Montana Supreme Court rules with New York Post in Whitefish venture capitalist’s defamation case

The Montana Supreme Court last week determined that the broad privilege New York law affords journalists to report on public affairs supersedes Montana law in Whitefish venture capitalist Michael Goguen’s lawsuit against the New York Post.

Authored by Justice Laurie McKinnon, the court’s unanimous March 12 order reversed part of a lower court order denying a motion by the Post to dismiss the lawsuit. Flathead County District Court Judge Amy Eddy had previously ruled that Montana law — which provides journalists narrower privilege than New York law — applied, and thus, that a jury should have a chance to decide if the Post’s reporting about Goguen constituted “a true and fair report absent malice.”

But McKinnon, citing an array of legal standards, wrote that the “Conduct in question occurred in New York, and New York has the more significant interest in regulating the conduct of its citizens.

“Although Montana does have an interest in protecting its citizens from defamation, the issue we are addressing under Montana’s choice of law rules is the privilege and not the underlying defamation,” she continued. 

Michael Goguen is a Whitefish engineer and businessman who was previously a partner at the Silicon Valley venture capital firm Sequoia Capital. In recent years, he was the subject of a pair of high-profile civil lawsuits alleging sexual and criminal misconduct. In the first lawsuit, filed by an ex-girlfriend, the California Supreme Court awarded Goguen $14 million in fraud and extortion damages and barred the ex-girlfriend from repeating or publishing the allegations. In the second, Matthew Marshall, a former business partner of Goguen’s who later served jail time for fraud, sued Goguen under federal racketeering law. That complaint alleged in part that the defense company he and Marshall co-founded was designed to cover up Goguen’s alleged extra-marital affairs. It was ultimately tossed shortly after the extent to which Marshall had defrauded Goguen and others became clear. 

In 2021, the New York Post published an article covering the lawsuits titled “Tech billionaire allegedly kept spreadsheet of 5,000 women he had sex with.” The article noted that Goguen had prevailed against his ex-girlfriend in court and that Marshall had pleaded guilty to wire fraud and tax evasion. But it did so after recounting the graphic allegations against Goguen from the two complaints. 

A lawyer for Goguen demanded corrections and a published apology by the paper. The Post defended its statements but nevertheless issued two clarifications to the article. Goguen responded by filing a defamation lawsuit against the paper in Flathead County District Court. 

The Post moved to dismiss the lawsuit, leading to a dispute over competing media laws in Montana and New York. The specific question before the state district court — and subsequently the Montana Supreme Court — concerned what is sometimes called the “fair report privilege,” a legal privilege that extends a presumption of good faith to the news media in defamation matters. 

In more practical terms, it makes it hard to win a defamation or libel lawsuit against a news outlet that is reporting the facts of some public proceeding, even if the content of that report contains potentially defamatory material. 

New York’s law makes that privilege absolute. Here’s how it reads: “A civil action cannot be maintained against any person, firm or corporation, for the publication of a fair and true report of any judicial proceeding, legislative proceeding or other official proceeding, or for any heading of the report which is a fair and true headnote of the statement published.” 

But Montana, as with many other states, imposes a caveat on the privilege — a “true and fair report” must also be made “without malice.” Because of this caveat, the district court ruled that a jury should be able to decide whether the statements were indeed made without malice. 

McKinnon determined that the district court erred in ruling that Montana’s statute was the appropriate one to apply to the case rather than the New York law. And, under the New York law, she wrote, “all the challenged statements were fair and substantially accurate reports of the proceedings and that the District Court erred in determining there were questions of fact that needed to be decided by a jury.” 

Led by the Reporters Committee for Freedom of the Press, the Montana Free Press was among several media outlets that filed an amicus curiae brief in support of the Post in this case.  

“As members and representatives of the news media and organizations that advocate on behalf of the First Amendment and newsgathering rights of the press, amici have a strong interest in ensuring that Montana’s statutory fair report privilege … is interpreted and applied in a manner that protects the news media’s ability to publish newsworthy information found in reports of official government proceedings, including, specifically, complaints filed in federal and state court proceedings,” the brief reads. “To expose the news media to liability for accurately reporting the allegations made in such complaints would not only be unprecedented on a nationwide scale but also would have a chilling effect on the exercise of First Amendment rights by members of the news media."

Arren Kimbel-Sannit is a reporter for the Montana Free Press, a nonprofit newsroom, and can be reached at akimbel@montanafreepress.org.