(CN) - In a defamation case with broad implications for how news organizations cover initial court proceedings, the New Jersey Supreme Court stayed an appellate court's decision against North Jersey Media Group.
Thomas John Salzano, the son of the owner of bankrupt telecommunications firm NorVergence, sued the media company for printing an article stating that he "allegedly stole close to $500,000 from the company, using the money to pay for drinks, trips to area clubs and for a five-bedroom Glen Ridge house."
Salzano said the allegations in the underlying bankruptcy complaint stated only that he had "unlawfully diverted, converted and misappropriated" NorVergence's funds "for his own personal benefit."
The New Jersey Superior Court dismissed the case, ruling that the paper's reportage had the same "sting" as the original complaint.
But an appellate court reversed, saying the reporter wrote the article before there was any judicial review or way to verify whether there was any truth to the allegations.
The appellate court's Judge Fisher determined that initial court proceedings are not covered by the fair report privilege.
The ruling would have prohibited media companies from reporting on breaking lawsuits until there has been judicial review, but the new order stays the decision until the state Supreme Court weighs in on the matter.
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