On appeal from Superior Court of New Jersey, Law Division, Somerset County.
McElroy, Dreier and Shebell. The opinion of the court was delivered by Dreier, J.A.D.
[199 NJSuper Page 309] Defendants, Courier-News Co. Inc. (Courier News) and one of its reporters, Sam Meddis (Meddis), have appealed from a jury award to plaintiff for compensatory damages in the amount of $200,000 for injuries to plaintiff's reputation, and an additional $850,000 for plaintiff's financial losses resulting from such damage to his reputation. Judge Robert E. Gaynor during this month-long libel trial ruled that defendants' conduct would be measured by a negligence standard, after determining that plaintiff was a nonpublic figure, and that the damage to his reputation could be compensable to him even though its effects were felt through the vehicle of a wholly-owned corporation
which itself was not libeled. We agree with each of these conclusions.
Plaintiff came to New Jersey from Maryland in 1951, and about three years later he and his brother organized a construction company called Sisler Brothers. In the late 1950's he was elected to the Franklin Township Committee and a year later unsuccessfully ran for Somerset County Freeholder. He then withdrew from political activity. Shortly thereafter plaintiff, with a group of local businessmen, helped organize the Franklin State Bank in Franklin Township, and plaintiff was elected as the bank's first president. After serving in that capacity for approximately 8 years, he was elected Chairman of the Board, serving in that office until early 1980.
Since approximately 1970 plaintiff also has been involved in the business of breeding standardbred racehorses. He initially bought a 60-acre farm near the Freehold Racetrack which he expanded through the 1970's until his horse farm in Manalapan Township, Apt-to-Acres, consisted of approximately 240 acres.
In 1976 he left the construction business, and upon retiring as Chairman of the Board of Franklin State Bank in 1980, he devoted his full time efforts to his horse farm.
Defendants contended that plaintiff was a public figure or limited public figure within the meaning of New York Times Co. v. Sullivan, 376 U.S. 254, 279-280, 84 S. Ct. 710, 725-726, 11 L. Ed. 2d 686, 706 (1964); Gertz v. Welch, 418 U.S. 323, 332, 342, 94 S. Ct. 2997, 3008, 41 L. Ed. 2d 789, 800-801, 807 (1974) and Waldbaum v. Fairchild Publications Inc., 627 F.2d 1287 (D.C.Cir.) cert. den. 449 U.S. 898, 101 S. Ct. 266, 66 L. Ed. 2d 128 (1980). They relied upon a series of newspaper articles published between 1958 and 1980 in which plaintiff was mentioned. The early articles concerned plaintiff's candidacy for Somerset County Freeholder in 1958 and his involvement as a leader in the Somerset County Democratic Committee. The articles published in the early 1960's discussed the founding of the Franklin State Bank wherein plaintiff is mentioned as a spokesman for
the bank in the context of its inception and growth. Subsequent articles in the New Brunswick Home News mentioned plaintiff as the Franklin State Bank expanded in the later 1960's and 1970's.
Another group of articles concerned a dispute between plaintiff and the Franklin Township Board of Adjustment when the Board rejected plaintiff's plan to build an apartment and shopping development in 1967, and his contentions in a subsequent lawsuit against the Township that his development plan had been rejected for political reasons.
Additional newspaper articles involved a 1972 tax appeal brought by a Franklin Township taxpayers' association, where the taxpayers sought an increase in the assessed value of the Sisler Building, an office building owned by plaintiff's construction company. Plaintiff subsequently filed a libel suit against the taxpayers' association. The newspapers reporting on the suit denominated plaintiff as "a prominent Franklin businessman." A Courier-News article concerning the suit published May 2, 1975 was written by defendant Meddis and indicated that the libel suit was settled by the parties. The assessment battle was not resolved until March 1979.
Judge Gaynor found that plaintiff's brief career as a local politician did not as of the time of the trial make him a household name in the community or give him fame or notoriety. In the language of Lawrence v. Bauer Pub. & Print. Ltd., 89 N.J. 451, 463, cert. den. 459 U.S. 999, 103 S. Ct. 358, 74 L. Ed. 2d 395 (1982), plaintiff did not possess "the requisite 'pervasive fame or notoriety'" (quoting Gertz, 418 U.S. at 352, 94 S. Ct. at 3013). His political career had ended in the early 1960's and defendants failed to show that any notoriety survived until the present controversy. Applying the standards of Waldbaum v. Fairchild Publications Inc., 627 F.2d at 1295-1296,
Judge Gaynor found that plaintiff was not a public figure for all purposes.
The judge then considered whether plaintiff could be a limited or semi-public figure, requiring the court to examine the nature and extent of the individual's participation in the particular controversy which gave rise to the defamation. Gertz v. Welch, 418 U.S. at 352, 94 S. Ct. at 3013. Judge Gaynor found that the investigation which was the subject matter of the allegedly defamatory articles did not create a public controversy or, even if it did there was no evidence that plaintiff assumed a voluntary active role in it or sought to influence public opinion. Lawrence, 89 N.J. at 464; see also Waldbaum, 627 F.2d at 1296.
After a careful review of all the evidence, Judge Gaynor determined that the status of the plaintiff was a question properly resolved by the court rather than the jury. Lawrence, 89 N.J. at 462; Gomez v. Murdock, 193 N.J. Super. 595, 599 (App.Div.1984). He held that plaintiff was a private individual with respect to the allegedly defamatory articles. Judge Gaynor properly analyzed both the controversy and plaintiff's role in the controversy before concluding that plaintiff was not a public figure either for general purposes or a limited purpose. We affirm that determination.
Having determined plaintiff's status as a private individual, Judge Gaynor next established the standard of conduct to which defendants would be held. In Gertz v. Welch, the United States Supreme Court stated:
[s]o long as they do not impose liability without fault, the States may define for themselves the appropriate standard of liability for a publisher or broadcaster of defamatory falsehood injurious to a private individual. [418 U.S. at 347, 94 S. Ct. at 3010].
The Restatement, Torts 2d, § 580B (1976), adopted the negligence standard:
§ 580B. Defamation of Private Person
One who publishes a false and defamatory communication concerning a private person, . . . is subject to liability, if, but only if, he
(a) knows that the statement is false and that it defames the other,
(b) acts in reckless disregard of these matters, or
(c) acts negligently in failing to ascertain them.
Comment g to § 580B discusses the negligence standard and notes that the question of negligence has been expressed both in terms of the defendants' state of mind ("by asking whether he had reasonable grounds for believing that the communication was true") and in terms of conduct ("whether the defendant acted reasonably in checking on the truth or falsity or defamatory character of the communication before publishing it"). The Restatement text, however, is clear that the negligence relates to whether the defendant "acts negligently" in failing to ascertain the falsity of the statement. It is clear from the s and appendix to § 580B that the vast majority of the states have opted for this negligence standard.
Although there is no New Jersey appellate authority mandating the negligence standard for a nonpublic figure, by implication the New Jersey Supreme Court in Lawrence v. Bauer has indicated that the negligence standard should be applied. The court there analyzed the plaintiffs' status by first finding that they were not "public officials" and then that they were not "public figures for all purposes." The court found each of them, however, to have been "a public figure with regard only to the firehouse appropriation controversy and the petition drive they spearheaded to force a public referendum on the matter." 89 N.J. at 463. The mere fact of the court's analysis of the rules governing media libel of a public official or public figure and analysis of each defendant's status indicates that our Supreme Court chose not to foreclose consideration of a different standard to be applied to a private figure. Were New Jersey to be included within the few jurisdictions that ...