N.Y. Court Rejects Preliminary Injunction Against Financial Writer

From Honig v. Buhl, decided Friday by Justice Alexander Tisch of the New York trial court:

Plaintiff commenced the instant action on June 1, 2021 asserting libel and slander, tortious interference with business relationships, trade libel, claims under New York Civil Rights Law §§ 50-51 [misappropriation of name or likeness] and a permanent injunction.

The complaint alleges that between 2016 and 2017, defendant [Teri Buhl] published articles that included false allegations about plaintiff. Plaintiff filed a lawsuit against defendant in the U.S. District Court for the Middle District of North Carolina regarding the same, which resulted in a confidential settlement agreement on or about January 3, 2018. The settlement agreement stated that defendant was to provide advance notice to plaintiff's counsel about the subject matter of any future articles about plaintiff so as to give plaintiff an opportunity to comment before the articles were published.

Plaintiff alleges that defendant published an article on her website, teribuhl.com, on October 22, 2020 entitled "Barry Honig allegedly set up Undisclosed promotion in Majesco $Cool $PTE to influence Stock price" …. Plaintiff claims that, despite due demand for retraction, it has not been taken down. {The complaint does not allege that defendant failed to comply with the settlement agreement.} Plaintiff also alleges that defendant published another article on or about May 11, 2021 entitled "Barry Honig promoted Jeff Auerbach gets Three Months Jail in stock Kickback Scheme" …. (the May 2021 Article).

At the same time the action was filed, plaintiff made the instant motion that moves for a preliminary injunction (1) compelling and directing the defendant to remove the articles published on or about October 20, 2020 and May 11, 2021 in which she allegedly makes false and libelous statements about plaintiff; (2) compelling and directing defendant to print a retraction for both the October 20, 2020 and May 11, 2021 articles; and (3) precluding defendant from publishing any such future libelous statements against plaintiff….

"A 'prior restraint' on speech is 'a law, regulation or judicial order that suppresses speech—or provides for its suppression at the discretion of government officials—on the basis of the speech's content and in advance of its actual expression.'" "Prior restraints on speech are "the most serious and the least tolerable infringement on First Amendment rights," and "any imposition of prior restraint, whatever the form, bears a heavy presumption against its constitutional validity." "Although the prohibition against prior restraint is not absolute, any restraint on speech … may be imposed only in the most 'exceptional cases.'"

Here, the relief sought clearly constitutes a prior restraint as it would infringe upon defendant's constitutionally protected rights to publish articles about plaintiff. Plaintiff failed to demonstrate the exceptional circumstances that warrant such injunctive relief here, i.e., that "the speech sought to be restrained is 'likely to produce a clear and present danger of a serious substantive evil that rises far above public inconvenience, annoyance, or unrest.'" The Court finds that this applies to relief sought prospectively and as to the already-published articles.

"In addition to the First Amendment's heavy presumption against prior restraints, courts have long held that equity will not enjoin a libel." … [T]he element of irreparable harm in the absence of an injunction would "fail[] because plaintiff has an adequate remedy at law, i.e., post-publication damages."

Although plaintiff relies on provisions of the confidential settlement agreement in support of the injunction, arguing that defendant contractually limited her right to free speech, those arguments do not appear to have been made in the moving papers and are improperly asserted for the first time in reply. Indeed, there is no cause of action [in this case] for breach of settlement agreement. Even if the Court were to consider the settlement agreement provisions, plaintiff's requested relief appears to go beyond the agreed-upon terms, which would still constitute a prior restraint).