The "Third-Party Allegation" Rule May Not be Dead Yet

02/06/2014

To paraphrase Mark Twain's famous quote, it appears that reports of the death of the third-party allegation rule in Texas defamation litigation may have been exaggerated.

In the Texas Supreme Court case of Neely v. Wilson, media defendants in a libel suit contended that the 1990 Texas Supreme Court decision in McIlvain v. Jacobs "shield[s] media defendants from defamation liability for publishing third-party allegations if the defendants show that the underlying allegations (1) were made, and (2) were accurately reported." In reversing a summary judgment granted to the media defendants and remanding the case for trial, the Texas Supreme Court, in its original opinion issued on June 28, 2013, said in response to that claim: "We disagree." That straightforward sentence, coupled with other language in the June 28, 2013, opinion, led many to conclude that the third-party allegation rule would not apply in Texas and a media defendant defending a story which reported allegations made by others would have to establish the substantial truth of the underlying allegation, not simply that the allegation was made, in order to urge the defense of substantial truth.

In response to the media defendants' motion for rehearing, however, the Court issued a "corrected" opinion on January 31, 2014. Although the Court denied the motion for rehearing and left the result unchanged, the new opinion deleted the sentence stating "We disagree," and added a new footnote in which the Court said that motion for rehearing briefing which "construes our [June 28, 2013] opinion as foreclosing" the third-party allegation rule "misconstrues our holding." The footnote said that the Neely summary judgment would be reversed because the plaintiff raised a fact issue as to "the truth or falsity of the gist" of the broadcast, but it added that the Court "leave[s] open the question of whether a broadcast whose gist is merely that allegations were made is substantially true if the allegations were accurately repeated."

Since many news stories every day report not what someone did but what someone said, the third party allegation rule is a critical defense tool in many cases, and it has been recognized by the Fifth Circuit and at least four Texas Courts of Appeals. While it would have been preferable if the Texas Supreme Court had joined that list and expressly recognized the rule, at least the opinion on rehearing does not, as the Court wrote in the new footnote, "foreclose such a rule." The third party allegation rule remains a defense that should be raised in appropriate cases and practitioners can hope that when given an opportunity to do so the Texas Supreme Court will one day affirmatively recognize it.

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