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Court Grants Summary Judgment in Public Official Defamation Action

“Now more than ever we depend upon the free press…”

By Andrew Pauwels

In an opinion and order issued on January 18, 2019, Judge Matthew Leitman, District Court Judge for the Eastern District of Michigan, granted summary judgment in favor of Scripps Media, Inc. in a defamation lawsuit brought by a former Detroit public official and his real estate company based on a series of WXYZ TV reports entitled "Secret Severances." Odis Jones et al. v. Scripps Media, Inc., No. 2:16-CV-12647.

Background and WXYZ's Broadcast

Odis Jones was the CEO of the Detroit Public Lighting Authority (the "PLA") from June 2013 through February 2016. The PLA was responsible for restoring the public lighting system in the City of Detroit, and Jones's leadership was widely praised. However, as Detroit Mayor Mike Duggan told WXYZ, "I wish the Lighting Authority would accomplish their purpose without staff turnover and without severances." During Jones's tenure at PLA, departing executives (including himself) were awarded hefty severances, not provided for in their employment contracts and all under a veil of secrecy.

The short version of the complicated history of PLA severances began in November 2015 after Jones fired the PLA General Counsel and the Head of Government and Community Affairs. In response the terminated employees retained counsel, who presented the PLA with draft whistleblower complaints based, in part, upon allegations of improper conduct by Jones. Those lawsuits were not filed; instead, the PLA agreed to pay the former employees substantial severance agreements totaling $200,000. Both severance agreements were subject to a non-disclosure clause.

One of the issues raised by these complaints involved the departure of COO Adam Troy. Troy was a long-time friend of Jones whom Jones hired as COO in 2014. In August 2015—before he had been in his position for a year—Troy voluntarily resigned his position. Although his employment contract did not include any severance, in his termination letter signed by Jones, he was awarded $58,000. Within a day of his departure Troy and Jones formed MVP Capital Ventures, LLC, a real estate development company.

All of the whistleblower claims were investigated by the new PLA General Counsel Tiffany Sadek. In what was referred to as the "Sadek Report," she found no wrongdoing by Jones. This report was somewhat questionable since, prior to becoming the PLA General Counsel, Sadek had represented Troy and had filed the incorporation papers for MVP Capital Ventures.

Finally, in February 2016, Jones abruptly announced his resignation from the PLA. Despite PLA's public announcements as to how sorry they were to see him resign, Jones retained counsel and received his own severance following a closed meeting of the PLA Board. His severance agreement was also not public and was subject to a non-disclosure agreement. It would later be revealed that Jones had in fact been fired by Mayor Duggan and that his severance was $250,000 of public money.

While the details of the severances were not known, the turnover and Jones' abrupt resignation raised questions that WXYZ reporter Ronnie Dahl set out to answer. In the spring of 2016, the PLA responded to her FOIA request for all records concerning severances that had been paid and provided all of the severance agreements notwithstanding the non-disclosure provisions. With this information and the Sadek Report that she had received from a confidential source, Dahl began researching what would become known as the "Secret Severances," series.

(During discovery in this litigation, the plaintiffs moved unsuccessfully for disclosure of Dahl's confidential source. WXYZ successfully preserved the confidentiality of Dahl's source, arguing that the source provided no information other than the Sadek Report itself, which WXYZ reported on and published on its website with the online version of the series.)

Dahl's three-part series on the PLA raised questions about the propriety and legality of a public body making these large severance payments. Dahl questioned whether the severance payments in response to threatened whistleblower litigation was an improper effort to conceal wrongdoing. She also questioned whether Jones and Troy had improperly received large sums of money to which they were not entitled, and focused on the timeline of Troy's departure, his receipt of a severance, and the founding (with Jones) of MVP Capital Ventures.

WXYZ's three broadcasts featured a number of interviews about the PLA and the severance payments. Dahl interviewed Detroit Mayor Mike Duggan and several members of the Detroit City Council. She interviewed Dr. Lorna Thomas, the Chair of the PLA Board, who declined to answer all of Dahl's questions about the severances, claiming that they were "personnel issues." Dahl also interviewed two legal experts for their perspective: Justin Long, Professor of Law at Wayne State University, and Deborah Gordon, a noted employment attorney in the metro-Detroit area. Dahl attempted to interview Jones, Troy, and others affiliated with them but her attempts did not bear fruit.

Litigation & Grant of Summary Judgment

Jones and MVP filed suit against Scripps Media, Inc., the owner of WXYZ. Jones and MVP alleged defamation and other claims arising out of the Secret Severance reports. The claims focused on four general categories of statements in the broadcasts: (1) that the severances were "secret"; (2) that the severances amounted to "buying silence"; (3) that the severance to Troy amounted to Jones giving Troy money; and (4) that Jones, in his actions at the PLA, "violated the law." In granting an initial motion to dismiss, the Court held that Jones was a public figure and dismissed the majority of the claims. The Court did, however, allow the claims related to the "violated the law" statement to survive dismissal.

As mentioned above, WXYZ's reporting featured an interview with Deborah Gordon, a prominent Detroit area employment attorney. In the interview, Gordon said the following about Jones: "If he violated the law, and other people got caught in the crossfire, bring those people back, get rid of him, turn it over to the AG, and don't waste any taxpayer money." Jones alleged that, in the broadcast, WXYZ intentionally edited the interview to remove the word "if" and depict Gordon as affirmatively stating "he broke the law." Jones claimed that this editing intentionally and maliciously rendered the statement false: essentially, he argued, WXYZ falsely portrayed Gordon as opining that Jones had broken the law at the PLA. Jones primarily relied on alleged personal animosity directed at him by Dahl as evidence of the malice underlying the intentional misquote.

Following the close of discovery, WXYZ moved for summary judgment, raising a number of arguments. First, WXYZ argued that the statement as presented was true because Jones had, in fact, violated the law while serving as CEO of the PLA. Second, WXYZ argued that, even if the statement were false, Jones could not establish actual malice. Discovery revealed that any obscuring of the word "if" was unintentional. In Dahl's final script she had selected a different part of the Gordon interview. As her camera operator began the final edit on a short deadline, he felt this part of Gordon's interview was not aesthetically pleasing as it showed the back of Gordon's head. He then proposed using the "if he violated the law" quote. He chose the quote from an interview log prepared by Dahl that contained the entire quote, including "if."

In the condensed time frame provided to edit the story, the cameraman closely cut the video in an attempt to preserve the entire statement, including the word "if," but remove completely the preceding word. Any obscuring of the word—as argued by the plaintiffs and troubling to the Court—was thus accidental. Finally, WXYZ argued that MVP Capital Venture's claims must fail because the remaining statement was not "of and concerning" MVP.

The Court granted WXYZ's motion for summary judgment. First, as to Jones, the Court held that "no reasonable juror could find by clear and convincing evidence that WXYZ acted with actual malice." Specifically, the Court found that, at most, Jones had established negligence on the part of the cameraman, and Jones could not rely on Dahl's alleged dislike without any evidence to connect such malice to the cameraman's actions. Second, as to MVP, the Court held that the statement at issue was not "of and concerning" MVP. Specifically, the Court ruled that, because the quote addressed alleged misconduct by Jones at PLA, it "did not impugn the manner in which MVP conducted its private operations [and thus] did not 'concern' or defame MVP."

The Court's decision reaffirmed several bedrock principles of defamation law. Notably, the Court's opinion emphasizes the important constitutional safeguard provided by the actual malice standard. More fundamentally, the Court reiterated the crucial role a free press plays in society and offered words of reassurance:

"Now more than ever, we depend upon the 'free press' to 'awaken[] public interest in governmental affairs' and to expos[e] corruption among public officers and employees. . . . Indeed, '[t]he press plays a unique role as a check on government abuse' and serves 'as a watchdog of government activity." WXYZ "performed this essential 'watchdog' function" in investigating and exposing the severance payments at the PLA.

Andrew Pauwels is an associate at Honigman Miller in Detroit. Scripps Media, Inc. was represented by James E. Stewart, Leonard M. Niehoff, and Andrew M. Pauwels of Honigman LLP, who worked closely with David M. Giles, Deputy General Counsel of the E.W. Scripps Company.

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