Trout Point Lodge, Limited v. Doug Handshoe

Case: 13-60002 Document: 00512364014 Page: 1 Date Filed: 09/05/2013

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT United States Court of Appeals

Fifth Circuit

FILED

September 5, 2013

No. 13-60002 Lyle W. Cayce

Clerk

TROUT POINT LODGE, LIMITED, a Nova Scotia Limited Company,

VAUGHN PERRET, and CHARLES LEARY,

Plaintiffs-Appellants,

v.

DOUG K. HANDSHOE,

Defendant-Appellee.

Appeal from the United States District Court

for the Southern District of Mississippi

Before REAVLEY, ELROD, and GRAVES, Circuit Judges.

JENNIFER WALKER ELROD, Circuit Judge:

This case requires us to construe the newly-enacted Securing the

Protection of our Enduring and Established Constitutional Heritage Act

(the “SPEECH Act”), 28 U.S.C. § 4102. Appellants Trout Point Lodge, Ltd.

(“Trout Point Lodge”), Vaughn Perret (“Perret”), and Charles Leary (“Leary”)

(collectively, “Trout Point”) seek to enforce a defamation-based default judgment

that they obtained against Appellee Doug K. Handshoe (“Handshoe”) in Nova

Scotia, Canada. We agree with the district court that Trout Point cannot satisfy

its burden under the SPEECH Act to show that either (A) Nova Scotian law

provided at least as much protection for freedom of speech and press in

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Handshoe’s case as would be provided by the First Amendment and relevant

state law, or (B) Handshoe would have been found liable for defamation by a

Mississippi court. 28 U.S.C. § 4102. Accordingly, we AFFIRM.

I.

Handshoe, a Mississippi citizen, owns and operates Slabbed.org, a public-

affairs blog with the tagline “Alternative New Media for the Gulf South.” He

describes Slabbed.org as a “forum for local residents and other interested

parties to gather and share information regarding various political and legal

issues that impact the Gulf Coast.”

One of the blog’s focal points over the last few years has been Aaron

Broussard, the former Parish President of Jefferson Parish, Louisiana.1

Broussard was indicted in the United States District Court for the Eastern

District of Louisiana and pleaded guilty to charges of bribery and theft in

September 2012. Handshoe claims that Slabbed.org has been “instrumental”

in reporting the “ongoing corruption scandal, indictment, and guilty plea”

involving Broussard.

During his time in office, Broussard owned property in Nova Scotia. The

property sat on Trout Point Road, very close to Trout Point Lodge, a hotel that

Perret and Leary own and operate.2 In about January 2010, Handshoe began

publishing entries on Slabbed.org alleging a link between Broussard and Trout

Point Lodge, Perret, and Leary. At or near the same time, the Times-Picayune,

1

In addition to his blog, the record indicates that Handshoe engages in several other

forms of internet communication. For example, he maintains a Twitter account for

Slabbed.org and posts comments on several other web sites.

2

Daniel Abel, a non-party to this suit, is also a principal owner of Trout Point Lodge.

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a New Orleans newspaper, published an article indicating that Broussard had

an ownership interest in Trout Point Lodge and that Jefferson Parish

contractors had paid to rent the premises. The Times-Picayune retracted this

assertion and issued a correction after Perret and Leary alerted the paper to

purported “factual errors in [its] reporting.” It appears that the corporate

parent of the Times-Picayune also took the Slabbed.org blog offline after Perret

and Leary demanded this retraction. The district court determined that

Handshoe, “apparently in reaction to his blog being taken offline,” found

another web host for his site and “began an internet campaign to damage Perret

and Leary.”3 Specifically, Handshoe posted several updates regarding Trout

Point Lodge, Perret, and Leary, which the district court noted “can be

characterized as derogatory, mean spirited, sexist, and homophobic.”

Trout Point filed suit in the Supreme Court of Nova Scotia (the “Nova

Scotia Court”) on September 1, 2011, alleging defamation and related claims.

Trout Point’s First Amended Statement of Claim referred to publications on

Slabbed.org and related third-party web sites, which it asserted “were directly

defamatory and were also defamatory by both true and false innuendo in that

they would tend to lower the opinion or estimation of the plaintiffs in the eyes

of others who read the defamatory publications as a series, or alternatively, in

parts.” At the outset, the First Amended Statement of Claim asserted four

3

In April 2011, Handshoe wrote: “I think by now even our most casual readers know

our successor website, Slabbed.org was knocked offline courtesy of the Times Picayune’s

corporate parent Advance Publications and this started a chain of events that resulted in

Slabbed temporarily being moved back to WordPress. I’d submit this was a miscalculation of

gargantuan proportions for several reasons, which will become clear as I roll out this series

of posts on Aaron Broussard’s connections to Trout Point Lodge and its purported owners . . . .”

3

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primary sources of reputational harm: (1) content linking Trout Point with the

“Jefferson Parish Political Corruption Scandal,” the “sting” of which was that

“Trout Point Lodge and its owners were somehow involved in corruption, fraud,

money laundering, and ‘pay to play’ schemes involving Jefferson Parish

President Aaron Broussard and his administration”; (2) the “clear imputation”

that Trout Point “misled investors and court officials in litigation” with the

Atlantic Canada Opportunities Agency (“ACOA”), the “sting” of which was that

“Leary perjured himself, investors were misled, businesses nefariously changed

ownership, and that the ACOA litigation is ongoing, with the plaintiffs [losing]

every step of the way”; (3) the “imputation” that the “Trout Point Lodge

business is actively failing, near bankruptcy, having once relied on the good

graces of Aaron Broussard,” along with the “related imputation” that Perret and

Leary “have had a series of failed businesses that used other people’s money,

creating a pattern,” the “sting” of which was that Trout Points’s “13-year-old

business is on the verge of bankruptcy, that the plaintiffs will take the money

and run, and that the plaintiffs are either con artists or have no business

acumen whatsoever”; and (4) the “unabashed anti-gay, anti-homosexual rhetoric

and rants of the defendant,” used to “amplify and support the three other stings

listed above” and “support[] and shore[] up all the other defamatory

imputations.”

The First Amended Statement of Claim continued to describe several

specific blog posts on Slabbed.org, reciting much of the offensive language that

Handshoe used to refer to Perret and Leary. Some of the alleged defamatory

statements indicated Handshoe’s poor opinion of Perret and Leary, for example,

that they “had Champagne taste on a beer budget,” “work as a unit to grift their

4

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way through life,” and were either “first-class b-tches, common thugs, or plain

ol’ morons.”

In stating its defamation claim, Trout Point generically alleged that

Handshoe’s publications were false and malicious. It did not, however, make

any specific statements to refute the truth of the individual blog posts at issue.4

For example, the First Amended Statement of Claim included no information

regarding Trout Point’s actual connection to Broussard, if any, or its financial

solvency.

Trout Point purportedly served Handshoe with a notice of the First

Amended Statement of Claim in Mississippi, but Handshoe did not appear in

the Nova Scotia action. In December 2011, the Nova Scotia Court entered a

default judgment against Handshoe (the “Nova Scotia Judgment”). The Nova

Scotia Judgment provided: “In accordance with the Civil Procedure Rule

31.12(4), Douglas K. Handshoe is now taken to have admitted, for the purposes

of this action, the claims made against him in the Statement of Claim.”

The Nova Scotia Court set the matter for a hearing to assess damages.

At the hearing, Perret and Leary testified and offered additional evidence

regarding Handshoe’s allegedly defamatory statements and the damage that

4

Specifically, Trout Point made the blanket assertion that the Slabbed.org posts were

“replete with inaccuracies and an apparent inattention to basic ethics and duties to check facts

before publishing,” and that “the false statements set forth in the defendants’ publications

exposed the plaintiffs to public contempt, ridicule, aversion, and disgrace, and induced an evil

opinion of the plaintiffs in the minds of right-thinking persons and deprived the plaintiffs of

their friendly intercourse in and commerce with society.” The First Amended Statement of

Claim further alleged that Handshoe acted in a “reckless and malicious manner without due

consideration for the standards of information gathering an dissemination ordinarily followed

by responsible writers, editors, and publishers,” disregarding whether the published content

was “true or false.”

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they inflicted on Trout Point Lodge, and Perret and Leary individually.

Following the hearing, the court issued an oral decision summarizing the

relevant Canadian law, the content of the publications at issue, and the harm

that Trout Point purportedly suffered. Ultimately, the court awarded Trout

Point Lodge $75,000 in general damages, and Leary and Perret each $100,000

in general damages, $50,000 in aggravated damages, and $25,000 in punitive

damages. It also awarded $2,000 in costs.5

Trout Point enrolled the Nova Scotia Judgment in the Circuit Court of

Hancock County, Mississippi, in March 2012 in an attempt to collect its

damages award. Handshoe removed the action to the United States District

Court for the Southern District of Mississippi pursuant to the SPEECH Act.

The parties agreed that all issues were strictly legal in nature and, therefore,

elected to submit the matter to the district court on cross-motions for summary

judgment.

The district court entered summary judgment in Handshoe’s favor,

finding that Trout Point failed to meet its burden under the SPEECH Act to

show that “Handshoe was afforded at least as much protection for freedom of

5

In addition to monetary relief, the Nova Scotia Court entered a permanent injunction

against Handshoe, “restraining him from disseminating, posting on the Internet or publishing,

in any manner whatsoever, directly or indirectly, any statements about the plaintiffs, Trout

Point Lodge, Charles L. Leary, and [Vaughn] J. Perret.” The injunction included “publication,

circulation and promotion on the blog named Slabbed, and any similar or other publications.”

The court added, for “further particularity,” that Handshoe “shall not publish or cause to be

published or otherwise disseminate or distribute in any manner whatsoever . . . any

statements or other communications which refer to the plaintiffs by name, depiction or

description.” It ordered Handshoe to immediately remove any such material from publication.

Trout Point does not seek to enforce the injunction in this action. Rightly so, as the injunction

does not comport with even the most basic protections against prior restraints on speech in

the United States. See Neb. Press Ass’n v. Stuart, 427 U.S. 539, 559 (1976) (explaining the

heavy presumption that a prior restraint on speech is unconstitutional).

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speech in [the Nova Scotia] action as he would have in a domestic proceeding

or, alternatively, that Handshoe would have been found liable for defamation

by a domestic court.” Trout Point timely appealed.

II.

We review de novo a district court’s grant of summary judgment, applying

the same standard as the district court. Ford Motor Co. v. Tex. Dep’t of Transp.,

264 F.3d 493, 498 (5th Cir. 2001) (citation omitted). Summary judgment is

appropriate “if the movant shows that there is no genuine dispute as to any

material fact and the movant is entitled to judgment as a matter of law.” Fed.

R. Civ. P. 56(a). “A genuine issue of material fact exists when the evidence is

such that a reasonable jury could return a verdict for the non-moving party.”

Gates v. Tex. Dep’t of Protective & Regulatory Servs., 537 F.3d 404, 417 (5th Cir.

2008) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986)). “On

cross-motions for summary judgment, we review each party’s motion

independently, viewing the evidence and inferences in the light most favorable

to the nonmoving party.” Ford, 264 F.3d at 498 (citing Taylor v. Gregg, 36 F.3d

453, 455 (5th Cir. 1994)).

III.

This action depends on our interpretation of the SPEECH Act. The task

of statutory interpretation begins and, if possible, ends with the language of the

statute. In re Nowlin, 576 F.3d 258, 261–62 (5th Cir. 2009) (citing Lamie v.

U.S. Trustee, 540 U.S. 526, 534 (2004)). When the language is plain, we “must

enforce the statute’s plain meaning, unless absurd.” Id.; see also BedRoc Ltd.

v. United States, 541 U.S. 176, 183 (2004) (“The preeminent canon of statutory

interpretation requires [the court] to ‘presume that [the] legislature says in a

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statute what it means and means in a statute what it says there.’” (quoting

Conn. Nat’l Bank v. Germain, 503 U.S. 249, 253–54 (1992))). We determine

whether statutory language is plain or ambiguous “by reference to the language

itself, the specific context in which that language is used, and the broader

context of the statute as a whole.” Robinson v. Shell Oil Co., 519 U.S. 337, 341

(1997).

Many commentators have explained that Congress enacted the SPEECH

Act in 2010 in response to the perceived threat of “libel tourism,” a form of

international forum-shopping in which a plaintiff chooses to file a defamation

claim in a foreign jurisdiction with more favorable substantive law.6 In

enacting the statute, Congress found that “by seeking out foreign jurisdictions

that do not provide the full extent of free-speech protections to authors and

publishers that are available in the United States” and by suing United States

authors or publishers in those foreign jurisdictions, some persons were

“obstructing” the free expression rights of domestic authors and publishers and

“chilling” domestic citizens’ First Amendment interest in “receiving information

on matters of importance.”7 See Findings to Pub. L. No. 111-223, § 2, 124 Stat.

6

See, e.g., Lili Levi, The Problem of Trans-National Libel, 60 Am. J. Comp. L. 507, 508

n.1, 509–10 (2012); Andrew R. Klein, Some Thoughts on Libel Tourism, 38 Pepp. L. Rev. 375,

391 (2011); Doug Rendleman, Collecting a Libel Tourist’s Defamation Judgment?, 67 Wash.

& Lee L. Rev. 467, 468 (2010); Tara Sturtevant, Can the United States Talk the Talk & Walk

the Walk When it Comes to Libel Tourism: How the Freedom to Sue Abroad Can Kill the

Freedom of Speech at Home, 22 Pace Int’l L. Rev. 269, 269 (2010); Robert L. McFarland, Please

Do Not Publish This Article in England: A Jurisdictional Response to Libel Tourism, 79 Miss.

L.J. 617, 625 (2010); Sarah Staveley-O’Carroll, Libel Tourism Laws: Spoiling the Holiday and

Saving the First Amendment?, 4 N.Y.U. J. L. & Liberty 252, 264 (2009).

7

Before Congress enacted the SPEECH Act, some courts had refused to enforce foreign

defamation judgments on First Amendment public-policy grounds. See, e.g., Bachchan v. India

Abroad Publ’ns, Inc., 585 N.Y.S.2d 661, 665 (N.Y. Sup. Ct. 1992) (stating that the First

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2380, reproduced in the Notes section of 28 U.S.C. § 4101. It further found that

“[g]overnments and courts of foreign countries scattered around the world have

failed to curtail this practice . . . and foreign libel judgments inconsistent with

United States [F]irst [A]mendment protections are increasingly common.” Id.

With these findings in mind, the SPEECH Act provides that a domestic

court “shall not recognize or enforce a foreign judgment for defamation” unless

it satisfies both First Amendment and due process considerations. See 28

U.S.C. § 4102. We focus our inquiry on the statute’s “First Amendment

considerations” provision.

Under the “First Amendment considerations” provision of the SPEECH

Act, a foreign defamation judgment is unrecognizable and unenforceable unless

(A) the defamation law applied in the foreign court’s adjudication

provided at least as much protection for freedom of speech and

press in that case as would be provided by the [F]irst [A]mendment

to the Constitution of the United States and by the constitution and

law of the State in which the domestic court is located; or

(B) even if the defamation law applied in the foreign court’s

adjudication did not provide as much protection for freedom of

speech and press as the [F]irst [A]mendment to the Constitution of

the United States and the constitution and law of the State, the

party opposing recognition or enforcement of that foreign judgment

would have been found liable for defamation by a domestic court

applying the [F]irst [A]mendment to the Constitution of the United

Amendment “would be seriously jeopardized by entry of [a] foreign libel judgment granted

pursuant to standards deemed appropriate in England but considered antithetical to the

protections afforded [to] the press by the U.S. Constitution”); Telnikoff v. Matusevitch, 702

A.2d 230, 251 (Md. 1997) (“[A]t the heart of the First Amendment . . . is the recognition of the

fundamental importance of the free flow of ideas and opinions on matters of public interest

and concern. The importance of that free flow of ideas and opinions on matters of public

concern precludes Maryland recognition of Telnikoff’s English libel judgment.” (internal

quotation marks and citation omitted)).

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States and the constitution and law of the State in which the

domestic court is located.

§ 4102(a)(1).

Although there is no case law directly interpreting these two prongs, the

plain language of the statute suggests two distinct options for a party seeking

to enforce a foreign defamation judgment: one focused on the law applied by

the foreign forum and one focused on the facts the parties presented in the

foreign proceeding.8 Put differently, a party may enforce a foreign defamation

judgment in a domestic court if either (A) the law of the foreign forum, as

applied in the foreign proceeding, provides free-speech protection that is

coextensive with relevant domestic law,9 or (B) the facts, as proven in the

foreign proceeding, are sufficient to establish a defamation claim under

domestic law. We address each prong in turn.

A.

8

When construing a statute, a court should give effect, if possible, to every word and

every provision Congress used. See, e.g., Duncan v. Walker, 533 U.S. 167, 174 (2001) (“[A]

statute ought, upon the whole, to be so construed that, if it can be prevented, no clause,

sentence, or word shall be superfluous, void, or insignificant” (internal quotation marks

omitted)). Also, if possible, the court interprets provisions of a statute in a manner that

renders them compatible, not contradictory. See FDA v. Brown & Williamson Tobacco Corp.,

529 U.S. 120, 132 (2000) (“A court must . . . interpret the statute as a symmetrical and

coherent regulatory scheme, and fit, if possible, all parts into an harmonious whole.” (internal

quotation marks and citations omitted)).

9

The statute does not require that all of a foreign forum’s law be coextensive with the

First Amendment, but rather only the law applied “in that case.” § 4102(a)(1)(A). For

example, presume that the free speech jurisprudence of Country X is identical to domestic law

in every respect except as applied to public figures. Applying prong one of the “First

Amendment considerations” inquiry, a defamation judgment awarded against a non-public

figure in Country X would be enforceable in the United States, as the law applied to the case

was coextensive with the First Amendment. It would not be enforceable, however—at least

not on the basis of § 4102(a)(1)(A)—against a public figure.

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There is no meaningful dispute that the law applied by the Nova Scotia

Court provides less protection of speech and press than First Amendment and

Mississippi law. Canadian defamation law is derivative of the defamation law

of the United Kingdom, which has long been substantially less protective of free

speech. As Justice Black noted in Bridges v. California:

No purpose in ratifying the Bill of Rights was clearer than that of

securing for the people of the United States much greater freedom

of religion, expression, assembly, and petition than the people of

Great Britain had ever enjoyed. . . . Ratified as it was while the

memory of many oppressive English restrictions on the enumerated

liberties was still fresh, the First Amendment cannot reasonably be

taken as approving prevalent English practices. On the contrary,

the only conclusion supported by history is that the unqualified

prohibitions laid down by the framers were intended to give to

liberty of the press, as to the other liberties, the broadest scope that

could be countenanced in an orderly society.

314 U.S. 252, 265 (1941). Thus, while Canadian law generally comports with

England’s traditional common-law approach, the United States has parted ways

with its northern neighbor in matters of free speech.10

10

Although English common law in the colonial era prohibited prior restraints on

speech, a publisher was subject to punishment for “improper, mischievous, or illegal”

statements, regardless of their truth. See Rodney A. Smolla, Smolla & Nimmer on Freedom

of Speech § 1.5 (citation omitted); see also Van Vechten Veeder, The History and Theory of the

Law of Defamation, 3 Colum. L. Rev. 546 (1903) (offering an extensive overview of early

defamation law in England). Although both English and Canadian defamation law have

evolved somewhat, Canadian law generally aligns with the English approach. See Rodney A.

Smolla, Law of Defamation § 1:9.75 (2013). The United States’s First Amendment law does

not. See Chaplinsky v. New Hampshire, 315 U.S. 568, n.3 (1942) (“The protection of the First

Amendment, mirrored in the Fourteenth, is not limited to the Blackstonian idea that freedom

of the press means only freedom from restraint prior to publication.”); see also Bachchan, 585

N.Y.S.2d at 665 (holding that an English libel judgment was unenforceable because it was

“antithetical to the protections afforded the press by the U.S. Constitution”); Telnikoff, 877

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The most critical legal difference here is that a Canadian plaintiff—unlike

a plaintiff subject to First Amendment and Mississippi state law—need not

prove falsity as an element of its prima facie defamation claim. Rather, in

Canada, truth is a defense that a defamation defendant may raise and, if so,

must prove. Compare Grant v. Torstar, (2009) 3 S.C.R. 640, para. 28–32 (Can.)

(holding that “falsity and damages are presumed” if a plaintiff proves the

elements of a prima facie defamation case), with Blake v. Gannet Co., 529 So.

2d 595, 602 (Miss. 1988) (holding that a defamation plaintiff bears the burden

of proving falsity).11 See Eugenie Brouillet, Free Speech, Reputation, and the

Canadian Balance, 50 N.Y.L. Sch. L. Rev. 33, 52 (2006) (“In the Canadian

common law, the courts have chosen a low threshold for the establishment by

the plaintiff of a prima facie cause of action in defamation, offering considerable

protection to his right to reputation. The balance in favor of free speech is

restored by a number of defenses, but the burden of proof rests on the

F. Supp. 1 (holding that an English libel judgment was not enforceable because it was

“contrary to U.S. libel standards”).

11

Canadian law is also less protective than domestic law regarding the standard of

proof that applies to statements about public figures. Specifically, domestic law requires a

plaintiff to prove, by clear and convincing evidence, that the alleged defamers acted with

actual malice; Canadian law does not. Compare Gannett Co., 529 So. 2d at 600, with Hill v.

Church of Scientology of Toronto, (1995) 2 S.C.R. 1130 (Can.).

Handshoe asserts that this legal difference is important here because Trout Point is

a vortex public figure and, therefore, Trout Point must meet the heightened “actual malice”

standard. See Eason v. Fed. Broad. Co., 697 So. 2d 435, 438 (Miss. 1997) (defining a vortex

public figure as “one who is otherwise a private citizen but who thrusts himself or becomes

thrust into the vortex of a matter of legitimate public interest” (citation omitted)). We need

not decide this issue because Trout Point failed to demonstrate that it proved falsity in the

Nova Scotia proceeding, the more basic requirement to uphold the Nova Scotia Judgment.

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defendant. In comparison, . . . American laws both seem to show a certain bias

towards freedom of expression and freedom of the press; the burden of proof of

the wrongful nature of the injury to reputation lies in both cases with the

person defamed.” (footnote omitted)). Thus, Trout Point cannot satisfy the first

prong of the First-Amendment considerations inquiry; that is, the law applied

in the Nova Scotia proceeding did not provide at least as much protection for

freedom of speech and press as Handshoe would have received under domestic

law.

B.

The more challenging question in this case arises from the statute’s

second prong: whether a Mississippi court presented with the same facts and

circumstances would have found Handshoe liable for defamation. The answer

depends on whether the facts Trout Point proved in the Nova Scotia proceeding

were sufficient to demonstrate falsity under the United States Constitution and

Mississippi state law. In Mississippi, “[t]he threshold question in a defamation

suit is whether the published statements are false. Truth is a complete defense

to an action for libel. The plaintiff bears the burden to prove such falsity.”

Armistead v. Minor, 815 So. 2d 1189, 1194 (Miss. 2002) (quotations and

citations omitted). Significantly, statements that are “substantially true” are

not defamatory in Mississippi. Id. “As the United States Supreme Court has

noted, minor inaccuracies do not amount to falsity so long as the substance, the

gist, the sting, of the libelous charge be justified.” Id. (internal quotation marks

omitted) (quoting Masson v. New Yorker Magazine, Inc., 501 U.S 496, 517

(1991)).

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Applying First Amendment and Mississippi law, the district court

concluded that Trout Point failed to prove falsity in the Nova Scotia proceeding:

[H]ad the Plaintiffs filed their defamation action in Mississippi,

they would be required to prove falsity before they would be

entitled to damages. Handshoe has not published any specific

allegations about what role he believes Leary and Perret played in

Broussard’s crimes. It is possible this is because Handshoe does not

have any information indicating Plaintiffs were involved in

Broussard’s criminal activity. Handshoe, has, however, made

numerous more generalized allegations about connections between

Leary, Perret, Abel, and Broussard. Some of these statements

seem to be based in fact; others appear[] to be conspiracy theories

that may or may not be substantiated. As noted above, under the

law of Mississippi, even those statements that are “substantially

true” are protected speech. And this Court cannot determine, based

on the record before it, the truth or falsity of Handshoe’s claims

that the Plaintiffs are connected to Aaron Broussard’s criminal

activities. Nor should it enforce a judgment in an action that, if

brought in this Court, would depend upon the plaintiff’s proof that

the statements at issue are false.

On appeal, Trout Point criticizes the district court’s reasoning because it “hinges

entirely upon the faulty premise that [Trout Point] failed to prove the falsity of

the publications at issue.”12 Trout Point relies on two key sources to establish

12

Trout Point asserts that the district court may have relied on sources outside of the

summary judgment record to reach its conclusion. The district court did refer to the number

of posts regarding Trout Point that appeared on Slabbed.org in 2012 and a separately-filed

case pending in the Eastern District of Louisiana, in which the plaintiffs alleged a connection

between Trout Point and Broussard. These are matters about which the court was entitled

to take judicial notice. See, e.g., Kitty Hawk Aircargo, Inc. v. Chao., 418 F.3d 453, 457 (5th Cir.

2005) (taking judicial notice of approval by the National Mediation Board published on the

agency’s website); Coleman v. Dretke, 409 F.3d 665, 667 (5th Cir. 2005) (taking judicial notice

of Texas agency’s website). Moreover, careful review of the district court opinion demonstrates

that it did not use these sources to reach any conclusion. Thus, we reject Trout Point’s

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the falsity of Handshoe’s statements: (1) the allegations in Trout Point’s First

Amended Statement of Claim, deemed admitted by the Nova Scotia Judgment,

and (2) the Nova Scotia Court’s purported factual findings made in the course

of awarding damages. In our view, neither is sufficient to establish that a

Mississippi court confronted with the same facts and circumstances would have

found Handshoe liable for defamation. We turn first to the allegations deemed

admitted by Nova Scotia Judgment.

1.

In Mississippi, a plaintiff may obtain a default judgment when the

defendant “has failed to plead or otherwise defend” the case. Miss. R. Civ. P.

55(a); see also Fed. R. Civ. P. 55(a). But a default judgment is not appropriate

if the plaintiff’s allegations are insufficient to state a claim. DynaSteel Corp. v.

Aztec Indus., Inc., 611 So. 2d 977, 988 (Miss. 1992) (reversing a punitive

damages award pursuant to a default judgment where the plaintiff’s “blanket

assertions” were insufficient to support the relief awarded); see Lewis v. Lynn,

236 F.3d 766, 767 (5th Cir. 2001) (upholding district court’s denial of entry of

default judgment because, even if true, the plaintiff’s allegations did not support

a finding of liability).13

If a court does award a default judgment, it is “unassailable on the merits

argument.

13

See also Waldron v. Milana, No. 5:10-CV-0065 GTS/DEP, 2013 WL 2445047, at *5

(N.D.N.Y. June 5, 2013) (declining to award a default judgment on a defamation claim where

the facts alleged were “not sufficient to state a claim” because the alleged injury occurred

outside of the limitations period).

15

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No. 13-60002

but only so far as it is supported by well-pleaded allegations, assumed to be true.”

Leach v. Shelter Ins. Co., 909 So. 2d 1283, 1287–88 (Miss. Ct. App. 2005)

(emphasis added) (citing Nishimatsu Constr. Co., Ltd. v. Hous. Nat’l Bank, 515

F.2d 1200, 1206 (5th Cir. 1975)).14 “Allegations that are in effect conclusions of

law are not considered well-pleaded allegations . . . and a defendant will not be

held to have admitted such averments on default.” DynaSteel, 611 So. 2d at 985.

Thus, a default judgment does not equate to “a general admission or an absolute

confession.” Leach, 909 So. 2d at 1287–88.15

Applying these principles here, Trout Point failed to show that a state or

federal court in Mississippi faced with the First Amended Statement of Claim

would have awarded a default judgment in its favor. Although Handshoe’s

failure to answer or otherwise defend the case satisfies the basic prerequisite for

14

These cases apply the comment to Mississippi Rule of Civil Procedure 55, which

states that, upon entry of default, a “defendant has no further standing to contest the factual

allegations of [a] plaintiff’s claim for relief.” Miss. R. Civ. P. 55 cmt.; Hankins v. Md. Cas.

Co./Zurich Am. Ins. Co., 101 So. 3d 645, 653 (Miss. 2012) (relying on rule and comment to

conclude that factual allegations were “uncontested” upon entry of a default judgment).

15

Mississippi courts treat a default judgment “as a conclusive and final adjudication

of the issues necessary to justify the relief awarded.” Miss. R. Civ. P. 55 cmt.; see Hogan v.

Buckingham ex rel. Buckingham, 730 So. 2d 15, 20 (Miss. 1998) (relying on rule and comment);

Chassaniol v. Bank of Kilmichael, 626 So. 2d 127, 132 (Miss. 1993) (same). By analogy to res

judicata principles, an issue is necessary to justify the relief awarded if the judgment “‘could

not have been rendered without deciding the matter.’” See Miss. Emp. Sec. Comm’n v. Phila.

Mun. Separate Sch. Dist. of Neshoba Cnty., 437 So. 2d 388, 401 (Miss. 1983) (quoting Haring

v. Prosise, 462 U.S. 306, 315 (1983)); see also Franklin Collection Serv., Inc. v. Stewart, 863 So.

2d 925, 929 (Miss. 2003) (applying res judicata principles to a default judgment). Here,

because falsity was not “necessary to justify” the Nova Scotia Judgment, it is not a “conclusive

and final adjudication” of that issue.

16

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default,16 the allegations in the First Amended Statement of Claim—particularly

those regarding the falsity of Handshoe’s statements—are not particularly well-

pleaded for at least three reasons.

First, the First Amended Statement of Claim is unclear regarding whether

all, or just some, of Handshoe’s statements are false. At the outset, it indicates

that Handshoe’s statements were “defamatory by both true and false innuendo.”

(emphasis added). In explaining the particular statements at issue, the First

Amended Statement of Claim repeatedly emphasizes that the statements were

“defamatory,” in that they would tend to lower one’s opinion of Trout Point.17

But it specifically alleges falsity with respect to only a limited few of the

statements, and offers no facts to rebut or undermine most of Handshoe’s

statements.18 Although Trout Point includes some generic allegations of falsity

16

Am. States Ins. Co. v. Rogillio, 10 So. 3d 463, 467 (Miss. 2009) (affirming a district

court’s default judgment after a defendant failed to answer or otherwise defend an action).

17

Trout Point argues that Handshoe’s statements are defamatory per se. In

Mississippi, there are five categories of defamation per se:

(1) Words imputing the guilt or commission of some criminal offense involving

moral turpitude and infamous punishment[;] (2) Words imputing the existence

of some contagious disease[;] (3) Words imputing unfitness in an officer who

holds an office of profit or emolument, either in respect of morals or inability to

discharge the duties thereof[;] (4) Words imputing a want of integrity or

capacity, whether mental or pecuniary, in the conduct of a profession, trade or

business; and in this and some other jurisdictions[; and] (5) words imputing to

a female a want of chastity.

Speed v. Scott, 787 So. 2d 626, 632 (Miss. 2001) (quoting W.T. Farley, Inc. v. Bufkin, 132 So.

86, 87 (1931)). Even assuming that some of the alleged statements are defamatory per se, that

simply means that Trout Point need not establish special damages as a prerequisite to

recovery. Id. It does not eliminate the falsity requirement. Id.

18

Compare, for example, paragraph 54 of the First Amended Statement of Claim with

paragraph 100. Paragraph 54 alleges: “Publishing that Trout Point Lodge was not doing well

17

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towards the end of its defamation claim—specifically in paragraphs 113, 115,

116, and 118—this catch-all language offers little guidance regarding whether

some or all of the statements are allegedly false, especially in light of the First

Amended Statement of Claim’s earlier reference to “true innuendo” as a source

of harm.19

For this reason, Trout Point cannot show that a state or federal court in

Mississippi would grant a default judgment based on the First Amended

Statement of Claim. Indeed, a Mississippi court has affirmed dismissal where

a complaint failed to specify which of a series of statements constituted slander.

Chalk v. Bertholf, 980 So. 2d 290, 298–99 (Miss. Ct. App. 2007) (emphasis added)

(“Because the complaint did not contain any information as to the substance or

effect of the statements with which the appellants allege they were slandered,

Bertholf and Bryant were left with approximately two hours worth of radio air

time to analyze and attempt to guess which parts of the radio show the

appellants alleged slanderous in order to begin their defense.”). Similarly, here,

a Mississippi court could deny a default judgment because the First Amended

Statement of Claim does not clearly and specifically allege that each of the

financially is defamatory of the corporate plaintiff. Public reports of poor business

performance would tend to lower the esteem of the corporate plaintiff in the eyes of a

reasonable person.” Trout Point does not specifically allege that the statement is false, nor

does it claim that, for example, its financial performance had not declined. Paragraph 100,

on the other hand, states: “Defendant Handshoe states that the Plaintiff Trout Point Lodge

advertises heavily on TripAdvisor. This is defamatory, and untrue, designed to make it appear

as though plaintiff is in dire economic straights and has resorted to drastic measures to

advertise.” (emphasis added).

19

Trout Point also makes some generic allegations that the statements were false in

raising its related claims, for example, in paragraphs 130 and 143.

18

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relevant statements is false.

Second, some of the publications at issue are statements of unverifiable

opinion. For example, Trout Point based its defamation claim, in part, on the

allegation that Handshoe used “unabashed anti-gay, anti-homosexual rhetoric

and rants of the defendants” intended to “engender[] discrimination and hatred.”

The First Amended Statement of Claim complains that Handshoe referred to

Perret and Leary as “‘girls,’ ‘blow buddies,’ ‘queer f-g scum,’ and ‘b-tches,’

published more than one reference to a gay-themed movie, and posted video clips

of movies and music videos commonly associated with gay stereotypes.” While

less grotesque, many of the other statements at issue also involve expressions

of opinion; for example, that Trout Point had “Champagne taste on a beer

budget,” that Perret and Leary were a “litigious bunch,” and that the Nova

Scotia action was “foolish and frivolous.”

Though offensive, these statements generally are not actionable in

Mississippi. The Mississippi Supreme Court has recognized that “name calling

and verbal abuse are to be taken as statements of opinion, not fact, and therefore

will not give rise to an action for libel.” Johnson v. Delta-Democrat Pub. Co., 531

So. 2d 811, 814 (Miss. 1988) (collecting cases). “[N]othing in life or our law

guarantees a person immunity from occasional sharp criticism, nor should it.

. . . [N]o person avoids a few linguistic slings and arrows, many demonstrably

unfair.” Ferguson v. Watkins, 448 So. 2d 271, 276 (Miss. 1984). Thus,

statements of opinion are actionable “only if they clearly and unmistakably

imply the allegation of undisclosed false and defamatory facts as the basis for

the opinion.” Id.; see also Tex. Beef Grp. v. Winfrey, 201 F.3d 680, 688 (5th Cir.

19

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2000) (“[O]pinions, though strongly stated, . . . based on truthful established fact,

. . . are not actionable under the First Amendment.”); Peter Scalamandre &

Sons, Inc. v. Kaufman, 113 F.3d 556, 564 (5th Cir. 1997) (“Defamation law

should not be used as a threat to force individuals to muzzle their truthful,

reasonable opinions and beliefs.”).20 Here, although some of Handshoe’s opinions

certainly imply facts (e.g., that Trout Point was involved in the Aaron Broussard

scandal), his bare “linguistic slings and arrows” do not. Indeed, counsel for

Trout Point conceded at oral argument that Handshoe’s offensive insults and

opinion statements would not be actionable in Mississippi. Thus, Trout Point

cannot show that a state or federal court in Mississippi would grant a default

judgment on these opinion-based allegations.

Finally, a state or federal court in Mississippi could view some of the

allegations in the First Amended Statement of Claim as legal conclusions, as

opposed to well-pleaded facts. The Mississippi Supreme Court’s decision in

DynaSteel illustrates this point. 611 So. 2d at 985. There, the court held that

punitive damages were not recoverable on a default judgment because the

allegations in the complaint, taken as true, were insufficient to support a finding

of bad faith. Id. It stated:

Allegations that are in effect conclusions of law are not considered

well-pleaded allegations, however, and a defendant will not be held

to have admitted such averments on default. Aztec alleged in its

20

Mere labeling of a statement as a “fact” or an “opinion” is not dispositive in

determining its actionability. Roussel v. Robbins, 688 So. 2d 714, 723 (Miss. 1996). “A

statement, even if phrased as an opinion, will not enjoy constitutional protection if the court

concludes that its substance or gist could reasonably be interpreted as declaring or implying

an assertion of fact.” Id. (quoting Keohane v. Wilkerson, 859 P.2d 291, 296 (Colo. 1993)).

20

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complaint that DynaSteel obstinately and willfully refused to pay

Aztec and that such conduct constituted gross bad faith. Given the

legal significance attached to the phrases “obstinate and willful

refusal to pay” and “bad faith refusal to pay”, inquiries into the

truth of assertions are not purely factual but at least mixed

questions of law and fact. All we can take as admitted from these

blanket assertions is that DynaSteel did not pay Aztec. The issue

of whether DynaSteel’s failure to pay constituted such bad faith as

to rise to the level of an independent tort is not one that can be

taken as admitted but instead must be decided by the court.

Id. (internal citations omitted). Here, Trout Point’s allegations of falsity are

unaccompanied by any facts that contradict or otherwise undermine the

allegedly defamatory statements.21 Given the legal significance attached to the

word “falsity,” Mississippi law requires Trout Point to do more than merely cry

“false” to prove its claim.22 Therefore, even deemed admitted, the allegations

likely would have been insufficient—without subsequent evidence, analysis,

and fact-finding—to satisfy Trout Point’s burden in a Mississippi court.

For these three reasons, Trout Point failed to show that the allegations

in the First Amended Statement of Claim, standing alone and taken as true,

would be sufficient to support a defamation claim in a Mississippi court. Trout

21

A federal district court in Maryland applying analogous state law recently awarded

a default judgment in a defamation case, but only after determining that “the complaint not

only alleges that these statements from the Article are ‘untrue,’ it also sets forth a variety of

facts that, when taken in the light most favorable to Plaintiffs, tend to show that GAP is a

legitimate, government-approved program. Falsity of the above statements is therefore

properly alleged.” Russell v. Railey, No. DKC-08-2468, 2012 WL 1190972, at *4 (D. Md. Apr.

9, 2012).

22

Because statements that are “substantially true” are not actionable in Mississippi,

whether a statement is false as a technical matter may differ from whether it is “false” as a

legal matter.

21

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Point asserts a second ground to establish falsity, however: the Nova Scotia

Court’s purported factual findings that Handshoe’s statements were false and

malicious. We turn next to that issue.

2.

As a threshold matter, the plain language of the SPEECH Act suggests

that the purported “factual findings”23 of the Nova Scotia Court are irrelevant

to the enforceability inquiry. The critical question is not whether the Nova

Scotia Court found falsity, but rather whether a state or federal court in

Mississippi faced with the allegations in the First Amended Statement of Claim

would have done so. See § 4102(a)(1)(B) (requiring the party seeking to enforce

the foreign defamation judgment to establish that the defendant “would have

been found liable for defamation by a domestic court applying the [F]irst

[A]mendment to the Constitution of the United States and the constitution and

law of the State in which the domestic court is located”). Moreover, the Nova

Scotia Court issued its factual findings at a damages hearing that occurred after

it had already granted default judgment in favor of Trout Point.

But even assuming, arguendo, that the Nova Scotia Court’s factual

findings have some bearing on the enforceability inquiry, they are insufficient

to demonstrate falsity. As the district court summarized, the Nova Scotia

Court’s oral decision “does not contain specific findings of fact with respect to

the falsity of Handshoe’s statements.” Indeed, despite repeated entreaties at

23

The Nova Scotia Court did not issue formal findings of fact. Rather, it commented

on the evidence in the course of issuing an oral opinion awarding Trout Point compensatory,

aggravated, and punitive damages. We assume arguendo that the court’s comments constitute

factual findings.

22

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oral argument, Trout Point could not identify a single specific allegation in the

Statement of Claim that the Nova Scotia Court found was actually false.

Rather, the Nova Scotia Court noted generically that some statements were

“erroneous,” but remained silent as to the truth of others.24 The only statement

with arguably global reach is that Handshoe’s conduct was “outrageous” in the

“face of true facts” about Trout Point. This simply is not direct enough to

constitute a meaningful factual finding that all of Handshoe’s statements were

false.25

In analyzing the Nova Scotia Court’s oral opinion and purported factual

findings, it is important to note that the court based its damages award on

allegations and evidence that a Mississippi court would not have credited. For

one, the Nova Scotia Court considered numerous statements that did not

appear in the First Amended Statement of Claim, many of which occurred after

24

Compare, e.g., “The plaintiffs were erroneously identified as being connected with Mr.

Broussard in a business venture and Mr. Broussard was named in error as owning Trout Point

Lodge,” with “The defamation continued with statements that Trout Point Lodge was losing

business or going bankrupt because of the investigation of Mr. Broussard and his inability to

continue to support it. . . . The statements also contained anti-gay rhetoric and homophobic

comments.”

25

Trout Point emphasized that certain evidence, specifically, affidavits and testimony

by Perret and Leary, demonstrated the falsity of Handshoe’s statements. But this evidence,

like the purported factual findings, was admitted at the damages hearing after the Nova Scotia

Court had already issued the Nova Scotia Judgment. Even if we consider this evidence, it still

does not establish that all of the alleged statements were, in fact, false. Moreover, it refers to

numerous statements of opinion and publications that post-dated the First Amended

Statement of Claim. Thus, for essentially the same reasons discussed above, we hold that the

evidence Trout Point cites is insufficient to show that Trout Point would have been entitled

to relief in a Mississippi court.

23

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Trout Point filed its case.26 In Mississippi, a “default judgment may not extend

to matters outside the issues raised by the pleadings or beyond the scope of the

relief demanded.”27 Miss. R. Civ. P. 54(c) cmt. Indeed, Trout Point itself

acknowledges that “each communication of the same defamatory matter by the

same defamer, whether to a new person or to the same person, is a separate and

distinct publication, for which a separate cause of action arises.” Thus, a

Mississippi court would not grant relief based on statements that did not appear

in the plaintiffs’ complaint. Moreover, the Nova Scotia Court awarded damages

based on the name-calling and verbal abuse discussed above, which is not

actionable in Mississippi. In sum, much of the conduct that underlies the Nova

Scotia Court’s oral opinion and damages award would not give rise to relief in

Mississippi.

IV.

Before we conclude, we note that the SPEECH Act also contains a

“jurisdictional considerations” provision, which requires “the party seeking

recognition or enforcement of the foreign judgment” to show that “the exercise

of personal jurisdiction by the foreign court comported with the due process

requirements that are imposed on domestic courts by the Constitution of the

United States.” § 4102(b).

26

For example, the Nova Scotia Court noted in its oral opinion that “further defamatory

comments were made earlier this month, when the Notice of Assessment of Damages was

served on [Handshoe].”

27

For this reason, we do not look to the content of the publications (beyond what is

specifically alleged in the First Amended Statement of Claim) to determine whether a state

or federal court in Mississippi would have found Handshoe liable for defamation.

24

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Handshoe asserts that Trout Point also failed to satisfy this provision

because the Nova Scotia Court’s exercise of personal jurisdiction over him did

not comport with our nation’s due process requirements. He makes a strong

argument that Nova Scotia was not the “focal point” of the statements that

preceded the First Amended Statement of Claim. Cf. Calder v. Jones, 465 U.S.

783, 788–90 (1984). But we, like the district court, need not resolve whether

Handshoe had the requisite minimum contacts with Nova Scotia at the time that

Trout Point filed suit, as Trout Point’s failure to satisfy the First Amendment

considerations provision of the SPEECH Act is fatal to its claim.

V.

For the above-stated reasons, Trout Point failed to satisfy its burden to

show that either (1) Canadian law offers as much free speech protection as the

United States Constitution and Mississippi state law, or (2) a Mississippi court

presented with the same facts and circumstances would have found Handshoe

liable for defamation. Accordingly, we hold that the Nova Scotia Judgment is

unrecognizable and unenforceable. We AFFIRM.

25