Arbitrators, Like Judges, Are Immune from Libel Lawsuits Based on Their Opinions

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From today’s decision by Judge Jia Cobb in Seltzer v. Financial Industry Regulatory Authority:

Plaintiff Susan Seltzer participated in an arbitration proceeding before the Financial Industry Regulatory Authority (FINRA). The arbitration concluded with a written award that was published online. Seltzer alleges that the award defamed her by incorrectly describing her actions in the arbitration proceeding. She also contends that FINRA took actions to “tag” the award to her name in a Google search. Seeking to recover for the harms she allegedly suffered from the publication of those statements, Seltzer sued FINRA….

The Court can make out the following from Seltzer’s allegations. The events giving rise to this case involve an arbitration Seltzer initiated in FINRA’s arbitration forum in 2017. The arbitration panel issued a written award dismissing Seltzer’s claim. The award included some descriptions of the arbitration proceedings and characterized Seltzer as acting “vicious[ly]” and making “ad hominem attacks” against other parties, among other things. Seltzer acknowledges that FINRA’s Codes of Arbitration Procedure requires that it make all arbitration awards publicly available. Accordingly, FINRA posted the arbitration award online…. Seltzer knew about the statements as early as November 6, 2018 ….

Seltzer also alleges that on July 13, 2020, FINRA began “publish[ing] the false and defamatory award tagged to [her] name in a Google Search.”  Seltzer does not clearly explain how she claims FINRA did this, but she seems to allege that FINRA was responsible for the award appearing in Google searches of her name. She alleges that in 2022, FINRA created “knowledge graphs” that also linked the “defamatory award” to her. Her Complaint includes allegations that FINRA altered the complaint that she filed in the arbitration by removing the names of certain individuals, but she does not allege that FINRA altered any allegedly defamatory statements in the award.

The court held that plaintiff’s claims were barred by D.C.’s one-year statute of limitations for libel claims:

Seltzer tries to avoid the statute of limitations problem by alleging that FINRA somehow linked the award to her on the web, or otherwise caused the award to appear in Google search results for her name and business, in 2021 and 2022, well after FINRA first posted the award. Seltzer contends that by manipulating Google search results to “tag” the award to online searches that include her name, FINRA republished the defamatory statements (or caused them to be republished) and thus restarted the statute of limitations clock.

The Court disagrees. In the District of Columbia, the “single publication” rule governs the statute of limitations for defamatory statements. Under this rule, the statute of limitations begins to run on the date the statement is published or is “first generally available to the public.” The statute of limitations does not restart simply because “[c]opies of the original” are made, as such copies are “still part of the single publication.” However, the statute of limitations will restart if the statement is republished in a “a new publication” that is intended to “reach a new audience.” Although this rule is most easily applied to traditional media, courts resolving claims for web-based defamation have found that “a statement on a website is not republished unless the statement itself is substantively altered or added to, or the website is directed to a new audience.” …

Certainly, the statute of limitations does not restart every time that Seltzer performs a Google search and can pull up the arbitration award or other information about her. The award is available on the same online portal and has not been republished. Even taking Seltzer’s factual assertions as true, she seems to describe Google’s search engine operating as it normally does. There is nothing surprising or nefarious about Seltzer’s allegation that when she enters “FINRA Awards Seltzer” into the Google search engine, the arbitration award and other results relating to Seltzer appear. And if the Court has misunderstood Seltzer’s allegations, FINRA has not republished the arbitration panel’s conclusions to a “new audience” simply because a third-party search engine brings up a previously published award when a user searches related key terms….

And the court held that FINRA was in any event protected by arbitral immunity:

“Judges, advocates, and witnesses” enjoy “absolute immunity” when acting in their official capacity “because of the special nature of their responsibilities” and because the “loser in one forum will frequently seek another, charging the participants in the first with unconstitutional animus” or other wrongs. Absolute immunity is thus “necessary to assure judges, advocates, and witnesses can perform their respective functions without harassment or intimidation.” Courts in this District, in agreement with most circuit courts that have considered the issue, have extended this privilege to cover both individual arbitrators and arbitration forums because of their quasi-judicial nature.  The Court is persuaded by this precedent and finds that FINRA is immune from suit….

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