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Federal Appellate Court Hands Michael Avenatti Another Loss in Defamation Lawsuit Against Fox News


Michael Avenatti via Drew Angerer_Getty Images

Michael Avenatti has lost his bid to reinstate his defamation lawsuit against Fox News, as a federal appellate court on Thursday affirmed a judge’s dismissal order.

Avenatti sought more than $250 million from the network and several well-known commentators, including Sean Hannity, Laura Ingraham, Maria Bartiromo and Howard Kurtz, in a November 2020 lawsuit over coverage of his 2018 arrest in Los Angeles on suspicion of assaulting his then-girlfriend.

But a judge dismissed the case last August, saying Avenatti didn’t meet the basic legal threshold as a public figure required to show actual malice.

Avenatti’s appeal focused not on the reasons for the dismissal but on a more procedural issue that argued the federal court didn’t have jurisdiction to dismiss the case because it improperly denied his request to move it to state court. Avenatti originally filed the case in Delaware Superior Court, but Fox News removed it to federal court, arguing it was warranted because Avenatti was a California resident but none of the named defendants were.

As Thursday opinion summarizes: “Avenatti did not accept this sudden removal to federal court lying down.”

Three days later, he filed an amended complaint naming as a defendant a Fox News employee living in California. He then asked to remand the case to state court, arguing that the addition of a California-based defendant mooted Fox News’ argument about Avenatti being the only California resident in the lawsuit.

But Judge Stephanos Bibas of the Third Circuit, sitting by designation in the District of Delaware, declined to remand the case, deciding instead to drop Hunt as a defendant and restore the geographic diversity that had previously warranted federal jurisdiction. He then granted a defense motion to dismiss, writing: “Avenatti dislikes how Fox News covered his arrest. But he cannot overcome the truthfulness of the gist of Fox’s coverage—he was, after all, arrested for suspected domestic violence.”

Thursday’s opinion, decided by Bibas’ Third Circuit colleagues Thomas Ambro, Marjorie Rendell and Julio Fuentes, said Bibas’ opinion dropping Hunt and restoring federal jurisdiction was “thorough and well-reasoned” and his analysis “hit all the key notes.”

“It was reasonable for the District Court to suspect an illicit motive based on this sequence of events,” according to the opinion, adding that the court “had good reason to conclude that Hunt was added to force remand, a fact the Court rightly weighed in favor of dropping him.”

A Fox News spokesperson said the network is pleased with the decision.

“Today’s ruling is another victory for journalists everywhere, who should not be intimidated into silence when bullies like Michael Avenatti file baseless multimillion-dollar lawsuits and further waste the Court’s time with appeals,” according to a statement.

The opening brief from Avenatti’s lawyer, Shawn R. Perez of Las Vegas, accused Fox News’ lawyers of “blatant forum shopping” by removing the case to federal court “based on a technicality,” but the judges made clear they weren’t swayed.

“Coming from Avenatti, the accusation of exploiting technicalities to obtain one’s preferred forum rings hollow,” according to the opinion. “In any event, there is nothing inequitable about asserting one’s legal rights, as Fox News did, and Defendants’ interest in maintaining the federal forum was no less significant than Avenatti’s desire to departure.”

Fox News was represented by Eric M. George of Ellis George Cipollone O’Brien Annaguey LLP, who also represented Avenatti’s ex-law partner Jason M. Frank in civil proceedings related to $4.85 million Avenatti owes Frank.

Avenatti is currently at a federal prison near Long Beach, California, serving sentences for extorting Nike and defrauding Stormy Daniels. He pleaded guilty to five felonies in his 36-count Central District of California case in June, including four counts of wire fraud, and is awaiting an Oct. 3 sentencing.

Read the full opinion below:

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A graduate of the University of Oregon, Meghann worked at The Spokesman-Review in Spokane, Washington, and the Idaho Statesman in Boise, Idaho, before moving to California in 2013 to work at the Orange County Register. She spent four years as a litigation reporter for the Los Angeles Daily Journal and one year as a California-based editor and reporter for and associated publications such as The National Law Journal and New York Law Journal before joining Law & Crime News. Meghann has written for The Washington Post, Los Angeles Times, The New York Times, Los Angeles Magazine, Bloomberg Law, ABA Journal, The Forward, Los Angeles Business Journal and the Laguna Beach Independent. Her Twitter coverage of federal court hearings in a lawsuit over homelessness in Los Angeles placed 1st in the Los Angeles Press Club's Southern California Journalism Awards for Best Use of Social Media by an Independent Journalist in 2021. An article she freelanced for Los Angeles Times Community News about a debate among federal judges regarding the safety of jury trials during COVID also placed 1st in the Orange County Press Club Awards for Best Pandemic News Story in 2021.