Appeals court tosses out American Sniper defamation award to Ventura

Taya Kyle and her late husband’s publishing team can breathe a sigh of relief … for now, anyway. The Eighth Circuit Court of Appeals has tossed out Jesse Ventura’s win on defamation and “unjust enrichment,” citing numerous errors by the court that presided in the 2014 lawsuit.  As it turns out, the trial court ignored the fact that Minnesota bars “unjust enrichment” lawsuits:

A federal appeals court has thrown out a $1.8 million judgment awarded to former Minnesota Gov. Jesse Ventura, who says he was defamed in the late author Chris Kyle’s bestselling book “American Sniper.”

The 8th U.S. Circuit Court of Appeals on Monday rejected the jury’s 2014 award of $500,000 for defamation and $1.3 million for unjust enrichment against Kyle’s estate.

The court reversed the unjust-enrichment award, saying it fails as a matter of law. It also vacated the defamation award, but ordered a new trial for that portion of the case.

That’s hardly the extent of the errors found by the court in the trial. The court unanimously noted that the introduction of speculation on defamation insurance and the extent to which Harper Collins’ financial interest in the case violated evidentiary rules — a point that counsel for Kyle repeatedly made in both objections and in motions for mistrial. Two of the three judges on the panel ruled those errors fatal to the case:

At trial, Ventura’s counsel asked Rosenblum whether she was aware Kyle’s attorneys were “being paid by the insurance company for HarperCollins” and “HarperCollins has a direct financial interest in the outcome of this litigation because they are providing the insurance.” Ventura’s counsel asked Hubbard whether he was “aware of any insurance provision in [HarperCollins’s] contract [with Kyle]” and inquired “you obtain insurance coverage in the case when an author may get sued for libel or defamation, correct?” These questions assumed facts never in evidence—an insurance policy purchased by HarperCollins that covered Kyle, and Kyle’s attorneys were paid by the insurer. Both witnesses denied awareness of any insurance policy. Kyle’s counsel objected to this questioning before Ventura’s counsel’s cross-examination, tried to object at the time, and moved for a mistrial after each witness testified. The district court permitted this cross-examination, by which Ventura’s counsel ostensibly sought to show the HarperCollins witnesses were biased in favor of Kyle because HarperCollins and Kyle were covered by the same insurance policy. …

Here, there is no evidence Rosenblum and Hubbard had any economic tie or “substantial connection” to HarperCollins’s insurance carrier. They were not currently or formerly employed by the insurance company, seeking employment with the insurance company, paid for their testimony by the insurance company, or holders of stock in the insurance company. See Wright & Graham, supra § 5367. There was no risk Rosenblum and Hubbard might personally contribute to the payment of any judgment in favor of Ventura. Ventura even failed to show a judgment in his favor could adversely affect Rosenblum’s and Hubbard’s employment with HarperCollins. …

It is difficult to envision how Rosenblum and Hubbard could have been biased or even influenced by an insurance policy of which they were unaware. Even if they had been aware of a policy, any “connection” they had to the insurance carrier was far too remote to create a risk of bias strong enough to outweigh the substantial prejudice of Ventura’s counsel’s pointed and repeated references to unproven insurance.

Since they never established that an insurance policy exists, the evidentiary rule barring this kind of testimony remains in place. The third judge also agreed that this questioning and the inclusion of this argument in the summation violated evidentiary rules, but that the impact on the jury was negligible and not sufficient to overturn the jury’s findings.

The judges were united on the “unjust enrichment” claims, however, arguing that it constituted a back-door method of amplifying the defamation award. Minnesota law bars that kind of claim outside of a contractual relationship, which Ventura and Kyle clearly did not have:

Under Minnesota law, “to prevail on a claim of unjust enrichment, a claimant must establish an implied-in-law or quasi-contract in which the defendant received a benefit of value that unjustly enriched the defendant in a manner that is illegal or unlawful.” Caldas v. Affordable Granite & Stone, Inc., 820 N.W.2d 826, 838 (Minn. 2012). We agree with Kyle that “Ventura cannot maintain a claim for unjust enrichment because he had no pre-existing contractual or quasi-contractual relationship with Kyle.” See id. (“We have limited the application of unjust enrichment to claims premised on an implied or quasi-contract between the claimant and the party alleged to be unjustly enriched.”).

Although Ventura is correct that “[a] quasi-contract will be imposed” where “a benefit was conferred unknowingly or unwillingly,” we reject Ventura’s assertion that Ventura conferred a “benefit” on Kyle by Ventura’s mere existence as a colorful figure who might inspire people to make up stories about him. Galante v. Oz, Inc., 379 N.W.2d 723, 725-26 (Minn. Ct. App. 1986). Ventura’s unjust-enrichment claim is not allowed by Minnesota law.

If that argument holds up, then everyone who comments about Ventura would have a “quasi-contract” with him. Kyle’s team challenged this on First Amendent grounds as well, but the court took a pass on those issues since they could reach a quick conclusion on Minnesota law. It might have been interesting to hear their thoughts on the constitutional argument, but courts routinely pass on those judgments if they can decide on narrower terms. For now, everyone gets to continue arguing their favored positions.

The court vacated both verdicts, reversing the unjust-enrichment claim outright but remanding the defamation case back to the circuit court. It’s not necessarily all good news for Kyle, assuming that this opinion doesn’t get overturned on appeal to the Supreme Court. Their team wanted the defamation case tossed out with prejudice based on the failure of Ventura to prove actual malice and material falsity. The majority opinion avoids dealing with that issue, and the dissenting judge discusses it only briefly in a footnote to state that they don’t want to take sides on what was essentially a credibility contest between competing witnesses:

Because the majority vacates and remands the defamation judgment for new 13 trial based on the references to insurance in trial testimony and closing argument, the majority does not address Kyle’s additional arguments that Kyle is entitled to a new trial on the defamation claim because the district court failed to instruct the jury that Ventura had to prove material falsity by clear and convincing evidence and Ventura failed to establish actual malice. On remand, these issues will likely be raised again. Out of an abundance of caution, I decline to issue an advisory opinion on the merits of these questions.

In other words, Minnesotans getting jury-duty summons may wind up on Ventura v Kyle in the near future.