Articles Posted in Libel

Suppose you’ve spoken your mind about someone you don’t like and have been accused of defamation. Should you apologize? If you intentionally defamed the character of another person out of ill will or spite, you’re probably not going to want to apologize. But if you’ve either had a change of heart or a sudden realization that you’re about to get sued, there are some good reasons to say you’re sorry.

For one thing, apologizing–if done right–can mitigate the plaintiff’s damages. Plaintiffs who sue for libel or slander in Virginia aren’t just limited to recovery of out-of-pocket pecuniary losses; they can also recover damages for pure emotional distress. Even without proof of actual reputational harm, Virginia courts have allowed plaintiffs to recover compensation for mental anguish, embarrassment, and humiliation. In essence, the worse the plaintiff feels, the higher the potential for a large damages award. In the business world, studies of disgruntled customers have shown that they are more than twice as likely to forgive a company that performs poorly but then apologizes than one that offers payment in lieu of an apology. It stands to reason, then, that a plaintiff’s emotional distress will likely be diminished if you make a sincere, timely apology, and publish that apology to the same group to whom you made the defamatory remarks.
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In bankruptcy court, the presumption in favor of public access to judicial records can be overcome if “scandalous or defamatory matter” is contained in a paper filed therein. (See 11 U.S.C. Section 107). Curiously, there is an absolute judicial privilege for statements made in connection with and relevant to a judicial proceeding, so normally one wouldn’t expect to find “defamatory matter” in a court filing. Still, there is a relevance requirement to be entitled to the privilege, and there’s always a possibility that potentially defamatory or scandalous statements will be made in a court filing that have nothing to do with the underlying merits. And that’s exactly what happened in the recent case of Robbins v. Tripp.

Attorney John W. Tripp was handling a case in bankruptcy court when certain issues arose relating to perceived problems with his practice. The court ordered him to prepare and file a report containing details relating to his organization of files, supervision of staff, communication with clients, and related matters. The bankruptcy court instructed that the report be written “candidly and not as an advocate for any party to this matter.” Mr. Tripp moved for leave to file the report under seal, based in part on Section 107’s “scandalous or defamatory” provision. The motion was granted, and the trustee appealed.
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Insurance against defamation claims is often found in policies providing coverage for liability arising from “personal and advertising injury.” In State Farm Fire and Casualty Co. v. Franklin Center for Government and Public Integrity, for example, the United States District Court for the Eastern District of Virginia examined a business liability insurance policy to determine whether State Farm was required to defend the insured in a lawsuit alleging claims for defamation and tortious interference. The court considered the plain language of the policy and its exclusions and ultimately held that State Farm had an obligation to defend its insured.

Franklin Center for Government and Public Integrity (“FCGPI”) operates the website. GreenTech Automotive, Inc., filed a civil action against FCGPI alleging defamation and intentional interference with business and prospective business relations stemming from two articles posted on FCGPI was insured by a State Farm business liability policy, and State Farm brought a declaratory judgment action seeking a declaration of non-coverage based primarily on various policy exceptions.
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If Sally Ferreira‘s allegations are true, she has a valid claim for defamation per se against rapper 50 Cent which could possibly result in a seven-figure damages award. Ms. Ferreira, an actress, model, and dancer, sued 50 Cent (real name Curtis J. Jackson, III) for defamation and emotional distress in federal court in New York, making the following allegations:

Ms. Ferreira has appeared in music videos for various artists such as 50 Cent, Kanye West, Jay Z, Nicki Minaj, Missy Elliot, and Lil’ Kim. In March, Ms. Ferreira participated in 50 Cent’s music video for the song “Big Rich Town,” filmed on the subway in the Bronx. Shortly after the video shoot, leaked photographs of Ms. Ferreira and 50 Cent taken during the shoot appeared on Hip Hop Weekly and, along with commentary speculating (erroneously) that the two were spotted riding the subway together and that they were romantically involved.
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Concerns that freedom of online speech would be chilled if Internet Service Providers were liable for allegedly defamatory remarks made by posters to their sites led Congress to pass the Communications Decency Act (the “CDA”). The CDA shields companies serving as intermediaries for other parties’ potentially injurious speech from tort liability arising from users’ comments. Section 230 of the CDA provides that “[n]o 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.” Although the CDA is interpreted broadly in light of Congress’ intent in passing the statute, an interactive computer service provider remains liable for its own speech.

To benefit from CDA immunity, (1) the defendant must be a provider or user of an interactive computer service; (2) the plaintiff’s claim must be based on information provided by another information content provider; and (3) the claim must treat the defendant as the publisher or speaker of the allegedly harmful speech. In Small Justice LLC v. Xcentric Ventures LLC, a federal court in Massachusetts found that Ripoff Report should not lose its CDA immunity even if it was found to have copyright ownership of the allegedly defamatory content, and even if, as the plaintiff alleged, it “intentionally caused…two defamatory per se publications to be prominently and frequently featured on Google…and other search engines.”
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To be actionable as libel, a statement must reasonably imply false and defamatory facts when read in context. Context is important because the setting of the speech makes its nature apparent and helps determine how its intended audience would have interpreted the statement. In some cases, a literally false statement will not be actionable because contextual factors demonstrate that the true meaning of the statement is something other than what the words alone might suggest. In other words, the statement that a plaintiff must prove false to prevail in a defamation case is not necessarily the literal phrase published but rather what a reasonable reader would have understood the author to have said. In Farah v. Esquire Magazine, the United States Court of Appeals for the District of Columbia Circuit discussed the importance of these principles in a case involving political satire.

Jerome Corsi is the popular author of several New York Times bestsellers and the book “Where’s the Birth Certificate? The Case that Barack Obama is Not Eligible to be President” published by WND Books. Joseph Farah is the Editor and CEO of WND’s parent company,, a competitor of Esquire Magazine. On the day after “Where’s the Birth Certificate” was released, Esquire published an online article on “The Politics Blog” entitled “BREAKING: Jerome Corsi’s Birther Book Pulled from Shelves!” A copy of the Drudge Siren, a symbol of sensationalistic news, appeared above an image of the book’s cover. The article claimed that Farah had announced plans to recall and “pulp” the entire first run of the book and to refund purchaser’s money because three weeks earlier, Obama had produced his long form birth certificate indicating he was born in Hawaii. Later, Esquire published an update clarifying that the article was satirical, but the writer of the article referred to Corsi as an “execrable piece of shit” in an interview published on another online publication, The Daily Caller.

Farah and Corsi sued for defamation and other torts. According to the complaint, after the article was published, Farah received numerous requests for confirmation of the story and comment, and consumers began requesting refunds. The plaintiffs also claimed that they were attacked by book supporters and that book stores pulled the book from their shelves or refused to sell it. Farah and Corsi contended that Esquire only published the update after Farah indicated that he was exploring legal options and that the update was likewise false and defamatory. The district court granted Esquire’s motions to dismiss under both Federal Rule of Civil Procedure 12(b)(6) and D.C.’s Anti-SLAPP Act, D.C. Code § 16-5501 et seq.

On a de novo review, the Court of Appeals upheld the district court’s dismissal of the complaint for failure to state a claim, declining to address the Anti-SLAPP issue. The court held that the article was protected political satire and that the update and writer’s comments were non-actionable statements of opinion. The court noted that the United States Supreme Court has repeatedly extended First Amendment protection to statements that do not reasonably state or imply defamatory falsehoods when read in context. Satire is a broad and complex genre that is sometimes funny and other times cruel and mocking or even absurd. The court gave the example of Jonathan Swift’s famous jonathanswift.jpgsatire “A Modest Proposal” in which he suggested killing and eating Irish children to solve the problem of Irish poverty. Although satirical speech is literally false, it enjoys First Amendment protection.

To qualify as defamatory, a plaintiff must prove not that the literal published phrase is false but that what a reasonable reader would have understood the author to have said is untrue. Satire is not actionable if it cannot reasonably be interpreted as stating actual facts. Farah and Corsi did not disagree that satire is protected, but they asserted that this attempt at satire was actionable because reasonable readers would take the fictitious blog post literally.

The court held that to determine how a reasonable reader would have understood a particular satirical statement, courts should assess the hypothetical reader’s “well-considered view,” formed after time for reflection, rather than her “immediate yet transitory reaction.” Thus, even if some actual readers don’t “get” the satire and mistake it for actual news, satire that, taken in context, would be understood (upon reflection) as satire by a reasonable reader, enjoys First Amendment protection and will not support a defamation action.

The court also noted that an article’s “indicia of satire” can be subtle. In this case, for example, the body of the article “did not employ the sort of imitation and exaggerated mimicry that are typical of parody.” The court explained that satire can incorporate a wide variety of literary forms and devices to achieve its intended effect, such as “ridicule, derision, burlesque, irony, parody, or caricature.” The fact that an article’s satirical nature may not be immediately obvious does not remove it from First Amendment protection.

Considering this particular article in context, the court held that a reasonable reader could not understand it to convey real news about the plaintiffs. The intended audience consisted of readers of “The Politics Blog” who would have been familiar with Esquire’s history of publishing satire. They were also politically informed readers who would have been familiar with WorldNetDaily and its positions on the birther controversy.

Reasonable readers would have recognized the signs of satire in the article such as the substance of the story itself, i.e., that Farah, a leader of the movement to challenge Obama’s eligibility to serve, had suddenly and without warning decided to recall and “pulp” Corsi’s book. The humorous and outlandish elements in the article also suggest satire. For example, the article claims Corsi wrote a book entitled “Capricorn One: NASA, JFK, and the Great ‘Moon Landing’ Cover-Up.” Additionally, the article contained quotes using foul language which would not likely appear in a serious news story. Stylistic details such as the exclamatory headline and the use of the Drudge Siren symbol similarly alerted readers that the article was not to be taken seriously.

The court held that because a reasonable reader could not understand the blog post to convey actual facts about the plaintiffs, it was not actionable as defamation. Rather, almost everything about the article indicated that it was political speech aimed at criticizing the plaintiffs’ public position on Obama’s eligibility to hold office. The article was protected by the First Amendment and the district court properly dismissed the defamation claim.

The District of Columbia’s anti-SLAPP act applies to actions that arise from an act in furtherance of the right of advocacy on issues of public interest. It provides that if a party makes a prima facie showing that the case involves the type of claim to which the act applies, the court will dismiss the case–with prejudice–unless the responding party can demonstrate that the claim is likely to succeed on the merits. D.C. Code § 16-5502(a)-(b). Although there has been some uncertainty as to whether D.C.’s anti-SLAPP act applies in federal court, the emerging trend has been to find that it does. On September 27, 2013, Judge Emmet G. Sullivan of the District of Columbia District Court found the statute applicable to a defamation lawsuit brought by Yasser Abbas and granted the defendant’s special motion to dismiss made under its terms.

Yasser Abbas is a wealthy businessman and political emissary for his father’s regime, the Palestinian Authority (“PA”). He sued Foreign Policy Group, LLC, and journalist Jonathan Schanzer for certain statements Schanzer made in an article he had written about the sons of the Palestinian president. The article was published in the “Argument” section of Foreign Policy Magazine and questioned whether the sons of the Palestinian president were “growing rich off their father’s system” and whether they had “enriched themselves at the expense of regular Palestinians” and U.S. taxpayers.

When the defendants responded with a motion to dismiss under the anti-SLAPP act, the first question was whether D.C.’s statute even applied in federal court, a question not yet decided by D.C.’s highest court. The issue boils down to whether the anti-SLAPP statute should be viewed as substantive or procedural, as federal courts sitting in diversity apply federal procedural laws but state substantive laws. Judge Sullivan looked to other circuits and found that many interpret similar state statutes as substantive and do apply them in federal diversity cases. Notably, the D.C. Circuit has upheld a district court decision denying a special motion to dismiss under the anti-SLAPP statute because it was not timely filed. Although that decision did not specifically hold that the anti-SLAPP statute was substantive, it implied as much. With this background, Judge Sullivan was persuaded that the anti-SLAPP law applies in federal court.

To succeed on their special motion, the defendants were required to show that Mr. Abbas’ claim arose from “an act in furtherance of the right of advocacy on issues of public interest.” The court found that Mr. Abbas was a limited purpose public figure because he had voluntarily thrust himself into a role of prominence in Palestinian DCdistrictcourt.jpgpolitics and in the controversy surrounding his wealth. Further, the question of U.S. aid to the PA and the manner in which the PA used such aid are questions that have been debated at length for years. The court held that the “level of corruption in the PA,” whether Mr. Abbas has enriched himself by virtue of his political ties, and whether his wealth can be traced to U.S. tax dollars are issues of public (not private) interest. Accordingly, the court held that the defendants had made a prima facie showing that the defamation claim arose from an act in furtherance of the right of advocacy on issues of the public interest. The burden then shifted to Mr. Abbas to show that he was likely to succeed on the merits.

Mr. Abbas contended that the questions invited his colleagues and the world to wonder if he has enriched himself at the expense of others. He argued that, while posed as questions, the statements could be read as assertions of fact, falsely accusing him of using wrongful and possibly criminal means to accumulate wealth. The defendants responded that the article merely raised unanswered questions, and that even if they could be interpreted as assertions, the statements were pure opinion and therefore non-actionable.

The court agreed with the defendants, finding that the questions posed in the article could not reasonably be interpreted as statements of fact. The court found that the questions merely invite the reader to form an independent opinion as to the relationship between the Abbas family and its wealth, which invitation is “the paradigm of a properly functioning press.”

Even if the questions were capable of defamatory meaning, the court held that they were statements of opinion protected by the First Amendment. The factual basis for the article’s questions was outlined with statements and hyperlinked source material. This put the reader on notice that the piece was one of opinion. Also, the article appeared in the Argument section of the Foreign Policy Group website–a place where readers expect to find opinion pieces.

The court held that Mr. Abbas failed to meet his burden of proving that he was likely to prevail on the merits. Accordingly, the court granted the defendants’ special motion to dismiss.

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 eraser.jpgdismissed 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.

The court also examined the statute in context of surrounding statutes which likewise focused on court and law enforcement records and the custodians of those records. Given the plain language of the statute when read in context, the court found that legislature intended to ensure that custodians of criminal records treat persons who qualify for erasure as if they have never been arrested in order to minimize the stigma associated with an arrest. The legislature did not intend to silence private persons who might have obtained arrest information nor did it intend “the sweeping, history-altering design” that Ms. Martin perceived.

Furthermore, the court noted that it must construe statutes in a manner that comports with the constitution. If the erasure statute exposed publishers to defamation claims for publishing true and newsworthy statements, it would be unconstitutional.

Continuing, the judge observed that the erasure statute operates “in the legal sphere, not the historical sphere” and does not “purport to wipe from the public record the fact that certain historical events have taken place. Only in a totalitarian system could law purport to have such a sweeping effect.” Citing a New Jersey case, the court noted that erasure statutes “cannot banish memories.” The bottom line is that Ms. Martin was, in fact, arrested in 2010. That was true at the time it was published and it will always be true.

The court’s rejection of Ms. Martin’s reading of the erasure statute rendered all of her claims insufficient as a matter of law. Her libel claim required publication of a false and defamatory statement. Because no genuine dispute existed as to the truth of the statements at the time they were first published, her claim failed. Likewise, to prove false light in Connecticut, a plaintiff must show that the published statements are not true and are a major misrepresentation. The First Amendment requires that a media defendant be liable for false light only where it publishes highly offensive material without regard to its falsity. Where the matter is true, a defendant is constitutionally protected. Because there was no genuine dispute that the statements were true, the false light claim failed. Ms. Martin’s claim for negligent infliction of emotional distress failed as well because publishing a true article is not negligent. Finally, her invasion of privacy claim failed because the value of a person’s name is not appropriated by mere mention of it in reference to legitimate public activities.

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 Mann.jpgfrom 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.

At the same time, in response to pressure from the National Review, Steyn and others, the EPA investigated Mann and found no evidence of scientific misconduct. The National Science Foundation also investigated Mann’s work and found that Penn State had not adequately reviewed the allegations and failed to interview critics of Mann’s work

Two years later, Penn State was in headlines due to the Jerry Sandusky scandal. FBI Director Louis Freeh concluded that the university had failed to properly investigate allegations of misconduct when they arose and suggested that it should undertake a thorough and honest review of its culture which seemed to value the avoidance of bad publicity and its consequences above all else.

The National Review seized on the Sandusky scandal and published Steyn’s article “Football and Hockey” on its website in a section called “The Corner.” The piece contained an excerpt from and a link to a post by Rand Simberg on entitled “The Other Scandal in Unhappy Valley” which compared the Sandusky scandal and the university’s failure to handle the matter properly with its investigation into Mann’s work. Steyn agreed that Simberg had a point but admitted he might not have “extended the metaphor all the way into the locker-room showers” with quite the zeal Simberg did. Steyn also stated that Mann was the man behind the “fraudulent climate-change hockey stick graph, the very ringmaster of the tree-ring circus,” and he concluded by noting the similarities between Penn State’s investigation of Sandusky and Mann and questioning its handling of both matters.

Mann demanded a retraction and apology for the accusations of academic fraud. In response, the National Review asserted that the term “fraudulent” was used to mean “intellectually bogus and wrong” rather than criminally fraudulent.

Mann sued in D.C. Superior Court, alleging libel and intentional infliction of emotional distress against the National Review, Steyn, Simberg and the owner of, Competitive Enterprise Institute. His complaint was based on the statements that (1) Mann had engaged in data manipulation and scientific misconduct and was the “poster-boy of the corrupt and disgraced climate science echo chamber,” (2) Mann was the man behind the “fraudulent climate-change hockey stick graph, the very ringmaster of the tree-ring circus,” and (3) Mann’s work was intellectually bogus.

The National Review and Steyn moved to dismiss under both D.C.’s Anti-SLAPP Act and Federal Rule of Civil Procedure 12(b)(6). The defendants argued that their comments are protected by the First Amendment and that the Anti-SLAPP Act applies because Mann’s claims stem from statements made in a public forum that discusses issues of public interest, i.e., climate change and global warming. Mann asserted that the Anti-SLAPP Act was enacted to deter large private interests from bringing meritless suits to deter common citizens from exercising their political or legal rights and was not intended to apply to cases such as this. The court found that because the defendants’ comments were made with respect to climate issues which are environmental issues and issues of public interest, and were made in publications that were available to the public, the Anti-SLAPP Act applies.

The Anti-SLAPP Act provides that if a party filing a special motion to dismiss makes a prima facie showing that the claim at issue arises from an act in furtherance of the right of advocacy on issues of public interest, then the court will grant the motion unless the responding party shows that the claim is “likely to succeed on the merits.” The parties disagreed on the level of proof this standard requires. The defendants asserted that “likely” poses a higher burden than “probability,” which is the term used in the corresponding California statue upon which the D.C. statute is based. Mann argued that there is no difference between “likely” and probability.” The court turned to Black’s Law Dictionary which defines the “likelihood of success on the merits test” in the context of a preliminary injunction as requiring the litigant to show “a reasonable probability of success in the litigation.” The California statute requires the plaintiff to show a “probability of prevailing on the claim by making a prima facie showing of facts that would, if proved, support a judgment in the plaintiff’s favor.” The court held that the standard is similar to that used on a motion for judgment as a matter of law and that Mann must present a sufficient legal basis for his claims in order to survive the anti-SLAPP motion.

The defendants argued that Mann would be unable to make a prima facie case for libel because he could not prove the actual malice required where plaintiff is a public figure. They also argued that Mann would be unable to prove the falsity of the statements because the statements were ones of opinion. Mann countered that he could demonstrate actual malice by showing that the defendants entertained serious doubts as to the truth of the statements or acted with a high degree of awareness that the statements were probably false. He argued that the statements were false and defamatory per se and that the defendants made them with knowledge of their falsity or with reckless disregard of the truth. He contended that whether he engaged in fraud is verifiable by analyzing the elements of fraud or considering the investigations conducted regarding his research.

On the issue of malice, the court found that sufficient evidence existed to show at least reckless disregard of truth or falsity, as Mann had been investigated several times, at least once due to the defendants’ accusations, and his research has been found to be accurate. The court held that where the defendants consistently claim that Mann’s work is inaccurate despite being proven accurate, then there is a strong probability that the defendants disregarded the falsity of their statements and did so with reckless disregard. Although the evidence was not yet sufficient to show clear and convincing evidence of actual malice, the court found sufficient evidence to necessitate further discovery on the matter.

Regarding the fact vs. opinion question, the court noted that opinions may be actionable if they imply a provably false fact or rely upon stated facts that are provably false. To determine whether a statement is actionable opinion, a court must examine the context of the statement. The court found that the statements at issue here questioned facts rather than simply inviting readers to ask questions. The court held that, given the definition of fraud and the common readers’ interpretation of the words “fraud” and “fraudulent,” the statements were more than brutally honest commentary. The court held that the assertions of fraud rely upon facts that are provably false in light of the fact that Mann has been investigated and his research and conclusions determined to be sound. Evidence indicated that the defendants’ statements were not pure opinion but rather were statements based on provably false facts.

The defendants also argued that the statements were rhetorical hyperbole – witty and obvious exaggeration– which is protected under the First Amendment, and that the statements criticized Mann’s work and ideas rather than Mann himself and thus cannot be defamatory. The court found that, when considered in the context of all of the comments and accusations made over the years and the “constant” requests for investigations of Mann’s work, the statements appear more as factual assertions.

Finally, the defendants argued that their statements were protected by D.C.’s fair comment privilege, which protects opinions based on facts that are well known to readers. To take advantage of this privilege, a defendant must show that the publication was fair and accurate and that the publication properly attributed the statement to the official source. Here, the court found that the accusations of fraud were provably false as several reputable bodies had found his work sound. Thus, the court held that the fair comment privilege did not apply.

For these reasons, the court denied the motions to dismiss and lifted the discovery stay.

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, news.jpgappeared 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.

Bukstel claims he never requested a trading halt on VitaminSpice stock and that defendants deliberately falsified the Article to sensationalize a story for the benefit of its readership and with complete disregard for the harm the statements would cause him. When Bukstel learned about the Article, he contacted defendants and informed them that the Article’s title and content were false and that the publication was jeopardizing an $8 million deal. Bukstel told the defendants that VitaminSpice investors were contacting him with concerns, and he asked DealFlow to issue a press release with a retraction and apology. Bukstel hoped such a release would restore investor confidence and salvage the sale.

The complaint alleges that DealFlow acknowledged the falsity of the title but did not issue the requested press release. Rather, the defendants simply changed the title to “VitaminSpice Halted Amid Dispute Between CEO, Attorney Over Stock Manipulation” and the opening line to “The chief executive of the microcap company VitaminSpice Inc. (VTMS) says that he provided a document to the Securities and Exchange Commission…” According to Bukstel, these changes were made only to the online versions of the Article after the print edition had been sent to thousands of subscribers.

Bukstel sued DealFlow, its CEO, Editor and a journalist working for DealFlow for defamation and intentional interference with contractual relations. According to the complaint, Bukstel has more than 18 years of experience in data integration, data security and communications. Bukstel asserts that he was nominated for a humanitarian award by the Department of Defense, has been a national speaker on electronic data interchange and a guest lecturer at The Wharton Business School and holds a B.S. and a PhD. As the CEO of VitaminSpice, Bukstel claims that his professional reputation is essential to maintaining the confidence and morale of his fellow officers, directors, employees and shareholders and is important to potential investors and future shareholders who rely on the reputation of corporate officers in their investment decisions.

Bukstel contends that defendants intentionally published defamatory and libelous statements about him. He argues that the defamatory meaning of the statements is self-evident because the statements are false. Bukstel asserts that the article created skepticism among VitaminSpice investors and potential investors by creating the impression that he was in dereliction of his fiduciary duty to VitaminSpice and that it harmed employee and shareholder confidence and morale. Bukstel claims to have suffered embarrassment, reputational damage and emotional distress as well as the opportunity to complete the $8 million sale of VitaminSpice assets. He contends that the individual defendants acted outside the scope of their duties as officers or employees of DealFlow. As of this writing, the defendants have not yet responded to the suit.

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