Press Release In Video Game Litigation Not Libelous

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.'