## Facts

- Brown & Williamson Tobacco Corporation manufactured Viceroy cigarettes and used an advertising agency that commissioned market research on marketing to young smokers.
- A market-research proposal recommended presenting cigarettes as part of an “illicit pleasure” category and, within legal constraints, associating smoking with “pot,” alcohol, and sex; the proposal also advised against communicating health-related points.
- Brown & Williamson rejected the proposal and terminated its relationship with the advertising agency, asserting that no advertising campaign implementing the proposal ever ran.
- Walter Jacobson, a CBS-owned Chicago television news anchor, aired a recurring on-screen commentary segment branded as “Walter Jacobson’s Perspective” as part of a series on cigarette marketing.
- Relying on materials that included discussion of the proposal, Jacobson told viewers that Brown & Williamson was effectively pursuing a theme of targeting youth and seeking to associate Viceroy cigarettes with “pot, wine, beer, and sex,” conveying the impression the company had adopted and acted on the strategy.
- Before the broadcast, Brown & Williamson informed Jacobson and CBS that the strategy had been rejected and not implemented; Jacobson did not revise the script.
- The segment aired four times, reaching an audience estimated at more than 2.5 million viewers.
- Brown & Williamson filed a diversity libel action in the Northern District of Illinois; a jury awarded $3,000,000 in compensatory damages (treated as presumed damages for libel per se) and $2,050,000 in punitive damages.
- The district court reduced compensatory damages to $1.00 nominal while leaving punitive damages intact; Brown & Williamson appealed the reduction, and defendants cross-appealed liability and punitive damages.

## Issues

1. Whether the trial evidence supported liability for defamation, including the constitutionally required level of fault for a media defendant (actual malice).
2. Whether Illinois libel-per-se doctrine permitted substantial presumed compensatory damages without proof of specific pecuniary loss, and whether the district court properly reduced the jury’s award to nominal damages.
3. Whether punitive damages were permissible on the record and could stand alongside nominal or presumed compensatory damages consistent with constitutional limits.

## Decision

- The court affirmed the judgment as to liability.
- The court held the evidence supported a finding of actual malice based on broadcasting an implication of implementation despite being told the strategy was rejected and lacking evidence it was carried out.
- The court reversed the compensatory-damages reduction in part and reinstated $1,000,000 of the jury’s original compensatory award (instead of $1.00).
- The court affirmed the full $2,050,000 punitive-damages award.

## Legal Principles

- Specific, provably false accusations of serious misconduct by an identifiable company are actionable even where the industry is broadly disfavored; general public hostility does not immunize concrete false charges.
- Under Illinois law, libel per se supports presumed general damages for reputational harm that is real but difficult to quantify; substantial awards may be justified by the gravity of the charge and the breadth of publication.
- A broadcaster may be found to have acted with reckless disregard for truth where the subject denies implementation of an alleged plan, the broadcaster lacks evidence of implementation, and the broadcast nonetheless presents or implies implementation as fact to a large audience.
- Punitive damages may be sustained in a libel-per-se case where actual malice is shown; they are not barred solely because compensatory damages are presumed rather than tied to itemized economic loss.

## Conclusion

The Seventh Circuit sustained a libel verdict arising from a televised commentary that implied a cigarette manufacturer had adopted a youth-targeting strategy it had rejected, holding that the evidence supported actual malice, reinstating $1,000,000 in presumed compensatory damages for libel per se, and affirming $2,050,000 in punitive damages.


Brown & Williamson Tobacco Corp. v. Jacobson, 827 F.2d 1119 (7th Cir. 1987)