A New Jersey appellate court ruled last week that journalists can be subject to libel lawsuits for reporting the contents of a legal complaint.
Though the fair report privilege has long provided journalists with a defense to libel suits for stories that quote from official proceedings, the court held that the privilege only applies when journalists quote from court decisions — not from court pleadings filed by individual parties.
Last week’s ruling reversed a lower court decision dismissing a libel claim against The Record and The Glen Ridge Voice. Thomas John Salzano, whose father was the CEO of a bankrupt telecommunications firm called NorVergence, filed the lawsuit after the newspapers reported that the bankruptcy trustee in New Jersey had filed a complaint against him for allegedly misappropriating roughly $500,000 from NorVergence.
The lower court judge, ruling from the bench, dismissed the suit and said Salzano had not proven actual malice – the standard that is applied in defamation claims involving public figures or matters of public concern.
On appeal, the newspapers argued that the articles about Salzano should be protected by the fair report privilege. But the Superior Court of New Jersey, Appellate Division, though recognizing that the defense would require dismissal of the claim, held that in this instance it was not applicable.
“Because the trustee’s complaint was filed in the bankruptcy court the day prior to the first of these articles, and was not subject to any sort of judicial review by the time the articles were published, we must conclude that the fair report privilege does not apply,” wrote Judge Clarkson Fisher, Jr.
Additionally, the court recognized that the articles about Salzano were matters of public concern and it applied the actual malice standard. Actual malice requires Salzano to prove that the newspapers acted with reckless disregard for the truth. Acknowledging that Salzano had not proven that standard, the court held that the case should be remanded back to the lower court and Salzano should be given an opportunity to amend his complaint to try to prove actual malice.
Bruce Rosen, the attorney who argued the case on behalf of the media, said the decision was troubling because it makes it difficult for journalists to know exactly what type of documents will be covered by the fair report privilege and what types will subject them to libel litigation.
“It’s had an immediate impact on my client, and I’m sure on other publications as well,” Rosen said. “There’s a quandary now about what journalists can cover aggressively when they are reporting about new complaints and even criminal indictments.”
Jennifer Borg, in-house counsel for The Record, told The Associated Press that the decision would have a “chilling effect” on a newspaper’s ability to gather news. Borg said The Record planned to appeal the ruling to the state Supreme Court.