Pippen v. NBC Universal Media LLC, No. 12-3294 (7th Cir. 2013)

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Justia Opinion Summary

Scottie Pippen won six championship rings with the Chicago Bulls and was named to the National Basketball Association’s list of the 50 greatest players in its history. Since he retired in 2004, he has lost much of the fortune he amassed during his playing days through bad investments. He has pursued multiple lawsuits against former financial and legal advisors. The media learned of Pippen’s problems and several news organizations incorrectly reported that he had filed for bankruptcy. Pippen contends that the false reports have impaired his ability to earn a living by product endorsements and appearances. He filed suit, alleging that he was defamed and cast in a false light. The district court dismissed, finding that the falsehoods did not fit any of the categories of statements recognized by Illinois law to be so innately harmful that damages may be presumed and that the complaint did not plausibly allege that the defendants had published the falsehoods with knowledge the statement was false or reckless disregard of whether it was false, as required for a public figure such as Pippen to recover defamation damages. The Seventh Circuit affirmed.

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In the United States Court of Appeals For the Seventh Circuit ____________________   No.  12-­ 3294   SCOTTIE  PIPPEN,   Plaintiff-­ Appellant,   v.   NBCUNIVERSAL  MEDIA,  LLC,  et  al.,   Defendants-­ Appellees.   ____________________   Appeal  from  the  United  States  District  Court  for  the   Northern  District  of  Illinois,  Eastern  Division.   No.  11  C  8834    Sharon  Johnson  Coleman,  Judge.   ____________________   ARGUED  APRIL  19,  2013    DECIDED  AUGUST  21,  2013   ____________________   Before   EASTERBROOK,   Chief   Judge,   and   POSNER   and   WILLIAMS,  Circuit  Judges.   EASTERBROOK,   Chief   Judge.   Scottie   Pippen,   who   won   six   championship  rings  with  the  Chicago  Bulls  and  was  named   in  1996  to  the  National  Basketball  Association s  list  of  the  50   greatest   players   in   its   history,   has   encountered   financial   re-­ verses   since   his   playing   days   ended   in   2004.   He   has   lost   through   bad   investments   a   large   portion   of   the   fortune   he   amassed   during   his   playing   days.   In   an   effort   to   recoup   No.  12-­ 3294   2   some   of   these   losses,   he   has   pursued   multiple   lawsuits   against   former   financial   and   legal   advisors   who   he   believes   led   him   astray.   The   media   caught   wind   of   Pippen s   woes,   and   several   news   organizations   reported   that   he   had   filed   for  bankruptcy.  This  is  false;  he  has  not.   Pippen  contends  that  the  false  reports  have  impaired  his   ability   to   earn   a   living   through   product   endorsements   and   personal  appearances.  He  filed  this  suit  against  multiple  de-­ fendants   under   the   diversity   jurisdiction   in   the   Northern   District  of  Illinois,  contending  that  he  was  defamed  and  cast   in  a  false  light.  The  district  court  dismissed  the  complaint.  It   found  that  the  falsehoods  did  not  fit  within  any  of  the  cate-­ gories   of   statements   recognized   by   Illinois   law   to   be   so   in-­ nately  harmful  that  damages  may  be  presumed.  The  district   court   also   concluded   that   the   complaint   did   not   plausibly   allege  that  the  defendants  had  published  the  falsehoods  with   actual  malice a  term  that  looks  as  if  it  might  mean   ill  will   but   in   fact   means   knowledge   the   statement   is   false   or   reck-­ less   disregard   of   whether   it   is   false.   Masson   v.   New   Yorker   Magazine,  Inc.,  501  U.S.  496,  510  (1991).  Demonstrating  actual   malice  is  a  requirement  for  a  public  figure  such  as  Pippen  to   recover  damages  for  defamation,  New  York  Times  Co.  v.  Sulli-­ van,  376  U.S.  254,  279 80  (1964),  and  to  make  out  a  claim  of   false  light  under  Illinois  law.  Lovgren  v.  Citizens  First  National   Bank  of  Princeton,  126  Ill.  2d  411,  422 23  (1989).   There   are   two   types   of   action   for   defamation.   The   first,   called   defamation   per   quod,   requires   a   plaintiff   to   show   that   the   false   statements   caused   him   harm.   Some   statements,   however,  expose  the  subject  to  such  great  obloquy  that  they   are  actionable  without  proof  of  injury.  This  is  defamation  per   3   No.  12-­ 3294   se.   Tuite   v.   Corbitt,   224   Ill.   2d   490,   501   (2006).   Let   us   begin   with  the  latter  type.   Illinois   recognizes   five   categories   of   defamation   per   se,   Bryson  v.  News  America  Publications,  Inc.,  174  Ill.  2d  77,  88 89   (1996),   but   only   two   are   of   interest   here:   (1)   statements   that   suggest  that  the  subject  can t  perform  his  job  because  of  lack   of  ability  or  want  of  integrity,  and  (2)  statements  that  preju-­ dice  the  subject  in  the  pursuit  of  his  trade  or  profession.  The   difference   between   the   two   is   subtle.   The   former   seems   to   imply  some  sort  of  on-­ the-­ job  malfeasance;  the  latter  covers   suitability  for  a  trade  or  profession.  Haynes  v.  Alfred  A.  Knopf,   Inc.,  8  F.3d  1222,  1226  (7th  Cir.  1993).  Pippen  argues  that  this   court  has  already  established  in  Giant  Screen  Sports  v.  Canadi-­ an   Imperial   Bank   of   Commerce,   553   F.3d   527   (7th   Cir.   2009),   that  false  accusations  of  bankruptcy  fit  into  one  of  these  cat-­ egories.   But  the  statements  at  issue  in  Giant  Screen  Sports  were  not   about   bankruptcy;   instead,   they   repeated   false   accusations   that   a   company   willfully   defaulted   on   a   credit   agreement   it   was  not  a  party  to.  The  statements  depicted  the  company  as   one   that   shirked   its   contractual   obligations;   a   reader   might   reasonably   think   twice   about   doing   business   with   the   com-­ pany.   A   similar   taint   does   not   attach   to   the   reputation   of   people  who  go  bankrupt.  Many  innocent  reasons  lead  to  fi-­ nancial  distress.  Readers  of  the  defendants  statements   who   mistakenly   believe   that   Pippen   is   insolvent   readily   could   conclude  that  his  advisers  bear  the  blame.   What s   more,   Pippen   was   reported   to   be   personally   bankrupt.  To  succeed  under  Illinois  law  without  the  need  to   prove   injury,   he   must   show   that   he   was   falsely   accused   of   lacking  ability  in  his  trade  or  of  doing  something  bad  while   No.  12-­ 3294   4   performing  his  job.  Cody  v.  Harris,  409  F.3d  853,  857 58  (7th   Cir.   2005).   Pippen   has   been   employed   since   he   retired   from   basketball  as  a  goodwill  ambassador  for  the  Chicago  Bulls,  a   basketball   analyst,   and   a   celebrity   product   endorser.   Bank-­ ruptcy  does  not  imply  that  he  lacks  the  competence  or  integ-­ rity  to  perform  any  of  these  jobs.   Sometimes   personal   and   professional   ability   or   integrity   are   linked.   Kumaran   v.   Brotman,   247   Ill.   App.   3d   216   (1993).   When   the   subject   of   the   false   statements   is   employed   in   an   occupation  (schoolteacher  for  example)  that  requires  certain   personal  traits,  such  as  trustworthiness,  accusations  of  being   a   scam   artist   or   an   inveterate   liar   could   lead   to   unemploy-­ ment.   Pippen   does   not   contend   that   his   is   such   a   situation.   His   post-­ retirement   employability   derives   from   his   pre-­ retirement   stardom   (for   his   endorsement   and   appearance   work)   and   basketball   knowledge   (for   his   work   as   an   ana-­ lyst),   not   his   financial   prudence   or   investment   savvy.   Re-­ ports   of   personal   bankruptcy   would   not   so   impugn   his   job   performance  that  they  necessarily  constitute  defamation.   This  leaves  the  second  type  of  defamation  (per  quod).  Eve-­ rything   we   say   about   defamation   per   quod   applies   to   the   false-­ light   claim   as   well;   we   need   not   mention   it   again.   The   district   court   dismissed   these   claims   after   concluding   that   Pippen  had  failed  to  allege  special  damages  in  sufficient  de-­ tail.  We  think  this  a  mistake.  In  diversity  litigation,  the  fed-­ eral   rules   prevail   over   any   contrary   requirements   of   state   practice.   Walker   v.   Armco   Steel   Corp.,   446   U.S.   740   (1980);   Brown   &   Williamson   Tobacco   Corp.   v.   Jacobson,   713   F.2d   262,   269  (7th  Cir.  1983);  Anderson  v.  Vanden  Dorpel,  172  Ill.  2d  399,   416   (1996).   The   federal   rule,   Fed.   R.   Civ.   P.   9(g),   says   that   special  damages  must  be   specifically  stated .  It  can  be  hard   5   No.  12-­ 3294   to   know   how   specific   is   specific   enough,   but   specifically   must   be   something   less   than   the   particularity   standard   that   Rule   9(b)   prescribes   for   allegations   of   fraud.   We   need   not  probe  the  meaning  of   specifically ,  because  it  is  enough   to   identify   a   concrete   loss.   Action   Repair,   Inc.   v.   American   Broadcasting  Cos.,  Inc.,  776  F.2d  143,  149 50  (7th  Cir.  1985).   Pippen s   complaint   alleges   that   his   endorsement   and   personal-­ appearance   opportunities   dwindled   as   a   result   of   the   defendants   false   reports.   In   a   proposed   amended   com-­ plaint,   Pippen   itemized   losses   that   in   his   view   flowed   from   defendants   statements;   he   identified   specific   business   op-­ portunities   that   had   been   available   to   him   earlier   but   that,   following   the   defendants   statements,   were   available   no   more.   This   is   more   than   a   general   allegation   of   economic   loss;   it   is   an   allegation   that   third   parties   have   ceased   to   do   business   with   him   because   of   the   defendants   actions.   This   contention  may  be  substantively  inadequate.  It  appears  to  be   an  example  of  the  post  hoc  ergo  propter  hoc  fallacy:  since  Pip-­ pen s   opportunities   diminished   after   the   statements   were   made,   he   believes   they   must   have   diminished   because   the   statements  were  made.  This  theory  of  causation  is  weak  for   professional  athletes,  whose  earnings  related  to  past  stardom   drop  as  time  passes  since  their  playing  days.  But,  as  a  matter   of  pleading,  Pippen  did  enough.   The  district  court  had  a  second  reason,  however,  and  it  is   stronger.  The  judge  observed  that  Pippen  is  a  public  figure,   which  he  concedes.  Thus  he  must  show  that  the  defendants   published  the  defamatory  statements  with  actual  malice in   other  words,  that  the  defendants  either  knew  the  statements   to  be  false  or  were  recklessly  indifferent  to  whether  they  are   true  or  false.  New  York  Times,  376  U.S.  at  279 80;  Underwager   No.  12-­ 3294   6   v.  Salter,  22  F.3d  730,  733  (7th  Cir.  1994).  States  of  mind  may   be   pleaded   generally,   but   a   plaintiff   still   must   point   to   de-­ tails  sufficient  to  render  a  claim  plausible.  Bell  Atlantic  Corp.   v.  Twombly,  550  U.S.  544,  570  (2007);  Ashcroft  v.  Iqbal,  556  U.S.   662,  678  (2009).   Defendants  had  many  ways  to  learn  whether  Pippen  had   filed   for   bankruptcy.   For   example,   all   bankruptcy   court   dockets  can  be  searched  simultaneously  through  the  federal   courts   PACER   service.   And   then   there s   the   tried-­ and-­ true   journalistic  practice  of  asking  a  story s  subject.  If  rather  than   relying   on   the   rumor   mill   the   defendants   had   conducted   even   a   cursory   investigation,   they   would   have   discovered   that  Pippen  had  not  declared  bankruptcy and  they  concede   this.  But  failure  to  investigate  is  precisely  what  the  Supreme   Court   has   said   is   insufficient   to   establish   reckless   disregard   for   the   truth.   Harte-­ Hanks   Communications,   Inc.   v.   Connaugh-­ ton,  491  U.S.  657,  688  (1989).   The  Supreme  Court  also  has  said  that  actual  malice  can-­ not   be   inferred   from   a   publisher s   failure   to   retract   a   state-­ ment  once  it  learns  it  to  be  false.  New  York  Times,  376  U.S.  at   286.   Thus   the   fact   that   Pippen   alerted   the   defendants   by   email   after   publication   that   he   had   not   entered   bankruptcy   does  not  help  him  establish  actual  malice  at  the  time  of  pub-­ lication.  And  Illinois  has  adopted  the  Uniform  Single  Publi-­ cation   Act,   740   ILCS   165/1,   which   provides   that   a   claim   for   relief  for  defamation  is  complete  at  the  time  of  first  publica-­ tion;   later   circulation   of   the   original   publication   does   not   trigger   fresh   claims.   The   Act   protects   speakers   and   writers   from   repeated   litigation   arising   from   a   single,   but   mass-­ produced,  defamatory  publication.   7   No.  12-­ 3294   Pippen  argues  that  the  Act  does  not  apply  to  statements   on   the   Internet,   where   all   defendants   made   their   reportage   available.   Online   publishers   do   not   face   the   same   logistical   hurdles   or   costs   in   correcting   a   false   statement   as   their   old-­ media   counterparts.   Print   publishers   would   need   to   hunt   down  every  physical  copy  of  a  book,  magazine,  or  newspa-­ per   in   circulation,   while   Internet   publishers   can   alter   their   sites   with   relative   ease.   In   Pippen s   view,   then,   every   day   that  an  unaltered  defamatory  statement  remains  online  after   a   publisher   learns   of   its   falsity   constitutes   an   actionable   re-­ publication.   Illinois   courts   have   not   yet   considered   how   the   single-­ publication  rule  applies  to  Internet  publications,  so  our  job  is   to   predict   how   the   state s   highest   court   would   answer   the   question  if  asked.  Giuffre  Organization,  Ltd.  v.  Euromotorsport   Racing,   Inc.,   141   F.3d   1216,   1219   (7th   Cir.   1998).   In   the   ab-­ sence   of   any   Illinois   authority   on   the   question,   decisions   from  other  jurisdictions  may  prove  instructive.  Lexington  In-­ surance   Co.   v.   Rugg   &   Knopp,   Inc.,   165   F.3d   1087,   1090   (7th   Cir.   1999).   We   conclude   that,   if   presented   with   the   oppor-­ tunity,  the  Supreme  Court  of  Illinois  would  deem  the  single-­ publication  rule  applicable  to  the  Internet.   Every  state  court  that  has  considered  the  question  applies   the   single-­ publication   rule   to   information   online.   See   Chris-­ toff   v.   Nestle   USA,   Inc.,   47   Cal.   4th   468   (2009);   T.S.   v.   Plain   Dealer,   194   Ohio   App.   3d   30   (2011);   Ladd   v.   Uecker,   323   Wis.   2d   798   (App.   2010);   Kaufman   v.   Islamic   Society   of   Arlington,   291   S.W.   3d   130   (Tex.   App.   2009);   Woodhull   v.   Meinel,   145   N.M.   533   (App.   2008);   Churchill   v.   State,   378   N.J.   Super.   471   (2005);  Firth  v.  State,  98  N.Y.  2d  365  (2003).  And  those  federal   courts  that  have  addressed  the  topic  have  concluded  that  the   No.  12-­ 3294   8   relevant   state   supreme   court   would   agree.   See   Shepard   v.   TheHuffingtonPost.Com,  Inc.,  509  F.  App x.  556  (8th  Cir.  2013)   (Minnesota  law)  (nonprecedential);  In  re  Philadelphia  Newspa-­ pers,   LLC,   690   F.3d   161,   174 75   (3d   Cir.   2012)   (Pennsylvania   law).   Pippen   does   not   alert   us   to   any   authority   supporting   his  view,  and  we  have  found  none.   The   theme   of   these   decisions   is   that   excluding   the   Inter-­ net   from   the   single-­ publication   rule   would   eviscerate   the   statute  of  limitations  and  expose  online  publishers  to  poten-­ tially   limitless   liability.   This   same   concern   previously   led   courts   to   apply   the   single-­ publication   rule   to   books.   They   did   so   despite   the   fact   that   book   publishers   have   greater   post-­ publication  control  over  the  circulation  of  their  content   than  do  newspaper  publishers.  See  Gregoire  v.  G.P.  Putnam s   Sons,  298  N.Y.  119,  124 26  (1948);  Kilian  v.  Stackpole  Sons,  Inc.,   98  F.Supp.  500,  503 04  (M.D.  Pa.  1951).  All  copies  of  a  single   newspaper   edition   are   made   available   to   the   public   on   one   day;   in   contrast,   book   publishers   hold   stock   in   reserve   and   release   batches   to   the   public   over   months   or   years.   In   Pip-­ pen s  view,  the  single-­ publication  rule  ought  not  have  been   extended   to   book   publishers   because   they   could   pulp   the   books   they   kept   in   stock,   while   newspaper   publishers   had   no   leftover   stock   to   destroy.   But   no   court   saw   it   that   way,   and  no  court  has  been  persuaded  that  the  even  greater  con-­ trol  that  Internet  publishers  have  over  their  content and  the   much  lower  cost  of  editing  or  deleting  that  content is  a  rea-­ son  to  exclude  them  from  the  Act s  coverage.  Indeed,  courts   have   drawn   the   opposite   conclusion:   the   Internet s   greater   reach   comes   with   an   even   greater   potential   for   endless   retriggering  of  the  statute  of  limitations,  multiplicity  of  suits   and  harassment  of  defendants.  Firth,  98  N.Y.  2d  at  370;  see   9   No.  12-­ 3294   also,   e.g.,   Churchill,   378   N.J.   Super.   at   480 81.   All   the   more   reason  that  the  single-­ publication  rule  should  apply.   A  publisher s  degree  of  control  over  its  content  does  not   matter   to   Illinois s   test   for   whether   redistribution   of   a   de-­ famatory   statement   amounts   to   a   republication.   Instead,   courts   must   ask   whether   the   act   of   the   defendant   [was]   a   conscious   independent   one .   Winrod   v.   Time   Inc.,   334   Ill.   App.   59   (1948);   see   also   Dubinksy   v.   United   Airlines   Master   Executive  Council,  303  Ill.  App.  3d  317,  333 34  (1999);  Found-­ ing   Church   of   Scientology   v.   American   Medical   Association,   60   Ill.  App.  3d  586,  589  (1978).  Courts  have  grappled  with  what   degree   of   affirmative   act   constitutes   a   republication.   See   Canatella   v.   Van   De   Kamp,   486   F.3d   1128,   1135 36   (9th   Cir.   2007);   Yaeger   v.   Bowlin,   693   F.3d   1076,   1083   (9th   Cir.   2012).   The   defendants   in   those   cases   changed   the   URL   where   the   statements  were  posted  but  left  the  statements  unaltered.  In   Firth,   the   defendants   added   an   unrelated   story   to   the   web   page  hosting  the  allegedly  defamatory  statement.  98  N.Y.  2d   at  367.  None  of  those  acts  was  sufficient  to  count  as  a  repub-­ lication.   Pippen   does   not   contend   that   the   defendants   took   any   action   beyond   initially   posting   the   stories   to   their   web   sites,  and  we  conclude  that  Illinois  would  deem  the  passive   maintenance  of  a  web  site  not  a  republication.   AFFIRMED