Lindberg v. Dow Jones & Co.
| Decision Date | 11 August 2021 |
| Docket Number | 20-CV-8231 (LAK) |
| Court | U.S. District Court — Southern District of New York |
| Parties | GREG E. LINDBERG Plaintiff, v. DOW JONES & COMPANY, INC, Defendant. |
Aaron Z. Tobin Michael Merrick Condon Tobin Sladek Thornton, PLLC Charles A. Gruen Law Offices of Charles A. Gruen Attorneys for Plaintiff
Robert P. LoBue Patterson, Belknap, Webb & Tyler LLP Attorneys for Defendant
This case arises from two allegedly defamatory articles published in The Wall Street Journal (the "Journal") about Greg Lindberg's business and romantic pursuits.[1] Lindberg is the founder and sole owner of the Global Growth investment firm and its portfolio of affiliated companies, which includes a number of insurance companies.[2] In early 2019, the Journal reported that Lindberg had diverted $2 billion from these insurance companies for his personal use.[3] A number of months later, the Journal published a second article about Lindberg that focused on his alleged use of surveillance operatives to spy on his former fiancee and other women who "caught his eye."[4]
Lindberg claims that these articles were defamatory and that reporters for the Journal improperly relied on sources who were subject to confidentiality agreements or owed him a duty of confidentiality. He alleges that Dow Jones & Company Inc. ("Dow Jones") - the owner of The WallStreet Journal'-is liable to him for defamation tortious interference with contracts, and aiding and abetting breaches of fiduciary duty.
The Journal first reported on Lindberg in a February 28 2019 article posted to the newspaper's website under the title Financier Who Amassed Insurance Firms Diverted $2 Billion into His Private Empire (the "First Article").[5] It was printed on March 1, 2019 with minor modifications on the front page of the print Journal with the title Insurance Tycoon Diverts $2 Billion.[6]
The First Article claimed that Lindberg had diverted $2 billion of insurance company funds for his personal benefit by causing the insurers to lend money to entities he owned.[7] According to the article, insurance companies typically invest premiums "conservatively" to ensure sufficient liquidity to pay insurance claims.[8] For the same reason, the article claimed, state regulators monitor and regulate insurance companies' investments in affiliated entities.[9] For example, the article noted that "[s]ome states" limit affiliate investments to[10] percent of an insurer's assets.'0 In contrast, the article claimed that one of Lindberg's insurance companies had invested more than 50 percent of its assets in affiliated entities.[11]
The article reported also that Lindberg had moved his insurance companies to North Carolina, where regulators allowed his insurance companies to invest up to 40 percent of their assets in affiliated entities.[12] It explained that Lindberg had made generous political contributions to the North Carolina insurance commissioner- Wayne Goodwin - who was up for re-election around the time that Lindberg moved his insurance companies to the state.[13] In addition, the article claimed that "in consultation with" North Carolina regulators, Lindberg had restructured the insurance companies' investments into special purpose vehicles ("SPVs") that Lindberg owned - but did not control - to avoid the limitations on investing in affiliated entities, [14] According to the article, the SPVs did not simply hold that money. Instead, they lent it to Lindberg's other companies, which allowed Lindberg to profit from these assets as well.[15]
While Lindberg was engaged in these lending practices, the article claimed, his net worth had increased to $1.7 billion.[16] It described various luxury items that Lindberg purportedly had purchased at the time, such as a Gulfstream aircraft, a 214-foot yacht, and multiple large properties.[17] With respect to one such purchase - a 12, 000 square-foot mansion in Raleigh, North Carolina - the Journal claimed that it had traced the funds used to purchase the home to one of Lindberg's insurance companies.[18]
The article revealed also that Lindberg - whom it described as the largest political donor in North Carolina - was the subject of a federal criminal investigation regarding his donations to North Carolina regulators.[19] It stated also that the North Carolina regulators were concerned about the solvency of the SPVs and affiliated entities that had borrowed money from these insurance companies.[20] It noted that these entities had paid dividends to Lindberg, "suggesting that insurance money was flowing into his pockets."[21]
On October 3, 2019, the Journal's online edition published another article about Lindberg (the "Second Article").[22] Entitled 'Active Interest': Insurance Tycoon Spied on Women Who Caught His Eye, it allegedly "reinforced the impression" that Lindberg and his businesses were operating in an "unethical" or "legally dubious" manner and "sought to create the impression that Lindberg harassed, stalked and victimized women in his personal life."[23]
The article began by noting that federal officials had obtained a warrant to arrest Lindberg following an investigation into whether he had bribed a state regulator.[24] Next, the article said that Lindberg had paid dozens of surveillance operatives to trail women he was, or was interested in, dating.[25] The report included colorful details and photos from surveillance dossiers and quoted heavily from surveillance operatives. For example, it reported that one surveillance operative had enrolled in a culinary school in Manhattan where Lindberg's then fiancee - referred to as MM - was taking classes so that the operative could keep a close eye on her activities without her knowledge.[26] The article quoted a surveillance dossier's report that MM was "not social at [the school] and appears to have no interest in her classmates . . . MM is very focused and business minded."[27]
While the article noted that Lindberg had met some women at nightclubs and through matchmaker services, it claimed also that Lindberg had identified "prospective partners" for surveillance officials to track by "scourfing] Instagram" for women, who were "often aspiring models."[28] "Then," it claimed, "the surveillance team went to work, finding the woman's address and following her to learn about habits and possible boyfriends."[29]
The article claimed that "Mr. Lindberg's unorthodox pursuit of romantic interests is a previously unreported sign of the entrepreneur's lavish lifestyle since he started acquiring life insurers in 2014" and explained that "[t]he spending took off after Mr. Lindberg began lending at least $2 billion of the insurers' funds to his private conglomerate, the focus of a Journal investigation in February."[30]The words "a Journal investigation in February" contained a hyperlink[31] that, if selected, took the reader to the First Article on the Journal's website, [32]
Next, the article reported that state and federal authorities in separate investigations were "seeking to follow the money trail" from Lindberg's insurers and noted that "[Regulators fear many of the loans to Mr. Lindberg's businesses may be uncollectible and that the financial hole at his insurers could exceed $ 1 billion."[33] It then reported that "[t]wo state insurance departments have taken control of much of his insurance empire, looking to preserve assets."[34] The Journal explained that "[authorities sometimes sue owners of troubled insurers to recover missing funds, and lavish spending could be used as trial evidence."[35]
The article speculated about the source of funds for Lindberg's surveillance activities. In that regard it stated: "[w]here the money for the pursuit and surveillance of women came from isn't clear."[36] Nonetheless, it noted that "[b]ank records and internal Lindberg corporate documents reviewed by the Journal show that Mr. Lindberg shuffled money among scores of private companies he controlled, through wire transfers, inter company loans and fee arrangements."[37] It explained also that "property deeds show he used insurance-company funds to buy a Raleigh, N.C., mansion."[38]However, the Journal reported, a "spokesman for Mr. Lindberg said the loans from his insurers were proper, that none have defaulted and that no insurance money was used for Mr. Lindberg's lifestyle or his surveillance operation."[39]
Lindberg alleges that the North Carolina Department of Insurance (the "Department") began investigating his business activities in 2017.[40] According to Lindberg, the Department "pushed" the Global Growth insurance companies into rehabilitation in June 2019, a move that he claims led to millions of dollars of losses and impacted policyholders.[41] Separately, in early 2020, Lindberg was convicted of federal bribery in the Western District of North Carolina.[42]
On October 2, 2020, Lindberg brought this action against Dow Jones for defamation, tortious interference with contracts and aiding and abetting a breach of fiduciary duty. The defamation claim asserts that eleven statements published by the Journal were defamatory. At a high level, the allegedly defamatory statements in the First Article are: (1) Lindberg "diverted" "huge sums" from his insurers, (2) the insurers invested in entities that were "insolvent," (3) the assets were used to "expand [Lindberg's] private holdings," (4) the lending practice was a "risky strategy," (5) the "sheer scale" of Lindberg's use of insurers' assets "has little precedent," (6) the "insurers disguised the flow of money," (7) Lindberg "found" the SPV strategy, and (8) "insurance...
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