ENTERTAINMENT & MEDIA LITIGATION: HOWARD K. STERN’S DEFAMATION CLAIM SURVIVES SUMMARY JUDGMENT

NY FEDERAL JUDGE RULES THAT ALLEGEDLY DEFAMATORY STATEMENTS ABOUT ANNA NICOLE SMITH’S ATTORNEY/COMPANION SHOULD BE PRESENTED TO A JURY

Last Wednesday, on August 12, 2009, a federal district court judge in New York ruled that the defamation case filed by Anna Nicole Smith’s former attorney and companion, Howard K. Stern, against the publisher and author of the book “Blonde Ambition: The Untold Story Behind Anna Nicole Smith’s Death” should proceed to trial against the author, MSNBC investigative reporter, Rita Cosby. Judge Dennis Chin’s decision provides several interesting legal tidbits as well as a glimpse into the media frenzy that followed Smith and her death.

“Blonde Ambition” made several explosive revelations about Smith, Stern, and Larry Birkhead, Smith’s other love interest and father of her baby, Dannielyn. Cosby wrote among other things that (a) Smith caught Stern and Birkhead having oral sex with each other at a party in Los Angeles, (b) Smith remarked that Stern was gay, (c) Smith watched a sex tape of Stern and Birkhead on a regular basis as witnessed by her nannies, (d) Stern regularly “pimped” out Smith to others to have sex with and (e) Stern played a role in Smith’s death. As expected, these revelations made Cosby’s book an instant best-seller. However, also as expected, Stern was none too pleased with the contents of that book — and sued Cosby and her publisher for defamation in New York.

The following are the highlights of Judge Chin’s decision. You can see a copy of Judge Chin’s ruling here.

BEING LABELED AS “HOMOSEXUAL” IS NOT DEFAMATORY PER SE

Perhaps the most interesting aspect of the decision is Judge Chin’s ruling that calling someone gay is not defamatory per se. Traditionally, being called a homosexual was automatically considered by law to be defamatory — and actionable. In other words, the law historically assumed that calling someone (falsely) a homosexual would automatically subject the target to “contempt” or “ridicule” by others.

Judge Chin’s decision is among the few reported decisions which address the issue — whether being falsely accused of homosexuality is automatically defamatory. Judge Chin stated that “[t]he past few decades have seen a veritable sea change in social attitudes about homosexuality” and that in 2009 “the ‘current of contemporary public opinion’ does not support the notion that New Yorkers view gays and lesbians as shameful or odious.”

The decision recognizes that at least one other court disagreed — and believed that being called “gay” was still defamatory per se because (among other things) of the discrimination and prejudice against the gay community. However, the decision found that the existence of discrimination and prejudice does not necessarily lead to the conclusion that society views homosexuals as “contemptible” or “disgraceful.” I agree with Judge Chin on this point — since if the test for being defamatory per se includes everyone who is subject to prejudice or discrimination, then being labeled as part of any number of groups — minorities, women, a religion, etc. — could be considered defamatory per se.

However, at the end of the day, Judge Chin did provide Stern with the opportunity to proceed with his defamation claim at trial. The decision concludes that the statements accusing Stern of having homosexual sex with Birkhead at a party were capable of having a defamatory meaning and that a jury would decide the issue. So while Stern might have preferred having a defamatory per se ruling in his favor, Stern survived summary judgment and can proceed against Cosby.

THE “LIBEL PROOF” PLAINTIFF AND INCREMENTAL HARM DOCTRINE

Aside from the more interesting analysis that being called gay is not defamatory per se, Judge Chin also analyzed the more mundane legal principles concerning whether Stern is a “libel proof plaintiff” and whether the “incremental harm doctrine” precludes liability. Judge Chin ruled that Stern’s reputation is not so poor that his reputation could not suffer further damage — i.e. that he cannot be libeled. Judge Chin also ruled that statements protected by the First Amendment did not do so much harm that the unprotected statements caused only “incidental” harm. Perhaps more importantly, Judge Chin’s opinion recognized that the validity of both the libel proof plaintiff doctrine and the incremental harm doctrine were questionable in light of more recent Supreme Court precedent. For those of us who play in the media law space, this will be something to watch in the near future.

EVIDENCE OF ACTUAL MALICE PRECLUDES SUMMARY JUDGMENT

The other interesting part of Judge Chin’s opinion is his recitation of the evidence of Cosby’s “actual malice” — the telltale signs that show she either had no regard for the truth or was reckless to the truthfulness of the statements in “Blonde Ambition.” I won’t repeat all the evidence here. But the somewhat shocking thing to me was the evidence that a skilled, experienced and decorated investigative reporter like Cosby could be so driven to publish such an explosive expose that she would fabricate sources and then seek to bribe other sources (after the publication) to provide sworn testimony that would provide support for her statements. Obviously, evidence that a reporter faked her sources, and then attempted to cover up her conduct through a post publication bribery of other sources, is strong evidence that the reporter cared little for the truth of her publication. So the finding that Stern had adduced sufficient evidence of actual malice against Cosby was expected.

However, Judge Chin did not attribute Cosby’s conduct to the publisher, Hachette Book Group, USA, for liability purposes. Since Cosby was not an employee, Hachette was able to escape liability even though evidence of Cosby’s actual malice was very strong. Judge Chin followed existing legal principles that a publisher need not “fact check” an independent author.

Of course, if evidence of fabrication was so strong, one would think that the publisher would know — or should have known — that the truth of such statements may be in question. And if the truth were in question in the extreme case, perhaps publishers should be held as accountable to the same extent as the author — without regard to whether the author is an employee. I would have liked to have seen the publisher held mroe accountable in this extreme case — if Cosby’s story was so incredible (as Judge Chin seemed to believe), then a publisher shouldn’t be able to just accept it as truth because of the reporter’s credentials.

LESSONS TO BE LEARNED

The main takeaway from Stern’s case in NY reinforces what I have been saying about defamation cases. The issues are complicated, and litigating them requires substantial resources — on both sides. Stern’s case involves evidence that the reporter (Cosby) fabricated sources and attempted a post-publication cover up and attempted bribery. Even with that kind of evidence, the publisher of “Blonde Ambition” escaped liability — and Cosby still has a chance to win at trial. The typical defamation case will not have evidence of malice that is as explosive as what appears to have been produced in the Stern case.

So at the outset of any defamation case, clients must be fully aware of what they are getting into. More times than not, defamation cases are filed and later quickly abandoned when the legal complexities (and expense) becomes apparent. I insist that my clients and potential clients be fully aware of the complexities — and the costs — at the outset of any case — regardless of whether they are a plaintiff or defendant in the case. That way, surprises are kept to a minimum.