The Second Circuit on Tuesday partly revived a defamation case brought by a former executive of a Dutch hedge fund over Bloomberg News coverage of his allegations that the fund was engaged in a massive bribery scheme.
Carmen Germaine of Law360 writes, “The appellate court affirmed that the executive can’t sue the fund itself.
“A three-judge panel affirmed a federal judge’s decision that former Palladyne International Asset Management BV executive Dan Friedman can’t sue the hedge fund because Connecticut law doesn’t allow jurisdiction over out-of-state defendants in defamation cases, rejecting his argument that the state law violates the equal protection clause or the right to petition.
“But the appellate court partly revived Friedman’s defamation claims against Bloomberg, finding that he can sue the news organization over a statement from Palladyne claiming that he “repeatedly tried to extort money from the company” that was included in coverage of a suit Friedman filed against the fund.
“‘This statement can be read as something other than a characterization of Friedman’s underlying lawsuit against Palladyne and is reasonably susceptible to a defamatory meaning — that Friedman actually committed the criminal act of extortion — a statement that is capable of being proven false,’ the panel said.”
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