BIRKENFELD v. UBS AG (2019)

Order, Supreme Court, New York County (Sherry Klein Heitler, J.), entered January 12, 2018, which granted defendants' motion to dismiss the complaint, unanimously affirmed.

Plaintiff pled guilty in the U.S. District Court for the Southern District of Florida to one count of conspiracy to defraud United States authorities.  As part of his plea agreement, plaintiff admitted to illegal conduct, including, inter alia, that he “prepared false and misleading IRS Forms” and assisted “wealthy U.S. clients in concealing their ownership of the assets held offshore.”  These admitted facts support the conclusion that defendants' quoted statements, published subsequently in the New York Post and Bloomberg BNA, that plaintiff was “convicted in the U.S. for, among other things, having lied to the U.S. authorities,” were, at a minimum, substantially true, if not absolutely true.  Since truth is a complete defense to a defamation claim, dismissal of the complaint was warranted (Dillon v. City of New York, 261 A.D.2d 34, 38, 704 N.Y.S.2d 1 [1st Dept. 1999]; see Stepanov v. Dow Jones & Co., 120 A.D.3d 28, 34, 987 N.Y.S.2d 37 [1st Dept. 2014] ).

We reject plaintiff's argument that the statements were defamatory by implication (Stepanov, 120 A.D.3d at 37–38, 987 N.Y.S.2d 37).  Both articles in which the statements were published addressed plaintiff's conviction in detail and made clear that plaintiff was convicted for his conduct in the tax fraud scheme, not that he lied to the government during his conduct as a whistleblower (see Stepanov, 120 A.D.3d at 38, 987 N.Y.S.2d 37).

Having determined that the statements were substantially true, we do not reach the issue of whether they are also protected by the statutory privilege of Civil Rights Law § 74.