Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Reason
Reason
Politics
Eugene Volokh

Trump Media Libel Lawsuit Against Washington Post Dismissed, but Might Be Refiled With More Detailed "Actual Malice" Allegations

From today's opinion in Trump Media & Technology Group Corp. v. WP Co. LLC, decided by Judge Tom Barber (M.D. Fla.):

This lawsuit for defamation by Plaintiff Trump Media & Technology Group Corp. ("TMTG") against Defendant WP Company LLC (the "Post") arises from an article titled "Trust linked to porn-friendly bank could gain a stake in Trump's Truth Social," published by the Post on May 13, 2023, and circulated on Twitter (now known as "X") by Post personnel. The article described events related to a contemplated merger between TMTG and Digital World Acquisition Corp. ("DWAC") as part of taking TMTG's "Truth Social" business public.

The article noted there had been a delay in obtaining SEC approval for the merger, which supporters of former President Donald Trump and TMTG attributed to political bias. The article offered an alternative explanation: concerns over a loan or loans obtained by TMTG, the identities of the lenders, and whether those loans had been properly disclosed by DWAC in its public filings. The article cited various sources for its story, including "internal documents a company whistleblower has shared with federal investigators and [the Post]" and statements expressly attributed to the whistleblower, former TMTG officer Will Wilkerson.

The article related that in late 2021, with the proposed merger "frozen" and TMTG concerned about paying its bills, DWAC president Patrick Orlando announced he had arranged for $8 million in loans from an entity known as "ES Family Trust." According to the article, the loans were part of a deal in which TMTG would receive the loans, and in exchange, ES Family Trust would acquire an equity interest in the public entity to be formed from the merger of TMTG and DWAC. This loan-for-stock deal was reflected, according to the article, in a convertible promissory note, although the article acknowledged that the only copy of the note the Post had been able to locate was unsigned. The article also reported that some of the funds were wired by another entity, Paxum Bank, which had ties to ES Family Trust and to the adult film industry. Also, according to the article, TMTG paid a finder's fee of $240,000 in connection with the loans to Entoro Securities, a Texas entity of which Orlando was a managing director.

The article stated that neither the loan-for-stock deal nor the finder's fee had been disclosed to shareholders of DWAC or the SEC, and that New York University law professor Michael Ohlrogge opined that these matters could affect the value of the shares and should have been disclosed. The article also noted that the British journal The Guardian had earlier reported that federal prosecutors in New York were investigating whether TMTG violated money laundering statutes in connection with these loans, and that TMTG Chief Executive Officer Devin Nunes filed a lawsuit against Wilkerson and others (including The Guardian) asserting that the Guardian story was "fabricated."

TMTG sued for libel, but the court concluded that it hadn't adequately alleged knowing or reckless falsehood (so-called "actual malice"), though it concluded that the matter was close as to some allegations, and allowed plaintiff to file an amended complaint that could provide such allegations (assuming there was a plausible basis for them).

The court also discussed the Post's "neutral reporting privilege" argument, and partly accepted it but partly rejected it:

As an alternative ground for dismissal, the Post asserts the entire article is protected by the "neutral reporting privilege," a qualified privilege under Florida law for "disinterested" and "neutral" reporting on "matters of public concern." The few Florida cases on this issue contain seemingly very broad statements of this privilege. However, this broad language cannot be taken out of the factual context in which the courts have applied the privilege. The privilege has been applied in situations in which a media defendant has republished a defamatory statement made by another person, where the making of the statement itself was a newsworthy event.

The Post tries to bring itself within these cases, relying principally on Rendon v. Bloomberg, L.P. (S.D. Fla 2019). In Rendon, the defendant published an article relating the statements of a hacker who claimed he was hired by a political consultant to engage in cyber-attacks against political opponents. The consultant sued the publisher of the article. The district court dismissed the complaint, noting that the article consistently made it clear that the matters reported did not reflect the reporters' opinions but those of their source, the hacker. The court also noted that the article reported that the plaintiff denied the hacker's allegations, and that it reported that emails the hacker had provided were "fake." …

The Court agrees with TMTG that the neutral reporting privilege does not apply, at least not to the entire article or all the challenged statements. The article does not simply republish statements made by Wilkerson or relate his point of view. It attributes only certain specific statements to Wilkerson, and the challenged statements are not among them. Instead, the challenged statements are presented as the Post's own conclusions or inferences based on its review of admittedly "inconclusive" documents, the statements expressly attributed to Wilkerson, and whatever other evidence the Post may have gathered from Wilkerson or other sources. TMTG is correct that the article appears to "take sides" to that extent.

The exception to the foregoing would appear to be the Investigation Statement, which recites The Guardian's report of a money laundering investigation. The Guardian has been described as a "well respected, left-of-center, nationally circulated newspaper generally regarded as being among the top three or four newspapers in Great Britain." The Guardian's report and Nunes's denial in the lawsuit he filed, particularly in the context of public discussion of the reason for the SEC's delay in approving the merger, are independently newsworthy and touch on an area of public interest. In the Investigation Statement, the Post merely recited the opposing positions of both sides on this narrow issue. This aspect of the article appears to fit squarely within the type of reporting to which the neutral reporting privilege has been applied.

The parties agree that the neutral reporting privilege is a qualified privilege. Even if the privilege would otherwise apply, it may be defeated where the defendant abused the privilege by acting with express malice, that is, with the primary motive of injuring the plaintiff. TMTG argues that the Post abused any privilege because it published the statements "maliciously and excessively" and that it intended to injure TMTG. Under the Twombly/Iqbal standard, TMTG must plead facts to plausibly suggest the Post acted with a primary intent or motive to injure TMTG in order to negate the privilege, but it does not do so in its current complaint….

The court concluded:

Defamation is a highly technical and often confusing area of the law, and case law imposes unusual obstacles on a public figure plaintiff suing a media defendant. TMTG, however, may file an amended complaint to attempt to surmount those obstacles. In any amended complaint, as to each challenged statement, TMTG should clearly allege what aspect of the statement is false, what documents or other information demonstrate the specific aspect was false, and how the Post was aware of the documents or information.

The post Trump Media Libel Lawsuit Against Washington Post Dismissed, but Might Be Refiled With More Detailed "Actual Malice" Allegations appeared first on Reason.com.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.