Salzano v. North Jersey Media Group, Inc., et. al.: Defamation Arising Out of Court Filings

Fair Report Privilege: The New Jersey Appellate Division recently handed down an important decision relating to the republication of allegations that were originally set forth in a legal complaint. In Salzano v. North Jersey Media Group, Inc., et. al., A-6715-06T1, the plaintiff, Thomas John Salzano sued various newspapers and related individuals at those entities for defamation. The statements underlying the alleged defamation consisted of newspaper articles that outlined (and arguably elaborated upon) a complaint brought against Mr. Salzano by a bankruptcy trustee. The complaint alleged, among other things, that Mr. Salzano had “‘unlawfully diverted, converted and misappropriated’ [the entity that was in bankruptcy]’s funds ‘for his own personal benefit.’” These allegations were then reported in various newspaper articles published by the defendants.

The media defendants moved to dismiss the civil complaint on the basis that the fair report privilege should apply as a defense to defamation. The Appellate Division reversed the lower court decision and held that the privilege did not apply. Hence, the case should not be dismissed.

The fair report privilege is an established exception to republication liability under New Jersey defamation law. The general rule is that absent the application of a privilege, a person or entity is liable for republishing a defamatory statement. The Court in Salzano cited the New Jersey Supreme Court’s decision in Costello v. Ocean County Observer, 136 N.J. 594 (1994), where the fair report privilege was articulated and discussed at length. Citing Costello, the Court noted that “to republish a defamatory statement, the reporter or newspaper must verify that a statement was spoken, and also that the substance of the statement is true.” Accordingly, the Court held that the newspapers and related defendants erred in not verifying the facts of the complaint prior to republishing them in the articles.

The Court further held that the fact that the original statements were made in the context of a judicial proceeding was not enough to immunize the media entities. In so holding, the Court noted that although the fair report privilege applies to statements made in “judicial and other official proceedings,” it did not provide an exception to liability in this case. The Court noted that the fair report privilege does not apply to preliminary pleadings “‘such as a complaint or petition, before any judicial action has been taken.’” Accordingly, the Appellate Division held that the media defendants could not assert that the privilege extended to their republication merely because the statements were republished from a judicial filing. Specifically, the Court said that the fact that they were in a complaint made it clear that the privilege should not apply.

Another interesting determination by the Salzano Court was that the actual malice standard should apply to Mr. Salzano’s claims because he was, in essence, a public figure by association. This essentially means that it would not be enough to prove that the defendant was negligent in publishing the statements, but instead, the plaintiff would need to prove an intentional misstatement or willful disregard of the truth. The Court specifically noted that at the time of the articles’ publication, Mr. Salzano was not a public figure. Nevertheless, the Court noted that, as the chief managing officer of the bankrupt entity which was in a highly regulated industry, Mr. Salzano’s father was a public figure. The Court noted that the bankruptcy made the company’s business affairs a matter of public interest and concern. The Court then extended this to indicate that, through the allegations made against him, Mr. Salzano had himself become “enmeshed in a matter of public concern.” Therefore, the Court applied the more stringent, actual malice standard.

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