Petition for Writ of Certiorari — BYD Company Ltd., Petitioner v. Alliance for American Manufacturing, et al.

No. _________

In the

Supreme Court of the United States

BYD COMPANY LTD.,

PETITIONER,

V.

ALLIANCE FOR AMERICAN MANUFACTURING, SCOTT

NORMAN PAUL, CATHALIJNE ADAMS, AND MATTHEW

MCMULLAN,

Respondents.

───────────────

On Petition for Writ of Certiorari to the United States

Court of Appeals for the District of Columbia Circuit

PETITION FOR WRIT OF CERTIORARI

CHARLES J. HARDER

Counsel of Record

DILAN A. ESPER

HARDER LLP

8383 Wilshire Blvd.,

Ste. 526

Beverly Hills, CA 90211

(424) 203-1600

CHarder@HarderLLP.com

DEsper@HarderLLP.com

Attorneys for Petitioner

ii

QUESTION PRESENTED

New York Times Co. v. Sullivan, 376 U.S. 254

(1964), St. Amant v. Thompson, 390 U.S. 727 (1968),

and

Harte-Hanks

Communications,

Inc.

v.

Connaughton, 491 U.S. 657 (1989), balanced the

reputational interests of public figures in defamation

cases with the First Amendment interests of

defendants, by requiring that public figure plaintiffs

meet the significant burden of proving “actual malice”

by clear and convincing evidence at trial, but

permitting plaintiffs to plead such claims and obtain

discovery to establish defendants’ mental state and

meet the actual malice standard.

The question presented is whether Bell Atlantic

Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft

v. Iqbal, 556 U.S. 662 (2009), sub silentio overturned

the balance struck in Sullivan and its progeny, and

created a new, more robust privilege, permitting even

intentional or reckless defamation of public figures so

long as plaintiffs do not have the facts regarding the

defendant’s mental state at the time of suit and would

require discovery to prove that the defendant

recklessly disregarded the truth.

iii

CORPORATE DISCLOSURE STATEMENT

Petitioner BYD Company Ltd. is a nongovernmental

corporation. It has no parent corporation and no

publicly held corporation owns 10% or more of its

stock.

RELATED PROCEEDINGS

There are no related cases. However, BYD Company

Ltd. v. VICE Media, LLC, No. 21-1518, currently

awaiting disposition by this Court on a petition for

certiorari, raises the same legal issue of pleading

actual malice in a defamation case as is raised herein.

iv

TABLE OF CONTENTS

TABLE OF CONTENTS ........................................... iv

TABLE OF AUTHORITIES ....................................... v

INTRODUCTION ........................................................ 1

OPINIONS BELOW .................................................... 4

JURISDICTION .......................................................... 4

CONSTITUTIONAL PROVISIONS INVOLVED ...... 4

STATEMENT OF THE CASE .................................... 5

REASONS FOR GRANTING THE WRIT .................. 9

1. Sullivan Struck a Balance Where Public

Figure Plaintiffs Were Required to Prove

Actual Malice at Trial, But Could Take

Discovery to Obtain Facts Regarding the

Defendants’ Mental State................................. 9

2. After Iqbal and Twombly, the Courts of

Appeal Changed the Sullivan Balance and

Created a New First Amendment Privilege

to Knowingly Defame ..................................... 15

3. This Court Should Resolve the Conflict in

the Lower Courts as to How Iqbal and

Twombly Apply to Defamation Cases ........... 22

CONCLUSION .......................................................... 23

APPENDIX ....................................................................... 1a

v

TABLE OF CONTENTS

Appendix

DISTRICT COURT OPINION ................................. 2a

D.C. CIRCUIT OPINION ....................................... 25a

vi

TABLE OF AUTHORITIES

Page(s)

Cases

Ashcroft v. Iqbal, 556 U.S. 662 (2009) ........................ 1

Bell Atlantic Corp. v. Twombly, 550 U.S.

544 (2007) ............................................................... 1

Berisha v. Lawson,

141 S.Ct. 2424 (2021) ............................................. 1

Biro v. Conde Nast,

807 F.3d 541 (2d Cir. 2015) ................................. 18

Church of Scientology Int’l v. Behar,

238 F.3d 168 (2d Cir. 2001) ................................. 14

Earley v. Gatehouse Media

Pennsylvania Holdings, Inc.,

2015 WL 1163787 (M.D. Pa. Mar. 13,

2015) ......................................................... 15, 18, 22

Flowers v. Carville,

310 F.3d 1118 (9th Cir. 2002) .............................. 14

Gertz v. Robert Welch, Inc.,

418 U.S. 323 (1974) .............................................. 10

Harte-Hanks Communications, Inc. v.

Connaughton,

491 U.S. 657 (1989) .............................................. 12

vii

Herbert v. Lando,

441 U.S. 153 (1979) ............................ 12, 13, 15, 21

Michel v. NYP Holdings, Inc.,

816 F.3d 686 (11th Cir. 2016) ............ 15, 16, 17, 22

Nelson Auto Center, Inc. v. Multimedia

Holdings Corp.,

951 F.3d 952 (8th Cir. 2020) .......................... 18, 22

New York Times Co. v. Sullivan,

376 U.S. 254

(1964) ........................................................................

............ 1, 2, 9, 10, 11, 15, 16, 17, 18, 19, 20, 21, 22

New York Times Co. v. Sullivan,

144 So.2d 25 (Ala. 1962) ........................................ 9

Pace v. Baker-White,

432 F. Supp. 3d 495 (E.D. Pa. 2020) ................... 22

Resolute Forest Products, Inc. v.

Greenpeace Int’l,

302 F. Supp. 3d 1005 (N.D. Cal.

2017) ..................................................................... 19

Rodriguez de Quijas v. Shearson/

American Express, Inc.,

490 U.S. 477 (1989) .............................................. 17

Schatz v. Republican Leadership

Committee,

669 F.3d 50 (1st Cir. 2012) ................................ 22*

St. Amant v. Thompson,

390 U.S. 727 (1968) .................................. 11, 17, 18

viii

Tah v. Global Witness Publishing, Inc.,

991 F.3d 231 (D.C. Cir. 2021) ................................ 1

Statutes

28 U.S.C. § 1254(1) ...................................................... 4

28 U.S.C. § 1291 .......................................................... 4

28 U.S.C. § 1332 .......................................................... 4

Statutes and Constitutional Provisions

U. S. Const. 1st Amend. 4, 9, 10, 13, 14, 15, 16, 17, 22

Rules

Fed. R. Civ. P. 12(b)(6) .................................... 5, 20, 21

1

INTRODUCTION

This case arises out of a troubling trend in the

lower courts. At a time when Justices of this Court

and other prominent judges have been discussing

whether the New York Times Co. v. Sullivan “actual

malice” standard for public figure defamation

plaintiffs should be reexamined and perhaps curtailed

or overturned,1 many federal Courts of Appeal and

District Courts have effectively created a new,

broader privilege allowing people to defame public

figures, even intentionally, without facing liability.

The mechanism that the lower courts have used is

this Court’s holdings in Ashcroft v. Iqbal and Bell

Atlantic Corp. v. Twombly—cases that require

plaintiffs to meet a “plausibility” standard when

pleading. That plausibility standard is supposed to be

minimal, merely requiring the plaintiff to provide the

judiciary with some assurance that there is factual

support for the claim. But in defamation cases, the

Iqbal/Twombly standard is now commonly being used

to dismiss any claim where the plaintiff does not, at

the time of filing, already possess proof of the

defendant’s mental state. Plaintiffs are being denied

the right to take discovery to obtain the necessary

clear and convincing evidence that the defendant

recklessly disregarded the truth, even though

evidence of the defendant’s mental state is usually in

1 See, e.g., Berisha v. Lawson, 141 S. Ct. 2424, 2424 (2021)

(Thomas, J., dissenting from denial of cert.); id. at 2425

(Gorsuch, J., dissenting from denial of cert.); Tah v. Global

Witness Publishing, Inc., 991 F.3d 231, 243 (D.C. Cir. 2021)

(Silberman, J., dissenting).

2

the control of the defendant at the time the complaint

is filed. The effect of this practice by the lower courts

is to broaden the Sullivan privilege in a manner that

is almost unrecognizable. The original Sullivan

privilege protected those who accidentally publish

falsehoods, while allowing cases to proceed against

those who recklessly disregard the truth. Now,

however, even knowing, blatant liars can (and do)

escape liability and successfully obtain a dismissal of

defamation claims. The basis for these dismissals is

that the plaintiff, having taken no discovery, cannot

specifically allege the defendant’s mental state at the

time the defamatory statement was made.

This practice is a dangerous expansion of Sullivan,

in favor of defamation defendants. The Sullivan

standard was never intended to protect those who

knowingly or recklessly lie, nor should it. But that is

how Sullivan has evolved in the lower courts, postIqbal/Twombly.

This Court therefore should intervene and

announce the proper standard for pleading

defamation cases—a standard that does not misuse

Iqbal and Twombly to resurrect the argument rejected

in Sullivan, and create a new privilege to defame

someone with impunity, even when the defendant

knowingly lied or recklessly disregarded the truth.

This is especially important given that so many

commentators, judges, and even Justices of this Court

have expressed concern about the breadth of even the

original Sullivan privilege.

Independently, the lower courts applying the

Iqbal/Twombly standard to actual malice have been

3

wildly inconsistent. Some are actually reversing the

traditional standard of pleading and drawing

inferences in the defendant’s favor, while other

decisions are at least somewhat more moderate and

draw inferences in the plaintiff’s favor. This Court

should therefore step in to establish how

Iqbal/Twombly should be applied to motions to

dismiss in defamation cases.

In the case at bar, Petitioner pleaded a claim that,

pre-Iqbal and Twombly, would have merited discovery

on the actual malice issue: Petitioner claimed

Respondent published an article that misrepresented

the contents of a non-governmental organization’s

report that was in the Respondent’s possession at the

time Respondent published its story. Under the preTwombly standard, a claim that Respondent had in its

possession a report that said X, and Respondent

misrepresented the report and published Y instead,

would have been sufficient to move the case past the

pleadings stage and into discovery on the actual

malice issue. Petitioner would have been permitted to

take discovery directed to Respondent’s mental state

when it made the defamatory statement. However,

the D.C. Circuit, applying the new Sullivan-onsteroids standard, concluded that Petitioner could not

even take discovery as to whether Respondent was

aware of the information in the NGO’s report that

contradicted Respondent’s story. Instead, the D.C.

Circuit affirmed the dismissal of the Complaint based

not only on its misreading of the NGO’s report, but

also on its conclusion that Petitioner failed to allege

facts and evidence regarding what specifically

Respondent was subjectively thinking at the time of

publication—information impossible for Petitioner to

4

know and allege without discovery. This was clear

error.

This Court should grant certiorari and make clear

that Iqbal and Twombly did not create a new First

Amendment privilege to allow people to recklessly or

even intentionally defame public figures by denying

plaintiffs the only realistic mechanism—discovery—

to prove the defendant’s mental state.

OPINIONS BELOW

The opinion of the Court of Appeals (Pet. App.25a)

is reported at 2022 WL 1463866 (D.C. Cir. May 10,

2022). The opinion of the District Court (Pet. App. 2a)

is reported at 554 F.Supp.3d 1 (D.D.C. 2021).

JURISDICTION

The District Court had jurisdiction under 28

U.S.C. § 1332 because the parties are diverse and the

amount in controversy was over $75,000. The D.C.

Circuit had appellate jurisdiction under 28 U.S.C. §

1291.

The Court of Appeals entered its decision on May

10, 2022. This Court’s jurisdiction is invoked under

28 U.S.C. § 1254(1).

CONSTITUTIONAL PROVISIONS INVOLVED

U.S. Const. amend. I.

Congress shall make no law respecting an

establishment of religion, or prohibiting the free

5

exercise thereof; or abridging the freedom of speech,

or of the press; or the right of the people peaceably to

assemble, and to petition the Government for a

redress of grievances.

STATEMENT OF THE CASE2

Petitioner BYD Company Ltd. (an acronym for

“Build Your Dreams”; herein “Petitioner” or “BYD”),

is a publicly-traded corporation and one of the world’s

largest producers and suppliers of electric vehicles,

including electric cars, buses, trucks and forklifts,

solar panels and lithium batteries, and personal

protective equipment (“PPE”) including masks used

by frontline personnel during the COVID-19

pandemic, among many other innovative, important

and useful products. Warren Buffet’s company,

Berkshire Hathaway, is a major investor in BYD. In

2020, BYD won a contract to supply the State of

California with $1 billion worth of PPE masks to

protect its nurses, doctors, caregivers, first responders

and other frontline personnel during the COVID-19

pandemic. BYD is based in China.

Before the events that gave rise to this litigation,

BYD enjoyed a very good reputation as a reliable

supplier of quality products in the global marketplace.

Appellee Alliance for American Manufacturing

(“AAM”) exists to promote U.S.-based companies and

disparage non-U.S. based companies, particularly

Because this is an appeal from an order dismissing the

Complaint under Fed. R. Civ. P. 12(b)(6), the facts as plausibly

pleaded by Petitioner are taken to be true.

2

6

companies based in China such as BYD.

On March 3, 2020, AAM published a story written

by Appellee Cathalijne Adams, entitled “Some of the

World’s Biggest Brands Depend on Forced Labor in

China,” claiming that BYD “Depend[s] on Forced

Labor in China” and “profit[s] from this forced labor”

(the “Article”). These statements are completely false.

BYD does not use forced labor (i.e., slave labor) in its

supply chain, does not depend on forced labor, and

does not profit from forced labor. AAM fabricated

these facts for the purpose of causing tremendous

harm to BYD, and these false statements in the

Article did in fact have that effect on BYD’s business.

The Article purports to be a description of the

“ASPI Report,” a report from a non-governmental

organization in Australia published on or about

March 1, 2020, entitled “Uyghurs for Sale:

‘Reeducation,’ forced labour and surveillance beyond

Xinjiang.” However, the ASPI Report contains a

detailed statement of ASPI’s findings with respect to

various companies, and the findings related to BYD

do not implicate BYD in the use or profit from forced

labor. Rather, ASPI’s findings regarding BYD are

that BYD had business dealings with a company

(Dongguan) that happens to own a subsidiary (Hubei)

that allegedly used forced labor. The ASPI Report

does not allege that BYD had any dealings whatsoever

with the subsidiary, Hubei. BYD, in fact, has not had

any business dealings with Hubei.

On one page of the ASPI Report, there is a diagram

drawing an arrow between Hubei and BYD. However,

that diagram refers readers back to the appendix for

7

the specific information regarding the relationships

being purportedly depicted. In the Appendix to which

they are directed, readers can easily see that the only

facts actually being alleged concern a relationship

between BYD and Dongguan, and that no relationship

between BYD and Hubei is alleged in the report.

Thus, it is apparent from the face of the ASPI

Report that BYD is being accused of nothing more

than having a relationship with Dongguan.

Dongguan happens to own a subsidiary, Hubei, which

is not related to BYD, but which allegedly is

implicated in the use of forced labor. There is no

allegation in the ASPI Report that BYD is in any way

related to Hubei or its alleged use of forced labor.

Notwithstanding these facts, AAM and Adams falsely

claimed in the Article that the ASPI Report states

that BYD depends on, and profits from, forced labor.

This statement is completely false, and AAM and

Adams knew it was false when they published the

Article.

The Complaint alleges that these two statements

were made with actual malice because the contents of

the ASPI Report were well known to AAM and Adams

at the time of publication. AAM and Adams knew that

the ASPI Report did not allege that BYD had any

dealings with Hubei, the company that allegedly used

forced labor. Nonetheless, they still published these

false, defamatory, and very harmful statements of and

concerning BYD.

The Complaint was filed on November 25, 2020.

Respondents moved to dismiss the Complaint,

arguing, inter alia, (1) that it failed to allege damages

8

in excess of $75,000, and thus failed to establish

subject matter jurisdiction; and (2) that it failed to

allege actual malice.

On April 21, 2021, the District Court granted the

motion to dismiss in part. The Court held that

Appellees were correct that BYD failed to specifically

allege the amount in controversy for purposes of

subject matter jurisdiction. BYD amended its

Complaint, inserting additional allegations regarding

the amount in controversy. Respondents again moved

to dismiss, once more arguing that BYD failed to

allege the amount in controversy, and reasserting

their claims that BYD failed to allege actual malice.

On August 6, 2021, the District Court granted

Respondents’ second Motion to Dismiss in a published

decision. This time, the District Court agreed with

BYD that it had sufficiently alleged the amount in

controversy. However, the District Court held that

BYD had failed to adequately allege actual malice.

BYD timely noticed an appeal. After briefing, on

May 10, 2022, the D.C. Circuit affirmed in an

unpublished opinion, holding that because the ASPI

Report contained generic conclusory statements about

many companies “directly or indirectly benefitting

from forced labor,” this meant that Respondents could

not have, as a matter of law, plausibly acted with

actual malice. The D.C. Circuit’s analysis completely

ignored the portions of the ASPI Report that indicate

that the actual allegation against BYD was simply

that it did business with Dongguan and that

Dongguan owned Hubei. The D.C. Circuit, relying on

Iqbal, also faulted Petitioner for failing to allege facts

9

and evidence regarding Respondents’ mental state to

support its actual malice allegation beyond

Respondents’ possession of the ASPI Report and their

bias against foreign companies.

REASONS FOR GRANTING THE WRIT

1. Sullivan Struck a Balance Where Public

Figure Plaintiffs Were Required to Prove

Actual Malice at Trial, But Could Take

Discovery to Obtain Facts Regarding the

Defendants’ Mental State.

This Court’s landmark decision in New York Times

Co. v. Sullivan federalized certain aspects of

defamation law due to First Amendment concerns.

Among the requirements imposed are two that are at

issue here:

a. That a public official must prove the defendant

acted with “actual malice” (at least reckless

disregard of the truth) to obtain a defamation

judgment (this holding was later extended to

public figures as well).

b. That actual malice must be proven at trial by

clear and convincing evidence, not a mere

preponderance of the evidence.

Importantly, the Court’s decision in Sullivan took

a middle ground. The Alabama state courts had taken

the position that defamation was categorically

unprotected under the First Amendment. New York

Times Co. v. Sullivan, 144 So. 2d 25, 40 (Ala. 1962)

(“The First Amendment of the U. S. Constitution does

10

not protect libelous publications.”). On the other

hand, Justices Black and Douglas of this Court took

the position that defamation suits by public officials

should be barred under all circumstances, even if the

defendant knowingly lied about them. Sullivan, 376

U.S. at 293 (Black, J., concurring) (“The requirement

that malice be proved provides at best an evanescent

protection for the right critically to discuss public

affairs and certainly does not measure up to the

sturdy

safeguard

embodied

in

the

First

Amendment.”). This Court struck a compromise and

adopted an approach that permits suits and

judgments against intentional liars and those who

consciously disregard the truth, so long as the proof at

trial is clear and convincing. This Court later

extended the same standard, described as “actual

malice,” to also apply to public figure plaintiffs. Gertz

v. Robert Welch, Inc., 418 U.S. 323, 342 (1974).

The Gertz case was very clear that the Sullivan

actual malice standard was a very aggressive,

substantive protection of First Amendment interests

that imposed significant costs on deserving

defamation plaintiffs: “This standard administers an

extremely powerful antidote to the inducement to

media self-censorship of the common-law rule of strict

liability for libel and slander. And it exacts a

correspondingly high price from the victims of

defamatory falsehood. Plainly many deserving

plaintiffs, including some intentionally subjected to

injury, will be unable to surmount the barrier of the

New York Times test.” Id.

On at least two occasions, this Court has

reaffirmed and clarified the actual malice standard.

11

First, St. Amant v. Thompson, 390 U.S. 727, 732

(1968), gave vivid examples of the sort of conduct that

would constitute reckless disregard of the truth:

The defendant in a defamation action brought

by a public official cannot, however,

automatically insure a favorable verdict by

testifying that he published with a belief that

the statements were true. The finder of fact

must determine whether the publication was

indeed made in good faith. Professions of good

faith will be unlikely to prove persuasive, for

example, where a story is fabricated by the

defendant, is the product of his imagination, or

is based wholly on an unverified anonymous

telephone call. Nor will they be likely to prevail

when the publisher’s allegations are so

inherently improbable that only a reckless man

would have put them in circulation. Likewise,

recklessness may be found where there are

obvious reasons to doubt the veracity of the

informant or the accuracy of his reports.

The St. Amant examples illustrate the

evidentiary nature of the Sullivan actual malice

standard. St. Amant posits that the defendant will

testify he or she published in good faith but that such

testimony would be insufficient to defeat liability.

This presumes the complaint will not be dismissed

based solely on the defendant’s claimed good faith,

and that discovery will be taken and testimony given.

Similarly, St. Amant suggests that plaintiffs will have

an opportunity to prove the defendant simply

fabricated the story or relied on unverified or

anonymous sourcing, or an unreliable source. This

12

holding presumes that plaintiffs will obtain discovery

on the issue of actual malice because, realistically,

such information can only be obtained in discovery:

plaintiffs will know nothing about defendants’ source

or sources, or their mental state, before such discovery

is taken.

This Court returned to actual malice in HarteHanks Communications, Inc. v. Connaughton, 491

U.S. 657 (1989). There, the Court discussed two ways

of defining reckless disregard for the truth: a “high

degree of awareness of probable falsity” or the

defendant having “entertained serious doubts as to

the truth of his publication.” Id. at 667. Again, the

defendant’s subjective mental state is paramount to

the analysis: a plaintiff is not a mind-reader, and thus

will need discovery to present evidence at trial that

the defendant was aware of the probable falsity of the

defamatory statement, or entertained serious doubts

prior to publication. How else, besides discovery, can

a plaintiff possibly obtain such evidence?

Connaughton evaluated a full evidentiary record in

determining that the actual malice standard was

satisfied in that case, including proof that the

newspaper in Connaughton made a decision not to

listen to tapes that would have called its story into

doubt. Id. at 683. No plaintiff could obtain this sort

of evidence—that the reporters deliberately decided

not to listen to tapes within their possession—without

discovery.

The need for discovery of evidence to learn the

mental state of defamation defendants, to satisfy the

actual malice standard, was expressly endorsed by

this Court in Herbert v. Lando, 441 U.S. 153 (1979).

13

In Herbert, the defendant in a defamation case asked

this Court to establish an evidentiary privilege, based

on the First Amendment, to prohibit defamation

plaintiffs from inquiring into the editorial process of a

news reporter. This Court rejected that argument,

because recognition of such a privilege would make it

impossible for many defamation plaintiffs to establish

actual malice: “[I]t is plain enough that the suggested

privilege for the editorial process would constitute a

substantial interference with the ability of a

defamation plaintiff to establish the ingredients of

malice as required by New York Times.... It may be

that plaintiffs will rarely be successful in proving

awareness of falsehood from the mouth of the

defendant himself, but the relevance of answers to

such inquiries ... can hardly be doubted.” 441 U.S. at

170. The Court concluded that “our cases necessarily

contemplate examination of the editorial process to

prove the necessary awareness of probable falsehood.”

Id. at 172. “If the publication is false but there is an

exonerating explanation, the defendant will surely

testify to this effect.... Why should not the plaintiff be

permitted to inquire before trial? On the other hand,

if the publisher in fact had serious doubts about

accuracy, but published nevertheless, no undue selfcensorship will result from permitting the relevant

inquiry.” Id. at 173.

Thus, prior to Iqbal and Twombly, the balance

struck by this Court was that defamation defendants

are protected from liability for their negligent

publication of falsehoods of and concerning public

figures, but when they act with the requisite scienter

(reckless disregard of the truth), proven with clear

and convincing evidence, there is no legal privilege

14

against defamation liability. Plaintiffs thus would

need to establish, with convincing clarity, what the

defendants knew and when they knew it. This

evidence would be obtained in discovery, because the

information is not otherwise available to plaintiffs:

defendants’ state of mind certainly is not a matter of

public record. And if the plaintiff is unable to obtain

in discovery sufficient evidence of the defendant’s

reckless disregard of the truth, then the First

Amendment would require that the defendant prevail

in the case.

In accordance with the framework set out in this

Court’s defamation decisions, federal courts have

permitted defamation plaintiffs to allege actual

malice generally. For instance, Flowers v. Carville,

310 F.3d 1118, 1130 (9th Cir. 2002), contains a typical

discussion of the issue, citing earlier cases from the

Second and Fifth Circuits: “This case is before us on

a motion to dismiss. We ask only whether the

pleadings are sufficient, not whether the plaintiff

could find evidence to support them.... The First

Amendment imposes substantive requirements on the

state of mind a public figure must prove in order to

recover for defamation, but it doesn’t require him to

prove that state of mind in the complaint.” Id. (citing

Belli v. Orlando Daily Newspapers, Inc., 389 F.2d 579,

589 (5th Cir. 1967); Boyd v. Nationwide Mutual

Insurance Co., 208 F.3d 406, 410 (2d Cir. 2000)). As

the Second Circuit summarized, “resolution of the ...

actual malice inquir[y] typically requires discovery.”

Church of Scientology Int’l v. Behar, 238 F.3d 168, 173

(2d Cir. 2001). This was settled law pre-Iqbal and

Twombly.

15

2. After Iqbal and Twombly, the Courts of

Appeal Changed the Sullivan Balance and

Created a New First Amendment Privilege

to Knowingly Defame.

This Court’s decisions in Iqbal and Twombly

impose a “plausibility” standard on federal pleading.

The plausibility standard was not intended to be

onerous. See Twombly, 550 U.S. at 556 (“And, of

course, a well-pleaded complaint may proceed even if

it strikes a savvy judge that actual proof of those facts

is improbable, and that a recovery is very remote and

unlikely.”) (cleaned up). However, the lower courts

have taken an approach that makes the standard

onerous in defamation cases: they have effectively

overturned this Court’s decision in Herbert and

created a new privilege for defamation defendants,

declaring that pleading actual malice in a defamation

case now requires the plaintiff to have specific

knowledge of what the defendant knew and/or was

thinking at the time of the publication. One court

even went so far as to say it explicitly: pleading actual

malice is now, in fact, an “onerous task.” Earley v.

Gatehouse Media Pennsylvania Holdings, Inc., 2015

WL 1163787 at *2 (M.D. Pa. Mar. 13, 2015).

The Eleventh Circuit’s decision in Michel v. NYP

Holdings, Inc., 816 F.3d 686 (11th Cir. 2016), vividly

illustrates the broadened Sullivan privilege. In

Michel, the Court of Appeals specifically held that the

protections of Sullivan were insufficient, and the

Iqbal/Twombly standard must be aggressively

applied in defamation cases to provide additional

First Amendment protections to defamation

defendants:

16

Moreover, application of the plausibility

pleading standard makes particular sense when

examining public figure defamation suits. In

these cases, there is a powerful interest in

ensuring that free speech is not unduly

burdened by the necessity of defending against

expensive yet groundless litigation. Indeed, the

actual malice standard was designed to allow

publishers the “breathing space” needed to

ensure robust reporting on public figures and

events.... Forcing publishers to defend

inappropriate suits through expensive discovery

proceedings in all cases would constrict that

breathing space in exactly the manner the

actual malice standard was intended to prevent.

The costs and efforts required to defend a

lawsuit through that stage of litigation could

chill free speech nearly as effectively as the

absence of the actual malice standard

altogether. Thus, a public figure bringing a

defamation suit must plausibly plead actual

malice in accordance with the requirements set

forth in Iqbal and Twombly.

Id. at 702.

Thus, the Michel court is saying that the carefully

balanced protections of Sullivan are not enough. The

Michel court concludes that, even though Sullivan

and its progeny authorized plaintiffs to obtain

discovery and allowed them an opportunity to prove

their claim of actual malice, this Court’s decisions in

Iqbal and Twombly effectively overruled that

doctrine, and adopted a position akin to the absolute

17

First Amendment immunity for false statements,

which was the position of Justices Black and Douglas

that the majority of this Court rejected in Sullivan.

Of course, only this Court can overturn its own

precedents.

Rodriguez de Quijas v. Shearson/

American Express, Inc., 490 U.S. 477, 485 (1989).

The new standard requiring specific pleading of

actual malice means that the lower courts are

dismissing, at the pleading stage, defamation cases

where discovery could and would confirm that the

defendants did, indeed, recklessly disregard the truth.

For instance, in Michel, the Eleventh Circuit pointed

to the claim made by the defendants in the allegedly

defamatory article that the reporters had spoken to

numerous sources, as establishing that they did not

act with actual malice. 816 F.3d at 704 (“The article

indicates that the reporters spoke with, consulted, or

otherwise reached out to a Foundation insider, event

organizers, the founder of the Foundation, the venue,

the Foundation’s website, and state charity records.”).

Of course, the self-serving, unsworn, out-of-court

statements of journalists in their article are

inadmissible hearsay, and St. Amant stated that even

sworn statements by journalists that they acted in

good faith would not be accepted as definitively

negating actual malice. 390 U.S. at 732 (“The

defendant in a defamation action brought by a public

official cannot, however, automatically insure a

favorable verdict by testifying that he published with

a belief that the statements were true.”). What if it

turned out that the reporters in Michel were

untruthful or exaggerating what they had done and

had not, in fact, spoken to all of the sources to whom

18

they claimed to have spoken, or if they were

misleading the public as to what those sources had

said to them? The Eleventh Circuit has created a

privilege to lie, because plaintiffs are being prevented

from obtaining the discovery that would show the

false statement of fact was made with knowing or

reckless disregard for the truth.

Another example of the new, broader conception of

the Sullivan privilege being applied by the lower

courts is Biro v. Conde Nast, 807 F.3d 541 (2d Cir.

2015). In Biro, the Second Circuit held the plaintiff’s

St. Amant argument that the defendants relied wholly

on unverified sources was foreclosed by the

defendants’ unsworn claim that they relied on

multiple sources. 807 F.3d at 546. Again, if the

defendants were lying about their sourcing, there is

no remedy. This, again, creates the privilege to lie

that the Court expressly rejected in Sullivan.

Numerous other cases have applied this new

expansion of the Sullivan privilege to dismiss cases

where discovery might have disclosed evidence of

reckless disregard of the truth. See, e.g., Nelson Auto

Center, Inc. v. Multimedia Holdings Corp., 951 F.3d

952, 959 (8th Cir. 2020) (defendants republished a

statement they had already retracted; the court

presumed that it “shows nothing more than mere

oversight” and dismissed the complaint that pleaded

the false statement was deliberate, not accidental);

Earley, 2015 WL 1163787 at *3 (complaint that

alleged that defendants knew the true facts at least a

year before they published a defamatory statement

did not make plausible allegations of actual malice).

19

Some courts have gone so far to announce that a

defamation plaintiff, in the complaint, must

specifically identify the individuals within a

journalistic organization who knew that a particular

statement was false or acted with reckless disregard

for the truth, and what each specific person knew—

without any discovery at all. See Resolute Forest

Products, Inc. v. Greenpeace Int’l, 302 F. Supp. 3d

1005, 1018 (N.D. Cal. 2017) (applying this standard to

dismiss a complaint). Under this standard, a plaintiff

suing a newspaper would be required to identify what

each reporter and editor knew at the time a story was

published, without any discovery. This is completely

antithetical to the balance struck in Sullivan;

virtually no major media outlet would ever face

liability, even for a deliberate falsehood, under such a

standard.

The facts of this case present this Court with an

opportunity to clarify the law in this area. Here,

BYD’s claim would have never been dismissed for

failure to plead actual malice based on the preTwombly standard. BYD alleged that Respondents

falsely reported it used forced labor, when in fact it

never did, and that Respondents’ reporting was based

on a single source (the ASPI Report), which

specifically states that its accusation against BYD is

that BYD contracts with a company that has a

subsidiary (unrelated to BYD) that allegedly uses

forced labor, not that BYD itself used forced labor in

its supply chain. Pre-Twombly, BYD would have had

the opportunity to develop this claim in discovery by:

(1) asking Respondents whether they read the ASPI

Report and what they understood the ASPI Report to

be saying; (2) obtaining Respondents’ internal

20

communications regarding what they knew at the

time of publication, whether they considered ASPI to

be a biased or untrustworthy source, and whether

they had any other sources; and (3) questioning

Respondents’ witnesses involved in the story

regarding these same issues. Through this discovery

process, which would have been routine pre-Twombly,

BYD would be able to establish whether Respondents

knowingly or recklessly disregarded the portion of the

ASPI Report that explains that BYD merely

contracted with a company that had a subsidiary that

allegedly used forced labor, whether Respondents had

any proof or evidence that BYD actually used forced

labor, and what (if anything) Respondents did to

confirm or check their story.

Under the new, expanded Sullivan-on-steroids

privilege, however, the District Court and D.C. Circuit

denied BYD the opportunity to take any discovery.

Instead, they turned Rule 12(b)(6) on its head by

relying solely on the unsworn statements in

Respondents’ Article, taking such statements to be

true, and construing Respondents’ actions in the light

most favorable to Respondents.

Whether or not the District Court’s or D.C.

Circuit’s construction of the facts regarding actual

malice is correct is an issue that cannot be evaluated

on a motion to dismiss. In that posture, courts should

not be evaluating and excusing a defendant’s mental

state based on contestable facts, and especially not

when doing so upsets the careful balance that this

Court struck in Sullivan, which took into account the

various competing interests in defamation cases.

21

The approach of the lower courts in defamation

pleading cases post-Iqbal and Twombly effectively

creates a privilege to publish even intentionally false

statements of fact, which the Sullivan majority

explicitly rejected. For instance, one possibility

(which BYD believes occurred) is that Respondents

knew full well the limited nature of ASPI’s

accusations against BYD, and also that ASPI was a

biased and therefore unreliable publication.

However, Respondents could not find any

corroborating source for the defamatory statement.

Respondents then nevertheless decided to publish the

“forced labor” accusation anyway because it was

scandalous and they wanted to harm BYD and

threaten its ability to sell electric vehicles and buses

in the United States. Pre-Twombly, BYD would have

had an opportunity to prove that Respondents acted

with actual malice.

Now, under the approach

sanctioned by many lower courts including in the case

at bar, publishers have an effective privilege to

knowingly publish false statements of fact, because

they know that a plaintiff will never find out (because

they are not permitted discovery) what the reporters

really knew or consciously disregarded. Injured

plaintiffs, having no access to the publisher’s internal

editorial process, will virtually never be able to plead

a claim that survives a Rule 12(b)(6) motion, no

matter how egregious the false factual statement

about the plaintiff, or how much damage it causes.

Courts have created, through Iqbal and Twombly, the

very privilege that this Court rejected in Herbert.

This Court should grant certiorari to confirm that this

is not the law, and set forth the correct standard.

22

3. This Court Should Resolve the Conflict in

the Lower Courts as to How Iqbal and

Twombly Apply to Defamation Cases.

Independently, certiorari also is warranted

because there are significant conflicts among the

lower courts regarding the actual standard to be

applied to Iqbal/Twombly motions interposed against

public figure defamation complaints.

As noted above, the Eleventh Circuit and the

Eastern District of Pennsylvania represent one

extreme. In Michel, the Eleventh Circuit specifically

held that Iqbal and Twombly should be strictly

enforced to extend additional First Amendment

protections, beyond Sullivan, to defamation

defendants. 816 F.3d at 702. The Eastern District of

Pennsylvania has repeatedly held that the burden of

pleading actual malice in a defamation case is

“onerous,” a total departure from the pre-Twombly

practice whereby defamation plaintiffs would

routinely get discovery on actual malice. Early, 2015

WL 1163787 at *2; Pace v. Baker-White, 432 F. Supp.

3d 495, 513 (E.D. Pa. 2020).

In contrast, other courts have applied a somewhat

more relaxed standard. For instance, in Nelson Auto

Center, the Eighth Circuit required only that a

plaintiff raise a reasonable expectation of successfully

discovering evidence of actual malice. 951 F.3d at

958.

In Schatz v. Republican Leadership Committee,

669 F.3d 50, 55 (1st Cir. 2012), the First Circuit

applied a standard that draws all reasonable

23

inferences in the plaintiff’s favor, which is the

traditional standard with respect to pleadings

motions.

Should inferences be drawn in the defendant’s

favor, or the plaintiff’s? The cases are in conflict. This

Court should grant certiorari to resolve the conflict

and announce a definitive standard for pleadings

motions in public figure defamation cases.

CONCLUSION

For the foregoing reasons, the petition for writ of

certiorari should be granted.

Respectfully submitted,

Dated: August 8, 2022

/s/ Charles J. Harder

CHARLES J. HARDER

Counsel of Record

DILAN A. ESPER

HARDER LLP

8383 Wilshire Blvd.,

Suite. 526

Beverly Hills, CA 90211

(424) 203-1600

CHarder@HarderLLP.com

DEsper@HarderLLP.com

Attorneys for Petitioner

1a

APPENDIX

2a

DISTRICT COURT OPINION

United States District Court, District of Columbia.

BYD COMPANY LTD., Plaintiff

v.

ALLIANCE FOR AMERICAN MANUFACTURING,

et al., Defendants.

Case No. 1:20-cv-03458 (TNM)

|

Signed 08/06/2021

MEMORANDUM OPINION

TREVOR N. McFADDEN, U.S.D.J.

BYD Company Ltd. has filed an amended

complaint alleging defamation against a nonprofit

organization, the Alliance for American

Manufacturing, and several of its employees. As

before, Defendants move to dismiss the complaint for

lack of subject matter jurisdiction and failure to state

a claim. The Court disagrees with their jurisdictional

arguments but agrees that BYD fails to state a

claim. The Court will dismiss the amended complaint

without prejudice.

I.

BYD “is one of the world’s largest producers

and suppliers of electric vehicles including electric

cars, buses, trucks, and forklifts, as well as solar

panels, lithium batteries, and protective masks and

equipment, among many other ... products.” Am.

Compl. ¶ 1, ECF No. 22. The company is

incorporated in and has its principal place of

3a

business in the People’s Republic of China. Id. ¶ 5.

The Alliance for American Manufacturing is “a nonprofit organization that advocates in favor of

American-made products.” Id. ¶ 2. It is

headquartered in Washington, D.C., and the

individual employee-Defendants live nearby. Id. ¶¶

6–9.

BYD alleges that the American Alliance for

Manufacturing and its employees (collectively, the

“Alliance”) defamed it in three separate statements.

Id. ¶¶ 19–22. The first statement appeared in a blog

post on the Alliance’s website and claimed BYD

“depend[ed]” on and “profit[ed] from” forced labor in

China. Defs.’ Mot. to Dismiss Ex. B (“Ex. B”) at 2, 4,

ECF No. 23-4.1 The second statement, which also

appeared in an Alliance blog post, questioned why

California selected BYD, an “automaker,” to produce

medical equipment for the state under a $1 billion

contract. Defs.’ Mot. to Dismiss Ex. C (“Ex. C”) at 3,

ECF No. 23-5. The post catalogs many issues with

BYD’s performance under the contract and notes

that BYD issued California a $500 million refund

after its N95 masks failed to secure federal

certification. Id. The third statement, from an

Alliance press release, accused BYD of maintaining

“links” to the Chinese government and military.

Defs.’ Mot. to Dismiss Ex. D (“Ex. D”) at 2, ECF No.

23-6. The press release quoted Alliance President

Scott Paul, who claimed U.S. lawmakers had

4a

“irrefutable evidence” that BYD is “simply an arm of

China’s military and government.” Id.1

The Court dismissed BYD’s first complaint

because it failed to allege damages that met the

jurisdictional threshold for diversity cases. See BYD

Co. Ltd. v. All. for Am. Mfg., No. 1:20-CV-03458

(TNM), 2021 WL 1564445, at *1 (D.D.C. Apr. 21,

2021). In its amended complaint, BYD claims it

“suffered extensive, specific damages as a result of

the Defendants’ statements” and lists several

contracts it allegedly lost due to the Alliance’s

defamation. Am. Compl. ¶¶ 24–26. BYD alleges that

the Alliance made all three statements with actual

malice, id. ¶ 27, and it seeks compensatory and

punitive damages, permanent injunctive relief, and

costs, id. ¶ 37. The Alliance moves to dismiss for lack

of subject matter jurisdiction under Federal Rule of

Civil Procedure 12(b)(1) and for failure to state a

claim under Rule 12(b)(6). See Defs.’ Mot. to Dismiss

the Am. Compl. (“Mot. Dismiss”), ECF No. 23. The

motion is now ripe.

II.

To survive a motion to dismiss under Rule

12(b)(1), the plaintiff bears the burden of proving

that the Court has subject matter jurisdiction to hear

its claims. See Arpaio v. Obama, 797 F.3d 11, 19

(D.C. Cir. 2015). In evaluating a motion to dismiss

under Rule 12(b)(1), the Court must “treat the

1 All citations are to the page numbers generated by this

Court’s CM/ECF system.

5a

complaint’s factual allegations *6 as true ... and must

grant plaintiff[s] the benefit of all inferences that can

be derived from the facts alleged.” Sparrow v. United

Air Lines, Inc., 216 F.3d 1111, 1113 (D.C. Cir. 2000)

(cleaned up).

To survive a motion to dismiss under Rule

12(b)(6), “a complaint must contain sufficient factual

matter, accepted as true, to state a claim to relief

that is plausible on its face.” Hurd v. District of

Columbia, 864 F.3d 671, 678 (D.C. Cir. 2017)

(cleaned up). A plaintiff must plead “factual content

that allows the court to draw the reasonable

inference that the defendant is liable for the

misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662,

678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). The

Court accepts the complaint’s factual allegations as

true and grants the plaintiff “all inferences that can

be derived from the facts alleged.” L. Xia v. Tillerson,

865 F.3d 643, 649 (D.C. Cir. 2017) (cleaned up). The

Court need not, however, credit “a legal conclusion

couched as a factual allegation.” Iqbal, 556 U.S. at

678, 129 S.Ct. 1937 (cleaned up). The Court

considers “only the facts alleged in the complaint,

any documents either attached to or incorporated in

the complaint[,] and matters of which [it] may take

judicial notice.” Hurd, 864 F.3d at 678 (cleaned up).

Rule 12 plays an especially important role in

defamation cases, such as this one. “The Supreme

Court has directed courts to expeditiously weed out

unmeritorious defamation suits.” Kahl v. Bureau of

Nat’l Affairs, Inc., 856 F.3d 106, 109 (D.C. Cir. 2017)

(cleaned up). “Early resolution of defamation cases

under Federal Rule of Civil Procedure 12(b)(6) not

6a

only protects against the costs of meritless litigation,

but provides assurance to those exercising their First

Amendment rights that doing so will not needlessly

become prohibitively expensive.” Fairbanks v. Roller,

314 F. Supp. 3d 85, 89 (D.D.C. 2018) (internal

citation omitted).

III.

BYD maintains the Court has diversity

jurisdiction over this case. See Am. Compl. ¶ 10.

Diversity jurisdiction requires an amount in

controversy exceeding $75,000 and, as relevant here,

a dispute between “citizens of a State and citizens or

subjects of a foreign state.” 28 U.S.C. § 1332(a)(2).2

The Alliance does not contest jurisdiction based on

citizenship. Instead, it argues BYD “has once again

failed to plead facts sufficient to establish that it

suffered any cognizable damages as a result of the

Alliance’s statements.” Mot. Dismiss at 1.

Specifically, the Alliance contends BYD fails to show

how the Alliance’s statements harmed BYD. Id. And

even if it could make this showing, the Alliance

argues BYD would still flunk the amount-incontroversy requirement because the National

Defense Authorization Act for FY 2020 (NDAA)

“created a massive barrier to BYD’s ability to

compete” for the very contracts it says it lost because

of the Alliance’s alleged defamation. Defs.’ Mem. in

Supp. of Mot. to Dismiss the Am. Compl. (“Defs.’

Mem.”) at 7, ECF No. 23-1.2

2 As in its original complaint, BYD mistakenly cites 28 U.S.C. §

1332(a)(1). Compl. ¶ 10, ECF No. 1; Am. Compl. ¶ 10. This

provision does not apply because BYD is a foreign corporation.

7a

The Court considers (A) whether BYD’s

pleadings meet the amount-in-controversy threshold,

and (B) the effect of the NDAA.

A.

BYD added three paragraphs to its amended

complaint that contain specific allegations of lost

profits resulting from the Alliance’s statements.

First, BYD claims it “has not been able to complete

two contracts to sell electric buses to two major

urban transit companies in the United States.” Am.

Compl. ¶ 24. Second, BYD claims it “lost a potential

contract in 2021 with the Utah Transit Agency,

which would have netted BYD approximately $44

million dollars.” Id. ¶ 25. Third, BYD claims “other

potential customers ... have indicated to BYD a

reticence to deal with the company because of the

public controversy that resulted from Defendants’

false statements.” Id. ¶ 26.

The Alliance maintains these are mere

assertions and that BYD does not show how the

Alliance’s speech cost it business. Defs.’ Mem. at 15–

18. The Alliance argues that the Court “need not

accept inferences drawn by the plaintiff ... if those

inferences are unsupported by facts alleged in the

complaint or amount to merely legal conclusions.”

Defs.’ Mem. at 16 (quoting Rosenkrantz v. Inter-Am.

Dev. Bank, No. CV 20-3670 (BAH), 2021 WL

1254367, at *6 (D.D.C. Apr. 5, 2021)). In the

The Court construes BYD’s amended complaint as seeking

jurisdiction under § 1332(a)(2).

8a

Alliance’s telling, BYD is alleging supposedly

defamatory statements and purported injuries but

not explaining causality—it’s asking the Court to fill

in the blanks.

But the law is generous to plaintiffs on

amounts in controversy. To justify dismissal, “[i]t

must appear to a legal certainty that the claim is

really for less than the jurisdictional amount.” St.

Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S.

283, 289, 58 S.Ct. 586, 82 L.Ed. 845 (1938). “[T]he

Supreme Court’s yardstick [in St. Paul Mercury]

demands that courts be very confident that a party

cannot recover the jurisdictional amount before

dismissing the case for want of jurisdiction.”

Rosenboro v. Kim, 994 F.2d 13, 17 (D.C. Cir. 1993).

Thus, at the motion-to-dismiss stage, a court “should

find jurisdiction ... even if it has serious doubts as to

the bases for establishing an amount-in-controversy.”

Bronner v. Duggan, 317 F. Supp. 3d 284, 288 (D.D.C.

2018).

This is a low bar for BYD to surmount. Given

the amount of BYD’s alleged losses and the Court’s

duty to “treat the complaint’s factual allegations as

true ... [and] grant plaintiff the benefit of all

inferences that can be derived from the facts

alleged,” the Court finds that BYD has now met the

amount-in-controversy requirement. Sparrow, 216

F.3d at 1113 (cleaned up).

B.

Next, the Alliance contends that the NDAA

“effectively prohibits municipal transit agencies ...

9a

from pursuing business with certain qualifying

companies, such as BYD.” Defs.’ Mem. at 20

(emphasis added). Because the contracts at issue are

between BYD and municipal agencies, and because

Congress added the NDAA language “before any of

the allegedly defamatory statements were

published,” the Alliance argues its statements could

not have had any effect on BYD’s contracts. Id.

But the Alliance puts a lot of weight on the

word effectively. All the Alliance shows is that the

NDAA might have affected BYD’s contracts. And in

any event, the NDAA has a two-year phase-in period

during which municipalities can keep purchasing

rolling stock from companies such as BYD. See 49

U.S.C. § 5323(u)(5)(B) (“[T]his subsection ... shall not

apply to the award of a contract or subcontract made

by a public transportation agency with any rolling

stock manufacturer for the 2-year period beginning

on or after the date of enactment of this

subsection.”). By the Alliance’s own account, the

President signed the NDAA into law in December

2019. See Defs.’ Mem. at 20. Thus, the NDAA could

not have affected any of BYD’s sales before December

2021.

The Court has jurisdiction and turns next to

the Alliance’s 12(b)(6) arguments.3

3 BYD claims it is improper to consider the Alliance’s 12(b)(6)

arguments because the Court’s April 21, 2021 Order “granted

Defendants’ motion on the sole ground of subject matter

jurisdiction and denied the remainder.” Pl.’s Mem. of P. & A. in

Opp’n to Defs.’ Second Mot. Dismiss (“Pl.’s Mem. Opp’n”) at 17,

ECF No. 24. Not so. “When a defendant files a motion to

dismiss under Rule 12(b)(1) and Rule 12(b)(6), this Circuit has

10a

IV.

Because of First Amendment protections,

courts scrutinize defamation cases “against the

background of a profound national commitment to

the principle that debate on public issues should be

uninhibited, robust, and wide-open.” New York

Times Co. v. Sullivan, 376 U.S. 254, 270, 84 S.Ct.

710, 11 L.Ed.2d 686 (1964). This is especially true

when, as here, the plaintiff is a public figure.4

Protected speech against public figures can “include

vehement, caustic, and sometimes unpleasantly

sharp attacks.” Id.

“Under District of Columbia law, a defamation

claim requires: (1) a false and defamatory statement;

(2) published without privilege to a third party; (3)

made with the requisite fault; and (4) damages.”

Fairbanks, 314 F. Supp. 3d at 90. To plead “requisite

fault,” a public figure must allege “that the

defendant published the defamatory falsehood with

actual malice, that is, with knowledge that it was

false or with reckless disregard of whether it was

held that the court must first examine the Rule 12(b)(1)

challenges, because if it must dismiss the complaint for lack of

subject matter jurisdiction, the accompanying defenses and

objections become moot and do not need to be determined.”

Schmidt v. U.S. Capitol Police Bd., 826 F. Supp. 2d 59, 64

(D.D.C. 2011) (cleaned up). The Court did not reach the merits

of the 12(b)(6) arguments in its prior order because it

determined it lacked jurisdiction. Only now that BYD has

overcome the 12(b)(1) hurdle must the Court consider 12(b)(6).

4 BYD concedes it is “at least a limited purpose public figure.”

Pl.’s Mem. Opp’n at 19 n.3.

11a

false or not.” Liberty Lobby, Inc. v. Dow Jones & Co.,

838 F.2d 1287, 1292 (D.C. Cir. 1988) (cleaned up).

“Reckless disregard” means that the speaker acted

with a “high degree of awareness of [the statement’s]

probable falsity.” Garrison v. Louisiana, 379 U.S. 64,

74, 85 S.Ct. 209, 13 L.Ed.2d 125 (1964). This is a

“subjective” standard. McFarlane v. Sheridan Square

Press, Inc., 91 F.3d 1501, 1508 (D.C. Cir. 1996).

The Alliance argues that BYD failed to

adequately plead that it made any of its three

allegedly defamatory statements with actual malice.

Mot. Dismiss at 2. It submitted several exhibits in

support of its arguments. BYD responds that the

Court should not consider any of them, arguing

“Defendants’ Exhibits are not documents attached as

exhibits or incorporated by reference in the

Complaint.” Pl.’s Mem. Opp’n at 19 n.2.

The Court disagrees. The Alliance’s first five

exhibits consist of the three articles containing the

allegedly defamatory statements at issue plus two

research reports that served as the impetus for the

Alliance’s statements. Decl. of Bezalel A. Stern in

Supp. of Defs.’ Mot. to Dismiss the Am. Compl.

(“Stern Decl.”) ¶¶ 2–6, ECF No. 23-2. One of these

research reports, the ASPI Report, is mentioned by

name in BYD’s amended complaint. Am. Compl. ¶¶

15–18. The Alliance’s sixth and final exhibit is the

source code for one of the blog posts containing one of

its allegedly defamatory statements. Stern Decl. ¶ 7.

The source code is part of the blog post. BYD thus

incorporated all these exhibits into its amended

complaint. And despite repeatedly arguing that the

Alliance fails to provide legal authorities establishing

12a

that its exhibits are part of the record, BYD never

disputes their authenticity. The Court will therefore

consider them in adjudicating the Alliance’s FRCP

12(b)(6) motion. See Kaempe v. Myers, 367 F.3d 958,

965 (D.C. Cir. 2004) (“It is also clear that these

documents—which were appended to [Defendant’s]

motion to dismiss and whose authenticity is not

disputed—may be considered here because they are

referred to in the complaint and are integral to

[Plaintiff’s] conversion claim.”).

The Court next addresses each of the

Alliance’s statements in turn.

A.

The Alliance’s first allegedly defamatory

statement appeared in a March 2020 blog post on the

Alliance’s website. The post, titled “Some of the

World’s Biggest Brands Depend on Forced Labor”

(Forced Labor Story), reports on purported

associations between global brands and Uyghurs in

China who had allegedly been “transferred from reeducation camps to a network of 27 Chinese factories

for state-sponsored forced labor.” Ex. B at 3. The blog

post links to articles published by Reuters and the

New York Times, but its primary source and focus is

a report written by the Australian Strategic Policy

Institute (ASPI). Id. The post’s sole reference to BYD

states: “It should come as little surprise that several

known bad actors are also profiting from this forced

labor, including ... Build Your Dreams (BYD).” Id. at

4.

13a

BYD contends that the Forced Labor Story “is

not supported by any facts whatsoever, including any

facts contained in the ASPI report.” Am. Compl. ¶

19. Calling the Forced Labor Story “a complete

fabrication by Defendants,” BYD states that “all

ASPI reported is that BYD had business dealings

with a company (Dongguan) that happens to own a

subsidiary (Hubei) that allegedly used forced labor....

BYD, in fact, has not had any business dealings with

Hubei.” Id. ¶ 20. In BYD’s telling, a close reading of

the ASPI Report provides “support for the

proposition that Defendants did not rely in good faith

on the ASPI Report when they wrote and published

the Forced Labor Story, and in fact entertained

serious doubts as to the truth of Defendants’ own

statements about BYD.” Pl.’s Mem. Opp’n at 21.

But more is needed. BYD pleads no

nonconclusory facts alleging the Alliance knew what

it was reporting was false or questioned its truth.

See Hourani v. Psybersolutions LLC, 164 F. Supp. 3d

128, 141 (D.D.C. 2016) (“To allege actual malice, a

plaintiff must assert that the defendant realized that

his statement was false or that he subjectively

entertained serious doubt as to the truth of his

statement.”) (cleaned up), aff’d, 690 F. App’x 1 (D.C.

Cir. 2017). The closest BYD comes to pleading actual

malice is its claim that because the Alliance “linked

[to] the ASPI Report [in] the Forced Labor Story, [it]

must have known that the ASPI Report did not

establish that BYD profited in any way from forced

labor.” Am. Compl. ¶ 27.

More, even granting BYD’s contention that the

Alliance misrepresented the ASPI Report, it does not

14a

reasonably follow that the Alliance knew it was

misrepresenting it. It is just as likely—if not more—

that the Alliance merely had a different

interpretation of the ASPI Report. BYD offers a

barely disguised legal conclusion. And the Court is

“not bound to accept as true a legal conclusion

couched as a factual allegation.” Trudeau v. Fed.

Trade Comm’n, 456 F.3d 178, 193 (D.C. Cir. 2006)

(cleaned up).

BYD doubles down on this argument in its

briefing. It explains that “[t]he theory of actual

malice pleaded is that [the Alliance] had the ASPI

Report in [its] possession, obviously read it, and yet

... knowingly or recklessly wrote and published two

statements that completely misstated the

conclusions of the ASPI Report.... It is an entirely

reasonable inference that [the Alliance] ...

entertained serious doubts about the truth of such

statements.” Pl.’s Mem. Opp’n at 19. Once more,

BYD asserts the Alliance must have acted knowingly

or recklessly just because its statements were

(according to BYD) false. But if BYD’s pleadings

were sufficient, there would be no reason for courts

to require plaintiffs to show defendants spoke with

“knowledge that [their speech] was false or with

reckless disregard of whether it was false or not.”

Liberty Lobby, 838 F.2d at 1292 (cleaned up). A court

could assume the requisite state of mind if a plaintiff

pled that a defendant’s statements were false.

The Court will not accept BYD’s invitation to

rewrite the law of defamation. To draw reasonable

inferences in BYD’s favor, the Court needs facts

alleging the Alliance’s awareness of, or disregard for,

15a

the truthfulness of its statement. BYD gives the

Court only speculation.

This speculation is especially glaring

considering the ASPI Report’s ample support for the

Forced Labor Story’s claim about BYD. The ASPI

Report’s Executive Summary states: “ASPI’s

research has identified 83 foreign and Chinese

companies directly or indirectly benefitting from the

use of Uyghur workers outside Xinjiang through

potentially abusive labour [sic] transfer programs as

recently as 2019: ... BYD.” Defs.’ Mot. to Dismiss Ex.

A (“Ex. A”) at 8, ECF No. 23-3. Elsewhere, the ASPI

Report states that 105 Uyghur workers were

transferred to Hubei, a subsidiary of Dongguan,

which in turn directly supplies BYD. Id. at 37. BYD

claims this relationship is too attenuated to show

that it benefits from forced labor, and it maintains

that it has no relationship with Hubei. Am. Compl. ¶

20. But Figure 17 of the ASPI Report contradicts this

claim and depicts Hubei directly supplying BYD. Ex.

A at 27.

The ASPI Report also provides endnotes for

many of its claims. BYD contends that the endnotes

do not provide enough support. Pl.’s Mem. Opp’n at

21. But to defeat a defamation claim, the Alliance

need not have tracked down and verified that each

endnote supports each claim. Because the actual

malice standard is subjective, what matters is not

whether the endnotes actually support the claims in

ASPI’s Report but whether the Alliance thought they

did. St. Amant v. Thompson, 390 U.S. 727, 731, 88

S.Ct. 1323, 20 L.Ed.2d 262 (1968) (analyzing

16a

whether “defendant in fact entertained serious

doubts as to the truth of his publication”).

To be sure, the Forced Labor Story applies its

own veneer to the ASPI Report. The Story reports

that BYD “profit[s]” from forced labor, for example.

Ex. B at 4. The word “profits” does not appear in the

ASPI Report. But the ASPI Report does say BYD

“directly or indirectly benefit[s]” from forced labor.

Ex. A at 8. And BYD must plead the existence of

more than minor linguistic differences to make out a

claim for defamation. Liberty Lobby, Inc. v. Rees, 852

F.2d 595, 600–01 (D.C. Cir. 1988) (“[M]inor

inaccuracies will not give rise to a defamation claim

when the ultimate defamatory implications are

themselves not actionable.... [A]ctual malice is not

established in cases in which the statement is

substantially accurate”).

BYD fails to make out a claim for defamation

as to the Alliance’s first statement.

B.

The Alliance’s second allegedly defamatory

statement is another blog post. The post, titled

“California has a $1 Billion Contract for PPE with

BYD, a Company Controlled by the Chinese State,”

was published in the early days of the COVID-19

pandemic. Ex. C at 2. It focuses on the lack of

American-made personal protective equipment (PPE)

and individual states’ difficulties in acquiring

medical supplies. Id. at 3–7. Illinois, for example,

“was able to get some [PPE] out of China by handing

some dude a $3.4 million check in a McDonald’s

17a

parking lot off I-55.” Id. at 4. The post acknowledges

that, with stories such as these, the need for PPE

was dire. But it asks why BYD, an “automaker,” is

now manufacturing medical supplies. Id. at 3. And it

highlights the company’s early woes, including its

failure to receive federal certification for its N95

masks. Id. This failure forced BYD to refund

California $500 million. Id.

BYD’s primary complaint about the post is its

headline, claiming that BYD is “controlled” by the

Chinese government. Am. Compl. ¶ 21. Pointing to

“extensive information online that establishes that

BYD has private ownership and is not state-owned,”

BYD quotes McFarlane for the proposition that

“[a]lthough failure to investigate will not alone

support a finding of actual malice ... the purposeful

avoidance of truth is in a different category.” Pl.’s

Mem. Opp’n at 22–23 (quoting McFarlane, 91 F.3d at

1510).

But BYD alleges no facts showing the

Alliance’s awareness of BYD’s purported private

ownership. See McFarlane, 91 F.3d at 1508

(“[B]ecause the actual malice inquiry is subjective ...

the inference of actual malice must necessarily be

drawn solely upon the basis of the information that

was available to and considered by the defendant

prior to publication.”) (emphasis added). BYD baldly

asserts that the Alliance “knew that BYD is a private

corporation” and “[n]evertheless ... knowingly or

recklessly wrote and published the false statements.”

Pl.’s Mem. Opp’n at 22 (emphasis in original). This is

a legal conclusion and does not pass muster.

18a

More, the Radarlock Report is full of

allegations that reasonably could have led the

Alliance to the opposite conclusion. The Report, titled

“Building the China Dream: BYD & China’s Grand

Strategic Offensive,” Defs.’ Mot. to Dismiss Ex. E

(“Ex. E”) at 2, ECF No. 23-7, states, among other

things, that:

• BYD is “part of a government-directed and supported ‘innovation center’ that seeks

explicitly to combine ‘domestic and foreign

resources’ to build up a Chinese-dominated

next-generation vehicle industry.” Id. at 7.

• The Company’s leadership “boasts direct ties

to the [Chinese Communist Party’s] industrial

policy apparatus and [military-civil fusion]

project.” Id.

• A joint venture between BYD and a stateowned electronics company “helps the State to

integrate and guide the various technological

arms that Beijing deploys and combines in the

Network Great Power Strategy.” Id. at 11–12.

• “In 2018, [BYD] announced ‘strategic

cooperation’ with the China Academy of

Launch Vehicle Technology ... the largest

research and production base of missile

weapons and launch vehicles in China. Press

releases from the time announced this

cooperation as a ‘new step’ for both entities in

‘military-civil fusion’ (MCF).” Id. at 13.

19a

• “BYD—through the web of state- and

military-affiliated entities that it supports—

allows Beijing access to and a position of

leverage over global supply chains, technology

flows, and, ultimately, data.” Id. at 17.

The Alliance’s claim that BYD is “control[led]”

by the Chinese government is a reasonable gloss on

these statements. Ex. C. Even granting BYD’s claim

that it is a private company, the Court agrees that

“[b]eing a private corporation ... is not exclusive of, or

a bar against, being ‘under the control of’ or being an

‘arm of the state.’ ” Reply in Supp. of Defs.’ Mot. to

Dismiss (“Repl. Supp. Mot. Dismiss”) at 15, ECF No.

25. Especially in China. Even if this were a close call,

under the First Amendment, close calls go against

public figures. See Fairbanks, 314 F. Supp. 3d at 90

(“The First Amendment requires public figures suing

in defamation to demonstrate by at least a fair

preponderance of the evidence that the allegedly

defamatory statement is false, with close cases

decided against them.”) (cleaned up). BYD thus does

not plausibly allege the Alliance’s second statement

was defamatory.

C.

The Alliance’s third allegedly defamatory

statement is in a press release. The release bears the

title, “Congress Must Act After New Evidence Links

CRRC and BYD to Chinese Government and

Military.” Ex. D. It cites the same Radarlock Report

discussed above, and it says that BYD “is both deeply

subsidized by Beijing and work[s] hand-in-hand with

Party leaders, China’s military, and Huawei to

20a

penetrate the U.S. market.” Id. at 2. The press

release quotes the Alliance’s President Scott Paul as

saying that U.S. lawmakers “now have irrefutable

evidence that CRCC and BYD are simply an arm of

China’s military and government.” Id. It also urges

Congress to block BYD’s sales in the United States,

citing “the wealth of new evidence linking CRRC and

BYD to China’s ‘military-civil fusion’ regime that

leverages China’s commercial and military

capabilities in an effort to dominate the U.S.

market.” Id. at 3.

Invoking now-familiar arguments, BYD

contends the press release is defamatory because

“BYD is not an ‘arm’ of either China’s military or its

government” but “is a privately held, privately run

corporation that happens to be chartered and located

in mainland China.” Am. Compl. ¶ 22. BYD alleges—

without pleading any supporting facts—that the

Alliance published the press release “in an effort to

spread mistruths about BYD ... and thereby

encourage discrimination against BYD and its

products to impede its ability to compete fairly in the

marketplace for supply contracts in the United

States.” Pl.’s Mem. Opp’n at 22. The Alliance must

have known its statements were false, BYD claims,

because “there is extensive information online that

establishes BYD has private ownership and is not

state-owned.” Id. at 22–23.

BYD does not plead the Alliance possessed

subjective knowledge of the “extensive information

online” purportedly showing BYD’s private

ownership. See McFarlane, 91 F.3d at 1508 (“[T]he

actual malice inquiry is subjective.”). If BYD meant

21a

to argue that the Alliance ignored this information or

failed to investigate—and therefore acted

recklessly—it misconstrues the standard. See

Hourani, 164 F. Supp. 3d at 141 (“It is not enough to

prove simply that the defendant failed to investigate

or check the accuracy of a false statement, he must

have had a subjective awareness of the probable

falsity of the publication.”) (cleaned up). Recall that

the Radarlock Report contained ample information to

support the claim that BYD has ties to the Chinese

government and military. See supra IV.B.

In any event, BYD’s claim about the press

release is time-barred. The statute of limitations for

defamation claims in the District is one year. D.C.

Code § 12-301(4) (2019). “Defamation occurs on

publication, and the statute of limitations runs from

the date of publication.” Wallace v. Skadden, Arps,

Slate, Meagher & Flom, 715 A.2d 873, 882 (D.C.

1998) (cleaned up). As explained below, the press

release was published on October 25, 2019. BYD

therefore needed to sue prior to October 25, 2020, but

it did not file its initial complaint until a month

later. See Compl.

BYD argues the Alliance’s press release is

undated, but the Alliance provides three indicators of

its date: (1) publicly available source code; (2) a

screenshot of the press release with the date

included; and (3) a link to a dated external article

published the same day as the press release. Because

the external article is no longer available, the Court

only relies on the first two indicators.

22a

BYD rejects the source code as evidence

because “[n]o authority is cited” for the proposition

that source code “is the proper subject of judicial

notice.” Pl.’s Mem. Opp’n at 26. But a court “may

take judicial notice of facts contained in public

records of other proceedings, and of historical,

political, or statistical facts, and any other facts that

are verifiable with certainty.” Johnson v. Comm’n on

Pres. Debates, 202 F. Supp. 3d 159, 167 (D.D.C.

2016) (cleaned up). Anyone with a web browser can

view a webpage’s source code, so it is “verifiable with

certainty.” And notably, BYD does not dispute the

validity of the source code. Instead, BYD argues that

the Alliance does not “take into account the

possibility that the Press Release was subsequently

modified in a manner to qualify as republication.”

Pl.’s Mem. Opp’n at 26. Citing Jankovic v.

International Crisis Group, 494 F.3d 1080 (D.C. Cir.

2007), BYD explains that if the Alliance modified

and republished the webpage, it could reset the

statute of limitations to run from the date of

republication. Id.

Several problems doom BYD’s argument.

First, BYD forgets that it bears the burden of

pleading sufficient “factual content [to allow] the

court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.” Iqbal,

556 U.S. at 678, 129 S.Ct. 1937. BYD pleads no facts

from which the Court can infer that the Alliance

republished or even might have republished the

press release. It only raises the “possibility” that the

press release was republished. Pl.’s Mem. Opp’n at

26. The Court will not draw inferences based on

mere possibilities.

23a

Second, BYD does not even address the

screenshot of the press release the Alliance included

in its memorandum in support of its motion to

dismiss. See Defs.’ Mem. at 35. Instead, BYD claims

the Alliance “concede[s]” that the press release is

“undated,” and for support cites its own complaint.

See Pl.’s Mem. Opp’n at 25. The Alliance concedes no

such thing. Instead, the Alliance directs the Court to

access the press release through the “Press Release

directory” on its website. Defs.’ Mem. at 35. Accessed

this way, the press release shows it was published on

October 25, 2019. Id.

The Court finds the date of the press release is

not subject to “reasonable dispute” and takes judicial

notice that the press release was published on

October 25, 2019. Hurd, 864 F.3d at 686. BYD’s

claim about the press release is time-barred.

V.

The Alliance asks the Court to dismiss the

complaint with prejudice. Mot. Dismiss at 2. But “[a]

dismissal with prejudice is warranted only when a

trial court determines that the allegation of other

facts consistent with the challenged pleading could

not possibly cure the deficiency.” Firestone v.

Firestone, 76 F.3d 1205, 1209 (D.C. Cir. 1996)

(cleaned up). It remains possible that BYD can cure

the deficiencies in its complaint by alleging facts

showing that the Alliance published its two blog

posts with actual malice.

24a

For these reasons, the Alliance’s motion to

dismiss will be granted in part, and the court will

dismiss BYD’s complaint without prejudice. BYD has

now had two bites at the apple. It should expect that

a third bite would be its last.

25a

D. C. CIRCUIT COURT OPINION

BYD COMPANY LTD., Appellant

v.

ALLIANCE FOR AMERICAN

MANUFACTURING, et al., Appellees

No. 21-7099

Appeal from the United States District Court for the

District of Columbia (No. 1:20-cv-03458)

Before: Henderson, Pillard, and Katsas, Circuit

Judges.

JUDGMENT

Per Curiam

This appeal was considered on the record from

the United States District Court for the District of

Columbia and on the briefs of the parties. See Fed. R.

App. P. 34(a)(2); D.C. Cir. R. 34(j). The court has

afforded the issues full consideration and has

determined that they do not warrant a published

opinion. See D.C. Cir. R. 36(d). For the following

reasons, it is ORDERED that the judgment of the

district court be AFFIRMED.

BYD Company Ltd., a Chinese corporation,

brings defamation claims against the Alliance for

American Manufacturing and three of its employees.

The claims before us arise from two short articles

that the Alliance published on its website. The

26a

articles state that BYD benefits from forced labor

and is controlled by the Chinese government. The

district court dismissed the complaint for failure to

plausibly allege that the Alliance published the

articles with actual malice. BYD Co. v. Alliance for

Am. Mfg., 554 F. Supp. 3d 1 (D.D.C. 2021). We

affirm.

To establish defamation under D.C. law, a

plaintiff must show, among other things, that the

defendant made a false and defamatory statement

and acted with the requisite level of fault. Beeton v.

District of Columbia, 779 A.2d 918, 923 (D.C. 2001).

For statements about a public figure, the fault

standard is actual malice, which means the

defendant made the statement “with knowledge that

it was false or with reckless disregard of whether it

was false or not.” Kahl v. Bureau of Nat’l Affairs,

Inc., 856 F.3d 106, 116 (D.C. Cir. 2017) (quoting New

York Times v. Sullivan, 376 U.S. 254, 280 (1964)). It

is not enough that the defendant “should have

known” that its statement was false; the defendant

must have “in fact harbored subjective doubt” about

the truth of its claim. Jankovic v. Int’l Crisis Grp.,

822 F.3d 576, 589 (D.C. Cir. 2016). BYD concedes

that it is a public figure for the purposes of this case.

Thus, to survive a motion to dismiss, BYD must

allege facts that support a plausible inference of

actual malice. See Ashcroft v. Iqbal, 556 U.S. 662,

678 (2009). BYD’s complaint falls far short of that

standard.

27a

The first disputed article is titled “Some of the

World’s Biggest Brands Depend on Forced Labor in

China.” A. 442. It describes a think-tank report that

accuses the Chinese government of sending members

of its Uyghur population into forced labor. The

article further states that “several known bad actors

are also profiting from this forced labor, including ...

Build Your Dreams (BYD).” A. 443. BYD alleges that

the report does not support this claim and that the

Alliance must have known as much. But the report

does support the claim. The report lists BYD as

among the companies “directly or indirectly

benefiting from the use of” forced labor. A. 412. And

it states that a subsidiary of BYD’s direct supplier

uses over 100 forced laborers to make its products. A.

419. BYD further alleges that the Alliance is biased

against foreign companies, but bias alone does not

support an inference of actual malice. Tavoulareas v.

Piro, 817 F.2d 762, 795 (D.C. Cir. 1987) (en banc).

Tavoulareas left open the possibility that ill will

could support a finding of actual malice “when

combined with other, more substantial evidence of a

defendant’s bad faith.” Id. But BYD’s complaint

makes no allegations of that sort.

The second article is titled “California has a $1

Billion Contract for PPE with BYD, a Company

Controlled by the Chinese State.” A. 446. BYD

contends that its status as a privately owned

corporation is well known, which it says supports a

plausible inference that the Alliance remained

willfully blind. But the “failure to investigate will not

alone support a finding of actual malice.” McFarlane

28a

v. Sheridan Square Press, Inc., 91 F.3d 1501, 1510

(D.C. Cir. 1996) (cleaned up). To raise an inference of

actual malice based on willful blindness, BYD

needed to allege something more, such as facts

showing that the Alliance had “reason to doubt the

veracity of its source.” Id. BYD’s sparse complaint

makes no such allegations. In any event, a privately

owned company may be controlled by a government,

so knowledge that BYD was privately owned would

suggest little if anything about a claim that the

Chinese government effectively controlled it.

For these reasons, we affirm the district

court’s judgment. Pursuant to D.C. Circuit Rule 34,

this disposition will not be published. The Clerk is

directed to withhold issuance of the mandate until

seven days after resolution of any timely petition for

rehearing or petition for rehearing en banc. See Fed.

R. App. P. 41(b); D.C. Cir. R. 41(a)(1).