“Double Dipping Doctor” Defamation Dispute Dismissed

An Illinois appellate court affirmed the dismissal of the former Chief of Osteopathic Surgery at Stroger Hospital’s complaint against various media outlets for reporting that the hospital overpaid him tens of thousands of dollars via direct deposit while he was on an unpaid leave and working in a private clinic elsewhere.  See Kapotas v Better Government Association et al. The plaintiff claimed that he never noticed the County’s deposits in his checking account, which approximated $80,000 over several months, and that he repaid the hospital upon request.

FVLD represented Sun-Times Media, LLC, which reported the overpayments in its Chicago Sun-Times newspaper.

The appellate court held that the plaintiff was not defamed because the news reports were properly construed as blaming the County for payroll errors.  The court rejected the plaintiff’s contentions that references to an ongoing investigation by the Inspector General implied criminality or that referring to him as the  “double dipping doctor” imputed embezzlement (as opposed to the undisputed fact that he was paid by the County while practicing elsewhere).  Indeed, the court recognized the plaintiff could not prove falsity in light of his fundamental admission to receiving the payments. Significantly, the court protected the right to publish condensed or even sensationalist headlines so long as the accompanying article, read in conjunction with the headline, is substantially true.

The court also rejected related tort claims, including that the defendants interfered with the plaintiff’s relationship with a job recruiter and invaded his privacy by publishing his compensation.  Ultimately, the court recognized that the public’s interest in overpayments to public employees outweighed plaintiff’s personal privacy.

While the court found these news reports were factually correct, sometimes published statements simply lack enough factual content to support a defamation claim. In an earlier defamation case in which FVLD represented a successful defendant, the Illinois Supreme Court explained that the distinction between fact and opinion depends on whether the statement is an “objectively verifiable assertion.”  See Imperial Apparel v. Cosmo’s Designer Direct, et al. Statements presented as opinions that contain or allude to false facts may rise to defamation, but the Court held that a retailer’s ad disparaging its competitor did not cross the line.

Interestingly, the United States Supreme Court recently extended an analogous defense to the securities laws by holding that an opinion expressed in a company’s registration statement did not constitute an untrue statement of material fact under the Securities and Exchange Act.  The Court found that a statement by pharmacy-services company Omnicare that “[w]e believe our contract arrangements with other healthcare providers, our pharmaceutical suppliers and our pharmacy practices are in compliance with applicable federal and state laws,” was not a “fact”, although it could become actionable if the registration statement omitted known facts contrary to those implied by management’s opinion.  Accordingly, we foresee that metaphysical debates over the opinion/fact dichotomy will increasingly permeate legal disputes.

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