ANTHONY BOBULINSKI and STEFAN PASSANTINO v. JESSICA TARLOV
24-CV-2349 (JPO)
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
November 26, 2024
J. PAUL OETKEN, District Judge
Plaintiffs Anthony Bobulinski and Stefan Passantino (“Plaintiffs”) bring this action against Defendant Jessica Tarlov, asserting claims of defamation directly and by implication as to both Plaintiffs and injurious falsehood as to Passantino.
Before the Court is Tarlov’s motion to dismiss for failure to state a claim and motion for attorney’s fees under New York’s anti-SLAPP law. For the reasons that follow, the motion to dismiss is granted. And because the Court concludes that the mandatory fee-shifting provision of New York’s anti-SLAPP law applies in federal court, Tarlov’s motion for attorney’s fees is also granted.
I. Background
A. Factual Background
The following facts are drawn from the allegations in Plaintiffs’ complaint (see ECF No. 1 (“Compl.”)), which are presumed true for the purpose of resolving Tarlov’s motion to dismiss. Fink v. Time Warner Cable, 714 F.3d 739, 740-41 (2d Cir. 2013).
Anthony Bobulinski is a “successful businessman” and former “business partner” of Hunter Biden. (Compl. ¶¶ 8, 11.) Stefan Passantino is an attorney and founder of Elections LLC who represented Bobulinski in front of the United States House of Representatives Committee
Bobulinski worked with Hunter Biden in 2017, when Bobulinski served as the CEO of SinoHawk Holding, “a [Chinese] company designed to find investments in the United States.” (Id. ¶¶ 11, 19.) During the course of this business partnership, Bobulinski became “concerned” that Hunter Biden was allegedly misusing company funds and “profiting off of his father’s name when [his father] was Vice President of the United States.” (Id. ¶¶ 12-19.)
Bobulinski began “speaking publicly against the Biden family” in 2020. (Id. ¶ 37.) Since he “came forward” about the Bidens’ alleged misconduct, Bobulinski has “spent over $500,000 of his own money on legal fees.” (Id. ¶¶ 17, 37.) And, according to Bobulinski, “[n]either President Trump, nor any persons or entities affiliated with President Trump, have ever paid” for Bobulinski’s legal fees. (Id. ¶ 37.)
On March 20, 2024, Mr. Bobulinski appeared as a witness before the House Oversight Committee to testify about “the conduct he witnessed by Joseph Biden, Hunter Biden, and Biden Family business associates.” (Id. ¶ 20.) Passantino represented Bobulinski for the appearance and attended the hearing with his client. (Id.) Bobulinski paid Passantino directly both for this matter and “several years of previous representation.” (Id. ¶ 24.)
During the hearing, Representative Jasmine Crockett said on the floor of the House:
Mr. Bobulinski, I know that you take exception to the fact that your credibility has been called into question over and over[.] [D]o you know who Elections LLC is? . . . I’d ask unanimous consent to enter into the record a document indicating that the law firm representing Tony Bobulinski was paid $10,000 as recently as January of this year by the Save America PAC, which you may recognize as Donald Trump’s PAC.
(Id. ¶ 58.)
In response to that statement, Plaintiffs sent Tarlov a letter “demand[ing] that Ms. Tarlov retract and apologize for her defamatory comments” about Bobulinski’s legal fees. (Id. ¶ 31.) During the March 21st airing of The Five, Tarlov said:
I would like to clarify a comment I made yesterday during our discussion of Tony Bobulinski’s appearance at the congressional hearing. During an exchange with my colleagues about the hearing, I said that Mr. Bobulinski’s lawyer’s fees have been paid for by a Trump Super PAC as recently as January. What was actually said at the hearing was that the law firm representing Mr. Bobulinski was paid by a Trump PAC. I have seen no indication that those payments were made in connection to Mr. Bobulinski’s legal fees, and he denies that they were. Alright.
(Id. ¶ 32 (“March 21st Statement”).)
The following day, March 22, 2024, Plaintiffs sent Tarlov a second letter stating that her “attempted retraction was half-hearted, incomplete, and unacceptable,” and demanding that she provide a more fulsome retraction, as dictated by Plaintiffs. (Id. ¶ 33.) However, Tarlov did not make any subsequent remarks on air about her previous statements. (See id.)
B. Procedural History
Plaintiffs commenced this action on March 28, 2024, asserting defamation and injurious falsehood. (Compl.) Tarlov moved to dismiss the action on May 20, 2024. (ECF No. 17.) Plaintiffs opposed the motion on July 1, 2024 (ECF No. 25 (“Opp.”)), and Tarlov replied in support of her motion on July 29, 2024, also requesting oral argument before the Court (ECF No. 29).
On October 2, 2024, the Court ordered argument on the pending motion to dismiss (ECF No. 30), and on October 24, 2024, the parties conducted in-person oral argument.
To survive a motion to dismiss under
III. Discussion
Plaintiffs bring New York statе law claims against Tarlov for defamation, defamation by implication, defamation per se, and injurious falsehood for the March 20th Statement and the March 21st Statement. Tarlov moves to dismiss on the grounds that (1) Plaintiffs have failed to allege a defamatory statement; (2) Plaintiffs have not alleged facts that show actual malice; and (3) Plaintiffs’ claims do not qualify as defamation per se, and Plaintiffs fail to plead special damages. Tarlov also argues that she is entitled to attorney’s fees under New York Civil Rights Law. The Court agrees on all counts.
A. Defamation
To state a claim for defamation under New York law, a plaintiff must adequately allege: (1) a “defamatory statement,” (2) “published to a third party,” (3) “made with the applicable level of fault,” (4) causing special damages or qualifying as defamation per se. Chandok v. Klessig, 632 F.3d 803, 814 (2d Cir. 2011). Tarlov does not contest that her statements were
1. Defamatory Statement
The New York Court of Appeals has defined “defamation” as “a false statement ‘that tends to expose a person to public contempt, hatred, ridicule, aversion or disgrace.’” Davis v. Boeheim, 24 N.Y.3d 262, 269 (N.Y. 2014) (quoting Thomas H. v Paul B., 18 N.Y.3d 580, 584 (N.Y. 2012)). Whether or not Tarlov’s on-air statements were defamatory is “a legal question to be resolved by the court[s] in the first instance.” Celle v. Filipino Rep. Enterprises Inc., 209 F.3d 163, 177 (2d Cir. 2000) (quoting Aronson v. Wiersma, 65 N.Y.2d 592, 593 (N.Y. 1985)). In making this determination, a court must consider “the context of the entire statement . . . , tested against the understanding of the average reader, and if [the words are] not reasonably susceptible of a defamatory meaning, they are not actionable and cannot be made so by a strained or artificial construction.” Aronson, 65 N.Y.2d at 594.
a. Tarlov’s March 20th Statement
On The Five’s March 20, 2024 airing, during a discussion about that day’s House Oversight Committee hearing, Tarlov said: “Ok, Tony Bobulinski’s lawyers’ fees have been paid by a Trump Super PAC. That’s as recently as January.” (Compl. ¶ 29.) Tarlov does not contest that this statement was false. In fact, she concedes, the reason she made her subsequent comment was to “correct[] her statement on air.” (ECF No. 19 (“Mem.”) at 11.) However, not every false statement is defamatory. Here, the allegation that Bobulinski’s attorney’s fees were paid by a Trump PAC is not defamatory because it does not tend to expose either Bobulinski or Passantino to “public contempt, hatred, ridicule, aversion or disgrace.” Davis, 24 N.Y.3d at 269.
Bobulinski, a self-proclaimed “political moderate” (Compl. ¶ 16), made several decisions, relevant here, when faced with witnessing alleged misdeeds of the sitting Vice President of the United States. First, Bоbulinski came forward at a special press conference to tell his story and then immediately thereafter attended the final presidential debate as a personal guest of then-President Trump.1 (Mem. at 13.) Second, he retained an attorney who was a former Trump White House attorney and founder of a law firm that had previously taken payment from the Save America PAC. (Compl. ¶ 59.) And third, Bobulinski agreed to appear before the House Oversight Committee’s election-year impeachment inquiry hearing, entitled “Influence Peddling: Examining Joe Biden’s Abuse of Public Office.”2 (Id. ¶ 20.) For a political commentator to then make a statement (incorrectly) about Bobulinski’s connection to a “Trump Super PAC” does not impact Bobulinski’s reputation meaningfully more than any of these other decisions.
Nor is it untoward for a congressional witness to have his legal fees paid for by a third party. It is neither uncommon nor contrary to ethical rules for a third party to pay for someone’s legal fees, so long as the client provides informed consent and the attorney’s independence is not
Bobulinski contends that Tarlov’s statement “subjected him to hatred, distrust, ridicule, contempt, and/or disgrace by a certain segment of America and the world which lives in an alternate reality.” (Compl. ¶ 50.) But case law directs courts to look to a “reasonable” interpretation by the “average” listener, and the Court is not prepared to assume that the average American “lives in an alternate reality.”4 See Aronson, 65 N.Y.2d at 594. Further, the Second Circuit has held that allegedly defamatory statements are to be construed as they would “by the public to which they are addressed.” Celle, 209 F.3d at 177-78 (quoting November v. Time Inc., 13 N.Y.2d 175, 178 (N.Y. 1963)). Bobulinski has not alleged that an average viewer of The Five would be more likely than the average American to hear this comment connecting him to President Trump and hate, distrust, or ridicule him. Nor could he. However, regardless of whether the scope of this inquiry is the average intended listener or the average American more generally, Bobulinski fails to make the case that Tarlov’s statement subjected him to public ridicule or contempt. Connecting Bobulinski to the former—and future—democratically elected
Nor has Bobulinski adequately alleged defamation by implication. Bobulinski argues that the March 20th Statement “negatively impl[ied] that his testimony is bought and paid for.” (Compl. ¶ 50.) “Under a defamation-by-implication theory, [Plaintiff] ‘must make a rigorous showing that’ [the statement] ‘as a whole can be reasonably read both to impart a defamatory inference and to affirmatively suggest that the author intended or endorsed that inference.’” Lindell v. Mail Media Inc., 575 F. Supp. 3d 479, 488 (S.D.N.Y. 2021) (quoting Stepanov v. Dow Jones & Co., 987 N.Y.S.2d 37, 37-38 (1st Dep’t 2014)); see also Kavanagh v. Zwilling, 578 F. App’x 24, 24-25 (2d Cir. 2014) (summary order) (quoting the same).
At the outset, the Complaint does not even specify what defamatory implication Plaintiffs believe Tarlov intended her viewers to draw, alleging only that her statement “caused . . . viewers[] not to trust or find credibility with Plaintiffs.” (Compl. ¶ 62.) Stating that a congressional witness’s legal fees are paid by a PAC may imply nothing more than that the witness shares or sympathizes with the beliefs of that PAC. Tarlov might have said such a thing to emphasize the fact that Bobulinski was invited by House Republicans as a majority witness.5 Or she might have been pointing out that there are two sides to every story, and presenting only Bobulinski’s side during the on-air discussion was not pаinting the full picture. But it is a “strained or artificial construction” to interpret Tarlov’s statement as accusing Bobulinski of lying to Congress. Aronson, 65 N.Y.2d at 594.
Because the March 20th Statement was not directly or impliedly defamatory with respect to Bobulinski, Bobulinski fails to meet his burden on this element.
ii. Passantino
The March 20th Statement also does not subject Passantino to “public contempt, hatred, ridicule, aversion or disgrace.” See Davis, 24 N.Y.3d at 269. Passantino is “one of the leading political lawyers in the country” (Compl. ¶ 21) and previously served as Deputy White House
Defamation by implication fails here as well. Passantino argues that Tarlov’s March 20th Statement “indicat[ed], in conspiracy-theory fashion, that Mr. Passantino was part of a scheme to present politically motivated and improperly paid-for tainted testimony in violation of his ethical duties.” (Id. ¶ 51). Yet this implication requires even more logical jumps than the one offered by Bobulinski. Here, the listener must interpret Tarlov’s comment as insinuating that because a third party paid Bobulinski’s legal fees, Bobulinski’s (unnamed) lawyer ignored the governing ethical rules of his profession6 and coached Bobulinski to lie in front of Congress.
And even if this interpretation were reasonable, Passantino has failed to adequately allege that Tarlov “intended or endorsed” such an inference. See Lindell, 575 F. Supp. 3d at 488. Passantino does not allege any facts about Tarlov’s underlying intent, and he does not allege that Tarlov even knew who Passantino was at the time she made the statement about Bobulinski.
Passantino thus fails to allege a defamatory statement with respect to Passantino.
b. Tarlov’s March 21st Statement
On The Five’s March 21, 2024 airing, Tarlov “clarif[ied]” her statement from the previous day, stating:
I would like to clarify a comment I made yesterday during our discussion of Tony Bobulinski’s appearance at the congressional hearing. During an exchange with my colleagues about the hearing, I said that Mr. Bobulinski’s lawyer’s fees have been paid for by a Trump Super PAC as recently as January. What was actually said at the hearing was that the law firm representing Mr. Bobulinski was paid by a Trump PAC. I have seen no indication that those payments were made in connection to Mr. Bobulinski’s legal fees, and he denies that they were. Alright.
(Compl. ¶ 32.)
This statement is not defamatory on its face because it is not false. “[O]n a pre-answer motion to dismiss a defendant will prevail on this ground only if the statement’s truth may be established from the complaint alone.” Stega v. New York Downtown Hosp., 31 N.Y.3d 661, 674 (N.Y. 2018). In their Complaint, Plaintiffs excerpt Representative Jasmine Crockett’s comments to Bobulinski during the hearing: “[T]he law firm representing Tony Bobulinski was paid $10,000 as recently as January of this year by the Save America PAC, which you may recognize as Donald Trump’s PAC.” (Compl. ¶ 58.) Tarlov’s clarification merely restated exactly what Representative Crockett said in the Committee hearing the day before, none of which Plaintiffs have alleged is untrue.
Plaintiffs do not actually argue that Tarlov’s second statement was false, but rather contend that by not saying more and not explicitly rеtracting her previous statement, this “omission of . . . context” “did nothing to dispel the negative impression left with the viewers that [the March 20th Statement] may, in fact, be true.” (Id. ¶ 60.) “New York courts have . . . been hesitant to find defamation based on the omission of facts, unless the omitted facts would materially change the meaning of the statements that are expressed.” Biro v. Conde Nast, 883 F. Supp. 2d 441, 466 (S.D.N.Y. 2012).
It stretches the English language too far to hear Tarlov’s clarification as a wink and a nod and that she was really telling the truth the day before. While it is true that Tarlov could have used the word “retraction” rather than “clarification,” such a decision is well within the “editorial
Further, using the exact language Plaintiffs demanded—“Mr. Bobulinski has paid over $500,000[] in legal fees . . . out of his own pocket since 2020”—would not materially change the meaning of what Tarlov said on March 21st. (ECF No. 1-1 at 2.) Tarlov said that she had “seen no indication” that thе Save America PAC’s payments to Passantino’s firm “were made in connection to Mr. Bobulinski’s fees,” and she clarified that “[Bobulinski] denies that they were.” (Compl. ¶ 32.) Tarlov’s rephrasing of the demand letter sent by Plaintiffs’ counsel does not substantively change its import. Though Tarlov qualified her own words to say that Bobulinski denied his fees were paid by the Save America PAC rather than to state the assertion as a fact, such a qualification is exactly the kind of editorial prudence that generally protects media commentators from overstating or misleading viewers when they do not have the full facts in front of them. It would be ironic indeed if the Court were to determine that a commentator, in an attempt to be more careful with assertions on air, instead triggered a defamation case for what she might have been insinuating with her qualified language.
Because the March 21st Statement was not false and does not qualify as defamation by omission or implication, it is not defamatory as to Bobulinski or Passantino.
a. Standard of Fault
The next element of defamation that Tarlov challenges is that a statement must be “made with the applicable level of fault.” Chandok, 632 F.3d at 814. Here, “actual malice” is the correct standard to apply to both Bobulinski and Passantino’s claims, because Tarlov’s comments were about “an issue of public interest,” to which New York “anti-strategic litigation against public participation” (anti-SLAPP) law applies the actual malice standard.
The actual malice standard of fault also applies to Bobulinski because he is a “limited-purpose public figure.”8 Biro v. Conde Nast, 807 F.3d 541, 544 (2d Cir. 2015). The Second
Circuit looks to four factors to determine whether a plaintiff qualifies as a limited-purpose public figure: The Plaintiff must have “(1) successfully invited public attention to his views in an effort to influence others prior to the incident that is the subject of litigation; (2) voluntarily injected himself into a public controversy related to the subject of the litigation; (3) assumed a position of prominence in the public controversy; and (4) maintained regular and continuing access to the media.” Lerman v. Flynt Distrib. Co., 745 F.2d 123, 136-37 (2d Cir. 1984).
When Bobulinski publiсly “came forward” and accused the President of the United States of foreign corruption (Compl. ¶ 17), he “invited public attention” and “voluntarily injected himself” into a high-profile public controversy. And when he voluntarily participated in the congressional impeachment inquiry, he “assumed a position of prominence.”9 He also appeared with then-President Trump at a press conference in 2020 and attended the final presidential debate as a guest of Trump.10 Finally, given the extensive media coverage of Bobulinski over the past four years and his role in the recent impeachment inquiry, he has sufficient access to the media, including Fox News, to use as a platform for any necessary rebuttal, something ordinary citizens lack.11 See Gertz v. Welch, 418 U.S. 323, 344 (1974) (“The first remedy of any victim
of defamation is self-help—using available opportunities to contradict the lie or correct the error and thereby to minimize its adverse impact on reputation. . . . [P]ublic figures usually enjoy significantly greater access to the channels of effective communication and hence have a more realistic opportunity to counteract false statements than private individuals normally enjoy.”).
b. Applying Actual Malice
To show actual malice, plаintiffs must adequately allege that the statement at issue was “made with knowledge of its falsity or with reckless disregard of whether it was false.”
Plaintiffs do not adequately allege that Tarlov knew her statement about Bobulinski’s legal funding was false. Other than making conclusory assertions that Tarlov made the statements either “knowing that they were false or with reckless disregard for the truth” (Compl. ¶¶ 49, 53), Plaintiffs provide no additional supporting facts to indicate Tarlov’s subjective state of mind. See BYD Co. Ltd. v. VICE Media LLC, 531 F. Supp. 3d 810, 822-24 (S.D.N.Y. 2021) (“[The Complaint] fails to plausibly establish any basis of subjective knowledge” because “[it] alleges no nonconclusory facts that support the proposition that [the defendant] knew that it was reporting falsities.”), aff’d, No. 21-CV-1097, 2022 WL 598973 (2d Cir. Mar. 1, 2022). Plaintiffs
Nor do Plaintiffs adequately allege that Tarlov acted with “reckless disregard.” In order to allege reckless disregard, Plaintiffs must “establish that defendant[] in fact entertained serious doubts as to the truth of the publication or that [she] actually had a high degree of awareness of its probable falsity.” Sweeney v. Prisoners’ Legal Servs. of N.Y., Inc., 84 N.Y.2d 786, 793 (N.Y. 1995) (cleaned up); see also Kipper v. NYP Holdings Co., 12 N.Y.3d 348, 354-55 (N.Y. 2009) (“The inquiry is a subjective one, focusing upon the state of mind of the publisher of the allegedly libelous statements at the time of publication.”). Plaintiffs have failed to allege any such facts about Tarlov’s subjective state of mind.
Though Plaintiffs state that “[p]ayments from PACs are also available in public filings, none of which show a Trump-affiliated PAC paying for Mr. Bobulinski’s legal fees” (Compl. ¶ 41), just because such information is publicly available does not mean that Tarlov was under an affirmative duty to seek it out before she spoke on air. As the New York Court of Appeals has stated, a failure to investigate, absent the “extreme case” of “willful avoidance of knowledge,” Kipper, 12 N.Y.3d at 355, is insufficient to prove actual malice “even if a prudent person would
Because Plaintiffs have failed to meet the high bar of adequately alleging that Tarlov had knowledge of falsity or reckless disregard for the truth, they have not pleaded actual malice.
3. Damages
The third and final defamation element Tarlov challenges is harm. Defamation, ordinarily, “is not actionable unless the plaintiff suffers special damage” which is defined as “the loss of something having economic or pecuniary value.” Liberman v. Gelstein, 80 N.Y.2d 429, 434 (N.Y. 1992) (quotation marks omitted); Palin v. N.Y. Times Co., 113 F.4th 245, 268 (2d Cir. 2024). Special damages require a specific accounting beyond a rough estimate. Drug Rsch. Corp. v. Curtis Pub. Co., 7 N.Y.2d 435, 441 (N.Y. 1960) (holding that “round figures, with no attempt at itemization” do not qualify as special damages); see also Thai v. Cayre Grp., Ltd., 726 F. Supp. 2d 323, 330 (S.D.N.Y. 2010) (“The particularity requirement is strictly applied, as courts will dismiss defamation claims for failure to allege special damages with the requisite degree of specificity.”).
Plaintiffs have requested “compensatory, special, and punitivе damages of thirty million dollars ($30,000,000.00)” and “[a]n award of Plaintiffs’ costs associated with this action, including but not limited to their reasonable attorneys’ fees and expenses.” (Compl. at 17.) The only details Plaintiffs provide are identical statements that each of the three separate claims (defamation, defamation by implication, and injurious falsehood) entitles Plaintiffs to $10,000,000. (Compl. ¶¶ 54, 64, 69.) This rough estimation, devoid of accounting or explanation, is insufficient to allege special damages.
Plaintiffs argue that they do not need to allege special damages because their claims qualify as defamation per se. The four types of statements that traditionally fall under
Bobulinski also fails to adequately allege that Tarlov’s statements tended to injure him in his capacity as a businessman. The New York Court of Appeals has held that, for a statement to qualify as defamation per se under the professional conduct exception, the statement must specifically reference conduct that is incompatible with a person’s profession, “rather than a more general reflection upon the plaintiff’s character or qualities.” Liberman, 80 N.Y.2d at 436 (quotation marks omitted). The Court cannot discern how comments about a political entity paying Bobulinski’s legal fees in front of a congressional hearing are related to his profession or professional capacities.
The same is true of Passantino’s claim of defamation per se. Passantino alleges that Tarlov’s statements “deliberately injured Mr. Passantino in his trade, business, or profession by indicating, in conspiracy-theory fashion, that Mr. Passantino was part of a scheme to present politically motivated and improperly paid-for tainted testimony in violation of his ethical duties.” (Compl. ¶ 50.) But as previously discussed, the allegation that Passantino was accepting third-party payment from a PAC would not be a violation of his ethical duties. See supra Section III.A.1.a.ii.; n. 3. So long as Passantino follows the specific professional conduct guidelines of
Because Plaintiffs have failed to allege either special damages or defamation per se, they fail to adequately allege the specific harm necessary to proceed with a defamation claim.
B. Injurious Falsehood
Tarlov contends that Passantino fails to state a claim for injurious falsehood for the same reasons his defamation per se claim was insufficiently pleaded: Passantino fails to plead actual malice and special damages, and Tarlov’s statements did not implicate his professional services.13 Injurious falsehood, also known as “trade libel,” “consists of the knowing publication of false matter derogatory to the plaintiff’s business of a kind calculated to prevent others from dealing with the business or otherwise interfering with its relations with others, to its detriment.” Kasada, Inc. v. Access Cap., Inc., No. 01-CV-8893, 2004 WL 2903776, at *15 (S.D.N.Y. Dec. 14, 2004) (citing and collecting New York state court cases). In addition to a statеment “denigrating the quality of the plaintiff’s business’s goods or services,” a plaintiff must allege “1) falsity of the alleged statements; (2) publication to a third person; (3) malice; and (4) special damages.” Grayson v. Ressler & Ressler, 271 F. Supp. 3d 501, 518 (S.D.N.Y. 2017) (quotation marks omitted).
Passantino’s claim of injurious falsehood is therefore dismissed.
C. Attorney’s Fees
Tarlov asks the Court, should she suсceed on her motion to dismiss, to award attorney’s fees under the amended New York anti-SLAPP law. (Mem. at 34-35.) Plaintiffs oppose Tarlov’s request, arguing that the attorney’s fees provision “do[es] not apply in federal courts” because it conflicts with
In 2020, New York amended its anti-SLAPP law “to broaden the scope of the law and provide greater protections to defendants.” Kesner, 590 F. Supp. 3d at 699 (quotation marks omitted). That amendment included
A defendant in an action involving public petition and participation, as defined in paragraph (a) of subdivision one of section seventy-six-a of this article, may maintain an action, claim, cross claim or counterclaim to recover damages, including costs and attorney‘s fees, from any person who commenced or continued such action; provided that:
(a) costs and attorney‘s fees shall be recovered upon a demonstration, including an adjudication pursuant to subdivision (g) of rule thirty-two hundred eleven or subdivision (h) of rule thirty-two hundred twelve of the civil practice law and rules, that the action involving publiс petition and participation was commenced or continued without a substantial basis in fact and law and could not be supported by a substantial argument for the extension, modification or reversal of existing law.
Whether a state statutory provision applies to a case in a federal court sitting in diversity is an Erie question, which requires federal courts to “apply state substantive law and federal procedural law.” Gasperini v. Ctr. for Humanities, 518 U.S. 415, 427 (1996) (citing Erie R. Co. v. Tompkins, 304 U.S. 64 (1938)). The Supreme Court‘s latest guidance on the hazy division between “substantive” or “procedural” law is found in Shady Grove Orthopedic Associates v. Allstate Insurance Co., 559 U.S. 393 (2010), a “diversity jurisdiction case with a plurality opinion which has generated differing interpretations by courts and scholars.” Corley v. United States, 11 F.4th 79, 88 (2d Cir. 2021).
a. Shady Grove, La Liberte, and Adelson
The portion of the Shady Grove opinion commanding a majority of justices instructs courts, before they conduct a full Erie analysis, to first to determine whether a Federal Rule of Civil Procedure “attempts to answer the same question” as a state statute. Shady Grove, 559 U.S. at 399. Plaintiffs answer this threshold question by asserting that
But Plaintiffs fail to grapple with an important difference between La Liberte and this case. La Liberte addressed a California statute which provided for a “special motion to strike” described by California courts as “an efficient procedural mechanism for the early and inexpensive dismissal of nonmeritorious claims” that threatened a person‘s First Amendment rights “in connection with a public issue.” La Liberte, 966 F.3d at 85 (internal quotation marks omitted) (emphasis added). The Second Circuit thus held that this procedural mechanism for dismissal “is already answered (differently) by Federal Rules 12 and 56,” thus failing Shady Grove step one. Id. at 87. Due to its square conflict with the Federal Rules governing dismissal of a plaintiff‘s claims, the California special motion to strike could not apply in federal court. Id.
Here, however, the operative rule is not procedural. The only procedural rule that the Court is applying is a federal rule:
Indeed, in Adelson v. Harris, 774 F.3d 803, 809 (2d Cir. 2014), the Second Circuit found it “unproblematic” to conclude that the mandatory fee-shifting provision in Nevada‘s anti-SLAPP law was “substantive within the meaning of Erie” and “does not squarely conflict with a valid federal rule.” Applying the fee-shifting provision on a
The legal impact of the Nevada Anti-SLAPP statute—at least as applied in this case—is substantive rather than procedural for purposes of Erie. The Nevada statute does not establish a “reasonable probability of success” standard that must be met without discovery, like the California Anti-SLAPP law. . . . [E]ven if the procedural elements of certain Anti-SLAPP statutes present problems under Erie, . . . those problems are not presented in this case, where the effects of the Anti-SLAPP law (fee-shifting and a heightened substantive legal standard) are substantive.
Adelson v. Harris, 973 F. Supp. 2d 467, 494 n.21 (S.D.N.Y. 2013), aff’d, 774 F.3d 803 (2d Cir. 2014).
The court in La Liberte did not purport to overrule its earlier decision in Adelson. Instead, it distinguished Adelson, quoting this Court‘s language above and noting that Nevada‘s anti-SLAPP law was “quite different” from California‘s due to the latter‘s “reasonable probability of success” standard. La Liberte, 966 F.3d at 86-87 n.3. The La Liberte court went on to consider the defendant‘s and amici‘s argument that the fee-shifting provision of the California law should apply upon the granting of a
This Court concludes that Adelson, and not La Liberte, controls this case under the New York anti-SLAPP law‘s fee-shifting provision, for three reasons. First, the New York anti-SLAPP law does not include a “reasonable probability of success” requirement like the California law addressed in La Liberte. Rather, it operates more like the Nevada anti-SLAPP law at issue in Adelson.15
Second, the New York anti-SLAPP law does not have the feature of California‘s law that the La Liberte court considered fatal to its application in fеderal court: a provision tying fee-shifting to a specific state procedural mechanism. As the First Circuit recently concluded (and as explained further below), ”
Third, the entitlement to attorney‘s fees under the New York anti-SLAPP law follows from the failure to state a claim as a matter of New York law. Logically, a complaint that fails to
substantial basis in fact and law . . . .‘“; remanding for reinstatement of attorney‘s fee demand
In short, the anti-SLAPP law here—a motion for attorney‘s fees upon a
Passing this threshold question, the Shady Grove majority would next direct courts to “wade into Erie‘s murky waters.” Shady Grove, 559 U.S. at 398. Entitlement to attorney‘s fees is a substantive right under Erie. See Riordan, 977 F.2d at 53; Adelson, 774 F.3d at 809. The New York legislature has made the policy decision that mandatory fee-shifting applies to the subset of cases defined as SLAPP suits where the claim lacks a “substantial basis.” And applying
Prevention of forum shopping is also a concern implicated here. When a federal court refuses to apply a substantive right available in state court, forum shopрing becomes a logical
b. Justice Stevens‘s Concurrence in Shady Grove
Even if a court were to find
that position taken by those Members who concurred in the judgments on the narrowest grounds.” (quotation marks omitted)).
Though Justice Stevens joined the Shady Grove majority in holding that New York Civil Practice Law Section 901(b) was procedural and thus
While Justice Stevens‘s Shady Grove concurrence was not relevant to the purely procedural special motion to strike in La Liberte, and thus the Second Circuit did not reach this second-level analysis, Justice Stevens‘s more nuanced test is relevant in this case, where a substantive right is clearly implicated. Shady Grove, 559 U.S. at 423.
Here, the Plaintiffs’ argument that
The fact that
Thus, whether or not a court were to determine that
2. Availability of Attorney‘s Fees in the Original Action
Plaintiffs challenge Tarlov‘s demand for fees on another ground, arguing that under the plain meaning of
or counterclaim. See Isaly, 213 N.Y.S.3d at 861-62 (holding the same); Aristocrat Plastic Surgery P.C. v. Silva, 206 A.D.3d 26, 32 (1st Dep‘t 2022) (permitting defendant in original action to collect attorney‘s fees under
3. Application of Section 70-a(1)
Having established that
Section III.A. Nor have they adequately alleged injurious falsehood, failing to plead two independent elements (fault and damages). See supra Section III.B.
Accordingly, Tarlov is entitled to attorney‘s fees under
D. Leave to Amend
Plaintiffs request leave to amend in the event that Tarlov‘s motion to dismiss is granted. (Opp. at 33.) However, Plaintiffs identify only one way they could amend their complaint to overcome the deficiencies raised by the motion: by more specifically pleading special damages. (Opp. at 25.) Because Plaintiffs fail to adequately allege two other elements of defamation—defamatory statement and fault—pleading more specific harm would be futile. Further, no additional facts could change the Court‘s holding that Tarlov‘s statements were not defamatory as a matter of law. See Foman v. Davis, 371 US. 178, 182 (1962) (directing courts to grant leave
IV. Conclusion
For the foregoing reasons, Tarlov‘s motion dismiss is GRANTED and her demand for attorney‘s fees is GRANTED. Plaintiffs’ request for leave to amend is DENIED.
Tarlov shall submit any request for attorney‘s fees and costs with appropriate documentation on or before December 20, 2024. Her publicly filed submission may be redacted for privileged matters, with an unredacted version submitted to the Court by email. Plaintiffs may file any response on or before January 15, 2025.
The Clerk of Court is directed to close the motion at Docket Number 17.
SO ORDERED.
Dated: November 26, 2024
New York, New York
____________________________________
J. PAUL OETKEN
United States District Judge