Wake jury awards $7.5 million to punish N&O in libel trial

A day after awarding a $1.5 million libel verdict against The News & Observer and reporter Mandy Locke, a Wake County jury came back with an additional $7.5 million decision against the newspaper Wednesday as punishment for defaming a state government employee in 2010.

The jury’s verdicts for Beth Desmond, an agent with the State Bureau of Investigation, concluded a 3 1/2-week trial in Wake County Superior Court that the presiding judge A. Graham Shirley II described afterward as “probably one of the most interesting cases that I’ve ever been involved in.” The jurors, who had reported to the Raleigh courthouse for jury duty on Sept. 27, left the courtroom requesting that no one speak to them about their decisions.

The jury’s punitive award was so large that it exceeded the state’s legal cap limiting punitive damages to three times the amount of compensatory damages, in this case $1.5 million. That means the paper and Locke together owe Desmond $1.5 million in compensatory damages and the N&O will ultimately owe Desmond a little over $4.5 million in punitive damages, for a total of about $6 million. Additionally, the jury decided Wednesday that Locke must pay Desmond $75,000 in punitive damages.

Desmond and her husband, Brian, declined comment. Desmond’s lawyer, James Johnson, said she is relieved the jury found in her favor.

The arguments on punitive damages were held Wednesday morning as a trial-within-a-trial. As a guide to their deliberations, the jurors were told by Judge Shirley that as of Aug. 28, The News & Observer Publishing Co. had a net worth of $248.2 million.

During the arguments on punitive damages, Johnson urged the jurors to send a strong message to the newspaper.

“They have a power,” Johnson said. “With the flick of a pen they can wreak havoc on somebody’s life.”

Johnson told the jury the N&O has yet to acknowledge it did anything wrong.

“Do they get that? Do they understand?” Johnson said. “It’s almost like they consider Beth collateral damage in a war. When you bomb a village, people get killed, but it’s not our problem.”

The jury’s financial awards to Desmond will be held in abeyance while the N&O appeals the case. The newspaper has steadfastly maintained that its coverage was not only accurate but a valuable public service. The N&O’s tried to get the case dismissed at every turn and its lawyers were unsuccessful in persuading the judge to let in evidence that bolstered the paper’s case.

“We disagree with the jury’s conclusion as well as the extraordinary damages it awarded,” said N&O executive editor John Drescher in a prepared statement. “Our 2010 reporting on issues at the SBI was deep and, not surprisingly, controversial.

“The N&O has not, and will not, shy away from reporting on tough issues important to North Carolina,” Drescher said. “We will appeal the jury’s decision and look forward to discussing these stories with the appellate courts.”

The N&O’s lawyers made brief comments to the jury Wednesday about punitive damages, but spoke at length to the judge when the jury was out.

“At the end of the day, the idea that in a democratic republic people can’t talk about the work of public figures without risking a libel award in the seven figures is anathema to democracy,” said N&O lawyer Mark Prak. “Don’t you know, in an already financially challenged business, moving from the print world to the digital world, it’ll have a speech-suppressive effect on journalists, editors and publishers to inform, check, question and report on the government.”

Desmond sued the N&O for libel over 2010 coverage of her ballistics analysis and testimony in a 2006 murder trial in Pitt County. The N&O had reported that independent firearms experts questioned whether she knew anything about firearms analysis, and that some suspected she fabricated evidence to help Pitt County prosecutors win a murder conviction.

During the trial Desmond testified that the paper in essence accused her of committing a crime, triggering events that resulted in Desmond developing post-traumatic stress disorder. Desmond, 51, still works at SBI but no longer performs firearms analysis and now oversees background checks.

The jury concluded that all six statements subject to the libel suit – five published in August 2010 and one in December 2010 – were materially false in the narrow sense that the judge required jurors to define falsehood: whether or not Locke’s interview sources told Locke what she printed. Four of her sources testified that they were either misquoted or taken out of context.

Johnson said the four sources, along with internal emails and newsroom memos, made an impression on the jury.

“You get to the point when you’re on the jury that enough’s enough,” Johnson said. “It would be nice to see the light shine on the N&O for once and force them to think about the way they treat people.”

John Murawski: 919-829-8932, @johnmurawski