The Virginia Defamation Law Blog

June 10, 2013

Lost Profits Caused by Defamation Must Be Proven with Competent Evidence

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.

June 3, 2013

This Is Why Exact Words Must Be Pleaded

by Lee E. Berlik

Defamation claims carry a particularity requirement, though the degree of particularity required is not as high as with fraud claims. While it is not necessary, for example, to specifically identify in the complaint the persons reading or hearing the statement, or to describe all the surrounding circumstances existing at the time the statement was allegedly made, what is required is to identify the exact words claimed to be defamatory.

This rule exists for good reason: it helps free court dockets of cases in which a plaintiff’s characterization of a statement (which is often exaggerated or unreasonable) forms the basis for the claim rather than the statement itself. Courts need to be able to make a threshold determination of things like whether the words at issue appear to be about the plaintiff, whether they are capable of being reasonably interpreted as a statement of fact, and whether they would tend to degrade the plaintiff in the eyes of the community. Defamatory meaning is a huge component of the test for liability, and the precise language used is crucial to the existence of an actionable claim.

Take the lawsuit filed in D.C. last month against NBA great LeBron James by a man claiming to be his father, Leicester Bryce Stovell.

May 16, 2013

Injunctive Relief Unavailable for False Light Claim, Says Pennsylvania Court

by Lee E. Berlik

Many jurisdictions, including Pennsylvania, follow the old common law rule that equity will not enjoin a libel. The First Amendment carries a presumption against prior restraints, but does not pose an absolute bar to injunctive relief in defamation actions. Still, most courts are extremely reluctant to grant equitable relief in actions for libel, slander, invasion of privacy, and related actions, due in no small part to the fact that money damages are usually adequate to compensate the plaintiff.

Recently, in Pennsylvania, Dr. Steven R. Graboff, a board certified orthopaedic surgeon and expert witness, tried unsuccessfully to obtain an injunction against the American Academy of Orthopaedic Surgeons and the American Association of Orthopaedic Surgeons (AAOS), requiring them to remove from their website an article that portrayed him in a false light. In an earlier action, Graboff had sued for false light invasion of privacy based on the offending article and a jury awarded him $196,000 in economic and non-economic damages. After the lawsuit, however, AAOS refused to take down the article. So Dr. Graboff sued them again, alleging “continued tortious conduct.”

He sought an injunction as well as additional compensatory and punitive damages, claiming AAOS intentionally and maliciously disregarded his rights by keeping the harmful article on the website in willful disregard of the earlier judgment. AAOS moved to dismiss this new action on several grounds.

May 1, 2013

Google Loath to Remove Content Claimed to Be Defamatory

by Lee E. Berlik

The Internet search giant Google periodically issues “Transparency Reports” which summarize government requests for removal of content from the Internet and Google’s response to the requests. Google also discloses statistics regarding requests received from copyright holders. The latest report, issued for the last six months of 2012, reveals that Google received 2,285 government requests to remove 24,179 pieces of content during that time period – a significant increase from the first six months of 2012 during which it received 1,811 requests to remove 18,070 pieces of content. By a large margin, the number one reason for a removal request is claimed defamation, followed by privacy and security reasons, trademark and copyright infringement, violence, impersonation, government criticism, bullying, national security, adult content, hate speech, religious offense, drug abuse, electoral law, geographical dispute, suicide promotion and “other.”

The large increase in removal requests is mostly due to clips of the movie “Innocence of Muslims” and Brazil’s most recent elections. Twenty countries asked Google to review YouTube videos containing clips of “Innocence of Muslims.” Seventeen of those countries asked Google to remove the videos. Although Google restricted the videos from view in some countries, it did not remove the content from others. Google received 316 requests for removal of information relating to alleged violations of Brazil’s electoral code. Although it removed some content in response to court decisions, it is appealing other cases on the ground of freedom of expression under the Brazilian Constitution. Also related to the elections, Google received requests from a prosecutor, an attorney and a judge to remove blog posts and search results that were allegedly defamatory. Google refused to remove this content.

The latest report shows that Google readily removes content that infringes a protected copyright or trademark, and that it complies with court orders to remove defamatory matter. However, Google is typically unwilling to remove allegedly defamatory material that has not been declared as such by a court of law. For example, Google refused to remove YouTube videos that allegedly defamed a school administrator, police officers, government officials and prosecutors, and it only age-restricted an allegedly defamatory video showing Argentina’s president in a compromising position. However, Google did remove items that a court had ruled defamatory to a man and his family, and in response to a court order, it removed a blog post that allegedly defamed a retired military officer accused of business gain through political ties.

April 20, 2013

D.C. Defamation Case Filed Against Redskin Fred Davis

by Lee E. Berlik

Makini R. Chaka is an owner of Remy Enterprise Group, LLC (“Remy”), an entity that arranges and coordinates logistics for celebrity appearances at public and private events. When Remy arranges a celebrity appearance, either the venue or the celebrity pays Remy a portion of the fee paid to the celebrity. Remy’s clients include professional athletes, music recording artists and other well-known entertainers.

According to a new lawsuit filed in District of Columbia federal court, Washington Redskin tight end Frederick Davis has described Chaka as a “madam” and “pimpette” who procures prostitutes for professional athletes. In her Complaint, Chaka contends that Davis also insinuated that she is violent, dishonest and an extortionist. Chaka claims that Davis said as much to Chaka’s clients and potential clients, and has sued him for defamation, invasion of privacy, tortious interference with contract and intentional infliction of emotional distress.

To falsely identify someone as a “madam” or “pimp” may be defamatory, but much will depend on the precise words used and the context in which the statement was made. Not long ago, motorcycle stuntman Evel Knievel sued ESPN when they published a picture of him with his arms around two women (one of whom was his wife) and the caption, “Evel Knievel proves that you’re never too old to be a pimp.” Evel claimed the caption was defamatory because he was not actually soliciting prostitution and his wife was not a prostitute. The Ninth Circuit held that the statement was not actionable, based primarily on the fact it was published on an extreme sports website full of lighthearted, jocular content targeted at a youthful audience. In other words, the court found that a reasonable reader would likely not interpret the “pimp” statement literally.

April 15, 2013

Overzealous Pleading Doesn’t Advance Your Cause

by Lee E. Berlik

Travel agent John Mathews may have a meritorious claim against a Virginia hotel for breaching a contract to provide food for a large group of tourists. It’s hard to tell, though, when he clutters his complaint with counts for defamation, invasion of privacy, tortious interference, and intentional infliction of emotional distress, and fails to include a count for breach of contract. This latest complaint represents Mr. Mathews’ fourth attempt to present his case to a federal court in Pennsylvania. Had he opted to file a simple breach-of-contract action in Virginia’s general district court instead, he might have secured a judgment by now.

The allegations go as follows. Mr. Mathews booked a “Winter Get Away Tour” with the Westin hotel at Washington Dulles in 2012. He alleges he planned the event with the hotel sales manager and estimated there would be 150 guests with the tour. He claims he emphasized that this was only an estimate and he would furnish a final number later.

When 174 people signed up for the getaway (or rather, the “get away”), the hotel was not able to feed everyone, as the head chef apparently wasn’t notified of the final number. On both Saturday and Sunday nights, some guests went without meals and an unlimited, all-you-can-eat buffet was converted to a limited, one-serving one. Mathews had advertised the tour to include two buffet dinners and two buffet breakfasts and claims he had to reimburse many guests due to the missed or reduced meals.

April 8, 2013

Federal Employees May Be Immune From Defamation Claims

by Lee E. Berlik

I previously reported on the Stafford County case of Suzanne Brown v. Katherine Schoeneman in which Brown, an FBI agent, brought a defamation action against Schoeneman for allegedly false reports Schoeneman made to superiors accusing Brown of making sexual advances toward her. The Government removed the case to federal court, substituted itself as the defendant under the Westfall Act, and moved to dismiss under the Federal Tort Claims Act. The court granted the motion as the FTCA’s waiver of sovereign immunity expressly excludes claims for libel and slander. See 28 U.S.C. § 2680(h).

The Westfall Act (aka the Federal Employees Liability Reform and Tort Compensation Act of 1988) amended the Federal Tort Claims Act to make it the exclusive remedy for torts committed by federal employees acting within the scope of their employment. It precludes federal employees from being sued for claims arising under state tort law (such as slander or intentional infliction of emotional distress) if they were acting within the scope of their employment. See 28 U.S.C. § 2679(b)(1). If the FTCA precludes recovery against the United States, then the plaintiff may be left without a remedy, as this case demonstrates.

Upon consideration of the Government’s motion to dismiss, the only issue before the court was whether the allegedly defamatory acts fell within the scope of Ms. Schoeneman’s employment. The plaintiff did not dispute that if the conduct was committed within the scope of employment, substitution of the United States as the defendant and removal to federal court was appropriate.

April 2, 2013

Proving Malice in Defamation-By-Implication Cases

by Lee E. Berlik

In ordinary defamation cases, proving malice is a straightforward affair because the statement at issue is only capable of being understood in a defamatory sense and the only question is whether the speaker knew the statement was false (or acted with reckless disregard to its falsity). Conversely, in defamation-by-implication cases, the allegedly defamatory statement has two possible meanings: one that is defamatory and one that is not. This complicates the malice inquiry because the speaker may or may not have intended to imply the defamatory meaning.

Recently, the Third Circuit had the opportunity to consider (1) whether the actual malice standard applies differently in defamation-by-implication cases such that more than knowledge of falsity or reckless disregard for truth is required and (2) if the standard is different, can a plaintiff can satisfy the actual malice standard by showing defendant’s mere awareness of a defamatory implication and reckless disregard of that implication or whether plaintiff must show actual intent to convey a defamatory meaning.

The Third Circuit agreed with several other circuits that plaintiffs in defamation-by-implication cases must show something beyond knowledge of, or recklessness in regard to, the FALSITY of the statement’s defamatory

March 24, 2013

Unauthorized Product Placement: Defamation by Implication?

by Lee E. Berlik

Recmad, an apparently straitlaced company from Portugal, disapproves of the music video for “Danza Kuduro.” Why? Because the artists in the video are shown partying on Recmad’s yacht with a bunch of scantily clad women. In a lawsuit filed in Florida last month, Recmad claims it never agreed to allow the defendants to show the yacht in the music video, and that the video implies that Recmad advocates and engages in a “fast, lavish, over-the-top lifestyle.” Recmad seeks to recover damages for defamation by implication.

The suit, recently removed to federal court, is against UMG Recordings and other music industry businesses and professionals. According to the allegations of the complaint, defendants Don Omar and Lucenzo began filming the music video for “Danza Kuduro” in early 2010 on the Caribbean island of St. Martin. The video features Omar and Lucenzo living the high life with yachts, mansions, fast cars and “women in bikinis.” According to the complaint, Le Reve is “prominently featured in the video,” but apparently is shown only briefly, starting at the 2:15 mark. The video shows Omar and Lucenzo approaching some women on Le Reve, who then disembark to join Omar and Lucenzo on another yacht.

Recmad contends that the video became a worldwide hit, topping the music charts in numerous countries and that defendants have profited substantially through the sale and marketing of the song and video. According to Recmad, the defendants’ unauthorized use falsely implies that the owners of Le Reve engage in “wrongful and suspect conduct.” The crux of Remcad’s argument is that juxtaposition of its yacht with a lifestyle it does not condone resulted in defamation by implication. Recmad claims that it has “suffered damages” but does not specify those damages.

March 6, 2013

FTCA Bars Defamation Claims Against Federal Government

by Lee E. Berlik

If you work for the federal government and a co-worker spreads false and malicious rumors about you that damage your reputation, it will be very difficult to pursue a claim for libel or slander against the individual in question. The recent Maryland case of Shake v. Gividen demonstrates the hurdles a prospective plaintiff would face in pursuing such an action.

Donald Shake worked for the Department of Veterans Affairs until he was terminated in 2011. Teresa Gividen and Brian Sexton also worked at the Department of Veterans Affairs. Gividen was the Assistant Human Resources Chief. Shake claimed that Gividen and Sexton accused him of accessing the medical records of a veteran and not completing hundreds of work orders. He asserted that Gividen and Sexton started rumors that Shake was the subject of disciplinary proceedings and that numerous complaints had been lodged against him. Shake sued Gividen and Sexton for defamation, alleging that they slandered his name and reputation by making false and malicious statements about him. Shake alleged that he lost his job and retirement benefits as a result of the slander and that his reputation was harmed such that he was unable to secure subsequent employment.

The United States filed a motion contending that Gividen and Sexton should be dismissed because they were acting within the scope of their employment, and it asked to be substituted as the sole defendant in the case pursuant to the Federal Tort Claims Act (FTCA). The United States further argued that Shake’s defamation claim should then be dismissed for failure to exhaust administrative remedies and on sovereign immunity grounds. The court agreed.