Your ELi: An Update on the Lawsuit Against ELi

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Dylan Lees for ELi

The Graduate Hotel (left) and The Abbot (center) now rise on land Chappelle had aimed to redevelop.

After over seven years of operation as a nonprofit, nonpartisan, local news organization, East Lansing Info (ELi) has truly become a community asset. And one of the ways we keep that asset healthy is to value transparency, including through transparency about our own operations.

So, today, I’m writing to you as our Executive Director and Publisher to give you an update on the alleged-defamation lawsuit launched against ELi and me by real estate developer Scott Chappelle.

By way of background, Chappelle was the long-time East Lansing-based developer who failed to redevelop properties at the northwest corner of Abbot Road and Grand River Avenue, properties left blighted and ultimately foreclosed upon. (Today, through the work of a different developer, The Abbot apartment building and The Graduate Hotel stand on the land at issue.) Last year, Chappelle came under federal indictment for tax and bank fraud, among other charges.

Besides asking for damages in the suit against us, Chappelle wants the court to order the removal from the internet of material he wants gone, “including but not limited to requesting removal of any such statements from the Internet search engines Google, Yahoo!, and Bing, and all websites,” and he wants “a permanent injunction prohibiting Defendants and their agents from creating, publishing, or disseminating the same or similar defamatory statements about Plaintiffs”.

The corner of Abbot Road and Grand River Ave., where blight persisted for years, and where a new developer ultimately built The Abbot.

ELi reporter Andrew Graham has been covering this for ELi. As Andrew has reported, Chappelle had filed the case in Washtenaw County (where Ann Arbor is located), and our attorney, Brian D. Wassom of Warner Norcross + Judd LLP, asked for the case to be dismissed.

Wassom wrote in our legal response that “Plaintiff Chappelle is one more in a long line of disgruntled criminal defendants using state defamation and tort law as a weapon to retaliate against journalists doing their duty to keep the public informed on matters of public concern. Like the complaints of scores of similarly situated plaintiffs before him, Chappelle’s Complaint is legally baseless and should be promptly dismissed.”

Wassom asked the Washtenaw court that if the case was not immediately dismissed, it be moved to Ingham County, arguing, “Chappelle’s choice to file in this [Washtenaw] Court on such flimsy grounds is an embarrassingly transparent attempt to avoid having this case decided by judges who know him and the properties at issue, and who (in the case of Judge Draganchuk) have ruled against him in prior litigation over the same issues that underlie this case.”

In 2016, Ingham County Judge Joyce Draganchuk had ruled against Chappelle in a suit he brought related to the East Lansing foreclosure. In that case, as ELi reported, Judge Draganchuk had called Chappelle’s lawyers’ arguments “curious at best and probably better characterized, at least to this court, as incomprehensible.”

A photo of the back of the vacated commercial building that existed before The Graduate was built there.

In our case, as Andrew reported for ELi, Judge Timothy P. Connors in Washtenaw decided in June to simply move the lawsuit over to Ingham. It has now been assigned to the courtroom of Judge Wanda M. Stokes, who will hear our request for dismissal.

The original alleged-defamation suit from Chappelle named me, East Lansing Info, and also Eliot Singer, who had done extensive research into Chappelle and who had shared material with the FBI. Singer has since issued an apology and retraction and Chappelle dropped the suit against him, although Chappelle is subpoenaing Singer for the suit against ELi and me.

Singer chose to hire as his attorney Kyle Bristow, who previously sued Michigan State University for denying a venue to white nationalist Richard Spencer. According to The Daily Beast, Bristow has a long history of championing right-wing causes. I haven’t spoken to Singer, so I cannot shed any light on his reasoning for his choice of representation.

With the move to Ingham County and his dropping the suit against Singer, Chappelle has filed an amended complaint against us. That means I am having to again take time away from my normal reporting duties at ELi to assist in our defense by providing our attorney with explanatory information and supporting documentation for our response to the amended complaint.

It frustrates me to have to take time away from my public service to do this, but it is now a necessary part of this job. The good thing is that I really like working with Brian, and I love doing investigative research.

Let me give you just one example of how we work through each line, step by step. In his complaint and also in his amended complaint, Chappelle refers to the National Development Council’s findings as having allegedly belied my reporting that he had a troubled history as a developer.

Here’s what he doesn’t explain in his complaint, but what we need to explain in our response:

The National Development Council (NDC) was an external consultant hired by the City of East Lansing to conduct “due diligence” on Chappelle while he was trying to get to a deal done with the City and while many citizens were objecting to the City about what was going on.

As Steve Reed reported for the Lansing State Journal on June 30, 2015, the initial “due diligence” review of Chappelle’s situation by NDC rep Corey Leon seemed positive.

But, as Reed reported, Leon “said he might have reached a different conclusion if he had known the developer [Chappelle] recently sued a lender.”

That omission “raise[d] a major concern” according to Leon. Reed reported that Leon “described the information as ‘far more important and far more relevant’ than information he received about other lawsuits in Florida and Ohio.”

The lawsuit that Leon apparently didn’t know about had been filed twelve days earlier by Chappelle’s team against the major lender in Chappelle’s would-be East Lansing deal. In filing that suit, Chappelle was trying to avoid foreclosure on the blighted East Lansing properties, and to stop the lender from releasing certain information into the public realm. (See that lawsuit info here.)

Another of the properties that was vacated, boarded up, and ultimately foreclosed upon, at 341-345 Evergreen Ave.

The issue of the National Development Council’s take is just one example of where the legal complaint against us sounds forceful, but digging shows the record to reveal a very different take. Multiply that a few times, and you get a sense of what I’m doing lately with time I would rather spend on fresh investigative reporting for you.

Yes, this is stressful and time-consuming. But what we have in ELi is too important not to fight for and to keep working for. And there’s a larger issue at stake here – the people’s right to bring forward important information that is in the public interest.

And it’s been great having Brian Wassom, a fierce defender of the freedom of the press, as our attorney for this. If I ever have cancer, I want an oncologist like Brian is a lawyer.

Andrew Graham reported recently on the latest in Chappelle’s federal criminal trial: Chappelle had attempted to be declared mentally unfit to stand trial, but on Aug. 17, Judge Hala Y. Jarbou ruled that Chappelle “is able to understand the nature and consequences of the proceeding against him and to assist properly in his defense.”

The criminal trial had been set for Sept. 13 but has now been delayed because the attorney who had been representing Chappelle in that withdrew due to “an irreconcilable conflict of interest.” Judge Jarbou warned on Sept. 2 that if Chappelle can’t find another attorney soon, he may need to represent himself. (Chappelle is an attorney.) A status conference for that case is set for Sept. 22.

Finally, with regard to the civil case against us, remember that anyone can launch a lawsuit, whether or not they have a legitimate basis for it. And, we know well from our reporting experience, what happens in the justice system cannot always be predicted.

What we can do, here at ELi, is to keep doing our public service news-reporting job for you. I am sorry that I must necessarily do less of it while I deal with this, but we have a strong, great, reporting and editing team. If you want to know what you can do to help, join me today in financially supporting the ELi team’s work in keeping East Lansing informed. We turn your donations into honest, meaningful news.

And thank you for being part of this.

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