253 F. Supp. 3d 333
D. Mass.2017Background
- Plaintiffs: Rev. Fr. Emmanuel Lemelson (hedge‑fund manager and priest) and his firm Lemelson Capital Management (LMC) sued Bloomberg, reporter Matthew Robinson, and editor Jesse Westbrook for defamation, commercial disparagement, negligence, and intentional interference after Bloomberg published an article and televised segment reporting an SEC probe into Lemelson’s trading.
- Article stated the SEC was examining whether Lemelson made false statements about companies he was shorting, citing unnamed sources; plaintiffs allege the story mischaracterized their research and implied dishonesty for profit.
- Lemelson told Robinson the day before publication that neither he nor his firm was the target of any SEC investigation; Robinson responded he would report Lemelson was being investigated anyway. Plaintiffs claim Bloomberg did not verify with the SEC and omitted Lemelson’s denial.
- Bloomberg added Lemelson’s press‑release denial to an update the same day and Robinson discussed the story on Bloomberg TV; plaintiffs requested retraction and sought $100 million plus injunctive relief.
- The complaint alleges lost fundraising, vendors declining work, and reputational harm in Lemelson’s religious community.
- District court granted defendants’ motion to dismiss all counts for failure to plausibly plead falsity coupled with the requisite fault (actual malice) and insufficiency of other tort elements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether statements that someone is the subject of an SEC investigation are defamatory | Bloomberg’s article falsely implied Lemelson was dishonest and under investigation for stock manipulation | Reporting an investigation (or arrest analog) is not defamatory as a matter of law | The court held the allegation of an SEC probe could be defamatory in context (distinguishing Foley) but dismissal turned on fault, not categorical non‑defamatory status |
| Applicable fault standard (public figure/actual malice) | Plaintiffs attempted to disavow public‑figure status; argued private or limited public figures | Defendants: plaintiffs are public figures given media exposure and market‑moving commentary; actual malice required | Court found plaintiffs were public figures (or at least not private) and required pleading of actual malice |
| Whether Complaint plausibly pleads actual malice (knowledge or reckless disregard) | Plaintiffs point to: Robinson’s comment he would write the investigation anyway and the absence of SEC inquiry | Defendants: lack of SEC confirmation is expected; plaintiffs admitted SEC was investigating Ligand and plaintiffs’ public commentary invited scrutiny; a denial is insufficient to show reckless disregard | Court held plaintiffs failed to plead facts giving a plausible inference of actual malice; denial alone insufficient; dismissal of defamation and disparagement claims granted |
| Viability of related tort claims (negligence; intentional interference) | Negligence and interference claims rest on published falsehoods and resulting harm | Defendants: these claims are constitutional attempts to evade actual malice standard and lack essential elements (specific relationships, improper means/motive) | Court dismissed negligence as duplicative of defamation and dismissed intentional interference for failure to plead specifics |
Key Cases Cited
- Shay v. Walters, 702 F.3d 76 (1st Cir. 2012) (defamation elements under Massachusetts law)
- Ravnikar v. Bogojavlensky, 438 Mass. 627 (Mass. 2003) (fault standards for defamation claims)
- Foley v. Lowell Sun Pub. Co., 404 Mass. 9 (Mass. 1989) (reporting an arrest not defamatory as a matter of law when read in context)
- Myers v. Boston Magazine Co., 380 Mass. 336 (Mass. 1980) (contextual interpretation of alleged defamatory statements)
- Information Control Corp. v. Genesis One Computer Corp., 611 F.2d 781 (9th Cir. 1979) (consider all words in context for defamatory meaning)
- Astra USA, Inc. v. Bildman, 455 Mass. 116 (Mass. 2009) (actual malice standard discussion)
- New York Times Co. v. Sullivan, 376 U.S. 254 (U.S. 1964) (actual malice standard for public‑figure defamation)
- Harte‑Hanks Commc’ns, Inc. v. Connaughton, 491 U.S. 657 (U.S. 1989) (reckless disregard requires more than failure to investigate; denials alone insufficient)
- Brown v. Hearst Corp., 54 F.3d 21 (1st Cir. 1995) (state common‑law claims cannot evade First Amendment actual malice requirement)
- HipSaver, Inc. v. Kiel, 464 Mass. 517 (Mass. 2013) (elements and fault for commercial disparagement)
- Blackstone v. Cashman, 448 Mass. 255 (Mass. 2007) (elements for intentional interference with advantageous relations)
- Weber v. Community Teamwork, Inc., 434 Mass. 761 (Mass. 2001) (intentional interference framework)