Entertainment Lawyers and our clients in the film, television, music, publishing, and journalism fields need to be aware of an alarming ruling that's just come down in a defamation case. (Defamation is the umbrella term for reputation injury cases such as Libel and Slander).
On Friday, February 13, 2009, the 1st Circuit Court of Appeals dealt a blow to free-speech and the First Amendment, in the case of Noonan v. Staples, holding that in defamation cases, the long-standing rule that truth is an absolute defense will not apply when the statement(s) in question were made with Actual Malice.
Courts have long applied a test for Actual Malice that looks at whether the Defendant knew the statement was false, or acted with reckless disregard for the truth/falsity of the statement (See the U.S. Supreme Court opinion in New York Times v. Sullivan). In Noonan, however, the Court expanded this, holding that Actual Malice could be found in a case involving a true statement, if made with malicious intent (ill will), disregarding 40 years of Defamation jurisprudence, and harkening back to a 1903 ruling by the Massachusetts Supreme Judicial Court.
The Noonan case involves an executive terminated from Staples for falsifying travel expense reports. After his firing, the company's Executive Vice President allegedly sent an email to 1500 Staples employees, naming Noonan and stating the reason for his termination.
Initially, the 1st Circuit followed the New York Times v. Sullivan Rule, but last week reviewed the decision, arriving at this alarming result, stating that given the evidence a jury could have found libel on the basis that in sending the email, defendant intended to hurt Noonan's reputation.
Although it seems fairly certain that Staples will ask for an en banc rehearing, and if necessary appeal to the U.S. Supreme Court, if allowed to stand, this case could make anybody a potential defendant. It will certainly have a chilling effect on important forms of speech, such as documentary films and many forms of investigative journalism.