Judge tosses convicted lawyer’s $10 million defamation lawsuit against Inner City Press

LOS ANGELES (CN) — A federal judge threw out the defamation lawsuit by a convicted lawyer seeking $10 million in damages against Inner City Press, a nonprofit operated by Matthew Lee who reports from the federal court in Manhattan, for purportedly falsely implying that he was charged and convicted of domestic violence.

U.S. District Judge Mark Scarsi on Wednesday granted Inner City Press's motion to strike the claims under California's anti-SLAPP statute, a law that empowers courts to dismiss at an early stage unmeritorious accusations that attempt to restrain free speech.

"The court agrees with defendants that the statements are subject to the fair and true report privilege," Scarsi said. "Defendants published the statements in connection with reporting about plaintiff’s criminal proceeding in the Southern District of New York, which undoubtedly constitutes a judicial proceeding under the privilege."

Derek Jones, who's serving a 66-month sentence in Lompoc, California, claimed that Lee, who covered his wire fraud case in New York, published a series of headlines that referred to him as "White Collar Criminal Linked to Black Eye," which were entirely fabricated because, Jones argues, there was never any mention of a "black eye" during the proceedings let alone an allegation that Jones caused said black eye.

At one of the hearings that the Inner City Press reported, federal prosecutors asked the judge to modify Jones's conditions of release pending sentencing "to preclude him from contacting two ex-girlfriends on the basis he had been accused of domestic abuse" according to Scarsi's ruling, a request the judge granted.

Jones, however, claims that Lee misrepresented what occurred at the Nov. 10, 2022 status conference at issue by creating "the false impression that Jones's culpability for crimes of domestic violence had already been established." Lee, Jones says, perpetuated the false narrative by continuing to refer to the "black eye" in his other stories on the case.

Scarsi wasn't persuaded that Lee had just created the headline and story out of thin air.

"Even if plaintiff is correct that the court did not make findings about the domestic abuse allegations levied at a status conference, it is indisputable the allegations were a substantive topic of discussion," the judge wrote.

"Defendants’ reporting captures the essence of the proceedings even if defendants exercised some literary license in their description of the conference," Scarsi added.

The judge allowed Jones to file an amended complaint to overcome the shortcomings of his defamation claim. He also allowed Inner City Press to seek their attorney's fees for prevailing on their anti-SLAPP motion.

The disbarred lawyer didn't immediately respond to a request for comment.

Jones pleaded guilty to one count of wire fraud, without a plea agreement, one week before he was to go on trial on charges he ran a yearslong scheme to defraud real estate and venture capital investors of millions of dollars.

He unsuccessfully tried to withdraw his plea on the eve of his sentencing hearing, and earlier this month, the Second Circuit Court of Appeals rejected his bid to vacate his sentence.

"Jones continued to deny responsibility leading up to sentencing," the appellate court said. "Jones argued that one of his investment schemes — for which he had manipulated a bank statement to show a balance of $7 million instead of the account’s actual negative balance [...] — was 'an entirely legitimate enterprise.'"

Follow @edpettersson

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