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N&O loses appeal of $6 million libel verdict in SBI agent’s lawsuit

Photo by Getty Images
Photo by Getty Images

A state appeals court has ruled in favor of an agent in the N.C. State Bureau of Investigation who had sued The News & Observer for libel and won $6 million from a Wake County jury after a 2016 trial that lasted more than three weeks.

A panel of three judges on the N.C. Court of Appeals on Tuesday unanimously rejected the newspaper’s appeal of the jury’s 2016 decision, in which the jury found that The N&O and reporter Mandy Locke libeled a public official and caused her to experience post-traumatic stress disorder.

The appeals court said that the more than 8,500 pages of court evidence from the trial “tended to show that the primary objective of defendants [the N&O] was sensationalism rather than truth.”

James Johnson, the attorney for SBI agent Beth Desmond, praised the court’s decision.

“My client has been struggling with all of the fallout caused by publication of the articles for the past eight years,” Johnson said by email. “She is just very relieved that the Court of Appeals has affirmed the jury’s verdict.”

The N&O had argued on appeal that Desmond failed to prove her defamation case under the state’s stringent legal standards and that the staggering amount of the verdict would stifle aggressive news coverage of public officials.

The N&O plans to appeal to the N.C. Supreme Court, but the high court is not obligated to accept the case if the appeals court decision is unanimous. Desmond, 53, filed the suit in 2011, and still works at the SBI.

“This case is enormously important because it involves the N&O’s reporting on the performance of a badge-wearing state government official, which is protected by the First Amendment,” said the N&O’s lawyer, John Bussian, in a phone interview. “The N&O continues to believe, as it has argued from the beginning, that the verdict should be overturned.”

At the appeals court, several news organizations told the court that if Desmond’s $6 million case is allowed to stand, it would cause “intolerable self-censorship” by journalists who hold back on controversial articles out of fear for potential lawsuits. The media groups also said in court filings that “the verdict in this case is particularly dangerous because its crippling size will weigh on the shoulders of all North Carolina news organizations.”

But the court’s three-judge panel said in a 56-page ruling that the freedom of the press must be balanced against the right of citizens to protection from having their reputations ruined by a news report that is “false or a reckless disregard for the truth.”

“But there is a limit, and here plaintiff [Beth Desmond] presented substantial and voluminous evidence that defendants [the N&O] exceeded that limit,” in the ruling written by Judge Donna Stroud and joined by judges Valerie Zachary and Hunter Murphy.

“We agree this case presents issues of critical importance not just to journalists but to all citizens and residents of North Carolina and to our court system,” the N.C. Appeals Court said. “Plaintiff [Beth Desmond] is a public official, and the articles published by defendants [the N&O] addressed issues of public concern, so she was required to prove her case to the very highest of standards.”

Desmond said at trial and on appeal that she was libeled five times in an April 2010 article by reporter Locke and once in a December 2010 article by reporter Joseph Neff. Both Neff and Locke, as well as investigative editor Steve Riley, have since left the N&O.

In the original article, Locke wrote that experts questioned the reliability of Desmond’s lab analysis of bullet fragments in a 2006 Pitt County murder case involving the shooting of a 10-year-old boy. According to Locke’s article, these experts “question whether Desmond knows anything about the discipline.” Locke also wrote that “some suspect she [Desmond] falsified the evidence” to help prosecutors win a conviction. In Locke’s story, one expert is quoted as asking “whether she [Desmond] did an analysis at all.”

Desmond contended that the N&O story accused her of committing a crime and put the allegation in the mouths of experts by means of misquoting them. When asked about this at trial, the experts said they were not criticizing Desmond’s forensics work in their interviews with Locke, but rather making general statements about the limitations of forensics as a science to trace bullet fragments back to a specific gun.

The N&O argued at trial that Locke reasonably interpreted the statements from the experts to reach an independent conclusion.

As the appeals court summed up the libel trial: “The accusation was that plaintiff [Desmond] fabricated the evidence in her report, perjured herself in her testimony in a murder trial, and intentionally or recklessly contributed to a possible wrongful conviction of an innocent person, with the logical corollary that the actual murderer would remain free to commit more crimes.”

After the trial, the jurors awarded Desmond $1.5 million in compensatory damages and $7.5 million in punitive damages against the paper, as well as $75,000 in punitive damages against Locke. But the Wake County Superior Court reduced the punitive damages against the paper to $4.5 million in accordance with a state law that limits such damages.

One of the disputes in the case was over what constitutes truth in a libel case. Desmond’s lawyer, Johnson, argued that Locke falsely attributed statements to sources who never said what Locke quoted them as saying. But the N&O said the attribution issue was a red herring, and what really mattered was the truth of the underlying statements about Desmond’s lab work, which the N&O defended as protected by the First Amendment.

The appeals court agreed with Desmond’s lawyer the two issues are connected: “Certainly, the truth or falsity of the underlying statements is important, but in this case, all the evidence tends to show that the statements are in fact false.”

The N&O argued from the start that the First Amendment grants a journalist the freedom of reaching independent interpretations, even if the interpretations are disputed, as long as the journalist believes the information and interpretations are true.

The appeals court said that the question of whether Locke genuinely believed she was telling the truth is not for her or the appeals court judges to decide; it is the jury’s decision. After all, Locke was merely a witness in the case, and her credibility was a matter for the jury to assess. And in the final analysis, the jury decided Locke either knew the statements she was reporting were false, or published them with “reckless disregard of whether [they were] false or not,” the court concluded.

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