Articles Posted in Defamatory Meaning

So you may have heard that environmental scientist Paul Brodeur is seeking $1 million in damages for libel, defamation, slander and false light against the movie studios behind 2013’s highly acclaimed film American Hustle. Why? Because according to him, the movie damaged his reputation by “attributing…a scientifically unsupportable statement” to him. Had this action been filed in Virginia rather than California, it would not likely go very far.

Here’s the scene: it’s the late 1970s or early 1980s, and the two characters played by Christian Bale and Jennifer Lawrence are arguing about the new microwave oven that just exploded in their kitchen:

Irving Rosenfeld: I told you not to put metal in the science oven! What did you do that for?

Extortion is a crime. Statements that falsely accuse another of committing a crime often constitute defamation per se in Virginia, particularly where the crime is one involving “moral turpitude.” Does it follow, then, that false accusations of extortion will automatically qualify as defamation per se? The answer, which will undoubtedly surprise many of you, is no. The reason lies in the importance of context in defamation actions.

A good illustration comes from the Tenth Circuit, which issued its decision in Hogan v. Winder a few days ago. Chris Hogan worked as a consultant for the Utah Telecommunications Open Infrastructure Agency (“UTOPIA”), a state agency charged with upgrading high-speed Internet access. In the spring of 2011, Hogan began to suspect that UTOPIA’s executive director unfairly favored a bid for a contract from the company where the director’s brother worked, and he expressed his suspicions to UTOPIA’s plant manager. He was terminated shortly thereafter. Believing that his termination was retaliatory, he hired a lawyer and sent UTOPIA a draft complaint along with certain settlement demands, pointing out that the public scrutiny that would result from filing the lawsuit would essentially destroy the company. In a response, UTOPIA’s attorney characterized Hogan’s demands as “extortion” and “blackmail.”
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Defamation claims arise frequently in employment settings. Employees often disagree with their performance reviews and, if they feel particularly aggrieved, resort to the courts to extract a modicum of revenge. Unfortunately for them, statements relating to employee discipline and termination made by managers and supervisors usually enjoy a qualified privilege against defamation claims. The privilege generally insulates such statements from liability absent clear and convincing evidence of malice or some other indicator that the privilege has been abused. When an employer makes a false and defamatory statement about an employee, but that statement is protected by a qualified privilege that has not been lost or abused, the statement is not actionable.

Of course, before the question of privilege even comes into play, there is the matter of whether the statement at issue is defamatory in the first place. In Regina M. Zarrelli v. City of Norfolk, Ms. Zarrelli sued the City of Norfolk, Virginia (her former employer) along with the City’s Commonwealth’s Attorney, Gregory D. Underwood, based in part on being required to apologize to a vendor. It didn’t work, and the case was dismissed both because the statements were not defamatory, and because even if they were, they were protected by qualified privilege.
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In James M. Tharpe, Jr. v. Rudy K. Lawidjaja, currently pending in the Lynchburg Division of the Western District of Virginia, plaintiff James Tharpe, a professional soccer coach and part-time model, alleges that photographer Rudy K. Lawidjaja persuaded him to pose nude after assuring him that no photographs showing Tharpe’s genitals or buttocks would be distributed. Lawidjaja took numerous nude photos of Tharpe and promoted him as a model. Eventually, the parties’ relationship deteriorated. Tharpe refused Lawidjaja’s invitation to quit his job as a soccer coach to relocate to the Washington, D.C. area and serve as Lawidjaja’s “house model.” Instead, he moved to Tennessee, where he coached soccer for a year, and later accepted a coaching position with Central Virginia United Soccer Club (“CVUS”) in Lynchburg.

In August 2011, CVUS notified Tharpe that an Internet search of his name returned inappropriate and embarrassing photographs of which parties associated with the soccer club did not approve. According to the court’s examination of the record, Lawidjaja had posted nude photographs of Tharpe on his website as well as other sites, identified Tharpe as a “porn star,” and digitally altered the photographs to depict Tharpe with an erection and ejaculating for the camera. The court found that Lawidjaja tagged these pornographic photographs with keywords to link the photos to CVUS (Tharpe’s employer, which had nothing to do with the photos) so that any Google search for CVUS would return the photographs. Tharpe sued Lawidjaja for defamation, intentional infliction of emotional distress, and other torts.
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To be actionable as libel or slander, a statement must not only be false, but must also be defamatory in nature. To have defamatory meaning, a statement must carry a sufficient degree of “sting”; merely offensive or unpleasant statements are not defamatory. See Chapin v. Knight-Ridder, Inc., 993 F.2d 1087, 1092 (4th Cir. 1993) (noting that falsity of statement and defamatory sting must coincide). A communication that is merely unflattering, annoying, irksome, or embarrassing, or that hurts the plaintiff’s feelings, without more, is not actionable in Virginia. See R. Sack, Libel, Slander and Related Problems 45 (1980). So how much of a sting is enough to state a claim?

While the Virginia Supreme Court has not spoken recently on the requisite degree of “sting” required to support a defamation action, federal courts applying Virginia law have held that a statement may be actionable only if it contains a false assertion of fact that “tends so to harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him.” See Wolf v. Fed. Nat. Mortg. Ass’n, 830 F. Supp. 2d 153, 168 (W.D. Va. 2011). This is also the position taken by the Virginia Model Jury Instructions and the Restatement (Second) of Torts. See Va. Model Jury Instr. 37.010; Restatement (Second) Torts § 559 (1977). (Update: On June 4, 2015, the Virginia Supreme Court decided Schaecher v. Bouffault, in which it formally adopted the Restatement test that has been followed in the Fourth Circuit for several years.)
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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, WorldNetDaily.com, 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.

A false and disparaging statement will not be grounds for a defamation claim unless the words are capable of sustaining a defamatory meaning. Not every insult will be actionable. What is “defamatory meaning”? Well, you should really consult a lawyer on that one as there is no easy answer. Virginia courts have tried to define it as words calculated to render the plaintiff “infamous, odious, or ridiculous.” (See Moss v. Harwood, 46 S.E. 385, 387 (Va. 1904)). Does that help? Not much. In New York, they look to whether the words “tend to expose one to public hatred, shame, obloquy, contumely, odium, contempt, ridicule, aversion, ostracism, degradation, or disgrace, or to induce an evil opinion of one in the minds of right-thinking persons, and to deprive one of their confidence and friendly intercourse in society.” (See Kimmerle v. New York Evening Journal, 186 N.E. 217, 218 (N.Y. 1933)). That seems specific enough, but try applying that test in the real world. How is a court to determine whether one statement tends to expose one to public ridicule but not another?

The Western District of Virginia had a chance to grapple with this question a little bit in AvePoint, Inc. v. Power Tools, Inc. In that case, the court was asked to consider whether a statement falsely describing AvePoint as a Chinese company was defamatory in meaning. Ultimately, the court found that the plaintiff’s allegations were sufficient to survive a motion to dismiss.

AvePoint and its subsidiary are American corporations and providers of infrastructure management and governance software platforms for Microsoft SharePoint products and technologies. AvePoint’s competitor, Axceler, offers similar software for Microsoft SharePoint products. AvePoint sued Axceler and its Regional Vice President of Sales for Western North America, Michael Burns, alleging that they made false and defamatory comments about AvePoint and its products and services on Twitter and in email communications with customers and potential customers. AvePoint alleged that Axceler and Burns made false statements describing AvePoint as a “Chinese company” whose products are “maintained in India,” and claiming falsely that Microsoft recommends Axceler’s software over AvePoint’s, that AvePoint’s customers were abandoning their contracts early in order to buy Axceler’s software, and that Axceler uses maintenance revenue in a way superior to AvePoint.

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

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

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

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

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

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

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

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

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

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