Court Opinion

ID: 9810198
Source: CourtListenerOpinion
Date Created: 2023-08-31 21:43:25.143397+00
Date Added: 2024-06-11T13:39:28.619070
License: Public Domain

OPINION OF THE COURT
Tom, J.P.
This defamation action arises out of a wholly accurate news report stating that federal authorities raided The Cheetah Club (Cheetah’s), a midtown Manhattan strip club, which they alleged to be “run by the [M]afia” and at the center of an underground immigration ring that brought Russian and eastern European women into the United States, forcing them to work as exotic dancers.
On November 30, 2011, federal agencies charged seven alleged members and associates of the Gambino and Bonanno crime families with, inter alia, transporting and harboring illegal aliens to work as dancers in New York area strip clubs. The indictment alleged that organized crime defendants controlled certain strip clubs and forced women who had been trafficked from eastern Europe to dance at the clubs. As the women would be placed in sham marriages for citizenship purposes, the federal operation was called “Operation Dancing Brides.”
On November 30, 2011, federal authorities executed a search warrant at Cheetah’s. In support of the warrant’s application, a federal officer averred that organized crime conspirators had negotiated terms with strip clubs, including Cheetah’s, for trafficked dancers to perform because, in Cheetah’s case, other providers had not been able to meet the club’s needs. According *84to the affidavit, the trafficked women were brought to Cheetah’s, where they were video recorded reading contracts and where the women thereafter danced. Plaintiffs take the position that no one at Cheetah’s was involved in the crimes underlying Operation Dancing Brides.
The relationship of the Times Square plaintiffs and their employees, the individual plaintiffs, to Cheetah’s is not explained, but there is no allegation that these entities are anything more than independent contractors. According to the complaint, plaintiff Times Square Restaurant No. 1, Inc. (No. 1) provides management and promotional services for the Champagne and VIP lounge areas of Cheetah’s. Plaintiff Dominica O’Neill is president of No. 1, and plaintiff Sean Callahan is employed as a manager and consultant whose responsibilities include food and beverages, as well as vendor coordination. Plaintiff Times Square Restaurant Group (the Group) operates a booking agency for the talent (dancers) at Cheetah’s, and plaintiff Philip Stein is employed by the Group as a manager. Plaintiff Three Amigos SJL Rest., Inc., doing business as The Cheetah Club, is not a party to this appeal.
After the raid at Cheetah’s, defendant CBS News broadcast the event during its noon news broadcast. Reporter Kathryn Brown (in front of Cheetah’s) broadcast the following:
“[S]ources tell CBS-2 News this bust is being dubbed ‘Operation Dancing Brides,’ and this strip club here, Cheetahs in Midtown, they say is at the center of the operation. Cheetahs advertises exotic women and the . . . federal authorities say it is run by the mafia. They have been here — feds have been here all morning. They conducted an early morning raid and they’ve been here for hours inside collecting evidence. They are still inside right now. Meantime, earlier this morning, agents with the immigrations and customs enforcement arrested 25 men described as ringleaders of this entire operation. Many of them they say are members of the Gambino and Bonanno crime families. They say the men were involved in an elaborate operation to recruit women from Russia and eastern Europe into the U.S. . . . [to] force the women to work as dancers in strip clubs across New York City, including Cheetahs . . . This is still a developing story and we will have much more on this tonight on CBS-2 News at 5:00.”
*85At 5:00 p.m., defendants broadcast a news program called The Evening Report, which contained, inter alia, the following segment:
“Federal authorities carried out boxes of evidence from this Midtown strip club during an early morning raid. They say the club, Cheetahs, is one of several at the center of an underground immigration ring that stretches from Times Square to the heart of Russia. Investigators say Russian and Italian mobsters were working together in the elaborate scheme to bring Russian and eastern European women to the U.S., then funnel them to strip clubs to work as exotic dancers.”
The Evening Report then showed Kathryn Brown interviewing a federal law enforcement official, the director of the National Organization for Women, and David Carlebach, an attorney for Cheetah’s. Carlebach was broadcast saying, “There is absolutely no La Cosa Nostra, as you say, connection.”
At 9:25 p.m., the local CBS New York website posted a summary of the story, embedding a PDF copy of the indictment. The website included the statements that Cheetah’s had been “raided,” and that Cheetah’s was “one of several [strip clubs] at the center of an underground immigration ring” controlled by indicted defendants who “protected their turf through intimidation and threats of physical and economic harm.” The story ended, “As federal teams cast a wide net around strip clubs and their owners [,] attorney David Carlebach . . . insisted his client’s hands are clean. ‘There is absolutely no “La Cosa Nostra,” as you say, connection,’ Carlebach said.”
By summons and verified complaint filed April 27, 2012, plaintiffs alleged that defendants, in broadcasting and publishing stories concerning Operation Dancing Brides, defamed them. Plaintiffs claimed that the stories were misleading, false, and malicious, and that plaintiffs had no connection with the Mafia, Operation Dancing Brides, human trafficking, extortion, or any other human rights abuse. The complaint contains four causes of action — defamation per quod, defamation per se, injurious falsehood, and respondeat superior. Plaintiffs assert that the false allegations of Cheetah’s involvement subjected plaintiffs to scorn and ridicule and adversely affected their ability to earn income from their activities on behalf of the club.
Defendants moved pursuant to CPLR 3211 (a) (1) and (7) for dismissal of the complaint. Defendants argued, inter alia, that *86all claims made by the Times Square plaintiffs and by the individual plaintiffs (collectively plaintiffs) must be dismissed because the challenged news reports were not “of and concerning” plaintiffs, as a matter of law.
Plaintiffs opposed defendants’ motion, arguing that the alleged libel designated plaintiffs in such a way so as to let those who knew them understand that they were the persons meant and that plaintiffs were entitled to so prove that fact to a jury. Specifically, plaintiffs pointed to the reports’ assertions that Cheetah’s was “run by the mafia” and “at the center” of a human trafficking ring. By making such statements, plaintiffs argued, defendants were asserting that O’Neill, Stein, and Callahan were members of organized crime.
The motion court granted defendants’ motion, found that all of the challenged statements related solely to Cheetah’s, and dismissed the claims of the Times Square plaintiffs and the individual plaintiffs. The court further found that nothing in any of the broadcasts mentioned, or even indirectly referred to, the Times Square corporations, nor did any statement assert or even imply that the individually named plaintiffs were part of the Mafia or a global trafficking scheme. That the broadcast might have a negative impact on the business of the Times Square corporations, or that they might have caused plaintiffs’ friends to shun them did not demonstrate that the statements were “of and concerning” plaintiffs. The court also noted that First Amendment concerns required plaintiffs to be clearly identifiable, which they were not.
On appeal, plaintiffs cling to their contention that they are clearly identifiable as the persons and entities that “run” Cheetah’s on account of the functions they perform for the club. At the outset, plaintiffs do not explain why entities that merely supply services to an establishment should be perceived by the public to exercise such control over its operation as to be identified with illegal activities on the premises. To the contrary, plaintiffs’ relationship to Cheetah’s is peripheral, and the public at large would have no reason to think that they were implicated in the federal investigation. As to patrons, there is no explanation of why they would be aware of the businesses that supply food and beverages to the club (Times Square Restaurant No. 1) or book dancers to perform there (Times Square Restaurant Group). While the individual plaintiffs involved in the operation of those businesses may be present at the club “on a daily basis . . . and are highly visible to . . . *87customers,” as the affidavit of Dominica O’Neill states, they are nevertheless mere employees. Significantly, they are not employees of Cheetah’s itself, but rather, present at the club to perform the services provided to it by their own employers. They can hardly be understood to be “those who ‘run’ the Cheetah Club,” which implies persons in a position of ownership or control, not vendors that supply management services or their employees, whose presence is required in order to render those services.
As noted, Cheetah’s is not a party to this appeal. The club’s owner, nonparty Selim Zherka, is currently being held without bail, awaiting trial on an indictment charging him with fraud, income tax fraud and witness tampering (United States v Zherka, 592 Fed Appx 35 [2d Cir 2015]). Zherka has filed numerous civil rights actions against government officials who he claims described him as a “mobster.” The lawsuits assert that allegations of his organized crime connections are false and are either motivated by prejudice against his Albanian ethnicity or retaliation for his ownership of strip clubs. Each case has either been dismissed prior to adjudication or voluntarily withdrawn by Zherka. Zherka, as the owner of Cheetah’s, is in a position of ownership and control, not plaintiffs. The Times Square plaintiffs are not identified in the news reports as being operated by organized crime, and their capacity as vendors to Cheetah’s hardly serves to equate them with those identified by the report as “the [M]afia.”
The affidavits supporting the warrant to search Cheetah’s remain under seal in connection with federal indictments arising out of information obtained from its execution. Thus, the asserted falsity of the news reports cannot be assessed. However, even assuming the reports to be untrue, plaintiffs do not establish that the accurate reporting of events surrounding the search, including the purportedly untrue statements attributed to federal authorities, is outside the protection of the First Amendment. Even upon a cursory analysis, it is impossible to escape the conclusion that exposing news organizations to defamation claims by any business supplying goods or services to an entity reported to be engaged in illegal conduct would have a chilling effect on free speech, specifically, the dissemination of information of general interest to the public. Even where a news report is inaccurate, a defamation action is subject to summary dismissal if “the story covered a topic within the sphere of legitimate public concern” (Carlucci v *88Poughkeepsie Newspapers, 88 AD2d 608, 609 [2d Dept 1982], affd 57 NY2d 883 [1982]).
As the dissent acknowledges, whether a particular publication is capable of the meaning ascribed to it is a question for the court (Julian v American Bus. Consultants, 2 NY2d 1, 14 [1956]). Similarly, whether a plaintiff in a defamation action lias demonstrated that a particular statement names or so identifies him so that the statement can be said to be “of and concerning” that plaintiff may be decided as a matter of law and need not be determined by a jury (see Springer v Viking Press, 60 NY2d 916, 917 [1983]). Where, as here, the statement does not name the plaintiffs at all and contains nothing that would cause a reader to think defendant was referring to them, the statement is not “of and concerning” the plaintiffs (Smith v Catsimatidis, 95 AD3d 737 [1st Dept 2012], lv denied 20 NY3d 852 [2012]; see Salvatore v Kumar, 45 AD3d 560, 563 [2d Dept 2007], lv denied 10 NY3d 703 [2008] [complaint dismissed where plaintiff was not named and statement in defendant’s publication about some of its “executives and personnel” was not sufficiently “of and concerning” plaintiffs, former employees of defendant]). As this Court has noted, a statement made about an organization is not understood to refer to any of its individual members unless that person is distinguished from other members of the group (Fulani v New York Times Co., 260 AD2d 215, 216 [1st Dept 1999]). Likewise, where an allegedly defamatory statement is directed at a company, it does not implicate the company’s suppliers, partners, vendors or affiliated enterprises even if they sustain injury as a result (see Kirch v Liberty Media Corp., 449 F3d 388, 398 [2d Cir 2006]).
The dissent accepts, as a matter of law and fact, that the individual plaintiffs (though not the Times Square plaintiffs) “run” Cheetah’s, as the complaint alleges. While this contention is superficially plausible, it does not withstand closer inspection. The argument is specious, founded upon an attempt to conflate the meaning of the terms “manage” and “run.” The fundamental flaw in the complaint is the failure to distinguish the concept of control over an organization from the mere provision of management services to the entity by a vendor or, more specifically, the employees of a vendor. The general understanding of a business “run by the [MJafia” is the subjugation of the entity by organized crime, typically by force and intimidation, in furtherance of illegal activities. Ultimately, the theory of recovery espoused in the complaint amounts to *89an exercise in semantics. While “run” may colloquially refer to management of the routine, day-to-day operation of a business, its meaning acquires a significantly more sinister connotation when used in the same sentence as “[M]afia.” The public certainly appreciates this distinction, even if the dissent does not appear to grasp its import. Significantly, the dissent does not contend that the individual plaintiffs were in a position to exercise such authority over Cheetah’s operation that they can be said to have been in control of its affairs (conceding that their employers, the Times Square plaintiffs, do not occupy such a position of dominance). Were the individual plaintiffs to attempt to meddle in the affairs of an entity truly “run” by organized crime, they would need to adopt yet a third, considerably more dynamic definition of the term.
A plaintiff bears the burden of pleading and proving that the asserted defamatory statement “designates the plaintiff in such a way as to let those who knew him understand that he was the person meant” (Stern v News Corp., 2010 WL 5158635, *5, 2010 US Dist LEXIS 133119, *16 [SD NY, Oct. 14, 2010, No. 08-Civ-7624 (DAB/RLE)], citing Fetler v Houghton Mifflin Co., 364 F2d 650, 651 [2d Cir 1966]). While a plaintiff may use extrinsic facts to prove that the statement is “of and concerning” him, he must show the reasonableness of concluding that the extrinsic facts were known to those to whom the statement was made (see Chicherchia v Cleary, 207 AD2d 855, 856 [2d Dept 1994]; see also Geisler v Petrocelli, 616 F2d 636, 639 [2d Cir 1980] [noting that the burden “ ‘is not a light one’ ”]). Plaintiffs seek to state their case by innuendo. As this Court stated:
“ ‘The question which an innuendo raises, is [one] of logic. It is, simply, whether the explanation given is a legitimate conclusion from the premise stated.’
“The innuendo, therefore, may not enlarge upon the meaning of words so as to convey a meaning that is not expressed” (Cole Fisher Rogow, Inc. v Carl Ally, Inc., 29 AD2d 423, 427 [1st Dept 1968] [alteration in original], affd 25 NY2d 943 [1969], quoting Tracy v Newsday, Inc., 5 NY2d 134, 136 [1959]).
The suggestion that the individual plaintiffs are necessarily identified as members of organized crime because they are employees of entities that provide management services to *90Cheetah’s — reported to be “run” by the Mafia — is simply not logical. It is based on innuendo and constitutes an attempt to enlarge the concept of managerial services to include domination and control of an organization by force, whether actual or threatened, in contravention of the rule set forth in Tracy.
Accordingly, the order of Supreme Court, New York County (Ellen M. Coin, J.), entered on or about April 18, 2013, which to the extent appealed from as limited by the briefs, granted defendants’ motion for dismissal of the defamation claims asserted by plaintiffs Times Square Restaurant No. 1, Inc., Times Square Restaurant Group, Dominica O’Neill, Shawn Callahan, and Philip Stein pursuant to CPLR 3211 (a) (1) and (7), should be affirmed, without costs.