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Nexus v. Buzzfeed, Inc.

United States District Court, District of Columbia

May 16, 2018

LIBRE BY NEXUS, Plaintiff,
v.
BUZZFEED, INC., et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          AMIT P. MEHTA, UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         This case arises out of the publication of a BuzzFeed News article about Plaintiff Libre by Nexus and an alleged federal law enforcement investigation into its business practices. In response to the article, Plaintiff filed this defamation action against BuzzFeed, Inc. (“BuzzFeed”), and its editor-in-chief, Ben Smith (collectively “Defendants”). Defendants now move to dismiss Plaintiff's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and the District of Columbia Anti-Strategic Lawsuits Against Public Participation (“Anti-SLAPP”) Act of 2010, D.C. Code §§ 16-5501 et seq. For the reasons stated below, the court grants in part and denies in part Defendants' Rule 12(b)(6) motion and denies Defendants' special motion to dismiss under the D.C. Anti-SLAPP Act.

         II. BACKGROUND

         A. Factual Background

         Plaintiff Libre by Nexus is a Virginia-based company that helps immigrant detainees nationwide to secure bail bonds. Am. Compl., ECF No. 2, ¶¶ 3, 8. Plaintiff provides such services by acting as a middleman between immigrant detainees and bail bond companies. See Id. ¶ 8. Plaintiff contracts with bail bond companies who actually post the immigration bonds, and Plaintiff, in turn, secures the immigrations bonds through indemnifying bonds and by using GPS technology to monitor released immigrant-detainees. Id. A released detainee does not have to pay the full amount of the bond, nor is the detainee required to pay collateral or use his own property as security. See Id. According to Plaintiff, its “immigration bond initiative . . . has reunited thousands of families.” Id.

         On July 23, 2016, BuzzFeed published an online article (“the Article”) titled “Immigrants Desperate To Get Out Of U.S. Detention Can Get Trapped By Debt” about Plaintiff and its business practices. Id. ¶ 9. The Article begins with an interview of an immigrant detainee who expresses gratitude to Plaintiff for securing his release, but laments the financial burden imposed by one of the release conditions, specifically, a monthly fee of $420 he must pay to Plaintiff for the GPS monitoring. See Defs.' Mot. to Dismiss, ECF No. 6 [hereinafter Defs.' Mot.], Decl. of Chad R. Bowman, Ex. A, ECF No. 6-2 [hereinafter Article], at 1-2. The Article then goes on to quote immigrant advocates who criticize Plaintiff's business model. According to the advocates, because of the prolonged period between release and a final hearing in court, some released detainees end up paying more than the immigration bond itself, leaving them with a heavy financial burden. Id. at 2-3.

         The Article then details Plaintiff's business model. It explains that Plaintiff's “customers” sign a contract agreeing to pay a nonrefundable $620 initial fee, a one-time 20 percent premium to the bond issuer, and a $420 monthly rental fee for the GPS tracking equipment. Id. at 3. Upon release, if the customer can pay 80 percent of the bond and agrees to cover the remaining 20 percent in installments, Plaintiff will remove the GPS tracking device. Id. Because many immigrant detainees do not have the assets or resources to pay 80 percent of the bond, even after release, the monthly fee quickly accrues and can become a heavy financial burden. Id. at 3-4. As an example, the Article cites and quotes from court papers in a case filed in Los Angeles, in which a released detainee claims that he paid $1, 390 more than his original bond. Id. at 4.

         The Article is not one-sided, however. BuzzFeed interviewed for the Article Plaintiff's President, Michael Donovan, who rebuffed the notion that he runs a predatory business. Id. As reflected in the Article, Donovan pointed out that detained immigrants would have few options to secure release without Plaintiff's service. Id. He also noted that Plaintiff repays all monies paid toward the collateral, if any, upon resolution of a detainee's case, and only 2 percent of customers fail to appear in court. Id.

         The Article then goes on to report that federal and state officials have made inquiries into Plaintiff's business practices. See Id. at 5. It states that in 2015, U.S. Representative Norma Torres “sent a letter to ICE requesting an investigation into [Plaintiff's] business practices and ‘possible exploitation' of its clients.” Id. at 1, 5. The Article then notes-critically, for purposes of this action-that Plaintiff “had already been investigated in 2013 by the commonwealth attorney for the State of Virginia, the Fairfax City Police Department, ” and, as most relevant here, by “ICE's [U.S. Immigration and Customs Enforcement (‘ICE')] Homeland Securit y Invest igat ion (HSI) unit for allegedly targeting undocumented immigrants in custody and fraudulently charging them a fee for services.” Id. at 5; see Am. Compl. ¶ 9. According to the Article, “[i]n internal ICE emails, deportation officers also expressed concerns about some of [Plaintiff's] business model and practices.” Article at 5. “The investigations, however, were eventually closed due to lack of evidence.” Id.; see Am. Compl. ¶ 9. The Article also notes that Donovan has had his own criminal troubles, having been convicted for passing bad checks when he was 19. Article at 5-6. According to Donovan, because he could not post bond, he sat in jail for seven months-an experience that inspired him to work in prison diversion programs. Id. at 6.

         The Article concludes by noting that Plaintiff has become an industry leader since its founding in 2014 and by reiterating both criticism and approval of Plaintiff's business model. The Article reports that, although Plaintiff donates 60 to 70 percent of its profits to its charitable arm, which provides pro bono legal services in immigration court, critics worry that this arrangement incentivizes the pro bono attorneys to drag out proceedings to “squeeze” more rental income from customers. Id. Donovan denied such conflict of interest. Id. The Article ends with quotes from a detainee who expresses his gratitude to Plaintiff for allowing him to reunite with his family. See Id. at 7.

         B. Procedural History

         Plaintiff filed this single-count defamation action against Defendants on July 22, 2017, see Compl., ECF No. 1, and amended its complaint the next day, see Am. Compl. In its Amended Complaint, Plaintiff alleges that the Article is “full of false and defamatory statements concerning [Plaintiff] and its business practices.” Am. Compl. ¶ 9; accord Id. ¶ 1. Yet, Plaintiff identifies only one statement from the Article as false and defamatory: “‘ICE's Homeland Security Investigations (HSI) unit [investigated Plaintiff] for allegedly targeting undocumented immigrants in custody and fraudulently charging them a fee for services, '” but “the investigation was ‘eventually closed due to lack of evidence.'” Am. Compl. ¶ 9; see Id. ¶¶ 1, 10, 13; see also Id. ¶ 17 (“The statement that [Plaintiff] was under investigation for what amounts to fraud, and/or criminal conduct, in the practice of its business is of such a type and nature to tend to prejudice [it] in the eyes of clients, . . . business partners, bond brokers[] . . . [and] sureties, . . . and members of its community in general.” (emphasis added)). Plaintiff avers that at the time the Article was published, Defendants had “full knowledge” of a letter from ICE to U.S. Representative Torres, dated November 15, 2015 (“November 2015 Letter”), which Plaintiff characterizes as having “addressed and disposed of any question regarding a so-called ‘HSI investigation, '” “establishe[d] beyond any reasonable doubt that [Plaintiff] was not under investigation by ICE, ” and “practically endorsed [Plaintiff's] business model.” Id. ¶ 10. Plaintiff then offers what appears to be a single quote from the November 2015 Letter: “ICE has no legal authority to investigate or prosecute bail bond companies or other related service providers regarding allegations of inappropriate conduct between two private parties such as an indemnitor and bond company.” Id. Plaintiff did not attach the November 2015 Letter to its pleading.

         On October 13, 2017, Defendants moved to dismiss Plaintiff's Amended Complaint with prejudice for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. See Defs.' Mot. Defendants contend that Plaintiff fails to allege facts that plausibly establish that the challenged statement was false, capable of defamatory meaning, or even published with the requisite intent (in this case, actual malice). See Id. at 1-3. Alternatively, Defendants argue that because the Article links to and accurately describes a governmental record, the “fair report privilege” forecloses Plaintiff's defamation claim. Id. at 1.

         In addition to their Rule 12(b)(6) motion, Defendants also filed a “Special Motion to Dismiss” pursuant to the District of Columbia Anti-SLAPP Act, D.C. Code § 16-5502(a). See Defs.' Special Mot. to Dismiss, ECF No. 7 [hereinafter Defs.' Special Mot.]. In that motion, Defendants submit that the Amended Complaint must be dismissed with prejudice under the D.C. Anti-SLAPP Act because the Article constitutes “an act in furtherance of the right of advocacy on issues of public interest, ” D.C. Code § 16-5502(b), and, for the same reasons articulated in Defendants' 12(b)(6) motion, Plaintiff cannot demonstrate that its defamation claim is “likely to succeed on the merits, ” id. See Defs.' Special Mot. at 4. Defendants seek, under the D.C. Anti-SLAPP Act, dismissal of this action with prejudice and an award of reasonable attorneys' fees and costs. Id. at 12; see also D.C. Code § 16-5502(d); id. § 16-5504.

         III. LEGAL STANDARD

         A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of a complaint. Sickle v. Torres Advanced Enter. Sols., LLC, 884 F.3d 338, 344 (D.C. Cir. 2018). “To survive a motion to dismiss, a complaint must contain sufficient factual matter . . . to state a claim to relief that is plausible on its face.” Id. at 344-45 (alteration in original) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). A claim is plausible on its face “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.

         When evaluating a motion under Rule 12(b)(6), the court must “accept the plaintiff's factual allegations as true, ” Sickle, 884 F.3d at 345, and “construe the complaint in favor of the plaintiff, who must be granted the benefit of all inferences that can be derived from the facts alleged, ” Hettinga v. United States, 677 F.3d 471, 476 (D.C. Cir. 2012) (internal quotation marks omitted). The court need not accept as true, however, “a legal conclusion couched as a factual allegation.” Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, ...


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