Media law consists of substantive laws that affect the news media. Beginning in the late 1960s and early 1970s, journalists in the United States extended their watchdog role from covering government to investigating corporations. That expansion directly affected corporate reputation because for the first time on a widespread basis, investigative journalists were shining a light onto previously private corporate behavior.
By and large, the courts protect the right of the media to report on matters of importance to the public. Media investigations into government activities are obviously vital to a working democracy. But knowledge of corporate activity can be equally important given the size and influence of corporations today.
Although many areas of the law affect the news media, this entry focuses on media laws that may affect corporate reputation. It begins with a discussion of the First Amendment, which protects the media from restraints by the government. It then explores how the courts balance the First Amendment rights of the media with the Sixth Amendment rights of defendants to a fair trial. It also discusses how the media are treated in defamation and invasion of privacy cases and their ability to access government records.
The First Amendment to the U.S. Constitution provides that Congress shall make no law abridging freedom of speech and of the press. Although it refers only to Congress, the Supreme Court has extended the provision to all levels of government. The First Amendment is seen as vital in a democracy. According to democratic theory, individuals are capable of self-governance. They are able to weigh the options and decide who will best represent their interests. But to make educated decisions, people need to have access to information and the freedom to debate the issues in public. The First Amendment is designed to ensure that those rights are protected from government interference.
The news media are uniquely situated in that the press is specifically referenced in the First Amendment, which was an acknowledgment on the part of the Constitution’s drafters of the important role the news media play in a democracy. The media act as surrogates for the public, investigating government and corporations and keeping the public informed.
Because of the perceived value of free speech, courts apply preferred-position balancing when asked to decide whether a law is constitutional. Under this approach, freedom of expression is given a preferred status, or position, when balanced against other rights. Courts are skeptical from the outset about limitations on freedom of expression and presume that the limitation is illegal. The fear is that the government is trying to stop the speech because of its content. It is up to the government to convince the courts that its interests should take precedence.
In deciding whether a regulation should be struck down or whether freedom of speech should give way in the circumstances, the courts subject the regulation to what is known as strict scrutiny. Under this test, any regulation that restricts the freedom of the people to speak is automatically presumed to be unconstitutional unless the government can convince the courts that the regulation is justified by a compelling interest and is narrowly tailored to achieve that interest. The idea that speech, and the media, should be given a preferred position is reflected in much of media law.
The Sixth Amendment guarantees criminal defendants the right to a fair trial. At times, however, media coverage before and during a trial can appear to threaten that right. When the amount of publicity about a trial becomes extraordinary, it may raise a presumption of prejudice. In other words, there is so much information in the media that the court does not believe that the jury can make a decision based solely on the evidence presented in court, and as a result, the defendant will not receive a fair trial.
The courts have several legal remedies to lessen the impact of prejudicial publicity on a trial. For example, they can order the jury to be sequestered, the trial moved to a new location, or a new jury empaneled. They can also put restraints on media sources, such as attorneys, witnesses, and law enforcement officers, forbidding them from talking to the media. But the Supreme Court draws a line when it comes to restraining the media from publishing information obtained about the trial. The Court has said that the media do not have a constitutional right to gather news, only to publish it. Thus, prior restraints on the reporting of trial proceedings are rare. Before issuing an order restraining the media, a court must consider the extent of the coverage, alternative measures to safeguard the defendant’s Sixth Amendment rights, and whether such an order would be effective.
Similarly, courtrooms can only be closed to the public and the media under special circumstances. Criminal and civil judicial proceedings are presumptively open. The party seeking closure would have to establish a compelling reason for the judge to so order. Juvenile proceedings are an exception. In most states, they are closed to protect the juvenile defendant.
It is unlikely then that a corporate defendant would be able to successfully keep the media out of the courtroom or get a new trial because of prejudicial publicity. Trials can negatively affect corporate reputation and be more costly in the court of public opinion than in the court of law itself.
Defamation protects individuals from false statements that harm their reputations. It is important to note here how the news media are treated in defamation cases. Ruling in 1964 in New York Times Co. v. Sullivan, the Supreme Court held that a police commissioner had to prove that the New York Times acted with actual malice in publishing defamatory statements about him. In other words, he had to establish that the paper knew that the statements about him were false when they were published or recklessly disregarded their truth or falsity. The Court said that such an onus was needed to protect free and robust debate in society. Public officials, such as police commissioners, ought to have thick skins and be prepared for media scrutiny of their actions. They should not be turning to the courts for protection when they had ready access to the media to rebut any statements they disagreed with. Later, the requirement of proving actual malice was extended to public figures. Public figures have special prominence in society or have thrust themselves into a public controversy to affect its resolution. In subsequent rulings, the Court has indicated that public figures, whether individuals or corporations, already receive media scrutiny and have ready access to the media to respond to the allegations.
To prove actual malice, a plaintiff must provide evidence of the defendant’s state of mind, which is very difficult to do. As a result, the news media tend to win defamation actions brought against them, which was the Court’s intention. The news media are protected from defamation suits so that they can continue to investigate stories without fear of retribution. Corporations need to carefully consider whether it is worth suing the media over a negative news story. For example, Reliance Insurance Company sued Barron’s magazine over a report analyzing the company’s initial public offering. The article suggested that the initial public offering was only to benefit Reliance’s majority shareholder, another corporation, and questioned the shareholder’s accounting practices. The court determined that Reliance was a public figure for the purposes of the libel action, and the company subsequently lost the case. Not only did Reliance lose, but it also drew attention to the initial report via the news media’s coverage of the lawsuit, drawing potentially more attention than the original article had.
Invasion of Privacy
Although privacy is not mentioned in the Bill of Rights, the Supreme Court has suggested that the concept of privacy is implicitly embedded in the U.S. Constitution. Four areas of privacy law affect the media, but only one of those also affects corporate reputation, and that is intrusion. Intrusion is not about publishing information but about gathering that information in the first place. It is defined as the offensive physical, electronic, or mechanical intrusion on another’s solitude.
Private homes have the greatest protection from intrusion. We expect our conversations and actions in our own home to be private. Thus, reporters cannot trespass on private property or use telephoto lenses to observe what is going on inside a private residence. Businesses have less protection, depending on the nature of that business. A call center, for example, with no walk-in traffic would be considered more private than would a clothing store. In public places, there is no expectation of privacy. Photos can be taken freely of people in public and recordings made of conversations overheard. The rationale is that people understand that others can see and hear them when they are in a public place.
The defense to intrusion is consent, either explicit or implied. If you invite a reporter into your home or business, you have explicitly consented to the person’s presence, and you cannot claim intrusion later. Businesses open to the public give implied consent for people to enter. But the media can overstep that consent. When CBS (Columbia Broadcasting System) entered an expensive restaurant with cameras rolling right at mealtime to check on public health problems, the state appellate court ruling in the case, Le Mistral v. CBS, said that CBS had exceeded the restaurant’s consent by being disruptive. Journalists can also exceed consent when they enter property under false pretenses with recorders and cameras hidden.
Electronic or Mechanical Intrusion
Federal and state laws prohibit people and organizations, including the news media, from hacking into computers, wiretapping, and recording third parties without their knowledge. A Cincinnati Enquirer reporter was convicted of violating Ohio’s wiretap and computer access laws for stealing internal voicemails from Chiquita Brands International, Inc. The reporter used the information obtained from the stolen messages for stories that were part of an 18-page exposé of Chiquita’s alleged involvement in bribery, human rights and environmental abuses, and arms trafficking throughout Latin America. The Enquirer agreed to pay Chiquita in excess of $10 million and ran a front-page apology. The courts protect the right of the media to report the news, but the media receive no special treatment when it comes to news gathering. Thus, had someone else hacked Chiquita’s computers and turned over the messages to the reporters, the reporters would have been free to publish the information.
Access to Information
At both the federal and state levels, regulations determine the right of journalists and citizens in general to have access to government meetings and documents. This section focuses on the federal Freedom of Information Act (FOIA). Most state FOIAs have similar provisions.
FOIA was enacted in 1966 and codified the policy of disclosure of federal government records, subject only to nine enumerated exemptions. While the FOIA’s purpose is to encourage openness of government records as an acknowledgement of the public’s right to know, the exemptions signify a recognition that agencies may, at the same time, have possession of private and confidential information that needs to be protected from disclosure. When someone requests records from a government agency, those records must be disclosed unless the agency can establish that they are covered by one of the nine exemptions. If the government refuses to disclose information on the basis that it is covered by one of the exemptions, the requestor may seek judicial review of the refusal.
Contained within the documents released may well be information related to corporate trade secrets and commercial or financial information obtained confidentially. Such information is exempt from disclosure under Exemption 4 of the FOIA. However, because government agencies are free to release documents pursuant to a request, even if those documents fall under an exemption, agencies must notify a corporation prior to disclosure to give the company a chance to seek an exemption for the materials.
To warrant an exemption, the documents must contain confidential commercial information. Under the current test, information is “confidential” for the purposes of Exemption 4 if disclosure is likely to impair the government’s ability to obtain such information in the future or will cause substantial harm to the competitive position of the party from whom the information was obtained. The agency in question does not need to prove an actual adverse effect on competition. Instead, the court hearing the case will use its own judgment given the material sought and the corporation’s competitive circumstances in deciding whether the information comes under Exemption 4. To prevail under the exemption, the risk must be imminent and not too speculative. In one case, a fear that the information would lead the public to an impression that the corporation was financially unstable was not sufficient to prevent disclosure.
Hopkins, W. W. (Ed.). (2015). Communication and the law: 2015 edition. Northport, AL: Vision Press.
Pember, D. R., & Calvert, C. (2011). Mass media law (17th ed.). New York: McGraw-Hill.
Radez, K. V. (2010). The Freedom of Information Act Exemption 4: Protecting corporate reputation in the post-crash regulatory environment. Columbia Business Law Review, 2015(2), 632–684.