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Tannerite Sports, LLC v. NBCUniversal News Group

United States Court of Appeals, Second Circuit

July 25, 2017

TANNERITE SPORTS, LLC, Plaintiff - Appellant,
v.
NBCUNIVERSAL NEWS GROUP, a division of NBCUNIVERSAL MEDIA, LLC, Defendant - Appellee. [1]

          Submitted: October 20, 2016

         Plaintiff-appellant Tannerite Sports, LLC ("Tannerite"), a manufacturer of exploding rifle targets, brought this action alleging that it was defamed by a television broadcast and an internet article, both published by defendant NBCUniversal News Group ("NBC"). Tannerite appeals an October 1, 2015 order granting NBC's motion to dismiss and denying Tannerite's motion to amend its complaint, as well as an October 2, 2015 judgment order. Both orders were entered by the United States District Court for the Southern District of New York (Scheindlin, J.).

         The district court dismissed Tannerite's claim because the complaint failed to allege that NBC's publications made a false statement, which is required to state a defamation claim under New York law. In particular, the district court ruled that NBC's characterization of the exploding rifle targets as "bombs" was substantially true. It also ruled that NBC did not suggest that the targets were dangerous in retail stores before consumers opened the targets' packaging and mixed their chemical ingredients together.

         On appeal, we similarly hold that New York defamation law and federal pleading standards require a plaintiff to allege facts that, if true, demonstrate that the defendant made a false statement. Applying New York's standard for falsity, which requires a plaintiff to allege that the defendant's statements were not substantially true, we conclude that Tannerite has failed to allege that NBC's publications contained false statements.

         Affirmed.

          Appearing for Appellant: David L. Cargille, Baer Crossey McDemus, LLC, Philadelphia, PA.

          Robert Jackel, Philadelphia, PA. Appearing for Appellee: Daniel M. Kummer, Chelley E. Talbert, Andrew D. Jacobs, NBCUniversal Media, LLC, New York, NY.

          Before: JACOBS, POOLER, Circuit Judges, and CRAWFORD, [2] District Judge

          POOLER, Circuit Judge

         Plaintiff-appellant Tannerite Sports, LLC ("Tannerite") appeals from an order of dismissal and a judgment entered by the United States District Court for the Southern District of New York (Scheindlin, J.). On appeal, we ask whether federal pleading standards, when applied to New York law, require a plaintiff asserting a defamation claim to allege facts demonstrating that the defendant made a false statement. We then consider whether Tannerite's defamation complaint alleged that defendant NBCUniversal News Group ("NBC") made false statements regarding Tannerite exploding rifle targets ("Tannerite targets" or "targets").

         Because we answer the first question in the affirmative and the second in the negative, we AFFIRM the district court's dismissal of the complaint and its entry of judgment.

         BACKGROUND

         I. The Broadcast

         "Right now, I am basically holding a bomb in my hand, " proclaimed television reporter Jeff Rossen, speaking against backdrop images of high- powered firearms and flame-engulfed cars. App'x at 89. "And you'll never believe where I got this, " he continued. Id. "A sporting goods store, no questions asked." Id. As the television camera zoomed in, he added that "the key ingredient here that causes the explosion has been used by terrorists to kill Americans." Id. Lifting two white containers for viewers to see, Rossen declared that "[t]his morning, you're about to see what happens when this gets in the wrong hands." Id.

         So began a report on NBC's Today Show considering the dangers of Tannerite exploding rifle targets. Tannerite's "targets" consist of separately packaged chemicals-ammonium nitrate and pyrotechnic grade aluminum powder-that detonate when mixed together and then shot with a high-velocity bullet. The targets enhance long-range recreational shooting, as the explosion provides an exciting acknowledgment that the target has been hit. Or, as Tannerite's 2014 Product Guide states, "[s]trike your target and the gratification is instant." App'x at 24.

         Unfortunately, but somewhat obviously, the targets pose dangers if misused. Tannerite's own product guide recommends that the targets be detonated "away from populated areas, " and notes that improper use of the targets "may start fires, may be less safe to handle, and [may cause] erratic performance." App'x at 25. And, because the targets contain ingredients that explode, they can be used to do harm rather than enhance recreation.

         The Today Show's report emphasized these risks, to put things mildly. When Rossen's introduction concluded, the scene changed abruptly to a small building in a country setting. Following a moment of serenity, the building exploded in a column of fire. A voice-over noted the presence of "dangerous and powerful explosives." App'x at 89. Viewers saw a montage of structures and cars bursting into flame.

         After displaying more destruction, Rossen turned his focus to "[t]he lead manufacturer" of the targets: Tannerite. Id. He described Tannerite targets' "key ingredient, " ammonium nitrate, as "a favorite of terrorists[, ] used in the Oklahoma City bombing, and to kill U.S. troops in Afghanistan." Id. He noted that "[t]he FBI even issu[ed] [an] intelligence bulletin in 2013, " stating that "it has potential use as [an] explosive[] in IEDs by criminals and extremists."[3] Id.

         NBC's broadcast emphasized the easy accessibility of Tannerite targets. It noted their presence at "most sporting goods stores" and online. Id. Rossen stated that he "went shopping and bought it by the cartload, " and his "producer bought forty pounds' worth online, enough to blow up a house." Id.

         Next came an interview with Travis Bond, a firearms expert. Bond stated that Tannerite is "extremely dangerous" and the "equivalent of buying explosives off the shelf." Id. A voice-over relayed Bond's view that "Tannerite is getting around the law on a technicality, separating the two [chemical] ingredients, even though they're sold together." Id. The video showed Bond cutting open separately-wrapped packets of chemicals contained within a package of Tannerite and mixing them together in a single container. After Bond mixed the chemicals, he stated, "[t]his is now classified by ATF as an explosive." Id.

         The report bemoaned the product's minimal regulatory supervision. Rossen interviewed Senator Richard Blumenthal, who argued that the products should be regulated more rigorously. Rossen then read Tannerite's response: that the product is safe when used properly and that "[o]nly girly-men want to regulate Tannerite rifle targets." App'x at 89.

         Back in the studio, Rossen, holding two cartons of Tannerite targets, turned to the Today Show anchors and noted that, "after buying all of these products, we are handing it over to experts, " but assured them that it is "not dangerous being in the studio right now. Of course, I wouldn't do that to you." Id. He added, "[a]nd you need the catalyst. But it is incredibly dangerous when you think about it . . . and how this is used overseas by terrorists." Id. An anchor added, "[a]nd in some cases here as well, by the way." Id.

         II. The Article

         An NBC internet article called "Bombs for sale: Targets containing dangerous explosive being sold legally" provided a similar account. App'x at 37. The article discussed injuries caused by the "exploding targets." Id. It stated that the "key ingredient" of the targets "is ammonium nitrate, the same substance used in the Oklahoma City bombing . . . and in IEDs . . . used against U.S. troops in Afghanistan." App'x at 38. It noted that "[g]un enthusiasts buy it for target practice because it explodes when you shoot it, letting you know you've made the shot." Id.

         The article again noted Bond's view that "Tannerite is getting around the law on a technicality by separating the two ingredients in its explosive- ammonium nitrate and aluminum powder-even though the two are sold together, " and quoted Bond as saying that "once itʹs mixed, itʹs classified as an explosive." Id. Like the video report, the article discussed Senator Blumenthal's views embracing greater regulation, and printed Tannerite's response that additional regulation would be inappropriate.

         III. Proceedings Below

         Tannerite sued NBC for defamation.[4] The complaint alleged that NBC defamed Tannerite in both the article and video by stating or suggesting, among other things, that the "targets are dangerous bombs as sold on store shelves, " which was false because "[p]laintiff's rifle targets are not bombs, " and, in any case, "are inert as sold in stores" and therefore not dangerous in that setting. App'x at 17-19.

         NBC moved to dismiss, and the district court granted the motion. Tannerite Sports, LLC v. NBCUniversal Media LLC, 135 F.Supp.3d 219, 236 (S.D.N.Y. 2015). The district court stated that a plaintiff wishing to recover under New York defamation law must allege, among other things, that the defendant made "a false statement about the plaintiff." Id. at 232. The court explained that "[t]ruth or falsity is determined by the common law standard of substantial truth, " and that "[a] statement is substantially true and not actionable if the published statement could have produced no worse an effect on the mind of a reader than the truth pertinent to the allegation." Id. at 233 (internal quotation marks and citations omitted).

         The district court ruled that Tannerite had not alleged that NBC made false statements. The court stated that "[t]here is no question that 'Tannerite-brand binary exploding rifle targets' explode. That is their purpose." Id. at 235 (emphasis in original). Consequently, even if NBC's "uses of the word 'bomb' [did not] me[et] the precise definition of the word . . . . the gist or substance . . . [was] true in light of the many meanings that reasonable audiences associate with the word." Id. (internal quotation marks and citations omitted). The court also wrote that neither publication "suggested that Tanneriteʹs exploding rifle targets are dangerous before the component ingredients are mixed, or that proper use of the products causes destruction or injury." Id. at 236. The court noted that the video demonstrated how the product's ingredients must be mixed, and both the video and article stated that the product does not become an explosive until its ingredients are mixed together. Id. The court also concluded that NBC's reports clearly described dangers from misuse, as opposed to proper use, of the products. Id.

         In the same order, the court also denied Tannerite's motion for leave to amend. Id.

         Tannerite appealed the district court's order granting NBC's motion to dismiss and denying the motion to amend, as well as the judgment order that followed soon after.

         DISCUSSION

         We review de novo a district court's order granting a motion to dismiss. Williams v. Priatno, 829 F.3d 118, 121 (2d Cir. 2016).

         I. Consideration of Substantial Truth at the ...


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