Eric Schneiderman New York State Attorney General Eric Schneiderman

 

Libel claims over media reports falsely linking a New Jersey woman to a drug and prostitution ring are shielded by the fair-report privilege, a federal appeals court ruled Wednesday.

Dismissal of claims by Janice Lee against TMZ Productions, the New York Daily News and other outlets was proper because they gave a fair and reasonable account of the arrest of Lee, even though her charges were later dropped, the appeals court said.

In January 2014, New York Attorney General Eric Schneiderman held a press conference to announce the arrests of Lee and 17 others in connection with a ring that allegedly provided cocaine and prostitutes to patrons. A visual aid at the press conference displayed the photos of Lee and the others. But Lee was apparently falsely accused,  and charges against her were dropped about a week after her arrest.

After the press conference, but before the charges were dropped, several publications published articles about the arrests, which were near the time that Super Bowl XLVIII was held at MetLife Stadium in East Rutherford.

Lee, who is a sales representative for a company that sells wigs and hair products, filed suit against TMZ, which posted an article about the arrests on its website; the Daily News; The Korea Times New York; and two other websites, Your Daily Media and All Things Crime, as well as some employees of the defendants. Several of the defendants published photos of the attorney general’s visual aid with Lee’s photo on it.

Her suit charged the defendants with libel and libel per se and with the negligent, reckless and intentional infliction of emotional distress. Her husband, son, mother and father also joined the suit as plaintiffs. U.S. District Judge William Martini dismissed the claims against the Daily News, Korea Times, Your Daily Media and All Things Crime in August 2015. Martini dismissed TMZ in March 2016. In both instances he found that the defendants’  articles were protected by the fair-reporting privilege under New Jersey law. Martini also found that the emotional distress claims were not valid because they were based on unsuccessful defamation claims. Lee appealed.

On appeal, Lee argues that the District Court erred by disregarding her claims that the defendants acted with reckless disregard for the falsity of their articles. But Third Circuit Judges Michael Chagares, Anthony Scirica and D. Michael Fisher deemed the defendants’ reports fair, full and accurate. After that standard is met, the privilege is absolute and cannot be defeated, the court said. To be found full, fair and accurate, articles need not be exact in every detail, but must convey to readers a substantially correct account, Scirica wrote for the court.

“Like the District Court, we find the articles challenged by Lee are entitled to the protections of the fair-report privilege because they present full, fair and accurate reports of the NYAG press conference and press release describing the alleged drug and prostitution ring—including Lee’s alleged involvement,” Scirica wrote.

Lee cites as defamatory the references in some of the articles to “party packs,” which are the combination of cocaine and prostitutes, but the attorney general’s press release uses that term, the appeals court said. Lee also cites as defamatory the tone and language used in some of the articles, particularly those from TMZ and Your Daily Media. The appeals court said the “colorful” language used may be distasteful or insulting, but use of such language is not actionable for defamation, the court said.

Matthew Leish, vice president and deputy general counsel at the New York Daily News, said of the ruling, “The Third Circuit decision makes clear once again that the press is free to report on arrests and indictments without fear of being sued for defamation if the charges are later dropped.”

Tom Ferber and Eric Fishman of Pryor Cashman in New York, representing TMZ, did not return calls.

Michael Kimm, the Englewood Cliffs lawyer representing Lee, did not respond to an email or a phone message.

Lee filed a separate suit against Schneiderman in the Southern District of New York that was settled for $325,000 in December 2015, according to court records.