Friday, October 16, 2009

Convert? Steal? What's the Big Difference?

Oh, the difference one word can make. John Salzano had been accused of converting hundreds of thousands of dollars in funds from his father’s company. Don’t you dare say he was accused of stealing the funds! Why, you ask? Because he’ll sue you and take the case all the way to the state supreme court.

The WSJ Law Blog reported that Salzano sued a New Jersey newspaper, The Record of Hackensack (or The Bergen Record), because it referenced a complaint as alleging that Salzano stole, as opposed to converted, the funds. The case has now reached the New Jersey Supreme Court, which heard arguments earlier this week. The newspaper argues that journalists may not be expected to know legal terms of art and, citing the “fair-report privilege,” maintains that the media should be free to report on allegations in complaints without the risk of liability.

The appellate court, however, ruled that the “fair-report” privilege did not apply to situations where a complaint is newly filed and the claims don’t stick. And, apparently at least one Justice was very skeptical of the “journalist’s aren’t lawyers” argument. Justice Robert Rivera-Soto stated that “If [a complaint] were written in Sanskrit, you’d have to get someone translate it.”

To be honest, I’m not convinced by the Record’s arguments either. While I admit that I’m not familiar with the intricacies of the fair-report privilege, any argument that journalists should categorically be let off the hook when legal terminology is used strikes me as asinine. And the standard here is one of negligence, as opposed to actual malice, because it appears Salzano is a private figure. Ignorance of legal terminology certainly rises to the standard of negligence.

That isn’t to say that I believe the paper should be held liable. As a matter of fact, I feel very strongly that they should not. A more compelling legal argument could have been made in their favor. Specifically, it must be proven that the defamatory statement (i.e. that he was accused of converting the funds) was false. Typically, the plaintiff bears this burden. See Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767 (1986). Although the statement that Salzano was accused of stealing funds is literally false, more is necessary. See Haynes v. Alfred A. Knopf, Inc., 8 F.3d 1222 (7th Cir. 1993) (the law protects false “details that, while not trivial, would not if corrected have altered the picture that the true facts paint”). Technical falsity is insufficient to overcome the burden of proving falsity; “material falsity” is required. See Masson v. New Yorker Magazine, 501 U.S. 496 (1991) (requiring “substantial truth”); Rouch v. Enquirer & News of Battle Creek, 440 Mich. 238 (1992) (requiring “material falsity” as opposed to "substantial truth" after the burden was switched from defendant to plaintiff).

Is the statement that Salzano was alleged to have stolen funds, when in actuality he was alleged to have converted them, materially false? I don’t think so, although I suppose it is debatable. What do you think?


  1. does the fact that the newspaper story uses the wrong langauge make it defamation or that the interpretation of that language can be two separate things?

  2. I must say this even though it seems to have already been said: you guys have done a really fantastic job with this blog. The legal analysis (for law students) is impeccable. Keep up the fantastic work.

  3. @ Navid--

    Thanks for the kind words. It's always good to hear such things about our efforts.

  4. @5:58;

    To have a successful defamation claim, you must be able to prove more than the fact that the statement was defamatory in nature. You must also prove, among other things, that the statement was false and that the fault requirement (in this case, likely negligence) was satisfied.

    The question here is not whether the statement was defamatory in nature. It clearly was. Even if the correct term was used (i.e. convert), the statement would have been defamatory. However, it obviously would not have been false. The issue now is whether using the word "stole" as opposed to "convert" satisfies the falsity element.

    @ Navid;

    Thanks so much for the compliment. We're glad that you're enjoying the blog.


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