What do Annie Oakley and Libel Insurance have in common?

06 Mar

We have all heard tales of Annie Oakley known for her sharp shooting and shooting a shotgun backwards over her shoulder rarely missing her mark. She retired from the Buffalo Bill Cody’s Wild West Show in 1901 to live quietly on the New Jersey shore.

Annie Oakley

But serene life and national image all changed on August 11, 1908 when William Randolph Hearst ran the headline “Famous Woman Crack Shot…Steals to Secure Cocaine” which showed a picture of Annie when she was in her late twenties in her famous pose of the backward shooter. The article went on to say that she was facing a 45 day sentence in a Chicago prison for stealing money from a man’s breeches to get her fix while in fact she was far from the scene of the alleged crime and had never used cocaine. Put bluntly, the article was an out an out lie.

Once the newspaper article hit the press 55 different newspapers picked up the stories off the wire and ran similar stories. It turned out that a woman of a similar name, Any Oakley was the real culprit. She was a burlesque performer whose real name was Maude Fontanella.

Annie Oakley asked that the newspapers retract the story. Most of the newspapers that printed the story had relied on the Hearst article, and upon learning of the libelous error they immediately retracted the false story with apologies. Hearst tried to avoid paying the anticipated court judgments of $20,000 ($300,000 adjusted for inflation in 2008 dollars ) by sending an investigator to Darke County with the intent of collecting reputation-smearing gossip from Oakley’s past. The investigator found nothing. ( )Regardless of the retractions, it was too late as her public image had been destroyed. “She had been one of the first American women who was really branding herself and she was very shrewd about her own marketing”. (Virginia Scharff, a history professor at the University of New Mexico ).

The only recourse left was for her to sue the newspapers, an effort that took seven years to sue 55 newspapers for libel—the largest action of its kind in history. At the end she won 54 out of the 55 suits winning then, what would be considered a sizeable sum, of $27,500 in her suit against Hearst’s Chicago Tribune. The only case she lost was due to the persuasive argument that “reliance on a wire service defeats a libel claim”. It is reported that while she was victorious that the seven years of litigation cost her more than her settlements, but she never wavered from her legal course to gain back her reputation.

Libel cases go way back in history and the laws surrounding libel have changed over time. For example it was once a crime to criticize the government of the United States which in essence was his interpretation of the Sedition Act of 1798. The act, as applied, allowed John Adams to imprison many editors opposed to his policies and forced 25 newspapers to shut down. Thomas Jefferson, after taking office in 1801, pardoned all the convicted and all fines were returned with interest. A century later, in 1912, Teddy Roosevelt sued a Michigan newspaper editor for libel for having printed that Roosevelt got drunk frequently.
The Legal Dictionary ( ) defines libel as “to publish in print (including pictures, writing or broadcast through radio, television or film, an untruth about another which will do harm to that person or his/her reputation, by tending to bring the target into ridicule, hatred, scorn or contempt of others. Libel is the written or broadcast form of defamation, distinguished from slander which is oral defamation. It is a tort (civil wrong) making the person or entity (like a newspaper, magazine or political organization) open to a lawsuit for damages by the person who and prove the statement about him/her was a lie.”

When we think of libel cases today, I think first of all the public figures such as those in politics or individuals in the entertainment industry who are victims of blatant misstatements or false statements. We need look only at the Enquirer or other such tabloids or listen to news commentators on political issues often expressing bias and distorting the issues. It would seem that each and every one of those individuals “libeled” would have a libel case against these news sources. What changed, or limited the ability for rampant lawsuits was a watershed opinion on libel law handed down by the United States Supreme Court in 1964 that made it much harder for public figures to sue for libel. The case was Sullivan v. New York Times which grew out of events during the 1960s civil rights movement in Alabama. L. B. Sullivan was the Montgomery city commissioner who filed a libel suit against four African American clergymen and the New York Times alleging that they had libeled him in reporting falsehoods about the demonstrations and pointed fingers directly at him. He won in the lower court and then the case was taken to the Supreme Court. Justice Brennan set out the rule that reshaped libel law. The court held that what must be present for a public figure to prevail in a libel suit is “actual malice”. Actual malice was defined by the court as knowledge that the item was false, or a reckless disregard as to its truth or falsity. Three members of the court wanted to goes even further, and hold that a public official can “never” sue for being criticized for how he performs his official duties. The majority did not go this far, but still their ruling made it harder for public figures to prevail in a lawsuit and gave news organizations some much needed protection from being harassed by libel suits.

A century later we have entered a new world of litigation surrounding the allegation of libel and broadened to a new area of concerns including invasion of privacy. With more and more businesses branching out from the traditional websites to other social media platforms the types of personal injury suites including libel suits have taken on a much more abstract meaning. Be it blogs, chat rooms, Facebook, or Twitter, all of these types of communications and networking present new types of lawsuits and a changing landscape of laws and regulation. The Federal Trade Commission (FTC) and the Department of Commerce (DOC) are paying close attention to alleged or perceived privacy abuses on the internet. The issues of expanded exponentially with the introduction of the internet. Personal Injury lawsuits have taken on a new meaning including: of the issues of First Amendment rights; libel and slander; false light ( a legal term that refers to a tort concerning privacy that is similar to the tort of defamation—it is one of the four categories of “privacy torts”) ; invasion of privacy arising by publication of private facts; intrusion upon seclusion (intruding upon the solitude or seclusion of another or their private affairs is subject to liability to the other for invasion of his privacy). These are all complex matters that are an outgrowth of the internet world that test the definition of libel in our courts AND in our insurance policies response.

Can the Commercial General Liability policy respond to protect the insured from defense costs and or damages? Answer is yes. The CGL includes a coverage section, Coverage B, that covers libel, slander, defamation. If however the insured is found responsible for speaking or publishing false statements that they knew were false the policy will not pay damages arising out of those specific allegations.

With the advent of the Internet, there has arisen a whole new host of exposures and as a result, the CGL has had many changes over the past few years removing coverage for cyber related activities. Injury or damage arising out of chat rooms, bulletin boards, or advertising for others is now excluded in the CGL. Claims of plagiarism or copyright infringement (such as taking really interesting articles written by somebody else and posting them on your own website without express permission from the author) are excluded from coverage in the CGL.

So where does this leave your insured? With the need for Cyber liability insurance. As an agent, make sure you talk about these exposures with your client and that you specifically offer them coverage that explains what you are offering to cover. There are many companies now that right this coverage; the coverages will vary from carrier to carrier. These policies can be very reasonable premium.The client needs to be fully aware of the coverage that they are accepting or rejecting.


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