By Eriq Gardner
August 11, 2017 - A federal judge remands the case to state court, rejecting HBO's argument that coal companies were fraudulently joined to escape diversity jurisdiction.
HBO has lost the first round in its fight with Murray Energy over a June 18 broadcast of Last Week Tonight With John Oliver, which covered President Donald Trump's generous treatment of the coal industry.
The network wanted a federal court rather than a West Virginia state judge to take up the quarrel over whether the show defamed Robert Murray, Murray Energy and other associated coal companies. HBO argued that because neither Murray, Oliver nor HBO reside in West Virginia, removing the case to federal court is proper. Four subsidiaries named as plaintiffs are based in the state, but the plaintiffs' lawyer argued they aren't real parties in interest.
But in a ruling on Thursday, the federal judge has remanded the case back to a state court where it originated.
"Defendants' primary contention is that the Plaintiff Corporations were not properly joined because the defamatory statements were not of and concerning the corporations, giving the corporations no possibility of asserting a right to relief," writes U.S. District Court Judge John Bailey. "As discussed herein, this Court finds that defamatory statements made about an executive of a business may be sufficient to defame his business where the statement was made about the individual in his professional capacity and reflects negatively on the operation of the business. Therefore, the Plaintiff Corporations may have been defamed by statements made about Mr. Murray, giving them a possibility of success in this action."
In the lawsuit, Murray complains about alleged statements or implications that Murray Energy sacrifices safety and the health of its employees for profits. The complaint also objects to Murray being described as a "geriatric Dr. Evil" and an actor in a squirrel costume that delivered the message "Eat Shit, Bob!" to Mr. Murray.
The judge's decision (read PDF here) today doesn't address the merits of the defamation claim — which brought a scathing response from the ACLU — but nevertheless is an important procedural defeat. As discussed here, media defendants prefer fighting in federal court, and cases like Terry Bollea (Hulk Hogan) v. Gawker in Florida or Beef Products Inc. v. ABC in South Dakota have showcased instances where state judges don't let the First Amendment curtail fact-finding. Additionally, West Virginia's judiciary has a controversial history with outside money from coal interests in elections of state judges.
Murray now gets home field advantage.