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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Defamation law affords remedies to plaintiffs whose reputations have been tarnished by the false and damaging statements of others. But defamation plaintiffs face a particular dilemma: because legal proceedings are generally open to the public, filing a lawsuit over the libel or slander usually results in further publicity of the very statements the plaintiff wants to suppress. This has become known as the Streisand Effect, and is the same dilemma faced by plaintiffs seeking to enforce contracts containing non-disparagement provisions.

A vivid example is provided by the case of Dr. Steven A. Guttenberg v. Dr. Robert W. Emery, currently pending in District of Columbia federal court. Doctors Guttenberg and Emery were joint shareholders of an oral surgery practice for roughly 20 years, but their relationship soured and litigation ensured in 2008. The doctors settled that case with a settlement agreement containing a non-disparagement provision that restricted each of them from making statements concerning the other that might be harmful to reputation.
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Courts grant temporary injunctions sparingly and only after the moving party has alleged and proved facts entitling it to relief. Injunctive relief generally is not available to prohibit the making of defamatory statements as prior restraints on speech violate the First Amendment to the United States Constitution. Injunctions may sometimes be granted, however, where the defamatory words are made in the furtherance of the commission of another intentional tort. Care must be taken to ensure that any injunction is narrowly tailored to achieve the pin-pointed objective of the needs of the case, as prior restraints on speech are considered the most serious and least tolerable infringement on First Amendment rights.

In Chevaldina v. R.K./FL Management, Inc., a Florida appellate court found that the trial court had abused its discretion in granting an injunction against defamatory speech. Irina Chevaldina was an unhappy former tenant of R.K. Management which owned and managed commercial properties in South Florida. When R.K. discovered that Ms. Chevaldina was the author of anonymous, unflattering blog posts about it, it added several tort claims to its already pending action for defamation per se and libel against the previously anonymous blogger. The tort claims included counts for tortious interference with contractual and advantageous business relationships.
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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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Otherwise defamatory statements made in connection with and relevant to a judicial proceeding are absolutely privileged against defamation claims. The so-called “judicial privilege” is broad 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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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 Rugs.jpgbefore 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.

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 Jury.jpgthe jury should never have been permitted to even consider the claim.

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 taxes.jpgper se. (Note: Oddly, the court did not address whether the statements could be interpreted as mere rhetorical hyperbole or other non-actionable opinion).

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.

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.jpgKolakowski 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.

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