Commercial Litigation Update

The Second Circuit Court of Appeals has once again revived Sarah Palin’s longstanding defamation suit against The New York Times. The Second Circuit’s opinion highlights important procedural and substantive issues in defamation actions involving public figures, particularly in the current polarized media environment.

Palin’s lawsuit, which we previously wrote about here, relates to a 2017 Times editorial that incorrectly linked a political ad from the 2008 Republican vice presidential candidate and former governor of Alaska to a 2011 mass shooting in Arizona that killed six people and injured 13 more, including Congresswoman Gabby Giffords. After an initial dismissal that was reversed on appeal, Palin’s case proceeded to trial in February 2022.

During jury deliberations, the District Court Judge announced in open court that he believed Palin had failed to produce sufficient evidence of actual malice, and, for that reason, would grant judgment in favor of the Times. However, the judge allowed the jury to continue deliberations and the jury subsequently returned a verdict for the Times. The court later revealed in a public filing that members of the jury had learned about the judge’s decision to dismiss the case during deliberations after receiving push notifications on their smartphones. This unusual procedural sequence, compounded by errors during the trial, led the Second Circuit to vacate the judgment and order a retrial, which is scheduled to begin on April 14, 2025.

The Supreme Court of New Jersey recently issued its decision in Comprehensive Neurosurgical, P.C. v. Valley Hospital, vacating a $24.3 million award to a neurosurgery practice. The Court’s opinion offers valuable insight regarding the scope of implied contractual obligations under New Jersey law, particularly in the hospital industry.

The underlying dispute involved Valley Hospital’s grant of exclusive privileges to a new group of neurosurgeons, which effectively revoked the longstanding privileges held by plaintiffs. These privileges included the right to use specialized medical equipment and treat “unassigned” emergency room patients, an essential part of plaintiffs’ practice. The plaintiffs alleged that Valley’s actions were retaliatory, prompted by plaintiffs’ association with a newly opened nearby hospital. As a result, plaintiffs filed suit against Valley, claiming the hospital’s decision violated public policy and the hospital’s medical staff bylaws. Valley argued that it made a valid administrative healthcare decision because plaintiffs were diverting patients to the newly opened hospital.

The last two years have provided legal professionals with a crash course in the remote practice of law. Attorneys and judges have been forced to navigate COVID-19 protocols and adapt to the rapidly changing legal landscape in the digital age. While the pandemic created an abundance of new technological challenges, it also impacted one of the oldest standards in our judicial system—service of process.