DiPaolo, D. v. Times Publishing

J. A04011/16

2016 PA Super 125

DOMINICK D. DiPAOLO : IN THE SUPERIOR COURT OF

: PENNSYLVANIA

v. :

:

TIMES PUBLISHING COMPANY, D/B/A :

ERIE TIMES NEWS, CYBERINK, LP, :

D/B/A GOERIE.COM, LISA THOMPSON, :

EDWARD PALATELLA JR., AND :

MICHAEL MACIAG, : No. 1713 WDA 2014

:

Appellants :

Appeal from the Order, October 10, 2014,

in the Court of Common Pleas of Erie County

Civil Division at No. 14004-2011

BEFORE: FORD ELLIOTT, P.J.E., BENDER, P.J.E., AND SHOGAN, J.

OPINION BY FORD ELLIOTT, P.J.E.: FILED JUNE 15, 2016

Appellants, Times Publishing Company, d/b/a Erie Times News

(“Times”); Cyberink, LP, d/b/a GoErie.com (“Cyberlink”); Lisa Thompson

(“Thompson”); Edward Palatella Jr. (“Palatella”); and Michael Maciag

(“Maciag”) appeal from the October 10, 2014 order entered in the Court of

Common Pleas that granted the motion to compel of appellee, Dominick D.

DiPaolo (“Judge DiPaolo”). We affirm.

The record reflects that Judge DiPaolo, a magisterial district judge,

filed a three-count complaint alleging libel with respect to a series of print

and online articles and blogs published on November 14, 2010;

November 28, 2010; April 16, 2011; and April 17, 2011. Times and

J. A04011/16

Cyberlink are business entities that publish the Erie Times News

newspaper and GoErie.com, an online newspaper. These business entities

employ the individual appellants Thompson, Palatella, and Maciag as

reporters, journalists, writers, and/or bloggers.

The events that gave rise to this appeal took root on October 28,

2010, when the Office of the Pennsylvania Attorney General

(“Attorney General”) initiated an action against Unicredit America

Incorporated (“Unicredit”), an Erie-based debt-collection company. The

complaint alleged that Unicredit engaged in certain debt-collection activities

that violated various Pennsylvania consumer-protection laws, as well as the

Pennsylvania Rules of Civil Procedure. The Attorney General also averred

that Unicredit improperly filed numerous civil actions in Judge DiPaolo’s

magisterial district office and then obtained judgments against most of the

defendant debtors. The Attorney General further alleged that in an attempt

to pressure the defendant debtors to satisfy judgments, Unicredit conducted

fake post-judgment proceedings in a fake courtroom presided over by a fake

judge.

Court proceedings in the Unicredit case took place before Erie County

Court of Common Pleas Judge Michael E. Dunlavey on November 2, 2010

and November 10, 2010. Those proceedings resulted in significant press

coverage, including articles published in the Erie Times News and on

GoErie.com. It was the publication of those articles that caused

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Judge DiPaolo to file his three-count defamation complaint, which he later

amended, against the appellants.

Count I of Judge DiPaolo’s amended complaint alleges libel against

appellants Times, Cyberlink, Palatella, and Thompson for the following

statements written by Palatella and Thompson and published by Times and

Cyberlink in print and online on November 14, 2010:

a. “Probe of Erie debt collector Unicredit widens;”

b. “Federal agents, Dunlavey and even one of

Unicredit’s former clients have taken notice of

the information surfacing in the case, which

according to what Dunlavey said in court, could

include a look at the practices in the office of

Erie 6th Ward District Judge Dominick DiPaolo;”

and

c. “The chief counsel of the State Supreme

Court’s Judicial Conduct Board, Joseph J.

Massa Jr., declined to comment on whether

violations cited by Dunlavey would be

investigated.”

Amended complaint in civil action, 12/28/11 at 23-24, ¶¶ 137-138 (Docket

#11).

Judge DiPaolo alleged that these statements harmed his reputation

because they explicitly state or suggest that the Unicredit probe was

widened to include Judge DiPaolo and that Judge Dunlavey had stated in

court that Judge DiPaolo could and/or should be investigated for his role in

that case by either Judge Dunlavey himself, the Attorney General’s office,

federal agents, or the Judicial Conduct Board. (Id. at 24, ¶ 139).

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Judge DiPaolo further alleged that Judge Dunlavey never stated that

Judge DiPaolo could, would, or should be the target of an investigation and

that Judge Dunlavey only stated that he defended Judge DiPaolo’s actions

and that he believed that Judge DiPaolo’s office had relied on Unicredit’s

representation. (Id. at 24, ¶ 140.)

Judge DiPaolo averred that the November 14, 2010 published

statements were made with actual malice because (i) Thompson and/or

Palatella attended the November 10, 2010 hearing and heard what

Judge Dunlavey said; (ii) appellant Thompson and/or Palatella subsequently

reviewed the November 10, 2010 hearing transcript and read what

Judge Dunlavey said; (iii) a November 11, 2010 article written by Thompson

accurately summarized the November 10, 2010 court proceeding;

(iv) Thompson and/or Palatella admitted that they reviewed the Judicial

Conduct Board’s website and knew that that board investigates judges for

alleged unethical or illegal conduct; (v) Thompson and/or Palatella reviewed

the Unicredit case docket and knew no other hearing occurred after the

November 10, 2010 proceeding and November 14, 2010, the date the article

was published. (Id. at 25, ¶ 142(a)-(g).)

Count II of Judge DiPaolo’s amended complaint alleges libel against

Times, Cyberlink, Thompson, and Palatella for statements written by

Thompson and Palatella and published by Times and Cyberlink in print and

online on November 28, 2010, and then subsequently republished in articles

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written by Thompson and Palatella and dated December 13, 2010;

December 21, 2010; December 22, 2010; and February 9, 2011. The

following allegedly defamatory statements were published after a hearing

before Judge Dunlavey on Unicredit’s motion for reconsideration for

post-trial relief on November 22, 2010:

a. the headline “Legal Ruling Questioned,

Unicredit Lawyer: Debt collector, judge not

involved with Kickback;”

b. The statement that “Dunlavey said it appeared

Unicredit established a ‘ghost system of justice’

by first obtaining judgment against debtors in

the wrong venue – mainly Erie 6th Ward

District Judge Dominick DiPaolo’s office – and

then using those judgments and sham court

proceedings in Unicredit’s offices to extract

payments from debtors;” and

c. The unfair republication of [Unicredit’s

Attorney Krista] Ott’s defamatory, but

judicially privileged, statement that “there is a

kickback scheme involving Unicredit and

Magisterial District Judge DiPaolo’s office” with

additional sting caused by the aforesaid

headline and statement.

Id. at 26-27, ¶ 146(a)-(c).

Judge DiPaolo alleged that these statements were defamatory because

they stated or suggested, and appellants’ readers understood them to mean,

that Judge Dunlavey had issued a ruling that found Judge DiPaolo was

involved in a kickback scheme with Unicredit; that Judge Dunlavey said or

suggested that Judge DiPaolo was involved in Unicredit’s “ghost system of

justice”; and that Judge DiPaolo was actually involved in a kickback scheme

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with Unicredit. (Id. at 27, ¶ 148.) Judge DiPaolo further alleged that

Judge Dunlavey never ruled, found, or otherwise stated or suggested that he

believed that Judge DiPaolo was involved in a kickback scheme with

Unicredit. (Id. at 27-28, ¶ 149.)

Judge DiPaolo averred that the November 28, 2010 published

statements were made with actual malice because, among other things,

Thompson and/or Palatella read and reviewed Judge Dunlavey’s

November 10, 2010 court order, as well as Attorney Ott’s motion for

reconsideration of that order, and one or both of those appellants had

knowledge of the Unicredit case generally, so that they would have known

that the statements published in the November 28, 2010 article were false.

Finally, Count III of Judge DiPaolo’s amended complaint alleges libel

against Times, Cyberlink, Thompson, Palatella, and Maciag for approximately

32 statements written by Thompson and Palatella and published by Times

and Cyberlink in print and online on April 16, 2011 and April 17, 2011,1 that

harmed Judge DiPaolo’s reputation because they stated or suggested, and

their readers understood them to mean:

a. That Judge DiPaolo had intentionally captioned

those Unicredit cases that he heard to conceal

that the creditors and/or debtors in those

cases were out of his jurisdiction;

1

These statements were also alleged to have been published on an April 16,

2011 blog post and on Unicredit’s web page. (Amended complaint in civil

action, 12/28/11 at 29, ¶ 155 (Docket #11).)

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b. That Judge DiPaolo improperly heard cases in

which his relatives were a party;

c. That Judge DiPaolo had extended judicial

favors to Unicredit based on an attenuated

familial relationship;

d. That Judge DiPaolo applied practices in his

office that differed from other Magisterial

District Judges in an improper effort to help

Unicredit;

e. That a Judge had stated that “DiPaolo takes

relatives[’] cases;”

f. That a Judge or the Attorney General had

called Judge DiPaolo’s practices

“unconscionable;” and

g. That Judge DiPaolo had knowledge of a

jurisdictional deficit in the Unicredit-related

cases filed in his office, that he had a duty to

raise that jurisdictional deficit, and that he did

not do so because he was related to one of

Unicredit’s principals.

Id. at 30, ¶ 157.

Judge DiPaolo alleged that Thompson, Palatella, and/or Maciag

intentionally misquoted and/or mischaracterized the proceedings and public

records upon which they based these statements and, therefore, made the

statements with actual malice. (Id. at ¶¶ 158-159.)

During discovery in this case, Judge DiPaolo served interrogatories and

requests for production on appellants. With respect to each alleged

defamatory publication, Judge DiPaolo requested that appellants “[i]dentify

each and every source who provided content used in the article and describe

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the information provided by each source;” “[i]dentify and provide every note

or set of notes reflecting the conversation had between the source identified

[] and the person with whom that source spoke;” and “[i]dentify and provide

any documents referred to in creating the article and state for what content

within the document, if any, relied upon that document in whole or in part.”

(Motion to compel, 4/10/14 Exhibit A (Docket #37).) Appellants objected to

these specific interrogatories and requests for production on the basis of

privilege under the Pennsylvania Shield Law2 and/or the qualified First

Amendment privilege, also known as the journalist’s privilege. Thereafter,

Judge DiPaolo filed his first motion to compel contending, among other

things, that he requested appellants’ notes, unpublished drafts, and

2

§ 5942. Confidential communications to news

reporters.

(a) General rule. --

No person engaged on, connected with,

or employed by any newspaper of

general circulation or any press

association or any radio or television

station, or any magazine of general

circulation, for the purpose of gathering,

procuring, compiling, editing or

publishing news, shall be required to

disclose the source of any information

procured or obtained by such person, in

any legal proceeding, trial or

investigation before any government

unit.

42 Pa.C.S.A. § 5942.

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documents referred to in creating the articles “because those notes, drafts,

and documents are likely to provide insight into the state of knowledge of

the reporters prior to their writing the [a]rticles and the mindset of the

reporters in their writing the [a]rticles.” (Id. at 5, ¶ 25.) Judge DiPaolo

further averred that he “requires this information to meet the actual malice

standard of liability required by the United States Constitution.” (Id. at

¶ 26.) At oral argument on the motion, Judge DiPaolo agreed to narrowly

tailor his discovery requests so that appellants could determine the

applicability of the Shield Law and/or the qualified First Amendment

privilege.

Subsequently, Judge DiPaolo sent a second set of interrogatories and

requests for production to appellants. In response to those interrogatories,

appellants identified notes of appellant Thompson.3 Additionally, during

Palatella’s deposition, Palatella testified as to the existence of a spreadsheet

that he prepared with appellant Maciag that compiled data from public court

records to determine the identity and/or number of debtors sued by

Unicredit who did not live within Judge DiPaolo’s magisterial district.

Thereafter, Judge DiPaolo filed a second motion to compel production of

3

Appellants did not produce appellant Thompson’s notes because, they

contend, Judge DiPaolo did not request them in his second set of

interrogatories and requests for production of documents and DiPaolo did

not establish facts necessary to overcome the journalist’s privilege.

(Defendants’ response in opposition to plaintiff’s motion to compel, 7/28/14

at 3, ¶¶ 12-13 (Docket #49).)

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appellants’ notes, unpublished drafts, and documents referred to in creating

the articles subject to redaction of confidential informants and a privilege

log. The request necessarily includes the notes Thompson took at the

November 10, 2010 hearing, as well the spreadsheet prepared by Palatella

and Maciag. The trial court granted Judge DiPaolo’s motion. This appeal

followed.

Appellants raise two issues for our review:

A. WHETHER THE TRIAL COURT ERRED IN

FINDING THAT, WITH RESPECT TO THE NOTES

PREPARED BY APPELLANT, THOMPSON,

APPELLEE HAD MADE A SHOWING SUFFICIENT

TO OVERCOME THE JOURNALIST’S PRIVILEGE

UNDER THE FIRST AMENDMENT?

B. WHETHER THE TRIAL COURT ERRED IN

FINDING THAT, WITH RESPECT TO THE

REPORTERS’ RESOURCE MATERIALS AND

SPREADSHEET, APPELLEE MADE A SHOWING

SUFFICIENT TO OVERCOME THE JOURNALIST’S

PRIVILEGE UNDER THE FIRST AMENDMENT?

Appellants’ brief at 2-3.

Preliminarily, we note that the order granting Judge DiPaolo’s motion

to compel is appealable as a collateral order.

[I]n general, discovery orders are not final, and are

therefore unappealable. However, discovery orders

involving privileged material are nevertheless

appealable as collateral to the principal action

pursuant to Pa.R.A.P. 313 (“Collateral Orders”).

Rule 313(a) states that “[a]n appeal may be taken

as of right from a collateral order of [a] . . . lower

court.”

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A collateral order is an order separable

from and collateral to the main cause of

action where the right involved is too

important to be denied review and the

question presented is such that if review

is postponed until final judgment in the

case, the claim will be irreparably lost.

Pa.R.A.P. 313(b). A discovery order is collateral only

when it is separate and distinct from the underlying

cause of action.

Generally, discovery orders involving purportedly

privileged material are appealable because if

immediate appellate review is not granted, the

disclosure of documents cannot be undone and

subsequent appellate review would be rendered

moot.

Rhodes v. USAA Casualty, 21 A.3d 1253, 1258 (Pa.Super. 2011), appeal

denied, 119 A.3d 351 (Pa. 2015) (internal case law citations and quotation

marks omitted).

Accordingly, we will review the trial court's order granting

Judge DiPaolo’s motion to compel. See id., quoting Berkeyheiser v.

A-Plus Investigations, Inc., 936 A.2d 1117, 1123-1124 (Pa.Super. 2007)

(“Pennsylvania courts have held that discovery orders involving potentially

confidential and privileged materials are immediately appealable as collateral

to the principal action.”).

Generally, when reviewing the propriety of a discovery order, our

standard of review is whether the trial court abused its discretion. Rhodes,

21 A.3d at 1258 (citations omitted). To the extent that we are presented

with questions of law, our scope of review is plenary. Id.

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The discovery order at issue compels the media appellants to produce

documents in Judge DiPaolo’s defamation suit against them.

“Defamation is a communication which tends to

harm an individual’s reputation so as to lower him or

her in the estimation of the community or deter third

persons from associating or dealing with him or her.”

Elia v. Erie Insurance Exchange, 430 Pa.Super.

384, 634 A.2d 657, 660 (1993). Only statements of

fact, not expressions of opinion, can support an

action in defamation. Id. In a defamation case, a

plaintiff must prove: “(1) The defamatory character

of the communication; (2) its publication by the

defendant; (3) its application to the plaintiff; (4) the

understanding by the recipient of its defamatory

meaning; (5) the understanding by the recipient of it

as intended to be applied to the plaintiff; (6) special

harm resulting to the plaintiff from its publication;

and (7) abuse of a conditionally privileged occasion.”

Porter v. Joy Realty, Inc., 872 A.2d 846, 849 n. 6

(Pa.Super. 2005), quoting, 42 Pa.C.S.A. § 8343(a).

See also, Weber v. Lancaster Newspapers, Inc.,

878 A.2d 63 (Pa.Super. 2005).

Moore v. Cobb-Nettleton, 889 A.2d 1262, 1267 (Pa.Super. 2005).

Here, no dispute exists that Judge DiPaolo, as a magistrate, is a public

official or a public figure.

[T]he appropriate standard of fault depends on

whether the plaintiff is a public or private figure. If

the plaintiff is a public official or public figure, and

the statement relates to a matter of public concern,

then to satisfy First Amendment strictures the

plaintiff must establish that the defendant made a

false and defamatory statement with actual malice.

In contrast, states are free to allow a private-figure

plaintiff to recover by establishing that the defendant

acted negligently rather than maliciously.

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American Future Systems, Inc. v. Better Business Bureau of Eastern

Pennsylvania, 923 A.2d 389, 400 (Pa. 2007), cert. denied, 552 U.S. 1076

(2007) (citations and parentheticals omitted).

The term “actual malice” (sometimes shortened to

“malice”) is a term of art that refers to a speaker’s

knowledge that his statement is false, or his reckless

disregard as to its truth or falsity. Thus, it implies at

a minimum that the speaker “‘entertained serious

doubts about the truth of his publication,’ . . . or

acted with a ‘high degree of awareness of . . .

probable falsity.’” Masson v. New Yorker

Magazine, 501 U.S. 496, 510, 111 S.Ct. 2419,

2429, 115 L.Ed.2d 447 (1991) (quoting St. Amant

v. Thompson, 390 U.S. 727, 731, 88 S.Ct. 1323,

1325, 20 L.Ed.2d 262 (1968); Garrison v.

Louisiana, 379 U.S. 64, 74, 85 S.Ct. 209, 216, 13

L.Ed.2d 125 (1964)). This term “should not be

confused with the concept of malice as an evil intent

or a motive arising from spite or ill will.” Id.

American Future Systems, Inc. 923 A.2d at 395 n.6.

Here, appellants contend that the trial court erred in ordering

compelled disclosure of Thompson’s notes and the resource materials used

and spreadsheet prepared by Palatella and Maciag because Judge DiPaolo

did not overcome the journalist’s privilege (also known as the qualified First

Amendment privilege) under the First Amendment of the United States

Constitution. We note that despite claiming the potential applicability of the

Pennsylvania Shield Law, 42 Pa.C.S.A. § 5942(a), to these documents in the

proceedings below, appellants advance no such argument on appeal. We

further note that the shield law, unlike the journalist’s privilege, is an

absolute privilege that protects a journalist from compelled disclosure of a

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confidential source. In interpreting the shield law, our supreme court has

held that a plaintiff may discover unpublished documentary information

gathered by the media to the extent that that documentary information does

not reveal the identity of a confidential source. Hatchard v.

Westinghouse Broadcasting Co., 532 A.2d 346, 351 (Pa. 1987). The

purpose of the shield law is to maintain a free flow of information to the

news media. Id.

Likewise, the reporter’s privilege was designed to protect freedom of

the press by insuring the free flow of information to reporters. Davis v.

Glanton, 705 A.2d 879, 885 (Pa.Super. 1997) (citation omitted). Thus,

there exists a stark distinction between the need for disclosure of materials

that identify or could lead to the identification of confidential sources from

the need for disclosure of materials created during the editorial process. The

following aptly examines the dichotomy:

In libel actions, the right of a plaintiff to discover into

the editorial process is a distinct issue from

discovery of a journalist’s confidential sources.

Courts have generally protected discovery of

confidential sources because of the effect disclosure

of such sources would have on a journalist’s conduct.

“Disclosure of confidential sources is . . . more

onerous than inquiry into the editorial process in that

it can significantly affect journalistic conduct.”

Marian E. Lindberg, Note, Source Protection In

Libel Suits After Herbert v. Lando, 81 Colum. L.

Rev. 338, 362 (1981). Furthermore, “compelled

disclosure of confidential sources might chill the flow

of information so essential to the freedom and

effectiveness of the press.” Mize v. McGraw-Hill,

86 F.R.D. 1, 4 (S.D. Tex. 1980). This “chilling effect”

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on the free flow of information that discovery may

have impinges on the public’s interest in news

dissemination in contravention of the First

Amendment.

The balance between a plaintiff’s need for disclosure

of either confidential sources or the editorial process,

and the public’s First Amendment interest in the free

flow of information was explained in Mize, decided

shortly after the Supreme Court of the United States

decision in Herbert v. Lando, 441 U.S. 153, 99 S.

Ct. 1635, 60 L. Ed. 2d 115, (1979):

The availability of the requested material

through alternative discovery

distinguishes the inquiry into the editorial

process from the disclosure of a

confidential source of information. Direct

disclosure of the editorial process

exposes the thoughts, considerations,

and state of mind of editors and writers.

At best, indirect evidence is a mere

shadow of the editorial process. In

contrast, the identity of a source of

information may be ferreted out without

direct disclosure by the press. Through

vigorous discovery, a plaintiff may

narrow down the field of possible sources

and finally pinpoint the actual source.

Where the plaintiff is aware of who knew

about the transaction or event to which

the allegedly libelous statement refers,

his task of pinpointing the source is

simplified. Thus, the plaintiff’s need for

disclosure of confidential sources may be

slighter than his need for compelled

disclosure of the editorial process.

At the same time, the publisher’s and the

public’s interests in the confidentiality of

sources surpasses their interest in the

confidentiality of the editorial process.

In Herbert, the Supreme Court

explained that disclosure of the editorial

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process would aid in the free flow of

information. It would have this effect

because editors would decide against

publishing material they knew to be

false, if they anticipated that their

conversations concerning the material

might be disclosed in the course of a law

suit. Since publication of false

information would be discouraged, the

public’s interest in the free flow of

truthful information would be served.

Mize, 86 F.R.D. at 3.

Titan Sports, Inc. v. Turner Broadcasting Systems, Inc. (In re

Madden), 967 F.Supp. 142, 146 (W.D.Pa. 1997), rev’d and remanded on

other grounds, 151 F.3d 125 (3d Cir. 1998). See also Hatchard, 532

A.2d at 349 (recognizing that the First Amendment does not bar a plaintiff

from inquiring into the editorial processes of the media defendant

responsible for publishing a defamatory statement because the plaintiff is

entitled to discover information that permits a meaningful inquiry into

whether the statement was made maliciously or recklessly).

In order to overcome the reporter’s privilege, the movant must

demonstrate (1) that the information sought is material, relevant, and

necessary; (2) a strong showing that the information cannot be obtained by

alternative means; and (3) that the information is crucial to the movant’s

case. Riley v. City of Chester, 612 F.2d 708, 716-717 (3d Cir. 1979).

Here, Judge DiPaolo does not seek disclosure of a confidential source

or materials that could lead to the identity of a confidential source; rather,

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he seeks disclosure of documents related to the editorial process that he

contends he needs in order to prove actual malice in his defamation action.

Preliminarily, we note that prohibiting disclosure of the information

sought by Judge DiPaolo would not further the goal of the reporter’s

privilege, which is to insure the free flow of information to reporters,

because this case does not involve a confidential source who provided

information to appellants. To the contrary, appellants created the

information sought during their own editorial process in connection with

writing and publishing the articles that are at the heart of Judge DiPaolo’s

defamation action against them. As a result, compelled disclosure would not

result in a chilling effect because it would have no impact on any future

confidential source’s decision to provide information to a reporter.

Additionally, the information sought goes to Thompson’s, Palatella’s,

and Maciag’s states of mind. Because Judge DiPaolo must prove actual

malice in his defamation action against appellants, Thompson’s notes and

the resource materials used and the spreadsheet created by Palatella and

Maciag during the editorial process are material, relevant, necessary, and

crucial to Judge DiPaolo’s defamation case against them.

Finally, this information cannot be obtained by alternative means.

Thompson’s notes constitute her personal record of the Unicredit case based

on her experience and perception. As a result, Thompson’s personal record

cannot be obtained from anyone other than Thompson. Likewise, the

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resource materials and spreadsheet compilation are personal to Palatella and

Maciag because they chose what debtors’ cases to include and what

methodology to employ in their analysis in order to ascertain their own

meaning of the data. Consequently, the resource materials and spreadsheet

cannot be obtained from anyone other than Palatella and Maciag.

We, therefore, find no abuse of discretion in the trial court’s finding

that Judge DiPaolo overcame the reporter’s privilege and its resulting order

granting Judge DiPaolo’s motion to compel.

Order affirmed.

Bender, P.J.E. joins the Opinion

Shogan, J. files a Dissenting Opinion.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 6/15/2016

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