Court finds absolute privilege for fair report

June 23, 2006  ·   The legal privilege that allows journalists to report accurately on an official proceeding without fear of a defamation judgment protects the reporters against allegations that they knew of or recklessly disregarded the falsity of those reports, the Illinois Supreme Court ruled Thursday.

In a 5-1 opinion, the court ruled that certain statements made in a series of articles by a manufacturing trade publication were defamatory while others were protected for various reasons, including the fair report privilege. The court also concluded that the fair report privilege extends to reporting on judicial actions.

The court ultimately returned the case to a lower court for trial on two statements made by Start magazine that Solaia Technology and one of its attorneys, Raymond Niro, contended were defamatory. The court dismissed the remainder of the numerous allegedly defamatory statements as non-defamatory or privileged.

“The Illinois Supreme Court’s ruling establishing an absolute privilege for fair and accurate reports of official proceedings provides important protection for the media in Illinois,” said Sondra Hemeryck, the attorney representing Specialty Publishing Co., the parent company of Start. “This ruling will allow the media to provide the public with accurate information about lawsuits and other governmental proceedings without the risk of liability.”

The case centered on Start‘s 2002 articles about Solaia Technology and its patent infringement lawsuits against manufacturers. The fair report privilege aspect of the case involved Start‘s reporting on an antitrust case filed by manufacturer Rockwell Automation against Solaia, the holder of the patent, and plaintiff in the case.

“Once Rockwell Automationfiled its antitrust complaint, Start could report any defamatory statements in the complaint” provided the report offered either a complete and accurate or a fair summary of the complaint, Justice Thomas R. Fitzgerald wrote for the majority. Five justices concluded that the reporting on the complaint was not complete and accurate so it needed to be a fair account of the complaint.

“In this regard, a court must determine if the sting of the defamatory statement in the [Rockwell] proceeding is the same sting of the defamatory statement in the report,” Fitzgerald wrote.

An inaccurate statement in one of the articles that said Rockwell named Solaia’s attorney as a defendant “impugned his integrity, prejudiced his practice of law, and implied that he committed a crime,” according to the court. The court concluded that this particular statement about Niro did not provide a fair synopsis of the complaint and therefore the privilege did not apply.

The court also concluded that a reference in an article to criminal proceedings against Solaia under the Sherman Antitrust Act was potentially defamatory but was protected by the fair report privilege because reporters could not be expected to have the same nuanced understanding of federal antitrust law possessed by attorneys.

“Plainly, freedom of the press is illusory if a cloud of defamation liability darkens the media’s reports of official proceedings,” Fitzgerald wrote. “But we remind reporters it is objectivity and civility that mark our finest journalism. Reports of official proceedings must be as fair as they are ardent if they are to help the public assess the value of our government in action. Had Start’s statement regarding the Sherman Antitrust Act strayed a bit farther from the statutory language, the implication left by the statement would have been actionable.”

In January 2003, Solaia and the law firm of Niro, Scavone, Haller & Niro — also mentioned extensively in the articles — sued the publishing company and its representatives for defamation. Among the statements at issue was one referencing “people in the world who want to make a lot of money . . . and don’t care how they do it.”

The Circuit Court of Cook County dismissed the lawsuit, ruling that each statement was either an innocent construction, protected as opinion or privileged as a “fair abridgment of the litigation” brought by Rockwell against Solaia.

In partially reversing the dismissal, the Appellate Court of Illinois in Chicago held that a January 2003 cover story, “Conspiracy of a Shakedown,” demonstrated enough of a claim of defamation to require a trial, because case law required that allegations of actual malice defeat the fair report privilege. The court also concluded that the overriding point of the coverage of the patent claims was defamatory.

In the high court ruling rejecting the appellate court’s reasoning, Justice Charles E. Freeman concurred in part and dissented in part. He ruled that a trial court must consider the case before the fair report privilege can be applied to the allegations of a complaint. “The majority’s holding invites collusion between a party who files a frivolous complaint containing defamatory statements, with full knowledge of the falsity of the statements but with equal certainty of protection through the application of the fair report privilege.”

(Solaia Technology, L.L.C. v. Specialty Publishing Company; Media counsel: Sondra A. Hemeryck, Schiff Hardin & Waite, Chicago) — PS

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