More than a half century ago, The New York Times prevailed in a landmark Supreme Court decision that established that public figures must demonstrate actual malice in order to prevail on a defamation claim. On Friday, in a legal battle with former vice presidential candidate Sarah Palin, the same publication argued that this standard could be rendered “null” if her libel lawsuit against the paper is revived. Based on what was said at a hearing today at the 2nd Circuit Court of Appeals, Palin seems to have an extremely strong chance of getting her second shot.

Palin attempted to sue the paper in 2017 after an editorial mistakenly linked one of her political action committee ads to a 2011 mass shooting that severely wounded then-Arizona Congresswoman Gabby Giffords. James Bennet, the writer of the editorial, wanted to make a point about a climate of political incitement, but The New York Times was quickly forced to make a correction acknowledging that no link had been established between Palin's ad and the shooting. Still, Palin wasn't satisfied and alleged that the paper purposely targeted her.

In August 2017, U.S. District Court Judge Jed Rakoff dismissed the lawsuit. "Nowhere is political journalism so free, so robust, or perhaps so rowdy as in the United States," wrote the judge in the order. "In the exercise of that freedom, mistakes will be made, some of which will be hurtful to others."

Because Palin is a public figure, Rakoff turned to the standards articulated in the 1964 Supreme Court ruling in New York Times Co. v. Sullivan, and concluded, "Negligence this may be; but defamation of a public figure it plainly is not."

What concerned a three-judge panel at the 2nd Circuit was not the ultimate merits of Palin's lawsuit, but rather the rules of federal procedure and the strange manner in which Rakoff had come to his opinion.

Among federal judges in New York, Rakoff has a strong reputation as being idiosyncratic. In this instance, Rakoff conducted an evidentiary hearing where Bennet was called to testify. While that might not seem so extraordinary to anyone accustomed to the speedy happenings of a legal procedural television show, it was to borrow the phrase of 2nd Circuit Judge John Keenan, "tremendously unusual."

John M. Walker Jr. and Denny Chin, the other two judges on the panel, explicitly agreed it was "unusual," repeating that word frequently over the course of an hour.

The reason why this evidentiary hearing has raised eyebrows is that on a motion to dismiss, judges aren't supposed to weigh evidence. Instead, at this particular stage of a case, judges must accept pled facts as true and determine whether those facts support a viable legal claim.

"If the district court had just ruled on what was in the complaint, I understand that," said Walker. "The hearing changes everything... In effect, didn't [Rakoff] try the issue of actual malice?"

An attorney for The New York Times attempted to steer the discussion to another giant of legal canon — the 2007 Supreme Court decision in Bell Atlantic Corp. v. Twombly — which allowed judges to dismiss cases at an early juncture where pleadings didn't add up to a plausible claim. The problem, as the three judges strongly put forward in questioning, was that Rakoff had seemingly attempted to go inside Bennet's head to come to the conclusion he simply wasn't aware of facts to the contrary when writing his opinion piece and had made an innocent "mistake."

"This could have been premeditated," said Keenan. "There was no cross-examination. Rakoff was the backstop. ... This is such an unusual proceeding, it seems to me that we have ventured into a trial."

The lawyer for the paper argued that Rakoff was merely determining what was really plausible.

"On one hand, there is the very obvious explanation that under time pressure, a mistake was made and it was promptly corrected," said the attorney. "On the other hand, there's the [conspiracy theory that Bennet] was helping out his brother [the Democratic senator from Colorado, whose opponent was endorsed by Palin]."

"That's a good jury argument," responded Walker, implicitly suggesting that a weighing of facts and the credibility of witnesses would have to occur at a later stage in the lawsuit.

In arguing that the case should be revived, Palin's attorney Elizabeth Locke noted how The New York Times had quickly brought a motion to dismiss and how that move had stopped discovery in the case. Palin never got, for instance, to interrogate other staffers at the paper about what Bennet was told before the editorial ran.

The impediment on discovery is largely why The New York Times and other news organizations standing behind the paper in amicus briefs are concerned about the impact of reviving Palin's lawsuit. Although famous plaintiffs would still need to establish knowledge of falsity or reckless disregard of the truth in order to ultimately win in defamation cases, permitting these plaintiffs to get past the first hurdle by generally pleading "there is actual malice here" would force defendants to go through the burdens and expense of litigation. That could cause publications to self-censor in order to avoid legal fights.

Locke did admit that her side gained the benefit of learning the identity of the editorial writer through Rakoff's order of an evidentiary hearing, but the appellate judges still seemed most interested in considering whether Rakoff had relied on what was outside of the pleadings in dismissing the case.

If there's any barrier to a revival of the lawsuit, it might be Keenan's question as to whether both sides had agreed to this unusual procedure and essentially amended the typical rules upon no objection. But even that doesn't seem likely to save The New York Times from another round in this case. Locke argued it was "more important" how Rakoff wouldn't allow an amended complaint, which she said had plausibly alleged actual malice.