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Gilman v. Spitzer

United States District Court, S.D. New York

October 1, 2012

William GILMAN, Plaintiff,
Eliot SPITZER and the Slate Group, LLC, Defendants.

Page 390

David Ian Greenberger, James William Halter, Jeffrey Lew Liddle, Liddle & Robinson, LLP, New York, NY, for Plaintiff.

Jay Ward Brown, Lee Levine, Levine Sullivan Koch & Schulz, LLP, Washington, DC, Katharine Taylor Larsen, Levine Sullivan Koch & Schulz, LLP, Philadelphia, PA, for Defendants.

Page 391


J. PAUL OETKEN, District Judge:

This is an action for defamation based on an article written by Eliot Spitzer and published in the online magazine Slate. The article addressed, among other things, an investigation of Marsh & McLennan Companies and certain of its employees by the office of then-New York Attorney General Spitzer. Defendants Spitzer and Slate have moved for judgment on the pleadings dismissing Plaintiff's defamation claim. For the reasons set forth below, Plaintiff's defamation claim is dismissed. The law of defamation, as bounded by the First Amendment's guarantee of free speech, does not allow this challenge to Spitzer's commentary.

Plaintiff also has moved to dismiss Defendants' counterclaim, filed under New York's anti-SLAPP (" Strategic Lawsuit Against Public Participation" ) statute. Because the allegations do not meet the criteria set forth in that statute, Defendants' counterclaim is also dismissed.

Accordingly, both Plaintiff's and Defendants' motions are granted, and both sides' claims are dismissed.

I. Background

The facts that are relevant to these motions are essentially undisputed. [1]


Plaintiff William Gilman was an employee of Marsh & McLennan Companies, Inc. (" Marsh" ) from 1976 to 2004. He was experienced and respected in the insurance industry, and he was responsible for a significant portion of Marsh's annual profits. (Compl. ¶¶ 7-8.) In 2004, Eliot Spitzer, then the New York State Attorney General, announced an investigation by his office into Marsh's use of " contingent commissions" — fees paid by insurers to insurance brokers who place insurance business with the insurer. Gilman's work for Marsh included negotiating contingent commissions. Spitzer took the position that Marsh's use of contingent commissions was illegal. (Compl. ¶¶ 9-11.)

In October 2004, Spitzer filed a civil complaint against Marsh, alleging fraud, antitrust, and other claims. Shortly thereafter, Marsh replaced its chief executive officer. (Compl. ¶¶ 12-13.) In January 2005, Marsh entered into an agreement with Spitzer resolving the civil complaint. (Compl. ¶ 14.) That agreement required Marsh to pay $850 million into a fund to be paid to customers for contingent commissions they had paid to Marsh. It provided that " [n]o portion of the Fund shall be considered a fine or a penalty." (Answer Ex. 6 at 3.) The agreement also required Marsh to apologize for its conduct and to undertake certain " business reforms," including ending the practice of accepting contingent commissions. ( Id. at 5-9, 16.)

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In September 2005, Spitzer's office announced an indictment against Gilman and seven others, charging them with 37 counts relating to the contingent-commission investigation. (Compl. ¶ 15.) They were charged with one count of fraud, one count of restraint of trade and competition in violation of the Donnelly Act, and 35 counts of grand larceny. See People v. Gilman, 28 Misc.3d 1217(A), 2010 N.Y. Slip Op. 51379(U), 2010 WL 3036983, at *1 (N.Y.Sup.Ct.2010). The State's position was that the defendants had " devised and implemented an illegal anti-trust conspiracy to fraudulently obtain millions of dollars for Marsh and its accomplice insurance companies by rigging the market for excess casualty insurance." Id. A bench trial before New York Supreme Court Justice James A. Yates took place from April 2007 to February 2008. Gilman was convicted of one count of restraint of trade and competition in violation of the Donnelly Act. Id. at *2; Compl. ¶ 16. Some of the remaining counts were dismissed and Gilman was acquitted on all remaining counts. Id.

Gilman was initially sentenced to 16 weekends of incarceration on the one count on which he was convicted. (Compl. ¶ 20 n. 2.) However, on July 2, 2010— while Gilman's appeal was pending and before he had begun serving his sentence— the trial judge vacated Gilman's conviction on the ground that exculpatory evidence had not been disclosed during his trial. As Justice Yates explained, " the verdict here rested firmly upon the testimony of [six witnesses], and yet, each one of them, after testifying with very favorable cooperation agreements, has, at times, before, during or shortly after trial, given sworn testimony discrediting, even contradicting, their trial testimony." People v. Gilman, 2010 WL 3036983 at *20. The judge concluded that " [w]hile each item of [undisclosed] evidence taken individually may present a reasonable possibility that the verdict would have been different, taken as a whole, the evidence raises not only a possibility, but a probability that its disclosure would have produced a different result." Id. at *19. Justice Yates' decision to vacate Gilman's conviction followed a second trial against three of Gilman's co-defendants, which resulted in acquittals on all charges, and which also revealed the previously undisclosed exculpatory evidence. Id. Charges against two other Marsh executives were dismissed by the trial court before trial. (Compl. ¶ 18.)

Prior to Gilman's trial, 21 other individuals— Marsh executives and insurance carrier executives— had pleaded guilty to charges relating to the contingent— commission investigation. People v. Gilman, 2010 WL 3036983 at *1 n. 4. According to the Complaint, each of these individuals received an adjournment in contemplation of dismissal or an unconditional discharge, and none received a sentence that included incarceration. (Compl. ¶ 19.)

The State initially filed an appeal from Justice Yates' October 2010 order vacating Gilman's conviction. However, in January 2011, the New York Attorney General's Office (then led by Attorney General Eric Schneiderman) dismissed the remaining charge against Gilman and withdrew its appeal. People v. Gilman, 80 A.D.3d 542, 914 N.Y.S.2d 899 (1st Dep't 2011); Compl. ¶ 20; Answer Ex. 11.


On August 13, 2010, the Wall Street Journal published an editorial with the headline " Eliot Spitzer's Last Admirer." The editorial primarily addressed then-Attorney General Andrew Cuomo's continuing prosecutions related to AIG and its former chairman, Hank Greenberg. It then turned to the Marsh matter:

One would think that Mr. Cuomo would want to end the era of stonewalling [regarding

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AIG], especially after the defeat his office sustained last month on still another Spitzer-created prosecution. Manhattan Supreme Court Justice James A. Yates vacated the felony convictions of two former employees of Marsh & McLennan Companies because the Attorney General's office had failed to turn over potentially exculpatory evidence to the defense.
Although prosecutors had earlier assured the court that " We don't want to be accused of hiding anything," Judge Yates found that the Attorney General's office had failed to turn over more than 700,000 pages of documents, plus deposition testimony from key witnesses.

(Compl. ¶ 22.)

Spitzer authored an article responding to the Wall Street Journal editorial, which was published on on August 22, 2010. Spitzer's article begins with the ...

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