Trout Point Lodge, Limited v. Doug Handshoe

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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
September 5, 2013
No. 13-60002 Lyle W. Cayce
Clerk
TROUT POINT LODGE, LIMITED, a Nova Scotia Limited Company,
VAUGHN PERRET, and CHARLES LEARY,
Plaintiffs-Appellants,
v.
DOUG K. HANDSHOE,
Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of Mississippi
Before REAVLEY, ELROD, and GRAVES, Circuit Judges.
JENNIFER WALKER ELROD, Circuit Judge:
This case requires us to construe the newly-enacted Securing the
Protection of our Enduring and Established Constitutional Heritage Act
(the “SPEECH Act”), 28 U.S.C. § 4102. Appellants Trout Point Lodge, Ltd.
(“Trout Point Lodge”), Vaughn Perret (“Perret”), and Charles Leary (“Leary”)
(collectively, “Trout Point”) seek to enforce a defamation-based default judgment
that they obtained against Appellee Doug K. Handshoe (“Handshoe”) in Nova
Scotia, Canada. We agree with the district court that Trout Point cannot satisfy
its burden under the SPEECH Act to show that either (A) Nova Scotian law
provided at least as much protection for freedom of speech and press in
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Handshoe’s case as would be provided by the First Amendment and relevant
state law, or (B) Handshoe would have been found liable for defamation by a
Mississippi court. 28 U.S.C. § 4102. Accordingly, we AFFIRM.
I.
Handshoe, a Mississippi citizen, owns and operates Slabbed.org, a public-
affairs blog with the tagline “Alternative New Media for the Gulf South.” He
describes Slabbed.org as a “forum for local residents and other interested
parties to gather and share information regarding various political and legal
issues that impact the Gulf Coast.”
One of the blog’s focal points over the last few years has been Aaron
Broussard, the former Parish President of Jefferson Parish, Louisiana.1
Broussard was indicted in the United States District Court for the Eastern
District of Louisiana and pleaded guilty to charges of bribery and theft in
September 2012. Handshoe claims that Slabbed.org has been “instrumental”
in reporting the “ongoing corruption scandal, indictment, and guilty plea”
involving Broussard.
During his time in office, Broussard owned property in Nova Scotia. The
property sat on Trout Point Road, very close to Trout Point Lodge, a hotel that
Perret and Leary own and operate.2 In about January 2010, Handshoe began
publishing entries on Slabbed.org alleging a link between Broussard and Trout
Point Lodge, Perret, and Leary. At or near the same time, the Times-Picayune,
1
In addition to his blog, the record indicates that Handshoe engages in several other
forms of internet communication. For example, he maintains a Twitter account for
Slabbed.org and posts comments on several other web sites.
2
Daniel Abel, a non-party to this suit, is also a principal owner of Trout Point Lodge.
2
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a New Orleans newspaper, published an article indicating that Broussard had
an ownership interest in Trout Point Lodge and that Jefferson Parish
contractors had paid to rent the premises. The Times-Picayune retracted this
assertion and issued a correction after Perret and Leary alerted the paper to
purported “factual errors in [its] reporting.” It appears that the corporate
parent of the Times-Picayune also took the Slabbed.org blog offline after Perret
and Leary demanded this retraction. The district court determined that
Handshoe, “apparently in reaction to his blog being taken offline,” found
another web host for his site and “began an internet campaign to damage Perret
and Leary.”3 Specifically, Handshoe posted several updates regarding Trout
Point Lodge, Perret, and Leary, which the district court noted “can be
characterized as derogatory, mean spirited, sexist, and homophobic.”
Trout Point filed suit in the Supreme Court of Nova Scotia (the “Nova
Scotia Court”) on September 1, 2011, alleging defamation and related claims.
Trout Point’s First Amended Statement of Claim referred to publications on
Slabbed.org and related third-party web sites, which it asserted “were directly
defamatory and were also defamatory by both true and false innuendo in that
they would tend to lower the opinion or estimation of the plaintiffs in the eyes
of others who read the defamatory publications as a series, or alternatively, in
parts.” At the outset, the First Amended Statement of Claim asserted four
3
In April 2011, Handshoe wrote: “I think by now even our most casual readers know
our successor website, Slabbed.org was knocked offline courtesy of the Times Picayune’s
corporate parent Advance Publications and this started a chain of events that resulted in
Slabbed temporarily being moved back to WordPress. I’d submit this was a miscalculation of
gargantuan proportions for several reasons, which will become clear as I roll out this series
of posts on Aaron Broussard’s connections to Trout Point Lodge and its purported owners . . . .”
3
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primary sources of reputational harm: (1) content linking Trout Point with the
“Jefferson Parish Political Corruption Scandal,” the “sting” of which was that
“Trout Point Lodge and its owners were somehow involved in corruption, fraud,
money laundering, and ‘pay to play’ schemes involving Jefferson Parish
President Aaron Broussard and his administration”; (2) the “clear imputation”
that Trout Point “misled investors and court officials in litigation” with the
Atlantic Canada Opportunities Agency (“ACOA”), the “sting” of which was that
“Leary perjured himself, investors were misled, businesses nefariously changed
ownership, and that the ACOA litigation is ongoing, with the plaintiffs [losing]
every step of the way”; (3) the “imputation” that the “Trout Point Lodge
business is actively failing, near bankruptcy, having once relied on the good
graces of Aaron Broussard,” along with the “related imputation” that Perret and
Leary “have had a series of failed businesses that used other people’s money,
creating a pattern,” the “sting” of which was that Trout Points’s “13-year-old
business is on the verge of bankruptcy, that the plaintiffs will take the money
and run, and that the plaintiffs are either con artists or have no business
acumen whatsoever”; and (4) the “unabashed anti-gay, anti-homosexual rhetoric
and rants of the defendant,” used to “amplify and support the three other stings
listed above” and “support[] and shore[] up all the other defamatory
imputations.”
The First Amended Statement of Claim continued to describe several
specific blog posts on Slabbed.org, reciting much of the offensive language that
Handshoe used to refer to Perret and Leary. Some of the alleged defamatory
statements indicated Handshoe’s poor opinion of Perret and Leary, for example,
that they “had Champagne taste on a beer budget,” “work as a unit to grift their
4
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way through life,” and were either “first-class b-tches, common thugs, or plain
ol’ morons.”
In stating its defamation claim, Trout Point generically alleged that
Handshoe’s publications were false and malicious. It did not, however, make
any specific statements to refute the truth of the individual blog posts at issue.4
For example, the First Amended Statement of Claim included no information
regarding Trout Point’s actual connection to Broussard, if any, or its financial
solvency.
Trout Point purportedly served Handshoe with a notice of the First
Amended Statement of Claim in Mississippi, but Handshoe did not appear in
the Nova Scotia action. In December 2011, the Nova Scotia Court entered a
default judgment against Handshoe (the “Nova Scotia Judgment”). The Nova
Scotia Judgment provided: “In accordance with the Civil Procedure Rule
31.12(4), Douglas K. Handshoe is now taken to have admitted, for the purposes
of this action, the claims made against him in the Statement of Claim.”
The Nova Scotia Court set the matter for a hearing to assess damages.
At the hearing, Perret and Leary testified and offered additional evidence
regarding Handshoe’s allegedly defamatory statements and the damage that
4
Specifically, Trout Point made the blanket assertion that the Slabbed.org posts were
“replete with inaccuracies and an apparent inattention to basic ethics and duties to check facts
before publishing,” and that “the false statements set forth in the defendants’ publications
exposed the plaintiffs to public contempt, ridicule, aversion, and disgrace, and induced an evil
opinion of the plaintiffs in the minds of right-thinking persons and deprived the plaintiffs of
their friendly intercourse in and commerce with society.” The First Amended Statement of
Claim further alleged that Handshoe acted in a “reckless and malicious manner without due
consideration for the standards of information gathering an dissemination ordinarily followed
by responsible writers, editors, and publishers,” disregarding whether the published content
was “true or false.”
5
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they inflicted on Trout Point Lodge, and Perret and Leary individually.
Following the hearing, the court issued an oral decision summarizing the
relevant Canadian law, the content of the publications at issue, and the harm
that Trout Point purportedly suffered. Ultimately, the court awarded Trout
Point Lodge $75,000 in general damages, and Leary and Perret each $100,000
in general damages, $50,000 in aggravated damages, and $25,000 in punitive
damages. It also awarded $2,000 in costs.5
Trout Point enrolled the Nova Scotia Judgment in the Circuit Court of
Hancock County, Mississippi, in March 2012 in an attempt to collect its
damages award. Handshoe removed the action to the United States District
Court for the Southern District of Mississippi pursuant to the SPEECH Act.
The parties agreed that all issues were strictly legal in nature and, therefore,
elected to submit the matter to the district court on cross-motions for summary
judgment.
The district court entered summary judgment in Handshoe’s favor,
finding that Trout Point failed to meet its burden under the SPEECH Act to
show that “Handshoe was afforded at least as much protection for freedom of
5
In addition to monetary relief, the Nova Scotia Court entered a permanent injunction
against Handshoe, “restraining him from disseminating, posting on the Internet or publishing,
in any manner whatsoever, directly or indirectly, any statements about the plaintiffs, Trout
Point Lodge, Charles L. Leary, and [Vaughn] J. Perret.” The injunction included “publication,
circulation and promotion on the blog named Slabbed, and any similar or other publications.”
The court added, for “further particularity,” that Handshoe “shall not publish or cause to be
published or otherwise disseminate or distribute in any manner whatsoever . . . any
statements or other communications which refer to the plaintiffs by name, depiction or
description.” It ordered Handshoe to immediately remove any such material from publication.
Trout Point does not seek to enforce the injunction in this action. Rightly so, as the injunction
does not comport with even the most basic protections against prior restraints on speech in
the United States. See Neb. Press Ass’n v. Stuart, 427 U.S. 539, 559 (1976) (explaining the
heavy presumption that a prior restraint on speech is unconstitutional).
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speech in [the Nova Scotia] action as he would have in a domestic proceeding
or, alternatively, that Handshoe would have been found liable for defamation
by a domestic court.” Trout Point timely appealed.
II.
We review de novo a district court’s grant of summary judgment, applying
the same standard as the district court. Ford Motor Co. v. Tex. Dep’t of Transp.,
264 F.3d 493, 498 (5th Cir. 2001) (citation omitted). Summary judgment is
appropriate “if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a). “A genuine issue of material fact exists when the evidence is
such that a reasonable jury could return a verdict for the non-moving party.”
Gates v. Tex. Dep’t of Protective & Regulatory Servs., 537 F.3d 404, 417 (5th Cir.
2008) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986)). “On
cross-motions for summary judgment, we review each party’s motion
independently, viewing the evidence and inferences in the light most favorable
to the nonmoving party.” Ford, 264 F.3d at 498 (citing Taylor v. Gregg, 36 F.3d
453, 455 (5th Cir. 1994)).
III.
This action depends on our interpretation of the SPEECH Act. The task
of statutory interpretation begins and, if possible, ends with the language of the
statute. In re Nowlin, 576 F.3d 258, 261–62 (5th Cir. 2009) (citing Lamie v.
U.S. Trustee, 540 U.S. 526, 534 (2004)). When the language is plain, we “must
enforce the statute’s plain meaning, unless absurd.” Id.; see also BedRoc Ltd.
v. United States, 541 U.S. 176, 183 (2004) (“The preeminent canon of statutory
interpretation requires [the court] to ‘presume that [the] legislature says in a
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statute what it means and means in a statute what it says there.’” (quoting
Conn. Nat’l Bank v. Germain, 503 U.S. 249, 253–54 (1992))). We determine
whether statutory language is plain or ambiguous “by reference to the language
itself, the specific context in which that language is used, and the broader
context of the statute as a whole.” Robinson v. Shell Oil Co., 519 U.S. 337, 341
(1997).
Many commentators have explained that Congress enacted the SPEECH
Act in 2010 in response to the perceived threat of “libel tourism,” a form of
international forum-shopping in which a plaintiff chooses to file a defamation
claim in a foreign jurisdiction with more favorable substantive law.6 In
enacting the statute, Congress found that “by seeking out foreign jurisdictions
that do not provide the full extent of free-speech protections to authors and
publishers that are available in the United States” and by suing United States
authors or publishers in those foreign jurisdictions, some persons were
“obstructing” the free expression rights of domestic authors and publishers and
“chilling” domestic citizens’ First Amendment interest in “receiving information
on matters of importance.”7 See Findings to Pub. L. No. 111-223, § 2, 124 Stat.
6See, e.g., Lili Levi, The Problem of Trans-National Libel, 60 Am. J. Comp. L. 507, 508
n.1, 509–10 (2012); Andrew R. Klein, Some Thoughts on Libel Tourism, 38 Pepp. L. Rev. 375,
391 (2011); Doug Rendleman, Collecting a Libel Tourist’s Defamation Judgment?, 67 Wash.
& Lee L. Rev. 467, 468 (2010); Tara Sturtevant, Can the United States Talk the Talk & Walk
the Walk When it Comes to Libel Tourism: How the Freedom to Sue Abroad Can Kill the
Freedom of Speech at Home, 22 Pace Int’l L. Rev. 269, 269 (2010); Robert L. McFarland, Please
Do Not Publish This Article in England: A Jurisdictional Response to Libel Tourism, 79 Miss.
L.J. 617, 625 (2010); Sarah Staveley-O’Carroll, Libel Tourism Laws: Spoiling the Holiday and
Saving the First Amendment?, 4 N.Y.U. J. L. & Liberty 252, 264 (2009).
7
Before Congress enacted the SPEECH Act, some courts had refused to enforce foreign
defamation judgments on First Amendment public-policy grounds. See, e.g., Bachchan v. India
Abroad Publ’ns, Inc., 585 N.Y.S.2d 661, 665 (N.Y. Sup. Ct. 1992) (stating that the First
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2380, reproduced in the Notes section of 28 U.S.C. § 4101. It further found that
“[g]overnments and courts of foreign countries scattered around the world have
failed to curtail this practice . . . and foreign libel judgments inconsistent with
United States [F]irst [A]mendment protections are increasingly common.” Id.With these findings in mind, the SPEECH Act provides that a domestic
court “shall not recognize or enforce a foreign judgment for defamation” unless
it satisfies both First Amendment and due process considerations. See 28
U.S.C. § 4102. We focus our inquiry on the statute’s “First Amendment
considerations” provision.
Under the “First Amendment considerations” provision of the SPEECH
Act, a foreign defamation judgment is unrecognizable and unenforceable unless
(A) the defamation law applied in the foreign court’s adjudication
provided at least as much protection for freedom of speech and
press in that case as would be provided by the [F]irst [A]mendment
to the Constitution of the United States and by the constitution and
law of the State in which the domestic court is located; or
(B) even if the defamation law applied in the foreign court’s
adjudication did not provide as much protection for freedom of
speech and press as the [F]irst [A]mendment to the Constitution of
the United States and the constitution and law of the State, the
party opposing recognition or enforcement of that foreign judgment
would have been found liable for defamation by a domestic court
applying the [F]irst [A]mendment to the Constitution of the United
Amendment “would be seriously jeopardized by entry of [a] foreign libel judgment granted
pursuant to standards deemed appropriate in England but considered antithetical to the
protections afforded [to] the press by the U.S. Constitution”); Telnikoff v. Matusevitch, 702
A.2d 230, 251 (Md. 1997) (“[A]t the heart of the First Amendment . . . is the recognition of the
fundamental importance of the free flow of ideas and opinions on matters of public interest
and concern. The importance of that free flow of ideas and opinions on matters of public
concern precludes Maryland recognition of Telnikoff’s English libel judgment.” (internal
quotation marks and citation omitted)).
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States and the constitution and law of the State in which the
domestic court is located.
§ 4102(a)(1).
Although there is no case law directly interpreting these two prongs, the
plain language of the statute suggests two distinct options for a party seeking
to enforce a foreign defamation judgment: one focused on the law applied by
the foreign forum and one focused on the facts the parties presented in the
foreign proceeding.8 Put differently, a party may enforce a foreign defamation
judgment in a domestic court if either (A) the law of the foreign forum, as
applied in the foreign proceeding, provides free-speech protection that is
coextensive with relevant domestic law,9 or (B) the facts, as proven in the
foreign proceeding, are sufficient to establish a defamation claim under
domestic law. We address each prong in turn.
A.
8
When construing a statute, a court should give effect, if possible, to every word and
every provision Congress used. See, e.g., Duncan v. Walker, 533 U.S. 167, 174 (2001) (“[A]
statute ought, upon the whole, to be so construed that, if it can be prevented, no clause,
sentence, or word shall be superfluous, void, or insignificant” (internal quotation marks
omitted)). Also, if possible, the court interprets provisions of a statute in a manner that
renders them compatible, not contradictory. See FDA v. Brown & Williamson Tobacco Corp.,
529 U.S. 120, 132 (2000) (“A court must . . . interpret the statute as a symmetrical and
coherent regulatory scheme, and fit, if possible, all parts into an harmonious whole.” (internal
quotation marks and citations omitted)).
9
The statute does not require that all of a foreign forum’s law be coextensive with the
First Amendment, but rather only the law applied “in that case.” § 4102(a)(1)(A). For
example, presume that the free speech jurisprudence of Country X is identical to domestic law
in every respect except as applied to public figures. Applying prong one of the “First
Amendment considerations” inquiry, a defamation judgment awarded against a non-public
figure in Country X would be enforceable in the United States, as the law applied to the case
was coextensive with the First Amendment. It would not be enforceable, however—at least
not on the basis of § 4102(a)(1)(A)—against a public figure.
10
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There is no meaningful dispute that the law applied by the Nova Scotia
Court provides less protection of speech and press than First Amendment and
Mississippi law. Canadian defamation law is derivative of the defamation law
of the United Kingdom, which has long been substantially less protective of free
speech. As Justice Black noted in Bridges v. California:
No purpose in ratifying the Bill of Rights was clearer than that of
securing for the people of the United States much greater freedom
of religion, expression, assembly, and petition than the people of
Great Britain had ever enjoyed. . . . Ratified as it was while the
memory of many oppressive English restrictions on the enumerated
liberties was still fresh, the First Amendment cannot reasonably be
taken as approving prevalent English practices. On the contrary,
the only conclusion supported by history is that the unqualified
prohibitions laid down by the framers were intended to give to
liberty of the press, as to the other liberties, the broadest scope that
could be countenanced in an orderly society.
314 U.S. 252, 265 (1941). Thus, while Canadian law generally comports with
England’s traditional common-law approach, the United States has parted ways
with its northern neighbor in matters of free speech.10
10
Although English common law in the colonial era prohibited prior restraints on
speech, a publisher was subject to punishment for “improper, mischievous, or illegal”
statements, regardless of their truth. See Rodney A. Smolla, Smolla & Nimmer on Freedom
of Speech § 1.5 (citation omitted); see also Van Vechten Veeder, The History and Theory of the
Law of Defamation, 3 Colum. L. Rev. 546 (1903) (offering an extensive overview of early
defamation law in England). Although both English and Canadian defamation law have
evolved somewhat, Canadian law generally aligns with the English approach. See Rodney A.
Smolla, Law of Defamation § 1:9.75 (2013). The United States’s First Amendment law does
not. See Chaplinsky v. New Hampshire, 315 U.S. 568, n.3 (1942) (“The protection of the First
Amendment, mirrored in the Fourteenth, is not limited to the Blackstonian idea that freedom
of the press means only freedom from restraint prior to publication.”); see also Bachchan, 585
N.Y.S.2d at 665 (holding that an English libel judgment was unenforceable because it was
“antithetical to the protections afforded the press by the U.S. Constitution”); Telnikoff, 877
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The most critical legal difference here is that a Canadian plaintiff—unlike
a plaintiff subject to First Amendment and Mississippi state law—need not
prove falsity as an element of its prima facie defamation claim. Rather, in
Canada, truth is a defense that a defamation defendant may raise and, if so,
must prove. Compare Grant v. Torstar, (2009) 3 S.C.R. 640, para. 28–32 (Can.)
(holding that “falsity and damages are presumed” if a plaintiff proves the
elements of a prima facie defamation case), with Blake v. Gannet Co., 529 So.
2d 595, 602 (Miss. 1988) (holding that a defamation plaintiff bears the burden
of proving falsity).11 See Eugenie Brouillet, Free Speech, Reputation, and the
Canadian Balance, 50 N.Y.L. Sch. L. Rev. 33, 52 (2006) (“In the Canadian
common law, the courts have chosen a low threshold for the establishment by
the plaintiff of a prima facie cause of action in defamation, offering considerable
protection to his right to reputation. The balance in favor of free speech is
restored by a number of defenses, but the burden of proof rests on the
F. Supp. 1 (holding that an English libel judgment was not enforceable because it was
“contrary to U.S. libel standards”).
11
Canadian law is also less protective than domestic law regarding the standard of
proof that applies to statements about public figures. Specifically, domestic law requires a
plaintiff to prove, by clear and convincing evidence, that the alleged defamers acted with
actual malice; Canadian law does not. Compare Gannett Co., 529 So. 2d at 600, with Hill v.
Church of Scientology of Toronto, (1995) 2 S.C.R. 1130 (Can.).
Handshoe asserts that this legal difference is important here because Trout Point is
a vortex public figure and, therefore, Trout Point must meet the heightened “actual malice”
standard. See Eason v. Fed. Broad. Co., 697 So. 2d 435, 438 (Miss. 1997) (defining a vortex
public figure as “one who is otherwise a private citizen but who thrusts himself or becomes
thrust into the vortex of a matter of legitimate public interest” (citation omitted)). We need
not decide this issue because Trout Point failed to demonstrate that it proved falsity in the
Nova Scotia proceeding, the more basic requirement to uphold the Nova Scotia Judgment.
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defendant. In comparison, . . . American laws both seem to show a certain bias
towards freedom of expression and freedom of the press; the burden of proof of
the wrongful nature of the injury to reputation lies in both cases with the
person defamed.” (footnote omitted)). Thus, Trout Point cannot satisfy the first
prong of the First-Amendment considerations inquiry; that is, the law applied
in the Nova Scotia proceeding did not provide at least as much protection for
freedom of speech and press as Handshoe would have received under domestic
law.
B.
The more challenging question in this case arises from the statute’s
second prong: whether a Mississippi court presented with the same facts and
circumstances would have found Handshoe liable for defamation. The answer
depends on whether the facts Trout Point proved in the Nova Scotia proceeding
were sufficient to demonstrate falsity under the United States Constitution and
Mississippi state law. In Mississippi, “[t]he threshold question in a defamation
suit is whether the published statements are false. Truth is a complete defense
to an action for libel. The plaintiff bears the burden to prove such falsity.”
Armistead v. Minor, 815 So. 2d 1189, 1194 (Miss. 2002) (quotations and
citations omitted). Significantly, statements that are “substantially true” are
not defamatory in Mississippi. Id. “As the United States Supreme Court has
noted, minor inaccuracies do not amount to falsity so long as the substance, the
gist, the sting, of the libelous charge be justified.” Id. (internal quotation marks
omitted) (quoting Masson v. New Yorker Magazine, Inc., 501 U.S 496, 517
(1991)).
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Applying First Amendment and Mississippi law, the district court
concluded that Trout Point failed to prove falsity in the Nova Scotia proceeding:
[H]ad the Plaintiffs filed their defamation action in Mississippi,
they would be required to prove falsity before they would be
entitled to damages. Handshoe has not published any specific
allegations about what role he believes Leary and Perret played in
Broussard’s crimes. It is possible this is because Handshoe does not
have any information indicating Plaintiffs were involved in
Broussard’s criminal activity. Handshoe, has, however, made
numerous more generalized allegations about connections between
Leary, Perret, Abel, and Broussard. Some of these statements
seem to be based in fact; others appear[] to be conspiracy theories
that may or may not be substantiated. As noted above, under the
law of Mississippi, even those statements that are “substantially
true” are protected speech. And this Court cannot determine, based
on the record before it, the truth or falsity of Handshoe’s claims
that the Plaintiffs are connected to Aaron Broussard’s criminal
activities. Nor should it enforce a judgment in an action that, if
brought in this Court, would depend upon the plaintiff’s proof that
the statements at issue are false.
On appeal, Trout Point criticizes the district court’s reasoning because it “hinges
entirely upon the faulty premise that [Trout Point] failed to prove the falsity of
the publications at issue.”12 Trout Point relies on two key sources to establish
12
Trout Point asserts that the district court may have relied on sources outside of the
summary judgment record to reach its conclusion. The district court did refer to the number
of posts regarding Trout Point that appeared on Slabbed.org in 2012 and a separately-filed
case pending in the Eastern District of Louisiana, in which the plaintiffs alleged a connection
between Trout Point and Broussard. These are matters about which the court was entitled
to take judicial notice. See, e.g., Kitty Hawk Aircargo, Inc. v. Chao., 418 F.3d 453, 457 (5th Cir.
2005) (taking judicial notice of approval by the National Mediation Board published on the
agency’s website); Coleman v. Dretke, 409 F.3d 665, 667 (5th Cir. 2005) (taking judicial notice
of Texas agency’s website). Moreover, careful review of the district court opinion demonstrates
that it did not use these sources to reach any conclusion. Thus, we reject Trout Point’s
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the falsity of Handshoe’s statements: (1) the allegations in Trout Point’s First
Amended Statement of Claim, deemed admitted by the Nova Scotia Judgment,
and (2) the Nova Scotia Court’s purported factual findings made in the course
of awarding damages. In our view, neither is sufficient to establish that a
Mississippi court confronted with the same facts and circumstances would have
found Handshoe liable for defamation. We turn first to the allegations deemed
admitted by Nova Scotia Judgment.
1.
In Mississippi, a plaintiff may obtain a default judgment when the
defendant “has failed to plead or otherwise defend” the case. Miss. R. Civ. P.
55(a); see also Fed. R. Civ. P. 55(a). But a default judgment is not appropriate
if the plaintiff’s allegations are insufficient to state a claim. DynaSteel Corp. v.
Aztec Indus., Inc., 611 So. 2d 977, 988 (Miss. 1992) (reversing a punitive
damages award pursuant to a default judgment where the plaintiff’s “blanket
assertions” were insufficient to support the relief awarded); see Lewis v. Lynn,
236 F.3d 766, 767 (5th Cir. 2001) (upholding district court’s denial of entry of
default judgment because, even if true, the plaintiff’s allegations did not support
a finding of liability).13
If a court does award a default judgment, it is “unassailable on the merits
argument.
13
See also Waldron v. Milana, No. 5:10-CV-0065 GTS/DEP, 2013 WL 2445047, at *5
(N.D.N.Y. June 5, 2013) (declining to award a default judgment on a defamation claim where
the facts alleged were “not sufficient to state a claim” because the alleged injury occurred
outside of the limitations period).
15
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No. 13-60002
but only so far as it is supported by well-pleaded allegations, assumed to be true.”
Leach v. Shelter Ins. Co., 909 So. 2d 1283, 1287–88 (Miss. Ct. App. 2005)
(emphasis added) (citing Nishimatsu Constr. Co., Ltd. v. Hous. Nat’l Bank, 515
F.2d 1200, 1206 (5th Cir. 1975)).14 “Allegations that are in effect conclusions of
law are not considered well-pleaded allegations . . . and a defendant will not be
held to have admitted such averments on default.” DynaSteel, 611 So. 2d at 985.
Thus, a default judgment does not equate to “a general admission or an absolute
confession.” Leach, 909 So. 2d at 1287–88.15
Applying these principles here, Trout Point failed to show that a state or
federal court in Mississippi faced with the First Amended Statement of Claim
would have awarded a default judgment in its favor. Although Handshoe’s
failure to answer or otherwise defend the case satisfies the basic prerequisite for
14
These cases apply the comment to Mississippi Rule of Civil Procedure 55, which
states that, upon entry of default, a “defendant has no further standing to contest the factual
allegations of [a] plaintiff’s claim for relief.” Miss. R. Civ. P. 55 cmt.; Hankins v. Md. Cas.
Co./Zurich Am. Ins. Co., 101 So. 3d 645, 653 (Miss. 2012) (relying on rule and comment to
conclude that factual allegations were “uncontested” upon entry of a default judgment).
15
Mississippi courts treat a default judgment “as a conclusive and final adjudication
of the issues necessary to justify the relief awarded.” Miss. R. Civ. P. 55 cmt.; see Hogan v.
Buckingham ex rel. Buckingham, 730 So. 2d 15, 20 (Miss. 1998) (relying on rule and comment);
Chassaniol v. Bank of Kilmichael, 626 So. 2d 127, 132 (Miss. 1993) (same). By analogy to res
judicata principles, an issue is necessary to justify the relief awarded if the judgment “‘could
not have been rendered without deciding the matter.’” See Miss. Emp. Sec. Comm’n v. Phila.
Mun. Separate Sch. Dist. of Neshoba Cnty., 437 So. 2d 388, 401 (Miss. 1983) (quoting Haring
v. Prosise, 462 U.S. 306, 315 (1983)); see also Franklin Collection Serv., Inc. v. Stewart, 863 So.
2d 925, 929 (Miss. 2003) (applying res judicata principles to a default judgment). Here,
because falsity was not “necessary to justify” the Nova Scotia Judgment, it is not a “conclusive
and final adjudication” of that issue.
16
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No. 13-60002
default,16 the allegations in the First Amended Statement of Claim—particularly
those regarding the falsity of Handshoe’s statements—are not particularly well-
pleaded for at least three reasons.
First, the First Amended Statement of Claim is unclear regarding whether
all, or just some, of Handshoe’s statements are false. At the outset, it indicates
that Handshoe’s statements were “defamatory by both true and false innuendo.”
(emphasis added). In explaining the particular statements at issue, the First
Amended Statement of Claim repeatedly emphasizes that the statements were
“defamatory,” in that they would tend to lower one’s opinion of Trout Point.17
But it specifically alleges falsity with respect to only a limited few of the
statements, and offers no facts to rebut or undermine most of Handshoe’s
statements.18 Although Trout Point includes some generic allegations of falsity
16
Am. States Ins. Co. v. Rogillio, 10 So. 3d 463, 467 (Miss. 2009) (affirming a district
court’s default judgment after a defendant failed to answer or otherwise defend an action).
17
Trout Point argues that Handshoe’s statements are defamatory per se. In
Mississippi, there are five categories of defamation per se:
(1) Words imputing the guilt or commission of some criminal offense involving
moral turpitude and infamous punishment[;] (2) Words imputing the existence
of some contagious disease[;] (3) Words imputing unfitness in an officer who
holds an office of profit or emolument, either in respect of morals or inability to
discharge the duties thereof[;] (4) Words imputing a want of integrity or
capacity, whether mental or pecuniary, in the conduct of a profession, trade or
business; and in this and some other jurisdictions[; and] (5) words imputing to
a female a want of chastity.
Speed v. Scott, 787 So. 2d 626, 632 (Miss. 2001) (quoting W.T. Farley, Inc. v. Bufkin, 132 So.
86, 87 (1931)). Even assuming that some of the alleged statements are defamatory per se, that
simply means that Trout Point need not establish special damages as a prerequisite to
recovery. Id. It does not eliminate the falsity requirement. Id.18
Compare, for example, paragraph 54 of the First Amended Statement of Claim with
paragraph 100. Paragraph 54 alleges: “Publishing that Trout Point Lodge was not doing well
17
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No. 13-60002
towards the end of its defamation claim—specifically in paragraphs 113, 115,
116, and 118—this catch-all language offers little guidance regarding whether
some or all of the statements are allegedly false, especially in light of the First
Amended Statement of Claim’s earlier reference to “true innuendo” as a source
of harm.19
For this reason, Trout Point cannot show that a state or federal court in
Mississippi would grant a default judgment based on the First Amended
Statement of Claim. Indeed, a Mississippi court has affirmed dismissal where
a complaint failed to specify which of a series of statements constituted slander.
Chalk v. Bertholf, 980 So. 2d 290, 298–99 (Miss. Ct. App. 2007) (emphasis added)
(“Because the complaint did not contain any information as to the substance or
effect of the statements with which the appellants allege they were slandered,
Bertholf and Bryant were left with approximately two hours worth of radio air
time to analyze and attempt to guess which parts of the radio show the
appellants alleged slanderous in order to begin their defense.”). Similarly, here,
a Mississippi court could deny a default judgment because the First Amended
Statement of Claim does not clearly and specifically allege that each of the
financially is defamatory of the corporate plaintiff. Public reports of poor business
performance would tend to lower the esteem of the corporate plaintiff in the eyes of a
reasonable person.” Trout Point does not specifically allege that the statement is false, nor
does it claim that, for example, its financial performance had not declined. Paragraph 100,
on the other hand, states: “Defendant Handshoe states that the Plaintiff Trout Point Lodge
advertises heavily on TripAdvisor. This is defamatory, and untrue, designed to make it appear
as though plaintiff is in dire economic straights and has resorted to drastic measures to
advertise.” (emphasis added).
19
Trout Point also makes some generic allegations that the statements were false in
raising its related claims, for example, in paragraphs 130 and 143.
18
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No. 13-60002
relevant statements is false.
Second, some of the publications at issue are statements of unverifiable
opinion. For example, Trout Point based its defamation claim, in part, on the
allegation that Handshoe used “unabashed anti-gay, anti-homosexual rhetoric
and rants of the defendants” intended to “engender[] discrimination and hatred.”
The First Amended Statement of Claim complains that Handshoe referred to
Perret and Leary as “‘girls,’ ‘blow buddies,’ ‘queer f-g scum,’ and ‘b-tches,’
published more than one reference to a gay-themed movie, and posted video clips
of movies and music videos commonly associated with gay stereotypes.” While
less grotesque, many of the other statements at issue also involve expressions
of opinion; for example, that Trout Point had “Champagne taste on a beer
budget,” that Perret and Leary were a “litigious bunch,” and that the Nova
Scotia action was “foolish and frivolous.”
Though offensive, these statements generally are not actionable in
Mississippi. The Mississippi Supreme Court has recognized that “name calling
and verbal abuse are to be taken as statements of opinion, not fact, and therefore
will not give rise to an action for libel.” Johnson v. Delta-Democrat Pub. Co., 531
So. 2d 811, 814 (Miss. 1988) (collecting cases). “[N]othing in life or our law
guarantees a person immunity from occasional sharp criticism, nor should it.
. . . [N]o person avoids a few linguistic slings and arrows, many demonstrably
unfair.” Ferguson v. Watkins, 448 So. 2d 271, 276 (Miss. 1984). Thus,
statements of opinion are actionable “only if they clearly and unmistakably
imply the allegation of undisclosed false and defamatory facts as the basis for
the opinion.” Id.; see also Tex. Beef Grp. v. Winfrey, 201 F.3d 680, 688 (5th Cir.
19
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No. 13-60002
2000) (“[O]pinions, though strongly stated, . . . based on truthful established fact,
. . . are not actionable under the First Amendment.”); Peter Scalamandre &
Sons, Inc. v. Kaufman, 113 F.3d 556, 564 (5th Cir. 1997) (“Defamation law
should not be used as a threat to force individuals to muzzle their truthful,
reasonable opinions and beliefs.”).20 Here, although some of Handshoe’s opinions
certainly imply facts (e.g., that Trout Point was involved in the Aaron Broussard
scandal), his bare “linguistic slings and arrows” do not. Indeed, counsel for
Trout Point conceded at oral argument that Handshoe’s offensive insults and
opinion statements would not be actionable in Mississippi. Thus, Trout Point
cannot show that a state or federal court in Mississippi would grant a default
judgment on these opinion-based allegations.
Finally, a state or federal court in Mississippi could view some of the
allegations in the First Amended Statement of Claim as legal conclusions, as
opposed to well-pleaded facts. The Mississippi Supreme Court’s decision in
DynaSteel illustrates this point. 611 So. 2d at 985. There, the court held that
punitive damages were not recoverable on a default judgment because the
allegations in the complaint, taken as true, were insufficient to support a finding
of bad faith. Id. It stated:
Allegations that are in effect conclusions of law are not considered
well-pleaded allegations, however, and a defendant will not be held
to have admitted such averments on default. Aztec alleged in its
20
Mere labeling of a statement as a “fact” or an “opinion” is not dispositive in
determining its actionability. Roussel v. Robbins, 688 So. 2d 714, 723 (Miss. 1996). “A
statement, even if phrased as an opinion, will not enjoy constitutional protection if the court
concludes that its substance or gist could reasonably be interpreted as declaring or implying
an assertion of fact.” Id. (quoting Keohane v. Wilkerson, 859 P.2d 291, 296 (Colo. 1993)).
20
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No. 13-60002
complaint that DynaSteel obstinately and willfully refused to pay
Aztec and that such conduct constituted gross bad faith. Given the
legal significance attached to the phrases “obstinate and willful
refusal to pay” and “bad faith refusal to pay”, inquiries into the
truth of assertions are not purely factual but at least mixed
questions of law and fact. All we can take as admitted from these
blanket assertions is that DynaSteel did not pay Aztec. The issue
of whether DynaSteel’s failure to pay constituted such bad faith as
to rise to the level of an independent tort is not one that can be
taken as admitted but instead must be decided by the court.
Id. (internal citations omitted). Here, Trout Point’s allegations of falsity are
unaccompanied by any facts that contradict or otherwise undermine the
allegedly defamatory statements.21 Given the legal significance attached to the
word “falsity,” Mississippi law requires Trout Point to do more than merely cry
“false” to prove its claim.22 Therefore, even deemed admitted, the allegations
likely would have been insufficient—without subsequent evidence, analysis,
and fact-finding—to satisfy Trout Point’s burden in a Mississippi court.
For these three reasons, Trout Point failed to show that the allegations
in the First Amended Statement of Claim, standing alone and taken as true,
would be sufficient to support a defamation claim in a Mississippi court. Trout
21
A federal district court in Maryland applying analogous state law recently awarded
a default judgment in a defamation case, but only after determining that “the complaint not
only alleges that these statements from the Article are ‘untrue,’ it also sets forth a variety of
facts that, when taken in the light most favorable to Plaintiffs, tend to show that GAP is a
legitimate, government-approved program. Falsity of the above statements is therefore
properly alleged.” Russell v. Railey, No. DKC-08-2468, 2012 WL 1190972, at *4 (D. Md. Apr.
9, 2012).
22
Because statements that are “substantially true” are not actionable in Mississippi,
whether a statement is false as a technical matter may differ from whether it is “false” as a
legal matter.
21
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No. 13-60002
Point asserts a second ground to establish falsity, however: the Nova Scotia
Court’s purported factual findings that Handshoe’s statements were false and
malicious. We turn next to that issue.
2.
As a threshold matter, the plain language of the SPEECH Act suggests
that the purported “factual findings”23 of the Nova Scotia Court are irrelevant
to the enforceability inquiry. The critical question is not whether the Nova
Scotia Court found falsity, but rather whether a state or federal court in
Mississippi faced with the allegations in the First Amended Statement of Claim
would have done so. See § 4102(a)(1)(B) (requiring the party seeking to enforce
the foreign defamation judgment to establish that the defendant “would have
been found liable for defamation by a domestic court applying the [F]irst
[A]mendment to the Constitution of the United States and the constitution and
law of the State in which the domestic court is located”). Moreover, the Nova
Scotia Court issued its factual findings at a damages hearing that occurred after
it had already granted default judgment in favor of Trout Point.
But even assuming, arguendo, that the Nova Scotia Court’s factual
findings have some bearing on the enforceability inquiry, they are insufficient
to demonstrate falsity. As the district court summarized, the Nova Scotia
Court’s oral decision “does not contain specific findings of fact with respect to
the falsity of Handshoe’s statements.” Indeed, despite repeated entreaties at
23
The Nova Scotia Court did not issue formal findings of fact. Rather, it commented
on the evidence in the course of issuing an oral opinion awarding Trout Point compensatory,
aggravated, and punitive damages. We assume arguendo that the court’s comments constitute
factual findings.
22
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No. 13-60002
oral argument, Trout Point could not identify a single specific allegation in the
Statement of Claim that the Nova Scotia Court found was actually false.
Rather, the Nova Scotia Court noted generically that some statements were
“erroneous,” but remained silent as to the truth of others.24 The only statement
with arguably global reach is that Handshoe’s conduct was “outrageous” in the
“face of true facts” about Trout Point. This simply is not direct enough to
constitute a meaningful factual finding that all of Handshoe’s statements were
false.25
In analyzing the Nova Scotia Court’s oral opinion and purported factual
findings, it is important to note that the court based its damages award on
allegations and evidence that a Mississippi court would not have credited. For
one, the Nova Scotia Court considered numerous statements that did not
appear in the First Amended Statement of Claim, many of which occurred after
24
Compare, e.g., “The plaintiffs were erroneously identified as being connected with Mr.
Broussard in a business venture and Mr. Broussard was named in error as owning Trout Point
Lodge,” with “The defamation continued with statements that Trout Point Lodge was losing
business or going bankrupt because of the investigation of Mr. Broussard and his inability to
continue to support it. . . . The statements also contained anti-gay rhetoric and homophobic
comments.”
25
Trout Point emphasized that certain evidence, specifically, affidavits and testimony
by Perret and Leary, demonstrated the falsity of Handshoe’s statements. But this evidence,
like the purported factual findings, was admitted at the damages hearing after the Nova Scotia
Court had already issued the Nova Scotia Judgment. Even if we consider this evidence, it still
does not establish that all of the alleged statements were, in fact, false. Moreover, it refers to
numerous statements of opinion and publications that post-dated the First Amended
Statement of Claim. Thus, for essentially the same reasons discussed above, we hold that the
evidence Trout Point cites is insufficient to show that Trout Point would have been entitled
to relief in a Mississippi court.
23
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No. 13-60002
Trout Point filed its case.26 In Mississippi, a “default judgment may not extend
to matters outside the issues raised by the pleadings or beyond the scope of the
relief demanded.”27 Miss. R. Civ. P. 54(c) cmt. Indeed, Trout Point itself
acknowledges that “each communication of the same defamatory matter by the
same defamer, whether to a new person or to the same person, is a separate and
distinct publication, for which a separate cause of action arises.” Thus, a
Mississippi court would not grant relief based on statements that did not appear
in the plaintiffs’ complaint. Moreover, the Nova Scotia Court awarded damages
based on the name-calling and verbal abuse discussed above, which is not
actionable in Mississippi. In sum, much of the conduct that underlies the Nova
Scotia Court’s oral opinion and damages award would not give rise to relief in
Mississippi.
IV.
Before we conclude, we note that the SPEECH Act also contains a
“jurisdictional considerations” provision, which requires “the party seeking
recognition or enforcement of the foreign judgment” to show that “the exercise
of personal jurisdiction by the foreign court comported with the due process
requirements that are imposed on domestic courts by the Constitution of the
United States.” § 4102(b).
26
For example, the Nova Scotia Court noted in its oral opinion that “further defamatory
comments were made earlier this month, when the Notice of Assessment of Damages was
served on [Handshoe].”
27
For this reason, we do not look to the content of the publications (beyond what is
specifically alleged in the First Amended Statement of Claim) to determine whether a state
or federal court in Mississippi would have found Handshoe liable for defamation.
24
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No. 13-60002
Handshoe asserts that Trout Point also failed to satisfy this provision
because the Nova Scotia Court’s exercise of personal jurisdiction over him did
not comport with our nation’s due process requirements. He makes a strong
argument that Nova Scotia was not the “focal point” of the statements that
preceded the First Amended Statement of Claim. Cf. Calder v. Jones, 465 U.S.
783, 788–90 (1984). But we, like the district court, need not resolve whether
Handshoe had the requisite minimum contacts with Nova Scotia at the time that
Trout Point filed suit, as Trout Point’s failure to satisfy the First Amendment
considerations provision of the SPEECH Act is fatal to its claim.
V.
For the above-stated reasons, Trout Point failed to satisfy its burden to
show that either (1) Canadian law offers as much free speech protection as the
United States Constitution and Mississippi state law, or (2) a Mississippi court
presented with the same facts and circumstances would have found Handshoe
liable for defamation. Accordingly, we hold that the Nova Scotia Judgment is
unrecognizable and unenforceable. We AFFIRM.
25