eShares, Inc. v. Talton, III
1:22-cv-10987
S.D.N.Y.Jun 23, 2025Background
- Jerry O. Talton, III, a former employee, sued eShares, Inc. (d/b/a Carta, Inc.) and another defendant, alleging, among other claims, defamation and retaliation related to his termination.
- Carta and Ward published a Medium post about Talton, allegedly stating that Talton was unemployable due to racist and sexist behavior.
- Carta moved to compel production of Talton’s personal communications containing racist and sexist language and discrimination complaints against Carta.
- Talton argued that the discovery requests were overbroad and not sufficiently tied to the defamation or retaliation issues at hand.
- The court previously ruled in part on related discovery disputes and reconsideration motions, and the instant order addresses the outstanding issues on discovery scope.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Discovery of Talton’s racist/sexist communications | Overbroad, not directly relevant to employability claims | Necessary for substantial truth defense in defamation | Denied as overbroad; not required |
| Standard for substantial truth in defamation | Only conduct known to employer at firing is relevant | Any racist/sexist behavior is relevant to truth | Only employer-known conduct is relevant |
| Discovery of discrimination complaints against Carta | Irrelevant beyond limited window; race-based not alleged | Relevant to pretext for retaliation claim, all categories | Granted only as to sex/sexual orientation-based from 9/17/18 to 1/20/24 |
| Discrimination complaint scope | Race-based irrelevant to this claim | All bases, including race, should be discoverable | Denied as to race-based, allowed as to sex/sexual orientation |
Key Cases Cited
- Andrews v. At World Props., LLC, 236 N.E.3d 540 (Ill. App. 1st 2023) (Defines the "gist" or "sting" standard for assessing substantial truth in defamation)
- Vachet v. Cent. Newspapers, Inc., 816 F.2d 313 (7th Cir. 1987) (Minor inaccuracies do not defeat a substantial truth defense in defamation)
- Guccione v. Hustler Mag., Inc., 800 F.2d 298 (2d Cir. 1986) (Discusses substantial truth in defamation context)
- Desnick v. Am. Broad. Companies, Inc., 44 F.3d 1345 (7th Cir. 1995) (False accusations closely related to true facts are not defamatory)