Supreme Court, New York County, March 9, 2021

Mintz & Gold LLP (Steven G. Mintz and Terence McCormick of counsel) for NYP Holdings, Inc., defendant.

Rothstein Law PLLC (Eric E. Rothstein of counsel) for plaintiff.

Plaintiff David Sackler brings this action for defamation per se/libel per se/slander per se against defendants^[FN1] Hearst Magazines and NYP Holdings, Inc. (the Post), alleging that the defendants, while reporting on Purdue Pharma's involvement in the OxyContin epidemic, mistakenly used photographs of plaintiff instead of the David Sackler of the Sackler family, which owns Purdue Pharma. In motion sequence No. 2, the Post moves to dismiss the [*2]amended complaint, on the grounds that plaintiff fails to allege that the Post acted with actual malice in publishing the photographs. The motion has been fully submitted and oral argument was held via remote conference on January 20, 2021.

This case arises from the defendants' collective reporting of the Sackler family's involvement in the United States opioid epidemic through the company Purdue Pharma. Plaintiff David Sackler, who is not a member of the Sackler family, is a consultant and professional in the health and wellness industry.

As relevant to this motion, plaintiff alleges that when the Post published a story online about the Sackler family on May 12, 2019, it included a photograph of plaintiff, rather than the David Sackler of Purdue Pharma. (NYSCEF Doc No. 6, amended complaint ¶¶ 111-115.) Plaintiff notes that the online photograph is a picture of plaintiff holding a bottle of Trimwater, which is a beverage distributed by plaintiff's company, Lifestyle Beverages, Inc. (Id. ¶ 116.) The story also ran in the {**71 Misc 3d at 695}printed version of the Post, featuring the same photograph but cropping the bottle of Trimwater out of frame. (Id. ¶ 119.)

Plaintiff also alleges that the Post published a different photograph of him, again holding a bottle of Trimwater, in a May 15, 2019 online article, titled "MET to reject gifts from Sacklers amid fury over opioid crisis." (Id. ¶¶ 126-130.) The printed version of this story did not feature a photograph. (Id. ¶ 132.)

The Post moves to dismiss, arguing in its brief that under New York's choice of law principles, New Jersey's defamation law applies because plaintiff is domiciled in New Jersey. (NYSCEF Doc No. 23 at 9.) The Post argues that under New Jersey law, plaintiff would be required to plead facts supporting an inference of actual malice because the Post's articles related to a matter of a legitimate public concern, and that because plaintiff has failed to do so, the amended complaint must be dismissed. In opposition, plaintiff argues that New York law applies. (NYSCEF Doc No. 36 at 5-14.)

While the motion was sub judice, the New York State Legislature adopted amendments to its "anti-SLAPP (strategic lawsuits against public participation)" law, codified at Civil Rights Law §§ 70-a and 76-a.^[FN2] The amendment to section 76-a broadened the definition of "[a]n 'action involving public petition and participation' " and imposed the requirement that a plaintiff "establish[ ] by clear and convincing evidence that any communication which gives rise to the action" was made with actual malice. (Civil Rights Law § 76-a [1] [a]; [2].) The amendment to section 70-a gives defendants in such actions who are successful in their motions to dismiss or for summary judgment the right to bring a claim for costs and attorney's fees. In a December 29, 2020 memorandum order from the United States District Court for the Southern District of New York, the Honorable Judge Jed S. Rakoff ruled that the anti-SLAPP amendments applied retroactively.

The Post maintains that Judge Rakoff's analysis is correct and the amendments do apply retroactively, thus resolving the choice of law dispute, as there is no conflict in the standard of proof for defamation between New Jersey and New York because both states now require a showing of actual malice.{**71 Misc 3d at 696}

The amendment^[FN3] at issue in this case is as follows:

"§ 76-a. Actions involving public petition and participation; when actual malice to be proven

"1. For purposes of this section:

"(a) An 'action involving public petition and participation' is a claim based upon:

"(1) any communication in a place open to the public or a public forum in connection with an issue of public interest; or

"(2) any other lawful conduct in furtherance of the exercise of the constitutional right of free speech in connection with an issue of public interest, or in furtherance of the exercise of the constitutional right of petition.

"(b) 'Claim' includes any lawsuit, cause of action, cross-claim, counterclaim, or other judicial pleading or filing requesting relief.

"(c) 'Communication' shall mean any statement, claim, allegation in a proceeding, decision, protest, writing, argument, contention or other expression.

"(d) 'Public interest' shall be construed broadly, and shall mean any subject other than a purely private matter.

"2. In an action involving public petition and participation, damages may only be recovered if the plaintiff, in addition to all other necessary elements, shall have established by clear and convincing evidence that any communication which gives rise to the action was made with knowledge of its falsity or with reckless disregard of whether it was false, where the truth or falsity of such communication is material to the cause of action at issue.

"3. Nothing in this section shall be construed to limit any constitutional, statutory or common law protections of defendants to actions involving public petition and participation." (Civil Rights Law § 76-a.)

In Palin v New York Times Co. (— F Supp 3d —, 2020 WL 7711593 [SD NY, Dec. 29, 2020, 17-cv-4853 (JSR)]), Judge Rakoff{**71 Misc 3d at 697} held that the amendments applied retroactively. Palin is a case wherein the former Governor of Alaska and 2008 vice-presidential candidate sued the New York Times, alleging that they defamed her in a 2017 editorial regarding gun control. Prior to the amendments passing in November 2020, the parties were contesting whether the federal constitutional rule, which imposed an actual malice requirement, or New York law, which did not, governed the case. However, that issue was to be resolved after the New York Times moved for an order reflecting the change in law.

Judge Rakoff's holding that "§ 76-a is a remedial statute that should be given retroactive effect" was based on several factors. (Palin, — F Supp 3d at —, 2020 WL 7711593, *3.) He cited to the session law, which stated that the amendment "shall take effect immediately" (L 2020, ch 250, § 4), and also cited to the justification offered by State Senator Brad Hoylman, the sponsor of the amendments, who stated:

"Section 76-a of the Civil Rights Law was originally enacted by the Legislature to provide[*4]'the utmost protection for the free exercise o[f] speech, petition, and association rights, particularly where such rights are exercised in a public forum with respect to issues of public concern.' L. 1992 Ch. 767. However, as drafted, and as narrowly interpreted by the courts, the application of Section 76-a has failed to accomplish that objective. In practice, the current statute has been strictly limited to cases initiated by persons or business entities that are embroiled in controversies over a public application or permit, usually in a real estate development situation. By revising the definition of an 'action involving public petition and participation,' this amendment to Section 76-a will better advance the purposes that the Legislature originally identified in enacting New York's anti-SLAPP law. This is done by broadly widening the ambit of the law to include matters of 'public interest', which is to be broadly construed, e.g. anything other than a 'purely private matter'." (Sponsor's Mem in Support of 2019-2020 NY Senate Bill S52-A, enacted as L 2020, ch 250, https://www.nysenate.gov/legislation/bills/2019/s52 [July 22, 2020]; Palin, — F Supp 3d at —, 2020 WL 7711593, *3, citing 2019-2020 NY Assembly Bill A5991-A § 4.)

{**71 Misc 3d at 698}After the Palin decision, the Honorable Judge Eric N. Vitaliano of the Eastern District of New York issued a decision in Coleman v Grand (— F Supp 3d —, 2021 WL 768167 [ED NY, Feb. 22, 2021, 18-cv-5663 (ENV) (RLM)]) noting agreement with Judge Rakoff that the anti-SLAPP amendment applied retroactively. (Coleman, — F Supp 3d at —, 2021 WL 768167, *8.)

This court finds that the anti-SLAPP amendments are intended to apply retroactively in order to effectuate the remedial and beneficial purpose of the statute. (Matter of Gleason [Michael Vee, Ltd.], 96 NY2d 117, 122 [2001].) Further, plaintiff suffers no undue prejudice from retroactive application, as plaintiff has attempted to couch his claim against the Post in terms of actual malice from the filing of the complaint (amended complaint ¶ 165; NYSCEF Doc No. 36 ¶ 53) and had ample opportunity to argue the issue at oral argument.

Although plaintiff is correct that Sarah Palin is a public figure (tr at 13, lines 5-18), nothing in the text of the amended statute indicates that the legislature intended for the statute to only apply to defamation cases involving such public figures. The amendment defines an "action involving public . . . participation" to be a claim based upon "any communication in a place open to the public or a public forum in connection with an issue of public interest" and further states that the term " '[p]ublic interest' shall be construed broadly, and shall mean any subject other than a purely private matter." (Civil Rights Law § 76-a [1] [a] [1]; [d].) Thus, by the text of the statute, plaintiff's argument that he is "not the kind of person the SLAPP legislation is intended to impact" because "anti-SLAPP protects the little guy from being put upon by the big guy for taking part in the political process" is inaccurate. (Tr at 12, lines 8-10; at 13, lines 7-10.) Plaintiff's argument, however, ignores the very purpose of the amendment which is to broaden the scope of actionable cases involving the public interest, in order to protect free speech "in a public forum with respect to issues of public concern." (Sponsor's Mem in Support of 2019-2020 NY Senate Bill S52-A.)

Plaintiff's argument that Judge Rakoff's holding "did not change the standard already applicable in that case of actual malice" is irrelevant to this case. Palin dealt with a choice of law issue between federal law, which, in a prior decision, was held to impose an actual malice standard, and New York law, which the defendants argued also imposed an actual malice{**71 Misc 3d at 699} standard (for defamation cases involving public figures), although Judge Rakoff had declined to address that argument. After the amendment was passed, the defendants filed their motion for reconsideration, which the court granted, as a determination on the retroactivity of the [*5]amendment would be relevant in the event that plaintiff lost at trial and appealed the court's decision that federal law imposed an actual malice standard. (Palin, — F Supp 3d at —, 2020 WL 7711593, *2-3.)

Here, a determination of the retroactivity issue eliminates the conflict between New York and New Jersey defamation law and thus would change the standard applicable to the action. As demonstrated in the parties' submissions, New Jersey law requires a showing of actual malice, while New York law (formerly) did not. (See generally NYSCEF Doc Nos. 23, 36.)

Lastly, plaintiff's argument that the legislature "could have said if it wanted to that it's retroactive" ignores Judge Rakoff's reasoning, who held that the legislature did "say" the statute is intended to be retroactive. (Tr at 13, line 25; at 14, line 1.) Plaintiff's contention that the amendments do not apply to the issues before the court also sidesteps the role of the court in determining the retroactive effect of legislation when a definite statement is not included in the text of the statute. (See Matter of Gleason, 96 NY2d at 122.)

Having determined that the amendment is retroactive, the court will now turn to the issue of whether plaintiff adequately pleads actual malice to withstand the motion to dismiss.

On a pre-answer motion to dismiss a complaint for failure to state a cause of action, pursuant to CPLR 3211 (a) (7), "the court should accept as true the facts alleged in the complaint, accord plaintiff the benefit of every possible inference, and only determine whether the facts, as alleged, fit within any cognizable legal theory." (Frank v DaimlerChrysler Corp., 292 AD2d 118, 121 [1st Dept 2002].) However, "factual allegations that do not state a viable cause of action, that consist of bare legal conclusions, or that are inherently incredible or clearly contradicted by documentary evidence are not entitled to such consideration." (Skillgames, LLC v Brody, 1 AD3d 247, 250 [1st Dept 2003].)

Additionally, CPLR 3211 (g) provides that in cases involving the public interest, as defined by Civil Rights Law § 76-a, where a defendant moves to dismiss pursuant to CPLR 3211{**71 Misc 3d at 700}  (a) (7), "the burden is upon the plaintiff to establish that its claim has the requisite substantial basis." (Duane Reade, Inc. v Clark, 2 Misc 3d 1007[A], 2004 NY Slip Op 50174[U], *5 [Sup Ct, NY County 2004] [internal quotation marks omitted].) "In order to avoid dismissal of its SLAPP suit complaint, plaintiff must establish by clear and convincing evidence a 'substantial basis' in fact and law for its claim. The Legislature viewed 'substantial' as a more stringent standard than the 'reasonable' standard that would otherwise apply." (Id., quoting David D. Siegel, 1992 Supp Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C3211:73, 2004 Pocket Part at 27.)

As discussed above, Civil Rights Law § 76-a (2) now states that, in any action regarding the public interest, "damages may only be recovered if the plaintiff, in addition to all other necessary elements, shall have established by clear and convincing evidence that any communication which gives rise to the action was made with knowledge of its falsity or with reckless disregard of whether it was false." (See also Sweeney v Prisoners' Legal Servs. of N.Y., 84 NY2d 786, 792 [1995] [" 'Actual malice' means that defendants published the false information about plaintiff with knowledge that it was false or with reckless disregard of whether it was false or not" (internal quotation marks omitted)].)

Here, the court finds that plaintiff fails to establish by clear and convincing evidence that the Post published the photograph of him with actual malice. Plaintiff's sole allegation is that the Post "did no research, insufficient research, or research that was not reasonably calculated to determine" if the David Sackler in the photographs was the David Sackler of Purdue Pharma. (Amended complaint ¶ 131.) However, it is well settled that a "failure to investigate will not alone [*6]support a finding of actual malice." (Harte-Hanks Communications, Inc. v Connaughton, 491 US 657, 692 [1989]; see also St. Amant v Thompson, 390 US 727, 731 [1968] ["reckless conduct is not measured by whether a reasonably prudent man would have published, or would have investigated before publishing. There must be sufficient evidence to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of his publication"]; Kipper v NYP Holdings Co., Inc., 12 NY3d 348, 355 [2009] [plaintiff's reliance on the Post's "failure to employ fact-checkers, to attempt to verify the status of his license prior to publication, or to identify those individuals responsible for the{**71 Misc 3d at 701} false headline and statement" was insufficient to establish actual malice by clear and convincing evidence]; Rivera v Time Warner Inc., 56 AD3d 298, 298 [1st Dept 2008] ["Actual malice cannot be inferred from factual allegations merely suggesting that Time Warner had reason to question the accuracy of the information at issue"].)

In opposition, plaintiff contends that further discovery is needed for him to establish actual malice in this case. (NYSCEF Doc No. 36 ¶¶ 51-55.) However, plaintiff's contention ignores his burden of proof. Pursuant to CPLR 3211 (g), the court "shall" grant the motion to dismiss unless plaintiff can establish that its claim has a "substantial basis in law." Contrary to plaintiff's contention, further discovery will not rectify plaintiff's legally insufficient allegations, as a failure to adequately research whether the published photographs were of the "correct" David Sackler does not, as a matter of law, constitute actual malice.

Relatedly, plaintiff's request to replead is denied. Repleading would be futile, as plaintiff has failed to demonstrate a meritorious cause of action and has not shown that his claim has a substantial basis in law. Thus, the court "shall" grant the motion. (CPLR 3211 [g].)

Accordingly, it is hereby ordered that the motion of defendant NYP Holdings, Inc., motion sequence No. 2, to dismiss the amended complaint herein is granted and the amended complaint is dismissed in its entirety as against said defendant, with costs and disbursements to said defendant as taxed by the Clerk of the Court, and the Clerk is directed to enter judgment accordingly in favor of said defendant; and it is further ordered that the action is severed and continued against the remaining defendant, Hearst Magazines; and it is further ordered that the caption be amended to reflect the dismissal and that all future papers filed with the court bear the amended caption.