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Newspaper Loses Libel Lawsuit

Court: Jury awards $2.25 million to a man who said the Santa Barbara paper falsely linked him to fraud.


Eleven years after a suit was filed, a Los Angeles Superior Court jury has awarded $2.25 million in damages to a Beverly Hills businessman who said he was defamed by articles in the Santa Barbara News-Press.

The jury found the stories falsely linked Leonard M. Ross to a massive investor fraud investigation in the 1970s, said Anthony Glassman, Ross' attorney. The damages were imposed on the News-Press and the New York Times Co., which owned the Santa Barbara paper when the articles were written, in 1988 and 1989.

"We're pleased with the finding of liability. It's been a long, hard struggle," said Glassman. Ross thanked the jurors after the award was announced Thursday, he said.

George Freeman, assistant general counsel for the New York Times Co., expressed disappointment. "We felt this was an important story," he said. Ross was the leading shareholder of Santa Barbara Savings and Loan during the S&L crisis of the late 1980s.

Freeman said the company might appeal.

The 9-3 verdict marked the second time a jury has ruled in Ross' favor. In 1993, another jury awarded Ross $7.5 million, including $2.5 million for emotional distress. A judge later set the ruling aside, saying it was excessive and flawed by inconsistencies.

At the center of Ross' claim was an allegation that the paper falsely linked him to two criminal investigations when he was investigated only once and never charged. Ross argued that he was wrongly associated by the news reports with an investigation of investor fraud that sent his former partner, Barry Marlin, to prison.

Glassman said Ross waged the protracted battle because he believed "he owed it to his family to clear his name and reputation."

Ross describes his life as a rags to riches story. He said he was raised in a New York housing project, worked his way through UCLA law school and achieved success in business. He lives in a former estate of William Randolph Hearst and Marion Davies.

Sandra Baron, executive director of the Libel Defense Resource Center in New York, said the Ross case is a lengthy one. But long-running libel cases are not unusual.

"There are a lot of serious principles involved in libel cases," she said. Two reputations are at stake, not just the person filing the suit but the news organization being sued.

After libel awards spiked in the 1980s, Baron said, they have dropped in recent years. In the first two years of the '90s, nearly three of five awards exceeded $1 million and one in four exceeded $10 million. For the entire decade, only a third of awards exceeded $1 million, and one in 10 was above $10 million.

Tom Bolton, executive editor of the News-Press, said he "hates to see a newspaper lose a damage award," but notes the paper was then under different ownership and management. The New York Times Co. sold the paper last year to Santa Barbara businesswoman Wendy McCaw.

Freeman said he is concerned because this case involved a principle called libel by implication, meaning that a statement may suggest something false and damaging without saying it outright. "It's real dangerous to allow cases to go forward that involve implications cobbled together by attorneys," he said.

Glassman denied this was solely an implication case. "There were three separate statements," he said. "The jury found all three statements to be false."

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