Reger v. Associated Press, The

Background

Michael Reger sued The Associated Press (AP) over an article published on June 16, 2022, about a civil securities-fraud lawsuit against him. Reger was found civilly liable for securities fraud and as a control person for Dakota Plains Holdings, Inc., but was found not liable for insider trading.

Reger alleged that the AP article inaccurately stated that he was “convicted” and “found guilty” of securities fraud and “acquitted” of insider trading. He also alleged that the article’s discussion of criminal convictions involving co-defendants, along with hyperlinks to related articles, implied that he had been criminally charged, convicted, and subject to imprisonment. He claimed reputational and business harm, including loss of business opportunities and other consequences.

Reger asserted claims for defamation, defamation by implication, defamation per se, and intentional infliction of emotional distress. The AP moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint plausibly states a legal claim. The court declined at this stage to consider nearly four dozen media stories and other documents offered by the AP, limiting its review to the complaint and documents attached to it.

Defamation

Under Minnesota law, a defamation claim requires a plaintiff to allege that the defendant published a factual statement about the plaintiff that was false and harmed the plaintiff’s reputation. The AP did not dispute that Reger had alleged those elements.

The AP argued that Reger was a limited-purpose public figure and therefore had to allege “actual malice,” meaning that the statements were made knowing they were false or with reckless disregard for whether they were false. The court held that deciding whether Reger was a limited-purpose public figure required more factual development and was premature on a motion to dismiss. The court also held that, even if the actual-malice standard applied, Reger plausibly alleged it because the AP’s statements were allegedly contradicted by the accurate article it cited.

The AP also argued that the article was substantially accurate when read as a whole. The court rejected that argument at this stage, explaining that whether the errors materially changed the article’s meaning or effect on readers was a question that could not be resolved on the pleadings. The defamation claim therefore was not dismissed.

Defamation by Implication

Reger alleged that the AP’s arrangement of facts and omissions implied a defamatory connection between him and the criminal conduct of other defendants. The AP argued that Reger had not adequately alleged that it intended that implication. The court found that the complaint alleged intent, including bad faith, and held that Reger had pleaded enough facts to proceed on the implied-defamation theory.

Defamation Per Se

Defamation per se is a category of defamation in which reputational harm may be presumed. The court explained that false accusations of committing a crime and false statements about a person’s business, trade, or professional conduct can qualify. It held that Reger adequately pleaded defamation per se based on the article’s alleged factual errors and implications.

Intentional Infliction of Emotional Distress

The AP argued that Reger could not repackage his defamation allegations as intentional infliction of emotional distress and had not met the demanding pleading standard for that claim. Reger did not respond to those arguments. The court treated the claim as abandoned and dismissed it with prejudice.

Disposition

The court granted in part and denied in part the AP’s motion to dismiss. The defamation, defamation-by-implication, and defamation-per-se claims remained pending, while the intentional-infliction-of-emotional-distress claim was dismissed with prejudice.