Defamation by Implication under Tennessee Law

In Grant v. The Commercial Appeal, No. W2015-00208-COA-R3-CV (Sept. 18, 2015), plaintiff sued defendants for various causes of action related to an online and print newspaper article, although on appeal the only causes of action at issue were defamation and defamation by implication. The articles were about plaintiff’s involvement in a mall revitalization project in Memphis that had recently been approved by the Memphis City Council. The article, in part, contained information regarding the following:

  • plaintiff failed to tell the City Council that he owed a large sum of money to the federal government;
  • plaintiff “stated that he had no financial interest in the project, yet…various state records and other transactions [plaintiff] has been involved with suggested otherwise;”
  • upon investigation, it was discovered that plaintiff had an office on the mall’s property;
  • a city councilman was quoted as saying the project was the “worst project we ever approved” and that the city council was unaware that plaintiff was “one of the project’s principals;”
  • a quote from a “frat brother” of plaintiff saying plaintiff worked on the mall project as an adviser for free;
  • an online headline saying “Silent partner? [plaintiff’s] involvement clouds $1.5 million Southbrook Mall deal.”

Plaintiff asserted that “the substance of the articles [were] defamatory to him,” making it appear that he was dishonest and deceptive, and that defendants had acted with actual malice.

Defendants filed a motion to dismiss, which the trial court granted on two bases: (1) “that the complaint failed to state a claim upon which relief can be granted as the statements at issue ‘are not defamatory or capable of defamatory meaning,’” and (2) that the article fell within the fair report privilege.

On appeal, the Court first overturned the finding that the articles fell within the fair report privilege. In order for a defendant to be protected by this qualified privilege, “(1) the report must be of a public proceeding or official actions of government that have been made public; (2) the report must be a fair and accurate summary of the proceedings and must display balance and neutrality; and (3) the report must not be made with actual malice.” Here, the articles were not limited to reporting on a public meeting; instead, the article specifically referenced personal interviews and a newspaper staff member’s personal visit to the mall property. “The inclusion of certain investigatory interviews and descriptions clearly falls outside of the scope of the fair report privilege because their ties to any official proceedings are tenuous at best.”

Although failing on the first prong was enough to overturn the privilege holding, the Court went on to clarify that these articles would fail to fall under the privilege at the motion to dismiss stage on the second two prongs as well. The Court stated that, at this point in the proceedings, it could not conclude that “the report is a fair and accurate summation of the proceedings and that the report displays balance and neutrality.” Further, plaintiff had sufficiently plead actual malice, which was enough to avoid a motion to dismiss based on the fair report privilege. Accordingly, the trial court’s ruling that the articles were privileged was overturned.

Next, the Court turned to the two causes of action at issue: defamation and defamation by implication. Plaintiff asserted that five of the specific statements from the articles, as well as the general implication of the articles, was defamatory and implied that he was “dishonest and/or a liar.” Defendants responded, though, that the articles were “only intended to communicate that questions surrounded the extent of [plaintiff’s] involvement in the project.” While whether a statement was understood as defamatory is generally a question of fact, the Court pointed out that whether something is “capable of conveying a defamatory meaning” is a question of law. When considering this issue, a Court must avoid looking at statements individually and instead “review the statement in the full context of the communication in which the statement is made, and consideration of the broader social context surrounding the communication.” While questions may be capable of defamatory meaning, they “must be reasonably read as an assertion of false fact; inquiry itself, however embarrassing or unpleasant to its subject, is not accusation.”

Here, the Court found that “[o]n its face, the Article here raises a question about [plaintiff’s] involvement in the Southbrook Mall project and whether he was being honest with city officials.” The Court concluded:

 

[T]he question raised does not constitute an ‘assertion’ by the [defendants] that [plaintiff] was either hiding his involvement or deceiving city officials. It is not equivalent to a direct charge. The Article did not include an answer to the question regarding [plaintiff’s] involvement. Several times, the Article included [plaintiff’s] own statements concerning his involvement with the project, and the questions concerning whether [plaintiff] was dishonest or deceptive to city leaders remains unanswered by the Article.

 

(internal citations and quotations omitted). Accordingly, the Court held that the articles did not “form an assertion under which [plaintiff’s] claim of defamation can be sustained for purposes of a motion to dismiss,” so the dismissal of plaintiff’s defamation claim was affirmed.

As to defamation by implication, however, the Court overturned the dismissal. The Court pointed out that in Tennessee a “statement may be capable of defamatory meaning even if the words do not appear defamatory on their face, but instead imply or suggest a defamatory meaning.” A claim for defamation by implication may exist where “the defamatory message is not explicitly stated, but when it is conveyed by implication.” Here, “the Article juxtaposes a series of facts so as to imply a defamatory connection between them.” A reasonable reading of the articles could convey that plaintiff “deceived city leaders and is concealing his involvement in the Southbrook Mall project.” Thus, the Court concluded that “the statements in the Article constitute a threat to [plaintiff’s] reputation,” as the “plain and natural import of the Article’s language and implications suggest that [plaintiff] has not been forthright with city leaders regarding his control or financial interest over the project.” The Court overturned the dismissal of the defamation by implication claim and remanded that claim to the trial court.

The Court of Appeals did a good job analyzing this case and correcting the trial court here. While the fair report privilege has its place, it is not intended to protect articles that go beyond reporting on a public meeting. The articles at issue here included site investigations and interviews with multiple sources, which were clearly outside the scope of the fair report privilege. Further, the Court was correct to reinstate the defamation by implication claim. Although the article apparently did not present any defamatory information as facts, the way it was written was intended to imply that plaintiff had been dishonest. Plaintiff had plead enough to get past the motion to dismiss stage, and the Court of Appeals correctly overturned the trial court’s dismissal of this claim.