PAN AM SYSTEMS INC et al v. HARDENBERGH et al

Filing 20

ORDER ON DEFENDANTS MOTION TO DISMISS 14 By JUDGE NANCY TORRESEN. (dfr)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
PAN AM SYSTEMS, INC. et al.,
Plaintiffs,
v.
CHALMERS HARDENBERGH,
et al.,
Defendants.

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) Civil Docket No. 2:11-cv-00339-NT
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ORDER ON DEFENDANTS’ MOTION TO DISMISS
INTRODUCTION
Defendants move to dismiss Plaintiffs’ Complaint for failure to state claims
on which relief can be granted. For the reasons set forth below, Defendants’ Motion
is GRANTED. The Plaintiffs’ claims are DISMISSED without prejudice. Plaintiffs
are given leave to file an Amended Complaint within thirty (30) days from the date
of this order.
FACTS ALLEGED IN THE COMPLAINT
The Plaintiffs are Pan Am Systems, Inc. (“Pan Am”), its subsidiary,
Springfield Terminal Railway Company (“Springfield Terminal”), and David
Andrew Fink. Mr. Fink was the President and Chief Executive Officer of Pan Am
from approximately 2000 to March of 2011.
Defendant Atlantic Northeast Rails & Ports, Inc. (“ANRP”) is a “widely read
weekly trade newsletter and e-bulletin covering the Northeastern United States,
Eastern Quebec and the Canadian Maritimes regions,” which also maintains a

website containing back issues of its newsletters. Complaint at ¶¶ 4-5. Defendant
Chalmers Hardenbergh is the editor, publisher, owner, and principal of ANRP.
Defendant C.M. Hardenbergh, P.A., is a Maine corporation which is an owner and
principal of ANRP.
The Complaint alleges that the Defendants published the following
statements about the Plaintiffs in ANRP’s trade newsletter, e-bulletins, and on
ANRP’s website between December 2, 2009 and March 17, 2011.
On December 2, 2009, ANRP Issue 09#11B “ST: COAL DERAILMENT”
stated:
Peter Burling, chair of the New Hampshire Rail Transit Authority,
blamed ST for the accident. “What has happened here is a perfectly
predictable accident – but it’s hard to describe it as an accident, since
the probabilities were so clear it was going to take place. The only
thing we didn’t know is when and where . . . . A horrendously
dilapidated railroad system has caused a slow-moving coal train to fall
off the tracks.”
Complaint at ¶ 12A.1
ANRP’s October 12, 2010 E-Bulletin and October 22, 2010 Issue 10#10A,
“PAN AM AT NEARS” and “PATRIOT CORRIDOR CONGESTION,” stated:
In addition to the complaints from Maine and New Hampshire [See
10#09B] about how long cars are taking to move from Mechanicville to
Ayer, one other prominent customer at NEARS was dissatisfied with
Pan Am service. She’s been familiar with it for many years and would
say only this: “It’s been consistent. Consistently bad.”
Id. at ¶12B (brackets in Complaint).
ANRP’s November 2, 2010 E-bulletin and November 8, 2010 Issue 10#10B,
“ST: HOME-GROWN APUs” and “A wise use of company resources?” stated:
1

To avoid confusion, the Court will refer to the subparagraphs of Paragraph 12 alphabetically.

2

Terry Judge, sales and marketing director plus communications
manager for Kim Hostart, which manufactures many of the APUs used
in North American locomotives, was bemused by the Pan Am move. “I
would think they have plenty of other challenges, [such as] safety
challenges, employee relations and locomotive maintenance.
Id. at ¶12C (brackets in Complaint).
ANRP’s December 10, 2010 E-Bulletin and December 21, 2010 Issue 10#12A,
“Better interchange would mean more customers” stated:
Despite ST’s promise to locate a crew in Concord and switch customers
five days a week [see 10#05A], Dearness reported that ST has done
neither. . . . If ST would provide the service it promised, Dearness
believes he could land two more customers. One is “very frustrated
because it would like to start now, and can’t due to the level of service
and is familiar” with ST’s lack of service.
Id. at ¶12D (brackets in Complaint).
ANRP’s March 10, 2011 E-Bulletin and March 21, 2011 Issue 11#02B “PAN
AM: A NEW DAWN?” stated:
PAN AM OWNER TIM MELLON REMOVED DAVE FINK PERE from
management of the company according to four separate sources: one
MBTA, one union, one Maine source, and one form [sic] other railroad
management in New England. Sources differ on what precipitated the
action, whether Fink is formally removed or is only on a “leave of
absence,” and whether Mellon came to new England to administer the
coup de grace or did it by telephone, but all agree that David Andrew
Fink, the head of Pan Am Systems, is no longer in charge.
Id. at ¶12E.
ANRP’s March 17, 2011 E-Bulletin and March 21, 2011 Issue #02B “PAN
AM: HAZ-MAT SERVICE” stated:
The railroad “loses” cars on a consistent ongoing basis, including one
car “lost” for over 60 days….even though certain DHS and DOT
statutes require carriers to release [TIH] cars within 48 hours.

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Id. at ¶ 12F (brackets in Complaint).
The Plaintiffs have brought a four count Complaint against the Defendants
alleging defamation, defamation per se, false light, and punitive damages. The
Defendants have moved to dismiss each count of the Complaint under Federal Rule
of Civil Procedure 12(b)(6) for failure to state claims upon which relief may be
granted. In their Response, the Plaintiffs claim that they have alleged sufficient
facts to state claims for defamation and false light. They further explain that they
have plead defamation per se and punitive damages not as separate causes of action
but rather to put the Defendants on notice that they are pursuing a defamation per
se theory and seek punitive damages.
LEGAL STANDARD
Rule 8 of the Federal Rules of Civil Procedure requires that a complaint
contain “a short and plain statement of the claim showing that the pleader is
entitled to relief” and that “each allegation must be simple, concise, and direct.”
Fed. R. Civ. P. 8(a)(2), (d)(1). The First Circuit has set forth, consistent with Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007),
and Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009), the
“proper way of handling a motion to dismiss” for failure to state a claim upon which
relief can be granted under Federal Rule of Civil Procedure 12(b)(6):
Step one: isolate and ignore statements in the complaint that simply
offer legal labels and conclusions or merely rehash cause-of-action
elements. Step two: take the complaint’s well-pled (i.e. non-conclusory,
non-speculative) facts as true, drawing all reasonable inferences in the
pleader’s favor, and see if they plausibly narrate a claim for relief.

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Schatz v. Republican State Leadership Comm., No. 11-1437, 2012 WL 414264, at *4
(1st Cir. Feb. 10, 2012) (citations omitted). “Plausible, of course, means something
more than merely possible, and gauging a pleaded situation’s plausibility is a
‘context-specific’ job that requires the reviewing court to ‘draw on’ our ‘judicial
experience and common sense.’” Id. (quoting Iqbal, 129 S. Ct. at 1950). “Although
there is no need for detailed factual allegations, a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its
face; accordingly, a complaint must include more than a rote recital of the elements
of a cause of action, but instead must include factual content that allows the court
to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Artuso v. Vertex Pharma, Inc., 637 F.3d 1, 5 (1st Cir. 2011).
ANALYSIS
I.

DEFAMATION
The elements of a defamation action under Maine common law, are:
(1)
(2)
(3)
(4)

a false and defamatory statement pertaining to the plaintiff;
an unprivileged publication to a third party;
fault amounting at least to negligence; and
defamation per se or special harm.

Garrett v. Tandy Corp., 295 F.3d 94, 103 (1st Cir. 2002) (citing Rippett v. Bemis, 672
A.2d 82, 86 (Me. 1996)); Morgan v. Kooistra, 941 A.2d 447, 455 (Me. 2008).
Over the last fifty years, the Supreme Court has imposed various
constitutional restrictions on common law defamation actions. The Court, concerned
about the chilling effect of defamation actions on free speech, has sought to ensure
robust public debate on areas of public concern. In cases brought by public officials
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or public figures, for instance, plaintiffs are required to prove that the allegedly
defamatory statements were made with “actual malice,” that is, with knowledge
that the statements were false or with reckless disregard of the statements’ falsity.
New York Times Co. v. Sullivan, 376 U.S. 254, 279-83, 84 S. Ct. 710, 11 L. Ed. 2d
686 (1964) (public officials); Curtis Publ’g Co. v. Butts, 388 U.S. 130, 154-55, 87 S.
Ct. 1975, 18 L. Ed. 2d 1094 (1967) (public figures).
Private individuals claiming to be defamed by statements relating to matters
of public interest or concern are required to make some showing of fault and are not
permitted to recover presumed or punitive damages unless actual malice is shown.
Gertz v. Robert Welch, Inc. 418 U.S. 323, 349-50, 94 S. Ct. 2997, 41 L. Ed. 2d 789
(1974). In defamation actions against a media defendant on matters of public
concern, the Court has rejected the common law presumption of falsity and instead
imposed the burden of showing the falsity of the statements on the plaintiffs.
Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767, 776-77, 106 S. Ct. 1558, 89 L.
Ed. 2d 783 (1986). The Supreme Court has also imposed constitutional limits on the
type of speech which is actionable, carving out exceptions for statements which are
not provable as false such as rhetorical hyperbole, imaginative expression, and
parody. Milkovich v. Lorain Journal Co., 497 U.S. 1, 16-21, 110 S. Ct. 2695, 111 L.
Ed. 2d 1 (1990) (citing cases). See also Veilleux v. Nat’l Broad. Co., 206 F.3d 92, 107
(1st Cir. 2000).

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A. Media Defendant, Matter of Public Concern, Public Official or
Figures
In order to ascertain which elements must be borne by the Plaintiffs, it is
necessary to decide whether: (1) the Plaintiffs are public officials or public figures;
(2) the defendants are members of the media; and (3) the speech involves a matter
of public concern.
1. Media Defendant
Starting with the easiest of these questions, the Complaint alleges that
ANRP is a “widely read weekly trade newsletter and e-bulletin covering the
Northeastern United States, Eastern Quebec and the Canadian Maritimes regions”
and Chalmers Hardenbergh and C.M. Hardenbergh, P.A. are the owners and
principals of ANRP. As such, Defendants should be treated as “media defendants.”
2. Matter of Public Concern
We can also tell from the Complaint that the speech at issue in this case
involves matters of public concern. Matters of public concern are those that can be
“fairly considered as relating to any matter of political, social, or other concern to
the community.” Connick v. Myers, 461 U.S. 138, 146-47, 103 S. Ct. 1684, 75 L. Ed.
2d 708 (1983). Matters of private concern are those that address “matters only of
personal interest.” Id. Courts determine whether a statement pertains to a public
concern by assessing its “content, form and context.” Dun & Bradstreet, Inc. v.
Greenmoss Builders, Inc., 472 U.S. 749, 761, 105 S. Ct. 2939, 86 L. Ed. 2d 593
(1985).

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In determining whether a statement impacts a matter of public concern, “the
relevant community need not be very large and the relevant concern need not be of
paramount importance or national scope. Rather, ‘it is sufficient that the speech
concern matters in which even a relatively small segment of the general public
might be interested.’” Levinsky’s, Inc. v. Wal-Mart Stores, Inc., 127 F.3d 122, 132 (1st
Cir. 1997) (quoting Roe v. City of San Francisco, 109 F.3d 578, 585 (9th Cir. 1997)).
In Levinsky’s, a manager at Wal-Mart told a journalist that a retail competitor
(Levinsky’s) took a long time to answer their phones. The district court, analyzing
whether this defamatory statement addressed a matter of public concern stated:
This speech, however, can be reasonably understood as addressing a
matter of general public concern in the context of the competition
between these two retailers for customers. The statement regarding
Levinsky’s telephone response habits speaks directly to customer
service: a consideration of primary importance to consumers in a
competitive marketplace.
Levinsky’s, Inc. v. Wal-Mart Stores, Inc., 999 F. Supp. 137, 142 (D. Me. 1998).
As for “content,” the statements involve the condition of the Plaintiffs’
railways, the service provided by the Plaintiffs to their freight customers, and the
operations of the Plaintiffs’ railroads. As for the “form” of the statements, the
Complaint reveals that they were part of articles critical of the Plaintiffs that were
published between December 2009 and March 2011 in the Defendants’ trade
newsletter and e-bulletin. The Complaint, which includes only snippets from the
Defendant’s articles, reveals little about the “context” of the statements. What the
Court can determine from the excerpts provided, however, is that the articles are

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critical of the Plaintiffs’ railroad operations on important issues such as safety and
service.
Railroads are a highly regulated industry, subject to public laws on safety, 49
U.S.C. §§ 20101 - 21311, provided with special public funding, 49 U.S.C. §§ 22101 –
22706, and subject to oversight by the Federal Railroad Administration, 49 U.S.C. §
103, and the Surface Transportation Board, ICC Termination Act of 1995, 49 U.S.C.
§§ 701 - 727. Over a hundred years ago, in a case deciding the power of the courts to
compel two railroad companies to connect their lines, the Supreme Court
underscored the public interest in the operation of railroads.
Railroads have from the very outset been regarded as public highways,
and the right and the duty of the government to regulate in a
reasonable and proper manner the conduct and business of railroad
corporations have been founded upon that fact. Constituting public
highways of a most important character, the function of proper
regulation by the government springs from the fact that in relation to
all highways the duty of regulation is governmental in its nature. . . . It
is because they are such highways that the land upon which the rails
are laid, and also that which may be necessary for the other purposes
of the corporation, is said to be used for a public purpose, and on that
ground the power of eminent domain which is given them is held to be
a constitutional exercise of legislative authority. The right of the
legislature to tax in furtherance of such use is founded upon the same
considerations that the use is a public one, and therefore taxation in
support of such a use is valid. The companies hold a public franchise,
and governmental supervision is valid. They are organized for the
public interests and to subserve primarily the public good and
convenience.
Wisconsin, M. & P.R. Co. v. Jacobson, 179 U.S. 287, 297, 21 S. Ct. 115 (1900).
Assessed against this backdrop, the public interest in the safety, efficiency,
and viability of the rail system – whether freight or passenger – is clear. See,

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Guilford Trans. Indus. v. Wilner, 760 A.2d 580, 597 (D.C. Cir. 2000) (comments
made by media defendant about railroad operator and its troubled history with
labor unions and litigation with Amtrak over maintenance of track were of
substantial public concern).2 Judged by their content, form and context, the
allegedly defamatory statements concern matters of public interest.
3. Public Figures
Plaintiffs are public figures if they either assume “‘roles of especial
prominence in the affairs of society,’ perhaps by occupying positions of ‘persuasive
power and influence,’ or . . . ‘thrust themselves to the forefront of particular public
controversies in order to influence the resolution of the issues involved.’” Pendleton
v. Haverhill, 156 F.3d 57, 67 (1st Cir. 1998) (quoting Gertz, 418 U.S. at 345).
Plaintiffs who fall into the second category are considered public figures only for
that particular controversy or limited-purpose public figures. Gertz, 418 U.S. at 351.
To assess whether the Plaintiffs are limited-purpose public figures, the Court must
first determine if a public controversy existed prior to the alleged defamatory
publications. Norris v. Bangor Publ’g Co., 53 F. Supp. 2d 495 (D. Me. 1999).
The Plaintiffs cite Snead v. Redland Aggregates, Ltd., 998 F.2d 1325 (5th Cir. 1993), to
support their claim that they are private parties in a matter involving private concerns. In Snead,
the inventor of a “dump” mechanism for trains sued two English companies (Redland and Standard)
for misappropriation of trade secrets and breach of a confidential relationship. Redland was a
company which quarried sand, gravel, and crushed stone. Standard was a manufacturer of trains.
After the suit was filed, Snead issued a press release accusing Redland and Standard of
“international theft,” “international espionage,” and “international piracy.” The defendants
counterclaimed for libel. The Fifth Circuit held that Standard and Redland were private parties and
the speech at issue was not a matter of public concern. Snead is factually distinguishable from this
case in that there was no media defendant, and the unsolicited press release was solely in the
interest of Snead. Furthermore, the Fifth Circuit used a different standard to assess matters of
public concern, focusing on whether the statements were of interest to the general public rather than
to a particular industry. In contrast, the First Circuit has instructed that the relevant interested
community “need not be very large and the relevant concern need not be of paramount importance or
national scope.” Levinsky’s, 127 F.3d at 132.
2

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If Plaintiffs are private citizens, they need only allege that the Defendants
negligently disregarded the falsity of the statements. If, however, Plaintiffs are
public figures, then they are required to allege actual malice, that is, that the
Defendants acted knowingly or with reckless disregard of the falsity of the
statements. In Guilford, similar litigation which apparently involves one of the
same plaintiffs (Mr. Fink), the court expressed the view that the railroad company
plaintiffs and Mr. Fink were public figures. Guilford, 760 A.2d at 588 n.5.
The Complaint does not provide sufficient facts to support a conclusion that
the Plaintiffs are public figures. The Plaintiffs argue that they are not public
figures. The Defendants have asked the Court to take judicial notice of several local
newspaper articles that mention Pan Am, Springfield Terminal, and Mr. Fink, in
support of Defendants’ claim that Pan Am, Springfield Terminal, and Mr. Fink are
public figures. The Court declines to take judicial notice of these newspaper articles
and sidesteps the question of whether the Plaintiffs are public figures for the
purposes of the Motion to Dismiss. Accordingly, the Complaint, at least at this stage
of the proceedings, need only allege fault on the part of the Defendants to the
negligence standard.
B. Elements of Defamation
In their Motion to Dismiss, the Defendants argue that the Plaintiffs have
failed to allege facts sufficient to support each of the elements of defamation. The
Defendants argue that one of the statements is privileged under the common law
fair report privilege. The Defendants contend that the statements alleged in the

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Complaint do not bear a defamatory meaning and, even if they do, are statements of
opinion that are not provably false. The Defendants also argue that the Plaintiffs
have not sufficiently alleged falsity or fault — under either an actual malice or
negligence standard.
1. Unprivileged Publication
The Defendants argue that the Court should find that the publication of the
statement made by Peter Burling, the Chair of the New Hampshire Rail Transit
Authority, is protected by the fair report privilege. In states that have recognized
the fair report privilege, publishers who “fairly and accurately report certain types
of official or governmental action’ are immune from lawsuits arising out of such
reports. Yohe v. Nugent, 321 F.3d 35, 42 (1st Cir. 2003) (applying Massachusetts fair
report privilege). The Defendants ask the Court to apply this privilege even though
it has not yet been recognized in Maine. The Court declines the invitation. Katz v.
Pershing, LLC, 672 F.3d 64, 74 (1st Cir. 2012) (“After all, federal diversity courts are
charged with ascertaining state law, not with reshaping it.”).
2. Defamatory
In order to be actionable, a statement must be defamatory. A communication
is defamatory if it “tends so to harm the reputation of another as to lower him in the
estimation of the community or to deter third persons from associating or dealing
with him.” Bakal v. Weare, 583 A.2d 1028, 1029 (Me. 1990) (quoting Restatement
(Second) of Torts § 617 (1977)). See also Veilleux, 206 F.3d at 107-08. Whether a
false statement can be found defamatory is a question of law. Morgan, 941 A.2d at

12

455. The Court must construe allegedly defamatory statements in “the light of what
might reasonably have been understood therefrom by the persons who read it.”
Chapman v. Gannett, 171 A. 397, 398 (Me. 1934) (quoting Cooley on Torts (4th Ed.)
503, § 146).
The Defendants argue that many of the statements alleged by the Plaintiffs
are statements of opinion, not fact. Because “expressions of opinion may often imply
an assertion of objective fact,” the Supreme Court has declined to create a
“wholesale defamation exemption for anything that might be labeled ‘opinion.’”
Milkovich, 497 U.S. at 18. However, “a statement of opinion relating to matters of
public concern which does not contain a provably false factual connotation will
receive full constitutional protection.” Id.
“The crucial difference between statements of fact and opinion depends upon
whether ordinary persons hearing or reading the matter complained of would be
likely to understand it as an expression of the speaker’s or writer’s opinion, or as a
statement of existing fact.” Caron v. Bangor Publ’g Co., 470 A.2d 782, 785 (Me.
1984) (quoting Mashburn v. Collins, 355 So.2d 879, 885 (La. 1977)). The Court
must “look to the totality of the circumstances and to whether the statement was
intended to state an objective fact or a personal observation.” Ballard v. Wagner,
877 A.2d 1083, 1087-88 (Me. 2005) (citing Lester v. Powers, 596 A.2d 65, 71 (Me.
1991)); True v. Ladner, 513 A.2d 257 (Me. 1986) (superintendent’s statements that
former math teacher was not good and could not turn the students on were
actionable because they implied undisclosed defamatory facts.)

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Without having the articles from which these statements were taken, it is
difficult to determine whether the statements were likely to be understood as an
expression of the writer’s opinion or a statement of existing fact. Several of the
statements could be construed either way. At this motion to dismiss stage, drawing
all inferences in the Plaintiffs’ favor, the Court finds, with one exception, that the
statements are capable of a defamatory meaning.
There is one statement which on its face is not defamatory under Maine law.
PAN AM: A NEW DAWN? PAN AM OWNER TIM MELLON
REMOVED DAVE FINK PERE from management of the company
according to four separate sources: one MBTA, one union, one Maine
source, and one form [sic] other railroad management in New
England.3 Sources differ on what precipitated the action, whether Fink
is formally removed or is only on a ‘leave of absence,’ and whether
Mellon came to New England to administer the coup de grace4 or did it
by telephone, but all agree that David Andrew Fink, the head of Pan
Am Systems, is no longer in charge.
Complaint at ¶ 12E. Maine law provides that a statement that an individual is
fired, without providing defamatory reasons for the firing, is not defamatory. “An
employee may be discharged for any one of a multitude of reasons unrelated to his
honesty, integrity or occupational skill, or indeed for no reason at all. . . . [I]t is the
reason for discharge rather than the discharge alone which can render the
statement slanderous per se.” Picard v. Brennan, 307 A.2d 833, 835 (Me. 1973).
Since the statement provides no reason for Mr. Fink’s removal from Pan Am, it does
not bear a defamatory meaning under Maine law.
3

“The publication of false and defamatory statements even if attributed to others can still form the basis for a
claim of defamation.” Jamison v. OHI, No. Civ.A. CV-03-569, 2005 WL 3678040, (Me. Super. Ct. Nov. 28, 2005).
4

One can infer from this quote that Mr. Fink’s removal was not his choice. The hyperbolic term “coup de
grace” carries with it a sense that Mr. Fink was fired, but it says nothing about why he was discharged.

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3. False
In order to be actionable, a statement must be provable as false. Levesque v.
Doocy, 560 F.3d 82, 88 (1st Cir. 2009). Because this case involves a media defendant
making statements of public concern, the Plaintiffs bear the burden of showing the
falsity of the statements. Philadelphia Newspapers, Inc., 475 U.S. at 776.
Construing all inferences in the Plaintiffs’ favor, as the Court is bound to do
on a motion to dismiss, the Court agrees with the Defendants that the Complaint is
deficient in its allegations of falsity. Although the Complaint alleges that the
statements contained in Paragraph 12 are “false,” it provides absolutely no factual
underpinning to support that claim. A “complaint must include more than a rote
recital of the elements of a cause of action, but instead must include factual content
that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Artuso, 637 F.3d at 5.
The Plaintiffs are in a position to know whether and how the statements are
false. For example, the quote from Peter Burling could be false in a number of ways.
Peter Burling may have never spoken the words attributed to him. It could also be
that no derailment of a coal train ever occurred. Or perhaps a train did derail but
not because the railways were dilapidated. The Plaintiffs must, especially under the
Iqbal/Twombley standard, provide factual underpinning of how the statements are
false.

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4. Fault
The fault that a defamation plaintiff must allege depends on whether the
plaintiff is a public official, public figure, or private person. Because the Court is
unable, at this stage of the proceedings, to determine whether the Plaintiffs are
public figures who must show actual malice, the Court will assess whether the
Complaint has sufficiently alleged that the Defendants negligently disregarded the
falsity of the statements.
To show that the Defendants were at fault in their publication of the
statements, the Plaintiffs point only to their bald allegation that the statements set
forth in the Complaint were false.5 The Plaintiffs argue that fault “is reasonably
implied by their publication of false defamatory statements to third persons.”
Plaintiffs’ Response to Motion to Dismiss at 10. Particularly where, as here, the
Defendants have not offered the factual underpinning necessary for the inference
that the statements were false in the first place, their allegations that the
Defendants acted negligently fall short. Rote recitation of the elements does not
allow the Court to make the inference that the Defendants negligently disregarded
the falsity of the statements. Hakky v. Washington Post Co., No. 8:09-cv-2406-T30MAP, 2010 WL 2573902, at *6 (M.D. Fla. June 24, 2010) (dismissal appropriate
5

The Plaintiffs allege that Defendants’ publication of the statements “amounts to at
least negligence,” Complaint ¶ 16, and that Defendants “published the aforedescribed false and
defamatory statements with knowledge of their falsity, or in reckless disregard of the truth or falsity
of such statements,” id. at ¶ 17. The Plaintiffs repeat these same allegations in Count II. Id. at ¶¶
22-23. In Count III, the Plaintiffs allege that “Defendants had knowledge, or acted in reckless
disregard, to the falsity of the aforedescribed publicized matter.” Id. at ¶ 27. In Count IV, Plaintiffs
allege that “Defendants’ aforedescribed actions were committed with actual or implied malice
towards Plaintiffs.” Id. at ¶ 30. Each of these statements is a legal conclusion and the Complaint
contains no other factual allegations of fault.

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where plaintiff does not state how defendants made statements negligently or
provide facts supporting malice.) See also Schatz, 2012 WL 414264, at *4
(allegations that “offer legal labels and conclusions or merely rehash cause-of-action
elements” are to be ignored).
5. Defamation Per Se
Plaintiffs concede that defamation per se is not a separate cause of action, but
rather is included to put the Defendants on notice that the suit involves defamation
per se. Under Maine law, statements are defamatory per se if they relate to a
persons’ profession, occupation, or official station. Galarneau v. Merrill Lynch,
Pierce, Fenner & Smith, Inc., 504 F.3d 189, 198 (1st Cir. 2007); Saunders v. VanPelt,
497 A.2d 1121, 1126 (Me. 1985). Defamation per se is “relevant to damages, not to
liability. Under it, claimants in certain defamation cases need not prove actual
damages as a prerequisite to recovery.” Levinsky’s, 127 F.3d at 135.
However, since the statements involve matters of public concern they are
protected by the First Amendment, and in order to recover presumed or punitive
damages, the Plaintiffs must prove actual malice. Dun & Bradstreet, 472 U.S. at
751. As has been discussed, the Complaint is insufficient to state even a claim for
negligent defamation, much less actual malice. Once again, the Plaintiffs merely
rehash the legal standard, and they have failed to set forth a factual basis sufficient
to establish that they are entitled to presumptive damages under the defamation
per se doctrine.

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II.

FALSE LIGHT
The Restatement (Second) of Torts defines false light as:
One who gives publicity to a matter concerning another that places the
other before the public in a false light . . . if (a) the false light in which
the other was placed would be highly offensive to a reasonable person,
and (b) the actor had knowledge of or acted in reckless disregard as to
the falsity of the publicized matter and the false light in which the
other would be placed.

Restatement (Second) of Torts § 652E. A false light cause of action may lie only
when “there is such a major misrepresentation of [the plaintiff’s] character, history,
activities or beliefs that serious offense may reasonably be expected to be taken by a
reasonable man in his position.” Restatement (Second) of Torts § 652E cmt. c (1977).
Nelson v. Maine Times, 373 A.2d 1221 (Me. 1977).
The Plaintiffs concede that a corporation may not bring a false light cause of
action and press a false light claim only on behalf of Mr. Fink. The Defendants
argue that the Plaintiffs have failed to state a claim for false light because they
have not sufficiently alleged that the Defendants acted with malice, or that the
statements are highly offensive.
There are only two references ― an e-bulletin published on March 10, 2011
and a newsletter published on March 21, 2011 ― to Mr. Fink, and both report on his
removal from Pan Am management. These statements, as discussed above,
reasonably bear the inference that Mr. Fink was fired.
As we have previously stated, under Maine law statements that a person has
been discharged are not considered defamatory because “[a]n employee may be
discharged for any one of a multitude of reasons unrelated to his honesty, integrity
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or occupational skill, or indeed for no reason at all.” Picard, 307 A.2d at 835.6
Statements which are incapable of a defamatory meaning under Maine law cannot
support a false light claim.
In Veilleux, the plaintiffs argued that their false light judgment should be
sustained even if their defamation judgment were to be reversed. The First Circuit
held that “to the extent that we determined that the statements at issue did not
disparage plaintiffs, those statements fail to satisfy the requirement under Maine
law that the false light in which plaintiffs were placed be ‘highly offensive to a
reasonable person.’” Veilleux, 206 F.3d at 134. The First Circuit noted that “no
Maine court has yet grappled with the question of whether a false light claim may
proceed where a defamation claim premised on the same statement may not.” Id. at
135.
The Maine Superior Court, quoting Veilleux, has since dismissed a false light
claim where the statement did not disparage or defame the plaintiff. Halco v.
Davey, No. CV-05-037, 2006 WL 6112069 (Me. Super. Ct. June 14, 2006). The Maine
Supreme Judicial Court upheld the dismissal. Halco v. Davey, 919 A.2d 626, 630-31
(Me. 2007). Because the Plaintiffs’ false light claim is based on statements which

6

The Court notes that the case cited by the Plaintiffs for the proposition that “statements calling into
question the professional performance of a doctor could be found to be highly offensive,” Wentworth-Douglass
Hosp. v. Young & Novis Prof’l Assoc., No. 10-cv-120-SM, 2011 WL 446739 (D.N.H. Feb. 4, 2011), is
distinguishable. Questioning a doctor’s professional performance, impugns his or her occupational skill and is far
more offensive to a reasonable person than stating that someone was removed from a position.

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are not defamatory under Maine law, the Plaintiffs’ false light claim must be
dismissed.7
III.

PUNITIVE DAMAGES

Because the Plaintiffs’ underlying causes of action are insufficient to state a
claim under Rule 12(b)(6), the Plaintiffs’ claim for punitive damages must also be
dismissed. Halco, 919 A.2d at 631 (because no cause of action except breach of
contract survived motion to dismiss, plaintiff’s claim for punitive damages was
properly dismissed); Havlik v. Johnson & Wales Univ., 509 F.3d 25, 34 (1st Cir.
2007) (“punitive damages are not a separate cause of action but, rather, an element
of damages in, and thus wholly derivative of, the plaintiff’s defamation claim”).
To the extent that Plaintiffs can amend their Complaint to cure its defects,
the Court advises that to be eligible for punitive damages, Plaintiffs must allege
sufficient factual support for an inference that Defendants acted either with
subjective ill will towards the Plaintiffs or in a manner so outrageous that malice
towards them can be implied. Tuttle v. Raymond, 494 A.2d 1353, 1361 (Me. 1985).
“[F]or the purpose of assessing punitive damages, such ‘implied’ or ‘legal’ malice will
not be established by the defendant’s mere reckless disregard of the circumstances.”
Id.

The Plaintiffs’ false light claim has additional deficiencies which mirror those contained in
Plaintiffs’ defamation claim. The complaint does not allege sufficient facts to support an inference
either that the statements pertaining to Mr. Fink were false or that the Defendants had knowledge
of or acted in reckless disregard as to the falsity of the publicized matter.
7

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IV.

LEAVE TO FILE AMENDED COMPLAINT
The First Circuit has recently acknowledged that “[t]he precedents on

pleading specificity are in a period of transition” and has suggested that district
courts allow plaintiffs to amend their complaints and provide plaintiffs an
indication of what the district court expects in the amended pleading. Pruell v.
Caritas Christi, No. 11-1929, 2012 WL 1324455 at *4 (1st Cir. April 18, 2012).
Throughout this opinion, the Court has pointed out deficiencies and suggested
where it believes additional factual support is required. The Court grants the
Plaintiffs 30 days in which to file an amended complaint which addresses the
deficiencies.
CONCLUSION
The Court GRANTS Defendants’ Motion to Dismiss with respect to Counts I,
III and IV, without prejudice. The Court finds that Count II of the Complaint is not
a separate cause of action and that it is subsumed by the ruling on Count I. The
Court GRANTS Plaintiffs leave to file an Amended Complaint within thirty (30)
days from the date of this order.

SO ORDERED.
/s/ Nancy Torresen
United States District Judge
Dated this 14th day of May, 2012.

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