Legal Update: May 2011

The Pitfalls of Reporting Rumors

A recent case illustrates pitfalls of reporting rumors and third party statements.

A recent Alabama appellate court (Little v. Consolidated Publishing Company) found that a newspaper reporter and publisher could be liable for maliciously publishing a false and defamatory rumor about a city councilman resulting from the newspaper's failure to thoroughly investigate the rumor.
The factual background of this case is both interesting and instructive. It gives newspapers a good roadmap on how some courts will analyze a libel claim based on the reporting of a rumor. To clearly describe the holding, the facts are laid out below in some detail.

The libel plaintiff (Little) was a Christian minister who served as a councilman for the City of Anniston. Councilman Little recommended the hiring of a human resource management consultant to perform an audit. The City eventually hired the consultant and the audit was conducted. Before and after the audit was finalized, Councilman Little had several meetings and telephone calls with the consultant.

During this time, a rival of Little's, Spain, was elected and he began questioning the usefulness of the audit work and wanted an investigation. Later, both of these councilmen (Little and Spain) were interviewed by a newspaper reporter for the Anniston Star, Megan Nichols. The reporter's story related Spain's displeasure with the audit. The story quoted Spain as saying there was a "buzz" that Little had a "personal relationship" with the consultant and that's why he recommended her hiring. Little, on the other hand, said he was not involved personally with the consultant.

The reporter later explained in an affidavit that it was her understanding from statements made by Spain that there was a rumor in the community that Little may have been dating the consultant, and that Little had "pushed" for her to be hired due to the rumored personal relationship. The reporter said she did not write the story out of malice but admitted she had not investigated whether, in fact, a rumor was circulating about Little and the consultant, and could only verify that Spain had said as much. The reporter said she had inquired of Little, who denied it, and had attempted to contact the consultant without success. The publisher testified he knew that Spain did not like Little and that the newspaper had a policy of double-checking divisive remarks, but there was no attempt to do so for Spain's statements.

Little demanded a retraction and the newspaper published a short article stating that the person quoted was not stating that the rumor was true or untrue and that the newspaper was not alleging such rumor had a factual basis.

After that, Little sued the newspaper and the reporter for libel, claiming that they had acted maliciously in publishing the rumor that Little had recommended the consultant due to a relationship. The trial court granted summary judgment in the newspaper's favor. However, on appeal, the higher court disagreed. The appellate court said the newspaper failed to produce any evidence that Little had recommended the consultant due to a personal relationship, as the quoted rumor said.

Furthermore, the court said it did not matter that the newspaper had only reported a third party's (Spain's) statement that it was a rumor and that Little had denied it. The appellate court explained that publication of libelous material, "although purporting to be spoken by a third person, does not protect the publisher, who is liable for what he publishes." In other words, the reporter cannot defend on the ground that the newspaper reporter "accurately quoted the rumormonger, even if the newspaper story clearly identified the statement as an unverified report and even if the newspaper story contained a denial of the rumor by its subject." The appropriate inquiry for the jury will be not whether such rumors existed but whether the rumors were based upon fact or whether they were false.

Interestingly, the court went on to discuss the fair report privilege. Did the privilege apply to protect the accurate reporting of statements attributed to Spain and Little during a public meeting? The court said that normally it would apply but that malice (recklessness) on the part of the newspaper in this case had overcome it. How was such recklessness manifested according to the court? Despite the fact that the reporter knew Spain disliked Little, that Spain said the relationship was totally a rumor, and that Little denied the relationship, the reporter did not attempt an investigation to determine the truth of the matter before publishing, as was the newspaper's policy. While failure to investigate alone does not prove malice, if the information is not "hot news," malice can be inferred if the investigation was "grossly inadequate," as was found in this case.

As a result, the appellate court reversed the summary judgment in favor of the publisher and reporter.

This is a good real-world scenario for publishers and editors to be cautious when reporting information attributed to third parties; and that even if reported from a public hearing, the fair report privilege may not always be present as a defense.


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