The Virginia Defamation Law Blog

January 23, 2014

Absolute Judicial Privilege Extends Outside the Courtroom

Virginia recognizes an absolute privilege against defamation claims in three situations: (1) statements made in connection with judicial proceedings (the so-called “judicial privilege”); (2) statements made in the course of legislative proceedings; and (3) communications among military officers. A person who makes a defamatory statement in one of these contexts is completely immune from liability even if the statement was made maliciously and with knowledge of falsity. The judicial privilege is by far the most common of the absolute privileges, as it has broad application and applies to all forms of communication during litigation. The doctrine encourages unrestricted speech in litigation which in turn promotes compromise and settlement. The United States Bankruptcy Court for the Eastern District of Virginia recently held that not only does the privilege extend to communications outside the courtroom, but that when litigation is pending, the communication need not be made to an interested party to qualify for protection.

The case is Chesapeake Trust v. Chesapeake Bay Enterprise, Inc. (In re Potomac Supply Corp.), decided December 31, 2013. The bankruptcy court had approved the debtor’s sale of its operations to an unrelated entity called Potomac Supply, LLC. Chesapeake Bay Enterprise (CBE), an entity who had also negotiated to buy the debtor’s operations, filed a motion to reconsider. Potomac Supply’s attorney sent an email to CBE’s attorney, asking for two exhibits that were missing from the reconsideration motion and making a reference to “all of the fraudulent financing proposals we received from your client…” CBE responded with a third-party complaint alleging that the email was defamatory. The third-party defendants moved to dismiss, relying on the absolute judicial privilege.
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January 20, 2014

How to Unmask Anonymous Yelp Reviewers Who Defame Your Business

by Lee E. Berlik

The First Amendment protects anonymous speech, including online reviews of products and services written by people using fake names. The right to anonymous speech, however, is not absolute. Defamatory speech, whether or not anonymous, is not entitled to protection, as there is no constitutional value in false statements of fact. If someone pretending to be a former customer writes a defamatory review on Yelp, Amazon, or some other consumer-review site, but doesn’t disclose his or her real name, how does the business owner go about identifying the individual so that the individual can be held accountable? The answer lies in Section 8.01-407.1 of the Code of Virginia, which sets forth a specific procedure for uncovering the identities of people who communicate anonymously over the Internet.

The proper application of this statute was recently discussed in Yelp v. Hadeed Carpet Cleaning, a case arising out of Alexandria. As of October 2012, Yelp’s site contained seventy-five reviews about Hadeed Carpet Cleaning, many of them critical. Included among these reviews were assertions by anonymous authors claiming to have been charged for work never performed and claiming that “precious rugs were shrunk.” Hadeed sued the anonymous authors for defamation, alleging that the reviewers were never actual customers of Hadeed.

After filing the lawsuit, Hadeed promptly issued a subpoena duces tecum to Yelp, demanding the production of documents that would enable Hadeed to identify the authors of the allegedly defamatory reviews. Yelp objected, arguing that Hadeed had not complied with the requirements of Section 8.01-407.1. Hadeed revised its subpoena to comply with the statute, but Yelp continued to object and refused to comply. On a motion to compel compliance, the Circuit Court for the City of Alexandria held that Hadeed’s subpoena satisfied the requirements of both the statute and the First Amendment, and ordered Yelp to disclose the information. Yelp refused, and was held in contempt. It then appealed that ruling to the Virginia Court of Appeals (which has jurisdiction to consider appeals of civil contempt orders), arguing that the First Amendment requires a showing of merit on both the law and facts before a subpoena duces tecum to identify an anonymous speaker can be enforced. The Court of Appeals disagreed, holding in a case of first impression that Section 8.01-407.1 is not unconstitutional and that it alone provides the unmasking standard in Virginia.

January 10, 2014

Implication Not Defamatory if Not Reasonably Drawn

by Lee E. Berlik

The Supreme Court of Virginia issued an opinion today in which it addressed the concept of defamation by implication. Building on its 1954 decision in Carwile v. Richmond Newspapers, the court reiterated that although defamatory meaning can sometimes be implied with literally true statements, the inferred meaning cannot be extended beyond the ordinary and common acceptation of the words used. Innuendo cannot be used to introduce new matter or extend the meaning of the words used by the speaker. In short, “the alleged implication must be reasonably drawn from the words actually used.”

In Webb v. Virginian-Pilot Media Companies, LLC, Phillip D. Webb, an assistant principal at Oscar Smith High School in Chesapeake, sued Virginian-Pilot and reporter Louis Hansen for its handling of a story about the school’s disciplinary process. Webb’s son, a student of a neighboring school where Webb previously coached pole vaulting, had been charged with a felony for assaulting another student’s father but received no punishment from the school. Webb’s lawsuit acknowledged that the reporting of the story was truthful, but claimed that the story implied that Webb abused his position of authority to obtain preferential treatment for his son. Webb argued that when the reporter wrote that the student “did not get preferential treatment because of his dad’s position,” the implied meaning was “exactly the opposite.” The court did not agree.

While acknowledging that the article insinuated that Webb’s son may have benefited from special treatment, the court held that there was nothing in the article to suggest that Webb solicited or otherwise procured such treatment. Therefore, the article was not reasonably capable of the defamatory meaning Webb ascribed to it and the jury should never have been permitted to even consider the claim.

January 6, 2014

Defamed Business Entitled to Presumed Damages, But No Injunction

by Lee E. Berlik

In Virginia, a statement may constitute defamation per se if it imputes an unfitness to perform the duties of a job or a lack of integrity in the performance of those duties, or if it prejudices the plaintiff in its profession or trade. Corporations, like people, can be defamed in this manner. To prejudice a plaintiff in its profession or trade, the statements must relate to the skills or character required to carry out the particular occupation of the plaintiff. Examples include statements that cast aspersions on the target’s honesty, credit, efficiency, or its prestige or standing in its field of business. The advantages to a plaintiff when the words at issue are declared defamatory per se (as opposed to per quod) are significant: compensatory damages will be presumed and need not be proven, and punitive damages may be awarded even if compensatory damages are not.

The United States District Court for the Eastern District of Virginia applied these principles in JTH Tax, Inc. v. Grabert. JTH Tax (better known as Liberty Tax Service) franchises tax preparation centers throughout the United States. Trisha Grabert had signed four franchise agreements but was terminated by Liberty due to her alleged failure to submit required reports and pay monies owed. A disgruntled Grabert resorted to www.unhappyfranchisee.com and Facebook, where she posted numerous statements asserting, among other things, that (1) Liberty’s quarterly results were “lies and sloppy;” (2) Liberty “bribed” an individual “to testify falsely;” (3) Liberty was engaged in “unlawful actions” that “interfered with [Grabert’s] success;” (4) Liberty “steal[s]” tax stores from franchisees; (5) Liberty is “dirty and getting sloppy so they will take your first born to save their tail right now from crippling losses and a shutdown;” and (6) “Liberty Tax, as a whole” are “crooks.”

Liberty sued Grabert for defamation per se, as well as for breach of the notes and franchise agreements. The court found that the statements imputed a lack of integrity to Liberty, prejudiced Liberty in its profession, and cast aspersions on its honesty, efficiency, prestige and standing in its field. Because Grabert failed to appear and defend the accuracy of her statements, the court held that the exhibits were sufficient to demonstrate defamation per se. (Note: Oddly, the court did not address whether the statements could be interpreted as mere rhetorical hyperbole or other non-actionable opinion).

December 11, 2013

The Importance of Context

by Lee E. Berlik

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.

December 2, 2013

No Defamation Liability for Statements made to FBI During Background Check

by Lee E. Berlik

In most (but not all) cases, absolute immunity applies to statements made by government contractors to government investigators in the course of an official investigation. The United States District Court for the Eastern District of Virginia recently addressed this issue in Kolakowski v. Lynch and found that statements made to the FBI in the course of an employment background check could not form the basis of a defamation action.

Daniel Kolakowski filed an employment discrimination charge with the EEOC against his former employer, MITRE Corporation, alleging he had been harassed because of his Polish ancestry. Kolakowski and MITRE eventually signed a mediation agreement resolving the dispute. Under the agreement, MITRE agreed to not discriminate or retaliate against Kolakowski for filing the charge.

When Kolakowski later applied for a job with the Federal Bureau of Investigation, he signed a form authorizing the FBI to investigate his background and allowing former employers to release information about him. The FBI interviewed three of Kolakowski’s former supervisors at MITRE. The three employees allegedly told the FBI that FBI seal.jpg Kolakowski took excessive days off work, exaggerated how much worked, lied about his wife having cancer, and was generally untruthful. When the FBI did not hire Kolakowski, he sued MITRE and the three supervisors for breach of contract and defamation. The defendants removed the case to federal court and moved to dismiss for failure to state a claim.

November 25, 2013

Falsely Attributing Country of Origin Can Be Defamatory

by Lee E. Berlik

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.

November 4, 2013

Why Suing Your Critics Is Not Always a Good Customer-Relations Strategy

by Lee E. Berlik

Emily Hughes is an unhappy customer of Johnson Utilities, which supplies water to parts of Arizona. Emily posted various complaints to a Facebook group in which she described “yellow water” coming from her faucets and expressed dismay about low water pressure. Until recently, I had never heard of Emily Hughes, Johnson Utilities, or the allegations about yellow water being supplied to certain residents of Arizona. But Johnson Utilities decided that the appropriate means to address the situation was to sue Emily for defamation. That caused the story to show up in my news feed, mostly in the form of opinion pieces mocking the lawsuit.

The reason the lawsuit strikes so many as silly is that Emily Hughes didn’t just write about the yellow water entering her home, she took a video of it. The video clearly shows yellow water coming out of a faucet. She uploaded the video to a Facebook page entitled “Citizens Against Johnson Utilities”–a page ostensibly formed by citizens concerned with the local water provider’s environmental practices as well as low water pressure in the area. The site was renamed “The San Tan Valley Safe Water Advocates” in August. CBS 5 News included Emily’s video in a televised report about consumer complaints regarding the water supplied by Johnson Utilities.

At first glance, the complaint appears to have very little merit. Johnson Utilities complains about things that are generally not actionable in a court of law, like Emily expressing “extreme hostility” towards Johnson Utilities, going on a “ceaseless vendetta,” and posting various “disparaging statements” on Facebook. Johnson even makes the yellow water.jpg odd allegation that Emily’s opposition to a rate increase was part of a scheme to defame the company. The lawsuit suggests she would “oppose any rate changes that could be beneficial” to the utility company, without recognizing the possibility that Emily might just prefer not to have to pay more money for water.

November 1, 2013

SCoVA Clarifies Law of Qualified Privilege

by Lee E. Berlik

Sometimes the context in which a statement is made provides the speaker with a qualified privilege against defamation claims. A qualified privilege generally attaches to communications between persons on a subject in which the persons share an interest or duty. If such a privilege applies, the speaker will not be liable for slander unless the plaintiff can show by “clear and convincing” proof that the privilege has been lost or abused. In a published opinion released yesterday by the Supreme Court of Virginia, the court reversed its prior decisions mandating that the speaker have acted in good faith as a prerequisite to the privilege attaching, and clarified the situations in which the privilege can be lost or abused.

The case involved a dispute between Dr. Robert Smith, a trauma surgeon, and Dr. Bradley Cashion, an anesthesiologist. In November of 2009, the two were part of an emergency operating team providing care to a critically injured patient. The patient did not survive the procedure, and Dr. Smith blamed Dr. Cashion. In the presence of other members of the operating team, Dr. Smith claimed the patient “could have made it with better resuscitation” and directly accused Dr. Cashion of purposefully failing to resuscitate him. “You just euthanized my patient,” he allegedly told Dr. Cashion.

The trial court sustained Dr. Smith’s demurrer to the statements that the patient “could have made it with better resuscitation” and “[y]ou determined from the beginning that he wasn’t going to make it and purposefully didn’t resuscitate him,” finding them both to be non-actionable expressions of opinion. The Virginia Supreme Court disagreed, finding that both statements attributed the patient’s death to Dr. Cashion’s action or inaction, which it found to be an allegation of fact capable of being proven true or false. The latter statement was held to be the equivalent of the “you just euthanized my patient” statement, which the trial court correctly found to be a statement of fact. (Note: Justice McClanahan, however, found the euthanasia references to be mere rhetorical hyperbole, and wrote a detailed dissenting opinion explaining why she would find the statements not actionable).

October 28, 2013

Mere Suspicion of Negative Job Reference Insufficient to Support Defamation Claim

by Lee E. Berlik

Having trouble finding a new job? That doesn’t necessarily mean that your former employer is spreading defamatory disinformation about you. Any defamation claim you might file against your former employer in federal court is going to be dismissed unless you can both identify exactly what was said about you, and produce evidence of those statements sufficient to support a jury verdict in your favor. On October 8, 2013, the Eastern District of Virginia granted the defendant’s motion for summary judgment in Gierbolini v. SAIC, illustrating these principles.

Catherine Gierbolini was working for Science Applications International Corporation (SAIC) as a Personnel Coordinator in Kuwait under the supervision of Raymond Mattes and alongside subordinate Heather Hudson when her poor relationship with Hudson eventually led to her termination. Gierbolini accused Hudson of disobeying orders and reporting false claims of misconduct to management. Gierbolini and Hudson frequently bickered, and each submitted complaints about the other to Mattes who issued them both a written reprimand for unprofessional conduct. Mattes eventually gave Gierbolini a written memo terminating her employment.

Gierbolini was unable to secure employment after her termination and suspected that SAIC issued a “letter of release” – a document that the military uses to bar personnel from returning to an active theater of war. She also surmised that Mattes and Hudson gave poor references to potential employers. Gierbolini sued SAIC for defamation and other claims. SAIC moved for summary judgment on the defamation claim, arguing that it was time-barred and that Gierbolini had failed to produce sufficient evidence of the statements claimed to be defamatory.