## Facts

- Federal authorities raided The Cheetah Club, a midtown Manhattan strip club, during an investigation into an alleged trafficking and sham-marriage scheme tied to organized crime.
- A CBS television report, broadcast from outside the club, stated that sources and federal authorities said the investigation was dubbed “Operation Dancing Brides,” that the club was “at the center of the operation,” and that authorities said it was “run by the mafia.”
- The report described arrests and allegations that women from Russia and Eastern Europe were recruited, placed in sham marriages, and forced to work at strip clubs, including The Cheetah Club.
- CBS also posted an online story summarizing the indictment and provided the indictment as an attachment.
- The club’s owner/operator sued, along with separate entities that provided dancer booking, management, and promotional services and certain individual managers affiliated with those entities.
- The non-club plaintiffs alleged that statements about the club being “run by the mafia” and “at the center” of the operation defamed them by implication because they “effectively ran” the club.

## Issues

1. Whether the challenged broadcasts were reasonably “of and concerning” the independent contractor entities and individual managers who were not named or identified in the reports.
2. Whether the broadcasts were substantially true, as reports of official allegations arising from the raid and indictment, defeating defamation liability.
3. Whether the small-group defamation doctrine allowed unnamed managers/entities to sue based on statements directed at the club.

## Decision

- The Appellate Division, First Department affirmed dismissal of the defamation claims brought by the independent contractor entities and individual managers.
- The court held the broadcasts were substantially accurate reports of what federal authorities alleged about the club’s role in the investigation.
- The court held the statements were not “of and concerning” the non-club plaintiffs because the reports focused on the club and did not identify those plaintiffs by name, title, or description.
- The court rejected application of small-group defamation because the broadcasts did not refer to a defined, readily ascertainable small group whose members would be understood by ordinary viewers to be accused.

## Legal Principles

- A defamation plaintiff must show the challenged statement is “of and concerning” the plaintiff, meaning an ordinary audience would reasonably understand the statement to refer to that plaintiff, even if unnamed.
- Statements directed at a business entity do not, without identifying content, automatically defame affiliated contractors or employees who claim to “run” the entity.
- The small-group defamation doctrine is narrowly applied; it requires a sufficiently small and identifiable group such that the publication would be understood as referring to each member.
- Substantial truth defeats defamation liability; a statement is not actionable if its gist is true, and reports accurately conveying official allegations are protected even if harmful to reputation.

## Conclusion

The court upheld dismissal because the challenged CBS reports, which attributed the accusations to federal authorities and tracked official allegations, were substantially true and could not reasonably be understood by ordinary viewers as referring to unnamed management entities or individual managers.


Three Amigos SJL Rest., Inc. v. CBS News, Inc., 132 A.D.3d 82, 15 N.Y.S.3d 36 (1st Dep’t 2015)