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Maine Defamation Award Upheld

The First Circuit just upheld a whopper of a defamation award against Merril Lynch for statements made about a terminated employee. See Galarneau v. Merrill Lynch, __ F.3d __ (1st Cir. 2007).

Unfortunately for Merrill Lynch, they appear to have neglected to raise their best First Amendment defenses at the trial level. From the language of the First Circuit opinion, the Court seems to hint that it might have held otherwise had Merrill Lynch properly raised them at the proper time.

Merrill Lynch asks us to apply the heightened standard of review appropriate for cases raising First Amendment concerns. See Bose Corp. v Consumers Union of United States, Inc., 466 U.S. 485, 499 (1984)(“[I]n cases raising First Amendment issues . . . an appellate court has an obligation to ‘make an independent examination of the whole record’ in order to make sure that ‘the judgment does not constitute a forbidden intrusion on the field of free expression.'” (quoting New York Times Co. v. Sullivan, 376 U.S. 254, 285 (1964))). We decline to do so, however, because Merrill Lynch failed to argue in the trial court that this case had any First Amendment implications. (case)

Merrill Lynch relied unwaveringly on Maine common law to establish that Galarneau had the burden of proving falsity and actual malice by a preponderance of the evidence. Accordingly, the jury was never instructed as to the First Amendment’s role in the case, if any.

Because Merrill Lynch failed to make a case for a “First Amendment privilege” at trial, and instead relied exclusively on the conditional privilege afforded by Maine common law, it has forfeited the argument that the First Amendment imposes a special burden on Galarneau. See United States v. Slade, 980 F.2d 27, 30 (1st Cir. 1992) (“It is a bedrock rule that when a party has not
presented an argument to the district court, [it] may not unveil it in the court of appeals.”). We therefore have no opportunity to apply heightened review.

Accordingly, the First Circuit only reviewed whether the evidence initially provided to the jury supported the verdict as handed down. Finding that the evidence was sufficient, the Court upheld the verdict.

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