Nunes v. Cable News Network, Inc.

• Decision Date: 14 April 2022
• Docket Number: 21-637,August Term, 2021
• Parties: Devin G. NUNES, Plaintiff-Appellant, v. CABLE NEWS NETWORK, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

31 F.4th 135

Devin G. NUNES, Plaintiff-Appellant,

v.CABLE NEWS NETWORK, INC., Defendant-Appellee.

No. 21-637

August Term, 2021

United States Court of Appeals, Second Circuit.

Argued: November 30, 2021

Decided: April 14, 2022

Steven S. Biss, Law Office of Steven S. Biss, Charlottesville, VA, for Plaintiff-Appellant.

Stephen J. Fuzesi (Kevin T. Baine, Nicholas G. Gamse, Matthew J. Greer, on the brief), Williams & Connolly LLP, Washington, D.C., for Defendant-Appellee.

Before: Park, Nardini, and Menashi, Circuit Judges.

Judge Menashi dissents in a separate opinion.

William J. Nardini, Circuit Judge:

In this diversity action, Plaintiff-Appellant Devin G. Nunes sued Defendant-Appellee Cable News Network, Inc. ("CNN") for defamation and civil conspiracy in the United States District Court for the Eastern District of Virginia. The case was eventually transferred to the Southern District of New York (Laura Taylor Swain, Chief Judge ), but all parties agree that the action remains governed by the choice-of-law principles of Virginia, the state law of the forum where this suit was originally filed. And so the question we face is: How would a Virginia state court have ruled in this case?

The district court dismissed Nunes's action for failure to state a claim based on two key holdings. First, it predicted that the Virginia Supreme Court would, in applying lex loci delicti to a multistate defamation suit like that brought by Nunes, determine that the "place of the wrong" is the state where the plaintiff is primarily injured as a result of the allegedly tortious online content, i.e., the plaintiff's domicile, absent strong countervailing circumstances. Applying this standard, the district court determined that California law governed Nunes's claims. Second, applying California's retraction statute for defamation claims— California Civil Code § 48a —the district court determined that Nunes failed to state a claim because he did not adequately allege a retraction demand or special damages as required by section 48a and Federal Rule of Civil Procedure 9(g). Nunes challenges each of these conclusions on appeal.

For the reasons outlined below, we affirm the judgment of the district court.

I. BACKGROUND

A. Factual background.¹

At the time of the alleged defamatory conduct, Devin Nunes was a citizen of California and a member of the United States House of Representatives. He represented California for over twenty years in different positions of public office and served in the House of Representatives starting in 2003, where he represented California's 21st and, beginning in 2010, 22nd Congressional District. Nunes was the Ranking Member of the House Intelligence Committee, which oversees matters pertaining to national security. In his capacity as the Ranking Member of that committee, Nunes played a leading role during the House of Representatives’ first impeachment inquiry into U.S. President Donald J. Trump, which was announced on September 24, 2019.

CNN, a Delaware corporation headquartered in Georgia, operates a digital media network that publishes and disseminates news through a variety of platforms. CNN's network includes television broadcasts, the publication of articles online, and the operation of multiple social media accounts. Through these multimedia outlets, CNN delivers news every hour of every day to tens of millions of readers and viewers worldwide.

On November 22, 2019, CNN published an article written by reporter Vicky Ward. The article reported that Joseph Bondy, a lawyer for Lev Parnas (an indicted associate of Rudolph Giuliani), had stated that Parnas was willing to testify to Congress that Nunes had traveled to Vienna and met with former Ukrainian Prosecutor General Victor Shokin (the "Ward Article"). According to the article, Parnas was willing to testify that Nunes's meetings were to discuss "digging up dirt" on former Vice President Joe Biden. Joint App'x at 29.

Around the same time that the article was published on CNN's digital network, Ward appeared as a guest on a CNN news program, Cuomo Prime Time , hosted by news anchor Chris Cuomo. Ward and Cuomo discussed the article and allegedly "published further defamatory statements" about Nunes's involvement in "looking for dirt on the Bidens." Id. at 35–36. Ward's article was also disseminated broadly through both CNN organizational social media accounts, such as the accounts for CNN International and CNN Politics, and the individual accounts of CNN employees.

B. Procedural history.

On December 3, 2019, Nunes filed this action in the United States District Court for the Eastern District of Virginia against CNN. Nunes brought claims of defamation and conspiracy to defame based on CNN's publication on its website of the Ward Article, the discussion of the contents of that article on Cuomo Prime Time , and its republication through various social media platforms.

CNN moved to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) and, in the alternative, to transfer the case to the Southern District of New York under 28 U.S.C § 1404(a). Nunes filed an amended complaint,² and CNN renewed its motion to dismiss. The district court in the Eastern District of Virginia granted CNN's motion to transfer to the Southern District of New York, which then granted CNN's renewed motion to dismiss.

In dismissing Nunes's complaint, the court applied the choice-of-law doctrine of Virginia, the state of the transferor court. Because internet publication occurred simultaneously in multiple states, the district court predicted that the Virginia Supreme Court would, in applying lex loci delicti , look to the state of the plaintiff's greatest injury to determine the place of the wrong, which is presumptively the state of a plaintiff's domicile in the absence of strong countervailing circumstances. Here, the district court found the place of the injury to be Nunes's home state of California and, under that state's law, Nunes failed to comply with "the statutory notice and retraction demand requirements" of California's "retraction statute," thus limiting his recovery to special damages. Nunes v. Cable News Network, Inc. (CNN ), 520 F. Supp. 3d 549, 560 (S.D.N.Y. 2021) ; Cal. Civ. Code § 48a(a). The district court dismissed Nunes's complaint with prejudice after concluding that Nunes "fail[ed] to meet the minimum pleading requirements for special damages established by [Federal Rule of Civil Procedure] 9(g)." CNN , 520 F. Supp. 3d at 560. The court also determined that Nunes failed to state a conspiracy claim because "there [was] no underlying tort to support a viable claim for conspiracy." Id. at 561. Nunes timely appeals the district court's order dismissing his action with prejudice and entering judgment in favor of CNN.

II. DISCUSSION

On appeal, Nunes challenges the district court's ruling on various grounds. First, he argues that the Virginia Supreme Court would, applying lex loci delicti , determine that New York is the "place of the wrong" because it is the place from which the allegedly defamatory statements were disseminated; and alternatively, that he was primarily injured in either the District of Columbia or Virginia, or at least that the choice-of-law determination cannot be made without discovery. Second, he argues that even if California law does apply, section 48a is procedural rather than substantive, and therefore does not apply under Virginia's choice-of-law rules; and that even if section 48a does apply, he ought to have been granted leave to further amend his complaint so he could plead special damages. Nunes also requests that we certify to the Virginia Supreme Court the question of how lex loci delicti applies to multistate defamation cases like Nunes's.

We agree with the district court that the Virginia Supreme Court would apply California law, including its retraction statute, to Nunes's multistate defamation claim. Further, the court did not err in failing to sua sponte grant Nunes leave to amend. Accordingly, we affirm the district court's dismissal of the complaint with prejudice for failure to state a claim.

A. Standard of review.

We review de novo a district court's choice-of-law determination and its grant of a motion to dismiss under Rule 12(b)(6). See Int'l Bus. Machs. Corp. v. Liberty Mut. Ins. Co. , 363 F.3d 137, 143 (2d Cir. 2004) (choice of law); Biro v. Condé Nast , 807 F.3d 541, 544 (2d Cir. 2015) (motion to dismiss).

B. California law applies to Nunes's claims.

1. Lex loci delicti.

It is undisputed that Virginia's choice-of-law principles determine the substantive law governing Nunes's defamation claim because this case was transferred from the Eastern District of Virginia. "Transfers under [ 28 U.S.C.] § 1404(a) by a court that has jurisdiction are adjudicated in the transferee state under the law of the transferor state."

U.S. Bank Nat'l Ass'n v. Bank of Am. N.A. , 916 F.3d 143, 154 (2d Cir. 2019) (emphasis omitted); see Van Dusen v. Barrack , 376 U.S. 612, 639, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964) ; Klaxon Co. v. Stentor Elec. Mfg. Co. , 313 U.S. 487, 494–97, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941).

Virginia applies the doctrine of lex loci delicti to determine which state's substantive law applies in tort actions. See Dreher v. Budget Rent-A-Car Sys., Inc. , 272 Va. 390, 395, 634 S.E.2d 324 (2006). Under this approach, "the law of the place of the wrong governs all matters related to the basis of the right of action." Id. "The place of the wrong for purposes of the lex loci delicti rule ... is defined as the place where the last event necessary to make an act liable for an alleged tort takes place." Quillen v. Int'l Playtex, Inc. , 789 F.2d 1041, 1044 (4th Cir. 1986) (internal quotation marks omitted); accord Restatement (First) of Conflict of Laws § 377 (1934) (articulating the traditional lex loci delicti approach). "Where harm is done to the reputation of a person, the place of wrong is where the defamatory statement is...