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Court Dismisses Defamation Lawsuit Over Steele Dossier

Published: August 22, 2018
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You may have noticed that an awful lot of news broke yesterday concerning a wide variety of legal cases all touching on the President. Most of the coverage, of course, went to the two big cases: the guilty verdict against former campaign chair Paul Manafort and the guilty plea by former Trump personal lawyer Michael Cohen. There were some other cases with breaking news as well, including a judge in New York rejecting Trump's attempt to dump a lawsuit filed against his private security team for apparently beating up some protesters. Also, in a (frankly, very weak) defamation lawsuit filed by former Apprentice contestant Summer Zervos, apparently Trump has refused to submit to discovery requests, leading Zervos' legal team to file a motion to compel him to respond.

Most of those cases don't cover the kinds of things we usually talk about (the defamation case being the exception -- but at this stage, there really isn't that much worth commenting on). However, there was yet another case loosely involving the President that is something we'd talk about and which concluded late Monday (though, the news broke on Tuesday as well). And that involved a defamation case filed by three Russians against Christopher Steele, author of the so-called "Steele Dossier." Back in October of last year, three Russians, Mikhail Fridman, German Khan and Peter Aven, who are all involved with Alfa-Bank, sued Fusion GPS and its founder Glenn Simpson in federal court for defamation. That case is still waiting for a ruling on both a Motion to Dismiss and an Anti-SLAPP Motion.

However, while all of that was going on, the same three Russians filed a very similar case in the DC Superior Court (the equivalent of a state court, rather than federal court). That case was filed in April of this year, and while the federal court is still dilly dallying around on it, the state court dismissed the case on anti-SLAPP grounds (which rendered a related Motion to Dismiss moot.).

As we've discussed in the past, unfortunately, DC federal courts have decided that DC's (decent) anti-SLAPP statute does not apply in federal court (which suggests the anti-SLAPP motion in the federal case may fail, even if the Motion to Dismiss may succeed), but it has always applied in DC's local courts. And here, the judge, Anthony Epstein, applied it in a pretty straightforward manner to decide that the Russians have no case. Like most anti-SLAPP laws, which are designed to stop bogus defamation lawsuits quickly, DC's shifts the burden to the plaintiffs early on, requiring them to establish a likelihood of success in their claims in order for the case to move forward.

For that to happen, the Russians needed to show evidence that Steele's statements about them in the dossier were false, damaging and done with actual malice (which means Steele would have had to known they were false, or done so with reckless disregard for the truth). This is a pretty high bar. Rather than just do so, the Russians tried a different strategy, which tried to attack the applicability of the anti-SLAPP law in the first place:

Plaintiffs make four arguments: (a) Defendants cannot seek protection under the Anti- SLAPP Act because they are not entitled to any protections under the First Amendment; (b) Defendants do not make a prima facie case under the Act that Plaintiffs' claims arise from an act in furtherance of the right of advocacy on issues of public interest; (c) Plaintiffs have shown they are likely to succeed on the merits; and (d) Plaintiffs are at least entitled to targeted discovery to enable them to defeat the motion.

The court buys exactly zero of these four arguments. Claiming that Steele doesn't get First Amendment protections because he's not a citizen is a clear non-starter. That's not how the First Amendment works:

The Act does not explicitly limit its protection to activity that is also protected by the First Amendment, and indeed the Act's legislative history indicates that the Council intended the Act to apply more broadly. In addition, by its terms, the Act does not limit its protections to U.S. citizens or entities. Although Plaintiffs argue otherwise... the plain language of DC. Code § 16- 5502(a) indicates that any party can file a special motion to dismiss. Reading an implied limitation to District residents into the Act would be contrary to the purposes of the Act and the First Amendment to provide broad protection for speech on issues of public interest (as the Court discusses in the next paragraph). In addition, Plaintiffs have not cited, and the Court is not aware of, any case holding that the defenses that a defendant in a defamation case may assert under D.C. law or the First Amendment depend on whether the defendant is a U. S. citizen or entity.

Plaintiffs contend that even if Defendants' speech involves issues of public interest in the United States, it is unprotected by the First Amendment because Mr. Steele is not a US. citizen or resident and Orbis is not a U.S. company. However, advocacy on issues of public interest has the capacity to inform public debate, and thereby furthers the purposes of the First Amendment, regardless of the citizenship or residency of the speaker. The First Amendment protects our "profound national commitment to the principle that debate on public issues should be uninhibited, robust, and wide-open." New York Times v. Sullivan, 376 US. at 270. Constitutional standards for defamation cases have been developed to safeguard the "important societal interest in vigorous debate over matters of public concern protected by the First Amendment." See Mann, 150 A.3d at 1241. Moreover, the First Amendment "guarantees are not for the benefit of the press so much as for the benefit of all of us." Time, Inc. v. Hill, 385 US. 374. 389 (1967). "It is now well established that the Constitution protects the right to receive information and ideas." Kleinclienst v. Mandel, 408 US. 753, 762-63 (1972) (citations and quotations omitted). As a result, the interest of US. citizens in receiving information that the First Amendment protects does not depend on whether the speaker is a US. citizen or resident.

The court then goes on to point out that even if the above wasn't true, it still wouldn't matter because Steele clearly had close ties to the US. He was hired by a US company to produce the document, and was in the US when he shared the document with the media, and he regularly did other work in and around Washington DC.

As for the second attack, that Steele failed to show that this was an issue of public interest, the court also isn't buying it, because it's obvious nonsense (the "CIR" referred to here stands for "Company Intelligence Reports," a bunch of which made up what's now called the Steele Dossier, and CIR 112 is the one that discusses the Russian plaintiffs and Alfa-Bank):

The Steele Dossier as a whole plainly concerns an "issue of public interest" within the meaning of § 16-5501(3) because it relates to possible Russian interference with the 2016 presidential election. The Steele Dossier generated so much attention and interest in the United States precisely because its contents relate to active public debates here. See Waldbaum, 627 F.2d at 1296-97 (courts "may not question the legitimacy of the public's concern" to avoid becoming "censors of what information is relevant to self-government") (quoting Supreme Court cases). Plaintiffs themselves "readily agree that the 2016 US. Presidential election was of public interest." ... A key part of Plaintiffs' case is that CIR 112 implicitly alleged that Plaintiffs aided "the Kremlin's interference in the 2016 US. Presidential election," and Plaintiffs cannot contend both that Defendants in CIR 112 accused them of cooperation with Russian interference in the election and that these statements did not involve an issue of public interest in the United States. Plaintiffs own contentions therefore establish at least a prima facie case that Defendants' allegedly defamatory statements involve a matter of public interest.

Moreover, CIR 112 expressly discusses Russian foreign policy toward the United States and President Putin's advisors on Russia-U.S. policy, and these too are issues of public interest within the meaning of Contrary to their argument that Defendants defamed them by accusing them of complicity in Russian interference with the 2016 US. presidential election, Plaintiffs argue that CIR 112 does not relate to an issue of public interest because it does not mention any presidential candidate by name or explicitly address the 2016 presidential election.... However, involvement of Russian international businessmen in Russian foreign policy, specifically including Russian foreign policy toward the United States, involves an issue of public interest in the United States, regardless of whether it relates to a particular election.

Finally, we get to the actual attempt to get past the anti-SLAPP and present evidence of a likelihood of success on the merits. That did not go well.

Plaintiffs have not carried their burden because they do not offer evidence that a reasonable jury could find to be clear and convincing proof that Defendants knew that facts stated in, or reasonably implied by, CIR 112 were false or that they published CIR 112 with reckless disregard of the falsity of these stated or implied facts.

In other words: no actual malice, no defamation, go home. While the Russians tried to come up with a formulation that showed actual malice, the court, correctly, rejects it. First, they claim that some of Steele's conjecture had no support, but the court points out that conjecture is protected by the First Amendment and not actionable anyway. Then, they claim that Steele didn't include supporting facts. But, again, that's not enough to show actual malice:

Plaintiffs do not offer any evidence that Defendants knew, or recklessly disregarded substantial information, that no conceivable possibility existed that Plaintiffs were involved in any such Russian interference. The failure to include supporting facts does not support a reasonable inference by clear and convincing evidence that Defendants knew the statements were false or acted in reckless disregard to their falsity: lacking supporting information is different from having opposing information; and although lack of evidence may establish negligence, negligence "is constitutionally insufficient to show the recklessness that is required for a finding of actual malice."

Then, they try to claim that it was "reckless" for Steele to share the Dossier, but that's not what reckless disregard means in the actual malice standard. The court spells out what they failed to show... and even points out other public information calling into question Alfa-Bank's alleged involvement in corruption (this, of course, does not bode well for claims about corruption being defamatory)

Plaintiffs do not offer evidence that Mr. Steele in fact had subjective doubts or recklessly disregarded information about its falsity, or that Defendants had obvious reason to doubt the source described in CIR 112 as a "trusted compatriot" of a "top level Russian government official." See Bank, 387 F. Supp. 2d at 1253-54 (a publisher does not have a duty to corroborate even when a single source of potentially libelous material is a person of questionable credibility); St. Amant, 390 US. at 733 ("Failure to investigate does not in itself establish bad faith"); see Gertz v. Robert Welch, 418 US. 323, 332 (1974) ("mere proof of failure to investigate, without more, cannot establish reckless disregard for the truth"). Moreover, the information in the Steele Dossier about corrupt payments to Russian public officials was consistent with other information in the public domain: "Although Alfa Bank has developed a reputation in the international community as one of the most respected Russian financial institutions, Aven and Fridman have been dogged by allegations of corruption and illegal conduct." OAO Alfa Bank, 387 F. Supp. 2d at 28 (footnote omitted). Mr. Fridman himself acknowledged that the "rules of business" in Russia "are quite different to western standards" and to "be completely clean and transparent is not realistic." Id. at 29.

Also, there's this attempt by the Russians to totally upend basically all of US defamation law, and say that Steele has to prove that what is stated is "true" or else it's actual malice. That's... not how it works.

Plaintiffs argue that Defendants have not demonstrated that the statements are true.... However, the burden is on Plaintiffs to show that the statements were false, not on Defendants to demonstrate their truth.

So, without any evidence to get over the actual malice hump, the court says that the plaintiffs have completely failed to show any likelihood of success, thus triggering the anti-SLAPP law to dump the case.

There is, of course, also the Hail Mary pass at the end of the Plaintiff's efforts, which is to try to force the case into discovery first. Of course, this is explicitly what anti-SLAPP laws are designed to prevent: stopping a bogus defamation case from eating up a ton of the defendants' time and resources in discovery. Indeed, the court notes that this seems like a clear desire to just go on a fishing expedition. After first pointing out that the Russians have presented zero evidence that Steele is somehow holding onto information that will prove actual malice, it notes:

...the Constitution does not entitle plaintiffs in defamation cases to conduct fishing expeditions. The provision of the Act permitting targeted discovery only ifthe plaintiff shows a likelihood that discovery will produce clear and convincing evidence of actual malice is consistent with plaintiffs' constitutional rights, including their right to trial by jury.... It is also consistent with more general direction from the Supreme Court "to expeditiously weed out unmeritorious defamation suits" in order to "preserve First Amendment freedoms."

And thus:

Plaintiffs are correct that the Act was "not enacted to immunize surreptitious for-hire intelligence operatives who defame private persons." ... However, the Act was enacted to protect the right of advocacy on issues of public interest, and it does not exempt advocates if they can be described as "surreptitious for-hire intelligence operatives." Nor does the Act immunize any defamatory statement whether the information was obtained surreptitiously or openly, or for hire or for other reasons. The Act allows defamation suits involving statements about issues of public interest to proceed, provided that the subjects of the alleged defamatory statement offers evidence that they are likely to succeed. Plaintiffs have failed to provide such evidence....

In other words, this was a classic SLAPP suit and has now been tossed out based on DC's anti-SLAPP law, exactly as it should be. And it was dismissed with prejudice as well, so they don't get to file an amended complaint. Of course, they could appeal, but this is a pretty straightforward application of both an anti-SLAPP law and basic defamation law in the US, so it seems unlikely that such an appeal would be successful.

Over in the federal case, this ruling has already been filed with the judge, though again, it is likely that the federal court will not use the anti-SLAPP law, but seems likely to dismiss for basically the same reasons, just on the Motion to Dismiss instead.

Either way it's nice to see an anti-SLAPP law doing the job it's supposed to do in getting questionable defamation cases, that appear to be brought just to silence a speaker, dismissed quickly. It's yet another reminder of why (a) we need a federal anti-SLAPP law and (b) more states should pass their own anti-SLAPP laws as well.

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