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HALCYON JETS, INC., Plaintiff-Respondent, v. JET ONE GROUP, INC., et al., Defendants-Appellants.

Decided: January 28, 2010

MAZZARELLI, J.P., SWEENY, MOSKOWITZ, MANZANET-DANIELS, ROMÁN, JJ. Steven G. Legum, Mineola, for appellants. Schrader & Schoenberg, LLP, New York (Bruce A. Schoenberg of counsel), for respondent.

Order, Supreme Court, New York County (Emily Jane Goodman, J.), entered March 16, 2009, which, insofar as appealed from, denied defendants' motion pursuant to CPLR 3211(a)(7) to dismiss plaintiff's cause of action for defamation, unanimously affirmed, without costs.

The parties are business competitors. After filing a federal court complaint setting forth fraud and RICO claims for various alleged wrongdoing by plaintiff, defendants disseminated what the parties characterize as a “press release” reporting the filing of their federal complaint and summarizing its allegations. Plaintiff then instituted this action for defamation, alleging that the press release was false and resulted in significant consequential business losses; defendants moved to dismiss on the basis of the protections afforded by New York Civil Rights Law § 74 to fair and accurate reports of judicial proceedings; and the motion court denied the motion on the basis of Williams v. Williams (23 N.Y.2d 592 [1969] ).

Williams created a judicial exception to the statutory protections if it appears that the public policy goals of the statute are being thwarted by the commencement of litigation intended as a device to protect a report thereof and thereby disseminate defamatory information (see id. at 599). Defendants' intention to use the federal action as such a device is a factual issue that is sufficiently pleaded and cannot be presently be decided. We note, as did the motion court, that the press release here, unlike that in Williams, was not the reportage of an independent publisher but rather was issued by defendants themselves. While not dispositive, defendants' self-publication tends to connect the litigation and report thereof more closely than in Williams, making this an a fortiori case, and undermining defendants' argument that because their press release, unlike that in Williams, was not directed at members of the parties' industry but was disseminated as a general news item, Williams does not apply as a matter of law.

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