2019 COA 115
Colo. Ct. App.2019Background
- SG Interests I and VII (SGI) and Gunnison Energy (GEC) entered a Memorandum of Understanding (MOU) to avoid competing on four BLM oil and gas leases; SGI won the bids and assigned 50% to GEC without disclosing the MOU to the BLM.
- A relator filed an FCA qui tam action and DOJ later sued for Sherman Act violations; DOJ negotiated settlements requiring payments and compliance terms; a first settlement was rejected by the federal court as nuisance-value, a second was approved in 2013.
- Numerous press reports described the settlements as fines or penalties for collusion; SGI did not sue those commentators.
- In 2016, after BLM canceled some SGI leases and a newspaper ran an article, defendant Kolbenschlag posted an online comment saying SGI had been "actually fined for colluding (with GEC) to rig bid prices," linking to a DOJ press release.
- SGI sued Kolbenschlag for libel; the district court converted motions to summary judgment, denied SGI's request to depose Kolbenschlag under C.R.C.P. 56(f), and granted summary judgment for Kolbenschlag, finding the comment substantially true and immaterial.
- The Court of Appeals affirmed summary judgment, denied SGI's discovery claim, and remanded for determination of appellate attorney fees against SGI and counsel.
Issues and Key Cases Cited
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kolbenschlag's online comment was defamatory because it said SGI was "actually fined for colluding" | SGI: The statement was false and materially misleading because the case settled, no trial or admission of guilt occurred, and settlement reflected nuisance-value/business decision | Kolbenschlag: The gist/sting of the comment is substantially true given the DOJ settlements, findings, and publicity describing payments and restrictions as penalties for anticompetitive bidding | Court: Comment was substantially true or any inaccuracy immaterial; summary judgment for Kolbenschlag affirmed |
| Whether SGI could obtain Kolbenschlag's deposition under C.R.C.P. 56(f) to challenge substantial truth | SGI: Deposition would show defendant's factual basis and possibly reveal unique knowledge or bad faith | Kolbenschlag: Subjective belief and intent irrelevant to objective substantial-truth inquiry; he had no special knowledge | Court: Denial proper; subjective motives irrelevant and SGI failed to show depositions would produce facts to avoid summary judgment |
| Whether lack of trial/admissions defeats substantial-truth defense | SGI: No judicial finding of illegal conduct, so comment is materially false | Kolbenschlag: Settlements, DOJ statements, and approved antitrust settlement conveyed that the conduct was treated as per se Sherman Act violation and penalized | Court: Settlements, DOJ characterization, and imposed obligations support substantial truth; absence of trial does not render statement false |
| Whether appeal and underlying suit were frivolous justifying appellate fees | SGI: Appeal asserted errors in legal rulings on truth and discovery | Kolbenschlag: Appeal lacked substantial justification given undisputed record supporting truth and irrelevance of deposition | Court: Appeal groundless and frivolous; remanded to district court to fix reasonable appellate attorney fees against SGI and counsel |
Key Cases Cited
- Gordon v. Boyles, 99 P.3d 75 (Colo. App. 2004) (substantial-truth doctrine in defamation law)
- Gomba v. McLaughlin, 504 P.2d 337 (Colo. 1972) (gist/sting substantial-truth test)
- Bustos v. A & E Television Networks, 646 F.3d 762 (10th Cir. 2011) (plaintiff must prove falsity and materiality under Colorado law)
- Brokers’ Choice of Am., Inc. v. NBC Universal, Inc., 861 F.3d 1081 (10th Cir. 2017) (substantial-truth focuses on gist, overlooks minor inaccuracies)
- Knapp v. Post Printing & Publ’g Co., 114 P.2d 981 (Colo. 1941) (meaning of defamatory statement judged by plain and ordinary meaning)