Gripe Site Cases: The Charles Schwab Defamation Lawsuit
We like to talk about gripe site cases — and there’s a new one to dissect.
A dissatisfied business partner, in search of recompense, accuses a mogul’s son – by way of a few DIY websites – of cavorting with a convicted killer!? Nope, it’s not a Dick Wolf special – it’s a real case involving venerated financier, Charles Schwab, Charles’ son Michael and a former dictator’s criminally notorious son, Tommy Suharto.
- Former Business Partner of Nicholas Behunin
- Son of Charles R. Schwab
Charles R. Schwab
- Renowned Finance Mogul
- Father of Michael Schwab
- Third Party
- Alleged Real Estate Swindler
- Convicted Criminal Who Spent 4 Years In Prison
- Former Business Partner of Michael Schwab
- Alleged “Anti-Schwab Website” Mastermind
Steiner & Libo
- Counsel for Nicholas Behunin
- Alleged “Anti-Schwab Website” Enabler
The Story: What Led To The Schwab Defamation Lawsuit
Our tale of online defamation woe tracks back to 2002. That year, an Indonesian court sentenced Tommy Suharto, the notorious son of Indonesian’s now-deceased second president, Suharto, to 15 years in prison. What crime? The younger Suharto hired henchmen to take out a Supreme Court judge, in broad daylight.
Suspiciously, Tommy was out of prison within four years.
Act 1: The Real Estate Deal between Schwab Son Michael & Nicholas Behunin
Sometime in 2009, son of legendary investor Charles Schwab, Michael Schwab, and businessman Nicholas Behunin shook hands on a Balinese real estate deal. The plan? Eco-friendly luxury resorts in Indonesia.
Unfortunately, the strategy went south, and the relationship ended acrimoniously.
Act 2: The Alleged Shakedown
Behunin felt Schwab and co. cheated, and he didn’t walk away quietly. Behunin demanded $25 million dollars for his troubles; Schwab refused. So, Behunin sued for the $25 million.
And it’s around this time when a handful of gripe site websites launched. Accusatory and satirical, several anti-Schwab blogs found their way online. They featured quips like “How to profit from a brutal dictator” and “Launder Money Overseas.” The so-called “suck sites” targeted Michael and Charles Schwab’s alleged relationship with Tommy Suharto – the Uday Hussein of Indonesian.
Act 3: The “Gripe Site” Defamation Lawsuit
As you may have already guessed, the Schwabs insist they’ve “never met” or engaged in any business dealings with any of the Suharto men. They also think Behunin is behind the accusatory websites. So, the First Family of investments filed a defamation of character lawsuit that is sure to go down in the annals of gripe site cases.
The lawsuit reads in part:
“The only reason to create these fraudulent websites was to besmirch the good name and reputation of Charles R. Schwab and his son Michael. Not one claim on the landing page of the site is true or correct and the guilty parties were aware of that prior to making the defamatory statements,”
“In sum, (Leonard) Steiner (Steiner & Libo and Nicholas Behunin) used the Websites as a tool for the extortion of Schwab. The Website’s clear objective was, and is, to publicly embarrass and shame Schwab and then to leverage that public embarrassment into litigation advantage in Behunin’s lawsuit against Schwab.”
“The Defendants agreed to a scheme that included providing false and defamatory information to third parties who would post articles or blogs on the internet repeating the false and defamatory statements provided to them by Defendants…creating the impression that the false statements on the websites had been independently corroborated by the third-party posters,” according the lawsuit by Michael Schwab filed by his attorney David H. Schwartz.
The Masts of Defamation: What Plaintiffs Must Prove To Win Gripe Site Cases
Defamation is more than just a negative comment or a lie. To win slander and libel lawsuits, plaintiffs must satisfy the four masts of defamation: Publication, Falsity, Harm and Negligence.
Publication: Just as it sounds. The statements under review must have been published for public consumption – either in print or digitally – or spoken in a public forum.
Falsity: As the old saying goes, it isn’t defamation if it’s true.
Harm: The statements under review must have caused financial or materially reputational harm for the plaintiff. Hurt feelings don’t cut it.
Negligence: The great equalizer in defamation suits – intent and negligence. Believe it or not, if a defendant broadcasts a bold-faced lie about you, but genuinely believed in the validity of the information and can prove proper due diligence, then 8 times out of 10 a judge won’t hold the defendant liable. In cases where the plaintiff is a public figure, they have to meet the even higher standard of “actual malice” – a legal term meaning that a person knowingly prevaricates. (To learn more about actual malice, go here.)
Truth! The Pin on Which All Defamation Lawsuits Turn
If the Lance Armstrong scandal taught us one thing, it’s that all that glitters isn’t honestly gold. And I use Armstrong as an example because he won several defamation lawsuits against detractors who reported the truth.
It’s not pretty, but here’s the truth: In slander and libel lawsuits, the winner is the party with the most convincing evidence. If defendants can prove their accusations are fair, they’ll walk away unscathed.
We’ve bookmarked this Schwab gripe site case – because it could get very interesting.
Gripe Site Case UPDATE: Behunin’s pushing back with an anti-SLAPP motion. http://www.marketwatch.com/story/nicholas-behunin-files-anti-slapp-motion-against-charles-schwab-2014-12-17
If you’d like to read more about gripe site cases, head on over here. If you’d like to speak with an online defamation lawyer about a gripe site and “suck site” legal issue of your own, get in touch here.