Devin Nunes Loses Defamation Appeal Against Ryan Lizza and Esquire

Nunes and his family's farm can't sufficiently show damages, so the court doesn't have to reach any of the other elements of defamation.

From Nunes v. Lizza, decided yesterday by Eighth Circuit Chief Judge Steven Colloton, joined by Judge James Loken and Bobby Shepherd:

Devin Nunes, a former Member of Congress from California, sued journalist Ryan Lizza and Hearst Magazine Media, Inc., for defamation…. On September 30, 2018, Esquire (then owned by Hearst) published an online article, written by Lizza, entitled "Devin Nunes's Family Farm Is Hiding a Politically Explosive Secret." Viewed in the light most favorable to the plaintiffs, the article implicitly accused Nunes and his family of conspiring to hide the fact that NuStar Farms employed undocumented labor. The article was republished in the November 2018 print edition of Esquire magazine, this time entitled "Milking the System."

The article included statements about Nunes and his family hiding that the family farm moved from California to Iowa over a decade earlier. The article suggested that the family concealed the move in part because "Midwestern dairies tend to run on undocumented labor."

The article quoted two sources asserting firsthand knowledge that NuStar farms hired undocumented labor. One source personally sent undocumented workers to the farm. The other source, an undocumented immigrant, claimed to have worked at NuStar. Viewed in the light most favorable to the plaintiffs, the article left the reader with the impression that Nunes and his family were conspiring to hide a "politically explosive secret" that the farm had moved to Iowa and employed undocumented labor….

Nunes sued Lizza and Hearst … alleg[ing] express defamation based on eleven assertedly false statements in the article. The lawsuit also claimed defamation by implication, alleging that the article falsely implies that Nunes "conspired or colluded with his family and with others to hide or cover-up" that NuStar Farms "employs undocumented labor." … {This court [in 2021] affirmed the district court's dismissal of the express defamation claim but reversed and remanded for further proceedings on the claim for defamation by implication. [See this post. -EV]}

[As to the implied defamation claim,] Nunes presented insufficient evidence that he is entitled to damages, so we need not address other elements of his claim.

A defamation claim under California law [which applies to Nunes's claims -EV] requires a plaintiff to prove (1) a publication that is (2) false, (3) defamatory, (4) and unprivileged, and (5) that causes special damage. California Civil Code § 48a governs the types of damages a plaintiff may recover in a defamation action: special, general, and exemplary damages. Special damages are "all damages" to the plaintiff's "property, business, trade, profession, or occupation." General damages, on the other hand, are "loss of reputation, shame, mortification, and hurt feelings." Exemplary damages are additional damages recovered "for the sake of example and by way of punishing a defendant."

To recover "general damages" and "exemplary damages," the plaintiff must serve the publisher with a "written notice specifying the statements claimed to be libelous and demanding that those statements be corrected." The notice and demand must be served within twenty days after the plaintiff discovers the publication of the defamatory statements. If a plaintiff does not follow this process, then he may recover only "special damages."

The district court correctly concluded that Nunes is eligible, at most, to recover only special damages. Nunes failed to follow California's notice and demand statute for the recovery of general and exemplary damages. The article was published on September 30, 2018. Nunes sent a demand to Lizza and Hearst almost a year later, and there is no showing that he first discovered the article within twenty days before the demand. Therefore, Nunes may not recover general or exemplary damages, and the case turns on whether he suffered special damages.

Special damages "encompass only economic loss" and "must be pled and proved precisely." The plaintiff must provide evidence of "the nature and extent of the loss" to recover. "A general allegation of the loss of a prospective employment, sale, or profit will not suffice." Nunes claims that he suffered special damages because the article impaired his future career opportunities, impacted his ability to raise funds, and damaged his election campaign for Congress in 2018.

Nunes prevailed in his re-election campaign of 2018 and thus has not shown damage to his ability to secure re-election. He also has not presented sufficient evidence that his ability to raise funds was diminished as a result of the article. While he claims that two to three dozen companies declined to give money to his campaign, he produced no evidence to support this assertion—not even the names of the alleged companies. Instead, the evidence showed that Nunes's campaign funding steadily increased each election cycle. From 2014 to 2016, Nunes received over $2 million in funding. From 2016 to 2018, he accumulated nearly $13 million. And from 2018 to 2020, he collected over $26 million. Nunes therefore did not produce evidence of his diminished ability to raise campaign funds.

Nunes also failed to present sufficient evidence that the article impaired his prospects for employment. He states that he should have enjoyed more employment opportunities as a former Member of Congress with attendant experience. But general allegations of loss of prospective employment are insufficient to prove special damages. Nunes did not produce evidence that he sought any particular position or present evidence of employment opportunities that were available to other former Members of Congress who were similarly situated. The only evidence regarding Nunes's employment shows that after he retired from Congress, he became the chief executive officer of Trump Media & Technology Group, Corp., with a starting salary of $750,000. The job, Nunes admits, was secured "based on the strength of Congressman Nunes's reputation." Nunes thus did not produce evidence to support his allegation that he suffered economic loss as a result of the article….

[As to the NuStar plaintiffs' defamation claim,] there is insufficient evidence to create a genuine dispute of material fact on the issue of injury and affirm the district court's judgment on that basis.

To succeed in an action against a media defendant under Iowa law [which is applicable to the NuStar claims -EV], a plaintiff who is a private figure must prove "(1) publication (2) of a defamatory statement (3) concerning the plaintiff (4) in negligent breach of the professional standard of care (5) that resulted in demonstrable injury" to the plaintiff. A plaintiff must show "actual reputational harm when suing a media defendant, and not merely emotional distress or humiliation, before he or she may recover for any parasitic damages such as personal humiliation or mental anguish."

The NuStar plaintiffs argue that their business suffered economic harm after the article was published. They claim that one person stopped doing business with NuStar Farms as a result of the article. But the NuStar plaintiffs failed to produce evidence that the suggested business relationship existed, let alone that the other party discontinued the association. This bare assertion of lost business is insufficient to establish a cognizable injury.

To counter the claim of injury, Lizza and Hearst produced evidence that NuStar's revenues and profits increased after the article's publication. Lizza and Hearst also produced an expert who determined that the NuStar plaintiffs did not suffer lost profits or diminution of business value. The NuStar plaintiffs respond that other factors contributed to the increases in revenues and profits. Once Lizza and Hearst produced evidence to support their motion, however, the NuStar plaintiffs were required to set forth specific facts to establish a genuine dispute for trial. They failed to do so, and the record is insufficient to support a finding that the NuStar plaintiffs suffered economic harm.

The NuStar plaintiffs also argue that they suffered reputational harm. They point to evidence that the farm started to receive threatening phone calls after the article was published. The plaintiffs also produced evidence of negative comments and reviews about NuStar from users of social media.

To prove injury to reputation [under Iowa law], however, a plaintiff must show that the plaintiff had a particular reputation before the article and that people thought worse of the plaintiff after reading the article…. [T]he NuStar plaintiffs did not produce evidence of a good reputation before the article was published…..

Jonathan R. Donnellan, Ravi V. Sitwala, Nathaniel S. Boyer, Sarah S. Park, Nina N. Shah, and Kristen L. Hauser represent defendants.