Monthly Archives: January 2014

Libel and Slander 101: Defamation By Implication

defamation by implication
Can you successfully sue someone for implying something defamatory?

Where do U.S. courts fall on the issue of defamation by implication? Do First Amendment rights render the notion unconstitutional? We’ll answer these questions by applying a “lawsuit that never was” involving everyone’s favorite (allegedly) crack-smoking mayor from Toronto, Rob Ford.

Toronto’s scandal-engulfed mayor, Rob Ford, conjured another maelstrom. During a televised interview with the infamous Conrad Black, Ford plopped a sack of rumor dung at the doorstep of a Toronto Star reporter. The politically neutered mayor quipped:

“He’s taking photos of little kids. I do want to say that word, but you start thinking ‘what’s this guy all about.’”

Soon after the interview aired, Dale sent Ford a libel notice demanding an apology and retraction. At first, Ford played it as you might expect him to play it, badly. At a press conference, he said he stood by “every word” of his Interview.

When asked about the interview, Conrad Black — with the confidence of prime-time lawyer, sporting a soft-spot for the powerfully put upon — tossed some suspect gotcha-logic into the mix, admonishing the media outlet for evoking the word pedophile, pointing out that Ford never uttered the phrase.

Black, however, may have been wrong, because the Canadian Criminal Code clearly states:

“Defamatory libel may be expressed directly or by insinuation or irony in words legibly marked on any substance or by any object signifying a defamatory libel otherwise than by words.” [emphasis added]

Fast forward a few days. Someone must have alerted Ford of the improbability of winning a slander suit because he publicly apologized to Dale and offered a clear retraction of his insinuation. Case closed.

What Would Have Happened if This Defamation by Implication Case Was Tried in the United States?

But the whole ordeal got us thinking: If Dale v. Ford had been tried in a U.S. court, would Dale have won? Where do U.S. courts fall on the issue of defamation by implication? Do First Amendment rights make it impossible under United States law?

We’ll answer these questions below by looking at historical defamation by implication case law precedence.

First, A Quick Summary of Defamation Law in the United States

In part thanks to the First Amendment, the United States has the most defendant-friendly slander and libel laws in the world. The Second Restatement of Torts (§ 559) defines defamation thusly:

“A communication is defamatory if it tends 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.”

The rules for slander and libel are straightforward:

  1. If the statements in question are true, they won’t be considered defamatory 95% of the time. (Every so often an individual wins a slander or libel case even if the defendant reported or publicized the truth. Plus, plaintiffs can use other torts similar to defamation.)
  2. Opinion does not constitute defamation. In trash-talk terms, labeling someone a dirtbag is not defamatory because one person’s dirtbag could be another person’s prince.
  3. In order for a statement to be libelous or slanderous, it must contain a false statement of fact.
  4. The material must have been imparted to people.
  5. The plaintiff must show that the statements under review led directly to some material harm, such as lost wages, lost job – anything quantifiable. In some jurisdictions, plaintiffs don’t have to show harm when accused of:
    • a crime;
    • having a loathsome disease;
    • not being able to conduct business ethically or materially;
    • sexual misconduct.

These are called defamation per se cases, meaning the statements are egregious enough to be understood as innately harmful.

Why Does Defamation by Insinuation Present A Legal Quandary? (Hint: Actual Malice)

The legal premise of “actual malice” plays a prominent role in U.S. defamation law. Actual malice is when a person knowingly publishes a lie or offending statement with reckless disregard for the truth. It only applies in cases where the plaintiff is a public figure.

Now, what constitutes “reckless disregard for the truth” is nebulous and differs depending on jurisdiction. As a general rule of thumb, the ruling in Schiavane Construction v. Time Inc. is often used as a benchmark. It states:

“[T]he defendant in fact entertained serious doubts as to the truth of the statement or that the defendant had a subjective awareness of probable falsity.” To add, Herbert 441 U.S. at 160 suggests, “Proof of actual malice depends upon the defendant’s actual state of mind.”

The Tricky Thing About Implications

When it comes to defamation by implication, the duality of insinuation creates a legal dilemma. After all, implications “have two possible meanings, one that is defamatory and one that is not,” (American Jurisprudence 2d Libel and Slander §158). Moreover, legal precedence demands that the innocent connotation of an implied statement must be accepted as the speaker’s intent.

When the claimant has to prove actual malice, the matter becomes further complicated since “[t]he need to show intent necessarily means that the actual malice standard will have different elements of proof in ordinary defamation cases than in defamation by implication cases.”

Actual Malice Definition

United States defamation law differentiates between public and private figures. If a public figure files a slander or libel lawsuit, he or she must prove actual malice, whereas a private citizen does not. In simple terms, actual malice is present when the plaintiff can prove that the defendant knowingly printed a lie, had serious doubts about the validity of the information but publicized it anyway, or acted with reckless disregard for the truth (shoddy due diligence).

If The Plaintiff Is A Public Figure That Has To Prove Actual Malice in a Defamation by Implication Case, How Can He or She Show Intent?

In cases where actual malice plays a role, the plaintiff must prove that the defendant knowingly made questionable information public. So, what happens in a defamation by insinuation suit? After all, by definition, a public figure plaintiff must prove the defendant intended to convey the insidious meaning, as opposed to the innocent meaning, of the doubly connoted statement.

The Third Circuit addressed this issue when reviewing Kendall v. Virgin Island Daily News in March 2013.

Kendall v. VI Daily News: The Quick Summary

In 2007, Judge Leon Kendall let a guy (we’ll call him “Nigel”) out on bail. While awaiting his next hearing, Nigel allegedly raped and killed a 12-year-old girl. A reporter for the Virgin Island Daily News published an article insinuating that Kendall let Nigel out despite knowing his violent background. The incident sparked protests outside the courthouse.

Upset over the accusations, Kendall filed a defamation lawsuit against the journalist and VI Daily arguing defamation by implication. Ultimately, the case turned on the following line:

“Kendall found probable cause to charge [Nigel] but released him pending trial – despite [Nigel’s] history of violence including charges of rape, assault and weapons.”

Kendall and crew argued that since the protests about Nigel meant that the public “understood that judge Kendall had released [him] despite his history of violence,” which presumably meant he was responsible for the victim’s death.

Sounds horrible, right? Well, it turns out that Kendall wasn’t as culpable as the paper made it appear. The reason Kendall granted bail was because past plea agreements prevented the judge from seeing his violent past. On paper, Nigel came across as a non-violent suspect.

The case went to trial. In the end, the jury sided with Kendall and awarded him $240,000 in defamation damages. Displeased, the Virgin Island Daily News moved for a bench judgment, which the Superior Court granted, and the justices reversed the jury’s decision.

Then Kendall appealed the decision. The bench, however, affirmed the lower court’s decision. Case closed, right?

Not so quickly. Despite confusion as to whether or not the Third Circuit was in a superior position to the Virgin Island Supreme Court, the court was granted certiorari and released an opinion on the Kendall case. In this instance, the Third Circuit wanted to make sure the VISC properly applied the standard of actual malice.

What is Certiorari?

Certiorari is when a higher court calls up the records of a lower court for review. In non-fancy words, it’s like a teacher reviewing a student teacher’s work. It’s also the primary way in which  the Supreme Court of the United States calls up cases.

Kendall’s position as a judge made him a public figure. So, not only did the case involve tricky defamation by implication elements, but also actual malice. Because of all the outstanding elements, Kendall v.VIDN ended up being a precedent setting case.

As stated above, the rub of a public figure defamation by implication cases is proving actual malice. After all, since 2 meanings are possible, the plaintiff must convince a judge or jury that the defendant intended to impart the insidious meaning – a tricky feat in a free speech principled country.

One school of thought argues that the mere act of disregarding the defamatory meaning of an implied statement satisfies the actual malice standard. In Kendall, however, the court ruled, “if mere knowledge [was] sufficient to find defamatory intent, then actual malice would be found no matter how unlikely it is that a listener would interpret the statement as having a defamatory meaning” – and, therefore, an invalid argument.

Examples of Defamation by Implication Rulings From United States Courts

Kendall is not the first time the question of actual malice in defamation by implication cases has arose. In the past, judges have demanded that plaintiffs “show with clear and convincing evidence that the defendant is intended or knew of the implications that the plaintiff [was] attempting to draw from the allegedly defamatory material” – (Saenz 841 F. 2d – Compuware Corp)

In Price v. Viking Penguin the bench ruled:

“We do not recognize defamation by implication” because statements couldn’t pass the specificity test for fact/opinion dichotomy.”

In Woods v. Evansville Press Co:

Seventh Circuit affirmed, “an implied statement, just as a statement made in direct language, can be defamatory.” During the course of the hearing, however, the plaintiff failed to prove intent on the part of the defendant, not meeting the standard “to create a triable issue.”

In Newton v. National Broadcasting, Co.:

Newton sued NBC Universal for implying the company used mafia ties to finance a hotel acquisition. Unlike other defamation by implication cases, the plaintiff originally won because NBC edited the material, thereby assuming culpability.

Defamation by Implication Attorneys

Defamation by implication cases are nuanced. In order to win, you must have rock solid arguments and evidence to support your story.

Kelly Warner handles defamation by implication cases. We know the nooks and crannies of the law and understand the particulars. If you’re serious and looking to litigate a defamation by implication issue, get in touch today.

Additional Source: http://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=2870&context=flr

Startup Operating Agreements: Everything You Need To Know In 5 Minutes

A startup operating agreement is an intrical part of your startup's master plan.
A startup operating agreement is an integral part of your startup’s master plan.
Image credit: nexusplexus / 123RF Stock Photo

You’ve got a startup, and you’re looking to make it legit. If you’re serious about doing things the right way, the first thing to do is get an operating agreement. The free startup operating agreements you find online are sometimes inaccurate or don’t do a great job of protecting entrepreneurs’ interests. If you do use a free startup operating agreement, you may find yourself beholden to archaic default business operation laws. So, the best thing to do – and no, I’m not just saying this because I’m a startup business lawyer (well, maybe a little) – is to find a startup business lawyer who can draft a rock-solid operating agreement that protects your interests as far as the law allows.

What should be in a startup operating agreement? Let’s break it down.

What is the purpose of an operating agreement?

Startup operating agreements are meant to protect the people creating the business. That could be just you or a group of people entering into a partnership. If done correctly, an operating agreement decreases participants’ personal liability and in many circumstances can mitigate a lot of legal red tape.

Also, technically speaking, if you don’t have an operating agreement, you don’t have a legal LLC. Without an official document delineating your business as an entity separate from yourself, all liability falls onto your shoulders. That new condo you just bought? With an operating agreement, you could find yourself kissing it goodbye.

Once an operating agreement is signed by all parties it is the guiding doc of the company and binds signatories to its terms.

Another reason to have an operating agreement: If you don’t have one, when conflicts arise, the state “default rules” take effect – and state rules are often very unfriendly.

What types of issues are usually addressed in a Startup Operating Agreement?

The typical operating agreements outlines understandings and procedures related to finances, business procedures, operating structures and ownership percentages, Ownership percentages, Voting rights, Individual responsibilities, Powers and duties, Profit distribution, Loss distribution, Meeting schedule, Dissolutionshment plans, Buyout stipulations and Buy-sell rules.

I don’t need a startup operating agreement. Me and my partners are thicker than thieves and can work through anything without an official document?

Do not let yourself fall into the, “but me and my business partners are BFFs” trap. So many people do, and so many people get screwed. It doesn’t matter if you are starting a business with your grandmother; make sure you have an operating agreement in place. It will save you all sorts of headaches in the future.

How long is a typical operating agreement and how much would it cost me to have a lawyer draft one?

A startup operating agreement can be anywhere between 1 and 1,000 pages. The length depends on the size of your business, the plan and your industry.

Do any states require startups to have an operating agreement?

The federal government and every state government strongly urge every startup to have an operating agreement, but only two states require one – New York and Missouri.

Do you have any parting advice about operating agreements for online startup companies?

The Small Business Administration strongly suggests keeping operating agreement confidential.

The Small Business Administration strongly advises to keep operating agreements confidential. Why? Because they can contain a whole lot of personal information. Now, of course every entity a party to the agreement should understand its parameters, but it’s not something to go shouting off at the mouth about at say, a Scientology recruitment seminar or amongst strangers.

 

For a more detailed overview of startup operating agreements, head to the Small Business Administration’s website, SBA.gov – US Small Business Administration. If you need an attorney to draft a startup operating agreement, get in touch with Kelly Warner Law today.

Satire v. Defamation Explanation

piece of paper on wood table that says I like being sarcastic to represent satire v defamation law
A satire v. defamation Explanation
Image credit: maxmitzu / 123RF Stock Photo

“With cases involving outrageous parody and satire, the path of least resistance has been to find the ‘speech’ non-defamatory as a matter of law. The rationale used to justify this conclusion is that no reasonable reader could understand the publication as an assertion of fact. The presumption is that satires so outrageous as to preclude belief is incapable of harming reputation”From Constitutional Law-Satire, Defamation, and the Believability Rule as a Bar To Recovery – Falwell v. Flynt by Kevin M. Smith

What is the difference between satire and defamation? Is Satire legal in the United States? What happens if someone deems your satirical work defamatory? Is there a legal line that satirists can’t cross? Below, we’ll discuss these questions, plus take a look at two lawsuits that turned on the difference between satire v. defamation.

Satire v. Defamation: The Case Of The Esquire Blog Post

Magazine Blogger Pokes Fun At Author

In a December 2013 satire v. defamation case, a court booted a $120 million lawsuit against Esquire Magazine. Jerome Corsi had sued the media outlet for poking fun at his book,“Where’s the Birth Certificate? The Case That Barack Obama is not Eligible to Be President”.  Unfortunately for Corsi, Obama released his long-form birth certificate days before the book  hit shelves. Esquire writer Mark Warren – apparently tickled by the bad timing — posted a satirical recall notice of the book on Esquire.com. Warren titled his blog post: “BREAKING: Jerome Corsi’s Birther Book Pulled From Shelves!”

People Without A Nose For Satire Believed Blogger’s Post; Blogger Adds “Satire Notice”

According to Corsi, within hours of Warren’s post publishing, to comply with the last minute recall, bookstore owners frantically pulled “Where’s the Birth Certificate” from shelves. Concerned about the possible mass confusion, Corsi quickly sent a complaint directly to Warren. Obligingly, Warren added a “satire disclaimer” to his piece; though, he also called Corsi an “execrable piece of shit”. (Hey, you win some; you lose some.)

Defamation Lawsuit Filed

Unsatisfied with Warren’s disclaimer, Corsi filed a defamation lawsuit against the author and Esquire. In his claim, the book-writing birther argued that Warren’s fictitious recall was malicious, false and reputation damaging. Since defamation plaintiffs almost always have to prove material harm, Corsi alleged that the satirical blog post hurt book sales.

Judge: “Satire is not Defamation.”

A D.C. Circuit panel, however, didn’t see eye to eye with Corsi. Upon review, the judges reasoned that after “reflection” a “reasonable reader” wouldn’t believe Warren’s posting. While the bench did admonish Warren’s language as “salty,” it also affirmed that salty or not, opinion and satirical speech were protected by the 1st Amendment.

Judges’ opinions from the Esquire Satire v. Defamation lawsuit:

  1. Warren’s post was a “public statement on an issue of national concern,” and therefore not defamatory;
  2. In reaction to the plaintiff’s argument that people believed Warren’s post, the appeals court opined, “It is the nature of satire that not everyone gets it”;
  3. On the value of satire: “Indeed, satire is effective as social commentary precisely because it is based in truth.”

In the end, the judges ruled that the post wasn’t likely to cause people to “reverse course,” so not defamatory.

Humor v. Parody v. Satire v. Defamation Under U.S. Law

Over the years, U.S. courts have made it abundantly clear: parody and satire are not defamatory. Does that mean all satirists and biting comics emerge victorious from defamation scraps? Absolutely not. Why? Because the nature of humor plays an important role – and, as you may know from experience, one person’s humor may leave another person stone-faced.

In a law review article entitled “Just a Joke: Defamatory Humor and Incongruity’s Promise”, Laura A. Little perfectly summarized the fact/opinion dichotomy in U.S. defamation law. She wrote:

“[When considering satire defamation cases, judges must consider] the right of individuals and groups to be free from attack on their property, dignity, and honor versus the right of individuals to free expression. To make matters more complicated—in fact, much more complicated—the line must not only account for, but also respect, the artistry of comedy and its beneficial contributions to society.”

In other words, which takes precedence in United States law, reputation or free expression? The best answer: it depends on the details. Nine times out of ten parody and satire are seen as opinion and, therefore, non-defamatory. But every once in a while, when the moon is in the 7th house, and Jupiter aligns with Kepler 22b, a judge or jury will side with a satirically scorned plaintiff in a satire v defamation lawsuit.

The Mothership of All Satire v Defamation Lawsuits

The best-known satire v defamation U.S. legal showdown is Hustler Magazine v. Falwell – a lawsuit immortalized in Oliver Stone’s “The People v. Larry Flynt”.

One minute synopsis of the case: Falwell sued Larry Flynt for publishing a satirical advertisement in Flynt’s nudy gentlemen’s magazine, Hustler. The faux ad implied that Falwell got it on with his own mom in an outhouse. At first, Falwell won; but, the issue made its way to the Supreme Court of the United States. And, in a ground-breaking, unanimous decision, all 7 justices ruled — albeit a few reluctantly — in favor of the pornographer. According to the court, the ad was pure satire/parody protected by the First Amendment.

Satire v. Defamation Q & A

Satire v. Defamation: What Is The Difference?

Defamation is a believable false statement of fact that causes material harm. Satire is “the use of humor, irony, exaggeration, or ridicule to expose and criticize people’s stupidity or vices, particularly in the context of contemporary politics and other topical issues.” In simpler terms: defamation is a malicious lie passed off as truth; satire is a humorous skewering of a cultural or political event – regardless of whether or not you agree with the viewpoint.

What Is The Difference Between Parody And Satire?

Parody involves the manipulation of extant works, usually for comedic effect. Similarly, but not exactly, satire is an exaggerated commentary on an irritating or hypocritical issue.

Is Satire Legal In The United States?

In a word, Yes.

What Should I Do If Someone Deems My Satirical Work Defamatory?

If your work is truly satirical, keep calm and carry on. At the very least, consult a defamation attorney to ensure your satirical work doesn’t cross any legal lines. Cases exist where an artist considered his or her work transformative and satirical, but a judge thought otherwise.

Is There A Line That Satirists Can’t Cross In A Satire v. Defamation Scenario?

In a way, the worst thing a satirist can do is not make their work outrageous enough. If a “reasonable person” could realistically construe your work as truth, not art, you could find yourself in legal trouble.

Do you need to speak with an attorney well-versed in satire v defamation law? If yes, contact Kelly Warner Law today. We have successfully handled many defamation lawsuits, cleared people’s good names and helped businesses get past a bout of bad press. The longer you wait the worse the problem gets. Give us ring if you’re serious about clearing up your mess quickly and quietly.

Other Sources
Catherine L. Amspacher and Randel Steven Springer. Humor, Defamation and Intentional Infliction of Emotional Distress: The Potential Predicament for Private Figure Plaintiffs, 31 Wm. & Mary L. Rev. 701(1990), http://scholarship.law.wm.edu/wmlr/vol31/iss3/6