Burson - Davis & Gilbert Opinion on libel relating to January 26 09 Press Release by Garbus.doc

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    F.P.O.

    Direct Dial: 212.468.4890Personal Fax: 212.974.6938

    Email: [email protected]

    March 31, 2009

    By Email and U.S. Mail

    Mark W. Williams, Esq.Sherman & Howard L.L.C.633 Seventeenth Street, Ste. 3000Denver, CO 80202

    Re: Claims by Stan Lee et al. against Burson-Marsteller

    Dear Mark:

    As you know, we represent Burson-Marsteller (Burson) with respect to the claimraised by your clients Stan Lee, Arthur Lieberman, and POW! Entertainment Inc (POW!)in your February 16, 2009 letter that a press release issued by Burson on behalf of itsclient, SL Claims LLC (SLC) on January 27, 2009 (the Press Release) is defamatory.This letter addresses the lack of merit of that claim.

    To establish such a claim, your clients will have to prove that Burson made falseand defamatory statements of fact in the Press Release. This they will not be able to do.The Press Release contained truthful statements of facts, or pure opinion i.e. , statementswhich cannot be reasonably interpreted as stating or implying assertions of fact (which arenot actionable). See Unelko Corp. v. Rooney , 912 F.2d 1049, 1053 (9 th Cir. 1990); Moyer v. Amador Valley Joint Union High School District , 225 Cal. App. 3d 720 (1990); Immuno

    AG v. Moor-Jankowski , 77 N.Y.2d 235 (1991). Judge Wilson did, in fact, rule that thetransfer of certain intellectual property rights from the chapter 11 bankruptcy estate of StanLee Media, Inc. to QED Productions, LLC [(QED)] was done in violation of the automaticstay, and was therefore void as a matter of law. QED is a subsidiary of POW!, and StanLee and Arthur Lieberman were principals of POW! at the time of the transfer. These factswere either in the court order or in the record before the court when it made its ruling.Furthermore, POW!s own website identifies Mr. Lee and Mr. Lieberman as founders andprincipals of POW! and POW! issued its own press release in 2005 regarding POW!sacquisition of these assets. The Press Release was thus a fair and substantially accuratereport of the court order because it was based on facts that, even if not included in thecourt order, were part of the record before the court, and was based on facts that weretrue.

    Other statements in the Press Release were the opinion of SLC, and readers wouldinterpret them as such in the context of a press release issued by a party to a litigation.See e.g., Partington v. Bugliosi , 56 F.3d 1147 (9th Cir. 1995) (statements concerningopposing counsel by an attorney not actionable because they offered the personalviewpoint of the author concerning a trial and readers would recognize the statements as

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    Mark W. Williams, Esq.March 31, 2009Page 2

    highly subjective opinions of the author); Mattel, Inc. v. MCA Records, Inc. , 28 F. Supp. 2d1120, 1159-62 (C.D. Cal. 1998) (statements regarding a lawsuit found to be non-actionablehyperbole where the public knew that each side believed strongly in its position).

    Moreover, your clients are clearly public figures, and the issue a judicial rulingregarding the transfer of assets of a bankruptcy estate is a matter of public concern,including to the creditors of the estate, investors and shareholders of POW!, a publiccompany, and its business associates. Moreover, POW! and its principals voluntarilyattempted to influence the public by, among other things, issuing the 2005 press releasementioned above. Mattel , 28 F. Supp. 2d at 1162-1164. Therefore, your clients wouldhave to prove, by clear and convincing evidence, that any allegedly defamatory statementswere made with actual malice on the part of Burson. Id. at 1163. Actual malice requiresthat your clients establish Bursons subjective intent and show that the statements weremade with knowledge that they were false or reckless disregard; i.e. , a high probability of awareness that they were false. Id. Failure to investigate does not constitute actualmalice. See Masson v. New Yorker Magazine , 960 F.2d 896, 901 (9th Cir. 1992) (findingthat a publisher with no obvious reason to doubt the accuracy of a story is under no duty toconduct an investigation); Mattel , 28 F. Supp. 2d at 1164 (finding no actual malice whendefendant made statements without full knowledge and failed to retract them and statingthat failure to investigate, even when a reasonably prudent person would have done so, isnot sufficient to establish reckless disregard); Freeman v. Johnston , 84 N.Y.2d 52 (1994)(failure to investigate alone will not support finding of actual malice).

    Your clients cannot meet this burden. Assuming arguendo that there were anyfalse statements in the Press Release, Burson had no knowledge or high probability of awareness that any such statements were false. Burson reviewed the Court Order, andrelied on SLC and SLCs counsel in approving the accuracy of the Press Release. As youknow, SLCs counsel, Marty Garbus, is an experienced attorney, including in the field of defamation and first amendment law. It was thus certainly reasonable for Burson to relyupon SLC and Mr. Garbus to approve the Press Release for accuracy. See Bindrim v.Mitchell , 92 Cal. App. 3d 61, 73 (1979) (finding no actual malice on the part of thepublisher where it received authors assurances regarding the characters in a manuscriptand an editor knowledgeable about libel read the manuscript). Indeed, we find it tellingthat your clients have not asserted any claims against SLC, on whose behalf Bursonissued the Press Release.

    Although Burson believes your clients claim has no merit, in order to avoidlitigation, as you know, Burson did agree to issue an amended statement, which weproposed to you on March 5 th, 2009. We do not believe the retraction your clientsrequested was accurate or appropriate. As I explained to you, your retraction couldexpose Burson to liability from SLC, and thus was unreasonable. In addition, in light of thefact that your clients have issued their own press release which, as public figures, theyhave the means of doing negates the need for a retraction from Burson.

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    Mark W. Williams, Esq.March 31, 2009Page 3

    Nevertheless, we are still willing to discuss this matter further in order to reach anamicable resolution and are still willing to issue the amended statement we provided toyou. It does, however, seem more practicable for you to negotiate a statement directlywith SLC since that is the party that the Press Release was issued for and the party whoapproved the Press Release.

    This letter is written for settlement purposes only and without waiver of any our clients rights, claims and/or defenses.

    Very truly yours,

    Marc J. Rachman

    cc: Jack Cairl, Esq.