Ex-Congressman Alan Grayson Loses Libel Claim Before Eleventh Circuit

"The defendants' [reliance] on ... source materials, including an official congressional report, articles in well-known newspapers and magazines, and police reports ... '... alone ... defeat[s] any claim of actual malice.'"

From Grayson v. No Labels, Inc., decided today by the Eleventh Circuit (Chief Judge William Pryor and Judges Barbara Lagoa and Andrew Brasher):

Alan Grayson appeals the summary judgment against his second amended complaint of defamation, defamation by implication, and civil conspiracy …. Grayson alleged that his reputation was tarnished and he lost his seat in the United States House of Representatives because the defendants falsely denounced him for profiteering and for spousal abuse.

The district court ruled that the defendants' reference to reliable publications in their mailings and online postings evidenced they acted without actual malice and were not liable for defamation and that Grayson's claim of civil conspiracy failed as a matter of law. We affirm….

Grayson alleged that the defendants, "acting through Progress Tomorrow," disparaged him using the mail, internet postings, and the website "FloridaDeservesBetter.org." Those materials touted that a "Congressional Ethics Investigation Found Alan Grayson Abused His Office for Financial Gain" and "to enrich himself," that he "[h]id income on his public disclosures," and that he "[u]sed taxpayer resources to conduct his high-risk investor scheme." One mailing depicted Grayson sitting in a chaise lounge on the beach in Grand Cayman with a drink close at hand.

A two-sided mailing had, on one side, a man carrying an attache case striding to a jet bound for Grand Cayman and, on the other side, an opened attache case containing a passport bearing Grayson's photo with dollar signs for eyes and 15 stacks of $100 bills. A third mailing accused Grayson of abusing his former wife. On Facebook, the defendants touted that Grayson "used international government travel to drum up business for his hedge fund," "used Congressional staff to work for the fund," and had a hostile incident with a reporter….

Some of the defendants' mailings urged readers to examine a "nearly 1,000 page report" produced after a "congressional ethics investigation" of Grayson. Investigators found that Grayson, "an attorney who often worked on litigation involving the federal government," created a hedge fund during his first term in office from which "on at least one occasion … [he] appear[ed] to have received compensation"; he "managed a Virginia-based corporation that used the Grayson name and provided legal services involving a fiduciary relationship"; and he "agreed to receive contingent fees in cases in which the federal government had a direct and substantial interest … during his time in Congress."

The report described omissions from "Grayson's annual financial disclosure forms concerning assets, income, agreements and positions" "significantly related to … the Grayson Hedge Fund and … [his] interest in law firms and pending litigation" and Grayson's role as a "limited partner in three energy-sector limited partnerships, all of which had agreements with the federal government" while he was a member of Congress. The report also described "multiple instances in which a congressional staffer[,] … who was also employed by the Grayson Hedge Fund, used official time and resources to work for the hedge fund" and for Grayson and how Grayson misused campaign resources….

The district court ruled that the defendants' "reasonable reliance on previously published reports from … independent, reputable sources rebut[ted] the presence of actual malice" and rendered Grayson's "defamation claims not viable." The district court declined to consider Grayson's "various theories and conjectures regarding [the] Defendants' liability" that lacked evidentiary support, Grayson's "cease and desist letter characterizing Defendants' publications as defamatory," or his allegations of additional defamatory statements in his opposition to summary judgment. The district court also ruled that, without any actionable defamation, Grayson's "civil conspiracy claim also fail[ed]." …

Grayson submitted no evidence from which a jury might plausibly infer that the defendants distributed statements "with knowledge that [the statements] were false or with reckless disregard of whether [they were] false or not." The defendants' mailings and online postings cite source materials, including an official congressional report, articles in well-known newspapers and magazines, and police reports. The defendants' "reliance on these many independent sources, alone, … defeat[s] any claim of actual malice." And it does not matter that, as Grayson argues, republication of defamatory statements is defamation because "a reasonable juror would not conclude (clearly and convincingly) that [the defendants would] h[ave] serious doubts about the truth of" the information they were repeating….