An Alabama appellate court has held that a newspaper can commit libel by reporting rumor even when the newspaper accurately quotes the rumor’s source, includes a denial by the rumor’s subject, and makes clear that the allegation is unverified.

Benjamin Little, a Christian minister and Anniston, Alabama, city councilman, sued the Anniston Star and its reporter Megan Nichols for a news story and editorial. The publications suggested that Little orchestrated a “sweetheart deal” to hire Yolanda Jackson, a human-resources consultant, to perform an audit of the city’s human-resources department.

The Star’s source was fellow councilman John Spain, a known rival of Little on the council. Spain suggested to the Star that Jackson’s audit was worthless, and that there was “a buzz in the city that Little had or has a personal relationship with Jackson, and that’s why he pushed her for hiring last year.” The story quoted Spain as saying the rumor would be unfair to Little if it were untrue, and contained a direct denial by Little that he had any personal relationship with Jackson. In the lawsuit, Little, who is African American, claimed libel and intentional infliction of emotional distress for the Star’s “campaign of vilification” with racial undertones against him.

The trial court granted the Star’s motion for summary judgment as to the libel claim on grounds that the Star truthfully reported the fact that Spain said there were rumors, and that Little failed to prove the rumors were inaccurate. It also granted summary judgment as to the intentional infliction of emotional distress claim because it was unsupported by any evidence that the Star singled out Little for criticism based on his race.

However, in a 3-2 decision, the majority of the appellate court reversed the trial court as to the libel claim, finding that the allegedly libelous statements were not “substantially true,” and could be found to suggest that Little and Jackson in fact had a “personal relationship.”

In its defense, the Star argued that it did not publish a story that said that Little and Jackson actually had a personal relationship, but instead simply reported that Spain said that there was a rumor to that effect circulating around Anniston. The Star also argued that Spain’s quote was protected by the fair report privilege and that there was no evidence of actual malice. However, the appeals court rejected all of those arguments.

In determining “truth,” the appeals court found that there was no evidence that Little had any type of relationship with Jackson other than professional, and that Little had denied this in the story and in his deposition. The appeals court also rejected the Star’s argument that reporting the existence of the rumor was actually true, finding that “the fact that the publication of the scandalous matter purports to be based on rumor is no defense” and that the Star’s repetition gave the rumor currency, and absent an expression of disbelief, actually worked to confirm it. The court held that:

[A] newspaper reporter or publisher cannot avoid liability for publishing a false and defamatory statement on the ground that the newspaper reporter or publisher accurately quoted the rumormonger, even if the newspaper story clearly identified the statement as an unverified report and even if the newspaper story contains a denial of the rumor by its subject.

The appeals court also rejected the Star’s fair report privilege argument, holding that it could not apply to the one-on-one interview between Spain and Nichols as it had occurred after a public meeting, and that, under Alabama law, the record contained sufficient evidence of actual malice by the Star to defeat privilege in that state. The court cited to evidence that the Star knew that Spain disliked Little, that Spain related information that was founded totally on rumor, that Little flatly denied such rumors, that the Star had no reason to doubt those denials, and that the Star’s publisher testified that the newspaper violated its general policy of “double-checking particularly divisive remarks.”