The Fourth Circuit Court of Appeals held oral argument Wednesday in Svetlana Lokhova’s appeal from a lower court’s dismissal of her suit against confidential human source Stefan Halper and a slew of media outlets. For 50 minutes, the three-judge panel peppered attorneys with an array of questions.
Wednesday’s appeal followed a federal judge’s dismissal of Lokhova’s lawsuit against Halper, the Wall Street Journal, Washington Post, New York Times, and NBC. Lokhova, a former Ph.D. student at Cambridge University and an expert in communist Russia’s intelligence operations, alleged Halper peddled false claims that she was a Russian spy and a paramour of Michael Flynn, with various media outlets then pushing that narrative in the run-up to the 2016 election and following.
In addition to defamation, Lokhova alleged intentional interference with contract and business relations, as once Halper’s narrative took hold, she lost a second book deal and other business opportunities, according to her complaint. Lokhova also alleged a civil conspiracy by the defendants.
The trial court tossed Lokhova’s complaint, finding most of the claims barred by Virginia’s one-year statute of limitations. The court also concluded the allegations in the complaint failed to provide the required specificity and that the articles did not present defamatory statements about Lokhova in any event.
In his brief on appeal, Lokhova’s attorney, Steven Biss, attacked a dozen-plus aspects of the trial court’s ruling. During Wednesday’s oral argument, Biss focused on two aspects of the lower court’s decision.
First, Biss challenged the dismissal of Lokhova’s claim against Halper for intentional interference with contractual relations. This tort claim allows a plaintiff, like Lokhova, to recover when a third party interferes with a contract. In this case, Lokhova claimed she lost a book deal and other business dealings as a result of Halper’s defamation.
During argument, the three-judge panel — which consisted of Judge James Wynn, a Bill Clinton appointee; Judge Stephanie Thacker, an Obama appointee; and Judge Marvin Quattlebaum, Jr., a Trump appointee — pushed Lokhova’s attorney to cite the specific allegations in the complaint that established Halper knew of Lokhova’s book deal and other business relations she claims she lost because of Halper’s defamation.
Reminding Biss that under the controlling Supreme Court precedent of Iqbal and Twombly, he had to do more than conclusorily allege Halper knew of the contracts, Judge Quattlebaum queried counsel on what specified facts supported the claim. Here, Biss highlighted the allegations detailing Halper’s position at Cambridge and his awareness of Lokhova’s work, to argue that reading those facts in the light most favorable to his client satisfied the legal standard. Biss also stressed that, unlike the defamation claims that came with a one-year statute of limitations, the limitation period for the intentional interference with contract claim was five years.
Halper’s attorney disagreed, arguing that Lokhova’s intentional interference claim was time-barred because the wrongful conduct on which it was based was defamation. Thus, a one-year statute governed, according to Halper’s counsel. Halper’s attorney also maintained that the complaint lacked sufficient detail to establish his client knew of Lokhova’s book deal.
From their questioning, Judges Wynn and Quattlebaum seemed intent on dissecting the complaint to determine whether Lokhova’s allegations were sufficient to allow her intentional interference claim to proceed to the discovery stage.
Lokhova’s attorney next focused on the defamation claims and specifically the question of “republication.” The lower court had dismissed the defamation claims, finding them barred by Virginia’s one-year statute of limitations. On appeal, Biss argued that each time a third-party tweeted an older article, the statute of limitations ran anew. The panel seemed unpersuaded by this argument.
Biss’s alternative theory of “republication” — that a hyperlink resets the statute of limitations — gained more traction with Quattlebaum. “When you elect to run a separate article, with hyperlink, why aren’t you exposing yourself?” the Trump appointee asked counsel for The New York Times and Wall Street Journal. In response, the media giants’ attorney referenced decisions out of two other circuits that concluded that a hyperlink, by itself, is not a republication.
The question of republication by a hyperlink seemed to stymie the panel, and the judge’s conference that followed oral argument likely focused on that question. But even if the panel agrees that the defendant-publishers republished the allegedly defamatory statements by including hyperlinks, the question remains whether those statements constituted defamation.
Judge Thacker seemed most focused on that issue, interrupting Biss shortly into the argument to ask what specific allegations qualified as defamation. Biss hit some highpoints, citing various paragraphs of the complaint, and then added that we now know, four years after the fact from declassified material, that Halper was the source of the false statements.
Not enough time was allocated to the oral argument for the parties and the court to delve more deeply into the question of defamation. That will leave the court to wade through the allegations of the complaint and the numerous articles to determine if the various defendant media outlets published defamatory statements about Lokhova.
Here, the Virginia Supreme Court decision in Pendleton v. Newsome will hold great significance. In Pendelton, the Supreme Court of Virginia “reiterated that Virginia law recognizes a claim for defamation by inference, implication or insinuation.” That is precisely how Lokhova was defamed. But it will take some heavy lifting for the court to analyze the allegations against each of the defendants and determine whether, reading those allegations in the light most favorable to Lokhova—as the law requires—her claim satisfies the standard of Pendelton.
Whether the court will find the allegations of defamation sufficient—and timely—is unclear. Conversely, the panel made clear its view that defendant NBC Universal could not be held liable for allegedly defamatory tweets by their contributor, Malcolm Nance, under Virginia law. The panel also seemed unlikely to sanction the plaintiff or plaintiff’s attorney, as Halper had requested, although Judge Thacker seemed more open to that possibility.
It will be several months before the court hands down its decision. But in the interim, we may learn more about Halper’s role from Special Counsel John Durham, who is investigating the Russia collusion hoax.
Given that previously declassified materials revealed that Halper relayed false information about Lokhova and Flynn to the FBI during the Crossfire Hurricane investigation and that he also tried to pass off the story to Christopher Steele, it would be surprising if Halper’s role were not under further scrutiny by Durham’s team.
That scrutiny, though, even if it results in charges against Halper, won’t make Lokhova whole again. And even a victory in the Fourth Circuit is unlikely to repair the damage done to her career and life—but it would be a start.
Margot Cleveland is a senior contributor to The Federalist. Cleveland served nearly 25 years as a permanent law clerk to a federal appellate judge and is a former full-time faculty member and adjunct instructor at the college of business at the University of Notre Dame.
The views expressed here are those of Cleveland in her private capacity.