Cengage Advantage Books: Foundations of the Legal Environment of Business 3rd Edition by Marianne Jennings

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Trump v. O'Brien 29 A.3d 1090 (N.J. Super. 2011)
Truth Trumps
Facts
Donald Trump (plaintiff) sued Timothy O'Brien, the author of Trump Nation, the Art of Being the Donald , and his publisher (defendants) for defamation for the book's representations about Mr. Trump's net worth. To determine Mr. Trump's net worth, Mr. O'Brien interviewed and reinterviewed three anonymous sources who eventually lowered their estimates of Trump's net worth to be, at that time, between $150 million and $250 million. Their lowered estimates resulted from the decreased value of Trump's casino holdings at the time O'Brien was writing the book. O'Brien, who also interviewed Trump, wrote:
So I asked around for guidance. Three people with direct knowledge of Donald's finances, people who had worked closely with him for years, told me that they thought his net worth was somewhere between $150 million and $250 million. By anyone's standards this still qualified Donald as comfortably wealthy, but none of these people thought he was remotely close to being a billionaire.
That passage was followed by:
Donald dismissed this as naysaying. "You can go ahead and speak to guys who have four-hundred-pound wives at home who are jealous of me, but the guys who really know me know I'm a great builder," he told me.
Trump alleged in his suit that these and other statements such as those that referred to Mr. Trump's "verbal billions" and "Trump's ability to float above the wreckage of his financial miscues and magically add zeroes to his bank account ensured that he remained an object of fascination" were false statements that harmed his reputation. The trial court granted summary judgment for Mr. O'Brien and Mr. Trump appealed.
Judicial Opinion
PAYNE, Appellate Division Judge Because there is no doubt that Trump is a public figure, the alleged defamatory statements by O'Brien must have been uttered or published with "actual malice." [ N.Y. Times Co. v Sullivan , 376 U.S. 254 (1964).] To establish actual malice, Trump was required to demonstrate by clear and convincing evidence, that O'Brien published his statements "with knowledge that [they were] false or with reckless disregard of whether [they were] false or not."
In this context, "reckless disregard" refers to "the publishing of defamatory statements with a 'high degree of awareness of their probable falsity.'" In fact, "the recklessness in publishing material of obviously doubtful veracity must approach the level of publishing a 'knowing, calculated falsehood.' Negligent publishing does not satisfy the actual-malice test."
"To find actual malice, the factfinder must determine that the defendant in fact entertained serious doubts about the truth of the statement or that defendant had a subjective awareness of the story's probable falsity."
O'Brien has certified that he re-interviewed his three confidential sources prior to publishing their net worth estimates, and he has produced notes of his meetings with them both in 2004 and in 2005. The notes are significant, in that they provide remarkably similar estimates of Trump's net worth, thereby suggesting the accuracy of the information conveyed.
Further, the accounts of the sources contain significant amounts of additional information that O'Brien was able to verify independently.
In the book, O'Brien did not cite the sources' views as fact, but instead utilized their lower figures as an illustration of the spread in estimates of Trump's wealth, while suggesting that, in his own view, Trump's net worth was far less than he claimed it to be. O'Brien's opinions in this regard were not actionable, because they were absolutely privileged. O'Brien reported Trump's denial of the accuracy of the low net worth figures, although his statement, touting his abilities as a builder, can be construed as less of a denial than an avoidance of the issue presented.
Trump relied in large measure on a 2004 Statement of Financial Condition prepared by Weiser L.L.P., Certified Public Accountants, to which O'Brien was allegedly given access on three occasions including during the course of the April 21, 2005 meeting. However, a preface to that Statement demonstrates its limited value as an accurate representation of Trump's net worth. There, the accountants cautioned that they had "not audited or reviewed the accompanying statement of financial condition and, accordingly, do not express an opinion or any other form of assurance on it." Further, the accountants noted significant departures from generally accepted accounting principles.
Defendants quote a September 9, 2004 article in The Washington Post , which stated:
Actually, it's hard to know exactly what percent of Trump's net worth is tied to the casino business, because most of Trump's portfolio is in privately held companies that don't report earnings. He's described himself as "a billionaire many times over," but who knows? There are skeptics out there who believe Trump has $300 million, tops. And the guy has a reputation for, let's say, shading the news in a light that reflects his enthusiasm.
Absent actual malice on his part, respondeat superior liability cannot arise. Thus we find that summary judgment was properly granted. Affirmed.
Case Questions
1. Explain why the court focuses on the fact-finding efforts of Mr. O'Brien.
2. What is the significance of others raising doubts about Mr. Trump's net worth?
3. What lessons should writers and reporters learn from this case? Editors? Publishers?