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Reports on golf course audit may be defamatory

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NEWS MEDIA UPDATE   ·   SECOND CIRCUIT   ·   Libel   ·   Sep. 29, 2005

NEWS MEDIA UPDATE   ·   SECOND CIRCUIT   ·   Libel   ·   Sep. 29, 2005

Reports on golf course audit may be defamatory

  • A New York newspaper and television station will have to stand trial on defamation charges after a federal appeals court panel reinstated a lawsuit over reports about an audit of a public golf course.

Sep. 29, 2005  ·   A reasonable jury could find falsity and defamatory meaning in news reports regarding bookkeeping at a public golf course in the Village of Endicott, N.Y., the U.S. Court of Appeals in New York (2nd Cir.) ruled, reinstating a defamation case that a lower court dismissed.

“We’re concerned about the decision because the panel picked out isolated words and phrases that they obviously didn’t like and pulled together an alleged defamatory meaning,” said Charles D. Tobin, one of the media lawyers in the case. “If you read the article as a whole, the defamatory meaning just simply isn’t there.”

The case arose over a Feb. 25, 2001, article and broadcast by the Binghamton Press & Sun-Bulletin and News Channel 34, respectively, about an audit of the village’s management of its golf course. The audit found that under course Manager John Karedes, the village had paid invoices that were not its responsibility. In March 2001, Karedes was fired. He sued the newspaper and the station in September 2001.

The U.S. District Court for the Northern District of New York dismissed the case in March 2004, ruling that the stories were substantially true and subsequently, non-defamatory. However, in a unanimous Sept. 9 decision, a three-judge appellate panel found that “a reasonable jury could find the reports to have defamatory meaning, and to be false.”

The court determined this even though the stories quoted Karedes’ defense of his role in the controversy, saying that the “defamatory tendency is not wholly offset by the giving of Karedes’ side of the story,” Judge Dennis Jacobs wrote. “Karedes’ denials and explanations may blunt, but do not correct, the statement that is arguably made and that may be untrue: that one finding of an independent audit commissioned by the Village was that Karedes caused the Village to pay large sums on behalf of a private interest.”

The court focused on the headline, a sidebar, and five phrases in the story which convey “an initial impression to the public that the Village made gratuitous payments,” according to Jacobs. “These passages (and others), in the context of a well-publicized scandal regarding the misappropriation of public funds and the Mayor’s challenges to Karedes’ conduct, may be said to have exposed Karedes to ‘public hatred, shame, obloquy, contumely, [and] odium,” and thus the passages could be considered defamatory.

The media parties have filed an appeal to receive a hearing in front of the whole appellate court. The Reporters Committee for Freedom of the Press has joined the defendants in a friend-of-the-court brief.

“The gist of the audit is that Karedes did not do a good job keeping books,” Tobin said. “The articles accurately told that story.”

The decision could weaken libel protection in the Second Circuit, Tobin said.

“This stands as a very bad precedent that future courts could use that you can just pull out isolated words and phrases in a story to find defamatory meaning,” Tobin said. “It’s a large setback for general libel principles and especially for New York’s generally favorable libel laws.”

(Karedes v. Ackerly Group, Inc.; Media Counsel: Walter E. Diercks, Rubin, Winston, Diercks, Harris & Cooke; Charles D. Tobin, Holland & Knight, Washington, D.C.)CM

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