The Results Are In: First Amendment Soundly Defeats Claims Regarding Allegedly Defamatory Campaign Advertisements

On November 6, 2018, Arkansas Supreme Court Associate Justice Courtney Goodson was elected to remain in her position with the Arkansas Supreme Court.  Her victory undoubtedly softened the blow of being denied a preliminary injunction seeking to stop an attack advertising campaign levied against her by the Republican State Leadership Committee – Judicial Fairness Initiative, a Washington-based special interest group (the “Special Interest Group”), in support of her opponent, David Sterling.  Goodson complained that television advertisements and a campaign mailer created by the Special Interest Group defamed her.

Broadly speaking, the campaign advertisements at issue contained two types of allegedly defamatory statements.  First, the Special Interest Group asserted that Goodson accepted various gifts, including a $50,000 trip to Italy and large campaign contributions from plaintiffs’ law firms.  It was undisputed that Goodson accepted a trip to Italy from a personal friend and lawyer and complied with judicial ethics rules both by timely disclosing the gift and recusing herself from cases involving the lawyer who gave the gift.  The testimony from the preliminary injunction hearing confirmed that Goodson’s campaign accepted contributions from plaintiffs’ law firms, but that Goodson did not personally solicit campaign contributions or even know who contributed to her campaign.  Goodson argued that the statements regarding the gift and campaign contributions were false by implication or omission because she had recused herself from the cases as required.

Second, the Special Interest Group asserted that Goodson asked for an $18,000 per year pay raise.  Goodson alleged, however, that she did not personally request a raise; rather, the Chief Justice raised the issue on behalf of every member of the Arkansas Supreme Court.  Moreover, after initially refusing to answer questions on the topic at the hearing, Goodson eventually testified that she voted against the raise.  Notably, this was the first time Goodson had publicly disclosed her vote.

On November 1, 2018, the United States District Court for the Eastern District of Arkansas denied Goodson’s motion for a preliminary injunction on two separate grounds.

A Preliminary Injunction Would Violate the First Amendment

The court held that granting a preliminary injunction would be an impermissible prior restraint on speech because it would stop the Special Interest Group from publishing its campaign materials, which would be tantamount to restricting it from speaking.  The term “prior restraint” refers to an administrative or judicial orders prohibiting certain communications before they occur.  Alexander v. United States, 509 U.S. 544, 550 (1993) (quotations omitted).  Temporary restraining orders and injunctions “are classic examples of prior restraints.”  Id.

As the court correctly noted, restraining future speech is almost always prohibited by the First Amendment, such that any prior restraint bears a heavy presumption against its constitutional validity.  The court also observed that while some federal and state courts have found that a narrowly-tailored prior restraint is permissible following a full trial at which it is determined that the defendant defamed the plaintiff, it is “wholly unprecedented” for a federal court to enter a preliminary injunction in a defamation case.  Indeed, the U.S. Supreme Court, for its part, has never approved a prior restraint in a defamation case.

The court also reasoned that the context of the case militated against a preliminary injunction—imposing any prior restraint on election-related speech should be viewed with extreme caution.  Indeed, “debate on the qualifications of candidates [is] integral to the operation of the system of government established by our Constitution.”  Buckley v. Valeo, 424 U.S. 1, 14 (1976).  Accordingly, the court denied the preliminary injunction as a prior restraint on speech, particularly given that the speech at issue had not yet been determined to be defamatory.

Goodson Was Unlikely to Succeed on the Merits

The court also held that Goodson could now show a reasonable probability of succeeding on the merits of her defamation claim, as she must in order to obtain a preliminary injunction.  The court explained that, because she is a public official, Goodson must show that the Special Interest Group made the statements at issue with actual malice.

The court stated that Goodson likely could not prove actual malice concerning the statements about her trip to Italy and campaign contributions.

The court also concluded that Goodson was unlikely to show that the Special Interest Group acted with actual malice regarding the advertisements stating that Goodson requested a pay raise.  Although it did not confirm whether Goodson voted for the pay raise before running the advertisement, there was no indication that the Special Interest Group made the statement knowing it was false or that it was very likely false.  The court cautioned, however, that Goodson’s testimony at the hearing provided notice that she voted against the raise.

While a bitter pill for Goodson to swallow as a candidate facing political advertisements making allegedly false claims against her, the court reached the correct result.  A prior restraint on free speech may be upheld, if at all, only in extraordinary circumstances.  The U.S. Supreme Court has suggested that such extraordinary circumstances may be found for matters of national security or to control obscenity.  Near v. Minnesota, 283 U.S. 697, 716 (1931); see N.Y. Times v. United States, 403 U.S. 713, 718-720 (1971) (Black, J., concurring).  Furthermore, a prior restraint restricting political speech is particularly problematic given that political speech “is at the heart of our democratic process and ‘operates at the core of the First Amendment.’”  Ariz. Right to Life PAC v. Bayless, 320 F.3d 1002, 1008 (9th Cir. 2003) (quoting Boos v. Barry, 485 U.S. 312, 318 (1988)).

The First Amendment is of vital importance, particularly in the arena of political speech, as “[o]nly a free and unrestrained press can effectively expose deception in the government.”  N.Y. Times, 403 U.S. at 717 (Black, J., concurring).  In Goodson, the Eastern District of Arkansas, correctly recognizing this, avoided taking a step down the proverbial slippery slope.

Indiana Supreme Court Finds Fantasy Sports Statistics Newsworthy In Right of Publicity Claim

Plaintiff-Appellants Akeem Daniels, Cameron Stingily, and Nicholas Stoner were collegiate student–athletes between 2014-2016.  Their on-field performances were collected as numerical statistics and published by various fantasy sports website operators including Defendants-Appellees DraftKings, Inc. and FanDuel, Inc.  For a fee, consumers could access detailed information such as Plaintiffs’ names, images, and statistics, assess the athletes’ weekly performances, and assemble a virtual team of real-life athletes to compete against other users’ teams on Defendants’ websites.

Plaintiffs filed a class action in Indiana alleging that Defendants “used their names and likenesses in operating and promoting online fantasy sports contests without Plaintiffs’ consent, in violation of their right of publicity.”  Defendants removed the case to the U.S. District Court for the Southern District of Indiana and moved to dismiss, arguing that Plaintiffs failed to state a claim because the use of Plaintiffs’ names and statistics fell under certain statutory exceptions to the right of publicity.  The District Court dismissed the suit, finding no violation of Plaintiffs’ right of publicity because the use of their likenesses was in material that had newsworthy value and was a matter of public interest under the exceptions to the Indiana right of publicity statute.  Plaintiffs appealed to the Seventh Circuit Court of Appeals, which certified the question of Indiana law to the Court in Daniels v. FanDuel, Inc., 884 F.3d 672, 674 (7th Cir. 2018).

On October 24, 2018, the Indiana Supreme Court answered the certified question from the U.S. Court of Appeals for the Seventh Circuit asking, “[w]hether online fantasy-sports operators that condition entry on payment, and distribute cash prizes, need the consent of players whose names, pictures, and statistics are used in the contests, in advertising the contests, or both.”

The Indiana Supreme Court answered that “online fantasy sports operators that condition entry to contests on payment and distribute cash prizes do not violate the Indiana right of publicity statute when those organizations use the names, pictures, and statistics of players without their consent because the use falls within the meaning of “material that has newsworthy value,” an exception under the statute.”

Indiana’s right of publicity statute provides that “a person may not use an aspect of a personality’s right of publicity for a commercial purpose without having obtained previous written consent.”  Ind. Code § 32-36-1- 8(a).  Indiana law defines the scope of a person’s right of publicity as a personality’s property interest in his/her (1) name; (2) voice; (3) signature; (4) photograph; (5) image; (6) likeness; (7) distinctive appearance; (8) gestures; or (9) mannerisms.  Ind. Code § 32-36-1-7.  The law exempts such claims when the material has “political or newsworthy” value.  The Court focused on the scope of this exception.

In its decision, the Indiana Supreme Court maintained a narrow focus on the certified question by limiting its opinion to the “newsworthy value” exception.  Specifically, the Court analyzed the spectrum of “material that has newsworthy value” and concluded that the use of players’ names, pictures, and statistics in fantasy sports contests does not violate the right of publicity in Indiana.

On the question of newsworthiness, the Court rejected Plaintiffs’ arguments that the statutory exception for newsworthiness does not apply in the context of commercial use.  First, the Court found that the statute itself does prohibit the use of a person’s right of publicity “for a commercial purpose” and therefore, the Court declined to read such a requirement into the otherwise clear language of the statute.  Second, the Court held that whether Defendants are media companies or news broadcasters is immaterial in the context of the newsworthiness exception.  The plain language of the statute only speaks to the use of a personality’s right of publicity in “[m]aterial that has political or newsworthy value.”  Ind. Code § 32-36-1-1(c)(1)(B).  Finally, the Court noted that Plaintiffs’ information is not stripped of its newsworthy value simply because it is placed behind a paywall or used in the context of a fantasy sports game.  “On the contrary, fantasy sports operators use factual data combined with a significant, creative component that allows consumers to interact with the data in a unique way” and “Defendants’ use of the players’ names, images, and statistics in conducting fantasy sports competitions bears resemblance to the publication of the same information in newspapers and websites across the nation.”  The Court agreed with Defendants that, “it would be strange law that a person would not have a first amendment right to use information that is available to everyone.”  Thus, the Court held that Indiana’s right of publicity statute contains an exception for material with newsworthy value that includes online fantasy sports.  The case is Akeem Daniels, Cameron Stingily, and Nicholas Stoner v. FanDuel, Inc. and DraftKings, Inc., 18S-CQ-134.

Trump Uses First Amendment To Avoid Liability In Defamation Action

October 15, 2018 – Blanketing Himself In First Amendment Protections, Trump Wins Dismissal of Stormy Daniels’ Defamation Suit

October 16, 2018 – Prominent Nonprofit Sues Trump For Using His Presidential Powers To Violate The First Amendment

 On October 15, 2018, U.S. District Judge James S. Otero of the Central District of California issued an order dismissing the defamation case brought by adult film star Stephanie Clifford, a.k.a. Stormy Daniels (“Daniels”).  The case concerns President Trump’s tweet about the allegedly anonymous man who threatened Ms. Daniels to keep quiet about her affair with Mr. Trump.  The Court found that Mr. Trump’s tweet was an exercise of his right of free speech under the First Amendment, dismissed the case and awarded Trump his legal fees.  The case is Stephanie Clifford v. Donald J. Trump, Case 2:18-cv-06893 SJO (FFMx) (C.D. Cal.).

The Tweet

Daniels alleges that in May of 2011, she agreed to cooperate with In Touch Magazine in connection with an article about her past relationship with Trump.  Daniels agreed to speak to the magazine after her ex-husband approached In Touch without her approval.  As alleged in her complaint, a few weeks after agreeing to speak to the publication, a man approached her in Las Vegas, Nevada, threatening her and her daughter to “Leave Trump alone.  Forget the story.”  After Trump was elected President on November 8, 2016, Daniels worked with a sketch artist to render a sketch of the person who had threatened her in 2011.  She released the sketch publicly on April 17, 2018.  The next day, on April 18, 2018, Trump, using his personal Twitter account (@RealDonaldTrump), posted the following tweet:

“A sketch years later about a nonexistent man. A total con job, playing the Fake News Media for fools (but they know it)!”

Daniels Sues Trump For Defamation Based On Trump’s “Con Job” Tweet

In response to his tweet, Daniels filed a complaint for defamation against Trump on April 30, 2018 in the Southern District of New York. Daniels alleged that Trump’s “tweet attacks the veracity of her account of the threatening incident that took place in 2011” and “suggests that she is falsely accusing an individual of committing a crime against her.”  She contended that Trump meant to convey that she “is a liar, someone who should not be trusted, that her claims about the threatening encounter are false, and that she was falsely accusing the individual depicted in the sketch of committing a crime, where no crime had been committed.”  On this basis, Daniels alleged that Trump’s tweet was false and defamatory, and constituted defamation per se because it charged her with committing a serious crime.  

On August 8, 2018, the parties agreed to transfer the case from the Southern District of New York to the Central District of California. On August 27, 2018 Trump filed a motion to dismiss the complaint pursuant to the applicable anti-SLAPP statute. Welcoming the First Amendment protections that both the anti-SLAPP statute itself and judicial precedent provide, Trump argued, among other things, that his tweet was a non-actionable opinion.

Luckily for Trump, the district court recognized that the anti-SLAPP statute seeks to “encourage and safeguard the constitutional rights of persons to petition, speak freely, associate freely, and otherwise participate in government to the maximum extent permitted by law and, at the same time, protect the rights of a person to file meritorious lawsuits for demonstrable injury.”

The Court Determines The Tweet Constitutes Non-Actionable Rhetorical Hyperbole, Dismisses The Complaint And Awards Trump His Legal Fees As Required By The Anti-SLAPP Statute

The Court easily determined that the complaint related to Trump’s exercise of his right of free speech and agreed with Trump that his tweet constituted “rhetorical hyperbole” which is protected by the First Amendment.  The Court also held that Trump sought to use language to challenge Ms. Daniels’ account of her affair and the threat that she purportedly received in 2011, and that the U.S. Supreme Court has held that a published statement that is “pointed, exaggerated, and heavily laden with emotional rhetoric and moral outrage” cannot constitute a defamatory statement.” See Milkovich v. Lorain Journal Co., 497 U.S. 1, 32 (1990).  Relying on judicial precedent regarding the First Amendment, the Court explained that even statements such as “ripping off” and “sleazy” constitute non-actionable opinion.

The Day After Trump Wins Under The First Amendment, Nonprofit Sues Trump For Allegedly Using His Presidential Powers To Violate The First Amendment

Trump’s victory on First Amendment grounds stands in stark contrast to his public criticisms of an expansive right to free speech. Trump has issued numerous tweets condemning the actions of journalists, which many argue constitutes an effort to impinge the rights of the media and freedom of speech.  With repeated “Fake News” soundbites and tweeting about changing libel laws, Trump sure seemed to enjoy the protections of the First Amendment when he was the defendant in a defamation action.

Nevertheless, the day after the Court dismissed Daniels’ defamation case on First Amendment grounds, on October 16, 2018, Pen American Center, Inc.—a prominent nonprofit organization that works to defend free expression—filed a complaint against President Trump in the Southern District of New York.  Plaintiffs allege that, acting in his official capacity as the President of the United States, Trump intended to stifle exercise of the constitutional protections of free speech and a free press, and therefore violated the First Amendment and his oath to uphold the Constitution.  The complaint alleges that Trump has issued retaliatory directives to officials in Trump’s Administration and public threats to use his government powers against news organizations and journalists who have reported on his statements, actions, and policies in unfavorable ways, including the following:

  • Trump allegedly demanded that Jeff Bezos, Amazon, and The Washington Post, which Bezos owns personally, be punished because of The Post’s coverage of him. This includes reports that Trump allegedly issued an executive order directing the U.S. Postal Service to double Amazon’s delivery rates.
  • Trump allegedly has threatened CNN and its parent company, Time Warner.
  • Trump allegedly regularly threatens to withdraw the White House press credentials of individual reporters.
  • Trump allegedly has threatened to challenge broadcast licenses for television stations owned by or carrying NBC and other networks.

Plaintiffs argue that Trump has First Amendment rights and is free to criticize the press, but he is not free to use the power and authority of the United States government to punish and stifle free speech.  Plaintiffs contend that Trump has directed his threats and retaliatory actions at specific outlets whose content and viewpoints he views as hostile.  As a result, journalists who report on the President seek a  remedy for what they allege is the President’s unconstitutional actions aimed at suppressing speech.  Specifically, plaintiffs seek an order (a) declaring that Trump ’s retaliatory acts violate the First Amendment, and (b) enjoining “Trump from directing any officer, employee, agency, or other agent or instrumentality of the United States government to take any action against any person or entity with intent to retaliate against, intimidate, or otherwise constrain speech critical of him or his Administration.”  The case is Pen American Center, Inc. v. Donald J. Trump, in his official capacity as President of the United States, Case: 1:18-cv-09433 (S.D.N.Y).

Given his arguments in Stephanie Clifford v. Donald J. Trump, it appears that President Trump is a big fan of the First Amendment.  His arguments in response to the Pen American Center, Inc. v. Trump case, wherein he is flatly accused of stifling First Amendment protections, will be interesting to follow.  Stay tuned.

Los Angeles Superior Court Quashes Subpoena to CBS under California’s Press Shield Law

Austin Harrouff faces two counts of first degree murder in Florida for the fatal stabbings of John Stevens and Michelle Mishcon on August 15, 2016.  The case was widely publicized after police investigators said that when they apprehended Harrouff, he was on top of Stevens, biting his face.

Ever since, Harrouff’s attorneys have been involved in a two year legal battle with CBS over unpublished excerpts of an interview CBS obtained between talk-show host Dr. Phil McGraw and Harrouff, conducted at the St. Mary’s Medical Center just days after his arrest.  CBS aired clips from the interview on Dr. Phil’s show in which Harrouff claimed that he did not remember much from the night of the incident, but said it was “like a nightmare” and that he “never wanted it to happen.”  CBS later released an edited 22-minute version of the interview.

Harrouff’s lawyers argued that the full recording, including the outstanding 8 minutes of unpublished material, should be released so that their expert could make sure that Harrouff was not coached by McGraw or his staff during the interview in order to evaluate the defendant’s anticipated insanity defense.  CBS argued that there was no dialogue between Harrouff and McGraw during the 8 minutes of unpublished material.  In September 2017, the trial judge in Florida ruled that the recording was essential to Harrouff’s defense and ordered that the full recording be released.  Harrouff subsequently issued a subpoena to CBS in California for the full recording.

California has a robust “shield law” for the press which provides an immunity from being held in contempt to reporters, editors, publishers, and other press-related individuals and organizations as embodied in the California Constitution, Article I, Section 2(b) and California Evidence Code § 1070.  The shield law protects both confidential sources of information and “unpublished information” including notes, outtakes, photographs, audio recordings, or videos that have not been transmitted to the public.

California courts have applied the shield law differently in various contexts.  For example, in civil suits where the press is a non-party, the immunity from contempt is absolute.  New York Times v. Superior Court, 51 Cal. 3d 453 (1990).  Similarly, in a criminal case, the shield law is also absolute where the prosecution seeks confidential or unpublished information from the press.  Miller v. Superior Court, 21 Cal. 4th 883 (1999).

Where, as here, however, when a criminal defendant seeks information from the press protected by the shield law, the criminal defendant must first establish “a reasonable possibility that the information will materially assist his defense.”  If that threshold is met, then the California Supreme Court has set forth a balancing test to determine whether the defendant’s federal constitutional right to a fair trial preempts California’s shield law immunity.  Delaney v. Superior Court, 50 Cal. 3d 785 (1990).  The factors considered are (1) whether the unpublished information is confidential or sensitive; (2) the interests sought to be protected by the shield law; (3) the importance of the information to the criminal defendant; and (4) whether there is an alternative source for the unpublished information.

In the Harrouff case, the California court concluded that the subpoena to CBS was subject to California’s Press Shield Law and held that Harrouff was unable to make the requisite threshold showing of “a reasonable possibility” that the information would assist his defense.  The court determined that Harrouff had failed to prove that the 8 minutes of outstanding video, “which does not contain any interactions or questions towards Harrouff or otherwise capture his behavior or demeanor,” was sufficiently relevant to Harouff’s defense to overcome shield law immunity.

The case is State of Florida v. Harrouff, Los Angeles Superior Court, Case No. BS172573.

Did The Ninth Circuit’s “Blurred Lines” Ruling Just Quietly Move To Kill Off The So-Called Inverse Ratio Rule?

This week, on July 11, 2018, the Ninth Circuit issued an order which both denied a petition to rehear its “Blurred Lines” decision en banc, which upheld the 2015 jury verdict that the hit song “Blurred Lines” by Pharrell Williams, Clifford Harris, Jr. (aka “T.I.”), and Robin Thicke infringed the copyright to Marvin Gaye’s “Got to Give it Up,” and amended its original opinion.  Opinion While the denial of the petition to rehear the case en banc is grabbing all the headlines, it is the amended opinion that stands to make the biggest impact on copyright law.  The amended opinion quietly deletes all references to the oft-criticized inverse ratio rule.  By taking out all references to the so-called inverse ratio rule in its amended opinion (and in the dissent), the Ninth Circuit may be signaling that the inverse ratio rule (considered and rejected by the Second Circuit more than 50 years ago) has finally danced its last dance in the Ninth Circuit.

As we pointed out in our 2011 article, as a practical matter, the so-called inverse ratio rule makes precisely no sense.  As stated from time to time, under the inverse ratio “rule,” if the plaintiff establishes a high degree of access to its work by the defendants, a finding of copyright infringement may supposedly be based upon a lesser degree of similarity.  Nonsense.  As a matter of basic copyright law, no degree of access can substitute for a finding that the works are in fact substantially similar within the meaning of the Copyright Act.  A court’s determination of whether there is substantial similarity of protectable expression is made by looking at the works and analyzing them.  That analysis is totally unrelated to whether the defendant had no access, some access, had a lot of access or even had the plaintiff’s work posted on the wall of the writers’ room.

District courts within the Ninth Circuit have struggled with the so-called inverse ratio rule for years. Some judges have correctly determined that it makes no sense, and refuse to apply it.  Other judges pay lip service to it, but then admit that they are not sure how it applies.  Other judges have applied it, but it is totally unclear from the decisions as to how it was applied.

The bottom line is that a plaintiff must still prove substantial similarity regardless of how strong its evidence is that the defendant had access to the plaintiff’s work. This is true even where the defendant in fact copied from the plaintiff’s work.  Even in that instance the plaintiff has to prove the full measure of substantial similarity of protectable expression within the meaning of the Copyright Act.  Simply put, not all copying is unlawful.

The Second Circuit considered and rejected the inverse ratio rule more than 50 years ago (in 1961). In light of the Ninth Circuit’s amended opinion of July 11, 2018, and its deletion of all discussion of the so-called inverse ratio rule, it appears that the Ninth Circuit is, at long last, starting to catch up.

California’s Revenge Porn Statutes

Several members of the University of Central Florida chapter of the Delta Sigma Phi fraternity were recently sued, along with the fraternity itself, by a woman claiming that the fraternity operated a secret Facebook group where members uploaded images and video of private sexual encounters for other fraternity members to see.  The case is Kathryn Novak v. Brandon Simpson, et al., Case No. 6:18-cv-00922-RBD-TBS (M.D. Fla. June 13, 2018).

The Plaintiff claims that she had a sexual relationship with defendant Brandon Simpson from October 2017 to February 2018 during which time Simpson recorded sexual encounters with her. Plaintiff claims that Simpson distributed video of the couple having sex to at least five Delta Sigma Phi fraternity members who then shared the video with the rest of the fraternity house.

The frat allegedly operated a secret Facebook group called the “Dog Pound” where fraternity brothers “routinely posted electronic video and images of their sexual ‘conquests’” and that the page was then used to disseminate nude images and videos of young women.  The women involved allegedly did not consent to the distribution of the material.  Plaintiff is asserting claims for invasion of privacy, intentional and negligent infliction of emotional distress, and a claim under Florida’s revenge porn statute.

Like Florida, California has a revenge porn statute.  In 2013, the California legislature added “revenge porn” as a crime under California Penal Code § 647(j)(4).  The statute makes it a misdemeanor offense to intentionally distribute images of another identifiable person depicted in a sexual act “under circumstances in which the persons agree or understand that the image shall remain private.”

California also recognizes a civil revenge porn claim under Civil Code § 1708.85, which creates a private cause of action against persons who intentionally distribute private images depicting an intimate body part of another.

Both of these statutes apply to the distribution of consensually-taken images.  For example, the circumstance presented under § 647(j)(4)(A) oftentimes is when a victim consents to the picture taking during a consensual sexual relationship, and the victim and victim’s partner agree not to distribute the image, but the image is distributed after the relationship is ended.  For this reason, the statutes have never been used to impose liability against media publishers because it has been impossible to show that publishers had an agreement with the subject that the images were to remain private.

Furthermore, publishers who lawfully obtain information, even if they know or have reason to know that the information was unlawfully obtained by the source, cannot be held liable for publishing newsworthy stories about the material.  Bartnicki v. Vopper, 532 U.S. 514, 535 (2001).  Consistent therewith, California’s civil revenge porn statute expressly recognizes that “[t]here shall be no liability on the part of the person distributing [sexually explicit materials] [where] … [t]he distributed material constitutes a matter of public concern.”  Cal. Civ. Code § 1708.85(c)(4).

Overall, despite being at the forefront of codifying revenge porn laws, analysts have noted that California’s statutes could be improved.  In particular, both statutes require a showing that the parties involved agreed or expected that the images would remain private, which can be difficult to establish when the persons involved (usually former partners) consented to recording the images but did not explicitly agree to keep them private.  Accordingly, revenge porn claims are typically asserted as claims for invasion of privacy, misappropriation of likeness, infliction of emotional distress, and copyright infringement.

Minnesota Court of Appeals Extends Fair Report Privilege to Stories that Accurately Summarize Police Press Conferences and Press Releases

The Minnesota Court of Appeals recently ruled that the “fair-report privilege” protects the media against defamation claims for news reports that accurately summarize official press conferences held by law enforcement or law enforcement agencies’ official press releases.  The fair report privilege is a broad privilege afforded to the press to publish defamatory statements so long as the report relies on official public documents or statements by public officials and the report fairly and accurately uses those sources.

On November 29, 2012 the Cold Spring, Minnesota police department came to perform a welfare check on Mr. Ryan Larson at his family’s request.  On the way, Officer Tom Decker was shot and killed in the vicinity of Larson’s residence.  Police arrested Larson in connection with the murder.  On November 30, 2012, law enforcement officials held a joint press conference about the incident, during which officials made statements about the arrest and answered questions.  In addition, the Minnesota Department of Public Safety issued a news release the same day stating that Larson had been arrested and booked on murder charges.

The story was covered by local media, including Defendants KARE 11 News and the St. Cloud Times, which reported on the incident and the police press conference in various broadcasts and articles published in the days following the arrest.  Eventually, however, Larson was released after investigators determined that there was insufficient evidence against him and he was cleared as a suspect in August 2013.

Larson sued KARE 11 and the St. Cloud Times for defamation over 11 statements made in the reporting on the arrest that indicated that he was accused of murder and that police believed or stated that he had shot Officer Decker.  At trial the jury found in favor of defendants, holding that although each statement was defamatory, referred to Larson, and was published, none of the statements were false.  Larson successfully moved for a new trial and defendants appealed.

On appeal, Larson argued that the fair-report privilege did not apply to news reports about law enforcement statements at the police press conference and in the press release.  The Court of Appeals disagreed and ordered judgment in favor of defendants.  The Court relied principally on the Minnesota Supreme Court case of Moreno v. Crookston Times Printing Co., which held that the fair report privilege applies to “an accurate and complete report or a fair abridgement of events that are part of the regular business of a city council meeting.”

The Court relied on two public policy principles for the extension of Moreno to police press conferences and press releases.  It explained that, because the meeting was public, a fair and accurate report would simply relay information to the reader that she would have seen or heard were she at the meeting.  Further, it held that there was an “obvious public interest in having public affairs made known to all.”

Accordingly, the Court analogized the police press statements to the public statements made at a city council meeting and further held that there was an “obvious public interest” in information relayed to the public by law enforcement officials.  Applying Moreno, the Court held that the fair report privilege extended to fair and accurate reporting of statements made by law enforcement officials at official press conferences or in official press releases based on its conclusion that “[w]e can discern no meaningful distinction between citizen statements … made at a city council meeting and police statements about a recent crime at an official press conference.”

The case is Larson v. Gannett Co., Inc., No. A17-1068, 2018 WL 2090538 (Minn. Ct. App. May 7, 2018).

Without Doubt, Anonymous Sources Do Not Equate to Actual Malice

On April 25, 2018, the Second Circuit affirmed the district court’s dismissal of Venezuela’s “Number Two” politician’s, Diosdado Cabello-Rondon (“Cabello”), libel suit against Dow Jones & Company, Inc. (“Dow Jones”).

The suit stems from a Wall Street Journal (“WSJ”) article titled “Venezuelan Officials Suspected of Turning Country into Global Cocaine Hub.” See José de Córdoba and Juan Forero, “Venezuelan Officials Suspected of Turning Country into Global Cocaine Hub,” THE WALL STREET JOURNAL, May 18, 2015. The WSJ reported that Cabello, the former head of Venezuela’s national assembly, was the target of a U.S. Drug Enforcement Administration investigation for drug trafficking and money laundering.  Following the publication, Cabello filed a libel suit against the WSJ’s Parent Company, Dow Jones.  The Second Amended Complaint (“Complaint”) alleged that the article contained “false and defamatory allegations” and that the WSJ contrived the allegations and falsely attributed them to fictitious, anonymous sources or, in the alternative, failed to properly investigate its sources. The Complaint also alleged that the WSJ should have questioned the reliability of its sources because “no legitimate DOJ source has, or could conceivably have leaked such sensitive information core to an ongoing international criminal investigation,” where the case presents “nothing inherently controversial,” and any leakage “can serve no noble cause[.]”

On August 17, 2017, the district court dismissed the Complaint with prejudice because Cabello failed to plead falsity adequately as to some of the statements in the article, and failed to plead malice adequately. The Second Circuit affirmed the decision finding that the Complaint did not plausibly allege actual malice as required for a public figure plaintiff.

To establish a prima facie case for libel under New York Law, a plaintiff must plead facts supporting a plausible inference that “the identified statements were false.” Mosdos Chofetz Chaim, Inc. v. RBS Citizens, N.A., 14 F. Supp. 3d 191, 216 (S.D.N.Y. 2014).  When the plaintiff is a public figure, he must also plead actual malice. See Biro v. Conde Nast, 963 F. Supp. 2d 255, 270 (S.D.N.Y. 2013), aff’d, 807 F.3d 541 (2d Cir. 2015), and aff’d, 622 F. App’x 67 (2d Cir. 2015). The Second Circuit has held that the actual malice standard is not measured by ill will or animosity, “but instead the speaker’s subjective doubts about the truth of the publication.” See Church of Scientology Int’l v. Behar, 238 F.3d 168, 174 (2d Cir. 2001). In other words, in order to survive a motion to dismiss in the absence of a showing of a knowingly false statement, the plaintiff must plead plausible grounds that the defendant “entertained serious doubts” as to the truth of the publication. Biro, 807 F.3d at 545. Absent the allegations of “enough facts to raise a reasonable expectation that discovery will reveal evidence of actual malice[,]” a complaint will not survive. Id. at 546.

Applying this standard to Cabello’s Complaint, the Second Circuit made clear that reliance on anonymous sources alone does not support an inference that the publisher acted with actual malice. The Court characterized Cabello’s theory that any investigation into his activities simply could not have been leaked by government authorities as “patently unbelievable.” In fact, Cabello’s theory completely worked against his allegations because as the “Number Two” politician in a country with vast oil wealth and a complex relationship with the United States, it is certainly a controversial matter where a leak would not be unlikely or impossible. As such, the allegations were not enough to buttress an inference of actual malice.  Accordingly, the Court affirmed the district court’s order dismissing the Complaint with prejudice, as this was the Cabello’s second time failing to adequately amend his complaint as to the libel claim.

Putting It In Writing: The Return of The Morality Clause In The Age of #MeToo and Time’s Up (Part II)

Part I: The Birth of Morals Clauses in Entertainment Services Contracts

Part II: Twenty-First Century Morality Clauses in Entertainment Services Contracts

Morality clauses, or morals clauses, are making a comeback in the age of the #MeToo and Time’s Up movements.  A sample morality clause in an actor talent agreement may read as follows:

Artist shall act at all times with due regard to public morals, conventions and Studio policies. If Artist shall have committed or does commit any act, or if Artist shall have conducted or does conduct himself in a manner, which shall be an offense involving moral turpitude under federal, state or local laws, or which might tend to bring Artist to public disrepute, contempt, scandal or ridicule, or which may embarrass, offend, insult or denigrate individuals or groups, or that may shock, insult or offend the community or Studio workforce or public morals or decency or prejudice Studio, or which results in or is likely to result in actual or threatened claims against Studio, or which otherwise may might tend to reflect unfavorably upon Studio, Studio shall have the right to terminate this Agreement upon notice to Artist given at any time following the date on which the commission of such act, or such conduct, shall have become known to Studio.

Studios, networks, producers, distributors, financiers, advertisers and many others make a significant investment in television and motion picture projects. That investment is put at risk if public opinion turns against a key personality or executive connected with a project.  Recent events involving actor Kevin Spacey are a case in point.  After multiple reports surfaced that Kevin Spacey engaged in sexual misconduct, studios cancelled a number of his pending film and television projects.  Imperative Entertainment, the financier of Ridley Scott’s All the Money in the World, spent $10 million to reshoot Spacey’s scenes with Christopher Plummer and save the film in time for its holiday release. Separately, Netflix immediately severed its relationship with Spacey, reportedly losing tens of millions of dollars by shutting down production on House of Cards and scrapping its Spacey-driven Gore Vidal biopic, which was already in post-production.  Because Spacey did not have a morality clause in his contracts, he was reportedly paid for the entire final season of House of Cards and for All the Money in the World.  In January 2018, Netflix announced that it took a “$39m non-cash charge in Q4 for unreleased content [it] decided not to move forward with.”  Netflix CFO, David B. Wells, confirmed in the Q4 earnings call that the “write-downs” were “related to the societal reset around sexual harassment.”

Indeed, this is the very scenario Universal sought to avoid when it first announced the use of morality clauses in September 1921:

“As contracts are drawn today, a company seems to be liable not only to continue to pay the salary of an actor or actress who forfeits the respect of the public, but has to bear the obloquy of still having them in its employ. Pictures on the market or unreleased and unreleasable are sufficient penalty to pay for an infraction of the moral law by an employee in whose good name millions may be tied up and over whose moral conduct the company has no control whatever.”  (Morality Clause For Films, N.Y. Times, Sept. 22, 1921, at 8) (PDF).

Those who oppose the use of morality clauses worry that they can be drafted too broadly and are subject to abuse.  This criticism is supported, in part, by the politicized history of morality clauses.  In the 1940’s and 1950’s, several studios used morality clauses to terminate the agreements of the so-called Hollywood Ten, a group of ten actors and screenwriters who were jailed, and blacklisted by movie studios, for publicly denouncing the activities of the House Committee on Un-American Activities during its investigation of Communist influence in Hollywood.  Even today, some representing talent fear that morality clauses, particularly those that are broad or ambiguous, may create pretext for termination of contracts based on other factors.  There is also concern that morality clauses can be unfair to talent since anyone can invent an accusation, or make a public statement that is not necessarily true.  Both the Director’s Guild of America (DGA) and the Writer’s Guild of America (WGA) have banned morals clauses in guild member agreements for decades.  The DGA Basic Agreement states that: “Employer agrees that it shall not include or enforce any so-called ‘morals clause,’ as the term is commonly understood in the motion picture and television industries, in any contract of employment or deal memo for the services of an employee.”  Similarly, the WGA Basic Agreement states that: “Company agrees that it will not include the so-called ‘morals clause’ in any writer’s employment agreement covered by this Basic Agreement.”  Though the Screen Actors Guild-American Federation of Radio and Television Artists (SAG-AFTRA) does not contain a similar prohibition, talent agents and attorneys often negotiate for the removal of a morality clause from a talent agreement, or to narrow and clarify the terms.

Despite these concerns, the ambiguities highlighted by opponents of morality clauses can be negotiated to tailor these clauses more precisely and address each parties’ position.  Moreover, the incentive to avoid deliberately destroying a project would also ensure that a talent agreement is only terminated pursuant to a morality clause when it is warranted.

The #MeToo and Time’s Up Movements are playing an important role in forcing a number of industries, including Hollywood, to recognize and be accountable for conduct.  In the meantime, film studios, networks, and producers have begun reconsidering the use of morality clauses both as a way to deter misconduct and to provide them with some means to protect their investments.

New York Defamation Suit Against Trump To Proceed: The public response to an accusation of sexual misconduct may give rise to a defamation claim

On March 20, 2018, a New York state judge held that Summer Zervos, a former contestant on the reality television show The Apprentice, can move forward with her defamation suit against President Trump in Zervos v. Trump, No. 150522/17 (N.Y. Sup. Ct. Mar. 20, 2018).  The ruling illustrates both that a sitting President is not immune to civil liability even in state court, and that a defendant’s public response to an accusation of sexual misconduct may give rise to a defamation claim.

During the 2016 presidential campaign, Zervos was one of roughly twenty women who accused Trump of sexual misconduct after the footage from the television show Access Hollywood was made public.  On October 14, 2016, Zervos and her attorney held a press conference where she alleged that Trump sexually assaulted her on several occasions in 2007.  The following day, Trump denied the allegations as “100% fabricated and made up charges” in a statement on his campaign website.  Trump continued to deny the allegations at campaign rallies and in a series of tweets.  During the October 19, 2016 presidential debate, Trump again called the allegations “lies” and “fiction.”  Finally, during a October 22, 2016 Pennsylvania campaign rally, Trump made the following public statements:

“Every Woman lied when they came forward to hurt my campaign, total fabrication.  The events never happened. Never. All of these liars will be sued after the election is over.”  (Zervos Complaint, ¶ 74).

On January 17, 2017, Zervos filed a complaint in New York state court, alleging that the President Elect made defamatory statements about her. Zervos alleges she suffered at least $2,914 in financial losses, and seeks an unspecified amount of compensatory and punitive damages.  Three days after the complaint was filed, Trump became the 45th President of the United States.  Trump moved to dismiss the complaint or continue the lawsuit until after he leaves office.  On March 20, the New York court denied his motion, finding that the President has no immunity for purely private acts, even in state court, and that Zervos stated a cause of action for defamation.  The court cited the U.S. Supreme Court’s unanimous opinion in Clinton v. Jones, 520 U.S. 681 (1997), which held that a sitting President does not have absolute immunity from civil lawsuits related to conduct prior to the presidency.

After finding that “[n]o one is above the law,” the court also held that Zervos’s complaint met the minimal standard necessary to plead a cause of action for defamation and therefore withstood a motion to dismiss.  In support, the court cited a 2014 decision by New York’s highest court in Davis v. Boeheim, 24 N.Y.3d 262 (2014), which held that an action for defamation could be maintained against a defendant who called his accusers liars.  In reviewing the alleged public statements Trump made about Zervos, the court found that Trump used “specific, easily understood language to communicate” that Zervos lied to further her interests.

The court’s decision to allow the Zervos defamation claim to proceed hinged on its determination that, as alleged by Zervos, Trump’s statements constituted actionable statements of fact, rather than nonactionable statements of opinion.  The court determined that Trump’s “repeated statements … cannot be characterized simply as opinion, heated rhetoric or hyperbole.”  Trump’s attorney filed a notice of appeal on April 1, 2018.

Following the court’s order denying Trump’s motion to dismiss the Zervos complaint, on March 26, 2018, Stephanie Clifford (a.k.a. Stormy Daniels), the woman who went public about her alleged sexual relationship with President Trump, amended her complaint against Trump, pending in the United States District Court for the Central District of California, captioned Stephanie Clifford v. Donald J. Trump et al, No. 2:18-cv-02217 (C.D. Cal. Apr 2, 2018).  Clifford added a defamation claim again the President’s longtime personal lawyer, Michael Cohen, who allegedly paid her $130,000 to keep the details of the alleged affair secret.  Clifford alleges that the public statement Cohen issued on February 13, 2018, stating that “Just because something isn’t true, doesn’t mean that it can’t cause you harm or damage,” was reasonably understood by those who read or heard it to concern Clifford and was “meant to convey that Clifford is a liar, someone who should not be trusted, and that her claims about her relationship with Mr. Trump” are not true.  Clifford Complaint, ¶¶ 66-67.  Defendants have filed a motion to compel Clifford’s lawsuit to arbitration.

These cases make clear that a public response to an allegation of sexual misconduct may potentially give rise to a claim of defamation.

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