U.S. District Judge Oliver Gasch yesterday reversed a jury's verdict that The Washington Post libeled Mobil Oil Corp. president William P. Tavoulareas in a 1979 article about his business dealings.
The decision threw out the jury's award of $2,050,000 to Tavoulareas.
Gasch said he had "thoroughly reviewed the massive record in this case and concluded that there is no evidence to support the jury's verdict. In the absence of 'actual malice' knowingly printing a falsehood or showing reckless disregard of the truth , the judgment rendered against The Post must be set aside."
The judge wrote in a 23-page opinion that the article, which detailed Tavoulareas' involvement in the creation of a London-based shipping firm run by his son, Peter, "falls far short of being a model of fair, unbiased, investigative journalism. There is no evidence in the record, however, to show that it contained knowing lies or statements made in reckless disregard of the truth."
Post editors and reporters greeted yesterday's decision with elation. "We're delighted that our reporting was vindicated and it's a great day for newspapers everywhere," said Post executive editor Benjamin C. Bradlee.
The 63-year-old Tavoulareas, who rose through the ranks of Mobil to become its chief executive and earn more than $1.2 million a year, had greeted last July's verdict as a "vindication for my family and my son and a vindication for my company."
Last night, Mobil Oil spokesman John Flint said that "until Mr. Tavoulareas and his attorneys have the opportunity to study Judge Gasch's opinion, Mr. Tavoulareas will not have any statement." Flint also said Mobil would have no comment on the decision, since the suit was brought by Tavoulareas and his son, not the oil company. Tavoulareas has the right to appeal yesterday's ruling to the U.S. Court of Appeals.
The article in question, written by Patrick Tyler, said the elder Tavoulareas "set up his son" in 1974 as a partner in the London firm, Atlas Maritime Co. The oil company executive and his son both sued The Post for defamation, claiming that the story held them up to ridicule and embarrassed them. The Post argued that the stories were accurate and based on careful and extensive reporting. Gasch did not rule on the truth or falsity of the article.
Gasch said that Tyler's use of the phrase "set up" in the lead of the story "may not be the most felicitous choice of vocabulary . . . but, given the material that formed the basis for this statement, it cannot be said that it was a lie or a reckless untruth."
In rendering its verdict last summer for the elder Tavoulareas, the jury found that the newspaper, Tyler and special correspondent Sandy Golden, who does not work for The Post but led Tyler to an initial source for the story, knew the Nov. 30 story was false when they published it or demonstrated a "reckless disregard" about the accuracy of the article.
At the same time, the jury found that a followup story published Dec. 1, 1979, did not libel Tavoulareas. The jurors held that Peter Tavoulareas had not been libeled by either story, and that Bradlee and Bob Woodward, a Post assistant managing editor who did some initial work in 1976 on the story and later had a hand in editing Tyler's stories, were not liable for libel.
The same jury found that Dr. Philip Piro, a former Tavoulareas son-in-law and Tyler's initial source in reporting the story, had slandered both Tavoulareases by the comments he made about them.
The jury awarded the Mobil president $5,000 in the Piro case and his son $1,000. Piro has asked for both those judgments to be overturned, and Gasch said in a footnote in yesterday's ruling that he is still considering Piro's requests.
In his opinion, Gasch reviewed the various claims Tavoulareas and his team of lawyers presented during the trial about the 80-inch Nov. 30 story and said they "must be construed in the light most favorable to" Tavoulareas.
But the judge said that "it should be noted that this article was neither 'fabricated' by the defendants nor was it based merely upon the imaginations of two newspaper reporters. Despite the fact that certain portions of the story may have been 'slanted,' the record clearly reflects that Tyler expended a large amount of time and effort on its preparation.
"Tyler attempted to speak to high-level Mobil executives and to William and Peter Tavoulareas on a number of occasions but they consistently rebuffed his efforts," the judge said. "Mobil ultimately responded to Tyler's requests by furnishing him with written responses to his inquiries, and he included most of this information in the article."
Gasch noted that the Nov. 30 article contained "well over twenty separate paragraphs that set forth Mobil's position on the matter." The judge noted that Tavoulareas' attorneys had strongly emphasized an in-house memo written by then Post copy editor Cass Peterson before the Tavoulareas story appeared, in which she wrote to another editor: "It's impossible to believe that Tavoulareas alone could put together such a scheme for the sake of his son's business career, or that he would want to."
Gasch rejected The Post's contention at trial that Peterson "did not actually mean that she found the article impossible to believe." But the judge added, "Nevertheless, no matter how this memorandum is construed, it does not prove that The Post acted with actual malice. She was merely expressing her uninformed opinion that she found the story hard to believe."
Upon learning about Gasch's remark, Peterson, now a reporter, said, "I've never been so happy in my life to be an uninformed person."
Two of the jurors in the case who said they had originally wanted to rule in the newspaper's favor last night expressed pleasure at Gasch's ruling.
"I'm glad for The Post," said E. Franklin Johnson, a Commerce Department oceanographer. "Well, I thought it was an injustice. It was not fair. I thought The Post should have won. The four of us were for The Post. There was one guy who just could not be convinced."
Juror Ellie M. Kelley said, "I am so delighted because I was the holdout for The Post and it has worried me all these months that I just didn't hold out and have a hung jury. I think that the judge has done exactly what he should have done."
The jury's foreman, Geoffrey Mott, led the jury room deliberations in favor of Tavoulareas, according to other jurors. Reached last night, Mott said, "Thanks for the information. I have no comment."
Floyd Abrams, a New York lawyer who represents the New York Times and the NBC television network, said, "The decision of the court is a significant vindication of the right and the ability of the press to cover controversial issues. I think this will ease the concerns of newspapers around the country that we have entered a new era of unrestrained high judgments that can be obtained by large corporations against the press."
Bradlee embraced Tyler, as well as Post publisher Donald E. Graham and Katharine Graham, board chairman of the Washington Post Co.
Tyler said, "I feel better than I have since July 30, l982," the date the six-member jury rendered its verdict after hearing 16 days of testimony and deliberating 18 1/2 hours over three days. "I feel vindicated. What the judge did is to remove from us the awful feeling that you're punished for doing what we thought was a reasonable and thorough job of reporting."