Docket No. 100555.
IN THE
SUPREME COURT
OF
THE STATE OF ILLINOIS
SOLAIA TECHNOLOGY, LLC, et al., Appellees, v. SPECIALTY
PUBLISHING COMPANY et al., Appellants.
Opinion filed June 22, 2006.
JUSTICE FITZGERALD delivered the judgment of the
court, with opinion.
Justices McMorrow, Kilbride, Garman, and Karmeier
concurred in the judgment and opinion.
Chief Justice Thomas took no part in the decision.
Justice Freeman concurred in part and dissented in part,
with opinion.
OPINION
The plaintiffs, Solaia Technology, LLC (Solaia Technology),
the law firm of Niro, Scavone, Haller, & Niro, Ltd. (NSHN), and
Raymond Niro, filed a defamation complaint against the
defendants, Specialty Publishing Company, Peggy Smedley,
John Buell, and John Doe. The circuit court of Cook County
dismissed the complaint; the appellate court affirmed in part
and reversed in part (357 Ill. App. 3d 1).
The central issue in this case is whether the so-called fair
report privilege defeats the plaintiffs= allegations that the
defendants made false statements with actual malice. The
defendants argue it does; the plaintiffs argue it does not. The
plaintiffs also request cross-relief, asserting that the appellate
court erred in holding various statements made by the
defendants were not defamatory. For the reasons that follow,
we affirm in part, reverse in part, and remand.
BACKGROUND
In 2001, Solaia Technology purchased United States Patent
No. 5,038,318, commonly known as the =318 patent, from
Schneider Automation, Inc. (Schneider Automation). The =318
patent relates to a system or standard for communicating real-
time information between computers and machines. According
to Solaia Technology, this standard is employed by virtually
every company that uses a computer to control its
manufacturing operation. Since purchasing the patent, Solaia
Technology has aggressively enforced it, bringing infringement
claims against various well-known companies. Solaia
Technology has been represented in these suits by Niro and
his firm, NSHN.
Specialty Publishing Company publishes Start magazine,
whose target readership is manufacturing company executives.
In an April 2002 article entitled AChaos in Manufacturing,@ Start
began its coverage of Solaia Technology=s infringement
claims. 1 Before discussing Apatent attorneys pitting customers
1
Though not all of Start=s coverage of Solaia Technology=s infringement
claims is allegedly defamatory, we quote extensively from the three issues
of Start mentioned in the plaintiffs= complaint in order to provide context
for the statements at issue.
against suppliers,@ Start sketched the background of this
litigation. According to Start, the AOPC Foundation@ was
founded in 1996 by a group of companies seeking to develop
an Aopen standard@ to provide Ainteroperabilty@ between
computers and machines used in manufacturing. The standard
became very successful and was adopted by hundreds of
companies:
AClearly, on the surface, the goal of [the OPC
Foundation] was to enable the staunchest of
competitors to play nice in the sandbox and develop an
elusive open standard. In the end, an open standard
would mean less expense for vendors and more
solutions for users.
Thus, came the birth of what is known as the OPC
Foundation today. It all seemed so perfect. *** Sharing
data and information that was once was [sic]
proprietary. Innocent enough. And it was, in the
beginning.@
Start described what it termed AThe legal entanglement@:
ASo far, you should be asking yourself, what=s the
big deal? Until last year, there really wasn=t any until a
lawsuit was filed against [three] world-class
manufacturers ***.
Solaia Technology *** filed the lawsuit alleging that
all three end user manufacturers are violating a patent
that it purchased from Schneider Electric=s Automation
Business ***. Schneider sold the rights to its patent to
Solaia between March and August of last year. Now
Solaia, aided by the legal firm of Niro, Scavone, Haller &
Niro, Chicago, Ill. is on a legal campaign targeting
manufacturers who might be infringing on its patent.@
Start then detailed Solaia Technology=s infringement claims
and offered comments on them from the OPC Foundation=s
attorney and Solaia Technology=s attorney.
Under a subheadline ABaying for blood,@ Start continued:
ABefore we discuss who created this mess, we need
to stipulate to a few points. As we stated earlier, this is
an amazing [sic] irresistible story that deserves a lot of
-3-
coverage. It involves intrigue and lots of money. And the
innocent companies who are being forced to defend
themselves in this debacleBthe victims whose fate is
fueling the outrageBdeserve a lot of sympathy. So how
did this get so far out of line? Blame old-fashioned
market mania, aided and abetted by deeply greedy
people who wanted to make more money despite the
costs. Without question, most of the frenzy is simply
about money.
*** [T]here is certainly a lot of finger-pointing going
on and no one wants to take responsibility for creating
this legal nightmare. To really grasp the enormity of the
problem, we will need to explore in detail each of the
players and what they had hoped to accomplish.
The manufacturing mob is baying for blood, and
many companies blame Schneider. In fact, just about
everyone Start spoke with either on or off the record
within the manufacturing community is furious over
Schneider=s initial actions. Their anger is only being
fanned by Solaia=s lawsuits against leading
manufacturers.@
Start summarized the history of the =318 patent and
Schneider Automation=s sale of it to Solaia Technology:
ASolaia Technology acquired the patent for an
undisclosed amount. Although Solaia and its legal firm
will not confirm or deny it, some companies are
speculating the offer for the patent was based on a
contingency bid. If this assessment is correct, Schneider
would only be paid if Solaia wins its legal battle.@
According to Start, AIf Solaia proves victorious, it clearly intends
to turn its sights on other prey.@ But A[a]ttorneys from Niro,
Scavone, Haller & Niro reiterate that they are just following the
law and that its clients should not be punished for taking
advantage of the rules.@
Start closed with a general comment on patent reform:
AIt seems that new patents are issued monthly, if not
weekly, granting more and more patents. Some argue
that the U.S. Patent And [sic] Trademark Office is not
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supposed to issue patents on ideas[;] however, many
contend that is what it is doing with software patents.
The end result is having a chilling effect on the software
industry as more and more companies file lawsuits to
defend these so-called patents.
***
Watergate spawned campaign-finance reform,
perhaps the Solaia lawsuits will spawn patent reform.@
In August 2002, Start=s cover announced, AThe Chaos
Deepens: Clorox Settles ... Others Are Sued.@ The cover and
the accompanying article also featured a photocopy of the first
page of Solaia Technology=s patent infringement complaint
against 16 well-known companies. Inside, Start noted that
Clorox had settled with the ASolaia Technology LLC legal
machine,@ but that more manufacturers Ahave been tossed into
the legal fray as Solaia cast out a bigger net. *** If Solaia is
successful in its legal carnage it could set the stage for many
other manufacturers, both large and small, to be sued, or to be
forced to pay Solaia royalty fees.@ In fact, Start reported, A[t]he
legal nightmare deepens@ for the 16 Aworld class
manufacturers@ named as defendants by Solaia Technology
Ajust two days before Americans celebrated their
independence.@ Start continued:
AAttorneys at Niro, Scavone, Haller & Niro strongly
stress that this is just the beginning. Solaia=s attorneys
intend to continue to file suits against manufacturers
they believe are infringing on patent =318. However,
more and more manufacturers are publicly vowing to
defend their positions in court.
***
Although individual inventors have been selling their
patents for quite some time, many observers are
frustrated the patent system is being used as a vicious
legal weapon to generate revenue.@
Start repeated much of its coverage of Solaia Technology=s
infringement claims from the April 2002 issue. Schneider
Automation sold the =318 patent to Solaia Technology; Solaia
Technology then began enforcing it. Start noted that one of
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Solaia Technology=s attorneys and a member of NSHN denied
any connection between Solaia Technology and Schneider
Automation, but Start further noted that documents reveal Athe
relationship between these two companies might be more
intimately linked.@ After reviewing these documents, Start
continued:
ADespite the devastating news that more
manufacturers are being targeted, what makes this
litigation even more disturbing is how it will impact the
manufacturing industry as a whole.
***
Daniel Henderson, the president of Solaia
Technology, aided by the legal firm of Niro, Scavone,
Haller & Niro is on a legal campaign targeting
manufacturers that might be infringing on its patent.
Henderson and his legal machine have a war chest of
many patent victories. Niro, Scavone, Haller & Niro
intend to parlay these victories into more money for both
its client and its law firm.@
Start concluded:
AFor these *** manufacturers there is no escape.
They are now embroiled in a legal battle that many
insist can only harm the manufacturing industry, costing
manufacturers millions.
As industry observers, Start editors admit Solaia is
hungry and will continue to target manufacturers. ***
***
In the end, no one wins and money prevails.@
In a column titled AExhibit 5,@ Start president and publisher
Peggy Smedley questioned why Apeople, and perhaps
companies,@ including Solaia Technology, are Aso gung ho to
sue these days.@ Smedley answered herself, AIt=s about money,
pure and simple.@ She noted that the Clorox settlement with the
ASolaia legal machine@ has cast a cloud of pessimism over the
industrial marketplace:
AAs we dig deeper into this case, we are uncovering
information that points to a few disturbing facts about
patent infringement cases. Namely, litigation in the
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manufacturing industry has become a runaway train,
fueled by lawyers and their clients hoping to cash in on
patent infringement claims. *** It seems that
corporations of all sizes and shapes are taking
advantage of the patent law and exercising their legal
right to defend their patents. Clearly, this has become a
great new revenue source for many companies.
***
Niro, Scavone, Haller & Niro, attorneys for Solaia,
reiterate that they are just following the law and its
clients should not be punished for taking advantage of
the rules. Perhaps they are right. I just can=t help but
feel sorry for these companies that are being forced to
defend themselves.
***
While much information has been revealed in legal
documents and briefs that have been filed in the court,
still key details continue to be revealed. Speculation and
concern about certain misdeeds are on the rise. Thus,
we will continue to follow these cases as well as
continue to investigate all the facts.@
This issue of Start also contained a sidebar article entitled
AMore Than Just About Money,@ which sympathetically
presented Niro=s comments on patent litigation and the
controversy surrounding Solaia Technology=s infringement
claims.
Many of the companies subject to these claims purchased
the technology incorporating the =318 patent from Rockwell
Automation, Inc. (Rockwell Automation), and these companies
filed third-party claims against Rockwell Automation, alleging
that it refused to indemnify them. According to Start, Rockwell
Automation then filed a complaint in Illinois federal court
against Solaia Technology, claiming that the =318 patent was
invalid and that Solaia Technology=s infringement claims
constituted an unfair method of competition. Rockwell
Automation asked the court to hear its case prior to hearing the
third-party claims. The court evidently dismissed Rockwell
Automation=s complaint, but Rockwell pressed forward.
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In December 2002, Rockwell Automation filed another
complaint in Wisconsin federal court against Solaia
Technology, NSHN, and Schneider Automation. In strong
language, Rockwell Automation alleged that Solaia
Technology, NSHN, and Schneider Automation, whom
Rockwell Automation collectively labeled Athe Conspirators,@
engaged in Aconcerted action@ to extract money from its
customers through a Abad-faith campaign@ of Abaseless and
repetitive threats, allegations and suits *** in an apparent effort
to >shakedown= manufacturers.@ According to Rockwell
Automation, the conspirators overstated Ain a reckless and
misleading fashion@ the scope of the =318 patent that they
sought to enforce in an effort to weaken Rockwell Automation
and to garner Atens of millions in strike suit settlements.@
Rockwell Automation charged that Solaia Technology is a
Afront@ or Ashell@ entity created for the sole purposes of holding
the =318 patent and instituting litigation based on it. Rockwell
Automation also charged that NSHN orchestrated this litigation
schemeBfrom the sale of the =318 patent to the preparation of
Afalse, misleading and threatening infringement letters@ and
later the filing of baseless and serial patent infringement
claims. Rockwell Automation called this conduct Aunlawful,@
and its complaint asserted that Solaia Technology, NSHN, and
Schneider Automation violated, inter alia, section 1 of the
Sherman Antitrust Act. See 15 U.S.C. '1 (2000). Rockwell
Automation asked for compensatory damages, treble damages
and attorney fees under the Clayton Act (15 U.S.C. '15(a)
(2000)), punitive damages, and injunctive relief.
Start covered Rockwell Automation=s move, and the Solaia
Technology=s infringement claims, in the January 2003 issue,
the cover of which previewed, ACHAOS UPDATE:
CONSPIRACY SHAKEDOWN.@ On a page titled AMAILCALL@
and under the headline ASOLAIA MESS@ 2 Start published an
email containing A[t]houghts on the Solaia patent from an
industry veteran who prefers to remain nameless.@ The industry
veteran stated:
2
It is unclear whether the headline ASOLAIA MESS@ was provided by
the unnamed author or by Start.
-8-
AThere are a number of issues related to this mess that
might appear mysterious.
First and foremost, if this patent is as valuable as
has been suggested then why (a) did Schneider sell it to
Solaia for $1 (plus a cut of the settlements) and why (b)
did the hundreds of process control vendors who were
notified that the patent was available decline to bid on
it?
The answer is pretty clear if you actually read the
patent.
*** [T]his is an extremely narrow patent.
*** [T]he reason why Schneider wanted to unload
the patent and why none of the [other] existing control
companies wanted to buy it was because the patent is
essentially worthless.
Which brings us to the next question. If the patent is
worthless then why is Solaia suing everyone and why
are the manufacturers caving in? The answer to the first
half is obvious. Why did Johnny Cochrane defend O.J.?
Why was the Washington sniper killing people? Why did
Enron and WorldCom cook the books? Because there
are people in the world who want to make a lot of
money and they don=t care how they do it. Alas, there
always have been and there always will be.
As for the second half, lets [sic] say you are walking
home and you meet four large guys with baseball bats
who claim that they own the street and want you to give
them a $20 >toll= for using it. What do you do? *** [Y]ou
might suggest that you and the guys with the bats
appear before a competent court of law to discuss the
matter. But, while the guys with the bats ostensibly
agree to this, they also point out that in order to properly
prepare for the trial it will be necessary for them to beat
the crap out of you every day until the matter is decided
(the legal term for this is >discovery.=) [sic] So even
though you know you would win if you lived long enough
to get to the courtroom, in the end you pay the $20
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because its easier. As does the next guy and the guy
after that.
Which brings me to the only thing I don=t understand
about this mess. Why do the end-user companies keep
walking down that dark street alone? It seems to me
that if all of the companies got together with their own
bats and walked down the street as a group then, just
maybe, the muggers would go find another street.@
Start disclaimed these opinions, asserting that they do not
necessarily represent those of the magazine or its readers.
An article titled AConspiracy of a Shakedown@ appeared
later in the issue. This article began:
AAs 2002 was coming to a close, Rockwell
Automation was contemplating its next legal move with
the intensity of a grand chess master at an international
tournament. While it had been believed that Rockwell
had been checkmated, and other manufacturers had
been swept off the boards like so many sacrificial
pawns, Rockwell was readying itself for its biggest move
to date.
Rockwell *** turned the tables on Solaia Technology,
*** Schneider Automation, *** and attorney Raymond
Niro, Niro, Scavone, Haller & Niro, *** filing a lawsuit
charging the aforementioned with unfair business
practices.
On Dec. 10, 2002, Rockwell filed a lawsuit ***
claiming that Solaia, Schneider, and Niro=s law firm
have conspired in violation of antitrust laws to
>shakedown= Rockwell=s customers with baseless patent
infringement claims.
When an Illinois Circuit Court Judge last year
effectively dismissed Rockwell=s attempt to intervene in
the manufacturers= lawsuits, Rockwell decided to fight
fire with fire.@
Start then dissected Rockwell Automation=s complaint:
AThere are a couple of key points that appear to
standout in the 29-page document. First, Rockwell
claims that Niro, in conjunction with Solaia and
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Schneider, >have made and continue to make false and
objectively-baseless claims of patent infringements
against numerous manufacturers ***.=
Rockwell=s suit charges that Solaia=s lawsuits have
made claims that have caused injury to Rockwell in its
business and injury to competition in one or more
markets for industrial automation systems.
But that=s not all. In particular, as part of the plan to
injure Rockwell and disrupt competition, the
>conspirators= have made, >baseless threats and
allegations against manufacturing entities that those
manufacturers are infringing the =318 *** patent by,
among other things, using [Rockwell] products; have
overstated in a reckless and misleading fashion the
scope, applicability and importance of the =318 patent to
suppliers and users of industrial automation equipment
in general; and have instituted repetitive, baseless,
sham patent infringement litigation against those
manufacturers.=
The legal document states that the defendants
extract >substantial sums= of money from Rockwell=s
customers through an ongoing bad-faith campaign to
enforce and license patent =318.
***
In the end, Rockwell claims that Solaia, Schneider,
and Niro have specifically targeted Rockwell customers
to interfere with its relationship with both its actual and
prospective customers.
***
Rockwell filed its complaint under federal antitrust
laws: the Sherman Antitrust Act, the Clayton Act, and
Lanham Act.
The Sherman Antitrust Act outlaws all contracts,
combinations, and conspiracies that unreasonably
restrain interstate and foreign trade. *** The Sherman
Act also makes it a crime to monopolize or conspire with
any other person or persons to monopolize any part of
trade or commerce.@
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Start recapped its earlier coverage of ATHE SAGA.@
According to Start, ATo date, 20 world-class manufacturers
have been the targets of this legal nightmare that has resulted
in millions of dollars in settlements and legal fees. After the
original settlements, Solaia continued its legal carnage, filing
suit against 16 more manufacturers ***.@ Start noted that A[t]he
ongoing legal battles between Solaia, Rockwell, and the
manufacturers have been outlined in previous articles written
by Start magazine.@ Start directed, ATo read the history of the
previous twists and turns in this legal entanglement, [April =02,
Chaos in Manufacturing],@ and also listed seven other prior
issues containing features, updates, and editorials on ACHAOS
IN MANUFACTURING.@
Start then turned its attention to Niro. Under a subheadline
ANIRO FIRES UP ROCKWELL,@ Start stated:
AIt could be said that Niro inspired Rockwell to make its
most aggressive legal move to date. In fact, prior to
Rockwell filing its lawsuit, Niro told Start that if Rockwell
really wanted to intervene it better be committed all the
way.
Clearly, Rockwell=s recent filing proves that it is
committed. Rockwell admits that it will not acquiesce
and will continue to fight for manufacturers.
***
Niro anticipates garnering total settlements in the
range of $550 million to more than $600 million, before
his company ends its legal rampage. Without Rockwell
taking an aggressive stance to challenge the alleged
patent infringement cases, some industry observers
believe Niro would have run amuck suing even more
manufacturers.
Although actual numbers are confidential, Niro
confirms that Solaia has already collectively secured
millions of dollars in settlements. All of these
settlements set the stage for hundreds, if not thousands,
of other manufacturers to be sued before the patent
expires at the end of the decade.@
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Start then provided its historical perspective on Solaia
Technology=s infringement claims:
ATo really grasp the enormity of this litigation,
manufacturers need to understand what is at stake
here.
Solaia filed its lawsuits claiming that manufacturers
are violating the patent that it purchased from Schneider
Electric=s Automation Business. Schneider sold the
rights to its patent to Solaia between March and August
2001.
In less than six months after obtaining the rights to
the patent, Solaia had not only contacted manufacturers
questioning their use of the technology based on the
=318 patent, but filed a lawsuit in August.
According to the Rockwell filing, >Solaia
Technology=s single purpose is a Ashell company[@]
formed to serve as the [A]front[@] for baseless lawsuits
on a Solaia patent previously owned by Schneider.=
Since the original lawsuit was filed *** in 2001,
rumors have been flying around about the relationship
that exists between Solaia and Schneider.
***
As more and more information is revealed, Rockwell
believes it has enough proof to make its case that
Schneider sold the patent rights because it was an easy
way to >monopolize= and target Rockwell customers.@
Start noted that ANiro, lead attorney for Solaia, emphatically
denies these claims and insists that he will fight back with all
the legal fervour in his arsenal.@ Start quoted Niro:
A >I believe this is an act of desperation by Rockwell.
It strikes me that since they are losing before the court
at every turn, *** their frustration level must be so high
that they are desperate enough to not only bring a
lawsuit against our client and Schneider, but also
against us.=
***
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Niro explains the last time somebody tried a deal like
this, involving one of his clients in naming him as a
party, the case was not only dismissed, but there was
an award of attorney fees.
***
Forcefully Niro says, >I think it=s disgraceful. I have
received comments from other attorneys, including
attorneys who have represented some of the parties
who have settled with us. They think it=s disgraceful. I
think it will speak for itself. Rockwell will ultimately pay
the price for bringing a frivolous lawsuit.= @
On January 21, 2003, shortly after that issue of Start was
published, Solaia Technology, NSHN, and Niro filed a
complaint against Specialty Publishing Company, Smedley,
John Buell, the editor of Start, and AJohn Doe,@ the unnamed
industry veteran who wrote the letter in the January 2003 issue
of Start. The plaintiffs alleged, inter alia, that certain false
statements in Start=s April 2002, August 2002, and January
2003 issues constituted defamation per se. Regarding the April
2002 issue, the plaintiffs challenged the references to Ainnocent
companies,@ Adeeply greedy people,@ and Aso-called patents.@
Regarding the August 2002 issue, the plaintiffs challenged the
references to patent litigation as a Arunaway train, fueled by
lawyers and their clients hoping to cash in,@ rising Aspeculation
and concern about certain misdeeds@ by the plaintiffs, and
Solaia Technology=s Alegal carnage.@
Regarding the January 2003 issue, the plaintiffs challenged
the cover headline, ACHAOS UPDATE: CONSPIRACY
SHAKEDOWN,@ the cover story headline, AConspiracy of a
Shakedown,@ as well as the references to Rockwell
Automation=s charging Niro personally with unfair business
practices and to the Sherman Antitrust Act criminalizing
monopolies. The plaintiffs also attacked references in the
industry veteran=s letter, labeling Solaia=s patent Aessentially
worthless@ and likening the plaintiffs to Apeople in the world
who want to make a lot of money and *** don=t care how they
do it,@ such as O.J. Simpson=s criminal defense attorney
Johnny Cochrane, Enron and WorldCom executives charged
with various financial improprieties, the Washington, D.C.,
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sniper, and later to a group of muggers armed with baseball
bats.
On February 20, 2003, the defendants filed a combined
motion to dismiss the plaintiffs= complaint (735 ILCS 5/2B619.1
(West 2002)), arguing that these statements were not
defamatory and that some of them were privileged. On May 21,
2003, the trial court dismissed the plaintiffs= complaint,
concluding that each of the challenged statements was either
subject to an innocent construction, protected as an expression
of opinion, or privileged as Aa fair abridgment of the litigation.@
The trial court even stated, AThe language used and allegations
made in the Rockwell lawsuit are considerably more
aggressive than Start=s report of the complaint.@ The plaintiffs
then filed an amended complaint, which the trial court
dismissed with prejudice. The plaintiffs appealed.
A divided appellate court affirmed in part, reversed in part,
and remanded. 357 Ill. App. 3d 1. The appellate court
cataloged the statements in Start=s coverage of the Solaia
Technology litigation that, according to the plaintiffs,
constituted defamation per se. The appellate court held that
Start=s statement in April 2002 that Ainnocent companies@ have
been forced to defend themselves against Solaia Technology=s
infringement claims is capable of an innocent construction: A[I]t
is clear that the phrase >innocent companies= is referring not to
plaintiffs here, but to the companies that integrated what they
thought was a nonproprietary standard into their business
before it was revealed that a patent was owned on technology
that had been incorporated into the standard.@ 357 Ill. App. 3d
1 (contained in material unpublished under Supreme Court
Rule 23). With respect to Start=s statements that Adeeply
greedy people@ created the mess of Solaia Technology=s
infringement claims, and that Aspeculation and concern about
certain misdeeds are on the rise,@ the appellate court again
held that they are capable of an innocent construction. 357 Ill.
App. 3d 1 (contained in material unpublished under Supreme
Court Rule 23). According to the court, the deeply greedy
people whose misdeeds have spurred concern could be
Schneider Automation, its officers, the officers of other
companies filing infringement claims, or the lawyers who
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represent these other companies. 357 Ill. App. 3d 1 (contained
in material unpublished under Supreme Court Rule 23). With
respect to the industry veteran=s letter, the appellate court held
that it was an expression of opinion and therefore not
actionable. 357 Ill. App. 3d 1 (contained in material
unpublished under Supreme Court Rule 23). The appellate
court also held that Start=s statements regarding the Sherman
Act were not actionable because they were not false. 357 Ill.
App. 3d 1 (contained in material unpublished under Supreme
Court Rule 23).
The court then turned to the January 2003 cover article,
AConspiracy of a Shakedown.@ The court reviewed the common
law fair report privilege and section 611 of the first and second
Restatements of Torts. 357 Ill. App. 3d at 7-8. Relying upon
Newell v. Field Enterprises, Inc., 91 Ill. App. 3d 735 (1980), the
appellate court concluded that the fair report privilege attaches
when the complaint reported is filed. 357 Ill. App. 3d at 11. The
appellate court determined that the title was an accurate
summary of Rockwell Automation=s complaint, which contained
express allegations that Solaia Technology and NSHN
engaged in a shakedown scheme. 357 Ill. App. 3d at 8. The
court further determined that the title was fair because it did not
refer to Solaia Technology or NSHN:
A[T]here is nothing misplaced or omitted in the headline
of the article that would convey the impression that
Solaia or its law firm engaged in a >Conspiracy of a
Shakedown= to those who read it, and, accordingly, we
find that the headline was a fair abridgment of the
proceedings. *** [T]he remaining issue to be decided in
this case is whether Illinois law still allows allegations of
actual malice to defeat any claim of protection by the
fair report privilege.@ 357 Ill. App. 3d at 9-10.
The appellate court reviewed Catalano v. Pechous, 83 Ill.
2d 146 (1980), and noted that, since Catalano, there has been
a divergence of authority on this issue:
AAn examination of the Catalano decision reveals
that it is ultimately unclear as to whether the supreme
court chose to adopt section 611 of the Restatement
(Second) of Torts because the court never expressly so
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stated. However, regardless of whether our supreme
court adopted the Restatement (Second) of Torts=
approach, we read Catalano as holding that allegations
of actual malice defeat the privilege set forth in section
611, i.e., the fair report privilege.@ 357 Ill. App. 3d at 14.
The appellate court stated that the plaintiffs had adequately
pleaded actual malice. 357 Ill. App. 3d at 15. Accordingly, the
trial court erred in finding that the title AConspiracy of a
Shakedown@ did not support a claim for defamation. 357 Ill.
App. 3d at 15.
Finally, the appellate court addressed the plaintiffs=
argument that the Aoverriding point@ of Start=s coverage of the
Solaia Technology=s patent claims was defamatory. The court
stated that except for the headline AConspiracy of a
Shakedown,@ none of the challenged statements were
individually defamatory per se, and it consequently rejected the
plaintiffs= contention that their sum was defamatory. 357 Ill.
App. 3d 1 (contained in material unpublished under Supreme
Court Rule 23).
Justice Cahill wrote a special concurrence, in which he
agreed with the result, but stated that he would not have
addressed the fair report privilege with respect to the headline
AConspiracy of a Shakedown.@ 357 Ill. App. 3d at 16 (Cahill, J.,
specially concurring). According to Justice Cahill,
AThere is nothing in the text of the headline that would
leave the reader with an impression that the underlying
article reports on a complaint alleging unfair business
practices and conspiracy. Without reference to the
official proceeding, the reader is left with only one
conclusion: plaintiffs entered into an illegal conspiracy.
*** The headline in this case is known as a >catcher= or
>eye-stopper= in the media trade. Though sometimes
misleading, such headlines carry the reputational
weight, for whatever it is worth, of the media outlet. That
is why the headline in this case, if run in a newspaper or
magazine with no axe to grind, would have read
>Conspiracy of a Shakedown, Complaint Alleges.= It is of
little solace to plaintiffs that their names are not
identified in the headline or that the reader later learns
-17-
that the allegation comes from a privileged legal
document.@ 357 Ill. App. 3d at 16 (Cahill, J., specially
concurring).
We allowed the defendants= petition for leave to appeal. 177
Ill. 2d R. 315(a). We then allowed the Illinois Press Association,
the Chicago Tribune Company, the Copley Press, Inc., and the
Chicago Reader, Inc., to file an amicus curiae brief in support
of the defendants. 155 Ill. 2d R. 345.
ANALYSIS
A motion to dismiss under section 2B615(a) of the Code of
Civil Procedure (735 ILCS 5/2B615(a) (West 2002)) tests the
legal sufficiency of a plaintiff=s claim; a motion to dismiss under
section 2B619(a) (735 ILCS 5/2-619(a) (West 2000)) admits the
legal sufficiency of the plaintiff=s claim, but asserts certain
defects or defenses outside the pleading that defeat the claim.
See Provenzale v. Forister, 318 Ill. App. 3d 869, 878 (2001).
Under either section, our standard of review is de novo. See
Kedzie & 103rd Currency Exchange, Inc. v. Hodge, 156 Ill. 2d
112, 116 (1993).
In this appeal, the defendants argue that the appellate court
erred in holding that the fair report privilege could be trumped
by an allegation of actual malice. The plaintiffs respond that the
appellate court did not err in this regard, but it did err in holding
that the privilege applied at all because the defendant=s
statements were not a fair abridgement of the Rockwell
Automation antitrust complaint. In their request for cross-relief,
the plaintiffs also argue that the appellate court erred in holding
that various statements in the January 2003 issue of Start were
not defamatory.
To state a defamation claim, a plaintiff must present facts
showing that the defendant made a false statement about the
plaintiff, the defendant made an unprivileged publication of that
statement to a third party, and that this publication caused
damages. Krasinski v. United Parcel Service, Inc., 124 Ill. 2d
483, 490 (1988), citing Restatement (Second) of Torts '558
(1977). A defamatory statement is a statement that harms a
person=s reputation to the extent it lowers the person in the
eyes of the community or deters the community from
-18-
associating with her or him. Kolegas v. Heftel Broadcasting
Corp., 154 Ill. 2d 1, 10 (1992), citing Restatement (Second) of
Torts '559 (1977). A statement is defamatory per se if its harm
is obvious and apparent on its face. Owen v. Carr, 113 Ill. 2d
273, 277 (1986). In Illinois, there are five categories of
statements that are considered defamatory per se: (1) words
that impute a person has committed a crime; (2) words that
impute a person is infected with a loathsome communicable
disease; (3) words that impute a person is unable to perform or
lacks integrity in performing her or his employment duties; (4)
words that impute a person lacks ability or otherwise prejudices
that person in her or his profession; and (5) words that impute
a person has engaged in adultery or fornication. Van Horne v.
Muller, 185 Ill. 2d 299, 307 (1998), citing Bryson v. News
America Publications, Inc., 174 Ill. 2d 77, 88-89 (1996).
However, a statement that is defamatory per se is not
actionable if it is reasonably capable of an innocent
construction. Bryson, 174 Ill. 2d at 90. The so-called Ainnocent-
construction rule@ requires a court to consider the statement in
context and to give the words of the statement, and any
implications arising from them, their natural and obvious
meaning. Kolegas, 154 Ill. 2d at 11; John v. Tribune Co., 24 Ill.
2d 437, 442 (1962). A[I]f, as so construed, the statement may
reasonably be innocently interpreted or reasonably be
interpreted as referring to someone other than the plaintiff it
cannot be actionable per se.@ Chapski v. The Copley Press, 92
Ill. 2d 344, 352 (1982). A[A] statement >reasonably= capable of a
nondefamatory interpretation, given its verbal or literary
context, should be so interpreted. There is no balancing of
reasonable constructions ***.@ Mittelman v. Witous, 135 Ill. 2d
220, 232 (1989). That is, a court must interpret the words of the
statement Aas they appear[ ] to have been used and according
to the idea they were intended to convey to the reasonable
reader.@ Bryson, 174 Ill. 2d at 93, citing 33A Ill. L. & Prac.
Slander & Libel '12, at 25 (1970). When the defendant clearly
intended and unmistakably conveyed a defamatory meaning, a
court should not strain to see an inoffensive gloss on the
statement. Bryson, 174 Ill. 2d at 93; Chapski, 92 Ill. 2d at 350-
51.
-19-
Additionally, if a statement is defamatory per se, but not
subject to an innocent construction, it still may enjoy
constitutional protection as an expression of opinion. AUnder
the First Amendment there is no such thing as a false idea.
However pernicious an opinion may seem, we depend for its
correction not on the conscience of judges and juries but on
the competition of other ideas.@ Gertz v. Robert Welch, Inc.,
418 U.S. 323, 339-40, 41 L. Ed. 2d 789, 805, 94 S. Ct. 2997,
3007 (1974). However, there is no artificial distinction between
opinion and fact: a false assertion of fact can be defamatory
even when couched within apparent opinion or rhetorical
hyperbole. Bryson, 174 Ill. 2d at 99-100, citing Milkovich v.
Lorain Journal Co., 497 U.S. 1, 18-19, 111 L. Ed. 2d 1, 17-18,
110 S. Ct. 2695, 2705-06 (1990); Dubinsky v. United Airlines
Master Executive Council, 303 Ill. App. 3d 317, 324 (1999)
(Aexpressions of opinion may often imply an assertion of
objective fact and, in such cases, would be considered
actionable@). Indeed, A[i]t is well established that statements
made in the form of insinuation, allusion, irony, or question,
may be considered as defamatory as positive and direct
assertions of fact.@ Berkos v. National Broadcasting Co., 161 Ill.
App. 3d 476, 487 (1987). Similarly, A[a] defendant cannot
escape liability for defamatory factual assertions simply by
claiming that the statements were a form of ridicule, humor or
sarcasm.@ Kolegas, 154 Ill. 2d at 16. The test is restrictive: a
defamatory statement is constitutionally protected only if it
cannot be reasonably interpreted as stating actual fact.
Kolegas, 154 Ill. 2d at 14-15. Several considerations aid our
analysis: whether the statement has a precise and readily
understood meaning; whether the statement is verifiable; and
whether the statement=s literary or social context signals that it
has factual content. See Mittelman, 135 Ill. 2d at 243; Hopewell
v. Vitullo, 299 Ill. App. 3d 513, 518-19 (1998); see generally
Bryson, 174 Ill. 2d at 100-01; Restatement (Second) of Torts
'566 (1977). If a statement is factual, and it is false, it is
actionable.
The plaintiffs list several statements from the January 2003
issue of Start which they contend are defamatory per se: the
cover headline ACHAOS UPDATE: CONSPIRACY
-20-
SHAKEDOWN@; the reference in the cover article AConspiracy
of a Shakedown@ to the Sherman Act=s criminal provisions; the
assertion in that article that Rockwell Automation sued Niro
personally; the reference in that article to earlier issues of Start
covering the Solaia Technology litigation, particularly the
statement in the April 2002 issue of Start that Ainnocent
companies@ have been forced to defend themselves from
Adeeply greedy people@; and the industry veteran=s letter,
particularly the comment that the =318 patent was Aessentially
worthless@ and was being used to coerce settlements. Two of
these statementsBthe reference to earlier articles and the
comment in the industry veteran=s letterBdo not concern
Rockwell Automation=s antitrust complaint. We will address
these statements first, then address the other statements and
the fair report privilege.
The plaintiffs contend the reference to earlier articles was
defamatory because the earlier articles contained false
statements that the plaintiffs were using unfounded claims to
exact settlements. The plaintiffs specify that in the April 2002
article AChaos in Manufacturing,@ Start announced that
Ainnocent companies@ are being forced to defend themselves
from Adeeply greedy people.@ The appellate court found an
innocent construction to this statement: Ainnocent companies@
did not refer to the plaintiffs, and Adeeply greedy people@ could
refer to Schneider Automation, its officers, its attorneys, or
other companies filing infringement claims and their attorneys.
We find the appellate court=s reasoning unconvincing.
Certainly, Ainnocent companies@ does not refer to the plaintiffs,
but the natural and obvious implication of the entire passage
Athe innocent companies who are being forced to defend
themselves in this debacleBthe victims whose fate is fueling the
outrageBdeserve a lot of sympathy@ is that less-than-innocent,
less-than-sympathetic parties are victimizing them. Start
quickly identified these parties: Adeeply greedy people@ who aid
and abet Amarket mania.@ According to Start, Athere is certainly
a lot of finger-pointing going on and no one wants to take
responsibility for creating this legal nightmare.@ In an effort to
place responsibility, Start then attempted Ato explore in detail
-21-
each of the players and what they had hoped to
accomplished,@ noting in preface that Amany companies blame
Schneider@ and that A[t]heir anger is only being fanned by
Solaia=s lawsuits.@ Later in this article, Start stated that A[i]f
Solaia proves victorious, it clearly intends to turn its sights on
other prey.@
There is simply no innocent construction for this statement.
The defendants characterized the plaintiffs as deeply greedy
people, responsible for a legal nightmare, as well as
industrywide anger with patent enforcement lawsuits against
an increasing number of prey. This statement clearly impugns
the plaintiffs= integrity and thus falls within one of the
recognized categories of defamation per se. But it also falls
within the bounds of constitutionally protected opinion. The
phrase Adeeply greedy people@ has no precise meaning, and it
is not verifiable. Further, the context in which that phrase
appeared indicates that it may have been judgmental, but it
was not factual. This statement is not actionable.
The plaintiffs also contend that the comment in the industry
veteran=s letter was defamatory. See Barrett v. Fonorow, 343
Ill. App. 3d 1184, 1192 (2003) (noting that a newspaper may be
liable if a letter to the editor that it publishes contains a
defamatory statement), quoting J. Friedman & F. Buono,
Limiting Tort Liability for Online Third-Party Content Under
Section 230 of the Communications Act, 52 Fed. Comm. L.J.
647, 650-51 (2000); see generally 50 Am. Jur. 2d Libel &
Slander '256, at 517 (1995). The plaintiffs focus upon the
statement that the =318 patent was Aessentially worthless@ and
being used to generate settlement proceeds. The appellate
court held that this statement falls within the bounds of
constitutionally protected opinion.
Again, we disagree with the appellate court. Though the
phrase Aessentially worthless@ has no precise meaning in the
abstract, it has a very precise meaning in the context of the
letter. The industry veteran asked why Schneider Automation
sold the >318 patent to Solaia Technology for $1 Aplus a cut of
the settlements,@ while other companies declined to bid on it.
The industry veteran then stated, AThe answer is pretty clear if
-22-
you actually read the patent,@ to wit: Athis is an extremely
narrow patent.@ According to the industry veteran, Athe reason
why Schneider wanted to unload the patent and why none of
the [other] existing control companies wanted to buy it was
because the patent is essentially worthless.@ Thus, the letter
not only places a value on the patent, but bases this value on
an informed reading of the patent by the industry veteran. The
letter accuses the plaintiffs of filing infringement claims,
obviously, Ato make a lot of money,@ regardless of the means,
then compares their tactics to those of muggers armed with
baseball bats.
The letter undoubtedly employs hyperbole, but this
statement is not an opinion. Under its metaphorical chaff hides
a kernel of fact: Solaia Technology secured a worthless patent
and filed infringement claims with the sole aim of extracting
settlements. See Kumaran v. Brotman, 247 Ill. App. 3d 216,
228 (1993) (holding that a newspaper article suggesting the
plaintiff was Aworking a scam@ by filing Afrequent, unwarranted
lawsuits to procure pecuniary settlements@ was not an opinion
and thus actionable). The statement directly impugns the
plaintiffs= integrity by questioning the validity of the patent and
consequently the validity of Solaia Technology=s infringement
claims, and thus falls within one of the recognized categories of
defamation per se. We now turn to the remaining allegedly
defamatory statements, all of which concern Rockwell
Automation=s antitrust complaint, and thus implicate the fair
report privilege.
A defamatory statement is not actionable if it is privileged;
this is a question of law. See Layne v. Builders Plumbing
Supply Co., 210 Ill. App. 3d 966, 969 (1991). There are two
classes of privileged statements: those subject to an absolute
privilege, and those subject to a conditional or qualified
privilege. See Joseph v. Collis, 272 Ill. App. 3d 200, 210
(1995). The fair report privilege is a qualified privilege, which
promotes our system of self-governance by serving the public=s
interest in official proceedings, including judicial proceedings.
See Newell, 91 Ill. App. 3d at 744-45, citing Cox Broadcasting
Corp. v. Cohn, 420 U.S. 469, 491-92, 43 L. Ed. 2d 328, 347, 95
-23-
S. Ct. 1029, 1044-45 (1975). Section 611 of the second
Restatement of Torts provides: AThe 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 is privileged if the report is accurate
and complete or a fair abridgement of the occurrence
reported.@ Restatement (Second) of Torts '611 (1977). The
parties dispute whether this privilege can be defeated by
allegations of actual malice. 3
More than 20 years ago, the Seventh Circuit Court of
Appeals noted, AIllinois law is in disarray on the question
whether actual malice defeats the privilege of fair summary.@
Brown & Williamson Tobacco Corp. v. Jacobson, 713 F.2d 262,
272 (7th Cir. 1983). In Lulay v. Peoria Journal-Star, Inc., 34 Ill.
2d 112 (1966), we stated that section 611 of the first
Restatement of Torts Adefinitely expresses the prevailing, if not
unanimous, weight of judicial authority.@ Lulay, 34 Ill. 2d at 115.
Following that section, we held that the media enjoys a
privilege to report a defamatory statement made in a
government proceeding if the report is an accurate and
complete rendition or a fair abridgement of the proceedings,
and the report was not motivated by common law maliceBit was
not Aconceived or inspired solely because of a malicious design
to injure the plaintiff or his business.@ Lulay, 34 Ill. 2d at 115-16.
3
As the defendants note, the term Aactual malice@ means Aconstitutional
malice,@ as described in New York Times Co. v. Sullivan, 376 U.S. 254, 11
L. Ed. 2d 686, 84 S. Ct. 710 (1964). Actual or constitutional
maliceBsubjective awareness of the falsity or probable falsity of a
statementBis distinguishable from common law maliceBill will or intent to
harm. See Hustler Magazine v. Falwell, 485 U.S. 46, 53, 99 L. Ed. 2d 41,
50, 108 S. Ct. 876, 880-81 (1988).
-24-
In Catalano, we discussed Lulay, the first Restatement, and
the rule that the fair report privilege was Adefeasible if the
statement was made with malice, in the common law sense of
the term,@ i.e., the statement was intended to cause harm.
Catalano, 83 Ill. 2d at 167. We then noted, AWhen Lulay was
decided that limitation had of course been rendered obsolete
by New York Times v. Sullivan.@ Catalano, 83 Ill. 2d at 167. We
then quoted the second Restatement=s version of section 611,
in effect adopting it as our rule. Catalano, 83 Ill. 2d at 168.
The plaintiffs in Catalano did not argue that the report was
not accurate or fair. Instead, they argued that the fair report
privilege was inapplicable because the reporter did not hear the
defamatory statement at a governmental proceeding, but only
as later paraphrased by a government official. AThese points,@
we stated, Araise questions not addressed in Lulay@ and the fair
report privilege. Catalano, 83 Ill. 2d at 168. We held that the
plaintiffs did not show actual malice by the media defendants in
republishing the government official=s account of the
proceeding, as required by New York Times v. Sullivan.
Catalano, 83 Ill. 2d at 168, citing Restatement (Second) of
Torts '578 (1977). We did not incorporate actual malice into
the fair report privilege. See Tepper v. Copley Press, Inc., 308
Ill. App. 3d 713, 719 (1999); see also Hurst v. Capital Cities
Media, Inc., 323 Ill. App. 3d 812, 817-18 (2001). In fact, the first
amendment itself prevents actual malice from defeating the
privilege. See Gist v. Macon County Sheriff=s Department, 284
Ill. App. 3d 367, 376 (1996), citing Cohn, 420 U.S. 469, 43 L.
Ed. 2d 328, 95 S. Ct. 1029.
We hold that the fair report privilege overcomes allegations
of either common law or actual malice. As comment a to
section 611 explains,
AThe basis of this privilege is the interest of the public in
having information made available to it as to what
occurs in official proceedings and public meetings. ***
[T]he privilege exists even though the publisher himself
does not believe the defamatory words he reports to be
true and even when he knows them to be false. Abuse
of the privilege takes place, therefore, when the
-25-
publisher does not give a fair and accurate report of the
proceeding.@ Restatement (Second) of Torts '611,
Comment a, at 297-98 (1977).
Comment b states that the Constitution requires a
defamation plaintiff show that the defendant was at fault.
Restatement (Second) of Torts '611, Comment b, at 298
(1977). The fair report privilege in section 611 permits a
defendant to publish a report of an official proceeding even
though the defendant knows the report contains a false and
defamatory statement. Restatement (Second) of Torts '611,
Comment b, at 298 (1977). Accordingly, A[t]he constitutional
requirement of fault is met in this situation by a showing of fault
in failing to do what is reasonably necessary to insure that the
report is accurate and complete or a fair abridgment. *** If the
report of a public official proceeding is accurate or a fair
abridgment, an action cannot constitutionally be maintained.@
Restatement (Second) of Torts '611, Comment b, at 298
(1977).
Thus, the fair report privilege has two requirements: (1) the
report must be of an official proceeding; and (2) the report must
be complete and accurate or a fair abridgement of the official
proceeding. Here, the parties dispute whether Rockwell
Automation=s antitrust complaint itself is sufficient to satisfy the
first requirement.
Comment d to section 611 states that the fair report
privilege extends to the report of any official proceeding,
including proceedings before any court. Restatement (Second)
of Torts '611, Comment d, at 299 (1977). However,
A[a] report of a judicial proceeding implies that some
official action has been taken by the officer or body
whose proceedings are thus reported. The publication,
therefore, of the contents of preliminary pleadings[,]
such as a complaint or petition, before any judicial
action has been taken is not within the rule stated in this
Section. An important reason for this position has been
to prevent implementation of a scheme to file a
complaint for the purpose of establishing a privilege to
publicize its content and then dropping the action.@
-26-
Restatement (Second) of Torts '611, Comment e, at
300 (1977).
Comment c makes this clear:
AA person cannot confer this privilege upon himself
by making the original defamatory publication himself
and then reporting to other people what he had stated.
*** Nor may he confer the privilege upon a third person,
even a member of the communications media, by
making the original statement under a collusive
arrangement with that person for the purpose of
conferring the privilege upon him.@ Restatement
(Second) of Torts '611, Comment c, at 299 (1977).
In 1980, Illinois joined a growing trend, declining to place a
judicial-action limitation on the privilege. In Newell, the
appellate court weighed the arguments in favor of the majority
view that the privilege does not attach until judicial action has
occurred and the minority view that the privilege attaches when
the complaint is filed. Newell, 91 Ill. App. 3d at 745-46. The
court mentioned that the Seventh Circuit Court of Appeals
decided Illinois courts would adopt the minority view. Newell,
91 Ill. App. 3d at 746, citing American District Telegraph Co. v.
Brink=s Inc., 380 F.2d 131 (7th Cir. 1967). The appellate court
agreed, offering four distinct reasons. First, the filing of a
complaint is itself a public act. Newell, 91 Ill. App. 3d at 748.
Second, the privilege serves the public=s interest in the judicial
system, and this interest begins with the filing of a complaint.
Newell, 91 Ill. App. 3d at 746. Third, a judicial-action limitation
on the privilege would purportedly decrease the risk of
publishing scurrilous pleadings, but this limitation is ineffective:
ASimply because a suit has proceeded to the point where
judicial action of some kind has taken place does not
necessarily mean that the suit is less likely to be groundless
and brought in bad faith.@ Newell, 91 Ill. App. 3d at 747. Fourth,
the public has a sophisticated understanding of the court
system and is capable of evaluating information gleaned from a
complaint. Newell, 91 Ill. App. 3d at 747-48.
Though we have not previously noted our concurrence with
Newell, we do so now. We hold that there is no judicial-action
-27-
limitation on the fair report privilege in Illinois. Once Rockwell
Automation filed its antitrust complaint, Start could report any
defamatory statements in the complaint, provided it met the
second requirement of the fair report privilege.
Start=s coverage of the Rockwell Automation case was not
a complete and accurate rendering of a complaint, so we must
determine whether it was a fair abridgement. Gist, 284 Ill. App.
3d at 377 (Aone must either make a complete and accurate
report, or, if a summary is made, the summary must be >fair= for
the privilege to apply@). A fair abridgment means that the report
must convey to readers A >a substantially correct account.= @
Tepper, 308 Ill. App. 3d at 720, quoting Restatement (Second)
of Torts '611, Comment f, at 300 (1977). Comment f of the
second Restatement observes:
A[I]t is necessary that nothing be omitted or misplaced in
such a manner as to convey an erroneous impression to
those who hear or read it ***. The reporter is not
privileged under this Section to make additions of his
own that would convey a defamatory impression, nor to
impute corrupt motives to any one, nor to indict
expressly or by innuendo the veracity or integrity of any
of the parties.@ Restatement (Second) of Torts '611,
Comment f, at 300-01 (1977).
In this regard, a court must determine if the sting of the
defamatory statement in the proceeding is the same as the
sting of the defamatory statement in the report. See Myers v.
The Telegraph, 332 Ill. App. 3d 917, 923 (2002). If so, the
privilege defeats the defamation claim because the accuracy of
the summary is the Abenchmark of the privilege@; the report is
the public=s window to the proceeding. Gist, 284 Ill. App. 3d at
376, citing Restatement (Second) of Torts '611, Comment i, at
301 (1977); accord Maple Lanes, Inc. v. News Media Corp.,
322 Ill. App. 3d 842, 844 (2001), citing Dolatowski v. Life
Printing & Publishing Co., 197 Ill. App. 3d 23, 27 (1990); see
also Newell, 91 Ill. App. 3d at 749. 4
4
The appellate court stated that the Asting@ issue was forfeited because
the plaintiffs did not raise it until their reply brief. 357 Ill. App. 3d at 15,
-28-
citing Todt v. Ameritech Corp., 327 Ill. App. 3d 359, 369 (2002). In their
response brief below, the defendants argued that the sting of the
AConspiracy of a Shakedown@ article came from Rockwell Automation=s
antitrust complaint. The plaintiffs were entitled to counter. See 188 Ill. 2d
R. 341(g); Lieb v. Judges= Retirement System of Illinois, 314 Ill. App. 3d 87,
96 (2000) (APortions of a reply brief will not be stricken if the arguments
respond to arguments made in the appellee brief@).
-29-
We note that the defendants filed a combined motion to
dismiss, arguing in the alternative that the statements
challenged by the plaintiffs were not defamatory and that any
defamatory statements in the January 2003 issue fell within the
fair report privilege. Thus, with respect to the remaining
statements, we first must determine whether they were
defamatory. If they were, we then must determine whether the
fair report privilege applies, i.e., whether the statements were a
fair abridgement of Rockwell Automation=s antitrust complaint.
Start=s January 2003 cover headline ACHAOS UPDATE:
CONSPIRACY SHAKEDOWN@ and its cover story headline
AConspiracy of a Shakedown@ were not defamatory. As the
appellate court correctly observed, these headlines do not
directly refer to the plaintiffs. Nothing in the headlines leaves
the implication that the plaintiffs were involved in a conspiracy
or a shakedown. Even if we were to accept the argument made
in Justice Cahill=s concurrence and adopted by the plaintiffs
that the headlines were defamatory, they were a fair
abridgement of Rockwell Automation=s antitrust complaint.
ACHAOS UPDATE@ was a cue to Start=s readers that an article
in this issue would contain an update on the AChaos in
Manufacturing@ article from April 2002, as well as AThe Chaos
Deepens@ article from August 2002. ACONSPIRACY
SHAKEDOWN@ and AConspiracy of a Shakedown@ simply
borrow words from Rockwell Automation=s complaint.
According to the defendants, Rockwell Automation used a form
of the word Aconspiracy@ 25 times and the word Ashakedown@
three times in its complaint. The headlines do not identify the
plaintiffs as conspirators, and read together with the article
(see Harrison v. Chicago Sun-Times, Inc., 341 Ill. App. 3d 555,
570 (2003)), the headlines simply announce Start=s coverage
of Rockwell Automation=s complaint.
The statement in the AConspiracy of a Shakedown@ article
that Rockwell Automation sued Niro personally, charging him
with unfair business practices, impugned his integrity,
prejudiced his practice of law, and implied that he committed a
crime. It thus falls within several of the recognized categories
of defamation per se. See Hoeflicker v. Higginsville Advance,
-30-
Inc., 818 S.W.2d 650, 652-53 (Mo. Ct. App. 1991); see also
Weber v. Lancaster Newspapers, Inc., 2005 PA Super. 192,
&&29-34, 878 A.2d 63, 73-74. Further, this statement was not
a fair abridgement. It was baldly inaccurate. Even though Start
corrected its error in the very next sentence, Start perpetuated
this error throughout the article. In presenting Akey points@ from
Rockwell Automation=s complaint, Start quoted part of the
complaint=s first paragraph and stated: ARockwell claims that
Niro, in conjunction with Solaia and Schneider, >have made and
continue to make false and objectively-baseless claims of
patent infringements against numerous manufacturers.= @
Rockwell Automation=s complaint used ADefendants,@ rather
than ANiro, in conjunction with Solaia and Schneider.@ Start
later stated, AIn the end, Rockwell claims that Solaia,
Schneider, and Niro have specifically targeted Rockwell
customers to interfere with its relationship with both its actual
and prospective customers.@ 5
Finally, in describing how Niro personally inspired Rockwell
Automation to file its complaint, Start stated, ANiro anticipates
garnering total settlements in the range of $550 million to more
than $600 million, before his company ends its legal rampage.@
(Emphasis added.) Perhaps Start was referring to Niro=s limited
5
We note that in paragraph 38 of Rockwell Automation=s antitrust
complaint, Rockwell Automation stated, ASolaia and Niro identified
Rockwell products as the basis for their infringement claims.@ The
defendants have not brought this passage to our attention, but it does not
change our conclusion. This passage does not mean that Rockwell
Automation sued Niro personally, and it is likely that Niro, as a named
partner of the firm representing Solaia Technology, advised his client about
which companies may have infringed on the =318 patent.
-31-
liability company, NSHN, and not NSHN=s client, Solaia
Technology, but elsewhere in the article, Start used ANiro=s
firm,@ not Niro=s company. Start=s statement regarding Niro was
not a fair abridgement of Rockwell Automation=s complaint, and
the fair report privilege does not apply. Accordingly, the
plaintiffs= allegations regarding this statement survive.
Finally, the statement regarding the Sherman Antitrust Act
was defamatory. In its AConspiracy of a Shakedown@ article,
Start outlined Rockwell Automation=s complaint and stated,
ARockwell filed its complaint under federal antitrust laws: the
Sherman Antitrust Act, the Clayton Act, and Lanham Act.@
Start then added, AThe Sherman Antitrust Act outlaws all
contracts, combinations, and conspiracies that unreasonably
restrain interstate and foreign trade. *** The Sherman Act also
makes it a crime to monopolize or conspire with any person or
persons to monopolize any part of trade or commerce.@
(Emphasis added.) The appellate court correctly characterized
the statement as substantially true, but the plaintiffs did not
challenge the veracity of this statement standing alone.
Instead, they challenged the veracity of the implication left by
the statement, namely, they had committed a crime.
Rockwell Automation=s civil antitrust complaint did not
charge the plaintiffs with a crime. According to Rockwell
Automation, Solaia Technology, NSHN, and Schneider
Automation violated section 1 of the Sherman Antitrust Act by
contracting, combining, or conspiring to restrain trade in the
=318 patent, thus injuring competition and Rockwell
Automation. Rockwell alleged that the plaintiffs threatened,
instituted, and perpetuated a series of objectively baseless
infringement claims for financial gain, namely, pretrial
settlements. Rockwell Automation did not mention any criminal
proceedings. In fact, enforcement of section 1 of the Sherman
Antitrust Act is left to the United States Attorney (see 15 U.S.C.
'4 (2000)), and there is no indication in the record that such
proceedings against the plaintiffs were ever contemplated.
There is no innocent construction for this statement. The
natural and obvious implication of this statement is that the
plaintiffs committed a crime. The defendants assert that this
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statement was Aa summary for manufacturing company
executives who constitute Start=s readership of the basic
provisions of the federal antitrust laws,@ but they offer no
explanation why this summary did not include references to
other provisions more relevant to Rockwell Automation=s
complaint, e.g., section 15(a) of the Clayton Act, which
provides a private remedy for violations of the Sherman
Antitrust Act. See 15 U.S.C. '15(a) (2000) (any person who
shall be Ainjured [in his] business or property by reason of
anything forbidden in the antitrust laws *** may sue@ and
recover treble damages, interest, costs, and attorney fees).
Indeed, it is difficult to fathom why Start would make a
gratuitous reference to the criminality of conduct violating the
Sherman Antitrust Act after it had just noted that the statute
Aoutlaws@ such conduct.
Start=s statement regarding the Sherman Act implied that
the plaintiffs committed a crime, particularly when read with the
background of Start=s other coverage of Solaia Technology=s
infringement claims., 6 It thus falls within one of the recognized
6
In April 2002 Start created a narrative of innocent corporate victims
deserving sympathy against deeply greedy people who Aaid and abet@
maniacal markets, namely, Schneider Automation and Solaia Technology,
as well as ASolaia=s legal machine,@ Niro and NSHN. AAid and abet@ means
Aassist or facilitate the commission of a crime, or *** promote its
accomplishment.@ See Black=s Law Dictionary 76 (8th ed. 2004); see also
720 ILCS 5/5B2(c) (West 2002) (AA person is legally accountable for the
conduct of another when *** he *** aids, abets, agrees or attempts to aid,
such other person in the planning or commission of the [criminal] offense@).
In August 2002 Start labeled Solaia Technology=s infringement claims
as Alegal carnage,@ noting that Amany observers are frustrated that the patent
system is being used as a vicious legal weapon to generate revenue.@ Start
then noted that, while Solaia Technology=s attorneys in NSHN denied any
connection between Solaia Technology and Schneider Automation,
documents reveal Athe relationship between these companies might be more
intimately linked.@ Smedley hinted that Akey details@ in the Rockwell
Automation antitrust case Acontinue to be revealed. Speculation and concern
about certain misdeeds are on the rise.@ AMisdeed@ means Aa wrong deed: an
immoral or criminal action.@ See Webster=s Third New International
Dictionary 1443 (1986).
-33-
categories of defamation per se. However, we hesitate to
conclude that this statement falls outside the fair report
privilege. Cursory research would have revealed to Start that
the only section of the Sherman Antitrust Act cited in Rockwell
Automation=s complaint clearly states that a person found to
have violated the act is guilty of a crime:
A[E]very contract *** or conspiracy, in restraint of
trade or commerce among the several States *** is
declared to be illegal. Every person who shall make any
contract or engage in any combination or conspiracy
hereby declared to be illegal shall be deemed guilty of a
felony, and, on conviction thereof, shall be punished by
fine not exceeding $10,000,000 if a corporation, or, if
any other person, $350,000, or by imprisonment not
exceeding three years, or by both said punishments, in
the discretion of the court.@ 15 U.S.C. '1 (2000).
This section does not refer to prosecution of such violations,
but we cannot expect reporters to possess the same skills as
lawyers and to venture further into the filigree of federal
antitrust law, searching for a distinction between criminal and
civil enforcement actions. In light of the language of the statute,
we conclude that the statement was a fair abridgement of
Rockwell Automation=s antitrust complaint.
Plainly, freedom of the press is illusory if a cloud of
defamation liability darkens the media=s reports of official
Finally, in January 2003 Start published the industry veteran=s letter,
which observed, Athere are people in the world,@ like Johnny Cochrane, the
Washington, D.C., sniper, and Enron and WorldCom executives, Awho want
to make a lot of money and they don=t care how they do it.@ Start later
mentioned that Arumors have been flying around about the relationship that
exists between Solaia and Schneider.@
-34-
proceedings. See Krauss v. The Champaign News Gazette,
Inc., 59 Ill. App. 3d 745, 746-47 (1978) (AA robust and
unintimidated press is a necessary ingredient of self-
government@). We recognize that the media must have
Abreathing space@ (see Sullivan, 376 U.S. at 271-72, 11 L. Ed.
2d at 701, 84 S. Ct. at 721) in order to act effectively and
escape self-censorship. But we remind reporters it is objectivity
and civility that mark our finest journalism. Reports of official
proceedings must be as fair as they are ardent if they are to
help the public assess the value of our government in action.
Had Start=s statement regarding the Sherman Antitrust Act
strayed a bit farther from the statutory language, the implication
left by the statement would have been actionable.
In sum, we hold that the fair report privilege does not yield
to allegations that a media defendant reported with actual
malice false statements made in an official proceeding.
Further, we hold that there is no judicial-action limitation on the
fair report privilege in Illinois. Finally, we remand this cause to
the trial court, so the plaintiffs may proceed on their defamation
claims regarding the statement in the letter to the editor and
the statement that Niro was sued by Rockwell Automation.
CONCLUSION
For the reasons that we have stated, we affirm in part and
reverse in part the judgments below, and remand this cause to
the circuit court.
Judgments affirmed in part
and reversed in part;
cause remanded.
CHIEF JUSTICE THOMAS took no part in the consideration
or decision of this case.
JUSTICE FREEMAN, concurring in part and dissenting in
part:
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I agree with the majority=s conclusion that certain
statements made by defendants fall within one or more of the
recognized categories of statements that are defamatory per
se. I disagree, however, with the majority=s conclusion that the
fair report privilege shields defendants from liability for some of
the statements they made. Therefore, I write separately to
explain my position in this case.
The majority applies the fair report privilege to statements
that were based upon the bare and untested allegations of a
complaint. In my opinion, some action by the trial court is
necessary to trigger application of the fair report privilege.
Indeed, such a restriction on the fair report privilege is salutary
and preserves a proper balance between the individual=s right
to protect his reputation and the public=s interest in being
informed of court proceedings.
The majority=s willingness to apply the fair report privilege to
the statements at issue is particularly troubling when
considered in light of the court=s concurrent holding that a
showing of malice, whether actual malice or malice in fact, will
not defeat the defendants= claimed protection under the fair
report privilege. The majority=s holding invites collusion
between a party who files a frivolous complaint containing
defamatory statements and a defendant who publishes the
defamatory statements, with full knowledge of the falsity of the
statements but with equal certainty of protection through
application of the fair report privilege. Because I believe that
the majority does not strike the proper balance between the
rights of individual to their good reputation and the interest of
the public in being informed of court proceedings, I respectfully
dissent in part from the majority opinion.
ANALYSIS
At issue in this case is the proper balance between an
individual=s right to a good reputation and the public=s interest
in being informed of court proceedings. As the majority
recognizes, a defamatory communication violates an
individual=s right to a good reputation and gives rise to a cause
of action to recover damages for the violation. See J. Lee & B.
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Lindahl, Modern Tort Law '36:1, at 36B3 (2d ed. 2002); W.
Keeton, Prosser & Keeton on Torts '111, at 771 (5th ed.
1984). A defamatory statement becomes actionable when it is
actually communicated to a third person and understood by
that person as being defamatory. Modern Tort Law '36:4, at
36B9; Prosser & Keeton on Torts '113, at 797-98. When a
defamatory statement is published to a third person, that
person in turn may be liable for republication of the
communication to yet another individual. Modern Tort Law
'36:4, at 36B11.
Two classes of privileges have evolved as exceptions to the
general rule of liability for defamatory communications. Prosser
& Keeton on Torts ''114, 115. The first class encompasses
absolute privileges where immunity is conferred Aregardless of
motive and is based on the personal position or status of the
actor.@ Modern Tort Law '36:24, at 36B39. Statements made in
judicial proceedings are afforded immunity by absolute
privilege. Prosser & Keeton on Torts '114, at 816. It is
generally recognized that the fair and impartial administration
of judicial proceedings, the search for truth, and the vindication
of personal rights in legal proceedings may be fostered only
through Atotal freedom for the exchange of ideas@ (Modern Tort
Law '36:25, at 36B40) and, consequently, require absolute
immunity for statements made by judicial officers, attorneys,
parties, and witnesses in the proceedings.
The second class encompasses conditional or qualified
privileges where immunity is conferred because of Athe
occasion upon which the allegedly false statement is
published.@ Modern Tort Law '36:24, at 36B39. A conditional or
qualified privilege generally applies Awhere society=s interest in
compensating a person for loss of reputation is outweighed by
a competing interest that demands protection.@ Modern Tort
Law '36:32, at 36B47. See also Prosser & Keeton on Torts
'115, at 824. A conditional or qualified privilege may be lost if
the privilege is abused. Modern Tort Law '36:33, at 36B53;
Prosser & Keeton on Torts '115, at 832. As this court has
heretofore explained:
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AWhere no qualified privilege exists, the plaintiff need
only show that the defendant acted with negligence in
making the defamatory statements to prevail. [Citation.]
However, once a defendant establishes a qualified
privilege, a plaintiff must prove that the defendant either
intentionally published the material while knowing the
matter was false, or displayed a reckless disregard as to
the matter=s falseness.@ Kuwik v. Starmark Star
Marketing & Administration, Inc., 156 Ill. 2d 16, 24
(1993).
Thus, where a person publishes a statement with knowledge of
the falsity of the statement, a qualified privilege may not be
sufficient to shield the person from liability. Likewise, where a
person publishes a statement despite a high degree of
awareness of its probable falsity or despite entertaining serious
doubts as to truth of the statement, liability may not be
defeated by application of a qualified privilege. Kuwik, 156 Ill.
2d at 24-25; Mittelman v. Witous, 135 Ill. 2d 220, 237 (1989).
As the majority notes correctly, the fair report privilege falls
within the class of conditional or qualified privileges. Slip op. at
22. The privilege furthers the interest of the public to have
information about official proceedings and public meetings. In
Medico v. Time, Inc., 643 F.2d 134 (3d Cir. 1981), the court
explained the three rationales that have been used to justify
the fair report privilege. First,
Aan agency theory was offered to rationalize a privilege
of fair report: one who reports what happens in a public,
official proceeding acts as an agent for persons who
had a right to attend, and informs them of what they
might have seen for themselves. The agency rationale,
however, cannot explain application of the privilege to
proceedings or reports not open to public inspection.@
Medico, 643 F.2d at 140-41.
Second is a theory of public supervision:
A(The privilege is justified by) >the security which
publicity gives for the proper administration of justice. ...
It is desirable that the trial of causes should take place
under the public eye, not because the controversies of
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one citizen with another are of public concern, but
because it is of the highest moment that those who
administer justice should always act under the sense of
public responsibility and that every citizen should be
able to satisfy himself with his own eyes as to the mode
in which a public duty is performed.= @ Medico, 643 F.2d
at 141, quoting Cowley v. Pulsifer, 137 Mass. 392, 394
(1884).
The third rationale for the fair report privilege rests Aon the
public=s interest in learning of important matters.@ Medico, 643
F.2d at 142. The linchpin, however, is that the information
reported must be of some import. AMere curiosity in the private
affairs of others is of insufficient importance@ to warrant
granting the privilege. Note, Privilege to Republish Defamation,
64 Colum. L. Rev. 1102, 1111 (1964).
Looking at the theoretical underpinnings of the fair report
privilege, it is clear that the privilege serves the interest of the
public in information about governmental and court
proceedings. Where the public is not clearly entitled to the
information in question, such as where a meeting is not open to
the public, where the information is not fair and accurate, or
where the information is false, the interest of the public in such
information is less compelling, and protection of the plaintiff=s
right to his good reputation may call for a new balance. In my
opinion, the majority in the present case does not strike the
proper balance between the right of the plaintiffs to their
reputations and the interest of the public in obtaining
information about court proceedings.
The majority adopts the position of the Restatement
(Second) of Torts that the publication of defamatory matter
concerning another in a report of an official action or
proceeding is privileged. Slip op. at 22, citing Restatement
(Second) of Torts '611 (1977). As explained in comment d of
the Restatement (Second) of Torts:
AThe privilege covered in this Section extends to the
report of any official proceeding, or any action taken by
any officer or agency of the government of the United
States, or of any State or of any of its subdivisions.
-39-
Since the holding of an official hearing or meeting is in
itself an official proceeding, the privilege includes the
report of any official hearing or meeting, even though no
other action is taken. The filing of a report by an officer
or agency of the government is an action bringing a
reporting of the governmental report within the scope of
the privilege.
The privilege is thus applicable to the report of
proceedings before any court, whether it is one of
general or of special and limited jurisdiction.@
Restatement (Second) of Torts '611, Comment d, at
299 (1977).
Although the majority adopts the statement of the fair report
privilege outlined in '611, the majority rejects the limitation
imposed by comment e on the use of the fair report privilege.
See slip op. at 25. Instead, the majority concurs in the holding
of Newell v. Field Enterprises, Inc., 91 Ill. App. 3d 735 (1980),
that the fair report Aprivilege serves the public=s interest in the
judicial system, and this interest begins with the filing of a
complaint.@ Slip op. at 25. I disagree.
I believe the interests of the citizens of Illinois are better
served by adopting the position of the Restatement (Second) of
Torts. Comment e provides in part:
Ae. Necessity of official action in judicial proceedings.
A report of a judicial proceeding implies that some
official action has been taken by the officer or body
whose proceedings are thus reported. The publication,
therefore, of the contents of preliminary pleadings such
as a complaint or petition, before any judicial action has
been taken is not within the rule stated in this Section.
An important reason for this position has been to
prevent implementation of a scheme to file a complaint
for the purpose of establishing a privilege to publicize its
content and then dropping the action. (See Comment c).
It is not necessary, however, that a final disposition be
made of the matter in question; it is enough that some
judicial action has been taken so that, in the normal
progress of the proceeding, a final decision will be
-40-
rendered.@ Restatement (Second) of Torts '611,
Comment e, at 300.
The rationale for the restriction on the fair report privilege is
explained thus by a leading treatise:
AAn important field for the privilege is the reporting of
any judicial proceeding, no matter how inferior the
tribunal, and regardless of its jurisdiction over the
particular matter. The proceeding may be an ex parte
one, so long as some official action is taken, even
though it is only the holding of a hearing; but a mere
contemplated lawsuit not yet begun is clearly not
enough. Because of the opportunity afforded for
malicious public defamation and even extortion, through
suits begun and promptly discontinued, most courts are
agreed that some official action is essential to the
privilege. Thus it is the prevailing view, with some few
courts to the contrary, that a pleading or a deposition
filed in a case but not yet acted upon may not be
reported under the claim of privilege.@ Prosser & Keeton
on Torts '115, at 837.
I hasten to emphasize that under the approach advocated
in comment e and followed by a number of jurisdictions, the
public will gain access to information regarding the court
proceedings, and the policy consideration for providing such
access will be heeded. The issue, after all, is not whether the
public has an interest in information concerning the court
proceedings which is being denied. Rather, the issue is
whether a media defendant reporting on the court proceedings
may base its report on the bare, untested, and unsubstantiated
allegations of a complaint. When some official action has been
taken by the court in the proceedings, the media defendant will
be able to report on the proceedings, including the allegations
of the complaint. At that point, however, the media defendant
may have access to additional information which will allow it to
present a more balanced view of the court proceedings.
Further, the oversight of the proceedings provided by the court
and the possibility of sanctions for a frivolous complaint may
stay the hand of a plaintiff whose sole purpose is to defame an
-41-
innocent individual. The public=s interest in obtaining
information about the court proceedings will be met.
Concomitantly, the risk to the individual subjected to the
defamatory statements in the complaint will be minimized.
I agree with the observations made by the court in Sanford
v. Boston Herald-Traveler Corp., 318 Mass. 156, 159, 61
N.E.2d 5, 7 (1945), in balancing the interests in an action for
defamation:
APublic policy requires a glare of publicity upon the
doings of courts, even though individual litigants suffer
unmerited harm. But the publication of accusations
made by one party against another in a pleading is
neither a legal nor a moral duty of newspapers.
Enterprise in that matter ought to be at the risk of paying
damages if the accusations prove false. To be safe, a
newspaper has only to send its reporters to listen to
hearings rather than to search the files of cases not yet
brought before the court. The older doctrine of the
[Cowley v. Pulsifer, 137 Mass. 392 (1884)] and [Lundin
v. Post Publishing Co., 217 Mass. 213, 104 N.E. 480
(1914)] cases still seems to us well founded in principle
and without injustice in its practical operation. It is
supported by the great weight of authority in other
jurisdictions.@
See also Nixon v. Dispatch Printing Co., 101 Minn. 309, 312,
112 N.W. 258, 258 (1907) (A[I]f the filing of such a complaint
must be construed as a judicial proceeding within the rule
stated, then any one who happens to read the complaint after it
is filed is privileged to publish it ***. *** If such be the law, then
an easy and safe way has been provided whereby a party
desiring to libel another may do so with impunity by entitling the
libel in an action, labeling it a complaint, and filing it with the
clerk@). The majority here applies the fair report privilege to
statements that were based upon the bare and untested
allegations of a complaint. In my opinion, some action by the
trial court is necessary to trigger application of the fair report
privilege. Indeed, a restriction on the privilege preserves a
proper balance between the individual=s right to protect his
-42-
reputation and the public=s interest in being informed of court
proceedings. Under the watchful eye of the trial court, the risk
of collusion between the individual filing the frivolous,
defamatory complaint and the media outlet republishing the
defamatory allegations of the complaint is lessened.
The majority=s concurrent holding that malice, whether
actual malice or malice in fact, will not defeat a defendant=s
claimed protection under the fair report privilege only serves to
throw the balance further off. In Lulay v. Peoria Journal-Star,
Inc., 34 Ill. 2d 112 (1966), plaintiff proprietor of a combined
bakery, grocery store and restaurant in Peoria was cited by city
health officers for sanitary code violations. Plaintiff proprietor
satisfied the objections of the Department of Health and
received his food license. The following day, defendant
newspaper, after an interview with the director of the health
department, published the allegedly defamatory article. The
court first recognized that a privilege exists to report
government proceedings. Lulay, 34 Ill. 2d at 114-15. The court
then held:
AThe privilege to report governmental acts or
utterances can only be defeated by proving that a
particular publication was motivated solely by actual
malice. [Citations.] As expressed in the Restatement of
Torts, section 611, a publication reporting government
proceedings is nonactionable unless published >solely
for the purpose of causing harm to the person defamed.=
@ Lulay, 34 Ill. 2d at 115.
Although the Lulay court spoke in terms of actual malice, the
definition the court provided, that is, a communication made
solely for the purpose of causing harm to the person defamed,
was that of common law malice or malice in fact.
The court=s holding in Lulay was followed in Coursey v.
Greater Niles Township Publishing Corp., 40 Ill. 2d 257, 261
(1968), where the court observed:
AWith respect to defendant=s contention that the
article was a privileged comment on quasi-judicial
proceedings, the appellate court correctly stated the
controlling principle as expressed in the Restatement of
-43-
Torts, '611, that a newspaper is privileged to report the
activities of a >municipal corporation or of a body
empowered by law to perform a public duty *** although
it contains matter which is false and defamatory, if it is
(a) accurate and complete or a fair abridgement of such
proceedings, and (b) not made solely for the purpose of
causing harm to the person defamed.= @
In Catalano v. Pechous, 83 Ill. 2d 146 (1980), the court
considered whether the plaintiffs, seven of the eight aldermen
that comprised the city council of Berwyn, could maintain an
action for a defamatory statement allegedly made by defendant
Pechous at a council meeting, repeated by Pechous several
months later to a reporter, and quoted by the reporter in a
newspaper article. The plaintiffs argued the fair report privilege
did not apply because the reporter did not attend the council
meeting; the article was not published until five months after
the council meeting; the article was based on an account given
by Pechous; and not all of the statements by Pechous which
appear in the article were made at the meeting. In discussing
the concept of malice, the Catalano court noted that the Lulay
court had actually defined common law malice, that is, a
statement made for the purpose of causing harm to the person
defamed, in holding that malice defeats the fair report privilege.
Catalano, 83 Ill. 2d at 168. In the wake of New York Times Co.
v. Sullivan, 376 U.S. 254, 11 L. Ed. 2d 686, 84 S.Ct. 710
(1964), however, recovery for a defamatory statement
concerning a public official may be allowed only upon a
showing of actual malice, that is, Aonly if it is established both
that the utterance was false and that it was made with
knowledge of its falsity or in reckless disregard of whether it
was false or true.@ Catalano, 83 Ill. 2d at 155. The Catalano
court then observed that it need not decide whether, as argued
by the plaintiffs, the fair report privilege did not apply to the
statement at issue in the first instance. The plaintiffs, all public
officials, were not able to show actual malice on the part of the
newspaper defendants, as required by New York Times.
Catalano, 83 Ill. 2d at 168-69.
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The majority rejects the holding of Lulay, and presents
Catalano as support for its holding that a showing of malice,
whether actual malice or common law malice, will not defeat
application of the fair report privilege. The majority=s analysis is
overly dependent on Catalano, however. The Catalano court
itself noted it was not holding that the fair report privilege
applies where the individual claiming the privilege knew of the
statement=s falsity. The Catalano court observed:
AWe think it is also appropriate to state that in
holding that Pechous is liable and that the other
defendants are not, we are not, as the plaintiffs assert,
applying different standards, and we are not indicating
approval of the position taken by the court in Edwards v.
National Audubon Society, Inc. (2d Cir. 1977), 556 F.2d
113, cert. denied (1977), 434 U.S. 1002, 54 L. Ed. 2d
498, 98 S. Ct. 647, that a newspaper, under some
circumstances, is protected against liability in reporting
a defamatory statement about a public official or public
figure even if the newspaper knew that the statement
was false.@ Catalano, 83 Ill. 2d at 170.
The majority=s analysis enjoys greater support in the
Restatement (Second) of Torts. See Restatement (Second) of
Torts '611, Comment b, at 298 (1977).
The majority=s decision on the issue of malice provides
timely guidance for the Illinois courts. As noted by the majority,
Illinois law has been in disarray as to whether a showing of
malice defeats the fair report privilege. Slip op. at 22. Compare
Lykowski v. Bergman, 299 Ill. App. 3d 157 (1998) (following
Lulay and holding the privilege may be defeated by a showing
of malice); Kumaran v. Brotman, 247 Ill. App. 3d 216 (1993);
Reed v. Northwestern Publishing Co., 129 Ill. App. 3d 133
(1984); Emery v. Kimball Hill, Inc., 112 Ill. App. 3d 109 (1983);
Nagib v. News-Sun, 64 Ill. App. 3d 752 (1978); Colucci v.
Chicago Crime Comm=n, 31 Ill. App. 3d 802 (1975), with
Snitowsky v. NBC Subsidiary (WMAQ-TV), Inc., 297 Ill. App.
3d 304 (1998) (fair report privilege applies if the report is
accurate and complete or a fair abridgment of the occurrence
reported); Gist v. Macon County Sheriff=s Department, 284 Ill.
-45-
App. 3d 367 (1996). See also Berkos v. National Broadcasting
Co., 161 Ill. App. 3d 476, 493 (1987) (Presiding Justice
McMorrow, writing for the court, collecting cases and
observing: Athe question of whether the common law fair report
privilege can be forfeited upon a showing that the defendant
acted either with common law >express malice= or constitutional
law >actual malice,= where the news media has falsely defamed
a public official, a public figure, or a private figure with respect
to a matter of >public concern,= is apparently unsettled because
of conflicting Illinois precedent@). Without venturing into the
fray, I note simply that the majority=s holding that a defamatory
report is privileged if based on the contents of a complaint is
exacerbated by the concurrent holding that malice does not
defeat the fair report privilege.
It should be remembered that a plaintiff in a judicial
proceeding enjoys an absolute privilege for defamatory
statements he makes in the proceedings. As explained in a
leading treatise, the privilege Adoes not depend for its existence
upon the good faith of the defamer. An absolute privilege
confers immunity regardless of motive and is based on the
personal position or status of the actor.@ Modern Tort Law
'36:25, at 36B40. To allow a newspaper to publish the
defamatory statements the plaintiff includes in his complaint,
and to give the newspaper immunity when the newspaper is
aware of the falsity of the allegations in the plaintiff=s complaint,
is to degrade the right of the defamed individual to his good
reputation without real necessity. What damage a plaintiff
causes to the defamed individual by including defamatory
statements in a complaint will be multiplied exponentially by
publication of the defamatory statements in a newspaper. A
complaint in a court proceeding will go unnoticed by the vast
majority of the citizens of our state. Defamatory statements
broadcast in a newspaper or other media outlet may magnify
both the reach and the sting of the defamatory statements. A
private individual in particular most likely will not have the
resources to counter the defamatory allegations when they are
given voice in a media outlet.
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Again, the trade-off is not between affording a defamed
individual the right of redress and denying the public=s interest
in access to information concerning judicial proceedings.
Rather, the trade-off is between protecting the right of the
individual to his good reputation and delaying, for a short time,
publication of information about the court proceedings. I note
that numerous jurisdictions that have considered the issue at
bar have drawn a more appropriate balance, holding either that
the fair report privilege does not extend to a report based on
the contents of a complaint, or that the fair report privilege may
be defeated by a showing of malice. See Quigley v. Rosenthal,
327 F.3d 1044 (10th Cir. 2003) (applying Colorado law and
holding that the fair report privilege does not apply to the
reporting of the contents of pleadings before any judicial action
has taken place); Stem v. Gannett Satellite, Information
Network, Inc., 866 F. Supp. 355 (W.D. Tenn. 1994) (applying
Tennessee law, court held that privilege applied to affidavit that
was filed in court and became part of the judicial proceeding,
but actual malice would defeat application of the privilege);
Parsons v. Age-Herald Pub. Co., 181 Ala. 439, 61 So. 345
(1913) (court action is required and publication must be without
malice); Johnson v. Johnson Publishing Co., 271 A.2d 696,
698 (D.C. 1970) (AIf the publication fairly and accurately
repeats the wife=s assertions as contained in the complaint, the
defense of qualified privilege is available to appellee absent
proof that the article was published with malice@); Murphy v.
Maui Publishing Co., 23 Haw. 804 (1917) (court action is
required for application of fair report privilege); Flues v. New
Nonpareil Co., 155 Iowa 290, 135 N.W. 1083 (1912) (official
action is required and publication cannot be made with malice);
Paducah Newspapers, Inc. v. Bratcher, 274 Ky. 220, 118
S.W.2d 178 (1938) (fair report privilege applies to report based
on a complaint if the report is made without malice); Sanford,
318 Mass. 156, 61 N.E.2d 5 (official action is required); Park v.
Detroit Free Press Co., 72 Mich. 560, 568, 40 N.W. 731, 734
(1888) (AIf pleadings and other documents can be published to
the world by any one who gets access to them, no more
effectual way of doing malicious mischief with impunity could
be devised than filing papers containing false and scurrilous
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charges, and getting those printed as news.); Nixon, 101 Minn.
at 313, 112 N.W. at 259 (Aa complaint or other pleading in a
civil action, which has never been presented to the court for its
action, is not a judicial proceeding within the rule@); Brown v.
Globe Printing Co., 213 Mo. 611, 112 S.W. 462 (1908) (court
action is required for application of the fair report privilege);
Cox v. Lee Enterprises, Inc., 222 Mont. 527, 723 P.2d 238
(1986) (fair report privilege applies to a report that is based on
a complaint, but the report must be made without malice); Fitch
v. Daily News Publishing Co., 116 Neb. 474, 217 N.W. 947
(1928) (court action is required and publication must be done
without malice); Costello v. Ocean County Observer, 136 N.J.
594, 643 A.2d 1012 (1994) (official action is required and a
showing of malice will defeat the privilege); McCurdy v.
Hughes, 63 N.D. 435, 447, 248 N.W. 512, 516 (1933)
(observing that numerous cases have held Athat the rule of
privilege does not apply to pleadings which, though filed, have
not yet received judicial notice@); Pollock v. Rashid, 117 Ohio
App. 3d 361, 690 N.E.2d 903 (1996) (the publication of a fair
report of a pleading is privileged unless the report was
published maliciously); Mannix v. Portland Telegram, 144 Or.
172, 23 P.2d 138 (1933) (court action is required for application
of fair report privilege); Weber v. Lancaster Newspapers, Inc.,
2005 Pa. Super. 192, 878 A.2d 63 (2005) (fair report privilege
applies to pleadings but malice in fact will defeat application of
the privilege); Williams v. Black, 24 S.D. 501, 510, 124 N.W.
728, 732 (1910) (stating general rule that A >the publication of
the contents of a petition or of other pleadings or papers filed in
civil proceedings before trials or before any action has taken
place on such pleadings or papers by the court is not
privileged= @), quoting 25 Cyc. 406, 407; Baten v. Houston Oil
Co., 217 S.W. 394, 398 (Tex. Civ. App. 1919) (statute
declaring a fair, true, and impartial account of court
proceedings Aprivileged[ ] does not justify the publication of a
libelous written pleading, properly filed, upon which no action
by the court, judge, or any other officer has been taken@);
Russell v. Thomson Newspapers, Inc., 842 P.2d 896 (Utah
1992) (official action required and report must be made without
malice); O=Brien v. Tribune Publishing Co., 7 Wash. App. 107,
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117, 499 P.2d 24, 30 (1972) (AA newspaper has a qualified or
conditional privilege to report legal proceedings provided the
publication is a fair and accurate statement of the contents and
is made without malice@); Ilsley v. Sentinel Co., 133 Wis. 20,
113 N.W. 425 (1907) (official action required).
CONCLUSION
I cannot join fully in today=s opinion. I believe the opinion
does not strike a proper balance between an individual=s right
to his good reputation and the public=s interest in information
regarding court proceedings. The majority applies the fair
report privilege to statements that were based upon the bare
and untested allegations of a complaint. In my opinion, some
action by the trial court is necessary to trigger application of the
fair report privilege. Indeed, a restriction is salutary, forestalling
possible collusion between an individual who files a frivolous
complaint and the media defendant who republishing the
allegations of the complaint. As explained by the court in Ilsley,
133 Wis. at 24-26, 113 N.W. at 426-27:
AThe whole foundation for that privilege is the interest of
the public to know the conduct of judicial officers and
legislators, to the end that misconduct or incapacity may
be promptly discovered and remedied. ***
***
The fundamental reason is the same which
demands that proceedings of courts and legislatures
shall be open to the public. [Citations.] When this
reason is understood, it obviously fails wholly to justify
publication of defamatory contents of mere pleadings
and other preliminary papers which have simply been
filed in the clerk=s office. In those the public have no
concern until they are actually brought to the attention of
some judicial officer and some action on his part is
demanded based thereon. *** The fact that any one who
wishes may, on other grounds, have access to such
papers for examination, if any such right exists, has no
bearing on the question. The degree of publicity likely to
be so accomplished is trifling in comparison with general
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publication, and, at best, results incidentally from a
public policy of nondiscrimination by a mere clerk which
is in no wise promoted by spreading abroad the
information which one may acquire by such inspection.
In absence of dominating public interest, surely the
individual ought not to be subjected to such assaults
upon his character and reputation as may result from
general publication of charges which may thus be
made. The author of a pleading is broadly privileged in
asserting his claims against his opponent, and may, and
often does, make the most damaging charges with little
or no foundation. He may make them with no
expectation of proving them, nay, with no purpose of
ever proceeding further with his action, and yet furnish
most salacious matter for the enterprising reporter upon
whose industry the pleader may indeed have counted to
render his charges effective to injure his opponent
before the public, though he never expected any effect
for them in court.@
In my opinion, comment e to the Restatement (Second) of
Torts carves out a proper balance between the individual=s
right to protect his reputation and the public=s interest in being
informed of court proceedings and should be followed by this
court. In light of the foregoing, I respectfully dissent in part from
the majority opinion.
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Solaia Technology v. Specialty Publishing
Combined Opinion