To Demonstrate “Defamation by Implication” Where the Factual Statements Are Substantially True, It Must Be Shown the Communication as a Whole Imparts a Defamatory Inference and the Author Intended or Endorsed the Defamatory Inference

In a full-fledged opinion by Justice Feinman, the First Department adopted criteria for determining whether a publication is defamatory by implication.  The subject of the case was a published magazine article describing a conspiracy in Russia involving hundreds of millions in illicit funds.  The plaintiffs alleged that the article defamed them by implying involvement in the conspiracy. The First Department affirmed the dismissal of the complaint and adopted a standard which requires the plaintiff to demonstrate the defamatory inference of the substantially true statements, as well as that the author intended or endorsed that inference:

“Defamation by implication is premised not on direct statements but on false suggestions, impressions and implications arising from otherwise truthful statements” … . The implied defamation cause of action was recognized by the Court of Appeals in a 1963 decision determining that, although the publication at issue contained no directly defamatory statements, “a jury should decide whether a libelous intendment would naturally be given to it by the reading public acquainted with the parties and the subject-matter” … . The following year, the U.S. Supreme Court’s landmark decision in New York Times Co. v Sullivan (376 US 254 [1964]) found that the free speech protections guaranteed by the First Amendment to the U.S. Constitution placed substantial limits on the right to recover for defamatory statements … . In a 1977 libel decision, after discussing the impact Sullivan had on defamation jurisprudence, the Court of Appeals addressed an aspect of the plaintiff’s claim that was akin to implied defamation, noting that although an author “could not make up facts out of whole cloth, omission of relatively minor details in an otherwise basically accurate account is not actionable. This is largely a matter of editorial judgment in which the courts, and juries, have no proper function” … . * * *

“[I]f a communication, viewed in its entire context, merely conveys materially true facts from which a defamatory inference can reasonably be drawn, the libel is not established. But if the communication, by the particular manner or language in which the true facts are conveyed, supplies additional, affirmative evidence suggesting that the defendant intends or endorses the defamatory inference, the communication will be deemed capable of bearing that meaning” … .

…[T]his inquiry requires “an especially rigorous showing”: the “language must not only be reasonably read to impart the false innuendo, but it must also affirmatively suggest that the author intends or endorses the inference”… . * * *

… To survive a motion to dismiss a claim for defamation by implication where the factual statements at issue are substantially true, the plaintiff must make a rigorous showing that the language of the communication as a whole can be reasonably read both to impart a defamatory inference and to affirmatively suggest that the author intended or endorsed that inference. We believe this rule strikes the appropriate balance between a plaintiff’s right to recover in tort for statements that defame by implication and a defendant’s First Amendment protection for publishing substantially truthful statements… . Stepanov v Dow Jones & Co Inc, 2014 NY Slip Op 03940, 1st Dept 5-29-14