Nunes v. Cable News Network, Inc. ( 2022 )

21-637
Nunes v. Cable News Network, Inc.
In the
United States Court of Appeals
For the Second Circuit
August Term, 2021
No. 21-637
DEVIN G. NUNES,
Plaintiff-Appellant,
v.
CABLE NEWS NETWORK, INC.,
Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of New York
ARGUED: NOVEMBER 30, 2021
DECIDED: APRIL 14, 2022
Before: PARK, NARDINI, and MENASHI, Circuit Judges.
Plaintiff-Appellant Devin G. Nunes appeals the Southern
District of New York’s (Laura Taylor Swain, Chief Judge) dismissal of
his defamation and civil conspiracy claims for failure to state a claim.
We hold that the district court correctly predicted that the Virginia
Supreme Court, applying lex loci delicti, would determine that
California law governs Nunes’s claims. Further, we affirm the district
court’s determination that the complaint failed to state claims for
defamation and civil conspiracy to defame because Nunes (1) failed
to demand retraction in accordance with California Civil Code § 48a,
a substantive rule of decision, and (2) failed to plead special damages
with the specificity required under Federal Rule of Civil Procedure
9(g). Accordingly, we AFFIRM the judgment of the district court
dismissing the complaint with prejudice.
JUDGE MENASHI dissents in a separate opinion.
STEVEN S. BISS, Law Office of Steven S. Biss,
Charlottesville, VA, for Plaintiff-Appellant.
STEPHEN J. FUZESI (Kevin T. Baine, Nicholas
G. Gamse, Matthew J. Greer, on the brief),
Williams & Connolly LLP, Washington,
D.C., for Defendant-Appellee.
WILLIAM J. NARDINI, Circuit Judge:
In this diversity action, Plaintiff-Appellant Devin G. Nunes
sued Defendant-Appellee Cable News Network, Inc. (“CNN”) for
defamation and civil conspiracy in the United States District Court for
the Eastern District of Virginia. The case was eventually transferred
to the Southern District of New York (Laura Taylor Swain, Chief
2
Judge), but all parties agree that the action remains governed by the
choice-of-law principles of Virginia, the state law of the forum where
this suit was originally filed. And so the question we face is: How
would a Virginia state court have ruled in this case?
The district court dismissed Nunes’s action for failure to state
a claim based on two key holdings. First, it predicted that the Virginia
Supreme Court would, in applying lex loci delicti to a multistate
defamation suit like that brought by Nunes, determine that the “place
of the wrong” is the state where the plaintiff is primarily injured as a
result of the allegedly tortious online content, i.e., the plaintiff’s
domicile, absent strong countervailing circumstances. Applying this
standard, the district court determined that California law governed
Nunes’s claims. Second, applying California’s retraction statute for
defamation claims—California Civil Code § 48a—the district court
determined that Nunes failed to state a claim because he did not
adequately allege a retraction demand or special damages as required
3
by section 48a and Federal Rule of Civil Procedure 9(g). Nunes
challenges each of these conclusions on appeal.
For the reasons outlined below, we affirm the judgment of the
district court.
I. BACKGROUND
A. Factual background. 1
At the time of the alleged defamatory conduct, Devin Nunes
was a citizen of California and a member of the United States House
of Representatives. He represented California for over twenty years
in different positions of public office and served in the House of
Representatives starting in 2003, where he represented California’s
21st and, beginning in 2010, 22nd Congressional District. Nunes was
the Ranking Member of the House Intelligence Committee, which
oversees matters pertaining to national security. In his capacity as the
Ranking Member of that committee, Nunes played a leading role
1 The following facts are drawn from Nunes’s amended complaint, which
we accept as true for purposes of this appeal. See Alix v. McKinsey & Co., 23 F.4th
196, 202 (2d Cir. 2022).
4
during the House of Representatives’ first impeachment inquiry into
U.S. President Donald J. Trump, which was announced on September
24, 2019.
CNN, a Delaware corporation headquartered in Georgia,
operates a digital media network that publishes and disseminates
news through a variety of platforms. CNN’s network includes
television broadcasts, the publication of articles online, and the
operation of multiple social media accounts. Through these
multimedia outlets, CNN delivers news every hour of every day to
tens of millions of readers and viewers worldwide.
On November 22, 2019, CNN published an article written by
reporter Vicky Ward. The article reported that Joseph Bondy, a
lawyer for Lev Parnas (an indicted associate of Rudolph Giuliani),
had stated that Parnas was willing to testify to Congress that Nunes
had traveled to Vienna and met with former Ukrainian Prosecutor
General Victor Shokin (the “Ward Article”). According to the article,
5
Parnas was willing to testify that Nunes’s meetings were to discuss
“digging up dirt” on former Vice President Joe Biden. Joint App’x at
29.
Around the same time that the article was published on CNN’s
digital network, Ward appeared as a guest on a CNN news program,
Cuomo Prime Time, hosted by news anchor Chris Cuomo. Ward and
Cuomo discussed the article and allegedly “published further
defamatory statements” about Nunes’s involvement in “looking for
dirt on the Bidens.” Id. at 35–36. Ward’s article was also disseminated
broadly through both CNN organizational social media accounts,
such as the accounts for CNN International and CNN Politics, and the
individual accounts of CNN employees.
B. Procedural history.
On December 3, 2019, Nunes filed this action in the United
States District Court for the Eastern District of Virginia against CNN.
Nunes brought claims of defamation and conspiracy to defame based
on CNN’s publication on its website of the Ward Article, the
6
discussion of the contents of that article on Cuomo Prime Time, and its
republication through various social media platforms.
CNN moved to dismiss for failure to state a claim under
Federal Rule of Civil Procedure 12(b)(6) and, in the alternative, to
transfer the case to the Southern District of New York under 28 U.S.C
§ 1404(a). Nunes filed an amended complaint, 2 and CNN renewed its
motion to dismiss. The district court in the Eastern District of Virginia
granted CNN’s motion to transfer to the Southern District of New
York, which then granted CNN’s renewed motion to dismiss.
In dismissing Nunes’s complaint, the court applied the choice-
of-law doctrine of Virginia, the state of the transferor court. Because
internet publication occurred simultaneously in multiple states, the
district court predicted that the Virginia Supreme Court would, in
applying lex loci delicti, look to the state of the plaintiff’s greatest injury
to determine the place of the wrong, which is presumptively the state
2For convenience, we will refer in this opinion to the amended complaint
simply as the “complaint.”
7
of a plaintiff’s domicile in the absence of strong countervailing
circumstances. Here, the district court found the place of the injury
to be Nunes’s home state of California and, under that state’s law,
Nunes failed to comply with “the statutory notice and retraction
demand requirements” of California’s “retraction statute,” thus
limiting his recovery to special damages. Nunes v. Cable News
Network, Inc. (CNN), 520 F. Supp. 3d 549, 560 (S.D.N.Y. 2021); Cal. Civ.
Code § 48a(a). The district court dismissed Nunes’s complaint with
prejudice after concluding that Nunes “fail[ed] to meet the minimum
pleading requirements for special damages established by [Federal
Rule of Civil Procedure] 9(g).” CNN, 520 F. Supp. 3d at 560. The court
also determined that Nunes failed to state a conspiracy claim because
“there [was] no underlying tort to support a viable claim for
conspiracy.” Id. at 561. Nunes timely appeals the district court’s
order dismissing his action with prejudice and entering judgment in
favor of CNN.
8
II. DISCUSSION
On appeal, Nunes challenges the district court’s ruling on
various grounds. First, he argues that the Virginia Supreme Court
would, applying lex loci delicti, determine that New York is the “place
of the wrong” because it is the place from which the allegedly
defamatory statements were disseminated; and alternatively, that he
was primarily injured in either the District of Columbia or Virginia,
or at least that the choice-of-law determination cannot be made
without discovery. Second, he argues that even if California law does
apply, section 48a is procedural rather than substantive, and therefore
does not apply under Virginia’s choice-of-law rules; and that even if
section 48a does apply, he ought to have been granted leave to further
amend his complaint so he could plead special damages. Nunes also
requests that we certify to the Virginia Supreme Court the question of
how lex loci delicti applies to multistate defamation cases like Nunes’s.
We agree with the district court that the Virginia Supreme
Court would apply California law, including its retraction statute, to
9
Nunes’s multistate defamation claim. Further, the court did not err
in failing to sua sponte grant Nunes leave to amend. Accordingly, we
affirm the district court’s dismissal of the complaint with prejudice
for failure to state a claim.
A. Standard of review.
We review de novo a district court’s choice-of-law
determination and its grant of a motion to dismiss under Rule
12(b)(6). See Int’l Bus. Machs. Corp. v. Liberty Mut. Ins. Co., 363 F.3d
137, 143 (2d Cir. 2004) (choice of law); Biro v. Condé Nast, 807 F.3d 541,
544 (2d Cir. 2015) (motion to dismiss).
B. California law applies to Nunes’s claims.
1. Lex loci delicti.
It is undisputed that Virginia’s choice-of-law principles
determine the substantive law governing Nunes’s defamation claim
because this case was transferred from the Eastern District of Virginia.
“Transfers under [28 U.S.C.] § 1404(a) by a court that has jurisdiction
are adjudicated in the transferee state under the law of the transferor
10
state.” U.S. Bank Nat’l Ass’n v. Bank of Am. N.A., 916 F.3d 143, 154 (2d
Cir. 2019) (emphasis omitted); see Van Dusen v. Barrack, 376 U.S. 612,
639 (1964); Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 494–97
(1941).
Virginia applies the doctrine of lex loci delicti to determine
which state’s substantive law applies in tort actions. See Dreher v.
Budget Rent-A-Car Sys., Inc., 272 Va. 390, 395 (2006). Under this
approach, “the law of the place of the wrong governs all matters
related to the basis of the right of action.” Id. “The place of the wrong
for purposes of the lex loci delicti rule . . . is defined as the place where
the last event necessary to make an act liable for an alleged tort takes
place.” Quillen v. Int’l Playtex, Inc., 789 F.2d 1041, 1044 (4th Cir. 1986)
(internal quotation marks omitted); accord Restatement (First) of
Conflict of Laws § 377 (1934) (articulating the traditional lex loci delicti
approach). “Where harm is done to the reputation of a person, the
place of wrong is where the defamatory statement is communicated.”
11
Id. § 377 note 5; see also id. illus. 7 (“A, broadcasting in state X, slanders
B. B is well and favorably known in state Y and the broadcast is heard
there by many people conversant with B’s good repute. The place of
wrong is Y.”). In other words, “[i]n defamation actions, the place of
the harm has traditionally been considered to be the place where the
defamatory statement was published, i.e., seen or heard by non-
parties.” Wells v. Liddy, 186 F.3d 505, 521–22 (4th Cir. 1999).
As the district court noted, the Virginia Supreme Court has not
expressly addressed how Virginia’s lex loci delicti rule applies to a
defamation action involving content that, at the time of broadcasting,
simultaneously reaches viewers in multiple states and causes
reputational harm in several jurisdictions. See CNN, 520 F. Supp. 3d
at 555. When the Virginia Supreme Court “has spoken neither
directly nor indirectly on the particular issue,” a federal court sitting
in diversity must “predict how that court would rule if presented with
the issue.” St. Paul Fire & Marine Ins. Co. v. Am. Int’l Specialty Lines Ins.
12
Co., 365 F.3d 263, 272 (4th Cir. 2004) (internal quotation marks
omitted). “In so predicting . . . we may consider the teachings of
treatises, as well as the practices of other states.” Id. (internal
quotation marks omitted); see also Fed. Deposit Ins. Corp. v Nat’l Union
Fire Ins. Co. of Pittsburgh, 205 F.3d 66, 71 (2d Cir. 2000) (“Where there
is no decision of a state’s highest court directly, this court may look to
any sources on which the state’s highest court might rely in order to
determine what that court may decide.”).
Applying the principles set forth above, as well as those
animating the Virginia Supreme Court’s adherence to lex loci delicti,
we hold that the district court correctly determined that under the
circumstances presented in this case, the Virginia Supreme Court
would apply the substantive law of the state where the plaintiff
incurred the greatest reputational injury, with a presumption that
absent countervailing circumstances, a plaintiff suffers the most harm
in his state of domicile. See CNN, 520 F. Supp. 3d at 557.
13
We reject Nunes’s contention that, in the context of
simultaneous multi-state defamation cases, Virginia’s choice-of-law
principles require application of “the law of the state where the
publication first occurred,” understood by Nunes as the state from
which the statement emanated. Appellant’s Br. at 29. Under Virginia
law, a statement is not considered to be published until it is seen or
heard by a third party. See Food Lion, Inc. v. Melton, 250 Va. 144, 150–
51 (1995) (holding that publication requires a third party to have
heard the words spoken); Meadows v. Northrop Grumman Innovation
Sys., Inc., 436 F. Supp. 3d 879, 886 (W.D. Va. 2020) (collecting cases for
the proposition that, in the context of purportedly defamatory emails,
the place of publication is where the email was “opened and read”);
Katz v. Odin, Feldman & Pittleman, P.C., 332 F. Supp. 2d 909, 915 (E.D.
Va. 2004) (“[P]ublication of a defamatory statement requires that it be
communicated to a third party ‘so as to be heard and understood by
such person.’” (quoting Thalhimer Bros. v. Shaw, 156 Va. 863, 871
14
(1931))). Further, under the Restatement (First) of Conflict of Laws,
which sets forth the traditional lex loci delicti doctrine, the “place of
the wrong” for purposes of a defamation claim is where the content
was received and harm to the plaintiff’s reputation occurs. See
Restatement (First) of Conflict of Laws § 377 note 5, illus. 7.
Nunes’s proposed approach to apply “the law of the state
where the defendant first publishes the defamatory statements,”
Appellant’s Br. at 31, would focus on the place where the statements
were made or where the article was prepared, which he claims was
New York. This approach is in tension with the Restatement (First)
of Conflict of Laws and precluded by Virginia’s lex loci delicti rule,
which instead looks to “where the last event necessary to make an act
liable for an alleged tort takes place.” Quillen, 789 F.2d at 1044(internal quotation marks omitted). Here, that event was the receipt
and viewing of the allegedly defamatory information by third parties,
not CNN’s broadcast of that content or the preparation of the article
15
which, by themselves, are insufficient for the completion of the tort of
defamation. A consideration of where (or even whether) a third party
viewed the content is crucial in determining whether and where a
“publication” has occurred, which is an element of the tort of
defamation, and does not impermissibly focus on the “effects” of the
completed tort. See Restatement (Second) of Torts §§ 558, 577; see also
Food Lion, 250 Va. at 150–51. The state in which the message was
viewed, in turn, is the place of “the last event necessary” to complete
the tort for the purposes of lex loci delicti. See Restatement (First) of
Conflict of Laws § 377 note 5, illus. 7.
In any case, as a factual matter, we note that Nunes’s theory—
that New York is the place where the allegedly defamatory statements
were made—is unsupported by the allegations of the complaint, to
which we are limited on a motion to dismiss. The complaint says
nothing about where the content was uploaded or where the relevant
server resided, much less that either event occurred in New York. To
16
the contrary, the complaint asserts that “CNN published the CNN
Article . . . in Virginia and around the World” and that CNN is “a
Delaware corporation, headquartered in Georgia.” Joint App’x at 18,
37. The only evidence in the record linking New York to the
defamatory content is contained in the affidavits submitted by CNN
in support of its motion to transfer. These affidavits assert that the
allegedly defamatory article was prepared in New York, its writer
lived in New York, and that CNN telecast its nightly show discussing
the article from that state. Yet Nunes fails to explain why
consideration of this material is appropriate on a motion to dismiss
under Rule 12(b)(6). See Fed. R. Civ. P. 12(d) (requiring a court to treat
“a motion under Rule 12(b)(6) . . . as one for summary judgment under
Rule 56” if “matters outside the pleadings are presented to and not
excluded by the court”); Lively v. WAFRA Inv. Advisory Grp., Inc., 6
F.4th 293, 305 (2d Cir. 2021) (noting the exceptions to this rule, which
allow a court to “consider extrinsic material that the complaint
17
incorporates by reference, that is integral to the complaint, or of which
courts can take judicial notice” (internal quotation marks omitted)).
Further, a straightforward application of the lex loci delicti rule
to a multistate defamation claim is impracticable and unworkable. A
statement that is instantaneously transmitted across the country
could be viewed or heard simultaneously in several states,
implicating the law of all jurisdictions where third parties were
exposed to the information. See Wells, 186 F.3d at 527 (noting that the
“application of the traditional lex loci delicti rule becomes
cumbersome, if not completely impractical,” when the allegations
involve “widespread simultaneous publication of . . . allegedly
defamatory statement[s] in many different jurisdictions”); Nunes v.
WP Co., 21-cv-506, 2021 WL 3550896, at *6–7 (D.D.C. Aug. 11, 2021)
(explaining that “internet publications that are instantaneously made
available to third parties in multiple states (indeed, around the globe)
evade easy categorization under the lex loci rule” and that “[a]
18
patchwork of state laws could apply . . . to a radio show
simultaneously broadcast across and heard in several states”); James
R. Pielemeier, Constitutional Limitations on Choice of Law: The Special
Case of Multistate Defamation, 133 U. Pa. L. Rev. 381, 394 (1985) (“[A]
literal interpretation of [the lex loci delicti] approach would require
application of the law of each state of circulation. This would
necessitate separate instructions to the jury on the law of each state
and a separate award of damages for the injury suffered in each
state.”).
Such a framework is plainly incompatible with the principles
of “uniformity, predictability, and ease of application” animating
Virginia’s decision to adhere to lex loci delicti when making a choice-
of-law determination. McMillan v. McMillan, 219 Va. 1127, 1131
(1979). We thus agree with the district court that the Virginia
Supreme Court would—in the context of online defamatory content
published simultaneously in multiple jurisdictions—follow the lead
19
of numerous other courts in lex loci delicti jurisdictions and apply the
law of the state where a plaintiff incurs the greatest reputational
injury, with a presumption that a plaintiff suffers the brunt of the
injury in their home state. 3 Accord, e.g., Donald J. Trump for President,
Inc. v. CNN Broad., Inc., 500 F. Supp. 3d 1349, 1353–54 (N.D. Ga. 2020);
Swinney v. Frontier Airlines, Inc., 19-cv-808, 2020 WL 3868831, at *3
(M.D.N.C. July 9, 2020); Nobles v. Boyd, 14-cv-214, 2015 WL 2165962,
at *5 (E.D.N.C. May 8, 2015); Ascend Health Corp. v. Wells, 12-cv-83,
3We note here that three district courts confronted with this issue have
reached a similar conclusion. See WP Co., 21-cv-506, 2021 WL 3550896, at *7;
Gilmore v. Jones, 370 F. Supp. 3d 630, 664–66 (W.D. Va. 2019); Hatfill v. Foster, 415 F.
Supp. 2d 353, 365 (S.D.N.Y. 2006). Nunes points to Depp v. Heard, which held that
in the context of online defamation, “the place of the wrong . . . is the place where
the act of publication . . . to the internet occurred,” which in that case was where
the servers used to upload the article resided. 102 Va. Cir. 324, 2019 WL 8883669,
at *5–6 (Va. Cir. Ct. July 25, 2019). We disagree with that court’s conclusion that,
under the law of Virginia, “[t]he last event to make [the defendant] liable for the
alleged defamatory statements . . . was uploading [them] to the internet.” Id. at *6.
As we understand the case law of the Virginia Supreme Court, the act of uploading
content to the internet is not enough to constitute the completed tort of defamation;
instead, a third party must also receive and understand the content. In any event,
as noted above, the complaint says nothing about where the content was uploaded
or the relevant server resided.
20
2013 WL 1010589, at *2 (E.D.N.C. Mar. 14, 2013); Miller v. Lear Siegler,
Inc., 525 F. Supp. 46, 56 (D. Kan. 1981).
We also reject Nunes’s argument that applying the law of the
state where the plaintiff suffers the greatest reputational harm is an
adoption of the “most significant relationship” test rejected by the
Virginia Supreme Court. 4 That choice-of-law doctrine considers
various factors to determine the state with “the most significant
relationship to the occurrence and the parties.” Restatement (Second)
of Conflict of Laws § 150. Thus, courts applying that test account for
considerations other than the place of injury. See, e.g., Kinsey v. N.Y.
4 Nunes finds support for his argument in a pair of decisions noting the
similarity between the “most significant relationship” test and an approach that
looks to where the plaintiff suffered the greatest harm and presumes that location
to be the plaintiff’s domiciliary state. See Depp, 102 Va. Cir. 324, 2019 WL 8883669,
at *4–5 (finding that a test “defin[ing] the place of the wrong as the state where the
plaintiff is primarily injured . . . . tracks closely to the underlying rationale behind
the significant relationship test” (internal quotation marks omitted)); Kylin
Network (Beijing) Movie & Culture Media Co. v. Fidlow, 16-cv-999, 2017 WL 2385343,
at *3 n.2 (E.D. Va. June 1, 2017) (without deciding the issue, “view[ing] [the
plaintiff’s] argument” that his domicile is a relevant consideration under Virginia
choice-of-law principles “with skepticism” because it is a factor under a provision
of the Second Restatement that “Virginia has never adopted”).
21
Times Co., 991 F.3d 171, 176 (2d Cir. 2021) (considering under New
York choice of law “all the factors that might impact on the interests
of various states in the litigation” such as “where the plaintiff suffered
the greatest injury; where the statements emanated and were
broadcast; where the activities to which the allegedly defamatory
statements refer took place; and the policy interests of the states
whose law might apply” (internal quotation marks omitted)). Indeed,
Nunes’s preferred approach tracks the Second Restatement by urging
this Court to focus on acts preceding publication (such as facts about
the article’s preparation, posting, and authorship), rather than
looking simply to the last event necessary to complete the tort:
publication. Cf. Restatement (Second) of Conflict of Laws § 150 cmt. e
(instructing courts to look also to “the state or states where the
defendant did his act or acts of communication, such as assembling,
printing and distributing” the material).
22
The district court’s framework here, on the other hand, focuses
on the place of injury specifically to identify the presumed locus of
the final event needed to complete a multistate tort of defamation and
permits consideration of countervailing factors only in rare
circumstances. And while the “most significant relationship” test
similarly employs a presumption that “the state of most significant
relationship will usually be the state where the person was domiciled
at the time,” Restatement (Second) of Conflict of Laws § 150(2), we do
not believe that the Virginia Supreme Court would jettison its
preference for consistency, predictability, and ease-of-application,
along with its focus on the last event necessary to make an actor liable
for a tort, merely to avoid any overlap with the Second Restatement. 5
5 Under our rules and those of the Supreme Court of Virginia, we may
certify a question to that court “where a question of state law is ‘determinative’ of
a claim before us and ‘it appears that there is no controlling precedent on point in
the decisions of [the Supreme Court of Virginia] or the Court of Appeals of
Virginia.’” Casey v. Merck & Co., 653 F.3d 95, 101 (2d Cir. 2011) (quoting Va. Sup.
Ct. R. 5:40(a)) (citing 2d Cir. Local R. 27.2). “We do not certify every case that meets
these criteria, but instead evaluate at least three factors in determining whether
certification is appropriate: (1) the absence of authoritative state court decisions;
23
2. Place of injury.
With the above framework in mind, we hold that the district
court correctly determined that California law applies to Nunes’s
claims because (1) the complaint alleges with substantial detail
Nunes’s connection to California and the importance of his reputation
among the constituents in his district, and (2) nothing alleged in the
complaint suggests countervailing circumstances sufficient to
overcome the presumption that his greatest reputational harm
occurred in his home state. We therefore disagree with Nunes’s
arguments to the contrary.
Nunes argues that “[e]ven if the Court were to follow” the
district court’s rationale, “the fact is that [his] injuries are concentrated
(2) the importance of the issue to the state; and (3) the capacity of certification to
resolve the litigation.” Id. (internal quotation marks omitted). Because we find
sufficient authority with which to predict the Virginia Supreme Court’s
disposition of this issue, and because we do not certify questions to a state’s
highest court “routinely”—indeed, “[t]he procedure must not be a device for
shifting the burdens of this Court to those whose burdens are at least as great,”
DiBella v. Hopkins, 403 F.3d 102, 111 (2d Cir. 2005) (internal quotation marks
omitted)—we decline to certify the issue here.
24
in Virginia or the District of Columbia where [he] works.”
Appellant’s Br. at 32 n.5. We are unpersuaded by this argument,
which is unsupported by the allegations in Nunes’s complaint.
Nunes was domiciled in California and, as one of California’s
representatives in Congress, was accountable to his constituents
there. The complaint describes his extensive ties to that state, not
Virginia or the District of Columbia. See Joint App’x at 16–17. To be
sure, the complaint does allege that Nunes suffered some reputational
harm outside of California, see, e.g., id. at 61 (alleging that CNN
“intentionally and unlawfully imped[ed] . . . . [Nunes’s] duties as a
United States Congressman, including the performance of his duties
as Ranking Member of the House Intelligence Committee during the
impeachment inquiry”); id. at 41 (alleging that CNN’s goal “was to
inflict maximum damage to [his] reputation . . . and to cause him to
be removed from the impeachment inquiry”). But these allegations
are insufficient to overcome the presumption that Nunes suffered the
25
greatest harm in his home state of California among those constituents
who were responsible for sending him to Washington, D.C., in the
first place. See Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009) (requiring
a plaintiff to offer more than “naked assertions devoid of further
factual enhancement” (internal quotation marks omitted)).
Nunes’s reliance on Nunes v. WP Co., 2021 WL 3550896, also
does not alter this outcome. The court in WP found that Nunes
suffered the greatest harm in the District of Columbia because the
defendant there, the Washington Post, “reports on local D.C. news
and is more directed toward D.C. audiences than media outlets such
as CNN.” Id. at *8. Additionally, unlike the complaint here, the
complaint in that case did not include factual allegations further
supporting the presumption that Nunes suffered the greatest injury
in California. Likewise, we reject Nunes’s assertion that the choice-
of-law issue here cannot be decided “without evidence,” Appellant’s
Br. at 33–34, because, first, Nunes does not describe what is not
26
currently known but that could be determined through discovery
and, second, he makes no cogent argument as to why any discovery
would be required to adequately allege a reputational tort on the basis
of widely publicized news articles and broadcasts.
In sum, the district court did not err in applying Virginia’s lex
loci delicti rule by determining where the plaintiff suffered the greatest
injury, which is presumptively the state of plaintiff’s domicile. The
district court also correctly held that California law applied to
Nunes’s defamation action under this framework.
C. The California retraction statute is a substantive rule of
decision under Virginia law.
The district court determined that California’s retraction
statute, California Civil Code § 48a, is a substantive law and thus
applies under Virginia’s choice-of-law rules because “limits on
recovery are substantive law.” CNN, 520 F. Supp. 3d at 560 (internal
quotation marks omitted) (citing Price v. Stossel, 07-cv-11364, 2008 WL
2434137, at *6 n.12 (S.D.N.Y. June 4, 2008) (noting that “[a]t least one
27
court in this District [] has found the [California retraction] statute
applicable in diversity actions . . . and another has implied that the
statute is substantive . . . .”) (alterations in original)). On appeal,
Nunes does not challenge the district court’s determination that he
failed to request a correction, as required by section 48a, or its
determination that he did not adequately plead special damages.
Instead, he claims that the district court erred in applying that statute
because it is procedural rather than substantive under Virginia law.
We disagree.
To determine whether a state statute is a substantive rule of
decision that a district court is bound to apply in a diversity action,
we must discern whether “state conflict-of-law principles” require
application of that statute if the case “were brought in [the applicable]
28
state court.” Liberty Synergistics Inc. v. Microflo Ltd., 718 F.3d 138, 153
(2d Cir. 2013). 6
Under Virginia conflict-of-law principles, the lex loci delicti
doctrine determines the choice of substantive law while procedural
matters are governed by Virginia law. See Hooper v. Musolino, 234 Va.
558, 566 (1988). If a provision of a statute “goes to the very right of
the action . . . it is a matter of substantive law.” Willard v. Aetna Cas.
& Sur. Co., 213 Va. 481, 483 (1973). “[W]hile the right to recovery and
the limits on recovery are substantive law, the distribution of the
recovery is remedial law.” Walters v. Rockwell Int’l Corp., 559 F. Supp.
47, 49–50 (E.D. Va. 1983); accord Spring v. United States, 833 F. Supp.
575, 579 (E.D. Va. 1993) (finding that a statute involving “limits on
recovery” is a substantive rule of decision); see also Baise v. Warren, 158
6 Typically, a federal court must also consider whether the rule of decision
“is ‘substantive’ within the meaning of Erie,” which “is a question of federal law.”
Liberty Synergistics Inc., 718 F.3d at 152. We do not reach this issue because Nunes
argues only that Virginia law precludes the application of the California retraction
statute.
29
Va. 505, 508 (1932) (noting that “the rights of the parties with respect
to their causes of action are governed by the lex loci” while laws
concerning “the admissibility of evidence and the enforcement of
those rights are governed by the lex fori”).
The California retraction statute provides that “[i]n any action
for damages for the publication of a libel in a daily or weekly news
publication, or of a slander by radio broadcast, plaintiff shall only
recover special damages unless a correction is demanded and is not
published or broadcast.” Cal. Civ. Code § 48a(a). Moreover, the
statute requires that such a request “be served within 20 days after
knowledge of the publication or broadcast of the statements claimed
to be libelous.” Id. Under Virginia choice-of-law rules, we hold that
this statute is substantive, not procedural. It substantially limits—and
may even preclude—a defendant’s liability for defamation and
therefore alters the “rights of the [plaintiff] with respect to the[]
cause[] of action.” Baise, 158 Va. at 508; see Jones v. R.S. Jones & Assocs.,
30
Inc., 246 Va. 3, 7 (1993) (finding a statute specifically limiting liability
under a right of action to be substantive); Hoilett v. Goodyear Tire &
Rubber Co., 81 Va. Cir. 176, 2010 WL 11020458, at *3 (Va. Cir. Ct. 2010)
(holding that a Maryland statutory cap on non-economic damages for
wrongful death suits is substantive as a matter of Virginia law). Thus,
the district court correctly applied the California retraction statute to
this dispute. As noted above, Nunes makes no claim that he complied
with the procedures outlined in section 48a.
Accordingly, the district court did not err in concluding that
California Civil Code § 48a governs, that Nunes failed to comply with
that statute because he did not make a timely demand for a correction
from CNN, and that the complaint should therefore be dismissed
with prejudice for failure to state a claim. Dismissal is required
because, as the district court correctly found, the complaint does not
allege special damages with the necessary specificity under Federal
Rule of Civil Procedure 9(g), and instead merely alleges “special
31
damages” by including those words conclusorily in the general
allegations of damages. 7 Lastly, because, under California law,
conspiracy “[s]tanding alone . . . does no harm and engenders no tort
liability,” Applied Equip. Corp. v. Litton Saudi Arabia Ltd., 869 P.2d 454,
457 (Cal. 1994), the district court also correctly dismissed Nunes’s civil
conspiracy claim with prejudice.
III. CONCLUSION
In sum, we hold as follows:
(1) Under Virginia law, applying lex loci delicti to a defamation
action involving content that simultaneously reaches
viewers and causes reputational harm in several states, the
“place of the wrong” is the district where the plaintiff
7 We also reject Nunes’s argument that the district court abused its
discretion by not granting him leave to replead. Nunes filed his amended
complaint after receiving a preview of CNN’s motion to dismiss, failed to request
leave to further amend below, and does not specify facts that could remedy the
deficiencies in his pleadings. See Horoshko v. Citibank, N.A., 373 F.3d 248, 249–50
(2d Cir. 2004) (“The [plaintiffs’] contention that the District Court abused its
discretion in not permitting an amendment that was never requested is
frivolous.”).
32
suffered the greatest injury, i.e., presumptively where the
plaintiff was domiciled absent strong countervailing
circumstances.
(2) Based on the allegations in the complaint and Virginia’s lex
loci delicti rule, California law governs Nunes’s defamation
and civil conspiracy claims.
(3) California’s retraction statute, California Civil Code § 48a, is
a substantive rule of decision under Virginia law. Nunes
undisputedly failed to comply with that statute or to
adequately allege special damages.
We therefore AFFIRM the judgment of the district court
dismissing with prejudice Nunes’s defamation and civil conspiracy
claims.
33
MENASHI, Circuit Judge, dissenting:
In deciding a choice-of-law question, “the settled rule in
Virginia is that the substantive rights of the parties in a multistate tort
action are governed by the law of the place of the wrong.” McMillan
v. McMillan, 219 Va. 1127, 1128 (1979). The Virginia Supreme Court
has declined to adopt the so-called “‘modern’ approach” that requires
courts to determine which state’s law “has the most significant
relationship to the occurrence and the parties,” generally applying in
a case such as this one the law of the plaintiff’s domicile. Id. at 1129-
30 (quoting Restatement (Second) of Conflict of Laws § 145 (1971)).
The Virginia Supreme Court has said that “the uniformity,
predictability, and ease of application of the Virginia rule” should not
be abandoned “for a concept which is so susceptible to inconstancy.”
Id. at 1131. Thus, “Virginia’s choice of law rule selects the law of the
state in which the wrongful act took place, wherever the effects of that
act are felt” and indeed “even when that place differs from the place
where the effects of injury are felt.” Milton v. IIT Rsch. Inst., 138 F.3d
519, 522 (4th Cir. 1998) (Wilkinson, C.J.).
It is true that, in a case in which a defamatory statement is
published to multiple jurisdictions simultaneously, a single “place of
the wrong” is not so easily identified. But applying the law of the
place where the statements were made closely resembles the Virginia
Supreme Court’s “place of the wrong” approach. By contrast, the
approach that the court predicts the Virginia Supreme Court would
adopt—an analysis of “where the plaintiff incurred the greatest
reputational injury, with a presumption that absent countervailing
circumstances, a plaintiff suffers the most harm in his state of
domicile,” ante at 13-14—resembles the modern approach that the
Virginia Supreme Court has rejected. I doubt that the Virginia
Supreme Court would adopt that approach and, even under that
approach, I would not conclude that Congressman Nunes suffered
the greatest reputational injury from the alleged defamation in
California. Accordingly, I dissent.
I
The place of the wrong in a defamation case is where the
defamatory statement was published, meaning the place in which a
third party first receives it. With a nationwide broadcast, it is not
possible to identify one such place, and therefore the Virginia
Supreme Court would need to apply a second-best approach. As the
court notes, “other courts in lex loci delicti jurisdictions” faced with
such circumstances “apply the law of the state where a plaintiff incurs
the greatest reputational injury, with a presumption that a plaintiff
suffers the brunt of the injury in their home state.” Ante at 20. But, as
Nunes points out, other courts specifically applying Virginia’s choice-
of-law rules have predicted that the Virginia Supreme Court would
choose the place from which the defamatory statement was broadcast
as the place of publication. 1 The “place of broadcast” rule more
1 See, e.g., Wiest v. E-Fense, Inc., 356 F. Supp. 2d 604, 608 (E.D. Va. 2005)
(“Because Plaintiff alleges that the website in question is controlled from
Defendant E–Fense, Inc.’s corporate headquarters located in Virginia, and
the allegedly defamatory statements were published on this website,
Virginia law applies.”) (internal quotation marks omitted); Scott v. Moon,
No. 2:19-CV-5, 2019 WL 332415, at *3 n.5 (W.D. Va. Jan. 24, 2019) (“Scott
alleges that Moon published the statements at issue on a website that he
controls from Florida. Accordingly, Florida law applies to Scott’s claims
against Moon.”); Scott v. Carlson, No. 2:18-CV-47, 2018 WL 6537145, at *2 n.3
(W.D. Va. Dec. 12, 2018) (“Scott alleges that Carlson, a New York resident,
published the statements at issue on a website that he created and on
YouTube. Accordingly, New York law applies to Scott’s claims against
2
closely resembles the Virginia Supreme Court’s approach to
identifying the place of publication, and it is more faithful to the
Virginia Supreme Court’s decision to adhere to the “place of the
wrong” rule and to reject modern approaches based on domicile.
Virginia’s choice-of-law rules aim to promote predictability by
identifying a single place “in which the wrongful act took place,
wherever the effects of that act are felt.” Milton, 138 F.3d at 522. In this
case, all the defamatory statements were made in New York. That is
the place in which the wrongful act took place.
Focusing on the place in which the tortious conduct occurred—
that is, the place of broadcast—resembles the “place of the wrong”
approach that the Virginia Supreme Court generally applies. In the
simple defamation case involving a local television station or
newspaper, the “place of broadcast” rule and the “place of
publication” rule will always lead to the same result. The “place of
Carlson.”); ABLV Bank v. Ctr. for Advanced Def. Stud. Inc., No. 1:14-CV-1118,
2015 WL 12517012, at *2 (E.D. Va. Apr. 21, 2015) (“Here, it is undisputed
that ABLV’s report was published from its office in Washington, D.C. It is
irrelevant that the negative effects of that publication were felt in New York;
any reputational damage caused by C4ADS occurred everywhere due to
the nature of online publication. Thus, D.C. law shall govern the case.”);
Mireskandari v. Daily Mail & Gen. Tr. PLC, No. CL-2019-9418, 2020 WL
8837630, at *12 (Va. Cir. Ct. July 27, 2020) (“Unlike in Depp where the alleged
defamatory op-ed was first printed and/or uploaded in Virginia,
Mr. Mireskandari has not alleged the Daily Mail’s alleged defamatory
article was first published in Virginia, as opposed to elsewhere.”); Depp v.
Heard, No. CL-2019-2911, 2019 WL 8883669, at *5 (Va. Cir. Ct. July 25,2019)
(“[T]he place of the wrong in this case is the place where the act of
publication of Ms. Heard’s Op-Ed to the internet occurred.”); Nunes v.
Twitter, No. CL-19-1715-00, 2019 WL 11815060, at *2 (Va. Cir. Ct. Oct. 2,
2019) (“[T]he posts to social media were made in Virginia and therefore the
publication occurred in Virginia.”).
3
greatest reputational injury” rule, by contrast, would not. That is
because the latter rule relies on different considerations, looking away
from the conduct of the tortfeasor and to the effects of that conduct
instead. 2
The “place of greatest reputational injury” rule too closely
resembles the “most significant relationship” test that the Virginia
Supreme Court has expressly rejected. It employs the same
presumption about the plaintiff’s domicile. See ante at 23
(acknowledging that “the ‘most significant relationship’ test similarly
employs a presumption that ‘the state of most significant relationship
will usually be the state where the person was domiciled at the time’”)
(quoting Restatement (Second) of Conflict of Laws § 150(2)).
Therefore, the “place of greatest reputational injury” rule “would
effectively replace Virginia’s traditional rule for tort cases with
default application of the law of plaintiff’s domicile.” Milton, 138 F.3d
at 522. To the extent that either the “place of greatest reputational
injury” rule or the “most significant relationship” rule departs from
the domicile presumption, it does so on the basis of a case-by-case
analysis of the relationships between the available fora and the
dispute between the parties. But that interest-balancing inquiry does
not resemble the way that the Virginia Supreme Court approaches
2 The court denies that its approach looks to the effects of the defamatory
statement. See ante at 16 (“A consideration of where (or even whether) a
third party viewed the content … does not impermissibly focus on the
‘effects’ of the completed tort.”). But we know where a third party viewed
the content: nationwide. The court’s “greatest reputational injury”
approach does not simply look at where the content was viewed; it looks to
the effects of its being viewed in multiple jurisdictions in order to determine
where it inflicted the greatest injury.
4
these cases. Instead, it resembles the approach that the Virginia
Supreme Court has rejected. See McMillan, 219 Va. at 1129 (“The
advocates of this ‘modern’ approach express dissatisfaction with the
mechanical application of the place-of-the-wrong rule and impose a
duty on the forum court to make an analytical examination of the facts
of each case to determine what law should govern the parties’
substantive rights.”). Even if the court is correct that the “place of
greatest reputational injury” analysis is not exactly the same as the
“most significant relationship” inquiry, it bears a close family
resemblance.
The court criticizes the “place of publication” rule for being “in
tension with the Restatement (First) of Conflict of Laws” and the
requirements of “Virginia’s lex loci delicti rule” because it is not based
on the place in which third parties viewed the content. Ante at 15. That
is an odd criticism, given the court’s recognition that it is not possible
to apply the “place of the wrong” rule in this case because there is no
single place in which third parties viewed the content. Neither the
“place of broadcast” rule nor the “place of greatest reputational
injury” rule reflects the requirements of the First Restatement or the
traditional Virginia rule. The question we must answer is whether it
is more faithful to that rule to look to the place where the statements
were made or the place where the statements had the greatest impact.
In my view, the Virginia Supreme Court would choose the former. 3
For that reason, I would apply New York law in this case.
3 Because the “place of greatest reputational injury” rule and Virginia’s
traditional “place of the wrong” rule are based on such divergent
considerations, the interaction of the two rules would lead to peculiarities.
For example, imagine that the television show in this case had an east coast
5
The court suggests that it cannot determine on a motion to
dismiss where the statements were made because the complaint does
not adequately identify that location. See ante at 16. If that were true,
it would be a reason for denying the motion to dismiss rather than
granting it. We have observed that “choice-of-law determinations are
fact-intensive inquiries that would be premature to resolve at the
motion-to-dismiss stage.” Bristol-Myers Squibb Co. v. Matrix Labs. Ltd.,
655 F. App’x 9, 13 (2d Cir. 2016). If “the complaint itself leaves
unanswered questions about critical aspects of the pertinent facts,” a
court “is well-advised to refrain from making an immediate choice-
of-law determination. After all, when there are important holes in the
record, discovery will likely illuminate critical facts bearing on the
unanswered questions and, thus, on the ultimate question of which
state’s law should apply.” Foisie v. Worcester Polytechnic Inst., 967 F.3d
27, 42-43 (1st Cir. 2020). On a motion to dismiss, we resolve such
ambiguities in favor of the non-moving party; the ambiguity is not a
reason to dismiss the case. See Bristol-Myers, 655 F. App’x at 13
broadcast and a west coast broadcast, each at 8:00 pm in the respective time
zones. California law could not possibly apply because the show would
have been seen on the east coast—thus completing the tort—three hours
before it was seen in California. The “place of the wrong” rule would
preclude the application of California law, but the “place of greatest
reputational injury” would require an analysis of the depth of Nunes’s
injury in each of the states along the east coast. In another scenario, the
television show might have had a studio audience, in which case the place
of publication would indisputably be New York and New York law would
apply. The choice of law could turn on these factual quirks because the
“place of the wrong” rule focuses on the conduct constituting the tort while
the “place of greatest reputational injury” rule focuses on the effects of the
tort. Instead of adopting an approach that so diverges from the “place of
the wrong” analysis, I would retain the focus on the conduct constituting
the tort by looking to the place of broadcast.
6
(explaining that because the court could not “determine at the
motion-to-dismiss stage which law indeed governs … the district
court improperly dismissed the [complaint] for failure to state a
claim”).
In any event, it is no great mystery where the statements took
place. Every party and every court involved in these proceedings
agrees it was New York. The district court acknowledged that “the
location of the reporters and the news organization” as well as the
location where “the statements were made” was New York. Nunes v.
CNN, Inc., 520 F. Supp. 3d 549, 556-57 (S.D.N.Y. 2021). 4 The U.S.
District Court for the Eastern District of Virginia, where this case was
originally filed, granted a motion to transfer because “the Southern
District of New York … is the more logical and convenient forum in
which to adjudicate the claims here presented,” given that “[t]he
Article was researched, written, and published in New York,” the
television program “was broadcast from and produced in New
York,” and the “key witnesses reside in New York.” Nunes v. CNN,
Inc., No. 3:19-CV-889, 2020 WL 2616704, at *1-*4 (E.D. Va. May 22,
2020). And CNN represented that the “telecast took place in New
York” and the reporter “works at CNN’s New York office, and wrote
the article in New York.” Def.’s Mem. in Supp. of Mot. to Transfer 3-
4, Nunes, 520 F. Supp. 3d 549 (No. 20-CV-03976), ECF No. 14-1. The
4 The district court predicted, despite those facts, that the Virginia Supreme
Court would look to the place of greatest reputational injury instead of the
place of broadcast. See 520 F. Supp. 3d at 557 (“[T]he governing choice of
law rule does not contemplate the application of New York state law based
on the location of the reporters and the news organization.”).
7
only reason this case is before us at all is because the location at which
the statements were made was apparent to everyone.
I would apply the “place of broadcast” rule even if the place of
broadcast could not yet be determined. But no one disputes that the
place of broadcast was New York.
II
Even assuming that the court were correct that the Virginia
Supreme Court would adopt the “place of greatest reputational
injury” rule, however, the district court erred in concluding that the
greatest reputational injury occurred in California rather than in
Washington, D.C. The district court only cursorily considered the
argument that the allegedly defamatory article injured Nunes in
Washington “because that is where he performs his role overseeing
the activities of the Intelligence Community.” Nunes, 520 F. Supp. 3d
at 557. Yet the complaint alleges that the defamation injured him
precisely in his ability to perform that role.
The court insists that “nothing alleged in the complaint
suggests countervailing circumstances sufficient to overcome the
presumption that [Nunes’s] greatest reputational harm occurred in
his home state” of California. Ante at 24. The amended complaint,
however, alleges that CNN “intentionally and unlawfully imped[ed]
… [Nunes’s] duties as a United States Congressman, including the
performance of his duties as a Ranking Member of the House
Intelligence Committee during the impeachment inquiry.” J. App’x
61. It alleges that CNN aimed to inflict “maximum damage to [his]
reputation … and to cause him to be removed from the impeachment
inquiry.” J. App’x 41. The broadcast and the article were focused
8
directly on the impeachment inquiry, which was occurring in
Washington.
The complaint demonstrates the effect of the allegations on the
impeachment inquiry. The article was published in CNN Politics
under the headline “Giuliani associate willing to tell Congress Nunes
met with ex-Ukrainian official to get dirt on Biden,” J. App’x 38,
specifically referencing implications for the impeachment inquiry in
Washington. The complaint alleges that the Democratic
Congressional Campaign Committee and other political actors used
the statements to question Nunes’s credibility with respect to the
impeachment inquiry. J. App’x 47, 48. The House Permanent Select
Committee on Intelligence cited the CNN article as part of its
“Trump-Ukraine Impeachment Inquiry Report.” H.R. Rep. No. 116-
335, at 192 n.207. The chairman of the House Armed Services
Committee announced that it was “[q]uite likely” that Nunes would
“face an ethics investigation over allegations that he met with an ex-
Ukrainian official to obtain information about former vice president
Joe Biden and his son” that were contained in the CNN statements. 5
The CNN statements were about, and substantially affected,
the impeachment proceedings in Washington. But the amended
complaint does not say anything about injury to Nunes’s reputation
in California. The district court simply asserted that he must have
suffered “a greater injury … in the home state that sends him to
5
Rosalind S. Helderman & Colby Itkowitz, Top House Democrat says ethics probe of
Nunes is likely over alleged meeting with Ukrainian about Bidens, Wash. Post (Nov. 23,
2019), available at https://www.washingtonpost.com/politics/top-house-
democrat-says-ethics-probe-of-nunes-is-likely-over-alleged-meeting-with-
ukrainian-about-bidens/2019/11/23/0dde6b22-0e0a-11ea-97ac-
a7ccc8dd1ebc_story.html.
9
Congress as the representative of his district.” Nunes, 520 F. Supp. 3d
at 557. That conclusion is not so obvious that it can be asserted with
no analysis of the factual allegations. Those allegations indicate that
Nunes was a high-profile figure in the impeachment proceedings in
Washington, and CNN’s statements about his involvement in the
subject matter of those proceedings affected his role. The complaint
does not indicate that CNN’s statements had any impact in California.
There may be wisdom in the Virginia Supreme Court’s
adherence to a rule that does not require courts to analyze the impact
of defamatory statements to determine the law that applies. But given
the court’s decision to engage in that sort of analysis, it is difficult to
avoid the conclusion the greatest impact in this case was in
Washington.
For these reasons, I dissent.
10