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Neelon v. Krueger

United States District Court, D. Massachusetts

July 30, 2015

DANIEL P. NEELON, Plaintiff,


INDIRA TALWANI District Judge.

I. Introduction

Plaintiff Daniel P. Neelon ("Neelon"), a Massachusetts attorney, brings claims alleging that he was harmed by public statements made in Canada by Defendants about events occurring in Mongolia. In broad strokes, the factual allegations are as follows.[1] In order to finance mining exploration in Mongolia, Garrison Asia, Ltd. ("Garrison Asia") and Defendant Blair Krueger ("Krueger") entered into a loan agreement with Georges Cohen ("Cohen"). Neelon drafted the loan agreement. The loan agreement included a default and remedy provision stating that, upon a default on the loan's terms, Cohen could take ownership of Garrison Asia from its parent company, Defendant Desert Eagle Resources, Ltd., formerly known as Garrison International, Ltd. ("Garrison International").

Soon after the loan agreement was signed, ownership of Garrison Asia was transferred to Cohen. The parties dispute the details of how this transfer occurred, whether a default precipitated the transfer, and whether the transfer was completed legally. What is agreed upon, however, is that Defendants thereafter filed a complaint requesting that Mongolian officials commence a criminal investigation of the transfer. Defendants subsequently published two press releases from Canada through an online wire service. These releases made statements regarding the allegedly unlawful transfer of Garrison Asia's ownership, the complaint filed with Mongolian authorities, the ensuing investigation by authorities, and the criminal charges that allegedly resulted.

Neelon claims that these press releases were defamatory. Neelon also brings a claim for violation of Mass. Gen. Laws. ch. 93A ("Chapter 93A"), which prohibits unfair or deceptive business acts or practices. Now before the court is Defendants' Motion for Summary Judgment [#321]. As set forth below, this motion is DENIED as to the defamation claims (Counts I and II) and ALLOWED as to the Chapter 93A claim (Count III).

II. Summary Judgment Standard

Summary judgment is appropriate only where the movant shows that there are no genuine disputes of material fact and summary judgment is warranted as a matter of law. See Fed.R.Civ.P. 56(a). A fact is material if it "has the potential to change the outcome of the suit under the governing law." Martinez v. Colon, 54 F.3d 980, 984 (1st Cir. 1995). A material fact is genuinely in dispute if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

III. Defamation and Defamation Per Se (Counts I & II)

A. Choice of Law

The parties dispute whether Canadian or Massachusetts law governs Neelon's claims for defamation relating to Defendants' May 20, 2011 and September 23, 2011 press releases. Defendants assert that Canadian law applies because they issued the publications from Canada and had a subjective expectation that Canadian law would govern their conduct. See Defs.' Mem. Law Supp. Mot. Summ. J. 1-2 [#322] [hereinafter Defs.' Mem.]. Neelon argues that Massachusetts law should govern because the statements were published to Massachusetts, he is a Massachusetts resident, and he suffered harm from the statements principally in Massachusetts. See Pl.'s Opp'n Defs.' Mot. Summ. J. 1-2 [#335] [hereinafter Pl.'s Opp'n].

In determining which substantive law to apply, the court looks to Massachusetts choice-of-law rules. See Servicios Comerciales Andinos, S.A. v. General Elec. Del Caribe, Inc., 145 F.3d 463, 479 (1st Cir. 1998). For issues of tort, Massachusetts does not "tie... conflicts law to any specific choice-of-law doctrine, but seek[s] instead a functional choice-of-law approach that responds to the interests of the parties, the States involved, and the interstate system as a whole."[2] Bushkin Assocs. v. Raytheon Co., 473 N.E.2d 662, 668 (Mass. 1985). The Massachusetts Supreme Judicial Court ("the Supreme Judicial Court") has held, however, that the Restatement (Second) of Conflicts of Laws (1971) ("the Restatement") is an "obvious source of guidance" for choice-of-law questions. Bushkin, 473 N.E.2d at 669.

Section 150(2) of the Restatement states that, in cases involving multistate defamation, "the state of [the] most significant relationship will usually be the state where the person was domiciled at the time [of the alleged defamation], if the matter complained of was published in that state." There is no dispute that Neelon was a Massachusetts domiciliary in May and September 2011. Accordingly, the court will apply Massachusetts law unless the factors articulated in section 6 of the Restatement show that Canada has a more significant relationship to the occurrence.[3] See Restatement § 150(1) (allowing for consideration of section 6 factors to determine the state with the most significant relationship).

The factors articulated in section 6 are as follows:

(a) the needs of the interstate and international systems, (b) the relevant policies of the forum, (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue, (d) the protection of justified expectations, (e) the basic policies underlying the particular field of law, (f) certainty, predictability and uniformity of result, and (g) ease in the determination and application of the law to be applied.

Restatement § 6. Applied to the facts of this case, these factors do not rebut the presumption that Massachusetts law governs Neelon's defamation claims.

Massachusetts has an interest in protecting its citizens from reputational harm caused by defamatory speech, and the September press release identified Neelon as a Massachusetts lawyer. Moreover, a reasonable speaker in 2011 would know that using an online wire service with multinational reach creates a global, not Canada-specific, audience. Accordingly, Defendants' assertion that they subjectively believed only Canadian law would govern their statements is accorded little weight. In light of the ability for instantaneous multinational publication, the court will also not assign undue weight to the forum in which a statement was physically uploaded onto the internet. Doing so would incentivize publication from less protective forums and undercut the legitimate interest of states in protecting their citizens from harm. The ease of determining and assessing the contours of Massachusetts law also favors its application. For the above-stated reasons, the court finds that Massachusetts law applies to Neelon's defamation claims in this case.[4]

B. A Jury Could Find the Press Releases Defamatory

On May 20, 2011 Defendants issued a press release titled "Garrison International Ltd.: Unauthorized Transfer of Company Subsidiary, " which states in relevant part that:

The company stamp for Garrison Asia LLC... was taken from the office of Garrison Asia LLC without the knowledge or permission of any of the Officers or Directors of the Company.... [The] stamp was used to transfer the ownership of the shares of Garrison Asia LLC away from the Company.... Notwithstanding the use of the stamp, in order to change the ownership of Garrison Asia LLC, a notarized signature from the signing authorities of this company would have been required. It is not clear at this time how the notarized signatures were obtained by the two men who took the stamp from Garrison's office in Ulaan Baatar, Mongolia.

See Am. Compl., Ex. 4 [#18-4] [hereinafter May Release]. The press release continues:

[T]he matter was reported to the Mongolian Police who have conducted an investigation and interviewed those involved. As a result of their investigation, the Mongolian Police have recommended to proceed with a criminal ...

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