## Facts

- Larry Klayman was terminated from his position at Judicial Watch, Inc. (Judicial Watch).
- Upon his departure, Klayman and Judicial Watch entered into a severance agreement containing a mutual nondisparagement clause.
- The nondisparagement clause barred each party from making, or causing others to make, disparaging, defamatory, or negative comments or remarks about the other party.
- Klayman later sued Judicial Watch, alleging it breached the nondisparagement clause by using its influence to persuade media outlets to shun him.
- Klayman claimed Judicial Watch’s alleged conduct cost him professional opportunities, including a planned CNN appearance.
- During the litigation, the district court sanctioned Klayman for discovery-related misconduct by limiting the categories of damages he could pursue.
- After the sanctions, the parties asked the court to clarify whether Klayman could still seek damages for harm to his reputation in connection with the alleged nondisparagement breach.
- Klayman had not produced evidence quantifying the monetary losses he claimed to have suffered from the alleged “shunning” and lost opportunities.

## Issues

1. After the court’s discovery sanctions limiting damages, could Klayman still pursue damages for harm to reputation based on an alleged breach of the severance agreement’s nondisparagement clause?
2. Would allowing reputational damages in this posture effectively import tort-like injury (e.g., defamation-type harm) into a contract claim based only on duties created by the agreement?
3. Could Klayman proceed on reputational or opportunity-loss damages where he had not produced evidence enabling a non-speculative calculation of monetary loss?

## Decision

- The court issued a clarification order construing the effect of its prior sanctions on the damages Klayman could seek.
- The court limited Klayman to damages that are recoverable as contract damages and that remained available after the sanction order.
- The court rejected Klayman’s attempt to seek broad reputational damages tied to alleged disparagement and media “shunning,” treating that theory as tort-like harm not recoverable merely because the parties had a contract.
- The court reasoned that a plaintiff cannot transform conduct into an actionable tort simply by pointing to a duty created by contract (including a nondisparagement clause).
- The court also relied on the lack of record support for Klayman’s claimed losses, noting his failure to produce evidence quantifying monetary damages from the alleged lost media and professional opportunities.

## Legal Principles

- Contract remedies compensate for breach of contractual duties; they do not automatically provide tort-style recovery for reputational injury absent an independent duty recognized by tort law.
- A party cannot claim that conduct is tortious solely because the contract imposed the duty allegedly violated.
- Contract damages must be proven with a reasonable basis for calculation; speculative or unquantified damages are not recoverable.
- Discovery sanctions may restrict the categories of damages and proof available at later stages of litigation, and courts may enforce those limits when a party seeks to expand damages theories after noncompliance.
- A nondisparagement clause is enforced through contract law; requested damages must match what contract law permits and what the evidentiary record supports.

## Conclusion

In this post-sanctions clarification ruling, the District Court for the District of Columbia limited Larry Klayman’s available recovery on his severance agreement nondisparagement theory, holding that he could not pursue broad reputational damages tied to alleged media “shunning” and lost opportunities where such harm resembled tort-type injury and where he failed to produce non-speculative proof quantifying his claimed losses, particularly in light of prior discovery sanctions restricting damages.


Klayman v. Judicial Watch, Inc., 255 F. Supp. 3d 161 (2017)