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Durando v. Nutley Sun

April 8, 2010


On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-5340-05.

Per curiam.


Argued January 6, 2010

Before Judges Graves, Sabatino and Newman.

This is a defamation case. Plaintiffs Ronald Durando ("Durando") and Gustave Dotoli ("Dotoli") appeal the Law Division's entry of summary judgment in favor of defendants The Nutley Sun and North Jersey Media Group, Inc. ("NJMG"). The motion judge granted summary judgment because there was insufficient evidence that defendants had published an inaccurate headline about plaintiffs in their newspaper with actual malice. We affirm.


These are the facts relevant to our consideration of the issues raised on appeal.

The newspaper headline and the related news article at issue arose out of an investigation of plaintiffs by the Securities and Exchange Commission ("the SEC" or "the Commission"). On November 15, 2005, the SEC filed a civil complaint in the United States District Court for the District of Connecticut, alleging that plaintiffs and their associates had violated numerous sections of the Securities Act of 1933, 15 U.S.C.A. §§ 77a-77aa, and Securities Exchange Act of 1934, 15 U.S.C.A. §§ 78a-78oo. The SEC complaint particularly alleged that plaintiffs and their associates had pumped up the value of the stock of a company they owned, then sold that stock to the investing public with knowledge that the stock was worth only a fraction of what they were selling it for.*fn1 As a result, plaintiffs allegedly gained more than $9 million in profits from the transaction. The complaint was publicized by the SEC in a litigation release dated November 16, 2005 and posted to the Commission's website.

The SEC's complaint was reported in a news story written by Kathleen Lynn, a staff writer for The Record, a daily newspaper based in Hackensack. The Record and The Nutley Sun, a weekly regional paper, are both owned by NJMG.

Lynn's story about plaintiffs appeared in the November 17, 2005 edition of The Record under a headline in that paper which read: "3 N.J. men accused in $9M stock scam." The article, as printed in The Record, detailed the allegations contained in the complaint, identified plaintiffs by name as two of the three men involved in the civil case, and identified both plaintiffs as residents of Nutley.

The executive editor of The Nutley Sun at the time was Paul Milo. After Lynn's story ran in The Record, Milo received an e-mail alert*fn2 that The Record had published an article concerning persons in Nutley, which might be of interest to his newspaper. At his deposition, Milo could not recall if he contacted the editor of The Record, or if anyone else from NJMG was involved in the decision to reprint Lynn's article in The Nutley Sun. However, he did testify that his standard routine when he wanted to reprint an article from The Record was to e-mail Frank Scandale, the editor of The Record, and indicate his intention to reprint the article in The Nutley Sun.

Milo decided to republish Lynn's article in The Nutley Sun's edition on December 8, 2005. On Monday, December 5, 2005, when Milo physically laid out the article in the newspaper, he changed the headline. He also removed the last three paragraphs from the story. The new headline above the story on page eleven read: "Local men charged in stock scheme."

The day after editing the initial article, Tuesday, December 6, 2005, Milo added a "teaser" headline to the front page of the edition. The teaser read: "Local men arrested in 'pump and dump' scheme[.]" The teaser referenced page eleven of the edition, where the story, with its new headline, had been placed.

The teaser appears as the third and final such headline from the top of the front page on the December 8th edition. Above it were two unrelated headlines. The top headline, which was in larger and bolder font than the headlines below it, read, "School board stops crossing guard funding." Underneath this was a subheading for the crossing guard story, which read, "Town says it cannot absorb total cost." This subheading was in the same font and type size as the headline referencing plaintiffs' story. The second headline, also ...

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