A Substantial Basis In Law

The New York Appellate Division for the First Judicial Department remanded for calculation of fees and costs of a defamation case dismissed on anti-SLAPP rounds

This case presents the issue of what constitutes a “substantial basis in law” under the anti-SLAPP law. We hold, based on our reading of CPLR 3211(g) and (h), that “substantial basis” under the anti-SLAPP law means “such relevant proof as a reasonable mind may accept as adequate to support a conclusion or ultimate fact” (Smartmatic USA Corp. v Fox Corp., 213 AD3d 512, 512 [1st Dept 2023] [internal quotation marks omitted]), a phrase drawn from the relevant legislative history. We further find that, because the complaint in this case fails to survive ordinary CPLR 3211(a)(7) analysis, plaintiffs have failed to meet the higher burden under CPLR 3211(g) of showing that their SLAPP suit has a substantial basis in law. Accordingly, defendants — a media entity and a reporter — are entitled to mandatory costs and attorneys’ fees pursuant to Civil Rights Law § 70-a. We remand the case solely for calculation of those costs and fees.

Facts

This case arises from the contentious divorce and custody dispute between plaintiff Karl Reeves (Karl), Chief Executive Officer of plaintiffs CEINY Corp., Consolidated Elevator Industries, Inc., and Consolidated Elevator Service Corp. (collectively Consolidated), and his estranged wife Julianne Michelle Reeves (Michelle). In the year leading up to Michelle’s divorce filing in 2017, Karl was arrested on five occasions, and variously charged with assault, endangering the welfare of a child, criminal possession of controlled substance, and aggravated assault. All charges were eventually dismissed as part of a plea agreement. During the custody dispute, The Foundation for Child Victims of Family Court (FCVFC), an organization that aims to assist parties in custody disagreements, filed a series of ethics complaints on Michelle’s behalf against the judge presiding over the custody litigation, a legal aid attorney, social workers, and caseworkers. FCVFC alleged that each of the named parties biased the custody proceeding in Karl’s favor by actively hiding or ignoring Karl’s harmful behavior, including his death threats to Michelle’s family, his self-description as a proud Neo Nazi, and the “fact” that he was a “substantiated drug abuser.” In January 2019, Karl filed a defamation action against Michelle, Michelle’s mother, FCVFC, and an FCVFC representative. Five months later, in May 2019, Karl discontinued the action against Michelle and her mother.

In July 2019, defendant Associated Newspaper Ltd. (ANL) d/b/a Mail Online and The Daily Mail (The Daily Mail) published a story on its online site written by defendant Anneta Konstantinides, with the title “Seriously, I’ll kill both of them: NY socialite and actress is locked in vicious custody battle with ‘racist ketamine-snorting millionaire’ CEO husband after he accused her of Pornhub fame and threatened to kill her parents.” Before the story was posted, Konstantinides reached out to Karl with a request for comment and informed him that the article would contain threatening text messages from Karl, audio and video footage of Karl taking drugs, and audio of Karl using racist and abusive language. Karl warned ANL that publishing the story would defame him and his businesses. Karl’s attorneys wrote to The Daily Mail and cautioned that the story was false and part of a scheme by Michelle to defame Karl. ANL published the story anyway. On two separate occasions, after publication, Karl’s attorneys demanded retractions. ANL did not oblige.

Karl and Consolidated commenced the instant lawsuit, alleging six causes of action: defamation, intentional infliction of emotion distress, negligent infliction of emotional distress, tortious interference with contract, tortious interference with prospective business relationships, and prima facie tort. The complaint identified 12 purported defamatory statements, all of which were published on defendants’ website as part of the July 2019 article. Plaintiffs alleged that the statements were defamatory and that they were negligently and/or knowingly made with malice and with the intent to cause emotional distress and financial harm to Karl’s businesses.

The Supreme Court order is linked here. (Mike Frisch)