What's known as the "fair reporting privilege" has protected the media from defamation suits when a story discloses accusations made in a court filing. In other words: Newspapers weren't liable for any claims accurately quoted in a lawsuit, whether or not the charges had any relationship to the truth.
A Nov. 2008 appeals court decision against the practice by North Jersey Media Group (which publishes the Bergen Record) turned that approach on its head. Then, in January, the Supremes froze the ruling -- without reversing it -- so that it could review the case. That comes this Wednesday.
This all began with a March 2006 story in The Record drawn from a federal bankruptcy court complaint alleging that Thomas John Salzano misappropriated a half-million dollars from a now-defunct Newark telecommunications company for personal entertainment and to purchase a home.
The report, “Man accused of stealing $500,000 for high living,” appeared on the Record's Web site, as well as in the Glen Ridge Voice, a weekly newspaper.
In those stories, The Record reported that the bankruptcy trustee alleged that Salzano had “unlawfully diverted, converted and misappropriated" money "for his own personal benefit."
Salzano sued NJMG, saying the allegations in the complaint were unfounded. A lower court dismissed his claim, but the appeals court reinstated it.
The appeals judge said the newspaper wasn't privileged to “republish alleged defamatory statements within a bankruptcy court complaint” because it didn't independently verify the veracity of the allegations.
In essence, the appeals judges said newspapers must verify the facts of a complaint before reporting them -- to the point that it would have to prove the statements in the complaint itself were, in fact, true.
Otherwise, anyone could gin up a bogus complaint -- or even attempt to extort someone -- if they knew it would be reported, they said. The plaintiff could then dismiss the complaint, they said.
Now it's up to the Supremes to determine whether New Jersey is "media-friendly" or whether "legacy" institutions -- basically, old-time newspapers who already are losing ground to online-only news sites -- will be forced even further toward the abyss.
The flaw, the appeals judges said, is that the "fair report privilege" applied to court decisions, not to complaints filed willy-nilly.
NJMG appealed to the Supremes, hitching 18 other press and civil liberties group to a "friend-of-the-court brief" filed by the New Jersey Press Association.
There's obviously a lot at stake here.
The brief argues that limiting the fair report privilege chills speech by making it nearly impossible for reporters to know what type of court documents will be covered.
The fact that allegations are in a complaint, which could be made by anyone, made it clear that the privilege shouldn't apply, the appeals court countered.
In fact, the justices said, the "fair report" privilege doesn't apply to “[t]he publication ... of contents of preliminary pleadings such as a complaint or petition, before any judicial action has been taken."
For all a newpaper knows, the judges said, a plaintiff could dismiss the action once the story has been published: By then, the public damage already os done.
NJMG made matters worse, the appeals court ruled, when it reported that Salzano and his father “started a Kenilworth business last year called Charity Snack, which also went belly-up."
The statement had nothing to do with the bankruptcy proceedings, the court said.
Salzano predicted the appeals court ruling would “fortify” the First Amendment because it would ensure “integrity in reporting while protecting private citizens... Reporters should verify their facts and verify the sources where they get their facts from,” The Bergen Record itself quoted him as saying.
That gave the newspaper's attorneys the opportunity to claim the decision would impair free speech rights and chill reporting on judicial proceedings.
This week, the state's highest court gets to chart a course that could dramatically change the media landscape in a state long known for precedent-setting decisions. You can be sure media big-wigs will be watching -- and waiting.
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