Press Release In Video Game Litigation Not Libelous

The U.S. District Court for the Central District of California ruled that a plaintiffs' counsel in a video game litigation didn't libel a defendant in a statement the attorney posted on his law firm's website. Dreamstone Entertainment Ltd. v. Maysalward Inc., 2:14-cv-02063.

Dreamstone entered into an agreement for Maysalward and its principal Nour Khrais to develop the mobile-device video game GHUL: 1001 Arabian Nights. But Dreamstone later sued, claiming Maysalward breached the contract and withheld financial information. The defendants filed counterclaims including a libel-per-se allegation against plaintiffs' Dallas-TX-based counsel Jack Siegel and his firm. Siegel had posted a press release about the suit and a link to the complaint on his firm's website. Khrais objected to the press release claim that he and Maysalward 'have maliciously absconded with my clients' valuable intellectual property and hard earned money.' The press release ended with: 'We will fight tooth and nail to ensure the game is restored on gaming platforms and Defendants pay every dime needed to rectify the damage done to my clients' reputations and the GHUL franchise.'

In determining whether a statement is defamatory on its face, the U.S. Court of Appeals for the Ninth Circuit, within which the Central District of California resides, applies a 'totality of the circumstances' test. Applying this, District Judge Christina A. Snyder first noted in dismissing the libel counterclaim: '[T]he complained-of language is clearly attributed to co-counsel for plaintiffs and counterdefendants. Overall, the broad context of the statement suggests that the average reader would expect the press release to relate a predictably one-sided account of the circumstances giving rise to the litigation, and favors plaintiffs and counterdefendants.'

District Judge Snyder added: 'Here, although the particular passage cited by defendants and counterclaimants might appear to be factual in isolation, the press release as a whole makes clear that Spiegel [sic] was expressing his opinion. Through the use of cautionary language like '[t]he federal suit accuses' and '[t]he Complaint contends that,' the press release signals that it contains allegations, not proven facts. Moreover, because the complained-of sentence is attributed to plaintiffs and counterdefendants' counsel, a reasonable mind would expect the statement to be one-sided and even hyperbolic.'

Stan Soocher is Editor-in-Chief of Entertainment Law & Finance and a tenured Associate Professor of Music & Entertainment Industry Studies at the University of Colorado's Denver Campus. He can be reached at [email protected] or via www.stansoocher.com.

The U.S. District Court for the Central District of California ruled that a plaintiffs' counsel in a video game litigation didn't libel a defendant in a statement the attorney posted on his law firm's website. Dreamstone Entertainment Ltd. v. Maysalward Inc., 2:14-cv-02063.

Dreamstone entered into an agreement for Maysalward and its principal Nour Khrais to develop the mobile-device video game GHUL: 1001 Arabian Nights. But Dreamstone later sued, claiming Maysalward breached the contract and withheld financial information. The defendants filed counterclaims including a libel-per-se allegation against plaintiffs' Dallas-TX-based counsel Jack Siegel and his firm. Siegel had posted a press release about the suit and a link to the complaint on his firm's website. Khrais objected to the press release claim that he and Maysalward 'have maliciously absconded with my clients' valuable intellectual property and hard earned money.' The press release ended with: 'We will fight tooth and nail to ensure the game is restored on gaming platforms and Defendants pay every dime needed to rectify the damage done to my clients' reputations and the GHUL franchise.'

In determining whether a statement is defamatory on its face, the U.S. Court of Appeals for the Ninth Circuit, within which the Central District of California resides, applies a 'totality of the circumstances' test. Applying this, District Judge Christina A. Snyder first noted in dismissing the libel counterclaim: '[T]he complained-of language is clearly attributed to co-counsel for plaintiffs and counterdefendants. Overall, the broad context of the statement suggests that the average reader would expect the press release to relate a predictably one-sided account of the circumstances giving rise to the litigation, and favors plaintiffs and counterdefendants.'

District Judge Snyder added: 'Here, although the particular passage cited by defendants and counterclaimants might appear to be factual in isolation, the press release as a whole makes clear that Spiegel [sic] was expressing his opinion. Through the use of cautionary language like '[t]he federal suit accuses' and '[t]he Complaint contends that,' the press release signals that it contains allegations, not proven facts. Moreover, because the complained-of sentence is attributed to plaintiffs and counterdefendants' counsel, a reasonable mind would expect the statement to be one-sided and even hyperbolic.'

Stan Soocher is Editor-in-Chief of Entertainment Law & Finance and a tenured Associate Professor of Music & Entertainment Industry Studies at the University of Colorado's Denver Campus. He can be reached at [email protected] or via www.stansoocher.com.