Libel suit versus Daily Press matter of malicious intent
A libel lawsuit a local businessman threatened this week against the Santa Monica Daily Press and two of its staffers rests largely on “legal quibbles,” First Amendment lawyers said this week.
Lawyers said the alleged inaccuracies in a Dec. 27 article about a jury’s fraud award against Cyril Viguier and in favor of two people who once worked with him don’t appear to be libelous. Viguier and his attorney, who have declined to discuss the matter, didn’t return calls seeking comment.
“These things appear to me to be legalistic quibbles over the choice of words that the newspaper makes,” said Paul Mills, a lawyer that specializes in First Amendment litigation. “These are the kind of corrections that I would expect a cranky editor to blue pencil, not the basis for a successful libel suit.”
Libel, in the legal sense, is the crime of issuing a malicious defamatory publication, according to Webster’s Dictionary. Viguier alleges the Daily Press did just that in its report of a December jury verdict finding him liable for fraud and responsible — along with Surf Channel LLC., a company he founded that created extreme sports programs for cable — for $884,000. That money was to reimburse Phillipe Ney and Keline Howard, who worked on the programs and said they were promised membership shares in the company by Viguier. The award included punitive damages.
Viguier’s lawyer, Jay Woollacott, has complained that the Daily Press wrongfully referred to Ney and Howard as “partners,” overstated the amount of money awarded, confused the distinction between Viguier and Surf Channel, and technically erred in characterizing the verdict as an “order.” Woollacott further complained Viguier has been damaged because possible partners were put off by the Daily Press’ story about the verdict, which appeared to a potential world-wide audience in its online archive — and can appear in Internet searches.
In a four-page letter sent to the Daily Press this week, Woollacott said he’s been instructed to sue the Daily Press. He denied Howard and Ney were “partners,” but did not otherwise characterize them. In court, he argued they were paid for their work — as employees would be.
The two plaintiffs argued in the lawsuit they were promised more than 40 percent of company shares for their extensive work with Viguier on the Surf Channel programs. Court documents refer to the “sweat equity” the plaintiffs put into the start-up project in exchange for membership shares.
Surf Channel was a limited liability company, which is defined as a business structure that combines corporate and partnership attributes into one entity. Lawyers said a lay person could reasonably be expected to consider owners of membership shares in a limited liability company as “partners.”
“To say that he was partner, when actually their business association was other than partnership under the legal definition, seems like an insubstantial error,” said Mills.
The second mistake, which appeared in the article’s headline and first paragraph, indicated Viguier was responsible for the full $884,000 verdict. As the article later noted, Surf Channel, the company, also was found liable by the jury. Though Keline and Howard wanted Viguier to be responsible for that portion as well, the judge ruled against them. The maximum for which Viguier could be held responsible under the jury’s verdict was $584,000 — $300,000 in punitive damages and $284,000 for breach of contract.
Once again, First Amendment lawyers said that aspect of the article doesn’t appear to be libelous — especially as the alleged error was clarified later in the article.
“It’s pretty hard to see where someone was damaged in reporting someone had to pay $884,000 rather than $584,000,” said James Fosbinder, a Hawaiian-based lawyer who specializes in First Amendment law. “That seems pretty weak, in my opinion.”
A third error Woollacott noted was the newspaper’s reporting that Viguier “must pay” or “owes” money to the plaintiffs. Though the jury did hand down a verdict against Viguier and Surf Channel, as a matter of procedure it can’t order the defendants to pay, Woollacott argued.
Fosbinder said that argument also appears weak, saying, “That seems to be splitting hairs in a way that, I think, the average person wouldn’t think is important.”
“That seems to be splitting hairs in a way that, I think, the average person wouldn’t think is important.” — — JAMES FOSBINDER Attorney
Judges are obliged to issue judgments that reflect the jury’s findings. In Viguier’s case, Santa Monica Superior Court Judge Lorna Parnell never had to issue a judgment because the parties last Friday agreed to settle the case rather than face possible appeals or the potentially difficult process of collections.
The bottom line, Mills said, is that in order to be found liable for libel, a judge or jury must agree the newspaper acted maliciously in the reporting of the trial.
“The newspaper has a First Amendment status, so that if you state something erroneous about, say, for example, a political candidate, they have to show that your error was knowing or reckless — that there was malice,” he said. “Society needs coverage of people that thrust themselves into the public eye, so the media gets this extra level of protection against libel suits, while people who choose to appear in public have an extra level of exposure.”
Originally published in the Santa Monica Daily Press print edition on February 21, 2004. Read the original PDF.