Federal Court: Truth Is Not a Complete Defense for Private Libel Lawsuits

The U.S. First Circuit Court of Appeals, in a groundbreaking decision favoring private libel plaintiffs, has held that even a true statement – if published “maliciously” – can subject the speaker to libel damages. Applying Massachusetts law, and relying on a 1902 statute, the appeals court reversed the trial court’s judgment for a defendant who had published an email containing true, but unflattering, information about the plaintiff.

Albert S. Noonan was fired from his job as a salesman at Staples, Inc., for allegedly padding expense reports and violating the company’s travel policies. Subsequently, Staples’ executive vice president sent an email to all North American employees reporting that Noonan had been terminated for not complying with the company’s travel and expense policies. The First Circuit had originally affirmed the lower court’s dismissal of the case, but on rehearing, reversed and allowed the libel plaintiff to proceed.

Under Massachusetts law, a plaintiff alleging libel must ordinarily establish five elements: (1) that the defendant published a written statement; (2) of and concerning the plaintiff; that was both (3) defamatory and (4) false; and (5) either caused economic loss, or is actionable without proof of economic loss. The parties did not dispute any of these elements, except the falsity of the contents of the email.

While a libel defendant can assert a statement’s truth as an absolute defense, Massachusetts law recognizes a narrow exception to this defense: if the plaintiff can show that the defendant acted with “actual malice” in publishing the statement, the truth or falsity of the statement is immaterial and the libel action may proceed. Although the Massachusetts Supreme Judicial Court has ruled the statute unconstitutional when it relates to matters of public concern, it has never considered the statute’s applicability in libel cases involving matters of private concern.

In the federal district court in this case, Noonan argued that the email was both defamatory, false and malicious. Staples responded that the email was true, and that as a result, no libel action could lie. The district court sided with Staples. After reviewing the record and applicable law, the First Circuit agreed that the contents of the email were true and that there was no triable issue of fact on the question of truth.

However, the First Circuit then went on to rule that the narrow exception dealing with malicious publication applied to this case. Although the relevant statute does not define “actual malice,” the court accepted Noonan’s argument that “actual malice” refers to malevolent intent or ill will. Although “actual malice” is a familiar term in First Amendment law – and beginning in 1964, the U.S. Supreme Court and lower courts have defined it as a defendant’s knowledge that a defamatory statement was false or the defendant’s reckless disregard of whether of truth or falsity – the First Circuit declined to apply this definition to the statute, which was enacted decades before the First Amendment standard was announced.

Instead, the First Circuit turned to what it described as “the traditional tort law meaning of the term,” and found that under this more flexible definition, the email could have been found to have been distributed with actual malice. First, the executive vice president who sent the email worked for Staples for 12 years and had never previously referred to a fired employee by name in an email or other mass communication. Although Staples could provide a non-malicious explanation for naming Noonan in the email, the court determined that a jury should resolve whether or not the correspondence was malicious. Secondly, another employee had been fired for similar offenses, but the company did not distribute a similar email regarding that employee’s conduct. Further, the email was distributed to at least 1,500 Staples employees, many of who did not travel as part of their employment, and thus had no reason to be advised of the travel policy, or consequences for deviating from the policy. The court pointed out that such “excessive publication” can qualify as the type of common law “malice” sufficient to defeat a conditional privilege.

The First Circuit remanded the case to the trial court for trial on the defamation count. Staples subsequently requested that the First Circuit reconsider its ruling en banc, or alternatively, certify the constitutional question to the Massachusetts Supreme Judicial Court. The First Circuit denied both of those requests, finding that Staples did not timely argue that the statute was unconstitutional. Staples’ next recourse will be to petition for certiorari to the United States Supreme Court.