Cheng v. Neumann

106 F.4th 19

Dana CHENG; Epoch Group Inc., d/b/a Epoch Media Group, Plaintiffs, Appellees, v. Dan NEUMANN; Maine People's Alliance, d/b/a Beacon, Defendants, Appellants.

No. 23-1532

United States Court of Appeals, First Circuit

June 25, 2024

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE [Hon. Lance E. Walker, U.S. District Judge]

John-Mark Turner, with whom Christopher Cole, Cassandra O. Rodgers, and Sheehan, Phinney, Bass & Green, P.A. were on brief, for appellants.

Christopher J. Bakes, with whom Kip Joseph Adams, Bryan Paul Sugar, Lann G. McIntyre, and Lewis Brisbois Bisgaard & Smith LLP were on brief, for appellees.

Before Montecalvo, Lynch, and Rikelman, Circuit Judges.

RIKELMAN, Circuit Judge.

In 2021, a Maine news outlet, Beacon, ran an article about New York resident and political commentator Dana Cheng that characterized Cheng as "far-right" and a "conspiracy theorist." Cheng sued the article's author, Dan Neumann, and Beacon for defamation in federal court in Maine. Neumann and Beacon then sought dismissal of the case under both federal law and a New York anti-SLAPP¹ law that applies to meritless defamation lawsuits. Faced with dueling arguments by the parties about whether Maine or New York law applied to Cheng's defamation claim, the district court conducted a choice-of-law analysis, decided that New York law applied, and granted the motion to dismiss under New York's anti-SLAPP statute. On Cheng's appeal, we agreed with the district court's ruling but for a different reason: We decided that Cheng's lawsuit had to be dismissed under binding First Amendment principles protecting free speech by the press.

Back at the district court, Neumann requested attorneys' fees under the fee-shifting provision of New York's anti-SLAPP law. Faced with yet another choice-of-law dispute, the district court denied Neumann's request after determining that Maine, not New York, law applied to the specific issue of attorneys' fees. Now Neumann appeals, arguing that the district court erred in its choice-of-law analysis. Although we note the district court's careful analysis below, we certify to the Supreme Judicial Court of Maine (the "Law Court") the question of which state's law applies because there is no clear controlling precedent on point and the choice-of-law analysis is determinative of the attorneys' fees issue.

I. BACKGROUND

We draw the relevant facts from our prior decision in Cheng v. Neumann ("Cheng I"), 51 F.4th 438 (1st Cir. 2022), which describes the parties' dispute about the Beacon article in more detail.

Dana Cheng is a New York resident and the vice president and co-founder of The Epoch Times, a newspaper published by the New York-based Epoch Group. In June 2021, Cheng spoke at an event co-sponsored by the Maine Republican Party in Windham, Maine. A few weeks later, Beacon ran an article about the event titled "Maine GOP hosts speaker present at Jan. 6 Capitol assault." The article described Cheng's own statements about her presence during the attack on the U.S. Capitol on January 6th, 2021, and referred to Cheng as "far-right," "right-wing," and a "conspiracy theorist."

Cheng and the Epoch Group (together, "Cheng") sued Neumann and the Maine People's Alliance (together, "Neumann"), which publishes Beacon, for defamation in federal district court in Maine under diversity jurisdiction. Neumann moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim and, separately, under a provision of New York's anti-SLAPP statute, N.Y. C.P.L.R. § 3211(g).

New York is among the many states that have passed anti-SLAPP laws, which generally provide extra breathing room for the press and others speaking out on issues of public concern by deterring baseless lawsuits. See Libel and Privacy, Rep.'s Comm. for Freedom of the Press, https://perma.cc/BE5M-2UA5 (explaining that "[j]ournalists and news organizations often use anti-SLAPP laws to defend themselves against expensive, baseless lawsuits brought by the subject of an investigative story"). More specifically, such laws "provide . . . defendants [such as reporters and news outlets] with procedural and substantive defenses meant to prevent meritless suits from imposing significant litigation costs and chilling protected speech." Godin v. Schencks, 629 F.3d 79, 81 (1st Cir. 2010). New York's anti-SLAPP statute consists of three separate, interlocking provisions:

• N.Y. Civ. Rights Law § 76-a, which broadly defines "an action involving public petition and participation" to cover claims based on news articles about public figures and provides that a plaintiff like Cheng can succeed in such an action only if she establishes by "clear and convincing evidence" that the allegedly defamatory statement "was made with knowledge of its falsity or with reckless disregard of whether it was false";

• N.Y. C.P.L.R. § 3211(g), which provides a procedural mechanism for speakers like Neumann to move to dismiss an action involving public participation and instructs that such a motion "shall be granted unless the party [bringing the claim, here Cheng,] demonstrates that the cause of action has a substantial basis in law or is supported by a substantial argument for an extension, modification, or reversal of existing law"; and

• N.Y. Civ. Rights Law § 70-a ("section 70-a"), which provides that a defendant in an action involving public participation, such as a reporter or a news outlet like Neumann, is entitled to attorneys' fees upon a demonstration, including a finding under N.Y. C.P.L.R. § 3211(g), that the action was commenced without any substantial basis in law or argument for extending the law.

Given that Cheng resides in New York and Neumann is based in Maine, the parties disputed in the district court whether Maine or New York law applied. After conducting a choice-of-law analysis and determining that New York law governed Cheng's defamation claim because she is a New York resident and would have experienced any harm from the speech in New York, the district court granted Neumann's motion to dismiss under N.Y. C.P.L.R. § 3211(g). See Cheng v. Neumann, No. 21-cv-00181, 2022 WL 326785, at *7 (D. Me. Feb. 3, 2022) (explaining that "the New York anti-SLAPP law applies here rather than the standard Rule 12(b)(6) framework"); id. at *9 (dismissing the case because "[p]laintiffs have failed to demonstrate that [d]efendants' [a]rticle is not presumptively protected from suit under New York Civil Rights Law § 76-a or that their libel claim 'has a substantial basis in law['] . . . under New York Civil Practice Law and Rule 3211(g)"). Cheng appealed.

On appeal, we affirmed but took a different route. Instead of evaluating the district court's choice-of-law analysis and affirming under New York law, we "bypass[ed] the parties' choice-of-law disputes" and instead "look[ed] to dispositive First Amendment principles." Cheng I, 51 F.4th at 443. Because the Beacon article, on its face, contained only statements that were either factually true or expressions of opinion and therefore unprovable as false, we held that the complaint did not state a plausible defamation claim under any state's law given binding First Amendment precedent. Id. at 445-47.

Back in district court, as the winning party on the defamation claim, Neumann requested attorneys' fees and costs under Federal Rule of Civil Procedure 54(d)(2), which allows a prevailing party to move for attorneys' fees after the entry of judgment. The rule also requires the party seeking fees, here Neumann, to "specify . . . the statute, rule, or other grounds entitling the movant to the award." Fed. R. Civ. P. 54(d)(2)(B)(ii). Neumann identified section 70-a, the fee-shifting provision of New York's anti-SLAPP law, as the source of authority for his request.

The district court denied Neumann's attorneys' fees motion. It concluded that the question of which state's law applied to the attorneys' fees issue was a separate and distinct question from which state's law applied to Cheng's defamation claim itself. Relying on choice-of-law principles from the Second Restatement of Conflict of Laws, the court determined that Maine law governed Neumann's request for fees because "New York's interest in a Maine publisher's access to a fee-shifting remedy in a Maine court is of less significance than Maine's interest in affording that remedy." This timely appeal followed.

II. DISCUSSION

Neumann argues that the district court erred in its conflict of laws analysis on the attorneys' fees issue. He maintains that proper evaluation of the Restatement factors results in the application of New York law, under which he is entitled to fees.² In response, Cheng contends that our decision in Cheng I eliminated state law from this case altogether by resolving the merits on First Amendment grounds. In her view, under the law of the case doctrine, our prior decision means that only federal law applies in this case, and Neumann has no right to fees under federal law.

A. Law of the Case Doctrine

We begin with -- and reject -- Cheng's argument that the law of the case doctrine eliminates state law from this case altogether.

Under our precedent, "[t]he law of the case doctrine has two branches" directly related to appellate decisions. United States v. Matthews, 643 F.3d 9, 13 (1st Cir. 2011). The first branch, known as the "mandate rule," prevents a trial court from reconsidering matters that were "explicitly or implicitly decided by an earlier appellate decision in the same case." Id. (quoting United States v. Moran, 393 F.3d 1, 7 (1st Cir. 2004)). The second branch "binds a 'successor appellate panel in a second appeal in the same case' to honor fully the original decision." Id. (quoting Moran, 393 F.3d at 7). "Whether the doctrine applies in a specific instance is a question of law, engendering de novo review." Id.

Cheng argues that Neumann's request for fees under New York law violates this doctrine by ignoring...