Journalists, Bloggers Watching Libel Case Involving Staples’ E-mail

March 12, 2009

For decades, U.S. journalists have been guided by what most considered an absolute defense to libel lawsuits: If a news report is true, it can’t be libelous.

But a recent decision by a federal appeals court in Boston is calling that ironclad defense into question and creating an outcry from news organizations and bloggers worried it could make reporters hesitant to touch certain stories.

The case doesn’t involve anything published by a news outlet but instead an e-mail sent by Staples Inc., the Framingham-based office products company, to more than 1,500 employees, telling them a salesman had been fired for padding his expense reports.

A three-judge panel of the 1st U.S. Circuit Court of Appeals found Feb. 13 that even though the content of the e-mail was true, a jury could reasonably find that Staples had shown “actual malice” in widely circulating the e-mail to humiliate the salesman, Alan Noonan.

The court cited a 1902 Massachusetts law that holds that truth is a defense against libel unless the plaintiff can show “actual malice” on the part of the person publishing the statement.

The court’s ruling means Noonan’s defamation lawsuit against Staples can go forward.

But legal observers say the ruling could reverberate beyond the employment arena. Media bloggers have lambasted the ruling as an attack on the First Amendment, which guarantees free speech rights. And they say the case could have implications beyond Massachusetts because in most defamation lawsuits the libel law in the state where the plaintiff lives applies.

So, for example, if a California newspaper writes something about a Massachusetts resident and the newspaper is circulated or does business in Massachusetts, the Massachusetts law could apply.

Robert Ambrogi, a lawyer and executive director of the Massachusetts Newspaper Publishers Association, called the ruling “the most dangerous libel decision in decades” on his blog, Media Law.

Ambrogi said the ruling “freezes out the long accepted notion that truth is a defense to libel.”

“For the news media, it puts reporters in the odd position of having to not just assess the truth of what they’re reporting, but also assess the intent with which something was said,” he said in an interview.

Boston media lawyer Robert Bertsche said the ruling applies only to lawsuits brought by private figures, such as Noonan, about a “private concern.” But he said that the law does not clearly define what a “private concern” is, and that media organizations worry that juries would be more likely to find them guilty of libeling someone based on the court’s definition of actual malice as simple “ill will.”

“Let’s say a media outlet found out about Noonan’s firing and decided it was noteworthy that this individual were fired for this reason. If a jury deems that to be something of a private concern, the newspaper would potentially be on the hook for defamation for writing something that nobody disputes is true,” Bertsche said.

“It’s a scary notion when you start saying truth — undisputed truth — can be punished as defamation.”

But Noonan’s lawyer, Wendy Sibbison, said the ruling has been misinterpreted.

“This case doesn’t implicate the First Amendment,” Sibbison said. “The Massachusetts statute allows a plaintiff to recover damages for malicious true speech under a narrow set of circumstances.”

A 1964 U.S. Supreme Court case set a different standard for public figures, and it defines actual malice in those cases as requiring knowledge that the information was false or that it was published with “reckless disregard” to whether it was false.

Bertsche said there is broad concern the 1st Circuit ruling could create a precedent and make it much easier to sue news organizations for libel, even when there is no doubt a story is true.

“A prudent news organization is going to pull back — faced with that possibility — and refrain from publishing,” said Bertsche, who is preparing a friend of the court brief to accompany Staples’ appeal of the ruling to be filed next week by numerous news organizations, including The Associated Press.

Staples has asked the full bench of the 1st Circuit to rehear the case or to send the case to a lower court for a hearing.

Noonan, who lives in Plantation, Florida, and has a nonpublished telephone number, could not be reached for comment.

In his lawsuit, Noonan argued that the e-mail announcing his firing, which referred to him by name and said he was terminated after an “investigation,” could give the impression he had committed a crime.

Staples found that Noonan had submitted padded expense reports, including some where decimal points had been shifted two places. In one case, an airport McDonald’s meal that cost $11.29 was submitted as costing $1,129.

Noonan admitted that he often submitted reports with estimated expenses but said he intended to amend the reports later with the actual expenses. His lawyer said he was a “poor record-keeper” who undercharged Staples just as often as he overcharged it.

The executive who sent the e-mail had never previously referred to a fired employee by name in mass communication. The court said a jury could find that by sending the e-mail to more than 1,500 employees, Staples showed a malevolent desire to harm Noonan’s reputation.

Staples claimed the e-mail was sent to make it clear to employees that they must comply with the company’s travel and expense policy.

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