Motorcycle maker's libel suit vs. Jalopnik and Gawker Media survives motion to dismiss

A federal court in Alabama has refused to dismiss a motorcycle maker's libel suit against Jalopnik.com, the auto blog owned by Gawker Media. The suit, filed by Birmingham-based Confederate Motors, Inc. ("CMI") against Jalopnik and Gawker Media, also names as defendants Wes Siler, the author of the allegedly libelous post, and Grant Ray, a former employee of CMI whom the complaint says is employed by one of the defendants. (Defendants say "Ray is not, and has never been, employed or affiliated in any way with Gawker." Motion to Dismiss at 2 n.3. Ray has not been served.)

The offending April 9, 2009 post on Jalopnik describes CMI's high-end motorcycles -- Tom Cruise and Brad Pitt are apparently fans -- as "so unreliable that you'll probably have to push them." But CMI's complaint actually focuses not on that statement, but on Jalopnik's claim that "last we heard the Alabama-based company was being sued so heavily in state courts by disgruntled owners that they were unable to do business here," i.e., in New York. CMI's complaint charges that Jalopnik's post carries the "misleading implication is that CMI has been repeatedly sued in many state courts by disgruntled owners," and includes causes of action for libel per se, tortious interference with business relations, gross negligence, and libel per quod. (Oversimplifying a bit, libel per se refers to a statement that is defamatory on its face; libel per quod covers statements that are defamatory only in context, and requires proof of actual monetary damages.)

On March 24, Magistrate Judge John Ott granted the defendants' motion to dismiss the libel per se and gross negligence claims, but denied it as to libel per quod and tortious interference with business relations. The court agreed that the language about the alleged unreliability of CMI's motorcycles was opinion, incapable of defamatory meaning. Order at 12 & n. 5. But it concluded that the post's statement about the lawsuits allegedly filed in state courts against CMI "is more akin to a statement of fact than an opinion" and thus "is reasonably capable of a defamatory meaning sufficient to survive the motion to dismiss." Id. at 12. Here's CMI's opposition, and the defendants' reply.

CMI remains far from victory; its libel and tortious interference claims seem rather thin to me (its argument is based at least in part on the distinction between "Confederate Motors, Inc." and its predecessor "Confederate Motor Company, Inc."), and it will still have to survive a summary judgment motion and a trial. But ask yourself: If you were a New York-based auto blog and snark-based media company, would you really want to face a jury in defendant's hometown, where the company's arrival was celebrated by the motorcycle-riding governor? And I don't expect CMI to give up easily; its founder and CEO Matt Chambers happens to be a former plaintiffs' attorney.