Lawyer salary

Court dismisses attorney and client’s $120 million libel lawsuit against legal journal

From Beres vs. Daily Journal Corp.decided Monday by Judge William Dimitrouleas (SD Fla.):

Plaintiff Christopher T. Beres, a Florida attorney, and Plaintiff Andrew Delaney, one of Beres’ clients, bring a count of defamation against defendant Daily Journal Corporation based on the publication by the Daily Journal of a two-part article….

The Amended Complaint alleges that on April 28 and 29, 2020, the Daily Journal published a two-part article titled Does Covid-19 threaten your trade secrets? Yes. (First part)and Does Covid-19 threaten your trade secrets? Yes. (Part II). The plaintiffs allege that these articles defamed them. In addition to alleging that the headlines themselves are defamatory because “the articles ‘conclude’ that [P]the plaintiffs were guilty six days after the case was filed: “Yes, it is true”. The plaintiffs allege that the following statements in Part I are false and defamatory:

Any time an employee is terminated, there is the potential for trade secrets to be misappropriated or lost. Consider the following potential scenarios: …

  • A terminated employee cannot find a new job and decides to use the former employer’s trade secrets as a source of income. See, for example, HC2 Inc. c. DelaneyCase No. 1:20-cv-03178 (United States District Court for the Southern District of New York) (complaint alleges that a former employee of a legal staffing firm attempted to extort clients for $450,000 by threatening to release confidential information after they suspended a document review project due to the COVID-19 pandemic).

Plaintiffs allege that “[e]part of the first sentence” of the bulleted paragraph is false and defamatory because Delaney was not “a terminated employee [who] can’t find a new job”, Delaney hasn’t “decide to use the former employer’s trade secrets as a source of income”, and because there were no “trade secrets” in the SDNY action. Plaintiffs also allege that “the ‘threat to disclose confidential information’ and ‘extortion’ [t]The Daily Journal clearly references Beres’ April 7, 2020, job application letter to Toyota…, thus attributing these crimes to him. Plaintiffs seek twenty million dollars ($20,000,000.00) in compensatory damages and one hundred million dollars ($100,000,000.00) in punitive damages….

No, the district court said:

[1.] Beres, the attorney, loses “because nothing in the article – including the statement, the quote and the parenthesis – is ‘by and about’ Beres.”

[2.] As for Delaney, “the only part of the article concerning Delaney, a quote in parentheses and which accompanies it, contains no material falsehood”. “The introductory phrase ‘the complaint alleges’ makes it clear that the parenthesis merely describes the allegations in the complaint, not that it guarantees their truthfulness.” And the parenthesis describes these allegations with great precision: “A comparison of the allegations in the SDNY complaint with the parenthesis reveals that the parenthesis is not materially and materially untrue.

[3.] Nor can Delaney prevail on the theory that the sentences preceding the quote and the parenthesis defame him: this document “only presents a hypothetical ‘terminated employee’ in a ‘potential scenario'”, and the “‘see , for example, indicates that many sources indirectly support the proposition, “not that the case is a literal example of what preceded it.” (The court cites as authority the Bluebook – probably the most widely used legal citation manual – and a source relates to it; that probably makes sense, I think, given that the article is aimed at an audience of lawyers.)

Seems fair to me.