Judge Tosses Defamation Claim Against Fujifilm

(CN) - A Fujifilm executive did not defame a former employee by accusing him of orchestrating a nine-year scheme to defraud the company, a federal judge in Manhattan ruled.

Former marketing director Scott McNulty said the accusations, contained in a memo, damaged his reputation and subjected him to "ridicule and contempt."

McNulty said a senior executive sent the defamatory letter to Fuji employees and to third parties, including parents in his son's hockey league.

Fuji Photo Film U.S.A. filed a civil complaint against McNulty and his purported cohorts the same day the memo went out, alleging racketeering and fraud, among other charges.

It claimed that McNulty hired outside vendors to process rebate checks and to work on the Web site, then pocketed the money without completing the work.

Fuji said McNulty perpetrated the fraud for nearly a decade, until his resignation in 2004. The photo company demanded $12.5 million in damages.

McNulty countersued for defamation, claiming he suffered "not less than $1 million" in damages.

U.S. District Judge Shira A. Scheindlin dismissed the counterclaim, because McNulty couldn't prove that anyone other than Fuji employees received the memo, and employees had a legal right to the information.

She found McNulty's claim that the memo defamed him to third parties, such as the hockey parents, to be "insufficient."

"McNulty fails to identify which parents received the (memo), whether those parents were also Fuji employees, who at Fuji distributed the (memo) to the hockey parents, and when and where the distribution occurred," she wrote.

McNulty also claimed that the statements in the memo "go beyond merely reciting the allegations," arguing that they imply "serious further misconduct."

Judge Scheindlin found the argument "unconvincing."

She said the statements in the memo summarize, or quote directly from, the same allegations made in the complaint.

The judge tossed two additional counterclaims levied by another defendant, The Windwood Group, which accused Fuji of breach of contract and fraud.

Both defendants were given the chance to amend their counterclaims.

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