On April 25, 2018, the Second Circuit affirmed the district court’s dismissal of Venezuela’s “Number Two” politician’s, Diosdado Cabello-Rondon (“Cabello”), libel suit against Dow Jones & Company, Inc. (“Dow Jones”).
The suit stems from a Wall Street Journal (“WSJ”) article titled “Venezuelan Officials Suspected of Turning Country into Global Cocaine Hub.” See José de Córdoba and Juan Forero, “Venezuelan Officials Suspected of Turning Country into Global Cocaine Hub,” THE WALL STREET JOURNAL, May 18, 2015. The WSJ reported that Cabello, the former head of Venezuela’s national assembly, was the target of a U.S. Drug Enforcement Administration investigation for drug trafficking and money laundering. Following the publication, Cabello filed a libel suit against the WSJ’s Parent Company, Dow Jones. The Second Amended Complaint (“Complaint”) alleged that the article contained “false and defamatory allegations” and that the WSJ contrived the allegations and falsely attributed them to fictitious, anonymous sources or, in the alternative, failed to properly investigate its sources. The Complaint also alleged that the WSJ should have questioned the reliability of its sources because “no legitimate DOJ source has, or could conceivably have leaked such sensitive information core to an ongoing international criminal investigation,” where the case presents “nothing inherently controversial,” and any leakage “can serve no noble cause[.]”
On August 17, 2017, the district court dismissed the Complaint with prejudice because Cabello failed to plead falsity adequately as to some of the statements in the article, and failed to plead malice adequately. The Second Circuit affirmed the decision finding that the Complaint did not plausibly allege actual malice as required for a public figure plaintiff.
To establish a prima facie case for libel under New York Law, a plaintiff must plead facts supporting a plausible inference that “the identified statements were false.” Mosdos Chofetz Chaim, Inc. v. RBS Citizens, N.A., 14 F. Supp. 3d 191, 216 (S.D.N.Y. 2014). When the plaintiff is a public figure, he must also plead actual malice. See Biro v. Conde Nast, 963 F. Supp. 2d 255, 270 (S.D.N.Y. 2013), aff’d, 807 F.3d 541 (2d Cir. 2015), and aff’d, 622 F. App’x 67 (2d Cir. 2015). The Second Circuit has held that the actual malice standard is not measured by ill will or animosity, “but instead the speaker’s subjective doubts about the truth of the publication.” See Church of Scientology Int’l v. Behar, 238 F.3d 168, 174 (2d Cir. 2001). In other words, in order to survive a motion to dismiss in the absence of a showing of a knowingly false statement, the plaintiff must plead plausible grounds that the defendant “entertained serious doubts” as to the truth of the publication. Biro, 807 F.3d at 545. Absent the allegations of “enough facts to raise a reasonable expectation that discovery will reveal evidence of actual malice[,]” a complaint will not survive. Id. at 546.
Applying this standard to Cabello’s Complaint, the Second Circuit made clear that reliance on anonymous sources alone does not support an inference that the publisher acted with actual malice. The Court characterized Cabello’s theory that any investigation into his activities simply could not have been leaked by government authorities as “patently unbelievable.” In fact, Cabello’s theory completely worked against his allegations because as the “Number Two” politician in a country with vast oil wealth and a complex relationship with the United States, it is certainly a controversial matter where a leak would not be unlikely or impossible. As such, the allegations were not enough to buttress an inference of actual malice. Accordingly, the Court affirmed the district court’s order dismissing the Complaint with prejudice, as this was the Cabello’s second time failing to adequately amend his complaint as to the libel claim.
[View source.]
