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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: March 30, 2019

Defamation Claim Dismissed Because it Was Based on Conclusions Drawn from Undisputed Facts

On March 8, 2019, Justice Cohen of the New York County Commercial Division issued a decision in Eros Intl. PLC v. Mangrove Partners, 2019 NY Slip Op, 30604(U), dismissing a defamation claim because it was based on conclusions drawn from undisputed facts, explaining:

Under New York law, a claim for defamation must allege 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. Since only assertions of fact are capable of being proven false, a defamation claim therefore must be premised on published assertions of fact, rather than on assertions of opinion.

In Steinhilber v. Alphonse, 68 N.Y.2d 283, 289-290, the New York Court of Appeals explained the legal distinction between fact and opinion as follows:

A pure opinion is a statement of opinion which is accompanied by a recitation of the facts upon which it is based. An opinion not accompanied by such a factual recitation may, nevertheless, be pure opinion if it does not imply that it is based upon undisclosed facts. When, however, the statement of opinion implies that it is based upon facts which justify the opinion but are unknown to those reading or hearing it, it is a mixed opinion and is actionable. The actionable element of a mixed opinion is not the false opinion itself-it is the implication that the speaker knows certain facts, unknown to his audience, which support his opinion and are detrimental to the person about whom he is speaking.

Practically speaking, distinguishing between assertions of fact and nonactionable expressions of opinion has often proved a difficult task. Courts rely on three factors in making the distinction: (l) whether the specific language in issue has a precise meaning which is readily understood; (2) whether the statements are capable of being proven true or false; and (3) whether either the full context of the communication in which the statement appears or the broader social context and surrounding circumstances are such as to signal readers or listeners that what is being read or heard is likely to be opinion, not fact.

The contextual factor, which is often dispositive, lends both depth and difficulty to the analysis, and requires that the court consider the content of the communication as a whole, its tone and apparent purpose. Consistent with this holistic approach, rather than sifting through a communication for the purpose of isolating and identifying assertions of fact, the court should look to the over-all context in which the assertions were made and determine on that basis whether the reasonable reader would have believed that the challenged statements were conveying facts about the plaintiff.

Applying the principles outlined in Steinhilber and other cases to the litany of allegedly defamatory content alleged here, the Court determines that the statements at issue constitute protected opinion.

. . .

While isolated portions of the articles are arguably factual, those portions constitute facts supporting the writer’s opinion, which renders the writings as a whole pure opinion since it does not imply that it is based upon undisclosed facts.

. . .

To be sure, simply couching such statements in terms of opinion does not immunize them from claims of defamation. As the United States Supreme Court noted in Milkovitch, the statement, ‘In my opinion Jones is a
liar,’ can cause as much damage to reputation as the statement, ‘Jones is a liar.’ The key inquiry is whether challenged expression, however labeled by defendant, would reasonably appear to state or imply assertions of objective fact. In conjunction with the other aspects of the articles, however, the frequent use of opinion-like language further indicates to the reasonable reader that the author is expressing an opinion about Eros based on disclosed facts.

Fourth, many of the articles at issue here were posted on online forums that generally traffic in sharing financial opinions. . . . .

Web content, like all content, must be assessed on a case by case basis. Although several years ago it was suggested that readers give less credence to allegedly defamatory remarks published on the Internet than to similar remarks made in other contexts, this observation, even if it is assumed to be true, should not be read to immunize content the focus and purpose of which are to disseminate injurious falsehoods about their subjects. Our broader social context-a necessary element of the defamation analysis-suggests that online commentary is just as capable as print or broadcast media of inflicting the kinds of harm the defamation laws are designed to protect against. Indeed, online communications can spread more quickly, and to all comers of the world, than can print or broadcast media statements. But in this case, the language of the articles and the sites on which those articles appeared weigh in favor of the conclusion that they were voicing opinions.

. . .

The tweets identified by Eros as defamatory fall into two general categories: (i) tweets that accompany and advertise the articles discussed above and (ii) tweets that provide commentary on Eros separate from those articles. As to the first category, Eros’s claims regarding these tweets appear to overlap substantively with Eros’s claims against the articles which the tweets promote. Because the Court has found that the underlying articles are not defamatory, tweets that do nothing more than broadcast those articles do not take on a defamatory character.

Eros also takes aim at tweets which make allegedly defamatory statements outside the ones already alleged in the research articles. But the content of those tweets reflects protected opinions.

(Internal quotations and citations omitted).

Civil litigation can involve claims that cause real reputational harm, but not every statement can be the subject of a defamation claim. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions about whether statements about you or your business can be the basis for a claim for defamation.

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Posted in Commercial, Defamation
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