presumed and punitive damages without a showing of actual malice did not violate the First Amendment.

Real world impact

The ruling means businesses that are defamed in narrowly circulated, private commercial reports can be awarded presumed and punitive damages under state law without proving actual malice. The decision hinges on whether the statement concerns a public matter; if it does, stronger First Amendment protection still applies. The Court noted verification incentives and limited circulation reduce the risk of chilling protected public debate.

Dissents or concurrances

Chief Justice Burger and Justice White concurred in the judgment but expressed other views about Gertz and the standards for fault. Justice Brennan (joined by three Justices) dissented, arguing Gertz’s limits on presumed and punitive damages should apply even to credit reports.