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IRS Agents Who Revealed Details About Hunter Biden Investigation Lose Libel Suit Against Biden's Lawyer
The lawyer's claims that plaintiffs had violated federal law were opinions based on disclosed facts, the court concludes.
An excerpt from the long decision in Shapley v. Lowell by Judge Richard Leon (D.D.C.) filed today:
This case arises from the multi-year criminal investigation into Hunter Biden's tax compliance. Two of the Internal Revenue Service's special agents involved, plaintiffs Gary Shapley and Joseph Ziegler, revealed details about the investigation to Congress and the media due to their concerns that the Department of Justice and the Internal Revenue Service were giving Hunter Biden preferential treatment during the course of the investigation. Plaintiffs filed this suit against one of Hunter Biden's counsel, Abbe Lowell, alleging that he sent defamatory statements to the media that accuse plaintiffs of violating federal law….
For a statement to be "actionable," it must at least express or imply a verifiably false fact about the plaintiffs. … "[W]hen a writer gives a statement of opinion that is based upon true facts that are revealed to readers … such opinions generally are not actionable so long as the opinion does not otherwise imply unstated defamatory fact." …
Starting with context, the documents in which the challenged statements appear, and the circumstances of their alleged publication, cut against these statements being actionable. The statements are not isolated accusations of wrongdoing, as presented in the Complaint, but rather reasoned—albeit aggressive—positions that Biden's attorneys took in the course of representing and advocating for their client. During a criminal investigation of then-sitting President Joe Biden's son, Government agents disclosed details about the investigation to Congress and the media. Biden's defense attorneys wrote letters to Government officials in an attempt to stop more information about their client from becoming public. The challenged statements are contained in these letters.
In the lead letter, Lowell informs the reader that he is attaching the August 14, 2023 letter where he outlines the factual and legal reasons why he believes plaintiffs violated the law. He also attaches other correspondences, including Clark's letter to DOJ's Inspector General that provides a more detailed legal analysis. Viewed in the context of the letters, the challenged statements are a legal opinion advanced by defense attorneys to Government officials during a highly charged criminal investigation of their client.
Turning to the circumstances of the statement's publication, that too happened during Lowell's legal representation of his client. The Government's investigation of Hunter Biden received national attention, and Lowell believed that congressional representatives would publicly disclose the Biden attorneys' correspondences "on a selective, self-serving basis.". Lowell therefore represented that Biden's legal team were making the correspondences available to the public for "any person" to review. It is apparent from the letter that Lowell wanted to change the narrative concerning the Government's investigation of his client. Without a doubt, the authorship of the challenged statements and their subsequent publication were the product of legal advocacy.
Beyond context, the challenged statements cannot be "said to imply undisclosed defamatory facts." Just the opposite: the challenged statements are based on facts that are disclosed and undisputed. In the letters, Lowell provides the reader with a compilation of details about plaintiffs' congressional testimony and their disclosures to the media. Plaintiffs do not dispute the truth of these disclosed facts—only the legal significance of them. Given the breadth of detail in the letters, the reader would not understand Lowell to be implying any false facts about the plaintiffs. Instead, "the reader understands" such opinions as the speaker's "interpretation of the facts presented, and because the reader is free to draw his or her own conclusion based upon those facts, this type of statement is not actionable in defamation."
Finally, the challenged statements are not sufficiently factual to be "susceptible to proof of their truth or falsity." While the statements describing plaintiffs' conduct as "clear-cut crimes" and "quite simply felonies" may look like statements of fact at first blush, they express a legal opinion based on the application of Federal Rule of Criminal Procedure 6(e) and section 6103 of title 26 of the United States Code. And the application of these provisions is hardly straightforward. Rule 6(e) forbids the disclosure of grand jury material by certain persons, unless an enumerated exception applies. But our Circuit has held that, "when once-secret grand jury material becomes 'sufficiently widely known,' it may 'los[e] its character as Rule 6(e) material,'" though "not every public disclosure waives Rule 6(e) protections."
So too § 6103 provides that tax "[r]eturns and return information shall be confidential" and shall not be disclosed except as authorized. The U.S. Courts of Appeals are split as to when such information is no longer confidential and subject to the restrictions of the statute, if it is in the public domain. Our Circuit has not, however, weighed in on this so-called "public domain exception" to § 6103. Thus, while the legality of plaintiffs' conduct depends in part on questions of fact, it is ultimately a legal judgment. Due to the complexities in the law, that judgment is not readily verifiable as true or false….
The Supreme Court's decision in Milkovich v. Lorain Journal Company is instructive. In that case, a high school wrestling coach argued that a local newspaper libeled him by printing a column that implied he had perjured himself in a judicial proceeding concerning his role in a brawl at a wrestling match. The column was entitled "Maple [Heights High School] beat the law with the 'big lie,'" and stated, in part: "Anyone who attended the meet … knows in his heart that [the coach] … lied at the hearing after [he had] given his solemn oath to tell the truth." The Supreme Court held that a reasonable factfinder could conclude that the column implied an assertion that the coach perjured himself in a judicial proceeding, and that "the connotation that [the coach] committed perjury is sufficiently factual to be susceptible of being proved true or false" because "whether [the coach] lied … can be made on a core of objective evidence by comparing, inter alia, petitioner's testimony before the … board with his subsequent testimony before the trial court."
Here, by contrast, the factfinder cannot determine whether the challenged statements are true or false by verifying whether the plaintiffs' conduct violated established law; rather, the factfinder would have to decide, among other potential legal issues, the extent to which the public domain exceptions to Rule 6(e) and § 6103 are applicable to plaintiffs' conduct and the information that they disclosed. That inquiry is not purely factual; it is a matter of legal judgment!
Not surprisingly, plaintiffs disagree. They argue that Lowell did not "hedge his opinion or otherwise make clear that it was debatable" whether they committed felonies and that, by speaking with "finality," the challenged statements are verifiable facts. According to plaintiffs, because there is a circuit split as to the application of § 6103, it is false that their activities were a "clear-cut crime" or a crime without "cognizable legal protection." But the finality of a statement is not determinative of whether a statement is a fact as opposed to an expression of a firmly held opinion. Just as the qualifier "I think" does not transform a statement of fact into one of opinion, the lack of a qualifier does not necessarily turn an opinion into a fact. Here, Lowell made an assertive statement concerning nuanced law, and he was not required to provide a "balanced" view of his opinion.
Our system of justice is adversarial, and the reader expects that criminal defense attorneys are not neutral arbiters! While that does not give an attorney a free pass to say whatever he pleases, Lowell provides the reader with the legal and factual bases for his statements, and the reader would understand, and expect, that Biden's attorneys were advancing a legal position that was advantageous for their client….
Even if the challenged statements were actionable, plaintiffs' claims suffer from another fatal flaw: the Complaint does not plausibly allege that Lowell acted with "actual malice" [i.e., recklessness or knowledge as to the falsehood of the statements -EV] in allegedly publishing the letters….
Charles Michael, Jason M. Weinstein, and Michael E. Stoll (Steptoe & Johnson LLP) represent defendant.
