Scarlet Haze

Dear friends have advised me to shorten my posts and cut to the point. So, here's Kappa Sigma Fraternity v. Richard G. Miller Memorial Foundation, 2008 U.S. Dist. LEXIS 12379 (W.D. Va. Feb. 20, 2008). This is an interesting case out of my current state of abode, Virginia (although this case is from the U.S. District Court for the Western District of Virginia, and I'm residing within the Eastern District). This case brings to the fore issues of vicarious liability and internet defamation, within the framework of that great American institution, the fraternity.

The short background is that the Foundation was created by the fraternity in 1966, but with independent governance, the newly created body took a different path and eventually wound up in litigation with its former creator (much like Frankenstein's monster would have, if he had decent counsel--boy, if ever there were a wrongful birth case--but I digress). The Foundation is the defendant here, but the defamation claim is a counterclaim which the Foundation brought against the Fraternity.

The juicy part of the defamation claim is twofold.

First, the Fraternity passed a resolution noting that the governing body may "designate certain organizations as "Prohibited Memberships" for organizations for which membership in or support of is inconsistent with the principles and values of Kappa Sigma Fraternity," and further stating that "membership in or providing support to Kappa Sigma Memorial Foundation represents conduct unbecoming a Kappa Sigma."

Harsh. But defamatory? Possibly so, according to the court, which denied a motion to dismiss on the grounds that the resolution "could be interpreted by a reasonable person as at least implicitly disparaging, criticizing, or impugning the Foundation." My prediction is that once some evidence has been developed, this will not survive a motion for summary judgment - it's simply too vague and too much of an opinion to long survive as a charge that the Fraternity has made a false statement of fact.

Now to the second. The Fraternity maintains a listserve (which for some reason is named the Bologna1400), with access and use restricted to members of the Fraternity. On that listserve, some disgruntled young men made some nasty comments about the Foundation. Specifically... shucks, we don't know, the Court doesn't go so far as to report the nastiness (and I'm not going to spend 8 cents a page on PACER to download the complaint).

The Fraternity argues that:

• [S]tatements made on the Bologna1400 listserve by "rank and file" members cannot give rise to a cause of action against the Fraternity because the Fraternity cannot be held vicariously liable for such statements. The Fraternity concedes, however, that vicarious liability would attach if the Foundation could "establish that the Fraternity authorized or ratified the alleged statements by 'rank and file' members.

Vicarious liability is not, strictly speaking, a doctrine of defamation specifically, but of tort liability in general. The Foundation characterizes those 'rank and file' members as agents of the Fraternity, noting that the Fraternity, through its aforementioned resolution, had encouraged such conduct, and that Fraternity officers also post on the listserve, including the posting of disparaging comments. The Court finds this to be enough:

• Whether the Foundation will ultimately be able satisfy its burden of proving its allegations remains open to question, if not skepticism. Nevertheless, I find that the allegations of the Counterclaim, assuming that they are true and viewing them in the light most favorable to the Foundation, could show that the "rank and file" members who allegedly disparaged and defamed the Foundation did so as agents of the Fraternity and with actual authority, apparent authority, or subsequent ratification.

Again, I share the Court's skepticism (although it would help to exactly what alleged defamation was uttered). My prediction, again, is that the Foundation loses. In order to succeed on this claim against the Fraternity, the Foundation must show that the offending members were the equivalent of employees acting within the scope of their employment. That is, perhaps, a step too far for a Court to assess liability for a fraternity, considering that the same argument could be made against any number of tortious acts carried out by members of fraternities.* Of course, the Foundation is not without recourse, as it could sue the individual members who made the defamatory posts, but it is doubtful that those individuals have either depth of pocket to be worth pursuing. In any event it hardly seems likely that the Foundation, whatever its goals, would be interested in pursuing 'small fry' of the type that can be described as 'rank and file.'

*The author concedes that he was, in fact, an active member of Tau Epsilon Phi, back in college days which he can now barely remember. The author disclaims having committed any tortious acts during such period of active membership. If there were any, they were few and minor.

A hometown case.

Thanks to my former colleague, David M. Rogero, Esq., of Coral Gables Florida for bringing the following item from my hometown paper to my attention:

From the Miami Herald, Miami blog postings spark $25 million lawsuit

By PATRICK DANNER

• Developer Tibor Hollo has filed a $25 million defamation lawsuit against a Miami real estate agent who blogged that the octogenarian went bankrupt in the 1980s and is headed for a fall with the upheaval in the condo market. Hollo last week sued agent Lucas Lechuga and the Coral Gables brokerage Esslinger-Wooten-Maxwell alleging they have engaged in a smear campaign against him and his Opera Tower condo development on Lechuga's Miami Condo Investments blog.
  

The asserted defamation? A November 25 blog post wherein the defendant stated:

• "This developer went bankrupt in the 1980s and I think we'll see a repeat performance within the next 6 months. What do I know, though? I'm no real estate oracle."

The developer (and now plaintiff) counters that he never went bankrupt. Note that the original post does not say that the plaintiff had filed for bankruptcy, which is a legal nicety. One can go bankrupt (in the sense of having more debt than capital) and recover just fine. Since truth is a defense to defamation, this matter may await the discovery process to determine if there was any point in the 1980's where the statement holds true.

Fellow blogger Marc Randazza was quick to identify this as a SLAPP suit (the clever acronym for a "strategic lawsuit against public participation") - an effort to use litigation to intimidate or silence a critic from speaking badly about the litigant, even where the matter is protected speech about a matter of public importance. There is a question of infinite recursion there - could Hollo sue Randazza for deeming this a SLAAP suit? Almost certainly not, since the lawsuit itself is clearly a matter of public importance.

In this case (as in most cases), if the intent of the litigant was to squelch bad speech, it has badly backfired, and the assertion - true or not - has been spread much farther and wider than the defendant blogger had intended (or likely could have imagined).

This also raises the somewhat interesting issue of defamation over the Internet - I say "somewhat" because it really is not much different from defamation through any other media, except as to how quickly it spreads. There are also some immunity issues that arise with respect to internet service providers under provisions of the Digital Millennium Copyright Act ("DMCA"), but those issues are not present in this case, as the defendant is the blogger himself, and not whichever service hosts the blog.

My utterly confident prediction in this case is that the plaintiff will not win the $25 million in damages that he seeks. You can take that to the bank.