Thursday, March 28, 2013

US Judge Bartel Unsurprisingly Holds No Libel In The Word "Unfounded"

Several of the "inside the legal industry" papers are carrying subscription only stories tonight, on this picayune squabble, so I'll mention it, and give away a free link to US District Court Judge Harvey Bartel III's fine memorandum opinion (an eight page PDF file), to boot.

Under US law, statements of one's opinions, if couched in terms of an opinion, are rarely libelous. Doubly so when a lawyer is offering his opinion on whether an allegation of overbilling is meritorious, after an investigation has been conducted. Triply so, when all the lawyer is doing is responding to allegations about, and demands made upon his client by a third party. It is thus entirely unsurprising that the very-able Judge Bartel, sitting in the Eastern District of Pennsylvania, held -- as a matter of law -- that a lawyer's statement that these allegations of overbilling were "unfounded" could not support any charge of libel.

I also decided to discuss it because it appears that at least some of the dispute revolved around the fact that legacy Schering-Plough had engaged market research Team A, while legacy Merck was using market research Team B. The plaintiff in the libel action was Team B, prior to the merger/bust-up of  Schering-Plough/Merck. Then, as merger time approached -- and it became clearer that the post-merger Merck (through legacy Schering-Plough people it kept on staff) was likely to use Team A for this sort of market research -- the plaintiff joined Team A, and agreed to be the agent of Team A, on a market research project called the Cogent project.

When the Cogent project was completed, Team A released the plaintiff (but Team A continued to get work from New Merck). The plaintiff apparently alleged that Team A overbilled Merck for part of the Cogent project. Merck had its lawyers look into the matter, and they determined that the claim of overbilling lacked adequate evidence of wrongdoing.

And so, the lawyer's letter, answering a letter from the plaintiff, and stating that Merck believed the allegation of overbilling was "unfounded", became the basis upon which the plaintiff claimed that Merck had libeled him.

That claim has now been summarily dismissed by Judge Bartel -- here's a bit of his:
. . . .Under 42 Pa. Cons. Stat. Ann § 8343, the plaintiff must prove "the defamatory character of the communication." As an initial matter, however, the court must determine as a matter of law if the statement is capable of having a defamatory meaning. If not, the claim must be dismissed. . . .

[Merck's lawyer] was simply answering [the Plaintiff's] letter. He did so in a thoughtful and temperate manner. He was providing [the Plaintiff] with the result of the investigation that [the Plaintiff's] letter had initiated. . . .

The case before us is similar to the circumstances in Beckman, 419 A.2d at 585. That lawsuit involved a communication reporting on the decision of a University History Department committee finding a graduate student's performance on an oral examination to be "inadequate." The Superior Court concluded that the communication was not capable of being defamatory. . . .
I suspect this will end Merck's involvement in what was originally a termination of employment case -- at a third party contractor. To provide balance, I will also upload a copy of the plaintiff's pro se complaint, here. Feel free to read it, along with the judge's opinion dismissing it.

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