903 F.3d 19
1st Cir.2018Background
- Plaintiff Emmanuel Lemelson: Greek Orthodox priest and hedge-fund manager who publicly shorted and wrote about certain stocks (e.g., Ligand).
- Bloomberg published an article and aired an interview reporting the SEC was investigating whether Lemelson published false material to profit from short positions.
- Article attributed the report to “people with knowledge,” noted an SEC spokesman declined to comment, and included Lemelson’s denial after Bloomberg contacted him repeatedly.
- Lemelson sued Bloomberg and reporters for defamation, commercial disparagement, negligence, and interference with prospective economic advantage, alleging the SEC never investigated him and that Bloomberg acted with actual malice.
- The district court found Lemelson was at least a limited-purpose public figure and dismissed for failure to plausibly plead actual malice; Lemelson appealed dismissal of counts I, II, and IV.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff plausibly alleged actual malice for defamation | Lemelson: Bloomberg published false allegation that SEC investigated him and did so knowing or with reckless disregard of falsity | Bloomberg: Article relied on unnamed sources, tried to get SEC comment (spokesman declined), repeatedly sought Lemelson’s comment and published his denial; no basis to infer knowledge of falsity or reckless disregard | Held: Dismissed — plaintiff failed to plead facts making actual malice plausible |
| Whether failure to contact SEC or to include certain factual statements shows reckless disregard | Lemelson: Bloomberg didn’t verify with SEC and omitted Lemelson’s statements about Ligand investigation/whistleblower report | Bloomberg: Reporter attempted to contact SEC spokesman (article so states); SEC policy prevents confirming investigations; contacting plaintiff and printing his denial undercuts malice inference | Held: Dismissed — mere failure to investigate or omissions insufficient; no facts of purposeful avoidance of truth alleged |
| Whether commercial disparagement claim survives without actual malice | Lemelson: separate tort claim | Bloomberg: claim rises/falls with actual malice requirement for public-figure plaintiff | Held: Dismissed — falls with defamation actual-malice conclusion |
| Whether interference with prospective advantage was adequately pled | Lemelson: alleged elements in complaint | Bloomberg: contested factual sufficiency | Held: Waived on appeal — plaintiff provided only perfunctory argument; not preserved |
Key Cases Cited
- N.Y. Times Co. v. Sullivan, 376 U.S. 254 (establishes actual malice standard for public-figure defamation)
- Gertz v. Robert Welch, Inc., 418 U.S. 323 (limited-purpose public-figure doctrine)
- Harte-Hanks Communications, Inc. v. Connaughton, 491 U.S. 657 (actual malice requires proof of knowledge of falsity or reckless disregard; purposeful avoidance of the truth can show malice)
- St. Amant v. Thompson, 390 U.S. 727 (publisher must have entertained serious doubts about truth to show malice)
- Bose Corp. v. Consumers Union of U.S., Inc., 466 U.S. 485 (courts infer subjective state of mind from objective facts)
- Levesque v. Doocy, 560 F.3d 82 (First Circuit—actual malice is wholly subjective)
- Schatz v. Republican State Leadership Comm., 669 F.3d 50 (12(b)(6) pleading standard in actual-malice context)
- Howard v. Antilla, 294 F.3d 244 (failure to investigate—even extreme departures—insufficient for actual malice)