Beruflich Dokumente
Kultur Dokumente
Friedmanv.BloombergL.P.,etal.
2 In the
3 United States Court of Appeals
4 For the Second Circuit
5 ________
6
7 AUGUSTTERM,2016
8
9 ARGUED:OCTOBER31,2016
10 DECIDED:SEPTEMBER12,2017
11
12 No.161335cv
13
14 DANFRIEDMAN,
15 PlaintiffAppellant
16
17 v.
18
19 BLOOMBERGL.P.,CHRISTOPHERDOLMETSCH,ERIKLARSEN,MICHAEL
20 HYTHA,ANDREWDUNN,MILLTOWNPARTNERS,PATRICKHARVERSEN,
21 D.J.COLLINS,OLIVERRICKMAN,PALLADYNEINTERNATIONALASSET
22 MANAGEMENTB.V.,ISMAELABUDHER,LILYYEO,
23 DefendantsAppellees.
24 ________
25
26 AppealfromtheUnitedStatesDistrictCourt
27 fortheDistrictofConnecticut.
28 No.15Civ.43AlvinW.Thompson,Judge.
29 ________
30
31 Before:WALKER,HALL,andCHIN,CircuitJudges.
32 ________
33
2 No.161335cv
2 theUnitedStatesDistrictCourtfortheDistrictofConnecticut(Alvin
4 judgmentinfavorofthedefendantsappellees.Atissueinthiscase
6 forlongarmjurisdictionovercertainoutofstatedefendantsexcept
8 Amendmentrights.WeconcludethatitdoesnotandAFFIRMthe
11 statementsatissueinthiscase,whichwerereportedandpublished
13 RightsLaw74asafairandtruereportofjudicialproceedingsor
15 REVERSEinpartthedistrictcourtsdeterminationsregardingthese
17 remainingdefendantsconsistentwiththisopinion.
18 ________
19
3 No.161335cv
18 theUnitedStatesDistrictCourtfortheDistrictofConnecticut(Alvin
20 judgmentinfavorofthedefendantsappellees.Atissueinthiscase
22 forlongarmjurisdictionovercertainoutofstatedefendantsexcept
24 Amendmentrights.WeconcludethatitdoesnotandAFFIRMthe
2 statementsatissueinthiscase,whichwerereportedandpublished
4 RightsLaw74asafairandtruereportofjudicialproceedingsor
6 REVERSEinpartthedistrictcourtsdeterminationsregardingthese
8 remainingdefendantsconsistentwiththisopinion.
9 BACKGROUND
15 fraudulentlyinducedhimintoworkingasitsheadofriskinorder
16 tocreatetheappearancethatitwasalegitimatecompany.Friedman
17 claimedthat,overthecourseofnearlyeightmonths,Palladyneand
2 andconsistent,optimizedreturns.Appxat15,49,61.
6 operationfortheformerdictatorialGhaddafi[sic]regimeinLibya,
8 fundsatthebehestofthethenheadofLibyasstaterunNationalOil
9 Company,whowasthefatherinlawofPalladyneschiefexecutive
10 officer.FriedmanalsolearnedthattheUnitedStatesDepartmentof
14 wasnotengaginginlegitimateinvestmentactivitiesandcouldface
16 cognizableexplanation.Appxat75.
18 that had recruited him for the position, as well as several of their
6 No.161335cv
3 totaling$499,401,000,plusinterest,attorneysfeesandcosts.Healso
4 sought,asadditionalpunitivedamages,twoyearsoftheemployee
6 CourtenterjudgmentonallCountsfortheplaintiff.Appxat88.
9 LaunderingMoneyforQaddafi,thearticlereportedonFriedmans
11 defamation action against (1) Bloomberg L.P. and the authors and
12 editorsofthearticle(collectively,theBloombergDefendants);(2)
18 (collectively,theMilltownDefendants).
7 No.161335cv
2 werefalseandcausedhimseriousandirreparableharm:
12 contactinghimforaresponseorotherwiseverifyingtheiraccuracy,
13 andactedwithrecklessdisregardbyfailingtocorrectorretractthe
15 Defendantstotheirinaccuracy.1
18 lackofpersonaljurisdictionand12(b)(6)forfailuretostateaclaim.
19 Ingrantingthemotion,thedistrictcourtconcludedthatConn.Gen.
1Thereisanupdatedversionofthisarticleinthepartiesjointappendix
thatincludesaresponsefromFriedmanslawyer.BecauseFriedmandoes
notmentionthisversionorattachittohiscomplaint,wedonotconsiderit
forpurposesofthisappeal.
8 No.161335cv
2 individuals,foreignpartnerships,andforeignvoluntaryassociations
3 exceptindefamationcases,depriveditofpersonaljurisdictionover
9 personaljurisdictionoverPalladyne.
10 TheBloombergDefendantsalsofiledamotiontodismissthe
12 which the district court granted. The district court held that the
14 millionwasprotectedbyN.Y.Civ.RightsLaw74becauseitwasa
15 fairandtruereportofFriedmanscomplaintandthatthestatement
2 dismissalofhiscomplaint.
3 DISCUSSION
4 Friedmanarguesonappealinteraliathat(1)thedistrictcourt
6 PalladyneDefendantspursuanttoConn.Gen.Stat.5259bbecause
7 thestatutesexclusionofdefamationactionsisunconstitutional2;(2)
8 theforasmuchas$500millionstatementisdefamatorybecauseit
9 fails to clarify that he could not have been awarded this amount
10 evenifhislawsuitweresuccessful;and(3)therepeatedlytriedto
13 character.
14 I. ConnecticutGeneralStatute5259b
15 Wereviewdenovoanappealfromadistrictcourtsdismissal
16 forlackofpersonaljurisdiction.Whitakerv.Am.Telecasting,Inc.,261
2Friedmanalsoassertsthatthelowercourthadjurisdictionoverthe
corporatedefendantsunderConn.Gen.Stat.33929.However,hefailsto
raiseanyargumentsonthispointand,therefore,wedonotaddressthe
districtcourtsdeterminationtothecontrary.
10 No.161335cv
1 F.3d 196, 208 (2d Cir. 2001). The plaintiff bears the burden of
4 courtmustlookfirsttothelongarmstatuteoftheforumstate....
8 relevantlongarmstatute,Conn.Gen.Stat.5259b(a),provides:
18 BasedontheplainlanguageofConn.Gen.Stat.5259b,the
20 actionovertheindividualMilltownandPalladyneDefendants,who
4 andFourteenthAmendmentrighttoequalprotection.Wedisagree.
7 people...topetitiontheGovernmentforaredressofgrievances.
11 v.BerettaU.S.A.Corp.,524F.3d384,397(2dCir.2008)(citationand
12 internalquotationmarksomitted).Aplaintiffsconstitutionalright
15 brackets omitted); see also Christopher v. Harbury, 536 U.S. 403, 413
18 preparingandfilingsuitsatthepresenttime);Boundsv.Smith,430
12 No.161335cv
1 U.S.817,828(1977)(requiringprisonauthoritiestoprovideinmates
2 withadequatelawlibrariesorlegalassistancetopermitmeaningful
3 litigationofappeals).
5 here,astateslongarmstatutedoesnotprovideforjurisdictionover
8 unlessitchoosestodoso,andtheextenttowhichitsochoosesisa
9 matterforthelawofthestateasmadebyitslegislature.Brownv.
10 Lockheed Martin Corp., 814 F.3d 619, 626 (2d Cir. 2016) (quoting
16 with[theforumstate]suchthatthemaintenanceofthesuitdoesnot
17 offendtraditionalnotionsoffairplayandsubstantialjustice.326
18 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463
13 No.161335cv
1 (1940)).TheSupremeCourtdescribedtheextenttowhichitwould
3 jurisdiction over these defendants; it did not hold that state courts
6 the terms under which their courts could exercise jurisdiction over
7 outofstatedefendants.SeeRobertD.Sack,SackonDefamation:Libel,
10 coextensivewiththelimitsoftheDueProcessClause,somedonot
12 federal Constitution. Id.; see Best Van Lines, Inc. v. Walker, 490 F.3d
13 239,24445(2dCir.2007).
15 precludesitscourtsfromexercisingjurisdictionovercertainforeign
16 defendantsindefamationactions,4doesnotprovideforjurisdiction
4WenotethatConn.Gen.Stat.5259b(a)(1)doespermitjurisdictionover
outofstatedefendantsindefamationactionsifthedefendant[t]ransacts
anybusinesswithinthestate.
14 No.161335cv
1 to the limits of due process. See Conn. Gen. Stat. 5259b; see also
2 InternationalShoe,326U.S.at316.Thestatuteslimitationdoesnot,
6 do so, Brown, 814 F.3d at 626, and Friedman does not have any
9 Whitaker,261F.3dat208;seealsoGeorgev.StrickCorp.,496F.2d10,12
10 (10thCir.1974)([P]ertinentfederalcasesdonotcompelstatecourts
11 toopentheirdoorstoeverysuitwhichmeetstheminimumcontacts
12 requirementsofthedueprocessclauseofthefederalconstitution.);
13 Jennings v. McCall Corp., 320 F.2d 64, 68 (8th Cir. 1963) ([A] state
15 determiningthecircumstancesunderwhichaforeign[entity]would
16 beamenabletosuit,assumingofcoursethatminimumdueprocess
17 requirementsaremet....[Itis]astatesprivilegetoimposeitsown
18 jurisdictionallimitations.).Friedman,therefore,hasfailedtoshow
15 No.161335cv
2 courts.5
6 theEqualProtectionClausebyrestrictingtherightsofdefamation
9 whenthechallengedstatuteeither(1)burdensafundamentalright
10 or (2) targets a suspect class. See Heller v. Doe, 509 U.S. 312, 319
11 (1993). Friedman has not shown that his claim falls within either
12 category.Aswehavediscussed,astateisnotrequiredtoextendits
2 againstthoseforeigndefendants.Further,Friedmandoesnotargue
4 class.
5 Underrationalbasisreview,whichisapplicablehere,weare
6 requiredtodefertothelegislativechoice,absentashowingthatthe
8 F.2d74,77(2dCir.1986).Thepartychallengingthelaw,therefore,
10 Windsorv.UnitedStates,699F.3d169,180(2dCir.2012)(citationand
12 Friedmanarguesthatthestatuteslegislativehistorydoesnotstatea
1 rationalbasisfortheclassification.Heller,509U.S.at320(citations
2 andinternalquotationmarksomitted).
3 Conn.Gen.Stat.5259bwasmodeledafteranearlyidentical
4 provisioninNewYorkstateslongarmstatute.SeeN.Y.C.P.L.R.
5 302; Savin v. Ranier, 898 F.2d 304, 306 (2d Cir. 1990). We have
6 previously noted, in the context of the New York statute, that one
10 specialprotectionslestproceduralburdensshacklethem.BestVan
11 Lines,490F.3dat245(quotingLegrosv.Irving,38A.D.2d53,55(N.Y.
12 App.Div.1stDept1971));seealsoSPCAofUpstateN.Y.,Inc.v.Am.
13 WorkingCollieAssn,18N.Y.3d400,404(2012)(Defamationclaims
16 expression.).TheNewYorkstateexceptionfordefamationactions
18 publishedinotherstates[wouldnotbeforced]todefendthemselves
18 No.161335cv
2 490F.3dat245(quotingLegros,38A.D.2dat55).
6 exclusionandcreatesawidedefamationliabilityfreezoneforout
11 who are the alleged sources for the challenged statements in the
15 freedom of speech. See Best Van Lines, 490 F.3d at 245; see also
16 VincentC.Alexander,PracticeCommentaries,N.Y.C.P.L.R.302,at
17 C302:10(McKinney2008)(The[NewYorkStatelongarmstatutes]
2 individuals...tosuitinNewYorkdespitetheirpotentiallyremote
5 unavailing.SeeWindsor,699F.3dat180.
6 Insum,weagreewiththedistrictcourtthatConn.Gen.Stat.
7 5259bdoesnotviolateFriedmansFirstorFourteenthAmendment
8 rights.Wethereforeaffirmthedistrictcourtsdismissalpursuantto
10 andPalladyneDefendantsforlackofpersonaljurisdiction.
11 II. TheAllegedlyDefamatoryStatements
17 dismissunderRule12(b)(6),acceptingastruethefactualallegations
20 No.161335cv
2 Birov.CondeNast,807F.3d541,544(2dCir.2015).
3 a. TheForAsMuchAs$500MillionStatement
5 thearticlesstatementthatFriedmansuedPalladyneforasmuchas
6 $500 million is protected under N.Y. Civ. Rights Law 74. This
8 anyperson,firmorcorporation,forthepublicationofafairandtrue
9 reportofanyjudicialproceeding.N.Y.Civ.RightsLaw74.New
11 reportstandardof...74soastoprovidebroadprotectiontonews
12 accountsofjudicial...proceedings.Becherv.TroyPublgCo.,183
14 deemedafairandtruereportifitissubstantiallyaccurate,thatis
15 if,despiteminorinaccuracies,itdoesnotproduceadifferenteffect
17 Karadesv.AckerleyGrp.Inc.,423F.3d107,119(2dCir.2005)(citations
18 omitted).
21 No.161335cv
2 suitwasforasmuchas$500millionwasafairandtruereportofa
4 forreliefinFriedmanscomplaint,whichrequestedthattheCourt
5 enterjudgmentonallCountsfortheplaintiff,totaling$499,401,000,
6 exclusiveofattorneysfeesandcosts.Appxat89.Nowheredidthe
10 Friedmanweresuccessfulinhislawsuit,itwasnotnecessaryforthis
12 Defendantscharacterizationofthedamagessoughtwasanaccurate
13 descriptionofwhatwaswritteninthecomplaint.SeeLacherv.Engel,
14 33 A.D.3d 10, 17 (N.Y. App. Div. 1st Dept 2006) (Comments that
15 essentiallysummarizeorrestatetheallegationsofapleadingfiledin
2 Appxat31.
3 Friedmanargues,however,thatthestatementwasneitherfair
5 himforaresponseand,asasophisticatedmediacompany,itshould
6 haveknownthatFriedmanwouldnothavebeenabletorecoveras
7 muchas$500million.Friedmancitesnocaselawinsupportofhis
14 burdensome for the media and would conflict with the general
15 purposeof74.Cf.Becher,183A.D.2dat234(Newspaperscannot
16 beheldtoastandardofstrictaccountabilityforuseoflegaltermsof
23 No.161335cv
2 possibledefinition.(citationomitted)).6
3 Accordingly,becausewefindthat74applies,weaffirmthe
5 theasmuchas$500millionstatement.
6 b. TheRepeatedlyTriedtoExtortStatement
11 incriminalconductandimpliestheexistenceofundisclosedfacts
12 thataredetrimentaltohischaracter.Weagreethatthedistrictcourt
13 erredindismissingFriedmansclaimbasedonthisstatement.
6Friedmanfurtherarguesthatheisentitledtodiscoverytodeterminethe
source of this statement. However, once it is established that the
publication is reporting on a judicial proceeding, how a reporter gathers
his information concerning a judicial proceeding is immaterial provided
hisorherstoryisafairandsubstantiallyaccurateportrayaloftheevents
inquestion.SeeCholowskyv.Civiletti,69A.D.3d110,115(N.Y.App.Div.
2d Dept 2009) (citations and brackets omitted). We therefore find this
argumentunpersuasive.
24 No.161335cv
3 recoveraclaimforlibel:
9 Cellev.FilipinoReporterEnters.Inc.,209F.3d163,176(2dCir.2000).
10 Withrespecttothefirstelementofthiscauseofaction,whichisthe
14 provenfalse.SeeFlammv.Am.AssnofUniv.Women,201F.3d144,
15 15051(2dCir.2000).Adefendantisnotliableforstatementsthat
19 omitted).
2 hyperbole,avigorousepithet...reflect[ing]Palladynesbeliefthat
5 dismissingFriedmansclaim,thedistrictcourtreliedinparticularon
9 theplaintiffsnegotiationswiththecityasblackmail,weremerely
12 concludingthat:
13 Itissimplyimpossibletobelievethatareaderwhoreached
14 the word blackmail in either article would not have
15 understood exactly what was meant: it was [plaintiffs]
16 public and wholly legal negotiating proposals that were
17 being criticized. No reader could have thought that either
18 the speakers at the meetings or the newspaper articles
19 reporting their words were charging [plaintiff] with the
20 commissionofacriminaloffense.Onthecontrary,eventhe
21 most careless reader must have perceived that the word
22 wasnomorethanrhetoricalhyperbole,avigorousepithet
23 used by those who considered [plaintiffs] negotiating
24 positionextremelyunreasonable.
26 No.161335cv
2 citetoseveralNewYorkstatecasesinwhichcourtshaveheldthat,
4 rhetoricalhyperbolethatisnotactionable.
6 statedinapublicdebatethattheplaintiffslawsuitagainsthimand
7 other officials, alleging that they had conspired to take away the
11 Dept 2012). After the plaintiff sued the mayor for defamation, the
12 courtdeterminedthatbasedonthecontextinwhichthechallenged
15 listener would have understood that the mayor was stating his
16 opinion about the merits of plaintiffs lawsuit and not accusing the
17 plaintiff of criminal conduct. Id. at 960. The court held that the
18 statement was not actionable because the mayor had explained the
27 No.161335cv
1 factualbasisforhisbeliefthattheplaintiffwasattemptingtoextort
4 notimplytheexistenceofundisclosedfactsthatweredetrimentalto
5 theplaintiffscharacter.Id.at96061;seealsoSabharwal&Finkel,LLC
6 v. Sorrell, 117 A.D.3d 437, 43738 (N.Y. App. Div. 1st Dept 2014)
10 the lawsuit and the motivation of [the] attorneys, rather than [a]
13 May27,2004)(defendantsquoteinarticlecharacterizingplaintiffs
17 N.Y. v. Capital Newspaper Div. of Hearst Corp., 213 A.D.2d 940, 942
28 No.161335cv
2 extortiontodescribelawsuitfiledagainsthimnotactionable).
3 Here,theBloombergarticlediscussedFriedmanslawsuitand
7 company....Heworkedwithusforjusttwomonthsbeforebeing
8 dismissedforgrossmisconduct.Appxat38.Asinthecasescited
11 contextofaheateddispute.SeeMelius,94A.D.3dat95960.The
12 articledescribedFriedmansallegationsthatPalladynewasnothing
16 toacolleagueaboutthefirmscriminalexposure.Appxat3738.
17 However, unlike the cases cited by the district court and the
2 rhetoricalhyperboledescribingPalladynesbeliefthatthelawsuit
3 was frivolous. See Flamm, 201 F.3d at 15051. Palladyne did not
4 simplystatethatFriedmanslawsuitwasanattempttoextortmoney
6 repeatedlytriedtoextortmoneyfromthem.Thisstatementcanbe
11 provenfalse.Id.
13 readinthecontextofPalladynesentirequote.Afterassertingthat
15 PalladynewentontostatethatFriedmanwasdismissedforgross
16 misconduct.Appxat38.Palladynedidnotexplainwhetherthere
2 thatFriedmanwasfiredforengaginginthiscriminalconduct.
3 Further,evenifareasonablereadercouldinterprettheword
4 extortashyperboliclanguagedescribingFriedmansconduct,and
9 supporthisopinionandaredetrimentaltothepersonaboutwhom
10 heisspeaking.Steinhilberv.Alphonse,68N.Y.2d283,290(1986);see
11 also Hotchner v. CastilloPuche, 551 F.2d 910, 913 (2d Cir. 1977)
12 (Liabilityforlibelmayattach...whenanegativecharacterization
14 author is privy to facts about the person that are unknown to the
15 generalreader.).Here,Palladynesstatementcanbereadtoimply
18 indicatedthatFriedmanhadtakenprioractionsthatwereattempts
31 No.161335cv
1 toextortmoneyfromthecompany,butPalladynedidnotexplain
2 what those prior acts were or provide any details that would shed
3 lightonitsuseofthewordextort,whetheroutsideofthecontext
4 ofFriedmanslawsuitorasareferencetoit.SeeMelius,94A.D.3dat
5 961.
6 TheBloombergDefendantsarguethatthearticlemakesclear
8 concerns about the firms criminal exposure and then filed this
9 lawsuitinanattempttoextractmoneyfromPalladyne.Wedisagree
10 thatitisclear.AlthoughthearticlestatedthatFriedmanwasfired
13 PalladynesstatementthatFriedmanhadrepeatedlyattemptedto
14 extortthecompany,thatthereweremultipleactsthatFriedmanhad
15 takenwhichrosetothelevelofextortion.
17 Friedmanspriorconduct,Palladynesstatementcanstillbereadas
2 UnderNewYorklaw,suchastatementisactionable.SeeHotchner,
3 551F.2dat913.Wethereforereversethedistrictcourtsdismissal
4 ofFriedmansdefamationclaimbasedonthisstatement.
5 Onremand,itwillbeuptothejurytodecideboth(1)whether
9 Defamation2:4.16(Oncethejudgehasdeterminedthatthewords
10 complainedofarecapableofadefamatorymeaning,thatis,arenot
12 whethertheyweresounderstoodandwhethertheyinfactdefamed
13 theplaintiff.)(footnotesomitted)).Weexpressnoviewastohow
14 thoseissuesshouldbedecidedbythefactfinder.
15 CONCLUSION
18 Defendants,andAFFIRMinpartandREVERSEinpartthedismissal
33 No.161335cv
1 ofhisclaimsagainsttheBloombergDefendants.WeREMANDthe
2 casetothedistrictcourtforfurtherproceedingsconsistentwiththis
3 opinion.