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Staff cuts may make owners vulnerable in libel cases

COMMENTARY | September 15, 2006

What will the courts say when litigants argue that news organization chieftains got rid of experienced staffers and put in place a rawer, under-trained newsroom, knowingly making the product more error-prone?

By Gilbert Cranberg and Randall Bezanson

Scarcely a week passes without reports of cutbacks in newsrooms by layoffs, buyouts or attrition. The applause you hear is from investors who know that, in the labor-intensive newspaper business, the big savings are to be had in payroll. Better hold the applause, however, because news organizations with fewer reporters, copy editors and sub-editors inevitably produce shoddier news products more prone to errors that can cost news corporations dearly. Our tip to investors: study our article in the March 2005 Iowa Law Review, “Institutional Reckless Disregard for Truth in Public Defamation Actions Against the Press.”

The article describes the bad things that can happen to news corporations when they knowingly risk inaccuracy to feed the bottom line.

In a nutshell, we contend that the traditional stress in libel actions on the missteps by reporters and editors is myopic. Typically, in a libel suit, every action by a reporter or editor in producing the story is examined minutely, while seldom, if ever, are corporate policies scrutinized even though they may directly impact what appears in print. A downsizing policy that strips the newsroom of its most experienced staffers and replaces them with inexperienced, over-worked and under-trained reporters, copy editors and sub-editors is a libel suit waiting to happen.

We believe that libel law should be interpreted so that the concept of recklessness, until now examined only in the context of behavior by newsroom personnel, is extended to apply to corporate decisions. As we wrote:

“...the central flaw in the actual malice test [for libel]...is its exclusive focus on individual rather than corporate conduct. This shortcoming is so fundamental that the test should be supplemented, in the press setting at least, with an institutional reckless disregard standard. This standard would apply to actions brought not against the reporter and editor but against the corporation and would be based on corporate business decisions made in the face of known risks of falsity. This tort action would rest on a largely objective assessment of the corporate decisions that affect journalism when they manifest knowing indifference to the risk of defamatory falsehood that flows from the decisions.

“...In other words, if you are harmed by a mistake, you should have the right to inquire whether the mistake was the result of a company policy or decision adopted knowingly or in reckless disregard of the likelihood of error, and if so, to hold the institution responsible.”

How might a corporate decision to slash staffing be made in “knowing” or in “reckless disregard” of the risk of error? The people who are most aware of how belt-tightening hurts the news product are the people who work in newsrooms. If they complain about how short-handed copy desks and pressure to produce copy have left insufficient time to verify stories, and they make this known to management but it insists nevertheless on further cutbacks, that would be compelling evidence of an action made in knowing or in reckless disregard of the risk of error.

We did not advance the concept of “institutional reckless disregard” with this particular scenario in mind. But as we reflected on it, we realized that the concept lends itself to a greatly empowered newsroom. No longer would staffers simply have to swallow the cuts made to satisfy investors; they could speak up to management about the consequences, and with a much better chance of being taken seriously.

We anticipate that the departure in libel law that we propose will come about, if at all, by court interpretation. We are not aware of any libel suits having been filed as yet based on the concept of institutional recklessness. We are reasonably sure that, sooner or later, such suits will be filed. If they are, and staffers had posed the right questions, the nation’s newsrooms could well be the big winners.       

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