Greenberg v. Spitzer

• Decision Date: 13 September 2017
• Docket Number: 2014-07682. Index No. 1436/13.
• Parties: Maurice R. GREENBERG, respondent-appellant, v. Eliot L. SPITZER, appellant-respondent.
• Court: New York Supreme Court — Appellate Division

155 A.D.3d 27

62 N.Y.S.3d 372

Maurice R. GREENBERG, respondent-appellant,

v.Eliot L. SPITZER, appellant-respondent.

2014-07682. Index No. 1436/13.

Supreme Court, Appellate Division, Second Department, New York.

Sept. 13, 2017.

Levine Sullivan Koch & Schulz, LLP, New York, NY (Jay Ward Brown of counsel), for appellant-respondent.

Boies, Schiller & Flexner LLP, Armonk, NY (David Boies, Nicholas A. Gravante, Jr., Robert J. Dwyer, and Amy L. Neuhardt of counsel), for respondent-appellant.

MARK C. DILLON, J.P., CHERYL E. CHAMBERS, LEONARD B. AUSTIN, and ROBERT J. MILLER, JJ.

CHAMBERS, J.

This appeal presents an opportunity to discuss in some detail the proper application of CPLR 3211(a)(1) and (7) in the context of an action sounding in defamation.

I. Background

The plaintiff, Maurice R. Greenberg, is the former chairman and chief executive officer of American International Group, Inc. (hereinafter AIG), and the defendant, Eliot L. Spitzer, is the former Attorney General of the State of New York (hereinafter the NYAG).

In May 2005, Spitzer, who was then the NYAG, brought a lawsuit against Greenberg under General Business Law article 23–A (hereinafter the Martin Act), alleging, among other things, that Greenberg initiated at least two sham reinsurance transactions with General Reinsurance Corporation, Inc. (hereinafter the GenRe Transactions), which misled the investing public as to AIG's true financial condition. The case arose following Spitzer's announcement, in October 2004, of a wide-ranging investigation into fraud and anti-competitive practices in the insurance industry. During the same time period, AIG was embroiled in a series of lawsuits brought against it by the United States Securities and Exchange Commission (hereinafter the SEC), the United States Department of Justice (hereinafter the DOJ), and the Office of the NYAG.

On July 13, 2012, Spitzer (who was no longer in public office at the time) appeared on the CNBC television program "The Closing Bell" with program anchor Maria Bartiromo (hereinafter the July 13 Interview) to respond to comments made by Dennis Vacco, who had preceded Spitzer as the NYAG. Vacco had appeared on the same program a few days earlier and had stated that during a meeting with Spitzer in September 2004, Spitzer made a "startling personal attack" on Greenberg, which left Vacco "with an uneasy feeling that there was some personal animus that was driving him."

During the July 13 Interview, Spitzer made several statements concerning Greenberg's role in the GenRe Transactions, as well as the circumstances surrounding the termination of his tenure as chairman and chief executive officer of AIG.

On July 16, 2012, Spitzer appeared on his own program, "Viewpoint" on Current TV (hereinafter the Viewpoint Appearance), during which he re-aired several portions of the July 13 Interview. Approximately one year later, a book written by Spitzer entitled Protecting Capitalism Case by Case (hereinafter Protecting Capitalism ) was published.

At the time of Spitzer's two television appearances and the publication of Protecting Capitalism, the NYAG's action against Greenberg with respect to the GenRe Transactions remained pending and undecided (see People v. Greenberg, 21 N.Y.3d 439, 971 N.Y.S.2d 747, 994 N.E.2d 838 ; People v. Greenberg, 127 A.D.3d 529, 8 N.Y.S.3d 68 ).

On July 12, 2013, Greenberg commenced this defamation action against Spitzer based on various statements he made during the July 13 Interview and the Viewpoint Appearance, as well as in Protecting Capitalism. Spitzer subsequently moved to dismiss the amended complaint pursuant to CPLR 3211(a)(1) and (7) on the grounds that the challenged statements were substantially true, privileged under Civil Rights Law § 74 as fair and true reports of judicial proceedings, or otherwise non-actionable. He also argued that the amended complaint failed to sufficiently plead actual malice.

In an order dated June 24, 2014, the Supreme Court granted the motion in part and denied it in part. Spitzer appeals from so much of the order as denied certain branches of his motion, and Greenberg cross-appeals from so much of the same order as granted the remaining branches of Spitzer's motion.

Statements at issue

The alleged defamatory statements are reproduced below exactly as they appear in the amended complaint (including bolded language), except for statement number 3.1, which is reproduced from Protecting Capitalism.

1. July 13 Interview

1.1 " ‘Maria, wait a minute. Let's deal with the facts for a minute. We brought a charge that AIG's accounting was fundamentally fraudulent. The company admitted that, the Justice Department, the SEC joined us in those charges. The company's board removed Hank Greenberg. Because of what the silliness that is attached to this claim, people are saying I did this out of personal invective or somehow personal animosity attacks. Can I tell you something very simple, and I don't know if this will make Hank feel better or not. I have no emotions about him one way or the other. He is merely one in a litany, Maria, he is one in a litany of corporate executives who defrauded the market. We prosecuted them, the charge against the prosecutor that a prosecutor's motive is flawed is the last refuge of the guilty. I've had this claim made against me by every person we prosecuted’ "

(amended complaint, at ¶ 20 [hereinafter Statement 1.1] ).

1.2 " ‘Maria, Maria, there are people who still think that the moon, that the sun revolves around the earth. You know, let's deal with reality here. Hank Greenberg's accounting was fraudulent ’ "

(amended complaint, at ¶ 21 [hereinafter Statement 1.2] ).

1.3 " ‘Maria, look, I hate to say this to you, deal with facts and reality, not what Hank Greenberg's PR machine wants you to believe. Hank Greenberg was thrown out by his own board. His company paid 1.6 billion dollars in a settlement, acknowledged his accounting was fraudulent. These are facts, read the Federal Judicial Opinions. He was the one who instigated the conspiracy ’ "

(amended complaint, at ¶ 22 [hereinafter Statement 1.3] ).

1.4 "Eliot Spitzer: No, no Maria. Unfortunately, I have in front of me the transcript of what I said on Sunday morning TV, with George Stephanopoulos.

"Maria Bartiromo: ya, ya ...

"Eliot Spitzer: Here's the transcript:

‘

‘Deals were fundamentally flawed. The evidence is overwhelming that these were transactions created for the purpose of deceiving the market. We call that fraud, it's deceptive, it's wrong, it's illegal. That company was a black box run with an iron fist by a CEO who did not tell the public the truth. ’

"Every piece of that statement was accurate, and has been proven. "

(amended complaint, at ¶ 24 [hereinafter Statement 1.4] ).

1.5 "Eliot Spitzer: Maria, Maria, here is the federal court opinion. Do you want to read it. Twenty-nine pages. Hank Greenberg co-conspirator in fraud. Facts matter, Maria. I know that this is cable TV, but facts matter.

"Maria Bartiromo: I'm aware facts matter.

"Eliot Spitzer: Maria, you need to understand, AIG was being led by a CEO whose accounting was fraudulent. That's why the board removed him. He paid a fine of 1.6 billion dollars "

(amended complaint, at ¶ 26 [hereinafter Statement 1.5] ).

1.6 " ‘Hank Greenberg at AIG committed fraud. The record on that is indisputable ’ "

(amended complaint, at ¶ 27 [hereinafter Statement 1.6] ).

1.7 "Defendant Spitzer repeatedly and falsely asserted that a federal judge has found that Mr. Greenberg ‘is a conspirator whose actions began the conspiracy’ "

(amended complaint, at ¶ 29 [hereinafter Statement 1.7] ).

2. Viewpoint Appearance

2.1 "In the Viewpoint Appearance, Defendant Spitzer re-aired several portions of the July 13 Interview which included portions of the July 13 Defamatory Statements"

(amended complaint, at ¶ 35 [hereinafter Statement 2.1] ).

2.2 " ‘Every statement I have made about Hank Greenberg's role in these frauds has been proven true and accurate’ "

(amended complaint, at ¶ 36 [hereinafter Statement 2.2] ).

3. Protecting Capitalism

3.1 "I have avoided writing in this book about the ongoing litigation against Hank Greenberg, the former CEO of AIG. Because the case is still pending, I think it better that I limit my comments. That notwithstanding, several points must be made, given the constant effort to rewrite history. (It might be worth looking at my appearance on CNBC with Maria Bartiromo on July 13, 2012.)

"Here are a few salient and irrefutable points.

"1. AIG and Hank Greenberg were charged by the New York Attorney General's office—when I was Attorney General—with civil fraud and deceptive accounting practices, as well as a raft of other abuses;

"2. AIG settled those charges for $1.64 billion, at the time the largest payment in history. The New York Times reported the settlement as follows:

‘Under the settlement reached with the Justice Department, the Securities and Exchange Commission, the New York attorney general's office, and the New York State Insurance Department, A.I.G. acknowledged that it had deceived the investing public and regulators. ’

"3. Further from The Times:

‘Mr. Greenberg, who was removed by A.I.G.'s board last March, remains under investigation by the Securities and Exchange Commission and the Justice Department and faces a lawsuit by the New York attorney general, Eliot Spitzer.’

"4. A quote from a Bloomberg News report about the removal of Greenberg by the board:

‘Last night, AIG announced that Greenberg, 79, would step down as chief executive officer.... Greenberg's resignation as CEO came as New York Attorney General Eliot Spitzer zeroed in on a specific reinsurance transaction between AIG and Berkshire Hathaway Inc.'s General Reinsurance subsidiary.... Spitzer obtained information in the

past 10 to 14 days that Greenberg himself may have initiated the transaction...’

"5. Lest there by ANY doubt about the veracity of this claim of Greenberg's role, here is a quote from a federal judge's written opinion after a federal criminal prosecuti

...