Monday, February 16, 2009

Think You Know Libel Law? Think Again

A bedrock principle of libel law is that truth is an absolute defense. If what you say about someone is true, the person cannot win a libel case against you, even if you defame them. The federal appeals court in Boston put a jackhammer to the bedrock this week. In Noonan v. Staples, it ruled that even a true statement can be subject to a libel lawsuit if it was said with actual malice. In so deciding, the three-judge panel did an about face, reversing its own earlier decision in the same case. You need not be superstitious to appreciate the import of this Friday the 13th ruling. It is the most dangerous libel decision in decades. The decision puts a crack in the bedrock that threatens to undermine free speech.

To reach this outcome, the 1st U.S. Circuit Court of Appeals panel dusted off a 1902 statute that the highest state court in Massachusetts long ago ruled unconstitutional in a related context. The statute, G. L. c. 231, Section 92, says that truth is a defense to libel "unless actual malice is proved." In a 1998 case, Shaari v. Harvard Student Agencies, the Supreme Judicial Court ruled that statute unconstitutional as applied to matters of public concern. Citing a line of U.S. Supreme Court opinions leading back to the seminal 1964 case, New York Times v. Sullivan, the SJC said, "To apply this statute to the defendants' truthful defamatory statement concerning a matter of public concern, even if the statement is malicious, violates the First Amendment."

Remarkably, the 1st Circuit sidestepped Shaari with barely a nod to its significance. In a 34-page opinion written by Circuit Judge Juan R. Torruella, the court gave Shaari only a footnote. It dismissed Staples' argument that Shaari applied here on a procedural formality. "This argument is not developed now and was not raised in the initial briefing. Accordingly, we do not consider it at this time." It ignored Shaari even though the SJC suggested in dictum that the ruling should apply equally to private cases. "Although the Supreme Court has instructed that private figure plaintiffs may recover 'on a less demanding showing than that required' in cases of public figure plaintiffs, ... the falsity of the defendant's defamatory statement regarding matters of public concern remains a prerequisite to recovery," the SJC said.

At issue in this case was an e-mail a Staples executive sent to some 1,500 employees about the termination of Alan Noonan, a Staples sales director. The company terminated Noonan for cause after investigators concluded that he had deliberately falsified expense reports. The next day, Executive Vice President Jay Baitler sent the e-mail. "It is with sincere regret that I must inform you of the termination of Alan Noonan's employment with Staples," he wrote. "A thorough investigation determined that Alan was not in compliance with our [travel and expense] policies."

As the 1st Circuit itself acknowledged, "everything said in the e-mail was true." But it said Noonan could still have a claim under the 1902 statute if he could show that the e-mail was sent "with actual malice." The Supreme Court's decision in New York Times v. Sullivan defined actual malice as requiring knowledge that a statement was false or reckless disregard for its truth or falsity. The first time the 1st Circuit decided this case, it applied that standard to dismiss Noonan's appeal. This time, it leapfrogged back in time over 40 years of Supreme Court precedent to apply a 1903 SJC ruling that defined actual malice as "malicious intention," which Torruella recasts as "ill will."

"From this evidence, a jury could permissibly infer that Baitler singled out Noonan in order to humiliate him," Torruella wrote. He cites three pieces of evidence he considers key. First, Baitler had never before referred to a fired employee by name in a communication to employees. Second, he sent no memo about another employee who was fired for embezzling money through fraudulent expense reports. Third, he sent the e-mail to some 1,500 employees, many of whom did not travel and had no reason to be reminded of the policy. "The presence of these three pieces of evidence support inferences upon which a jury could base a verdict for Noonan," Torruella said.

This is far from the end of this case. The 1st Circuit's decision sends it back to the lower court for a trial to determine how the case should be decided. Most likely, Staples will ask the full panel of 1st Circuit judges to review this case en banc. It could even make its way to the Supreme Court. For the time being, however, be afraid -- be very, very afraid -- of this precedent. If ill will is all that is needed to turn a truthful statement into libel, then everyone is a potential defendant.

18 comments:

Kevin Houchin said...

Thanks for sharing this. Nice analysis.

Please keep us posted.

-Kevin Houchin

Bob Tarantino said...

By way of comparison, that decision appears to bring the law closer to that found in the Canadian province of Quebec, which is a civil code legal system. In Quebec, truth is not necessarily a defence to a defamation action if malice (in the sense of intention to injure) can be shown or if the matter is not a matter of public interest.

Jim Swanek said...

Rather, it sounds more like a European system in which hurt feelings must be recompensed if one intended to hurt them. We had a similar inanity recently with a man imprisoned for criminal public nuisance for whistling the same tune over and over again to his neighbors for several years. This prospective loss of freedom is our own fault for allowing the principle of "intentional infliction of emotional distress" to survive scrutiny.

Colette Vogele said...

This does seem turn defamation law on its head. In many cyber/on-line defamation cases it would not be hard to come up with evidence of "malice" (or at least a few facts to put it in question) which could alter the bargaining position in any defamation case.

Kyle Hause said...

I don't understand how the first circuit, sitting in diversity, even has the power under Erie to interpret the law this radically.

Stuart Wolfe (sbwolfe@wolfewyman.com said...

There has long been a tort in some (many?) states called "public disclosure of private facts" which involves disseminating the truth and yet is a variety of defamation. See: http://www.justia.com/trials-litigation/docs/caci/1800/1801.html

Ani said...

What about the SJC's footnotes 4 in both White v. Blue Cross and Phelan v. May Dept. Stores in 2004? Doesn't sound from those references as if the SJC has decided that G.L. c. 231, sec. 92 is necessarily unconstitutional, only that the "requirements" of the 1st amendment have to be taken into account. I've asked elsewhere whether the Supreme Court ever answered the question it left open in Cox Broadcasting v. Cohn as to "whether the First and Fourteenth Amendments require that truth be recognized as a defense in a defamation action brought by a private person, as distinguished from a public official or public figure." It seems to me a fairly big question that would require briefing as careful as the Supreme Court's leaving the question open ("The Court has nevertheless carefully left open the question ...") in Cox Broadcasting was.

Anonymous said...

Didn't the Supreme Court in NY Times say that "common law malice" was still a consideration? Didn't they distinguish their absolute truth standard as applying only when you're considering a public figure?

Mass state law has said since the early 1900s that truth is not an absolute defense. Unless I miss my mark here, a quick gloss over cases citing the law have held that to be the standard before and after NY Times, and all the way up to the Supreme Court.

Ani said...
This comment has been removed by the author.
yclipse said...

The key point here is that a state statute was enacted which "turned defamation law on its head". The judge was applying a statute, and was unwilling to extend the previous finding of unconstitutionality.

Nicolas Martin said...

FYI. Judge Torruella, from Puerto Rico, was appointeed in 1984 by Reagan, and Judge Lipez, from Maine, was appointed in 1998 by Clinton.

Honestly, can Americans be losing our freedoms any faster than is presently happening? Necessity is the mother of tyranny.

David Schwartz said...

So, what are your damages from someone telling the truth about you? Your hurt feelings?

If you lose a business opportunity because someone disclosed the truth about your business honesty, there is only one person responsible for your damages, and it's not the truth-teller.

St.Louis Kitchen said...

I am just finishing a kitchen renovation that was an absolute nightmare. The licensed contractor was horrible and had a terrible attitude. His work was awful with gaps between the cabinets etc.. I am considering putting up a small website telling about my experience. The contractor will definitely know who put the website up as I plan to post many pictures of the poor workmanship. The intention of the website would be to inform and warn other consumers about the bad contractor. This could certainly be perceived as malice by the contractor. Does the Noonan v. Staples decision mean that I could be successfully sued for informing others of the facts? I’m losing faith in the entire legal system and our first amendment rights.

Michael Benin said...

Two words come to my mind right now, chilling effect. It has to be a false criticism of professionalism, mental and physical health, financial standing, association, or a false accusation of a crime and proven that the person must be identified directly. Some kind of harm must be shown along with the communication to a mass audience. Truth will always be the ultimate defense against libel but proving truthful information must be clear and legetimate. For example, just because you saw someone do something and then decide to publish that information does not make it ok even though you know it was true. Each state has its own specificity to laws on libel.

Anonymous said...

What were the damages sustained by the complainant besides hurt feelings? If those are proven to that effect then that would be a sound cause of action. It would be tantamount to the curtailment of freedom of speech if it would just be hurt feelings and disregarding truth as a defense. In fact, the defendant was an officer of the company.

Barbara said...

Great analysis, thank you very much

E F Orwell said...

The UK Libel Laws have taken another step into the abyss and could signal the end of Free Speech. A UK based media club, The Groucho Club which is owned by a billion pound corporation ‘Graphite Capital’ have launched a one of kind High Court action for a pre publishing test case for libel against the author of an exposé book about the club. The book has not been completed yet and the case seems to be based on what could be written and not what has been written. www.g-book.co.uk is the book web site

What does the Chartered Institute of Journalists and its members make of this type of case where a legal action can be taken against a writer of a book that has not been written yet. This action is certainly a threat against all writers and journalists

Luiz Leitão said...

Hi, This is Luiz Leitão, from São Paulo, Brazil.

We do have a Supreme Court which reckons our freedom of speech consigned in our Constitution, BUT, a small newspaper or, worse, a blogger, will have to spend a rather high amount to appeal to that major court.

First or second degree judges even dare placing anticipated censorship on major newspapers, like O Estado de São Paulo, one of the most important diaries in Brazil. Since July,It's forbidden to publish anything related to the Senate president's son, investigated by the feds for a row of felonies.

Our Constituition says one can sue a journalist AFTER something proven to be false is published, but never previously. Nevertheless, such is the case of O Estado, and a blogger's.

We don't have the british Libel Law, but on the other hand, some judges simply ignore our Constitution. Justice by chance, mostly.

The post was useful, I'm writing an article mentioning the UK L.Law, brazilian cases, compared to the freedom US press has.