New Hampshire Supreme Court Finds Website Publisher May Claim Newsgathering Privilege; Adopts Dendrite Test For Disclosure of Anonymous Speakers

The New Hampshire Supreme Court has ruled in Mortgage Specialists Inc. v. Implode-Explode Heavy Industries Inc., that a company operating an online service that gathers information about mortgage lenders and posts it online qualifies as a newsgatherer for purposes of the state’s newsgathering privilege.

In Mortgage Specialists, the Court said in part:

Although our cases discussing the newsgathering privilege have involved traditional news media, such as newspapers, see, e.g., Keene Pub. Corp., 117 N.H. at 960, we reject Mortgage Specialists’ contention that the newsgathering privilege is inapplicable here because Implode is neither an established media entity nor engaged in investigative reporting. The trial court implicitly found that Implode is a “legitimate publisher of information” and a member of the press. The court further noted that it “has every reason to believe that [Implode] is a reputable entity desirous of only publishing legitimate information about the mortgage industry to various interested parties.”

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The fact that Implode operates a website makes it no less a member of the press. In light of the trial court’s implicit findings, we conclude that Implode’s website serves an informative function and contributes to the flow of information to the public. Thus, Implode is a reporter for purposes of the newsgathering privilege.

We also reject Mortgage Specialists’ alternative argument that if Implode is considered a reporter, then Downing v. Monitor Publishing Co., Inc., 120 N.H. 383, 415 A.2d 683 (1980), is controlling and disclosure is warranted. In Downing, the issue was whether the defendant-newspaper in a libel case should be required to disclose the source of allegedly defamatory information it published… In holding that it should, we also held that “there is no absolute privilege allowing the press to decline to reveal sources of information when those sources are essential to a libel plaintiff’s case.” … We established that a “plaintiff must satisfy the trial court that he has evidence to establish that there is a genuine issue of fact regarding the falsity of the publication.” … Critical to our ultimate ruling that source disclosure was required was the fact that as a public official, the plaintiff was required to prove that the defendant-newspaper acted with actual malice….Here, Mortgage Specialists does not seek damages against Implode for libel.

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We have set forth guidelines to determine whether a plaintiff can compel a defendant-newspaper to disclose confidential sources in a libel action…and whether a defendant can overcome the qualified newsgathering privilege in a criminal case….However, we have not yet established a standard to determine whether a plaintiff can overcome the newsgathering privilege in a civil suit where the press is a non-party to a defamation action. In the absence of binding precedent, in interpreting Part I, Article 22 of our State Constitution, we are guided by the First Circuit Court of Appeals’ balancing test, which weighs the First Amendment rights of a news organization against the rights of a litigant seeking confidential information…. In Bruno & Stillman, the First Circuit vacated the district court’s decision granting the boat company-plaintiff’s motion to compel the disclosure of confidential sources and information conveyed by them to The Boston Globe.

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The First Circuit agreed and instructed courts faced with requests for the discovery of journalistic materials to “be aware of the possibility that the unlimited or unthinking allowance of such requests will impinge upon First Amendment rights.” … It remanded the case for reconsideration of the plaintiff’s motion to compel discovery and instructed the district court to “balance the potential harm to the free flow of information that might result against the asserted need for the requested information.” … The court cited several factors for trial courts to consider, including whether the claim is merely “a pretense for using discovery powers in a fishing expedition,” whether there is a need for confidentiality between the journalist and the source, the exhaustion of other non-confidential sources, and the importance of confidentiality to preserve the journalist’s continued newsgathering effectiveness.

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We hold that this balancing test applies to a trial court’s review of a petition seeking disclosure of an anonymous source from the press to ascertain the identity of a potential defendant in a defamation action. Here, the trial court ordered the disclosure of the Loan Chart source without analyzing the applicability of the qualified newsgathering privilege or conducting any balancing of interests. We therefore vacate the trial court’s disclosure order and remand for further proceedings consistent with this opinion.

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Implode also challenges the trial court’s order mandating disclosure of the source of the Brianbattersby’s postings. Implode argues that the trial court erred in failing to balance Brianbattersy’s First Amendment rights against Mortgage Specialists’ need to discover his identity. In ordering disclosure of Brianbattersby’s identity, the court found that “[t]he maintenance of a free press does not give a publisher a right to protect the identity of someone who has provided it with unauthorized or defamatory information.”

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We take this opportunity to adopt a standard for trial courts to apply when a plaintiff requests disclosure of the identity of an anonymous defendant who has posted allegedly defamatory material on the Internet.

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Recently, several courts have enunciated rules regarding disclosure of anonymous Internet speakers…. The seminal case is Dendrite International, Inc. v. Doe Number 3, 342 N.J. Super. 134, 775 A.2d 756 (N.J. Super. Ct. App. Div. 2001). The plaintiff corporation, Dendrite, sued several John Doe defendants for defamation, based, in part, on the posting of statements on a website forum…. Dendrite appealed an order denying its request to conduct limited expedited discovery to ascertain the identity of the John Doe defendants…. A three-judge panel of the Superior Court of New Jersey affirmed the denial of Dendrite’s motion based upon the trial court’s finding that Dendrite failed to establish harm resulting from the Internet comments.

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We conclude that the Dendrite test is the appropriate standard by which to strike the balance between a defamation plaintiff’s right to protect its reputation and a defendant’s right to exercise free speech anonymously. Accordingly, we join those courts which endorse the Dendrite test…. We hold that the qualified privilege to speak anonymously requires the trial court to “balanc[e] … the equities and rights at issue,” thus ensuring that a plaintiff alleging defamation has a valid reason for piercing the speaker’s anonymity….We accordingly vacate the trial court’s disclosure order and remand for further proceedings consistent with the Dendrite test.
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Finally, Implode argues that the trial court erred in enjoining it from republishing the Loan Chart and the two Brianbattersby postings because the injunction constitutes an unlawful “prior restraint” on publication in violation of the First Amendment to the Federal Constitution. Mortgage Specialists counters that the publication of the Loan Chart is unlawful because it violates the confidentiality requirements of RSA 383:10-b (2006) and constitutes an invasion of privacy. It further asserts that the Brianbattersby postings are unlawful because they are false and defamatory.

Generally, “[w]e will uphold the issuance of an injunction absent an error of law, an unsustainable exercise of discretion, or clearly erroneous findings of fact.” … In cases involving alleged prior restraint of speech, the trial court must consider whether publication “threaten[s] an interest more fundamental than the First Amendment itself.” …In considering the validity of such injunctions under the First Amendment, we have “an obligation to ‘make an independent examination of the whole record’ in order to make sure that ‘the judgment does not constitute a forbidden intrusion on the field of free expression.’ …

Courts and commentators define prior restraint as a judicial order or administrative system that restricts speech, rather than merely punishing it after the fact…. In reviewing prior restraint cases, the United States Supreme Court has stated: “The court has interpreted … [First Amendment] guarantees to afford special protection against orders that prohibit the publication or broadcast of particular information or commentary — orders that impose a ‘previous’ or ‘prior’ restraint on speech.”…“Temporary restraining orders and permanent injunctions — i.e., court orders that actually forbid speech activities — are classic examples of prior restraints.” ….

In the seminal prior restraint case, Near v. Minnesota, 283 U.S. 697, 51 S. Ct. 625, 75 L. Ed. 1357 (1931), the defendant was the publisher of a newspaper containing anti-Semitic articles critical of local officials. In issuing a permanent injunction against the defendant, the trial court relied upon a state statute authorizing injunction of “malicious, scandalous and defamatory” publications…. The state supreme court affirmed, and the publisher appealed to the United States Supreme Court…. The Court reversed, finding that the state statute violated the freedom of the press because it was the “essence of censorship.”.. . The Court explained that prior restraints may be issued only in rare and extraordinary circumstances, such as when necessary to prevent the publication of troop movements during time of war, to prevent the publication of obscene material, and to prevent the overthrow of the government.

In the Pentagon Papers case, New York Times Co. v. United States, 403 U.S. 713, 714, 91 S. Ct. 2140, 29 L. Ed. 2d 822 (1971), the federal government sought to enjoin The New York Times and The Washington Post from publishing a stolen classified study on United States decision-making policy in Vietnam. Although the newspapers sought to publish these top-secret documents during the Vietnam War and the documents contained highly classified information that presumably threatened national security, the Supreme Court held that even those threats to important governmental interests could not overcome the established presumption against prior restraint on speech….

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Although the injunction here prohibits republication of the Loan Chart and postings, rather than their publication in the first instance, the injunction is nevertheless a restriction on what Implode may publish in the future. Accordingly, we conclude that the injunction effectively functions as a prior restraint that “freezes” speech at least for a time.

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Read the entire ruling here.