This is how hard it is to win defamation cases in New York

This case proves how difficult it is to win a defamation case in New York. Plaintiff is a university that sued Newsweek for reporting that it had pled guilty to money laundering. Plaintiff says this was not true. Technically, plaintiff is correct, but plaintiff loses the case.

The case is Olivet University v. Newsweek Digital, LLC, a summary order issued on December 6. The plaintiff is a private religious institutional consisting of multiple colleges around the United States. It pled guilty in 2020 to a charge that it had falsified business records in the first degree as well as conspiracy in the fifth degree, a misdemeanor. Under the terms of the plea agreement, the felony falsification of business records charge was reduced to a misdemeanor. 

Newsweek then published an article stating that the University pled guilty to money laundering. This was part of an article stating that the University was investigated by the Department of Homeland Security into whether its founder and his followers were part of a scheme to launder money for criminals in China and the United States. A subsequent Newsweek article again said the University had pleaded guilty to money laundering.

Plaintiff loses because the Court of Appeals says the Newsweek article was not false for purposes of bringing a defamation claim. While plaintiff plead guilty to conspiracy to commit money laundering, as opposed to substantive money laundering, technical inaccuracies like this, "especially in the inherently complicated context of criminal law, cannot be the basis of a defamation claim where the substance of the reported charge would not have a different effect on the mind of the reader from that which which the pleaded truth would have produced." That reasoning draws from Tannerite Sports, LLC v. NBC Universal News Group, 864 F.3d 236 (2d Cir. 2017). 

As if that holding is not enough to prove the difficulties in winning cases like this, there is another reason plaintiff cannot win: a New York statute says you cannot sue for defamation if the challenged statement is a "fair and true report of a judicial proceeding." This gives the media much leeway in reporting on legal cases, including criminal cases. The Court of Appeals holds, "Whether Olivet pled guilty to substantive money laundering or to a conspiracy to commit money laundering is a nuance lost on most readers, and “[n]ewspapers cannot be held to a standard of strict accountability for use of legal terms of art in a way that is not precisely or technically correct by every possible definition.” In other words, the Newsweek article, even if technically inaccurate, was close enough for protection under New York Civil Rights Law section 74.