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DOUGLASS v. HUSTLER MAGAZINE

September 24, 1984

ROBYN DOUGLASS, PLAINTIFF,
v.
HUSTLER MAGAZINE, INC., AND AUGUSTINE GREGORY, DEFENDANTS.



The opinion of the court was delivered by: Bua, District Judge.

MEMORANDUM ORDER

Before the Court are motions by defendant Hustler Magazine, Inc. ("Hustler") for judgment notwithstanding the verdict, or, in the alternative, for a new trial. For the reasons stated herein, Hustler's motion for judgment notwithstanding the verdict is denied. Hustler's motion for a new trial will be denied if plaintiff accepts remittitur in the amount of $600,000. In the event plaintiff refuses remittitur, Hustler's motion for a new trial will be granted.

I. FACTS

Plaintiff Robyn Douglass brought suit against defendant Hustler and defendant Augustine Gregory, a photographer and former employee of Hustler, alleging invasion of privacy, false light, and wrongful appropriation of plaintiff's likeness by publishing photographs of Douglass without her consent. After trial on the merits, the jury found for Douglass and against both defendants. Hustler was assessed $500,000 in compensatory damages and $1,500,000 in punitive damages; Gregory was assessed $500,000 in compensatory damages.

II. DISCUSSION

A. Covenant Not to Execute Judgment

  The controlling law on procedures in federal courts is
federal law. In this Circuit the most recent case resolving an
issue similar to this one is Quad/Graphics, Inc. v. Myron Fass,
724 F.2d 1230 (7th Cir. 1983). In Quad/Graphics, which involved
a pretrial settlement between the plaintiff and one defendant,
the court stated that "nonsettling defendants who are not
prejudiced by a partial settlement have no standing to
challenge it." Id. at 1232. See also In Re Beef Industry
Antitrust Litigation, 607 F.2d 167, 172 (5th Cir. 1979). The
court concluded that a "nonsettling party must demonstrate
plain legal prejudice in order to have standing to challenge a
partial settlement." Quad/Graphics, 724 F.2d at 1233. By
applying the standard of plain legal prejudice to challenges to
partial settlements, the Quad/Graphics court stressed that:

   . . the court should not intercede in the
  plaintiff's decision to settle with certain
  parties, unless a remaining party can demonstrate
  plain legal prejudice. This standard should
  strike the proper balance between the policy
  consideration of encouraging voluntary resolution
  of litigation and the court's duty to protect the
  rights of the parties before it. Id. 1233.

In this case, the covenant not to enforce judgment entered into between Douglass and Gregory is a type of settlement agreement. It is therefore appropriate to apply the standard of plain legal prejudice articulated in Quad/Graphics. Although the interests of justice would best have been served had the oral agreement been precisely communicated during the trial to Hustler and to this Court, Hustler has not shown plain legal prejudice as a result of Douglass' failure to do so. Clearly, there is no evidence in the record to indicate that Gregory's testimony at trial was influenced by the prospective covenent. In fact, the record shows Gregory's testimony substantially agrees with his affidavit given well before the time of trial.

Although the jury should have as much relevant information presented to it as possible, the absence of one fact is not necessarily prejudicial. Indeed, in Quad/Graphics, the court indicated that a showing of injury in fact or the creation of a tactical advantage is insufficient to establish plain legal prejudice. Quad/Graphics, 724 F.2d at 1233. There is nothing in the record to indicate, and defendant Hustler has not shown, that the jury would have brought in a different verdict had it been informed of the oral agreement between Douglass and Gregory.

Because Hustler has not demonstrated plain legal prejudice due to the unrevealed oral agreement between Douglass and Gregory or due to the covenant not to execute judgment signed by Douglass and Gregory, it is unlikely the jury would have reached a different conclusion had information concerning the covenant been revealed. Therefore, the trial was not tainted and a new trial is not necessary on the grounds of an undisclosed agreement.

Hustler next claims its liability for Douglass' injuries is wholly derivative from its employee Gregory under the theory of "respondeat superior." Therefore, according to Hustler, the covenant not to execute judgment against Gregory eliminated Douglass' right of recovery against Hustler.

Douglass' complaint, however, stated separate causes of action against Hustler as well as those derivative from Hustler's employee Gregory. Furthermore, the jury was properly instructed on the law concerning the relationship between a corporation and its officers and employees. The jury was instructed:

  The defendant Hustler is a corporation and can
  act only through its officers and employees. If
  you find against defendant Hustler on either of
  plaintiff's claims and determine that plaintiff
  is entitled to an award of compensatory damages,
  you may award punitive damages against Hustler
  only if you find that a superior officer of the
  corporation acted with actual malice and ordered,
  ...

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