statements at issue here, which were published following the
commencement of this litigation, constitute a "fair and true"
report of the allegations contained in the Complaint.
A report may be considered "fair and true" under Section 74 if
its substance is substantially accurate. See, e.g., Holy Spirit
Assn. v. New York Times Co., 49 N.Y.2d 63, 67, 424 N.Y.S.2d 165,
399 N.E.2d 1185 (1979); Wenz v. Becker, 948 F. Supp. 319,
324 (S.D.N.Y. 1996). A report cannot be said to be
"substantially accurate," however, if it would have a "different
effect" on the mind of the recipient than the "actual truth."
Daniel Goldreyer, Ltd. v. Van de Wetering, 217 A.D.2d 434,
630 N.Y.S.2d 18, 22 (1995). In other words, Section 74 does not
afford protection if the specific statements at issue,
considered in their context, "suggest more serious conduct
than that actually suggested in the official proceeding." Id.
Here, a reasonable juror could find that Mr. Klein's comments
at the Fairchild Summit suggested a form of fraud and
"counterfeiting" on the part of defendants going well beyond
anything reasonably suggested by the allegations of the
Complaint, which relate to contractual breaches, trademark
violations, and unauthorized distribution practices. Similarly,
a reasonable juror could well determine that Mr. Klein's
comments on Larry King Live were intended to, and did, suggest
problems in the quality and authenticity of Warnaco's goods
going beyond anything fairly inferable from the Complaint. At
most, a few snippets in the Complaint obliquely refer to design
problems that indirectly might have affected quality: but this
is far removed from the more frontal suggestions of deficient
quality that a reasonable juror might find Mr. Klein to have
suggested in the interview. Finally, as to the letter and press
release of May 30, 2000, these likewise contain statements that
a reasonable juror could find go well beyond the allegations of
the Complaint, insofar as they suggest quality problems with
Calvin Klein products manufactured by Warnaco. The Court
therefore finds that Section 74 immunity is, at best, a jury
question and cannot support summary judgment in plaintiffs'
Counterclaim Seven. Although Count Seven of the
counterclaims asserts that the statements of Mr. Klein on Larry
King Live amounted to tortious interference with the existing
and prospective business relations of Calvin Klein Jeanswear,
Inc., a subsidiary of Warnaco, plaintiffs contend that Count
Seven repackages defendants' corresponding defamation and libel
claims and therefore must be dismissed on the ground that, under
New York law, damage to one's reputation alone cannot form the
basis of a tortious interference claim. See, e.g., Tasso v.
Platinum Guild Int'l, 1997 WL 16066, at *4 (S.D.N.Y. 1997). In
other words, tortious interference claims must, at the very
least, allege specific pecuniary, rather than solely
Here, however, defendants' do just that, alleging a loss of
jeanswear sales to potential customers as a direct result of Mr.
Klein's Larry King Live interview. Even though defendants'
defamation claims also refer to this same loss of business as a
form of damages, see Second Amended Counterclaims, ¶¶ 87, 92,
103, 108, there is no reason why defendants should be precluded
from seeking compensation for such damage under two distinct
legal theories, so long as no double recovery is permitted.
Plaintiffs separately contend that defendants have failed to
adduce evidence that satisfies each of the four elements of a
tortious interference claim: (1) business relations with a third
party; (2) interference with those business relations; (3)
actions taken for the sole purpose of causing harm to the
claimant or the use of dishonest, unfair, or improper means; and
(4) injury to the business relationship. See Nadel v.
Play-by-Play Toys & Novelties, Inc., 208 F.3d 368, 382 (2d Cir.
2000). In particular, plaintiffs contend that defendants have
failed to establish either the existence of Warnaco's
prospective business relationships with the third parties it
identifies in its counterclaims, see Second
Amended Counterclaims, ¶¶ 111-112, or the causal nexus between
the conduct complained of and the alleged damage to Warnaco's
In fact, however, defendants have adduced sufficient evidence
to survive summary judgment. For example, a letter dated June
12, 2000 from Louise Tanguay-Papp, a vice-president at Shirmax,
Ltd. a Canadian retailer, to Suzanne Karkus, President of CKJ's
Womens Division, explains that "[f]ollowing the Calvin
Klein/Larry King interview of last week on CNN, we received
numerous calls from our store managers, concerned about the
negative press that Calvin Klein Jeanswear had received and the
impact that this would have on us, resulting in lesser than
expected sales." See Exhibits Cited in
Defendant-Counterclaimants' Memorandum in Opposition to
Plaintiffs' Motion for Summary Judgment ("Defendants'
Exhibits"), Ex. 30. The letter also confirms "the delay of the
CK plus-size launch" in Shirmax stores "to the Spring of 2001."
As explained by the Declaration of Suzanne Karkus, dated
November 30, 2000, also part of the record, see Defendants'
Exhibits, Ex. 31, Shirmax had previously expressed its intention
to purchase nearly $400,000 in jeanswear from CKJ in the year
2000. According to Ms. Karkus, this purchase was canceled by
Shirmax as a result of the Larry King Live interview.
There is also the sworn Declaration of Joel Rosenthal,
Director of Sales and New Business Development for the
International Division of Warnaco, dated November 30, 2000,
which avers that on June 9, 2000, Sportzone, a Venezuelan
company, reduced its previous order of $1,500,000 in unspecified
Warnaco products to $350,000, and that this reduction was
explained to Mr. Rosenthal by Sportzone's President Camilo
Ibrahim as being the result, at least in part, of the
"disparaging comments about the quality of Calvin Klein jeans"
made by Mr. Klein on the Larry King Live show. See
Defendants' Exhibits, Ex. 32. While as such the latter
assertions would be inadmissible hearsay, defendants have also
submitted a separate declaration, also dated November 30, 2000,
from Mr. Ibrahim himself, confirming Mr. Rosenthal's statements.
See Defendants' Exhibits, Ex. 33.
The Court finds that this evidence is sufficient to create a
genuine issue of material fact both as to the existence of
business relations between Warnaco and Shirmax or Sportzone and
as to whether Mr. Klein's statements were the cause of
defendants' lost sales.
Finally, plaintiffs assert that defendants have failed to
allege that CKI or Mr. Klein used any "improper means" to harm
the defendants or that they acted with the sole purpose of doing
so. However, defendants' defamation claims arising from the
Larry King Live interview have survived summary judgment, and
defamation surely counts as an improper means by which to
interfere in the business relations of another. See, e.g.,
Purgess v. Sharrock, 33 F.3d 134, 141 (2d Cir. 1994).
Accordingly, the Court hereby reconfirms its Order dated
October 10, 2000 and the portion of its Order dated December 19,
2000 relating to the same subject matter.