Gubarev v. Buzzfeed, Inc.
Gubarev v. Buzzfeed, Inc.
Opinion of the Court
THIS CAUSE comes before the Court upon Plaintiffs' Motion for Summary Judgment on Defendants' "Public Figure" Affirmative Defense (D.E. 208) and Defendants' Motion for Partial Summary Judgment on Issue of Plaintiffs' Status as Public Figures (D.E. 225).
For the reasons discussed below Plaintiffs' motion is granted; Defendants' motion is denied.
BACKGROUND
The facts recited below are undisputed except as otherwise noted.
I. The Parties
Plaintiff Aleksej Gubarev is a resident of the Republic of Cyprus. D.E. 212-2 ¶ 3. Until January 1, 2018, he was the chairman and CEO of Plaintiff XBT Holdings S.A. ("XBT"). Id. ¶ 1. XBT is a Luxembourg company. D.E. 38 ¶ 7. Plaintiff Webzilla, Inc. ("Webzilla"), which is a Florida corporation, is a subsidiary of XBT. Id. ¶ 8; D.E. 212-2 ¶ 2.
Defendant BuzzFeed, Inc. ("BuzzFeed") is a Delaware corporation with offices in eighteen cities around the world, including New York. D.E. 38 ¶ 9. Defendant Ben Smith is BuzzFeed's editor-in-chief, and he resides in Brooklyn, New York. Id. ¶ 10.
II. The Dossier
On January 10, 2017, BuzzFeed published an online article entitled These Reports Allege Trump Has Deep Ties to Russia (the "Article"), which included a 35-page dossier (the "Dossier"). D.E. 1-3, ¶ 1; D.E. 38 ¶ 1; D.E. 1-2 p. 19-21. In the Article, BuzzFeed described the Dossier as a compilation of memoranda assembled "for political opponents of Trump by a person who is understood to be a former British Intelligence agent." D.E. 1-2 p. 20. One memorandum, dated December 13, 2016, contains statements about Plaintiffs. As published by BuzzFeed, the pertinent portion of that memorandum appeared as follows:
[Redacted] reported that over the period March-September 2016 a company called XBT/Webzilla and its affiliates had been using botnets and porn traffic to transmit viruses, plant bugs, steal data, and conduct "altering operations" against the Democratic Party leadership. Entities linked to one Alexei GUBAROV
*1321[sic] were involved and he and another hacking expert, both recruited under duress by the FSB,[1 ] Seva KAPSUGOVICH were significant players in this operation. In Prague, COHEN [2 ] agreed [sic] contingency plans for various scenarios to protect the operation, but in particular what was to be done in the event that Hillary CLINTON won the presidency. It was important in this event that all cash payments owed were made quickly and discreetly and that cyber and other operators were stood down/able to go effectively to ground to cover their traces. (We reported earlier that the involvement of political operatives Paul MANAFORT and Carter PAGE in the secret TRUMP-Kremlin liaison had been exposed in the media in the run-up to Prague and that damage limitation of these also was discussed by COHEN with the Kremlin representatives).
D.E. 1-3. ¶ 26, D.E. 1-2 p. 19-21.
The Article included the following disclaimers:
The dossier, which is a collection of memos written over a period of months, includes specific, unverified, and potentially unverifiable allegations.... BuzzFeed News reporters in the US and Europe have been investigating various alleged facts in the dossier but have not verified or falsified them ... [The Dossier] is not just unconfirmed: It includes some clear errors.
Id. ¶ 3, D.E. 1-2, p. 20.
Plaintiffs allege that the Dossier's statements about them are false. D.E. 1-3 ¶ 27. Plaintiffs also allege that although BuzzFeed tasked its reporters with investigating the allegations, Defendants never contacted Plaintiffs to determine whether the allegations that they hacked the Democratic Party had merit. Id. ¶ 28, D.E. 38 ¶ 28. Plaintiffs assert that because Defendants could not verify the Dossier and knew that it contained "some clear errors," Defendants published it without reasonable care for, or with reckless disregard as to the truth. Id. ¶ 43. They go on to allege that Defendants' decision to publish the Dossier defamed them. Id. ¶ 51.
Defendants assert, among other affirmative defenses, that Plaintiffs are public figures and thus are required to prove actual malice. D.E. 38, p. 10.
III. Plaintiffs' Public Relations Activities
In 2005, Gubarev started Webazilla (later named Webzilla) as a small server company. D.E. 211-2 ¶ 3. Over the next decade or so, Gubarev and his team grew Webzilla and started other computer hosting companies, including Servers.com. Id. ¶ 4. All of these companies operate under the umbrella of XBT. Id.
Beginning in 2012, XBT and Webzilla began to circulate press releases using a London-based company, Marketwired, which circulates press releases worldwide. D.E. 212-2 ¶ 19. In a 2014 press release, Webzilla described itself as a peer of giant companies like Netflix, Google, and Akamai. Id. ¶ 20. That same year, XBT issued a press release about its acquisition of a website called DDoS.com, which it described as improving XBT's ability to deal with online security threats. Id. ¶ 22. Then in 2015, XBT issued a press release about a service called SecureVPN, which it described as a "unique version of online safety and help with internet protection." Id. ¶ 21.
*1322In 2015, Servers.com hired a public relations firm, Cutler PR, to generate publicity. D.E. 211-2. ¶ 9. It was the first of XBT's subsidiaries to do so. Id. Servers.com let Cutler decide what media they would target. Id. ¶ 12. Cutler proposed drafting articles for industry trade publications. D.E. 211-12, p. 61. Cutler described the articles as "not generally profile stories of the company," but rather, representative of "the company's views (as articulated through a senior executive) on a particular topic in the industry." Id. Their purpose was to show that Servers.com and its executives were experts in the field of data hosting and thus to add to their credibility. Id. ; D.E. 212-2 ¶ 26.
Cutler persuaded several publications to publish op-ed style articles promoting Servers.com. D.E. 212-2 ¶ 30. One publication, called Inc. , described Servers.com as one of "18 Tech Companies to Get Excited About," and noted that Servers.com "boasts super-secure servers." Id. ¶ 31. Cutler claimed responsibility for that publicity. Id.
Servers.com was unsatisfied with Cutler's efforts, and so suspended its services after only five months. D.E. 211-2. ¶ 16. Four months after that, Servers.com retained a new public relations firm, KGlobal. Id. ¶ 17. KGobal was retained for the sole purpose of increasing Servers.com's sales. Id. As with Cutler, Servers.com deferred to KGlobal's advice about public relations strategy. Id. ¶ 18.
Part of this strategy involved trying to convince various publications to write profiles Gubarev. Id. ¶ 19. Gubarev specifically requested that his name be included in the articles. D.E. 212-2 ¶ 52. To some publications, KGlobal called Gubarev "a great resource for stories about the Russian tech, startup and business scene...." D.E. 211-2 ¶ 19; D.E. 211-14, p. 2. To others, it simply referred to him as the CEO of Servers.com and offered to introduce the publication to that company's services. Id. These efforts resulted in interviews with AppMasters , Forbes , Bloomberg , Business Insider , VentureBeat , and Tech Insider. Id. ¶ 20; D.E. 212-2 ¶ 55. KGlobal provided training to Gubarev and other executives on "how to talk to a journalist." D.E. 212-2 ¶ 50. KGlobal also assisted Servers.com in issuing press releases; some of which were republished by online publications. D.E. 211-2 ¶ 21.
The relationship between Servers.com and KGlobal lasted only about three months; Gubarev terminated it after concluding that KGlobal was not generating sufficient publicity. Id. ¶ 22; D.E. 212-2 ¶ 62.
Besides these two relationships with public relations firms, Gubarev and XBT's various subsidiaries have been referenced in a few other publications which discussed a photography app that they created and Gubarev's professional success.
IV. Plaintiffs' Business Outreach In Russia
In or around 2015, as XBT began expanding its business into Russia, that country enacted a data privacy law. D.E.
*1323212-2 ¶ 32. Gubarev thought the new law was a business opportunity for XBT. Id. ¶ 34. XBT issued a press release describing its entrance into the Russian data storage market. Id. ¶ 35; D.E. 212-49. Gubarev and other XBT executives spoke to the press about the Russian law and XBT's entrance into Russia. Id. ¶ 36. In interviews, Gubarev mentioned that botnets were infecting cloud servers with increasing frequency and that control and security were key factors in choosing a server host. Id. ¶ 42. Gubarev also gave a press conference announcing the launch of Servers.com in Russia, which received coverage from one Russian website. Id. ¶ 39; D.E. 212-59.
Gubarev also spoke at a 2016 conference called the Russian Internet Forum about trends in global and Russian internet infrastructure.
V. The AWMOpen Conference
Beginning in the early 2000s and ending in the early 2010s, one of Gubarev's companies organized and operated a conference for adult webmasters.
VI. Plaintiffs' Public Statements During and After the 2016 Election
A. The Slate Article
On October 31, 2016, Slate published a story about possible communication between a computer server associated with the Trump campaign and computer servers associated with a Russian bank called Alfa Bank. D.E. 212-2 ¶ 56. On November 1, a Bloomberg reporter to whom Gubarev had previously promoted Servers.com contacted Gubarev. Id. ¶ 57; D.E. 211-2 ¶ 29. He asked Gubarev, "as a specialist," to help him "sort out [the] technical details" of the cyber-contacts described in the Slate article. Id. ; D.E 212-90. Gubarev asked an employee of XBT to analyze the technical claims in the Slate article (Gubarev himself lacked expertise on the issue) and then forwarded the reporter what he described as an "expert conclusion." Id. ¶ 85; D.E. 211-2 ¶ 31. Gubarev said, "[o]ur opinion is that the story was far-fetched f* *k." D.E. 212-90. The opinion doubted that the sources cited in the Slate article could have had access to the full server logs. Id.
After providing the requested analysis, Gubarev asked the reporter, "[w]ill there be a reference for us in the article?" Id. The reporter responded that he would use the provided quotes. Id. And indeed, when Bloomberg published the article it credited Gubarev with raising the question of whether the sources cited in the Slate article based their conclusions on full and complete server logs. D.E. 212-83. The *1324Bloomberg article did not cite Gubarev's opinion in support of any other statement. Id.
B. The White Ops Report
In December 2016, a cybersecurity firm called White Ops published a report detailing an alleged fraud perpetrated by Russian cybercriminals, which it dubbed "Methbot." D.E. 212-2 ¶ 64; 212-93. The White Ops report alleged that Russian cybercriminals were siphoning millions of dollars in advertising revenue from U.S. media companies. Id. The report generated media coverage in several publications including Forbes , Fortune , New York Times , and CNN. Id. ¶ 65.
Upon reading the White Ops report, XBT came to believe that a client who leased servers from Webzilla was implicated in the scheme. Id. ¶ 66; D.E. 213 pp. 189-90. XBT realized that it could face significant reputational damage if journalists discovered that it owned those servers. Id. ¶ 69. Accordingly, it rehired KGlobal to help minimize any bad press. Id. KGlobal advised that in light of the recent controversy over Russian hacking in the presidential election, it was important to "get in front of the story." Id.
XBT instructed KGlobal to reach out to White Ops and a journalist who had written about the report to say that Plaintiffs were also victims of the Methbot scam. Id. ¶ 70. XBT also instructed KGlobal to reveal only that the client was a Webzilla customer and to avoid any connection with their newer brand, Servers.com. Id. ¶ 71.
LEGAL STANDARD
Summary judgment is authorized only when the moving party meets its burden of demonstrating that "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56. When determining whether the moving party has met this burden, the Court must view the evidence and all factual inferences in the light most favorable to the non-moving party." Adickes v. S.H. Kress & Co. ,
The party opposing the motion may not simply rest upon mere allegations or denials of the pleadings; after the moving party has met its burden of proving that no genuine issue of material fact exists, the non-moving party must make a showing sufficient to establish the existence of an essential element of that party's case and on which that party will bear the burden of proof at trial." See Celotex Corp. v. Catrett ,
If the record presents factual issues, the Court must not decide them; it must deny the motion and proceed to trial. Envntl. Def. Fund v. Marsh ,
Moreover, the party opposing a motion for summary judgment need not respond to it with evidence unless and until the movant has properly supported the motion with sufficient evidence. Adickes ,
ANALYSIS
Defendants' fifth affirmative defense is that Plaintiffs are public figures and cannot meet their burden of proving actual malice. D.E. 38, p. 10. Both sides move for summary judgment on this affirmative defense; Defendants argue that Plaintiffs are limited public figures and Plaintiffs argue that they are not. Resolution of this issue is a matter of law for the Court to decide. Michel v. NYP Holdings, Inc. ,
I. The Public Figure Doctrine
In New York Times Co. v. Sullivan , the Supreme Court held that when the press publishes a defamatory statement about a public official, the publication is protected by the First Amendment unless the official proves that the press published the statement with actual malice.
Determining whether Plaintiffs are limited public figures requires a two-part analysis. In the first part, the Court considers two questions: (1) whether Plaintiffs "have greater access to the media which gives them a more realistic opportunity to counteract false statements than private individuals normally enjoy;" and (2) whether Plaintiffs have "voluntarily placed themselves in a position and acted in a manner which invited public scrutiny and comment." Silvester v. Am. Broad. Companies, Inc. ,
In the second part of the analysis, the Court considers whether the Plaintiffs are limited public figures with respect to the particular public controversy at issue. See
As the parties point out, the second of the basic Gertz criteria is incorporated into the second of the limited-public figure criteria. This is so because a limited public figure is a public figure only with *1326respect to the particular controversy at issue. Gertz ,
II. Plaintiffs Had Greater Access to the Media Than the Typical Private Individual
One of the trappings of a public figure is "regular and continuing access to the media." Hutchinson v. Proxmire ,
The record here reveals sufficient contacts with the media to satisfy this first criterion. Plaintiffs' public relations efforts resulted in articles in and interviews with several publications including, Inc. , Forbes , Bloomberg , Business Insider , VentureBeat , and Tech Insider. Although this was not as much media attention as Plaintiffs may have wanted, it is more than the typical private citizen enjoys. See Silvester ,
III. Defining the Controversy
The first prong of the limited-public figure test requires the Court to isolate the public controversy. Silvester ,
Defendants have provided the Court with a few news articles that help to point out the scope of the public controversy, but both parties refer primarily to the Dossier itself to identify the scope of the controversy. Plaintiffs argue that the controversy should be defined as an international conspiracy of the FSB to enlist computer hackers to infiltrate the Democratic Party in an attempt to undermine the 2016 presidential election. They also argue that the Court could take a broader view of the controversy and define it as Russia's attempts to interfere with the 2016 election. Defendants, on the other hand, advocate for a broad view of the controversy, arguing *1327that there were, in fact, many relevant public controversies including cybersecurity, cybercrime, malicious cyber activity by Russians, and Russian interference in the 2016 election.
Briefly the Court will summarize the news articles and other public documents proffered by Defendants for the purpose of identifying the relevant public controversy. The first is an article written in 2006, which discusses, among other things, how certain Russian individuals make money selling pornography, music, and spam mailing services. D.E. 212-21. The article describes these activities as "semi-legal."
Based on these materials, Defendants would broadly define the controversy to include all cybercrime (like child pornography), and cybersecurity in general. However, the law does not allow the relevant public controversy to be divorced from the allegedly defamatory statements and the context in which they were made. See, e.g. , Hatfill v. The New York Times Co. ,
Here, the Dossier, as described by BuzzFeed in the article publishing it, concerns "allegations that the Russian government has been 'cultivating, supporting and assisting' President-elect Donald Trump for years." D.E. 1-2, p. 20. The CNN article to which BuzzFeed hyperlinked described the Dossier as related to "a report on Russian interference in the 2016 election." D.E. 137-6. And as some of the news articles and government press releases make clear, there was significant media and government attention paid to Russia's cyber interference in the 2016 election. See D.E. 212-123-213-130; D.E. 212-130. Plainly, the Dossier was important at the time of its publication because it related to the ongoing controversy involving Russian interference in the election.
Moreover, where the Dossier mentions cybercrime and internet pornography, it does so only in the context of Russian interference with the election. Cybersecurity and cybercrime as general topics, however, are untethered from the Dossier and, more importantly, the public debate about Russian interference with the election, which made the Dossier a matter of public importance.
IV. Plaintiffs' Involvement in the Controversy
The second prong of the limited-public figure analysis addresses the extent of Plaintiffs' involvement in the public controversy. Silvester ,
Having defined the relevant controversy as Russian interference with the 2016 election, the question now before the Court is: to what extent did Plaintiffs involve themselves in the ongoing public debate about that interference. The record reveals only one instance where Plaintiffs commented on that controversy: Gubarev's statement, published by Bloomberg , calling into question whether the sources cited in the Slate article based their conclusions on full server logs. See D.E. 212-83.
To recap, in October 2016, Slate published an article about possible communications between a computer server associated with the Trump campaign and servers associated with a Russian bank. D.E. 212-2 ¶ 56. That article cited a number of computer experts who said they reviewed the campaign server's logs.
Alexey [sic] Gubarev, chief executive officer of Luxembourg-registered XBT holding, which owns the infrastructure-as-a-service provider Servers.com, told me there was no legitimate way to get access to the full server logs of a server that you do not control. That raises the question of whether the records obtained by Foer's "Concerned Nerds" were complete.
D.E. 212-83.
This is Plaintiffs' only public statement predating BuzzFeed's publication of the Dossier that was related to Russian interference in the 2016 election. And it is only tangentially related. It is not related to the Russian hacking allegations which were at the heart of the public controversy. See D.E. 212-123-213-130; 212-130. Rather, it is a technical opinion about whether someone could have reviewed the full logs of a campaign server, which may have been in communication with the servers at a Russian bank. This one technical opinion cannot reasonably be read as an attempt to influence the outcome of the public debate *1329about Russian interference in the election. Nor could it realistically have been expected to have an impact on the resolution of that controversy. See Silvester ,
Defendants cite several cases in support of the argument that even if Gubarev's statement to Bloomberg is Plaintiffs' only involvement with the controversy, Plaintiffs are still public figures. Those cases are unpersuasive because each of the plaintiffs there was significantly more involved in the controversy than Plaintiffs here. In Colodny v. Iverson, Yoakum, Papiano & Hatch ,
Defendants have also proffered substantial evidence of other public statements by Plaintiffs that were not related to Russian interference in the election. The Court will briefly address those statements and explain why they are not germane. First, Plaintiffs' public statements related to cybercrime and cybersecurity do not relate to Russian interference in the election. As discussed above, Defendants argue that the controversy should include cybersecurity and cybercrime generally. Accordingly, they argue that all of Plaintiffs' efforts to publicize their expertise, market share, and secure servers made them intimately involved with those controversies. If the public controversy was defined so broadly, then Defendants would stand on firmer ground. But the controversy is narrower than that. Plaintiffs' public involvement in cybersecurity and cybercrime issues, therefore, is not germane unless it is tied to Russian interference with the election. And, with the exception of Gubarev's comments published in Bloomberg , they are not.
The same goes for Plaintiffs involvement with the AWMOpen Conference. Even assuming that Defendants' version of the facts is correct-that the conference was for online pornographers and that some of *1330the participants were involved in cybercrime (See D.E. 212-2 ¶¶ 4-18)-general involvement with the online pornographic industry (legal or otherwise) is not germane to Russian interference with the election.
Likewise, Plaintiffs' efforts to minimize reputational damage after the White Ops report are not germane. The White Ops report alleged that Russian cybercriminals were stealing advertising revenue from U.S. media companies. D.E. 212-2 ¶ 64. Although relevant to cybercrime in general, it is not relevant to Russian interference with the 2016 election. In sum, with the exception of the Bloomberg article, Defendants have not identified any other public involvement by Plaintiffs in the relevant controversy. Accordingly, Plaintiffs are not public figures.
V. The Alleged Defamation Is Germane to Plaintiffs' Participation in the Controversy
Because Plaintiffs were only tangential participants in the relevant controversy, the final prong of the limited-public figure test is largely a moot point, but in the interest of completeness, the Court will briefly address it. The final prong asks whether the alleged defamation was germane to Plaintiffs' participation in the controversy. Silvester ,
To recap, the alleged defamation here is the following statement from the Dossier:
[Redacted] reported that over the period March-September 2016 a company called XBT/Webzilla and its affiliates had been using botnets and porn traffic to transmit viruses, plant bugs, steal data, and conduct "altering operations" against the Democratic Party leadership. Entities linked to one Alexei GUBAROV [sic] were involved and he and another hacking expert, both recruited under duress by the FSB, Seva KAPSUGOVICH were significant players in this operation.
D.E. 1-3. ¶ 26.
Plaintiffs' participation in the relevant controversy was Gubarev's one statement published in Bloomberg. D.E. 212-83; see Part IV, above. The alleged defamation and Gubarev's statement are both related to Russian interference in the election, even though their relation to one another is remote. But again, because Plaintiffs were only tangential participants in the controversy, they are not limited public figures.
CONCLUSION
For the reasons set forth above, it is hereby
ORDERED AND ADJUDGED that Plaintiffs' Motion (D.E. 208) is GRANTED; Defendants' Motion (D.E. 225) is DENIED.
DONE AND ORDERED in Chambers, Miami, Florida, this 18th day of December, 2018.
FSB refers to the Russian intelligence service.
"COHEN" refers to Michael Cohen, then-candidate Donald Trump's lawyer. D.E. 1-2, p. 18.
This summary of the cited publications' contents is the Court's own based on the English-language publications included as exhibits. The other publications are not in English, but Defendants do not challenge Plaintiffs' description of them as relating to "marketing of business or local matters in Cyprus" and so the Court accepts that characterization as undisputed.
Plaintiffs contend that Gubarev spoke only to a small group at the conference, not to the entire conference.
The record is not entirely clear about what webmasters are, what they do, or whether "adult webmasters" are involved in pornography. One article (D.E. 212-18) says that adult webmasters are sellers of internet pornography, and Defendants assert that the AWMOpen conference was for people involved "in the online pornography business." Gubarev, however, denied that the conference was for the online pornography industry. D.E. 212-6, 115:10-14. And one of the conference announcements attached to Defendants' statement of facts says that conference welcomes attendees from "various areas of online businesses." D.E. 212-11, p.2.
Indeed, it would be impossible to analyze the second Gertz factor without first isolating the controversy at issue and determining Plaintiffs' involvement in it.
Moreover, they are not controversies in the normal sense of that word. Cybercrime and cybersecurity are broad topics. But divorced from some specific event or debate, they are not controversies. See American Heritage Dictionary 319 (2nd ed. 1985) (defining "controversy" as "[a] dispute, esp. a lengthy and public one, between sides holding opposing views"); see also Waldbaum ,
Reference
- Full Case Name
- Aleksej GUBAREV v. BUZZFEED, INC.
- Status
- Published