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Panel hears appeal in Ventura defamation award

Jesse Ventura might have been guilty of hyperbole when he famously declared that he “shocked the world” back when he was elected governor. But there’s no disputing that he managed to shock the legal community when he prevailed at trial in a seemingly longshot lawsuit against the estate of Chris Kyle, the late Navy SEAL whose best-selling memoir “American Sniper” included an unflattering (and hotly disputed) account of a barroom brawl with the former governor.

Now the question is: Will that $1.8 million jury award — $500,000 for defamation, $1.3 million for unjust enrichment — survive?

On Tuesday, a three-judge panel from the 8th Circuit convened at the federal courthouse in St. Paul for oral arguments in a bid from Kyle’s widow, Taya. From the tenor of some of the bench’s inquiries, Ventura might want to stave off any spending sprees until the court renders its decision.

In one of the more telling exchanges, Chief Judge William Jay Riley pronounced himself “troubled” by a reference to insurance coverage made at trial by Ventura’s lawyer, David Bradley Olsen. In his closing argument, Olsen, of the Minneapolis firm Henson & Efron, P.A., told jurors that “the insurer is on the hook if you find that Jesse Ventura was defamed.”

“I understand it’s one phrase out of a long trial and lawyers get caught up in the heat of the moment and sometimes they step over the line,” Riley said. “But in my opinion, that was over the line. Now tell me, why we shouldn’t grant a mistrial for that?”

Olsen didn’t bite, instead responding that his remark “wasn’t heat of the moment, it was carefully considered.” It was intended, he explained, to expose the bias in the trial testimony from an employee of Chris Kyle’s publisher, Harper Collins.

“What I said was … it’s hard to believe this witness sat on the stand and told you that he doesn’t know if his company was on the hook,” Olsen explained. He noted that the insurance policy was explicitly referenced in Kyle’s book contract and had been entered into evidence.

But even if his reference to insurance did cross a line, Olsen said it shouldn’t be appealable because Kyle’s attorneys did not promptly move for a mistrial.

Arguing on behalf of the estate, Lee Levine, the prominent First Amendment lawyer from the Washington, D.C., firm of Levine Sullivan Koch & Schulz, said that Kyle’s trial lawyer (John Borger) raised the objection immediately following closing arguments.

As to the bias issue, Levine maintained that “simply doesn’t hold water.” He argued that that U.S. District Court Judge Richard Kyle should have declared a mistrial or given the jury with a cautionary instruction. “To be blunt, there is no conceivable excuse for this,” he said.

Levine said Judge Kyle made two other errors which also warranted a new trial: applying the wrong burden of proof for establishing material falsity (preponderance of the evidence, rather than the more exacting clear and convincing standard) and permitting the claim for unjust enrichment (which Levine argued is intended to resolve disputes in cases involving an implied or quasi-contractual relationship between the parties).

“To our knowledge, no court had ever held that a plaintiff may recover damages for unjust enrichment based on the publication of a defamatory falsehood,” Levine said.

In his opening statement, Olsen urged the panel to steer clear of the weighty constitutional issues emphasized by Levine (and in the amicus briefs from a group of First Amendment scholars and various media organizations).

“Courts should think hard, and then think hard again, before turning small cases into large ones,” Olsen said, quoting from a 2011 U.S. Supreme Court decision. “That admonition applies here.”

But even under the “clear and convincing” standard for establishing falsity, Olsen insisted Ventura met his burden because he demonstrated that incident at the heart of the case — the alleged fisticuffs and trash-talking between Ventura and Chris Kyle — never happened.

“There is no constitutional protection for defamatory speech,” Olsen said.

In remarks outside the courthouse immediately following the hearing, Ventura displayed his usual bravado, asserting that it was his celebrity (and Kyle’s fabricated account of the altercation) that propelled “American Sniper” to the top of the best-seller list.

“When you shoot a rocket to outer space, there has to be a booster rocket,” Ventura said. “His defamation of me was the booster rocket for this book.”

Asked what he made of Judge Riley’s comments, Ventura responded, “You like to be confident. You never know. It’s in the hands of the three judges. How do you read them?”  Still, he defended his lawyer’s reference to insurance coverage because, he said, Kyle’s attorneys had “poor-mouthed during the trial.”

“[Taya] Kyle is not gonna pay cent to anyone. The insurance company has her covered top to bottom,” Ventura maintained.

Although he said he has paid “almost a million dollars” out of pocket for the litigation, Ventura vowed to fight on if the panel rules against him. “I have to. It’s my name and it’s my reputation that I’ve spent 40 years building,” he added.

Jane E. Kirtley, a professor of media ethics and law at the University of Minnesota, speculated the court’s decision could come down to Olsen’s insurance comment.

“When a judge says something you did is ‘over the line,’ that’s a pretty strong statement” said Kirtley, who joined the group of First Amendment scholars in an amicus brief urging the court to toss out the verdict.

By ordering a mistrial on the basis of the insurance comment, Kirtley said the court could sidestep some of the thornier implications — potentially an appealing option. “If they can, lower-level courts generally prefer to avoid grappling with constitutional issues in an area of law like this, which is opaque and unsettled,” she observed.

Conversely, if the court sustains the jury award, Kirtley thinks that would “open the door to a lot of problematic lawsuits to media based on unjust enrichment arguments.”

And it wouldn’t just be traditional media that would be exposed, Kirtley said. Authors who write about living public figures — especially unauthorized biographies — would be particularly vulnerable to such claims, she said.

Kirtley said the court might not deliver either side a clear a win by affirming the defamation award but knocking down the unjust enrichment claim. If that happens, she predicted another appeal would follow.

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