Judges： Albin, Hoens
Filed Date： 2/28/2012
Status： Precedential
Modified Date： 11/11/2024
delivered the opinion of the Court.
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.
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.
I.
On November 15, 2005, the Securities and Exchange Commission (SEC) filed a complaint in the United States District Court for the District of Connecticut against Ronald Durando and Gustave Dotoli (residents of Nutley), charging them with various violations of federal securities laws.
On November 17, 2005, The Record—a newspaper owned by North Jersey Media Group—published an article written by staff writer Kathleen Lynn about the SEC complaint. The headline of the article read: “8 N.J. men accused in $9M stock scam.” The article in its entirety is set forth below:
Three New Jersey men pumped up the price of a worthless stock, then dumped it on unsuspecting investors in a $9 million scheme, the Securities and Exchange Commission said Wednesday.
According to the SEC, which filed a civil complaint Tuesday in Connecticut, the scheme involved a telecommunications company called PacketPort.com of Norwalk, Conn.
According to the SEC, Ronald Durando, 48, of Nutley, bought a controlling stake in an insolvent company called Linkon. Working with Gustave Dotoli, 70, of Nutley, and attorney Robert H. Jaffe, 69, of Mountainside, Durando changed the company’s name to PacketPort.com, the SEC said. Durando became CEO and Dotoli the chief financial officer.
Durando then allegedly paid IP Equity Inc., a California company that ran an Internet stock newsletter, to tout PacketPorl.com to investors as a promising company in the business of Internet phone service.
As a result of this publicity, the stock price rose to about $19.50, the SEC said. Then, the SEC said, Durando, Dotoli, Jaffe, and IP Equity and its principals dumped the shares—which the SEC called “essentially worthless”—for a total of more than $9 million.
They sold most of the shares through New York stockbroker William Coons III, the SEC said.
The SEC also says that Durando, Dotoli and Jaffe falsified PacketPort.com’s financial reports.
The SEC complaint names Durando, Dotoli, Jaffe, Coons, and the two IP Equity principals, M. Christopher Agarwal and Theodore Kunzog, as defendants. The complaint, which seeks disgorgement of the profits, alleges fraud and violations of various securities laws.
Lawyers for Durando, Dotoli and Jaffe did not return calls seeking comment.
The civil ease was filed in U.S. District Court in New Haven.
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 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 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
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.
II.
A.
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 easting one in a false light and intentional and negligent infliction of emotional distress. Plaintiffs sought compensatory, emotional-distress, and punitive damages.
B.
Milo was deposed almost a year after the publication of the “pump and dump” article. He explained that he was the executive editor of both The Nutley Sun and The Belleville Times, another local weekly newspaper. In that capacity, he performed editorial and administrative Junctions, overseeing a staff of ten people. Although he was aware that the SEC “regulate[s] the stock/investment industry,” he did not know whether it pursued criminal prosecutions. Milo understood the difference between civil and criminal actions. In preparing the teaser for the “pump and dump” article, Milo relied solely on Lynn’s article; he did not review the SEC’s press release. He did not recall his thought process in preparing the teaser, but conceded that in using the word “arrested,” he “had made a mistake.” In a colloquy with plaintiffs’ counsel, Milo responded to a series of questions about his understanding of the term “arrested” and whether he believed that plaintiffs had been subject to an arrest and a criminal prosecution:
Q. You said you don’t recall whether or not you thought it was a criminal action, but you wrote that they had been arrested?
A. Right.
Q. So what did you mean happened to them by using the word “arrested”?
*245 A. That they had done something criminal.
Q. What caused you to believe that these men had been arrested?
A. Beyond making an error—I mean, I have no other way to answer that question except to say that I made a mistake.
Q. And when you edited the article, did you believe that these—that [Durando] and [Dotoli] had been arrested?
A. I don,’t remember what my belief roas at the time I edited the article.
Q. Did you confidently believe that they had been arrested? Were you certain that they had been arrested?
A. I don’t remember what my belief was, like, at the time I wrote that teaser.
Q. So is it possible that you were not sure that they were arrested?
A. Yes.
Q. Is it possible that you entertained doubts as to whether or not they had been arrested?
A. It’s possible, but I don’t remember, just in answer to that previous question.
[ (Emphasis added).]
After that exchange and a lunch break, during which Milo conferred with counsel, Milo returned to the deposition and stated that he “missed the nuance” in the last questions posed by plaintiffs’ counsel. Milo made clear that when he wrote the teaser he harbored no doubts about its accuracy, despite the fact that he evidently made a mistake. Milo concluded that the erroneous teaser “got [in the paper] because at the time I wrote it, I thought it was the truth.”
In a certification attached to defendants’ summary-judgment motion, Milo asserted that he changed The Record’s headline from “3 N.J. men accused in $9M stock scam” to “Local men charged in stock scheme” because, in his mind, the term “charged” was synonymous with “accused.” He offered that there was no reason to write the word “arrested” rather than “accused” as both have the same journalistic weight. Furthermore, he maintained that he “would never endanger [his] credibility or livelihood by purposely
Milo also described his busy work schedule, which includes reading hundreds of pieces of correspondence each week leading up to publication. Tuesday night, when he wrote the teaser, is the most hectic time of the week because of the need to meet the printer’s hard deadline. Milo emphatically denied doubting the accuracy of the teaser at the time that he wrote it.
C.
The trial court granted defendants’ motion for reconsideration and entered summary judgment in favor of defendants on the false-light claim. In dismissing plaintiffs’ action, the court reviewed the record and governing legal authorities, concluding that there was not “sufficient evidence from which a jury could clearly and convincingly conclude that any ... of the defendants acted with actual malice.” The court emphasized that, to satisfy the actual-malice standard, plaintiffs needed to show more than that Milo departed from the conduct of a reasonably prudent editor. The court did not consider it decisive that Milo, at one point during the deposition, said “that it was possible that he was not sure at the time of publication as to the details of the arrest.” In that regard, the court observed: “[Tjhat someone was possibly uncertain at the time of publication, does not show sufficient clear and convincing evidence ... that the media defendants, in fact, entertained serious doubts as to the truth of the publication.”
III.
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
We granted plaintiffs’ petition for certification. Durando v. Nutley Sun, 203 N.J. 93, 999 A.2d 462 (2010).
IV.
A.
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. Senna v. Florimont, 196 N.J. 469, 489-90, 958 A.2d 427 (2008).
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 [defendants 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. G.D., supra, 205 N.J. at 292-93 & n. 7, 15 A.3d 300. “A defamatory statement, generally, is one that subjects an individual to eon-
A plaintiff also has a cause of action if a defendant publicizes a matter that portrays him “before the public in a false light.” Romaine v. Kallinger, 109 N.J. 282, 294, 537 A.2d 284 (1988) (quoting Restatement (Second) of Torts § 652E (1977)). 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 Lplaintiff] would be placed.” Ibid, (quoting Restatement (Second) of ToRs, supra, § 652E). 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.” Id. at 279-80, 84 S.Ct. at 726, 11 L.Ed.2d at 706. The Court further held that actual malice must be established with “convincing clarity.” Id. at 285-86, 84 S.Ct. at 729, 11 L.Ed.2d at 710. The Court’s decision underscored “a profound national commitment to the principle
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.” Id. at 485-86, 958 A.2d 427 (discussing Turf Lawnmower Repair, supra, 139 N.J. 392, 655 A.2d 417; Sisler, supra, 104 N.J. 256, 516 A.2d 1083; Dairy Stores, supra, 104 N.J. 125, 516 A.2d 220). 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. Id. at 495, 958 A.2d 427. 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. See id. at 496-97, 958 A.2d 427; Sisler, supra, 104 N.J. at 279, 516 A.2d 1083; Dairy Stores, supra, 104 N.J. at 146, 516 A.2d 220.
Additionally, the actual-malice standard applies to all speech-based torts involving matters of public concern or public officials. See DeAngelis v. Hill, 180 N.J. 1, 6, 19, 847 A.2d 1261 (2004) (applying actual-malice standard to false-light claim brought by police officer against private citizen); Hornberger v. Am. Broad. Cos., 351 N.J.Super. 577, 597-98, 799 A.2d 566 (App.Div.2002) (applying actual-malice standard to false-light claim); see
Actual malice is defined similarly under federal and state law. See Rocci v. Ecole Secondaire Macdonald-Cartier, 165 N.J. 149, 156, 755 A.2d 583 (2000) (treating common-law actual malice and constitutional actual malice synonymously). In a speech-based tort case involving a media defendant, “a plaintiff must establish that the publisher knew the statement to be false or acted in reckless disregard of its truth or falsity.” Dairy Stores, supra, 104 N.J. at 151, 516 A.2d 220; accord New York Times, supra, 376 U.S. at 279-80, 84 S.Ct. at 726, 11 L.Ed.2d at 706. In this case, plaintiffs contend that Milo, the executive editor of The Nutley Sun, acted with reckless disregard of the truth.
The reckless-disregard-for-the-truth prong has been defined in a variety of different ways, but the core principle has remained constant: establishing reckless disregard requires a showing that the defendant made the statement with a “high degree of awareness of [its] probable falsity.” Garrison v. Louisiana, 379 U.S. 64, 74, 85 S.Ct. 209, 216, 13 L.Ed.2d 125, 133 (1964). The test is subjective, not objective, and involves analyzing the thought processes of the particular defendant-in this instance, Milo. See Costello v. Ocean Cnty. Observer, 136 N.J. 594, 617, 643 A.2d 1012 (1994). The standard is not measured by how the reasonably prudent editor would have handled the matter. St. Amant v. Thompson, 390 U.S. 727, 731, 88 S.Ct. 1323, 1325, 20 L.Ed.2d 262, 267 (1968). Rather, to prove reckless disregard, there must be sufficient evidence that the named “defendant in fact entertained serious doubts as to the truth of the publication.” Ibid.
That an editor or reporter “sho%dd have known” or “should have doubted [the] accuracy” of an article before publish
To act with reckless disregard of the truth, a defendant must “actually doubt[]” the veracity of the article. Lawrence, supra, 89 N.J. at 468, 446 A.2d 469. 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. Maressa v. N.J. Monthly, 89 N.J. 176, 200, 445 A.2d 376 (1982).
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.” St. Amant, supra, 390 U.S. at 732, 88 S.Ct. at 1326, 20 L.Ed.2d at 268. 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.” Ibid.; accord Lynch v. N.J. Educ. Assoc., 161 N.J. 152, 165, 735 A.2d 1129 (1999).
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.
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. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255-56, 106 S.Ct. 2505, 2514, 91 L.Ed.2d 202, 216 (1986). “Although courts construe the evidence in the light most favorable to the non-moving party in a summary judgment motion, the ‘clear and convincing’ standard in [a] defamation action adds an additional weight to the plaintiffs’ usual ‘preponderance of the evidence’ burden.” Costello, supra, 136 N.J. at 615, 643 A.2d 1012.
Costello, supra, is an example of the heavy burden that a plaintiff faces in vaulting the actual-malice threshold in the summary-judgment context. In Costello, the Ocean County Observer published an article that erroneously related the contents of a court file. 136 N.J. at 604-05, 643 A.2d 1012. The newspaper reported on a draft, unsigned civil complaint that was appended to an unrelated order-to-show-cause pleading as though the complaint itself was filed and part of an ongoing proceeding. Id. at 601-04, 643 A.2d 1012. The draft complaint alleged that a police officer sexually abused a woman in handcuffs. Id. at 602, 643 A.2d 1012. The officer sued for defamation. Id. at 605, 643 A.2d 1012.
We determined that the article was not a “full, fair and accurate” report of a pending judicial proceeding and therefore the reporter and newspaper were not entitled to the protection of the fair-report privilege. Id. at 611-12, 643 A.2d 1012. Nevertheless, we concluded that the Appellate Division properly entered summary judgment in favor of the reporter and the newspaper because the evidence of record demonstrated that the reporter
As was true in Costello, summary judgment may play an important role in defamation cases, particularly against newspapers, because “the cost of defending a libel action can itself deter [a] free press.” Maressa, supra, 89 N.J. at 196, 445 A.2d 376. “The threat of prolonged and expensive litigation has a real potential for chilling journalistic criticism and comment upon public figures and public affairs.” Kotlikoff v. Cmty. News, 89 N.J. 62, 67, 444 A.2d 1086 (1982). Indeed, “[t]his is especially true of the many smaller journals and local newspapers which have played an important role in the affairs of New Jersey but which cannot withstand high litigation costs.” Maressa, supra, 89 N.J. at 196, 445 A.2d 376. For that reason, we have “eneourage[d] trial courts to give particularly careful consideration to identifying appropriate cases for summary judgment disposition” in defamation eases against newspapers. Kotlikoff, supra, 89 N.J. at 67-68, 444 A.2d 1086.
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
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.” See N.J.S.A. 2C:20-4. 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
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 ease,” 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
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.” Costello, supra, 136 N.J. at 620, 643 A.2d 1012.
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.
Because defendants had moved for summary judgment, we state these facts in a light most favorable to plaintiffs. See G.D. v. Kenny, 205 N.J. 275, 304, 15 A.3d 300 (2011) (citations omitted); R. 4:46-2(c).
Durando and Dotoli later entered into a settlement agreement with the SEC.
A "teaser” is a brief headline intended to catch the eye and encourage people to buy the periodical.
The retraction, which appeared in the same spot as the teaser, stated:
The Nutley Sun hereby retracts the headline “Local men arrested in 'pump & dump’ scheme”, which appeared on page A-l of the Dec. 8 edition. Ronald Durando and Gustave Dotoli were not arrested, but were served with a civil complaint by the federal Securities and Exchange Commission. The Nutley Sun regrets the error and any embarrassment it may have caused Mr. Durando and Mr. Dotoli.
One month later, Milo was reprimanded in writing by The Nutley Sun's publisher for printing the inaccurate teaser.
Plaintiffs did not press their claims for intentional and negligent infliction of emotional distress on appeal. In any event, because those torts are predicated on the same conduct alleged in the defamation and false-light claims, they too would be governed by the actual-malice standard. See G.D., supra, 205 N.J. at 307, 15 A.3d 300.
New Jersey "providefs] greater protection to speech involving matters of public concern than mandated by the United States Supreme Court’s First Amendment jurisprudence.” Senna, supra, 196 N.J. at 484-85, 958 A.2d 427 (citation omitted).
The application of summary-judgment principles in a case involving the actual-malice standard in a First Amendment or common-law case is the same. See Rocci, supra, 165 N.J. at 159, 755 A.2d 583 (citing constitutional summary-judgment standards when plaintiff was private person).
That Milo's error occurred in a promotional issue is not sufficient to establish that he had a motive to propagate a falsehood.