The Clouds Surrounding Rudy Giuliani Are Getting Darker

Recently, the Appellate Division of the State of New York issued an interim suspension of Rudy Giuliani’s law license on the ground that he repeatedly made false statements to courts concerning the 2020 election. This was an interim proceeding. Giuliani will get an opportunity to address the allegations at the hearing in that matter. Giuliani contests the allegations. However, the court concluded that:

“….[W]e conclude that there is uncontroverted evidence that respondent communicated demonstrably false and misleading statements to courts, lawmakers and the public at large in his capacity as lawyer for former President Donald J. Trump and the Trump campaign in connection with Trump’s failed effort at reelection in 2020. These false statements were made to improperly bolster respondent’s narrative that due to widespread voter fraud, victory in the 2020 United States presidential election was stolen from his client.”

In the Matter of Rudolph Giuliani, Case No. 2021-00506 (New York Appellate Division First Judicial Department), May 3, 2021.

The interim suspension is controversial, but it is an important opinion.

Today, another shoe dropped on Giuliani. In the case US Dominion, Inc. v. Giuliani, No. 21-cv-2013 (the sister case is US Dominion v. Powell, No. 21-cv-0040), the court held that Dominion’s claim for defamation stated a claim. When a defamation lawsuit is filed, the defendant will typically file a motion to dismiss. If the motion is granted with prejudice, the case comes to an end. If the motion is denied, the case goes forward to discovery. Dominion ultimately bears the burden of proof and, no doubt, Giuliani will contest the allegations in the Complaint. In my experience few defamation lawsuits survive a motion to dismiss. When a case does survive a motion to dismiss, that is a serious matter for the defendants.

In his motion to dismiss, Giuliani argued that Dominion did not adequately allege that it was damaged by Giuliani’s actions. The court rejected the claims and denied the motion to dismiss. Discovery will soon proceed on these claims.

The Court is not aware of any case requiring a corporate plaintiff alleging defamation per se to plead damages specially, and by its terms Rule 9(g) does not include such a requirement. In any event, Dominion has pleaded lost profits with the particularity required by Rule 9(g). Under that rule, a defamation plaintiff must set “forth the precise nature of [its] losses as well as the way in which the special damages resulted from the allegedly false publication.” Schoen v. Wash. Post, 246 F.2d 670, 672 (D.C. Cir. 1957). Here, Dominion alleges that Giuliani made defamatory statements about its involvement in the 2020 election, that the people who believed those statements made threats to Dominion employees and board members, and that those threats required Dominion to spend more than $565,000 on private security to protect its employees. Giuliani Compl. ¶ 126. Although Giuliani contends that Dominion may satisfy Rule 9(g) only by “identifying either particular customers whose business has been lost or facts showing an established business and the amount of sales before and after the disparaging publication, along with evidence of causation,” Browning v. Clinton, 292 F.3d 235, 245 (D.C. Cir. 2002), the cases he cites merely provide examples of how a plaintiff may specifically state pecuniary harm and demonstrate that those harms resulted from defendant’s conduct. In its Complaint against Giuliani, Dominion alleges that it suffered economic harm in the form of additional expenses that it would not have incurred if not for Giuliani’s alleged defamation, as well as the loss of future contracts. See also Giuliani Compl. ¶¶ 128 (noting that Dominion has incurred $1,170,000 in expenses to mitigate harm to reputation and business); id. ¶ 135 (projecting lost profits of $200 million over the next five years when reduced to present value).25 Dominion has also alleged how those losses resulted from Giuliani’s defamatory statements. Id. ¶¶ 106–32. The Complaint therefore alleges lost profits with adequate specificity and survives Giuliani’s Motion to Dismiss.

There will be more proceedings to come in these cases. They are important cases for anyone interested in legal ethics.

Ed Clinton, Jr.

http://www.clintonlaw.net

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