Sarah Palin lost the first round against The New York Times. Her lawsuit is still a threat to the First Amendment.

Sarah Palin has lost the first round in her libel suit against The New York Times after a jury concluded that the former vice-presidential candidate failed to prove that the newspaper acted with “actual malice” when it published an editorial linking her political action committee to the 2011 shooting of 19 people, including former Rep. Gabrielle Giffords in Tucson.

But when Palin appeals, her case has the potential to do more than reverse the jury’s verdict. It could fundamentally change the First Amendment by giving conservative judges what they have wanted for decades: the chance to overturn the Supreme Court’s landmark decision in New York Times v. Sullivan (1964) and its "actual malice" standard. That would make it significantly easier for public officials and public figures to sue those who make inaccurate statements about them.

There was an unusual development in the Palin case. While the jury was deliberating, Judge Jed Rakoff announced that if the jury found for Palin, he would overturn that ruling. Several jurors learned of the judge’s decision before the verdict was rendered. The court of appeals and the Supreme Court will likely consider whether that improperly influenced the jury.

More: Sarah Palin loses lawsuit against New York Times over libel allegations

More: Two justices say Supreme Court should reconsider landmark Sullivan case

Nevertheless, that will not be the key issue in Palin’s appeal. Of much greater significance is an almost 40-year-old Supreme Court case involving a publication’s negative product review.

In Bose Corp. v. Consumers Union (1984), the Court held that to protect the First Amendment, appellate courts have an obligation to closely scrutinize a trial court’s judgment when it rules against defendants in libel cases. Like Palin, Bose Corp. was a “public figure.” The trial judge ruled that the company was able to prove actual malice when its new speaker system was criticized in the magazine. The Court of Appeals reversed, and the Supreme Court agreed with the appellate court.

Central to the Bose case — and Palin’s appeal — is the Court’s interpretation of Section 52(a) of the Federal Rules of Civil Procedure. The Bose decision requires appellate courts to conduct a de novo review in cases involving the First Amendment to make sure that "the judgment does not constitute a forbidden intrusion on the field of free expression.”

An appellate court must, in effect, retry the case by conducting an independent evaluation of the evidence to see if it justifies an exception to the usually robust protection the First Amendment provides for almost all forms of speech.

This goes against the way courts usually function. Appellate judges do not see witnesses in person to evaluate their credibility. They don’t have access to all the evidence the jury considered. They read briefs from the attorneys and hear oral arguments. Federal Rule 52(a) tries to prevent appellate judges from second-guessing the trial court’s evaluation of the facts by prohibiting the reversal of the lower court’s ruling unless it is “clearly erroneous,” a difficult standard to meet.

More: Sarah Palin v. New York Times rightly questions media defamation protections

The Supreme Court in Bose held that the First Amendment is too important to be subject to the clearly erroneous standard, and it noted that Rule 52(a) does not forbid a review of the entire trial record. But it did not answer a question of great importance: Can appellate courts conduct their own review when the media organization wins at trial, as in the Palin case? Some legal scholars have argued that it is unfair to the plaintiff if such a comprehensive review takes place only if the defendant loses.

Bose is mainly about protecting the First Amendment. Justice John Paul Stevens wrote that the de novo requirement “reflects a deeply held conviction that judges — and particularly Members of this Court — must exercise such review in order to preserve the precious liberties established and ordained by the Constitution.” But he did not say that appellate courts can conduct an independent review only when the plaintiff wins at the trial level.

The First Amendment is clearly established in the Constitution, but the right to be compensated for harm to reputation caused by false and defamatory statements predates the Constitution. It has long been considered a necessary exception to First Amendment rights.

Justices Clarence Thomas and Neil Gorsuch have strongly argued that Sullivan should be reversed, and other conservative members of the court may agree. Justice Thomas wrote, “New York Times (v. Sullivan) and the Court’s decisions extending it were policy-driven decisions masquerading as constitutional law. Instead of simply applying the First Amendment as it was understood by the people who ratified it, the Court fashioned its own ‘federal rule(s)’ by balancing the ‘competing values at stake in defamation suits.’ ”

Here are two steps the Supreme Court may take in the Palin case:

First, the court can conclude that the actual malice standard — which requires a plaintiff to show by “clear and convincing evidence” that the defendant either knew the statement was false or recklessly disregarded whether it was false or not — is so difficult to prove that it lets purveyors of false and defamatory speech go unpunished and those harmed to be uncompensated. The court could devise a standard that is closer to the “negligence” requirement that most states impose on private persons bringing libel suits, which is much easier to prove than actual malice.

And second, after creating a new standard for public officials and public figures, the court may conduct a de novo review — using the ambiguity of Bose as precedent — and conclude that Palin met the new standard and grant her damages, thus avoiding a return to Judge Rakoff’s courtroom for another trial.

It may take several years for the appellate decisions to be issued in the Palin case, but it seems that Sullivan and the First Amendment are in danger.

Richard Labunski, Ph.D., J.D., is a retired journalism professor and author of “James Madison and the Struggle for the Bill of Rights.” He is professor emeritus at the School of Journalism and Media at the University of Kentucky. Email: richlab@aol.com

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This article originally appeared on Milwaukee Journal Sentinel: Sarah Palin's failed libel suit still a threat to the First Amendment