UPDATE: 2nd Circ. Sides with Spitzer & Slate in Insurance Broker Libel Claim

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Elliot Spitzer, former N.Y. Governor, Attorney General and ersatz CNN talk show host, may not have fared well in his recent attempt to re-enter the public sector as New York City Comptroller, but at least he won't be on the short-end of a defamation suit brought by a former Marsh & McClennan executive thanks to the United States Court of Appeals for the Second Circuit.

A five-page Summary Order decision by a three-judge appellate panel consisting of Justices Denny Chin, John M. Walker and Debra Ann Livingston upheld a ruling by the United States District Court for the Southern District of New York that Spitzer and E-zine Slate did not defame William Gilman, former executive marketing director for Marsh & McClennan, in an Aug. 22, 2010 Slate column (see "TUOL" post 8/23/11).

In 2005, Marsh paid $850 million to settle a civil suit brought by the State of New York eight months before Gilman and seven other Marsh execs were indicted on kickback charges and other misdeeds. An editorial in The Wall St. Journal blasted Spitzer for his prosecution, to which he responded with the allegedly defamatory Slate column entitled They Still Don't Get It in which he defended his pursuit of corporate malfeasance by Marsh and the American Insurance Group, Inc.

Gilman's 2008 felony antitrust violation conviction was overturned and subsequently the case against him was dismissed. He then filed a $60 million libel claim against the defendants over statements in the Slate column, including that the critical WSJ editorial "fail[ed] to note the many employees of Marsh who have been convicted and sentenced to jail terms" and "Marsh and its employees pocketed the increased fees and kickbacks."

The trial court ruled against Gilman on his defamation suit and in Gilman v. Spitzer et al. (Case No. 12-cv-4169), the appellate panel agreed that the allegedly offensive statements were too broad and did not harm Gilman's reputation. The Second Circuit noted that by virtue of charges against him being dismissed, Gilman was not harmed by the Slate column reference to Marsh top brass "convicted and sentenced to jail terms" because he was excluded from that group, and that general references to "Marsh and its employees" could not be construed to be about Gilman personally.

For individuals to prevail in so-called group libel claims, the group has to be small enough that the false statement at issue harms the reputation of each of the group's members (hence, one can't defame the U.S. Army), and the allegedly defamatory statement must particularly target the plaintiff. In this instance, Gilman was not identified by name in Spitzer's Slate piece.