Font Size: 
N.J. High Court Weighs Limits of Fair-Reporting Privilege
New Jersey Law Journal
October 15, 2009
New Jersey's highest court is being asked to sharpen the pencil on the boundaries of the fair-reporting privilege, which protects news media from defamation suits if they write fairly and accurately about pending litigation.
Last year, an appeals court trimmed back the privilege, saying it does not apply if an article is based only on an initial pleading that has not been subjected to judicial review.
On Wednesday, Bruce Rosen, the lawyer for North Jersey Media Group Inc., told the state Supreme Court that the ruling, if upheld, would essentially bar the media from performing its function of fairly reporting the news.
"This is essentially an assumption that the press can't be trusted to report on initial complaints," said Rosen, of Chatham, N.J.'s McCusker, Anselmi, Rosen & Carvelli. "This ignores 50 or 100 years of history."
The case, Salzano v. North Jersey Media Group Inc., A-78/79-08, stems from stories published by The Record of Hackensack and another North Jersey Media news paper about a bankruptcy trustee's complaint against the son of a businessman alleging improper monetary transactions.
The plaintiff Thomas J. Salzano, sued after The Record wrote a story, headlined "Man accused of stealing $500,000 for high living," that said he "allegedly stole close to $500,000 from the company, using the money to pay for drinks, trips to area clubs and for a five-bedroom Glen Ridge house, according to papers filed ... in U.S. Bankruptcy Court in Newark." The story ran in The Glen Ridge Echo headlined, "Argyle residence allegedly bought with stolen funds."
The story related in detail the factual allegations of the complaint, which concerned specific expenditures, and summarized some of the events that led NorVergence into bankruptcy and some of the losses allegedly sustained by employees, investors and customers.
Salzano is the son of Thomas N. Salzano, the former chief managing office of NorVervence, a defunct telecommunications company placed under control of the trustee. The complaint against the son included counts of conversion and unjust enrichment and sought avoidance of allegedly fraudulent conveyances and imposition of a constructive trust.
Essex County Superior Court Judge Hector DeSoto granted defense motions to dismiss for failure to state a cause of action. He applied the fair-reporting privilege and also found that Salzano was required to meet the heightened standard of showing actual malice rather than mere negligence.
The Appellate Division, in a reported decision, reinstated the complaint and said the fair reporting privilege does not apply to "[t]he publication ... of the contents of preliminary pleadings such as a complaint or petition, before any judicial action has been taken."
At the New Jersey Supreme Court on Wednesday, Rosen implied the appeals court ruling was spun out of wholecloth.
He asked, "What is a judicial action? Is it a status conference? A change of venue? A summary judgment? Why should there be such an exception in the first place?
"This is a very real issue of prior restraint and the fiction of protecting reputation," Rosen said.
He added that if a person named in a complaint that has been the subject of news reports feels he has been wronged, there are other avenues the person can pursue. For example, Salzano could have targeted the bankruptcy trustee for filing a frivolous claim. "But the report of the complaint was accurate," he said.
Justice Barry Albin said the news media cannot be expected to investigate the allegations in a filed complaint.
But Justice Roberto Rivera-Soto noted that many of the allegations in the complaint against Salzano turned out to not be true, and he asked Rosen whether the company ever printed a retraction or correction.
"I do not believe so," Rosen said. "But that is neither here nor there."
"Is it solely up to the press to decide whether to follow up?" Rivera-Soto asked.
"That's been the way it's worked since 1776 and before that," Rosen said.
"We operate in an imperfect world," Albin said. "The complaint goes on page 1 and the resolution is found on page 46."
"That happens some of the time," Rosen said. "You have to give the press some breathing room to make mistakes."
Thomas Cafferty, arguing on behalf of the amicus New Jersey Press Association, said the Appellate Division ruling "is depriving the ability of the press to perform its function as the eyes and ears of the public."
"The public has the right to know who is filing complaints in court," said Albin.
"Exactly," replied Cafferty, of Lyndhurst's Scarinci & Hollenbeck. "And the only way the press can do that is with the privilege ... and without the fear of being hauled into court and facing a judgment."
Salzano, who has represented himself throughout the proceedings, said the stories unfairly portrayed him as a thief.
"I had no notice of this," he said. "The only notice I had was a story in the paper saying I was accused of stealing $500,000. I was an unwilling participant in the bankruptcy, and the trustee didn't have all the facts to begin with."
The bankruptcy court papers, Salzano said, never accused him of stealing anything. "The average person understands 'stealing' as the equivalent of theft," he said.
Albin asked what a newspaper should do when someone files a suit alleging that a large chemical company poisoned the water.
That is different, Salzano said, because of the public-safety question and because the company is considered a public figure for purposes of requiring that it meet the actual malice standard.
"I'm not NorVergence," he said.
Rosen, speaking later in rebuttal, said the language in the trustee's complaint was highly technical and that the reporter likely did not know what certain terms meant in the bankruptcy statutes. "Reporters are not lawyers," he said.
"And they're not children," Rivera-Soto said. "If they're doing grown-up things they ought to know what they're doing. It sounds a lot like willful ignorance to me."
Rosen disagreed. "You're condemning an entire profession," he said.
