## Facts

- A New York state court entered judgment against Gunder, a former corporate director, for losses tied to dividends allegedly voted from capital in violation of law.
- The New York Times published a news item reporting the existence and amount of that judgment and summarizing related financial figures and dates.
- Gunder did not allege the entire news item was defamatory; he challenged only one sentence stating that after certain payments “aggregating $104,000” the company had remaining assets of “only $93,471.”
- Gunder alleged that this isolated sentence falsely portrayed the corporation’s remaining assets and defamed him.
- In the federal libel action, the New York Times asserted affirmative defenses in its answer.
- Gunder moved to strike all affirmative defenses as legally insufficient; the New York Times opposed and argued the complaint itself failed to state a claim.

## Issues

1. Whether a plaintiff’s motion to strike affirmative defenses permits the court to examine and dismiss a substantively defective complaint.
2. Whether a libel claim is stated when the plaintiff isolates a single sentence from a news report of a judicial judgment, rather than challenging the publication as a whole.
3. Whether the challenged sentence, read in context by an ordinary reader, conveyed a materially false and defamatory meaning.

## Decision

- The court treated the motion to strike as opening the pleadings and first tested the sufficiency of the complaint.
- The court held the complaint failed to state a cause of action for libel.
- Because the complaint was legally insufficient, the court effectively terminated the action at the pleading stage, rendering the motion to strike defenses immaterial.

## Legal Principles

- An attack on the legal sufficiency of an opposing pleading may “search the record,” allowing dismissal of the first pleading that is defective in substance, including a complaint that states no claim.
- In assessing whether language is defamatory, the challenged words must be read in the context of the entire publication and construed as an average, intelligent reader would understand them.
- A news report that fairly and substantially accurately describes judicial proceedings is generally not actionable; minor or immaterial inaccuracies that do not change the gist of the report do not support libel liability.

## Conclusion

The court dismissed the libel complaint because the allegedly defamatory sentence could not be evaluated in isolation and, when read as part of the full report of a judicial judgment, did not communicate a materially false and defamatory meaning sufficient to state a claim.


Gunder v. New York Times Co., 37 F. Supp. 911 (S.D.N.Y. 1941)