Mike Steenson
In Smartmatic USA Corp. v. Lindell,[1] Smartmatic sued Michael Lindell and MyPillow, Inc. in Minnesota federal district court, alleging defamation and violation of Minnesota’s Deceptive Trade Practices Act based on Lindell’s claims of fraud in the 2020 presidential election, including that Smartmatic voting machines were rigged. This post focuses on Smartmatic’s defamation claim against Lindell and MyPillow.
This is the introduction to the complaint filed by Smartmatic USA, Corp. against Mike Lindell and MyPillow:
1. Crazy like a fox. Mike Lindell knows exactly what he is doing, and it is dangerous.
2. Mr. Lindell knows Joe Biden and Kamala Harris won the 2020 election for President and Vice President of the United States. He knows the election was not rigged, fixed, or stolen. He knows voting machines did not switch votes from former President Trump to now President Biden.
3. These facts do not matter to Mr. Lindell because he knows he can sell. Mr. Lindell knows he can sell xenophobia. He knows he can sell conspiracy theory. He knows he can sell a preconceived story about voting machines stealing democracy by stealing votes from a president who is incredibly popular with millions of Americans. And, of course, Mr. Lindell—“the MyPillow Guy”—knows he needs to sell pillows to keep and increase his fortune.
4. Mr. Lindell saw a once-in-a-lifetime opportunity following the 2020 U.S. election. President Trump lost the election. That is, and was, undeniable. But Mr. Lindell knew that millions of people who voted for President Trump were unhappy. He also knew that they would embrace anyone who championed the idea that President Trump did not lose the election, but had it stolen from him and from them.
5. Mr. Lindell decided to become one of their champions. After others had gone silent, Mr. Lindell spoke out about the 2020 U.S. election being stolen from President Trump. He held rallies. He went on TV. He published videos. Once a fixture on late night infomercials embracing his pillows, in early 2021, Mr. Lindell’s infomercials turned to spreading disinformation about the 2020 U.S. election.
6. Mr. Lindell’s message was as dangerous as it was factually inaccurate. Mr. Lindell told people that Smartmatic stole the 2020 U.S. election. He told people that Smartmatic’s election technology, hardware, and software were hacked by China and other foreign countries. He told people that Smartmatic election technology, hardware, and software were developed for the sole purpose of stealing foreign elections by switching votes. And he told people that Smartmatic deployed its election technology, hardware, and software to do just that in the 2020 U.S. election. All lies.
7. Mr. Lindell intentionally stoked the fires of xenophobia and party-divide for the noble purpose of selling his pillows. The MyPillow brand was, and is, a ubiquitous feature of Mr. Lindell’s media appearances. The MyPillow logo is everywhere. Promo codes for ordering from MyPillow are conveniently and strategically placed during his appearances. Mr. Lindell’s sales strategy is brilliant: “If you like what I am saying about election fraud, you are going to love my pillows, so buy them to support me and my message.”
8. It is time to end Mr. Lindell’s campaign. Smartmatic had no role in the 2020 U.S. election outside of providing some technology, support, and services to Los Angeles County. That is it. Yet, Mr. Lindell sees fit to perpetuate a lie about the company because he wants to be seen as a champion of a deceptive message that still sells. But enough is enough. The country will sleep better at night knowing the judicial system holds people like Mr. Lindell accountable for spreading disinformation that deceives and harms others.
9. Smartmatic brings defamation and Minnesota Deceptive Trade Practices claims against Defendants Michael J. Lindell and his company MyPillow. Smartmatic seeks to recover for the economic and non-economic damage caused by Defendants’ disinformation campaign, punitive damages, attorneys’ fees and costs, and a permanent injunction. Finally, Smartmatic seeks a declaration requiring Defendants to retract their false statements and implications fully and completely.[2]
The introduction is followed by a lengthy complaint with detailed factual allegations covering some sixty-six pages. There are two primary causes of action asserted in the complaint. The first is for defamation[3] and the second for violation of the Minnesota Deceptive Trade Practices Act.[4] The defamation claim is based on the publication by Lindell and MyPillow of “false and inaccurate statements regarding Smartmatic’s involvement in the 2020 election and election hacking conspiracy theories.”[5] The deceptive trade practices claim alleged that Lindell, acting in his capacity as CEO and MyPillow spokesperson, made false and misleading statements about Smartmatic’s involvement in the 2020 election.[6]
Lindell and MyPillow moved to dismiss the claims. Applying Minnesota law, the federal district court denied the motion. There are several key points in the court’s order denying the motion. First, the district court held that because “Smartmatic comprises three corporate entities, Smartmatic is a public figure under Minnesota law.”[7] An important point about the public figure determination is that it involves both Minnesota and federal law.[8] The Supreme Court has not taken a position on whether corporations are public figures. Minnesota has, but not as a matter of First Amendment interpretation.
Public figures must prove a false statement of fact and by clear and convincing evidence that it was published with actual malice.[9] Actual malice in this context means publishing with knowledge of the falsity or in reckless disregard of the truth.[10] Reckless disregard requires proof that the defendant must have made the false publication with substantial doubts about the truth of the publication[11] or with “a high degree of awareness of . . . probable falsity.”[12]
Lindell argued that Smartmatic’s allegations of actual malice were insufficient “because Lindell has never expressed doubt as to the truthfulness of his challenged statements,” that the statements “were not inherently improbable,” and that he “relied on publicly available information, and some voting machines have flaws.”[13] He also argued “that allegations of a defendant’s ill will or profit motive, without more,” are insufficient to meet the actual malice standard.[14]
Construing the facts in the light most favorable to Smartmatic, the nonmoving party, the court held that Smartmatic “alleged facts sufficient to suggest that Lindell knew or should have known that his statements were false and acted with actual malice in promoting the challenged statements.”[15]
The defendants did not contest Smartmatic’s claim that Lindell caused it damages. Smartmatic alleged that the defamatory statements made by Lindell “made Smartmatic’s name and brand synonymous with election fraud in the minds of members of the public and government officials,” causing the company to “[expend] over one million dollars on public relations, crisis management, cybersecurity, and employee retention and recruitment efforts.”[16]
The court concluded that in “[c]onstruing the facts in the light most favorable to Smartmatic, and recognizing that the parties do not dispute Smartmatic’s reputational harm, . . . that Smartmatic has alleged facts sufficient to support a claim of reputational harm resulting from Lindell’s defamatory statements.”[17]
A second key point concerns whether Smartmatic would be entitled to presumed damage. In discussing the damages claim the court cited Maethner v. Someplace Safe, Inc.,[18] for the proposition that “[i]f the contested statements involve matters of public concern, a plaintiff also must present ‘evidence of actual harm to reputation.’”[19]
Maethner did not involve a defamation claim by a public figure, however. In that case the plaintiff was not a public figure but a private person potentially involved in a matter of public concern. In those cases, Gertz requires a showing of fault and actual harm to justify recovery.[20] The court in Maethner recognized that limitation in Richie v. Paramount Pictures, Inc.[21] Richie held that a private plaintiff involved in a matter of public concern could not recover damages for injury to reputation absent proof of actual injury to reputation, at least in a case against a media defendant. That rule was reaffirmed in Maethner and extended to nonmedia defendants.[22] The court in Maethner very specifically stated that “we hold that a private plaintiff may not recover presumed damages for defamatory statements involving a matter of public concern unless the plaintiff can establish actual malice.”[23]
If a private figure is entitled to recover presumed damages by proving New York Times v. Sullivan actual malice, it would be a misreading of Maethner to conclude that it would also require a plaintiff, public or private, to bear the additional burden of establish actual damages solely because the defamatory statements involved a matter of public concern. It is the greater degree of culpable conduct that justifies application of the presumed damages rule. The presumed damages rule entitles the plaintiff to recover presumed damages for injury to reputation.[24] Nothing prevents proof of actual harm for injury to reputation of course.
The requirement of proof of actual damages does not apply in cases where the plaintiff establishes New York Times Co. actual malice, however, a rule recognized in Gertz, Richie, and Maethner. A public figure has to establish actual malice, and establishing actual malice entitles the public figure to recover presumed damages. Because the higher burden of proof attached to actual malice is a justification for presumed damages, it would be incongruous to impose yet another layer of proof on the plaintiff to prove, in addition, actual damages if the public figure is involved in a matter of public concern. In fact, the very definition of public figure assumes that the public figure is involved in a matter of public concern.[25] The only possible distinction is that, in Minnesota, there is no requirement that a corporation be involved in a matter of public concern in order to be a public figure, and that if a corporation is so involved, it should meet the additional requirement. Maethner seems to clearly indicate that the requirements are not cumulative, however.
Of course, nothing in the presumed damages rule precludes the plaintiff from establishing actual injury to reputation.[26] In addition, a plaintiff seeking to recover special damages must prove those damages. They are not presumed.
The vicarious liability issue was disputed. Smartmatic alleged that MyPillow is vicariously liable for Lindell’s defamatory statements, based on Lindell’s “[use of] the platform he gained making defamatory statements about Smartmatic as a means for promoting MyPillow.”[27] Lindell argued that Smartmatic failed to allege that those statements were made “in the scope of Lindell’s employment duties and in furtherance of MyPillow’s business.”[28] The complaint in the case alleges that Lindell’s activities in making false claims about the election and Smartmatic’s role in it were intertwined with MyPillow advertising that capitalized on those claims.[29] It alleges that “[a]t all relevant times hereto, Mr. Lindell was acting as MyPillow’s agent and within the scope of his employment, including during each and every appearance he made defaming Smartmatic.”[30] Recognizing that link, the court concluded “that Smartmatic’s allegations state a plausible claim that MyPillow may be vicariously liable for Lindell’s actions,” and denied the motion to dismiss the vicarious liability claim.”[31]
No. 22-cv-0098, 2022 WL 4343299 (Minn. Dist. Ct. Sept. 19, 2022). ↑
Complaint, Smartmatic USA Corp. v. Lindell, 2022 WL 168592 (Minn. Dist. Ct. Jan. 18, 2022) (No. 22CV00098). ↑
Id. at 128. ↑
Id. at 130. ↑
Smartmatic USA Corp. v. Lindell, No. 22-cv-0098, 2022 WL 4343299, at *2 (Minn. Dist. Ct. Sept. 19, 2022). ↑
Id. at *6. ↑
Id. at *2. In Jadwin v. Minneapolis Star and Tribune Co., the supreme court considered whether the considerations governing the issue of whether a person is a public figure apply equally to corporations. 367 N.W.2d 476 (Minn. 1985). The court noted that determining the status of corporate plaintiffs involves different considerations, given what the court saw as a distinction driven by the Supreme Court’s recognition of the need to protect “uniquely human interests not possessed by corporations.” Id. at 486. Making the determination of whether a corporation is a public figure seems to require more than just an inquiry into the corporate form. The court did determine on the specific facts of the case that the defendants were limited public purpose figures. The court noted that the corporate plaintiffs were involved in activities that were “particularly clothed with the public interest.” Id. at 487. Most of the post-Jadwin law as to whether corporations are public figures consists of Eighth Circuit diversity cases applying Minnesota law.
In Northwest Airlines, Inc. v. Astraea Aviation Services, Inc., the Eighth Circuit considered the corporation as a public figure issue in the context of a choice of law issue in a defamation claim by Northwest against Astraea Aviation. 111 F.3d 1386 (8th Cir. 1997). The court referenced Jadwin for the baseline proposition that “Minnesota law considers a corporation a public figure and requires it to show that a statement was made with actual malice to establish a defamation claim.” Id. at 1393. The court noted that Northwest and Astraea “are both heavily regulated by the Federal Aviation Administration,” and therefore would appear to be public figures under Jadwin. Id. at 1393. Under Texas law, however, a corporation would have to enter a public controversy in order to influence the outcome of that controversy in order to be a public figure.
Porous Media Corp. v. Pall Corp., a case involving defamation and Lanham Act claims, the federal district court held that Porous Media was a public figure under both state and federal law. 173 F.3d 1109 (8th Cir. 1999). The Eighth Circuit affirmed the district court’s conclusion under state law but held that Porous was not a public figure under federal law. The case highlights the distinctions between Minnesota’s standard for determining whether a corporation is a public figure and the Gertz/First Amendment standard for making that determination. The Eighth Circuit held that Porous was not a public figure under federal law because it did not thrust itself “to the forefront of particular public controversies in order to influence the resolution of the issues involved.” Id. at 1119, (citing Gertz v. Robert Welch, Inc., 418 U.S. 323, 345, 351 (1974) where this is a requirement). Notwithstanding its conclusion under federal law, the court concluded that the public figure issue was foreclosed by its decision in Northwest Airlines, Inc. The court explained that “[b]ecause Porous is incorporated in Minnesota, conducts much of its business in Minnesota, is regulated by Minnesota (and to some extent, federal) authorities, and relies upon the substantive libel law of Minnesota, it is a ‘public figure’ under state law and must demonstrate that Pall’s statements were made with ‘actual malice.’” Id. at 1116. For other discussions, see Deven R. Desai, Speech, Citizenry, and the Market: A Corporate Public Figure Doctrine, 98 Minn. L. Rev. 455 (2013); Matthew D. Bunker, Corporate Chaos: The Muddled Jurisprudence of Corporate Public Figures, 23 Comm. L. & Pol’y 1 (2018); William P. Robinson III, Rachel M. Feit, & Katherine M. King, The Tie Goes To the Runner: The Need for Clearer and More Precise Criteria Regarding the Public Figure in Defamation Law, 42 U. Haw. L. Rev. 72, 124–27 (2019); Sheena Allen, Note, Defamation for Hire: Revisiting Sullivan in the Age of Sponsored Corporate Cyber-Smearing, 12 Ala. C.R. & C.L. L. Rev. 109, 139–44 (2020). ↑
See Nelson Auto Center, Inc. v. Multimedia Holdings Corp., 951 F.3d 952, 956 (8th Cir. 2020) (discussing “[w]hether Nelson Auto is a limited purpose public figure regarding the KARE 11 story is an issue of both federal and Minnesota law.”). ↑
Gertz v. Robert Welch, Inc., 418 U.S. 323, 342 (1974) (a public figure may recover only on a showing of “clear and convincing proof that the defamatory falsehood was made with knowledge of its falsity or with reckless disregard for the truth”). ↑
New York Times Co. v. Sullivan, 376 U.S. 254, 279–80 (1964). ↑
St. Amant v. Thompson, 390 U.S. 727, 731 (1968). ↑
Harte-Hanks Communications, Inc. v. Connaughton, 491 U.S. 657, 667 (1989) (quoting Garrison v. Louisiana, 379 U.S. 64, 74 (1964)). ↑
Smartmatic USA Corp. v. Lindell, No. 22-cv-0098, 2022 WL 4343299, at *5 (Minn. Dist. Ct. Sept. 19, 2022) (emphasis added). The “inherently probable” language comes from the Supreme Court’s opinion in St. Amant, where it stated that:
“The defendant in a defamation action brought by a public official cannot, however, automatically insure a favorable verdict by testifying that he published with a belief that the statements were true. The finder of fact must determine whether the publication was indeed made in good faith. Professions of good faith will be unlikely to prove persuasive, for example, where a story is fabricated by the defendant, is the product of his imagination, or is based wholly on an unverified anonymous telephone call. Nor will they be likely to prevail when the publisher’s allegations are so inherently improbable that only a reckless man would have put them in circulation. Likewise, recklessness may be found where there are obvious reasons to doubt the veracity of the informant or the accuracy of his reports.” 309 U.S. at 732. ↑
Smartmatic USA Corp., 2022 WL 4343299, at *5. ↑
Id. ↑
Id. ↑
Id. ↑
929 N.W.2d 868, 879 (Minn. 2019). ↑
Smartmatic USA Corp., 2022 WL 4343299, at *3. ↑
Gertz v. Robert Welch, Inc., 418 U.S. 323, 349 (1974). ↑
Maethner, 929 N.W.2d at 877–78. ↑
Id. at 878–79. ↑
See 4 Minn. Prac., Jury Instr. Guides—Civil, CIVJIG 50.50 (6th ed.); Mike Steenson, Presumed Damages in Defamation Law, 40 Wm. Mitchell L. Rev. 1492 (2014); Mike Steenson, Public Official, Figures, and Controversies in Minnesota Defamation Law, https://mhlawreview.org/2020/06/09/public-official-figures-and-controversies-in-minnesota-defamation-law/ [https://perma.cc/CA2V-2RNQ]. ↑
In Gertz the Court noted that, “For the most part those who attain this status have assumed roles of especial prominence in the affairs of society. Some occupy positions of such persuasive power and influence that they are deemed public figures for all purposes. More commonly, those classed as public figures have thrust themselves to the forefront of particular public controversies in order to influence the resolution of the issues involved. In either event, they invite attention and comment.”418 U.S. 323 at 345. ↑
See generally Mike Steenson, Presumed Damages in Defamation Law, 40 Wm. Mitchell L. Rev. 1492 (2014). ↑
Smartmatic USA Corp., 2022 WL 4343299, at *5. ↑
Id. ↑
Complaint at 4–5, Smartmatic USA Corp. v. Lindell, 2022 WL 168592 (Minn. Dist. Ct. Jan. 18, 2022) (No. 22CV00098). ↑
Id. at 4. ↑
Smartmatic USA Corp., 2022 WL 4343299, at *6. ↑