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Thursday, March 19, 2009

First Circuit Allows Defamation Case To Proceed; Massachusetts Law Allows Plaintiff To Try To Show Defendant Acted With "Actual Malice" Even If Statement Is True

The First Circuit has reversed itself in the Noonan case, ruling that the plaintiff presented sufficient grounds on which to proceed on a defamation claim.

Noonan claims first that Staples committed actionable libel against him through the sending of the Baitler e-mail. Under Massachusetts law, a plaintiff alleging libel must ordinarily establish five elements: (1) that the defendant published a written statement; (2) of and concerning the plaintiff; that was both (3) defamatory, and (4) false; and (5) either caused economic loss, or is actionable without proof of economic loss.

...

Since a given statement, even if libelous, must also be false to give rise to a cause of action, the defendant may assert the statement's truth as an absolute defense to a libel claim....Massachusetts law, however, recognizes a narrow exception to this defense: the truth or falsity of the statement is immaterial, and the libel action may proceed, if the plaintiff can show that the defendant acted with "actual malice" in publishing the statement....Noonan argued before the district court, and reiterates before us, that Baitler's e-mail was both defamatory and false, and thus constituted actionable libel. Staples countered that the evidence clearly established that Noonan did indeed violate the company's travel and expense policy, and that the e-mail was consequently true and no libel action could lie. The district court sided with Staples, concluding that Noonan's libel claim could not proceed as a matter of law because the Baitler e-mail was true: even when viewed in the light most favorable to Noonan, the record demonstrates that he failed to comply with the policy. Our review of the record and Massachusetts law leads us to the same conclusion. Thus, there is no triable issue of fact on the question of truth.

We focus first on Noonan's arguments concerning the e-mail's falsity, because if the evidence corroborates Staples's asserted defense that the e-mail's contents were true, then absent actual malice on the part of Staples, the libel claim must be dismissed regardless of whether the e-mail defamed Noonan....Noonan does not seriously challenge that, on their face, all the sentences in the e-mail were true. As the e-mail states and the record bears out, Staples did indeed commission an investigation of Noonan's expense-reporting practices, and the investigators determined that he was not in compliance with the travel and expense policy. Even Noonan admits that he frequently disregarded the letter of the policy, booking travel with non-company travel agents, using his personal credit card instead of the company card, and failing to turn in receipts. Whether, as Noonan asserts, he actually saved Staples money -- through, for example, buying cheaper plane tickets from online agents or committing mathematical or typographical errors on his expense reports in Staples's favor -- is immaterial. Whether, as Noonan asserts, many other traveling employees also regularly disregarded the policy is likewise irrelevant. Even taking these assertions as accurate, they do not change the simple fact relayed in the e-mail, and supported by the evidence in the record, that Staples fired Noonan after an investigation determined him to be out of compliance with the travel and expense policy....Noonan urges us, however, to look beyond the letter of the e-mail to the effect it must have had on its approximately 1,500 recipients. He argues that reasonable recipients could have read other passages in the e-mail and, viewing the e-mail in its totality, drawn the inference that he arrogantly regarded Staples's policies as subject to his personal whim and committed some sort of grave misconduct -- grave enough that Baitler himself departed from company policy on employee privacy by referring to Noonan by name in the e-mail. Indeed, according to Noonan, the e-mail's reference to an "investigation," the recent experience with the firing and later indictment of Dorman for stealing money from the company, and the fact that Staples took the drastic step of terminating Noonan instead of merely reprimanding him or delaying the relevant reimbursements, could have led reasonable readers to conclude that he, like Dorman, committed a crime. At the very least, the e-mail's reference to the company Code of Ethics could have given reasonable readers the impression that Noonan was terminated for illegal or unethical conduct in the reporting of his travel expenses. As support for these arguments, Noonan cites a number of cases applying Massachusetts law and holding that, to determine whether a given statement is defamatory, the court must look at it as a whole and in the context in which it was published.

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Noonan's only hope for keeping his libel claim alive is to prove that Staples -- or other employees responsible for composing and sending the e-mail -- acted with actual malice. As noted above, under Massachusetts law, even a true statement can form the basis of a libel action if the plaintiff proves that the defendant acted with "actual malice." ...

The relevant statute, Mass. Gen. Laws ch. 231, § 92, passed in 1902, does not define the term "actual malice." Noonan argues that the term "actual malice" refers to actual malevolent intent or ill will. Though we initially concluded otherwise, on rehearing we now agree.

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Though the Massachusetts statute at issue in this case also uses the term "actual malice," we are persuaded that we should not read that term as having the specialized meaning later developed by the Supreme Court. We had initially reached a different conclusion after considering Rotkiewicz v. Sadowsky, 431 Mass. 748, 730 N.E.2d 282 (Mass. 2000). In that public-figure case, the Supreme Judicial Court stated that "[i]n the context of defamation, the term 'actual malice' does not mean the defendant's dislike of, hatred of, or ill will toward, the plaintiff," but rather whether the defendant acted with knowledge of falsity or reckless disregard for whether a statement was true or false.... Based on this language, we had concluded that the public-figure definition of actual malice applied throughout "the context of defamation."...We now reject this conclusion for a number of reasons. First, since the statute was passed before the development of the modern definition of actual malice, it would not be consistent with legislative intent to read it as applying a more modern definition. ... Since the Legislature of 1902 could not have intended to apply the modern definition of "actual malice," we will not apply it here, absent an explicit contrary interpretation from the Supreme Judicial Court. Rotkiewicz is not such precedent; it was a public-figure case and was not interpreting Mass. Gen. Laws ch. 231, § 92. Rotkiewicz, 730 N.E.2d at 289.

...

The district court concluded that there was no evidence of actual malice. Viewing "actual malice" as "ill will," we disagree. First, in Baitler's twelve years with the company, he had never previously referred to a fired employee by name in an e-mail or other mass communication. From this evidence, a jury could permissibly infer that Baitler singled out Noonan in order to humiliate him. To be sure, Staples has offered a non-malicious explanation. Baitler stated in his deposition that he considered the e-mail naming Noonan to be important in effectively making the point to his employees that they must comply with Staples's travel and expense policies. But, a jury could nevertheless conclude that Baitler's explanation for the deviation from policy was pretextual.

...

Second, Baitler had supervised Dorman and had failed to notice his misfeasance. Moreover, Baitler did not send around a similar e-mail regarding Dorman's actions. Noonan explains that he will argue to the jury that they should infer that Baitler singled out Noonan to detract attention away from the Dorman scandal. These facts, while speculative on their own, could provide additional background to support Noonan's pretext argument.

Third, Baitler sent the e-mail to a list of 1500 or 1600 employees of Staples. Noonan contends that many individuals on that list did not travel and so had no reason to be advised of the travel policy. Noonan will thus ask the jury to infer that the e-mail's excessive publication shows Baitler's, and thus Staples's, malevolent desire to harm Noonan's reputation.

...

In this case, the presence of these three pieces of evidence support inferences upon which a jury could base a verdict for Noonan. In this case, where "motive and intent play a leading role, summary judgment should not be granted" since Noonan presented evidence beyond conclusory allegations or mere speculation.

The case is Noonan v. Staples, 2009 U.S. App. LEXIS 2848.







 




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