be permitted to proceed with their cause of action. 5A
id. § 1356, at 296.
The issue before this Court is whether plaintiffs CSI and
CCHR have stated something more than an accusation as to each
element of the tort of defamation under the laws of New York.
"The complaint must be deemed sufficient if plaintiff has
pleaded a colorable claim of libel." Lasky v. American
Broadcasting Companies, 606 F. Supp. 934, 938 (S.D.N.Y. 1985),
(citing Davis v. Ross, 754 F.2d 80 (2d Cir. 1985).*fn2 The
four elements are: a false and defamatory statement of and
concerning plaintiff; publication to a third party; fault, the
degree of which depends upon the status of the libelled party;
and special harm or per se actionability. Angio Medical Corp.
v. Eli Lilly & Co., 720 F. Supp. 269, 272 (S.D.N.Y. 1989).
The first element, defamatory meaning, is discussed at
greater length below. As to the second element, publication to
a third party, the computerized PaineWebber Advisory was, by
its nature, published to third parties. As to the third
element, fault, the Complaint alleges the highest level which
could possibly be required.*fn3 With regard to the fourth
element, special harm, under New York law, words are libel per
se if they "affect a person in his or her profession by
imputing to the person misconduct, incapacity, unfitness or
lack of any qualification deemed necessary for the conduct of
the profession." Lasky, 606 F. Supp. at 937; Davis, 754 F.2d at
82. As plaintiffs' Complaint articulates, this action meets
this requirement, therefore special damages do not have to be
pleaded. Complaint at ¶¶ 33, 37. All other elements of an
action for defamation being recognizable, we are left to
determine the issue of defamatory meaning.
Susceptibility to Defamatory Meaning
In this case the primary issue of law in dispute is the
existence of defamatory meaning in the PaineWebber Advisory.
This Court disagrees with Magistrate Judge Gershon and finds
that the statements could reasonably convey a defamatory
Whether the statements are reasonably susceptible of a
defamatory connotation is a question of law for the court.
First, the court decides whether the words are susceptible of
one or more meanings to the average reader. Davis, 754 F.2d at
82. If they are ambiguous, then the court decides if one of
these meanings could be defamatory. Id. If so, it is a question
of fact for the jury as to which meaning was the one actually
understood by readers of the statements. Lasky, 606 F. Supp. at
The principle of construction in New York is summed up in
"1. The Court must consider the publication as a
whole and not pick out and isolate particular
"2. The publication should be tested by its effect
on the average reader. The Court should neither
construe the words
with technical precision or strain to place a
particular interpretation on them, nor should the
Court interpret the words in their mildest and
most inoffensive sense to hold them non-libelous."
"3. The Court should read the accused words
against the background of their issuance with
respect to the circumstances of their publication
and the scope and apparent object of the writer."
Id. at 939.
Magistrate Judge Gershon agreed with defendants that the
defamatory meanings alleged by plaintiffs are unreasonable.
While Magistrate Judge Gershon made a technically logical
dissection of the sentences and their meanings, this Court
finds that the statements, in juxtaposition and in context, are
reasonably susceptible of a defamatory connotation. Thus, we
find that the statements must be submitted to a jury for a
determination of whether the ordinary and average person would
understand these words as defamatory.