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

November 2, 2012,

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 NatG.jpgto 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.

Since the statute is relatively new, only a handful of suits have tested the anti-SLAPP statute. A D.C. firefighter filed a libel claim against a television station which aired a report about the firefighter's high overtime earnings. The court granted the station's anti-SLAPP motion to dismiss. Several federal litigants have invoked the statute, and the courts have thus far found that the law does not apply in federal court. Other cases have been settled before the anti-SLAPP claims were decided. In another case, television host Rachel Maddow invoked the statute to dismiss a claim filed by a Christian rock artist against her and MSNBC. Although a Superior Court judge granted the motion, the plaintiff is attempting to remove the case to federal court where the anti-SLAPP statute might not apply.

Payne will be unable to continue with discovery in his case while the anti-SLAPP motion is pending, and if the city prevails, Payne could be liable for the city's legal fees.

Summary Judgment Still Possible in Virginia State Court

October 29, 2012,

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 norfolk.JPGcontract, 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.

In the NYCC email, Cummings stated, "The Cummings family did not join the club for an employee to become a predator, stalk, and harass them or for an environment that would encourage this kind of behavior." Addison claimed this was libel per se but the Court found it mere opinion and therefore not actionable.

Addison also claimed Cummings' draft complaint defamed her. As the Virginia Supreme Court clarified in June 2012, communications made outside of court but preliminary to proposed judicial proceedings will be absolutely privileged from defamation liability where (1) the statement is made preliminary to a proposed judicial proceeding; (2) the statement is "material, relevant or pertinent" to the proceeding; (3) the proceeding is contemplated in good faith and is under serious consideration; and (4) the communication is disclosed only to persons having an interest in the proposed proceeding.

The court applied an earlier version of this test and found that privilege should apply because the draft complaint had "some relation to a proceeding that is contemplated in good faith and under serious consideration" and because the draft complaint was substantially similar to the actual complaint.

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

October 28, 2012,

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 slap.pngapplicable 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.

Another issue on appeal will be whether the court of appeals has jurisdiction to consider the appeal as a collateral order. In general, courts only have jurisdiction over final judgments, but the collateral order doctrine allows parties to appeal a narrow class of decisions that resolve important questions. Citing case law, defendants contend that the First, Fifth and Ninth Circuits have considered this issue and, of five substantive opinions, four hold that the denial of an anti-SLAPP motion to dismiss is immediately appealable. Further, defendants argue that the Supreme Court and the District of Columbia Circuit have applied the collateral order doctrine where a defendant seeks an appeal to vindicate rights of high value such as ones embodied in the Constitution. Defendants contend that because the case involves constitutionally protected free speech regarding public figures and issues of public importance, the court should exercise jurisdiction over the appeal.

Defamation Case Against Eliot Spitzer and Slate Dismissed

October 8, 2012,

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.

Whether a statement is "of and concerning" the plaintiff is a question of law for the court to determine at the pleading stage, considering the challenged words in context and giving the language a natural reading. Because eliot_spitzer.jpgGilman was not mentioned by name in the article, in order to be defamatory, the language must be such that persons reading it would understand that it refers to Gilman. Gilman argued that a reasonable reader would understand the statement to be about him based on preceding sentences referring to the dismissal of two cases after conviction. The court disagreed and found that no reasonable reader of the entire passage would come away thinking both that Gilman's case was dismissed after conviction and that he was convicted and jailed on those charges.

Regarding the statement that Marsh's employees "pocketed ... increased fees and kickbacks," the court noted that statements which refer to an organization do not implicate its members. Gilman argued that the article's preceding references to the two dismissed cases sufficiently tied him to the statement, but the court found that if anything, the preceding sentences tended to weaken any inference to Gilman. The court also rejected Gilman's attempt to characterize the challenged statement as referring to only 20 individuals who were subject to prosecution. Courts have allowed defamation claims to proceed where a statement referred generally to a group numbering 25 people or fewer, but the court here found the argument unsupported by the language which referred broadly to "Marsh" and "its employees" rather than to a subset of employees who were subject to prosecution. Finding that the allegedly defamatory statements could not be reasonably interpreted to be "of and concerning" Gilman, the court dismissed the defamation claims.

Defamation Claims Require Proof of Fault

September 19, 2012,

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.

Under Virginia law, a private individual (as opposed to a public figure) suing for defamation must show that the defendant was at fault for publishing a false, defamatory statement. To establish fault, a private individual must show that the defendant knew that the statement was false, or, believing that the statement was true, lacked a reasonable basis for such belief, or acted negligently in failing to determine the facts on which the publication was based.

The Court found that, even if Wells Fargo had told others she failed to follow procedure or falsified documents, as she claimed, Sewell offered no evidence that Wells Fargo knew the statements were false or, believing them to be true, lacked a reasonable basis for that belief, or that it negligently failed to determine the underlying facts. Because she failed to demonstrate either falsity or fault, the Court granted Wells Fargo's motion for summary judgment.

Punitive Damages in Libel Case Reduced by 75%

September 17, 2012,

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 cut-money.jpgthe 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.

The first factor is the most important. In analyzing the reprehensibility of a defendant's conduct, courts consider whether (1) the harm caused was physical or merely economic; (2) the tortious conduct evinced disregard of the health or safety of others; (3) the target of the conduct was financially vulnerable; (4) the conduct involved repeated actions or was an isolated incident; and (5) the harm was the result of intentional malice, trickery, or deceit.

In this case, the court found that Ms. Kline-Perry's statements accusing Mr. Ebersole of animal cruelty involved only economic harm, did not evince disregard for the safety of others, and was an isolated incident. While Mr. Ebersole was financially vulnerable at the time of the conduct (in the midst of a bankruptcy proceeding) the court found that Ms. Kline-Perry was motivated not by malice but by a desire to protect animals. The court held that, although not extraordinarily reprehensible, Ms. Kline-Perry's conduct was sufficiently blameworthy that the jury was justified in awarding some punitive damages.

The court found a disparity between the harm that Mr. Ebersole suffered and the punitive damages award. Mr. Ebersole recovered $7,500 in compensatory damages yet the jury awarded him eight times that in punitive damages. The court also found a disparity between the punitive damages award and the maximum criminal penalty for slander and libel which in this case would have been $2,500. Here, the punitive damages award was twenty-four times the maximum criminal penalty, an indication of a "grossly excessive" amount of punitive damages.

For these reasons, the court found the punitive damages award to violate Ms. Kline-Perry's due process rights, and it reduced the award by 75% to $15,000. The court gave Mr. Ebersole ten days to accept the remitted amount or request a new trial. On September 5, 2012, he reluctantly accepted.

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

September 11, 2012,

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 dirtyhotels.jpgcontained actual numerical rankings with comments suggesting that the rankings were based in actual fact.

The court agreed that a reasonable person might consider the list when making hotel plans, but found that "propensity to initiate negative mental contemplation on behalf of a potential patron" is not the test for defamation. In determining whether TripAdvisor's list is defamatory, the court would not consider whether the list is compelling but rather whether a reasonable person could understand the language in question as an assertion of fact or instead merely hyperbolic opinion or rhetorical exaggeration.

The court found that neither the fact that TripAdvisor numbered its opinions one through ten nor that it supported its opinions with data converts its opinions to objective statements of fact. A reasonable person would not confuse a ranking system based on consumer reviews for an objective assertion of fact. Rather, a reasonable person would know that the list reflected the opinions of TripAdvisor's online users. Seaton did not plead any facts that would lead the court to find that TripAdvisor made a statement of fact or of opinion that it intended readers to believe was based on facts. Finally, the court found that although unverified online user reviews are a poor evaluative method, the system is not sufficiently erroneous so as to be labeled defamatory. For these reasons, the court held that TripAdvisor's "Dirtiest Hotels" list is unverifiable rhetorical hyperbole and could not form the basis of a defamation action.

Defamation in the Virginia Workplace

September 7, 2012,

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.

"Publication" is another potential issue in the employment context. An essential element of the cause of action for defamation, it is generally defined as communication to a person other than the plaintiff and other than the table.jpgspeaker. Internal corporate communications are considered by some courts to lack this "third party" requirement, as internal statements can be viewed as a corporate entity speaking to itself. Most Virginia courts, however, refuse to afford absolute immunity to all intra-corporate communications. (See, e.g., Larimore v. Blaylock, 259 Va. 568, 575 (2000)).

In Virginia, statements suggesting someone is unfit to perform his or her job requirements or lacks integrity in the job, and statements that tend to "prejudice" someone in his or her profession are considered defamation per se. A plaintiff need not prove actual harm to reputation in such cases and compensatory damages for injury to reputation, humiliation, and embarrassment are presumed. In the context of defamation in the workplace, the defamatory statement will almost always constitute defamation per se because most statements arising in this context will consist of an attack on the plaintiff's competency in his or her business, trade, or profession.

Other issues that typically come up in workplace defamation cases are whether the employer can be held accountable for the defamatory statements of its employees, whether the statements made during the performance review constitute protected opinion, whether they are too vague to be considered defamatory, and whether they contain defamatory innuendo understood by the recipient even if not apparent to an outsider.

Fraud Accusations Prompt Michael Mann's Lawyers to Threaten Litigation

September 3, 2012,

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.

His lawyers are also going to have to convince a judge that the use of the term "fraudulent," in the context of the article, should be treated as an assertion of fact rather than subjective opinion. The court could plausibly rule either way on this issue. Mr. Steyn's piece was commentary on a highly debatable topic - climate change - and a controversial graph - the "hockey stick" graph which depicts changes in the Earth's temperature from the year 1000 onward. In an effort to encourage the free exchange of ideas, courts have allowed the press much leeway when writing about public controversies, and the difference of opinion over the science behind climate change is the type of debate that the First Amendment protects. Great scientific minds can reasonably disagree where the climate change debate is concerned.

While the court might indeed find that the term was used to suggest Dr. Mann engaged in academic fraud, it might conceivably find instead that the statement would more reasonably be interpreted as a protected expression of opinion. Moreover, if the court considers the "fraudulent" characterization to be rhetorical hyperbole, rather than an assertion of literal fact, it will dismiss the claim.

It is rarely easy for a public figure to prevail in a defamation case, especially when the statements at issue relate to matters of public concern. At a minimum, if Dr. Mann decides to file suit, it will at least bring more attention to the climate-change debate.

Virginia's Insulting-Words Statute

August 31, 2012,

Freedom of speech is not without limitations. Under the "fighting words" exception, speech is unprotected if it tends to incite an immediate breach of the peace (i.e., it is inherently likely to provoke a violent reaction). Virginia is one of few states that has essentially codified the fighting words doctrine. Its "insulting words" statute is found at Section 8.01-45 of the Virginia Code.

The insulting words statute was first passed as part of the 1810 Anti-Dueling Act. The Anti-Dueling Act provided that "All words which, from their usual construction and common acceptation, are construed as insults, and tend to violence and breach of the peace, shall be actionable." Today, over 200 years later, the language of the statute is virtually unchanged. Times have changed, but Virginia law still prohibits the utterance of words that are so insulting and offensive that the average person, upon hearing them, is likely to react with violence. Insulting-words jurisprudence has evolved over the years as a form of defamation law.

To recover in a private lawsuit brought under § 8.01-45, the words used must not only be insults, but they must be fighting words that "tend to violence and breach of the peace." The United States Supreme Court has defined fighting words as "those personally abusive epithets which, when addressed to the ordinary citizen, are, as a duel.jpgmatter of common knowledge, inherently likely to provoke violent reaction." Cohen v. California, 403 U.S. 15, 20 (1971). The Supreme Court later expanded the definition by clarifying that provocation of "immediate" or "imminent" violence was required before mere insults could fall outside the protection of the First Amendment. N.A.A.C.P. v. Claiborne Hardware Co., 458 U.S. 886, 928 (1982).

Like defamation claims, alleged violations of the insulting-words statute must be measured by standards that satisfy the First Amendment and its protection of the freedom of speech. Constitutional limitations applicable to defamation claims apply with equal force to insulting-words claims. In essence, the First Amendment applies any time a plaintiff seeks damages for reputational, mental, or emotional injury allegedly resulting from a defendant's speech.

Not every harsh insult is going to be actionable. To satisfy the Constitution, Virginia courts can generally only apply the insulting-words statute to situations involving a clear and present danger of imminent harm. Most courts therefore require a verbal attack directed at a particular individual in a face-to-face confrontation that presents a clear and present danger of an immediate and violent physical response. Insults communicated over the phone, or made in an online forum, or sent via email, will usually not be sufficient.

A review of Virginia Supreme Court decisions interpreting the insulting-words statute demonstrates that the only language it has found sufficient to "tend to violence and breach of the peace" is language falsely accusing someone of the commission of a crime involving moral turpitude. Absent such false allegations, Virginia courts expect most people in modern society to be able to deal with being called most other four-letter words without resorting to dueling (or other violence) as a part of everyday life.

Section 230 Immunizes Users Who Link to Defamatory Statements of Others

August 27, 2012,

Under § 230(c)(1) of the Communications Decency Act (47 U.S.C. § 230(c)), "No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." Federal courts in Virginia have held that § 230 creates federal immunity to any cause of action that would make service providers (as opposed to content providers) liable for information originating with a third-party user of the service. For example, Section 230 has been found to bar claims for defamation, tortious interference with business expectancy, and trademark infringement. In Directory Assistants, Inc. v. Supermedia, LLC, the court clarified that Section 230 immunity applies not only to providers but also to users.

Directory Assistants is an advertising consulting agency that helps businesses advertise in yellow page directories. SuperMedia also sells advertising solutions. Directory Assistants had been the subject of allegedly false and defamatory postings on consumer review websites such as RipOffReport.com, ScamInformer.com, and YellowPages.com. According to Directory Assistants, SuperMedia sent an email to a prospective customer that included links to the allegedly defamatory postings. Directory Assistants sued SuperMedia for defamation, and SuperMedia moved to dismiss, arguing protection under Section 230.

Reviewing relevant case law and the statutory language, the court found that Section 230 protects users equally as it does providers, and it held that although a person who creates unlawful content may be held liable, a user of 230.jpgan interactive computer service who finds and forwards via e-mail content that others have posted online in an interactive computer service is immune from liability.

The court then examined whether the websites providing the various reports in the instant case qualified as interactive computer services and whether SuperMedia qualified as a user under the statute. The complaint alleged that RipOffReport and the other websites allowed many people access to a portal on the internet to post information about products and services. Courts have ruled that these types of websites are not internet content providers because they do not create the content that is posted.

Unlike some other federal decisions, the court applied a dictionary definition to the term "user," interpreting it to mean "someone who uses." The court found that SuperMedia, by going to websites like RipOffReport, reading postings and compiling links to these posts in an email, was "using" an interactive computer service. Therefore, the court held that SuperMedia was entitled to Section 230 immunity from defamation liability.

In its conclusion, the court noted that if Directory Assistants had some evidence that SuperMedia had a hand in creating the allegedly defamatory posts, it may have had a case, but current case law does not allow downstream users of content created by others to be held liable for defamatory statements.

Defamation By Implication Theory Prevents Dismissal of Art Analyst's Case

August 23, 2012,

In Virginia, defamation liability can be based on a statement that is literally true, if the true meaning of the statement arises from reasonable inferences attributable to it rather than the actual words used. Some jurisdictions refuse to recognize this "defamation by implication" or "implied defamation" theory, but on August 9, 2012, the Southern District of New York issued an opinion demonstrating that New York is among the states that recognize the doctrine.

Peter Paul Biro is in the business of art restoration and authentication and is well known in the art world for having developed scientific approaches to art authentication through fingerprint analysis. In July 2011, The New Yorker published an article titled "The Mark of a Masterpiece: The man who keeps finding famous fingerprints on uncelebrated works of art." (Note: a full copy of the article is attached to the opinion). Biro sued the magazine, investigative journalist David Grann, and others for defamation, claiming that various passages in the article damaged his reputation to the tune of two million dollars.

In Biro v. Condé Nast, the court adopted the Fourth Circuit's approach to defamatory implication claims, holding that a plaintiff must make an "especially rigorous showing" that (1) the language may be reasonably read to impart the false innuendo, and (2) the author intended or endorses the inference. Where an implication arises fingerprint.jpgdue to the omission rather than the expression of facts, the court will examine whether the omission would materially change the alleged implication.

On the other side of the coin, the court noted that if a statement is substantially true according to the understanding of the average reader, it will generally not be deemed defamatory. For example, the article stated that Biro "pioneered a radical approach to authenticating pictures." Biro claimed this statement was defamatory because he says there is nothing "radical" about fingerprints. Biro characterized the use of fingerprint analysis in art authentication as an "emerging field." The court found that the truth according to Biro would not have a different effect on the mind of the reader than the idea that fingerprint authentication is "radical." The court therefore dismissed those claims based on substantially true statements.

On the topic of fact vs. opinion, the court wrote that while expressions of opinion are generally not actionable as defamation, a statement of opinion that is based on undisclosed facts might be actionable because a reader may reasonably infer that the writer knows certain facts which support the opinion. For example, statements alleging that Biro had been caught in lies and was a "phony" suggest facts undisclosed to the reader, the court found. The court declined to dismiss claims based on these statements.

In the final analysis, just four of the original 24 counts survived the motion to dismiss.

Doctor's Defamation Claim Reconsidered by Judge Roush

August 13, 2012,

Judge Jane Marum Roush of the Fairfax Circuit Court has allowed Dr. Adel Kebaish to amend his complaint against Inova Fairfax Hospital to include four additional statements claimed to be defamatory. Judge Roush had previously found the alleged statements non-actionable but was persuaded by the plaintiff's attorneys to partially reconsider her earlier ruling.

Dr. Kebaish was an orthopedic and spine trauma surgeon at Inova Fairfax Hospital. Dr. Kebaish claims that Inova and several of its doctors and physician assistants defamed him and that Inova terminated him for objecting to substandard care and fraudulent billing practices. He filed a complaint against Inova, one of its administrators and ten of its doctors and physician assistants alleging causes of action for defamation per se as well as other business torts. The defendants demurred on various grounds.

The court reviewed each of the allegedly defamatory statements in the complaint and agreed with Inova that most of the statements were either statements of opinion, not actionable as defamation, or made by persons who were not named as defendants. To successfully state a claim for defamation in Virginia, a plaintiff must show that the ER.jpgdefendant published a false factual statement that harms the plaintiff or the plaintiff's reputation. Expressions of opinion are constitutionally protected and are not actionable as defamation.

The court initially sustained the demurrer to the defamation claim except as to two alleged statements: (1) that Dr. Kebaish had once operated on a patient with a "do not resuscitate" order without the family's consent; and (2) that Dr. Kebaish's privileges at Inova's emergency room had been revoked. Dr. Kebaish moved the court to reconsider its ruling as to the other statements.

Upon reconsideration, the court found that four additional allegations were statements of fact that, if proven to have been made and proven to be false, may be defamatory: (1) a doctor's statement that Dr. Kebaish turned away Medicaid patients; (2) a defendant's statement that Dr. Kebaish had caused a sciatic nerve injury to a patient treated for pelvic fracture and was hiding this fact; (3) a defendant's statement to an investigator for the Virginia Board of Medicine that Dr. Kebaish had operated on patients without taking x-rays, had caused complications, and had missed fractures on patients; and (4) a defendant's statement to potential patients that Dr. Kabaish's "hands shake."

Target of Online Griping Files Defamation Action

August 6, 2012,

Fairfax-based Direct Connect, LLC, a credit card processing company, has sued Inkthis, LLC, and its owner, Debra Sachs, for alleged defamation and tortious interference with contract. Direct Connect is upset about certain statements posted on Inkthis' Facebook wall, including one that referred to Direct Connect as "a bunch of thieves." The defendants recently removed the case from Fairfax Circuit Court to federal court in Alexandria.

The Facebook posts describe the author's frustration with certain business practices of Direct Connect, including what the author believed to be excessive charges debited from Inkthis' bank accounts. Direct Connect says the statements are false, that the defendants knew the statements were false when they made them and, by publishing descriptions of the company that included words like "inept," "horrible," and "thieves," the statements harmed Direct Connect's reputation.

Statements that are relative in nature and depend largely upon the speaker's viewpoint are generally considered expressions of opinion. Opinions cannot form the basis of a defamation action as they are protected by the First Amendment and generally cannot be interpreted as stating a provably false fact, a prerequisite for any thief.jpgdefamation claim. Thus, referring to Direct Connect as "inept" and "horrible" will likely be deemed non-actionable opinion. Referring to the company as "a bunch of thieves" presents a closer question.

Like opinions, rhetorical hyperbole cannot reasonably be interpreted as a statement asserting actual facts. In one often-cited Virginia case, the Virginia Supreme Court held that referring to a university executive as the "Director of Butt-Licking" was mere hyperbole and could not be reasonably interpreted as a factual statement.

The interesting question here is whether referring to a group as a "bunch of thieves" should be interpreted differently than referring to a specific individual as a "thief." Calling someone a thief is unquestionably defamatory, but notice the subtle change in meaning when (1) the statement is applied to a group of people, and (2) "thief" is replaced with "bunch of thieves." Is the speaker actually asserting that each and every member of Direct Connect is a thief? I expect the court will dismiss the defamation claim.

Absolute Judicial Privilege Extends to Demand Letters Sent in Good Faith

July 30, 2012,

Earlier I wrote about the case of Mansfield v. Bernabei, in which Fairfax Circuit Court Judge R. Terrence Ney sustained demurrers to a defamation claim based on statements made in a draft complaint forwarded to a small group of prospective defendants for settlement purposes. Judge Ney ruled that the statements were privileged from defamation liability because they were preliminary to a proposed judicial proceeding and sent in good faith. The Virginia Supreme Court has now affirmed that decision and set forth a new test for determining applicability of the judicial privilege in Virginia.

Under the new test, communications made outside of court but preliminary to proposed judicial proceedings will be absolutely privileged from defamation liability where (1) the statement is made preliminary to a proposed judicial proceeding; (2) the statement is "material, relevant or pertinent" to the proceeding; (3) the proceeding is contemplated in good faith and is under serious consideration; and (4) the communication is disclosed only to persons having an interest in the proposed proceeding.

(Note: The court enumerated only three elements, combining (2) and (3) above. Because the test contains four distinct concepts, I find it easier to think of this as a four-part test. But that's just me.)

The plaintiffs argued that to protect communications that are not part of an ongoing judicial proceeding would encourage abuse of the legal system by aggressive lawyers, who would be free to defame others in non-judicial VSC.jpgsettings without meaningful restraint. The court downplayed this concern, finding that adherence to the elements of the test would offer adequate protection against unbridled defamation. The court also emphasized the importance of encouraging compromise and settlement by facilitating free and open communication by parties and their counsel.

Applying the test to the facts of this case, the court found that the communication at issue was privileged and that the demurrers were properly sustained. The draft complaint and demand letter were marked "For Settlement Purposes Only," and the letter warned that "formal legal action" would follow if a response were not received. Formal legal action did, in fact, follow, and the actual complaint filed was substantially similar to the draft complaint. The communications were sent only to the potential defendants who were clearly interested persons. The court therefore affirmed the judgment of the circuit court.