Inkmango, Inc. v. Warren

Inkmango, Inc. v Warren 2024 NY Slip Op 33969(U) November 8, 2024 Supreme Court, New York County Docket Number: Index No. 152802/2024 Judge: Paul A. Goetz Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.

[FILED: NEW YORK COUNTY CLERK 11/08/2024 03:55 P~ INDEX NO. 152802/2024 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 11/08/2024

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. PAUL A. GOETZ PART 47 Justice ----------------------------------------------------------------- ----------------X INDEX NO. 152802/2024 INKMANGO, INC., MOTION DATE 06/18/2024 Plaintiff, MOTION SEQ. NO. 001 - V -

KATIE WARREN, BUSINESS INSIDER DECISION + ORDER ON MOTION Defendants. ------------------------------------------------------------------- --------------X

The following e-filed documents, listed by NYSCEF document number (Motion 001) 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24 were read on this motion to/for DISMISSAL

In this libel action, defendants move pursuant to CPLR § 3211 to dismiss the complaint,

arguing that the plaintiff has failed to meet the heightened pleading standard of a libel claim

under New York's anti-SLAPP statute. They additionally argue that under the anti-SLAPP

statute they are entitled to reasonable attorney's fees as the action was brought without a

substantial basis in fact and law.

BACKGROUND

Plaintiff, InkMango Inc., d/b/a the Juggernaut, is a media corporation with a focus on

South Asian news stories (NYSCEF Doc No 1 ,i 1). Defendant, Katie Warren, wrote and

defendant, Business Insider ("BI") published an article on March 5, 2024 titled "The Juggernaut

promised to revolutionize South Asian news. But insiders say the company's founder misled

investors, struggled to raise money, and left workers 'heartbroken" (the "Article") (NYSCEF

Doc No 3). The Article reported on the business decisions of the Juggernaut and its CEO,

Snighda Sur (id.). Plaintiff alleges that in the Article, defendants made misrepresentations about

its funding and investment activities by implying it misled investors (NYSCEF Doc No 1 ,i 10).

152802/2024 INKMANGO, INC. vs. WARREN, KATIE ET AL Page 1 of 11 Motion No. 001

[FILED: NEW YORK COUNTY CLERK 11/08/2024 03:55 P~ INDEX NO. 152802/2024 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 11/08/2024

[FILED: NEW YORK COUNTY CLERK 11/08/2024 03:55 P~ INDEX NO. 152802/2024 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 11/08/2024

[FILED: NEW YORK COUNTY CLERK 11/08/2024 03:55 P~ INDEX NO. 152802/2024 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 11/08/2024

whether it was false, where the truth or falsity of such communication is material to the cause of action at issue.

Whether the heightened pleading standard applies is dependent on whether the claim "is

an action involving public petition and participation as defined in [Civil Rights Law§ 76-a]"

(CPLR § 3212[g]). Civil Rights Law§ 76-a defines "an action involving public petition and

participation" as "any communication in a place open to the public or a public forum in

connection with an issue of public interest." It goes on to state "'Public interest' shall be

construed broadly, and shall mean any subject other than a purely private matter" (Civil Rights

Law§ 76-a[d]). "In order to fulfill the anti-SLAPP law's stated purpose of protecting public

petition and participation, the 2020 amendments provide that 'public interest' shall be broadly

construed to embrace matters of political, social, or other concern to the community" (Reeves

218 NYS3d at 27 [internal quotation marks omitted]).

Defendants argue that the suit is subject to the heightened pleading standards of CPLR §

3211 (g) because the reporting of the fundraising and business practices of a company is a public

concern. Plaintiff argues that the issues discussed in the article are private issues between a

private company and its investors and is outside the scope of public interest.

"Statements falling into the realm of mere gossip and prurient interest are not matters of

public concern" (Aristocrat Plastic Surgery, P.C. v Silva, 206 AD3d 26, 30 [1st Dept 2022]).

However, here the reporting of insider information at a company offering services to the public

which courts investors is not in the "realm of mere gossip" (id.). Indeed, in news articles

"addressing real estate transactions and issues of fraud and deceptive practices that could affect

the public ... fall within the expanded definition of public interest" (Golan v Daily News, L.P.,

77 Misc 3d 258,263 [Sup Ct 2022], affd, 214 AD3d 558 [1st Dept 2023]). Here, the business

and fundraising practices of plaintiff are well within the scope of public concern and

152802/2024 INKMANGO, INC. vs. WARREN, KATIE ET AL Page 4 of 11 Motion No. 001

4 of 11 [* 4]

[FILED: NEW YORK COUNTY CLERK 11/08/2024 03:55 P~ INDEX NO. 152802/2024 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 11/08/2024

accordingly, the anti-SLAPP statute and heightened pleading standard apply. Additionally,

plaintiff needs to "establish[] by clear and convincing evidence that [the allegedly defamatory

statements were] made with knowledge of [their] falsity or with reckless disregard of whether

[they were] false" (Civil Rights Law§ 76-a).

Basis for the Defamation Claims

Ordinarily, "[t]he elements [of a defamation claim] are a false statement, published

without privilege or authorization to a third party, constituting fault as judged by, at a minimum,

a negligence standard, and it must either cause special harm or constitute defamation per se"

(Frechtman v Gutterman, 115 AD3d 102, 104 [1st Dept 2014]). "A statement is defamatory on

its face when it suggests improper performance of one's professional duties or unprofessional

conduct" (id.). However, where as here the anti-SLAPP statute applies, "the plaintiff bears the

burden of establishing by clear and convincing evidence that defamatory false statements were

made with [actual malice, that is] knowledge of their falsity or with reckless disregard to

whether the statements were true or false" (Singh v Sukhram, 56 AD3d 187, 194 [2d Dept

2008]).

a. Non Actionable Opinion

Defendants argue that the allegedly defamatory statement is non-actionable opinion and

thus, incapable of being proven false which would require dismissal of the defamation claims.

"[O]nly statements of fact can be defamatory because statements of pure opinion cannot be

proven untrue" (Martin v Daily News L.P., 121 AD3d 90, 100 [1st Dept 2014]). "Distinguishing

between fact and opinion is a question of law for the courts, to be decided based on what the

average person hearing or reading the communication would take it to mean" (Davis v Boeheim,

24 NY3d 262,269 [2014]). There are two forms of pure opinion. "It may be a statement of

152802/2024 INKMANGO, INC. vs. WARREN, KATIE ET AL Page 5 of 11 Motion No. 001

5 of 11 [* 5]

[FILED: NEW YORK COUNTY CLERK 11/08/2024 03:55 P~ INDEX NO. 152802/2024 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 11/08/2024

opinion which is accompanied by a recitation of the facts upon which it is based, or it may be

[a]n opinion not accompanied by such a factual recitation so long as it does not imply that it is

based upon undisclosed facts" (id.). "[A]n opinion that implies that it is based upon facts which

justify the opinion but are unknown to those reading or hearing it, ... is a 'mixed opinion' and is

actionable" (id.).

To determine whether a statement is pure opinion the following factors must be

considered:

( 1) whether the specific language in issue has a precise meaning which is readily understood;

(2) whether the statements are capable of being proven true or false; and

(3) whether either the full context of the communication in which the statement appears or the broader social context and surrounding circumstances are such as to signal ... readers or listeners that what is being read or heard is likely to be opinion, not fact (Mann v Abel, IO NY3d 271,276 [2008]).

"The third factor lends both depth and difficulty to the analysis, and requires that the

court consider the content of the communication as a whole, its tone and apparent purpose"

(Davis, 24 NY3d at 270 [internal quotation marks omitted]).

Here, the statements challenged by plaintiff are, "Part of the issue, former colleagues

said, was that Sur didn't always pitch smartly (or honestly). The deck Sur presented to investors

touted stats like The Juggernaut's Instagram followers but lacked some critical information about

the company's finances" (NYSCEF Doc No 3). Plaintiff argues that by stating that Sur did not

pitch honestly, they are implying to their readers that they know facts which justify the opinion

but are unknown to those reading it. However, within the article defendants provide facts upon

which this opinion is based are undisputed by plaintiff. The article states: "Multiple people told

152802/2024 INKMANGO, INC. vs. WARREN, KATIE ET AL Page 6 of 11 Motion No. 001

6 of 11 [* 6]

[FILED: NEW YORK COUNTY CLERK 11/08/2024 03:55 P~ INDEX NO. 152802/2024 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 11/08/2024

BI that they witnessed Sur misrepresent aspects of The Juggernaut's business to potential hires

and investors, including falsely claiming that Oprah Winfrey had invested in the publication"

(id.).

Plaintiff does not dispute in its complaint, nor does Sur dispute in an affidavit submitted

in opposition to this motion, that the underlying fact is false (NYSCEF Doc No 1; NYSCEF Doc

No 22). Additionally, plaintiff submitted with the Complaint a fact check sent to Sur in which

she was asked and responded as follows:

Q: Several people said that you told employees, investors, and potential hires that Oprah Winfrey had invested in The Juggernaut. But a spokesperson for Winfrey told BI that Winfrey has zero affiliation with The Juggernaut. You also told people that either Gayle King or King's son had invested in the company. A partner at Concrete Rose, the venture capital firm where King's son, William Bumpus Jr., is a partner, said the firm never invested in The Juggernaut.

A: Will Bumpus is an investor of The Juggernaut through a vehicle that is not Concrete Rose. (NYSCEF Doc No 4).

The statement that "Sur didn't always pitch ... honestly" is a statement of pure opinion

based on facts plaintiff has not disputed. When this statement is viewed within the context of the

article, readers would likely believe that the statement is an opinion based upon the undisputed

facts contained the article (Mann, IO NY3d at 276). Since plaintiff fails to dispute the underlying

facts and "appears to seek every possible route around the essential fact that [it] does not claim

that [defendants'] statements were false, it has failed to state a claim for defamation" (Cabello-

Rondon v Dow Jones & Co., Inc., 45 Media L Rep 2746 [SDNY Aug. 16, 2017], affd, 720 Fed

Appx 87 [2d Cir 2018]).

Plaintiff also takes issue with the portion of the statement which says the "deck Sur

presented to investors ... lacked some critical information about the company's finances"

152802/2024 INKMANGO, INC. vs. WARREN, KATIE ET AL Page 7 of 11 Motion No. 001

7 of 11 [* 7]

[FILED: NEW YORK COUNTY CLERK 11/08/2024 03:55 P~ INDEX NO. 152802/2024 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 11/08/2024

(NYSCEF Doc No 3). Like the prior statement, when this statement is viewed within the context

of the article, readers would likely believe that the statement is an opinion based upon the

undisputed facts contained the article (Mann, IO NY3d at 276). Certain financial information

may be considered "critical" to one person, and not to another, so this statement is not "capable

of being proven true or false" (Mann, IO NY3d at 276). Further, plaintiff admits in its opposition

that the original decks provided were "standard, general, introductory decks, once an investor

confirmed interest, The Juggernaut shared more detailed information upon request" (NYSCEF

Doc No 21). While plaintiff may disagree with defendants' assessment that their original decks

lacked "critical" information, this is a matter of opinion and is non-actionable. Therefore, neither

of the two statements discussed are actionable.

b. Actual Malice

Defendants also argue that the complaint has not adequately plead actual malice, a

requirement since this suit is subject to the heightened pleading standards of the anti-SLAPP

statute. Plaintiff argues that it has pled that defendants knew that at the time of publication the

statements were untrue or recklessly disregarded whether they were true.

Since the anti-SLAPP statute applies, the "burden of proof as to the action's

meritoriousness [shifts] immediately to the plaintiff' (VIP Pet Grooming, 224 AD3d at 83).

"Actual malice is measured by what defendant actually believed and not by whether reasonably

prudent man would have published, or would have investigated before publishing" ( Goldblatt v

Seaman, 225 AD2d 585 [2d Dept 1996]). "There must be sufficient evidence to permit the

conclusion that the defendant in fact entertained serious doubts as to the truth of his publication"

(St. Amant v Thompson, 390 US 727, 731, [1968]). "[A]ctual malice standard is not satisfied

merely through a showing of ill will or "malice" in the ordinary sense of the term" (Harte-Hanks

152802/2024 INKMANGO, INC. vs. WARREN, KATIE ET AL Page 8 of 11 Motion No. 001

8 of 11 [* 8]

[FILED: NEW YORK COUNTY CLERK 11/08/2024 03:55 P~ INDEX NO. 152802/2024 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 11/08/2024

Communications, Inc. v Connaughton, 491 US 657, 666 [1989]). "Nor can the fact that [a]

defendant published the defamatory material in order to increase its profits suffice to prove

actual malice" (id. at 667). However, "[ e]vidence of ill will combined with other circumstantial

evidence indicating that the defendant acted with reckless disregard of the truth or falsity of a

defamatory statement may also support a finding of actual malice" ( Celle v Filipino Reporter

Enterprises Inc., 209 F3d 163, 183 [2d Cir 2000]). "Although failure to investigate will not alone

support a finding of actual malice, the purposeful avoidance of the truth is in a different category

(Harte-Hanks at 692).

Here, plaintiff alleges that the primary source of the article was a former disgruntled

employee of plaintiff and a personal friend of defendant Warren. Plaintiff also argues that

defendant did not choose to seek further information from sources provided to defendant by

plaintiff. However, plaintiff has "failed to allege facts sufficient to show actual malice with

convincing clarity" (Jimenez v United Fedn. of Teachers, 239 AD2d 265,266 [1st Dept 1997]).

Defendant Warren avers that she spoke to more than thirty sources when writing the

article (some of which were provided by Ms. Sur), including former employees and current

investors (NYSCEF Doc No 15 ,i 6). In fact, the article includes a positive quote from one

investor who said that "employee turnover [at Juggernaut] was on par with other companies in

his firm's portfolio" (NYSCEF Doc No 3). Additionally, defendant Warren affirms that she

reached out to Ms. Sur multiple times for an interview and when she declined, she requested

comments from Ms. Sur via email on the article which were incorporated into the article and

attributed to "a spokesperson for The Juggernaut" (NYSCEF Doc No 15 at ,i 8 - 14). Therefore,

plaintiff has failed to allege by clear and convincing evidence that defendants knowingly lied or

purposefully avoided the truth. Therefore, plaintiff has failed to allege actual malice.

152802/2024 INKMANGO, INC. vs. WARREN, KATIE ET AL Page 9 of 11 Motion No. 001

9 of 11 [* 9]

[FILED: NEW YORK COUNTY CLERK 11/08/2024 03:55 P~ INDEX NO. 152802/2024 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 11/08/2024

Accordingly, because neither of the statements pled in the complaint are actionable and

because plaintiff has failed to allege actual malice, it complaint will be dismissed.

Attorney's Fees

Civil Rights Law§ 70-a(l)(a) states "costs and attorney's fees shall be recovered upon a

demonstration, ... that the action involving public petition and participation was commenced or

continued without a substantial basis in fact and law and could not be supported by a substantial

argument for the extension, modification or reversal of existing law." Having found that

plaintiffs action involves a public petition, and that the plaintiff has failed to establish that its

defamation claims have a substantial basis in fact or law, defendants are entitled to reasonable

attorney's fees associated with defending this action.

Based on the foregoing, it is,

ORDERED that defendants' motion to dismiss the complaint is granted and the complaint

is dismissed in its entirety, with costs and disbursements to defendants as taxed by the Clerk of the

Court, and the Clerk is directed to enter judgment accordingly in favor of said defendants; and it

is further

ORDERED that pursuant to Civil Rights Law§ 70-a(l)(a) defendants are entitled to their

reasonable attorney's fees associated with this action; and it is further

ORDERED that defendants shall submit an affirmation in support of their request for

reasonable attorneys' fees within 20 days of entry of this order via NYSCEF and via e-mail to

SFC-Part47-Clerk@nycourts.gov; and it is further

152802/2024 INKMANGO, INC. vs. WARREN, KATIE ET AL Page 10 of 11 Motion No. 001

10 of 11 [* 10]

!FILED: NEW YORK COUNTY CLERK 11/08/2024 03 :55 PM! INDEX NO. 152802/2024 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 11/08/2024

ORDERED that any opposition to the request shall be submitted within 10 days thereafter.

11/8/2024 DATE PAUL A. GOETZ, J.S.C.

~ CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION

GRANTED □ DENIED GRANTED IN PART □ OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER

CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE

152802/2024 INKMANGO, INC. vs. WARREN, KATIE ET AL Page 11 of 11 Motion No. 001

11 of 11 [* 11]

Footnotes

[1] of 11 [* 1] Plaintiffs two causes of action against defendants, are for defamation, and defamation per se based upon the allegedly defamatory statement, "Part of the issue, former colleagues said, was that Sur didn't always pitch smartly (or honestly). The deck 1 Sur presented to investors touted stats like The Juggernaut's Instagram followers but lacked some critical information about the company's finances." (id at 77; NYSCEF Doc No 3). DISCUSSION Defendants argue that the case must be dismissed because plaintiff has failed to meet the heightened pleading standards imposed by New York's ant-SLAPP statute. They further argue that plaintiffs complaint also does not satisfy the general pleading requirements of CPLR §

[321] l(a)(7). Specifically, they argue that the allegedly defamatory statements are non-actionable opinions, that are supported by disclosed, undisputed facts, and that plaintiff has failed to allege and cannot prove actual malice. Plaintiff argues that the anti-SLAPP law does not apply because the allegedly defamatory statements in the article are not matters of public interest. Further, it argues that even if the anti- SLAPP law does apply, it has sufficiently plead causes of action for defamation arguing that the allegedly defamatory statements were not pure opinion, and that defendants knew at the time of publication, that the statements were false, thus satisfying the requirement that plaintiff pleads actual malice. Anti-SLAPP I Failure to State a Cause ofAction CPLR § 321 l(g) states: A motion to dismiss based on [CPLR § 321 l(a)(7)], in which the moving party has demonstrated that the action, claim, cross claim or counterclaim subject to the motion is an action involving public petition and participation as defined in [Civil Rights Law § 76-a], 1 While the parties do not define "deck" in this context it apparently refers to the materials shown to potential investors. 152802/2024 INKMANGO, INC. vs. WARREN, KATIE ET AL Page 2 of 11 Motion No. 001 2 of 11 [* 2] shall be granted unless the party responding to the motion demonstrates that the cause of action has a substantial basis in law or is supported by a substantial argument for an extension, modification or reversal of existing law. The court shall grant preference in the hearing of such motion. "[T]he 'substantial basis' standard applicable under CPLR 321 l(g) is more exacting than the liberal pleading standard applicable to ordinary CPLR 321 l(a)(7) motions" (Reeves v Associated Newspapers, Ltd., 218 NYS3d 19, 30 [1st Dept 2024]). When reviewing a "motion to dismiss for failure to state a cause of action pursuant to CPLR 321 l(a)(7), [courts] must accept the facts as alleged in the complaint as true, accord the plaintiff the benefit of every reasonable inference, and determine only whether the facts, as alleged fit within any cognizable legal theory" (Bangladesh Bank v Rizal Commercial Banking Corp., 226 AD3d 60, 85-86 [ I st Dept 2024] [internal quotations omitted]). "By contrast, a court reviewing the sufficiency of a pleading under CPLR 321 l(g) must look beyond the face of the pleadings to determine whether the claim alleged is supported by substantial evidence" (Reeves, 218 NYS3d at 30). Defendants "moving for dismissal [under CPLR 321 l(g)] need not establish a dispositive procedural or substantive defense on the merits of the action, as otherwise required under other provisions of CPLR 3211, but rather, need only establish that the true nature of the action is one within the scope of anti-SLAPP" (VIP Pet Grooming Studio, Inc. v Sproule, 224 AD3d 78, 83 [2d Dept 2024]). "The actual burden of proof as to the action's meritoriousness is thereupon shifted in the context of anti-SLAPP immediately to the plaintiff' (id.). Further Civil Rights Law § 7 6-a states: In an action involving public petition and participation, damages may only be recovered if the plaintiff, in addition to all other necessary elements, shall have established by clear and convincing evidence that any communication which gives rise to the action was made with knowledge of its falsity or with reckless disregard of 152802/2024 INKMANGO, INC. vs. WARREN, KATIE ET AL Page 3 of 11 Motion No. 001 3 of 11 [* 3]