SPECIAL REPORT: An editor for a local weekly owned by The Bergen Record’s parent company may have been careless, but that didn’t give two men charged with securities fraud grounds to sue over a Page One “teaser” that incorrectly said they were arrested, the state Supreme Court ruled this week.
By a vote of 5-2, the Supremes found an absence of malice, saying that nothing proves the editor recklessly disregarded the truth.
New Jersey’s common law “provides special protection to speech touching on matters of public concern, even when that speech contains some careless falsehoods,” they wrote in a 30-page opinion that drew widespread media interest. “A free and robust press, one that does not engage in self-censorship from fear of ruinous lawsuits, is essential to an enlightened democracy.”
The state’s highest court also acknowledged that “the free and unimpaired flow of information on matters of public concern” sometimes leads to mistakes.
“In those circumstances, freedom of speech and the press are values that outweigh the right to security in one’s personal reputation,” the Supremes found.
“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” isn’t sufficient grounds for a lawsuit, Justice Barry Albin wrote for the court.
“[T]he cost of defending a libel action can itself deter [a] free press,” he added. “The threat of prolonged and expensive litigation has a real potential for chilling journalistic criticism and comment upon public figures and public affairs.
“This 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.”
Ronald Durando and Gustave Dotoli, whose names weren’t in the teaser, were accused of illegal insider trading in a Nov. 15, 2005 complaint filed by the Securities and Exchange Commission. They hadn’t been arrested, however.
The Record published a story about the complaint on Nov. 17, under the headline: “3 N.J. men accused in $9M stock scam.”
Paul Milo, then the executive editor of NJMG’s Nutley Sun and Belleville Times, picked up the article for publication, then ran it in the paper’s Dec. 8 edition under the headline: “Local men charged in stock scheme.”
The front page of the Sun had three teasers, including: “Local men arrested in `pump and dump’ scheme, page 11.”
According to Wednesday’s Supreme Court decision:
“The day after publication… 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 retraction in The Nutley Sun’s next edition. On December 15, Sforza called plaintiffs’ counsel and requested that he delay filing a lawsuit until after she had time to discuss the matter with general counsel to the North Jersey Media Group, Jennifer Borg. Plaintiffs’ counsel told Sforza that he would not file a lawsuit until after December 19.
“Borg, whose approval was necessary before publication of a retraction, was unavailable the week of December 15 because she was tending to a dying relative at Hackensack Medical Center.
“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. This edition, however, was not circulated to the 2500 non-subscribers who received the December 8 edition with the erroneous teaser.”
Durando and Dotoli sued the newspaper and NJMG for libel. They later added claims of “casting one in a false light and intentional and negligent infliction of emotional distress” and sought “compensatory, emotional-distress, and punitive damages,” the Supreme Court decision notes.
Milo was deposed after the edition was published, it says. He said he “understood the difference between civil and criminal actions,” relied solely on the Record article without reviewing the SEC’s news release himself and “made a mistake” in using the word “arrested.”
Milo also said he was very busy at the time, including “reading hundreds of pieces of correspondence each week leading up to publication,” the majority opinion says. “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.”
A local judge dismissed the suit, finding no malicious intent.
“[T]hat 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,” the judge ruled.
The state Appellate Division upheld the decision, finding no “clear and convincing’ evidence” of actual malice that would warrant a jury trial. It was more “careless and unfortunate” that Milo goofed than a cause for a legal claim, they ruled.
The Supremes agreed.
“Although this case unquestionably involves sloppy journalism, the careless acts of a harried editor,” Albin wrote, they “cannot support a finding by clear and convincing evidence that the editor knowingly or in reckless disregard of the truth published the false teaser.
“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,” the decision says. “Milo concluded that the erroneous teaser ‘got [in the paper] because at the time I wrote it, I thought it was the truth.’
“The evidence does not suggest that Milo would have subjected himself to professional ridicule by making such a mistake or misstatement of the truth,” Albin added. “Once the mistake was revealed to him by the plaintiffs’ counsel, he set in motion steps to correct it.”
Albin cited rulings by the nation’s highest court that established the “actual malice” standard — “that is, with knowledge that it was false or with reckless disregard of whether it was false or not.” Actual malice also must be established with “convincing clarity,” the U.S. Supreme Court declared.
As for New Jersey, Albin wrote, 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.”
There was no evidence that Milo in any way doubted the veracity of the article, the Supremes ruled. That he should have before publishing it, they said, “is insufficient to show reckless disregard for the truth.”
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