Trump Media's Lawsuit Against Wash. Post Over "Trust Linked to Porn-Friendly Bank Could Gain a Stake in Trump's Truth Social" Thrown Out
· Reason
From Trump Media & Tech. Group Corp. v. WP Co. LLC, decided today by Judge Tom Barber (M.D. Fla.):
In 2023, Defendant WP Company LLC (the "Post") published an article titled "Trust linked to porn-friendly bank could gain a stake in Trump's Truth Social," which reported on the finances of Trump Media Technology Group ("TMTG"). After almost three years of litigation, the Post has now admitted that portions of the article included false information. Specifically, the Post admits its story incorrectly stated that TMTG paid a $240,000 referral fee in connection with an $8 million loan from an entity known as ES Family Trust. The Post now admits that no such payment was made and recently chose to publish a "Correction" to that effect {"Discovery in the ongoing litigation has established that Trump Media didn't pay a loan referral fee of $240,000, as was stated in the article and was based on The Post's reporting at the time of publication."}. TMTG contends in this defamation lawsuit that the statements about the referral fee were false and defamatory and seeks almost $2 billion in damages resulting from the publication.
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However, under controlling United States Supreme Court and Eleventh Circuit precedent following New York Times Co. v. Sullivan (1964), a jury will not have the opportunity to decide this case. To survive summary judgment, TMTG must show more than just that the Post's statements were false and defamatory.
Current law requires that TMTG also establish that the Post acted with "actual malice," that is, TMTG must prove that, at the time the Post published the statements, the Post either actually knew the statements were false or had serious doubt as to whether they were true or false. Further, to prevail under current law, TMTG must establish actual malice by evidence that goes beyond the "preponderance of the evidence" necessary in the usual civil case and adduce evidence on this issue that is clear and convincing.
These standards are exceedingly difficult for any plaintiff to meet, and TMTG has not met them here. TMTG's evidence establishes beyond any doubt whatsoever that the Post published false information—the Post has admitted that. Under the facts presented here, reasonable minds could certainly conclude the Post acted unreasonably and should have conducted a better investigation before making the challenged statements. But under controlling precedent, such a showing is not sufficient to establish actual malice by clear and convincing evidence. Accordingly, the Court is required to grant summary judgment for the Post….
The circumstantial evidence adduced by TMTG certainly supports a jury finding that the Post acted unreasonably and should have done a more thorough investigation into the alleged payment of the finder's fee. But it falls short of providing a basis for a jury finding that the evidence clearly and convincingly shows that the Post knew the story was false or published it with reckless disregard of whether it was false, that is, with serious doubt as to whether the story was true or false or with a high degree of awareness that the story was probably false.
First, there is no evidence that the Post fabricated the story that TMTG paid a finder's fee, nor is there anything inherently implausible or even extraordinary about the story itself.
Second, the Post did not rely on anonymous tips, rumors, or other manifestly unreliable sources as is sometimes the case. It relied on information received from Wilkerson, an insider in position to know the truth, who was willing to go on the record, and who was providing information not only to the Post but also to other newspapers and government officials. The Post also relied on information from Wilkerson's lawyers, whom the Post understood to be providing information on behalf of Wilkerson. See id. (affirming dismissal of defamation complaint where the story was not based on an unverified anonymous phone call).
[Reporter Drew] Harwell's declaration asserts that Wilkerson's lawyers told him that TMTG paid the fee. His contemporaneous notes confirm that assertion, as does a recording of an interview session involving not only the lawyers but Wilkerson himself. TMTG does not dispute Harwell's assertions. Although Wilkerson's deposition testimony might be slightly inconsistent with Harwell's declaration and raise an issue of fact as to whether Wilkerson himself actually told Harwell that TMTG paid the fee, Wilkerson does not deny that his lawyers did so.
TMTG argues that Wilkerson was an unreliable source because TMTG suspended and then fired Wilkerson, giving him a motive to fabricate the story in retaliation. As the Court has previously observed, an employee's termination does not necessarily cast doubt on negative information the employee provides about an employer.
Further, it is undisputed that Wilkerson did not "blow the whistle" after he had been fired. He was fired for "blowing the whistle," i.e., for providing information to the press. Harwell's declaration explains that he assessed Wilkerson's credibility and concluded based on past experience with Wilkerson that Wilkerson was reliable. No record evidence casts doubt on that assertion.
Third, the Post investigated the story by reviewing documents provided by Wilkerson and his lawyers, including a draft fee agreement and an invoice for the fee apparently from Entoro Securities. These documents are fully consistent with the assertion by Wilkerson's lawyers that TMTG paid the fee although they do not directly confirm it. They certainly do not contradict it. Harwell can be faulted for not pressing to obtain final documents or additional confirmation, but there is no evidence that
anyone or any document told Harwell the fee had not been paid. In the absence of an obvious reason to doubt the story, Harwell's failure to seek additional confirmation does not suggest that he actually doubted the fee had been paid and purposefully sought to avoid the truth.
Fourth, prior to publishing, and consistent with his usual practice, Harwell sent to TMTG and others what the Post refers to as "no surprises" emails. These are sent to provide the subjects of an article an overview of information that may be included in the article, to give the subjects notice and a chance to comment or provide additional information. Harwell reached out to a number of different sources that included TMTG itself, TMTG CEO Devin Nunes, TMTG co-founders Wes Moss and Andy Litinsky, DWAC CEO Patrick Orlando, Entoro partner James Row, and the SEC. None responded with any information.
TMTG criticizes Harwell's "no surprises" email on the ground that it referred only to the fee agreement rather than to payment of the fee, but the email's express reference to the fee agreement and to "Entoro's referral fee" is not what one would expect if the Post were trying to avoid the truth about the fee. If, as TMTG claims, the payment, not the agreement, is the critical fact, the Post's "no surprises" email could be expected to elicit an explanation from TMTG that, regardless of any agreement, the fee had not been paid. The notion that the reference to the fee agreement in the "no surprises" emails was intended to distract attention from the subject of payment of the fee is speculative and insufficient to create a genuine issue of fact.
TMTG also argues that the Post sought confirmation from sources that it expected would not respond. While government agencies might be expected to decline comment on ongoing cases or investigations, that is not true of the many other sources noted above to whom the Post reached out.
TMTG argues that actual malice is demonstrated by the fact that the Post learned within a few days after publication that its own sources lacked proof of payment but did not issue a correction. But the crucial inquiry for actual malice is the Post's state of mind at the time of publication. Assuming the Post's failure to correct the story immediately upon learning that Wilkerson had no knowledge that payment had been made is relevant at all to the Post's knowledge and state of mind at the time of publication, any inference from these post-publication facts to actual malice at the time of publication is speculative at best.
TMTG further argues that actual malice can be inferred from Harwell telling Professor Ohlrogge, an expert at New York University Law School that he consulted while developing the story, about an agreement to pay the fee but failing to inform him that the document the Post relied on as evidence of the agreement was an unsigned draft. However, Harwell stated in his declaration that he sent a copy of the draft agreement to Ohlrogge, and in any event, telling Ohlrogge there was an agreement or payment is perfectly consistent with Harwell's belief that there was an agreement and payment; it is hardly evidence that Harwell knew or doubted those things were true.
In short, a source who was in a position to know the truth and was not obviously unreliable told the Post that TMTG paid a finder's fee for the ES Family Trust loan. The idea that TMTG would pay such a fee is not inherently implausible. The source provided the Post with documents consistent with the assertion of payment although not directly confirming it. No person or document contradicted what the Post had been told. The Post reached out prior to publication to numerous sources, but none provided contrary information….
Although it is rooted in the First Amendment, which was adopted in 1791, the law applicable here was essentially invented by the U.S. Supreme Court in 1964 when it decided New York Times v. Sullivan. "Since 1964, however, our Nation's media landscape has shifted in ways few could have foreseen." Numerous justices, judges, and commentators have suggested that the law in this area needs to be revisited….
This Court shares many of [these] concerns, and if it were deciding this case on a clean slate, the result might be different. If the law did not require "clear and convincing evidence" of actual malice, it is likely the Post's motion for summary judgment would have been denied, and a jury would have had the opportunity to weigh in on this matter. However, "until the Supreme Court reconsiders Sullivan, we are bound by it[.]" As explained above, under controlling law, TMTG's evidence is insufficient to support a finding of actual malice under the clear and convincing standard, and summary judgment for the Post is therefore required….
Last year, Judge Barber had allowed the case to go forward based on the allegations in the Complaint, denying the Post defendants' motion to dismiss. But now that there has been discovery, the judge concluded that Trump Media hadn't introduced enough evidence to withstand a motion for summary judgment.
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