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United States District Court, Southern District of New York

June 14, 2002


The opinion of the court was delivered by: Buchwald, District Judge.


Plaintiff Paul Jacobson, a former employee of Deutsche Bank, A.G. ("DBAG"), brings this action for defamation against Rolf Breuer, CEO of DBAG, Edson Mitchell,*fn1 his former supervisor, and DBAG itself.*fn2 Defendants moved for summary judgment, arguing that Mr. Jacobson is unable to prove the most fundamental element of his case — that Mr. Breuer actually uttered the allegedly defamatory statements at issue. Because we find that the Federal Rules of Evidence mandate exclusion of the single piece of evidence offered by plaintiff to satisfy his burden on this element, we grant defendants' motion and dismiss this suit with prejudice.


Deutsche Bank, a German corporation, is one of the world's leading financial services providers, with nearly a hundred thousand employees and millions of customers. See From early 1996 to late 1997, Mr. Jacobson was a Managing Director and Co-Head of the North American Fixed Income Division of Deutsche Morgan Grenfell, Inc. ("DMG"), a subsidiary of DBAG. On or about November 30, 1997, however, Mr. Jacobson resigned from DMG.*fn3

Several months later, on or about March 3, 1998, Mr. Breuer presented a speech to the Frankfurt Law Society in Frankfurt, Germany, on the subject of the then-impending introduction of the Euro. Following the speech, Mr. Breuer was approached by members of the press, including Wolfgang Reuter, a reporter for Bloomberg News Service ("Bloomberg"),*fn4 at which point Mr. Reuter and Mr. Breuer conversed briefly in the German language (the "March 3 interview"). The only other person known to be present for this exchange was Dierk Hartwig, DBAG's chief press spokesman.

The following day, at 12:48 p.m. Eastern Time, Bloomberg issued a news report ("Article One") that attributes certain quotations to Mr. Breuer ostensibly based on the March 3 interview. Compl. Ex. A. Article One states, in pertinent part:

. . . Deutsche Bank is cutting costs in its North American investment banking business, Breuer said.

"We are dismissing people who haven't performed," Breuer said, "there are losers in the bank and we are getting rid of them."

Breuer admitted that the bank had a "very bad fourth quarter in bonds trading out of New York, and as a result we've dismissed Paul Jacobson." Jacobson was the head of the North American fixed-income sales business.*fn5

Id. The gravamen of Mr. Jacobson's Complaint is that Mr. Breuer's statements, as quoted in Article One, defamed him by, inter alia, falsely blaming him for bond trading losses,*fn6 falsely stating that he was "dismissed" from DBAG,*fn7 and implying that he is a "loser." Pl.'s Opp. at 13-14. Mr. Breuer, however, flatly denies making these statements and, indeed, denies ever uttering Mr. Jacobson's name during the March 3 interview. Def.'s Responses no. 32; Transcript of September 24, 1999, Deposition of Rolf E. Breuer ("Breuer Dep.") at 59:4-12; 110:23-25. Mr. Hartwig likewise denies that Mr. Breuer made the allegedly defamatory statements at issue. Transcript of February 21, 2002, Deposition of Dierk Hartwig ("Hartwig Dep.") at 9:21-25.

Accordingly, Mr. Jacobson has attempted to procure the testimony of the only other person known to have been present at the March 3 interview: Mr. Reuter himself. At this Court's request, Mr. Reuter was deposed by a German judge on October 20, 2000, in Germany. See Letter of Request for International Judicial Assistance Pursuant to the Hague Convention of 18 March 1970 on the Taking of Evidence in Civil or Commercial Matters*fn8 dated June 5, 2000; Transcript of October 20, 2000, Deposition of Wolfgang Johannes Reuter ("Reuter Oct. Dep."); Letter from James A. Batson dated November 1, 2000. While Mr. Reuter answered a few background questions, he invoked the journalist's privilege*fn9 in refusing to answer any questions about the March 3 interview.*fn10

Recognizing the import of Mr. Reuter's testimony, Mr. Jacobson promptly challenged this assertion of privilege in the Frankfurt District Court. See Letter from James A. Batson dated December 20, 2000. On May 18, 2001, the Frankfurt District Court issued an order upholding Mr. Reuter's assertion of privilege. See Letter from James A. Batson dated June 14, 2001. Mr. Jacobson unsuccessfully appealed the District Court's decision, and no further appeals are permitted. See Letter from James A. Batson dated December 14, 2001.


Defendants move for summary judgment pursuant to Fed.R.Civ.P. 56(c) on the ground that Mr. Jacobson has not proffered any competent evidence that Mr. Breuer actually uttered the allegedly defamatory statements at issue, an element of a prima facie case for defamation. As defendants are clearly correct on this point, we grant summary judgment*fn11 in their favor.*fn12 Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ("Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial."); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (plaintiff must present affirmative evidence to defeat motion for summary judgment and cannot solely discredit defendant's evidence).

A. Elements of a Claim for Defamation

As this is a diversity action, see Compl. ¶ 6, Mr. Jacobson's claim for defamation is governed by the substantive tort law of New York. The elements of a defamation claim in New York are fourfold: (1) a false and defamatory statement of and concerning the plaintiff uttered by the defendant; (2) publication by the defendant of such statement to a third party; (3) fault on the part of the defendant; and (4) injury to the plaintiff. See Weldy v. Piedmont Airlines, Inc., 985 F.2d 57, 61 (2d Cir. 1993). For present purposes, we focus on the first and most fundamental element — that a statement was actually uttered. If, as defendants argue, Mr. Jacobson cannot proffer any admissible evidence that would establish this element, we must grant summary judgment to defendants. See Celotex, 477 U.S. at 322, 106 S.Ct. 2548; Burlington Coat Factory Warehouse Corp. v. Esprit De Corp., 769 F.2d 919, 924 (2d Cir. 1985) (absent a showing that admissible evidence will be available at trial, non-moving party may not rely on inadmissible hearsay in opposing motion for summary judgment).

B. Article One is the Only Evidence Tending to Show that Mr. Breuer Uttered the Allegedly Defamatory Statements

Plaintiff has been unable to identify anyone who heard any part of the March 3 interview apart from Mr. Breuer, Mr. Reuter, and Mr. Hartwig. Both Mr. Breuer and Mr. Hartwig deny that Mr. Breuer uttered the allegedly defamatory statements at issue. Mr. Reuter's testimony as to what Mr. Breuer said during the March 3 interview is unavailable as he has successfully invoked a privilege against testifying. As such, the only evidence tending to show that Mr. Breuer actually made the statements attributed to him in Article One is Article One itself.*fn13

C. Article One is Hearsay

Hearsay is "a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted." Fed.R.Evid. 801(c). Here, Mr. Jacobson offers Article One, an out-of-court statement made by Mr. Reuter,*fn14 to prove the fact that Mr. Breuer made the statements attributed to him therein. As such, Article One is clearly hearsay.*fn15 See, e.g., Eisenstadt v. Centel Corp., 113 F.3d 738, 742 (7th Cir. 1997); McAllister v. New York City Police Dep't, 49 F. Supp.2d 688, 706 n. 12 (S.D.N.Y. 1999); Ladner v. City of New York, 20 F. Supp.2d 509, 519 (E.D.N.Y. 1998). Therefore, unless one of the hearsay exceptions contained in the Federal Rules of Evidence requires a different result, Article One is not admissible to prove that Mr. Breuer made the statements at issue. Fed.R.Evid. 802.

D. No Hearsay Exception Permits the Admission of Article One

Mr. Jacobson petitions us to admit Article One to prove that Mr. Breuer uttered the allegedly defamatory statements at issue despite its status as hearsay. He relies on both the residual and recorded recollection exceptions to the hearsay rule. Fed.R.Evid. 807, 803(5). We are not persuaded, however, by either argument.

1. Residual Exception

The residual exception to the hearsay rule provides, in pertinent part:

A statement not specifically covered by Rule 803 or 804 but having equivalent circumstantial guarantees of trustworthiness, is not excluded by the hearsay rule, if the court determines that (A) the statement is offered as evidence of a material fact; (B) the statement is more probative on the point for which it is offered than any other evidence which the proponent can procure through reasonable efforts; and (C) the general purposes of these rules and the interests of justice will best be served by admission of the statement into evidence.

Id. at 807. Thus, for Article One to be admitted under this exception, we must find that it has "equivalent circumstantial guarantees of trustworthiness" comparable to those exceptions specifically enumerated by the Federal Rules of Evidence. Id.; see also Fed.R.Evid. 803 (hearsay exceptions that do not depend on the declarant's availability to testify); Fed.R.Evid. 804 (hearsay exceptions that require that the declarant be unavailable to testify). As "[n]ews accounts, unsupported by corroborating evidence and offered to prove that certain statements were made, will usually lack the `circumstantial guarantees of trustworthiness' that Rule [807]*fn16 requires," Mr. Jacobson bears the burden*fn17 of demonstrating why Article One is an especially trustworthy news article before we will admit it under Rule 807. In re Columbia Sec. Litig., 155 F.R.D. 466, 475 (S.D.N.Y. 1994).

First, Mr. Jacobson analogizes the present circumstances to Dallas County v. Commercial Union Assurance Co., 286 F.2d 388 (5th Cir. 1961). The Dallas County Court, after acknowledging that "a newspaper article is hearsay, and in almost all circumstances is inadmissible," admitted a half-century old newspaper account of a courthouse fire because the circumstances surrounding the article indicated its trustworthiness. Id. at 392. In the sagacious words of Judge Wisdom,

it is inconceivable . . . that a newspaper reporter in a small town would report there was a fire in the dome of the new courthouse — if there had been no fire. [The reporter] is without motive to falsify, and a false report would have subjected the newspaper and him to embarrassment in the community. The usual dangers inherent in hearsay evidence, such as lack of memory, faulty narration, intent to influence the court proceedings, and plain lack of truthfulness are not present here.

Id. at 397. The present case, however, is clearly distinguishable from Dallas County.

The difference between the hearsay evidence offered in case at bar and Dallas County becomes evident when we recall that the Second Circuit has instructed us to analyze the trustworthiness of a piece of evidence offered under the residual exception with respect to whether, and to what extent, it minimizes the "four classic hearsay dangers," namely, insincerity, faulty perception, faulty memory, and faulty narration. Schering Corp. v. Pfizer, Inc., 189 F.3d 218, 232-33 (2d Cir. 1999) (citing, inter alia, Laurence H. Tribe, Triangulating Hearsay, 87 Harv.L.Rev. 957, 961 (1974)). Following Schering, we are obliged to look closely at the proposition for which hearsay evidence is being offered. In Dallas County, the proponent of the newspaper article was merely trying to prove that there had been a fire in the county courthouse nearly sixty years previously. Dallas County concerned what might be called a "binary event" — either there was a fire, or there was not.*fn18 The specifics of the temperature of the fire, exactly what time it started, et cetera, were not relevant to the case at hand. Thus, the binary nature of the proposition to be proved in Dallas County itself provides a "circumstantial guarantee[] of trustworthiness," because even if the author's perception, memory, or narration (three of the four classic hearsay dangers) were less than perfect, it truly is "inconceivable" that he would have misreported the simple occurrence of a fire in the courthouse. Dallas County, 286 F.2d at 397.*fn19

Whereas the proponent in Dallas County sought to prove a simple "binary" proposition, Mr. Jacobson seeks to prove that Mr. Breuer uttered certain specific statements at a specific time. We face a situation where every word, their placement, order, and translations from German to English, are highly relevant to Mr. Jacobson's defamation suit.*fn20 As Mr. Jacobson's case truly rises and falls on the details, the classic hearsay dangers of faulty perception, memory, and narration are inherent. Accordingly, Mr. Jacobson has failed to convince us that Article One is sufficiently trustworthy to be admitted as evidence that Mr. Breuer actually uttered the statements quoted therein.

Mr. Jacobson next argues that the process used by Mr. Reuter in writing articles for Bloomberg provides the circumstantial guarantee of trustworthiness required by Fed.R.Evid. 807. Pl.'s Opp. at 10-11. Mr. Jacobson points to the undisputed facts that Mr. Reuter is fluent in English and German, that he understands the meaning of quotation marks, that he normally writes down quotations from an interview "in a quiet moment" following the interview, that he always writes in English, and that he and at least one editor read every article he writes before publication. Id. This process, however, is fundamentally typical of journalists everywhere, and thus provides no support for Mr. Jacobson's contention that Article One is more trustworthy than the average news account.

Finally, Mr. Jacobson baldly asserts that we should admit Article One because, despite his diligent efforts, it is the only evidence available to him to prove his claim. Pl.'s Opp. at 11-12. In a civil case, however, necessity alone will not render hearsay admissible under the residual exception.*fn21 Such a rule would eviscerate the hearsay rule and, as such, we reject it.*fn22

2. Recorded Recollection

Mr. Jacobson also argues that Article One should be admitted as the recorded recollection of Mr. Reuter. See Fed.R.Evid. 803(5) (providing for the admissibility of a "memorandum or record concerning a matter about which a witness once had knowledge but now has insufficient recollection to enable the witness to testify fully and accurately, shown to have been made or adopted by the witness when the matter was fresh in the witness' memory and to reflect that knowledge correctly"). A necessary predicate of this Rule, however, is that there be a "witness" with an "insufficient recollection." Id. Here, there is no failure of recollection, but rather an assertion of privilege, that renders Mr. Reuter's testimony regarding the March 3 interview unavailable. As such, we cannot admit Article One as a recorded recollection under Fed.R.Evid. 803(5).*fn23


As the preceding discussion makes clear, Mr. Jacobson cannot put forth any admissible evidence on an essential element of his claim, namely, that the allegedly defamatory statements were actually uttered. Accordingly, we grant summary judgment to defendants, and respectfully request the Clerk to close this matter.

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