By Karen Roman
Wall Street Journal reporter Alexander Gladstone must face a defamation lawsuit for his July 2022 article and tweet regarding Texas business Beneficient and its founder and CEO Brad Heppner, according to a recent ruling by the United States District Court for the Eastern District of Texas.
In the suit, Beneficient and Mr. Heppner claim the July 2022 WSJ article read as a whole was defamation by “gist,” referring to a narrative that harms a third party’s reputation. It also claims two specific statements in the article were per se defamation. The plaintiffs argue that Mr. Gladstone’s work deliberately defamed them and damaged their reputations and economic livelihoods.
Beneficient, which helps investors monetize illiquid assets such as private equity, has been the subject of multiple articles written by Mr. Gladstone. The articles allegedly paint a picture of Mr. Heppner as a leader who exploited investors which, according to the lawsuit, includes falsehoods published with “actual malice.”
The suit also alleges that the tweet accompanying the article was defamation in its essence. The tweet read: “Beneficient CEO Brad Heppner used money from retail investors to help fund his lavish lifestyle. Those investors, many of them elderly and retired, are now facing up to $1.3 billion in losses.”
Gladstone moved to dismiss the case and the Court rejected that attempt, saying “The Court denies the motion…Plaintiffs have alleged a defamatory gist that is ‘reasonably capable of arising from the text’ of the article and tweet.”
“[T]he article repeatedly juxtaposes facts and uses provocative language in ways to convey the defamatory gist identified by Plaintiffs,” the ruling states. “That is sufficient evidence that Gladstone intended to convey the defamatory gist.”
The court also said Mr. Heppner had established a sufficient argument that Mr. Gladstone acted with wrongful intention. “Plaintiffs have adequately alleged actual malice by stating, among other things, that they ‘repeatedly notified Gladstone of specific factual errors’ in the article and that Gladstone nevertheless rejected or ignored their corrections to ‘serve his preconceived agenda.’”
The accusation that “Plaintiffs ‘engineered a sham transaction’ to fund a “lavish lifestyle” at the expense of “elderly and retired investors” is plainly defamatory,” the ruling said.
The court also said that WSJ can be regarded as a source of facts and is therefore not necessarily protected by laws concerning opinions or points of view. “Gladstone, moreover, has not shown that the publications are statutorily privileged as accurate reports of official proceedings or of third-party allegations, the ruling states. “Nor are the publications protected opinion, but rather are statements ‘capable of objective proof as true or false.”
The court also emphasized that Mr. Heppner and Beneficient attempted to share substantial evidence with Mr. Gladstone. “The article and tweet are not an accurate reporting of the hundreds [sic] pages Gladstone submitted,” the ruling states.
A spokesman for Mr. Heppner declined to comment while WSJ parent News Corp. didn’t respond to requests for comment from CorpGov.
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