A defamation lawsuit against East Lansing Info (ELi) and its founder Alice Dreger brought by real estate developer Scott Chappelle was summarily dismissed by Judge Joyce Draganchuk of Ingham County’s 30th Circuit Court today.
During an approximately 40-minute-long hearing on ELi’s motion to dismiss the case on First Amendment grounds, Draganchuk went point-by-point through the allegedly defamatory claims and explained how they failed to meet the legal definition of defamation. She also assessed the “general sting and gist” of the ELi report in question and a related post by Dreger to a public online forum, finding that was also incapable of rising to the level of defamation.
The exact reasons Draganchuk cited for each claim being protected under the First Amendment varied, but generally boiled down to the fact that they were true reports based on public records (including Chappelle’s federal indictment) and statements of others, or were expressions of opinion based on fact.
“This is a reassuring victory for the First Amendment and for investigative journalism across the State of Michigan,” said Brian Wassom of the Warner Norcross + Judd law firm, who represented ELi and Dreger.
“There was never any doubt that ELI’s reporting was well-sourced and a fair report of public records,” Wassom continued. “But in an environment where basic principles of free speech and the liberty of the press are under constant attack, it is profoundly gratifying when a court issues such a full-throated and well-reasoned endorsement of First Amendment values as this court did today.”
Chappelle’s lawyer arguing the motion on Wednesday, Daniel Powell of Minc Law, was particularly animated during arguments for why the case should continue, but avoided matters of fact. He claimed that “the truth would come out” if the case continued and the discovery process could take place and intimated that the work ELi and Dreger did (and does) was not in a journalistic capacity.
Powell and Chappelle’s other attorney in this case, Christopher Cataldo of the Jaffe Raitt Heuer & Weiss law firm, did not respond to a request for comment from ELi.
Wassom made a brief opening argument before Powell’s response. He pointed out that it was time to dismiss this suit, which was first filed on April 5, to negate the “chilling” effect a pending lawsuit can have over a news organization.
After Powell finished his response and argued for the suit to continue to trial, Wassom opted not to elaborate further, as Powell hadn’t addressed any matters directly in the filings.
At this point, Draganchuk went through the suit filed by Chappelle and explained how each and every claim he and his attorneys brought fell short.
She also explained how it was not improper for ELi to report on the federal indictment against Chappelle against the backdrop of his redevelopment work in East Lansing, as some of the same companies involved in Chappelle’s failed City Center II project are named in the federal indictment.
Draganchuk ultimately explained that Dreger’s writing on the federal indictment did not create an implication of fraud and other criminal history, given that the federal indictment on which her reporting was based had laid out an alleged long history of fraud and criminality.
Prior to hearing the suit on Wednesday, Draganchuk had previously ruled to keep the suit in her business court. It had earlier been assigned to Judge Wanda Stokes on Ingham’s 30th Circuit Court. It was moved to Draganchuk’s court because the main parties on this suit were Chappelle Development Company and Chappelle, plus ELi and Dreger.
Asked for comment, Dreger said she was enormously relieved and that this decision means ELi can continue its work in 2022, “if our community continues to support this work, as it has done for seven years.”
Dreger invited all ELi supporters to join her and the ELi team at a celebration at the Graduate Hotel’s rooftop bar starting at 4 p.m. and running to 6:30 p.m. today.
That hotel was built by developers who bought the Grand River Avenue properties at issue in this lawsuit, after Chappelle lost the properties to foreclosure in 2015.
UPDATE [Oct. 28, 2021, at 1:45 p.m.]:
In response to a request for comment from ELi, Powell sent a press release to ELi on Thursday morning.
The release opens with a bolded topline proclaiming that a prior, unrelated defendant — Eliot Singer — had issued a retraction and apology to Chappelle, and then the release notes the case against ELi and Dreger was dismissed yesterday. (Singer’s retraction and apology is not a new development, having occurred in July 2021.)
The rest of the release echoed various arguments Powell had unsuccessfully brought before Draganchuk on Wednesday. It attempted, as Powell has in the past, to assert Dreger and ELi based its reporting on false information while not making any specific claims and despite Draganchuk’s comprehensive rebuttal of similar arguments.
“There’s nothing new here,” said Wassom, ELi and Dreger’s attorney, when reached for comment on Thursday afternoon.
“Mr. Chappelle and his team can complain as much as they like about ELi’s reporting being ‘false’ or ‘defamatory,’” Wassom wrote by email. “But repetition doesn’t make those accusations accurate. They aren’t, as the court has already ruled.”
Singer’s personal retraction is a common theme in the release, which states that “questions must be asked” as to why ELi and Dreger haven’t published it.
Dreger, when asked about this on Thursday, said, “Eliot Singer can retract his opinions. No one can retract the facts. And yesterday, Judge Draganchuk based her decision on the facts.”
“We will not be intimidated,” Dreger said. “We will continue to serve this community with news.”
Correction: The article originally stated that Singer’s retraction occurred in 2020, not 2021.