A Fulton County, Ga., suit tests whether comments made in a press release about a lawsuit constitute libel.
In a complaint (pdf) filed last month in Fulton County Superior Court, Infinite Energy charges that comments made by attorney David L. Pardue, a partner with Hartman, Simons, Spielman & Wood until he left for Adorno & Yoss in January, were "false, malicious, and defamatory," and names the lawyer, Hartman Simons and Poston Communications as defendants in a one-count defamation suit.
A federal class action targeting Infinite, a natural gas supplier, for deceptive trade practices, was dismissed five months ago and is being appealed. Pardue represents the plaintiffs in the class action.
The underlying suit was filed in federal court in Atlanta last year on behalf of the more than 600-member Korean Cleaners Association of Atlanta, which charged that Infinite had deceived the cleaners -- whose businesses rely on natural gas -- into signing three-year contracts at inflated rates in the months following Hurricane Katrina, when natural gas prices spiked because of damage to offshore drilling platforms, pipelines and other infrastructure.
The complaint accused Infinite of switching some other cleaners' into the higher-rate contracts without their knowledge and refusing to renegotiate after prices dropped to normal levels. The multi-count suit charged the gas supplier with violating rules of the Georgia Public Service Commission, state and federal fair trade laws, negligent representation and unjust enrichment
The suit was filed on Nov. 18, 2008, by Pardue and Hartman Simons associates Christopher S. Badeaux and Jill R. Johnson. The same day, says the recent defamation suit, Poston issued a press release in which Pardue accused Infinite of engaging in "a clear case of wrongdoing" and "deliberate misinformation," and of being "determined to reap illegal profits and extract every penny possible from customers it has deceived, cheated and misled."
Excerpts from the release were published in The Atlanta Business Chronicle; American Drycleaner, a trade magazine and Web site; and LawyersandSettlements.com, according to the defamation suit.
On July 1, U.S. District Judge Timothy C. Batten Sr. granted summary judgment to Infinite, dismissing the dry cleaners' suit; an appeal of that order has been filed with the 11th U.S. Circuit Court of Appeals.
Infinite is represented in the federal action by Morris, Manning & Martin partners Marguerite E. Patrick and David A. Rabin and associate Kelly L. Whitehart. On Nov. 18, Patrick and firm associate Stephen M. Vaughn filed the defamation suit, which seeks unspecified actual and punitive damages and injunctions against all three defendants barring "further disclosure of false and defamatory information."
Patrick said she was unable to discuss the suit, and queries to Infinite's press office were not returned; nor were telephone and e-mail inquiries directed to Pardue and Hartman Simons' managing partner, Robert D. Simons.
Poston Communications owner David E. Poston, an attorney licensed to practice in Georgia, said he also was unable to comment as his company "is still examining the allegations and numerous potential defenses."
David E. Hudson, a partner at Augusta, Ga,'s Hull Barrett, who also serves as general counsel to the Georgia Press Association and reviewed the defamation suit at the Daily Report's request, said it seemed to have a high bar to clear.
"I think the plaintiffs are going to have an uphill climb," said Hudson. "My guess is that Infinite Energy is a public entity, so that means they're going to have to meet the 'actual malice' test."
Under the U.S. Supreme Court's 1964 decision in New York Times Co. v. Sullivan, public and private figures are held to different standards when seeking libel and defamation judgments. Unlike private figures, a public figure or entity must not only show that a negative statement made about it was untrue, but that the party making it knew it was false, or published it with "reckless disregard" for the truth.
That means, said Hudson, that Infinite must not only prove that the press release and Pardue's statement were false, but that the lawyer and PR company knew so at the time.
Some of the statements cited in the complaint, he said, such as the assertion that Infinite engaged in a "clear case of wrongdoing," are simply matters of opinion, and thus protected by law. Others, such as the statement that Infinite "engaged in deliberate misinformation," may well be a statement of fact but, even if false, the issue of actual malice must still be proved at trial.
Litigation communications specialist Robert H. Bork Jr., who oversees Virginia-based Bork Communications Group, said the suit is more likely a tactical move by Infinite's attorneys than a serious effort to hold the defendants liable for defamation.
"In baseball terms, they're probably 'playing a little chin music,'" said Bork, describing a pitcher's inside throws to a batter in an effort to force him back from the plate.
"I like the notion of playing hardball," said Bork, whose company advises corporations involved in ongoing or potential litigation on communications strategies to protect their reputations and advance their legal position.
"But," he said, "I've never heard of a defendant suing a plaintiff for making public comments in support of their litigation. And while I almost exclusively represent defendants, I find it troublesome; as a defense public relations spokesperson, I would hate to think that statements we make in defense of our clients would be open for slander and libel allegations."
The suit may be an effort to throw the dry cleaners' lawyers off their game during the appeal in the federal case, he said, "or they may just be sending a message to the next one."
"Unless the statements are truly malicious, there would be little point in undertaking this kind of litigation," said Bork.
To be sure, he said, anyone making public comments about pending litigation should be careful -- not necessarily out of fear of a libel suit, but to safeguard their own credibility.
"In my own practice," he said, "we certainly want to be, first and foremost, right and credible. If we're not credible, we do harm to our client's cause. We don't want to be outrageous, but we do want our point of view to picked up."
The case in Fulton County Superior Court is Infinite Energy v. Pardue, No. 2009CV177948.
