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District Judge Nicholas Bua erred in failing to instruct the jury that it must find that Hustler magazine committed actual malice by ''clear and convincing'' evidence.

Nevertheless we have now done what Hustleer asks, and reviewed the finding of actual malice de novo to the best of our ability, and we have concluded that the jury's finding was not only within the bounds of reason, but was, so far as we are able to determine from the cold record, a correct finding.

Hustler as we shall call the magazine and its publisher interchangeably has appealed, raising questions of tort law, freedom of the press, and trial procedure; Douglass has cross-appealed, complaining about the judge's action in reducing the punitive damages awarded by the jury.

Douglass's career throve in the following years.

This fact distinguishes the case from the two cases that give the most support to Douglass's false-light claim: Wood v.

In an impassioned plea to the jury, Miss Douglass' attorney, William Serpico, asked the panel to consider Hustler's admission that it decided to publish the photographs after it received a 'forged' release form.

Of course the issue in Zacchini was not whether the common law created a right of action against the television station--let alone the common law of Illinois the case came from Ohio --but whether the Constitution barred such a right of action if it existed in state law.

State Farm Mutual Automobile Ins.

In July, 1983, a jury found that Douglass, 32, who starred in the motion picture ''Breaking Away,'' was harmed emotionally and economically after the Hustler published unauthorized photos of her in 1981.

This was in Mary Beth G.