Graphnet, Inc. v. Retarus, Inc. (085529) (Hudson County & Statewide) ( 2022 )

SYLLABUS
This syllabus is not part of the Court’s opinion. It has been prepared by the Office of the
Clerk for the convenience of the reader. It has been neither reviewed nor approved by the
Court. In the interest of brevity, portions of an opinion may not have been summarized.
Graphnet, Inc. v. Retarus, Inc. (A-71-20) (085529)
Argued November 30, 2021 -- Decided February 11, 2022
FERNANDEZ-VINA, J., writing for a unanimous Court.
In this appeal, the Court considers whether a new trial on all damages is required
when the jury is improperly instructed on nominal damages and a plaintiff opposes
remittitur.
Plaintiff Graphnet, Inc. and defendant Retarus, Inc. are considered industry
competitors -- they each provide, among other things, cloud-based facsimile services. In
2014, Retarus published a brochure containing allegedly defamatory statements about
Graphnet. The brochure described Retarus’s services, listed some of its then-clients, and
contained a section titled “Competition Analysis” that described the purported advantages
of Retarus’s services over named competitors, including Graphnet. The brochure listed
several “[d]isadvantages” of Retarus’s competitors, including security issues, lack of
customer support, and “difficulty with uptime (especially Graphnet).”
Graphnet representatives received a copy of the brochure at a May 2016 event. In
August 2016, Graphnet filed a complaint against Retarus. Throughout discovery,
Graphnet failed to produce requested documents and took no depositions. Based on
Graphnet’s failure to present supporting evidence, the trial court dismissed all claims
except for the defamation and slander claims.
The trial court and the parties agreed that the court would charge the jury pursuant
to Model Civil Jury Charge 8.46, entitled “Defamation Damages (Private or Public),”
which instructs a jury on the elements of defamation. The trial court’s instructions
tracked the model charge closely, including Section D, which is devoted to “Nominal
Damages for Slander Per Se or Libel.” In keeping with the model charge, the court
instructed the jurors in part (emphases added):
For these reasons, you are permitted to award nominal
damages to compensate the plaintiff for injury to reputation
which you reasonably believe that may have been sustained.
Nominal damages are a small amount of money damages that
are not designed to compensate a plaintiff, but are awarded for
1
the infraction of a legal right where the extent of the loss is not
shown or where the right is one not dependent on the loss or
damage.
Neither party objected to the instructions at trial. The jury ultimately awarded
Graphnet $0 in compensatory damages but $800,000 in nominal damages.
Retarus filed a motion for remittitur. Graphnet opposed the motion. The trial
court granted Retarus’s motion, holding that the $800,000 award “was grossly
disproportionate to the purpose of nominal damages.” The court reduced Graphnet’s
award to $500, in part relying on N.J.S.A. 2A:15-5.10, which defines nominal damages
as “damages that are not designed to compensate a plaintiff and are less than $500.” A
final order of judgment in the amount of $500 was entered in May 2019.
Graphnet appealed, arguing that the trial court erred as a matter of law by ordering
remittitur without Graphnet’s consent. The Appellate Division affirmed in part, reversed
in part. The court recognized that the jury’s $800,000 nominal damages award was
“shockingly excessive and cannot stand” but concluded that the trial court improperly
awarded Graphnet $500 in nominal damages in violation of the well-settled doctrine of
remittitur. The appellate court remanded for a new trial on nominal damages only.
The Court granted certification. 246 N.J. 440 (2021).
HELD: As the Appellate Division found, remittitur was improper without Graphnet’s
consent. But this matter requires a new trial on all damages in which the jury is properly
instructed on actual and nominal damages. The Court also refers Model Civil Jury
Charge 8.46D to the Committee on Model Civil Jury Charges to be amended.
1. There are three main types of damages available in an action for defamation:
(1) compensatory or actual; (2) punitive or exemplary; and (3) nominal. Compensatory
damages depend on showings of actual harm, and may not include a damage award
presumed by the jury. Unlike compensatory damages, nominal damages do not attempt
to compensate the plaintiff for an actual loss. A nominal damages award may be made in
a defamation case to a plaintiff who has not proved a compensable loss. Such an award is
a judicial declaration that the plaintiff’s right has been violated. It serves the purpose of
vindicating the plaintiff’s character by a verdict of a jury that establishes the falsity of the
defamatory statement. Because nominal damages are awarded only when no showing of
loss has been made, they are envisioned as more of a legal remedy than a financial one.
Nominal damages, under New Jersey law, can best be defined as “a token amount of not
more than $500.” (pp. 14-16)
2. A grant of remittitur allows a court to decrease a “grossly excessive damages award
returned by a jury.” Cuevas v. Wentworth Grp., 226 N.J. 480, 499 (2016). In setting a
2
remittitur, the court must determine “the amount that a reasonable jury, properly
instructed, would have awarded.” Orientale v. Jennings, 239 N.J. 569, 577 (2019).
However, the court must obtain the plaintiff’s consent before it may grant remittitur. In
other words, “[t]he plaintiff has the choice either to accept the award as remitted by the
court or to proceed with a new damages trial before another jury.” Cuevas, 226 N.J. at
499. “The absence of mutual consent means that the case proceeds to a second jury for a
new damages trial.” Orientale, 239 N.J. at 595. (p. 17)
3. Erroneous jury instructions typically constitute reversible error. Such error most
commonly results from changes to adapt a model jury charge to the circumstances of a
particular case, but it can also result from a fatal flaw within a charge itself. (pp. 17-19)
4. The grant of remittitur here -- made without consent of the plaintiff -- was error. The
Court therefore considers the appropriate scope of the proceedings on remand. One can
only speculate as to the jury’s intentions in awarding Graphnet $0 in compensatory
damages and $800,000 in nominal damages. That is because the awards were made after
improper jury instructions. Nominal damages can be awarded in a defamation case when
a plaintiff has not proven a compensable loss. Here, following the model jury charge, the
jury was first told it could “award nominal damages to compensate the plaintiff” and then
told that “[n]ominal damages . . . are not designed to compensate a plaintiff.” The
contradictory instruction given on nominal damages did not adequately convey the law.
Instead, it opened the door for the jury to attempt to compensate Graphnet through
nominal damages in a way that was either wholly impermissible under the law or a
miscategorized but otherwise permissible form of compensatory damages. Viewing the
record in the light most favorable to Graphnet, as is required under the appropriate
standard of review, there is a possibility that the compensatory damages award might
have been different had the jury been properly instructed on the nature and function of
nominal damages. Therefore, a new trial on all damages is required. (pp. 19-21)
5. The model jury charge, as written, fails to instruct on the definition, scope, and
purpose of nominal damages. It instructs the jury “to compensate the plaintiff,” but then
contradicts itself by explaining that nominal damages “are not designed to compensate a
plaintiff.” The Court provides a charge for use on remand in the instant case and refers
Model Civil Jury Charge 8.46D to the Committee on Model Civil Jury Charges to
address the issues noted in this opinion. (pp. 22-23)
AFFIRMED AS MODIFIED. REMANDED for further proceedings.
CHIEF JUSTICE RABNER and JUSTICES ALBIN, PATTERSON, SOLOMON,
and PIERRE-LOUIS join in JUSTICE FERNANDEZ-VINA’s opinion.
3
SUPREME COURT OF NEW JERSEY
A-71 September Term 2020
085529
Graphnet, Inc.,
Plaintiff-Appellant,
v.
Retarus, Inc.,
Defendant-Respondent.
On certification to the Superior Court,
Appellate Division.
Argued Decided
November 30, 2021 February 11, 2022
Joseph Schramm, III, argued the cause for appellant
(FisherBroyles, attorneys; Joseph Schramm, III, on the
briefs).
Karl Geercken argued the cause for respondent (Alston &
Bird, attorneys; Karl Geercken and Steven L. Penaro, on
the briefs).
JUSTICE FERNANDEZ-VINA delivered the opinion of the Court.
In this appeal, the Court considers whether a new trial on all damages is
required when the jury is improperly instructed on nominal damages and a
plaintiff opposes remittitur.
1
Plaintiff Graphnet, Inc. and defendant Retarus, Inc. are competitors in
the cloud-based messaging industry. In 2014, Retarus published a brochure
containing allegedly defamatory statements about Graphnet. Graphnet filed a
civil action against Retarus in 2016 alleging, among other causes of action,
defamation.
Following trial, the court instructed the jury on damages for defamation
following Model Civil Jury Charge 8.46D, which instructs a jury that it may
award nominal damages “to compensate” a plaintiff for injury to reputation
caused by a defendant’s defamation. The jury returned a unanimous verdict
finding that Retarus defamed Graphnet. By a 5-1 vote, the jury found that
Graphnet failed to show that it suffered actual damages. However, the jury
awarded Graphnet $800,000 in nominal damages.
Without obtaining Graphnet’s consent, the trial court granted Retarus’s
motion for remittitur and reduced the nominal damages award to $500, holding
that $800,000 in nominal damages was grossly disproportionate to the purpose
of nominal damages.
The Appellate Division agreed that the initial nominal damages award
could not stand, but it vacated the trial court’s order and remanded for a new
trial on nominal damages because, in its view, granting a defendant’s motion
for remittitur without a plaintiff’s consent was improper.
2
For the reasons that follow, we affirm the Appellate Division’s finding
that remittitur was improper without Graphnet’s consent. However, we
conclude that this matter requires a new trial on all damages in which the jury
is properly instructed on actual and nominal damages. We also refer Model
Civil Jury Charge 8.46D to the Committee on Model Civil Jury Charges to be
amended.
I.
Graphnet and Retarus are considered industry competitors -- they each
provide, among other things, cloud-based facsimile services. In February
2011, Retarus, which is headquartered in Germany, announced an expansion
into the North American market.
In 2014, Retarus prepared the brochure that is the subject of Graphnet’s
defamation claim here. The brochure described Retarus’s services, listed some
of its then-clients, and contained a section titled “Competition Analysis” that
described the purported advantages of Retarus’s services over named
competitors, including Graphnet. The brochure listed several
“[d]isadvantages” of Retarus’s competitors, including security issues, lack of
customer support, and “difficulty with uptime (especially Graphnet).”
In May 2016, members of Graphnet’s sales team attended a technology
exposition event called Techspo in New York City. Retarus distributed the
3
brochure at the event, and Graphnet’s sales team brought a brochure back to a
member of Graphnet’s Executive Team, Guy Conte.
A.
On August 16, 2016, Graphnet filed a complaint against Retarus
asserting defamation/slander; disparagement of goods/trade libel; false light;
tortious interference with prospective economic advantage; tortious
interference with a contract; and unjust enrichment. Through an amendment to
the complaint, Graphnet added several causes of action, including violations of
the Telecommunications Act and Federal Communication Commission
regulations.
Throughout discovery, Graphnet failed to produce requested documents
and took no depositions. On September 14, 2018, Retarus moved for summary
judgment. Based on Graphnet’s failure to present supporting evidence, the
trial court dismissed all claims except for the defamation and slander claims.
A six-day jury trial began on January 29, 2019. At trial, Graphnet
introduced evidence that it had lost revenue from several clients after Retarus
published the brochure, most notably J.P. Morgan Chase (JPMC). JPMC was a
longstanding client of Graphnet’s for almost two decades and, at times,
generated $1.5 million in annual revenue for Graphnet. Retarus began doing
business with JPMC in 2014; that year, JPMC generated more than $1 million
4
in revenue for Graphnet. However, by 2015, Graphnet’s revenue from JPMC
began to decline, generating approximately $800,000 in 2015, $300,000 in
2016, and $100,000 in 2017. During this time, Retarus’s revenue from JPMC
began to increase. Retarus gained revenue from JPMC of approximately $1.5
million in 2016, $1.7 million in 2017, and $1.8 million in 2018. By 2019,
JMPC had ceased doing business with Graphnet.
Retarus’s Senior Vice President of Sales, Tim Valentine, testified at trial
that the brochure was not a promotional brochure intended to be given to
potential clients, but rather an internal tool used to train Retarus’s
telemarketers. He testified that he was unaware of Retarus distributing the
brochure to any potential clients or anywhere outside of the company .
Graphnet did not provide testimony at trial from anyone who received the
brochure at the Techspo exhibition.
The jury heard testimony derived from the affidavit and deposition of
Jeffrey Chaney, who worked at JPMC from 2001 to 2015 and had dealings
with both Graphnet and Retarus during that time. Chaney testified that he had
seen the brochure years earlier and that it looked “like a sales pitch to [JPMC]
of what Retarus can do for [JPMC].” He also testified that Retarus had neither
disparaged Graphnet nor provided materials to JPMC that cast Graphnet in a
5
negative light. Chaney stated that JPMC did not rely on the brochure in
choosing Retarus as a new vendor.
Conte testified that JPMC began reducing its business with Graphnet as
early as 2013 and conceded that Graphnet received complaints from many
customers, including JPMC, regarding issues in Graphnet’s services that
resulted from damage sustained from Hurricane Sandy in 2012.
B.
The trial court and the parties agreed that the court would charge the jury
pursuant to Model Civil Jury Charge 8.46, entitled “Defamation Damages
(Private or Public),” which instructs a jury on the elements of defamation.
Section A provides general instructions on damages, distinguishing between
compensatory and punitive damages. Sections B through D, in turn, focus on
compensatory damages: Section B applies to most claims for compensatory or
actual damages; Section C is devoted to compensatory damages for emotional
suffering; and, of particular relevance here, Section D is devoted to “Nominal
Damages for Slander Per Se or Libel.”
The trial court first provided the following instruction to the jury on
general damages:
For the injury to reputation caused by defendant’s
alleged defamatory statement, plaintiff seeks to recover
compensatory damages. Compensatory damages are
sought by the plaintiff for the recovery of money value
6
of their loss. If the plaintiff has established the
essential elements of their claim as explained in my
instructions, they’re entitled to compensatory damages
for all detrimental effects of the defamatory statement
relating to the plaintiff’s reputation which were
reasonably to be foreseen and which are the direct and
natural result of the defamatory statement. Damages
awarded for such purposes are compensatory.
That instruction followed Section A nearly verbatim other than the removal of
language about punitive damages, which were not sought by Graphnet.
The trial court then provided the jury the following instruction on
compensatory damages:
[C]ompensatory damages are referred to as special
damages. These damages are never presumed. They
must be specified by the plaintiff and proved by the
evidence. Plaintiff must show you what the special loss
was and by what sequence of connected events it was
produced by the defamation.
Plaintiff can recover these damages only if you
determine that the defendant’s conduct was a
substantial factor in causing plaintiff’s actual losses,
financial or economic. Evidence of embarrassment,
mental suffering or physical sickness will not -- and this
really doesn’t apply to it -- a company mental suffering
or sickness, but embarrassment will not, without more,
entitle plaintiff to these damages.
Here, the plaintiff claims that they suffered specific
damage as a result of the publication of the defamatory
statement. I will now outline the specific damages
claimed by the plaintiff. And these damages are as
follows: it is the loss of business opportunity and loss
of business property.
7
That instruction likewise followed Section B very closely, except for the
clarification about mental suffering or physical sickness.
Lastly, the trial court provided the following instruction to the jury on
nominal damages:
In the event that you find the plaintiff is not entitled to
actual damages plaintiff claims were caused by
defendant’s wrongful act, plaintiff seeks for recovery
for nominal damages which the law presumes to follow
naturally and necessarily from the publication of the
[libel] and are recoverable by the plaintiff without proof
of causation and without proof of actual injury. The
law recognizes the damage to reputation caused by
defamation may not always lend itself to proofs of -- by
objective evidence.
An opportunity may be closed to the business without
their knowledge. Damage to the character or reputation
could occur without the corporation or the business
knowing of the [libel] or slander. A person’s business
or, in this case, may be limited by the operations of
forces which the person cannot identify, but which,
nevertheless, were set in motion by the defamatory
statement. In fact, it has been said that the damages
which are presumed from publication of a defamatory
statement or material, while not capable of being
accurately measured, are in many ways more
substantial and real than those which can be proved and
measured accurately by a dollar amount.
For these reasons, you are permitted to award nominal
damages to compensate the plaintiff for injury to
reputation which you reasonably believe that may have
been sustained. Nominal damages are a small amount
of money damages that are not designed to compensate
a plaintiff, but are awarded for the infraction of a legal
8
right where the extent of the loss is not shown or where
the right is one not dependent on the loss or damage.
[(emphases added).]
Again, that instruction essentially followed Section D of the Model Civil Jury
Charge verbatim.
Neither party objected to the instructions at trial, and the parties agreed
to a jury verdict sheet of six questions, three of which were related to damages.
While it deliberated, the jury asked the court questions about calculating
damages, including whether the verdict sheet contained a typo in Question 6,
printed below, which concerned nominal damages. The court explained to the
jury that Question 6 asked “what is the amount of nominal damage -- damages
Graphnet is entitled to compensate Graphnet -- Graphnet’s injury to reputation
which you reasonably believe it sustained.” The parties agreed on the court’s
explanation.
On February 5, 2019, the jury returned a verdict finding Graphnet had
not shown actual damages suffered as a result of the 2014 publication of the
brochure to a third party. The jury answered the questions concerning
damages as follows, and these responses were confirmed by individually
polling the jurors:
Question 4: Has Graphnet shown by a preponderance
of the evidence actual damages that it suffered as a
result of the statement made by Retarus?
9
Answer 4: No.
Question 5: What is the amount of compensatory
damages (actual damages) Graphnet is entitled to as a
result of Retarus’s defamatory statements?
Answer 5: Zero.
Question 6: In the event that you find that Graphnet is
not entitled to actual damages, Graphnet may recover
nominal damages without proof of causation and
without proof of actual harm for the publication of the
defamatory statement to a third party other than
Graphnet. What is the amount of nominal damages
Graphnet is entitled to compensate Graphnet for the
injury to reputation which you reasonably believe is
sustained?
Answer 6: Amount of nominal damages: $800,000.
VOTE 6:0
At least five jurors must agree on the answer to this
question.
Cease deliberations and return your verdict.
Retarus filed a motion for remittitur. Graphnet opposed the motion. On
May 8, 2019, the trial court granted Retarus’s motion, holding that the
$800,000 award “was grossly disproportionate to the purpose of nominal
damages.” The court reduced Graphnet’s award to $500, in part relying on
N.J.S.A. 2A:15-5.10, which defines nominal damages as “damages that are not
designed to compensate a plaintiff and are less than $500.” A final order of
judgment in the amount of $500 was entered on May 24, 2019.
10
C.
Graphnet appealed, arguing that the trial court erred as a matter of law
by ordering remittitur without Graphnet’s consent. Graphnet sought
reinstatement of the jury award or, in the alternative, a new trial on all
damages. Graphnet contended that the jury instruction constituted harmful
error and was contradictory because it provided that nominal damages could be
awarded “to compensate” a plaintiff.
Retarus argued that a plaintiff’s consent to remittitur is not required and
that Graphnet waived its opportunity to object to the jury instructions at trial.
Retarus submitted that the jury was properly instructed on damages and that,
because Graphnet presented no evidence of actual damages, the $800,000
award was excessive as either a nominal damages or actual damages award.
In an unpublished opinion, the Appellate Division affirmed in part,
reversed in part, and remanded for a new trial on nominal damages only. The
court recognized that the jury’s $800,000 nominal damages award was
“shockingly excessive and cannot stand.” However, it concluded that the trial
court improperly awarded Graphnet $500 in nominal damages in violation of
the well-settled doctrine of remittitur: “when a court determines that a
damages award cannot stand because it is so grossly excessive that it shocks
the judicial conscience, [a] ‘plaintiff has the choice either to accept the award
11
as remitted by the court or to proceed with a new damages trial before another
jury.’” (quoting Cuevas v. Wentworth Grp., 226 N.J. 480, 499 (2016)).
Relying on this Court’s recent decision in Orientale v. Jennings, the appellate
court emphasized that the “absence of mutual consent means that the case
proceeds to a second jury for a new damages trial.” (quoting 239 N.J. 569,
595 (2019)). The Appellate Division vacated the trial court’s order and
remanded for a new trial limited to nominal damages.
We granted Graphnet’s petition for certification requesting a new trial on
all damages. 246 N.J. 440 (2021).
II.
Graphnet argues that the Appellate Division properly vacated the trial
court’s remittitur but improperly ordered a new trial on nominal damages only.
It maintains that a new jury trial on all damages is required under this Court’s
holding in Nuwave Investment Corp. v. Hyman Beck & Co., Inc., which
“requires a new trial on damages in which the [new] jury is properly instructed
on the various categories of damages.” 221 N.J. 495, 498 (2015). Graphnet
submits that the trial court’s erroneous instruction to the jury that it could
“compensate” Graphnet with a nominal damages award described actual
damages and led to the $800,000 nominal damages award. Graphnet also
12
requests that this Court provide guidance on Model Civil Jury Charge 8.46D
for future cases.
Retarus, on the other hand, argues that the Appellate Division correctly
granted a new trial on nominal damages only. It relies on Fertile v. St.
Michael’s Medical Center to support the argument that the purpose of
remittitur is to “avoid the necessity of a new trial.” 169 N.J. 481, 491 (2001) .
Retarus also relies on an unpublished Appellate Division opinion to support its
argument that Graphnet is not entitled to a new trial on compensatory damages
because the jury found that Graphnet did not suffer actual harm. Retarus
argues that, if granted a new trial on all damages, Graphnet will unfairly be
given another bite at the apple to prove compensatory damages, even though
the jury found it was entitled to none.
III.
This Court reviews a trial court’s grant of remittitur de novo, but defers
to a trial court’s “feel of the case.” Cuevas, 226 N.J. at 502. However, “[a]
judge’s ‘feel of the case’ based on observing a party or a witness in the
courtroom is entitled to minimal weight if the jury had the same opportunity to
make similar observations”; it is “the jury’s ‘feel of the case’ [that] controls
the outcome of the issues in dispute.” Ibid.
13
“[S]ubstantial deference . . . must be accorded [to] a damages award
rendered by a jury.” Orientale, 239 N.J. at 589. That deference can be
overcome only if a defendant establishes by clear and convincing evidence
“that the award is a ‘miscarriage of justice.’” Cuevas, 226 N.J. at 501 (quoting
Baxter v. Fairmont Food Co., 74 N.J. 588, 598 (1977)). The fact that a
damages award is substantial does not necessarily mean it is excessive and a
miscarriage of justice; so long as a jury could rationally have reached the
verdict from the evidence presented, it will be upheld. Jastram v. Kruse, 197
N.J. 216, 235 (2008); see also Johnson v. Scaccetti, 192 N.J. 256, 283 (2007)
(finding a remittitur unjustified even though the jury’s award was
“undoubtedly high, perhaps overly generous”).
Finally, “the trial record underlying a remittitur motion must be viewed
in the light most favorable to the plaintiff.” Cuevas, 226 N.J. at 486.
A.
There are three main types of damages available in an action for
defamation: “(1) compensatory or actual, which may be either (a) general or
(b) special; (2) punitive or exemplary; and (3) nominal.” W.J.A. v. D.A., 210
N.J. 229, 239 (2012) (quoting Prosser and Keeton on Torts § 116A at 842 (5th
ed. 1984)). “All compensatory damages . . . depend on showings of actual
harm, . . . and may not include a damage award presumed by the jury.”
14
Nuwave, 221 N.J. at 499. Special actual damages “compensate a plaintiff for
specific economic or pecuniary loss,” while general actual damages “address
harm that is not capable of precise monetary calculation.” Ibid. Therefore,
actual damages may include “impairment to reputation and standing in [a]
community.” W.J.A., 210 N.J. at 239 (citation omitted).
Unlike compensatory damages, “[n]ominal damages . . . do not attempt
to compensate the plaintiff for an actual loss. Rather, they are a trivial amount
. . . .” Nappe v. Anschelewitz, Barr, Ansell & Bonello, 97 N.J. 37, 48 (1984)
(citation omitted). Nominal damages “‘serve[] the purpose of vindicating’ the
character of ‘a plaintiff who has not proved a compensable loss.’” Nuwave,
221 N.J. at 499 (quoting W.J.A., 210 N.J. at 240-41). If “compensatory
damages are otherwise available to the plaintiff,” nominal damages are not to
be awarded. Id. at 500.
With regard to defamation cases, if a statement is found to be
defamatory without a finding of actual harm, then “only nominal damages can
be awarded.” Id. at 499.
A nominal damages award may be made in a
defamation case to a plaintiff who has not proved a
compensable loss. Nominal damages are awarded for
the infraction of a legal right, where the extent of the
loss is not shown, or where the right is one not
dependent upon loss or damage. Such an award is a
judicial declaration that the plaintiff’s right has been
violated. It serves the purpose of vindicating the
15
plaintiff’s character by a verdict of a jury that
establishes the falsity of the defamatory statement.
[W.J.A., 210 N.J. at 240-41 (citations and quotations
omitted).]
Because nominal damages are awarded only when no showing of loss
has been made, they are envisioned as more of a legal remedy than a financial
one. Modern Federal Jury Instruction 77-6, for example, specifies that
“[n]ominal damages may not be awarded for more than a token sum.” And the
Model Civil Jury Instructions for the District Courts of the Third Circuit
(2010) explicitly require that, for certain causes of action, if the jury should
“return a verdict for [plaintiff], but [plaintiff] has failed to prove compensatory
damages, then you must award nominal damages of $1.00.” See, e.g., Charges
4.8.2; 5.4.5; 6.4.5 (emphasis added). New Jersey’s court rule does not define
nominal damages, but N.J.S.A. 2A:15-5.10, which provides “[d]efinitions
relative to punitive damages awards,” states that “‘[n]ominal damages’ are
damages that are not designed to compensate a plaintiff and are less than
$500.”
We find no reason to depart from the limit set for nominal damages by
the Legislature. In sum, nominal damages, under New Jersey law, can best be
defined as “a token amount of not more than $500.”
16
B.
A grant of remittitur allows a court to decrease a “grossly excessive
damages award returned by a jury.” Cuevas, 226 N.J. at 499. In setting a
remittitur, the court must determine “the amount that a reasonable jury,
properly instructed, would have awarded.” Orientale v. Jennings, 239 N.J.
569, 577 (2019) (quoting Tronolone v. Palmer, 224 N.J. Super. 92,103 (App.
Div. 1988)).
If “[a] damages award . . . is so grossly excessive that it shocks the
judicial conscience [it] cannot stand, and . . . remittitur allows the parties the
option of avoiding the unnecessary expense and delay of a new trial.” Ibid.However, the court must obtain the plaintiff’s consent before it may grant
remittitur. Fertile, 169 N.J. at 491. In other words, “[t]he plaintiff has the
choice either to accept the award as remitted by the court or to proceed with a
new damages trial before another jury.” Cuevas, 226 N.J. at 499. Under this
Court’s holding in Orientale, “[t]he absence of mutual consent means that the
case proceeds to a second jury for a new damages trial.” 239 N.J. at 595.
C.
Erroneous jury instructions typically constitute reversible error. Das v.
Thani, 171 N.J. 518, 527 (2002). A reviewing court must determine whether
“the charge, considered as a whole, adequately conveys the law and is unlikely
17
to confuse or mislead the jury, even though part of the charge, standing alone,
might be incorrect.” Fischer v. Canario, 143 N.J. 235, 254 (1996). “The test,
therefore, is whether the charge in its entirety was ambiguous or misleading.”
State v. R.B., 183 N.J. 308, 324 (2005) (quoting State v. Hipplewith, 33 N.J.
300, 317 (1960)); see also Mogull v. CB Com. Real Est. Grp., Inc., 162 N.J.
449, 468 (2000) (taking a similar approach to mistakes in jury sheets, which
are not grounds for reversal unless they are “so misleading, confusing, or
ambiguous that they produce[] an unjust result”).
Such error most commonly results from changes made to adapt a model
jury charge to the circumstances of a particular case, cf. State v. Ramirez, 246
N.J. 61, 70 (2021) (“It is difficult to find that a charge that follows the Model
Charge so closely constitutes plain error.” (quoting Mogull, 162 N.J. at 466)),
but it can also result from a fatal flaw within a charge itself, see, e.g., Williams
v. State, 200 A.3d 314, 316, 328 (Md. 2019) (finding reversible error “where
the trial court gave a pattern jury instruction that erroneously omitted an
element of the sole offense for which the petitioner was convicted”).
New Jersey’s Model Civil Jury Charges are valuable aids created by the
Model Civil Jury Charge Committee “to be useful to trial judges and litigants,”
see Model Civil Jury Charges: General Comments, https://www.njcourts.gov/
attorneys/assets/civilcharges/generalcomments.pdf?c=UtQ, but they “are not
18
binding authority,” State v. Bryant, 419 N.J. Super. 15, 28 (App. Div. 2011).
“[W]hen the Court has occasion to address the contents of an adopted charge ,”
it may review the language of the charge in question to ensure it is “consistent
with the Court’s instructions.” See Flood v. Aluri-Vallabhaneni, 431 N.J.
Super. 365, 384 (App. Div. 2013) (underscoring that courts may “rest assured”
that the language of a model charge is indeed consistent with this Court’s
instructions only when such review has occurred); see also, e.g., Morlino v.
Med. Ctr. of Ocean Cty., 152 N.J. 563, 590 (1998) (referring a jury charge to
the Committee with instructions for modification).
IV.
A.
We first consider whether the grant of remittitur here -- made without
consent of the plaintiff -- was error. On this point, our precedent is clear:
“only the plaintiff -- not the defendant -- has the choice to accept the remitted
amount or proceed to a new damages trial.” Orientale, 239 N.J. at 590.
Because that did not happen at the trial court, we affirm the Appellate
Division’s decision to vacate the trial court’s order of remittitur and to remand
for further proceedings.
B.
We next consider the appropriate scope of the proceedings on remand.
19
At trial, the jury heard several witnesses testify that a decline in
Graphnet’s business was unrelated to and occurred well before Retarus’s
publication of the brochure. And the jury unanimously found that, although
Retarus defamed Graphnet, Graphnet failed to prove by a preponderance of the
evidence that it suffered actual damages from the defamation (response to
Question 4). Accordingly, it awarded Graphnet $0 in compensatory damages
(response to Question 5). Yet it simultaneously awarded $800,000 in nominal
damages (response to Question 6), which were described first in the jury
charge, then in Question 6 itself, and finally in the court’s response to the
jury’s inquiry about Question 6, as a means “to compensate Graphnet for the
injury to reputation which you reasonably believe is sustained.”
We can only speculate as to the jury’s intentions in awarding Graphnet
$0 in compensatory damages and $800,000 in nominal damages. That is
because the awards were made after improper jury instructions. As noted
earlier, nominal damages can be awarded in a defamation case when a plaintiff
has ---
not proven a compensable loss. Here, following the model jury charge, the
jury was first told it could “award nominal damages to compensate the
plaintiff” and then told that “[n]ominal damages . . . are not designed to
compensate a plaintiff.”
20
The contradictory instruction given on nominal damages did not
“adequately convey[] the law.” Fischer, 143 N.J. at 254. Instead, it opened
the door for the jury to attempt to compensate Graphnet through nominal
damages in a way that was either wholly impermissible under the law or a
miscategorized but otherwise permissible form of compensatory damages.
Viewing the record in the light most favorable to Graphnet, as is required
under our standard of review, we can only conclude that there is a possibility
that the compensatory damages award might have been different had the jury
been properly instructed on the nature and function of nominal damages.
Retarus submits that a new trial solely on nominal damages is required
here. We disagree. As originally charged, the instruction conflated actual
damages with nominal damages. Under our precedent in Nuwave, the
incorrect jury instruction warrants a new trial on all theories of damages rather
than one limited to nominal damages only. See 221 N.J. at 500 (“Because it is
unclear whether the entirety of the jury award was influenced by the
inadequate instruction . . . , the cleanest and most fair resolution is to vacate
the entire award and remand this matter for a new trial on damages.”).
Therefore, a new trial on all damages is required.
21
C.
Finally, we consider how an instruction on nominal damages could
appropriately convey to the jury the purpose -- and limitations -- of such
damages.
The model jury charge, as written, fails to instruct on the definition,
scope, and purpose of nominal damages. It instructs the jury “to compensate
the plaintiff,” but then contradicts itself by explaining that nominal damages
“are not designed to compensate a plaintiff.” Therefore, in the instant case, we
remand with instructions to charge the jury on nominal damages as follows :
In the event you find plaintiff is not entitled to actual
damages, plaintiff seeks an award of nominal damages,
which are recoverable without proof of causation and
without proof of actual injury.
The law recognizes that damage to reputation caused by
defamation may not always lend itself to proof by
objective evidence. An opportunity may be closed to
the person without the person’s knowledge. Damage to
character or reputation could occur without the person
knowing of the libel. A person’s business or
professional career may be limited by the operation of
forces which the person cannot identify but which,
nevertheless, were set in motion by the defamatory
statement. For those reasons, you are permitted to
award nominal damages to plaintiff for injury to
reputation which you reasonably believe plaintiff
sustained.
Nominal damages are a small amount of money
damages that are awarded for the infraction of a legal
right. They are a token amount of no more than $500.
22
Nominal damages are not designed to compensate a
plaintiff, but rather to recognize that the plaintiff has
suffered an infraction and to vindicate the plaintiff’s
character where the extent of loss is not shown, or
where the right is not one dependent upon loss or
damage. The law presumes that nominal damages
follow naturally and necessarily from the publication of
a libel even when no proof of actual loss is available.
We also refer Model Civil Jury Charge 8.46D to the Committee on
Model Civil Jury Charges to address the issues noted in this opinion.
V.
The judgment of the Appellate Division is affirmed as modified, and the
matter is remanded for proceedings consistent with this opinion.
CHIEF JUSTICE RABNER and JUSTICES ALBIN, PATTERSON,
SOLOMON, and PIERRE-LOUIS join in JUSTICE FERNANDEZ-VINA’s
opinion.
23