Newton’s Judgment Against NBC Overturned : Libel: Appeals court rules that evidence failed to show malice toward singer, who had been awarded $5 million.

SAN FRANCISCO —  A federal appeals court today dismissed Las Vegas singer Wayne Newton’s $5-million libel judgment against NBC, ruling that the evidence failed to show malice toward Newton.

The original $19-million jury verdict was the largest libel award in American history.

Three NBC stories in 1980 and 1981 claimed Newton had financed his 1980 purchase of the Aladdin Hotel with mob money and that organized crime figures were the hidden ownership behind the resort.

A Las Vegas jury found National Broadcasting Company Inc. guilty of defaming Newton in the broadcasts and awarded him $19 million in damages.

The trial judge in February, 1989, reduced the amount to $5.2 million.

The U.S. 9th Circuit Court of Appeals today unanimously ruled in a 50-page opinion, “Our review of the uncontroverted testimony, together with the cumulation of the circumstantial and documentary evidence, reveals almost no evidence of actual malice, much less clear and convincing proof.”

Newton’s lawyers had argued at the time of the trial that the network had a “total absence of institutional conscience.” The Newton lawyers said the stories were designed to curry favor with “Tonight Show” host Johnny Carson.

Carson lost out to Newton in a bid to buy the Aladdin Hotel and Casino in Las Vegas in 1980.

Testimony indicated that the $85-million Aladdin purchase was funded by the Valley Bank of Nevada.

Sued along with NBC were journalists Brian Ross and Ira Silverman, who were involved in the story.

NBC attorney Floyd Abrams said during the trial that Newton created his own problems by turning to crime figures Guido Penosi and Frank Piccolo for help in halting death threats against his family.

Newton argued that NBC showed malice by publishing statements that Piccolo was a hidden partner in Aladdin despite having Nevada Gaming Board testimony that Valley Bank financed the purchase.

The appeal court noted that testimony also showed that hidden interest in a casino is normally not actual ownership of a hotel but an interest in the “skim, the amount of casino receipts not reported to the appropriate authorities as receipts.”