Case Summary and Outcome

The United States Court of Appeals for the District of Columbia Circuit dismissed a defamation claim by two Liberian public figures against an international human rights organization. The organization had published a report in which they alleged that the public figures had received bribes for an oil deal. The majority of the Court held that there was no evidence of actual malice on the part of the organization – a necessary condition when a defamation case is brought by a public figure. The dissent called for an “overruling” of the New York Times v. Sullivan case which had introduced the requirement of actual malice, stating that it was a “threat to American Democracy” [p. 15].

---

Facts

In April 2018, Global Witness, an international human rights organization, published a report “Catch me if you can” where it detailed alleged corruption in the granting of an oil license in Liberia. In Liberia, oil licenses are awarded by the National Oil Company of Liberia (NOCAL). The government owns an Atlantic Ocean plot which is known to have potentially significant oil reserves and in 2007 NOCAL issued a license known as “Block 13” for the plot to a company called Broadway Consolidated PLC (BCP). This deal fell through. Subsequently, ExxonMobil (Exxon), a multinational oil company, became interested in Block 13 but as the BCP transaction was marred by rumors of corruption, Exxon had “Block 13” bought by a third-party, Canadian Overseas Petroleum Limited, who in turn resold it to Exxon. Exxon paid $120 million, of which $50 million went directly to Liberia. Unlike the BCP transaction where NOCAL was responsible for awarding the license, Liberia was represented in these rounds of negotiations by the Hydrocarbon Technical Committee (HTC), a six-member government entity created to “superintend negotiations” between oil companies and NOCAL.  Christiana Tah, Liberia’s Minister of Justice, and Randolph McClain, NOCAL’s CEO, were members of the HTC. The Liberian President directed that bonuses be paid to the HTC members by the NOCAL board. The President had sought advice from Tah and its legal advisor, Seward Cooper, who advised that the bonuses were “legally permissible” because the “pertinent” Liberian anti-corruption law had expired and because, even if the law was still in operation, the bonuses would be made on the President’s initiative, without any demands from the stakeholders [p. 3-4]. A total of $500,000 was paid out, and Tah and McClain each received $35,000.

In its report, Global Witness stated that a semi-autonomous Liberian agency, the Liberian Extractive Industries Transparency Initiative, had given them details of Exxon’s Block 13 deal, and shed light on the corruption surrounding the BCP deal suggesting there was part ownership of BCP by former Liberian government officials. The report specifically focused on the very “large” and “unusual” bonuses paid to HTC members including Tah and McClain. The report stated that Exxon had prior knowledge of the Block 13 license controversies and that the Canadian Overseas Petroleum Limited had bought the license with Exxon money. It did acknowledge that it did not possess any proof that the bribe given to HTC members was made on Exxon’s orders. Global Witness approached the members of HTC asking for their response to the allegations of bribery against them. The members denied the allegations and insisted that the bonuses given to them were rightfully authorized by NOCAL’s board.

After the HTC members denied the bribery allegations, Global Witness called on the Liberian government to investigate the alleged bribery. The organization also sent copies of its report to the US Attorney General as well as the US Chairman of the Securities and Exchange Commission. The Liberian Government’s investigation following the report by Global Witness concluded that the money paid to HTC officials did not constitute a bribe under Liberian law. Nevertheless, it did request that the members of HTC return the payment. Tah and McClain refused, reiterating that the payments were bonuses.

Tah and McClain sued Global Witness for defamation. Global Witness filed a special motion to dismiss under the District of Columbia’s anti-SLAPP (strategic lawsuits against public participation) statute, which “seeks to protect speakers from lawsuits ‘filed by one side of a political or public policy debate aimed to punish or prevent the expression of opposing points of view’” [p. 7]. Global Witness also filed a motion to dismiss the suit for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) arguing that Tah and McClain’s complaint failed to plead actual malice as required under the First Amendment, that there was “defamation by implication” and that “any defamatory implication was protected opinion” [p. 7].

The District Court denied Global Witness’s special motion by stating that the District of Columbia (D.C) Anti- SLAPP statute did not apply in Federal Court. However, the Court found that “the contents of the report are protected speech under the First Amendment and cannot sustain a defamation claim” and thus granted Global Witness’s Rule 12(b)(6) motion [p.8].

Tah and McClain appealed the decision to the Court of Appeals. Global Witness cross-appealed.

---

Decision Overview

Judge Tatel delivered the majority opinion of the Court, joined by Judge Srinivasan. Judge Silberman filed a dissenting opinion. The main issues that the Court was called upon to decide were whether the report published by Global Witness was published with actual malice and so was defamatory and whether the D.C. anti-SLAPP statute applies in a federal court exercising diversity jurisdiction.

Tah and McClain argued that there was sufficient actual malice in the Global Witness Report. They argued that Global Witness had “(1) begun its investigation with a preconceived story line, (2) received denials from some of those involved, (3) harbored ill-will toward Exxon, and (4) omitted Seward Cooper from the list of payment recipients” [p.8].

Global Witness argued that the District Court had erred in finding that the anti-SLAAP legislation did not apply in Federal Court.

The Court examined whether the anti-SLAPP statute applied in Federal Court. With reference to the Supreme Court decision in Shady Grove Orthopedic Associates., P.A. v. Allstate Insurance Co. and its own decision in Abbas v Foreign Policy Group, LLC, the Court concluded that the D.C. anti-SLAPP statute impermissibly “conflicts with the Federal Rules by setting up an additional hurdle a plaintiff must jump over to get to trial” [p. 9]. It rejected Global Witness’s argument that the decision in Competitive Enterprise Institute v. Mann had abrogated the Abbas decision. The Court affirmed the District Court’s decision to dismiss Global Witness’s motion to dismiss under the D.C. anti-SLAAP legislation.

In respect of Global Witness’s defamation by implication claim, the Court referred to White v. Fraternal Order of Police  in noting that it is required to determine “whether a challenged statement is capable of conveying a defamatory meaning” [p. 11]. The Court explained that the New York Times Co. v. Sullivan case had established that when the plaintiffs are public officials the “First Amendment requires that they also allege that the defamatory statement ‘was made with actual malice’” [p. 12]. The Court quoted Jankovic v. International Crisis Group and described the actual malice standard as reflecting “the cornerstone First Amendment principle that ‘speech relating to public officials and public figures, as distinct from private persons, enjoys greater protection’” [p. 12]. It noted that the jurisprudence has termed the actual malice standard as “daunting” and that the test is objective in that it must be clear that a defendant made the statements with a subjective “high degree of awareness of probable falsity” [p. 12].

The Court discussed the dissenting opinion which had observed that “actual malice” was present as the Global Witness report implied that Exxon had bribed Tah and McClain while admitting that it had no evidence of this bribery. The majority judgment found that Tah and McClain had not based their claim on an assertion that Global Witness had no evidence to make the allegation that they had been bribed by Exxon. In addition, the Court held that the report implied that NOCAL and not Exxon had bribed Tah and McClain. The Court emphasized that “a generic statement accusing someone of acting with reckless disregard …simply cannot be read to shoehorn in every conceivable actual malice theory” [p. 13].

The Court assessed the arguments Tah and McClain raised for the imputation of actual malice. It rejected the submission that Global Witness had “a preconceived story line” because its letters to Tah and McClain seeking comment mentioned the likelihood of the relevant payments being bribes. The Court referred to the Jankovic case and noted that the presence of “preconceived notions” is “not antithetical to the truthful presentation of facts” and stressed that investigative journalism “begins with some measure of suspicion” [p. 14]. It added that as Global Witness had reached out for comments before the publication of its report, which is a standard journalistic practice, this implied that their conclusion was not preconceived [p.15]. The Court commented that, as observed in Harte-Hanks Communications, Inc. v. Connaughton, in cases of “extreme departure from journalistic standards”, the actual malice threshold is never met [p. 15].

With reference to the case of Lohrenz v. Donnelly, the Court also rejected Tah and McClain’s argument that Global Witness’s “failure to credit their denials” demonstrated actual malice. The Court noted that this argument “finds no support in our First Amendment case law” and that a publisher is not obliged to accept denials – particularly as those denials are so commonplace [p. 15]. The Court held that Tah and McClain had not provided “readily verifiable evidence” to provide a “plausible” case that Global Witness published the report with the requisite “high degree of awareness of probably falsity” [p. 16].

The Court also rejected Tah and McClain’s argument that Global Witness “harbored ill-will” towards Exxon and its CEO Rex Tillerson, and referred to the cases of Tavoulareas v. Piro and Harte-Hanks in reiterating that “evidence of ill will ‘is insufficient by itself to support a finding of actual malice’” [p. 17]. The Court described the implication of Tah and McClain’s argument as “breathtaking” and noted that their interpretation of ill will would lead to a finding that investigative journalism which is “critical of its subject” contains actual malice and is therefore defamatory [p. 17]. The Court also rejected the argument that Global Witness’s failure to include Seward Cooper as one of the officials who received a bonus indicated that Global Witness had acted with awareness of the falsity of its claims.

Accordingly, the Court held that Tah and McClain had failed to prove Global Witness acted with actual malice and dismissed their defamation case.

Silberman J disagreed with the majority’s finding that Global Witness had alleged that NOCAL and not Exxon had bribed Tah and McClain. Silberman characterized the New York Times v. Sullivan case as requiring that – when holding a defendant liable for defamation of a public figure – the plaintiff must prove actual malice on the part of the defendant, namely that the defendant acted “with knowledge that the statement was false or with reckless disregard for the truth” [p. 4]. He added that this rule therefore balances the “vindication of reputational harms with the need to protect unintended falsehoods that inevitably arise as part of vibrant debate” [p. 4]. Silberman noted that “it is important not to confuse what a plaintiff must ultimately show with the kind of evidence he may use to make that showing” because a defendant will seldom admit to malice [p. 4]. He referred to the case of St. Amant v. Thompson which had provided examples of “objective circumstances that permit a subjective inference of actual malice”, including the fabrication of a story or the base of a story being an unverified anonymous telephone call, a story which is “inherently improbable”, and “where there are obvious reasons to doubt” the basis of a story [p. 4]. He described the St. Amant case as establishing a “straightforward framework for evaluating contentions of actual malice … [to] assess the inherent plausibility of a defendant’s story as well as the facts in support. And if we find the story objectively plausible, we then ask whether evidence to the contrary creates obvious reasons for doubt” [p. 5].

Silberman would have found that Global Witness’s story of insinuating that Exxon bribed Tah and McClain was “inherently implausible” because Global Witness admitted that it had no evidence of this, and that there was also no evidence that the bonuses paid by NOCAL were bribes. Accordingly, he would have held that “it is sufficient to infer actual malice at the 12(b)(6) stage since the story is inherently improbable” [p. 8].

Silberman disagreed with the majority’s outright dismissal of the value of the denials Global Witness received when it inquired into the truth of the bribery allegations, and characterized the Lohrenz case as requiring the Court to evaluate the content of a denial and not the denial “in itself” when judging whether it is relevant [p. 11-12]. He would have found that – unlike in Lohrenz where there was no obvious reason to doubt the story – Global Witness had no evidence to contradict the six denials which should have led Global Witness to doubt its story.

Silberman called for an “overruling of New York Times v. Sullivan” and referred to Justice Thomas’s comment in the Supreme Court case of McKee v. Cosby that the Sullivan case is “a policy-driven decision masquerading as constitutional law” [p. 15]. He added that the case is a “threat to American democracy” [p. 15]. Silberman noted the history of the Sullivan case and that the case “has increased the power of the media” [p. 19]. He accepted that there may have been a need to protect the “institutional press” to allow them to cover the civil rights movement but commented that “[i]n light of today’s very different circumstances, I doubt the Court would invent the same rule” [p. 19]. Silberman stated that the case “allows the press to cast false aspersions on public figures with near impunity” [p. 19-20], and referred to an article which said the press “more often manufactures scandals involving political conservatives” [p. 20]. Silberman stated that the “increased power of the press is so dangerous today because we are very close to one-party control of these institutions” [p. 20]. He noted that although “the bias against the Republican Party—not just controversial individuals—is rather shocking today, this is not new” and described the “most influential” newspapers as being “Democratic Party broadsheets” and television as a “Democratic Party trumpet” [p. 21]. Silberman also described Silicon Valley as “similarly filter[ing] news delivery in ways favorable to the Democratic Party” [p. 21]. Silberman warned that “ideological homogeneity in the media—or in the channels of information distribution—risks repressing certain ideas from the public consciousness just as surely as if access were restricted by the government” and that “the first step taken by any potential authoritarian or dictatorial regime is to gain control of communications, particularly the delivery of news” [p. 22].

---