Known v. Daily Holdings, Inc.

• Decision Date: 12 November 2015
• Citation: 21 N.Y.S.3d 6,135 A.D.3d 87
• Parties: John Rashad FRANKLIN also known as DJ Rashad Hayes, Plaintiff–Respondent, v. The DAILY HOLDINGS, INC. etc., et al., Defendants–Appellants.
• Court: New York Supreme Court — Appellate Division

135 A.D.3d 87

21 N.Y.S.3d 6

John Rashad FRANKLIN also known as DJ Rashad Hayes, Plaintiff–Respondent,

v.The DAILY HOLDINGS, INC. etc., et al., Defendants–Appellants.

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

Nov. 12, 2015.

Davis Wright Tremaine LLP, New York (Laura R. Handman and Deborah A. Adler of counsel), for appellants.

McLaughlin & Stern LLP, New York (Neil B. Solomon of counsel), for respondent.

JOHN W. SWEENY, JR., J.P., DIANNE T. RENWICK, KARLA MOSKOWITZ, PAUL G. FEINMAN, BARBARA R. KAPNICK, JJ.

KAPNICK, J.

This action arises from an internet news article alleged to be defamatory. Plaintiff is a DJ who, in 2012, occasionally worked at the downtown Manhattan nightclub WIP. Defendant, The Daily Holdings, Inc. "TDH" f/k/a News DP Holdings (the Daily), operated an iPad-only subscription based newspaper from 2010 to December of 2012. The Daily was a wholly owned subsidiary of defendant News Corporation (News Corp.).

On or about June 13, 2012, rappers Chris Brown and Drake and their entourages were allegedly involved in a fight at WIP over Brown's ex-girlfriend, singer Rihanna. According to plaintiff, two friends of his, identified by their Twitter handles as @BiggDoobs and @dj_trustory, who knew that he DJ'ed at WIP, tweeted him about the fight. In response, plaintiff posted to his Twitter account, "I was gonna start shooting in the air but I decided against it. Too much violence in the hip hop community." Plaintiff had 800 Twitter followers and his account was public.

On June 15, 2012 the Daily posted a news article about the altercation, titled "Ri–Ri's Rumble," which included the following statements:

" ‘So we're sitting in there. Me, a couple of others, Chris,’ eyewitness DJ Rashad Hayes said. ‘Drake comes in and keeps eyeballing the table.’

"Perhaps to show he didn't care that Drake had hooked up with his ex—or to flaunt the fact that he's rekindled his romance with her—Brown sent a bottle to Drake's table. Drake sent it back with a note, a witness told the New York Post. It read, ‘I'm f* * *ing the love of your life [Rihanna], deal with it.’

"And then things erupted. As rappers Maino and Meek Mill looked on, Brown and Drake's entourages threw bottles and fists throughout the club. ‘I was gonna start shooting in the air but I decided against it,’ Hayes said." (Boldface omitted.)

According to plaintiff, he posted a demand for a retraction in the Comments section of the article and on the Daily's "Contact the Daily" section of its site.

By summons and verified complaint dated February 14, 2014, plaintiff alleges that defendants, in publishing "Ri–Ri's Rumble," defamed him. Specifically, plaintiff alleges that defendants falsely identified him as a witness who made the statement: "So we're sitting in there. Me, a couple of others, Chris ... Drake comes in and keeps eyeballing the table," when he never made any such statement to anyone. Plaintiff further alleges that the article implied that he had stated, "I was gonna start shooting in the air but I decided against it" to a reporter in seriousness, when that statement was only a tweet he made in jest. Further, plaintiff alleges that he was not at WIP on the night of the fight and that by failing to publish his full tweet, the Daily changed it from one eschewing violence, to one that made it look as if plaintiff were a "gun-toting psychopath with an itchy trigger finger."

Plaintiff alleges that his career was on a sharp trajectory upward, and that he was on the cusp of breaking out as a prominent national and New York City DJ, but the article devastated his career. According to plaintiff, he was banned from WIP immediately after the article was published, and negotiations for various career opportunities ended. The complaint contains two causes of action—libel and libel per se.

By notice of motion dated March 6, 2014, defendants moved pursuant to CPLR 3211(a)(7) for dismissal of the complaint. Defendants argued that the published statements are not capable, as a matter of law, of a defamatory meaning. Defendants also argued that plaintiff admitted in his complaint to posting the relevant tweet, rendering it nonactionable and the entire article substantially true. Lastly, defendant News Corp. argued that it could not be liable, since there was no claim that it had any involvement in the publication of the article, nor did plaintiff plead facts sufficient to create parent/subsidiary liability.

Plaintiff argued in opposition that the Daily's misidentification of him as an eyewitness, its creation of a fabricated quote confirming that misidentification, and its publishing the tweet out of context, created the reasonable conclusion that plaintiff carried a loaded gun, intending to shoot it in a crowded club where he worked, and imputed characteristics to him incompatible with his being a DJ. Further, plaintiff argued that the article gave the false impression that he would speak with the press about the goings-on at trendy clubs and private parties, attended by celebrities and wealthy professionals, where he works. Regarding substantial truth, plaintiff argued that it is an affirmative defense to be raised in an answer, and thus an inappropriate basis for a motion to dismiss.

As to News Corp., plaintiff argued that he was not alleging liability merely because it was the parent corporation of the Daily, but because the Daily was the alter ego and/or agent of News Corp. Specifically, plaintiff argued that News Corp. CEO Rupert Murdoch was the creator of the Daily and took the stage at the Daily's launch party. Plaintiff further alleged that News Corp. spent $30 million to launch the Daily, News Corp. sent the invitations to the launch party, and News Corp.'s spokesman was quoted with respect to a lawsuit over the rights to the name "the Daily."

By order dated May 14, 2014, the motion court denied defendants' motion, noting that it must accept plaintiff's allegations in the complaint as true, and finding that "plaintiff's complaint [wa]s pled with sufficient specificity to form cognizant causes of action." The court did not specifically address defendants' claims of substantial truth, or News Corp.'s claim that it could not be held liable as the mere parent corporation of the Daily.

Discussion

"Defamation is the making of a false statement which tends to expose the plaintiff to public contempt, ridicule, aversion or disgrace, or induce an evil opinion of him in the minds of right-thinking persons, and to deprive him of their friendly intercourse in society" (Stepanov v. Dow Jones & Co., Inc., 120 A.D.3d 28, 34, 987 N.Y.S.2d 37 [1st Dept.2014] [internal quotation marks omitted] ). "To create liability for defamation there must be: (a) a false and defamatory statement concerning another; (b) an unprivileged publication to a third party; (c) fault amounting at least to negligence on the part of the publisher; and (d) either actionability of the statement irrespective of special harm or the existence of special harm caused by the publication" (Restatement [Second] of Torts § 558 ).

Alleged Defamatory Statements

There are two allegedly defamatory statements within the article. The first, which plaintiff maintains is a fabricated quotation, is, " ‘So we're sitting in there. Me, a couple of others, Chris,’ eyewitness DJ Rashad Hayes said. ‘Drake comes in and keeps eyeballing the table’ " (boldface omitted). The second statement, which is partially quoted from plaintiff's Twitter feed, is as follows: "And then things erupted. As rappers Maino and Meek Mill looked on, Brown and Drake's entourages threw bottles and fists throughout the club.¹ ‘I was gonna start shooting in the air but I decided against it,’ Hayes said (boldface omitted).

The parties largely focus on whether or not the statements are capable of a defamatory meaning and whether the second statement meets the falsity requirement, given that the Daily used words that were originally published via plaintiff's public Twitter account.

"[A] threshold issue for resolution by the court is whether the statement alleged to have caused plaintiff an injury is reasonably susceptible to the defamatory meaning imputed to it" (Agnant v. Shakur, 30 F.Supp.2d 420, 423–424 [S.D.N.Y.1998] [applying New York law] [internal quotation marks omitted] ). "The court's threshold inquiry is guided by both the meaning of the words as they would commonly be understood and the context in which they appear" (id. at 424 ).

With respect to the first alleged defamatory statement (" ‘So we're sitting in there. Me, a couple of others, Chris,’ eyewitness DJ Rashad Hayes said. ‘Drake comes in and keeps eyeballing the table.’ " [boldface omitted] ) and the allegedly fabricated portion of the second statement ("And then things erupted. As rappers Maino and Meek Mill looked on, Brown and Drake's entourages threw bottles and fists throughout the club." [boldface omitted] ), neither the language, nor the implication that plaintiff was a witness to the incident, are libelous on their face, meaning that the complained of words are not commonly understood to subject a person to public contempt or ridicule. Stated another way, the import of this statement is innocent on its face since it merely conveys that plaintiff was sitting at a table observing his surroundings; even if false, this statement is not defamatory. The only way plaintiff alleges that these statements are susceptible to a defamatory meaning is by reference to extrinsic facts. No reasonable juror could interpret the alleged defamatory statements in the manner urged by plaintiff without knowing that employers expect DJs not to publicly discuss or give interviews about the happenings at trendy clubs and private parties where they work (see e.g. Agnant, 30 F.Supp.2d at 426 ). The need for extrinsic facts to render the statement defamatory conclusively dictates that it cannot be libel per se (second cause of action) (id. ["It is well established in New York ... that statements cannot be...