I think it was Autolycus who said:

I assume there is a law of defamation in the U.S. and it also has the first amendment.

   How are those two reconciled normally in the U.S.?

First, let me say that I am not a lawyer, but I have spent my career rubbing shoulders with lawyers, and in my professional training and 46 years of working with lawyers I have learned a few things. That being given, my take on your question is like this:

The Constitution's function is to prescribe the shape, function, and limits of US government. "The government may do this; it may not do that; it is required to do the other. The way it does (whatever) is to be thus-and-so." Originally designed for the federal government, many parts of the Constitution, including the First Amendment, have been extended to cover the operations of state and local governments as well.

So the First Amendment prohibits the various governments in the US from preventing a private expression (however objectionable)--what is called "prior censorship". In general, it also prohibits the government from punishing the exercise of free speech. (Yes, there are exceptions to those principles, but that's the basic shape of things.)

Defamation, libel, and slander are actions by private persons, not government, and legal actions against the perpetrators may be brought by the individuals allegedly defamed. While such a lawsuit must be brought through the courts (a branch of government in the broad sense), the courts are merely referees, not parties to the controversy, and the First Amendment does not prevent the courts from acting to apply anti-defamation rules and sanctions. The courts do not in such a case exercise the police power of government.

Your question quoted above tends to confuse the two spheres of action.

I hope this answers your question, and that Messrs. Heric and Bridge don't shoot me down. I believe it to be a generally correct statement.

Dave Oesterreich