From today’s opinion in Trump Media & Technology Group Corp. v. WP Co. LLCdecided by Judge Tom Barber (M.D. Fla.):
This defamation lawsuit by plaintiff Trump Media & Technology Group Corp. (“TMTG”) against defendant WP Company LLC (the “Post”) arises from an article titled “Porn-Friendly Bank-Tied Trust Could Acquire a participation in Trump’s Truth Social ,” published by the Post on May 13, 2023 and disseminated on Twitter (now known as “X”) by Post staff. The article described events surrounding a planned merger between TMTG and Digital World Acquisition Corp. (“DWAC”) as part of TMTG’s “Truth Social” business release.
The article noted that there had been a delay in obtaining SEC approval for the merger, which supporters of former President Donald Trump and TMTG attributed to political bias. The article offered an alternative explanation: concerns about one or more loans obtained by TMTG, the identity of the lenders, and whether those loans had been adequately disclosed by DWAC in its public filings. The article cited various sources for its story, including “internal documents that a corporate whistleblower shared with federal investigators and [the Post]” and statements specifically attributed to the whistleblower, former TMTG official Will Wilkerson.
The article reported that in late 2021, with the proposed merger “on hold” and TMTG worried about paying its bills, DWAC President Patrick Orlando announced that he had arranged $8 million in loans from a known entity as “ES Family Trust”. According to the article, the loans were part of an agreement in which TMTG would receive the loans and, in exchange, ES Family Trust would acquire a stake in the public entity that would arise from the merger of TMTG and DWAC. This loan-for-stock agreement was reflected, according to the article, in a convertible promissory note, although the article acknowledged that the only copy of the promissory note the Post was able to locate was unsigned. The article also reported that some funds had been transferred from another entity, Paxum Bank, which had ties to ES Family Trust and the adult film industry. Additionally, according to the article, TMTG paid a $240,000 fee in connection with loans to Entoro Securities, a Texas entity of which Orlando was CEO.
The article stated that neither the loan-for-stock agreement nor the lender’s compensation had been disclosed to DWAC shareholders or the SEC, and that New York University law professor Michael Ohlrogge believed these matters could influence the value of the shares and should have been disclosed. The article also highlighted that the British magazine The Guardian had previously reported that federal prosecutors in New York were investigating whether TMTG had violated money laundering laws in connection with these loans, and that TMTG CEO Devin Nunes had filed a lawsuit against Wilkerson and others (including The Guardian) stating that the Caretaker the story was “made up”.
TMTG sued for defamation, but the court concluded that it had not adequately alleged knowing or reckless falsehood (so-called “actual misrepresentation”), although it concluded that the matter was close to some allegations and allowed the plaintiff to file an amended complaint that could provide such allegations (assuming there was a plausible basis for them).
The court also discussed the Post’s “neutral reporting privilege” argument, and partly accepted it but partly rejected it:
As an alternative reason for dismissal, the Post states that the entire article is protected by “neutral reporting privilege,” a qualified privilege under Florida law for “disinterested” and “neutral” reporting on “matters of public interest “. The few Florida cases on this issue contain apparently very broad affirmations of this privilege. However, this broad language cannot be extrapolated from the factual context in which courts have applied the privilege. The privilege has been applied in situations where a media defendant republished a defamatory statement made by another person, where the statement itself constituted a newsworthy event.
The Post tries to delve into these cases, focusing mainly on Rendon v. Bloomberg, LP (SD Fla 2019). In Rendon, the defendant published an article relating to statements by a hacker who claimed to have been hired by a political consultant to carry out cyberattacks against political opponents. The consultant sued the publisher of the article. The district court dismissed the complaint, noting that the article consistently made clear that the matters reported did not reflect the opinions of the journalists but those of their source, the hacker. The court also noted that the article reported that the plaintiff denied the hacker’s allegations and that the emails provided by the hacker were “fake.” …
The Court agrees with TMTG that the neutral reporting privilege does not apply, at least not to the entire article or all of the disputed statements. The article does not simply republish Wilkerson’s statements or his point of view. It attributes only a few specific statements to Wilkerson, and the disputed statements are not among them. Instead, the disputed statements are presented as the Post’s conclusions or inferences based on its review of admittedly “inconclusive” documents, statements expressly attributed to Wilkerson, and any other evidence the Post may have gathered from Wilkerson or other sources. TMTG is right that the article appears to be “taking a stand” in this regard.
The exception to the above would appear to be the statement of investigation, which reads The Guardian’s report of a money laundering investigation. The Guardian it was described as a “highly respected, centre-left, nationally circulated newspaper, generally considered to be in the top three or four newspapers in Britain”. The Guardian’s Nunes’ report and denial in the lawsuit he filed, particularly in the context of public discussion about the reason for the SEC’s delay in approving the merger, make independent news and touch on an area of public interest. In its investigative statement, the Post simply recited the opposing positions of both sides on this narrow issue. This aspect of the article seems to fit perfectly with the type of reporting to which the neutral reporting privilege has been applied.
The parties agree that the neutral reporting privilege is a qualified privilege. Even if the privilege applies differently, it can be voided if the defendant has abused the privilege by acting with express malice, i.e. with the primary motive of harming the plaintiff. TMTG claims that the Post abused any privilege because it published the statements “maliciously and excessively” and that it intended to harm TMTG. Under the Twombly/Iqbal standard, TMTG must assert facts to plausibly suggest that the Post acted with the intent or primary motive of harming TMTG in order to deny the privilege, but does not do so in its current complaint….
The Court concluded:
Defamation is a highly technical and often confusing area of the law, and the case law imposes unusual obstacles on a public figure suing a media defendant. TMTG, however, may file an amended complaint to attempt to overcome these obstacles. In each amended complaint, with respect to each disputed statement, TMTG should clearly state which aspect of the statement is false, what documents or other information demonstrate that the specific aspect was false, and how the Post knew of the documents or information .