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Butowsky v. Folkenflik

In Progress Mixed Outcome

Key Details

  • Mode of Expression
    Press / Newspapers
  • Date of Decision
    August 7, 2019
  • Outcome
    Affirmed Lower Court
  • Case Number
    4:18cv442
  • Region & Country
    United States, North America
  • Judicial Body
    Appellate Court
  • Type of Law
    Civil Law
  • Themes
    Defamation / Reputation

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Case Analysis

Case Summary and Outcome

The US District Court for the Easter District of Texas greenlit a defamation lawsuit against National Public Radio (NPR) for a series of articles about a far-right conspiracy theory. In May 2017, Fox News Channel published a story alleging that Seth Rich, a Democratic National Committee (DNC) staffer killed in an attempted robbery in a 2016, was responsible for leaking DNC emails to WikiLeaks. The article was retracted a week after publication, but the story generated conspiracies that the DNC and/or Hillary Clinton were somehow involved in Rich’s death. NPR published a series of articles about this and named Ed Butowsky as the man who orchestrated the Fox News publication. NPR claimed that its articles were largely based on a pleading from a lawsuit brought against Butowsky by Rod Wheeler, an investigator hired to look into Rich’s murder and who was alleged to have been misquoted by Butowsky. NPR sought to dismiss the lawsuit citing journalistic privilege and defense of truth, but a Magistrate Judge and the District Court found that Butowsky’s defamation claim could proceed as NPR’s articles exaggerated information from Wheeler’s pleadings, among other reasons.

This is an ongoing case that will be updated as new judgments become available.


Facts

Ed Butowsky is a commentator who sometimes appears on Fox News. In June 2018, he filed a defamation, business disparagement and civil conspiracy action against National Public Radio (NPR), its senior correspondent David Folkenflik and other current and former NPR executive editors.

Butowsky found issue with NPR’s series of articles published between August 2017 and March 2018 related to conspiracy theories surrounding the killing of Seth Rich, a Democratic National Committee (DNC) member. Rich was killed in a botched robbery attempt in July 2016. In May 2017, Fox News Channel published a story alleging that Rich was behind the 2016 leak of DNC emails to WikiLeaks. Some Fox News commentators claimed that there existed a connection between the DNC and the murder.

NPR covered these developments and David Folkenflik wrote a series of articles about the conspiracies surrounding Seth Rich’s death, Fox News’s coverage of it, and the harm it caused to Seth Rich’s parents. Much of the information in the articles was extracted from a lawsuit brought by Rod Wheeler against Fox (Wheeler v. Twenty-First Century Fox, Inc., et al., Case No.1:17-cv-05807 (S.D.N.Y. Aug. 1, 2017). Wheeler was a private investigator hired by Butowsky to investigate Seth Rich’s death. He later sued Fox News and Butowsky for misquoting him. Fox News retracted the story a week after publishing it because the article did not meet its editorial scrutiny.

In June 2018, Ed Butowsky sued NPR for defamation, and argued that the stories were written with intent to extort money from Fox. He sought $57 million in damages for alleged loss and injury to business, insult, pain, and mental suffering, humiliation, embarrassment, and injury to his reputation.

NPR contended that the allegedly defamatory articles were products of accurate reporting on a publicly filed lawsuit. NPR moved to dismiss on two grounds. First, it cited protection of reporting on judicial proceedings on matters of public concern under Texas law and the First Amendment of the US Constitution. The media organization argued that the statements in the articles were subject to fair report and fair comment privileges, as well as the “third-party allegation” rule. Second, NPR maintained that many statements in its articles did not concern Butowsky, were not defamatory or capable of a defamatory meaning, or were protected opinion, and thus the case should be dismissed for these reasons too.

On April 17, 2019, a Magistrate Judge found that NPR failed to establish privilege and that Butowsky sufficiently alleged that the articles were not substantially true. She also found that the articles concerned Butowsky and statements made in them were not expressions of opinion and were capable of a defamatory meaning. Lastly, she found that Butwosky pleaded sufficient facts to establish that NPR conspired to extort money from Fox. Accordingly, the Judge recommended that NPR’s motion to dismiss be denied.

NPR appealed on one factual and eight legal grounds. NPR claimed that the Magistrate Judge omitted important facts by ignoring significant accusations from the Wheeler lawsuit needed to accurately assess whether privileges applied. As for concerns with the Magistrate’s conclusions of law, NPR asserted that:

  1. The Texas Legislature and the Texas Supreme Court allowed the media to truthfully and accurately report on the allegations made by a third party regarding a matter of public interest.
  2. The Magistrate failed to analyze if common law and statutory reporting privileges barred Butowsky from filing a defamation claim against it.
  3. Butowsky’s allegations regarding collusion and actual malice were unsupported by facts.
  4. The Magistrate relied on facts not found in the original complaint (the operative pleading).
  5. The Magistrate improperly analyzed the claim of defamation per se, which refers to instances when defamatory information is so damaging, the plaintiff does not have to show damages. Specifically, NPR claimed that the Magistrate incorrectly concluded that the alleged defamatory statements were related to Butowsky, were statement of fact rather than opinion, that Butowsky was not a public figure, and that there was actual malice in NPR’s reporting.
  6. The Magistrate was bound by law to bar exemplary damages.
  7. Butwosky’s business disparagement claim did not survive because the defamation claim was wrong.
  8. Butowsky failed to provide sufficient facts to prove his conspiracy claim.

Butowsky asserted that the Magistrate Judge adequately reviewed the factual allegations and her findings were supported by facts that he provided.


Decision Overview

In August 2019, the US District Court for the Easter District of Texas upheld the Magistrate Judge’s findings and allowed the defamation lawsuit against NPR to proceed.

The Court first reviewed NPR’s objections to the Magistrate Judge’s findings of fact. The Court disagreed with NPR’s assertion that the Magistrate Judge failed to review the Wheeler complaint. The Court noted that the Wheeler complaint was reviewed as a whole and compared to the alleged defamatory statements, which led to the finding of significant discrepancies between the complaint and allegations in NPR’s articles. Thus, the Court dismissed NPR’s objections on the basis of a factual error.

The Court then proceeded by reviewing NPR’s appeals to the Magistrate’s conclusions of law. The Court recalled that under the Texas Citizens Participation Act, a defendant may seek a dismissal of a lawsuit in a case that “is based on, relates to, or is in response to a party’s exercise of the right of free speech.” (Tex. Civ. Pract. & Rem. Code Section 27.003(a)) There are two steps that the Act requires under legal precedent in Texas, first the party seeking dismissal must show by preponderance of the evidence that the legal action is related to the exercise of the right to free speech. Then, the burden shifts to the other party, which must establish “by clear and specific evidence a prima facie case for each essential element of the claim in question.” (Tex. Civ. Pract. & Rem. Code Section 27.003(c)) Neither parties contested the Act’s application.

NPR, however, sought an application of the Act under the precedent of Dallas Morning News, Inc. v Hall, 17-0637, S.W.3d (Tex. May 10, 2019) which established third-party reporting privilege. The Court highlighted that the statements made by the Dallas Morning News “fairly and accurately reported on the accusations, and qualified all of it with pervasive sourcing language.” Examples of sourcing included references to the lawsuit and the authorities who made certain statements. Here, however, the Court found that NPR failed to include “pervasive sourcing language” in its articles. Butowsky also had shown that the articles failed to recount the Wheeler complaint in a fair, true or impartial manner. Further, even if the NPR articles did meet the sourcing requirement, it went much farther than the Wheeler complaint and included speculative commentary that implied wrongdoing.

The Court then turned to assessing NPR’s claim that the Magistrate failed to identify and apply correct law concerning different common law and statutory privileges. Texas common law recognizes public interest privilege, the fair reporting privilege and fair comment privilege. The U.S. and Texas Constitutions also recognize the common law fair comment privilege. “This privilege defeats defamation where the alleged statement is an honest expression of opinion on matters of legitimate public interest when based on a true or privileged statement of fact.” (Milkovich v Lorain Journal Co., 497 U.S. 1, 21 (1990); Bentley v. Bunton, 94 S.W.3d 561, 579 (Tex. 2002)). The Texas Civil Practice and Remedies Code also includes fair report and fair comment privileges. This statutory fair comment privilege “[p]rovides immunity for a reasonable and fair comment on or criticism of an official act of a public official or other matter of public concern published for general information.” (Tex. Civ. Pract. & Rem. Code Section 73.002(b)(1)(A) and (b)(1)(B)).

If actual malice is shown then the privileges do not apply. NPR argued that the Magistrate Court confused various sources of privileges. This Court, however, found that argument irrelevant as although common law and statutory privileges derive from different sources, their applicability to a defamation claim is the same. More importantly, the Court found that Butowsky pleaded sufficient factual allegations to show actual malice.

The Court then looked at whether actual malice had been shown. A public figure “must show by clear and convincing evidence that a media defendant published the alleged defamatory statement with actual malice.” (Gertz v Robert Welch, Inc., 418 U.S. 323, 342 (1974)) However, a private individual must show actual malice to recover exemplary damages. “Actual malice in this context does not mean bad motive or ill will but rather knowledge of, or reckless disregard for, the falsity of a statement.” (Greer v Abraham, 489 S.S.3d 440, 443 (Tex. 2016))

Purposefully avoiding the truth establishes actual malice although failing to investigate by itself, does not. “Inherently improbable assertions and statements made on information that is obviously dubious may show actual malice. (Bentley v Bunton, 94 S.W.3d 563) A defendant repeating another’s words that he knows are false or improbable is relevant to prove actual malice. Butowsky argued that Folkenflik and NPR purposefully avoided the truth in their articles and made “inherently improbable assertions and statements made on information that is obviously dubious.” The Court here found that Butowsky provided specific facts, which if taken as true, showed actual malice. These included claims that Folkenflik failed to verify certain information, that he had no knowledge of other published information, that he had information that should have cautioned him from reporting on allegations. The Court thus dismissed NPR’s objections to the actual malice claim.

The Court also found that Butowsky pleaded sufficient facts to show civil conspiracy. It cited the Magistrate’s reliance on allegations that Folkenflik was picked by Douglas Wigdor, Wheeler’s attorney, to write the article because he knew that the reporter harbored bias and animosity towards Fox and Rupert Murdoch.

The Court dismissed NPR’s claim that the Magistrate relied on an amended complaint rather than the one initially submitted since Butowsky was entitled to amend his complaint.

The discussion then turned to whether Butowsky has a defamation per se claim. The Court recalled that to prove defamation per se, it must be shown that 1) the defendant published a false statement of fact; 2) the statement defamed the plaintiff; 3) the defendant acted with actual malice, if the defendant is a public figure or public official, or negligently, if the plaintiff is a private individual; and 4) the statement proximately caused damage. (Anderson v Durant, 550 S.W.3d 605, 617-18 (Tex. 2018))

NPR argued that its articles were substantially true. “A statement is substantially true if it conveys the same ‘gist’ as the literal truth even if it errs in the details.” (Turner v. KTRK Television, Inc., 38 S.W.3d at 115) However, even true statements of fact can be actionable if they are used to create a substantially false impression by omitting facts or retelling them in a misleading way. The media have a statutory privilege to assert truth as defense in Texas. NPR argued that its articles were accurate and simply republished allegations from the Wheeler lawsuit.  However, the Court found that Butowsky adequately showed that the “gist” of the Wheeler complaint was different from the “gist” of NPR’s articles. “Examining the statement in the articles as a whole, rather than individually, shows an objectively reasonable reader could find the reports misrepresented [Butowsky’s] role in the Seth Rich investigation and the Fox News story.” [p. 30]

The Court also disagreed with NPR that its articles were not about Butowsky. The Court clarified that the test to determine if a publication is “of and concerning” an individual is whether persons who knew or were acquainted with the individual understood that all allegedly defamatory publication referred to that individual. (Vice v Kasprzak, 318 S.W. 3d 1, 13 (Tex. App. – Houston [1st Dist.] 2009)). Only one of NPR’s articles failed to specifically name and feature Butowsky. However, reading even that article, those who knew Butowsky would have plausibly understood that the article was about him.

NPR claimed that its articles included statements of opinion rather than fact, including statements that the Fox News story was baseless, that the story was “fake news,” that Wheeler was used by Butowsky as a pawn, and other similar comments. The Court noted that “whether a statement is a fact or opinion depends on whether it is capable of being proved true or false.” (Milkovich v. Lorain Journal, 497 U.S. at 21 (1990)) Further, publishers cannot avoid liability for defamation by simply claiming that their statements were subjective opinions. NPR argued that their statements expressed a subjective view, and interpretation, a theory, a conjecture, or surmise, which under US Supreme Court precedent is not defamatory. Here, however, the Court noted that Folkenflik’s statements were made as verifiable statement of fact and were not merely expressing a subjective view.

The Court then reviewed NPR’s claim that the Magistrate was wrong in concluding that Butowsky was a “limited purpose public figure” or a person who is a public figure only on certain topics or controversies. “Limited purpose public figures ‘thrust themselves to the forefront of particular public controversies in order to influence the resolution of the issues involved.’” (Klentzman v Brady, 312 S.W.3d at 904). Just because the media discusses a person repeatedly, that by itself does not make him a limited purpose public figure. Applying these standards, the Court found that Butowsky was not a limited purpose public figure. He indeed appeared on national media outlets, but as a financial commentator. NPR also failed to show that Butowsky had a central role in the controversy surrounding the Seth Rich investigation.

NPR appealed.


Decision Direction

Quick Info

Decision Direction indicates whether the decision expands or contracts expression based on an analysis of the case.

Mixed Outcome

This case addresses a very topical concern in today’s media environment – how to investigate and cover misinformation campaigns, and the risks such work may entail? Lines between truth and fiction are blurred in successful misinformation campaigns, and the masterminds who spark them are hard to identify. NPR attempted to do this with its series of articles about the Seth Rich death conspiracy, and based on the Court’s assessment may have crossed the line on certain journalistic responsibilities. The case is still being litigated and NPR has not been found guilty of defamation. NPR stands behind its reporting and in the most recent filing accused Butowsky’s lawyers of misrepresenting facts to the Court and requested the lawyers to be suspended.

It is difficult to assess whether this judgment restricts expression or simply upholds standards on defamation. That said, the major concern with the judgment is the Court’s belief that NPR’s sourcing of the Wheeler complaint was inadequate.

Global Perspective

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Global Perspective demonstrates how the court’s decision was influenced by standards from one or many regions.

Table of Authorities

Case Significance

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Case significance refers to how influential the case is and how its significance changes over time.

The decision establishes a binding or persuasive precedent within its jurisdiction.

Official Case Documents

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