In re Gawker Media LLC

• Decision Date: 21 August 2017
• Docket Number: Case No. 16–11700 (SMB)
• Citation: 571 B.R. 612
• Parties: IN RE: GAWKER MEDIA LLC, et al., Debtors.
• Court: U.S. Bankruptcy Court — Southern District of New York

571 B.R. 612

IN RE: GAWKER MEDIA LLC, et al.,¹ Debtors.

Case No. 16–11700 (SMB)

United States Bankruptcy Court, S.D. New York.

Signed August 21, 2017

ROPES & GRAY LLP, Counsel for the Debtors and Reorganized Debtors, 1211 Avenue of the Americas, New York, New York 10036

Gregg M. Galardi, Esq., D. Ross Martin, Esq., Peter Walkingshaw, Esq., Of Counsel

RANDAZZA LEGAL GROUP, PLLC, Counsel for Charles C. Johnson and Got News LLC, 100 Pearl Street, 14th Floor, Hartford, Connecticut 06103, Jay M. Wolman, Esq., Of Counsel

MEMORANDUM DECISION REGARDING STAGE ONE ISSUES

STUART M. BERNSTEIN, United States Bankruptcy Judge:

Prior to the petition date in these chapter 11 cases, Charles C. Johnson ("Johnson") and his company, Got News LLC ("GotNews," and together with Johnson, the "Claimants") brought a lawsuit against Debtor Gawker Media LLC ("Gawker") and two of its employees in California state court (the "California Action") alleging various torts arising out of the publication of certain content on Gawker's websites.² Following the commencement of the Debtors' chapter 11 cases, Johnson and GotNews filed Proofs of Claim Nos. 53, 54, 202, 223, 246 and 298 (the "Claims"), one by each Claimant against each Debtor based on the same allegations as the California Action.³ The Debtors objected to the Claims. (Johnson Omnibus Objection at 1–2; GotNews Omnibus Objection at 1–2.)

The Omnibus Objections raised a host of issues but only two are presently before the Court. First, are the Claims "personal injury tort" claims which the Court cannot adjudicate? (Scheduling Order Regarding Debtors' Objections to Proofs of Claim of Got News LLC and Charles Johnson , dated Jan. 24, 2017 (the "Scheduling Order "), at ¶ 2 (ECF Doc. # 703).) Second, does the California anti-SLAPP statute, C AL . C IV . P ROC . C ODE § 425.16, apply to the Omnibus Objections ? (Id. ) For the reasons that follow, the Court concludes that the Claims are not "personal injury tort" claims within the meaning of 28 U.S.C. § 157(b)(2)(B), and the special motion and discovery-limiting procedures under the California anti-SLAPP statute are inapplicable to these contested matters.

BACKGROUND

A. The Gawker Articles and Prepetition Litigation

As of petition date, the Debtors operated seven distinct media brands with corresponding websites covering news and commentary on a variety of topics, including current events, pop culture, technology and sports. (Holden Declaration at ¶ 10–12.) The Debtors' websites allowed readers to engage with their content by "participating in online discussions," (id. at ¶ 13), and "commenting" on articles. (Cf., e.g., id. at ¶ 15 (stating that the Debtors believe they "have the best commenting environment of any digital media group").)

Johnson is a web-based journalist and the owner of GotNews, which operates through the GotNews.com website. (Opposition to Omnibus Objections to Proofs of Claim as to Charles C. Johnson and Got News LLC , dated Nov. 16, 2016 (the "Opposition ") at ¶ 2 (ECF Doc. # 452); Johnson Omnibus Objection at ¶ 4; GotNews Omnibus Objection at ¶ 4.) According to the Complaint , in the late summer of 2014, Johnson began investigating, and through GotNews reporting on, the events leading to the death of Michael Brown in Ferguson, Missouri, and its aftermath. (Complaint at ¶¶ 98 p. 21–¶ 108 p. 23; Johnson Omnibus Objection at ¶ 4; GotNews Omnibus Objection at ¶ 4.) Following Johnson's and GotNews's publication of these and certain other articles, and allegedly in retaliation for Johnson's Ferguson-related reporting, (Opposition at ¶¶ 3–4), Gawker published several articles (the "Gawker Articles") about the Claimants. (Johnson Omnibus Objection at ¶ 8; GotNews Omnibus Objection at ¶ 8; Opposition at ¶ 4.) The Gawker Articles included statements criticizing Johnson's honesty as a reporter and his professional skills as a journalist. They characterized Johnson's reporting as "erroneous[ ]" and stories Johnson had covered as "complete[ly] fabricat[ed]," interpreted Johnson's statements regarding Michael Brown's death as suggesting that Brown "deserved to die" and contended that Johnson "gets things wrong a lot ." (Johnson Omnibus Objection at ¶ 35 (emphasis in original) (quoting relevant Gawker Article); GotNews Omnibus Objection at ¶ 35 (emphasis in original) (same).) The Gawker Articles also cited "rumors" that Johnson had defecated in public and engaged in bestiality. (Johnson Omnibus Objection at ¶ 43 (quoting relevant Gawker Articles); GotNews Omnibus Objection at ¶ 43 (same).)

Gawker employees and affiliates and third parties posted comments on the articles relating to the articles and their content. (Johnson Omnibus Objection at ¶¶ 43, 47, 49 (quoting and discussing relevant Gawker Articles and comments); GotNews Omnibus Objection at ¶¶ 43, 47, 49 (same); see also, e.g., Opposition , Ex. 11.1 at 28–33 and Ex. 11.2 at 1–6 (attaching copies of comments) (ECF Doc. ## 452–11 and 452–12).) Additionally, Gawker, its employees and third parties posted content on the social media website twitter.com ("Twitter") that referenced and commented on the Gawker Articles and the rumors they discussed. (See, e.g., Opposition , Ex. 11.1 at 1–15 (attaching "screenshots" of Twitter posts by Gawker, its affiliates and third parties promoting, discussing and/or commenting on the Gawker Articles and their content).)

As a consequence of the publication of the Gawker Articles, Johnson filed a pro se Complaint on behalf of himself and GotNews in California state court.⁴ The Complaint named Gawker and J.K. Trotter and Greg Howard, the authors of the Gawker Articles, as defendants. Counts I and II asserted claims against Gawker and Trotter sounding in defamation and injurious falsehood, (Complaint at ¶ 226 p. 48–¶ 241 p. 54),⁵ Counts III and IV asserted the same claims against Gawker and Howard, (id. at ¶ 232 p. 54–¶ 247 p. 58), and Count V alleged that all of the defendants had cast both plaintiffs in a false light by "giv[ing] publicity to fictional matters not of public concern" and misrepresenting the plaintiffs' statements. (Id. at ¶ 232 p. 58–¶ 238 p. 60 (emphasis omitted).) Finally, Count VI asserted a claim against all defendants under 42 U.S.C. § 1983 based on a conspiracy to interfere with the plaintiffs' civil rights. (Id. at ¶ 232 p. 60–¶ 240 p. 62.) As a result, one or both plaintiffs suffered damages including injury to their reputation, jeopardy to their business, emotional injury and lost business and investments due to damaged business reputations. (Id. at ¶ 238 p. 53–¶ 239 p. 54, ¶ 245 p. 57–¶ 246 p. 58, ¶ 236 p. 59–¶ 237 p. 60, ¶ 240 p. 62.)

B. The Claims and the Omnibus Objections

Gawker filed a chapter 11 petition on June 10, 2016, (Voluntary Chapter 11 Petition of Gawker Media LLC , filed June 10, 2016 (ECF Doc. # 1)), thereby staying the California Action as against Gawker. 11 U.S.C. § 362(a)(1). Debtors Gawker Hungary Kft. ("Gawker Hungary") (f/k/a/ Kinja, Kft.) and Gawker Media Group, Inc. ("GMGI") filed their chapter 11 petitions two days later. (Voluntary Chapter 11 Petition of Kinja, Kft. , filed June 12, 2016 (Case No. 16–11718, ECF Doc. # 1); Voluntary Chapter 11 Petition of Gawker Media Group, Inc. , filed June 12, 2016 (Case No. 16–11719, ECF Doc. # 1).)

On September 28, 2016, GotNews and Johnson filed the Claims, consisting of six total claims, one against each Debtor by each of GotNews and Johnson. (Johnson Omnibus Objection at ¶ 3; GotNews Omnibus Objection at ¶ 3.) Each proof of claim asserted an unsecured claim for $20 million based on "damages from tortious conduct," and attached the Complaint . In connection with confirmation of the Amended Joint Chapter 11 Plan of Liquidation for Gawker Media Group, Inc., Gawker Media LLC, and Gawker Hungary Kft. (the "Plan "), the Debtors and the Claimants agreed that the Debtors would establish and fund a single reserve of $1.5 million solely to satisfy the Claims "to the extent [the] Claims become Allowed Claims" (as defined in the Plan ), and further agreed to cap the Claimants' recovery on account of the Claims at $1.5 million. (Findings of Fact, Conclusions of Law, and Order Confirming Amended Joint Chapter 11 Plan of Liquidation for Gawker Media Group, Inc., Gawker Media LLC and Gawker Hungary Kft. , dated Dec. 22, 2016 at ¶ 82 (ECF Doc. # 638).)

The Debtors filed the Omnibus Objections on October 31, 2016 seeking to disallow the Claims. They argued first that Federal Rules of Civil Procedure 12(b)(6) and/or 12(c) should be made applicable pursuant to Bankruptcy Rule 9014 because the Claims "sound in tort," are "based on outside litigation," and should be resolved in a manner "analog[ous] ... to the ordinary civil litigation process." (Johnson Omnibus Objection at ¶¶ 13–15, GotNews Omnibus Objection at ¶¶ 13–15.) As to the Claims themselves, the Objections contended that they were barred as a matter of California law under the California anti-SLAPP statute, (Johnson Omnibus Objection at ¶¶ 16–31; GotNews Omnibus Objection at ¶¶ 16–31), and that the statements by Gawker, its employees and/or third parties that formed the basis of the Complaint constituted opinion and were not actionable defamation, were framed as questions rather than assertions of fact or were third party statements for which the Debtors could not be liable under section 230 of the Communications Decency Act, 47 U.S.C. § 230. (Johnson Omnibus Objection at ¶¶ 32–50; GotNews Omnibus Objection at ¶¶ 32–50). Further, the false light claims by both Claimants failed because their defamation claims were not actionable (Johnson Omnibus Objection at ¶¶ 51–52; GotNews Omnibus Objection at ¶¶ 51–52), and the false light cause of action was not available to GotNews because GotNews, as a corporate entity, does not have the interests, including privacy and feelings, that the tort seeks to protect. (GotNews Omnibus Objection at ¶ 53.)

Additionally, even if the Gawker Articles were actionable, Johnson failed to allege and could not...