Nunes v. Lizza

486 F.Supp.3d 1267

Anthony NUNES, Jr.; Anthony Nunes, III; and NuStar Farms, LLC, Plaintiffs,

v.Ryan LIZZA; and Hearst Magazine Media, Inc., Defendants.

No. 20-CV-4003-CJW-MAR

United States District Court, N.D. Iowa, Western Division.

Signed September 11, 2020

Joseph M. Feller, Koopman Kennedy Feller, Sibley, IA, Steven Scott Biss, Pro Hac Vice, Law Office of Steven S. Biss, Charlottesville, VA, for Plaintiffs.

Jonathan R. Donnellan, Pro Hac Vice, Nathaniel S. Boyer, Ravi V. Sitwala, Pro Hac Vice, Hearst, New York, NY, Michael A. Giudicessi, Nicholas A. Klinefeldt, Susan Patricia Elgin, Faegre Drinker Biddle & Reath LLP, Des Moines, IA, for Defendants.

MEMORANDUM OPINION AND ORDER

C.J. Williams, United States District Judge

TABLE OF CONTENTS

I. BACKGROUND...1277

A. Factual Background...1277

B. Procedural Background...1278

II. APPLICABLE LAW...1278

A. Standard under FED. R. CIV. P. 12(b)(6)...1278

B. Substantive Law and Choice of Law...1279

1. Defamation by False Statement...1279

2. Defamation by Implication...1281

III. ANALYSIS...1281

A. Individual Statements...1282

B. Defamation by Implication...1292

1. Defamatory Inference...1292

2. Subjective Intent...1294

C. Involuntary Public Figures and Actual Malice...1294

1. Whether Plaintiffs are Involuntary Public Figures...1294

2. Whether Plaintiffs Pled Actual Malice...1297

D. Federal Rule of Civil Procedure 12(f)...1299

IV. CONCLUSION...1300

This matter is before the Court on defendants’ Pre-Answer Motion to Dismiss the Amended Complaint Pursuant to FED. R. CIV. P. 12(b)(6). (Doc. 33). Plaintiffs filed a timely resistance. (Doc. 41). Defendants timely replied to plaintiffs’ resistance. (Doc. 43). On July 23, 2020, the Court held oral argument on defendants’ motion to dismiss. (Doc. 46). The Court considers this matter fully submitted. For the following reasons, defendants’ motion to dismiss is granted in part and denied in part .

I. BACKGROUND

A. Factual Background

Plaintiff NuStar Farms, LLC ("NuStar") operates a dairy farm in Sibley, Iowa. (Doc. 28, at 3). Plaintiffs Anthony Nunes, Jr. ("Anthony Jr.") and Anthony Nunes III ("Anthony III") (collectively "the Nuneses") manage NuStar. (Id. , at 4). Devin Nunes, a California congressman, is Anthony Jr.’s son and Anthony III's brother. (Id. , at 3).

The Nunes family has long owned and managed a dairy farm located in Tulare, California. (Id. at 4 n.1). This farm is closely associated with Devin Nunes's political profile. (Id. ). In 2006, Anthony III, Anthony Jr., and Anthony Jr.’s wife Toni Dian ("Dian") moved to Iowa, formed NuStar, and started a new dairy farm. (Id. , at 3–4). Devin Nunes has never held any financial interest in NuStar and is not involved in its operations. (Id. ).

On September 30, 2018, defendant Hearst Magazine Media, Inc. published in its Esquire magazine an article written by defendant Ryan Lizza ("Lizza") about plaintiffs and Devin Nunes ("the Article"). (Id. , at 7–8); see also (Doc. 33-2).¹ The Court will discuss the relevant portions of the Article in detail in its analysis of the claims, but a brief overview is useful here.

The online version of the Article was headlined "Devin Nunes's Family Farm is Hiding a Politically Explosive Secret." (Doc. 33–2, at 2). The print version is entitled "Milking the System" and the text under the title, in part, asks "So why did [Devin Nunes's] parents and brother cover their tracks after quietly moving the farm to Iowa? Are they hiding something politically explosive?" (Doc. 33-3). In the seventh paragraph, the Article states "So here's the secret: The Nunes Family dairy of political lore—the one where [Devin Nunes's] brother and parents work—isn't in California. It's in Iowa." (Id. , at 5–6). The Article further explains the secret by discussing how Devin Nunes's family's move to Iowa was not publicized and was apparently obscured. See, e.g. , (id. , at 7). The Article goes on to discuss, among other things, the Nuneses’ sale of their farm in California, the purchase of a farm in Iowa, the Nuneses’ move to Iowa, and that Iowa dairy farmers, including NuStar, employ undocumented workers. (Doc. 33-2, at 4–6).

As part of his reporting, Lizza interviewed multiple sources about undocumented immigrant labor use on Iowa dairy farms generally and NuStar's use of undocumented labor specifically. See, e.g. , (id. , at 16). Lizza also spoke to Jerry Nelson ("Nelson"), a reporter for Dairy Star who previously wrote an article about the Nunes family's move to Iowa. (Id. , at 7). In the Article, Lizza also recounts his personal experience in Sibley investigating NuStar, including encounters with plaintiffs. See, e.g. , (id. , at 10).

B. Procedural Background

On January 16, 2020, plaintiffs filed a complaint in this Court alleging a single count of defamation. (Doc. 1). Paragraph 14 of the complaint alleged that the Article made false and defamatory statements about plaintiffs and listed 16 bullet points constituting the statements plaintiffs allege are false and defamatory. (Id. ). On March 23, 2020, defendants filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) or, in the alternative, a motion for a more definite statement under Rule 12(e). (Doc. 15). After further briefing by the parties, on April 24, 2020, the Court held a hearing on the motion. (Doc. 26). On May 12, 2020, the Court entered an order that denied without prejudice defendants’ Rule 12(b)(6) motion but granted defendants’ Rule 12(e) motion. (Doc. 27).

On May 24, 2020, plaintiffs filed an amended complaint, again alleging a single count of defamation. (Doc. 28). Under a subheading "B. The False Statements and Why They Are False," plaintiffs list 14 statements that they allege are false and defamatory. (Id. , at 14–21). Plaintiffs also allege that the Article as a whole is defamatory by implication, alleging that "Defendant's carefully chose their words and purposefully misrepresented facts" and "juxtapose[d] a series of facts so as to imply a defamatory connection between them." (Id. , at 21–23). On June 22, 2020, defendants moved to dismiss the amended complaint. (Doc. 33).

II. APPLICABLE LAW

A. Standard under FED. R. CIV. P. 12(b)(6)

A complaint must contain "a short and plain statement of the grounds for the court's jurisdiction," "a short and plain statement of the claim showing that the pleader is entitled to relief," and "a demand for the relief sought." FED. R. CIV. P. 8(a). Rule 12(b)(6) provides that a party may assert the defense of failure to state a claim upon which relief can be granted by motion "before pleading if a responsive pleading is allowed." "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal citations and quotation marks omitted). "Factual allegations must be enough to raise a right to relief above the speculative level," but "a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that recovery is very remote and unlikely." Id. , at 555–56, 127 S.Ct. 1955. Indeed, a theory asserted need only be plausible, which requires "enough fact to raise a reasonable expectation that discovery will reveal evidence of [the conduct alleged]." Id.

"[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged —but has not shown —that the pleader is entitled to relief."

Ashcroft v. Iqbal , 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (emphasis added) (citation and internal quotation marks omitted). "When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. When a pleading contains nothing more than conclusions, however, those conclusions are not entitled to the assumption of truth. Id. "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Id. "[T]here is no justification for dismissing a complaint for insufficiency of statement, except where it appears to a certainty that the plaintiff would be entitled to no relief under any state of facts which could be proved in support of the claim." Leimer v. State Mut. Life Assur. Co. of Worcester , 108 F.2d 302, 306 (8th Cir. 1940).

B. Substantive Law and Choice of Law

The Court has diversity jurisdiction over this case under Title 28, United States Code, Section 1332. See (Doc. 28, at 3–6). "A district court sitting in diversity applies the [substantive] law, including the choice-of-law rules, of the state in which it sits." Prudential Ins. Co. of Am. v. Kamrath , 475 F.3d 920, 924 (8th Cir. 2007). Here, both parties cite Iowa substantive law in their briefs and neither asserts a choice of law dispute. Consequently, the Court will apply Iowa substantive law.

1. Defamation by False Statement

Under Iowa law, defamation is either libel or slander. Theisen v. Covenant Med. Ctr., Inc. , 636 N.W.2d 74, 83 (Iowa 2001). The Iowa Supreme Court defines libel as the "malicious publication, expressed either in printing or in writing, or by signs or pictures, tending to injure the reputation of another person or to expose [that person] to public hatred, contempt, or ridicule or to injure [the person] in the maintenance of [a] business." Plendl v. Beuttler , 253 Iowa 259, 111 N.W.2d 669, 670–71 (1961). Here, plaintiffs’ complaint sounds in libel because it is based on an allegedly defamatory writing.

"Iowa courts recognize two types of libel: libel per se and libel per quod." Doe v. Hagar , 765 F.3d 855, 860 (8th Cir. 2014) (citation and internal quotation marks omitted). "A statement is libelous per se if it has ...