Designer Skin LLC v. S & L Vitamins, Inc., et al.
Cannon v. Mathis
S02G0361 (Ga. Sup. Ct., Nov. 25, 2002)
Reversing the court below, a divided Georgia Supreme Court holds that plaintiff, the President of a waste hauling company, is a limited purpose public figure who accordingly must prove that defendant proceeded with “actual malice” to prevail on libel claims arising out of defendant’s allegedly defamatory postings on an Internet bulletin board. The court further holds that plaintiff is barred by Georgia statute from pursuing punitive damage claims as a result such postings. According to the court, Georgia statute 51-5-11 requires any plaintiff libeled by a communication to first demand a retraction of the libelous statement before being permitted to proceed with a claim for punitive damages. As plaintiff did not make such a demand, he could not pursue his punitive damage claim. In a spirited dissent, three judges disagreed with each of these holdings.
Plaintiff Cannon was the President of Trans West Services Inc. (“Trans West”) a waste hauling company. The Solid Waste Management Authority of Crisp County, Georgia (“Authority”) decided to build a solid waste material recovery facility (“Facility”). Cannon assisted the Authority in a number of ways in this endeavor, most notably soliciting various towns and counties to enter into contracts with the Authority to supply solid waste for processing at the Facility. In one instance, Cannon, on behalf of Trans West, loaned the Authority funds needed to cause a town to agree to supply its waste to the Facility. Cannon’s company was appointed the exclusive waste hauler for the Facility, and hauled waste from these towns and counties to the Facility.
The Facility was beset by problems, which in turn engendered substantial local debate. Processing problems caused waste to be diverted to the county landfill. Financial difficulties, caused by the inability to generate adequate revenues from handled wastes, caused the Authority to be unable to pay its bills, including fees owed to Trans West. A grand jury investigation was launched. As a result of the failure to receive payment, Trans West stopped its hauling activities, and commenced suit.
Defendant Bruce Mathis was a Crisp County resident who, shortly after Cannon announced Trans West’s decision to stop hauling, posted three anonymous messages on an Internet bulletin board maintained by Yahoo for discussion concerning Waste Industries Inc., which had recently acquired Trans West. The postings in question were highly derogatory, and labeled Cannon “a crook” who had been “fired” by another company. The first and third postings touched on the debate concerning the Facility. The second, which labeled Cannon a “crook”, did not.
Plaintiff responded by commencing suit, charging that these statements libeled him. Plaintiff did not request a retraction before commencing suit.
The elements necessary to establish a claim for libel vary depending on the subject matter of the speech and the identity of the individual who is its subject. To establish a claim for defamation, the plaintiff must show:
When the subject of the speech is a matter of public concern, the showing the plaintiff must make changes. In such circumstances, the plaintiff must show “that the defendant published a defamatory statement about the plaintiff, the defamatory statement was false, the defendant was at fault in publishing it, and the plaintiff suffered actual injury from the statements.”
Finally, the showing the plaintiff must make changes again if the subject of defendant’s speech is determined to be a “public figure” or a “limited purpose public figure”. In such circumstances, it is not enough that plaintiff shows that defendant was negligent in making the challenged statement. Rather, in such circumstances, the plaintiff must show that defendant acted with “actual malice,” defined by the courts as acting with knowledge that the statement is false, or with reckless disregard of whether it was true or false.
The central issue on this appeal was whether Cannon was a limited purpose public figure. As shown by the foregoing, this determination impacts the showing plaintiff must make to prevail on his defamation claim. Under Georgia law, the court undertakes a three part analysis to determine if a party is a limited purpose public figure. Under this analysis “a court ‘must isolate the public controversy, examine the plaintiff’s involvement in the controversy, and determine whether the alleged defamation was germane to the plaintiff’s participation in the controversy.’”
Applying this analysis, the Georgia Supreme Court determined that Cannon was a limited purpose public figure for the purpose of discussions pertaining to the Facility, and accordingly that he had to prove that defendant acted with “actual malice” to prevail on his libel claims.
In reaching this conclusion, the court held that Cannon, by his involvement in the Authorities’ activities, and his decision to cease hauling activities, had either voluntarily injected himself into the public debate concerning the Facility, or been drawn into the debate sufficiently to become a limited purpose public figure with respect thereto. Because Mathis’ postings addressed the subject of this debate, the Court held that Cannon must meet the “actual malice” standard. Notably, the court stated:
As the court below had not determined if Cannon could meet the heightened “actual malice” standard, the case was remanded for further consideration.
The Court also held that under Georgia statute 51-5-11, Cannon was required to demand a retraction before being allowed to seek punitive damages from Mathis as a result of his allegedly defamatory postings. According to the Court:
The court held that this statute applied to all defamatory statements made by a defendant.
The majority’s determination was roundly criticized in a dissent authored by three justices, who disagreed with both of the major conclusions reached by the majority. Contrary to the majority, the dissenters believed that Cannon was not a limited purpose public figure and further, that Georgia’s retraction statute did not apply to Internet postings such as those at issue.