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Louisiana State Univ.

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Friday, March 23, 2012

New Jersey Supreme Court Upholds Lower Court "Inaccurate Teaser" Ruling

The New Jersey Supreme Court has held that a newspaper's publication of inaccurate "teaser" does not necessarily constitute actual malice or reckless disregard when the article corresponding to the the teaser is accurate, the matter discussed is one of public concern, and the persons discussed are not named in the teaser.

New Jersey's common law provides special protection to speech touching on matters of public concern, even when that speech contains some careless falsehoods. A free and robust press, one that does not engage in self-censorship from fear of ruinous lawsuits, is essential to an enlightened democracy. Our jurisprudence recognizes that the free and unimpaired flow of information on matters of public concern necessarily leads to some erroneous reporting due to human error. In those circumstances, freedom of speech and the press are values that outweigh the right to security in one's personal reputation. Provided that a reporter or editor does not publish a false and defamatory statement with actual malice -- that is, knowing that the statement is false or recklessly disregarding the truth -- the erroneous statement contained in an article touching on a matter of public interest is not actionable.

In this case, a regional weekly newspaper inaccurately printed a front-page "teaser," reporting that "two local men," plaintiffs -- whose names were not mentioned in the teaser -- had been arrested for stock fraud. The two men were charged with illicit stock manipulation in a complaint filed by the Securities and Exchange Commission, but they had not been arrested. Readers who turned to the article on page eleven learned that plaintiffs were the subject of a civil complaint alleging that they had bilked unsuspecting investors of nine million dollars. No word or phrase in the article itself suggested that plaintiffs had been arrested.

Plaintiffs filed a civil action against defendants, the newspaper and its parent company, alleging, among other things, defamation and false light. The trial court granted summary judgment to defendants, finding that plaintiffs could not establish that the teaser was published with actual malice. The Appellate Division upheld that decision.

We affirm. Although this case unquestionably involves sloppy journalism, the careless acts of a harried editor, the summary-judgment record before us cannot support a finding by clear and convincing evidence that the editor knowingly or in reckless disregard of the truth published the false teaser.

...


No one disputes that the article accurately described the contents of the SEC complaint. Neither the SEC complaint nor the article suggested that Durando and Dotoli were arrested.

The North Jersey Media Group also owns The Nutley Sun, a local weekly newspaper with approximately 5000 subscribers in Nutley Township and neighboring communities. The executive editor of The Nutley Sun, Paul Milo, received permission to reprint Lynn's article in The Record about Durando and Dotoli. On December 5, 2008, Milo prepared the article for publication in The Nutley Sun's December 8 edition -- a promotional issue circulated to 2500 non-subscribers in addition to the weekly's regular subscribers. Milo removed the last three paragraphs of the original article so that it would fit within his weekly newspaper's space constraints. He also wrote a new headline for the article: "Local men charged in stock scheme."

The following day, December 6, 2005, Milo composed three "teasers" for the front page of the December 8 edition of The Nutley Sun, referencing different articles within the newspaper. The teaser for the reprinted article read: "Local men arrested in 'pump and dump' scheme, page 11." That teaser -- the third listed on the upper portion of the front page -- was not only smaller in font than the lead teaser, which was in bold print, but also was in much smaller font than the bold-print lead headline, entitled "Peace on earth." The "pump and dump" teaser did not mention the names of either Durando or Dotoli. Nevertheless, the statement in the teaser that local men were "arrested" was erroneous. That error was not repeated in the text of the article on page eleven of the paper.

The day after publication, December 9, plaintiffs' attorney sent an email to The Nutley Sun pointing out that his clients had not been "arrested." Plaintiffs' counsel demanded a retraction and threatened to file suit. That same day, after conferring with his publisher, Milo forwarded the email to in-house counsel for the North Jersey Media Group, Dina Sforza. Sforza did not contact Milo until December 14 -- one day after the deadline for placing a retraction in The Nutley Sun's next edition. On December 15, Sforza called plaintiffs' counsel and requested that he delay filing a lawsuit until after she had time to discuss the matter with general counsel to the North Jersey Media Group, Jennifer Borg. Plaintiffs' counsel told Sforza that he would not file a lawsuit until after December 19. Borg, whose approval was necessary before publication of a retraction, was unavailable the week of December 15 because she was tending to a dying relative at Hackensack Medical Center.

On December 19, Borg gave approval for the filing of a retraction, and indeed one was published in boldface and large print on the front page of The Nutley Sun's December 22 edition.4 This edition, however, was not circulated to the [*16] 2500 non-subscribers who received the December 8 edition with the erroneous teaser. On December 16, plaintiffs' counsel already had filed the lawsuit, which is the subject of this appeal.

...

One month later, Milo was reprimanded in writing by The Nutley Sun's publisher for printing the inaccurate teaser.


...

The December 16 complaint filed by plaintiffs Durando and Dotoli alleged that defendants, The Nutley Sun and North Jersey Media Group, Inc., had committed the tort of libel. An amended complaint filed ten months later listed the additional tort claims of casting one in a false light and intentional and negligent infliction of emotional distress. Plaintiffs sought compensatory, emotional-distress, and punitive damages.

For our purposes, an extensive discussion of the procedural history is not necessary. Suffice it to say, the trial court ultimately granted summary judgment in favor of defendants on all claims and dismissed the complaint. With respect to the false-light claim, the trial court found that the article touched on a matter of public concern but initially denied summary judgment because, in its view, Milo had "obvious reasons to doubt the veracity" of the teaser in light of Lynn's article. However, the court later reconsidered its grant of summary judgment on the false-light claim, focusing on whether Milo acted with actual malice in publishing the erroneous teaser. The most relevant evidence touching on whether Milo acted with actual malice is found in his deposition testimony and his later certification.

...
In an unpublished opinion, the Appellate Division affirmed, finding that "there simply is not 'clear and convincing' evidence of actual malice here to warrant a jury trial" on defamation or false light. The panel reasoned that the "careless and unfortunate" use of the inaccurate word "arrested" was not sufficient to "satisfy the legal and constitutional requirements for liability." Like the trial court, the panel highlighted that plaintiffs' theory of the case rested on a "singular and tentative response" by Milo at deposition "that it was 'possible' that he was not sure about whether plaintiffs had been arrested when he printed  the headline." The panel noted Milo's clarification of that response and "the dearth of other evidence of reckless disregard for the truth." The panel also observed that plaintiffs could not "point to any evidence that Milo was informed prior to publication as to the falsity of his headline, or [that he was] provided with an obvious basis to reflect upon the truth of the teaser headline." Accordingly, the record did "not present 'clear and convincing' evidence" for "plaintiffs to survive summary judgment."

We granted plaintiffs' petition for certification....We also granted the motion of the New Jersey Press Association to participate as amicus curiae.

...

Our state common law, which is informed by the free-speech and -press guarantees of Article I, Paragraph 6 of the New Jersey Constitution, provides enhanced protection to  speech touching on matters of public concern and interest. ... We give such speech the protection of the actual-malice standard because of the "significant societal benefit in robust and unrestrained debate on matters of public interest" and because "[e]ven the fear of having to defend against a defamation suit may make some too timid to venture into discussions where speech may be prone to error." ... In a series of cases, we have applied the actual-malice standard to defamation lawsuits brought by private-figure plaintiffs against media defendants that have purportedly published erroneous news stories regarding a matter of public interest or concern. ...

Plaintiffs acknowledge that the actual-malice standard applies to their defamation and false-light claims and do not dispute the contours of that standard. Plaintiffs simply contend that they have "establish[ed] by 'clear and convincing' evidence that genuine issues of material fact exist with respect to whether or not [d]efendants published the false teaser headline with 'actual malice.'" Therefore, they claim that the Appellate Division erred in affirming the trial court's grant of summary judgment.

In deciding that issue, we address in turn the elements of defamation and false-light claims, the standard of actual malice that applies to these claims, and the summary-judgment standard governing this case.

B.

To succeed in a defamation action against a media defendant that publishes an article touching on a matter of public interest or concern, a plaintiff must prove three elements: (1) that the defendant made a false and defamatory statement concerning the plaintiff; (2) that the statement was communicated to another person (and was not privileged); and (3) that the defendant published the defamatory statement with actual malice. ..."A defamatory statement, generally, is one that subjects an individual to contempt or ridicule, one that harms a person's reputation by lowering the community's estimation of him or by deterring others from wanting to associate or deal with him." ...

A plaintiff also has a cause of action if a defendant publicizes a matter that portrays him "before the public in a false light." ...To prove the tort of false light, a plaintiff must satisfy two elements. He must show (1) that "the false light in which [he] was placed would be highly offensive to a reasonable person" and (2) that the defendant "had knowledge of or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the [plaintiff] would be placed." ...The second prong of a false-light claim parallels the requirements of the actual-malice standard in First Amendment jurisprudence and our own common law.

We next discuss the jurisprudential underpinnings and definition of actual malice in cases involving speech-based torts.

C.

The actual-malice standard came into being as a means of protecting the First Amendment principles of freedom of speech and freedom of the press. See New York Times Co. v. Sullivan, 376 U.S. 254, 279-80, 84 S. Ct. 710, 726, 11 L. Ed. 2d 686, 706 (1964). In New York Times, the United States Supreme Court held that the First Amendment "prohibits a public official from recovering damages for a defamatory falsehood relating to his official conduct unless he proves that the statement was made with 'actual malice' -- that is, with knowledge that it was false or with reckless disregard of whether it was false or not." .... The Court further held that actual malice must be established with "convincing clarity." ...The Court's decision underscored "a profound national commitment to the principle that debate on public issues should be uninhibited."... In discarding the lower common-law standard of proof, and adopting the heightened standard of "actual malice," the Court was acutely aware that "libel suits threatened to bankrupt newspapers like the New York Times and therefore 'dampen[] the vigor and limit[] the variety of public debate,' even discouraging truthful speech out of 'fear of the expense' of defending against such suits."


As mentioned earlier, this Court "expanded free speech protections under our common law -- beyond the mandate of federal law --" to cases involving media and media-related defendants "and applied the actual-malice standard to investigative news stories that addressed matters of public concern."...The media receives "enhanced protections when it publishes information on subjects related to health and safety, highly regulated industries, and consumer fraud" -- all matters of public concern. .... Today, in New Jersey the actual-malice standard protects both media and non-media defendants who make statements involving matters of public concern, regardless of whether the targets of the statements are public figures or private persons. ...

Additionally, the actual-malice standard applies to all speech-based torts involving matters of public concern or public officials. ...No one questions that the content of the article in this case involves a matter of public concern.

Actual malice is defined similarly under federal and state law. ... In this case, plaintiffs contend that Milo, the executive editor of The Nutley Sun, acted with reckless disregard of the truth.

...That an editor or reporter "should have known" or "should have doubted [the] accuracy" of an article before publishing it is insufficient to show reckless disregard for the truth. ... Thus, the actual-malice test will shield careless acts of publication that would be considered irresponsible by common journalistic standards. ..For example, the clumsy editing of an otherwise accurate article in a way that falsely stated that an attorney was under investigation -- a mistake made by the defendant due to "haste to edit the article while managing multiple responsibilities" -- was insufficient to meet the actual-malice threshold. ...

To act with reckless disregard of the truth, a defendant must "actually doubt[]" the veracity of the article....Only "[i]f the recklessness approaches the level of publishing a knowing, calculated falsehood," based on the summary-judgment record, should the case go to the jury. ...

Although the actual-malice standard is difficult to meet, a plaintiff will satisfy that standard --- despite an editor's professions of good faith -- if he can show a story was "fabricated by the defendant, is the product of his imagination, or is based wholly on an unverified anonymous telephone call." ... Likewise, a publisher will not "prevail" when his "allegations are so inherently improbable that only a reckless man would have put them in circulation" or when "there are obvious reasons to doubt the veracity of [an] informant or the accuracy of his reports." ....

We next address the summary-judgment standard that applies to a speech-based tort involving a media defendant that publishes an article involving a matter of public interest or concern.

V.

To defeat defendants' motion for summary judgment in this case, plaintiffs must establish that a reasonable jury could conclude by "clear and convincing evidence" that Milo published the erroneous teaser with actual malice. ...


...
We now apply these principles to the facts of this case.

VI.

On the summary-judgment record before us, Milo, the then-executive editor of The Nutley Sun for four months, was undoubtedly careless in composing the erroneous front-page teaser, "Local men arrested in 'pump and dump' scheme, page 11." After all, Lynn's article never indicated that Durando or Dotoli were arrested or being criminally prosecuted. But in determining whether the false-light claim survives summary judgment, we are not guided by the standard of how the reasonably prudent editor would have performed the task. Rather, we must determine whether, from the record, a reasonable jury could conclude that Milo -- despite his admitted mistake -- entertained serious doubts about the truth of the teaser when he published it. That is, could a reasonable jury conclude that Milo's conduct was so reckless that it "approache[d] the level of publishing a knowing, calculated falsehood?" .... Even viewing the evidence in the light most favorable to plaintiffs, the answer to that question is no. The reasons for this conclusion are many.

One does not have to condone Milo's shoddy editing to understand how he might have made the mistake in preparing the teaser, a day after he had read Lynn's article. Clearly, the article spoke about the civil complaint filed by the SEC against Durando and Dotoli, and Milo knew the difference between civil and criminal actions. But the language of the SEC complaint, as reflected in the article, also bespeaks criminality. The article stated that three men, including plaintiffs, "pumped up the price of a worthless stock, then dumped it on unsuspecting investors in a $9 million scheme." According to the article, the scheme was executed by taking an insolvent company, changing its name (basically repackaging it), and then falsely advertising  it to investors as "a promising company in the business of Internet phone service."

Had Milo read the actual SEC complaint, perhaps, the chance of a mistake would have been magnified. The complaint charged Durando and Dotoli with violations of federal securities laws, including the commission of "illegal insider trading" and the filing of "reports containing false and misleading statements." Under the New Jersey Code of Criminal Justice, a person commits the crime of theft "if he purposely obtains property of another by deception." ...That bears mentioning not because plaintiffs were charged with committing a crime, but because the language of the article sounded like a crime. That is not in any way to excuse Milo's mistake, for nowhere in Lynn's article or in the SEC's complaint or press release is there any suggestion that plaintiffs were arrested, and Lynn's article made reference only to a civil complaint.

This record does not permit us to conclude that Milo's professions -- that he made a mistake -- are inherently incredible or improbable. He was a harried editor, responsible for a staff of ten and reading hundreds of pieces of correspondence, racing to meet a printing deadline. Somehow, he mistakenly reconfigured the headline of the article, "Local men charged in stock scheme," to the front-page teaser, "Local men arrested . . . ."

Importantly, plaintiffs are not named in the teaser. Any reader who turned to page eleven of the paper learned in paragraphs one and two of the article, even before they reached the names Durando and Dotoli in paragraph three, that the two men were subject to a civil complaint filed by the SEC. As defendants have explained, the teaser and the article itself are somewhat contradictory, at least to anyone familiar with criminal and civil matters. The evidence does not suggest that Milo would have subjected himself to professional ridicule by making such a mistake or misstatement of the truth. Once the mistake was revealed to him by plaintiffs' counsel, he set in motion steps to correct it.

...

Not much can be made of Milo's deleting the last three paragraphs of Lynn's article to fit within the space requirements of his weekly newspaper. While it is true that one of those paragraphs noted again that the SEC complaint was a "civil case," another omitted paragraph included the damning information that the complaint "alleges fraud and violations of various securities laws." The editing does not suggest that Milo attempted to mislead the reader.

Like the trial court and the Appellate Division, we do not place much stock in the brief exchange between Milo and plaintiffs' counsel at deposition about whether it was "possible" Milo thought Durando and Dotoli had not been arrested. What we do know is that Milo admitted he made a mistake, did not recall his exact thought processes when he prepared the teaser, and believed it was accurate at the time of publication.

Plaintiffs' case can go forward only if, reviewing the entirety of the record in the light most favorable to them, Milo's professions are unworthy of belief. Given the heightened protections for free speech and a free press under the actual-malice standard, and the failure of plaintiffs to establish by clear and convincing evidence a jury issue, we come to the same conclusion as the trial court and the Appellate Division -- summary judgment must be granted.

Although plaintiffs' defamation and false-light claims must be dismissed, defendants can only take grim satisfaction with the outcome. The constitutional and common-law protections accorded to a free press place a great responsibility on the media to police itself. The primary objective of a free press is to promote the truth so that citizens will have a better understanding of current events and of the workings of their government. Falsehoods in an article that needlessly do harm to a person's reputation do not advance that objective. Moreover, "shoddy and careless reporting that leads to the dissemination of false or misleading information is detrimental to the enlightenment of a free society. A newspaper's greatest reward is the public's trust."

VII.

We affirm the Appellate Division, which upheld the trial court's grant of summary judgment in favor of defendants and dismissal of the defamation and false-light claims.

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