Texas Supreme Court addresses questions concerning defamation per se and mental anguish damages

by Eric Pearson

Dr. Variyam was the Chief of the Gastroenterology Division of the Texas Tech University Health Sciences Center in Lubbock. Dr. Hancock served as an associate professor under Dr. Variyam. A dispute arose between the doctors in 2006 over the transfer of patients from Dr. Hancock’s care to Dr. Variyam’s care after Dr. Variyam became the on-call doctor for the Division.

Dr. Variyam sent a letter to Hancock “to express [his] disapproval in the strongest words possible of the lack of professionalism and disregard for patient care that you exhibited this morning.” The letter detailed the alleged manner in which Hancock’s transfer of patients violated the Division’s policy and copied the Chair of the Department of Internal Medicine. The letter gave Hancock an opportunity to respond before Variyam lodged a formal complaint.

Hancock responded by sending a letter the same day to the Chair of the Department, the Dean of the School of Medicine, a Division colleague, and the entity reviewing the Division’s application for accreditation for its gastroenterology fellowship. In the letter, Hancock resigned his faculty position under Variyam, stated that Variyam had a “reputation for lack of veracity” and “deals in half truths, which legally is the same as a lie.” The Division’s fellowship was not accredited, and in February 2006, the Chair of the Department removed Variyam as Chief of the Division.

Dr. Variyam sued Dr. Hancock for defamation and sought damages for his removal as Chair, loss of reputation, and mental anguish. Hancock moved for partial summary judgment on Variyam’s claim for damages for removal as Chair, which the trial court granted. The trial court subsequently granted a directed verdict that Hancock’s letter was defamatory per se. The jury rejected Hancock’s substantial truth defense and awarded Variyam $30,000 for loss of past reputation, $30,000 for loss of future reputation, $15,000 for past mental anguish, $15,000 for future mental anguish, and $85,000 in exemplary damages (after finding by clear and convincing evidence Hancock made the statements with malice). The trial court entered judgment on the award and the court of appeals affirmed.  Hancock appealed to the Texas Supreme Court, arguing that the letter was not defamatory per se and that there was no evidence of damages.

Defamation is generally defined as the invasion of a person’s interest in her reputation and good name.   Defamation per se is a special category of defamation.  Historically, defamation per se has involved statements that are so obviously hurtful to a plaintiff’s reputation that the jury may presume general damages, including for loss of reputation and mental anguish. A statement that injures a person in her office, profession, or occupation is typically classified as defamatory per se.

There are three types of damages that may be at issue in defamation per se proceedings: (1) nominal damages; (2) actual or compensatory damages; and (3) exemplary damages.    Nominal damages “are a trivial sum of money awarded to a litigant who has established a cause of action but has not established that he is entitled to compensatory damages.” In defamation per se cases, nominal damages are awarded when “there is no proof that serious harm has resulted from the defendant’s attack upon the plaintiff’s character and reputation” or “when they are the only damages claimed, and the action is brought for the purpose of vindicating the plaintiff’s character by a verdict of a jury that establishes the falsity of the defamatory matter.”  The Texas Supreme Court has defined nominal damages as a “trifling sum,” such as $1.

Actual or compensatory damages are intended to compensate a plaintiff for the injury she incurred and include general damages (which are non-economic damages such as for loss of reputation or mental anguish) and special damages (which are economic damages such as for lost income) Historically in Texas, defamation per se claims allow the jury to presume the existence of general damages without proof of actual injury. If a statement is defamatory but not defamatory per se, nominal damages are not allowed and the plaintiff must prove the existence and amount of actual damages.

The first issue before the Texas Supreme Court was whether the letter was defamatory per se. A statement that injures a person in her office, profession, or occupation is typically classified as defamatory per se.

Dr. Hancock argued, among other things, that his statements that Dr. Variyam lacks veracity and deals in half truths did not uniquely injure Variyam in his profession as a physician and thus were not defamatory per se. Variyam responds that the statements were intended to, and did, injure him in his profession because the letter was circulated to other physicians and a failure to be truthful would impact his patient care, teaching, research, and publishing. The Supreme Court agreed with Dr. Hancock that the statements did not injure Dr. Variyam in his profession as a physician and thus were not defamatory per se.

Dr. Variyam argued, and the courts below agreed, that having a reputation for untruthfulness would “affect his relationship with other physicians that might send him business or work.” The court of appeals had noted that “[l]ike lawyers and bankers, a physician such as Variyam, by definition, depends greatly on his reputation.” The Supreme Court disagreed:

But the inquiry is not whether a reputation is necessary for a profession. If that were true—because all professions require reputations of some sort—all statements defaming professionals would be defamatory per se. Rather, the proper inquiry is whether a defamatory statement accuses a professional of lacking a peculiar or unique skill that is necessary for the proper conduct of the profession. […] The specific trait of truthfulness is not peculiar or unique to being a physician. As the comments to the Restatement illustrate, “a charge that a physician is dishonest in his fees is actionable, although an imputation of dishonesty in other respects does not affect his character or reputation as a physician.”

Hancock v. Variyam, No. 11-0772 (May 17, 2013).

The Supreme Court also rejected Dr. Variyam’s argument that a reputation for untruthfulness hinders his relations with his peers and his ability to research and publish:

[F]ew trades, businesses, and professions involve no human interaction. If an accusation of untruthfulness is defamatory per se for a physician in her profession, it would likewise be defamatory per se for other trades, businesses, and professions that rely on human interaction. In short, Hancock’s charges do not adversely affect Variyam’s fitness for the proper conduct of being a physician and are not defamatory per se.

Hancock v. Variyam.  The Supreme Court distinguished the letter in question from an Arizona case holding that a statement by one physician that he “wouldn’t send my dog or cat” to another physician was defamatory per se because it injured the other physician in his profession.

Because the Supreme Court found the letter was not defamatory per se, Dr. Variyam was not entitled to recover nominal damages and was not entitled to a presumption of general damages.  Instead, he was required to prove actual injury.

The jury awarded damages for mental anguish.  The Texas Supreme Court noted that mental anguish is only compensable if it causes a “substantial disruption in . . . daily routine” or “a high degree of mental pain and distress.”  Futher, “[e]ven when an occurrence is of the type for which mental anguish damages are recoverable, evidence of the nature, duration, and severity of the mental anguish is required.”

Dr. Variyum testified that, because of the letter, he experienced some sleeplessness, embarrassment and anxiety.  The Supreme Court decided that Dr. Variyam’s testimony at trial did not reflect a substantial disruption in daily routine or a high degree of mental pain and distress.  The Supreme Court noted that Variyam did not require medical attention and that his testimony did not elaborate on the impact of anxiety or depression on his life.  In addition, no other witnesses corroborate an outward manifestation of the mental anguish Variyam allegedly experienced. Variyam continued interacting with the recipients of the letter and he testified that the letter did not affect his care of patients.  The Supreme Court concluded that “we do not believe this to be evidence of a substantial disruption in daily routine or a high degree of mental pain and distress.”

Dr. Variyam argued his reputation was injured because other doctors may have believed the letter. Dr. Variyam testified that he feared colleagues would not send referrals to him because of the letter. The Supreme Court agreed that “[i]f this fear materialized, Variyam would be entitled to special damages upon proof, which would also serve as proof for loss of reputation.”  However, “the record does not reflect any evidence that a recipient of the letter believed Hancock’s statements. Accordingly, Variyam offered no evidence of loss of reputation.”

The Supreme Court reversed the judgment of the court of appeals and rendered judgment that Dr. Variyam take nothing.

by Eric Pearson

Eric Pearson is a licensed attorney and a partner at HO&P who handles commercial and personal injury lawsuits. Eric has been selected to the Super Lawyers List, a Thomson Reuters publication.