Lindberg v. Dow Jones & Co., Inc.

Background

Greg E. Lindberg sued Dow Jones & Company, Inc., the publisher and owner of The Wall Street Journal, over two articles. The first article reported that Lindberg had diverted $2 billion from insurance companies affiliated with his investment firm for personal use. The second article reported on surveillance of women, including Lindberg’s former fiancé, and discussed concerns about the financial condition of Lindberg’s insurance companies.

Lindberg’s original claims included defamation, tortious interference with contract, and aiding and abetting breaches of fiduciary duty. The court had previously dismissed all three claims. It ruled that the defamation claims based on the first article were untimely; that the defamation claim based on the second article required allegations of actual malice under Section 76-a of the New York Civil Rights Law; and that Lindberg had not adequately pleaded the tortious-interference or fiduciary-duty theories. The court allowed Lindberg to seek permission to amend the second-article defamation claim.

Legal Standard

The court considered whether the proposed amendments would be futile. An amendment is futile if the amended pleading still would fail to state a legally sufficient claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. At this stage, the court accepted well-pleaded factual allegations as true and considered the articles and other documents properly incorporated into or attached to the proposed amended complaint.

Defamation

Lindberg identified statements concerning a possible financial shortfall at his insurance companies, his search for prospective partners on Instagram, and surveillance of his former fiancé without her knowledge. He also alleged that the article implied that he had stalked, harassed, or victimized women.

Because the court had previously determined that the second article involved a matter of public interest, Lindberg had to plead actual malice. In this context, actual malice means that Dow Jones knew a statement was false or acted with reckless disregard for whether it was true. The court held that the proposed amendment did not meet that requirement.

Regarding the reported possible financial shortfall, the court noted that the article did not state that a $1 billion shortfall actually existed. It reported that regulators feared loans might be uncollectible and that the resulting shortfall could exceed $1 billion. Even accepting Lindberg’s characterization of the article for purposes of analysis, the court found that the proposed complaint did not allege facts showing that the reporters knew the statement was false or seriously doubted its truth. Lindberg relied principally on a letter from his attorney, but the court found that the letter did not explain why Lindberg’s personal wealth established that his insurance companies were financially sound or otherwise show that the reporters had serious doubts about the report.

The court reached the same conclusion regarding the surveillance statements. The fact that some sources may have been hostile toward Lindberg did not itself establish that the reporters knew the information was false. The reporters had received dossiers and internal chat threads describing the surveillance, and Lindberg did not allege that those sources’ information was false or falsely attributed. The article also included information that some women knew about or consented to surveillance-related activities and included statements from Lindberg’s attorney and spokesperson. The court concluded that these allegations did not plausibly show reckless disregard for the truth. It therefore denied leave to amend the defamation claim as futile.

Aiding and Abetting Breach of Fiduciary Duty

Lindberg alleged that Jeffrey Serber and Trent Trennepohl, who had worked as security contractors, breached fiduciary duties by providing confidential information to Journal reporters, and that the reporters aided those breaches.

The court held that the proposed amendment did not cure the prior pleading problems. Lindberg alleged that Serber and Trennepohl performed field work that informed close-protection operations and had access to sensitive personal information. But he did not plausibly allege that they exercised the control or dominance over him required for a fiduciary relationship. Receiving confidential information, without more, was insufficient. The court also stated that, even if Serber and Trennepohl had been fiduciaries, Lindberg had not plausibly alleged that the Journal reporters knew about any fiduciary duties. The court therefore denied leave to amend this claim.

Tortious Interference with Contract

Lindberg alleged that Serber and Trennepohl were bound by confidentiality and nondisclosure agreements and that Journal reporters improperly induced them to breach those agreements.

The court found that the proposed amended complaint cured the earlier deficiencies. Lindberg attached the agreements, identified provisions he claimed were violated, and alleged that Serber sent a copy of his agreement to the reporters and expressed concerns about providing information because of it. The court found those allegations sufficient to plead that the reporters knew about Serber’s obligations and plausibly alleged similar knowledge regarding Trennepohl. Lindberg also alleged that the reporters encouraged and enabled the contractors to provide confidential information in violation of their agreements.

Dow Jones argued that news-gathering activities were justified or fully protected by the First Amendment. The court rejected that argument at the pleading stage. Under New York law, whether interference was justified depends on a fact-specific balancing of interests, and factual questions remained about whether the reporters caused the alleged breaches. The court also held that the First Amendment did not categorically bar tort claims based on unlawful news-gathering conduct.

Disposition

The court granted leave to amend solely with regard to Lindberg’s tortious-interference-with-contract claim. It denied leave to amend in all other respects, including the defamation and aiding-and-abetting-breach-of-fiduciary-duty claims. The amended complaint was deemed served as of November 22, 2021.