Defamation and the Internet: How the Law Effectively Allows Bloggers to Take Risks Big Media Companies Can't, and How Companies Can Work to Level the Playing Field
|By JULIE HILDEN
|Wednesday, Jul. 23, 2008|
Increasingly, print journalism is struggling, as advertising dollars move to the Internet, subscriptions decrease, and newspapers find themselves competing with their own websites – which offer much of the same content the print editions do, free of charge – as well as other websites and blogs. Ironically, too, one common way in which newspapers have responded to money pressures is to make cuts in newsroom staff – and thus to decrease their comparative advantage vis-à-vis bloggers when it comes to offering high-quality content. As a result, it is now quite easy to imagine a near-future world in which print newspapers do not exist at all.
In this column, I’ll focus on one aspect of this important trend: the way in which it will likely alter the legal landscape regarding defamation and, in turn, affect free speech.
The Advantage of Shallow-Pocketed Blogs Versus Deep-Pocketed Media Companies
It used to be the case that news organizations faced essentially no competition at all from individual writers. However, with the advent of the Internet and of blogs – especially blogs written by those with expertise in a particular subject matter – that has changed dramatically. Moreover, blogs have a major financial and free-speech edge over both newspapers and online news sites funded by major media companies: It is generally not worth suing a blog for defamation.
If you sue the New York Times (online or offline) for defamation, the only effective caps on the amount you recover will be, first, the amount of the verdict a jury is willing to give you, and, second, the portion of that verdict that an appellate court feels is not too excessive under the circumstances. Moreover, if your case is a strong one, it may be essentially risk-free for you to bring it, since a contingency-fee attorney will pay the expenses, in exchange for taking a portion of the verdict if you do win.
In contrast, if you sue a shallow-pocketed individual blogger, you probably will not be able to find a contingency-fee attorney who is interested in your case. You’ll also find that – unless your attorney settles the case quickly, which usually means settling for a low amount -- your attorneys’ fees will almost instantly hit five figures, then move toward high five figures. (Let’s suppose the blogger does nothing at all to defend himself or herself. Even so, you will have to pay for your attorney to draft the complaint, propound discovery, prepare to depose witnesses, and then depose them. Also, if there’s an issue as to the writer’s state of mind – which there almost always is, in a defamation case – then the case will go to trial, because a jury is required to determine whether it finds the blogger credible when he or she testifies on the state-of-mind issue.)
This dynamic will likely mean that bloggers will be more cutting-edge and speculative in their coverage than major media sites – and simply faster in getting the news out there – because they don’t have as much reason to live in fear of defamation suits as major media companies do. This reality may make some bloggers cavalier, but it may make others fearless in the best way – willing to run stories in which they have solid confidence, despite the legal risk.
Frequently, a risky story at a newspaper won’t be run until in-house legal counsel checks it over, and if serious concerns are raised, there may be a lengthy debate about whether to run the story at all. In such a case, bloggers might not only have a speed edge, but also a news edge: They can go with stories that major media companies, whether online or offline, simply can’t afford to take the risk of printing.
How can media companies compete? I think there is an answer, but it will require their decentralizing significantly and altering their contractual arrangements with reporters.
How Media Companies Can Gain the Legal Advantage Bloggers Enjoy: More Independent Contractor Arrangements
The key way media companies can address their vulnerability to defamation suits is to stop hiring employees, and begin to embark upon relationships with independent contractors.
But, there is a cost to doing so: In order to preserve the legal protection of an independent contractor relationship, the media companies would need to give the independent-contractor reporters/bloggers more freedom than they currently give reporter employees. That’s because one key prong of the classic test for whether a person is an independent contractor or an employee is the degree of control that person has over what they do, and how they do it.
Yet, is this really a “cost”? Decentralization and individual control can lead to greater creativity, and more experimentation regarding approaches. Looking at the downside (say, an independent-contractor reporter or blogger whose work is of low quality) means ignoring the upside – an independent-contractor reporter or blogger whose work blazes a new trail.
Also, since it is much easier to cut off a relationship with an independent contractor than it is to fire an employee, if the downside does occur, it shouldn’t persist for long. Moreover, the looser relationship between the company and the independent contractors should help ensure that one “bad apple” independent contractor (say, one who engages in plagiarism or “sock-puppeting”) does not tarnish the company’s name. Audition periods may become common – and some bloggers’ archives may, alone, provide a strong audition.
Meanwhile, independent-contractor bloggers or reporters who excel can be honored for their work by the media company, and their relationship with the media company can be prominently featured on both the company’s site and the blog.
Allowing the Virtual Newsroom to Replace the Literal Newsroom
Another possible cost, for media companies, of moving to an independent-contractor arrangement is the loss of the newsroom itself. Providing office space for someone who works for you is a key factor cutting in favor of the determination that that person is an employee, not an independent contractor. Thus, retaining the newsroom means retaining defamation-suit exposure, as well. (It’s possible that a media company may be liable even for an independent contractor’s defamation, as well, but it is far more difficult to establish that liability than to establish the no-brainer liability for work by an employee.)
Again, though, it must be asked whether this “cost” really is a cost, after all. With newsrooms already suffering severe cuts, a larger “virtual” newsroom of independent contractors is beginning to look more and more competitive and attractive, as compared to a smaller, brick-and-mortar newsroom of employees. Virtual newsrooms also open up the possibility of more in-person reporting, and of remedying the bias toward covering big cities at the expense of smaller cities and rural areas – since independent contractors may be geographically dispersed, locating themselves even in places where there is no bureau or office of the company.
In sum, media organizations will have to change dramatically as they increasingly operate on the Internet alone (or, at a minimum, with greatly diminished print circulation). One handbook for change may come for an unlikely source: the legal test that determines who is an independent contractor, and who is an employee.