Philadelphia’s Commerce Court Finds no Actionable Defamation or False Light Claims for Online Communications about Comic Books

This litigation over comic books reminds us again how business follows value, litigation will arise in whatever quarter people do business, and those businesses need a forum to litigate their disputes.

The underlying circumstances center on communications concerning comic book restoration techniques and independent grading of that work. The legal issues involve defamation, false light, tortious interference, and conspiracy.

This post  highlights the central defamation and false light claims. The court rejected the tortious interference and civil conspiracy claims for some of the same reasons it rejected the defamation claims (discussed below), and because information was truthful, honest advice was given, and there were no current or prospective contracts.

Judge Wright Padilla’s opinion is factually detailed, and can be found in full here.

BACKGROUND

The Meyers plaintiffs are in the business of restoring and selling comic books. Defendant Certified is a  leader in grading and certifying collectible comic books. Its affiliate, Classic Collectible, provides restoration services to collectible comic book owners. Certified also provides an online chat/message board where comic book enthusiasts can post opinions and discuss issues. Matthew Nelson does grading for Certified and is Classic Collectible’s President. Paul Litch is Certified’s Primary Grader.

Two years into their comic book restoration business, the Meyers met with Nelson and Certified, and  a business relationship ensued. Certified provided the Meyers with grading on specific comic books, including one book Nelson described as “gorgeous”. In one instance, Certified was reluctant to provide a grade for the Meyers’ work, but eventually did so.

Some time later, the Meyers questioned Certified’s grading of a Meyers comic book submission. The Meyers went to a different grading company for review, receiving a higher grade on that same comic book. They stopped using Certified’s services, alleging that Certified graded incorrectly and had a conflict of interest because Classic Collectible also provided restoration services.

Six months later, the Meyers’ work became a discussion subject on Certified’s online chat board. The Meyers alleged a false rumor was circulating that Certified refused to grade the Meyers’ work on the basis it was not genuine restoration work.  Emily Meyers joined the online discussion, explaining the Meyers’ restoration process, Certified’s position, and the reasons the Meyers-Certified relationship ended. Nelson responded with a history and explanation of events as he understood them.

THE DEFAMATION CLAIMS

The Meyers alleged Nelson’s chat board posts defamed them. In addition, they alleged Nelson directly made defamatory comments to a particular buyer, as well as to others at comic book conventions. The Meyers further alleged other persons associated with Certified and Classic Collectible made defamatory comments to third parties. Finally, the Meyers alleged an auction house that  had  refused to sell their comics books defamed them as well. The court disagreed as to all of these claims.

1.     Defamation must be about facts, not opinions.

Judge Wright Padilla observed that “[o]nly statements of fact, not expressions of opinion, can support an action in defamation. Whether a particular statement or writing constitutes fact or opinion is a question of law for the court to determine in the first instance. A statement in the form of an opinion is actionable only if it may reasonably be understood to imply the existence of undisclosed defamatory facts justifying the opinion. A simple expression of opinion based on disclosed facts is not itself sufficient for defamation.”

As to Nelson’s chat board posts, the Court concluded that “Nelson’s posts are his opinions based on firsthand knowledge of his review of plaintiffs’ work and are fully supported by disclosed facts that inform the visitor of the facts used to support his opinions. Hence, any subsequent visitor to the chat room may, after reading the thread, discern the factual basis for Nelson’s opinions and independently decide whether to agree or disagree with Nelson’s opinions on plaintiffs restored comic books. While Nelson’s posts may have embarrassed or offended plaintiffs for their chosen technique and tools in restoring comic books, the posts are not defamatory.”

2.     Truth is an absolute defense.

The court further ruled Nelson’s verbal statement to third parties were not defamatory.  Judge Wright Padilla relied on the principle that truth is an absolute defense: “These statements are not actionable as defamatory. Truth is an absolute defense to defamation in Pennsylvania. The pertinent inquiry becomes whether, in viewing the evidence relevant to a motion for summary judgment most favorably toward the non-moving party, there exists a genuine issue of material fact as to the substantial truth of the stories reported. As it pertains to Nelson’s statement to third parties, there are no issues of fact regarding the substantial truth of the statements made.”

3.     The nature of the audience is critical.

The next claim concerned an email statement from Litch (the Primary Grader) to an auction house employee about “catching” a “fake cover”. The court concluded this did not constitute defamation, focusing its analysis on the employee receiving the email statement. While untrue, the court found that the statement had no defamatory impact on the individual receiving the email, or on the relevant community.

“Pennsylvania case law holds that the nature of the audience is a critical factor in determining whether the communication is defamatory.” In this case, the fake cover “statement was not intended for a large audience; therefore, there was no harm to plaintiffs’ reputation in the comic book community.” Further, “[w]hile Litch admitted that he never did catch a fake cover, it is clear from the record that this statement did not cause plaintiffs any harm since notwithstanding [that] statement, [the auction house employee] found plaintiffs work to be valuable and expressed an interest in selling the books.”

4.     There must be harm to reputation.

“A necessary element to a claim for defamation is special harm resulting to the plaintiff from publication of defamatory statements. Pecuniary loss is not the only, or even the most significant harm resulting from defamation. Injury to reputation, impairment of standing in the community, personal humiliation and mental anguish are types of actual harm compensable for defamation.”

Applying these standards, Judge Wright Padilla ruled for defendants on all the defamation claims  “because plaintiffs have failed to produce any evidence of reputational harm within the comic book community.” The sole evidence offered was “self-serving deposition testimony” that their reputation suffered, but “more is required than a bald assertion that the defamatory statements harmed a plaintiffs reputation ‘in the social, civil, professional and political community.’”

5.     There must be publication.

The court also addressed a separate defamation count against the auction house .  The auction house decided not to auction the Meyers’ comic books, and the Meyers brought defamation claims over communications concerning that decision.

Judge Wright Padilla identified the key legal principles governing this claim: “‘An essential element of a defamation action is publication.’ In order to be published, the communication must be expressed to a third party.” The court found no actionable publication.

The evidence of record showed that “any statements regarding plaintiffs and their comic book restorations were internal communications by email among the [auction house] personnel concerning whether to accept plaintiffs’ comic books for auction. There is no evidence that such communications were made public to third parties outside the [auction house] community.”

The court further observed the auction house “made a business decision not to sell/auction plaintiffs comic books.  This decision is privileged and not subject to judicial review.  As such, the … internal communications are not subject to a claim for defamation.”

FALSE LIGHT

“To adequately establish a false light invasion of privacy action a plaintiff must prove: ‘(1) the false light in which the other was placed would be highly offensive to a reasonable person and, (2) the actor had knowledge of or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the other would be placed.’ The elements of this claim are publicity, given to private facts, which would be highly offensive to a reasonable person and not of legitimate concern to the public.”

All of the Meyers’ false light claims failed. First, Nelson’s statements to third parties did not meet the publicity element. Communications that only reached a few people did “not show widespread publication that would cause plaintiffs harm.” As to the chat board posts, “while blogging may satisfy the element of widespread publicity … [Meyers] assumed the risk with her posts that responses would be forthcoming.  Subjecting Nelson’s posts to a claim of false light would chill his ability to respond to Emily Meyers statements.”

The court granted defendants summary judgment on all counts.

Date of Decision: January 22, 2019

Meyers v. Certified Guaranty Company, LLC, Court of Common Pleas of Philadelphia, December Term 2016, No. 1182 (Phila. Ct. C. P. Jan. 22, 2019) (Wright Padilla, J.) (Commerce Case Management Program)