Spitzer sued for defamation

Jessica M. Karmasek Aug. 26, 2011, 1:00pm


NEW YORK (Legal Newsline) - Former New York Attorney General Eliot Spitzer and Internet magazine Slate are being accused of defamation, according to a lawsuit filed in federal court last week.

Insurance executive William Gilman, in a complaint filed Aug. 19 in the U.S. District Court for the Southern District of New York, says Spitzer wrote an article in Slate "containing false and defamatory statements" about him.

The article, titled "They Still Don't Get It," published Aug. 22, 2010, is "patently false," said Gilman, who worked at Marsh & McLennan Companies Inc. for nearly 30 years.

Spitzer's article was in response to a Wall Street Journal editorial, published the week before, that was highly critical of Spitzer's handling of an investigation into Marsh and of the prosecution of Gilman and Edward McNenney.

Spitzer filed a civil complaint against Marsh in October 2004 in connection with the use of contingent commissions. In September 2005, Spitzer indicted Gilman and seven others, including McNenney.

Contingent commissions are fees paid by insurers to insurance brokers who place insurance business with the insurer. They are typically paid in addition to the regular commissions that insurance brokers receive from the insurer when the broker matches the insurer with a corporation that needs insurance coverage.

Much of Gilman's work for Marsh included negotiating these commissions.

Spitzer alleged in his investigation, which began in May 2004, that contingent commissions were illegal, despite their widespread use in the industry.

According to Gilman's complaint, Spitzer wrote in his article that Gilman was guilty of crimes, even crimes he was never accused of, despite the fact that his conviction had been vacated.

After an 11-month bench trial, both Gilman and McNenney were acquitted of all but one of the charges brought against them.

In January, current New York Attorney General Eric Schneiderman dismissed the remaining charge against Gilman and McNenney.

And though Spitzer's article doesn't name Gilman specifically, Gilman says "it is clear from the context that Mr. Spitzer is referring to Mr. Gilman."

Gilman also alleges that Spitzer made his statements with actual malice towards Gilman.

"Mr. Spitzer was well aware of his own allegations as attorney general and the resolution of those allegations in favor of Mr. Gilman and yet, recklessly disregarded these facts," Gilman wrote.

Gilman says "any amount of fact checking" would have revealed to Slate that Spitzer's statements were false.

"The Slate Group knew or should have known Mr. Spitzer's statements were false," he wrote.

Gilman's lawyers, Jeffrey L. Liddle and James W. Halter of New York law firm Liddle & Robinson LLP, say as a consequence of Spitzer's article, Gilman has suffered economic injury and continues to suffer damage to his reputation.

Gilman is seeking actual, special and compensatory damages of at least $10 million, general damages of at least $20 million and punitive damages of at least $30 million, plus costs, interest and attorneys fees.

According to the New York Times, a separate but related lawsuit was filed against Spitzer and Slate in New York state court for at least $30 million.

Spitzer told the Times on Monday that the lawsuit is "entirely frivolous."

Slate editor David Plots agreed, telling the Times it was a "baseless lawsuit" and that the magazine looked forward to defending it.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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