The $435 million defamation lawsuit brought against CNN by Devin Nunes (R., CA), has been dismissed but not on a determination of truth or the merits. The decision was based on a technical or procedural omission by Nunes, but the jurisdictional question was an impressive combination of standards in three different jurisdictions. United States District Judge Laura Taylor Swain issued a ruling in New York to apply Virginia’s choice of law standard that in turn applied California’s defamation laws. It was a cascading deconstruction of the lawsuit.  Nunes ultimately lost due to a failure to demand a retraction with 20 days and then a failure to properly plead special damages in light of that jurisdictional finding.

The lawsuit was prompted by CNN airing what Nunes alleged as a clearly false story that he was involved in efforts to get “dirt” on then-Democratic presidential candidate Joe Biden and his son, Hunter Biden. The source was Lev Parnas, a dubious character and long-time associate of Rudy Giuliani. He is facing criminal charges in New York.

Nunes wanted to prove that the story was false but CNN sought dismissal for the procedural failure. In my torts class, I teach defamation and often discuss the California retraction law.

The law is one of the most restrictive in the county.  Under the California Civil Code, a party is limited to special damages “unless a correction is demanded and is not published or broadcast, as provided in this section.” Cal. Civ. Code § 48a(a). “The notice and demand must be served within 20 days after knowledge of the publication or broadcast of the statements claimed to be libelous.”  Nunes did not ask for such a correction under California law because he filed in Virginia.  However, CNN insisted that his injury was inextricably tied to the fact that he represented and lives in a district in California.

California’s law is designed to hinder such lawsuits. It does not give much time to an aggrieved party to act, particularly when they are seeking the advice of counsel. It is very likely that brief period ran before Nunes resolved to sue and then secured the necessary counsel. This is even more difficult for average citizens who are unaware of the requirement.

In fairness to Nunes’ legal team, there was a good-faith argument that New York or Virginia law should apply rather than California’s law.  Both parties agreed that Virginia law would govern on choice of law since Nunes initiated this lawsuit in Virginia. That triggered Virginia’s application of the doctrine of lex loci delicti where “the law of the place of the wrong governs all matters related to the basis of the right of action.” Dreher v. Budget RentA-Car Sys., Inc., 634 S.E.2d 324, 326 (Va. 2006). However, with this type of broadcast or mass distribution publication, it is difficult to determine “the state where the content at issue was published.” Gilmore v. Jones, 370 F. Supp. 3d 630, 664 (W.D. Va. 2019). Accordingly, the federal court in New York had to decide where how Virginia courts would likely rule on the “place of the wrong” in this multistate defamation case. It ruled that the Virginia courts would likely apply the California law.

The jurisdictional question was a poison pill finding for the litigation.  As a result of the jurisdictional decision, the sufficiency of the amended complaint turned on whether it had properly alleged special damages. The Court found that Nunes had not:

“While the AC uses the phrase “special damages,” refers to “out of pocket expenses,” and includes a dollar amount that encompasses the entire array of damages claims, it provides no further indication of the basis or quantum of any special, or economic, element of his damages claim. A general “monetary demand stated in round numbers is generally not considered to reflect the specific damages required of special damages.” Marino v. Jonke, No. 11 CV 430 VB, 2012 WL 1871623, at *10 (S.D.N.Y. Mar. 30, 2012). Nor do such general allegations explain what the damages comprise or how they are calculated, denying both Defendant and the Court information as to the substance of the complaint. See Barrett v. U.S. Banknote Corp., No. 91 CIV. 7420 (RPP), 1992 WL 232055, at *8 (S.D.N.Y. Sept. 2, 1992) (holding that special damages allegation that proffered neither a specific damages figure nor a method of computing the damages was insufficient). In short, “[d]amage claims of this generality do not constitute adequate pleading of special damages[,]” id., and “without an allegation of special damages, the [AC] does not allege a legally sufficient cause of action [for defamation] under California law.” King v. Am. Broad. Companies, Inc., No. 97 CIV. 4963 (TPG), 1998 WL 665141, at *4 (S.D.N.Y. Sept. 28, 1998) (dismissing Plaintiff’s defamation Case 1:20-cv-03976-LTS-OTW Document 48 Filed 02/19/21 Page 16 of 18 NUNES – MTD VERSION FEBRUARY 19, 2021 17 claims where he failed to both comply with the California retraction statute and allege special damages in the complaint).”

As a result, Nunes will not be able to reach the merits of the case (absent an appeal). Of course, those merits were always a challenge since he is a public official. The standard for defamation for public figures and officials in the United States is the product of a decision decades ago in New York Times v. Sullivan. This is precisely the environment in which the opinion was written and he is precisely the type of plaintiff that the opinion was meant to deter. The Supreme Court ruled that tort law could not be used to overcome First Amendment protections for free speech or the free press. The Court sought to create “breathing space” for the media by articulating that standard that now applies to both public officials and public figures. In order to prevail, Weaver must show either actual knowledge of its falsity or a reckless disregard of the truth.

Here is the opinion: Nunes v. CNN