AFI Holdings of Illinois, LLC v. Waterman Broadcasting
Filing
45
OPINION AND ORDER denying 27 Defendant Jason Dorn M.D.'s Motion to Dismiss. Signed by Judge John E. Steele on 6/22/2018. (BLW)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
AFI HOLDINGS OF ILLINOIS,
LLC d/b/a
Happy
Leaves,
Inc.,
Plaintiff,
v.
Case No:
2:17-cv-491-FtM-99CM
WATERMAN
BROADCASTING,
a
Florida
corp.,
GRAHAM
HUNTER, LISA SPOONER, PETER
BUSCH,
and
JOSEPH
DORN,
M.D.,
Defendants.
OPINION AND ORDER
This matter comes before the Court on review of defendant
Joseph Dorn, M.D.’s Motion to Dismiss (Doc. #27) filed on April
13, 2018. Plaintiff filed a Response in Opposition (Doc. #36) on
April 30, 2018.
For the reasons set forth below, the Motion is
denied.
I.
On June 27, 2017, plaintiff AFI Holdings, LLC d/b/a Happy
Leaves, Inc., (“AFI”) filed suit in Lee County, Florida alleging
defamation and commercial disparagement against Defendant Waterman
Broadcasting (“Waterman”).
The case was removed to the Middle
District of Florida based on diversity jurisdiction.
AFI filed
an Amended Complaint (Doc. #22), adding the individual defendants.
AFI alleges that defendants’ statements during WBBH-TV’s July 1,
2016 segment on AFI’s sales of the hemp oil extract “Charlotte’s
Web” on Groupon defamed AFI and disparaged its product.
The Amended Complaint alleges as follows: AFI d/b/a Happy
Leaves distributes hemp oil extract for another company named CW
Hemp, Inc., which manufactures “Charlotte’s Web” in Colorado.
(Doc. #22, ¶ 12.)
Charlotte’s Web is a commercially available
full plant hemp extract.
is cannabidiol (CBD).
cannabis.
The active ingredient in Charlotte’s Web
CBD can be harvested from both hemp and
(Id., ¶ 13.)
CBD oils harvested from hemp, such as
Charlotte’s Web, have very low levels of tetrahydrocannadion (THC)
compared
to
those
harvested
regulated in the same way.
from
cannabis
(Id., ¶ 14.)
and
they
are
not
Plaintiff alleges that
according to Florida Bill 893.02, which became effective on July
1, 2014, the term “cannabis” does not include any cannabis that
contains 0.5 percent or less of THC and more than 15 percent of
CBD.
(Id., ¶ 15.)
The Charlotte’s Web hemp oil extract sold by
AFI on Groupon contains less than 0.3 percent of THC and does not
fall within the definition of “cannabis” under Florida law.
¶¶ 16, 18.)
(Id.,
Hemp oil extract is separate and distinct from
marijuana and marijuana oil extract is sold legally throughout all
50 states.
and
Hemp oil extract is not “pot” or “medical marijuana”
industrial
hemp
products
are
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currently
distributed
in
thousands of health and wellness stores across the United States.
(Id., ¶¶ 17, 22.)
CW Hemp, Inc.’s business model allows for exclusive regional
distributorships of Charlotte’s Web.
enjoyed
an
exclusive
agreement
Charlotte’s Web on Groupon.
selling through Groupon.
Prior to July 2, 2016, AFI
with
CW
Hemp,
Inc.
to
sell
AFI was CW Hemp’s only distributor
(Doc.
#22, ¶ 23.)
was particularly lucrative for AFI.
The Groupon account
In June 2016, AFI’s monthly
gross sales of Charlotte’s Web on Groupon were approximately
$75,000.
(Id., ¶ 24.)
On July 1, 2016, defendants Lisa Spooner and Peter Busch were
on-air anchors, and Graham Hunter was an on-air reporter for WBBHTV, located in Fort Myers, Florida.
operated by Waterman Broadcasting.
The station is owned and
(Doc. #22, ¶¶ 25-28.)
During
WBBH-TV’s 11:00 p.m. newscast on that date, defendants aired a
segment about AFI and Charlotte’s Web.
The segment identified
defendant Joseph Dorn, M.D. as an “expert” on the subject.
(Id.,
¶ 29.)
During the broadcast, defendants knowingly made false and/or
reckless statements about AFI and Charlotte’s Web in a way to
sensationalize the story.
(Doc. #22, ¶ 30.)
Plaintiff alleges
that defendants made the following statements: Ms. Spooner falsely
claimed that Charlotte’s Web was “medical marijuana” and that
“200mg of Charlotte’s Web Pot” could be purchased for “forty
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bucks.”
She stated that “pot” and “medical marijuana’ could now
be purchased on Groupon via AFI.
(Id., ¶ 31.)
Mr. Busch falsely
stated that “only five dispensaries in Florida are allowed to sell
it under Florida law” in reference to the Charlotte’s Web to imply
AFI was violating Florida law.
He also stated that “Graham Hunter
spoke to an expert about how it’s actually being sold in this ad”
in referring to AFI’s advertisement on Groupon.
(Id., ¶ 32.)
Mr.
Hunter falsely claimed that “there’s really no way to know exactly
what’s in this stuff without buying it and testing it.”
33.)
(Id., ¶
Mr. Hunter also provided misleading pictures and videos for
the segment, and also conducted street interviews. (Id., ¶¶ 3435.)
Hunter stated that he contacted Groupon to notify it of the
story and sent an email to AFI’s owner when in fact the email was
only sent to AFI two hours before airing the segment, asking: “What
is your product?” and “How is this legal to dispense to the U.S.?”
(Id., ¶ 40.)
The segment was aired before receiving a response.
Particularly
relevant
to
the
instant
Motion,
plaintiff
alleges that Dr. Dorn stated during the segment in reference to
AFI that “somebody like this, they’re not playing by the rules, so
who in the world knows what they’re selling.”
(Doc. #22, ¶ 36.)
Plaintiff alleges that this implies that AFI was violating Florida
law by selling Charlotte’s Web in Florida via Groupon.
(Id.)
As a result of the segment, Groupon discontinued all sales of
Charlotte’s Web on its website.
(Doc. #22, ¶¶ 43-44.)
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Plaintiff
states that Groupon would not have known about the story but for
Waterman and Mr. Hunter notifying it.
(Id., ¶ 45.)
AFI was the
only distributor of Charlotte’s Web on Groupon and following the
July 1, 2016 segment, AFI’s total sales were reduced to zero.
(Id., ¶ 46.)
On
July
14,
2016,
Waterman
posted
an
online
statement
retracting its July 1, 2016 story about AFI and Charlotte’s Web,
stating:
On July 1, 2016 NBC-2.com published a story here about
a (sic) Illinois based company called Happy Leaves
selling a product called Charlotte’s Web on Groupon.
In our story we characterized the product as ‘pot’ and
medical marijuana.
It is not.
According to their
company, the product is derived from hemp and Charlott’e
Web contains no illegal drugs or regulated drugs which
require a special license to sell.
The active ingredient in Charlotte’s Web is called CBD
(cannabidiol). CBD can be harvested from both hemp and
cannabis. CBD oils harvested from hemp have very low
levels of tetrahydrocannadion (THC) than those harvested
from cannabis and are not regulated in any way.
Oils made from Hemp CBD are much more accessible and can
be bought from many outlets.
We apologize for any
confusion created by our story.
(Doc. #22, ¶ 47.)
November
21,
2017,
However, between the retraction and at least
Waterman
continued
to
publish
defamatory
statements and images about AFI Holdings on its Facebook page.
(Id., ¶ 49.)
As a result of defendants’ statements that AFI was
violating Florida law, sales of Charlotte’s Web were devastated.
(Id., ¶ 50.)
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Plaintiff’s Amended Complaint alleges defamation per se and
commercial disparagement against all defendants (Counts I-VI).
Plaintiff seeks $1,200,000 in damages, as well as punitive damages.
Dr. Dorn moves to dismiss the defamation per se claim brought
against him (Count V).
The remaining defendants filed answers.
II.
A Complaint must contain a “short and plain statement of the
claim showing that the pleader is entitled to relief.”
Civ. P. 8(a)(2).
Fed. R.
This obligation “requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause
of action will not do.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007)(citation omitted).
To survive dismissal, the factual
allegations must be “plausible” and “must be enough to raise a
right to relief above the speculative level.”
Id; See also Edwards
v. Prime Inc., 602 F. 3d 1276, 1291 (11th Cir. 2010).
In deciding a Rule 12(b)(6) motion to dismiss, the Court must
accept all factual allegations in a Complaint as true and take
them in the light most favorable to plaintiff, Erickson v. Pardus,
551 U.S. 89 (2007), but “[l]egal conclusions without adequate
factual support are entitled to no assumption of truth,” Mamani v.
Berzain, 654 F. 3d 1148, 1153 (11th Cir. 2011)(citations omitted).
“Threadbare
recitals
of
the
elements
of
a
cause
of
supported by mere conclusory statements, do not suffice.”
556 U.S. at 678.
action,
Iqbal,
“Factual allegations that are merely consistent
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with
a
defendant’s
plausible.”
liability
fall
short
of
being
facially
Chaparro v. Carnival Corp., 693 F.3d 1333, 1337 (11th
Cir. 2012) (internal citations omitted).
Thus, the Court engages
in a two-step approach: “When there are well-pleaded factual
allegations,
a
court
should
assume
their
veracity
and
then
determine whether they plausibly give rise to an entitlement to
relief.”
Iqbal, 556 U.S. at 679.
III.
Plaintiff’s
Amended
Complaint
includes
one
allegedly
defamatory statement made by Dr. Dorn: “somebody like this, they’re
not playing by the rules, so who in the world knows what they’re
selling.”
(Doc. #22, ¶ 36.)
In moving for dismissal, Dr. Dorn
argues that this was a statement of pure opinion, not defamation.
Dr. Dorn also argues that his statement does not satisfy as
defamation per se because Dr. Dorn never actually referenced
plaintiff or its product; rather, the statement was about a larger
and undefined group of products.
Further, Dr. Dorn never stated
that any law had been violated, but argues that it is currently
illegal
to
sell
plaintiff’s
product
in
Florida.
Plaintiff
disagrees that it is currently illegal to sell Charlotte’s Web in
Florida and Dorn’s statement that AFI was not “playing by the
rules” implies that AFI was violating the law, which was false.
However, plaintiff states that even if it is shown that Charlotte’s
Web has become illegal to sell in Florida since the broadcast,
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that could go to damages, not the viability of AFI’s claim against
Dr. Dorn.
Defamation, which includes libel and slander 1, is generally
defined as “the unprivileged publication of false statements which
naturally and proximately result in injury to another.”
Wolfson
v. Kirk, 273 So. 2d 774, 776 (Fla. 4th DCA 1973). Under Florida
law, the elements of defamation are that a party (1) made a
statement,
(2)
that
was
false,
(3)
to
a
third
party,
i.e.,
published the statement, and (4) plaintiff suffered damages as a
result.
Shaw v. R.J. Reynolds Tobacco Co., 818 F. Supp. 1539
(M.D. Fla. 1993), aff’d, 15 F.3d 1097 (1993); See also Alan v.
Wells Fargo Bank, N.A., 604 F. App’x 863, 865 (11th Cir. 2015).
“[T]he complaint need only state such words and that they were
used in a defamatory manner,” and the sufficiency of such a
statement depends on whether the words were actionable per se.
Id. (quoting Perez v. City of Key West, Florida, 823 F. Supp. 934,
938 (M.D. Fla. 1993).
Malice is an additional component of a
claim of defamation per se.
See Alan v. Wells Fargo Bank, N.A.,
No. 14-80682-CIV, 2014 WL 11393570, at *2 (S.D. Fla. June 18, 2014)
(per se defamatory statements are “so obviously defamatory” that
malice and damages are presumed), aff’d, 604 F. App’x 863 (11th
1
Slander is ordinarily confined to spoke defamatory
statements, whereas libel pertains to written statements. Here,
only slander is at issue.
- 8 -
Cir.
2015).
Slander
is
actionable
per
se
in
a
variety
of
circumstances under Florida law, but pertinent here are words that
impugn a person’s trade or profession.
“Such words are actionable
per se if by general consent their character is injurious e.g.,
conduct, characteristics or condition incompatible with the proper
exercise of one’s lawful business, trade, profession or office.”
Perez, 823 F. Supp. at 938 (citing Joopanenko v. Gavagan, 67 So.
2d 434 (1953)).
When
bringing
a
defamation
action
premised
on
oral
statements, a plaintiff must “set out the substance of the spoken
words
with
sufficient
particularity
to
enable
the
determine whether the publication was defamatory.”
Insurers
Unlimited,
Inc.,
No.
1528629, *3 (M.D. Fla. 2005).
court
to
Spitalny v.
2:05-cv-12-FTM-29SPC,
2005
WL
“Absent sufficient allegations, a
claim for slander is properly dismissed for failure to state a
cause of action.”
Fowler v. Taco Viva, Inc., 646 F. Supp. 152,
157-58 (S.D. Fla. 1986); see also Grigsby v. Rest. Mgmt. Svcs.,
Inc., No. 94-cv-1115-CIV-T-17E, 1994 WL 855090 (dismissing slander
action for failure to state a claim when plaintiff neither alleged
the words or substances of the alleged defamatory statements nor
any actual damages resulting from such statements).
Here,
reasonably
hearing
understand
Dr.
it
Dorn’s
to
statement,
implicate
business within the confines of the law.
- 9 -
AFI’s
a
person
exercise
could
of
its
See Wolfson, 273 So. 2d
at 778 (concluding defamatory statement was actionable per se
because it characterized plaintiff, a financier/businessman, as a
“person with whom commercial relations were undesirable,” and as
such, was incompatible with plaintiff’s ability to conduct a lawful
business).
Dr. Dorn’s statement, “they’re not playing by the
rules” at a minimum implies to the listener that AFI is doing
something
improper
by
selling
Charlotte’s
Web
Florida, which by its nature is injurious to AFI.
F. Supp. at 938.
on
Groupon
in
See Perez, 823
Such a statement could have a defamatory or
harmful effect on AFI (and indeed did have such an effect).
AFI
has sufficiently pled the substance of Dr. Dorn’s alleged false
statement in the Amended Complaint, that it was made with actual
malice,
and
described
how
the
statement
was
injurious
to
plaintiff’s profession, as well as the damages that occurred as a
result.
Dr. Dorn’s argument that Charlotte’s Web was in fact
illegal at the time of the segment (a fact which the parties
dispute), does not change that plaintiff has plausibly alleges
that the statement was false at the time it was made.
Dr. Dorn’s argument that he never directly identified AFI or
its product during the segment does not compel a different result,
as the Court may consider the facts and circumstances to the extent
they might reasonably give meaning to the language used.
273 So. 2d at 778.
Wolfson,
Based upon plaintiff’s recitation of the facts
(which are incorporated by reference into Count V against Dr.
- 10 -
Dorn), the segment was about AFI and its Charlotte’s Web product
sold on Groupon.
When Dr. Dorn stated “somebody like this” it
clearly implies from the context of the segment that he was
speaking of AFI.
Further, the Court does not find that Dr. Dorn’s statement
was an expression of pure opinion.
Although statements of pure
opinion are not actionable as defamation, Johnson v. Clark, 484 F.
Supp. 2d 1242, 1247 (M.D. Fla. 2007) (citing Morse v. Ripken, 707
So. 2d 921, 922 (Fla. 4th DCA 1998)), courts distinguish between
pure expressions of opinion and mixed expressions.
F. Supp. 2d at 1247.
Johnson, 484
“Pure opinion occurs when someone makes a
comment or states an opinion based on facts which are set forth in
the article or which are otherwise known or available to the reader
or listener as a member of the public.”
Id. (citing From v.
Tallahassee Democrat, Inc., 400 So. 2d 52, 57 (Fla. 1st DCA 1981)).
“Mixed expression of opinion occurs when an opinion or comment is
made which is based upon facts regarding the plaintiff or his
conduct that have not been stated in the article or assumed to
exist by the parties to the communication.”
Id.
Whether a
statement is one of opinion or one of fact (or a mixture of both)
is a question of law.
Keller v. Miami Herald Pub. Co., 778 F.2d
711, 715 (11th Cir. 1985) (citing From, 400 So. 2d at 56-57).
Where the court finds that the statement in question is of mixed
opinion
and
fact
and
reasonably
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capable
of
defamatory
interpretation, then a jury issue is presented.
Johnson, 484 F.
Supp. 2d at 1247.
Dr. Dorn’s statement, considered in the context of the segment
as a whole as alleged in the Amended Complaint, could qualify as
a mixed expression of opinion and fact.
Dr. Dorn’s statement was
not based purely on facts as set forth in the broadcast, and the
statement
implies
the
regarding
plaintiff’s
assertion
compliance
of
other
with
Charlotte’s Web in Florida via Groupon.
undisclosed
Florida
law
by
facts
selling
Of course, a jury may
find that the “facts” upon which Dr. Dorn relied in support of his
opinion were either incomplete or incorrect, but as alleged,
plaintiff states a plausible claim for defamation per se.
Accordingly, it is now
ORDERED:
Defendant Joseph Dorn’s Motion to Dismiss (Doc. #27) is
DENIED.
DONE AND ORDERED at Fort Myers, Florida, this __22nd__ day of
June, 2017.
Copies:
All parties of record
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