U.S. Supreme Court Adds "Relevant Reader or Listener" to "Material Falsity" Defamation Analysis

HIGHLIGHTS:

• In its decision in Air Wisconsin Airlines Corp. v. Hoeper, the U.S. Supreme Court has ruled that "the relevant reader or listener" must be considered in assessing the falsity element in defamation lawsuits.
• The Air Wisconsin ruling could lead to greater opportunities for the early dismissals of defamation claims.

The United States Supreme Court, in a non-media defamation ruling, has held that courts must now consider "the relevant reader or listener" in considering the falsity element in defamation lawsuits. The decision could strengthen defenses to all defamation claims, especially in the increasing specialization of media audiences in the digital era.

Background

The Court's pronouncement yesterday in Air Wisconsin Airlines Corp. v. Hoeper overturned a Colorado jury's $1.2 million verdict in favor of a former pilot. The airline in 2004 had called TSA to report that pilot William Hoeper failed a flight-certification test, lost his temper with the instructor and left for the airport to catch a plane home. According to the Court's ruling, Air Wisconsin told the Transportation Security Administration (TSA) that Hoeper, who was licensed to carry a weapon on board, "may be armed," that the airline "was concerned about his mental stability and the whereabouts of his firearm" and that he was an "unstable pilot" who "was terminated today."

The Supreme Court Rules Statute Requires "Material Falsity"

The Court unanimously disagreed with the Colorado courts' legal analysis. The majority of the Justices held that the statements were protected under the immunity Congress provided to airlines under the Aviation and Transportation Security Act (ATSA), which ends the litigation. Three dissenting Justices, however, would have sent the decision back to Colorado for further proceedings.  

Congress granted broad protection under the ATSA, passed following 9/11, when airlines report potential security threats to TSA. The statute adopted the "actual malice" standard from the 1964 landmark defamation ruling New York Times v. Sullivan and expressly provides that immunity will not protect a statement made "with actual knowledge that the disclosure was false, inaccurate or misleading" or "with reckless disregard as to the truth or falsity of that disclosure."

The Court agreed with the airline that the actual malice standard also meant that Hoeper had to establish the material falsity of the statements, a different element of the defamation claim — the purpose of the statute itself, removing hesitation in swiftly reporting to TSA, made that clear. "It would defeat this purpose to deny immunity for substantially true reports, on the theory that the person making the report had not yet gathered enough information to be certain of its truth."

"Material Falsity" Looks at Audience Context

The Court then noted that under its leading 1991 ruling Masson v. New Yorker Magazine, Inc., "material falsity" turns on whether the literal truth, as compared with the statements at issue, "would have a different effect on the mind of the reader." The majority expanded on that standard in Hoeper:

"But the identity of the relevant reader or listener varies according to context. In determining whether a falsehood is material to a defamation claim, we care whether it affects the subject's reputation in the community. In the context of determining ATSA immunity, by contrast, we care whether a falsehood affects the authorities' perception of and response to a given threat."

Under the ATSA, the Court held an airline should be protected "absent a substantial likelihood that" the intended audience, which the Court identified as "a reasonable security officer" would view the difference between the literal truth and the report "important in determining a response to the supposed threat." Otherwise, the statement is not "materially false" and therefore immune.

The majority of the Justices, examining Air Wisconsin's statements under the new standard, held that the airline’s report was protected under the ATSA because they were not materially false:

• The statement that Hoeper was a licensed flight officer "who may be armed" was literally true.
• The statement that Hoeper "was terminated today" was not materially different than the literal truth — the airline had made plans to fire him but had not yet done so — because "[n]o reasonable TSA officer" would care if he "had just been fired or merely knew he was about to meet that fate."
• The statement that Hoeper was "unstable" or that Air Wisconsin was concerned about his "mental stability" was not materially different had the airline instead reported that "in a professional setting" Hoeper "blew up" at the instructor.
• The statement about Hoeper's "mental stability" also, according to the Court, "accurately conveyed 'the gist' of the situation." Air Wisconsin employees "did harbor concerns about Hoeper's mental state: They knew he had just 'blown up,' and they worried about what he might do next."

A Partial Dissent

Justice Antonin Scalia partially dissented in an opinion joined by Justices Clarence Thomas and Elena Kagan. Although the dissenters agreed with the majority on the legal standard, Justice Scalia wrote that from the facts, a Colorado jury could find Hoeper had stated a valid claim of material falsity in Air Wisconsin's report of an arguably "brief, run-of-the-mill, and arguably justified display of anger" that did not cause anyone "to view him as either irrational or a potential source of violence." The statute, to the dissenters, makes it "all the more important for the airline to make an accurate report to TSA."

Possible Implications for Future Defamation Claims

While the Court's ruling came in a narrow case interpreting immunity under a statute, its focus on the precise audience for the statements breaks new ground and does not appear to be limited to ATSA cases. In this era of increasingly niche social media, website, and legacy media publications and broadcasts, the Air Wisconsin v. Hoeper decision may provide more opportunities for the early dismissals of defamation claims.

Read a Holland & Knight account of the Air Wisconsin ruling that looks at its implications for the airline industry, including determining immunity under the Aviation and Transportation Security Act (ATSA).

Holland & Knight Partners Jerrold J. Ganzfried and Judith R. Nemsick filed an amicus curiae brief on behalf of DRI – The Voice of the Defense Bar, an organization of defense attorneys and in-house counsel that supported Air Wisconsin in this case.