Case Summary and Outcome

The State of São Paulo Court of Appeals found the publication of investigative news reports into fraudulent schemes allegedly committed by the State of São Paulo Railway Company were legitimate and enjoyed the protection of the Freedom of the Press clause of the Brazilian Constitution. The reports concerned a scandal involving the government of the State of São Paulo and several the railway companies, including the State-owned railway. The Court held that the reports merely recounted facts and faithfully reproduced the opinions of investigators, and that as a publicly owned company, the Railway Company must tolerate greater scrutiny by the media.

Facts

In July 2013, the magazine IstoÉ published two reports on alleged overpricing, bid rigging and corruption in public contracts for the construction of new metro lines in the capital of the State of São Paulo. The Companhia Paulista de Trens Metropolitanos (CPTM, the State of São Paulo Railroad Company), the bidder, filed a lawsuit claiming damages, alleging that the allegations were untrue and based on abstractions and suppositions.

Grupo 3, the owner of the magazine, argued in its defense that the news reports were clear and objective, and that they concerned an issue of public interest. Grupo 3 argued furthermore that the criticism had been aimed at the conduct of CPTM’s managers and not at the company, and that CPTM had not denied the allegations. In fact, investigations were ongoing and the news reports merely reproduced the conclusions of the responsible authorities. Finally, Grupo 3 argued that all quotes had been clearly indicated by using quotation marks and that their authors were all identified.

The first instance court dismissed CPTM’s claims, holding that both reports were truthful and protected under the right to freedom of expression, and noting that that numerous other publishers had published similar reports. CPTM appealed to the Court of Appeals.

Decision Overview

On April 7, 2016 Justice Eduardo Giacoia denied CPTM’s appeal and upheld the ruling of the first instance court. He held that both news reports were fully legitimate and enjoyed the protection of the Freedom of the Press clause of the Brazilian Constitution. The reports merely recounted investigations conducted by the Federal Competition Bureau and the European competition authorities (as there were European companies involved), and the settlement agreement reached with Siemens, one of the parties to the fraudulent scheme. In addition, the articles reported on the conclusions that the prosecutors had reached in their investigations. As such, there was no objectionable content in the news reports whatsoever. Both were truthful and grounded in the so-called animus narrandi – the right to tell what happens – without any distortion or personal conclusions about innocence or guilt.

Moreover, Justice Eduardo Giacoia emphasized that CPTM is a state-owned company. It belongs to the people of the State of São Paulo, who have a legitimate interest in knowing how it conducts it affairs. It follows that it should tolerate greater public scrutiny of its functioning by the media.