Judge must be gatekeeper in claims for defamation

A Virginia trial judge failed in his role as gatekeeper when he allowed a jury to consider a conglomeration of disputed statements in a defamation case without removing nonactionable comments, the Supreme Court of Virginia has ruled.

In its decision, the unanimous court laid out explicit directions for instructing juries in defamation cases, repudiating earlier guidance about allowing a jury to come to its own conclusions.

The Aug. 22 decision sets the stage for another trial in the case of a father sued by a Fairfax County psychologist over the father’s claims that the psychologist was padding her bills for services to his son. The 13-page opinion is Handberg v. Goldberg (VLW 019-6-061).

Billing battle

The father, Michael Handberg, hired Dr. Felicia Goldberg of Herndon to provide educational advocacy services for Handberg’s son at Loudoun County public schools. Goldberg’s business, The Morgan Center, provided additional testing services.

Handberg balked at some of the bills from the Morgan Center and he sent an email to Goldberg and to educational professionals at his son’s school advising he was terminating Goldberg for “fraudulent billing.” He reportedly labeled her billing practices as “unethical.”

Goldberg sued for defamation pointing to 11 statements in Handberg’s email. Handberg countersued for fraud and conversion.

The Fairfax County jury returned what Handberg’s lawyer termed a “classic conflicted verdict.” The jurors awarded Goldberg $90,000 for defamation, but they concluded Goldberg’s company was liable for conversion through a $35 debit card charge. The jurors tacked on $45,000 in punitive damages against the Morgan Center.

Despite the stiff punitive award against her company, the jury found Goldberg was not liable for fraud.

Gatekeeping guidance

On appeal, Handberg said the verdict as a whole was tainted by internal conflict.

“If I was to name this case, I think I would call it, ‘The Case of the Contradictory Verdict,’ if I could give it a Hardy Boys-type theme,” quipped Handberg’s appellate attorney J. Chapman Petersen as he addressed the justices in April.

The Supreme Court focused on the defamation gatekeeping issue, however.

Fairfax Circuit Judge Robert J. Smith had agreed with Handberg that the last three disputed statements in his email were mere expressions of opinion. Based on that unchallenged ruling, Handberg objected to two jury instructions that referred generally to all the statements in the email, without specifying the first eight statements at issue. Smith overruled the objection.

Those broadly worded instructions undermined the jury’s defamation verdict, the Supreme Court said. The court agreed with Handberg that the instruction constituted reversible error.

“The jury was thus permitted to find the last three statements to be defamatory; and in the absence here of a special verdict, there is no way to determine whether the jury based any or all of its defamation verdict on one or more of these last three statements,” wrote Justice Elizabeth A. McClanahan for the court.

The trial court violated its “essential gatekeeping function” of ensuring that a defamation action proceed only “upon statements which actually may defame a plaintiff,” the court said.

Goldberg pointed to the 1987 opinion in Richmond Newspapers Inc. v. Lipscomb in which the court disclaimed any duty to segregate potentially defamatory from non-defamatory material in jury instructions. The current court renounced that position.

“That holding was an aberration from what we had stated just two years earlier in Chaves and what we have consistently adhered to as the law governing defamation actions after Richmond Newspapers Inc.,” McClanahan wrote, referring to 1985’s Chaves v. Johnson.

The court said trial courts will have to decide on a case-by-case basis whether an unredacted document with both actionable statements of fact and statements of mere opinion should be disclosed for context or whether only actionable statements go to a jury.

“Either way, the trial court must specifically instruct the jury as to the actionable factual statements that the jury can consider in determining whether the defendant defamed the plaintiff – as opposed to statements of mere opinion which cannot be a basis for a defamation claim,” McClanahan wrote.

No conflict found in verdict

The court rejected Handberg’s contention that the conversion verdict negated the defamation verdict. Conversion does not amount to fraud, the court said.

In an interview, Petersen pointed to the $45,000 punitive award against Goldberg’s company. “They clearly found wrongdoing,” he said of the jurors. “You can’t be liable for defamation when the gist of what you said is true.”

The court never addressed the significance of the punitive award, however.

“Handberg’s conversion verdict against the Morgan Center cannot reasonably be interpreted to mean the jury found that the allegations of billing fraud against Dr. Goldberg were true,” McClanahan wrote.

Actionable statements

Petersen argued all of Handberg’s statements were mere opinion and Handberg’s demurrer should have been sustained in its entirety. The justices disagreed, concluding the first eight statements all were actionable statements of fact as a matter of law.

Handberg implicitly acknowledged three of the statements were actionable statements of fact, but he contended that trial evidence showed those statements were true, the court said.

That argument “puts the proverbial cart before the horse” at the demurrer stage, the high court said.

The court analyzed five other statements and concluded they met the “factual” test.

Handberg asserted Goldberg was intentionally receiving payment for services not provided. “This assertion was patently provable as true or false,” the court said.

Another statement that Goldberg’s business prioritized billing over the interests of children at least “implied an assertion of provable fact” in the context of other statements, the court said.

The court also pointed to statements accusing Goldberg of “excessive billing,” seeking reimbursement for services not authorized or performed and being “opportunistic and aggressive about pursuing money” as actionable.

Goldberg and her company were represented by James P. Campbell of Leesburg, who was not available for comment.