(CN) - The owner of a government contractor that had to pay a $28 million fine cannot sue the Buffalo News over its coverage of the case, a New York appeals court ruled.
National Air Cargo faced federal court proceedings for allegedly overcharging the military by millions of dollars for shipments to Iraq and Afghanistan. The company pleaded guilty in October 2007 to falsifying a proof-of-delivery document, and paid nearly $28 million in fines and restitution.
In describing the fine at trial, the prosecutor had said that National Air Cargo caused the government to lose $4.4 million.
Company owner Christopher Alf sued the Buffalo News in 2008, claiming it had falsely reported that he cheated the government. Alf highlighted 36 allegedly defamatory statements from the series of articles that Buffalo News ran on the case.
The Erie County Supreme Court ruled in favor of The Buffalo News, and the Appellate Division's Rochester-based Fourth Department agreed recently that the paper's coverage was "substantially accurate."
"We agree with defendant that the articles read as a whole, including all of the alleged defamatory statements, would lead the average reader to conclude that NAC, not plaintiff himself, had cheated the government," the unsigned opinion states.
The newspaper had reported that the plea deal helped Alf avoid jail time, and the court found no problem with this summary either.
While accepting the plea at trial, the prosecutor had noted that the owner of National Air Cargo would not "be processed by my office ... for the criminal offenses that relate to the facts set forth in paragraph 4 of the [plea] agreement, which are the falsifications, proofs of delivery sent as confirmation of delivery dates," according to the ruling.
Furthermore, the Buffalo News coverage aligned with Justice Department press releases, the court found.
"We conclude that the statements in the articles that NAC repeatedly overcharged the goverment, and that there would be no jail time for plaintiff and other company officials, were substantially accurate," the justices wrote.
Though Alf said his company settled to maintain its standing as an air freight forwarder, precedent says there is "no requirement that the publication report the plaintiff's side of the controversy," according to the decision.
In a partial dissent, two of the five justices on the appellate panel said that the paper had made defamatory statements about Alf.
"Notably, plaintiff was not a named defendant in the federal criminal action against NAC and there was no admission of criminal liability on the part of plaintiff during the proceedings," the dissent states.
It notes that the Buffalo News specifically named Alf as having "evaded serving jail time as a result of the plea deal by employing 'the best lawyers money can buy' and a 'dream team' of attorneys."
"Because the various reports impute wrongdoing to plaintiff as an individual, they produce 'a different effect on the mind of the reader from that which the pleaded truth would have produced' and 'suggest more serious conduct than that actually suggested in the official proceeding,'" the dissent stats, quoting precedent. "We therefore conclude that, with respect to the reports specifically concerning plaintiff, defendant did not act 'as the agent of the public, reporting only that which others could hear for themselves were they to attend the proceedings.'"
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