The Virginia Defamation Law Blog

September 30, 2013

The “Of and Concerning” Element of Defamatory Meaning

Last year I commented on Gilman v. Spitzer, a defamation case out of the Southern District of New York, in which the court dismissed the plaintiff’s defamation claim on the ground that the statements at issue could not be reasonably interpreted as being “of and concerning” the plaintiff. On September 18, 2013, the Second Circuit affirmed that decision, holding that the statement at issue did not pass the “of and concerning” test.

Defamatory words are not actionable unless they refer to someone, and do so clearly enough that those who hear or read the statement will understand the reference. This has come to be known as the “of and concerning” test. If the words are not “of and concerning” the plaintiff, then the plaintiff has no cause of action. Courts have the authority to decide as a threshold matter whether an alleged statement can be reasonably understood as referring to the plaintiff, and to dismiss the case at the outset if the statement cannot be so interpreted.

To recap, William Gilman, an employee of Marsh & McLennan Companies, Inc. sued Eliot Spitzer, former New York State Attorney General, for defamation stemming from an article that Spitzer wrote in response to a Wall Street Journal editorial questioning his prosecution of the insurance industry. Spitzer’s article criticized the editorial for noting that two cases against Marsh employees had been dismissed after the defendants were convicted, yet failing to acknowledge “the many employees of Marsh who have been convicted and sentenced to jail terms.” Gilman’s case was one of the two that had been dismissed. The article also accused “Marsh and its employees” of pocketing increased fees and kickbacks. Gilman was not mentioned by name in the article. The district court found that no reasonable reader of the entire passage would come away thinking that the article referred to Gilman, so it dismissed the claim.

September 9, 2013

“Actual Malice” Is Not Actually Malice

by Lee E. Berlik

Where an otherwise defamatory statement is subject to a qualified privilege, a plaintiff can overcome that privilege by showing that the defendant acted with actual malice. However, “actual malice” in the context of a defamation action–also known as “New York Times malice,” is a different concept than the common-law malice ordinarily required to support an award of punitive damages. Actual malice does not require evil intent, spite, or ill will. A speaker acts with actual malice when he knows that his statement is false or acts with reckless disregard as to its truth. Mere dislike of the plaintiff is not sufficient to indicate a speaker acted with actual malice.

The standard for whether a defendant has uttered a defamatory statement with actual malice is a subjective one. In a lawsuit against a newspaper, for example, the plaintiff would not necessarily prevail merely by showing that the publisher failed to conduct a sufficient factual investigation or that a “reasonably prudent” publisher would not have published the story. Reckless disregard for the truth requires more than just a departure from professional journalistic standards. (See Harte-Hanks Commc’ns, Inc. v. Connaughton, 491 U.S. 657, 666 (1989)). Rather, the court must get into the mind of the publisher and determine its state of mind at the time of publication. Reckless disregard for truth requires a high degree of awareness of probable falsity, such as when a publisher entertains “serious doubts as to the truth of his publication” but publishes the story anyway. (See St. Amant v. Thompson, 390 U.S. 727, 731 (1968)).

The distinction between actual malice and common-law malice was explained last month in the Texas case of Tyson v. Austin Eating Disorders Partners, LLC. Edward Tyson worked for Austin Eating Disorders Partners (AED) as medical director of AED’s Austin eating disorder treatment center. After Tyson was removed from his position, he asked his accountant to inquire about AED’s improved financials. Mark McCallum, CFO of AED, responded to the inquiry with an email to Tyson, AED’s Board of Directors, AED’s attorney, and AED’s accountant stating that AED’s financials had improved because Tyson had been a bad medical director who had no idea how to run the treatment center and took kickbacks for referring patients to other facilities. In a Second Amended Complaint asserting various defamation theories, Tyson conceded that McCallum’s email was subject to a qualified privilege, but argued that he overcame the privilege by alleging that McCallum acted with actual malice. AED and McCallum moved to dismiss the claim.

August 26, 2013

Reliance on Responsible Source Negates Actual Malice

by Lee E. Berlik

When a defamatory statement is made about a public figure, a plaintiff must prove that the statement was published with actual malice, i.e. with knowledge that the statement was false or with reckless disregard of whether it was false or not. Mere proof that a defendant failed to investigate the truth of a statement is not enough to show actual malice, and where a defendant relies on a responsible source in making a statement, he has not been grossly negligent, much less malicious. However, evidence of intent to avoid the truth can be sufficient to satisfy the actual malice standard. The Second Circuit recently addressed these issues in Dongguk University v. Yale University.

When Shin Jeong-ah applied for a position as an art history professor at the prestigious Dongguk University in South Korea, she stated that she held a Ph.D. from Yale University in Art History, and she submitted a document on Yale University letterhead that purported to be a certification of her degree. The certification contained an exact reproduction of Yale Associate Dean Pamela Schirmeister’s signature but misspelled the name and also misspelled the word “century” in Shin’s listed concentration – Twentieth Century Art. Nevertheless, Dongguk hired Shin and sent Yale an Inquiry Letter with the certification attached seeking to verify its authenticity. Dean Schirmeister received the letter and responded via fax “confirming that the attached letter [the certification] was issued by the Yale Graduate School and signed by me.”

Two years later, Dongguk became suspicious that Shin may have plagiarized her dissertation. An investigation revealed that Yale had no record of the dissertation and that in fact Shin had not received a Ph.D. from Yale. The Korean press latched on to the story, and Yale’s Deputy Counsel Susan Carney and Dean Edward Barnaby began referring all Shin-related media inquiries to its Office of Public Affairs.

August 19, 2013

Anti-SLAPP Law Will Not Immunize Every Statement About a Celebrity

by Lee E. Berlik

Anti-SLAPP laws provide an expedited procedure for dismissing lawsuits that are filed primarily to inhibit the valid exercise of constitutionally protected speech. A defendant seeking to avail herself of an Anti-SLAPP statute must show that the allegedly defamatory statements concern a public matter or a matter of public interest. Not all statements about a person in the public eye qualify. Rather, the subject of the statement must be involved in a public controversy or be so famous that her involvement in a private dispute is a matter of public interest. A California appellate court recently addressed this issue in Albanese v. Menounos and concluded that some celebrity disputes are just none of our business and don’t require the protection of the anti-SLAPP statute.

Lindsay Albanese is a celebrity stylist who worked at NBC for several years as a stylist for Maria Menounos of Access Hollywood fame. Albanese contends that on one occasion after leaving NBC, when Albanese and Menounos ran into each other at an event, Menounos loudly proclaimed that “Dolce and Gabbana won’t lend to me anymore because they said you never returned anything.” Menounos also allegedly told someone at the party afterwards that Albanese had stolen from her while she worked at NBC.

Albanese sued Menounos for defamation, tortious interference with prospective economic advantage, and intentional infliction of emotional distress, arguing that the statements were made with malice, actual knowledge of their falsity, and with specific intent to injure Albanese’s reputation and employment. Her complaint seeks damages for injury to her personal, business and professional reputation, embarrassment, humiliation, severe emotional distress, shunning, anguish, fear, loss of employment and employability and economic loss in the form of lost wages and future earnings. Menounos moved to strike the complaint under California’s anti-SLAPP law.

August 9, 2013

Erasure Statutes Do Not Erase History

by Lee E. Berlik

So your criminal record has been erased. Congratulations! Now you’re thinking about bringing a libel action against the news agencies who published stories documenting your arrest, because the local “deemer” statute states that you are deemed never to have been arrested and those embarrassing articles are still available online. Good idea? Have those articles, truthful at the time they were first published, become defamatory in light of recent events? Not according to a recent federal-court opinion out of Connecticut, which rejected Lorraine Martin’s claims for libel, false light, negligent infliction of emotional distress, and invasion of privacy in a case she filed against Hearst Corporation and other media outlets.

Lorraine Martin and her two sons were arrested in August 2010 and charged with possession of narcotics, drug paraphernalia and a controlled substance. Several news outlets published brief accounts of the arrest and charges in print and online. The charges were dismissed in January 2012 and qualified for erasure under Connecticut’s erasure statute which provides that thirteen months after a criminal charge is dismissed, the charge is erased and the person charged is deemed to have never been arrested. Ms. Martin asserted that because she qualified for erasure and had been deemed to have never been arrested, the defendants’ statements became false and defamatory. Ms. Martin asked the publications to remove the online articles and, when they refused, sued them.

Precepts of statutory construction dictate that the meaning of a statute be ascertained from its text and its relationship to other statutes. If the text is plain and unambiguous, the court will not consider extra-textual evidence. The “Erasure of Criminal Records” statute requires that court records and police and prosecutor records be erased following final judgment in a case in which the defendant is acquitted or the charge is dismissed or where a nolle prosequi is entered. Read as a whole, the statute concerns only the records of courts and law enforcement agencies and imposes requirements on them. For example, the statute prohibits the court clerk from disclosing information about erased charges. The court found that nothing in the statute suggests that the legislature intended to impose requirement on persons who work outside of courts or law enforcement.

July 29, 2013

Mann’s Defamation Suit Survives Anti-SLAPP Motion

by Lee E. Berlik

Well-known climate scientist Michael Mann made good on his threat to sue the National Review and columnist Mark Steyn for defamation based on statements made online questioning Mann’s global warming research. In response, the defendants filed a special motion to dismiss under D.C.’s anti-SLAPP statute, arguing that the online statements were made in furtherance of the right of advocacy on an issue of public interest. The court found that the anti-SLAPP statute did apply but nevertheless denied the motion.

Mann is a professor of meteorology and the Director of the Early System Science Center at Penn State. He is well known for his research on global warming and has published papers and books on the subject. The University of East Anglia’s Climate Research Unit (CRU) exchanged emails with Mann which were later misappropriated. In one email, a CRU scientist referred to Mann’s “nature trick” of adding in real temperatures for the last twenty years and from 1961 to “hide the decline.” Upon discovery of the emails, the University of East Anglia investigated the matter and concluded that the honesty and rigor of the CRU scientists was not in doubt but that the email referencing Mann’s “nature trick” was misleading.

In 2010, Penn State initiated an investigation of Mann and the CRU emails. The investigatory committee was comprised entirely of Penn State faculty members. Based on an interview with Mann, the committee cleared Mann of three of four charges against him. The last charge involved an allegation that Mann’s research might deviate from accepted norms. The committee interviewed an MIT professor who was critical of Mann’s work and later expressed dismay with the scope of the investigation and the committee’s analysis of the CRU emails.

July 15, 2013

VitaminSpice CEO Files Libel Claim Against DealFlow Media

by Lee E. Berlik

Edward Bukstel, CEO and majority shareholder of VitaminSpice, Inc., a publicly traded company, has brought a libel action in the Eastern District of Pennsylvania against DealFlow Media and affiliated individuals, claiming that DealFlow knowingly published a false story about VitaminSpice. The complaint alleges the following facts.

DealFlow provides independent research services and analysis for finance professionals such as investment managers, law firms, banks, public and private corporations, hedge funds, and financial companies. It publishes The DealFlow Report for individuals and institutions in the field of business and finance. DealFlow’s website asserts that over 6000 institutions rely on it for accurate, comprehensive and timely information about finance.

In early 2013, Bukstel negotiated a deal allegedly worth over $8 million involving the sale of VitaminSpice assets to a New York investor. An article appeared in a March issue of The DealFlow Report, entitled “VitaminSpice CEO Says He Requested Trading Halt Amid Dispute Over Stock Manipulation.” The Article went on to report that Bukstel had accused his former attorney of stock manipulation. According to Bukstel, the Article, its title in bold, appeared on page one of the issue and was the major headline. Bukstel asserts that the defendants intended the article to be conspicuous so that every reader would be drawn to it.

June 24, 2013

Pilot’s Defamation Case Goes to Supreme Court

by Lee E. Berlik

Applying Virginia law, the Colorado Supreme Court upheld a $1.4 million jury verdict against Air Wisconsin back in March of 2012, finding it was responsible for slander of a former pilot and not entitled to immunity. On June 17, 2013, the United States Supreme Court granted certiorari to consider the question of whether a court can deny the immunity provided by the Aviation and Transportation Security Act (ATSA) without a prior determination that the air carrier’s statements to the Transportation Security Administration (TSA) were materially false.

After the September 11th terrorist attacks, Congress passed the ATSA in order to encourage the reporting of security concerns. The ATSA requires airlines and their employees to report potential security threats to the TSA. Reporting parties are given broad immunity and may only be liable for reports made with actual knowledge that the report was false, inaccurate, or misleading, or with reckless disregard as to the truth or falsity of the report. Because failure to report can result in civil penalties, shorthand for the policy has become known as “when in doubt, report.”

William Hoeper was a pilot for Air Wisconsin Airlines. Hoeper apparently had failed three proficiency exams and abandoned his fourth attempt. Approximately ninety minutes into the test, Air Wisconsin contends that Hoeper ran the simulator out of fuel, flamed out the engines, and nearly crashed. According to Air Wisconsin, Hoeper knew he would be terminated and was acting irrationally, yelling and cursing at his instructors. Hoeper’s version of the story is that Air Wisconsin was conducting the simulator test unfairly, and a personal dispute was escalated into a matter of national security.

June 13, 2013

Not Every Website Is Entitled to Section 230 Immunity

by Lee E. Berlik

Section 230(c)(1) of the Communications Decency Act is intended to immunize providers of interactive computer services against liability arising from content created by third parties. Under Section 230, most Internet services will not be liable for false or defamatory material published on their sites so long as the information was created by another party. Although this statute provides website operators with a strong defense against defamation claims and other torts, a motion to dismiss is not a sure thing, at least not here in Virginia.

Section 230 applies to providers and users of an “interactive computer service,” but does not protect information content providers. If a website provides both functions, it will not be immune from liability. In Nasser v. WhitePages, Inc., the Western District of Virginia held that discovery would be required before the court could determine whether WhitePages was entitled to Section 230 immunity. Santa Clara University law professor Eric Goldman, who writes frequently about the protections of the Communications Decency Act, has sharply criticized the ruling as “overly cautious.”

Michael Nasser filed an emotional distress and nuisance action against WhitePages, Inc., alleging that WhitePages incorrectly listed his phone number as that of “Comcast Phone of Virginia,” resulting in thousands of unwanted phone calls intended for Comcast. Nasser made numerous requests to remove the listings, but the listings remained on WhitePages’ website for approximately sixteen months. Nasser alleged that he had to seek medical treatment for various issues because of the unwanted calls, and he sought $500,000 in compensatory and punitive damages for intentional and negligent infliction of emotional distress and nuisance.

June 10, 2013

Lost Profits Caused by Defamation Must Be Proven with Competent Evidence

by Lee E. Berlik

On May 31, 2013, the Fourth Circuit reversed a $4 million verdict against U.S. Bancorp for defamation, finding that the amount was excessive and/or unsupported because the jury apparently based its verdict on expert testimony of lost profits admitted in violation of Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). Still, in MyGallons, LLC v. U.S. Bancorp, the court found that Bancorp’s public statements refuting the plaintiff’s press release were sufficient to support defamation liability, so it ordered a new trial on damages only.

When Steve Verona conceived of a prepaid consumer gas card program, he contacted Voyager Fleet Systems, Inc., a subsidiary of U.S. Bancorp, about processing the program’s payments. Voyager operates a payment processing network for commercial and fleet gas purchases but was not set up to issue consumer gas cards. Verona explained his program to Bancorp executives, one of whom directed Verona to work with an authorized reseller of the Voyager payment processing system, “GoGas,” as Bancorp would not work with him until the program was larger. GoGas submitted and Bancorp approved Verona’s fleet card application and issued Verona several dozen cards using the Voyager payment network. Verona distributed the cards to family and friends who used the cards to purchase gas. Verona branded the program “MyGallons.”

Internally, Bancorp stated that MyGallons was an approved Voyager fleet card account and that it was working to expand the program. Bancorp began drafting a new contract for its relationship with MyGallons. Bancorp, GoGas and Verona worked to design fleet cards with MyGallons and Voyager logos on them.