Cheng v. NeumannCheng v. Neumann
John-Mark Turner, with whom Christopher Cole, Cassandra O. Rodgers, and Sheehan, Phinney, Bass & Green, P.A. were on brief, for appellants.
Christopher J. Bakes, with whom Kip Joseph Adams, Bryan Paul Sugar, Lann G. McIntyre, and Lewis Brisbois Bisgaard & Smith LLP were on brief, for appellees.
RIKELMAN, Circuit Judge. In 2021, a Maine news outlet, Beacon, ran an article about New York resident and political commentator Dana Cheng that characterized Cheng as “far-right” and a “conspiracy theorist.” Cheng sued the article‘s author, Dan Neumann, and
Back at the district court, Neumann requested attorneys’ fees under the fee-shifting provision of New York‘s anti-SLAPP law. Faced with yet another choice-of-law dispute, the district court denied Neumann‘s request after determining that Maine, not New York, law applied to the specific issue of attorneys’ fees. Now Neumann appeals, arguing that the district court erred in its choice-of-law analysis. Although we note the district court‘s careful analysis below, we certify to the Supreme Judicial Court of Maine (the “Law Court“) the question of which state‘s law applies because there is no clear controlling precedent on point and the choice-of-law analysis is determinative of the attorneys’ fees issue.
I. BACKGROUND
We draw the relevant facts from our prior decision in Cheng v. Neumann (”Cheng I“), 51 F.4th 438 (1st Cir. 2022), which describes the parties’ dispute about the Beacon article in more detail.
Dana Cheng is a New York resident and the vice president and co-founder of The Epoch Times, a newspaper published by the New York-based Epoch Group. In June 2021, Cheng spoke at an event co-sponsored by the Maine Republican Party in Windham, Maine. A few weeks later, Beacon ran an article about the event titled “Maine GOP hosts speaker present at Jan. 6 Capitol assault.” The article described Cheng‘s own statements about her presence during the attack on the U.S. Capitol on January 6th, 2021, and referred to Cheng as “far-right,” “right-wing,” and a “conspiracy theorist.”
Cheng and the Epoch Group (together, “Cheng“) sued Neumann and the Maine People‘s Alliance (together, “Neumann“), which publishes Beacon, for defamation in federal district court in Maine under diversity jurisdiction. Neumann moved to dismiss the complaint under
New York is among the many states that have passed anti-SLAPP laws, which generally provide extra breathing room for the press and others speaking out on issues of public concern by deterring baseless lawsuits. See Libel and Privacy, Rep.‘s Comm. for Freedom of the Press, https://perma.cc/BE5M-2UA5 (explaining that “[j]ournalists and news organizations often use anti-SLAPP laws to defend themselves against expensive, baseless lawsuits brought by the subject of an investigative story“). More specifically, such laws “provide . . . defendants [such as reporters and news outlets] with procedural and substantive defenses meant to prevent meritless suits from imposing significant litigation costs and chilling protected speech.” Godin v. Schencks, 629 F.3d 79, 81 (1st Cir. 2010).
N.Y. Civ. Rights Law § 76-a , which broadly defines “an action involving public petition and participation” to cover claims based on news articles about public figures and provides that a plaintiff like Cheng can succeed in such an action only if she establishes by “clear and convincing evidence” that the allegedly defamatory statement “was made with knowledge of its falsity or with reckless disregard of whether it was false“;N.Y. C.P.L.R. § 3211(g) , which provides a procedural mechanism for speakers like Neumann to move to dismiss an action involving public participation and instructs that such a motion “shall be granted unless the party [bringing the claim, here Cheng,] demonstrates that the cause of action has a substantial basis in law or is supported by a substantial argument for an extension, modification, or reversal of existing law“; andN.Y. Civ. Rights Law § 70-a (“section 70-a“), which provides that a defendant in an action involving public participation, such as a reporter or a news outlet like Neumann, is entitled to attorneys’ fees upon a demonstration, including a finding underN.Y. C.P.L.R. § 3211(g) , that the action was commenced without any substantial basis in law or argument for extending the law.
Given that Cheng resides in New York and Neumann is based in Maine, the parties disputed in the district court whether Maine or New York law applied. After conducting a choice-of-law analysis and determining that New York law governed Cheng‘s defamation claim because she is a New York resident and would have experienced any harm from the speech in New York, the district court granted Neumann‘s motion to dismiss under
On appeal, we affirmed but took a different route. Instead of evaluating the district court‘s choice-of-law analysis and affirming under New York law, we “bypass[ed] the parties’ choice-of-law disputes” and instead “look[ed] to dispositive First Amendment principles.” Cheng I, 51 F.4th at 443. Because the Beacon article, on its face, contained only statements that were either factually true or expressions of opinion and therefore unprovable as false, we held that the complaint did not state a plausible defamation claim under any state‘s law given binding First Amendment precedent. Id. at 445-47.
Back in district court, as the winning party on the defamation claim, Neumann requested attorneys’ fees and costs under
II. DISCUSSION
Neumann argues that the district court erred in its conflict of laws analysis on the attorneys’ fees issue. He maintains that proper evaluation of the Restatement factors results in the application of New York law, under which he is entitled to fees.2 In response, Cheng contends that our decision in Cheng I eliminated state law from this case altogether by resolving the merits on First Amendment grounds. In her view, under the law of the case doctrine, our prior decision means that only federal law applies in this case, and Neumann has no right to fees under federal law.
A. Law of the Case Doctrine
We begin with -- and reject -- Cheng‘s argument that the law of the case doctrine eliminates state law from this case altogether.
Under our precedent, “[t]he law of the case doctrine has two branches” directly related to appellate decisions. United States v. Matthews, 643 F.3d 9, 13 (1st Cir. 2011). The first branch, known as the “mandate rule,” prevents a trial court from reconsidering matters that were “explicitly or implicitly decided by an earlier appellate decision in the same case.” Id. (quoting United States v. Moran, 393 F.3d 1, 7 (1st Cir. 2004)). The second branch “binds a ‘successor appellate panel in a second appeal in the same case’ to honor fully the original decision.” Id. (quoting Moran, 393 F.3d at 7). “Whether the doctrine applies in a specific instance is a question of law, engendering de novo review.” Id.
Cheng argues that Neumann‘s request for fees under New York law violates this doctrine by ignoring the “legal effect” of our prior panel decision. She contends that our decision in Cheng I “determined that New York law does not apply.” Thus, she argues, awarding fees under New York law would violate the Cheng I court‘s mandate.
We disagree with Cheng and her interpretation of our prior decision. In Cheng I, we decided the merits of the defamation claim under overarching First Amendment principles that prevented us from having to consider the state choice-of-law issue. See 51 F.4th at 443. Importantly, although the First Amendment “place[s] limits on the application of the state law of defamation,” Milkovich v. Lorain J. Co., 497 U.S. 1, 14 (1990), it does not provide an independent source of federal defamation law. By finding that the statements in the Beacon article were not constitutionally actionable under the First Amendment,
Thus, Cheng‘s objection to the application of New York law based on the law of the case doctrine fails. Neumann‘s success on a federal constitutional defense does not alter the fact that this is a diversity suit involving only a state law claim for defamation. And in diversity actions, “in the absence of countervailing . . . principles,” federal courts “apply state law with regard to the allowance or disallowance of attorneys’ fees, as well as to the determination of the amount of the fee award.” 1 Robert L. Rossi, Attorneys’ Fees § 10:5 (3d ed. 2023) (footnotes omitted); see also B. Fernandez & HNOS, Inc. v. Kellogg USA, Inc., 516 F.3d 18, 28 (1st Cir. 2008) (“Attorneys’ fees are recoverable in diversity cases where a state law provides the right to recover such fees.” (footnotes omitted)).
B. The Conflict of Laws Issue
1. Whether a Conflict Exists
We turn next to Neumann‘s argument that the district court incorrectly applied Maine rather than New York law to the attorneys’ fees issue. We review this legal dispute over the choice-of-law analysis de novo. See Levin v. Dalva Bros., 459 F.3d 68, 73 (1st Cir. 2006). “When analyzing choice-of-law issues, federal courts sitting in diversity apply the substantive law of the forum state, here [Maine], including its conflict of laws rules.” Smith v. Prudential Ins. Co. of Am., 88 F.4th 40, 49 (1st Cir. 2023). As a threshold step, Maine courts consider whether any conflict exists between two states’ laws before conducting a choice-of-law analysis. See Flaherty v. Allstate Ins. Co., 822 A.2d 1159, 1165 (Me. 2003) (noting that Maine and Connecticut have distinct wrongful death statutes before analyzing which state‘s law should apply).
The parties essentially agree that there is a conflict between Maine and New York law on the attorneys’ fees issue, and the district court correctly concluded that such a conflict exists. As the parties point out, Maine has its own anti-SLAPP law, and the two states’ anti-SLAPP statutes are different in important ways. First, they have distinct provisions about the availability of attorneys’ fees when a complaint is dismissed. Compare
furtherance of the exercise of the constitutional right of free speech in connection with an issue of public interest“).
Thus, there is a clear conflict between Maine and New York law on the attorneys’ fees issue. So, we now proceed to the question of whether the district court correctly applied Maine choice-of-law rules in concluding that Maine law applies.4
2. Maine or New York Law?
Defamation is a common law tort. And under Maine law, “questions regarding . . . liability for tortious conduct are appropriately addressed pursuant to tort choice-of-law principles,” which Maine courts derive from the Second Restatement of Conflict of Laws. State Farm Mut. Auto. Ins. Co. v. Koshy, 995 A.2d 651, 660 (Me. 2010); see also Flaherty, 822 A.2d at 1165.
The Restatement provides specific guidance regarding choice-of-law determinations in “[m]ultistate [d]efamation” cases like this one. Restatement (Second) of Conflict of L. § 150 (Am. L. Inst. 1971). It instructs that “[t]he rights and liabilities
that arise from defamatory matter in any . . . book or newspaper, or any . . . similar
As the district court correctly concluded, the choice-of-law analysis must focus on the specific question here: Which state‘s law governs the attorneys’ fees dispute? Whether the Law Court would apply section 150 to the issue of attorneys’ fees in defamation suits is unclear. Although the Restatement suggests that “at least most issues involving [defamation]” should be determined by the law of the defamed party‘s domicile, id. § 150 cmt. e, no Maine court has applied the section 150(2) presumption
in the context of attorneys’ fees. In fact, no Maine court has yet evaluated whether this presumption applies to the merits of a defamation claim.
Even if it were obvious that the Law Court would apply section 150(2), how it would answer the subsequent question -- whether Maine has a “more significant relationship” to the attorneys’ fees issue, such that the presumption in favor of New York law could be overcome -- is far from clear. Several principles guide the “more significant relationship” inquiry. Id. § 145(1). The Restatement emphasizes:
(a) the needs of the interstate and international systems, (b) the relevant policies of the forum [here, Maine], (c) the relevant policies of other interested states [here, New York] and the relative interests of those states in the determination of the particular issue, . . . and (g) ease in the determination and application of the law to be applied.
Id. § 6(2); see also id. § 145 cmt. b. Maine courts put it more succinctly:
In applying the “most significant contacts and relationships” test, it is necessary to isolate the issue, to identify the policies embraced in the laws in conflict, and finally to examine the contacts with the respective jurisdictions to determine which jurisdiction has a superior interest in having its policy or law applied.
Collins v. Trius, Inc., 663 A.2d 570, 573 (Me. 1995); see also Flaherty, 822 A.2d at 1167.
The district court reasoned that Maine‘s interest in having its fee-shifting law apply was superior to New York‘s interest because Neumann resides in Maine and defended against the suit in Maine. On appeal, Neumann contends that the district court‘s analysis failed to sufficiently account for or balance the “policies embraced in the laws in conflict” -- here, the two states’ anti-SLAPP laws. Collins, 663 A.2d at 573. In Neumann‘s view, applying New York law would better accommodate both states’ interests by giving effect to New York‘s broader regime without hindering Maine‘s interests.
Neumann is correct that New York‘s anti-SLAPP law reflects a broad interest in giving speech, including speech by the press, as much breathing room as possible and deterring suits like this one. New
Maine has taken a different approach than New York in balancing the competing interests at stake, including how much breathing room to give the press in reporting on issues of public concern, by adopting a narrower anti-SLAPP statute. Its law covers only suits that target “petitioning activity” and provides that a court “may,” but not must, award attorneys’ fees upon a successful motion to dismiss such a suit.
We are not so sure. Each state‘s anti-SLAPP law reflects sensitive legislative judgments about how best to balance speakers’ rights to speak out on issues of public concern with injured parties’ rights to seek redress for alleged harms from such speech. New York law has given more leeway to more categories of speech than Maine has. Indeed, Maine deliberately chose to enact a law that allows a party to sue the press and speakers without fear of being held liable for attorneys’ fees if its suit is dismissed, as long as the suit does not involve “petitioning activity.” And even if the suit is about petitioning activity and fails on the merits, Maine law makes clear to speakers that they are not automatically entitled to attorneys’ fees for successfully defending against such a lawsuit. This is an important component of Maine‘s regime for plaintiffs evaluating whether to bring potentially valid defamation claims. It also impacts the actions of speakers in Maine: Those who are engaged in non-petitioning activity are on notice that they have less room for error in their speech, lest they be forced to bear the costs of defending themselves in court. Awarding fees under New York law could, at least potentially, upset this careful balance the Maine legislature has struck.
On the other hand, allowing a SLAPP plaintiff from New York to avoid fee liability simply because they sue an out-of-state resident in that resident‘s home court disserves New York‘s interest in deterring its residents from launching these types of suits at all. In an age when many communications take place over the internet, declining to apply New York law may severely impair New York‘s ability to regulate this aspect of its residents’ conduct.
3. Certification
“When faced with potentially outcome-determinative questions of Maine law for which ‘there is no clear controlling precedent in the decisions of the Supreme Judicial Court,’ a federal court may certify those questions to the Law Court ‘for instructions’ on how to rule.” Mundell v. Acadia Hosp. Corp., 92 F.4th 1, 6 (1st Cir. 2024) (quoting Me. R. App. P. 25). Of course, we do not certify every time a difficult question of state law arises. See Plourde v. Sorin Grp. USA, Inc., 23 F.4th 29, 36 (1st Cir. 2022) (explaining that we employ certification judiciously so as “not to bother our busy state colleagues with every difficult state-law issue that comes our way“). So long as the “answer to [a] question is ‘sufficiently clear to allow us to predict [the Law Court‘s] course,‘” we will answer it ourselves. R.I. Truck Ctr., LLC v. Daimler Trucks N. Am., LLC, 92 F.4th 330, 348 (1st Cir. 2024) (quoting Hosp. San Antonio, Inc. v. Oquendo-Lorenzo, 47 F.4th 1, 6 (1st Cir. 2022)). But when “the answer[] to the[] question[] may hinge on policy judgments best left to the [state] court,” In re Engage, Inc., 544 F.3d 50, 53 (1st Cir. 2008), and “the outcome [the court would reach is] far from certain,” Easthampton Sav. Bank v. City of Springfield, 736 F.3d 46, 51 (1st Cir. 2013), certification is prudent. Our Maine colleagues, in turn, will exercise their discretion to answer certified questions “when three criteria are met: (1) there is no dispute as to the material facts at issue; (2) there is no clear controlling precedent; and (3) [their] answer, in at least one alternative, would be determinative of the case.” Franchini v. Inv.‘s Bus. Daily, Inc., 268 A.3d 863, 865-66 (Me. 2022) (citation omitted).
Both our criteria for certifying a question and, in our view, Maine‘s criteria for answering it are met in this case. First, and most importantly, there is no controlling precedent on point. The Law Court has not established a legal standard for evaluating choice-of-law issues in a defamation action; as such, we cannot say definitively if it would adopt the section 150(2) presumption. Even if it were to apply this presumption to “most” issues in a defamation action, we do not know if attorneys’ fees liability is among those issues. And even if the presumption applied here, the outcome the Law Court would reach in determining whether Maine has a superior interest in consistently regulating the speech of its residents than New York has in deterring its residents from filing meritless lawsuits is “far from certain.” Easthampton Sav. Bank, 736 F.3d at 51.
Second, assuming the presumption applies, the superior interest inquiry may turn upon a policy judgment that would have “implications beyond these parties“: whether the goals of Maine‘s or New York‘s anti-SLAPP regime would be more harmed by the imposition of fees against a New York resident who brings a meritless defamation claim against a Maine resident. See In re Engage, Inc., 544 F.3d at 53. And, although “we often resolve questions of state law that affect many, certification is more appropriate” when, like here, the “policy arguments” do not “line up solely behind one solution.” Patel v. 7-Eleven, Inc., 8 F.4th 26, 29 (1st Cir. 2021) (quoting In re Engage, Inc., 544 F.3d at 57). Finally, we note that the outcome here may well impact how often out-of-state plaintiffs choose to file defamation claims in Maine‘s courts. As for the Law Court‘s additional criteria, no disputes of material fact exist, and its decision would be determinative of this case. If the Law Court were to find that New York law applies, then Neumann would be entitled to seek fees. And if Maine law applies, then Neumann‘s quest for fees ends. Accordingly, rather than hazard a guess on the choice-of-law issue, we certify the question to the Law Court.6
For all these reasons, we certify the following question to the Supreme Judicial Court of Maine:
Under Maine‘s conflict of laws rules, does Maine‘s or New York‘s anti-SLAPP law govern a New York plaintiff‘s fee liability after its defamation claim against a Maine resident for speech in Maine has been dismissed under
Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim under overarching First Amendment principles?
The clerk of this court is directed to forward to the Law Court, under the official seal of this court, a copy of the certified question and our decision in this case, along with copies of the briefs filed by the parties in this appeal, which provide all facts relevant to the issue certified. We retain jurisdiction pending the Law Court‘s determination.