Khan v. Orbis Bus. Intelligence

1

German Khan, Mikhail Fridman, and Petr Aven, Appellants, v. Orbis Business Intelligence Limited and Christopher Steele, Appellees.

Nos. 21-CV-0283, 21-CV-0440

Court of Appeals of The District of Columbia

April 13, 2023

Argued September 14, 2022

Appeals from the Superior Court of the District of Columbia (2018-CA-002667-B) (Hon. Anthony C. Epstein, Trial Judge)

Alan S. Lewis, with whom Kim Sperduto was on the brief, for appellants.

Christina Hull Eikhoff, with whom Kristin Ramsay and Kelley C. Barnaby were on the brief, for appellees.

Before Beckwith and Alikhan, Associate Judges, and Glickman ^[*] Senior Judge.

GLICKMAN, Senior Judge:

These consolidated appeals present challenges to awards of attorney fees and other litigation costs to prevailing defendants under the Anti-Strategic Lawsuits Against Public Participation ("Anti-SLAPP") Act.^[1]"Broadly speaking, the term SLAPP is used to refer to 'an action filed by one side of a political or public policy debate aimed to punish or prevent opposing points of view.'"^[2] The Council enacted the Anti-SLAPP Act "to protect targets of such meritless lawsuits."^[3] The Act empowers defendants to defeat SLAPPs at their inception, expeditiously and at minimal expense, by means of a "special motion to dismiss" the lawsuit and provisions for awarding successful defendants their attorney fees and costs. The Superior Court made two such awards in the present case after this court, in a previous appeal, affirmed its grant of the defendants' special motion to dismiss. We now affirm the awards, which compensated the defendants for the expenses they incurred in defeating that lawsuit and in litigating their motion to recover their costs of defense.

I. Background

In 2018, appellants German Khan, Mikhail Fridman, and Petr Aven sued appellees Christopher Steele and his company Orbis Business Intelligence Limited ("Orbis") in Superior Court for defamation. The allegedly false and defamatory statements about them were contained in the so-called "Steele Dossier," a collection of opposition research reports prepared by Steele for use in connection with the 2016 United States Presidential campaign. The Dossier was shared with politicians, government officials, and the media.

The statements at issue in the defamation action recounted what an unnamed "[t]op level Russian government official" told Steele he had heard from an unidentified "trusted compatriot": among other things, that Fridman, Aven, and the Alfa Group (appellants' Russian business conglomerate) had a longstanding relationship with Russian President Vladimir Putin; that they and Putin had exchanged "[s]ignificant favours" of a "political" and "business/legal" nature; that a former Alfa Group executive had acted as their intermediary "to deliver large amounts of illicit cash" to Putin in the 1990s (when Putin was deputy mayor of St. Petersburg); and that Alfa "held 'kompromat'" on President Putin and "his corrupt business activities from the 1990s," but Putin was able to make Fridman and Aven "do his political bidding."

Steele and Orbis filed a special motion to dismiss the defamation complaint pursuant to § 16-5502 of the Anti-SLAPP Act. As such a motion requires, they made what the Superior Court found to be a "prima facie showing" that appellants' claim of defamation arose from "an act in furtherance of the right of advocacy on issues of public interest."^[4] Upon such a showing, the court must grant the special motion to dismiss "unless the responding party demonstrates that the claim is likely to succeed on the merits."^[5] As we have explained, the question is one of legal sufficiency:

[I]n considering a special motion to dismiss, the court evaluates the likely success of the claim by asking whether a jury properly instructed on the applicable legal and constitutional standards could reasonably find that the claim is supported in light of the evidence that has been produced or proffered in connection with the motion. This standard achieves the Anti-SLAPP Act's goal of weeding out meritless litigation by ensuring early judicial review of the legal sufficiency of the evidence, consistent with First Amendment principles, while preserving the claimant's constitutional right to a jury trial.^[6]

The trial court concluded that appellants failed to make that demonstration in this case because they were unable to proffer clear and convincing evidence that Steele acted with actual malice, i.e., with knowledge that his statements were false or with reckless disregard for whether they were false or not.^[7] On appeal, this court affirmed the Superior Court's rulings and upheld its grant of the special motion to dismiss.^[8] "Even at the special motion to dismiss stage," we held, "appellants must proffer evidence capable of showing [actual malice] by the clear and convincing standard."^[9]

Having prevailed on that motion, Steele and Orbis moved pursuant to § 16-5504(a) of the Anti-SLAPP Act for an award of their reasonable attorney fees and other costs of the litigation. For convenience, we shall refer to the award in this opinion as a "fee award," and to § 16-5504(a) as a "fee-shifting" statute. Appellants did not dispute the reasonableness of the expenses that appellees sought to recover, but they opposed the motion on three other grounds.

First, appellants argued that special circumstances made a fee award unjust because their defamation lawsuit was not a "classic meritless" SLAPP brought in bad faith; their "goal in bringing the instant action," they said, "was not to prevent expression of an opposing point of view, but rather, was to clear their names" after they had been publicly maligned. Second, appellants argued that the fee-shifting provision in § 16-5504(a) is unconstitutional, on its face and as applied to them, because it imposes an undue burden on the First Amendment right to petition the government for a redress of grievances. Third, appellants contended that the application of the Anti-SLAPP Act's special motion to dismiss and fee-shifting provisions in their case violated the requirement in D.C. Code § 11-946 that the Superior Court "conduct its business according to the Federal Rules of Civil Procedure" unless this court has approved a modification of those Rules.

The trial judge, Associate Judge Epstein, rejected each of appellants' arguments, accepted the reasonableness of appellees' request, and issued an order on April 2, 2021, awarding appellees their attorney fees and other costs in the total sum of $440,538.58.

Appellees then moved for an additional award of $29,807.50 for the fees and costs they had incurred to obtain the April 2 award, which is commonly referred to as an award of "fees on fees." Appellants urged the court to deny the additional award, arguing that it would unjustly penalize them for raising what they called "three issues of first impression" in their opposition to the April 2 award. The judge found this objection unpersuasive and granted appellees' motion.

In the present appeals, appellants ask us to overturn each of the Superior Court's awards. They present us with essentially the same four arguments that they made in the proceedings below. For the reasons we now proceed to discuss, we are not persuaded by those arguments, and we affirm the two orders on appeal.

II. Appellees' Entitlement to Reasonable Attorney Fees and Costs under D.C. Code § 16-5504(a)

Section 16-5504(a) of the Anti-SLAPP Act provides that "[t]he court may award a moving party who prevails, in whole or in part, on a motion brought under § 16-5502 . . . the costs of litigation, including reasonable attorney fees." In Doe v. Burke, we construed this provision to mean that a successful movant on a special motion to dismiss "is entitled to reasonable attorney's fees in the ordinary course - i.e., presumptively - unless special circumstances in the case make a fee award unjust."^[10]

In opposition to appellees' fee motion, appellants argued that a fee award was unwarranted because their defamation lawsuit was not a classic, meritless SLAPP brought in bad faith. To establish that they had filed it in good faith to protect their reputations, appellants submitted documentary materials supporting their claim that Steele had published damaging falsehoods about their relationship with Putin without exercising reasonable care to confirm that the allegations were credible. Prominent in the materials appellants submitted were records and the decision in a lawsuit that appellants had brought against Orbis in the United Kingdom for "correction of the record and other remedies" available under the U.K.'s Data Protection Act 1998,^[11] and reports issued by the United States Office of the Inspector General and the Senate Judiciary Committee. As pertinent here, the trial court in the U.K. lawsuit (the High Court of Justice, Queen's Bench Division) found that the allegations in the Steele Dossier about illicit payments to Putin through an intermediary were proven to be false, and that Steele had failed to take reasonable steps to verify those allegations before he included them in his report.^[12] The U.S. governmental reports more generally criticized Steele's methodology and the sources he had relied on in producing the Dossier. Appellants contended that their good-faith assertion of a substantiated claim of defamation constituted a special circumstance that made a fee award unjust.

The trial judge disagreed. "Unfortunately for plaintiffs," the judge said, this court in Doe v Burke rejected the argument that special circumstances exist if the lawsuit is not "the classic meritless lawsuit that [the] Anti-SLAPP Act was designed to punish." The judge found that the materials appellants submitted in opposition...