The Volokh Conspiracy

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Anonymity of Libel Helps Justify Punitive Damages

"[M]ost revealing of actual knowledge of falsity is the vehicle chosen by Riccio to spread the falsehoods—the anonymous letter."


From Riccio v. Morelli, decided Friday by the Maryland Court of Special Appeals, in an opinion by Judge Zarnoch, joined by Judges Friedman and Gould:

In her decision, the Arbitrator, retired Court of Appeals Judge Irma S. Raker, laid out the background of the case:

Robert Riccio and Richard Morelli were friends for many years. This dispute arises from the [Riccio] Foundation golf tournament in June 2016, held in Ocean City, Maryland. The registration fee for the tournament was $450.00. Many of the participants, including Riccio and Morelli, stayed at the Tidelands Hotel in Ocean City. On the evening of June 4, 2016, Morelli and several of the other tournament participants ate dinner at the Embers Restaurant where the tournament sponsored an all-you-can-eat buffet dinner. A dispute arose between Morelli and the management regarding an unpaid bar bill ($25.00) and some missing cash left on the table. The Ocean City Police Department was called by the restaurant. The incident was resolved with no arrests and Morelli and his friend returned to the hotel by city bus.

The next morning, Riccio called Morelli in a heated telephone call. Morelli stated that before Riccio hung up, he said: "you're going to find out how many ways I can hurt you, now pack your bags." Riccio wanted Morelli to return to the Embers Restaurant to clear the air, to resolve any unresolved issues with the restaurant, and to generally protect the reputation of the golf event. Morelli refused. Ultimately, Riccio, who leased all the hotel rooms, asked the hotel to "evict" or remove Morelli, and according to Riccio, the hotel management told Morelli to leave. Morelli also issued a stop payment order on his golf tournament registration of $450 (and later sent a check for $94.99, which Riccio never cashed). Without laying out the details, Morelli left the hotel, returned, and then left.

Beginning in June 2016, Morelli began to seek information about the finances of the Foundation. The State of Maryland informed Morelli that the Foundation had not registered properly in Maryland and had failed to file required annual filings in Maryland and similarly in Pennsylvania. The Charities Division of the Maryland Secretary of State's Office and Commonwealth of Pennsylvania both investigated the Foundation's lack of compliance and as a result took regulatory action against the Foundation.

In December 2016, Ocean City Police Officer Grady applied for a statement of charges against Morelli, alleging trespass and theft arising out of a June golf event dispute. The Commissioner issued charges for trespass but declined the theft charge; the State's Attorney later filed a criminal information against Morelli for theft. Morelli eventually resolved the criminal charges; the charges were first placed on the stet docket to enable Morelli to perform community service and to reimburse the Foundation for $450.00. Following Morelli's performance of community service, the charges were nolle prossed.

Thereafter, much of the alleged defamatory activity occurred. [Morelli] made inquiries to the State of Maryland requesting information about the Foundation. He made a complaint to the Better Business Bureau and made a posting on Facebook about the Oasis Bar. An unsigned letter, including a copy of the Ocean City arrest report related to Morelli, was circulated around the Pennsylvania community, to Morelli's employer, the local airport Board, and others. [Jack Seamon, vice president and treasurer of the Foundation] sent a copy of [Morelli's] arrest report and the "anonymous" letter to the Better Business Bureau. [Morelli's] employer, Morgan Stanley, and others received the "anonymous" letter about [Morelli] and the Foundation's counsel (Luke Rommel) issued, on March 10, 2017, a Press Release about the dispute. Morelli sent a Letter to the Editor to the local Pennsylvania newspaper, which the paper published….

The arbitration stemmed from the parties' agreement to arbitrate, entered into after the claims were filed.

The Arbitrator held evidentiary hearings at which both Riccio and Morelli testified. On March 31, 2020, the Arbitrator issued her award. In this written decision, she rejected the defamation claims of Riccio and the Foundation; but found both claimants liable for defaming Morelli in the anonymous letter. She awarded Morelli $10,000 in compensatory damage against Riccio and $450 in damages against the Foundation. The decision also stated:

As to punitive damages, the Arbitrator finds that Respondent has established by clear and convincing evidence both constitutional malice and actual malice and awards punitive damage [of] $25,000 in favor of … Morelli against Claimant….

The Arbitrator hinged liability only on the anonymous letter, not the press release, which she found not to be malicious….

The court upheld the award, and added:

Here, the evidence before the Arbitrator showed conscious wrongdoing on Riccio's part—from the threats of harm to Morelli to the "laundry list" of outrageous attacks on Morelli, whom he had known for decades, to the focused and lengthy collection of recipients of the offensive letter, including Morelli's employer.

However, most revealing of actual knowledge of falsity is the vehicle chosen by Riccio to spread the falsehoods—the anonymous letter. In many ways it is like an anonymous tip to the police where the informant cannot "be held responsible if [his or] her allegations turn out to be fabricated." Florida v. J.L. (2000), see also McIntyre v. Ohio Elections Com'n (1995) (dissenting opinion of Justice Scalia) ("I am sure, however, that … a person who is required to put his name to a document is less likely to lie than one who can lie anonymously …"); and Charles Doskow, Peek-a-boo I see you: The Constitution, Defamation Plaintiffs, and Pseudonymous Internet Defendants, 5 Fla. A&M U.L. 197, 217 (2010) ("There is nothing commendable about anonymous libel or slander and scant reason to protect it.")

One author has identified as "harmful" motivations for anonymous speech: 1) anonymity as intimidation and 2) anonymity as insulation and concealment. Victoria Smith Ekstrand, The Many Masks of Anon: Anonymity as Cultural Practice and Reflection in Case Law, 18 J. Tech, L & Policy 1 (2013). Both such motivations are evidenced here. Riccio tried to conceal his involvement in the preparation and distribution of the anonymous letter, insulate himself from any accountability for it and intimidate Morelli's investigation into the family foundation. These facts exhibit consciousness of the falsehoods, as well as Piscatelli's requirement of an intent to deceive another by reason of the statements. In our view, the Arbitrator did not err in her finding of actual malice and her award of punitive damages.