Preston Hollow Capital LLC v. Nuveen LLC
| Decision Date | 14 June 2022 |
| Docket Number | N19C-10-107 MMJ CCLD |
| Parties | PRESTON HOLLOW CAPITAL LLC, Plaintiff, v. NUVEEN LLC, NUVEEN INVESTMENTS, INC., NUVEEN SECURITIES LLC, and NUVEEN ASSET MANAGEMENT LLC, Defendants. |
| Court | Superior Court of Delaware |
Submitted: March 24, 2022
On Defendant Nuveen Asset Management LLC's Motion for Summary Judgment GRANTED
On Plaintiff's Motion for Partial Summary Judgement GRANTED
R Judson Scaggs, Jr., Esq., Elizabeth A. Mullin, Esq., Morris Nichols, Arsht & Tunnell LLP, Wilmington, DE, David H Wollmuth, Esq., R. Scott Thompson, Esq. (Argued), Michael C. Ledley, Esq., Joshua M. Slocum, Esq., Sean P. McGonigle, Esq., Wollmuth Maher & Deutsch LLP, New York, NY, Attorneys for Plaintiff Peter J. Walsh, Jr., Esq., Jennifer C. Wasson, Esq., David A. Seal, Esq., Potter Anderson & Corroon LLP, Wilmington, DE, Leonard A. Gail, Esq. (Argued), Rachel S. Morse, Esq., Caitlin A. Kovacs, Esq. (Argued), Hillary W. Coustan, Esq., Massey & Gail LLP, Chicago, IL, Jonathan S. Massey, Esq., Jeremy G. Mallory, Esq., Massey & Gail LLP, Washington, D.C., Eva W. Cole, Winston & Strawn LLP, New York, NY, Attorneys for Defendant
MARY M. JOHNSTON JUDGE
This defamation action involves statements made by one business competitor about another. The facts set forth in the Court's prior Opinion in Preston Hollow Capital LLC v. Nuveen LLC,[1] issued on December 15, 2020, are incorporated by reference. Preston Hollow and Nuveen are both institutional investors involved in the high-yield municipal bond market.
The parties have filed cross Motions for Summary Judgement. Defendant argues: (1) Plaintiff cannot show harm to its reputation or business proximately caused by Defendant's Statements; (2) alternatively, several of Defendant's Statements are unactionable because they are opinions; and (3) Plaintiff is not entitled to presumed general damages for defamation per se.
Plaintiff seeks Partial Summary Judgment on the Second, Seventh, Ninth, Fourteenth, Seventeenth, and Twenty-Second Affirmative Defenses. Plaintiff also claims entitlement to summary judgment on the grounds that it is not a limited purpose public figure. The parties agree that Defenses Two, Seventeen, and Twenty-Two are no longer at issue. Defendants have also conceded that Defense Nine is no longer viable because there is no controversy regarding whether Plaintiff is a limited purpose public figure. Thus, the Court will only address Affirmative Defenses Seven and Fourteen.
Summary judgment is granted only if the moving party establishes that there are no genuine issues of material fact in dispute and judgment may be granted as a matter of law.[2] All facts are viewed in a light most favorable to the non-moving party.[3] Summary judgment may not be granted if the record indicates that a material fact is in dispute, or if there is a need to clarify the application of law to the specific circumstances.[4] When the facts permit a reasonable person to draw only one inference, the question becomes one for decision as a matter of law.[5] If the non-moving party bears the burden of proof at trial, yet "fails to make a showing sufficient to establish the existence of an element essential to that party's case," then summary judgment may be granted against that party.[6]
Superior Court Rule 56(h) provides:
Where the parties have filed cross motions for summary judgment and have not presented argument to the Court that there is an issue of fact material to the disposition of either motion, the Court shall deem the motions to be the equivalent of a stipulation for decision on the merits based on the record submitted with the motions.[7]
The Court will evaluate any contested facts pursuant to Rule 56(c). All facts are viewed in a light most favorable to the non-moving party.[8] The Court will evaluate the facts relating to each precise issue. The Court will take all reasonable inferences into consideration.
On April 9, 2020, the Court of Chancery issued a post-trial Memorandum Opinion in Preston Hollow Capital LLC v Nuveen, LLC.[9] The Court of Chancery determined that Preston Hollow had a reasonable probability of business opportunity, with which Nuveen intentionally interfered.[10] Defendant's interference proximately caused Plaintiff's harm. The Court of Chancery found "Nuveen went to the broker-dealers and gave them a clear message, and in response the broker-dealers took actions that curtailed the business expectancies of Preston Hollow."[11] The Court of Chancery characterized these messages as wrongful,[12] damaging,[13] malicious[14] and false.[15] The Court of Chancery found that
Defendant committed tortious interference with business relations. Plaintiff sought permanent injunctive relief, which the court denied.[16] The Court of Chancery held: [17] In short, Defendant did not present any evidence of damage, but could have.
On September 15, 2020, this Court issued an Opinion.[18] This Court found that the law of the case doctrine applies-preventing parties from relitigating previously-decided issues.[19] "For purposes of law of the case, the prior rulings of the Court of Chancery were-and still are-treated as if they were made by a Superior Court judge."[20] This Court also applied the doctrine of collateral estoppel to the statements made by Nuveen against Goldman Sachs.
Defendant Nuveen Asset Management, LLC's ["Defendant's"] Motion for Summary Judgment Elements of Defamation
A communication is considered defamatory "if it tends to so harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him."[23] The defamatory statement must affect the plaintiff's reputation in the entire community-causing it to be "grievously fractured."[24] In order to succeed on a claim for defamation, a plaintiff must show that: "(1) the defendant made a defamatory statement; (2) concerning the plaintiff; (3) the statement was published; and (4) a third party would understand the character of the communication as defamatory."[25]
Ultimately, the plaintiff also must prove injury.[26] "Where the plaintiff is a corporation, it must additionally 'show that the defamatory statements tend to prejudice the corporation in its business or to deter others from dealing with it.'"[27] When the plaintiff is a limited purpose public figure, the plaintiff must prove that the defamatory statement is both false and made with actual malice.[28]
Defamation Per Se - Issues
The legal issues left to be resolved regarding defamation per se are whether it is necessary to prove: (1) nominal damages; (2) compensatory or special damages; and (3) injury or reputational loss.
Additionally, in its December 15, 2020 Opinion, this Court outlined a number of factual disputes regarding defamation that made summary judgement inappropriate at that time. First, did Preston Hollow suffer any reputational loss? Second, was there publication to certain broker-dealers? Third, were certain statements more than mere non-actionable opinions? Fourth, did the defamation cause injury? Fifth, was the defamation a "substantial cause" of any injury? And sixth, did the recipients of defamatory statements understand those statements to be defamatory?
Damages - Defamation Per Se
Generally, "oral defamation is not actionable without special damages."[29]"Special harm is the loss of something having economic or pecuniary value."[30] "However, statements which 'malign one in a trade, business or profession' are a 'category of defamation, commonly called slander per se, which [is] actionable without proof of special damages.'"[31] "There is a presumption of damages with respect to statements that 'malign one in a trade, business or profession.'"[32]
Defendant[33] argues that this Court should not apply defamation per se. Alternatively, Defendant asserts that if defamation per se does apply, Plaintiff did not suffer general damages.
Although special damages need not be proved if the communication is actionable per se, the Constitution is now held by the Supreme Court to require proof of "actual injury" to the plaintiff, at least if the defendant did not have knowledge of the falsity of the statement or act in reckless disregard as to its truth.[34]
"One who is liable for a defamatory communication is liable for the proved, actual harm caused to the reputation of the person defamed."[35] "At common law general damages have traditionally been awarded not only for harm to reputation that is proved to have occurred, but also, in the absence of this proof, for harm to reputation...
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