Misreporting Bankruptcy Didn’t Defame Pippen

     (CN) – Scottie Pippen cannot revive defamation claims over media articles incorrectly reporting that the former NBA star had filed for bankruptcy, the 7th Circuit ruled.
     As a public figure, Pippen failed to show that the news organizations acted with “actual malice” when they reported about his financial situation, according to the ruling.
     After ending his professional basketball career in 2004, bad investments led Pippen to lose a large portion of the fortune he had amassed during his playing career that put him among the 50 greatest players in NBA history.
     Pippen has filed multiple lawsuits against former financial and legal advisers he accuses of leading him astray. When the media learned about Pippen’s problems, several news organizations reported that he had filed for bankruptcy, which was not true.
     Claiming that the false reports impaired his ability to earn a living through endorsements and personal appearances, Pippen sued NBC Universal Media and several other outlets.
     U.S. District Judge Sharon Coleman in the Northern District of Illinois dismissed the suit, finding that the false statements were not innately harmful enough to presume damages. She also concluded that Pippen failed to show that the media acted with actual malice in reporting on Pippen’s financial situation.
     The 7th Circuit affirmed on slightly different grounds Wednesday, finding that Pippen had stated special damages. Indeed, the longtime Chicago Bull identified specific business opportunities that were no longer available to him after the false media reports of his bankruptcy, according to the ruling.
     “It appears to be an example of the post hoc ergo propter hoc fallacy: since Pippen’s opportunities diminished after the statements were made, he believes they must have diminished because the statements were made,” Chief Judge Frank Easterbrook wrote for the court (emphasis in original). “This theory of causation is weak for professional athletes, whose earnings related to past stardom drop as time passes since their playing days. But, as a matter of pleading, Pippen did enough.”
     Pippen did fail, however, to prove that the news organizations acted with actual malice, a requirement for public figures pursuing defamation lawsuits. The six-time NBA champion and seven-time All-Star was required to prove that the media knew the statements about his bankruptcy were false or “were recklessly indifferent” about whether they were true or false.
     “If rather than relying on the rumor mill the defendants had conducted even a cursory investigation, they would have discovered that Pippen had not declared bankruptcy – and they concede this,” Easterbrook wrote. “But failure to investigate is precisely what the Supreme Court has said is insufficient to establish reckless disregard for the truth.”
     In addition, Pippen cannot prove actual malice by the failures of news organizations to retract their statements after Pippen informed them via email that he had not filed for bankruptcy. Later circulations of the original publication also do not trigger fresh claims of defamation, as a claim for relief is complete at the time of first publication, under the Uniform Single Publication Act.
     “The act protects speakers and writers from repeated litigation arising from a single, but mass-produced, defamatory publication,” Easterbrook wrote.
     Pippen argued that this should not apply to online publications, which would more easily be able to alter a story to correct a false statement than traditional print media publications.
     “Print publishers would need to hunt down every physical copy of a book, magazine, or newspaper in circulation, while Internet publishers can alter their sites with relative ease,” Easterbrook wrote. “In Pippen’s view, then, every day that an unaltered defamatory statement remains online after a publisher learns of its falsity constitutes an actionable republication.”
     Because Illinois courts have yet to consider how the single-publication rule applies to Internet publications, it is the 7th Circuit’s job to predict how the Supreme Court would answer the question.
     In looking at how state and federal courts have handled the question, Easterbrook found that the “theme of these decisions is that excluding the Internet from the single-publication rule would eviscerate the statute of limitations and expose online publishers to potentially limitless liability.”
     Pippen did not allege that any of the media outlets did anything beyond initially posting the stories about him to their websites, and Easterbrook found that “Illinois would deem the passive maintenance of a web site not a republication.”

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