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Cohen v. Cowles Media Co

    Brief Fact Summary. The Defendant, Cowles Media Co. (Defendant), promised the Plaintiff, Cohen (Plaintiff), confidentiality in order to receive certain information to be published. Defendant failed to adhere to the agreement and as a result the Plaintiff lost his employment and received a damage award by the trial court.

    Synopsis of Rule of Law. Compensatory damages are a proper remedy to avoid the injustice under a promissory estoppel claim.

    Facts. A newspaper owned by Defendant published a story reporting that a nominee for Lieutenant Governor had been charged with three counts of unlawful assembly and previously convicted of shoplifting. The newspapers revealed Plaintiff as the source and named the firm he worked for. It is undisputed that Plaintiff gave this information in return for the reporters’ promises to keep his identity secret. As a result Plaintiff was fired.
    The case was submitted to the jury on the theory of breach of contract and misrepresentation. The jury found liability on both counts and awarded $200,000 in compensatory damages and $250,000 in punitive damages against each newspaper for misrepresentation. The Court of Appeals set aside the misrepresentation damages, but affirmed the compensatory damages.
    The State Supreme Court affirmed the setting aside of punitive damages. Also, decided that the compensatory damages were not enforceable under standard breach of contracts theory. (Parties had not intended to assume legal obligation.) The award could be enforced under the theory of reliance, but that such a decision would intrude into the newspaper’s first Amendment rights.
    The United States Supreme Court (Supreme Court) held that the doctrine of promissory estoppel does not implicate the First Amendment.

    Issue. Is the award sustainable under the theory of promissory estoppel?

    Held. Yes. Under the restatement, the reporters promise was expected to induce and did induce the disclosure necessary for the story. A breach of that promise should result in damages to avoid injustice.
    Restatement Second Section:90 states: A promise which is expected to induce definite action by the promisee, and does induce the action is binding if injustice can be avoided only by enforcing the promise. The promise must be (1) clear and definite and (2) the promisor must have intended to induce reliance on the part of the promisee and such reliance must have occurred to the promisee’s detriment.
    Plaintiff receives the verdict of $200,000 for compensatory damages.

    Discussion. The Second Restatement Section:90 eliminates the requirement that reliance be definite and substantial and provides that the remedy granted for breach may be limited as justice requires. Damages then might be limited to restitution or measured to the extent of plaintiff’s reliance.


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