Published on:

Oregon Supreme Court: DEX Liable in Fraud / Misrepresentation Case

By

KNEPPER v. BROWN, AMERICAN ACADEMY OF COSMETIC SURGERY;and AMERICAN SOCIETY OF LIPO-SUCTION SURGERY, INC., Defendants, and DEX MEDIA, INC., fka U S WEST DEX, INC., (docket # A128550; S055155), decided 10/9/08

Before, De Muniz, Chief Justice., and Gillette, Durham, Balmer, Walters, and Linder, Justices.**

GILLETTE, J.

The decision of the Court of Appeals and the judgment of the circuit court are affirmed.

*Appeal from Multnomah County Circuit Court, Janice R. Wilson, Judge. 213 Or App 598, 162 P3d 1026 (2007).

**Kistler, J., did not participate in the consideration or decision of this cas


GILLETTE, J.

In this common-law fraud action, plaintiffs obtained a $1.5 million jury verdict against Dex Media, Inc. (Dex), based on Dex’s involvement in creating and publishing a Yellow Pages advertisement that misrepresented a doctor’s qualifications. On appeal, Dex argued that plaintiffs presented no evidence that the misrepresentation caused the injuries that plaintiffs claimed (pain and physical deformities resulting from a botched liposuction procedure) and that it therefore was entitled to a directed verdict or to a judgment notwithstanding the jury’s verdict. The Court of Appeals disagreed and affirmed the judgment for plaintiffs. Knepper v. Brown, 213 Or App 598, 162 P3d 1026 (2007). We allowed Dex’s petition for review and, for the reasons that follow, now affirm the decision of the Court of Appeals and the judgment of the trial court….
….

We think that Dex’s argument demands too much. This is not a case of the unwitting publication of an advertisement that turns out to be false. It is, instead, a case in which the publisher took a knowing and active part in the perpetration of the fraud. Punishing fraud has no impermissible “chilling” effect on the right to express views on “any subject whatever.” See Article I, section 8, of the Oregon Constitution (protecting such a right of expression). Fraud is excepted from that constitutional protection. See State v. Robertson, 293 Or 402, 412, 649 P2d 569 (1982) (explaining principle). What Dex argues would extend constitutional protection to fraud, and we reject that argument.

As we have explained, plaintiffs’ evidence permitted the jury to infer that the fraudulent misrepresentation by Dex and Brown was designed to mislead potential patients into believing that Brown was a board-certified plastic surgeon, thereby luring them into accepting surgery by Brown that he was not specially trained to perform. The misrepresentation created the risk that those who relied on it would be harmed as a particular result of Brown’s lack of expertise as a plastic surgeon, and that is what happened to plaintiffs. The trial judge did not err in refusing to grant Dex’s motions for directed verdict and judgment notwithstanding the jury’s verdict.

The decision of the Court of Appeals and the judgment of the circuit court are affirmed.” (link to full case)