Salzano v. North Jersey Media Group Inc.

993 A.2d 778, 201 N.J. 500, 38 Media L. Rep. (BNA) 1769, 2010 N.J. LEXIS 396
CourtSupreme Court of New Jersey
DecidedMay 11, 2010
DocketA-78/79 September Term 2008
StatusPublished
Cited by32 cases

This text of 993 A.2d 778 (Salzano v. North Jersey Media Group Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Salzano v. North Jersey Media Group Inc., 993 A.2d 778, 201 N.J. 500, 38 Media L. Rep. (BNA) 1769, 2010 N.J. LEXIS 396 (N.J. 2010).

Opinions

Justice LONG

delivered the opinion of the Court.

The law of defamation is rooted in the notion that individuals should be free to enjoy their reputations unimpaired by false and defamatory attacks. In some instances, however, publications that otherwise would be actionable may escape liability because we recognize that the publisher is acting in furtherance of a socially important interest that is entitled to protection, even at the expense of uncompensated harm to a plaintiffs reputation. That protection from liability is described as a privilege. One such privilege is accorded to the publication of defamatory matter concerning another in a report of an official action or proceeding, or of a meeting open to the public that deals with a matter of public concern. That privilege, which is denominated the fair-report privilege, recognizes the value we place on the right of the [506]*506public, in a democratic society, to be informed about a wide variety of official matters. It attaches where the report is accurate and complete or a fair abridgement of the occurrence that is recounted.

This case implicates the fair-report privilege insofar as defendants published information they gleaned from a complaint filed in bankruptcy court. Plaintiff argues that the privilege does not apply to initial court pleadings because there must be some “judicial action” to trigger its protections. The lower courts were divided on that issue. We hold that the principles that inform the fair-report privilege brook no exception for initial pleadings, which fall squarely within the protective sweep of the privilege.

We are also called upon to determine the nature of the fair-report privilege and whether it is subject to defeat by proof of malice. We hold that the fair-report privilege is a hybrid. It is conditional insofar as it attaches only to full, fair, and accurate reports of government proceedings. It becomes absolute once those prerequisites are met. Fault, sufficient to defeat the privilege, occurs when the publisher fails to do what is necessary to render the report full, fair, and accurate. If the publication, in fact, satisfies that standard, the state of mind of the publisher is irrelevant.

In this case, the portion of the challenged publications that was based upon a bankruptcy complaint was full, fair, and accurate, and thus, immune from a defamation suit because of the fair-report privilege. However, because the publications also contained defamatory information derived from sources other than the complaint, plaintiff may pursue his lawsuit in connection therewith.

I.

In June 2004, NorVergence, Inc. (“NorVergence”), a telecommunications company, abruptly laid off approximately 1,300 employees and disconnected the services it provided to thousands of small businesses. On June 30, 2004, an involuntary bankruptcy [507]*507petition was filed against NorVergenee. On July 14, 2004, NorVergence consented to the entry of an order for relief under Chapter 11 of the Bankruptcy Code and the immediate conversion of the case to a Chapter 7 liquidation proceeding. 11 U.S.C. § 1112(b). On November 4, 2004, the Federal Trade Commission filed suit against NorVergenee because of unfair and deceptive practices. The court entered default judgment against NorVergenee and determined that NorVergenee caused injury of at least $172,997,758.

Plaintiff Thomas John Salzano is the son of the former chief managing officer/consultant of NorVergenee, Thomas N. Salzano, and the nephew of the chief executive officer of NorVergenee, Peter J. Salzano. Plaintiff was never an employee of NorVergenee.

On March 1, 2006, the trustee for the bankrupt estate of NorVergenee filed a complaint against plaintiff in the United States Bankruptcy Court for the District of New Jersey, joining plaintiff as a third-party defendant in the bankruptcy proceeding. More specifically, the complaint sought, pursuant to 11 U.S.C. §§ 544(b), 548(a), 550(a) and N.J.S.A. 25:2-25(a), to avoid fraudulent transfers made to plaintiff, and to impose a constructive trust or equitable lien on the proceeds thereof.

The complaint alleged that plaintiff:

unlawfully diverted, converted and misappropriated [NorVergenceJs funds for his own personal benefit, and to the detriment of [NorVergenee], by, inter alia, (i) applying two NorVergenee checks, one in the amount of $61,200.00 dated July 1, 2003, and the other in the amount of $140,000.00 dated July 29, 2003, toward the purchase of his personal residence (the “Purchase Funds”) located at 20 Argyle Street, Qlen Ridge, NJ (the “Property”) and (ii) by charging personal expenses, such as outings to bars and clubs, clothing and other personal expenses, between November 25, 2002 and March 24, 2004, to [NorVergenceJs American Express Business Gold/Platinum totaling $268,795.84, as well as utilizing other corporate credit cards in undisclosed amounts (the “Charges”) (the Charges, together with the [ ]Purchase Funds[ ], the “Misappropriated Funds.”)
[ ]The Charges were on account of expenditures that were entirely unrelated to [NorVergenceJs business. [NorVergenee] transferred $268,795.84 to the AMEX Account between January 13, 2003 and April 20, 2004 in order to pay for the Charges on [plaintifffs behalf.

[508]*508On March 2, 2006, defendant, The Record, published a report with the headline, “Man accused of stealing $500,000 for high living,” and the subheading “NorVergence funds were taken.” The report, written by defendant Martha McKay, stated in its entirety:

The son of the mastermind behind NorVergence, a bankrupt Newark telecommunications firm, allegedly stole close to $500,000 from the company, using the money to pay for drinks, trips to area clubs and for a five-bedroom Glen Ridge house, according to court papers filed Wednesday in U.S. Bankruptcy Court in Newark.
Thomas John Salzano, son of Thomas N. Salzano, the chief managing officer of bankrupt NorVergence, was accused of using two company checks—one in the amount of $61,200 dated July 1, 2003, and another for $140,000 dated July 29, 2003—to help pay for “the purchase of his personal residence located at 20 Argyle St., Glen Ridge,” the papers said.
The complaint, filed by U.S. Trustee Charles Forman, also alleges that Thomas John Salzano used a NorVergence corporate American Express card to charge “personal expenses, such as outings to bars and clubs, clothing and other personal expenses” unrelated to NorVergence business.
The charges totaling $268,795 were made between November 25, 2002, and March 24, 2004.
Neither Forman nor Salzano could be reached for comment.
NorVergence’s abrupt bankruptcy in July 2004[ ] threw 1,300 people out of work and left thousands of small-business customers without phone and Internet service.
Legal battles raged when customers tried to get out of equipment leases that NorVergence had sold to more than 40 banks and leasing companies. In many cases, settlements have been reached, brokered by state attorneys general, providing some relief to deeply angry NorVergence customers.
Last year, a U.S[.] District Court ordered a $181.7 million default judgment against NorVergence in a case brought by the Federal Trade Commission.

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Bluebook (online)
993 A.2d 778, 201 N.J. 500, 38 Media L. Rep. (BNA) 1769, 2010 N.J. LEXIS 396, Counsel Stack Legal Research, https://law.counselstack.com/opinion/salzano-v-north-jersey-media-group-inc-nj-2010.