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PHILADELPHIA — In a quirky conclusion to a libel suit against The New York Times, a federal jury Monday found that the newspaper had defamed a Philadelphia business and had done so “intentionally, recklessly or negligently,” but that the plaintiff was entitled to no money since it had not suffered any “actual harm.” As a result, neither party could claim more than a Pyrrhic victory. The plaintiff won a finding that the paper had defamed it, but secured no damage award; and The Times earned a judgment in its favor, but was nonetheless branded by the jury as a defamer. In the suit, plaintiff Franklin Prescriptions Inc. in Philadelphia claimed it was the victim of “defamation by implication” when The Times used a portion of Franklin’s Internet site as a graphic to illustrate an Oct. 25, 2000, article headlined “A Web Bazaar Turns Into a Pharmaceutical Free-for-All.” Franklin and its lawyer, George Bochetto of Bochetto & Lentz, argued that the use of the graphic implied that Franklin engaged in some of the illegal conduct discussed in the article — even though the text of the article never mentioned Franklin by name. The truth, Bochetto said, is that Franklin doesn’t sell any drugs online, and its Internet site is used only for advertising its prices, especially for infertility drugs that are its specialty. The most damaging aspect of the article, Bochetto said, was a list of “safety tips,” published just to the right of the Franklin graphic, that warned readers to avoid Internet sites of pharmaceutical companies that do not list a phone number or address. Although Franklin’s Internet site lists both its address and phone number, Bochetto said, the newspaper graphic showed only the top portion of the site — with no number or address — suggesting that Franklin’s was one of the sites The Times wanted to warn its readers about. In its verdict, the jury answered six questions and sided with Franklin on the first five, finding that the article “contained a defamatory implication” about Franklin; that readers would understand the implication; that the implication would be “applied” to Franklin; and that it was a “substantially false” implication. In its fifth answer, the jury found that Franklin had proved “that The New York Times acted intentionally, reckless or negligently when it published the defamatory implication(s).” But the jury’s answer to the sixth question ended the case when it concluded that Franklin had not suffered any “actual harm that was substantially caused by the article.” In doing so, the jury apparently sided with The Times’ attorney, Elizabeth Ainslie of Schnader Harrison Segal & Lewis, who argued that Franklin had no proof that its business was harmed by the article since its financial records show that its sales continued to rise at a rate of $100,000 per year. In November 2000, the month after the article was published, Ainslie said, Franklin had $10,000 more in sales than the month before. After the verdict, Bochetto said he found the jury’s decision “very disappointing.” “How you can find that they [Franklin] were defamed by The New York Times, which has a million readers, and find that they aren’t entitled to any damages is beyond me,” Bochetto said. Bochetto said that it appeared to him that the jury “wanted proof beyond a reasonable doubt that they lost a specific amount of money.” In his closing argument, Bochetto had told the jury that evidence of lost sales was hard to come by since Franklin has no way of knowing which potential customers decided to avoid its site after reading The Times article. But Bochetto said there was nonetheless strong evidence that the article had harmed Franklin’s reputation because the statistics showed that visits to its Web site dropped significantly soon after it was published. Orders to the pharmacy, he said, also showed that sales to patients with out-of-state doctors dropped significantly, and that overnight deliveries dropped by 200 in the next year. Bochetto argued that the evidence showed that if the article had never appeared, Franklin’s business would have grown not just by $100,000, but by $1 million. But Ainslie urged the jury to follow the money trail and insisted that Franklin had proven “no damages whatsoever.” Shannon P. Duffy is a reporter with The Legal Intelligencer, a Recorder affiliate based in Philadelphia.

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