ADAM SCHNEIDER v. BRIAN UNGER

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1530-11T4

ADAM SCHNEIDER,

Plaintiff-Appellant,

v.

BRIAN UNGER, PAT POLITANO,

THE UNGER CHANGE TEAM, JON

EVANS, and PETER DELISA,

Defendants-Respondents.

_________________________________

January 10, 2013

Submitted October 15, 2012 - Decided

Before Judges Sabatino and Fasciale.

On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-2533-10.

Manning, Caliendo & Thomson, P.A., attorneys for appellant (Vincent P. Manning, on the brief).

Chamlin, Rosen, Uliano & Witherington, attorneys for respondents (James J. Uliano, on the brief).

PER CURIAM

This appeal involves a claim by plaintiff Adam Schneider, the mayor of Long Branch, alleging that, in the course of the 2010 mayoral election campaign, defendants Brian Unger, Pat Politano, The Unger Change Team, John Evans, and Peter DeLisa distributed campaign flyers that defamed him. In particular, the campaign flyers insinuated that plaintiff had accepted bribes from a former real estate developer. The developer has served as an undercover agent for the United States in several federal corruption cases against certain public officials and other individuals in New Jersey.1 Plaintiff is not, however, one of the officials who was prosecuted in those federal cases.

The trial court granted defendants summary judgment on the basis that plaintiff had not made a sufficient showing that defendants had acted with "actual malice," a necessary element of a defamation case where, as here, the plaintiff is a public official. We affirm that determination.

I.

From March 2010 until May 11, 2010, plaintiff was campaigning for re-election to the office of Mayor of the City of Long Branch as a twenty-year incumbent. Defendant Unger was an opposing candidate for the same office.

Defendant "Unger Change Team" was an organization that Unger established to coordinate efforts to obtain votes in his favor. According to plaintiff's complaint, defendant Politano was a consultant to Unger's campaign. Defendant DeLisa was likewise involved in the campaign, allegedly as Unger's campaign manager. Defendant Evans also participated in Unger's organization, allegedly as campaign chairman.

The mayoral campaign on both sides was particularly contentious. In particular, the Unger Change Team distributed flyers alleging that plaintiff had taken bribes from Solomon Dwek ("the informant"), a former real estate developer who had been convicted of bank fraud in 2006.

One flyer that defendants allegedly distributed in or before April 2010 featured a photograph of the informant. Referring to the informant, the flyer read: "He's one of the most notorious criminals in New Jersey. He bribed mayors with envelopes filled with cash. Long Branch Mayor Adam Schneider took his money."

Another flyer said to have been distributed by defendants asserted that the informant "passed out tens of thousands of dollars in bribes and campaign contributions to mayors, council members and government officials throughout New Jersey in the largest corruption case in state history. Schneider took campaign cash from [the informant] not once, not twice, but three different times." This flyer included images of an alleged report that plaintiff filed with the New Jersey Election Law Enforcement Commission, stating that the informant had made successive contributions of $1900, $1000, and $1800 to plaintiff's campaign.

A third flyer quoted testimony that the informant had given on May 5, 2010 at one of the federal corruption trials, coincidentally just a few days before the mayoral election:

I had a middleman make a bribe payment like [sic] to the Mayor of Long Branch or council people of Long Branch or sometimes I would give out auction tickets.

The Yeshiva would hold a charity auction, every year and I would at times give public officials, like council people in Long Branch . . . free auction tickets for their official assistance in expediting my land use applications, my use for my zoning.

The flyer read across the top, "Schneider and his Long Branch Council: Bribed. Breaking News . . ." (Ellipsis in original).

A fourth flyer from defendants' camp similarly read, "Breaking news . . . Official federal court documents: Mayor Schneider bribed." (Ellipsis in original). This flyer again quoted from a portion of the informant's May 2010 federal testimony: "I had a middleman make a bribe payment like to the Mayor of Long Branch or council people of Long Branch[.]"

For his own part, plaintiff distributed opposing flyers during the campaign which variously alleged that Unger "made an inappropriate sexual comment about a female employee" and subsequently lied about the incident, that Unger offered a bribe to a librarian "in an attempt to get special treatment," and that Unger lied about speaking with a Commissioner of the State Department of Environmental Protection. Two of these flyers referred to Unger as "lyin' Brian."

Before and after the Long Branch election, a number of media outlets covered the informant's federal testimony. The coverage described the informant's cooperation with the Federal Bureau of Investigation ("FBI") during what was described in one account as a "federal corruption and money-laundering sting." According to the record, the FBI sting "led to the arrests of dozens of elected officials, political operatives and religious figures" in this state.

Plaintiff was not among those charged with criminal activity. Nevertheless, several of the media accounts of the federal testimony made specific reference to the informant's statements about plaintiff, and his relationship with him.

For example, a May 6, 2010 article from PolitickerNJ.com repeated the informant's testimony that he used a middleman to make a bribe payment to "the Mayor of Long Branch." The article noted plaintiff's acknowledgement that he had accepted campaign contributions from the informant in the past, but also plaintiff's assertion that he had since cut ties with the informant eight years before the article was written.

Another press account referred to the informant as a "thief of first rank" who had "victimized . . . friends, associates, and even his own uncle" through a multimillion-dollar fraud. A separate article noted the informant's admission in his federal testimony in October 2010 that he "regularly bribed politicians to help . . . secure building approvals, including mayors and councilmen from Long Branch and West Long Branch." The article contained plaintiff's counter-assertion that the informant's testimony on those matters was "absolutely false."

Although not featured in entirety in the news articles, the informant's October 2010 federal testimony referred specifically to plaintiff as follows:

Q. Now, were there additional public officials in Long Branch that you provided what you believed to be an improper benefit?

A. Yes, there was.

Q. Can you describe the nature of the payments that you made?

A. The mayor of Long Branch was Adam Schneider and Councilman Anthony Giordano, his name was.

I was invited to a fund raiser [sic] for Mayor Schneider and Councilman Giordano at the Deal Golf Country Club, the golf course.

And when I was there, I already paid my admission ticket, I was there, and I was approached by one of my partners, Barry Kantrowitz, who came over to me with Mayor Schneider and Councilman Giordano, and he told me that they are looking for $10,000 in cash to help them out.

Q. What happened then?

A. I said, I have no problem giving you the $10,000 to help you out, but I have an application coming up for something in Long Branch on Ocean Avenue or Ocean Boulevard, make sure you take care of me with that application.

They gave me their assurances, and I gave the money to my partner Barry Kantrowitz, and he passed the money along to Mayor Schneider.

Plaintiff won the election, which was held on May 11, 2010. He continues to be the Mayor during the present litigation.

Ten days after winning re-election, plaintiff filed a complaint against defendants in the Law Division.2 Defendants filed an answer denying liability. With leave of the court, plaintiff then filed an amended complaint against defendants, alleging defamation and civil conspiracy. In particular, the amended complaint alleged that defendant's campaign flyers referring to the informant's May 5, 2010 federal testimony were defamatory.3 Defendants denied these allegations as well.

The parties undertook some limited discovery, including a deposition of the informant. Notably, the informant denied in his deposition having engaged in contact with any of defendants.4

Defendants moved for summary judgment. Among other things, they noted that because plaintiff is a public official, he cannot prevail in a defamation action unless he proves that false statements were made about him with "actual malice."5 Defendants denied having such a culpable state of mind in connection with the creation and distribution of the flyers. On the other hand, plaintiff's counsel argued that, given the nature of the informant's background and the publicity surrounding his activities, defendants "should have been highly suspicious . . . of anything [the informant] had to say about anything."

The motion judge, Hon. Patricia Del Bueno Cleary, J.S.C., granted defendants' application. In her oral statement of reasons, the judge noted that his status as a public office-holder placed upon him the burden of proving that defendants had published false statements about him knowingly, or at the very least with reckless disregard for the truth. The judge found this evidential burden had not been met.

Judge Cleary highlighted the fact that the informant's statements referred to in defendants' campaign flyers had been made under oath in court, and that there was no doubt as to whether he had made them. The judge also noted that in his post-election federal testimony in October 2010, the informant repeated his claim that he had bribed plaintiff, thus corroborating his earlier May 5, 2010 testimony featured in defendant's flyers.

The judge concluded that there was no question of material fact, and that defendants were entitled to judgment as a matter of law because plaintiff had not established that defendants acted knowingly or with reckless disregard for the truth.

II.

Plaintiff now raises a single argument on appeal, asserting that only a jury, "under the peculiar facts of this case," could properly determine if defendants' conduct amounted to reckless disregard for the truth. Having considered this argument and the record as a whole, we affirm the dismissal of plaintiff's lawsuit, substantially for the reasons expressed in Judge Cleary's bench opinion dated August 5, 2011. We amplify that opinion with the following observations.

As our Supreme Court has instructed, summary judgment is a favored device for winnowing out non-meritorious defamation cases before they are listed for trial. See Kotlikoff v. Cmty. News, 89 N.J. 62, 67-68 (1982). This preference reflects the robust constitutional history of our nation and state to protect and encourage free speech. Ibid.; see also Sullivan, supra, 376 U.S. at 270-71, 94 S. Ct. at 720-21, 11 L. Ed. 2d at 700-01; Dairy Stores, Inc. v. Sentinel Pub. Co., 104 N.J. 125, 138-39 (1986).

Where a plaintiff is a public official, the First Amendment of the United States Constitution prevents him from recovering on a defamation claim "unless he proves that the statement was made with 'actual malice' that is, with knowledge that it was false or with reckless disregard of whether it was false or not." Sullivan, supra, 376 U.S. at 279-80, 84 S. Ct. at 726, 11 L. Ed. 2d at 706; accord Durando v. Nutley Sun, 209 N.J. 235, 250-52 (2012) (reiterating the principle from Sullivan that public officials suing for defamation must prove actual malice, and applying that standard to matters of public interest or concern even when the plaintiff is not a public official).6 "Recklessness" in this context requires the plaintiff to prove that the statements were published "with a high degree of awareness of their probable falsity or with serious doubts as to the truth of [the] publication." DeAngelis v. Hill, 180 N.J. 1, 13 (2004) (alteration in original) (internal quotations and citations omitted).

The actual malice test is subjective, "and involves analyzing the thought processes of the particular defendant[.]" Durando, supra, 209 N.J. at 251. "[T]here must be sufficient evidence that the named 'defendant in fact entertained serious doubts as to the truth of the publication.'" Ibid. (quoting St. Amant v. Thompson, 390 U.S. 727, 731, 88 S. Ct. 1323, 1325, 20 L. Ed. 2d 262, 267 (1968)). When actual malice is an element, the plaintiff must prove it by clear and convincing evidence. DeAngelis, supra, 180 N.J. at 13.

As the mayor of Long Branch at the relevant time, plaintiff indisputably is a "public official" and so the actual malice standard applies. See, e.g., Lynch v. N.J. Educ. Ass'n, 161 N.J. 152, 169 (1999).

Hence, the pivotal question here is whether there is a triable issue concerning whether defendants distributed their campaign flyers with "actual malice" as to whether the claim that plaintiff accepted bribes from the informant was true or not. As we have noted, the flyers at issue quoted the informant's federal testimony that he "had a middleman make a bribe payment like to the Mayor of Long Branch or council people of Long Branch."

The Supreme Court's recent opinion in Durando, supra, provides useful guidance for the judicial assessment of actual malice. In that case, a newspaper had inaccurately printed in a "teaser" on its front page that two "local men" had been arrested for stock fraud. Durando, supra, 209 N.J. at 239. The plaintiffs, who were not named in the teaser but were identified in the full article, had not in fact been arrested, and the full article correctly stated that they were the subject of a civil complaint without any suggestion that they had been arrested. Ibid. The plaintiffs sued the newspaper, alleging defamation and false light, although a retraction was issued on the cover of the newspaper two weeks after the plaintiffs had filed suit. Id. at 240, 243.

The Durando plaintiffs deposed the executive editor of the newspaper, Paul Milo, who had composed the teaser after obtaining permission to reprint the full article, which a staff writer for a different newspaper had originally written. Id. at 241-44. Milo said that he relied solely on the article in preparing the teaser. Id. at 244. He further stated that he did not recall his "thought process" in preparing the teaser, but conceded his mistake in using the word "arrested." Ibid. He initially said that he "didn't remember" whether he entertained doubts as to whether the plaintiffs had been arrested, but after a break where he conferred with counsel, he stated that he harbored no doubts about its accuracy and that he wrote it into the teaser because he thought it was the truth. Id. at 244-45. The trial court in that case granted summary judgment to the defendant, and this court affirmed. Id. at 257.

The Supreme Court noted Milo's careless and perhaps unreasonable behavior. Id. at 254-55. Nevertheless, the Court observed that the record did not "permit [the Court] to conclude that Milo's professions . . . [were] inherently incredible or improbable." Id. at 256. Under the circumstances, "[t]he editing [did] not suggest that Milo attempted to mislead the reader." Ibid. The Court therefore affirmed the trial court's grant of summary judgment. Id. at 257.

Given that the Supreme Court found summary judgment appropriate in Durando on a factual record more indicative of the defendants' carelessness, it stands to reason that such relief is similarly appropriate here. Plaintiff has not come forward with competent proof of defendants' subjective understandings about whether he had, in fact, been bribed. Also, while the defendant's editor in Durando actually changed the news account to state, in error, that the plaintiffs had been "arrested," id. at 256, defendants here only repeated what the informant had stated under oath in federal testimony and what contemporaneous news articles were likewise repeating. There is no claim that the campaign flyers misquoted the informant's testimony, or that they injected additional factual allegations that he had not made on the witness stand.

In addition, there is no proof that defendants personally know the informant. The record is bereft of evidence that they had any personal experiences with him which would have led them to believe that his testimony under oath in federal court as a prosecution witness would have been false. Nothing establishes that defendants actually knew that the information they disseminated was false, or that they were reckless with regard to whether the information was false. The record lacks any legally competent proof of this essential element.

Even assuming defendants knew generally about the informant and his background, that does not mean that it would have been reckless for defendants to quote from and refer to his sworn testimony. The testimony at issue was an admission that the informant bribed officials, a crime under N.J.S.A. 2C:27-2. Although the informant presumably received immunity from further prosecution in exchange for his cooperation with the FBI, a person would not normally admit to committing such opprobrious acts unless he had actually committed them. See State v. White, 158 N.J. 230, 238 (1999) (stating, in the context of discussing the "statement against interest" hearsay exception under N.J.R.E. 803(c)(25), that "by human nature, individuals will neither assert, concede, nor admit to facts that would affect them unfavorably. Consequently, statements that so disserve the declarant are deemed inherently trustworthy and reliable.") (citations omitted); see also State v. Brown, 170 N.J. 138, 151-52 (2001) (distinguishing between an informant's statement in the context of a police investigation, which would not be a statement against interest, and an informant's statement unrelated to the investigation, which would be a statement against interest if it subjects the declarant to "hatred, ridicule, or social disapproval") (quoting State v. West, 145 N.J. Super. 226, 233 (App. Div. 1976) certif. denied, 73 N.J. 67 (1977)); cf. N.J.R.E. 803(c)(25) (allowing the admission into evidence of hearsay that is "[a] statement which was at the time of its making so far contrary to the declarant's pecuniary, proprietary, or social interest . . . that a reasonable person in declarant's position would not have made the statement unless the person believed it to be true").

Circumstantial indicia also support the potential veracity of the informant's federal testimony. As a federal witness, the informant would have had to "give an oath or affirmation to testify truthfully." Fed. R. Evid. 603. If the informant lied while giving his testimony, he would have exposed himself to criminal sanctions for perjury pursuant to 18 U.S.C.A. 1621. Although the details of his agreement with the FBI are not part of this record, it is likely that he would have risked forfeiting the protections afforded him under that agreement if he gave false testimony. The informant was also exposed to cross-examination by defense counsel in the criminal cases. These considerations further justify allowing defendants to presume that he was not lying in his sworn testimony that referred to plaintiff and to other Long Branch officials.

For these many reasons, we agree with the trial court that the informant's sworn federal testimony that he bribed plaintiff and other Long Branch officials is not so "inherently incredible or improbable on the record supplied to us" to surmount the actual malice standard. Durando, supra, 209 N.J. at 256.

We hasten to emphasize that we do not reach any conclusive determination here that the informant's testimonial assertions about plaintiff and others in Long Branch were actually truthful, and our opinion should not be misread to convey such a determination. Nor do we need to address, as a matter of civics or public policy, the virulent quality of the discourse and advertising that is prevalent in many political campaigns. All we need to decide is that, in this particular defamation case, the trial court did not err in finding the absence of the requisite proof of actual malice on the part of defendants. Summary judgment dismissing plaintiff's lawsuit was therefore appropriate.

Affirmed.

1 For an illustrative description of the developer's role in the prosecution of one such official, see United States v. Beldini, 443 F. Appx. 709, 710-12 (3d Cir. 2011).

2 The initial complaint and defendants' answer were not provided in the record on appeal. The parties do not contest any aspect of the procedural history.

3 The amended complaint did not allege that any other flyers were defamatory.

4 There is no indication in the briefs or the record that plaintiff contests this fact.

5 See New York Times Co. v. Sullivan, 376 U.S. 254, 279-80, 84 S. Ct. 710, 726, 11 L. Ed. 2d 686, 706 (1964).

6 For clarity's sake, we note that the law distinguishes between "public officials," "public figures," and "matters of public interest or concern." Public officials are those who hold public office. Gertz v. Robert Welch, Inc., 418 U.S. 323, 342, 94 S. Ct. 2997, 3008, 41 L. Ed. 2d 789, 807 (1974). Courts consider certain people to be "public figures" as a result of the "notoriety of their achievements or the vigor and success with which they seek the public's attention" even when they do not hold public office. Ibid. Although no clear definition of "matters of public interest or concern" has been enunciated in New Jersey, our courts consider the nature and importance of the speech, the identity of the speaker, and the identity of the intended audience in making this determination. See W.J.A. v. D.A., 210 N.J. 229, 244 (2012). The actual malice standard applies equally in New Jersey to defamation cases involving all three of these categories. Sullivan, 376 U.S. at 279-83, 84 S. Ct. at 726-27, 11 L. Ed. 2d at 706-08; Durando, 209 N.J. at 247-48.