Thursday, April 8, 2021

D.C. Court Remands Case Where Law Firm Sued For Radio Statements

The District of Columbia Court of Appeals remanded a lawsuit against a law firm, concluding that defamation claims were properly dismissed but that a tortious interference count survived

A local radio station published statements by attorney Michael Nadel, a partner at McDermott Will & Emery LLP (“McDermott Will”), about appellant, Federal Title & Escrow Co. (“Federal Title”), in connection with his firm’s representation of Sean Smith and Erin Wrona in a lawsuit against Federal Title for the loss of $1.57 million held in escrow. Considering these statements to be defamatory and otherwise tortious, the appellants (Federal Title and its owner, Todd Ewing) sued the appellees (Nadel, McDermott Will, Smith, and Wrona) for damages, as well as a published retraction of Nadel’s statements and their removal from all websites. Appellees filed a motion to dismiss for failure to state a claim under Super. Ct. Civ. R. 12(b)(6), as well as a special motion to dismiss under the District of Columbia Anti-Strategic Lawsuits Against Public Participation Act  (“Anti-SLAPP Act”).

The trial court granted appellees’ 12(b)(6) motion to dismiss based on its determination that appellants failed to plead any viable claim. The court also granted appellees’ anti-SLAPP motion to dismiss, concluding that they had made the required prima facie showing that Nadel’s statements comprised “an act in furtherance of the right of advocacy on issues of public interest[,]” unrebutted by appellants, and thus that appellants’ claims could not succeed on the merits. The trial court then awarded appellees their attorneys’ fees under the Anti-SLAPP Act fee-shifting provision.

We conclude that the trial court correctly dismissed appellants’ claims for defamation and false light invasion of privacy but erred in dismissing their claim for tortious interference with business relations. Furthermore, the trial court erred in granting appellees’ anti-SLAPP motion to dismiss and awarding them attorneys’ fees. Accordingly, we affirm in part, reverse in part, and remand for further proceedings.

The underlying dispute involved a transfer of funds

In August 2017, Smith and Wrona filed a federal RICO suit against appellants Federal Title and Ewing, as well as against Schifflett, JMZ, and Jeff Zorbo (JMZ’s owner). Shortly after the suit was filed, Nadel was interviewed by a reporter from the local public radio station, WAMU, resulting in publication of the following statements carried both on the air and on WAMU’s website:

“Federal Title either caused our money to be stolen or stole it, and we need to get our money back,” said Michael Nadel, the couple’s attorney. “We don’t have any evidence that it happened because of hackers other than Federal Title’s say-so.” Nadel also says Federal Title, which has offices in Friendship Heights and Logan Circle, failed to effectively communicate with Smith and Wrona ahead of the closing—a situation he attributes to the company being involved in the scheme. “Federal Title never called Sean Smith and said, ‘Bring your money to closing,’ and didn’t even bring it up until the middle of closing. So if they weren’t responsible for helping steal the money, it certainly seems like they knew well in advance of that closing that the money was gone. Their conduct shows that,” he said.

McDermott Will published on its website a link to the WAMU story and repeated on the website Nadel’s statements that Federal Title had “either caused our money to be stolen or stole it,” and that “if they weren’t responsible for helping steal the money, it certainly seems like they knew well in advance of that closing that the money was gone.”

The RICO case was dismissed and refiled in the local courts, where a joint stipulation of dismissal resolved it.

The defamation suit followed

When examining a defamation claim, we cannot separate the words from their context. As the trial court correctly concluded, when one considers Nadel’s statements in context, it is clear that he is communicating no more than his theory of his clients’ case. While appellants are correct in observing that statements which tend to “injure [the] plaintiff in his trade, profession or community standing” are important considerations in evaluating a defamation claim, “[a]n allegedly defamatory remark must be more than unpleasant or offensive; the language must make [appellants] appear odious, infamous, or ridiculous.”  It is therefore certainly the case that, if Nadel had simply asserted that Federal Title had stolen Smith’s and Wrona’s money, appellants likely would have appeared “infamous.” But the language used and its context made it clear to the audience “to whom it was addressed” – the general public – that appellees were not sure what happened to the money but held Federal Title legally responsible because they either “help[ed] steal the money” or “seem[ed] like they knew” what happened to it.20 In   the context of the radio reporter’s interview and related article, it would have been clear to the audience that, considered objectively, Nadel was speaking as an attorney, espousing a theory of liability to serve his clients’ interests, not making a personal accusation that appellants were “odious, infamous, or ridiculous.”

The tortious interference claim was properly pleaded.

A slap

we cannot interpret Nadel’s statements as relating to an issue of public interest simply because they appear in an article featuring the issue of cybercrime, which Nadel himself does not address. Neither can it be said that Federal Title and its principal, Todd Ewing, filed their claim as parties on “one side of a political or public policy debate” about “cybercrime” or any other issue of public interest, as required for a SLAPP lawsuit. Indeed, the only “debate” the parties were engaged in was over who was responsible for Smith’s and Wrona’s missing funds and by what means; Nadel expressed no opinion about cybercrime or any other public matter. Nadel’s statements, rather, were directed primarily at protecting his clients’ (and thus his own) commercial interests, which are not protected under the Anti-SLAPP Act.

...Notwithstanding the broad scope of “an issue of public interest,” which should be “liberally interpreted” under the Anti-SLAPP Act when addressing each criterion specified in § 16-5501(3), we must conclude that appellees have failed to make a prima facie showing that Nadel’s statements – nowhere embraced by any language in that subsection – were “in furtherance of the right of advocacy on issues of public interest.

(Mike Frisch)

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