Gilman v. Spitzer et al
Filing
21
MEMORANDUM OF LAW in Opposition re: 19 MOTION to Dismiss Defendants' Counterclaim.. Document filed by Eliot Spitzer, The Slate Law Group, LLC. (Brown, Jay)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
WILLIAM GILMAN,
Plaintiff/Counterclaim Defendant,
No. 11 Civ 5843 (JPO)
ECF Case
v.
ELIOT SPITZER and THE SLATE GROUP,
LLC,
ORAL ARGUMENT
REQUESTED
Defendants/Counterclaimants.
MEMORANDUM IN OPPOSITION TO
PLAINTIFF’S MOTION TO DISMISS DEFENDANTS’ COUNTERCLAIM
OF COUNSEL:
Eric Lieberman
James A. McLaughlin
THE WASHINGTON POST COMPANY
1150 Fifteenth Street, NW
Washington, DC 20071-7301
Telephone: (202) 334-6000
Facsimile: (202) 334-5075
mclaughlinj@washpost.com
liebermane@washpost.com
Lee Levine, pro hac vice
Jay Ward Brown, Bar No. JB-4376
Katharine Larsen, Bar No. KL-6153
LEVINE SULLIVAN KOCH & SCHULZ, LLP
1050 Seventeenth Street, NW, Suite 800
Washington, DC 20036
Telephone: (202) 508-1100
Facsimile: (202) 861-9888
llevine@lskslaw.com
jbrown@lskslaw.com
klarsen@lskslaw.com
Counsel for Defendants/Counterclaimants
TABLE OF CONTENTS
TABLE OF AUTHORITIES ...................................................................................................... ii
INTRODUCTION...................................................................................................................... 1
RELEVANT FACTS.................................................................................................................. 1
ARGUMENT ............................................................................................................................. 6
I.
THE TERMS OF THE ANTI-SLAPP STATUTE ARE PLAIN AND
UNAMBIGUOUS, AND DEFENDANTS’ PLEADING OBLIGATION
IS STRAIGHTFORWARD ................................................................................. 7
II.
THE COUNTERCLAIM ADEQUATELY ALLEGES THAT
MR. GILMAN IS A “PUBLIC PERMITTEE” .................................................. 10
III.
THE COUNTERCLAIM ADEQUATELY ALLEGES THAT
MR. GILMAN’S DEFAMATION CLAIM IS MATERIALLY RELATED
TO DEFENDANTS’ EFFORTS TO COMMENT ON OR TO
CHALLENGE OR OPPOSE HIS CONTINUED LICENSURE ........................ 13
IV.
THE COUNTERCLAIM ADEQUATELY ALLEGES THAT
MR. GILMAN’S DEFAMATION CLAIM LACKS MERIT............................. 21
CONCLUSION ........................................................................................................................ 25
i
TABLE OF AUTHORITIES
Page(s)
CASES
600 W. 115th St. Corp. v. Von Gutfeld,
80 N.Y.2d 130 (1992) ........................................................................................................... 7
Ashcroft v. Iqbal,
556 U.S. 662, 129 S. Ct. 1937 (2009).................................................................................. 22
Bell Atlantic v. Twombly,
550 U.S. 544 (2007)............................................................................................................ 22
Bridge Capital v. Ernst,
877 N.Y.S.2d 51 (N.Y. App. Div. 1st Dep’t 2009) .............................................................. 21
Chandok v. Klessig,
632 F.3d 803 (2d Cir. 2011)................................................................................................ 10
Cowen & Co. v. Tecnoconsult Holdings,
No. 96 CIV. 3748 (BSJ), 1996 WL 391884 (S.D.N.Y. July 11, 1996) ................................. 13
Duane Reade, Inc. v. Clark,
2 Misc.3d 1007(A), 784 N.Y.S.2d 920 (N.Y. Sup. Ct. N.Y. Cty. 2004).........................passim
Guerrero v. Carva,
779 N.Y.S.2d 12 (N.Y. App. Div. 1st Dep’t 2004) ...................................................19, 20, 21
Harfenes v. Sea Gate Assoc., Inc.,
647 N.Y.S.2d 329 (N.Y. Sup. Ct. N.Y. Cty. 1995) ........................................................passim
In re Erie County Agric. Soc’y v. Cluchey,
40 N.Y.2d 194 (1976) ......................................................................................................... 20
Kesselman v. The Rawlings Co., LLC,
668 F. Supp. 2d 604 (S.D.N.Y. 2009) ................................................................................... 2
Nat’l Ass’n of Pharm. Mfrs., Inc. v. Ayerst Labs,
850 F.2d 904 (2d Cir. 1988).................................................................................................. 6
Operating Local 649 Annuity Trust Fund v. Smith Barney Fund Mgmt., LLC,
595 F.3d 86 (2d Cir. 2010).................................................................................................. 22
OSJ, Inc. v. Work,
691 N.Y.S.2d 302 (N.Y. Sup. Ct. Madison Cty. 1999),
aff’d, 710 N.Y.S.2d 666 (N.Y. App. Div. 3d Dep’t 2000).................................................... 20
ii
Piazza v. Fla. Union Free Sch. Dist.,
777 F. Supp. 2d 669 (S.D.N.Y. 2011) ................................................................................... 2
Plummer v. Lederle Labs.,
819 F.2d 349 (2d Cir. 1987)................................................................................................ 13
Rolon v. Henneman,
443 F. Supp. 2d 532 (S.D.N.Y. 2006),
aff’d, 517 F.3d 140 (2d Cir. 2008)......................................................................................... 6
Rothman v. Gregor,
220 F.3d 81 (2d Cir. 2000).................................................................................................... 2
Sprint Spectrum LP v. Conn. Sitting Council,
274 F.3d 674 (2d Cir. 2001)................................................................................................ 20
Staehr v. Hartford Fin. Servs. Grp., Inc.,
547 F.3d 406 (2d Cir. 2008).................................................................................................. 2
Street Beat Sportswear, Inc. v. Nat’l Mobilization Against Sweatshops,
698 N.Y.S.2d 820 (N.Y. Sup. Ct. N.Y. Cty. 1999) .........................................................11, 17
STATUTES
735 Ill. Comp. Stat.................................................................................................................... 12
47 U.S.C. § 230 ........................................................................................................................ 23
Ark. Code Ann. §§ 16-63-501 to 508........................................................................................ 12
Cal. Civ. Proc. Code §§ 425.16 to 425.18 ................................................................................. 12
D.C. Code § 18-5501 to 5505 ................................................................................................... 12
La. Code Civ. Proc. Ann. art. 971 ............................................................................................. 12
N.Y. Civ. Rts. Law § 70-a ..................................................................................................passim
N.Y. Civ. Rts. Law § 76-a ..................................................................................................passim
Or. Rev. Stat. § 31.150 ............................................................................................................. 12
iii
OTHER AUTHORITIES
Edward W. McBride Jr., Note, The Empire State SLAPPS Back: New York’s Legislative
Response to SLAPP Suits, 17 Vt. L. Rev. 925, 952-53 (Spring 1993) .................................. 18
Marnie Stetson, Note, Reforming SLAPP Reform: New York’s Anti SLAPP Statute,
70 N.Y.U. L. Rev. 1324, 1355 (Dec. 1995) ......................................................................... 18
iv
INTRODUCTION
This defamation action arises from a publication authored by defendant Eliot Spitzer,
formerly the Attorney General of the State of New York, and published by defendant The Slate
Group, LLC, on the website www.slate.com (“Slate.com”). The publication addresses actions
taken by Mr. Spitzer when he served as Attorney General—specifically, civil and criminal
proceedings his office initiated against insurance-related companies and their executives,
including plaintiff William Gilman. In response to Mr. Gilman’s Complaint, Defendants have
answered and moved for judgment on the pleadings.
Pursuant to the requirements of N.Y. Civ. Rts. Law § 70-a(1)—New York’s anti-SLAPP
(“Strategic Lawsuit Against Public Participation”) statute—Defendants also have filed a
Counterclaim against Mr. Gilman. The anti-SLAPP statute is intended to prevent an applicant
for or holder of a public permit or license from using the threat of expensive litigation to silence
and/or punish advocacy on matters related to the permit or license. Where it applies, the antiSLAPP statute can alter the substantive standard of care governing the speaker’s conduct, and it
potentially entitles a defendant to recover its attorney’s fees and costs. Mr. Gilman has now
moved pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss the Counterclaim, arguing that the antiSLAPP statute does not apply in this instance. As Defendants demonstrate below, however, all
three issues he raises are properly resolved against him.
RELEVANT FACTS
The facts pertinent to Mr. Gilman’s motion to dismiss the Counterclaim generally are
simply stated. See Pl.’s Mem. of Law in Supp. of Mot. to Dismiss Defs.’ Counterclaim (“Pl.’s
1
Mem.”) at 1 n.1.1 Mr. Gilman was for many years a senior executive at the international
insurance brokerage commonly known as “Marsh.” See Counterclaim ¶ 7. Beginning in 1976
and through today, Mr. Gilman has repeatedly applied for and continuously been licensed as an
insurance broker by the New York State Department of Insurance (which two months ago was
renamed the Department of Financial Services). Id. ¶ 8, see also Pl.’s Mem. at 1 & n.3.
Mr. Spitzer, during his tenure as Attorney General, initiated an investigation of the
insurance industry that resulted in numerous criminal prosecutions and civil proceedings,
including against Marsh. Counterclaim ¶¶ 5, 22-27. The civil complaint filed against Marsh by
Mr. Spitzer’s office identified Mr. Gilman, among others, as an “enforcer” of illegal schemes in
which the company had engaged. Id. ¶ 23 & Ex. 5 at ¶ 50. Mr. Gilman was terminated by
Marsh in the course of its own investigation of the government’s allegations and he ultimately
was indicted by a Grand Jury for, among other crimes, bid-rigging and price-fixing carried out in
his role as an insurance broker. Id. ¶¶ 31-33. The specific details of Mr. Gilman’s actions are
recounted in the Counterclaim at paragraphs 9 through 33, and Defendants respectfully refer the
Court to that document, rather than repeat them here. Suffice to say, Mr. Gilman was convicted
of felony bid-rigging/price-fixing under the Donnelly Act, but that conviction was later vacated
because of prosecutorial error at trial. Id. ¶¶ 34-39.
1
The parties agree that, in adjudicating this motion to dismiss, the Court may take
judicial notice of documents referred to in or integral to the Counterclaim and official records
from other proceedings related to the subject of the Counterclaim. See Pl.’s Mem. at 1 n.1, 3 n.5;
see also, e.g., Kesselman v. The Rawlings Co., LLC, 668 F. Supp. 2d 604, 607 (S.D.N.Y. 2009)
(in adjudicating Rule 12(b)(6) motion, court may consider “‘documents that are attached to,
incorporated by reference in, or integral to the [challenged pleading]; and it may also consider
matters that are subject to judicial notice’” (quoting Byrd v. City of New York, No. 04 Civ 1396,
2005 WL 1349876, *1 (2d Cir. June 8, 2005))); accord Staehr v. Hartford Fin. Servs. Grp., Inc.,
547 F.3d 406, 424-26 (2d Cir. 2008); Rothman v. Gregor, 220 F.3d 81, 91-92 (2d Cir. 2000)
(taking judicial notice of complaint in separate lawsuit as public record); Piazza v. Fla. Union
Free Sch. Dist., 777 F. Supp. 2d 669, 677-78 (S.D.N.Y. 2011) (taking judicial notice of state
administrative record).
2
While the State’s appeal from the order vacating Mr. Gilman’s conviction was pending,
the Wall Street Journal published an editorial criticizing the efficacy and purpose of the
insurance industry investigation and legal proceedings that had been initiated by Mr. Spitzer and
continued by then-Attorney General Cuomo. Id. ¶¶ 40, 45. In response, nine days later,
Mr. Spitzer authored a piece rebutting the Journal’s contentions that was published on Slate.com.
Id. ¶¶ 46-48. A complete copy of the piece is attached to the Complaint as Exhibit A. Insofar as
relevant to the present motion, Mr. Spitzer observed:
The Journal’s editorial also seeks to disparage the cases my office
brought against Marsh & McLennan for a range of financial and
business crimes. The editorial notes that two of the cases against
employees of the company were dismissed after the defendants had
been convicted. The judge found that certain evidence that should
have been turned over to the defense was not. (The cases were tried
after my tenure as attorney general.) Unfortunately for the credibility
of the Journal, the editorial fails to note the many employees of
Marsh who have been convicted and sentenced to jail terms, or that
Marsh’s behavior was a blatant abuse of law and market power:
price-fixing, bid-rigging, and kickbacks all designed to harm their
customers and the market while Marsh and its employees pocketed
the increased fees and kickbacks. Marsh as a company paid an $850
million fine to resolve the claims and brought in new leadership. At
the time of the criminal conduct, Jeff Greenberg, Hank Greenberg’s
son, was the CEO of Marsh. He was forced to resign.
In January 2011, some five months after publication, the State announced it would
withdraw its appeal from the order vacating Mr. Gilman’s conviction and dismiss its case against
him, rather than retry it. Counterclaim ¶ 40. In dismissing the case, the State indicated that,
given the substantial resources already expended on the prosecution, a re-trial would not be an
efficient use of prosecutorial resources. Id. ¶ 40 & Ex. 11 (transcript of Jan. 12, 2011
proceedings) at 2:16-25. Thereafter, Mr. Gilman’s pending appeal from his conviction was
dismissed as moot. Id. ¶ 40 (citing People v. Gilman, 914 N.Y.S.2d 899 (2011)).
3
Mr. Gilman then initiated a civil lawsuit in this Court against his former employer, in
which he seeks damages on various theories. Id. ¶ 41 & Ex. 12. Not long after, on August 19,
2011, almost a year to the day after the piece was published, Mr. Gilman filed the present
defamation action against Mr. Spitzer, alleging that readers would have understood passages in it
to be an allegation that he was guilty of criminal wrongdoing. Id. ¶ 49; see also Compl.
¶¶ 24-35. Because (1) Mr. Gilman is a public licensee, (2) the publication at issue represents an
exercise by Defendants of their right to comment upon then-ongoing criminal proceedings that
directly affected Mr. Gilman’s license, and (3) the defamation Complaint is meritless and
brought for ulterior purposes, Defendants filed their Counterclaim under the anti-SLAPP statute.
In support of his motion to dismiss the Counterclaim, Mr. Gilman’s main contention is
that the publication in question is not materially related to his insurance license and that the antiSLAPP statute therefore does not apply. Pl.’s Mem. at 8-10. In support of this contention,
Mr. Gilman states as fact that “the New York State Department of Insurance [never] took any
formal action against Gilman” with respect to his license, id. at 2, and that “[t]here has never
been any proceeding by the New York Department of Insurance to take away Gilman’s license,”
id. at 8. Simply put, these statements are false.
After it was notified in 2004 that Marsh had suspended Mr. Gilman pending its further
internal investigation of the State’s allegations, the Department of Insurance opened its own
investigation, file no. CSB-370346, to determine whether Mr. Gilman’s license should be
suspended or revoked. Declaration of Jay Ward Brown (“Brown Decl.”) ¶ 2 & Ex. 1 (Letter
from Dep’t of Ins. to K. Padgett, Marsh & McLennan Cos. (Oct. 20, 2004) [NYDOI/Gilman-
4
00200]).2 Moreover, promptly after it was notified of the criminal charges against Mr. Gilman,
the Department of Insurance opened a second investigation, file no. CSB-489222, concerning
whether he should continue to be licensed. Id. ¶¶ 3-4 & Exs. 2 & 3 (2006 License Renewal
Questionnaire [NYDOI/Gilman-00126]; Letter from Dep’t of Ins. to W. Gilman (Oct. 19, 2006)
[NYDOI/Gilman-00001-03]). In connection with both investigations, the Department formally
requested and received information and materials from Marsh and from Mr. Gilman’s defense
counsel. Id. ¶ 4 & Ex. 3 (Letter from Dep’t of Ins. to W. Gilman (Oct. 19, 2006)
[NYDOI/Gilman-00001-03] (requesting further information in response to Gilman’s disclosures
to Dep’t of Ins. in Questionnaire regarding criminal charges); id. ¶ 5 & Ex. 4 (Letters from Dep’t
of Ins. to counsel to W. Gilman, R. Spinogatti (June 4, 2007; Sept. 24, 2007; Feb. 1, 2008; Feb.
26, 2008; May 12, 2008; Jan. 18, 2011) [NYDOI/Gilman-00026, 30, 35, 40, 125, 129]
(requesting information regarding trial, conviction, sentencing, and appeal)).
At Mr. Gilman’s sentencing, the trial judge expressly considered whether to order him to
surrender his license, but ultimately decided to defer to the Department of Insurance, which the
trial judge was informed was pursuing the matter. Id. ¶ 6 & Ex. 5 (Hr’g Tr. 87-88, Apr. 17, 2008
[NYDOI/Gilman-00115] (“The real issue for me is do I take it [the revocation of Gilman’s
insurance license] out of the hands of the superintendent or do I leave it in the hands of the
superintendent”); see also id. ¶ 7 & Ex. 6 (Hr’g Tr. 8-9, Apr. 23, 2008 [NYDOI/Gilman-00123]
(deciding that “whatever the superintendent does is what the superintendent does, and I stay out
2
The cited records from the Department of Insurance were delivered to Defendants’
counsel on November 28, 2011, in response to a request submitted on September 8, 2011 to the
Department under the Freedom of Information Law. (In responding to the FOIL request, the
Department advised counsel that is has withheld “boxes” of responsive documents on the ground
they are subject to various confidentiality agreements or regulations.) As noted, the parties agree
that the Court may take judicial notice of such official administrative records. See supra n.1.
5
of it”); cf. id. ¶ 8 & Ex. 7 (Hr’g Tr. 36-37, Apr. 17, 2008) [NYDOI/Gilman-00102-03] (People
explaining that “[a]ll of the cooperating defendants in this case had to surrender their licenses”)).
Thereafter, the Department formally demanded that Mr. Gilman surrender his license. Id.
¶ 9 & Ex. 8 (Letter from Dep’t of Ins. to counsel to W. Gilman, R. Spinogatti (June 18, 2008)
[NYDOI/Gilman-00373] (“Please ask Mr. Gilman to return his current BROKER License
No. BF-715665”)). Through counsel, Mr. Gilman declined voluntarily to do so. Id. ¶ 10 & Ex. 9
(Letter from R. Spinogatti to Dep’t of Ins. (June 26, 2008) [NYDOI/Gilman-00128]). It was not
until after the State announced it would not retry him—some five months after publication of
Mr. Spitzer’s piece—that the Department of Insurance notified Mr. Gilman that, as a result, it
would “close [its] file with no disciplinary action being taken.” Id. ¶ 11 & Ex. 10 (Letter from
Dep’t of Ins. to counsel to W. Gilman, R. Spinogatti (Jan. 28, 2011) [NYDOI/Gilman-00135]);
see also id. ¶ 12 & Ex. 11 (Letter from Dep’t of Ins. to counsel to W. Gilman, R. Spinogatti (Feb.
8, 2011) [NYDOI/Gilman-00199] (noting that both files had been closed as to Gilman)).
In other words, at the time Mr. Spitzer authored the publication at issue, the question
whether Mr. Gilman would be required to forfeit his insurance license was the subject of ongoing
administrative proceedings arising directly from the criminal prosecution that Mr. Spitzer’s
office initiated and about which he wrote.
ARGUMENT
Under Fed. R. Civ. P. 12(b)(6), the Court is obliged to accept the factual allegations of
the Counterclaim as true, and may grant Mr. Gilman’s motion to dismiss only if it is clear that
the Defendants cannot prove any set of facts that would entitle them to relief. Nat’l Ass’n of
Pharm. Mfrs., Inc. v. Ayerst Labs, 850 F.2d 904, 909 n.2 (2d Cir. 1988); Rolon v. Henneman,
443 F. Supp. 2d 532, 535 (S.D.N.Y. 2006), aff’d, 517 F.3d 140 (2d Cir. 2008). Thus, the single
6
question presented by the current motion is the threshold one of whether the Defendants have
pleaded sufficient facts to afford a basis on which a fact-finder could conclude that the antiSLAPP statute applies to Mr. Gilman’s defamation action. As Defendants demonstrate below,
the Counterclaim more than satisfies this standard.3
I.
THE TERMS OF THE ANTI-SLAPP STATUTE ARE PLAIN AND
UNAMBIGUOUS, AND DEFENDANTS’ PLEADING OBLIGATION IS
STRAIGHTFORWARD
As have many other jurisdictions, New York adopted legislation to combat so-called
SLAPP suits in 1992. As the Legislature declared when it enacted the statute:
[It is] the policy of the state that the rights of citizens to participate
freely in the public process must be safeguarded with great diligence.
The laws of the state must provide the utmost protection for the free
exercise of speech, petition and association rights, particularly where
such rights are exercised in a public forum with respect to issues of
public concern.
Laws of 1992 (ch. 767, § 1); see also, e.g., 600 W. 115th St. Corp. v. Von Gutfeld, 80 N.Y.2d
130, 137 n.1 (1992) (describing growing general concern with “strategic lawsuits against public
participation,” which are “characterized as having little legal merit but are filed nonetheless to
burden opponents with legal defense costs and the threat of liability and to discourage those who
might wish to speak out in the future” and observing that New York had just enacted law
specifically aimed at broadening protection of citizens facing such litigation).
Although its operative provisions are spread across three sections, New York’s antiSLAPP law is simple. First, the Legislature provided that damages may only be awarded against
3
No substantive questions regarding the effect of the anti-SLAPP statue are currently
presented. Assuming the Court sustains the Counterclaim, such questions, including the impact
of the statute on the standard of care applicable to Defendants’ conduct, as well as whether
Defendants are entitled to recover their attorney’s fees, would properly be raised at later stages of
these proceedings.
7
a defendant in a SLAPP suit alleging defamation if the plaintiff can prove a heightened degree of
culpability:
In an action involving public petition and participation, damages may
only be recovered if the plaintiff, in addition to all other necessary
elements, shall have established by clear and convincing evidence that
any communication which gives rise to the action was made with
knowledge of its falsity or with reckless disregard of whether it was
false, where the truth or falsity of such communication is material to
the cause of action at issue.
N.Y. Civ. Rts. Law § 76-a(2) (emphasis added). Second, the Legislature provided for recovery
by a “SLAPPed” speaker of his or her attorney’s fees and other damages:
1. A defendant in an action involving public petition and
participation . . . may maintain a[] . . . counterclaim to recover
damages, including costs and attorney’s fees, from any person who
commenced or continued such action; provided that:
(a) costs and attorney’s fees may be recovered upon a demonstration
that the action involving public petition and participation was
commenced or continued without a substantial basis in fact and law
and could not be supported by a substantial argument for the
extension, modification or reversal of existing law;
(b) other compensatory damages may only be recovered upon an
additional demonstration that the action involving public petition and
participation was commenced or continued for the purpose of
harassing, intimidating, punishing or otherwise maliciously inhibiting
the free exercise of speech, petition or association rights; and
(c) punitive damages may only be recovered upon an additional
demonstration that the action involving public petition and
participation was commenced or continued for the sole purpose of
harassing, intimidating, punishing or otherwise maliciously inhibiting
the free exercise of speech, petition or association rights.
N.Y. Civ. Rts. Law § 70-a (emphasis added).
As is evident, the key question in determining whether the substantive provisions of the
anti-SLAPP statute apply to a claim in the first instance is whether the action is one “involving
8
public petition and participation.” The Legislature defined that term in the third statutory
section:
An “action involving public petition and participation” is an action,
claim, cross claim or counterclaim for damages that is brought by a
public applicant or permittee, and is materially related to any efforts of
the defendant to report on, comment on, rule on, challenge or oppose
such application or permission.
N.Y. Civ. Rts. Law § 76-a(1)(a) (emphasis added). The Legislature also defined the term “public
applicant or permittee,” which means:
any person who has applied for or obtained a permit, zoning change,
lease, license, certificate or other entitlement for use or permission to
act from any government body, or any person with an interest,
connection or affiliation with such person that is materially related to
such application or permission.
N.Y. Civ. Rts. Law § 76-a(1)(b) (emphasis added). In addition to these expansive definitions,
the Legislature also chose to define broadly the types of public participation protected from
SLAPP suits, describing the class of protected “communications” to include not just testimony at
public hearings, but suits arising out of any form of public communication, including “any
statement, claim, allegation in a proceeding, decision, protest, writing, argument, contention or
other expression.” N.Y. Civ. Rts. Law § 76-a(1)(a) (emphasis added).
In short, as the plain language of the statute makes clear, in order to recover damages and
attorney’s fees under the anti-SLAPP statute, Defendants here must prove that (1) Mr. Gilman
held a license from the government, (2) Mr. Gilman’s defamation claim is materially related to
efforts by Defendants to comment on or to challenge or oppose Mr. Gilman’s continued
licensure, and (3) Mr. Gilman’s defamation claim is at least lacking a substantial basis in fact and
law. N.Y. Civ. Rts. Law § 76-a(1)-(2); see also, e.g., Duane Reade, Inc. v. Clark, 2 Misc.3d
1007(A), at *4, 784 N.Y.S.2d 920 (N.Y. Sup. Ct. N.Y. Cty. 2004) (whether anti-SLAPP statute
9
applies to lawsuit “requires a twofold inquiry” pursuant to which “court must determine whether
the plaintiff is a ‘public applicant or permittee,’” and then “whether the lawsuit is an ‘action
involving public petition and participation’”).
II.
THE COUNTERCLAIM ADEQUATELY ALLEGES THAT MR. GILMAN IS A
“PUBLIC PERMITTEE”
Mr. Gilman first seeks to evade the anti-SLAPP statute by arguing that he is not a “public
permittee.” Both the plain language of the statute and the cases applying it, however,
demonstrate that this contention is meritless.
It is both alleged specifically in the Counterclaim and conceded by Mr. Gilman that he
was and is the holder of a license issued by the Department of Insurance. Counterclaim ¶¶ 8, 22,
51; Pl.’s Mem. at 1. By its plain terms, the anti-SLAPP statute applies to legal proceedings
instituted by any “public applicant or permittee” and the Legislature has defined that term, in
relevant part, to mean “any person who has applied for or obtained a . . . license . . . from any
government body.” N.Y. Civ. Rts. Law § 76-a(1)(a)-(b). There can, therefore, be no question
that Defendants have adequately alleged this element of their claim. Indeed, because the
statutory language itself is plain and unambiguous and the relevant facts are undisputed, the
Court need look no further in order to hold as a matter of law that Mr. Gilman is a “public
permittee” within the meaning of the anti-SLAPP statute.
Both the statute’s legislative history and the case law construing it squarely support this
conclusion. Indeed, earlier this year, the Second Circuit observed that, “[u]niformly, the New
York courts have found that the persons properly alleged to be public applicants within the
meaning of the anti-SLAPP statute were persons whose proposed actions required government
permission.” Chandok v. Klessig, 632 F.3d 803, 819 (2d Cir. 2011) (holding that anti-SLAPP
statute did not apply to academic who had applied for government grant because she was free to
10
proceed with her proposed research without any government approval and was merely seeking
financial support for it); see also, e.g., Street Beat Sportswear, Inc. v. Nat’l Mobilization Against
Sweatshops, 698 N.Y.S.2d 820, 824 (N.Y. Sup. Ct. N.Y. Cty. 1999) (regardless of specific
term—registrant, applicant, permittee—used to denote plaintiff’s status, where “plaintiff can
only operate its business with the permission of [a state government body],” plaintiff “is a public
permittee because it ‘continues to be subject to state oversight’”); Brown Decl. ¶ 13 & Ex. 12
(Letter from Assemblyman William Bianchi to then-Governor Mario M. Cuomo (July 14, 1992)
(“The definition of ‘public applicant or permittee’ is intended to include anybody who has begun
the process of seeking governmental approval for a proposed action, anybody who has obtained
such an approval, or anybody who is acting in the absence of a required approval. It is not
intended that a formal application be the prerequisite for inclusion as a ‘public applicant or
permittee’[.]”)). Needless to say, Mr. Gilman could not have engaged in his profession as an
insurance broker without the license in question.
In support of his contention that the Court should ignore both the plain language of the
statute as well as its legislative history and the cases applying it, Mr. Gilman first points to the
phenomenon that originally led to enactment of anti-SLAPP statutes in scores of jurisdictions:
the frequent practice by large real estate developers of squelching environmental opposition to
their projects by bringing meritless claims for defamation against those who had the temerity to
speak against them. See Pl.’s Mem. at 7-8. That this particular phenomenon was the initial
impetus for development of anti-SLAPP legislation, however, is irrelevant to the reach of the
11
statute as enacted by the New York Legislature, which by its plain terms applies to any person
who seeks or obtains a government-issued license, not merely to real estate developers.4
The answer to Mr. Gilman’s other contention—that the Court must limit the reach of the
term “license” lest “anyone with a driver’s license issued by the Department of Motor Vehicles
[] be subject to the anti-SLAPP counterclaim,” Pl.’s Mem. at 8—is equally straightforward. If
the Legislature had wanted to exempt holders of driver’s licenses from the reach of the antiSLAPP statute, it could have done so, but it did not. The paucity of cases applying the statute to
disputes involving driver’s licenses doubtless is explained by the infrequency with which
defamation claims are filed in disputes over the quality of someone’s driving skills. But to the
extent a citizen one day is sued over an objection voiced to another’s entitlement to drive—
perhaps for urging revocation of the license of a habitually intoxicated driver—the holder of the
driver’s license would be a public permittee under the anti-SLAPP act just as surely as
Mr. Gilman is, and rightfully so. And, in any event, Defendants here do not allege that
Mr. Gilman is subject to suit under the anti-SLAPP statute because he holds a driver’s license.
4
New York is hardly alone in addressing a wide range of plaintiffs who use the litigation
process to try to silence critical speech: The vast majority of anti-SLAPP statutes apply broadly
to speech addressing matters of public concern, not merely to speech concerning developmentrelated controversies. See, e.g., Ark. Code Ann. §§ 16--63-501 to 508 (West 2011) (covering,
inter alia, “an act in furtherance of the right of free speech . . . in connection with an issue of
public interest or concern”); Cal. Civ. Proc. Code §§ 425.16 to 425.18 (West 2011) (covering
“any act . . . in furtherance of the person’s right of petition or free speech . . . in connection with
a public issue”); D.C. Code § 18-5501 to 5505 (2011) (covering, inter alia, any “expression or
expressive conduct that involves . . . communicating views to members of the public in
connection with an issue of public interest”); 735 Ill. Comp. Stat. 110/1 to 110/99 (West 2011)
(covering “acts in furtherance of [one’s] rights of petition, speech, association, or to otherwise
participate in government”); La. Code Civ. Proc. Ann. art. 971 (2011) (covering, inter alia,
“[a]ny written or oral statement or writing made in a place open to the public or a public forum
in connection with an issue of public interest”); Or. Rev. Stat. § 31.150 (West 2011) (covering,
inter alia, any verbal or written statement “in a place open to the public or a public forum in
connection with an issue of public interest”).
12
III.
THE COUNTERCLAIM ADEQUATELY ALLEGES THAT MR. GILMAN’S
DEFAMATION CLAIM IS MATERIALLY RELATED TO DEFENDANTS’
EFFORTS TO COMMENT ON OR TO CHALLENGE OR OPPOSE HIS
CONTINUED LICENSURE
In all candor, the lower New York State courts are all over the map when it comes to
articulating the standard for determining whether a lawsuit, such as Mr. Gilman’s here, is
“materially related to any efforts of the defendant to report on, comment on, rule on, challenge or
oppose [the plaintiff’s government] application or permission.” N.Y. Civ. Rts. Law § 76-a(1)(a).
While Defendants discuss the most relevant cases in more detail below, at bottom, for every case
that Mr. Gilman can cite suggesting that, to trigger the anti-SLAPP statute, the challenged
publication must expressly reference the permit or license being commented upon, Defendants
can point to an equal number holding that the nexus requirement is not nearly so strict. The
simple fact is that neither the New York Court of Appeals nor the Second Circuit has yet to
address the question and, as a result, this Court is obliged to predict how the New York Court of
Appeals would rule, based on its own analysis of the statutory text and legislative intent. E.g.,
Cowen & Co. v. Tecnoconsult Holdings, No. 96 CIV. 3748 (BSJ), 1996 WL 391884, at *4 n.3
(S.D.N.Y. July 11, 1996) (“Although this Court may look to lower court decisions for guidance
on questions of state law, this Court is bound only by decisions by the New York Court of
Appeals and the Court of Appeals for the Second Circuit.”); Plummer v. Lederle Labs., 819 F.2d
349, 355 (2d Cir. 1987) (“A federal court sitting in diversity must follow the law directed by the
[New York Court of Appeals], and if there is no direct decision . . . should determine what it
believes [the Court] would find if the issue were before it.”).
The starting point for this analysis is, of necessity, the allegations of Mr. Gilman’s
Complaint, which specifically claims that Mr. Spitzer’s piece defamed him by falsely asserting
13
that he had engaged in unlawful bid-rigging and price-fixing during his tenure at Marsh.5 The
question that follows is whether, having so construed Mr. Spitzer’s words, the Complaint is
“materially related to” Defendants’ efforts to oppose or comment on Mr. Gilman’s license.
Simply put, both Mr. Gilman and certain of the lower court decisions on which he relies
have misread the statute’s plain language. Mr. Gilman argues that the anti-SLAPP law requires
that Defendants’ publication be “materially related to” their efforts to attack Mr. Gilman’s
insurance license, Pl.’s Mem. at 8 (point heading II), and then bootstraps from that contention a
requirement that the publication expressly mention the insurance license and proceedings
regarding it. But the statute says no such thing. Rather, it expressly requires that the plaintiff’s
lawsuit (not the publication it places at issue) be “materially related to” the defendant’s efforts to
oppose or comment on the plaintiff’s permit or license. See N.Y. Civ. Rts. Law § 76-a(1)(a)
(defining “action involving public petition and participation” as “an action, claim, cross claim or
counterclaim for damages that is brought by a public applicant or permittee, and is materially
related to any efforts of the defendant to report on, comment on, rule on, challenge or oppose
such application or permission”). This is consistent with the purpose of the anti-SLAPP statute,
which is to discourage the use of the courts to intimidate critics of public applicants or
permittees. 8 Weinstein Korn Miller, N.Y. Civ. Pract. § 3211.51 (statute “focuses on retaliatory
litigation commenced or maintained for the purpose of intimidating persons who have voiced
opinions in public meetings or discussions inimical to those of the person controlling the
litigation” and is designed to deter such abuses).
5
It bears emphasis at this point that one of the grounds for Defendants’ motion for
judgment on the pleadings is that the piece cannot reasonably be construed in this manner and,
more specifically, that the particular allegedly defamatory statements at issue cannot reasonably
be understood as “of and concerning” Mr. Gilman.
14
The Counterclaim alleges, in appropriate factual detail, precisely what the plain language
of the anti-SLAPP statute requires: that Mr. Gilman filed his defamation claim in retaliation for
Mr. Spitzer’s conduct in initiating and comments in support of proceedings that jeopardized
Mr. Gilman’s status as a licensed insurance broker. Specifically, the Counterclaim alleges that
Mr. Spitzer, in his capacity as Attorney General, commenced proceedings that resulted in felony
criminal charges against Mr. Gilman—proceedings that were by any definition an effort to
“challenge or oppose” Mr. Gilman’s continued status as a licensed insurance broker. The Wall
Street Journal publicly criticized the insurance-related proceedings initiated by Mr. Spitzer’s
office and, in the publication challenged here, Mr. Spitzer both corrected misstatements by the
Journal and defended the public purpose served by and propriety of those prosecutions and civil
proceedings generally. Mr. Spitzer’s public rebuttal of the Journal’s criticism of the legal
proceedings was published during the pendency of the criminal charges against Mr. Gilman and
while the Department of Insurance was actively considering whether he should be required to
surrender his license. Counterclaim ¶¶ 22-40, 45-48; Brown Decl. 3-4 & Exs. 2 & 3.
The Counterclaim further alleges that Mr. Gilman is using this defamation action both to
punish Mr. Spitzer in his capacity as a private citizen, since he could not name Mr. Spitzer a codefendant in his companion case against Marsh because of Mr. Spitzer’s immunity from civil
liability for his acts as Attorney General, Counterclaim ¶¶ 41-44, and improperly to secure
discovery from Mr. Spitzer, as if he were a party to that action, through this one.6 In that
6
Indeed, at the December 2 conference held in this case, Mr. Gilman’s counsel made his
intentions in this regard clear. See Tr. at 3-4 (after Court ruled that discovery would be stayed
pending further briefing on Defendants’ motion for judgment on the pleadings, Mr. Gilman’s
counsel asserted that “the only issue that I wanted to raise . . . I might as well say it, is that we do
feel fairly strongly that it would be appropriate to have at the earliest possible time the – and this
may not entail any documentary discovery – the deposition of the defendant Spitzer”) (Brown
Decl. Ex. 15).
15
companion action, Mr. Gilman hurls the wild accusation that Mr. Spitzer abused his office to
obtain an indictment against Mr. Gilman under false pretenses—i.e., that Mr. Spitzer’s efforts as
Attorney General to challenge or oppose Mr. Gilman’s continued employment as an insurance
broker were themselves unlawful. Id. ¶¶ 42-43. In short, the Counterclaim alleges both the
nature of Mr. Spitzer’s conduct opposing Mr. Gilman’s continued status as a licensee (by way of
felony criminal charges against him), and the nature of the piece as public commentary, authored
in his capacity as a private citizen, defending that conduct. This is all that the anti-SLAPP act
requires a defendant in Mr. Spitzer’s position to plead.
The decision in Duane Reade, Inc. v. Clark, 2 Misc. 3d 1007(A), 784 N.Y.S.2d 920 (N.Y.
Sup. Ct. N.Y. Cty. 2004), is virtually on all fours with the present case. There, a local citizen
authored a display advertisement urging a boycott of Duane Reade drugstores because, the
author argued, it was a bad corporate neighbor. Id. at *10. Among other things, the author
objected to a lighted sign that the drugstore was constructing atop its building, claiming that the
lights would adversely affect the neighborhood. Id. at *2. The call for a boycott was published
in a Rockaway newspaper, The Wave. Duane Reade sued both the author and the newspaper for
defamation, and the defendants moved to dismiss the Complaint and for recovery of damages
under the anti-SLAPP statute. Id. at *1. The company argued that the anti-SLAPP statute did
not apply because its lawsuit was not “an ‘action involving public petition and participation’
under the act since its lawsuit [wa]s not materially related to any effort by [the author] to report
on, comment on or oppose Duane Reade’s application” for a permit. Id. at *6.
The court, however, rejected this contention and held that Duane Reade’s defamation
lawsuit was materially related to the author’s efforts to oppose construction of the sign (which
required a building permit) because the advertisement was published to the public while that
16
permit was under review by government authorities. Id. at *6; see also id. at *7 (government’s
final decision about sign was not made until two months after advertisement at issue was
published). That the advertisement made no specific reference to the permit review proceedings
was no bar to the statute’s application. Rather, despite his failure to make “reference to any
governmental process,” the author was objecting to activities that Duane Reade could only carry
out with government approval, and this alone, the court held, was a sufficient nexus to warrant
application of the anti-SLAPP statute. Id. at *7.7
At bottom, the court held, under any “reasonable interpretation of the facts” alleged, one
would have to conclude that the advertisement “constitute[d the author’s] effort to ‘report on,
comment on, . . . challenge or oppose’” issuance of a building permit to Duane Reade. Id. The
newspaper, which served as the vehicle for distribution of the author’s commentary, likewise
was entitled to avail itself of the protections of the anti-SLAPP act. Id. at *11 (granting motions
of both defendants to dismiss complaint and awarding to both defendants attorney’s fees and
compensatory and punitive damages under anti-SLAPP statute in amounts to be determined).
There is no principled basis on which Mr. Gilman can distinguish his own lawsuit against these
defendants from the one Duane Reade initiated against the advertiser and The Wave.
Indeed, Mr. Gilman relies here largely on the same arguments the court in Duane Reade
considered and rejected. For example, Mr. Gilman, like Duane Reade, cites Harfenes v. Sea
Gate Assoc., Inc., 647 N.Y.S.2d 329, 333 (N.Y. Sup. Ct. N.Y. Cty. 1995), for the proposition
7
See also Street Beat Sportswear, Inc. v. Nat’l Mobilization Against Sweatshops, 698
N.Y.S.2d 820, 824 (N.Y. Sup. Ct. N.Y. Cty. 1999) (although challenged commentary by
defendants at rallies and press conferences did not specifically reference pending legal
proceedings regarding plaintiff’s alleged violation of labor laws, it nevertheless generally
addressed plaintiff’s labor practices and there thus was sufficient nexus between suit against
defendants and their commentary regarding lawfulness of public permittee’s actions to trigger
anti-SLAPP statute).
17
that, to invoke the anti-SLAPP statute, the defendant must have “directly” challenged a permit or
license application. Pl.’s Mem. at 9. But, as the court in Duane Reade expressly recognized,
Harfenes does not support this proposition. In Harfenes, several individual homeowners asserted
a claim under the anti-SLAPP statute against a civic association. The homeowners contended
that they had been named by the association as defendants in a lawsuit in retaliation for opposing
an environmental permit. The court declined to apply the anti-SLAPP statute because (1) the
homeowners admitted that they had been entirely unaware of the association’s status as an
applicant for a permit until years afterward and (2) accordingly, the homeowners never
participated in the permit process in any manner. Id., 647 N.Y.S.2d at 330-31 & n.2; see also id.
at 332. Moreover, the homeowners did not claim to have taken part in any public protest or
participation, whether by placing an editorial advertisement or otherwise. Rather, the only
“petitioning” activity in which the homeowners claimed to have engaged was their filing of a
lawsuit in which they sought to discover the identity of certain trash hauling companies that
allegedly had aided and abetted the association in unlawful dumping in an effort to hold those
companies liable for the costs of environmental remediation. Id. In short, the holding in
Harfenes is wholly inapposite to the circumstances presented here.8
8
Although it is undisputed that proceedings regarding Mr. Gilman’s license remained
very much ongoing when the piece was published, his suggestion that the anti-SLAPP statute
applies only to communications challenging a permit or license while there are official
proceedings pending is irreconcilably at odds with the plain language of the statute as well as its
legislative history. Indeed, a principal sponsor of The Citizens Participation Act of 1992, as the
anti-SLAPP legislation was known, emphasized that it was intended to safeguard a wide range of
civic activism including, for example, publicly displaying a protest slogan written on a bedsheet.
See Brown Decl. ¶ 14 & Ex. 13 (New York Senate Debate Transcripts, 1992 Chapter 767,
Statement of Senator Marchi, at 8709-10); see also Edward W. McBride Jr., Note, The Empire
State SLAPPS Back: New York’s Legislative Response to SLAPP Suits, 17 Vt. L. Rev. 925, 95253 (Spring 1993) (statute protects “signing a petition or circulating a flier,” and “the
communication that is the basis of the libel suit is not limited to reporting a violation of law to
the government”); Marnie Stetson, Note, Reforming SLAPP Reform: New York’s Anti SLAPP
18
To the extent that Mr. Gilman may be suggesting that Harfenes stands for the additional
proposition that the anti-SLAPP statute requires that a communication be directed to the
permitting authorities, this, too, is inaccurate. As the court in Harfenes expressly observed, the
statute was “designed to protect those citizens who, usually before a government agency,
publicly challenge” permits or approvals, 647 N.Y.S.2d at 331 (emphasis added). Nowhere does
the court purport to hold that covered communications are exclusively those directed to
permitting authorities. The court in Duane Reade made exactly this point when it rejected the
same argument advanced by the drugstore chain there, observing that the court in Harfenes itself
had acknowledged
that the statute was “designed to protect those citizens who, usually
before a government agency, publicly challenge” permits or
approvals. Harfenes, 167 Misc. 2d at 650 (emphasis added). The
word “usually” counters plaintiff’s argument that Harfenes holds that
the legislation somehow excludes all communication except that
which occurs before a government agency. An interpretation that a
critic[’]s statements are unprivileged because they appeared in the
newspaper and were not spoken directly to the public agency would
be completely anti-thetical to the fundamental free speech rights
protected under the anti-SLAPP statute.
Duane Reade at *7.9
Statute, 70 N.Y.U. L. Rev. 1324, 1355 (Dec. 1995) (statute “protects any petitioning activity”
challenged by public permittees including, inter alia, “if a citizen writes a letter to the local
newspaper”). In particular, that a “public permittee” expressly includes an entity that has already
been granted a permit logically presupposes that commentary regarding the actions of such an
entity need not occur in the limited context of an ongoing government proceeding regarding
revocation to afford a sufficient nexus between the permittee’s suit and the defendant’s
commentary about the permittee. The statute plainly protects, and is intended to protect, speech
encouraging the commencement of revocation proceedings.
9
Mr. Gilman cites Guerrero v. Carva, 779 N.Y.S.2d 12 (N.Y. App. Div. 1st Dep’t 2004),
for the contrary proposition—i.e., that the defendant, and therefore the defendant’s
communication in issue, must have expressly been petitioning a particular government body.
Pl.’s Mem. at 8-9. But as the court in Guerrero candidly admitted, in suggesting that the
communication must identify the permit or application in question, it was (1) following Harfenes
and (2) engrafting onto the statute a limitation not present in its plain language. 779 N.Y.S.2d at
19
Similarly, in Adelphi University v. Committee to Save Adelphi, N.Y.L.J., Feb. 6, 1997, at
33 (N.Y. Sup. Ct. Nassau Cty. 1997) (Brown Decl., Ex. 14), the court held that the anti-SLAPP
statute is “not limited to covering lawsuits brought by a public permittee concerning statements
made directly to government agencies. . . . Defendant’s communications to the press were
calculated to elicit public interest in [plaintiff’s allegedly wrongful] activities and pressure state
regulators to act; they thus satisfy the ‘materially related’ element of the SLAPP [s]tatute.” As
that court emphasized, limiting application of the anti-SLAPP statute to only those statements
specifically challenging permits directly before an agency “would render it virtually useless since
almost every hotly contested public debate receives press coverage, and the ability to participate
in the debate to influence that coverage often determines the outcome.” Id. (emphasis added).10
21-22. For the reasons noted supra, Harfenes is inapposite and, in any event, courts are not
entitled to read into the statute terms the Legislature did not adopt. E.g., Sprint Spectrum LP v.
Conn. Sitting Council, 274 F.3d 674, 677 (2d Cir. 2001) (“When interpreting a statute, courts
should accord a statutory enactment its plain meaning. [Courts] may not by construction, read a
provision into legislation that is not clearly stated therein.” (internal quotation marks omitted));
In re Erie County Agric. Soc’y v. Cluchey, 40 N.Y.2d 194, 200 (1976) (“Courts should
not . . .add restrictions or limitations where none exist. . . .‘We are not privileged, by judicial
construction, to legislate.’ . . . [Courts] have no authority to read a requirement into a statute
under the guise of construction[.]” (citation omitted)). In addition, it cannot be disputed that both
the civil proceedings Mr. Spitzer commenced against Marsh, and the criminal prosecution he
initiated against Mr. Gilman, necessarily challenged Mr. Gilman’s ongoing entitlement to an
insurance license. See pp. 4-6, supra. Even the language Mr. Gilman quotes from Guerrero
purports to require only that the litigant invoking the anti-SLAPP statute have been engaged in
efforts to challenge the defamation plaintiff’s license; it does not purport to require that the
publication he claims defamed him itself constitute that challenge (so long as it otherwise is
materially related to his fitness to hold such a license). In short, even if the court in Guerrero
can properly be said to have reached the broad conclusion Mr. Gilman attributes to it, that
conclusion is not only of no relevance to this case, it is wrong and should not be perpetuated by
this Court.
10
The other cases cited by Mr. Gilman are easily distinguishable. For example, in OSJ,
Inc. v. Work, 691 N.Y.S.2d 302, 307 (N.Y. Sup. Ct. Madison Cty. 1999), aff’d, 710 N.Y.S.2d
666 (N.Y. App. Div. 3d Dep’t 2000), the “communication” in issue was the defendant’s trial
testimony, given in exchange for immunity from prosecution arising out of the events about
which he was compelled to testify. The court there concluded that such testimony is not public
petition or participation in the sense contemplated by the anti-SLAPP statute. Similarly, in
20
In the end, the referenced language from non-binding cases such as Harfenes and
Guerrero notwithstanding, under the plain language of the anti-SLAPP statute, Defendants have
alleged facts establishing the requisite nexus between this lawsuit and their efforts to challenge,
oppose and/or comment on Mr. Gilman’s fitness to serve as a licensed insurance broker.
IV.
THE COUNTERCLAIM ADEQUATELY ALLEGES THAT MR. GILMAN’S
DEFAMATION CLAIM LACKS MERIT
Finally, Mr. Gilman contends that Defendants have failed adequately to allege that his
defamation claim is meritless and that it was filed for improper purposes. Pl.’s Mem. at 10-11.
As noted, to recover attorney’s fees and costs, a party invoking the anti-SLAPP statute must
demonstrate that the plaintiff’s action “was commenced or continued without a substantial basis
in fact and law.” N.Y. Civ. Rts. Law § 70-a(1)(a). Similarly, to recover other compensatory
damages, a party invoking the anti-SLAPP statute must demonstrate that the plaintiff’s action
“was commenced or continued for the purpose of harassing, intimidating, punishing or otherwise
maliciously inhibiting the free exercise of speech, petition or association rights.”
Id. § 70-a(1)(b).
Mr. Gilman argues that the allegations of the Counterclaim are merely conclusory
assertions of law and that “Defendants do not, and cannot, allege facts from which a factfinder
could conclude that Plaintiff’s claim for defamation per se by libel is without merit.” Pl.’s Mem.
at 10-11 (citing Bell Atlantic v. Twombly, 550 U.S. 544 (2007)). Mr. Gilman certainly is correct
Bridge Capital v. Ernst, 877 N.Y.S.2d 51, 53 (N.Y. App. Div. 1st Dep’t 2009), the
“communication” was a private inquiry to the Attorney’s General’s office regarding the status of
approval of the defamation plaintiff’s condominium plan for use by the defendant in a contract
suit over damages regarding purchase of a condominium. That court, too, concluded that the
communication in question was not the type of public advocacy or participation contemplated by
the anti-SLAPP statute. It cannot reasonably be argued that the piece authored by Mr. Spitzer
and published on Slate.com was anything other than an effort to influence public debate about a
series of then-ongoing civil, criminal and administrative proceedings and, hence, “public
participation” in a classic sense.
21
that the Supreme Court has held that a counterclaimant, like any plaintiff, is required to allege in
good faith facts that support its contentions. Twombly, 550 U.S. at 555 (“a formulaic recitation
of a cause of action’s elements will not do” to avoid dismissal for failure to state claim). As the
Court later elaborated, an affirmative pleading “must contain sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible on its face,’” while a pleading that offers mere
“‘labels and conclusions,’” or that “tenders ‘naked assertion[s]’ devoid of further factual
enhancement’” is defective. Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949 (2009)
(quoting Twombly, 550 U.S. at 570); see also, e.g., Operating Local 649 Annuity Trust Fund v.
Smith Barney Fund Mgmt., LLC, 595 F.3d 86, 91 (2d Cir. 2010) (test is whether affirmative
pleading alleges “a plausible set of facts sufficient ‘to raise a right to relief above the speculative
level’” (quoting Twombly, 550 U.S. at 555)).
Defendants have set forth sufficient facts in support of each element of their
counterclaim. With respect to their obligation to plead facts supporting their claim that the
Complaint is without a substantial basis in fact or law, N.Y. Civ. Rts. Law § 70-a(1)(a), the
Counterclaim is replete with specific factual allegations. While Defendants respectfully refer the
Court to the Counterclaim itself rather than repeating its contents here, by way of summary
example:
• Defendants specifically refer to and incorporate by reference into their
Counterclaim the publication alleged by Mr. Gilman to be defamatory and quote relevant
language from it, Counterclaim ¶¶ 46-48, and Defendants specifically allege that the
piece does not identify Mr. Gilman, id. ¶ 48. The content of the piece itself is the only
“fact” relevant to the question of whether it can reasonably be understood as “of and
concerning” Mr. Gilman in the first instance, which it cannot. See Fifth Defense.
Without more, these allegations regarding the content of the piece demonstrate that
Mr. Gilman’s Complaint is without a substantial basis in law or fact.
• Defendants allege in specific detail—the text alone comprises eight pages of the
Counterclaim—the facts regarding Mr. Gilman’s conduct at Marsh Global Broking,
including specifically his role in rigging bids and fixing prices while employed there.
22
Counterclaim ¶¶ 7-40 & Exs. 2-11 (reviewing facts set forth in and incorporating as
exhibits judicial records and other official documents from underlying litigations and
investigations involving Gilman). Summarized briefly, these allegations set forth the
specific substance of solicitations to participate in criminal activity that Mr. Gilman made
to representatives of insurance companies, instructions he gave to his subordinates to
punish insurance companies who refused to take part in the illegal conduct, and false
statements that he made to customers of Marsh regarding the competitiveness of bids
obtained for their business. Id. Defendants also allege in detail the specific nature,
outcomes and timing of the criminal proceedings against Mr. Gilman. Id. ¶¶ 31-40 &
Exs. 10-11. These factual allegations directly support the propositions that, assuming the
challenged piece can be understood to be of and concerning Mr. Gilman in the first
instance, (1) he is unable to meet his burden of proving that the challenged statements to
the effect that he engaged in the referenced misconduct are materially false; (2) the piece
is in any event a fair and accurate report of official proceedings; and (3) Mr. Gilman is
unable to carry his burden of proving that Mr. Spitzer and The Slate Group violated the
applicable standard of care in writing and publishing it. See Sixth, Seventh and Tenth
Defenses. Any one of these propositions is sufficient to demonstrate that Defendants
have stated a claim that the Complaint is without substantial basis in law or fact.
• Defendants allege that Mr. Spitzer, the former Attorney General, authored the
piece, and that it was published on a website managed by The Slate Group. Counterclaim
¶¶ 4-5. These pleaded facts adequately support the affirmative defenses asserted by The
Slate Group that (1) it is entitled to immunity from this suit pursuant to 47 U.S.C. § 230,
and (2) that Mr. Gilman as a matter of law cannot meet his burden of proving that The
Slate Group violated the applicable standard of care. See Eighth and Tenth Defenses.11
As for the requirement that Defendants allege facts sufficient to support their contention
that Mr. Gilman’s action was instituted for an improper purpose, such as to harass or punish
them, N.Y. Civ. Rts. Law § 70-a(1)(b), he once again ignores express and detailed allegations in
the Counterclaim. As the Counterclaim explains, Mr. Gilman also has sued his former employer,
Marsh, in an action also pending before this Court. Counterclaim ¶¶ 41-43. In that action, Mr.
Gilman falsely alleges that Mr. Spitzer abused his office as Attorney General for personal gain,
specifically, that Mr. Spitzer conspired with various people to make Mr. Gilman a scapegoat in
11
See, e.g., Tr. at 4 (plaintiff’s counsel stating his “semi-educated opinion that there was
no fact-checker” employed by defendant The Slate Group to review the piece because “due to
the status of the author as a former governor and attorney general himself, there was more
latitude given to the facts as he would present them as opposed to what would happen if, say, I
wrote a piece”) (Brown Decl., Ex. 15).
23
return for lenient treatment of Marsh, and that Mr. Spitzer purportedly did so to benefit a
“friend” and campaign contributor, Michael Cherkasky (a defendant in the other action), and to
bolster his own “crime-fighting credentials” in advance of his planned run for governor. Id.
¶¶ 42-43 (citing and attaching as exhibit copy of complaint in other action). Furthermore,
Defendants allege, because Mr. Spitzer is immune from civil liability for acts undertaken in his
official capacity as Attorney General, Mr. Gilman could not name him a defendant in the other
action. Id. ¶ 44. Rather, Mr. Gilman used publication by Mr. Spitzer of the piece in question,
after his term in office had concluded, as an excuse to haul him into court and thereby secure
discovery from him in his case against Marsh as if Mr. Spitzer were a party to it. See id. ¶ 44.
Significantly, as Defendants also plead in their Counterclaim, Mr. Gilman did not object to the
accuracy of the piece at the time of its publication or for a year thereafter: neither he nor any of
his representatives ever complained to Mr. Spitzer or Slate.com about the piece, they never asked
for a retraction, never requested a correction, and never sent a letter to the editor to correct what
they now claim are falsehoods contained in it about Mr. Gilman. Id. ¶ 49.
Simply put, the factual allegations set forth in the Counterclaim are, at the very least,
plausible and sufficient to raise above a speculative level Defendants’ ability to prove that the
Complaint is without a substantial basis in fact and law, and that it was filed for a purpose other
than to secure compensation for injury to reputation. Consequently, this third prong of
Mr. Gilman’s motion to dismiss must also be rejected.
24
CONCLUSION
For the foregoing reasons, Defendants respectfully request that the Court deny Plaintiff’s
Motion to Dismiss Defendants’ Counterclaim.
Dated: December 13, 2011
Respectfully submitted,
LEVINE SULLIVAN KOCH & SCHULZ, LLP
By:
s/Jay Ward Brown
Lee Levine, pro hac vice
Jay Ward Brown, Bar No. JB-4376
Katharine Larsen, Bar No. KL-6153
1050 Seventeenth Street, NW, Suite 800
Washington, DC 20036
Telephone: (202) 508-1100
Facsimile: (202) 861-9888
llevine@lskslaw.com
jbrown@lskslaw.com
klarsen@lskslaw.com
OF COUNSEL:
Eric Lieberman
James A. McLaughlin
THE WASHINGTON POST COMPANY
1150 Fifteenth Street, NW
Washington, DC 20071-7301
Telephone: (202) 334-6000
Facsimile: (202) 334-5075
mclaughlinj@washpost.com
liebermane@washpost.com
Counsel for Defendants/Counterclaimants
25
CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing Memorandum in Opposition to Plaintiff’s
Motion to Dismiss Defendants’ Counterclaim was served via the Court’s CM/ECF system this
13th day of December 2011 upon the following:
Jeffrey L. Liddle
James W. Halter
LIDDLE & ROBINSON, L.L.P.
800 Third Avenue
New York, NY 10022
Counsel for Plaintiff/Counterclaim Defendant
s/Jay Ward Brown
Jay Ward Brown
26
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