¶ 1 Appellants Center for Biological Diversity, Inc., Martin Taylor, Shane Jimerfield, and A.J. Schneller (CBD) appeal from a jury verdict finding them liable for defaming appellees James K. Chilton, Jr., and Chilton Ranch and Cattle Company (Chilton) and interfering with Chilton's business expectations, and awarding Chilton $100,000 in compensatory damages and $500,000 in punitive damages. CBD argues that the Internet publication of material it had submitted in an appeal to the United States Forest Service (USFS) is absolutely privileged under both the federal and state constitutions and Arizona common law. CBD also contends that, even if the material is not absolutely privileged, Chilton failed to establish it was false or issued with actual malice, and that the trial court erred by submitting misleading questions to the jury. Finally, CBD asserts that the punitive damages award should be vacated. Finding no error, we affirm.
Factual and Procedural Background
¶ 2 Chilton is a rancher who holds a permit from the USFS to graze cattle on the Montana Allotment, an approximately 21,500-acre parcel of federal land in southern Arizona. As required by the National Environmental Policy Act (NEPA), 42 U.S.C. §§ 4321 to 4370F, and 40 C.F.R. § 1503, the USFS invited public comment on its decision to renew the permit in 1999. USFS renewed the permit for ten years in April 2002 after finding the renewal would have no significant impact on the environment. CBD, a non-profit group, appealed this decision within the USFS's administrative appeals process in June 2002.
¶ 3 In July 2002, CBD posted a "news advisory" on its website that included a link to the appeal and two appendices that contained twenty-one photographs and captions it had originally submitted to USFS. Jimer-field designed and managed the website for CBD, Taylor wrote the news advisory and some of the captions that accompanied the photographs, and Schneller took most of the photographs and wrote some of the captions. The USFS denied the appeal in August 2002.
¶ 4 After the news advisory had been posted for about a year, and a week after sending a letter demanding a retraction, Chilton sued CBD for defamation, false light, interference with business expectations, and intentional infliction of emotional distress. Before trial, Chilton withdrew the intentional infliction of emotional distress claim. During the trial, the court granted CBD's motion for a directed verdict on the false light claim. After the jury returned its verdict for Chilton, CBD appealed.
¶ 5 CBD contends the publication of the material it submitted to the USFS is absolutely privileged under both the federal and state constitutions and Arizona common law. Chilton responds that CBD's federal constitutional defense, based on the First Amendment's Petition Clause, has been waived and that the common law privilege is inapplicable.
First Amendment Petition Privilege
¶ 6 The First Amendment states "Congress shall make no law . . . abridging
They claim that the Noerr-Pennington doctrine extends the Petition Clause's protection to indirect petitioning, such as the Internet posting here.
¶ 7 After the jury rendered a verdict in favor of Chilton, CBD filed a joint motion for judgment as a matter of law and/or motion for new trial, arguing the Noerr-Pennington doctrine "provides an absolute privilege" for the material published on the website. The trial court found CBD had waived this argument, stating the Noerr-Pennington doctrine had not been "raised in pretrial motions, at trial, or at the time of the request for judgment as a matter of law during trial."
¶ 8 CBD asserts the trial court erred in finding it had waived its Noerr-Pennington doctrine claim, arguing it had raised the issue "in its answer, joint pretrial statement, [and] proposed jury instructions" before its post-trial motion. Because "[t]he concept of waiver is based on two factors: fair notice and judicial efficiency," Geronimo Hotel & Lodge v. Putzi, 151 Ariz. 477, 479, 728 P.2d 1227, 1229 (1986), we find the record supports the trial court's conclusion that CBD has not preserved this argument. See Golonka v. Gen. Motors Corp., 204 Ariz. 575, ¶ 34, 65 P.3d 956, 967 (App.2003) (reviewing a trial court's decision that a party had waived an issue for an abuse of discretion).
¶ 9 In the affirmative defenses section of its answer, CBD simply stated, "Defendants state . . . first amendment protection." In its portion of the joint pretrial statement, CBD contended "the News Advisory . . . [is] protected by the First Amendment right to free speech and to petition the federal government for a redress of grievances." CBD also proposed a jury instruction it now asserts had squarely raised the Noerr-Pennington doctrine claim. However, the instruction in no way fairly raised such a claim, and the issue it raises here was never briefed or argued to the trial court until the post-trial motion. Instead, CBD argued in its summary judgment motion that it was protected by a "legislative proceeding privilege," based on Bailey v. Superior Court, 130 Ariz. 366, 636 P.2d 144 (App.1981), and Arizona common law. CBD never raised or discussed the Noerr-Pennington doctrine in its directed verdict motion, made pursuant to Rule 50, Ariz. R. Civ. P., 16 A.R.S., Pt. 1, on the next to last day of the trial. Without any briefing or substantive discussion of the issue until after the trial had been completed, the trial court did not err in determining CBD had waived the issue.
¶ 10 CBD argues for a relaxation of the waiver doctrine under the rationale of Standard Chartered PLC v. Price Waterhouse, 190 Ariz. 6, 945 P.2d 317 (App.1996). In that case, Division One of this court found the failure to address an issue in a motion for directed verdict during trial did not automatically waive the issue for purposes of a motion for a judgment notwithstanding the verdict if the issue in question was a "pure issue of law that would not have been susceptible to the introduction of further evidence," and if the other party "was aware before [the] motion for JNOV of [the moving party's] position." Standard Chartered, 190 Ariz. at 27, 945 P.2d at 338. However, we find the Standard Chartered rationale inapplicable here. In Standard Chartered, the issue was adequately raised and argued before it was abandoned in the motion for a directed verdict; it "had [been] addressed . . . in summary judgment briefing before trial." Id. In significant contrast, there is nothing in our record that indicates there had been any
¶ 11 Finally, citing Dombey v. Phoenix Newspapers, Inc., 150 Ariz. 476, 482, 724 P.2d 562, 568 (1986), CBD argues we should suspend the "procedural" rule of waiver. We decline its invitation to do so. In Dombey, our supreme court addressed whether the plaintiff was a public figure for defamation purposes, despite the defendant's failure to raise the issue in the court of appeals, stating it could "suspend [waiver] in [its] discretion." Id. at 482, 724 P.2d at 568. CBD admits the issue in Dombey "was briefed and considered by the trial court," unlike here, where the Petition Clause issue was not briefed until after the trial had concluded, and the trial court had not previously been given the opportunity to consider the issue. See also McDowell Mountain Ranch Land Coal. v. Vizcaino, 190 Ariz. 1, 5, 945 P.2d 312, 316 (1997) (declining to hear constitutional challenges to residency requirement not raised below, although appellant urged consideration of issue under Dombey); Barsema v. Susong, 156 Ariz. 309, 311 n. 1, 751 P.2d 969, 971 n. 1 (1988) (appellate court's discretion to hear constitutional arguments not argued below should be "sparingly invoked").
Arizona Constitution Petition Privilege
¶ 12 CBD also argues that the Petition Clause of the Arizona Constitution supports its claim that the material it had published on its website is privileged.
Common Law Privilege
¶ 13 CBD additionally contends that it is entitled to an absolute privilege under Arizona common law. Chilton argues Arizona common law does not provide an absolute privilege,
¶ 14 We need not decide whether an absolute or qualified privilege applies here. The cases upon which CBD relies do not support its contention that the subsequent republishing on its website of the material it had previously submitted to the USFS is privileged. None of the cases CBD cites involves a situation in which a privilege is
¶ 15 Here, however, Chilton did not sue CBD for the statements it had made to the USFS during the appeal process, but for the material subsequently published on CBD's website.
¶ 16 CBD next argues the trial court erred in denying its post-trial motion for new trial because Chilton did not establish the statements on CBD's website were false.
¶ 18 CBD's news advisory began with a page titled "Chiltons' Grazing Permit Challenged: Forest Service Rejects Compromise." This page was not part of the material submitted to USFS as a part of CBD's appeal. This page contained the statement, "Arizona hunting, conservation, and environmental groups" opposed the appointment of Chilton's wife to the Arizona Game and Fish Commission because these groups "claimed that [the Chiltons] tried to suppress Arizona Dept. of Game and Fish recommendations concerning the Montana allotment, and that they have an agenda hostile to wildlife and endangered species." It also quoted Taylor as saying, "much of [the land] is grazed to bare dirt, and cattle are breaking into the Sonora Chub preserve." Many of the other statements on that page were critical of USFS and its grazing plan.
¶ 19 The news advisory also contained a link to the appeal and two appendices of photographs. The twenty-one photographs all contained captions, some simply listing where the photograph had been taken and others containing statements such as, "spring in Scribner Gulch trampled to mud," and, "dead deergrass trailing along streambed."
¶ 20 The jury was given special interrogatories with respect to falsity. Nine of the ten jurors found that CBD had made false statements in the news advisory. The same number found that the news advisory contained "misleading photographs." All ten found that the news advisory did not "accurately describe the condition of the Montana Allotment."
¶ 21 CBD admits that four of the twenty-one photographs "mistakenly depicted adjoining private lands." CBD argues, however, that "[i]t is undisputed that the unfenced boundaries of the private land and public land on the Montana Allotment are difficult to discern." Whether CBD was mistaken about the boundaries goes to malice rather than falsity and is not relevant.
¶ 22 CBD also contends the photographs were not false because, under NEPA, the USFS was "legally obligated to consider the impact of cattle on adjoining private land." However, the news advisory never indicated that the photographs had been taken of private land. The comments that preceded the photographs in the news advisory state that this is an "[i]nspection of [the] Montana [A]llotment."
¶ 23 Finally, CBD argues the news advisory was substantially true. "Substantial truth is an absolute defense to a defamation action in Arizona." Read v. Phoenix Newspapers, Inc., 169 Ariz. 353, 355, 819 P.2d 939, 941 (1991). In its opening brief, CBD stated, "Inevitably, what is absolute truth to an environmentalist about overgrazing on 21,500 acres of federal public land is a `lie' to a cattle rancher." Unsurprisingly, Chilton's witnesses testified that the photographs and captions were misrepresentations of the condition of the land in the Montana Allotment. Equally unsurprising is the fact that CBD's witnesses testified that these photographs and captions were accurate depictions. The jury was instructed as to the substantial truth defense and found the news advisory was not substantially true. Because there was evidence to support this finding, we may not substitute our judgment for that of the jury. See Hutcherson, 192 Ariz. 51, ¶ 13, 961 P.2d at 451.
¶ 24 Therefore, we find the trial court did not abuse its discretion in denying the post-trial motions on the falsity issue. See id. ¶ 12. Because of this conclusion, we need not address CBD's responses to Chilton's trial contentions concerning whether the photographs are "representative" of the Montana Allotment and whether "[t]he implication that the Chiltons are the `[w]orst' [p]ublic [l]and [r]anchers is [p]rotected [o]pinion."
¶ 25 Public figures "may recover damages for defamation only if they prove `actual malice,' that is, `knowledge that [the defamatory statement] was false or with reckless disregard of whether it was false or not.'" Currier v. Western Newspapers, Inc., 175 Ariz. 290, 292, 855 P.2d 1351, 1353 (1993), quoting New York Times v. Sullivan, 376 U.S. 254, 279-80, 84 S.Ct. 710, 726, 11 L.Ed.2d 686 (1964) (alteration in Currier). Public figures must prove actual malice by clear and convincing evidence. Id. at 292-93, 855 P.2d at 1353-54.
¶ 26 CBD contends the trial court erred in denying its motion for judgment as a matter of law as well as its post-trial motions on the issue of malice. A motion for judgment as a matter of law "should be granted if the facts produced in support of the claim or defense have so little probative value, given the quantum of evidence required, that reasonable people could not agree with the conclusion advanced by the proponent of the claim or defense." Orme Sch. v. Reeves, 166 Ariz. 301, 309, 802 P.2d 1000, 1008 (1990). "We review de novo a trial court's ruling on a motion for JMOL," and "[w]e view the evidence and all reasonable inferences from the evidence in the light most favorable to the nonmoving party." Monaco v. HealthPartners of S. Ariz., 196 Ariz. 299, ¶ 6, 995 P.2d 735, 738 (App.1999).
¶ 27 We conclude the jury could have found actual malice by clear and convincing evidence based solely on photograph # 18. This photograph, taken of private land, depicts Ruby Pasture and the caption reads, "California Gulch completely denuded of forage and severely compacted." The photograph shows two cows lying on a dry and barren field, which, viewed in the light most favorable to Chilton's defamation claim, see id., clearly suggests that Chilton's cattle solely created the damage.
¶ 28 Significantly, Schneller, who took the photograph, testified he had been to a May Day festival at this very location about a week and one-half to two weeks before he took photograph # 18. And a resident of the area testified that about five to six hundred people were at that festival, with people coming and going throughout the festival, some camping on the land, and that the festival had lasted at least three weeks. Chilton also presented evidence that several hundred cars, all-terrain vehicles, and recreational vehicles had also used this location during the festival. Because photograph # 18 insinuates that Chilton's cows caused the damage, and because Schneller took photograph # 18 after being present at the festival, a reasonable jury considering all the evidence could have found sufficient evidence of actual malice. The trial court therefore did not err in denying the motion for judgment as a matter of law on the issue of malice.
¶ 29 CBD contends the trial court "erroneously submitted three written questions to jurors . . . about only one element of defamation—falsity." The three questions were: 1) "Did the Defendants make any false statements in their News Advisory?" 2) "Did the Defendants' News Advisory accurately describe the condition of the Montana Allotment?" and 3) "Did the Defendants' News Advisory contain any misleading photographs?" CBD states that "[t]hese written questions . . . invited jurors to ignore the actual malice and substantial truth defenses because those elements did not require a written response." We review the trial court's decision to submit written interrogatories to the jury for an abuse of discretion. See Patania v. Silverstone, 3 Ariz.App. 424,
¶ 30 CBD has failed to show that the interrogatories were erroneous. The jury was properly instructed on all of the elements of defamation. The court specifically instructed the jury that it must find actual malice before it could find Chilton had been defamed, and that substantial truth is a defense to a defamation claim. "We must assume on review that the jury followed the instructions of the trial court." Hyatt Regency Phoenix Hotel Co. v. Winston & Strawn, 184 Ariz. 120, 140, 907 P.2d 506, 526 (App.1995).
¶ 31 The cases cited by CBD in which general verdicts were vacated by the United States Supreme Court in defamation cases are inapposite. In New York Times Co. v. Sullivan, 376 U.S. 254, 283, 84 S.Ct. 710, 727, 11 L.Ed.2d 686 (1964), the Court mandated an actual malice standard for libel actions brought by public officials. Alabama law required a showing of actual malice for punitive damages but not general damages. Id. at 283, 84 S.Ct. at 728. As the general verdict did not specify whether the damages awarded were punitive or general, the Supreme Court vacated the judgment. Id. at 284, 84 S.Ct. at 728. A general verdict in Greenbelt Cooperative Publishing Ass'n v. Bresler, 398 U.S. 6, 10-11, 90 S.Ct. 1537, 1540, 26 L.Ed.2d 6 (1970), was also vacated because the trial court incorrectly instructed the jury and, in light of the general verdict, it was impossible to know whether the jury had "imposed liability on a permissible or an impermissible ground." Neither of these cases involve a situation, as here, where the jury was correctly instructed. Because the jury is presumed to have followed the instructions it received, Hyatt Regency, 184 Ariz. at 140, 907 P.2d at 526, we cannot say the trial court abused its discretion in submitting the interrogatories to the jury. See Patania, 3 Ariz.App. at 428, 415 P.2d at 143.
¶ 32 CBD next challenges the trial court's denial of its motion for judgment as a matter of law as well as its post-trial motions on the issue of punitive damages. We review the denial of a motion for judgment as a matter of law de novo, viewing the evidence in the light most favorable to the nonmoving party. Monaco v. HealthPartners of S. Ariz., 196 Ariz. 299, ¶ 6, 995 P.2d 735, 738 (App.1999).
¶ 33 CBD first argues that punitive damages are inappropriate in this case because of the novel legal issues the case presented. It relies on two Ninth Circuit cases, Waits v. Frito-Lay, Inc., 978 F.2d 1093, 1104 (9th Cir.1992), and Morgan Guaranty Trust Co. v. American Savings & Loan Ass'n, 804 F.2d 1487, 1500 (9th Cir.1986), to argue that "cases involving novel legal issues generally are not appropriate for punishment." However, we disagree with CBD's contention that these issues are novel in Arizona. Defamation is a long-standing tort, and the common law privilege defense CBD raised in the trial court is also not novel, as evidenced by the cases upon which it relied to support its claim that its news advisory was privileged.
¶ 34 CBD further contends the mental state required for punitive damages was not established. In Linthicum v. Nationwide Life Insurance Co., 150 Ariz. 326, 331, 723 P.2d 675, 680 (1986), our supreme court stated a court must find an "evil mind" to support the imposition of punitive damages, and "[t]he key is the wrongdoer's intent to injure the plaintiff or his deliberate interference with the rights of others, consciously disregarding the unjustifiably substantial risk of significant harm." The trial court stated that its "previous decision in finding that there's enough to go to the jury on actual malice is almost 90 percent of what I need to decide that punitive damages also go to the jury," and gave a proper instruction to the jury on punitive damages. The circumstances we have already addressed regarding photograph # 18 could lead a reasonable jury to infer a "conscious disregard . . . [for the] risk of significant harm." Id. The record
¶ 35 CBD also asserts that the punitive damage award was "excessive, manifestly unfair, and unreasonable." It relies on Acheson v. Shafter, 107 Ariz. 576, 579, 490 P.2d 832, 835 (1971), for the proposition that we should vacate a punitive damage award if the verdict is "so exorbitant as to indicate passion, prejudice, [or] mistake." In denying CBD's post-trial motions, the trial court stated it was
¶ 36 Similarly, we cannot conclude the jury's verdict was a result of passion or prejudice. CBD argues "twenty-six members of the voir dire panel were excused by the court for cause, including many who openly expressed anti-environmentalist . . . or pro-ranching views." This argument is unavailing, however, because those excused did not serve on the jury, and CBD does not argue that their comments during voir dire influenced the panel in any way.
¶ 37 CBD's contention that the damages were excessive or unreasonable because it is a non-profit organization is also unconvincing. CBD fails to cite any cases holding that non-profit organizations should be subject to lower punitive damage awards. We are aware "that the [punitive damage] award must not financially kill the defendant." Hawkins v. Allstate Ins. Co., 152 Ariz. 490, 501, 733 P.2d 1073, 1084 (1987). But CBD does not argue, nor does the record support, that its non-profit status would make it unable to pay the punitive damages award and still survive financially.
¶ 38 Finally, we reject CBD's contention that the award is excessive in comparison with other Arizona defamation awards. "Whether punitive damages are excessive is based solely on the circumstances of each case." Nienstedt v. Wetzel, 133 Ariz. 348, 357, 651 P.2d 876, 885 (App.1982). We therefore conclude that the trial court did not err in denying the motion for judgment as a matter of law on the issue of punitive damages.
¶ 39 Affirmed.
CONCURRING: PHILIP G. ESPINOSA, Judge and JOSEPH W. HOWARD, Judge.
Further, we do not address CBD's argument, made for the first time in its reply brief, that the defamatory materials are not "of and concerning" Chilton. See United Bank v. Mesa N.O. Nelson Co., 121 Ariz. 438, 443, 590 P.2d 1384, 1389 (1979) (appellate court does not consider issues raised for first time in reply brief).