Biro v. Condé Nast: The “Plausibility” of Actual Malice Allegations in Public-Figure Defamation Cases

On Tuesday the U.S. Court of Appeals for the Second Circuit held that public-figure plaintiffs in defamation cases must set forth plausible allegations, at the pleadings stage, that media defendants acted with actual malice.  Heralded as a victory for the media industry and First Amendment rights, the court in Biro v. Condé Nast, et al. brought public figure defamation claims squarely in line with the modern pleading standards set forth in the Supreme Court’s Ashcroft v. Iqbal and Bell Atlantic Corp. v. Twombly decisions.

The Biro case arose out of a July 2010 article in The New Yorker written by journalist David Grann which focused on plaintiff, an art conservationist and forensics expert whose art authentication techniques have been the subject of controversy and skepticism.  The article criticized Biro’s methods and motivations, and gave readers a “negative impression” of the plaintiff.  The article was later republished or cited by various other defendants to the action.  Biro sued The New Yorker and its publishers (collectively referred to here as The New Yorker) and the various re-publishers for defamation.

The U.S. District Court for the Southern District of New York determined that Biro was a “limited purpose public figure” (a finding Biro disputed) who, pursuant to the Supreme Court’s landmark 1964 decision in New York Times Co. v. Sullivan, consequently had to establish that the defendants published the article with “actual malice” – i.e., knowledge of falsity or reckless disregard of the truth.  With respect to The New Yorker, Biro made several broad allegations, including that the magazine “either knew or had reason to believe that many of the statements of fact in the Article were false or inaccurate” and “failed to ‘investigate and determine the validity’ of the allegedly defamatory statements.”  Biro made similarly expansive allegations against the re-publisher defendants.  The District Court concluded that Biro’s complaint fell short of the standards set forth in Twombly and Iqbal, holding that he had “failed to plead sufficient facts to give rise to a plausible inference of actual malice.”

The Second Circuit agreed, rejecting Biro’s argument that his actual malice allegations were sufficient.  Biro’s claim that that his allegations did not require pleading “with particularity” that fraud claims require was rejected by the court, which explained that under Twombly and Iqbal, the required “short plain statement” of the plaintiff’s claim still requires allegations of malice to be plausibly stated.  (Biro was relying on the fraud standard in Federal Rule 9(b), which the court held was inapplicable, applying the lower standard of Federal Rule 8(a), as the Supreme Court had.)  Indeed, according to the court, defamation cases in the Second Circuit have long been treated, for procedural purposes, “no differently from other actions.”

The Second Circuit also rejected Biro’s claim that it would be “impossible” for public-figure plaintiffs to plead facts sufficient to establish a plausible claim of actual malice without conducting discovery, noting that as long as the pleaded facts “raise a reasonable expectation that discovery will reveal evidence of” actual malice, a claim may survive.  The court explained that, while the task may be difficult in light of the First Amendment issues at stake, plaintiffs can sufficiently plead actual malice by stating objective facts that would lead a court to plausibly infer actual malice (for example, when a plaintiff provides no source for the allegedly defamatory statements or the source denies giving the information).

Applying these standards to Biro’s complaint, the court held that the allegations against The New Yorker did not raise a plausible inference of actual malice.  Specifically, Biro did not allege that Grann had relied exclusively on unverified anonymous sources, and Biro’s complaint did not otherwise allege facts “that would have prompted the New Yorker defendants to question the reliability” of its sources at the time of publication.  Biro’s allegations against the re-publisher defendants were found to be similarly conclusory or otherwise inadequate to state a plausible claim for relief.

While other circuits have adopted similar pleading requirements for public-figure defamation claims over the last few years, the holding in Biro represents a significant and positive change in the Second Circuit, which is home to a substantial number of traditional and new media companies.  From a legal standpoint, the Biro court’s guidance on plausibly pleading actual malice should serve to protect media companies from questionable defamation claims by public figures and act as a filter at the early stages of litigation to ensure that those defendants’ First Amendment rights are given the deference they deserve.  From a practical standpoint, the ruling will likely decrease media companies’ litigation costs given the expanded opportunity to dispose of more cases prior to incurring the considerable costs associated with discovery.