Jankovic v. International Crisis Group

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 16, 2009 Decided January 29, 2010

No. 09-7044

MILAN JANKOVIC, ALSO KNOWN AS PHILIP ZEPTER,

APPELLANT

v.

INTERNATIONAL CRISIS GROUP, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:04-cv-01198-RBW)

William T. O’Brien argued the cause for appellant. With

him on the briefs were Lisa M. Norrett, John W. Lomas Jr.,

and Malcolm I. Lewin.

Amy L. Neuhardt argued the cause for appellee

International Crisis Group. With her on the brief was

Jonathan L. Greenblatt. Neil H. Koslowe entered an

appearance.

Before: GINSBURG and GRIFFITH, Circuit Judges, and

WILLIAMS, Senior Circuit Judge.

2

Opinion for the Court filed by Senior Circuit Judge

WILLIAMS.

WILLIAMS, Senior Circuit Judge: Milan Jankovic, also

known as Philip Zepter, sued International Crisis Group and

additional unnamed defendants Does 1 through 10 (“ICG,” for

the institution or for all defendants, as appropriate) for

defamation, false light and intentional interference with

business expectancy. The district court issued an order

granting ICG’s motion to dismiss (the “Order”), J.A. 1221-28

and Jankovic appeals. We reverse in part, affirm in part, and

remand for additional proceedings.

* * *

Jankovic is the founder of Zepter Group, which provides

“a wide range of products and services, including banking,

insurance, telecommunications, and retail sales of consumer

products.” J.A. 20. ICG is a non-profit organization that

describes itself as "working through field-based analysis and

high-level advocacy to prevent and resolve deadly conflict.”

International Crisis Group, Serbian Reform Stalls Again, ICG

Balkans Report No. 145 at 30 (July 17, 2003) (“Report 145”)

J.A. 82-124. ICG’s “reports and briefing papers are

distributed widely by email and printed copy to officials in

foreign ministries and international organisations and made

generally available at the same time via the organisation’s

Internet site.” Id. The language at issue in this case appears in

ICG’s Report 145, which addresses the deceleration of

Serbian reforms—reforms initially spurred by the

assassination of Premier Zoran Djindjic. We excerpt it below,

numbering the sentences to assist discussion:

3

[1] The unwillingness to continue the crackdown

reflects the power of the Milosevic-era financial

structures that – with the rigid oversight once provided by

the dictator removed – have transformed themselves into

a new Serbian oligarchy that finances many of the leading

political parties and has tremendous influence over

government decisions. [2] Some of the companies were

originally formed as fronts by State Security or Army

Counterintelligence (KOS), while others operated at the

direct pleasure of the ruling couple. [3] Under

Milosevic, many of these companies profited from special

informal monopolies, as well as the use of privileged

exchange rates. [4] In return, many of them financed the

regime and its parallel structures.

[5] Some of the individuals and companies are well

known to average Serbs: Delta Holding (Milorad

Miskovic), Karic (Bogoljub Karic), Pink (Zeljko

Mitrovic), Zepter (Milan Jankovic, aka Filip Zepter),

Kapital Banka (Djordje Nicovic), Toza Markovic (Dmitar

Segrt), Progres (Mirko Marjanovic), Simpo (Dragan

Tomic), Komercijalna Banka (Ljubomir Mihajlovic),

Novokabel (Djordje Siradovic), Stanko Subotic, Dibek

(Milan Beko), ABC (Radisav Rodic), Hemofarm

(Miodrag Babic), AIK Banka Nis (Ljubisa Jovanovic)

and Dijamant (Savo Knezevic) are but some of the most

prominent. [6] Because of the support they gave to

Milosevic and the parallel structures that characterised his

regime, many of these individuals or companies have at

one time or another been on EU visa ban lists, while

others have had their assets frozen in Europe or the US.80

[7] In the popular mind, they and their companies

were associated with the Milosevic regime and benefited

4

from it directly. [8] The DOS campaign platform in

September 2000 promised that crony companies and their

owners would be forced to answer for past misdeeds. [9]

Few of the Milosevic crony companies have been

subjected to legal action, however. [10] The

enforcement of the “extra-profit” law is often viewed as

selective and there have been only a handful of instances

in which back taxes, perhaps 65 million Euros worth,

have been collected.81 [11] Most disturbing is the

public’s perception that – at a time when the economy is

worsening – these companies’ positions of power,

influence and access to public resources seem to have

changed very little.

80

http://europa.eu.int/index.eu.htm#;

http://www.treas.gov/offices/eotffc/ofac/sdn/index.html

81

ICG interview with Finance Minister Djelic.

Report 145 at 17.

Plaintiff initially alleged that the above passage (as well

as two others in Report 145) contained defamatory statements,

placed him in a false light, and intentionally interfered with

his business expectancies. Jankovic v. Int’l Crisis Group, 429

F. Supp. 2d 165, 168-69 (D.D.C. 2006). The district court

dismissed these claims, characterizing the passages as “not

capable of defamatory meaning” and ruling that, as a result,

they could not support either of the other claims. Id. at 179.

In Jankovic v. Int’l Crisis Group, 494 F.3d 1080 (D.C. Cir.

2007), we reversed the district court’s dismissal in part,

finding that the passage excerpted above was susceptible of a

defamatory reading. Id. at 1091.

5

Specifically, following the sequence laid out in Moldea v.

New York Times Co. 15 F.3d 1137, 1142 (D.C. Cir. 1994)

(Moldea I), we first found that, despite “numerous qualifiers,”

a reasonable reader could construe the passage as asserting

“that Philip Zepter, personally, was a ‘crony’ of Milosevic

who supported the regime in exchange for favorable

treatment” and “that Philip Zepter was actively in alliance

with Milosevic and his regime.” Jankovic, 494 F.3d at 1091.

The understanding that Report 145 accused Jankovic of

“supporting” the Milosevic regime clearly derives from

sentences 5 and 6 of the passage. Sentence 5 lists “Zepter

(Milan Jankovic, aka Filip Zepter)” as belonging to the new

Serbian oligarchy described in the first sentence. Sentence 6

imputes support of Milosevic (“and the parallel structures that

characterised his regime”) to those named in sentence 5. In

addition, sentences 1 through 4 implied the quid pro quo

feature that we identified (“in exchange for favorable

treatment”).

We note that sentences 2, 3, 4 and 6 use the pronouns

“some” or “many,” leaving open the possibility that readers of

Report 145 might not suppose that the companies and

individuals named in sentence 5 were generally guilty of the

conduct charged in sentences 2, 3, 4 and 6. But the prior

panel, though recognizing that the passage contained a

number of “qualifiers,” Jankovic, 494 F.3d at 1091, could not

have reached its interpretation unless it supposed that

ordinary, reasonable readers could read the report as implying

that those named in sentence 5 were guilty of supporting

Milosevic and of receiving favorable treatment in exchange.

Even if we disagreed with that understanding, which we do

not, we are bound to it under the doctrine of law of the case.

LaShawn A. v. Barry, 87 F.3d 1389, 1393 (D.C. Cir. 1996) (en

6

banc) (“[T]he same issue presented a second time in the same

case in the same court should lead to the same result.”)

(emphasis in original).

As to the defamatory quality of the assertions, we

observed that “[m]erely associating somebody with a foreign

government would not ordinarily be defamatory”; but, citing a

case involving the apartheid regime of South Africa, we found

that in this case the relationship asserted could be “sufficiently

‘odious, infamous, or ridiculous’” to so qualify. Jankovic,

494 F.3d at 1091 (citing Southern Air Transport, Inc. v. ABC,

Inc., 877 F.2d 1010 (D.C. Cir.1989)). We remanded to the

district court with instructions that it consider “the

applicability and merits of . . . Opinion and Fair Comment

Protection, the Fair Report Privilege, or the Neutral-Reportage

Doctrine.” Id.

On remand, ICG filed a motion seeking dismissal on

grounds of opinion, fair comment, and fair report privilege.

Jankovic opposed and also sought discovery on facts relating

to the asserted defenses. The district court denied Jankovic’s

discovery motion and concluded that the passage was shielded

by the fair report and fair comment privileges and protected as

opinion. Holding that the passage was non-actionable, the

district court dismissed all of Jankovic’s claims. Order at 2.

The court also held that the claim for intentional interference

with business expectancy was inadequately pled. Id. at 6-7.

Jankovic now challenges all these rulings. We review the

district court’s dismissal de novo. Weyrich v. New Republic,

Inc., 235 F.3d 617, 623-24 (D.C. Cir. 2001). While we affirm

dismissal of the claim for intentional interference with

business expectancy, we hold that none of the privileges or

protections raised by ICG applies to the assertions that

7

Jankovic supported the Milosevic regime and that he received

advantages in exchange. Accordingly, we remand the case for

further proceedings on the claims for defamation and false

light.

* * *

A. The privileges and defenses

Fair report. Under applicable District of Columbia law,

a defendant must “clear[] two major hurdles” to qualify for

the fair report privilege. Phillips v. Evening Star Newspaper

Co., 424 A.2d 78, 89 (D.C. App. 1980). It must show, first,

that its publication was a “fair and accurate report” of a

qualified government source, and, second, that the publication

properly attributed the statement to the official source. Id.

See also Dameron v. Washington Magazine, Inc., 779 F.2d

736 (D.C. Cir. 1985); Prins v. Int’l Telephone & Telegraph

Corp., 757 F. Supp. 87, 93 (D.D.C. 1991).

There are serious problems on the score of proper

“attribution.” The pertinent government source is referenced

in footnote 80 of Report 145, which contains the Uniform

Resource Locator (“URL”) for an Office of Foreign Assets

Control (OFAC) website: http://www.treas.gov/offices/eotffc/

ofac/sdn/index.html (last visited Dec. 22, 2009). The cited

URL is currently non-functional: the Treasury’s server returns

an error message saying that it is not aware of the page.

ICG asserts that those who now access that URL will be

“automatically transfer[red] to the now-current OFAC

webpage regarding the Specially Designated Nationals

(‘SDN’) List at http://www.treas.gov/offices/enforcement/

ofac/sdn/index.html” (last visited Dec. 22, 2009). ICG Br. at

8

32 n.18. Not only is that not correct, but this second OFAC

URL is also non-functioning.

Whatever the efficacy of the URLs as such, ICG claims

that footnote 80 adequately attributes the defamatory

statements to the OFAC’s frozen assets list for 1998, and to

Executive Order 13088: Blocking Property of the

Governments of the Federal Republic of Yugoslavia (Serbia

and Montenegro), the Republic of Serbia, and the Republic of

Montenegro, and Prohibiting New Investment in the Republic

of Serbia in Response to the Situation in Kosovo (June 9,

1998), 63 Fed. Reg 32109 (the “Executive Order”). ICG Br.

at 33; see also id. at 42. We will assume in ICG’s favor that

Report 145 adequately leads the reader to either or both of

these sources.

As we shall see, however, Report 145 does not give a

“fair and accurate” report of either of them. The apparent

listing of Zepter Banka appears on page 40 of a 42-page

single-spaced list that ICG offered to the district court as “a

true and correct copy of the screen shot of SDN Changes

1998.” J.A. 454, 576. At page 9 of this “screen shot” is a

heading indicating that the names below (which include more

than 100 banks) were added to the frozen assets list on June

18, 1998:

06/18/98: The following names have been added to the

list of Specially Designated Nationals and Blocked

Persons in connection with an Executive Order issued by

President Clinton blocking property of the Governments

of the Federal Republic of Yugoslavia (Serbia and

Montenegro), the Republic of Serbia, and the Republic of

Montenegro, and Prohibiting new investment in the

Republic of Serbia in response to the situation in Kosovo.

9

J.A. 545.

This listing, standing alone, tells only that it occurred

pursuant to the Executive Order and that the entities either

were property of the Yugoslav, Serbian or Montenegrin

governments or somehow had a role in enabling investment in

the Republic of Serbia. Not a word suggests that Zepter

Banka, let alone Phillip Zepter, supported the Milosevic

regime or received advantages in exchange.

In the Executive Order itself, President Clinton ordered

(with immaterial exceptions):

[A]ll property and interests in property of the

Governments of the Federal Republic of Yugoslavia

(Serbia and Montenegro), the Republic of Serbia, and the

Republic of Montenegro that are in the United States, that

hereafter come within the United States, or that are or

hereafter come within the possession or control of United

States persons . . . are hereby blocked.

63 Fed. Reg. at 32109, § 1(a). The order defines the

“government of the Federal Republic of Yugoslavia (Serbia

and Montenegro)” as

the government of the Federal Republic of Yugoslavia

(Serbia and Montenegro), its agencies, instrumentalities,

and controlled entities, including all financial institutions

and state-owned and socially owned entities organized or

located in the Federal Republic of Yugoslavia (Serbia and

Montenegro) as of June 9, 1998.

Id. § 5(e) (emphasis added). It similarly defines the

governments of Serbia and Montenegro to include all

financial institutions organized or located in those countries.

10

Id. §§ 5(f), 5(g). These definitions are replicated in

regulations of the Office of Foreign Assets Control of the

Treasury Department. 31 C.F.R. §§ 586.306-308.

Later Treasury regulations explain:

These governments are defined in §§ 586.306 and

586.308 of the Regulations, respectively, and include “all

financial institutions and state-owned and socially-owned

entities organized or located” in the territories of the FRY

(S&M) state and the Republic of Serbia, respectively, as

well as “any persons acting or purporting to act for or on

behalf of'” those governments.

64 Fed. Reg. 60660/3 (Nov. 8, 1999).

These definitions make it clear that the regulations treat

all financial institutions as agencies, instrumentalities, or

controlled entities of the governments of the various territories

where they are organized or located. As a financial

institution, Zepter Banka would appear on the frozen assets

list whatever its relationship was to the Milosevic regime, so

long as it met either the locational or the organizational

criterion. Thus Report 145’s assertions that Zepter Banka

gave “support” to Milosevic, and that its U.S. assets were

frozen because of that support, are not fair or accurate reports

of any government document ICG has identified.

Accordingly, the fair report privilege is of no use to ICG.

Opinion, non-verifiable propositions. Although the

parties direct arguments to whether ICG’s assertions are

“opinion,” the Supreme Court’s decision in Milkovich v.

Lorain Journal Co., 497 U.S. 1, 20 (1990), made clear that the

First Amendment gives no protection to an assertion

“sufficiently factual to be susceptible of being proved true or

11

false,” id. at 21, even if the assertion is expressed by

implication in “a statement of ‘opinion,’” id. at 20. See also

Moldea v. New York Times Co., 22 F.3d 310, 313 (D.C. Cir.

1994). (ICG does not suggest that liability under the law of

the District of Columbia might (in this respect) be narrower

than what the First Amendment allows.)

In finding non-verifiability, the district court focused on

the word “crony,” Order at 4-5, which we indeed used in our

summary of Report 145’s relevant statements. But regardless

of whether that epithet is verifiable standing alone, the

question here is the verifiability of ICG’s assertions that the

plaintiff “gave” “support” to Milosevic (sentence 6), and that

he gave support “in exchange for favorable treatment” (as the

prior panel summarized the reasonably understood meaning of

the relevant sentences, see 494 F.3d at 1091). To resolve the

issue of “verifiability,” we need not probe arcane matters of

epistemology; both propositions are verifiable in the practical

sense that our legal system is ready to make decisions on the

basis of how such issues are resolved—decisions profoundly

impacting people’s lives.

As to “support,” for example, the Supreme Court has

upheld the authority of the executive branch to detain an

individual, including a citizen, on a showing that he was

(among other things) “‘part of or supporting forces hostile to

the United States or coalition partners.’” Hamdi v. Rumsfeld,

542 U.S. 507, 516 (2004) (emphasis added). Similarly,

whether support is offered in exchange for favorable treatment

is analogous to the factual inquiry underlying the offense of

bribery. See 18 U.S.C. § 201(b) (“Whoever . . . directly or

indirectly, corruptly gives, offers or promises anything of

value to any public official . . . with intent . . . to influence any

official act . . . shall be fined . . . or imprisoned for not more

12

than fifteen years, or both.”). If such points are verifiable

enough to be the bases for prolonged detention, they are

surely (at least in the potentially defamatory constructions

understood by the prior panel) verifiable enough for

defamation liability.

As part of its “opinion” argument, ICG says that the

“factual basis for the connection between Zepter and the

Milosevic regime that this Court held could be gleaned from

[Report 145] is fully disclosed to the reader,” and that

therefore ICG should be immune under the doctrine that “a

statement of opinion that is based upon true facts that are

revealed to readers . . . [is] generally . . . not actionable so

long as the opinion does not otherwise imply unstated

defamatory facts.” ICG Br. at 29 (quoting Moldea I, 15 F.3d

at 1144-45). But as we explained above, the proposition that

we said a reasonable reader could derive from Report 145—

that Zepter supported the Milosevic regime or “the parallel

structures that characterised his regime”—is based on ICG’s

assertions in sentences 5 and 6 that Zepter or Zepter Banka

appeared on the frozen assets list because of support that was

provided to Milosevic. Though Zepter Banka did appear on

the frozen assets list, there is no evidence in the record that its

appearance was based upon support for Milosevic, as opposed

its simply being a financial institution in the region (and

therefore automatically listed). Whether or not the

defamatory reading of the passage constitutes an opinion, this

aspect of Moldea I protects only opinions based on true facts,

accurately disclosed. As ICG falsely stated the basis for the

frozen assets lists, the doctrine is of no use to it. See

Milkovich, 497 U.S. at 18-19 (“Even if the speaker states the

facts upon which he bases his opinion, if those facts are either

incorrect or incomplete, or if his assessment of them is

13

erroneous, the statement may still imply a false assertion of

fact.”).

ICG makes an additional somewhat muddled effort to

pull the sting of Report 145. ICG Br. at 29-35. This portion

of its brief appears to rely on the notion that authors of the

report saved it from any defamatory character by sprinkling

the pronouns “many” and “some” throughout its allegations.

As we said earlier, that reading is inconsistent with the

interpretation reached by the prior panel and is thus of no help

to ICG.

Fair comment. ICG argues “fair comment” also as a free-

standing doctrine under District of Columbia law (separately

from its role in ICG’s First Amendment non-verifiability

defense). ICG Br. at 40-41. But a conclusion based on a

misstatement of fact is not protected by the privilege. See

Washington Times Co. v. Bonner, 86 F.2d 836, 841 n.4 (D.C.

Cir. 1936) (“[T]he facts asserted as predicate of the fair

comment must be true . . . .”). As we explained above, ICG

here relies on the appearance of Zepter Banka on the frozen

assets lists. Those lists, however, do not buttress accusations

that Zepter Banka or Jankovic supported Milosevic or did so

“in exchange for favorable treatment.” Accordingly, the key

passages of Report 145 are not protected as fair comment.

In short, the excerpted passage is not protected as fair

comment, fair report or opinion, whether for purposes of

defamation, false light or intentional interference with

business expectancy.

14

B. Intentional Interference with Business Expectancy

We have said that a plaintiff must plead, as necessary

elements for a claim for intentional interference with business

expectancy under District of Columbia law: “(1) the existence

of a valid business relationship or expectancy, (2) knowledge

of the relationship or expectancy on the part of the interferer,

(3) intentional interference inducing or causing a breach or

termination of the relationship or expectancy, and (4) resultant

damage.” Bennett Enters. v. Domino’s Pizza, Inc., 45 F.3d

493, 499 (D.C. Cir.1995).

For the first element Jankovic appears to rely entirely on

allegations of harm to his business generally. His complaint

alleges, for example: “Plaintiffs’ businesses have suffered a

loss of current growth and business opportunities, a loss of

future growth and business opportunities, and a loss of access

to markets that otherwise would have been available,

amounting to general damages in an amount to be proven at

trial.” Complaint ¶ 104.

But the first element of the tort, “a valid business

relationship or expectancy,” appears to require rather specific

business opportunities (to be sure, however, not ones

necessarily manifested in any contract). The cases invoked by

the parties all revolve around relatively specific anticipated

transactions: a prospective book deal, Browning v. Clinton,

292 F.3d 235 (D.C. Cir. 2002); “three potential sources of

prospective employment,” Kimmel v. Gallaudet Univ., 639 F.

Supp. 2d 34, 45 (D.D.C. 2009); development of a specific

property in the District of Columbia, Carr v. Brown, 395 A.2d

79, 82-84 (D.C. 1978); opportunity to represent a trustee in a

specific litigation, Dem. State Comm. of D.C. v. Bebchick, 706

A.2d 569 (D.C. 1998). See also Laser Labs, Inc. v. ETL

15

Testing Labs., Inc., 29 F. Supp. 2d 21 (D. Mass. 1998)

(dismissing a claim for intentional interference with business

expectancy under Massachusetts law where plaintiff failed to

allege interference with specific expectancies). The

opportunities alleged by Jankovic, by contrast, appear to be

simply the generic opportunities of any successful enterprise,

a type of injury that can be protected by an award of damages

in a successful defamation suit. See Robert D. Sack, Sack on

Defamation, Libel, Slander and Related Problems § 10.5.1 (3d

ed. 2009) (citing cases). Accordingly, we affirm the district

court’s dismissal of the business expectancy claim.

Conclusion

While we affirm the district court’s dismissal of

Jankovic’s claim for intentional interference with a business

expectancy, we reverse its dismissal of the remaining counts,

and remand for proceedings consistent with this opinion.

So ordered.