PORTLAND — Lawyers representing a Virginia-based political action committee argued Monday that a federal defamation lawsuit filed by an unsuccessful state Senate candidate should be dismissed.

The lawyers say campaign fliers that James Schatz claims defamed him are examples of protected political speech.

Lawyers for Schatz, however, said the fliers made it appear that Schatz committed a felony, which the defendants knew was not true, said lawyer Barry Mills of Ellsworth. The fliers suggested Schatz, of Blue Hill, voted to cancel his town’s fireworks display and then spent the money on a self-serving political campaign, Mills said.

U. S. District Judge D. Brock Hornby didn’t say when he would rule on the dismissal motion. But he made it clear that attacking a candidate’s spending priorities amounts to normal political debate.

“We criticize government spending every day,” Hornby said. “It’s the major thing separating the two parties.”

If Hornby rejects the motion to dismiss, the case could be heard by a jury and also would allow Schatz’ legal team to subpoena PAC and other records that could show what the PAC knew when it published what he called erroneous statements, and why it juxtaposed two unrelated issues and made them appear connected, Mills said.

The PAC has already been slapped with the largest fine in the history of the state ethics panel – $26,000 – for failing to report its expenditures on time, which deprived opposition candidates of Clean Election money they should have received.

The case stems from the November election, when the Republican State Leadership Committee spent $400,000 targeting Democrats in five senate races. All five were defeated, which helped Republicans secure a Senate majority.

Schatz, a Democrat, ran against Republican Brian Langley to replace Democratic Sen. Dennis Damon, who was forced out by term limits.

Schatz spent $23,000 on his campaign, Mills said. In the final days, the Republican PAC spent $70,000 on efforts to defeat Schatz, Mills said. Langley won with 9,597 votes to Schatz’ 6,397. Green Party candidate Lynne Williams received 2,307.

Schatz sued in federal court, saying the campaign literature attacking him was false and defamed him.

The fliers said he voted to cancel a $10,000 fireworks display and instead spent money on a political campaign. The flier did not say that the canceled fireworks display was in 2009 or that Schatz voted against cutting the funds.

It also did not say that Blue Hill town meeting voters voted in 2008 to approve spending the $10,000 on a political campaign aimed at blocking the school consolidation law.

“This was an artificial juxtaposition created by these defendants for the purpose of creating an insinuation or innuendo that Mr. Schatz wrongly expended that money,” Mills said. Saying Schatz ‘misused’ taxpayer money is tantamount to accusing him of a crime, he said.

Schatz said afterward he is pursuing the case because he wants to reclaim his reputation.

“I’ve been a selectman for 16 years. I’m 71 years old,” he said after Monday’s hearing. “This takes all the work I’ve done to establish my reputation and throws a bucket of paint on it and I don’t have a lot of time to get that back.”

To prove defamation, Schatz would have to show that false attacks exposed him to hatred or ridicule. Because he is a public figure, he would have to show that the statements were made with malice or reckless disregard for the truth.

The defendants’ lawyers said the PAC relied on a newspaper article in which Schatz was quoted explaining why Blue Hill decided to cancel its fireworks. The quotes seemed to show he voted for it, said Andrew Friedman, representing one of two Washington law firms hired to defend the case, along with local lawyers from Verrill Dana.

The fliers also cited another article about the school consolidation effort, noting that even though town meeting voters approved allowing the $10,000 to be spent, the actual spending was at the discretion of selectmen, so technically, Schatz did decide to spend money on a political campaign, Friedman said.

Saying Schatz “misused” taxpayer funds is an opinion based on legislative priorities, Friedman said.

Tim Brown, another lawyer for the defense, said courts have ruled consistently in favor of avoiding any action that might chill freedom of expression.

Mills agreed the stakes are high for the electoral process, but not because of limits on speech.

“These large corporations have the capacity to overwhelm local elections, to buy state legislative races,” Mills said. “The question is, is there any limit on what they can say. If this becomes the norm, our country will be drastically changed.”

 

Staff Writer David Hench can be contacted at 791-6327 or at: dhench@pressherald.com

 

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