5.1 The “public figure test” comprises a number of developments in the common law of defamation in the United States, introduced in a line of cases beginning with New York Times Co v Sullivan.1 In summary, the reforms provide special criteria governing liability for plaintiffs in particular categories (“public figures”), making it more difficult for those plaintiffs to establish a cause of action in defamation.
5.2 The Commission discussed the public figure test in detail in our Discussion Paper.2 We there identified a number of problems with the test as it operates in the United States.3 We attempted to predict what would happen if these reforms were introduced in New South Wales. As a result, we expressed a preliminary view that a formal public figure test is undesirable and that the objectives of the test could be better achieved by specific reforms affecting procedures and remedies as well as aspects of substantive liability.4
THE PUBLIC FIGURE TEST AFTER THEOPHANOUS
5.3 The High Court’s judgment in Theophanous v Herald and Weekly Times Ltd5 analysed in some detail the jurisprudence associated with New York Times v Sullivan and the United States public figure test. The majority judgments of the Court were influenced by a number of its theoretical justifications.6 However, the majority also considered the theoretical and practical difficulties with the test previously identified by this Commission in DP 32.7 As a result, the Court established a new defence, based on an implied constitutional freedom of political communication, to actions for damages for defamation in cases of political discussion. The Commission now addresses the relationship between this new defence and the United States public figure test.
5.4 In Theophanous, the High Court, by majority, established that the implied freedom of political communication in the Australian Constitution covers discussion of the conduct, policies or fitness for office of government members, political parties, public bodies, public officers and those seeking public office. It also includes discussion of the political views and public conduct of persons who are engaged in activities that have become the subject of political debate.8 This formulation was not exhaustive; only “commercial speech without political content” was specifically excluded. In Theophanous the new defence was applied to publications involving criticism of a member of the Commonwealth Parliament. In the related case of Stephens v West Australian Newspapers Ltd, the Court held that it covered criticism of members of a State Parliament.9
5.5 This may establish a form of public figure test, as courts extend the principles of the decision to claims brought by other holders of, and candidates for, public office, and to those other persons whose activities have become the subject of political debate. Examples given were “trade union leaders, Aboriginal political leaders, political and economic commentators.”10 Deane J suggested that judges and “leading members of the Executive” were covered.11 The joint judgment later appeared to restrict this broad approach, indicating a preliminary view that it should not cover government employees or public figures who do not hold official positions.12 The key issue is whether the publication complained of took place in the course of political discussion,13 but it may be that a second element of the test to be applied will develop, requiring some categorisation of the plaintiff.14 If so, the decision may be used to establish special criteria governing liability for plaintiffs in particular categories.
5.6 It is arguable, then, that Theophanous has established a modified form of public figure test in Australia which could be further developed.15 It is, therefore, essential to give consideration to the public figure test as it has developed in American jurisprudence and to the possible lines of development of Australian defamation law.
5.7 The Commission addresses the public figure test at this point in its Report because the test has radically altered the cause of action in United States defamation law. This Chapter summarises the problems with the public figure test as it operates in the United States, and provides further justification for the Commission’s view that free speech and correction of unfair damage to reputation could be better served by other means.
THE PROBLEMS WITH THE PUBLIC FIGURE TEST
5.8 To succeed in a defamation claim in the United States, plaintiffs classed as “public officials” or “public figures” must prove that the defendant acted with “actual malice” - defined as actual knowledge of the falsity of the published material or reckless disregard as to its truth.16 This is far more stringent than the common law concept of malice which defeats qualified privilege or comment. At common law, malice includes ill will, spite and improper motive.17 “Reckless disregard” exists only where the defendant consciously held doubts about the truth of the matters asserted; mere indifference to the truth and failure to investigate is insufficient.18 Further, in the United States the plaintiff must prove actual malice with “convincing clarity”, an onus of proof which goes beyond the “balance of probabilities” normally used in civil cases.19
5.9 The constitutional guarantee of free speech has also altered the position of plaintiffs who are neither public officials nor public figures. Such “private figures” must prove that the defendant was at least negligent, even where the defendant knew the material was defamatory and intended to refer to the plaintiff (in such a case, the plaintiff must show negligence in failing to discover the truth).20 This means that all plaintiffs must prove some fault on the defendant’s part.21 Further, all plaintiffs bear the onus of proving falsity, as this is an essential element of the tort.
5.10 Finally, all plaintiffs must prove actual malice to recover presumed and punitive damages, unless the plaintiff is a private figure and the defamation does not relate to a “matter of public concern”, in which case the plaintiff in most States need only show negligence. In other cases, unless actual malice is shown, a private figure can recover only for actual loss.22
5.11 Many expert commentators in the United States believe that the decision in New York Times v Sullivan, and the line of decisions following it, have not only proved ineffective, but also counterproductive, in achieving its purported aims. The problems arise from the interaction of this rule with the pre-existing law of libel and general aspects of American tort law and procedure. It is possible to identify seven general areas of difficulty arising from the public figure test.23
Complex categories of plaintiffs
5.12 American courts spend a great deal of time assessing whether the plaintiff is a private figure or a public figure, and if the latter, then whether he or she is a public figure for all purposes or only for limited purposes.24 If the plaintiff is held to be a private figure, different rules of liability will apply depending on whether the issue involved is one of public or private concern.25
Difficulty and expense of litigating “fault”
5.13 Since most plaintiffs in the US must prove not only falsity but also “actual malice”, a key issue in most libel trials is the state of mind of the defendant.26 Complications arise when the publication is the work of several people, such as a junior reporter, a sub-editor and an editor. Extensive American discovery procedures, involving the discovery not only of documents but also of evidence, result in close scrutiny of all circumstances leading up to the publication.27 The requirement for plaintiffs to prove all these elements with “convincing clarity” causes further difficulties for plaintiffs and expense for both sides.28
Need to overrule journalists’ privilege
5.14 Many US states have “shield laws” to protect journalists from revealing their confidential sources in court. However, many of these leave a discretion in the court to decide whether the privilege should be overruled. In defamation cases where “actual malice” needs to be proved, protection of sources often will be undermined because the existence and identity of the source and the information obtained from the source are crucial evidence in determining the state of mind of the defendant.29
Excessive damage awards resulting from juries’ focus on media fault
5.15 In cases against media defendants which reach trial, the jury will be shown in great detail all of the evidence that the plaintiff can produce to show that the defendant behaved recklessly or maliciously in publishing falsehood about the plaintiff. This may activate any existing prejudices which juries have against media defendants, which can be given full expression through a massive award of presumed and punitive damages. The highest award on record against a media defendant is US$58 million,30 while the average in 1990-1991 was more than US$8 million. The average in 1992-1993 dropped sharply to a “mere” US$1.06 million.31
High incidence of successful appeals by defendants
5.16 To protect the free speech values enshrined in the First Amendment, the US Supreme Court has laid down that its essential requirements, notably that of “clear and convincing” proof of known or reckless falsity, must on appeal be subject to independent judicial review involving an examination of the whole record.32 This is a distinctly intrusive form of judicial supervision, and arguably involves the appellate court in “state of mind” rulings that are inappropriate for a court that does not see or hear the witnesses. More significantly for present purposes, it means that only a small proportion of the huge jury awards of damages survive the appeal process. Appellate courts often completely overturn or massively reduce the amount of awards.33
5.17 Often therefore, the public figure plaintiff will end up with total defeat or a pyrrhic victory. The defendant, even if victorious in formal terms, will have devoted enormous time and resources conducting the defence. Under US costs rules the defendant, even if victorious, will have to pay its own legal costs which can be huge.34 The plaintiff, having most likely negotiated a contingent fee arrangement, will be better off in this regard, but will still have to meet out of pocket expenses.35
Tendency to promote unsatisfactory regulatory standard
5.18 It has been argued that, since tort law standards inevitably affect not only the relations between private individuals but the conduct of all forms of enterprise in public life, it is appropriate to examine the Sullivan rule as an aspect of the regulatory standards governing media performance.36 On this view of its role, Sullivan has clear shortcomings. First and foremost, it creates “perverse incentives”: it encourages sloppy journalism because the lower the standard of care that is seen as “normal” for journalists, the harder it will be for public figure plaintiffs to prove the greater dereliction of “recklessness” required under the Sullivan rule. Secondly, it focuses on process rather than performance standards: how the story was put together becomes more important than whether it is true.37 Proof of a breach of standards requires a highly intrusive investigation of the inner operations of the defendant organisation.38 Thirdly, because it obscures the truth/falsehood issue, it “is ill tailored to achieve one important regulatory goal, preventing injury to individuals through falsehoods”.39
No resolution of issue of truth
5.19 Public figure plaintiffs, as well as most (if not all) private figure plaintiffs, clearly now bear the specific onus of proving the relevant defamatory allegation to be false.40 Therefore, if the plaintiff wins, this does convey the message that the imputation was false. But, as outlined above, the plaintiff often loses.
5.20 It has been estimated that some three-quarters of cases filed against media defendants never get to trial, because of a successful motion by the defendant for summary judgment.41 If the case does make it to trial, plaintiffs (at least against media defendants) have reasonable prospects of success, because of the tendency of juries to punish the media. However, on appeal, plaintiffs often lose.
5.21 Since in most of these cases the reason for the plaintiff’s loss is a failure to prove with “convincing clarity” an issue of subjective fault on the defendant’s part, the objective issue of truth or falsity is often not directly addressed, let alone clearly resolved.42 It follows that, “whatever the popular view may be, truth and falsity have very little to do with libel litigation ... It is now the defendant’s conduct, rather than the plaintiff’s reputation, that is on trial”.43
Summary
5.22 The “public figure test” recognised in the United States appears only to contribute to the problems of lengthy and costly proceedings, with the sole emphasis on damages as a remedy, which the Commission seeks to avoid.44 However, as stated in para 5.1, the public figure test actually comprises a package of reforms made in the wake of New York Times Inc v Sullivan. A wholesale importation of that package into the law of New South Wales would hinder effective adjudication of the issue of truth, which the Commission sees as an important yardstick by which to assess any defamation law.45 The Commission believes that free speech is better served by requiring the plaintiff to prove falsity. This not only addresses the plaintiff’s key complaint - that the defendant has published a false and defamatory imputation - but also promotes free speech by eliminating liability entirely for statements which the plaintiff cannot prove to be false.
FOOTNOTES
1. (1964) 376 US 254.
2. See New South Wales Law Reform Commission, Defamation (DP 32, 1993) at Chapter 10.
3. DP 32 at paras 10.36-10.56.
4. DP 32 at paras 10.61-10.62.
5. (1994) 182 CLR 104.
6. Mason CJ, Toohey and Gaudron JJ discussed the American law at 130-136 and framed the terms of the new implied freedom of speech defence at 137. Deane J would have gone further and held that no liability in damages for defamation arose from publications about the official conduct or suitability of a member of Parliament or other holder of high public office (at 185). However, he joined with the orders proposed by the joint judgment in order to achieve a majority (at 187-188).
7. Theophanous at 134-136.
8. Theophanous at 124 per Mason CJ, Toohey and Gaudron JJ, at 179-180 per Deane J. This formulation could include the private conduct of public officials, if this is relevant to their “fitness for office”, though it covers only the “public conduct” of what may be broadly termed public figures.
9. (1994) 182 CLR 211 at 133-134 per Mason CJ, Toohey and Gaudron JJ, at 257 per Deane J. It was also held that a similar implied freedom existed in the Western Australian Constitution (at 89).
10. Theophanous at 124. In Williams v John Fairfax and Sons (Supreme Court of NSW, 24 October 1994, CLD 10872/89, unreported) Levine J held that it was arguable that the new defence applied to criticism of the conduct of a magistrate during committal proceedings. In Lewandowski v Lovell (Supreme Court of WA, 4 April 1995, unreported) Master Adams held that it was arguable that the new defence applied to criticism of the conduct of a police officer in charge of an investigation and invested with State power, who was therefore not “a public officer of insignificance”.
11. At 180.
12. At 134.
13. See Sporting Shooter’s Association of Australia (Vic) v Gun Control Australia and Crook (1995) 2 Media Law Reporter 83 (exchange between rival lobby groups part of active political debate and within “political discussion”).
14. See Hartley v Nationwide News Pty Ltd (1995) 31 Gazette of Law and Journalism 9 (alderman); Williams v John Fairfax & Sons Ltd (Supreme Court of NSW, Levine J, No 10872/1989, unreported) at 11 (defendant to defamation action by plaintiff magistrate arguably able to avail itself of “new common law privilege defence” and “implied freedom of speech” defence).
15. Eg A Deamer, “Don’t Jump for Joy” (1994) 26 Gazette of Law and Journalism 3. But see S Walker, “The Impact of the High Court’s Free Speech Cases on Defamation Law” (1995) 17 Sydney Law Review 43.
16. In Australia it is clear that, in cases to which the constitutional defence applies, the defendant does not have to establish absence of malice (Theophanous at 137-138). However, it is not clear whether the plaintiff can defeat the constitutional defence by relying on common law malice: see para 10.16.
17. Horrocks v Lowe [1975] AC 135 at 149-151. It should be noted that, in the US, a journalist’s ill-will towards the plaintiff is not itself sufficient to support a finding of “actual malice”: Masson v New Yorker Magazine (1991) 111 S Ct 2419 at 2429.
18. St Amant v Thompson (1968) 390 US 727 at 731; Beckley Newspapers Corp v Hanks (1967) 389 US 81 at 84-85.
19. New York Times Co v Sullivan (1964) 376 US 254 at 385-386.
20. Gertz v Robert Welch Inc (1974) 418 US 323 at 347; Dun & Bradstreet Inc v Greenmoss Builders Inc (1985) 472 US 749.
21. Each State may decide on the appropriate measure of liability for private figures, provided that it is at least negligence. Most States have adopted a negligence standard.
22. Gertz v Robert Welch at 349; Dun & Bradstreet Inc v Greenmoss Builders Inc (1985) 472 US 749.
23. This summary is drawn from M R Chesterman, “The Money or the Truth: Defamation Reform in Australia and the USA” (1995) 18 UNSW Law Journal 300 at 302-308.
24. Rosenblatt v Baer (1966) 383 US 75 at 85; Curtis Publishing Co v Butts (1967) 388 US 130 at 164; Gertz v Robert Welch Inc (1974) 418 US 323; Time Inc v Firestone (1976) 424 US 448; Philadelphia Newspapers Inc v Hepps (1986) 475 US 767. There are myriad cases addressing the issue of how to characterise the plaintiff.
25. See paras 5.9-5.10.
26. See D A Anderson, “Is Libel Law Worth Reforming?” in Soloski and Bezanson (eds) Reforming Libel Law (Guilford Press, New York, 1992) at 8-9, 15-17; G C Cook, “Reconciling the First Amendment with the Individual’s Reputation: The Declaratory Judgment as an Option for Libel Suits” (1989) 93 Dickinson Law Review 265 at 265-266.
27. Anderson, in Soloski and Bezanson, at 15-17, 18-19.
28. See para 5.8.
29. Herbert v Lando (1979) 441 US 153; Anderson, in Soloski and Bezanson, at 20-21.
30. Feazell v A H Belo Corp (Texas District Court, McLennan County, 19 April 1991, No 86-22271).
31. Libel Defense Resource Center, “Trial Results, Damage Awards and Appeals, 1992-93”, LDRC Bulletin, 31 January 1994 at 3.
32. Anderson, in Soloski and Bezanson, at 4-7. An example of what this can involve is Bose Corp v Consumers Union of United States Inc (1984) 466 US 485.
33. The highest award upheld on appeal is US$3 million: Brown & Williamson Tobacco Corp v Jacobson (1987) 827 F 2d 1119, cert denied (1988) 485 US 933.
34. Summit Valley Industries Inc v Local 112 United Brotherhood of Carpenters (1982) 456 US 717 at 721. Estimates of the defendant’s legal costs in large public figure actions include US$3-4 million for Herbert v Lando (1979) 441 US 153 and US$3.75-5.75 million for Westmoreland v CBS (1984) 752 F 2d 16 (2d Cir): D M Cendali, “Of Things to Come - the Actual Impact of Herbert v Lando and a Proposed National Correction Statute” (1985) 22 Harvard Journal of Legislation 441 at 467.
35. The Iowa Libel Research Project, the largest empirical study into US defamation law, found that 73% of plaintiffs have a contingency fee arrangement; an additional 12.7% have a partial contingency fee arrangement: R P Bezanson, G Cranberg and J Soloski Libel Law and the Press: Myth and Reality (Free Press, New York, 1987) at 69.
36. M M Shapiro, “Libel Regulatory Analysis” (1986) 74 California Law Review 883.
37. Shapiro at 885-886. A recent study points out another questionable result of the actual malice rule, namely, that it involves judges setting standards of how journalists should behave: B C Murchison, J Soloski, R P Bezanson, G Cranberg, and R L Wissler, “Sullivan’s Paradox: The Emergence of Judicial Standards of Journalism” (1994) 73 North Carolina Law Review 7. This, of course, can also occur under criteria such as “reasonableness”.
38. J H Skolnick, “Foreword: The Sociological Tort of Defamation” (1986) 74 California Law Review 677 at 681-682 (arguing that US juries appear to care less about process (how the story came about) than about product (whether the story was true or false), despite the requirements of the public figure test). Cf 686-7.
39. Shapiro at 885.
40. See para 5.9.
41. Anderson, in Soloski and Bezanson, at 7-8; Cook at 266, 273.
42. Anderson, in Soloski and Bezanson, at 21-22.
43. L A Powe, The Fourth Estate and the Constitution: Freedom of the Press in America (University of California Press, Berkeley, 1991) at 121, 125.
44. See para 2.20.
45. See paras 4.7-4.15.
