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DEFAMATION CRITERIA FOR A PUBLIC FIGURE DESCRIBED; APPELLATE REVIEW POWERS IN PUBLIC FIGURE DEFAMATION ACTIONS EXPLAINED.

In affirming Supreme Court’s denial of a motion to set aside the verdict in a defamation action, the Second Department explained the law as it relates to public figures (here plaintiff was a school superintendent) and the unique powers of the appellate courts in this context. The defamation verdict related to a remark on a website stating plaintiff had procured enhanced grades for his daughter:

 

The Constitution, as interpreted in the New York Times case, bars the plaintiff “from recovering damages for a defamatory falsehood relating to his official conduct unless he proves that the statement was made with actual malice’—that is, with knowledge that it was false or with reckless disregard of whether it was false or not” … . Actual malice must be proved by “clear and convincing evidence” … . The Court of Appeals has recognized that “[t]he usual deference paid by courts to jury verdicts is inapplicable in cases subject to the New York Times Co. v Sullivan rule” … . “[T]he appellate court must make a de novo review of the entire record, and determine whether the proof before the trial court supports the finding of actual malice with convincing clarity” … . Eastwood v Hoefer, 2016 NY Slip Op 00674, 2nd Dept 2-3-16

 

DEFAMATION (CRITERIA FOR PUBLIC FIGURES EXPLAINED)/DEFAMATION (APPELLATE REVIEW POWERS IN PUBLIC-FIGURE DEFAMATION CASES)/APPEALS (APPELLATE REVIEW POWERS IN PUBLIC-FIGURE DEFAMATION CASES)

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HOSPITAL DEFENDANTS ENTITLED TO MEDICAL-PEER-REVIEW AND COMMON-INTEREST QUALIFIED PRIVILEGE RE: COMMENTS MADE IN CONNECTION WITH THE TERMINATION OF PLAINITFF-PHYSICIAN’S HOSPITAL PRIVILEGES.

The Second Department, reversing Supreme Court, determined defendant hospital and administrators were entitled to summary judgment dismissing plaintiff’s defamation complaint. Plaintiff was a physician with privileges at defendant hospital. Based upon complaints about plaintiff’s behavior, the hospital terminated plaintiff’s hospital privileges pursuant to a recommendation of the hospital’s credentials committee. The statements at issue were made before, during and after the administrative proceedings at the hospital. The Second Department determined the defendants were not entitled to absolute privilege for comments made during the meeting of the credentials committee because those proceedings were not judicial or quasi-judicial in nature. However, the defendants were entitled to qualified privilege for medical peer review proceedings pursuant to 42 USC 1111. With respect to comments made both prior to and during the meeting of the credentials committee, the Second Department found that a “qualified privilege of common interest” applied. The Second Department rejected Supreme Court’s finding that plaintiff had raised a question of fact whether the defendants acted with malice (which would have removed the qualified privilege). With respect to comments made after the termination of plaintiff’s hospital privileges, the Second Department found, based upon plaintiff’s public comments, plaintiff was a limited-purpose public figure and there was no showing defendants’ post-termination comments were made with actual malice.  Concerning the two types of qualified privilege which were found applicable, the court explained:

 

The defendants established, prima facie, that they were entitled to a qualified privilege under 42 USC § 11111(a), part of the Health Care Quality Improvement Act, which creates a qualified privilege for information provided in medical peer review proceedings concerning the competence or professional conduct of a physician, “unless such information is false and the person providing it knew that such information was false” (42 USC § 11111[a][2]…)

* * * With respect to [the] causes of action … predicated upon allegedly defamatory statements made both during and prior to the Credentials Committee meeting, the defendants established, prima facie, that they were entitled to a qualified privilege of common interest … , under state statutory law (see Public Health Law §§ 2805-j[2]; 2805-m[3]; Education Law § 6527[3], [5]), and under [the hospital’s] bylaws … . Colantonio v Mercy Med. Ctr., 2016 NY Slip Op 00147, 2nd Dept 1-13-16

 

DEFAMATION (MEDICAL PEER REVIEW AND COMMON INTEREST QUALIFIED PRIVILEGE APPLIED TO COMMENTS MADE IN CONNECTION OF TERMINATION OF PLAINTIFF’S HOSPITAL PRVILEGES)/QUALIFIED PRIVILEGE (DEFAMATION, MEDICAL PEER REVIEW AND COMMON INTEREST QUALIFIED PRIVILEGE APPLIED TO COMMENTS MADE IN CONNECTION OF TERMINATION OF PLAINTIFF’S HOSPITAL PRVILEGES)/MEDICAL PEER REVIEW QUALIFIED PRIVILEGE (DEFAMATION)/COMMON INTEREST QUALIFIED PRIVILEGE (DEFAMATION)

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Libel Action Based Upon Allegedly False Impressions Created by an Article in an Online News Publication, Including the Allegedly False Context of a Quotation of Plaintiff’s Own Words, Allowed to Go Forward; Pleading Requirements for Piercing the Corporate Veil Not Met.

The First Department, in a full-fledged opinion by Justice Kapnick, determined: (1) the complaint did not state a cause of action for libel per se (because extrinsic facts were necessary for a defamatory interpretation of the statement); (2) the libel cause action failed to sufficiently plead special damages (leave to replead granted); (3) the fact that one of the allegedly defamatory statements was in plaintiff’s “own words” did not warrant dismissal; and (4) the complaint did not adequately allege that the publisher of the statements (Daily Holdings) was the alter ego of Rupert Murdoch’s News Corporation. The opinion includes substantive discussions (which cannot be fairly summarized here) of defamation, falsity, libel per se, libel, special damages, the so-called “own words” defense, and the requirements for piercing the corporate veil. With respect to the plaintiff’s twitter post which allegedly was used in a false context, the court discussed the so-called “own words defense:”

It is true that courts across the country have extended the “truth defense” to include an “own words” defense (see e.g., Thomas v Pearl, 998 F2d 447, 452 [7th Cir 1993] [holding that “(a) party’s accurate quoting of another’s statement cannot defame the speaker’s reputation since the speaker is himself responsible for whatever harm the words might cause. . . . The fact that a statement is true, or in this case accurately quoted, is an absolute defense to a defamation action.”]; Van Buskirk v Cable News Network, Inc., 284 F3d 977, 981-982 [9th Cir 2002] [applying the “own words” defense despite “contextual discrepancies” between the plaintiff’s own words and the defendants’ quotation of those words]; Johnson v Overnite Transp. Co., 19 F3d 392, 392 n1 [8th Cir 1994] [recognizing the “general rule that a defamation claim arises only from a communication by someone other than the person defamed”]; Smith v School Dist. of Philadelphia, 112 F Supp 2d 417, 429 [ED Pa 2000] [noting that “(g)enerally, a plaintiff can not (sic) be defamed by the use of his own words”]). Although defendants cite to Thomas v Pearl (998 F2d 447) in their brief, the parties failed to specifically address whether the “own words” defense should be adopted by this Court; and we are aware of no authority, in either New York State jurisprudence or in the Second Circuit, which either expressly accepts or rejects the “own words” defense. We are aware of only one case in the State, albeit a federal district court case, that even mentions the defense: Fine v ESPN (11 F Supp 3d 209, 224 [ND NY 2014]), in a section titled ” Own Words’ Defense,” states that it cannot reach the issue because the records needed to compare the plaintiff’s and the defendant’s words were not properly before the court on a motion to dismiss. This highlights, however, the importance of a court’s need to compare the two statements as they appear in the actual writings before applying the “own words” defense to dismiss a defamation claim. This is also evident from the fact that the “own words” defense derives from the “truth defense.” Even if we were to adopt the “own words” defense, we find that it would not apply here where a comparison of the two statements reveals the potential for them to have different effects on the mind of the reader. Franklin v Daily Holdings, Inc., 2015 NY Slip Op 08139, 1st Dept 11-12-15

 

Plaintiffs, Who Provided Management Services to a Club Described in the Media as “Run by the Mafia,” Did Not Raise a Question of Fact About Whether the Remark Was “Of and Concerning” the Plaintiffs by “Innuendo”

The First Department, in a full-fledged opinion by Justice Tom, over a two-justice partial dissent, determined that the defamation claims were properly dismissed. The plaintiffs provided management services to a club, Cheetah’s, but did not own or run the club (plaintiffs provided food services and booked dancers). The club was raided by federal authorities and arrests were made based upon allegations of illegal “trafficking” of women who performed as exotic dancers at the club. A news report about the raid characterized the club as “run by the mafia.”  The defamation claims were deemed properly dismissed because the relevant remarks were directed to “Cheetah’s,” and were not, therefore, “of and concerning” the plaintiffs by “innuendo.” The dissenters argued plaintiffs had raised a question of fact whether the “run by the mafia” statement was “of and concerning” them.  The majority explained:

A plaintiff bears the burden of pleading and proving that the asserted defamatory statement “designates the plaintiff in such a way as to let those who knew him understand that he was the person meant” … . While a plaintiff may use extrinsic facts to prove that the statement is “of and concerning” him, he must show the reasonableness of concluding that the extrinsic facts were known to those to whom the statement was made … . Plaintiffs seek to state their case by innuendo. As this Court stated:

” The question which an innuendo raises, is [one] of logic. It is, simply, whether the explanation given is a legitimate conclusion from the premise stated.’ The innuendo, therefore, may not enlarge upon the meaning of words so as to convey a meaning that is not expressed” (… quoting Tracy v Newday, Inc., 5 NY2d 134, 136 [1959], affd 25 NY2d 943 [1969]).

The suggestion that the individual plaintiffs are necessarily identified as members of organized crime because they are employees of entities that provide management services to Cheetah’s — reported to be “run” by the Mafia — is simply not logical. It is based on innuendo and constitutes an attempt to enlarge the concept of managerial services to include domination and control of an organization by force, whether actual or threatened, in contravention of the rule set forth in Tracy. Three Amigos SJL Rest., Inc. v CBS News Inc., 2015 NY Slip Op 06409, 1st Dept 8-4-15

 

Statements at Issue Were Statements of Opinion Directly Linked to the Plaintiff’s Writings—Defamation Complaint Properly Dismissed

The Second Department determined the defamation action against a newspaper was properly dismissed.  The newspaper article referred to writings by the plaintiff which were described as racist.  The article questioned whether plaintiff, who allegedly held “white supremacist” views, should be the principal of a school with minority students.  The court determined the relevant statements in the article were statements of opinion which were linked directly to quotations from plaintiff’s writings.  Therefore the statements constituted nonactionable opinion:

“Since falsity is a necessary element of a defamation cause of action and only facts’ are capable of being proven false, it follows that only statements alleging facts can properly be the subject of a defamation action'” … . In distinguishing between facts and opinion, the factors the court must consider are (1) whether the specific language has a precise meaning that is readily understood, (2) whether the statements are capable of being proven true or false, and (3) whether the context in which the statement appears signals to readers that the statement is likely to be opinion, not fact … . “The dispositive inquiry . . . is whether a reasonable [reader] could have concluded that [the statements were] conveying facts about the plaintiff” … .

In this case, the context of the complained-of statements was such that a reasonable reader would have concluded that he or she was reading opinions, and not facts, about the plaintiff. Moreover, in all instances, the Daily News defendants made the statements with express reference to the written materials authored by the plaintiff, including quotations from the books. Thus, the statements of opinion are nonactionable on the additional basis that there was full disclosure of the facts supporting the opinions … . Silverman v Daily News, L.P., 2015 NY Slip Op 05463, 2nd Dept 6-24-15

 

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Absolute Privilege Attaches to Statement Made by a Nonparticipant in the Litigation Which Is Republished by an Attorney In the Course of the Litigation

The Third Department determined an action based upon the republication of an allegedly defamatory statement (made by a nonparticipant in the litigation) by an assistant attorney general in the course of a medical malpractice case was precluded by the absolute privilege afforded attorneys in matters related to litigation:

Statements made by parties and their counsel in the context of a legal action or proceeding are protected by an absolute privilege so long as, “by any view or under any circumstances, they are pertinent to the litigation” … . Allowing such statements or writings to form the basis of an action for defamation “would be an impediment to justice, because it would hamper the search for truth and prevent making inquiries with that freedom and boldness which the welfare of society requires” … . A liberal standard guides the inquiry of what is pertinent … , and encompasses “any statement that may possibly or plausibly be relevant or pertinent, with the barest rationality” … . Moreover, the burden rests with claimant “to conclusively, and as a matter of law, establish the impertinency and the irrelevance of the statement” … .

Here, claimant asserts that the memorandum was prepared by a nonparticipant to the litigation which removes it from the protection of the absolute privilege; however, this contention ignores that claimant’s action is grounded in the republication of the alleged defamatory statement by the AAG, whose statements are afforded the protection … . It is evident that the AAG turned over the memorandum after the malpractice litigation had been commenced in federal court … and, further, the statements in the memorandum were clearly pertinent to the malpractice litigation, as they concerned allegations that were relevant to the treatment of the inmate … . McPhillips v State of New York, 2015 NY Slip Op 05242, 3rd Dept 6-18-15

 

Prima Facie Case of Defamation Made Out in the Complaint

The Fourth Department determined the complaint made out a prima facie case of defamation. The statements were included in a newspaper article and were attributed to defendant. The court succinctly explained the applicable law:

“The elements of a cause of action for defamation are a false statement, published without privilege or authorization to a third party, constituting fault as judged by, at a minimum, a negligence standard, and it must either cause special harm or constitute defamation per se”…, and we conclude that the complaint sufficiently alleges those elements and, thus, states a viable cause of action. We further conclude, contrary to defendant’s contention, that the “particular words complained of” were sufficiently set forth in the complaint as required by CPLR 3016 (a) and, in any event, plaintiff attached to the complaint the full Niagara Falls Reporter article containing the alleged defamatory statements … . Defendant contends that, because he did not participate in the drafting of the Niagara Falls Reporter article, he cannot be held liable for defamation and, thus, the court properly granted his cross motion. That contention is without merit. It is well established that “[a]nyone giving a statement to a representative of a newspaper authorizing or intending its publication is responsible for any damage caused by the publication” … . Accadia Site Contr., Inc. v Skurka, 2015 NY Slip Op 04958, 4th Dept 6-12-15

 

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The Absence of Proof Defendants Disclosed Slanderous Statements Included in Letters to Plaintiff Precluded a “Name-Clearing” Hearing/The Jury Should Not Have Been Allowed to Consider “Ostracism and Rejection” Damages Absent Proof Defendants Were Responsible for Republication of the Slanderous Remarks by Third Persons

In a lawsuit stemming from allegedly slanderous remarks made by defendants in connection with plaintiff’s termination from employment by the defendant school district, the Third Department determined plaintiff’s petition for a name-clearing hearing should have been dismissed, because there was no evidence defendants disclosed the relevant letters to anyone, and the jury should not have been allowed to consider rumor-related “ostracism and rejection” damages, because there was no evidence defendants were responsible for the alleged repetition of the slander by third persons. A new trial on damages was ordered:

Proof of “ostracism and rejection” to establish damages for defamation is only admissible if the proof is “‘the direct and well-connected result'” of a defamatory statement at issue … . Further, even when a defendant’s slanderous statement is connected by proof to that statement’s republication, “‘one who utters a slander . . . is not responsible for its voluntary and unjustifiable repetition, without his [or her] authority or request, by others over whom he [or she] has no control and who thereby make themselves liable to the person injured'” … . This is because “each person who repeats the defamatory statement is responsible for the resulting damages” … .

Plaintiff’s proof regarding rumors and ostracism fail these tests. Plaintiff and her witnesses offered no proof that directly connected [defendants’] slanderous statements to the ostracism that plaintiff allegedly suffered … . Further, even assuming that the content of the rumors allegedly spread by community members allowed for a reasonable inference that said community members were aware of [defendants’] slanderous statements, proof of republication was nonetheless improper given the absence of evidence that defendants had any knowledge of or played any role in such republication … . Compounding the effect of the error, Supreme Court did not instruct the jury that plaintiff had the burden of proving that the ostracism harms that plaintiff allegedly suffered were actually connected to [defendants’] statements, despite defendants’ request that it do so. Wilcox v Newark Val. Cent. School Dist., 2015 NY Slip Op 04890, 3rd Dept 6-11-15

 

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“Pertinent to Litigation” Privilege for Statements Made by an Attorney Does Not Apply If the Relevant Litigation Is a “Sham”—Here Sufficient “Sham Litigation” Allegations Were Made—Slander Per Se Cause of Action Should Not Have Been Dismissed

In finding plaintiff had stated a cause of action for slander per se, the First Department explained that the privilege for statements made by an attorney which pertain to on-going litigation does not apply if the litigation is a “sham.”  The plaintiff, an attorney, sued Finkelstein, also an attorney, for statements alleged to have been made by Finkelstein to plaintiff’s former client, Harrison. Plaintiff alleged that Finkelstein told Harrison plaintiff had taken Harrison’s money and that Finkelstein was the source of the false allegations in Harrison’s complaint against plaintiff.  Disagreeing with Supreme Court, the First Department held that the complaint stated a cause of action because the complaint sufficiently alleged the lawsuit brought by Harrison was a “sham” to which the “statements pertinent to litigation” privilege would not apply:

… [A] statement that is pertinent to litigation is absolutely privileged and cannot form the basis of a defamation action. That principal of law was first stated by the Court of Appeals in Youmans v Smith (153 NY 214, 219 [1897]), and was recently reaffirmed by the Court in Front, Inc. v Khalil (24 NY3d 713 [2015]) . This Court has held that, where the privilege is invoked, “any doubts are to be resolved in favor of pertinence” … . Further, the test to determine whether a statement is pertinent to litigation is ” extremely liberal'” …, such that the offending statement, to be actionable, must have been “outrageously out of context” … .

This Court has recognized, however, that the privilege is capable of abuse and will not be conferred where the underlying lawsuit was a sham action brought solely to defame the defendant … , in which this Court declined to dismiss a defamation claim based on the pertinency privilege where the context in which the allegedly offending statement was made was a litigation that the plaintiffs filed but never prosecuted. The existence of this “sham litigation” exception has been confirmed (but not applied) in other cases in this Department… . Flomenhaft v Finkelstein, 2015 NY Slip Op 03468, 1st Dept 4-28-15

 

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Pre-Litigation Statements Made by an Attorney (Here In a Cease and Desist Letter) Are Protected by Qualified, Not Absolute, Privilege—Such Statements Are Privileged If Not Motivated by Malice and If Pertinent to Anticipated Litigation

The Court of Appeals, in a full-fledged opinion by Judge Abdus-Salaam, determined that statements made by an attorney prior to the commencement of litigation are protected by a qualified, not absolute privilege.  A qualified privilege will not protect statements motivated by malice.  Here statements made by an attorney in a cease and desist letter were made in good faith and were pertinent to anticipated litigation, and therefore protected by qualified privilege:

… “[A]s a matter of policy, the courts confine absolute privilege to a very few situations” … . We recognize that extending privileged status to communication made prior to anticipated litigation has the potential to be abused. Thus, applying an absolute privilege to statements made during a phase prior to litigation would be problematic and unnecessary to advance the goals of encouraging communication prior to the commencement of litigation. To ensure that such communications are afforded sufficient protection the privilege should be qualified. Rather than applying the general malice standard to this pre-litigation stage, the privilege should only be applied to statements pertinent to a good-faith anticipated litigation. This requirement ensures that privilege does not protect attorneys who are seeking to bully, harass, or intimidate their client’s adversaries by threatening baseless litigation or by asserting wholly unmeritorious claims, unsupported in law and fact, in violation of counsel’s ethical obligations … . Therefore, we hold that statements made prior to the commencement of an anticipated litigation are privileged, and that the privilege is lost where a defendant proves that the statements were not pertinent to a good-faith anticipated litigation … . Front Inc v Khalil, 2015 NY Slip Op 01554, CtApp 2-24-15

 

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