Less than three months after Paramount Pictures released the hit movie The Wolf of Wall Street in December 2013, former Stratton Oakmont attorney and executive Andrew Greene sued the studio and the movie’s production companies for claims including invasion of privacy and libel per se. Greene took the position that one of the movie’s outlandish characters – Nicky “Rugrat” Koskoff – “is one that viewers understood to be a depiction of” Greene. Three of Greene’s four claims – statutory and common law invasion of privacy and private-figure libel per se – were dismissed in 2015. Last week, New York federal judge Joanna Seybert dismissed Greene’s final claim for public-figure libel per se on summary judgment after Greene failed to meet the actual malice standard applied to public figures. The case is Greene v. Paramount Pictures Corp., et al., No. 2:14-cv-01044 in the United States District Court for the Eastern District of New York.

The Wolf of Wall Street is based on the memoir from former Stratton-head Jordan Belfort, who served jail time after pleading guilty to securities fraud and other criminal counts. The movie purports to be “based on actual events” (as told in the memoir) but also caveats that some of the depicted events are fictional and that some of the characters have fictional names and are composites of real-life individuals. Specifically, the movie’s closing credits include the following disclaimer:

While this story is based on actual events, certain characters, characterizations, incidents, locations and dialogue were fictionalized or invented for purposes of dramatization. With respect to such fictionalization or invention, any similarity to the name or to the actual character or history of any person, living or dead, or any product or entity or actual incident, is entirely for dramatic purpose and not intended to reflect on an actual character, history, product or entity.

The fictional character at issue, Koskoff, is depicted in the movie as “engaged in or condoning criminal activity, drug use, sexual relations with prostitutes, and other unprofessional behavior” including shaving a woman’s head in the company boardroom. The Defendants stated that Koskoff was a composite of several different people discussed in Belfort’s memoir, including Greene. Certain witnesses who knew Greene testified that they believed that Koskoff was a depiction of Greene because, like Greene, he wore a toupee and was a lawyer involved in corporate finance at the firm.

The elements of libel in New York include a written defamatory factual statement of and concerning the plaintiff. Where the plaintiff is a public figure, he must demonstrate by clear and convincing evidence that the defendant acted with actual malice. Actual malice, in turn, is a term of art denoting deliberate or reckless falsification and courts will find reckless disregard where there is a subjective awareness of probable falsity. Greene conceded that he was a public figure.

Because Koskoff was a composite character, the Court intertwined the actual malice inquiry with the question of whether there was a false statement “of and concerning” Greene. The Court reasoned that, if Koskoff was “of and concerning” Greene, certain aspects of Koskoff were by nature false as to Greene (i.e., those aspects of the character taken from the other two real-life people) and, under those circumstances, Defendants would have acted with knowledge of that falsity. “In other words, under a literal application of the test, actual malice is ‘automatic’ if the character is ‘of and concerning’ Plaintiff.” Order at 18. The Court reframed this “automatic actual malice” test, instead asking whether the Defendants “acted with knowledge or reckless disregard in making a statement ‘of and concerning’ the plaintiff through the portrayal of a fictional character.” Order at 19-20. Thus, the inquiry became: Did the Defendants know or act with reckless disregard for whether the portrayal of Koskoff was “of and concerning” Greene?

The Court held that the Defendants did not act with actual malice. Even if Koskoff was a depiction of Greene, Greene’s libel per se claim failed because the Defendants had not acted with knowledge or reckless disregard for whether Koskoff was “of and concerning” Plaintiff. The Court looked to the following factors in reaching its conclusion:

  1. The fictionalized nature of the movie;
  2. The undisputed fact that Koskoff is a composite of three different people and “has a different name, nickname, employment history, personal history, and criminal history than” Greene;
  3. The movie’s disclaimer; and
  4. Evidence of each Defendant’s subjective understanding that no real person was portrayed—or defamed—by the Koskoff character, as well as the lack of evidence to the contrary.

With regard to the last point, the Court’s order discusses, in some detail, the testimony of numerous witnesses from Paramount and the production companies to this effect. Among other things, one of the producers testified that, although the movie’s characters did things similar to actual events that took place at Stratton Oakmont, there was no attempt to have any character depicted in the movie that would reasonably be understood to be a specific Stratton Oakmont employee. He further testified to his belief that viewers would not understand Koskoff to refer to any specific, real-life person, given the differences in name, job, and personal history between Koskoff and those who inspired the character. Instead, to the extent viewers did believe that this was a depiction of a real person, he believed that “such a viewer would think that the real person’s name is Koskoff.” Order at 22.

Accordingly, the Court held that Greene could not carry his burden with respect to the actual malice standard, having failed to establish that the Defendants entertained serious doubts as to the truth of the publication. As a result, the Court granted the Defendants’ summary judgment motion and dismissed Greene’s libel claim with prejudice.