J. A04011/16

2016 PA Super 125

DOMINICK D. DiPAOLO : : IN THE SUPERIOR COURT OF

PENNSYLVANIA v. : : TIMES PUBLISHING COMPANY, D/B/A ERIE TIMES NEWS, CYBERINK, LP, D/B/A GOERIE.COM, LISA THOMPSON, EDWARD PALATELLA JR., AND MICHAEL MACIAG, : : : : : No. 1713 WDA 2014 : Appellants :

Appeal from the Order, October 10, 2014, in the Court of Common Pleas of Erie County Civil Division at No. 14004-2011

BEFORE: FORD ELLIOTT, P.J.E., BENDER, P.J.E., AND SHOGAN, J.

OPINION BY FORD ELLIOTT, P.J.E.: FILED JUNE 15, 2016 Appellants, Times Publishing Company, d/b/a Erie T imes News (“Times”); Cyberink, LP, d/b/a GoErie.com (“Cyberli nk”); Lisa Thompson (“Thompson”); Edward Palatella Jr. (“Palatella”); a nd Michael Maciag (“Maciag”) appeal from the October 10, 2014 order e ntered in the Court of Common Pleas that granted the motion to compel of a ppellee, Dominick D. DiPaolo (“Judge DiPaolo”). We affirm. The record reflects that Judge DiPaolo, a magister ial district judge, filed a three-count complaint alleging libel with r espect to a series of print and online articles and blogs published on November 14, 2010; November 28, 2010; April 16, 2011; and April 17, 20 11. Times andJ. A04011/16

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Cyberlink are business entities that publish the Erie Times News newspaper and GoErie.com, an online newspaper. The se business entities employ the individual appellants Thompson, Palatell a, and Maciag as reporters, journalists, writers, and/or bloggers. The events that gave rise to this appeal took root on October 28, 2010, when the Office of the Pennsylvania Attorney General (“Attorney General”) initiated an action against Un icredit America Incorporated (“Unicredit”), an Erie-based debt-coll ection company. The complaint alleged that Unicredit engaged in certain debt-collection activities that violated various Pennsylvania consumer-protect ion laws, as well as the Pennsylvania Rules of Civil Procedure. The Attorne y General also averred that Unicredit improperly filed numerous civil acti ons in Judge DiPaolo’s magisterial district office and then obtained judgm ents against most of the defendant debtors. The Attorney General further al leged that in an attempt to pressure the defendant debtors to satisfy judgme nts, Unicredit conducted fake post-judgment proceedings in a fake courtroom presided over by a fake judge. Court proceedings in the Unicredit case took place before Erie County Court of Common Pleas Judge Michael E. Dunlavey on November 2, 2010 and November 10, 2010. Those proceedings resulted in significant press coverage, including articles published in the Erie Times News and on GoErie.com. It was the publication of those articl es that causedJ. A04011/16

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Judge DiPaolo to file his three-count defamation co mplaint, which he later amended, against the appellants. Count I of Judge DiPaolo’s amended complaint alleg es libel against appellants Times, Cyberlink, Palatella, and Thompso n for the following statements written by Palatella and Thompson and pu blished by Times and Cyberlink in print and online on November 14, 2010:

a. “Probe of Erie debt collector Unicredit widens;” b. “Federal agents, Dunlavey and even one of Unicredit’s former clients have taken notice of the information surfacing in the case, which according to what Dunlavey said in court, could include a look at the practices in the office of Erie 6 th Ward District Judge Dominick DiPaolo;” and c. “The chief counsel of the State Supreme Court’s Judicial Conduct Board, Joseph J. Massa Jr., declined to comment on whether violations cited by Dunlavey would be investigated.” Amended complaint in civil action, 12/28/11 at 23-2 4, ¶¶ 137-138 (Docket #11). Judge DiPaolo alleged that these statements harmed his reputation because they explicitly state or suggest that the U nicredit probe was widened to include Judge DiPaolo and that Judge Dun lavey had stated in court that Judge DiPaolo could and/or should be inv estigated for his role in that case by either Judge Dunlavey himself, the Att orney General’s office, federal agents, or the Judicial Conduct Board. ( Id. at 24, ¶ 139).J. A04011/16

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Judge DiPaolo further alleged that Judge Dunlavey n ever stated that Judge DiPaolo could, would, or should be the target of an investigation and that Judge Dunlavey only stated that he defended Ju dge DiPaolo’s actions and that he believed that Judge DiPaolo’s office ha d relied on Unicredit’s representation. ( Id. at 24, ¶ 140.) Judge DiPaolo averred that the November 14, 2010 p ublished statements were made with actual malice because (i) Thompson and/or Palatella attended the November 10, 2010 hearing an d heard what Judge Dunlavey said; (ii) appellant Thompson and/or Palatella subsequently reviewed the November 10, 2010 hearing transcript a nd read what Judge Dunlavey said; (iii) a November 11, 2010 arti cle written by Thompson accurately summarized the November 10, 2010 court p roceeding; (iv) Thompson and/or Palatella admitted that they r eviewed the Judicial

Conduct Board’s website and knew that that board in vestigates judges for alleged unethical or illegal conduct; (v) Thompson and/or Palatella reviewed the Unicredit case docket and knew no other hearing occurred after the November 10, 2010 proceeding and November 14, 2010, the date the article was published. ( Id. at 25, ¶ 142(a)-(g).) Count II of Judge DiPaolo’s amended complaint alle ges libel against Times, Cyberlink, Thompson, and Palatella for state ments written by Thompson and Palatella and published by Times and C yberlink in print and online on November 28, 2010, and then subsequently republished in articlesJ. A04011/16

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written by Thompson and Palatella and dated Decembe r 13, 2010; December 21, 2010; December 22, 2010; and February 9, 2011. The following allegedly defamatory statements were publ ished after a hearing before Judge Dunlavey on Unicredit’s motion for rec onsideration for post-trial relief on November 22, 2010:

a. the headline “Legal Ruling Questioned, Unicredit Lawyer: Debt collector, judge not involved with Kickback;” b. The statement that “Dunlavey said it appeared Unicredit established a ‘ghost system of justice’ by first obtaining judgment against debtors in the wrong venue – mainly Erie 6 th Ward District Judge Dominick DiPaolo’s office – and then using those judgments and sham court proceedings in Unicredit’s offices to extract payments from debtors;” and c. The unfair republication of [Unicredit’s Attorney Krista] Ott’s defamatory, but judicially privileged, statement that “there is a kickback scheme involving Unicredit and Magisterial District Judge DiPaolo’s office” with additional sting caused by the aforesaid headline and statement.

Id. at 26-27, ¶ 146(a)-(c). Judge DiPaolo alleged that these statements were d efamatory because they stated or suggested, and appellants’ readers u nderstood them to mean, that Judge Dunlavey had issued a ruling that found Judge DiPaolo was involved in a kickback scheme with Unicredit; that Judge Dunlavey said or suggested that Judge DiPaolo was involved in Unicre dit’s “ghost system of justice”; and that Judge DiPaolo was actually invol ved in a kickback schemeJ. A04011/16

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with Unicredit. ( Id. at 27, ¶ 148.) Judge DiPaolo further alleged that Judge Dunlavey never ruled, found, or otherwise sta ted or suggested that he believed that Judge DiPaolo was involved in a kickb ack scheme with Unicredit. ( Id. at 27-28, ¶ 149.) Judge DiPaolo averred that the November 28, 2010 p ublished statements were made with actual malice because, am ong other things, Thompson and/or Palatella read and reviewed Judge D unlavey’s November 10, 2010 court order, as well as Attorney Ott’s motion for reconsideration of that order, and one or both of t hose appellants had knowledge of the Unicredit case generally, so that they would have known that the statements published in the November 28, 2 010 article were false. Finally, Count III of Judge DiPaolo’s amended comp laint alleges libel against Times, Cyberlink, Thompson, Palatella, and Maciag for approximately 32 statements written by Thompson and Palatella and published by Times and Cyberlink in print and online on April 16, 2011 and April 17, 2011, 1 that harmed Judge DiPaolo’s reputation because they stat ed or suggested, and

their readers understood them to mean:

a. That Judge DiPaolo had intentionally captioned those Unicredit cases that he heard to conceal that the creditors and/or debtors in those cases were out of his jurisdiction;

1 These statements were also alleged to have been pu blished on an April 16, 2011 blog post and on Unicredit’s web page. (Amend ed complaint in civil action, 12/28/11 at 29, ¶ 155 (Docket #11).)J. A04011/16

- 7 - b. That Judge DiPaolo improperly heard cases in which his relatives were a party; c. That Judge DiPaolo had extended judicial favors to Unicredit based on an attenuated familial relationship; d. That Judge DiPaolo applied practices in his office that differed from other Magisterial District Judges in an improper effort to help Unicredit; e. That a Judge had stated that “DiPaolo takes relatives[’] cases;” f. That a Judge or the Attorney General had called Judge DiPaolo’s practices “unconscionable;” and g. That Judge DiPaolo had knowledge of a jurisdictional deficit in the Unicredit-related cases filed in his office, that he had a duty to raise that jurisdictional deficit, and that he did not do so because he was related to one of Unicredit’s principals.

Id. at 30, ¶ 157. Judge DiPaolo alleged that Thompson, Palatella, an d/or Maciag intentionally misquoted and/or mischaracterized the proceedings and public records upon which they based these statements and, therefore, made the statements with actual malice. ( Id. at ¶¶ 158-159.) During discovery in this case, Judge DiPaolo serve d interrogatories and requests for production on appellants. With respec t to each alleged defamatory publication, Judge DiPaolo requested tha t appellants “[i]dentify each and every source who provided content used in the article and describeJ. A04011/16

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the information provided by each source;” “[i]denti fy and provide every note or set of notes reflecting the conversation had bet ween the source identified [] and the person with whom that source spoke;” and “[i]dentify and provide any documents referred to in creating the article a nd state for what content within the document, if any, relied upon that docum ent in whole or in part.” (Motion to compel, 4/10/14 Exhibit A (Docket #37).) Appellants objected to these specific interrogatories and requests for pro duction on the basis of privilege under the Pennsylvania Shield Law 2 and/or the qualified First Amendment privilege, also known as the journalist’s privilege. Thereafter, Judge DiPaolo filed his first motion to compel cont ending, among other things, that he requested appellants’ notes, unpubl ished drafts, and

2 § 5942. Confidential communications to news

reporters

. (a) General rule. -- No person engaged on, connected with, or employed by any newspaper of general circulation or any press association or any radio or television station, or any magazine of general circulation, for the purpose of gathering, procuring, compiling, editing or publishing news, shall be required to disclose the source of any information procured or obtained by such person, in any legal proceeding, trial or investigation before any government unit. 42 Pa.C.S.A. § 5942.J. A04011/16

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documents referred to in creating the articles “bec ause those notes, drafts, and documents are likely to provide insight into th e state of knowledge of the reporters prior to their writing the [a]rticles and the mindset of the reporters in their writing the [a]rticles.” ( Id. at 5, ¶ 25.) Judge DiPaolo further averred that he “requires this information to meet the actual malice standard of liability required by the United States Constitution.” ( Id. at ¶ 26.) At oral argument on the motion, Judge DiPao lo agreed to narrowly tailor his discovery requests so that appellants co uld determine the applicability of the Shield Law and/or the qualifie d First Amendment privilege. Subsequently, Judge DiPaolo sent a second set of i nterrogatories and requests for production to appellants. In response to those interrogatories, appellants identified notes of appellant Thompson. 3 Additionally, during Palatella’s deposition, Palatella testified as to t he existence of a spreadsheet that he prepared with appellant Maciag that compile d data from public court records to determine the identity and/or number of debtors sued by Unicredit who did not live within Judge DiPaolo’s m agisterial district. Thereafter, Judge DiPaolo filed a second motion to compel production of

3 Appellants did not produce appellant Thompson’s no tes because, they contend, Judge DiPaolo did not request them in his second set of interrogatories and requests for production of docu ments and DiPaolo did not establish facts necessary to overcome the journ alist’s privilege. (Defendants’ response in opposition to plaintiff’s motion to compel, 7/28/14 at 3, ¶¶ 12-13 (Docket #49).)J. A04011/16

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appellants’ notes, unpublished drafts, and document s referred to in creating the articles subject to redaction of confidential i nformants and a privilege log. The request necessarily includes the notes Th ompson took at the November 10, 2010 hearing, as well the spreadsheet prepared by Palatella and Maciag. The trial court granted Judge DiPaolo’ s motion. This appeal

followed. Appellants raise two issues for our review:

A. WHETHER THE TRIAL COURT ERRED IN FINDING THAT, WITH RESPECT TO THE NOTES PREPARED BY APPELLANT, THOMPSON, APPELLEE HAD MADE A SHOWING SUFFICIENT TO OVERCOME THE JOURNALIST’S PRIVILEGE UNDER THE FIRST AMENDMENT?

B. WHETHER THE TRIAL COURT ERRED IN FINDING THAT, WITH RESPECT TO THE REPORTERS’ RESOURCE MATERIALS AND SPREADSHEET, APPELLEE MADE A SHOWING SUFFICIENT TO OVERCOME THE JOURNALIST’S PRIVILEGE UNDER THE FIRST AMENDMENT? Appellants’ brief at 2-3. Preliminarily, we note that the order granting Jud ge DiPaolo’s motion to compel is appealable as a collateral order.

[I]n general, discovery orders are not final, and a re therefore unappealable. However, discovery orders involving privileged material are nevertheless appealable as collateral to the principal action pursuant to Pa.R.A.P. 313 (“Collateral Orders”). Rule 313(a) states that “[a]n appeal may be taken as of right from a collateral order of [a] . . . lo wer court.”J. A04011/16

- 11 - A collateral order is an order separable from and collateral to the main cause of action where the right involved is too important to be denied review and the question presented is such that if review is postponed until final judgment in the case, the claim will be irreparably lost. Pa.R.A.P. 313(b). A discovery order is collateral only when it is separate and distinct from the underlyin g cause of action. Generally, discovery orders involving purportedly privileged material are appealable because if immediate appellate review is not granted, the disclosure of documents cannot be undone and subsequent appellate review would be rendered moot. Rhodes v. USAA Casualty , 21 A.3d 1253, 1258 (Pa.Super. 2011), appeal

denied , 119 A.3d 351 (Pa. 2015) (internal case law citati ons and quotation marks omitted). Accordingly, we will review the trial court's orde r granting Judge DiPaolo’s motion to compel. See id. , quoting Berkeyheiser v. A-Plus Investigations, Inc. , 936 A.2d 1117, 1123-1124 (Pa.Super. 2007) (“Pennsylvania courts have held that discovery orde rs involving potentially confidential and privileged materials are immediate ly appealable as collateral to the principal action.”). Generally, when reviewing the propriety of a disco very order, our

standard of review is whether the trial court abuse d its discretion. Rhodes , 21 A.3d at 1258 (citations omitted). To the extent that we are presented with questions of law, our scope of review is plena ry. Id.J. A04011/16

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The discovery order at issue compels the media app ellants to produce documents in Judge DiPaolo’s defamation suit agains t them.

“Defamation is a communication which tends to harm an individual’s reputation so as to lower him or her in the estimation of the community or deter thi rd persons from associating or dealing with him or her .” Elia v. Erie Insurance Exchange , 430 Pa.Super. 384, 634 A.2d 657, 660 (1993). Only statements of fact, not expressions of opinion, can support an action in defamation. Id. In a defamation case, a plaintiff must prove: “(1) The defamatory characte r of the communication; (2) its publication by the defendant; (3) its application to the plaintiff; (4 ) the understanding by the recipient of its defamatory meaning; (5) the understanding by the recipient of it as intended to be applied to the plaintiff; (6) spe cial harm resulting to the plaintiff from its publicatio n; and (7) abuse of a conditionally privileged occasio n.” Porter v. Joy Realty, Inc. , 872 A.2d 846, 849 n. 6 (Pa.Super. 2005), quoting, 42 Pa.C.S.A. § 8343(a). See also, Weber v. Lancaster Newspapers, Inc. , 878 A.2d 63 (Pa.Super. 2005).

Moore v. Cobb-Nettleton , 889 A.2d 1262, 1267 (Pa.Super. 2005). Here, no dispute exists that Judge DiPaolo, as a m agistrate, is a public official or a public figure.

[T]he appropriate standard of fault depends on whether the plaintiff is a public or private figure . If the plaintiff is a public official or public figure , and the statement relates to a matter of public concern , then to satisfy First Amendment strictures the plaintiff must establish that the defendant made a false and defamatory statement with actual malice. In contrast, states are free to allow a private-fig ure plaintiff to recover by establishing that the defen dant acted negligently rather than maliciously.J. A04011/16

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American Future Systems, Inc. v. Better Business Bure au of Eastern Pennsylvania , 923 A.2d 389, 400 (Pa. 2007), cert. denied , 552 U.S. 1076 (2007) (citations and parentheticals omitted).

The term “actual malice” (sometimes shortened to “malice”) is a term of art that refers to a speaker ’s knowledge that his statement is false, or his reckl ess disregard as to its truth or falsity. Thus, it imp lies at a minimum that the speaker “‘entertained serious doubts about the truth of his publication,’ . . . o r acted with a ‘high degree of awareness of . . . probable falsity.’” Masson v. New Yorker Magazine , 501 U.S. 496, 510, 111 S.Ct. 2419, 2429, 115 L.Ed.2d 447 (1991) (quoting St. Amant v. Thompson , 390 U.S. 727, 731, 88 S.Ct. 1323, 1325, 20 L.Ed.2d 262 (1968); Garrison v. Louisiana , 379 U.S. 64, 74, 85 S.Ct. 209, 216, 13 L.Ed.2d 125 (1964)). This term “should not be confused with the concept of malice as an evil inte nt or a motive arising from spite or ill will.” Id. American Future Systems, Inc. 923 A.2d at 395 n.6. Here, appellants contend that the trial court erre d in ordering compelled disclosure of Thompson’s notes and the re source materials used and spreadsheet prepared by Palatella and Maciag be cause Judge DiPaolo did not overcome the journalist’s privilege (also k nown as the qualified First Amendment privilege) under the First Amendment of t he United States Constitution. We note that despite claiming the po tential applicability of the Pennsylvania Shield Law, 42 Pa.C.S.A. § 5942(a), to these documents in the proceedings below, appellants advance no such argum ent on appeal. We further note that the shield law, unlike the journa list’s privilege, is an absolute privilege that protects a journalist from compelled disclosure of aJ. A04011/16

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confidential source. In interpreting the shield la w, our supreme court has held that a plaintiff may discover unpublished docu mentary information gathered by the media to the extent that that docum entary information does not reveal the identity of a confidential source. Hatchard v. Westinghouse Broadcasting Co. , 532 A.2d 346, 351 (Pa. 1987). The purpose of the shield law is to maintain a free flo w of information to the

news media. Id. Likewise, the reporter’s privilege was designed to protect freedom of the press by insuring the free flow of information to reporters. Davis v.

Glanton , 705 A.2d 879, 885 (Pa.Super. 1997) (citation omit ted). Thus,

there exists a stark distinction between the need f or disclosure of materials that identify or could lead to the identification o f confidential sources from the need for disclosure of materials created during the editorial process. The following aptly examines the dichotomy:

In libel actions, the right of a plaintiff to disco ver into the editorial process is a distinct issue from discovery of a journalist’s confidential sources. Courts have generally protected discovery of confidential sources because of the effect disclosu re of such sources would have on a journalist’s conduc t. “Disclosure of confidential sources is . . . more onerous than inquiry into the editorial process in that it can significantly affect journalistic conduct.” Marian E. Lindberg, Note, Source Protection In Libel Suits After Herbert v. Lando , 81 Colum. L. Rev. 338, 362 (1981). Furthermore, “compelled disclosure of confidential sources might chill the flow of information so essential to the freedom and effectiveness of the press.” Mize v. McGraw-Hill , 86 F.R.D. 1, 4 (S.D. Tex. 1980). This “chilling ef fect”J. A04011/16

- 15 - on the free flow of information that discovery may have impinges on the public’s interest in news dissemination in contravention of the First Amendment. The balance between a plaintiff’s need for disclosu re of either confidential sources or the editorial pro cess, and the public’s First Amendment interest in the fr ee flow of information was explained in Mize , decided shortly after the Supreme Court of the United State s decision in Herbert v. Lando , 441 U.S. 153, 99 S. Ct. 1635, 60 L. Ed. 2d 115, (1979): The availability of the requested material through alternative discovery distinguishes the inquiry into the editorial process from the disclosure of a confidential source of information. Direct disclosure of the editorial process exposes the thoughts, considerations, and state of mind of editors and writers. At best, indirect evidence is a mere shadow of the editorial process. In contrast, the identity of a source of information may be ferreted out without direct disclosure by the press. Through vigorous discovery, a plaintiff may narrow down the field of possible sources and finally pinpoint the actual source. Where the plaintiff is aware of who knew about the transaction or event to which the allegedly libelous statement refers, his task of pinpointing the source is simplified. Thus, the plaintiff’s need for disclosure of confidential sources may be slighter than his need for compelled disclosure of the editorial process. At the same time, the publisher’s and the public’s interests in the confidentiality of sources surpasses their interest in the confidentiality of the editorial process. In Herbert , the Supreme Court explained that disclosure of the editorialJ. A04011/16

- 16 - process would aid in the free flow of information. It would have this effect because editors would decide against publishing material they knew to be false, if they anticipated that their conversations concerning the material might be disclosed in the course of a law suit. Since publication of false information would be discouraged, the public’s interest in the free flow of truthful information would be served.

Mize , 86 F.R.D. at 3. Titan Sports, Inc. v. Turner Broadcasting Systems, I nc. (In re Madden) , 967 F.Supp. 142, 146 (W.D.Pa. 1997), rev’d and remanded on other grounds , 151 F.3d 125 (3d Cir. 1998). See also Hatchard , 532 A.2d at 349 (recognizing that the First Amendment d oes not bar a plaintiff from inquiring into the editorial processes of the media defendant responsible for publishing a defamatory statement b ecause the plaintiff is entitled to discover information that permits a mea ningful inquiry into whether the statement was made maliciously or reckl essly). In order to overcome the reporter’s privilege, the movant must demonstrate (1) that the information sought is mate rial, relevant, and necessary; (2) a strong showing that the informatio n cannot be obtained by alternative means; and (3) that the information is crucial to the movant’s

case. Riley v. City of Chester , 612 F.2d 708, 716-717 (3d Cir. 1979). Here, Judge DiPaolo does not seek disclosure of a confidential source or materials that could lead to the identity of a c onfidential source; rather,J. A04011/16

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he seeks disclosure of documents related to the edi torial process that he contends he needs in order to prove actual malice i n his defamation action. Preliminarily, we note that prohibiting disclosure of the information sought by Judge DiPaolo would not further the goal of the reporter’s privilege, which is to insure the free flow of info rmation to reporters,

because this case does not involve a confidential s ource who provided information to appellants. To the contrary, appell ants created the information sought during their own editorial proce ss in connection with writing and publishing the articles that are at the heart of Judge DiPaolo’s defamation action against them. As a result, compe lled disclosure would not result in a chilling effect because it would have n o impact on any future confidential source’s decision to provide informati on to a reporter. Additionally, the information sought goes to Thomp son’s, Palatella’s, and Maciag’s states of mind. Because Judge DiPaolo must prove actual malice in his defamation action against appellants, Thompson’s notes and the resource materials used and the spreadsheet cre ated by Palatella and Maciag during the editorial process are material, r elevant, necessary, and crucial to Judge DiPaolo’s defamation case against them. Finally, this information cannot be obtained by al ternative means. Thompson’s notes constitute her personal record of the Unicredit case based on her experience and perception. As a result, Tho mpson’s personal record cannot be obtained from anyone other than Thompson. Likewise, theJ. A04011/16

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resource materials and spreadsheet compilation are personal to Palatella and Maciag because they chose what debtors’ cases to in clude and what methodology to employ in their analysis in order to ascertain their own meaning of the data. Consequently, the resource ma terials and spreadsheet cannot be obtained from anyone other than Palatella and Maciag. We, therefore, find no abuse of discretion in the trial court’s finding that Judge DiPaolo overcame the reporter’s privileg e and its resulting order granting Judge DiPaolo’s motion to compel.

Order affirmed. Bender, P.J.E. joins the Opinion Shogan, J. files a Dissenting Opinion.

Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary Date: 6/15/2016