Spitzer Tells Judge Free Speech Protects Against Libel Suit

Lawyers for Eliot Spitzer, the former New York governor, asked a federal judge to dismiss a libel suit over an article he wrote, claiming it was accurate and protected by the Constitution’s First Amendment.

Spitzer’s lawyers argued before U.S. District Judge Paul Oetken today in Manhattan that the article he wrote for the online magazine Slate didn’t libel former Marsh & McLennan Cos. (MMC) executive William Gilman.

“These sentences can’t be about Mr. Gilman,” Lee Levine, a lawyer for Spitzer, told the judge, referring to the part of the article Gilman claims defames him. “The piece doesn’t say Mr. Gilman’s verdict was vacated but he was guilty anyway.”

Oetken said he will rule later on the motion.

Gilman, who worked at Marsh & McLennan from 1976 to 2004, was indicted in 2005 after an investigation by then-Attorney General Spitzer over practices in the insurance industry. He and other executives were charged with a conspiracy to fix prices and rig bids on insurance contracts. The state had filed a bid- rigging lawsuit against Marsh in 2004. Gilman was fired by the company, according to court papers.

After an 11-month trial without a jury, New York Supreme Court Justice James Yates found Gilman and co-defendant Edward McNenney guilty of one count of restraint of trade and competition. Yates vacated that verdict in July 2010 after ruling that certain evidence wasn’t disclosed by the prosecutors to the defense. In January 2011, New York Attorney General Eric Schneiderman declined to retry the men and dropped the charges against them.

Newspaper Editorial

In August 2010, the Wall Street Journal ran an editorial critical of Spitzer’s investigation of Marsh & McLennan. In response, Spitzer wrote the piece for Slate the same month. In it, he noted that Marsh & McLennan agreed to pay $850 million to customers for reimbursements of premiums in connection with the investigation. He also said that unnamed Marsh executives “pocketed” increased fees and kickbacks.

“This wasn’t journalism,” Jeffrey Liddle, a lawyer for Gilman, told the judge. “This was an attempt to justify one person at the expense of another.”

Gilman sued Spitzer and Slate Group LLC in August 2011. Slate is owned by Washington Post Co. (WPO)

‘Clear From Context’

“Mr. Spitzer indicates that Mr. Gilman is guilty of crimes, even crimes he was never accused of, despite the fact that his conviction has been vacated,” Gilman’s lawyers wrote in the complaint. While noting that Spitzer hadn’t named him in the article, Gilman’s lawyers said, “It is clear from the context that Mr. Spitzer is referring to Mr. Gilman.”

Gilman is seeking $60 million in damages.

“Mr. Spitzer’s one-sentence summary of the Marsh-related cases his office initiated was substantially accurate as regards the contour of the criminal charge against Mr. Gilman that was pending in August 2010 when the piece was published,” Spitzer’s lawyers said in their motion for judgment.

The case is Gilman v. Spitzer, 11-05843, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Don Jeffrey in New York at djeffrey1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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