590 F.Supp.3d 680
S.D.N.Y.2022Background
- Plaintiff Harvey J. Kesner, a securities lawyer, sued blogger/journalist Teri Buhl for libel based on three publications (Oct. 31, 2018 article; Mar. 27, 2019 tweet; June 7, 2019 article) that suggested he participated in Honig-related pump‑and‑dump schemes and other unlawful conduct.
- The SEC filed an action against Barry Honig and associates; its First Amended Complaint referred to "Issuer's Counsel" and an "Issuer's Counsel Partner," which the parties agree described Kesner and his firm.
- Buhl relied on multiple confidential and non‑confidential sources, documents, emails (including emails between Kesner and a broker‑dealer), and the SEC FAC in reporting; Kesner disputed facts but produced little or no discovery and filed a deficient Local Rule 56.1 response citing mainly his complaint.
- The Southern District of New York previously dismissed most claims; only the three publications alleging criminal conduct survived to the summary judgment stage. Buhl moved for summary judgment; Kesner moved to dismiss Buhl's counterclaim seeking fees under N.Y. Civ. Rights Law § 70‑a.
- The Court granted summary judgment for Buhl, concluding Kesner failed to present clear and convincing evidence of actual malice; the Court also dismissed Buhl's § 70‑a counterclaim because that statutory dismissal/fees procedure conflicts with Federal Rules in a diversity action.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Buhl published the statements with "actual malice" (required under NY anti‑SLAPP) | Kesner argued alleged inconsistencies (e.g., Fisher statement), emails, failure to investigate, and his clean record evidence Buhl entertained serious doubts about truthfulness | Buhl argued her reporting relied on multiple sources, documents, emails, and the SEC FAC; she had no subjective doubts and conducted reasonable investigation | Held for Buhl: Kesner produced no admissible evidence from discovery to allow a jury to find actual malice by clear and convincing evidence; summary judgment granted |
| Whether N.Y. Civ. Rights Law § 70‑a (fee/dismissal remedy) applies in federal diversity cases | Kesner argued § 70‑a cannot be applied because its "substantial basis" standard conflicts with FRCP 12/56 | Buhl argued § 70‑a need not import CPLR § 3211(g) rigidly and can be applied | Held for Kesner: § 70‑a's pleading/dismissal standard conflicts with the Federal Rules under Erie as interpreted in La Liberte v. Reid; the counterclaim for § 70‑a relief dismissed |
Key Cases Cited
- Celle v. Filipino Rep. Enters. Inc., 209 F.3d 163 (2d Cir. 2000) (standards for actual malice and evidence to infer recklessness)
- Harte‑Hanks Commc'ns, Inc. v. Connaughton, 491 U.S. 657 (1989) (intent to avoid the truth as evidence of actual malice)
- Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974) (limitations on negligence standard and the need for actual malice for public‑interest communications)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary judgment standard and proof required for defamation matters)
- La Liberte v. Reid, 966 F.3d 79 (2d Cir. 2020) (California anti‑SLAPP probability standard conflicts with Federal Rules; applied to Erie analysis)
- Dongguk Univ. v. Yale Univ., 734 F.3d 113 (2d Cir. 2013) (actual malice requires evidence of subjective doubts or high awareness of probable falsity)
- Biro v. Conde Nast, 807 F.3d 541 (2d Cir. 2015) (actual malice is difficult to prove; proof rests on objective facts about defendant's conduct)
- Masson v. New Yorker Magazine, Inc., 501 U.S. 496 (1991) (clarifying scope of actual malice and falsity inquiries)