D.C. Federal Appeals Court Reinstates Serbian Businessman’s Defamation Action
September 26, 2007
Judith Frances Bonilla - Washington
Reversing a portion of the trial court’s order, the U.S. Court of Appeals for the District of Columbia has concluded that a passage in an international watchdog group’s report tying the plaintiff to deposed Serbian dictator Slobodan Milosovic was capable of a defamatory meaning. The appellate court, however, affirmed dismissal of the plaintiff’s claims arising from two other publications because the statute of limitations had expired.
The ruling permits the plaintiff, Serbian businessman Philip Zepter, who sued under his real name, Milan Jankovic, to proceed on his claims for defamation, false light invasion of privacy and tortious interference with business expectancy. The lawsuit is pending against International Crisis Group (ICG). ICG is a nonprofit, nongovernmental organization that advocates against deadly conflict.
Zepter sued ICG and one of its employees based on three publications: a March 18, 2003, report, Serbia after Djindcic; a July 17, 2003, report, Serbian Reform Stalls Again; and an email by the ICG employee. The publications tied a number of individuals and businesses to Milosevic’s political regime. Milosevic was put on trial as a war criminal before his death from natural causes.
On appeal, Zepter contended that the trial court improperly dismissed his original complaint for lack of diversity jurisdiction. The appellate court rejected his arguments, affirming the dismissal on the trial court’s alternative ruling that there was no personal jurisdiction over the ICG employee. Additionally, upholding the trial court’s application of the D.C. one-year statute of limitations, the court found no basis for Zepter’s arguments of equitable estoppel, equitable tolling and lulling because there was no allegation that ICG took any affirmative action to conceal the existence of a claim or to prevent Zepter from properly filing his suit.
The court also considered whether the copying of a publication by a third party for distribution via the Internet constituted a new publication for which the original publisher could be held liable. The court held that just as a third-party copy in the print media world would not constitute a new publication under the “single-publication” rule, neither would a copy on the Internet.
After upholding the dismissals of claims arising from that report and the email, the D.C. Circuit then examined three separate passages from the July 17, 2003, ICG report. The court held one passage, which alleged that Zepter Banka – an entity with which Zepter was associated – maintained close ties to the Serbian state security agency rumored to be involved in various criminal activities, was not “of and concerning” him. The passage neither mentioned nor referred to Zepter indirectly. Framing the issue as “whether the namesake of a corporation can be defamed when false misdeeds are attributed to his company[,]” the D.C. Circuit noted that under case law, “statements which refer to an organization do not implicate its members” and that “matters that might ‘reflect[ ] poorly on an individual’ are not necessarily ‘concerning’ that person.” Also noting that Zepter’s own lawsuit emphasized the expansive nature of his business enterprise, the court held that no reasonable reader would construe the passage to be about him personally.
The court similarly held that another passage referring to “a former employee of ... a Zepter company” was also not actionable, as it also was not “of and concerning” Zepter.
However, the D.C. Circuit found that the language of one passage, which referred to Zepter personally, was capable of a defamatory meaning. The passage alleged that Zepter and others supported and benefited from Milosevic’s political regime. The district court had concluded that because the publication did not mention “war crimes or ethnic cleansing by Milosevic or the Serbian Government,” the “allegations of mutual support” should be described as “political, not criminal” and therefore not capable of defamatory meaning. The appellate court disagreed:
Merely associating somebody with a foreign government would not ordinarily be defamatory, but in Southern Air Transport, Inc. v. ABC, Inc., 877 F.2d 1010 (D.C. Cir. 1989), this court acknowledged that “[a]n inference that [a plaintiff company] was engaged in dealings with the [apartheid] government of South Africa clearly would have a defamatory meaning because of the intense antipathy felt by a great number of Americans towards South Africa.” ... In that light, the passage could lead a reasonable reader to conclude that Philip Zepter was actively in alliance with Milosevic and his regime, and so, Philip Zepter has made sufficient allegations to establish a prima facie case of defamation.
The claims arising from this passage were remanded to the trial court for review of the other defenses and privileges raised by ICG.
For more information, email Judith F. Bonilla at Judith.Bonilla@hklaw.com or call toll free, 1-888-688-8500.