Owens v. Lead Stories, LLC
S20C-10-016 CAK
Del. Super. Ct.Jul 20, 2021Background
- Plaintiffs Candace Owens (public figure) and Candace Owens, LLC (Del. LLC) allege Lead Stories and Gannett (USA TODAY) published third‑party fact‑checks that caused Facebook to place "false information" labels on Owens’ posts and to suspend her ability to run ads.
- Lead Stories (CO LLC) had a contract with Facebook (DE corp.) to supply fact‑checking stories that Facebook could display to users, including Delaware users.
- Plaintiffs filed suit asserting defamation (against Lead Stories), intentional interference with contractual relations, tortious interference with prospective business relations, and common‑law unfair competition (against both defendants).
- Procedural posture: Lead Stories moved to dismiss for lack of personal jurisdiction; both defendants moved to dismiss for failure to state a claim under Del. Super. Ct. Civ. R. 12(b)(2) and 12(b)(6).
- Court held there is no general jurisdiction over Lead Stories, but exercised specific jurisdiction under 10 Del. C. §3104(c)(3) (tortious injury in Delaware caused by acts/omissions in Delaware via the Facebook channel); however, the court dismissed all substantive tort claims for failure to state a claim, principally on First Amendment/defamation grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over Lead Stories | Lead Stories’ contract with Facebook and resulting labels/harms in DE suffice for jurisdiction | No general presence in DE; specific jurisdiction requires stricter causation; contacts are Colorado‑based | No general jurisdiction; specific jurisdiction exists under §3104(c)(3) because Lead Stories knew its Facebook fact‑checks would be used in DE and could foreseeably cause tortious injury; exercise consistent with due process (Zippo/Ford analysis) |
| Defamation (Lead Stories) | Lead Stories published false statements (including labels "Hoax Alert"/"False") with actual malice | Statements are true/substantially true or non‑actionable opinion/hyperbole; no actual malice pleaded | Dismissed: plaintiffs failed reasonable‑conceivability showing of falsity and actual malice; labels regarded as rhetorical/hyperbolic protected speech |
| Intentional interference with contractual relations | Defendants’ fact‑checks caused Facebook to suspend Plaintiffs’ ad rights, improperly inducing breach/termination | Facebook relationship is at‑will; statements protected by First Amendment; no wrongful means | Dismissed: no improper interference pleaded because the alleged harms stem from protected speech; First Amendment bars liability absent pleaded falsity/actual malice |
| Tortious interference w/ prospective business relations & unfair competition | Defendants diverted customers and advertising revenue, destroying prospective opportunities (ads, book sales) | Conduct is protected speech; no improper means alleged | Dismissed: plaintiffs did not plead interference was improper; First Amendment protections apply to claims whose gravamen is alleged injurious falsehood |
Key Cases Cited
- International Shoe Co. v. Washington, 326 U.S. 310 (establishing minimum‑contacts due process framework)
- Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997) (sliding‑scale test for internet contacts and interactivity)
- Ford Motor Co. v. Montana Eighth Judicial Dist. Court, 141 S. Ct. 1017 (expanding specific‑jurisdiction inquiry to claims that "relate to" forum contacts)
- Bristol‑Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (limits on specific jurisdiction where forum lacks connection to nonresident plaintiffs’ claims)
- New York Times Co. v. Sullivan, 376 U.S. 254 (constitutional actual‑malice standard for public‑figure defamation)
- N.A.A.C.P. v. Claiborne Hardware Co., 458 U.S. 886 (First Amendment bars liability for nonviolent, protected activity causing economic harm)
- Milkovich v. Lorain Journal Co., 497 U.S. 1 (distinguishing protected opinion from actionable false factual assertions)
- Greenbelt Cooperative Publishing Ass'n v. Bresler, 398 U.S. 6 (rhetorical hyperbole and loose figurative language not actionable defamation)