The Virginia Defamation Law Blog

November 5, 2012

Government Defamation May Violate Civil Rights

In theory at least, when a government agency defames an individual, the defamation may be characterized as a violation of civil rights: a deprivation of “liberty” without due process of law. The United States Supreme Court, however, has held that an ordinary state-law defamation claim against the government will usually not be sufficient to state a civil rights claim. Under the “stigma plus” or “reputation-plus” test, a plaintiff must prove some loss beyond loss of reputation, such as the loss of a job. A recent New York case demonstrates how difficult it can be to maintain such an action.

Michael Jones, Jr., was Canandaigua, New York’s Planning Board Attorney in 2008. Per agreement, he billed at two rates, depending on the circumstances. The Town Board approved his billing statements until August when members of the Town Board challenged the billing. The Town Board investigated and published a report accusing Jones of ethical violations. It referred the matter to the District Attorney and took steps to get him fired, get him to resign, or prevent his contract from being renewed. He completed his contractual term but did not seek renewal, believing doing so would be futile.

Claiming the extensive press coverage hurt his legal practice, Jones sued the Town, the majority Town Board members, and the Town Board attorneys for several state law actions, including defamation. In his federal actions, he claimed the Town violated his right to substantive due process and his civil rights, denying him a property right of continued service as Planning Board Attorney and defaming him so badly that the stigma has substantially harmed his ability to practice law.

November 2, 2012

D.C. Defamation Cases Continue to Meet Anti-SLAPP Statute

by Lee E. Berlik

Statements made in the course of litigation by parties to the case are absolutely privileged and cannot form the basis of a defamation action. At the same time, reporters enjoy a “fair report” privilege that allows them to report and comment on judicial proceedings without fear of defamation liability, even if they repeat the allegedly defamatory statements in their coverage of the case, provided the report is a fair and accurate description of the case. Does it follow, then, that a litigant can make defamatory comments to a reporter during the course of a case? Most courts would answer that in the negative, since the reporter is not involved in the case. But if that litigant is speaking about an issue of public interest, such as the operation of the District’s financial office, his comments may be protected by D.C.’s anti-SLAPP act.

Eric Payne, former contracting director for the District of Columbia, sued D.C.’s Chief Financial Officer, Natwar Gandhi, for wrongful termination. In an interview with The Washington Post, Gandhi claimed that he fired Payne because he was “a very poor manager,” “nasty to people,” and “rude to outsiders.” Payne then sued Gandhi and the District of Columbia alleging that these remarks defamed him. The city has indicated that it plans to file a special motion to dismiss the case under the city’s anti-SLAPP statute.

A “SLAPP” (or Strategic Lawsuit Against Public Participation) can exist in many forms but traditionally consists of a frivolous lawsuit filed by one side of a public debate against someone who has exercised the right of free speech to express an opposing viewpoint. The anti-SLAPP statute was enacted primarily to protect citizen activists from these lawsuits filed for intimidation purposes, but can be applied in any situation where the lawsuit threatens the right of advocacy on issues of public interest.

October 29, 2012

Summary Judgment Still Possible in Virginia State Court

by Lee E. Berlik

On October 4, 2012, the Virginia Supreme Court rejected the appeal of a personal trainer, represented by Virginia Beach lawyer Jeremiah A. Denton III, and allowed to stand the summary judgment order entered by the Norfolk Circuit Court against the trainer on her defamation claim. This shows just how serious the Virginia Supreme Court is about the absolute privilege that extends to defamatory statements made in demand letters preliminary to contemplated litigation and sent in good faith. Summary judgment is appropriate if a defamation claim is based on a privileged statement.

Darryl and Julie Cummings were members of the Norfolk Yacht and Country Club (“NYCC”). Deborah Allison, a personal trainer at NYCC and at Norfolk Academy, pursued and entered into a physical relationship with Julie. Darryl reported Addison’s actions to NYCC management. Though the NYCC warned her not to pursue Julie Cummings on NYCC property, Addison disobeyed and was fired. Cummings and his wife ultimately divorced.

Darryl sued Addison for intentional infliction of emotional distress, tortious interference, and professional malpractice. Addison counterclaimed for intentional infliction of emotional distress, tortious interference with contract, tortious interference with a contract expectancy, and defamation. Addison’s claims stemmed from Cummings’ email to the NYCC president, a draft complaint he sent to NYCC’s attorney, and emails he sent to Norfolk Academy’s headmaster.

October 28, 2012

Does D.C.’s Anti-SLAPP Statute Apply in Federal Court?

by Lee E. Berlik

Former Georgia State Director for Rural Development, Shirley Sherrod, filed a defamation action in the United States District Court for the District of Columbia against bloggers Andrew Breitbart and Larry O’Connor based on a blog post allegedly portraying her as racist. The court denied defendants’ special motion to dismiss under D.C.’s anti-SLAPP Act. Defendants appealed, and the case is now pending before the United States Court of Appeals for the District of Columbia Circuit

The district court cited three reasons for its dismissal. First, it found that entertaining defendants’ motion would require retroactive application of the anti-SLAPP statute as Sherrod filed her complaint on February 11, 2011 and the D.C. anti-SLAPP Act did not become effective until March 31, 2011. Typically, only statutes that are purely procedural in nature can be applied retroactively, and the court held that the Act is substantive (or has substantive consequences). Defendants argue that whether the statute only applies to actions filed after its effective date is an issue of first impression, and summary disposition of a case of first impression involving a newly enacted statue that protects important First Amendment rights is not appropriate.

The district court found that even if the statute were purely procedural, the Erie doctrine, which requires federal courts sitting in diversity to apply state substantive law and federal procedural law, bars its application in federal court. Finally, the district court held that even if defendants could show that the statute is both retroactive and applicable in federal court, the plain language of the statute bars the motion to dismiss–the statute provides that a party may file a special motion to dismiss within 45 days after service of the claim, and here, the motion was filed more than two weeks after the 45 days had passed.

October 8, 2012

Defamation Case Against Eliot Spitzer and Slate Dismissed

by Lee E. Berlik

Libel and slander claims depend to a large extent on whom the plaintiff targeted with the allegedly defamatory statement. Defamatory words may not support a cause of action unless they directly or inferentially refer to the plaintiff–this has come to be known as the “of and concerning” test. The defamation case filed against former Governor Eliot Spitzer and Slate Magazine Slate for a column Mr. Spitzer wrote in 2010 about an insurance bid-rigging scandal was recently dismissed by a New York court on the ground that the article did not sufficiently identify the plaintiff–a former insurance executive at Marsh & McLennan–as the subject of the statements.

William Gilman’s work for Marsh included negotiating “contingent commissions”–fees paid by insurers to insurance brokers who place insurance business with the insurer. As attorney general, Spitzer took the position that Marsh’s use of such commissions was illegal. A lawsuit ensued and Gilman was convicted of one count of restraint of trade and competition. While Gilman’s appeal was pending, the trial judge vacated his conviction because exculpatory evidence had not been disclosed during trial. Spitzer wrote an article published on Slate.com in response to a Wall Street Journal article criticizing his handling of the Marsh case. Gilman brought a claim for defamation against Spitzer and Slate based on statements in Spitzer’s article.

Gilman’s defamation claim was based on (1) a reference to “the many employees of Marsh who have been convicted and sentenced to jail terms” and (2) the statement that Marsh’s employees “pocketed … increased fees and kickbacks.” Defendants argued that neither of the challenged statements was “of and concerning” Gilman and therefore could not be defamatory.

September 19, 2012

Defamation Claims Require Proof of Fault

by Lee E. Berlik

A former bank teller’s defamation and wrongful termination action against Wells Fargo, filed in the Western District of Virginia, has been decided in Wells Fargo’s favor. Judge Samuel G. Wilson granted the bank’s motion for summary judgment due to the failure of the teller to make a coherent, factual showing that the bank was at fault, or that the alleged defamatory statements were false.

The teller, Adrienne Sewell, was terminated for violating the bank’s policies and procedures. Wells Fargo rules limited the amount of cash tellers could retain in their cash drawers. To stay below the maximum, sellers would “sell” cash to a second teller, record the transaction electronically then deliver the cash in person. On several occasions, teller Adrienne Sewell and others failed to physically move the cash, thereby misstating their balance sheets and having too much cash in their bank drawers. At the end of the day, they would “buy back” the cash, thereby righting the balances, but the practice violated bank rules. The bank investigated her activities, gathered documents, and obtained admissions from Sewell and others that they had violated bank policy and procedure.

Sewell sued Wells Fargo for defamation, breach of contract, and wrongful termination. She argued the bank defamed her by telling others she had falsified documents and had violated bank procedures.

September 17, 2012

Punitive Damages in Libel Case Reduced by 75%

by Lee E. Berlik

A jury awarded Russell Ebersole $7,500 in compensatory damages and $60,000 in punitive damages on his libel claim against Bridget Kline-Perry in the United States District Court for the Eastern District of Virginia. Ms. Kline-Perry moved for a new trial or, alternatively, a reduction of the punitive damages award, which the court treated as a motion for remittitur. Finding $60,000 to be unconstitutionally excessive, the court remitted the punitive damages to $15,000 and gave Mr. Ebersole the option of accepting the reduced amount or requesting a new trial.

The court agreed with Ms. Kline-Perry that the $60,000 award of punitive damages violated her right to due process. When faced with an excessive verdict, courts will generally order a remittitur. Remittitur is a process by which the court reduces the damages award while giving the plaintiff the option of re-trying the case in lieu of accepting the reduction. The Federal Rules of Civil Procedure do not provide specifically for remittitur, but precedent holds that a court should order remittitur when a jury award is so excessive as to result in a miscarriage of justice.

In determining whether a jury award of punitive damages violates due process, courts consider (1) the degree of reprehensibility of the defendant’s misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded and the civil penalties authorized or imposed in comparable cases.

September 11, 2012

“Dirtiest Hotels” List is Rhetorical Hyperbole and Not Grounds for Defamation Action

by Lee E. Berlik

Kenneth M. Seaton, sole proprietor of the Grant Resort Hotel and Convention Center in Pigeon Forge, Tennessee, brought a defamation action against TripAdvisor after the hotel was identified by the travel site as the dirtiest hotel in America. The United States District Court for the Eastern District of Tennessee, however, found that TripAdvisor’s list of “2011 Dirtiest Hotels” could not support a defamation claim and dismissed the case on August 22, 2012.

TripAdvisor relies solely on customer reviews to compile its “Dirtiest Hotels” list – it does not conduct an independent investigation of each hotel. Seaton claimed that TripAdvisor attempted to assure the public that its list is factual, reliable and trustworthy by including the following statements along with its list: (1) “World’s Most Trusted Travel Advice”; (2) “TripAdvisor lifts the lid on America’s Dirtiest Hotels”; (3) “Top 10 U.S. Crime-Scenes Revealed, According to Traveler Cleanliness Ratings”; (4) “Now, in its sixth year, and true to its promise to share the whole truth about hotels to help travelers plan their trips, TripAdvisor names and shames the nation’s most hair-raising hotels”; (5) “This year, the tarnished title of America’s dirtiest hotel goes to Grand Resort Hotel and Convention Center, in Pigeon Forge, Tennessee.” The list quoted a TripAdvisor user: “There was dirt at least ½ inch thick in the bathtub which was filled with lots of dark hair.” The list also featured a photograph of a ripped bedspread.

Defamation claims require proof of false statements or false implications. Seaton contended that by publishing its “2011 Dirtiest Hotels” list, TripAdvisor was implying that the Grand Resort Hotel and Convention Center was, in fact, the dirtiest hotel in the United States and that a reasonable person reading the list would consider this supposed fact in making their travel plans. Seaton argued that the list was not mere hyperbole because it contained actual numerical rankings with comments suggesting that the rankings were based in actual fact.

September 7, 2012

Defamation in the Virginia Workplace

by Lee E. Berlik

Defamation claims arise frequently in the employment context. Your boss and your co-workers are subject to the same libel and slander laws that apply outside the workplace, and they need to be careful not to exceed the boundaries of fair criticism. The employment relationship, however, does present special challenges to a contemplated defamation lawsuit. As any good defamation lawyer will tell you, a primary obstacle in establishing defamation liability in the employment context is the existence of qualified privilege.

Workplace defamation suits often involve statements made during performance evaluations, tenure review, or employee terminations. These statements will often be deemed privileged, as a limited privilege applies to communications made in good faith on any subject matter in which the person communicating has an interest, or with reference to which he has a duty if made to another person having a corresponding interest or duty. Performance evaluations, tenure reviews, and employee terminations all typically involve situations where it is necessary or expected to make statements about another individual that could potentially affect another’s professional standing or reputation.

The protection offered by qualified privilege can be lost, however, if it is abused. If statements are made to a third party having no business hearing the information, they lack the requisite “corresponding interest or duty” and the privilege may be lost. Similarly, the qualified “interest or duty” privilege can be defeated if the plaintiff shows the defamatory statements were made with malice.

September 3, 2012

Fraud Accusations Prompt Michael Mann’s Lawyers to Threaten Litigation

by Lee E. Berlik

Climate change scientist Dr. Michael Mann is threatening legal action against the National Review magazine for a blog post that appeared in “The Corner” section of its online publication. In the article, journalist Mark Steyn quoted writer Rand Simberg’s observation that Dr. Mann “could be said to be the Jerry Sandusky of climate science, except that instead of molesting children, he has molested and tortured data…” Mr. Steyn went on to call Mann “the man behind the fraudulent climate-change ‘hockey stick’ graph, the very ringmaster of the tree-ring circus.”

In a demand letter to the National Review, Dr. Mann’s attorney, John Williams, contends that Mr. Steyn’s statements amount to accusations of academic fraud and constitute defamation per se. He argues that the statements were false and were made with the knowledge that they were false. He cites several inquiries into his research which concluded that he has not engaged in academic fraud as proof that Mr. Steyn’s statements are false. Dr. Mann demands that the National Review retract the article and apologize or face legal action.

Dr. Mann may have a valid complaint, but he is going to have his work cut out for him. Dr. Mann is a well-known, much published and often quoted figure in the climate change debate. In fact, Dr. Mann has written a book on the climate change controversy. Courts have held that scientists who inject themselves into public controversies over scientific and political debates are public figures. As a public figure, Dr. Mann would have to prove by clear and convincing evidence that the National Review published a provably false statement with knowledge that it was false or with reckless disregard of whether it was false or not.