“Defamation by implication” action may proceed against Commercial Appeal in Shelby County Circuit Court

Adding a “question mark” to a controversial published statement does not necessarily shelter you from liability in Tennessee.

That is one of the ostensible takeaways from an opinion issued by the Tennessee Court of Appeals on Friday.  In its written opinion, the Court of Appeals held that the local court’s dismissal of Greg Grant’s “defamation by implication” claim against the newspaper was premature.

If you are inclined to read the opinion in Greg Grant v. The Commercial Appeal, et al. (linked here), you will notice that the Court also ruled that Tennessee’s “Fair Report” privilege does not protect the Commercial Appeal in this case but that, on the other hand, the statements at issue are not capable of defamatory meaning (and so the straight defamation claim should not proceed).  The Appeals Court remanded the case to Circuit Court however, for consideration of the “defamation by implication” claim.

I write about it here because the opinion carries with it an important message about the frequent efforts by media organizations to inoculate themselves from liability by posing questions in their reporting to which they cannot offer affirmative answers.  Simply put, sometimes it works, sometimes it does not, but it is not a sure thing.

Brief background:

Greg Grant sued the Commercial Appeal and several of its alleged agents over an October 19, 2013 article headlined, “Silent partner?  Grant’s involvement clouds $1.5 million Southbrook mall deal.”  (article link: here).  The article itself attempts to determine whether, in fact, Mr. Grant really is a partner in the mall deal and to what extent.  As the Appeals Court notes, the article does not answer the question with certainty (that’s why the trial court found that the straight defamation claim could not proceed. “To be considered defamatory, ―a question must be reasonably read as an assertion of false fact; inquiry itself, however embarrassing or unpleasant to its subject, is not accusation.”  Eisenstein v. WTVF-TV, 389 S.W. 313, 320 (Tenn. 2012)).

The newspaper is not however, in the clear on Grant’s “defamation by implication” claim.

In the process of examining Grant’s involvement, the newspaper accurately reports that Grant lost a 2002 False Claims Act case brought by the U.S. Government.  In that case, the District Court found (in 2004), that “a bus company owned by Grant submitted bogus bills by not carrying insurance and by claiming to have transported a TennCare patient to medical clinics when the patient was either in the hospital or getting treatment at home.”  The Commercial Appeal further reported that the District Court judge found that “Grant submitted 3,306 false claims totaling $52, 573.  By law, he tripled those damages to $187,719 and then tacked on an additional $5.7 million in civil penalties.”

Fast forward nine years, and the Commercial Appeal is investigating what Grant stood to gain from a conditional grant of $1.5 million awarded by the Memphis City Council toward development of the Southbrook mall.

Defamation by implication

And this is where this area of the law becomes precarious for media organizations.  According to the Court of Appeals, “Tennessee law provides that a statement may be capable of defamatory meaning even if the words do not appear defamatory on their face, but instead imply or suggest a defamatory meaning.”  The Court of Appeals found that the Commercial Appeal article ‘juxtaposes a series of facts so as to imply a defamatory connection between them.’”  See Opinion.

Grant argues that the “implication of the Article was to portray him as dishonest and deceptive.”   The Court of Appeals says this need to be examined further because:

As one example, the Article points to a letter written from Mr. Grant to [former Housing and Community Development Director Robert] Lipscomb wherein Mr. Grant wrote that he had ―removed himself from the project.  Then, the Article, seemingly attempting to undercut Mr. Grant‘s assertion in his letter to Mr. Lipscomb, states: ―Recently filed state records, however, list Grant as the registered agent for Southbrook Properties, Inc. . . .  As a second example, the Article provides: ―After an initial round of quibbling, Grant agreed he maintains an office at Southbrook.   The clear import of the preceding sentence is that Mr. Grant avoided admitting to the newspaper that he maintained an office at the mall.

In our opinion, the statements made in the Article . . .  are capable of implicitly bearing a defamatory meaning when read by a reasonable person.

Greg Grant v. The Commercial Appeal, No. W2015–00208-COA-R3-CV (September 18, 2015).

So there it is, “defamation by implication.”  Here is what the Tennessee Court of Appeals had to say about this cause of action on Friday:

Defamation by implication occurs when statements that are true are nevertheless actionable if they imply facts that are not true.  Id. (citing Aegis Sciences, No. M2012-00898-COA-R3- CV, 2013 WL 175807, at *11 (Tenn. Ct. App. Jan. 16, 2013)).

Here is the analysis upon which the Court relied:

“Defamation by implication” is false suggestions, impressions and implications arising from otherwise truthful statements. Defamation by implication arises not from what is stated but from what is implied when a defendant juxtaposes a series of facts so as to imply a defamatory connection between them, or (2) creates a defamatory implication by omitting facts, such that the defendant may be held responsible for the defamatory implication, unless it qualifies as an opinion, even when the particular facts are correct. Otherwise, by a careful choice of words in juxtaposition of statements in a publication, a potential defendant may make statements that are true yet just as damaging as if they were actually false. Defamation by implication is also referred to as ―innuendo.  For example, an article was found implicitly defamatory where it truthfully reported that a woman upon finding her husband at plaintiff‘s home, shot the plaintiff, but the article neglected to state that at the time they were all at a social gathering with several other people, including plaintiff‘s husband. Courts apply differing standards to defamation by implication actions from requiring the defamatory implication to arise from a material omission to not allowing such an action as contrary to free speech values.

Id. (quoting 4 Modern Tort Law: Liability and Litigation § 36:2 (2d ed.))(emphasis added).

Unlike a defamation claim, where a plaintiff needs to prove that the subject statements were false, a “defamation by implication” claim only requires that the subject statements “leave a false impression.”

The Court of Appeals ruling is not the end of the litigation.  It is merely the ruling on whether the underlying lawsuit should go forward in Shelby County.  On several points, the Court of Appeals held in favor of the newspaper, but on this one issue, the Court held that the Plaintiff will be able to proceed with his claim of “defamation by implication,” which alleges that the Commercial Appeal “impl[ied] that Mr. Grant is a dishonest businessman” and that this implication “could cause harm to his reputation in the community.”

Bottom line:  At least in Tennessee (and the other states referenced by this Court), media organizations are not automatically safe from liability by publishing reports in a “question” format.  If those reports carry with them untrue implications, you may still have tort exposure.


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