You should suggest that they adopt an orphan from Bangalore.
I am in fact a practicing lawyer. And unless New York Times v. Sullivan was overruled recently without my knowledge, the First Amendment to the US Constitution does limit private actions for damages based on defamation. I also call to your attention Gertz v. Robert Welch, Inc. And considering the ample precedent holding otherwise, it is simply false to assert, as you do, that "[t]he First Amendment only deals with prior restraint."
The question is not whether the Constitution gives one a right to say bad things about people with impunity, for it has never been held to do so, and I know of no serious argument that it does. The question is whether a person may be liable for a true statement that injures another's reputation. I have not researched the question directly, but such liability seems at first thought to be inconsistent with the holding in Gertz that state law may not impose strict liability for defamatory falsehoods that injure an individual. If you know of a contrary authority, I'd love to hear of it.
I'm not sure why this didn't come up previously, although I can guess. But the reason would *not* be one or both parties' decision that a higher court would be a better place to raise the issue. The reason is that (with a few exceptions), you can't raise an issue on appeal that you didn't raise at trial.
This may make more sense if you put it in the context of the courts' function--or at least what *they* consider their function to be. Federal courts in the US don't see their primary job to be deciding questions of law; they see it to be deciding disputes, which necessarily includes deciding questions of law. So an appellate court isn't going to want to be the first one to address a legal question relevant to the case; that's too much like deciding an abstract legal question. Instead, they want it to be considered first at the trial level, because that's where the parties can best work out what the question really is and how it really matters to the case.
Not if (1) there's no controlling precedent and (2) neither party brings it up. Courts rarely introduce new legal questions on their own, and appellate courts rarely consider questions that the parties didn't raise at trial. If Staples didn't raise this issue, then neither party briefed it. And if neither party briefed it, the First Circuit wasn't going to consider it, again, unless there were already clear, binding precedent from the Supreme Court.
And if there had been such precedent, Staples would certainly have raised it at the beginning, in a motion to dismiss, before it spent all this money getting to summary judgment.
It is incorrect to say that truth is an absolute defense to a claim of libel. Apparently, Massachusetts law allows a suit to go ahead based on defamatory statements that are based on "actual malice."
Possibly Massachusetts law is incompatible with the US Constitution in this regard. I am inclined to believe it is. But Staples never brought it up--if they had, the panel would have mentioned it in at least one their opinions, and the court didn't.
In other words, the First Amendment question simply didn't come up. The sole question was what Massachusetts law was, not whether that law was consistent with the Constitution.