North Carolina Court Dismisses Plaintiffs' Appeal in Libel Action against "The Game"

A decision last week from the North Carolina Court of Appeals illustrates an important principle concerning the nature of appellate review in defamation actions -- that non-final orders are ordinarily not subject to immediate appeal by the plaintiff.  The case of Nguyen v. Taylor involved a host of libel and related claims brought by five Greensboro police officers against a rapper, Jayceon Taylor, known as "The Game", arising out of an October 28, 2005, incident that occurred in a Greensboro mall.  Taylor was arrested after he and his entourage were asked to leave the mall and an altercation ensued.

Following his release on bail, Taylor stated to a reporter that the officers involved "thought I was Rodney King."  In addition, footage of the altercation appeared on a DVD entitled "stop snitchin' stop lying," which included an image of one of the plaintiff officers.  The back cover of the DVD stated that it included "the full 15 minute footage of The Game being wrongfully arrested in North Carolina."  A website contained similar assertions, and the footage also appeared on youtube.

The officers sued Taylor, other members of his entourage, and a number of entities related to Taylor, alleging 17 different claims.  These claims fell into seven broad categories: (1) defamation claims based on the statement Taylor made to the reporter; (2) defamation claims based on statements appearing on the website; (3) defamation claims based on the statements appearing on the DVD; (4) claims relating to alleged misleading editing of the footage on the DVD; (5) misappropriation claims based on the image on the DVD; (6) misappropriation claims based on the footage appearing on the DVD and on youtube; and (7) unfair and deceptive trade practices claims.  The defendants, including Taylor, whom plaintiffs served and who were not in default moved to dismiss.  The trial court granted the motion to dismiss in part and denied it in part, dismissing some of the claims.

The plaintiffs attempted to appeal the trial court's decision to the Court of Appeals.  Because the decision was not final -- certain claims against certain defendants remain pending -- it is known as an "interlocutory" order.  Under North Carolina law, interlocutory orders are ordinarily not subject to immediate appeal.  However, if the decision touches upon a substantial right that would be prejudiced absent an immediate appeal, the appeal may proceed.  Media defendants often rely on this principle to assert their right to appeal immediately trial-court decisions denying motions to dismiss or for summary judgment in cases implicating First Amendment issues, such as in defamation actions involving the New York Times v. Sullivan actual malice standard.

In the Nguyen case, it was the defamation plaintiffs who asserted the right to an immediate appeal of a decision dismissing parts of their complaint.  The plaintiffs' theory was that because the remaining claims arose out of the same set of facts as the dismissed claims, proceeding to trial now risked inconsistent verdicts.  In contrast, the plaintiffs argued, if their appeal were heard first, those claims, if any, that were reinstated following appellate review could proceed to trial along with the claims the trial court did not dismiss.

The Court of Appeals rejected the plaintiffs' argument and dismissed their appeal as an improper interlocutory appeal.  In analyzing the various claims plaintiffs had alleged in their complaint, the court held that while all the causes of action arose out of the same incident, the various claims were distinct.  In other words, even though the evidence bearing on the dismissed and non-dismissed claims may overlap to some degree, those claims involved either distinct legal elements or distinct parties, or both.  As a result, according to the court, "plaintiffs have failed to show that they will be prejudiced by the possibility of inconsistent verdicts in two separate proceedings."

The lesson of the Nguyen case is two-fold.  First, its outcome is consistent with a pattern of appellate jurisprudence that looks closely at interlocutory orders to determine whether in fact they are subject to immediate appeal.  Second, it confirms there is value in winning dismissal of some, if not all, of the causes of action in defamation cases involving many claims for relief.  Having those claims dismissed may well narrow the scope of the issues to be litigated, while at the same time not necessarily subjecting the defendant to a lengthy detour to an appellate court.

Supreme Court Stays Appellate Ruling Requiring Disclosure of Ballot Initiative Supporters

The U.S. Supreme Court took action today in a high-profile public records dispute, issuing a stay of a Ninth Circuit ruling that requires the release of the names of those who petitioned to include a referendum on the ballot in the State of Washington this November.  The dispute relates to Referendum 71, a ballot initiative that would overturn a Washington law, passed this year, granting legal rights to domestic partners equivalent to those enjoyed by married couples.  The initiative was launched by a conservative group that opposes same-sex marriage.

In order to appear on the November ballot, supporters of Referendum 71 were required to secure in excess of 120,000 signatures on petitions.  They achieved that benchmark by the July deadline.  Shortly after the petitions were submitted, supporters of Referendum 71 filed suit in federal court in Washington, seeking a temporary restraining order that would block the release of the names appearing on the petitions.  Opponents of Referendum 71 had requested access to the names under Washington's public disclosure act.

According to the plaintiffs, those who had requested the list of names had indicated they would publish the list on the Internet.  In the federal lawsuit, the plaintiffs contended that making the list available under public records laws threatened to chill the First Amendment activity of supporters of Referendum 71.  The plaintiffs contend those who petitioned to include Referendum 71 on the November ballot would face harassment from opponents of the ballot measure if their names were made publicly available.

This case therefore presents an interesting intersection of the statutory right to access public records and the First Amendment right to speak and participate in the political process anonymously.  In response to the plaintiffs' lawsuit, the federal district judge issued in July a temporary restraining order and later in September a preliminary injunction blocking the release of the petitioners' names.  According to the September decision, the plaintiffs' legal theory is as follows:

In Count I of the complaint, Plaintiffs allege that the Washington Public Records
Act, RCW 42.56.001, violates the First Amendment as applied to referendum petitions because the act is not narrowly tailored to serve a compelling governmental interest. In Count II, Plaintiffs allege that the Public Records Act is unconstitutional as applied to R-71 because “there is a reasonable probability that the signatories of the R-71 petition will be subjected to threats, harassment, and reprisals.”

In its ruling, the district court concluded that "supporting the referral of a referendum is protected political speech, which includes the component of the right to speak anonymously."  The court went on to conclude that the public nature of the petition verification process (which may be observed by initiative opponents and proponents alike so long as information contained on the petitions is not recorded) meant that public disclosure of the names on the petitions was not necessary as a check on the integrity of the referendum process.

The State of Washington appealed the decision entering a preliminary injunction to the Ninth Circuit Court of Appeals, which, in an order released October 15, reversed the district court's decision and required the release of the list of petitioners.  The Ninth Circuit has not yet issued a written decision, but rather has indicated that a full written opinion will follow in due course.  In arguing its case to the Ninth Circuit, the State of Washington maintained that the list of names should be publicly available under Washington's public disclosure law because the referendum process is more akin to the legislative process than to the secret ballot.

The case took a new twist today when Justice Anthony Kennedy issued a short order staying the Ninth Circuit's decision while the U.S. Supreme Court decided whether to take up the matter.  Justice Stevens was the only Justice who indicated he would have denied the stay request.  We will follow this case closely as it proceeds.

Jury Returns Verdict of No Liability in Massachusetts Libel Trial

Late last week a federal jury returned a verdict in the defendant's favor in a libel case from Massachusetts that has attracted national attention.  The case, Noonan v. Staples, came into the spotlight because of a ruling from the First Circuit Court of Appeals that the plaintiff's libel claim could go to trial even if the communication at issue were true or substantially true.  We wrote about the decision here, noting the consternation the decision had drawn from First Amendment advocates for its implication that a truthful publication, if published with common-law malice, could constitute actionable defamation.  Such an outcome erodes the principle, long taken as gospel in libel jurisprudence, that truth operates as an absolute defense to liability.

The lawsuit involved a private-figure plaintiff who sued his former employer (Staples) for sending out a mass email discussing his termination of employment.  The plaintiff contended that the email, which asserted that Staples had fired Noonan “for cause” because Noonan allegedly “padded his expense reports,” was libelous.  The trial court dismissed the claim at the summary judgment stage, holding that the email at issue was true or substantially true and therefore could not be actionable as a matter of law.

The First Circuit reinstated Noonan's claim, focusing on a Massachusetts statute that predated the Supreme Court's seminal New York Times v. Sullivan decision and that  provides:

The defendant in an action for writing or for publishing a libel may introduce in evidence the truth of the matter contained in the publication charged as libelous; and the truth shall be a justification unless actual malice is proved.

The First Circuit reasoned that while the statute could no longer be applied as a constitutional matter in public-figure or private figure/public concern cases after Sullivan, it still could operate in defamation actions brought by private figures such as Noonan over matters of private concern. 

The case therefore went to trial on the question of whether Staples representative sent the truthful email with malice.  The jury answered the question negatively, which precluded any liability on the part of Staples.  However, Staples still was put to the time and expense -- not to mention the risk -- of a jury trial on a defamation claim involving a communication that was true.  Courts have long recognized that the mere prospect of facing trial -- even on a legally deficient claim -- can have a chilling effect on speech.

So while the final outcome was a good one for Staples, the legacy of this case may be troubling for media organizations and other defendants who are sued by private-figure plaintiffs, at least in Massachusetts.  Even though Staples ultimately prevailed, the First Circuit's summary judgment decision remains good law unless addressed by the Massachusetts legislature.  The decision is binding on district courts in the First Circuit and available to be cited as persuasive authority in the state courts of Massachusetts and elsewhere, and it therefore may lead to other libel defendants proceeding to trial on claims of dubious validity.

N.C. Court of Appeals Affirms Order Sealing Search Warrant

In a decision released today, the North Carolina Court of Appeals affirmed a trial court order sealing three search warrants and related materials in a high-profile murder case in Cary, North Carolina. The decision, In re Cooper, represents the first instance in which a North Carolina appellate court has squarely addressed the standards applicable to orders sealing search warrant materials, and it resulted in a set back for press interests in North Carolina.

The case arose out of the investigation into the death of Nancy Cooper.  In July 2008, the Cary Police Department and the State of North Carolina submitted three applications for search warrants in connection with the investigation into Nancy Cooper's murder.  With respect to each of the three search warrants, the trial court entered orders sealing the applications, the search warrants themselves, and the returns for a period of 30 days.  Each of the search warrants related to Nancy Cooper's husband, who was ultimately arrested in October 2008 and charged with her murder.  He has maintained his innocence, and the charges remain pending.

In sealing the search warrant materials, the trial court found that the materials fell within the scope of N.C. Gen. Stat. s. 132-1.4(c), which outlines certain information that is a matter of public record, as well as N.C. Gen. Stat. s. 132-1.4(k), which specifically provides that;

The following court records are public records and may be withheld only when sealed by court order: arrest and search warrants that have been returned by law enforcement agencies, indictments, criminal summons, and nontestimonial identification orders.

However, the trial court concluded that N.C. Gen. Stat. s. 132-1.4(e) authorized sealing the material because release would jeopardize the right of the State to prosecute a defendant or the right of a defendant to a fair trial or would undermine an on-going investigation.  The trial court also referenced an administrative order in place in Wake County, North Carolina since May 2008 relating to the sealing of search warrant materials, which allowed motions to seal to be made ex parte.

Upon learning of the sealing orders, WRAL-TV and The News and Observer moved to unseal all the materials covered by the three sealing orders.  The trial court denied the media's motion to unseal.  In August 2008, the trial court extended the period in which the search warrants and related materials would remained sealed.  An appeal then ensued.

Even though the search warrant materials were eventually released during the pendency of the appeal, the Court of Appeals addressed the merits of the media's appeal under the familiar exception to the mootness doctrine for cases "capable of repetition, yet evading review."  Challenges to sealing orders, like challenges to gag orders, public records and open meetings disputes, and other access issues, often run their course on a time frame too short to permit full litigation and appeal.

The Court of Appeals analyzed the case under the federal appellate decision of Baltimore Sun Co. v. Goetz.  The court agreed with the media that the search warrant materials "are ordinarily considered public records and are open for the public's review."  The court also rejected the trial court's conclusion that N.C. Gen. Stat. s. 132-1.4(e) supported sealing the materials.  As the court  pointed out,  that provision refers only to public records listed in N.C. Gen. Stat. s. 132-1.4(c)(1)  through (c)(5), which do not expressly refer to search warrants.

However, the court also concluded that the sealing of the search warrant materials was not an abuse of discretion because a trial court "may, in the proper circumstances, shield portions of court proceedings and records from the public."  The court found the considerations cited by the trial court -- the right to prosecute a defendant, fair trial, and preserving the integrity of an on-going investigation -- were sufficient to support the sealing orders under N.C. Gen. Stat. s. 132-1.4(k).

The Court of Appeals also rejected the media's argument that the public enjoyed a common-law right of access to the search warrant materials under Goetz.  It gave little consideration to this argument, concluding that the passage of legislation concerning access to search warrants (i.e., N.C. Gen. Stat. s. 132-1.4(k)) supplanted any common-law right of access.  The court  did not address the fact that the statute provides no standards by which orders sealing search warrants are to be measured.

Finally, the Court of Appeals rejected the media's constitutional arguments as well.  In Goetz, the Fourth Circuit held that the test for determining whether there exists a First Amendment right of access to judicial records such as search warrant materials is as follows:

The test for determining whether a first amendment right of access is available is: 1) "whether the place and process have historically been open to the press and general public," and 2) "whether public access plays a significant positive role in the functioning of the particular process in question."

If these two prongs are met, then a qualified right of access exists, which may be overcome only through proof that a sealing order is narrowly tailored to serve a compelling government interest.

The Court of Appeals concluded that search warrants fail the first prong of the Goetz test, citing Goetz. Although Goetz indeed found no First Amendment right of access to search warrant affidavits, that case did not address access to search warrants themselves or to their returns.  In fact, in Goetz, the magistrate did not seal the warrant, the return, or the inventory, which the Goetz court noted in describing the procedural requirement that trial courts consider alternatives to sealing documents.

The Court of Appeals in Cooper went on to find that the procedural requirements set out in Goetz had been satisfied.  According to the Fourth Circuit in Goetz, any order "closing trial proceedings must 'be articulated along with findings specific enough that a reviewing court can determine whether the closure order was properly entered.'"  In addition, the court must consider alternatives.  The Fourth Circuit in Goetz vacated the order sealing the search warrant affidavit for failure to abide by these procedural requirements.  In Cooper, however, the Court of Appeals found these procedures met through the trial court's finding that the considerations outlined in N.C. Gen. Stat. s. 132-1.4(e) would be implicated by release of the search warrant materials.

As to the fact that the trial court, unlike in Goetz, sealed all the search warrant materials and not just the affidavits, the court explained that revealing portions of these materials would have been impractical and would have frustrated the purpose of sealing the affidavits, given that all of the materials related to Nancy Cooper's husband and to their marital relationship.  The court also noted that the sealing order was of limited duration, which it found indicated the trial court  considered the least restrictive means of keeping the information secret.

Finally, the Court of Appeals rejected the media's argument that the "open courts" provision of the North Carolina Constitution, Article I, Section 18, required access to the search warrant materials.  It found that while the open courts provision creates a qualified right of access to criminal records and documents, that qualified right was overcome in this case by the considerations recited in the trial court's sealing order.