Having Been Active in a controversial solid waste project, the owner of a waste services company cannot successfully sue for defamatory criticism of his conduct unless he meets the strict standards of proof applicable to public figures, according to a ruling by the Georgia Supreme Court.
In 1994, the Solid Waste Management Authority of Crisp County, Ga., decided to construct a materials recovery facility. The financial viability of the project depended on commitments of solid waste from other jurisdictions. Chris Cannon, who owned TransWaste Services Inc., initiated efforts to secure these waste delivery contracts for the authority. In addition, TransWaste loaned money to the authority for other aspects of the project. Perhaps coincidentally, the hauler ended up with an exclusive 25-year contract to transport waste from participating communities to Crisp County.
The $70 million plant opened in May 1998 with fanfare but never performed as predicted nor generated sufficient revenue. Processing problems forced the authority to divert more waste to the county landfill where capacity began to dwindle. The county commission raised property taxes to deal with rising waste disposal costs and to expand its landfill. By late 1999, TransWaste had sued the authority for $2.25 million owed under a promissory note and its hauling contract. After Cannon learned that the authority was paying other creditors but ignoring TransWaste, the company halted waste deliveries to the plant.
Local residents, including Bruce Mathis, grew angry and impatient. They attended authority and county commission meetings on a regular basis, asking critical questions and making negative comments. Shortly after a local grand jury issued a report decrying the authority's performance, Mathis posted three messages on the Internet bulletin board of TransWaste's parent company, accusing Cannon of being a crook and a thief.
Cannon sued Mathis for libel. The trial court ruled that Mathis' words were defamatory, and the ruling was affirmed by an intermediate level appeals court. The state high court agreed to review whether the lower courts used the proper standard of liability.
The U.S. Supreme Court has held that the constitutional guarantees of free speech and free press prohibit a public official from recovering damages for defamatory criticism of his conduct unless the official proves that the defendant either knew the statements were false or recklessly disregarded their validity. In a later ruling, the high court extended this standard to “limited public figures,” that is, individuals who inject themselves or are drawn into a public controversy on a particular issue.
Applying this standard, the Georgia Supreme Court concluded that the nature and extent of Cannon's participation in the solid waste controversy in Crisp County made him a limited-purpose public figure. “[He] blurred the distinction between his private business and his … public efforts [to] develop the … project,” the court said. It reversed the lower court judgment and remanded the case to the trial court, where Cannon must prove his case against Mathis under the stricter standard.
[Mathis v. Cannon, 576 S.E.2d 376 (Ga. 2002)]
The columnist is a Washington, D.C., attorney and serves as general counsel of the Solid Waste Association of North America.
The legal editor welcomes comments from readers. Contact Barry Shanoff via e-mail: [email protected].