## Facts

- The Ottumwa Courier published an item in its courthouse records section incorrectly stating that attorney Richard R. Schlegel II had filed for bankruptcy.
- The error resulted from misreading a bankruptcy filing in which Schlegel was counsel for the debtor, not the debtor.
- The next day, the newspaper printed a front-page correction and apology.
- Schlegel testified he was upset and embarrassed; his wife and others described changes in his demeanor and physical symptoms after the publication.
- Witnesses testified some community members read the erroneous item; many later learned it was false, including through the published correction.

## Issues

1. Whether the plaintiffs produced legally sufficient evidence of “actual injury” to support compensatory damages for defamation based on the erroneous bankruptcy report.
2. If not, whether defendants were entitled to a directed verdict or judgment notwithstanding the verdict (JNOV) on compensatory damages.

## Decision

- The Iowa Supreme Court held the plaintiffs failed to present sufficient evidence of actual injury to support compensatory damages.
- The court ruled defendants’ directed verdict and JNOV motions on compensatory damages should have been granted.
- The court affirmed JNOV for defendants on punitive damages.
- The court reversed the denial of JNOV on compensatory damages and remanded with directions to enter judgment for defendants.

## Legal Principles

- A defamation plaintiff must prove “actual injury” to recover compensatory damages; damages are not presumed from falsity and publication alone.
- “Actual injury” may include reputational harm, impaired standing in the community, personal humiliation, and mental anguish, but it must be supported by competent, non-speculative evidence.
- Generalized testimony that a plaintiff was upset, angry, or embarrassed, without evidence of reputational impairment or other concrete injury proximately caused by the publication, is insufficient as a matter of law.
- Where the record lacks substantial evidence of actual injury, the proper remedy is directed verdict or JNOV for the defendant, notwithstanding a jury’s damages award.

## Conclusion

Because the plaintiffs did not present substantial evidence that the erroneous bankruptcy notice caused compensable actual injury—particularly reputational harm—the Iowa Supreme Court required judgment for the newspaper defendants and rejected the compensatory and punitive damages claims.


Schlegel v. Ottumwa Courier, 585 N.W.2d 217 (Iowa 1998)