Goguen v. NYP Holdings, Inc.

544 P.3d 868

2024 MT 47

Michael L. GOGUEN, Plaintiff, Appellee, and Cross-Appellant,

v.NYP HOLDINGS, INC.; Isabel Vincent; and Does 1 through 100, Defendants and Appellants,William Dial, Defendant and Cross-Appellee.

DA 22-0512

Supreme Court of Montana.

Argued: September 15, 2023

Submitted: September 26, 2023

Decided: March 12, 2024

APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV-21-1382(A), Honorable Amy Eddy, Presiding Judge

For Appellants: Matt J. Kelly, Amy McNulty, Tarlow Stonecipher Weamer & Kelly, PLLC, Bozeman, Montana, Laura R. Handman (argued), Adam I. Rich, Davis Wright Tremaine LLP, New York, New York

For Appellee: Reid J. Perkins, Worden Thane, P.C., Missoula, Montana, Bruce E. VanDalsem, Robert M. Schwartz (argped), Quinn Emanuel Urquhart & Sullivan, LLP, Los Angeles, California, Diane M. Doolittle, Quinn Emanuel Urquhart & Sullivan, LLP, Redwood Shores, California

For Cross-Appellee: Peter Michael Meloy (argued), Meloy Law Firm, Helena, Montana

For Amici The Reporters Committee for Freedom of the Press and Media Organizations: Elizabeth L. Griffing, Axilon Law of Montana, Helena, Montana

Justice Laurie McKinnon delivered the Opinion of the Court

¶1 NYP Holdings and Isabel Vincent appeal the July 26, 2022 order denying their motion to dismiss entered in the Eleventh Judicial District Court, Flathead County. Goguen cross-appeals.

¶2 We review the following issues on appeal:

1.Under Montana’s choice of law rules, does New York law govern the fair report privilege?

2. Can the application of the fair report privilege be determined as a matter of law?

3. Did the District Court err when it determined Dial’s statements were protected opinion?

FACTUAL AND PROCEDURAL BACKGROUND

¶3 Micheal Goguen is an engineer and businessman who resides near Whitefish, MT. He has been the subject of two civil lawsuits alleging sexual and criminal misconduct. The first lawsuit occurred in 2016 and was filed by a former girlfriend, Amber Baptiste, who alleged Goguen had sexually assaulted her. The California Superior Court found for Goguen on his counterclaims of fraud and extortion and awarded Goguen $14 million in damages and enjoined Baptiste from repeating or publishing the defamatory statements. The second lawsuit was initiated in February 2021 by several former employees of Goguen’s, including Matthew Marshall. Marshall worked for Amyntor, a private security company Goguen and Marshall formed in 2013. The Complaint alleged numerous instances of sexual and criminal misconduct by Goguen, including allegations of plotting murder, paying off law enforcement, and sexual assault. This lawsuit was filed while Marshall was under federal indictment and being investigated for crimes related to his business dealings with Goguen. Marshall pled guilty to wire fraud, money laundering, and tax evasion on November 10, 2021. Marshall is currently serving a six-year prison term for those crimes and owes Goguen over $2 million in restitution for defrauding him. Marshall’s lawsuit against Goguen was dismissed with prejudice on May 24, 2022.

¶4 The New York Post ("NYP") released an online article written by Isabel Vincent reporting on these two lawsuits on November 20, 2021, titled "Tech billionaire allegedly kept spreadsheet of 5,000 women he had sex with," followed by a print article the next day. The article details the allegations from both the Marshall and Baptiste Complaints, along with allegations from Goguen’s former friend, Bryan Nash, and a quote from the retired Whitefish police chief, Bill Dial. While the article indicates Goguen won his countersuit against Baptiste, Marshall pled guilty to wire fraud and tax evasion, and Nash was convicted of stalking and extortion of Goguen, it mentions these facts after recounting the complainant’s allegations against Goguen. The article concludes with a quote from Dial, referring to him as a local authority, wherein Dial said, " ‘This man has to be stopped ... He’s a billionaire a la Harvey Weinstein and Epstein. There’s a lot of people in this community who know what he’s about and they’re afraid of him.’"

¶5 The day after the article was published, Goguen posted a statement on Twitter denying the allegations. That same day, NYP published a second article, based on Goguen’s Twitter response, entitled "Tech billionaire Michael Goguen fires back at bombshell allegations." Goguen’s legal counsel sent a demand letter to NYP on November 21, 2021, asking for corrections to the article and a published apology. The NYP responded on November 24, 2021, claiming all statements in the article are privileged as a fair and accurate report of judicial proceedings. However, in its discretion, NYP chose to clarify two points in the article: (1) that Baptiste’s allegations were found by the court to be false and defamatory and Baptiste was ordered to pay Goguen $14 million in damages, and (2) that it would change a photo caption to make it clear the allegations against Goguen were part of a civil suit and not a federal indictment.

¶6 Goguen then filed a Complaint against NYP, Vincent, and Dial for defamation in Montana’s Eleventh Judicial District Court, Flathead County. The Complaint alleged the following statements from the Post article were false, defamatory, and unprotected by any privilege:

1. Goguen "transformed" Whitefish, Montana, "into his private fiefdom" and "a dark banana republic."

2. Goguen "controls local law enforcement."

3. Goguen maintains a "spreadsheet documenting his sexual encounters" with "5,000 women."

4. Goguen "outfitted a local bar he owns with a basement ‘boom boom’ room, which features a stripper pole" and used the room "to maintain women for the purpose of committing illicit sexual activity."

5. Goguen "could not obtain a security clearance with the US government because of the allegations of sexual abuse."

6. "Women tried to complain to police about Goguen’s alleged sexual assaults."

7. Members of the Flathead County Sheriff’s Department were "on Goguen’s payroll."

8. One woman "told a local police officer that Goguen had allegedly sexually assaulted her."

9. "Pam Doe told Whitefish police that Goguen had sexually assaulted her" and "later recanted her story with police after signing a non-disparagement agreement with Goguen."

10. "Threats to publicize unsubstantiated incidents of sexual impropriety unnerved former Sequoia Capital partner Michael Goguen and other Valley luminaries, according to a federal indictment."

11. Amber Baptiste accused Goguen of; "constant sexual abuse," "countless hours of forced sodomy," and de- mands that Baptiste refer to Goguen as "king" and "emperor."

12. Amber Baptiste "underwent surgery for a ruptured anal canal after Goguen ‘forcibly sodomized her and left her bleeding and alone on the floor of a hotel room in a foreign country.’"

13. Amber Baptiste was restrained "from filing any similar suits against" Goguen.

14. Goguen "filed a counter-claim" against Baptiste.’

15. Goguen "falsely told the FBI that Marshall did not have the requisite experience [and] had stolen and then laundered funds from Goguen."

16. "[A]ccording to the civil complaint, Marshall spent the cash on Goguen’s orders and was not reimbursed by Goguen."

¶7 NYP moved to dismiss on the basis that the article was protected by New York’s fan report privilege and Dial moved to dismiss on the basis his communication was protected opinion. The District Court denied NYP’s motion to dismiss, finding that Montana law applied to the issue of whether the article was privileged, and whether the article was a true and fair report absent malice was a question of fact for the jury. The District Court granted Dial’s motion to dismiss, reasoning they were protected opinion statements and not sufficiently factual to imply undisclosed facts beyond those contained in the NYP article.

¶8 The District Court certified its Order as final pursuant to M. R. Civ. P. 54(b), and this Court found the certification to be in compliance with M. R. App. P. 6(6) on September 20,2022.

STANDARD OF REVIEW

[1–3] ¶9 We review a district court ruling on a motion to dismiss de novo. Turner ν. City of Dillon, 2020 MT 83, ¶ 6, 399 Mont. 481, 461 P.3d 122. A claim can be dismissed under M. R. Civ. P. 12(b)(6) if either it does not state a Cognizable legal theory for relief or fails to plead sufficient facts that, if taken as true, would entitle the claimant to relief. Stowe v. Big Sky Vacation Rentals, Inc., 2019 MT 288, ¶ 12, 398 Mont. 91, 454 P.3d 655. We construe all well-pleaded facts in the light most favorable to the plaintiff. In re Estate of Swanberg, 2020 MT 153, ¶ 6; 400 Mont. 247, 465 P.3d 1165.

DISCUSSION

[4, 5] ¶10 In a society which takes seriously the principle that government rests upon the consent of the governed, the press plays a critical role in providing information to the people which allows citizens to form judgments and to intelligently govern. "The press has a preferred position in our constitutional scheme, not to enable it to make money, not to set newsmen apart as a favored class, but to bring fulfillment to the public’s right to know." Branzburg ν. Hayes, 408 U.S. 665, 721, 92 S.Ct. 2646, 33 L.Ed.2d 626 (1972) (Douglas, J., Dissent). To preserve the "marketplace of ideas so essential to our system of democracy, we must be willing to assume the risk of argument and lawful disagreement." James v. Board of Education, 461 F.2d 566, 572 (2d Cir. 1972). Our First Amendment protections do not turn upon the "truth, popularity, or social utility of the ideas and beliefs which are offered." NA.A.C.P. v. Button, 371 U.S. 415, 445, 83 S.Ct. 328, 9 L.Ed.2d 405 (1963). As the Court has explained:

In the realm of religious faith, and in that of political belief, sharp differences arise. In both fields the tenets of one man may seem the rankest error to his neighbor. To persuade others of his own point of view, the pleader, as we know, at times,

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