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Stuart Weiss and Atlantic City News Agency, Inc v. Pinnacle Entertainment


April 27, 2012


On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-3612-09.

Per curiam.


Argued January 25, 2012

Before Judges Cuff, Lihotz and Waugh.

Plaintiffs Atlantic City News Agency (ACNA) and its owner, Stuart Weiss, appeal from the dismissal of their complaint alleging defamation, false light, invasion of privacy, and product disparagement. Following our review of the arguments presented on appeal, in light of the record and applicable law, we affirm the April 13, 2011 order dismissing plaintiffs' complaint, concluding the allegations are insufficient to sustain a cause of action.

Plaintiffs alleged defendants Pinnacle Entertainment, Inc., its Chief Executive Officer Daniel R. Lee, its employee Kimberly Townsend, and its affiliated companies, Pinnacle Atlantic City and ACE Gaming, LLC, related defamatory statements published in three articles appearing in the city newspaper, Press of Atlantic City (the Press). Defendants sought to develop a new casino resort on the former Sands Casino site, and offered to purchase plaintiffs' adjacent realty. Plaintiffs declined the offer and provided a counter offer, which defendants found unreasonable. Thereafter, defendants urged the City of Atlantic City to exercise eminent domain by declaring plaintiffs' and other properties necessary for defendants' development, "in need of redevelopment."*fn1

In their September 14, 2008 complaint, plaintiffs identified comments attributed to individual defendants, reported in the three newspaper articles and also posted on the Press's website. The claimed offensive excerpts included in the first article were found to have been made beyond the one year statute of limitations.*fn2 Because they are not relevant on appeal, we decline to discuss them.

The other remarks reported in the latter two Press articles in part emanated from Lee's August 21, 2008 appearance during a Casino Control Commission (CCC) hearing investigating the need for redevelopment. In urging the CCC take action, Lee characterized ACNA's business as a "really tawdry adult bookstore." On a September 21, 2008 front page article, the Press reported on the CCC's hearings and included this statement. The article also mentioned Lee's comment plaintiffs sought in the "ballpark of $100 million an acre" for their property, followed by his remark that all the property owners' asking prices "were either high or ridiculous. Those that were high, I think in every case we've reached a deal. Those who are ridiculous, we have not."

A second story printed in the Press on September 26, 2008, repeated Lee's "really tawdry" remark, without referencing whether it was made during the CCC hearing or on some other occasion. Further, the article quoted Townsend's statement plaintiffs had asked for "about $5.5 million" for their building. Finally, this commentary was attributed to Lee:

If Atlantic City has any hope of reinventing itself and competing with the newer and better casinos in Connecticut, Pennsylvania and, likely, Maryland, then it has to wake up and recognize these businesses for what they are - blights that draw a negative element to an area and that frighten away the average American that is necessarily the bread and butter of every new casino.

Defendants moved for dismissal of the complaint, asserting plaintiffs failed to allege an actionable claim. The initial motion judge reviewed the specific statements relied upon by plaintiffs to support their contentions and found no basis for relief regarding the references to plaintiffs' asking price, including the remark it was "in the ballpark of one hundred million an acre" and the "either high or ridiculous" quip. However, the initial motion judge did not dismiss the product disparagement claim stating, "I'm not suggesting that I have made any determination whether [ACNA] is or is not [primarily engaged in the sale of pornographic materials]. What I'm suggesting is that on this motion record[,] I can neither take judicial notice of that fact . . . or not." He further suggested the question of whether the use of the term "blight" was an opinion requiring a "fact sensitive analysis," which could not be made on the pleadings filed. The initial motion judge also declined to rule on defendants' asserted application of privilege, concluding such a claim was better left for summary judgment.

Regarding the claims surviving the initial motion to dismiss, plaintiffs were ordered to "amend their complaint to identify the circumstances of publication of those statements not made to reporters or to the Press[.]" Plaintiffs were to plead the specific factual circumstances surrounding the alleged publication of statements alleged to be defamatory and "provide, to the extent known, the content of each statement, when it was made, where it was made, and to whom it was made."

Plaintiffs filed an amended complaint that included sixty-two paragraphs of asserted facts followed by five claims for relief. The content of the facts alleged was confined to Townsend's and Lee's remarks reported in the September 21 and 26 newspaper articles. The complaint in paragraph twenty-seven noted Lee's September 21 remarks were made during the CCC hearing, stating: "According to the [September 21, 2008] article, in his testimony Lee called [ACNA] a 'really tawdry adult bookstore.'" Paragraph twenty-eight then asserts that statement is false and "Lee knew the statement to be false when he made it." The subsequent paragraphs repeat the other statements we have listed above, and add these statements:

34. Plaintiffs are informed and believe that one or more of the defendants, or someone acting on their behalf, . . . sent the transcript of the August 21, 2008 [CCC] hearing to the reporter. . . .

35. . . . Plaintiffs are informed and believe that one or more defendants, or someone acting on their behalf, . . . spoke with the reporter . . . on or about September 20, 2008, and confirmed Lee's statements as quoted in the transcript. . . .

37. The [September 26, 2008] story contains statements [by] Townsend not previously reported. The story refers to a "statement" [by] Lee that does not appear in the transcript of the . . . [CCC] hearing. . . .

38. Plaintiffs are informed and believe that Townsend spoke to the reporter on behalf of Lee and the other defendants between the publication of the September 21, 2008 article and the September 26, 2008 article. The article states that Townsend "divulged Weiss's asking price this week[.]"

44. . . . Plaintiffs are informed and believe that Lee's "statement" was prepared by Pinnacle or someone acting on its behalf, . . . and sent to the reporter between the September 21 article and the September 26 article. . . .

Then, in summary fashion, the amended complaint lists six causes of action by referencing the paragraph numbers of the prior factual allegation relied upon to support each claim.

A different Law Division judge was assigned to review defendants' second motion to dismiss. In a comprehensive fifteen-page Memorandum of Decision, the second motion judge considered the allegations and, after granting plaintiffs every reasonable factual inference, found the statements legally deficient to form any cause of action. He dismissed the complaint with prejudice. R. 4:6-2(e).

On appeal, plaintiffs contend the second motion judge erred by: 1) making discrete factual errors when reviewing their complaint; 2) failing to apply the law of the case doctrine; 3) incorrectly applying the doctrine of privilege to bar relief; and 4) incorrectly concluding plaintiffs' claims were time barred.

In our review of the trial court's determination, we afford no deference to the "trial court's interpretation of the law and the legal consequences that flow from established facts[.]" Manalapan Realty, L.P., v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). "[M]atters of law are subject to a de novo review." Balsamides v. Protameen Chems., Inc., 160 N.J. 352, 372 (1999).

Review of a motion to dismiss pursuant to Rule 4:6-2(e), "requires an assumption that the allegations of the pleading are true and affords the pleader all reasonable factual inferences."

Seidenberg v. Summit Bank, 348 N.J. Super. 243, 249-50 (App. Div. 2002). When examining the legal sufficiency of the facts alleged in the complaint, "a reviewing court 'searches the complaint in depth and with liberality to ascertain whether the fundament of a cause of action may be gleaned even from an obscure statement of claim, [and] opportunity being given to amend if necessary.'" Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989) (citing Di Cristofaro v. Laurel Grove Mem'l Park, 43 N.J. Super. 244, 252 (App. Div. 1957)). We apply the same standard as the trial court, and base "our review of the order in question in light of the facts pleaded by plaintiffs and the reasonable inferences that may be drawn therefrom." Seidenberg, supra, 348 N.J. Super. at 250.

Plaintiffs maintain a liberal reading of the assertions in the amended complaint shows they satisfactorily identified offensive statements, the defamer and the circumstances of publication. Central to each of the claimed causes of action is the characterization of ACNA as a "really tawdry adult bookstore" or "blight" is false. In examining these issues, the second motion judge found ACNA was in fact an adult bookstore and the descriptive "really tawdry" or use of the term "blight" was merely a matter of opinion, making the statements not actionable. Plaintiffs disagree, arguing these issues had previously been determined favorably to their position, requiring the second motion judge to accept the findings made by the initial motion judge, who declined to dismiss the product disparagement and false light claims. Plaintiffs contend the second motion judge's independent analysis of the issues, resulting in dismissal of its causes of action, was at odds with the established decisions previously made and violated the "law of the case" doctrine. We disagree.

"Under the law-of-the-case doctrine, 'where there is an unreversed decision of a question of law or fact made during the course of litigation, such decision settles that question for all subsequent stages of the suit[,]'" Bahrle v. Exxon Corp., 279 N.J. Super. 5, 21 (App. Div. 1995) (quoting Slowinski v. Valley Nat'l Bank, 264 N.J. Super. 172, 179 (App. Div. 1993)), aff'd, 145 N.J. 144 (1996), and the determination "should be respected by all other lower or equal courts during the pendency of that case." Lanzet v. Greenberg, 126 N.J. 168, 192 (1991) (citing State v. Reldan, 100 N.J. 187, 203 (1985)). The doctrine is a non-binding rule intended "to prevent relitigation of a previously resolved issue." In re Estate of Stockdale, 196 N.J. 275, 311 (2008). When applicable, it prohibits "a second judge on the same level, in the absence of additional developments or proofs, from differing with an earlier ruling[.]" Hart v. City of Jersey City, 308 N.J. Super. 487, 497 (App. Div. 1998).

Plaintiffs concede the doctrine is not an absolute rule as "'the court is never irrevocably bound by its prior interlocutory ruling[.]'" Daniel v. N.J. Dep't of Transp., 239 N.J. Super. 563, 581 (App. Div.) (quoting Sisler v. Gannett Co., 222 N.J. Super. 153, 159 (App. Div. 1987), certif. denied, 110 N.J. 304 (1988)), certif. denied, 122 N.J. 325 (1990). In fact, it is well-accepted that "[a] hallmark of the law of the case doctrine is its discretionary nature, calling upon the deciding judge to balance the value of judicial deference for the rulings of a coordinate judge against those 'factors that bear on the pursuit of justice and, particularly, the search for truth.'" Hart, supra, 308 N.J. Super. at 498 (quoting Reldan, supra, 100 N.J. at 205). Further, the doctrine is to "be applied flexibly to serve the interests of justice." Reldan, supra, 100 N.J. at 205. However, plaintiffs suggest the second motion judge failed to adequately explain his divergence from the previous determinations.

Our review of the record convinces us the earlier denial of the motion to dismiss was not based on a determination of a disputed issue. The decision denying the motion to dismiss did not specifically address the adequacy of the statements as supporting a cause of action and the second motion judge was free to review the defendant's allegations anew in light of the amended complaint.

As discussed in detail below, the amended complaint failed to plead the claims with the level of specificity required. See Darakjian v. Hanna, 366 N.J. Super. 238, 248-49 (App. Div. 2004). The complaint "must state the essential elements of a cause of action simply, concisely and directly. . . . A vague conclusory allegation is not enough." Id. at 249 (internal quotation marks and citations omitted). Further, "[i]t is not enough for plaintiffs to assert . . . that any essential facts that the court may find lacking can be dredged up in discovery." Printing Mart-Morristown, supra, 116 N.J. at 768.

The second motion judge properly reviewed the pleadings to discern their sufficiency and did not abrogate his responsibility to acknowledge the law of the case. He was free to consider whether the newly alleged facts in the amended pleading satisfactorily recited defamatory statements concerning plaintiffs, which were false and communicated to others by defendants. He concluded the comments identified were opinions or opinions coupled with true facts that were not actionable. He made additional legal determinations regarding the timeliness of plaintiffs' action and the applicability of privileged.

Because our de novo confirms the identified remarks are statements of opinion, which are not defamatory, precluding the asserted causes of action, we need not address the additionally raised legal issues.

Plaintiffs' complaint pursues causes of action for defamation and product disparagement. Although "the two causes sometimes overlap, actions for defamation and product disparagement stem from different branches of tort law." Dairy Stores, Inc. v. Sentinel Pub. Co., 104 N.J. 125, 133 (1986). "A defamation action, which encompasses libel and slander, affords a remedy for damage to one's reputation." Ibid. Determination of "[w]hether a statement is defamatory is a matter of law[.]" Russo v. Nagel, 358 N.J. Super. 254, 262 (App. Div. 2003).

"[T]o prove defamation, a plaintiff must establish, in addition to damages, that the defendant (1) made a defamatory statement of fact (2) concerning the plaintiff (3) which was false, and (4) which was communicated to a person or persons other than the plaintiff. The fifth element that must be proven is fault. Where . . . [the] plaintiff is a private figure and the speech is about an exclusively private concern, a traditional negligence standard of fault is applicable, which is defined as communicating the false statement while acting negligently in failing to ascertain the truth or falsity of the statement before communicating it. Fault may also be established by showing that [the] defendant knows the statement is false and that it defames plaintiff or [the] defendant acts with reckless disregard of its truth or falsity."

[Beck v. Tribert, 312 N.J. Super. 335, 349-50 (App. Div.) (alterations in original) (quoting Feggans v. Billington, 291 N.J. Super. 382, 390-91 (App. Div. 1996)), certif. denied, 156 N.J. 424 (1998).]

When an identified statement addresses a matter of public concern, a plaintiff claiming it was defamed by the remark must prove the statement is false. Dairy Stores, supra, 104 N.J. at 134-135 (citing Phila. Newspapers, Inc., v. Hepps, 475 U.S. 767, 768-69, 106 S. Ct. 1558, 1559, 89 L. Ed. 2d 783, 787 (1986)).

"By comparison, an action for product disparagement is an offshoot of the cause of action for interference with contractual relations, such as sales to a prospective buyer." Id. at 133. "The two causes may merge when a disparaging statement about a product reflects on the reputation of the business that made, distributed, or sold it." Ibid. However, "[c]courts generally are reluctant to impute a lack of integrity to a corporation merely from a criticism of its product." Id. at 134.

In our review of the amended complaint, we conclude its recitals do not satisfactorily plead the elements of either cause of action. The amended complaint's references to the "really tawdry" remark was an opinion and the "blight" comment, also an opinion, was a fair comment on an issue of public concern.

The amended complaint addressed the post-CCC hearing publication of the "really tawdry" remark, by presuming defendants delivered the CCC transcript to the Press, maintaining someone on behalf of defendants must have confirmed the statements Lee made before the CCC, and alleging Townsend spoke to a reporter, sometime between the September 21 and 26 articles, during which she probably repeated the remark. Further, plaintiffs cite the "blight" commentary printed in the September 26 Press article as a direct defamatory statement. We determine that even a broad reading of the allegations in the amended complaint results in a conclusion that the "really tawdry adult book store" remark and the "blight" commentary were opinions based on underlying facts and not defamation.

New Jersey law limits defamation actions to those statements with a defamatory meaning. Ward v. Zelikovsky, 136 N.J. 516, 528 (1994). However, "[o]pinion statements . . . are generally not capable of proof of truth or falsity . . . [and] generally have received substantial protection under the law." Id. at 531. Nevertheless, opinion statements may be actionable when they "imply false underlying objective facts." Lynch v. N.J. Educ. Ass'n, 161 N.J. 152, 167 (1999).

Despite plaintiffs' protests, it is not false to state ACNA is an adult book store. ACNA's main signage prominently proclaims "adult books, videos, and viewing rooms" among its offered products and services. Considering the "content, verifiability, and context of the challenged statements[,]" Zelikovsky, supra, 136 N.J. at 529, we concur with the second motion judge's conclusion that "[p]laintiff[s] could . . . never prevail" on the notion that labeling ACNA as an adult bookstore was a knowingly false statement. Whether ACNA was a bookstore that sold adult materials, products and services, or an adult bookstore is insignificant given the undeniable underlying reality: ACNA was in the adult entertainment business.

Lee's additional modifiers, "really tawdry," expressed his opinion, nothing more. Importantly, that opinion was grounded on the irrefutable fact that ACNA distributed adult books and videos. Therefore, nothing about Lee's statement implied a false underlying fact. Lynch, supra, 161 N.J. at 167. Since falsity is an element of defamation, false light, and product disparagement, see Romaine v. Kallinger, 109 N.J. 282, 293 (1988) (holding statements for false light must unreasonably place one in a false light before the public); see also Dairy Stores, supra, 104 N.J. at 161 (stating product disparagement must contain false allegations regarding plaintiff or plaintiff's products); Maressa v. N.J. Monthly, 89 N.J. 176, 190 (stating defamation requires a false statement), cert. denied, 459 U.S. 907, 103 S. Ct. 211, 74 L. Ed. 2d 169 (1982), the second motion judge properly dismissed plaintiffs' claims based on the "really tawdry" remark.

We reach a similar conclusion regarding the "blight" commentary printed in the September 26 Press article. Lee's statement regarded the need for reform of Atlantic City's boardwalk landscape to compete with sister states' casinos. The second motion judge concluded the issue was one of public concern. While it is true that blight is a term of art, see N.J. Const. art. VIII, § 3, ¶ 1; N.J.S.A. 40:37A-55.1, we reject plaintiffs' contention the comment was defamatory because their property was never adjudicated a "blight." Plaintiffs also ask that we link Lee's "really tawdry adult bookstore" remark from the CCC hearing to the commentary advocating the need to redevelop the blighted areas of the City's boardwalk area, thus transforming the statements to a challenge against ACNA's adult entertainment products.

Lee's blight commentary generally offered his opinion on the need for redevelopment of the area, presumably to allow Pinnacle's new casino project. The blight commentary was never coupled with a reference to ACNA or directed to its products.

Rather, Lee's statements were fair commentary on an issue of public concern that is the needed redevelopment of the city's boardwalk area. Dairy Stores, supra, 104 N.J. at 139.

Overall, plaintiffs fail to demonstrate their complaint properly sets forth defamatory remarks published by defendants, which rise to defamation or product disparagement. We conclude the second motion judge's review of the issues did not pursue a "manifestly unjust course" that would warrant reversal. Union Cnty. Improvement Auth. v. Artaki, LLC, 392 N.J. Super. 141, 149 (App. Div. 2007) (internal quotation marks omitted).

We also reject plaintiffs' false light claims resulting from Townsend's and Lee's statements regarding plaintiffs' purported asking price for the sale of its property. The tort results in liability when one is placed "'before the public in a false light[,]'" which is "'highly offensive to a reasonable person,'" and defendants "'acted in reckless disregard as to the falsity of the publicized matter[.]'" Romaine, supra, 109 N.J. at 294 (quoting Restatement (Second) of Torts § 652E (1977)). Plaintiffs' complaint does not dispute Townsend's assertion they sought $5.5 million dollars and Lee's "high or ridiculous" statement was found not to be defamatory. The amended complaint adds nothing that would alter this conclusion. Consequently, we find no basis to disturb the second motion judge's conclusions.

See Sickles v. Cabot Corp., 379 N.J. Super. 100, 106 (App. Div.) (holding under Rule 4:6-2(e), a complaint that states no basis for relief must be dismissed), certif. denied, 185 N.J. 297 (2005).

Based on our conclusions, we need not address the additional reasons recited by the trial court for dismissal of plaintiffs' complaint, that is, that Lee's statements were privileged, see Dairy Stores, supra, 104 N.J. at 136 ("Certain statements, such as those made in judicial, legislative, or administrative proceedings, are absolutely privileged because the need for unfettered expression is crucial to the public weal."); and the complaint was untimely, see Swan v. Boardwalk Regency Corp., 407 N.J. Super. 108, 121 (App. Div. 2009) (holding false light invasion of privacy claim based on defamatory allegations time-barred by the one-year statute of limitations applicable to defamation).


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