Spitzer Wins Dismissal of Ex-Marsh Executive’s Lawsuit

Eliot Spitzer, the former New York governor, won dismissal of a lawsuit claiming he defamed a former Marsh & McLennan Cos. (MMC) executive in an article he wrote for the online magazine Slate.

U.S. District Judge Paul Oetken in Manhattan granted Spitzer’s motion for judgment without a trial and dismissed the libel suit by William Gilman. Gilman was seeking $60 million in damages.

The reasons for yesterday’s ruling will be set forth in a forthcoming memorandum of opinion, Oetken said in his order. The judge also granted Gilman’s request to dismiss Spitzer’s counterclaim that the lawsuit violated New York’s law against so-called strategic lawsuits against public participation, also known as SLAPPs.

Gilman, who worked at Marsh from 1976 to 2004, was indicted in 2005 after Spitzer, then New York’s attorney general, investigated insurance-industry practices. Gilman and other executives were accused of a conspiracy to fix prices and rig bids on insurance contracts. The state had filed a bid-rigging lawsuit against Marsh in 2004.

After an 11-month trial, New York Supreme Court Justice James Yates found Gilman and co-defendant Edward McNenney guilty of one count of restraint of trade and competition. In 2010, Yates vacated that verdict after ruling that certain evidence wasn’t disclosed by the prosecutors to the defense.

Fees, Kickbacks

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

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

“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 said in the complaint. Although Spitzer didn’t name him in the article, Gilman’s lawyers said, “It is clear from the context that Mr. Spitzer is referring to Mr. Gilman.”

Spitzer claimed that the article didn’t libel Gilman and that it was accurate and protected by the First Amendment to the U.S. Constitution.

‘Substantially Accurate’

“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 court papers.

In January 2011, New York Attorney General Eric Schneiderman declined to retry Gilman and McNenney and dismissed the charges against them.

Jeffrey Liddle, a lawyer for Gilman, and Lee Levine, a lawyer for Spitzer, didn’t immediately return calls to their offices after regular business hours yesterday seeking comment on the ruling.

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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