The Second Circuit has now affirmed dismissal of a defamation lawsuit brought by casino magnate and Republican mega-donor Sheldon Adelson against the National Jewish Democratic Council (NJDC) and two members of its leadership. This decision, along with opinions issued by other courts throughout the case, are likely to be important precedents for applying both the fair report privilege in the internet age and anti-SLAPP statutes in federal court.

The basis for Adelson's suit was a petition published by the NJDC on its website in July 2012, in the midst of the presidential election campaign. The petition urged then-candidate Mitt Romney not to accept political donations (what it termed "dirty money") from Adelson for several reasons, including recent "reports" that Adelson had "personally approved" of prostitution in his casinos in Macau. The words "personally approved" contained a hyperlink to an Associated Press article, which discussed a lawsuit against Adelson by one of his former executives, Steven Jacobs. In the course of that suit, Jacobs had said that "the prior prostitution strategy" in the Macau casinos "had been personally developed and approved by Adelson."

Adelson filed a defamation suit in the Southern District of New York, and the defendants moved to dismiss under Federal Rule 12(b)(6) and Nevada's anti-SLAPP statute. Judge J. Paul Oetken granted both motions. He ruled that the defendants' statements were either within the fair report privilege or non-actionable statements of opinion. Importantly, he held that the hyperlink in the words "personally approved" was sufficient to attribute that statement to Jacobs' lawsuit against Adelson. As he put it, "[t]he hyperlink is the twenty-first century equivalent of the footnote for purposes of attribution in defamation law." Judge Oetken also granted the defendants their attorneys' fees under the anti-SLAPP statute, finding that the statements were communications "aimed at procuring any government or electoral action, result or outcome" and made in good faith—i.e., without knowledge that they were false.

Adelson appealed to the Second Circuit, which largely affirmed, but which certified two questions to the Nevada Supreme Court: whether the hyperlink was sufficient for purposes of Nevada's fair report privilege, and whether the Nevada anti-SLAPP statute covered speech seeking to influence an election but not addressed to a government agency. The Nevada Supreme Court answered both questions in the affirmative. The hyperlink was sufficient because of "textual references" in the petition and placement of the hyperlink in the same sentence as the content it purported to support. On the anti-SLAPP issue, the court simply rested on one of its recent decisions holding that a communication need not be made directly to a governmental agency to fall within the ambit of the statute.

Despite the Nevada Supreme Court rulings, when the case returned to the Second Circuit, Adelson asked the court to reinstate his suit, arguing that 1) his defamation claim also rested on the unprivileged alleged implication that he "used funds from prostitution to finance his campaign contributions"; 2) the district court erred in holding that the defendants made the statements in good faith; and 3) Adelson should have been permitted additional discovery on the anti-SLAPP statute's scienter requirement.

The Second Circuit rejected each argument. It held that the Nevada Supreme Court's affirmative answer to the first certified question settled the application of the fair report privilege, and the Second Circuit noted that while its prior opinion did not expressly address whether the defendants acted in good faith, it had held so implicitly. In any event, the district court was correct to rule that Adelson failed to allege knowledge of falsity and that no additional discovery was warranted. The Second Circuit therefore affirmed the district court's dismissal of the claim and application of the anti-SLAPP statute.

The attorneys in Ballard Spahr's Media and Entertainment Law Group are dedicated to supporting the free press and the First Amendment rights of groups and individuals. The Group helps clients navigate challenging media law issues across all platforms and industries.

Note: Ballard Spahr attorneys Lee Levine, Seth D. Berlin, Chad R. Bowman, and Matthew E. Kelley represented the NJDC and individual defendants in this matter.

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