Biro v. Conde Nast, No. 14-3815 (2d Cir. 2015)
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Peter Paul Biro, a controversial figure known in the art world for using fingerprint analysis to authenticate art in an effort to insert a measure of objectivity into a previously subjective process, filed suit against the New Yorker defendants as well as republishers for defamation after an article was published about him. Among other things, the article contained interviews of various individuals critical of plaintiff, and it suggested that he stood to profit from some of his more dubious authentications. The district court dismissed the complaint. The court held that Rule 8 of the Federal Rules of Civil Procedure requires a limited‐purpose public figure to plead in a plausible way that defendants acted with actual malice. In this case, the court concluded that plaintiff failed to plausibly allege that defendants acted with actual malice. Accordingly, the court affirmed the judgment.
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14-3815-cv Biro v. Condé Nast 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2015 (Argued: October 2, 2015 Decided: December 8, 2015) Docket No. 14 3815 cv _____________________________________ PETER PAUL BIRO, Plaintiff Appellant, v. CONDÉ NAST, a division of Advance Magazine Publishers Inc., DAVID GRANN, ADVANCE MAGAZINE PUBLISHERS INC., LOUISE BLOUIN MEDIA INC., GLOBAL FINE ART REGISTRY LLC, THERESA FRANKS, PADDY JOHNSON, YALE UNIVERSITY PRESS, Defendants Appellees, PATRICK BAHNERS, GEORGIA MUSEUM OF ART, INTERNATIONAL COUNCIL OF MUSEUMS, DAN RATTINER, MANHATTAN MEDIA LLC, DAN’S PAPERS, LLC, GAWKER MEDIA LLC, BUSINESS INSIDER, INC., Defendants. _____________________________________ 1 14-3815-cv Biro v. Condé Nast 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Before: JACOBS and LOHIER, Circuit Judges, and CRAWFORD, District Judge.* Peter Paul Biro was the subject of a 2010 article in The New Yorker written by David Grann and published by Condé Nast, a division of Advance Magazine Publishers Inc. Biro sued Grann, Condé Nast, and Advance for defamation, adding defendants who he alleged republished the defamatory statements from the original New Yorker article or, in some cases, further defamed him when referring to the article. The United States District Court for the Southern District of New York (Oetken, J.) dismissed Biro’s complaint, holding that Biro was a limited purpose public figure who failed to plead sufficient facts to give rise to a plausible inference of actual malice. We affirm. RICHARD A. ALTMAN, Law Office of Richard A. Altman, New York, NY, for Plaintiff Appellant. DAVID A. SCHULZ, Levine Sullivan Koch & Schulz, LLP, New York, NY; Chad R. Bowman, Levine Sullivan Koch & Schulz, LLP, Washington, DC, for Defendants Appellees Condé Nast, a division of Advance Magazine Publishers Inc., Advance Magazine Publishers Inc., and David Grann. Diane Boenig Cavanaugh, Desmond C.B. Lyons, Lyons McGovern, LLP, White Plains, NY, for Defendant Appellee Louise Blouin Media Inc. ANTHONY N. GAETA (William A. Friedman, on the brief), Levine DeSantis, LLC, Springfield, NJ, for Defendants Appellees Global Fine Art Registry LLC and Theresa Franks. DARREN W. JOHNSON (Lynn B. Bayard, Danielle B. Polebaum, on the brief), Paul, Weiss, Rifkind, The Honorable Geoffrey W. Crawford, of the United States District Court for the District of Vermont, sitting by designation. * 2 14-3815-cv Biro v. Condé Nast 1 2 3 4 5 6 7 8 9 Wharton & Garrison LLP, New York, NY, for Defendant Appellee Paddy Johnson. FLOYD ABRAMS (Brian Markley, on the brief), Cahill Gordon & Reindel LLP, New York, NY, for Defendant Appellee Yale University Press. LOHIER, Circuit Judge: In this appeal from a dismissal of a defamation suit, we address 10 11 whether Rule 8 of the Federal Rules of Civil Procedure requires a limited 12 purpose public figure to plead in a plausible way that defendants acted 13 with actual malice. We conclude that it does. We therefore affirm the 14 judgment of the United States District Court for the Southern District of 15 New York (Oetken, J.) dismissing plaintiff Peter Paul Biro’s complaint on 16 the ground that he failed to plead sufficient facts to give rise to a plausible 17 inference of actual malice. We dispose of Biro’s remaining arguments on 18 appeal in a separate summary order filed simultaneously with this 19 opinion.1 In urging reversal, Biro argues that he does not have to allege actual malice because he is not a limited purpose public figure. We conclude in the summary order that the District Court correctly held that Biro was a limited purpose public figure. 1 3 14-3815-cv Biro v. Condé Nast 1 BACKGROUND 2 This defamation suit involves a July 2010 article (the “Article”) 3 written by journalist David Grann and published by The New Yorker.2 4 The Article focused on Biro, a controversial figure known in the art world 5 for using fingerprint analysis to authenticate art in an effort to insert a 6 measure of objectivity into a previously subjective process. The Article 7 raised questions about the trustworthiness of Biro’s methods and his 8 authentication of paintings. Among other things, the Article contained 9 interviews of various individuals critical of Biro, and it suggested that Biro 10 stood to profit from some of his more dubious authentications. To say the 11 least, we agree with the District Court’s observation that “[t]here is little 12 question that a reader may walk away from the Article with a negative 13 impression of Biro.” Biro v. Condé Nast (Biro I), 883 F. Supp. 2d 441, 482 14 (S.D.N.Y. 2012). The Article was subsequently republished or referenced by various 15 16 other defendants (collectively, the “republishers”), including Louise Blouin 17 Media Inc. (“LBM”) in an interview published on its website; the Global The New Yorker is published by defendant Condé Nast, a division of defendant Advance Magazine Publishers Inc. (“Advance”). 2 4 14-3815-cv Biro v. Condé Nast 1 Fine Art Registry (“FAR”) and Theresa Franks in a series of online posts 2 about Biro’s ongoing defamation litigation; Paddy Johnson on an art blog; 3 and the Yale University Press (“YUP”) in a book it published that referred 4 generally to a “purported forensics expert” without naming Biro. 5 Biro sued Grann, Condé Nast, and Advance (collectively, the “New 6 Yorker defendants”) as well as the republishers for defamation. Biro 7 generally alleged that each of the New Yorker defendants “either knew or 8 believed or had reason to believe that many of the statements of fact in the 9 Article were false or inaccurate, and nonetheless published them,” and 10 that they “acted with actual malice, or in reckless disregard of the truth, or 11 both.” Biro sought to buttress his allegation of actual malice by further 12 alleging that the New Yorker defendants, among other things, (1) failed to 13 “investigate and determine the validity” of the allegedly defamatory 14 statements; (2) relied on anonymous and biased sources; and (3) “ignore[d] 15 the many other works of art which plaintiff has worked with over the 16 years, as well as his many satisfied clients.” Biro also alleged that Grann 17 had “defamatory propensities.” 5 14-3815-cv Biro v. Condé Nast Turning to the republishers, Biro generally alleged that LBM, FAR, 1 2 Franks, Johnson, and YUP acted with actual malice “in that [they] knew or 3 should have known” that many of the statements of fact in the Article 4 “were false,” and that they “published [the statements] . . . 5 notwithstanding that knowledge.” In addition, Biro alleged that LBM 6 “fail[ed] to remove the interview for one month”; Johnson did not retract 7 the alleged defamatory statements; YUP “chose to publish [the] language 8 notwithstanding that plaintiff had already sued others for defamation 9 arising from the Article”; and FAR and Franks published the statements 10 “with ill will and malicious and evil intent to harm” Biro.3 11 The District Court held that Biro had adequately alleged an 12 “actionable defamatory false statement of fact, or false implication,” with 13 respect to four sections of the Article. Biro I, 883 F. Supp. 2d at 483. But 14 the District Court ultimately dismissed both the claims against the New 15 Yorker defendants related to those sections and the claims against the 16 majority of the republishers on the ground that Biro, as a limited purpose 17 public figure, failed to plead sufficient facts to give rise to a plausible We address the dismissal of Biro’s claims against FAR and Franks in the separate summary order filed simultaneously with this opinion. 3 6 14-3815-cv Biro v. Condé Nast 1 inference of actual malice. See Biro v. Condé Nast (Biro II), 963 F. Supp. 2d 2 255, 276, 281, 288 (S.D.N.Y. 2013); Biro v. Condé Nast (Biro III), No. 11 CV 3 4442 (JPO), 2014 WL 4851901, at *1 2, *4 5 (S.D.N.Y. Sept. 30, 2014). In 4 doing so, the District Court relied on Iqbal’s instruction that, where a 5 particular state of mind is an element of a claim, Rule 8 requires that it be 6 plausibly pleaded and supported by factual allegations. Biro II, 963 F. 7 Supp. 2d at 278 (citing Ashcroft v. Iqbal, 556 U.S. 662, 686 87 (2009)); see 8 also ATSI Commc’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 & n.2 (2d Cir. 9 2007). 10 This appeal followed. 11 DISCUSSION 12 We review de novo the grant of a motion to dismiss under Rule 13 12(b)(6) or a motion for judgment on the pleadings under Rule 12(c), 14 accepting as true the factual allegations in the complaint and drawing all 15 inferences in the plaintiff’s favor. See DiFolco v. MSNBC Cable L.L.C., 622 16 F.3d 104, 110 11 (2d Cir. 2010); Graziano v. Pataki, 689 F.3d 110, 114 (2d 17 Cir. 2012). To survive either motion, a complaint must contain “enough 18 facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. 7 14-3815-cv Biro v. Condé Nast 1 Twombly, 550 U.S. 544, 570 (2007); see DiFolco, 622 F.3d at 111 (Rule 2 12(b)(6)); Graziano, 689 F.3d at 114 (Rule 12(c)). A claim is plausible 3 “when the plaintiff pleads factual content that allows the court to draw the 4 reasonable inference that the defendant is liable for the misconduct 5 alleged.” Iqbal, 556 U.S. at 678. But “naked assertions” or “conclusory 6 statements” are not enough. Id. (quotation marks omitted). These federal 7 pleading rules and standards, including the Supreme Court’s 8 interpretation of Rule 8, prevail in “ ‘all civil actions,’ ” id. at 684 (quoting 9 Fed. R. Civ. P. 1), including diversity litigation, see Hanna v. Plumer, 380 10 U.S. 460, 468 74 (1965); Cnty. of Erie, N.Y. v. Colgan Air, Inc., 711 F.3d 147, 11 149 (2d Cir. 2013) (applying Rule 8’s plausibility standard in an action 12 based on diversity jurisdiction). 13 Limited purpose public figures who seek damages for defamatory 14 statements must show that the statements were made with “actual 15 malice”—that is, with knowledge that the statements were false or with 16 reckless disregard as to their falsity. See, e.g., N.Y. Times Co. v. Sullivan, 17 376 U.S. 254, 279 80 (1964) (public officials); Curtis Publ’g Co. v. Butts, 388 18 U.S. 130, 154 55 (1967) (public figures); Lerman v. Flynt Distrib. Co., 745 8 14-3815-cv Biro v. Condé Nast 1 F.2d 123, 137, 139 (2d Cir. 1984) (limited purpose public figures). In urging 2 us to hold that he did not have to allege facts sufficient to render his 3 allegations of actual malice plausible, Biro notes that Rule 9(b) allows 4 malice to “be alleged generally,” Fed. R. Civ. P. 9(b), and points to the 5 District Court’s observation that “neither the Supreme Court nor the 6 Second Circuit has precisely articulated the effect of Iqbal and Twombly on 7 defamation cases,” Biro II, 963 F. Supp. 2d at 278. Both observations may 8 be true, but Iqbal makes clear that, Rule 9(b)’s language notwithstanding, 9 Rule 8’s plausibility standard applies to pleading intent. 556 U.S. at 686 87. 10 There, the Supreme Court held that “Rule 9(b) requires particularity when 11 pleading fraud or mistake, while allowing malice, intent, knowledge, and 12 other conditions of a person’s mind to be alleged generally,” but “does not 13 give [a plaintiff] license to evade the less rigid—though still operative— 14 strictures of Rule 8.” Id. (quotation marks omitted). It follows that malice 15 must be alleged plausibly in accordance with Rule 8. Our sister circuits 16 that have considered the issue agree. See, e.g., Pippen v. NBCUniversal 17 Media, LLC, 734 F.3d 610, 614 (7th Cir. 2013) (“States of mind may be 18 pleaded generally, but a plaintiff still must point to details sufficient to 9 14-3815-cv Biro v. Condé Nast 1 render a claim plausible.”); Mayfield v. Nat’l Ass’n for Stock Car Auto 2 Racing, Inc., 674 F.3d 369, 377 (4th Cir. 2012) (“[M]alice must still be 3 alleged in accordance with Rule 8—a ‘plausible’ claim for relief must be 4 articulated.”); Schatz v. Republican State Leadership Comm., 669 F.3d 50, 5 58 (1st Cir. 2012) (“[T]o make out a plausible malice claim, a plaintiff must 6 still lay out enough facts from which malice might reasonably be inferred . 7 . . .”). In any event, we have long made clear that “[d]efamation actions 8 are, for procedural purposes, . . . to be treated no differently from other 9 actions,” Yiamouyiannis v. Consumers Union, 619 F.2d 932, 940 (2d Cir. 10 1980), and Biro fails to offer a persuasive reason why the pleading 11 standard should differ in defamation cases generally or in the malice 12 inquiry specifically. 13 Biro relies on our pre Iqbal decision in Church of Scientology 14 International v. Behar, in which we explained that “resolution of the . . . 15 actual malice inquir[y] typically requires discovery,” 238 F.3d 168, 173 (2d 16 Cir. 2001), to argue that it is “impossible” without discovery for a plaintiff 17 to plead facts demonstrating that the claim of actual malice is plausible. 18 We disagree. The hurdles to plausibly pleading actual malice, though 10 14-3815-cv Biro v. Condé Nast 1 significant given the First Amendment interests at stake, are by no means 2 insurmountable. See 2 Robert D. Sack, Sack on Defamation § 16:2.2 at 16.7 3 8 (4th ed. 2010) (“It can hardly be ruled out . . . that plaintiffs’ counsel will 4 develop extrajudicial means of obtaining sufficient facts to plead ‘actual 5 malice’ with the degree of specificity required by Iqbal and Twombly, 6 enabling the plaintiff to prevail on a defendant’s motion to dismiss and 7 then to engage in further discovery on the issue.”). “Although actual 8 malice is subjective, a court typically will infer actual malice from objective 9 facts,” understanding that a defendant in a defamation action will rarely 10 admit that he published the relevant statements with actual malice. Celle 11 v. Filipino Reporter Enters. Inc., 209 F.3d 163, 183 (2d Cir. 2000) (quotation 12 marks omitted). And of course whether actual malice can plausibly be 13 inferred will depend on the facts and circumstances of each case. For 14 example, a plaintiff may allege that “a story [was] fabricated by the 15 defendant” if the defendant provides no source for the allegedly 16 defamatory statements or if the purported source denies giving the 17 information. St. Amant v. Thompson, 390 U.S. 727, 732 (1968). Or the 18 plaintiff may point to the fact that the allegedly defamatory statements 11 14-3815-cv Biro v. Condé Nast 1 were “based wholly on an unverified anonymous telephone call” or were 2 published despite “obvious [specified] reasons to doubt the veracity of the 3 informant or the accuracy of his reports” or despite the “inherently 4 improbable” nature of the statements themselves. Id. 5 In practice, requiring that actual malice be plausibly alleged has not 6 doomed defamation cases against public figures. To the contrary, district 7 courts in and out of our Circuit have inferred actual malice at the pleading 8 stage from allegations that referred to the nature and circumstances of the 9 alleged defamation or previous dealings with the defendant. See, e.g., 10 Tiversa Holding Corp. v. LabMD, Inc., Civ. A. No. 13 1296, 2014 WL 11 1584211, at *7 (W.D. Pa. Apr. 21, 2014); Lynch v. Ackley, Civ. No. 12 3:12CV537 (JBA), 2012 WL 6553649, at *9 (D. Conn. Dec. 14, 2012); 13 Ciemniecki v. Parker McCay P.A., Civ. No. 09 6450 (RBK/KMW), 2010 WL 14 2326209, at *14 (D.N.J. June 7, 2010). 15 Relying on Boyd v. Nationwide Mutual Insurance Company, which 16 was decided prior to Iqbal and Twombly, Biro also argues that he was 17 entitled to proceed to discovery because he alleged “facts suggestive 18 enough to warrant discovery, even where those facts alone would not 12 14-3815-cv Biro v. Condé Nast 1 establish a cause of action for defamation.” 208 F.3d 406, 410 (2d Cir. 2 2000). To the extent that Biro reads Boyd as permitting an implausible 3 claim to proceed to discovery, we think Twombly rejected this approach. 4 550 U.S. at 559 (“It is no answer to say that a claim just shy of a plausible 5 entitlement to relief can, if groundless, be weeded out early in the 6 discovery process . . . .”). Instead, a public figure plaintiff must plead 7 “plausible grounds” to infer actual malice by alleging “enough fact[s] to 8 raise a reasonable expectation that discovery will reveal evidence of” 9 actual malice. Id. at 556. 10 Having determined that actual malice must be plausibly alleged, we 11 now consider whether Biro’s allegations meet that standard. We conclude 12 that they do not. 13 First, Biro’s nonconclusory allegations against the New Yorker 14 defendants fall short of raising a plausible inference of actual malice. We 15 recognize that although “[f]ailure to investigate does not in itself establish 16 bad faith,” St. Amant, 390 U.S. at 733, reliance on anonymous or unreliable 17 sources without further investigation may support an inference of actual 18 malice, id. at 732. Here, though, none of the four sections of the Article 13 14-3815-cv Biro v. Condé Nast 1 containing the allegedly defamatory statements were based “wholly” on 2 information from unverified and anonymous sources. Id.; Church of 3 Scientology Int’l, 238 F.3d at 174. Nor does Biro’s complaint allege facts 4 that would have prompted the New Yorker defendants to question the 5 reliability of any of the named or unnamed sources at the time the Article 6 was published. For example, the allegations casting doubt on the 7 reliability of Franks and Marion Hendler as sources relate only to events 8 that occurred after publication of the Article and therefore “cannot be 9 relevant to the publisher’s state of mind [regarding] his alleged malice at 10 the time of publication.” Herbert v. Lando, 781 F.2d 298, 306 (2d Cir. 11 1986). The failure of the New Yorker defendants to correct a statement 12 unrelated to the allegedly defamatory statements in light of events that 13 occurred after publication is similarly insufficient to render the allegation 14 of actual malice plausible. In addition, Grann’s decision to focus on Biro’s 15 controversial authentications, while ignoring both his other 16 authentications and his satisfied clients, does not plausibly suggest that 17 Grann “entertained serious doubts as to the truth of his publication.” St. 18 Amant, 390 U.S. at 731; see also Church of Scientology Int’l, 238 F.3d at 174 14 14-3815-cv Biro v. Condé Nast 1 (“Despite its name, the actual malice standard does not measure malice in 2 the sense of ill will or animosity, but instead the speaker’s subjective 3 doubts about the truth of the publication.”).4 Second, we conclude that nearly all of Biro’s allegations against the 4 5 republisher defendants LBM, Johnson, and YUP are conclusory. We agree 6 with the District Court that any remaining nonconclusory allegations 7 against these defendants are inadequate to state a plausible claim for relief. In summary, Biro does not plausibly allege that the defendants acted 8 9 with actual malice. CONCLUSION 10 For the foregoing reasons and those set forth in the accompanying 11 12 summary order, we AFFIRM the judgment of the District Court. Biro’s allegation about Grann’s “defamatory propensities” rests entirely on a lawsuit against Grann that was not adjudicated on the merits; it is not an allegation that Grann actually defamed the plaintiff in that lawsuit or any other lawsuit prior to this one. In other words, there is no well pleaded, nonconclusory allegation that Grann actually had “defamatory propensities.” 4 15
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