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But, damages for defamation have always included far more than medical bills and lost wages. 3 Restatement of Torts § 621, Comment a (1938) ("It is not necessary for the plaintiff [who is seeking general damages in an action for defamation] to prove any specific harm to his reputation or any other loss caused thereby"). And, damages for emotional distress are normal, not just in defamation cases, but in all intentional tort cases, if the defendant's behavior is egregious enough. See, eg, Molien v. Kaiser Foundation Hospitals, 27 Cal.3d 916, 927 (1980) ["intentional torts will support an award of damages for emotional distress alone, but only in cases involving 'extreme and outrageous intentional invasions of one's mental and emotional tranquility.'"].
No, it doesn't, not unless 1) the award is not reduced by the court upon entry of judgment, which happens all the time; and 2) the award was actually arbitrary. You seem to assume that "large" = "arbitrary." But, without looking at the actual evidence before the jury, there is no way to determine whether it was arbitrary or not. The fact that the amount awarded to each plaintiff varied from 28 million to 120 million, is at least some evidence that the jury did not act arbitrarily.
Finally, it does not remotely create a precedent that anyone "traumatized by speech" can be awarded any compensation at all; rather it is merely the latest in 200+ years of precedent holding that someone harmed by** unprotected **speech, of which defamation is an obvious example, can be compensated.
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