Ideally, the law of defamation would be able to achieve two goals simultaneously. First, the law would deter the citizenry, including the press, from communicating all unprivileged, false, defamatory speech. Because perfect deterrence is impossible, the law would also provide a remedy that could cure a wounded reputation if deterrence failed to prevent harm from the outset. Second, the law would allow free speech to flourish and public debate to rage unfettered. Beneficial speech would be fully encouraged. A balance between these two goals is, essentially, what jurists have attempted to achieve with defamation laws.
A balancing of the two goals is required because an analysis will reveal that they are, in some fundamental ways, diametrically opposed.2 Because the two goals are in opposition, particularly with regard to deterrence and free speech, one goal must either cancel out the other, or compromises must be made between them.
In New York Times Co. v. Sullivan,3 the United States Supreme Court decided that the balance of defamation law should tilt markedly towards promoting free speech and away from deterrence. 4 Though it was ostensibly striving to protect reputation, the Sullivan Court's new constitutional regime was primarily designed to prevent the chilling of speech and to protect "uninhibited, robust, and wideopen" debate on public issues.5 Unfortunately, its new balancing test left injured plaintiffs without acceptable remedial protection. The Court was so concerned about preventing chilling of speech that it created a regime that neither sufficiently deters speech nor provides vindication for those with damaged reputations. Ironically, the regime does not even fully protect legitimate speech.
Because the post-Sullivan defamation law fails to provide either deterrence or a satisfactory remedy for victims of defamatory falsehoods, many legal scholars have called for libel law to be reformed.6 Without some higher degree of deterrence, no regime can ever efficiently prevent reputation from being harmed. However, unless the Supreme Court reverses itself in significant ways or unless a viable alternative remedy is adopted, such deterrence is impossible. What exactly should be deterred? As stated above, the ideal libel law regime should deter unprivileged, defamatory falsehoods. This premise is based on four assumptions: (1) False speech, though not usually desirable, is not harmful to reputation unless it is also defamatory. Therefore, expending judicial resources to deter speech that is false, but not defamatory, is unnecessary. (2) Similarly, speech that is defamatory, but not false, need not be deterred, even though defamatory speech is harmful, suppression of the truth should be discouraged. This assumption reflects the notion that, in some cases, a person or business's reputation deserves to be harmed. For example, if a company is dumping toxins into a town's water supply, its reputation will undoubtedly be harmed by disclosure of its nefarious activities. In fact, reporting the dumping will probably be calculated to harm the company's reputation. There is, however, a societal interest in the harmful disclosure. (3) There are limited classes of defamatory falsehoods that require protection and should not be deterred because their value outweighs their potential for causing harm. These categories are those that have traditionally been protected by absolute privileges and include speech like testimony in trials or remarks made on the floor of Congress. Like privileged speech, outlandish and satirical defamatory falsehoods should also not be deterred. Such speech is valuable because, as the Supreme Court recognized in Hustler v. Falwell,7 "it is clear that our political discourse would have been considerably poorer" without satire, parodies, and political cartoons.8 (4) Finally, more than just knowing, defamatory lies should be deterred. Any defamatory falsehood, regardless of the intent behind it, should be discouraged (with the exception of the types of speech described in assumption number three). …