Cleveland-Cliffs Inc. v. Ruia

Background

Cleveland-Cliffs, Inc. brought a single-count claim for libel per se against Ravikant Ruia and Essar Global Fund Limited. Libel is written defamation. “Libel per se” refers to written statements treated as sufficiently harmful on their face that the plaintiff does not have to prove actual damages. Cleveland-Cliffs sought compensatory and punitive damages and an injunction preventing further defamation.

The dispute concerned a one-page letter that Essar Global purchased as an advertisement in the Star Tribune on May 26, 2021. Ruia signed the letter and addressed it to “Dear Minnesotans.” The letter stated: “Mesabi Metallics has invested more than $1.5 billion on a mine that has been closed for 35 years. Over these decades, no other mining company in Minnesota invested or attempted to revive the mine.”

Cleveland-Cliffs alleged that the statement was false and referred to Cleveland-Cliffs by fair implication, even though the company was not named. It alleged that it had publicly expressed interest in the project, invested time and money in potential business plans, bid on assets during a bankruptcy, acquired mineral rights, sought changes to a mining permit, and spent more than $50 million on those efforts. Cleveland-Cliffs alleged that the statement harmed its business reputation.

The opinion states that Ruia had not been served and had not appeared. The court warned that, unless Cleveland-Cliffs filed proof of service within 30 days or showed good cause for the lack of service, the court would dismiss the action as to Ruia for failure to prosecute. The motion addressed in this opinion was Essar Global’s motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint plausibly states a legal claim.

Legal standard

At the motion-to-dismiss stage, the court accepts plausible factual allegations as true and views them in the light most favorable to the plaintiff. A complaint must contain enough factual matter to make relief plausible, rather than relying only on conclusory statements.

Under the law discussed in the opinion, a defamation claim requires a published false statement of fact concerning the plaintiff that tends to harm the plaintiff’s reputation or lower the plaintiff in the community’s estimation. A plaintiff need not be named if a reader could fairly understand that the statement referred to the plaintiff. Whether a statement concerns the plaintiff is generally a fact question for a jury. False statements about a person’s business, trade, or professional conduct may constitute libel per se.

Analysis

Essar Global argued that the challenged sentence was not defamatory, did not refer to Cleveland-Cliffs, and could not be proven false. Cleveland-Cliffs argued that the sentence falsely suggested it had shown no interest in the mining project, despite its alleged investments and efforts.

The court treated Cleveland-Cliffs’ allegations that it had spent at least $50 million acquiring private mineral rights and parcels at the site as true for purposes of the motion. Based on those allegations, the court concluded that the statement that “no other mining company” had invested in or attempted to revive the mine was plausibly libelous per se. The court reasoned that a reasonable person could understand the statement to mean that Cleveland-Cliffs had done nothing at the site and was not interested in doing so. The court therefore concluded that Cleveland-Cliffs had sufficiently stated a defamation claim.

Disposition

Judge Magnuson ordered that Essar Global’s motion to dismiss, docket number 13, was DENIED. The ruling allowed Cleveland-Cliffs’ claim against Essar Global to remain at the pleading stage. The opinion did not decide whether the statement was ultimately false or whether Cleveland-Cliffs would prevail on the defamation claim, and it did not resolve the claims against Ruia.