Renco Group, Inc. v Workers World Party, Inc.

[*1] Renco Group, Inc. v Workers World Party, Inc. 2006 NY Slip Op 51809(U) [13 Misc 3d 1213(A)] Decided on September 26, 2006 Supreme Court, New York County Lehner, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on September 26, 2006
Supreme Court, New York County

The Renco Group, Inc., Plaintiff,

against

Workers World Party, Inc., WW Publishers, Inc., and Brenda Ryan, Defendants.



102875/06



For plaintiff

Arnold & Porter LLP, 399 Park Avenue, New York, NY 10022, (212) 715-1000

(H. Peter Haveles, of counsel)

AND

Carter Ledyard & Milburn, 2 Wall Street, New York, NY 10005, (212) 732-3200

(John J. Walsh, of counsel)

For defendants

Davis Wright Tremaine LLP, 1633 Broadway, New York, NY 10019, (212) 489-8230

(Peter Karanjia, of counsel)

Edward H. Lehner, J.

Before the court is a motion by defendants to dismiss plaintiff's complaint pursuant to CPLR 3211(a) 1 and 7.

Plaintiff is a holding company that owns WCI Steel, Inc. ("WCI") through its subsidiary Renco Steel Holdings, Inc. ("Renco") (Complaint, ¶7, 8). Workers World Party, Inc. (the "Party") owns and publishes the Workers World Paper (the "Paper")(tr. p. 5) and owns and operates the Workers World web site; WW Publishers, Inc ("WW") is a subsidiary of the Party responsible for publishing and distributing the Paper; and Brenda Ryan is a reporter for the Paper (complaint ¶¶2-4) (collectively "Defendants").

In the complaint, which sets forth one cause of action for libel, plaintiff alleges that: "(o)n February 14, 2006, (the Party) and (WW) published an article on the Workers World web site written by Ryan, entitled WCI Steel Bankruptcy Robs Workers' Pensions (the WCI Article') ... (which includes) the following statements: Ira Rennert, a market speculator who became rich buying up distressed companies, founded the Renco Group. Rennert used WCI as collateral to borrow money from the Wall Street bankers who became WCI's primary creditors when the company went bankrupt. Rennert and the bankers have put forth competing plans to reorganize WCI, both of which center around the pension fund. After robbing the pension fund, Renco now claims it can cover the fund's shortfall." (¶¶22, 23) (emphasis added in complaint)

On February 16, 2006, Renco's counsel sent a letter to Deidre Griswold, the Paper's editor, seeking a retraction but "(i)n response ... (the Party) and (WW) ... repeated publication of the malicious, false and defamatory statement ... in the February 23, 2006 issue of the print edition (and) they published a second article on the (Party) web site entitled Is Renco Robbing Steelworker Pensions (the Renco Article') (which stated): Renco has retained Arnold & Porter LLP, a global powerhouse of 650 lawyers with legions of powerful Fortune 500 clients. A letter from the firm claims a Feb. [*2]14 WW article about Renco was false and defamatory.' Headlined WCI steel bankruptcy robs workers' pensions,' the WW article backs up the claim that after robbing the pension fund, Renco now claims it can cover the shortfall.'

According to the letter from Arnold & Porter, Renco never robbed the pension fund and WW must withdraw the current version of the article from its website and should not reprint it in any future edition of the print edition. ...' It demands that WWW apologize to the Renco Group and its officers, directors, employees and shareholders' or face legal action.' WW editor Deirdre Griswold says, The paper is standing by the article unconditionally and refuses to accept Arnold & Porter's ultimatum. The article accurately described their client as robbing the pension funds.'" (Id. ¶¶29-32) (emphasis added in complaint).

The February 14 article states that there is a "widespread campaign of corporations like United Airlines, Delphi Automotive Systems and Bethlehem Steel to use bankruptcy to steal workers' pensions." It also mentions Delta Airlines, IBM and Alcoa taking steps to deprive workers of pensions and asserts that "[p]ensions are deferred wages" and "now the brutal hand of capitalism wants to snatch away this hard-earned pay." The February 23, article states that the shortfall in pension plans is approximately $450 billion in the private sector and $300 billion in the public sector, and concludes that: "Only under worker's control can (pensions) be guaranteed." Next to the "Workers World" heading on the Party's web site is the phrase "workers & oppressed people of the world unite."

Penal Law §160.00 provides: "Robbery is forcible stealing. A person forcibly steals property and commits robbery when, in the course of committing a larceny, he uses or threatens the immediate use of physical force upon another person for the purpose of:1. Preventing or overcoming resistance to the taking of the property or to the retention thereof immediately after the taking; or2. Compelling the owner of such property or another person to deliver up the property or to engage in other conduct which aids in the commission of the larceny."

Penal Law §155.05 states that: "A person steals property and commits larceny when, with intent to deprive another of property or to appropriate the same to himself or to a third person, he wrongfully takes, obtains or withholds such property from an owner thereof."[*3]

Defendants assert that the statements at issue are protected opinion and rhetorical hyperbole and therefore non-actionable, particularly when read in the context that the issue of pension financing is a matter of public concern (Defendants' Memorandum of Law dated May 25, 2006, pp. 6-8), and that the Party is "as an offshoot of the Socialist Workers Party ... (that) describes its role as an agitator for social reform (and) ... welcomes everyone who wants to fight for socialism ... (and brings) a revolutionary analysis to current events" (Id., p. 8).

"On a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberal construction ... (and the court is to) accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" [Leon v. Martinez, 84 NY2d 83, 87-88 (1994)]. "Where a plaintiff alleges that statements are false and defamatory, the legal question for the court on a motion to dismiss is whether the contested statements are reasonably susceptible of a defamatory connotation. In making this determination, the court must give the disputed language a fair reading in the context of the publication as a whole" [Armstrong v. Simon & Schuster, Inc., 85 NY2d 373, 380 (1995)] (internal citations omitted).

In setting forth the principles of law regarding opinion, the court in Steinhilber v. Alphonse, 68 NY2d 283 (1986), stated: "An expression of pure opinion is not actionable. It receives the Federal constitutional protection accorded to the expression of ideas, no matter how vituperative or unreasonable it may be. A pure opinion' is a statement of opinion which is accompanied by a recitation of the facts upon which it is based. An opinion not accompanied by such a factual recitation may, nevertheless, be pure opinion' if it does not imply that it is based upon undisclosed facts. When, however, the statement of opinion implies that it is based upon facts which justify the opinion but are unknown to those reading or hearing it, it is a mixed opinion' and is actionable. The actionable element of a mixed opinion' is not the false opinion itself it is the implication that the speaker knows certain facts, unknown to his audience, which support his opinion and are detrimental to the person about whom he is speaking." [pp. 289-290] (internal citations omitted).

The court went on to say that while "determining whether a given statement expresses fact or opinion may be difficult, (t)he question is one of law for the court and one which must be answered on the basis of what the average person hearing or reading the communication would take it to mean" (p. 290).

In Brian v. Richardson, 87 NY2d 46, 51 (1995), the court wrote: "The essence of the tort of libel is the publication of a statement about an individual that is both false and defamatory. Since falsity is a sine qua non of a libel claim and since only assertions of fact are capable of being proven false, we have consistently held that a libel action cannot be maintained unless it is premised on published assertions of fact.Distinguishing between assertions of fact and nonactionable expressions of [*4]opinion has often proved a difficult task. The factors to be considered are: (1) whether the specific language in issue has a precise meaning which is readily understood; (2) whether the statements are capable of being proven true or false; and (3) whether either the full context of the communication in which the statement appears or the broader social context and surrounding circumstances are such as to signal * * * readers or listeners that what is being read or heard is likely to be opinion, not fact'" (emphasis in original).

Moreover, in comparing the status of New York law under our constitution to that set forth in the majority opinion in Milkovich v. Lorain Journal Co., 497 U.S. 1 (1990) with respect to the United States Constitution, our Court of Appeals has stated that New York "has embraced a test for determining what constitutes a nonactionable statement of opinion that is more flexible and is decidedly more protective of the cherished constitutional guarantee of free speech'" [Gross v. New York Times Company, 82 NY2d 146, 152 (1993)]. "[I]n distinguishing between actionable factual assertions and nonactionable opinion, the courts must consider the content of the communication as a whole, as well as its tone and apparent purpose. Rather than sifting through a communication for the purpose of isolating and identifying assertions of fact, the court should look to the over-all context in which the assertions were made and determine on that basis whether the reasonable reader would have believed that the challenged statements were conveying facts about the libel plaintiff'" [Brian v. Richardson, 87 NY2d supra at p. 51, quoting Immuno AG. v. Moor-Jankowski, 77 NY2d 235, 254 (1991)].

Also, statements "couched in loose, figurative or hyperbolic language in charged circumstances" [Immuno AG. v. Moor-Jankowski, 77 NY2d supra at p. 254] have been held to be rhetorical hyperbole and therefore nonactionable opinion. Where "(n)o reasonable person would conclude that ... actual criminality is charged by the epithets thieves' and false do-gooders' ... (t)he statements were (held to be) pure opinion" [Polish American Immigration Relief Committee, Inc. v. Relax, 189 AD2d 370, 374 (1st Dept. 1993)]. See also, Zysk v. Fidelity Title Insurance Company of New York, 14 AD3d 609 (2nd Dept. 2005); McGill v. Parker, 179 AD2d 98 (1st Dept. 1992); Redeye Grill L.P. v. Restaurant Opportunity Center of New York, NY, NYLJ, August 25, 2006 (p. 23, Sup. Ct., NY Co.).

Plaintiff states that the use of the word "robbing" in the articles is the basis for the complaint (tr. p. 33). However, it has been stated that a the court must avoid "the hypertechnical parsing' of written and spoken words for the purpose of identifying possible fact(s)' that might form the basis of a sustainable libel action .... Indeed, it has already been held that assertions that a person is guilty of blackmail,' fraud,' bribery' and corruption' could, in certain contexts, be understood as mere nonactionable rhetorical hyperbole' or vigorous epithet(s),' ... (and therefore) the courts are obliged to consider the communication as a whole, as well as its immediate and broader social contexts, to determine whether the reasonable listener or reader is likely to regard the remark as an assertion of provable fact" [Gross v. New York Times Company, 82 NY2d supra at pp. 155-156].

On this general issue, in Greenbelt Cooperative Publishing Association v. Bressler, 398 U.S. 6 (1970), Justice Stewart wrote (pp. 12, 14): "Freedom of discussion, if it would fulfill its historic function in this nation, must [*5]embrace all issues about which information is needed or appropriate to enable the members of society to cope with the exigencies of their period .... Because the threat or actual imposition of pecuniary liability for alleged defamation may impair the unfettered exercise of these First Amendment freedoms, the Constitution imposes stringent limitations upon the permissible scope of such liability.

* * * "It is simply impossible to believe that a reader who reached the word blackmail' in either article would not have understood exactly what was meant: it was Bresler's public and wholly legal negotiating proposals that were being criticized. No reader could have thought that either the speakers at the meetings or the newspaper articles reporting their words were charging Bresler with the commission of a criminal offense. On the contrary, even the most careless reader must have perceived that the word was no more than rhetorical hyperbole, a vigorous epithet used by those who considered Bresler's negotiating position extremely unreasonable. Indeed, the record is completely devoid of evidence that anyone in the city of Greenbelt or anywhere else thought Bresler had been charged with a crime."

See also, Old Dominion Branch No. 496 v. Austin, 418 U.S. 264 (1974).

Applying these principles to the case at bar, it is clear that the implication to the reasonable reader of the subject articles is not one of criminality by the stealing of pension funds. Rather, the articles discuss in an impassioned manner an area of public concern that of alleged corporate underfunding of retirement obligations owed to workers, and how parts of corporate America are purportedly depriving workers of pension rights through bankruptcy proceedings. The Party, a strongly ideological political party that has a "socialist" and "revolutionary" perspective, in its scathing criticism of the pension system, employed colorful rhetoric that is the hallmark of hyperbole. Thus, the court finds, considering the articles as a whole and the advocacy purpose for which the articles were published by the Party, that the statements therein alleged to be libelous are in fact nonactionable opinion. That the articles were published through the internet in addition to being printed in the Paper requires no different result as a reasonable reader of the articles on the internet would, even in the absence of any prior knowledge of the political leanings of the Party, recognize the advocacy nature thereof with respect to the issue of the use of the bankruptcy laws to deprive workers of asserted earned pension rights.

In light of the foregoing, Defendants' motion to dismiss the complaint is granted, and the Clerk shall enter judgment accordingly.

Dated: September 26, 2006_______________

J.S.C.