Butowsky v. Folkenflik
| Decision Date | 07 August 2019 |
| Docket Number | Civil Action No. 4:18cv442 |
| Parties | ED BUTOWSKY Plaintiff v. DAVID FOLKENFLIK, ET AL. Defendants |
| Court | U.S. District Court — Eastern District of Texas |
The above-entitled and numbered civil action was heretofore referred to United States Magistrate Judge Caroline M. Craven pursuant to 28 U.S.C. § 636. On April 17, 2019, the Magistrate Judge issued a Report and Recommendation, recommending Defendants' Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6) for Failure to State a Claim (Dkt. # 25) be denied. National Public Radio, Inc. ("NPR"), David Folkenflik, Edith Chapin, Leslie Cook, and Pallavi Gogoi (collectively "Defendants") filed objections to the Report and Recommendation. Plaintiff Ed Butowsky ("Plaintiff") filed a response to the objections. The Court conducts a de novo review of the Magistrate Judge's findings and conclusions.
This is an action for defamation, business disparagement, and civil conspiracy filed by Plaintiff, a Dallas investment advisor, against NPR, its senior media correspondent, David Folkenflik ("Folkenflik"), and certain former and current executive editors at NPR.1 According to Plaintiff, Defendants published false and defamatory statements about Plaintiff online and via Twitter betweenAugust 2017 and March 2018 - statements Plaintiff alleges injured his business and reputation. Specifically, Plaintiff claims Folkenflik knowingly and intentionally conspired with Douglas H. Wigdor ("Wigdor") to promote, publish, and republish a demonstrably false and defamatory narrative about Plaintiff. Joint Report of Attorney Conference (Dkt. # 52) at 2. Plaintiff alleges Folkenflik actively colluded with Wigdor, Folkenflik knew he was part of Wigdor's "press strategy" to extort money from Fox, and Folkenflik willingly assumed the role of "firecracker" in the scheme. Id. Plaintiff seeks money damages for alleged loss and injury to his business, insult, pain and mental suffering, humiliation, embarrassment, and injury to his reputation sustained as a result of Defendants' publication of allegedly false and defamatory statements. Id.
In his original complaint, Plaintiff alleges four causes of action: (1) defamation per se (Dkt. # 1, ¶¶ 161-168); (2) business disparagement (id., ¶¶ 169-174); (3) civil conspiracy (id., ¶¶ 175-179); and (4) intentional infliction of emotional distress (id., ¶¶ 180-185).2 Defendants contend Plaintiff filed suit against them for accurately reporting on a publicly filed lawsuit on a matter of public concern.3 Defendants moved to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), asserting Plaintiff's complaint fails to state a plausible claim for relief for two primary reasons. First, Defendants argue both Texas law and the First Amendment to the United States Constitution protect Defendants' reporting on judicial proceedings and about matters of public concern. Defendants arguethe statements in the NPR articles at issue in this case are subject to statutory and common law privileges and defenses that preclude civil liability - namely the fair report privilege, the fair comment privilege, and the "third-party allegation" rule. Second, Defendants argue many of the statements are not "of and concerning" Plaintiff, are not defamatory or capable of a defamatory meaning, or are protected expressions of opinion and should be dismissed for these reasons as well.
On April 17, 2019, the Magistrate Judge entered a 98-page Report and Recommendation ("R&R") regarding proposed findings of fact and recommendations that Defendants' motion to dismiss be denied. Dkt. # 58. The Magistrate Judge first found Defendants did not establish the common law and statutory privileges barred Plaintiff's claims. Id. at 49. Additionally, she found Plaintiff sufficiently alleged the publications at issue were not substantially true, and the third-party allegation rule did not bar Plaintiff's claims as a matter of law at this stage of the proceeding. Id. at 51. She next concluded Plaintiff adequately pleaded facts sufficient to allege a defamation claim. Specifically, she found, at this stage of the proceedings, accepting the allegations in Plaintiff's complaint as true, Plaintiff plausibly alleged the statements at issue were "of and concerning" Plaintiff. She also found the statements at issue were not expressions of opinion and were capable of a defamatory meaning. Id. at 74, 78. She then considered whether the Defamation Mitigation Act ("DMA") barred Plaintiff's defamation claim. She concluded Plaintiff's failure to follow the DMA did not require dismissal of the action, and the issue of recovery of exemplary damages was more appropriate for consideration in the context of summary judgment. Id. at 95. Lastly, the Magistrate Judge found Plaintiff pleaded facts sufficient to state a claim for civil conspiracy. Id. at 97.
Defendants filed objections to both the R&R's statement of facts and the conclusions of law,more specifically described below.
Defendants argue the statement of facts in the R&R omits significant accusations against Plaintiff from the Wheeler lawsuit. Dkt. # 63 at 5. Defendants claim these missing allegations are relevant to Defendants' motion because this Court must compare the Reports and the Wheeler complaint to accurately assess whether privileges apply. Id.
Defendants also assert eight main objections to the R&R's conclusions of law. These objections and all sub-parts to any objection are set out below.
In their first objection, Defendants argue the R&R errs by relying on overturned case law to conclude the third-party allegation rule did not bar Plaintiff's claims at this stage of the case and under the facts alleged in the complaint. Id. at 7-8. According to Defendants, the Texas Legislature and the Texas Supreme Court recognize the third-party allegation rule as an exception to the republication rule, allowing the media to truthfully and accurately report on allegations made by a third party regarding a matter of public concern. Id. Defendants state because the Reports at issue here were just a republication of the Wheeler complaint, the third-party allegation rule bars Plaintiff's defamation claim. Id.
Defendants' second objection argues the R&R fails to correctly analyze whether common law and statutory privileges bar Plaintiff's defamation claim. Id. at 8-14. Defendants' second objection is broken into four sub-arguments: (1) the R&R erroneously relies on the Restatement (Second) of Torts as a guide for interpreting Texas privilege law; (2) the R&R uses comments to the Restatement in its analysis, even though there is ample reason to believe the Texas Supreme Courtwould reject the Restatement and its comments; (3) the R&R intermingles the different constitutional, common law, and statutory privileges in its analysis; and (4) the R&R uses the public-interest privilege standard to analyze whether the fair report and fair comment privileges apply. Id.
In their third objection, Defendants argue the R&R wrongly concludes Plaintiff's allegations were sufficiently pleaded under Iqbal/Twombly. Id. at 14-15. Specifically, Defendants state Plaintiff's allegations regarding collusion and actual malice are conclusory and unsupported by any facts. Id.
In their fourth objection, Defendants claim the R&R errs in relying on supplemental allegations found in Plaintiff's response to Defendants' motion to dismiss (Dkt. # 32) and Plaintiff's proposed amended complaint (Dkt. # 54). Id. at 15-17. Defendants argue the R&R uses facts not found in the operative pleading (the original complaint) and considers the un-pleaded cause of action, defamation per quod. Id.
Defendants argue in their fifth objection the R&R improperly analyzes Plaintiff's defamation per se claim. Id. at 17-23. Defendants break the fifth objection into five discrete sub-arguments as follows: (1) the R&R incorrectly analyzes the falsity of the publications at issue; (2) the R&R incorrectly concludes the alleged defamatory statements were "of and concerning" Plaintiff; (3) the R&R wrongly finds the statements at issue were statements of fact and not opinion; (4) the R&R erroneously concludes the allegations did not support finding Plaintiff was a public figure; and (5) the R&R improperly finds Plaintiff's allegations plausibly alleged actual malice. Id. Sub-argument five is identical to Defendants' third objection.
In their sixth objection, Defendants argue Plaintiff's failure to comply with the Texas DMA is a bar to litigation or at least a bar to exemplary damages, as opposed to the findings in the R&Rthat this issue should be raised and decided at summary judgment. Id. at 23-24.
In their seventh objection, Defendants argue the R&R's business disparagement analysis is erroneous. Id. at 24. The R&R finds Plaintiff's business disparagement claim survives for the same reasons Plaintiff's defamation claims survive. Id. Defendants argue that because the R&R's defamation analysis is wrong, so is the R&R's conclusion that Plaintiff's business disparagement survives. Id.
In their last objection, Defendants object to the R&R's civil conspiracy analysis. Id. While Defendants agree the R&R correctly identifies the applicable law, they argue Plaintiff failed to allege sufficient facts to give rise to a plausible claim for relief for a conspiracy. Id. This argument is also raised by Defendants in their third objection.
Plaintiff argues the Magistrate Judge adequately reviewed Plaintiff's factual allegations, correctly finding the allegations sufficient to state a claim for relief. Dkt. # 64. Plaintiff asserts the R&R does not rely heavily on one decision but considers the entire body of Texas law...
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