Byd Company Ltd v. Alliance for American Manufacturing ( 2021 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
BYD COMPANY LTD,
Plaintiff
v. Case No. 1:20-cv-03458 (TNM)
ALLIANCE FOR AMERICAN
MANUFACTURING, et al.,
Defendants.
MEMORANDUM OPINION
BYD Company Ltd. has filed an amended complaint alleging defamation against a
nonprofit organization, the Alliance for American Manufacturing, and several of its employees.
As before, Defendants move to dismiss the complaint for lack of subject matter jurisdiction and
failure to state a claim. The Court disagrees with their jurisdictional arguments but agrees that
BYD fails to state a claim. The Court will dismiss the amended complaint without prejudice.
I.
BYD “is one of the world’s largest producers and suppliers of electric vehicles including
electric cars, buses, trucks, and forklifts, as well as solar panels, lithium batteries, and protective
masks and equipment, among many other . . . products.” Am. Compl. ¶ 1, ECF No. 22. The
company is incorporated in and has its principal place of business in the People’s Republic of
China. Id. ¶ 5. The Alliance for American Manufacturing is “a non-profit organization that
advocates in favor of American-made products.” Id. ¶ 2. It is headquartered in Washington,
D.C., and the individual employee-Defendants live nearby. Id. ¶¶ 6–9.
BYD alleges that the American Alliance for Manufacturing and its employees
(collectively, the “Alliance”) defamed it in three separate statements. Id. ¶¶ 19–22. The first
statement appeared in a blog post on the Alliance’s website and claimed BYD “depend[ed]” on
and “profit[ed] from” forced labor in China. Defs.’ Mot. to Dismiss Ex. B (“Ex. B”) at 2, 4, ECF
No. 23-4. 1 The second statement, which also appeared in an Alliance blog post, questioned why
California selected BYD, an “automaker,” to produce medical equipment for the state under a $1
billion contract. Defs.’ Mot. to Dismiss Ex. C (“Ex. C”) at 3, ECF No. 23-5. The post catalogs
many issues with BYD’s performance under the contract and notes that BYD issued California a
$500 million refund after its N95 masks failed to secure federal certification. Id. The third
statement, from an Alliance press release, accused BYD of maintaining “links” to the Chinese
government and military. Defs.’ Mot. to Dismiss Ex. D (“Ex. D”) at 2, ECF No. 23-6. The press
release quoted Alliance President Scott Paul, who claimed U.S. lawmakers had “irrefutable
evidence” that BYD is “simply an arm of China’s military and government.” Id.
The Court dismissed BYD’s first complaint because it failed to allege damages that met
the jurisdictional threshold for diversity cases. See BYD Co. Ltd. v. All. for Am. Mfg., No. 1:20-
CV-03458 (TNM), 2021 WL 1564445, at *1 (D.D.C. Apr. 21, 2021). In its amended complaint,
BYD claims it “suffered extensive, specific damages as a result of the Defendants’ statements”
and lists several contracts it allegedly lost due to the Alliance’s defamation. Am. Compl. ¶¶ 24–
26. BYD alleges that the Alliance made all three statements with actual malice, id. ¶ 27, and it
seeks compensatory and punitive damages, permanent injunctive relief, and costs, id. ¶ 37. The
Alliance moves to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil
Procedure 12(b)(1) and for failure to state a claim under Rule 12(b)(6). See Defs.’ Mot. to
Dismiss the Am. Compl. (“Mot. Dismiss”), ECF No. 23. The motion is now ripe.
1
All citations are to the page numbers generated by this Court’s CM/ECF system.
2
II.
To survive a motion to dismiss under Rule 12(b)(1), the plaintiff bears the burden of
proving that the Court has subject matter jurisdiction to hear its claims. See Arpaio v. Obama,
797 F.3d 11, 19 (D.C. Cir. 2015). In evaluating a motion to dismiss under Rule 12(b)(1), the
Court must “treat the complaint’s factual allegations as true . . . and must grant plaintiff[s] the
benefit of all inferences that can be derived from the facts alleged.” Sparrow v. United Air Lines,
Inc., 216 F.3d 1111, 1113 (D.C. Cir. 2000) (cleaned up).
To survive a motion to dismiss under Rule 12(b)(6), “a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Hurd v.
District of Columbia, 864 F.3d 671, 678 (D.C. Cir. 2017) (cleaned up). A plaintiff must plead
“factual content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Court accepts the
complaint’s factual allegations as true and grants the plaintiff “all inferences that can be derived
from the facts alleged.” L. Xia v. Tillerson, 865 F.3d 643, 649 (D.C. Cir. 2017) (cleaned up).
The Court need not, however, credit “a legal conclusion couched as a factual allegation.” Iqbal,
556 U.S. at 678 (cleaned up). The Court considers “only the facts alleged in the complaint, any
documents either attached to or incorporated in the complaint[,] and matters of which [it] may
take judicial notice.” Hurd, 864 F.3d at 678 (cleaned up).
Rule 12 plays an especially important role in defamation cases, such as this one. “The
Supreme Court has directed courts to expeditiously weed out unmeritorious defamation suits.”
Kahl v. Bureau of Nat’l Affairs, Inc. 856 F.3d 106, 109 (D.C. Cir. 2017) (cleaned up). “Early
resolution of defamation cases under Federal Rule of Civil Procedure 12(b)(6) not only protects
against the costs of meritless litigation, but provides assurance to those exercising their First
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Amendment rights that doing so will not needlessly become prohibitively expensive.” Fairbanks
v. Roller, 314 F. Supp. 3d 85, 89 (D.D.C. 2018) (internal citation omitted).
III.
BYD maintains the Court has diversity jurisdiction over this case. See Am. Compl. ¶ 10.
Diversity jurisdiction requires an amount in controversy exceeding $75,000 and, as relevant here,
a dispute between “citizens of a State and citizens or subjects of a foreign state.” 28 U.S.C.
§ 1332(a)(2). 2 The Alliance does not contest jurisdiction based on citizenship. Instead, it argues
BYD “has once again failed to plead facts sufficient to establish that it suffered any cognizable
damages as a result of the Alliance’s statements.” Mot. Dismiss at 1. Specifically, the Alliance
contends BYD fails to show how the Alliance’s statements harmed BYD. Id. And even if it
could make this showing, the Alliance argues BYD would still flunk the amount-in-controversy
requirement because the National Defense Authorization Act for FY 2020 (NDAA) “created a
massive barrier to BYD’s ability to compete” for the very contracts it says it lost because of the
Alliance’s alleged defamation. Defs.’ Mem. in Supp. of Mot. to Dismiss the Am. Compl.
(“Defs.’ Mem.”) at 7, ECF No. 23-1.
The Court considers (A) whether BYD’s pleadings meet the amount-in-controversy
threshold, and (B) the effect of the NDAA.
A.
BYD added three paragraphs to its amended complaint that contain specific allegations of
lost profits resulting from the Alliance’s statements. First, BYD claims it “has not been able to
complete two contracts to sell electric buses to two major urban transit companies in the United
2
As in its original complaint, BYD mistakenly cites 28 U.S.C. § 1332(a)(1). Compl. ¶ 10, ECF
No. 1; Am. Compl. ¶ 10. This provision does not apply because BYD is a foreign corporation.
The Court construes BYD’s amended complaint as seeking jurisdiction under § 1332(a)(2).
4
States.” Am. Compl. ¶ 24. Second, BYD claims it “lost a potential contract in 2021 with the
Utah Transit Agency, which would have netted BYD approximately $44 million dollars.” Id. ¶
25. Third, BYD claims “other potential customers . . . have indicated to BYD a reticence to deal
with the company because of the public controversy that resulted from Defendants’ false
statements.” Id. ¶ 26.
The Alliance maintains these are mere assertions and that BYD does not show how the
Alliance’s speech cost it business. Defs.’ Mem. at 15–18. The Alliance argues that the Court
“need not accept inferences drawn by the plaintiff . . . if those inferences are unsupported by
facts alleged in the complaint or amount to merely legal conclusions.” Defs.’ Mem. at 16
(quoting Rosenkrantz v. Inter-Am. Dev. Bank, No. CV 20-3670 (BAH), 2021 WL 1254367, at *6
(D.D.C. Apr. 5, 2021)). In the Alliance’s telling, BYD is alleging supposedly defamatory
statements and purported injuries but not explaining causality—it’s asking the Court to fill in the
blanks.
But the law is generous to plaintiffs on amounts in controversy. To justify dismissal, “[i]t
must appear to a legal certainty that the claim is really for less than the jurisdictional amount.”
St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938). “[T]he Supreme
Court’s yardstick [in St. Paul Mercury] demands that courts be very confident that a party cannot
recover the jurisdictional amount before dismissing the case for want of jurisdiction.”
Rosenboro v. Kim, 994 F.2d 13, 17 (D.C. Cir. 1993). Thus, at the motion-to-dismiss stage, a
court “should find jurisdiction . . . even if it has serious doubts as to the bases for establishing an
amount-in-controversy.” Bronner v. Duggan, 317 F. Supp. 3d 284, 288 (D.D.C. 2018).
This is a low bar for BYD to surmount. Given the amount of BYD’s alleged losses and
the Court’s duty to “treat the complaint’s factual allegations as true . . . [and] grant plaintiff the
5
benefit of all inferences that can be derived from the facts alleged,” the Court finds that BYD has
now met the amount-in-controversy requirement. Sparrow, 216 F.3d at 1113 (cleaned up).
B.
Next, the Alliance contends that the NDAA “effectively prohibits municipal transit
agencies . . . from pursuing business with certain qualifying companies, such as BYD.” Defs.’
Mem. at 20 (emphasis added). Because the contracts at issue are between BYD and municipal
agencies, and because Congress added the NDAA language “before any of the allegedly
defamatory statements were published,” the Alliance argues its statements could not have had
any effect on BYD’s contracts. Id.But the Alliance puts a lot of weight on the word effectively. All the Alliance shows is
that the NDAA might have affected BYD’s contracts. And in any event, the NDAA has a two-
year phase-in period during which municipalities can keep purchasing rolling stock from
companies such as BYD. See 49 U.S.C. § 5323(u)(5)(B) (“[T]his subsection . . . shall not apply
to the award of a contract or subcontract made by a public transportation agency with any rolling
stock manufacturer for the 2-year period beginning on or after the date of enactment of this
subsection.”). By the Alliance’s own account, the President signed the NDAA into law in
December 2019. See Defs.’ Mem. at 20. Thus, the NDAA could not have affected any of
BYD’s sales before December 2021.
The Court has jurisdiction and turns next to the Alliance’s 12(b)(6) arguments. 3
3
BYD claims it is improper to consider the Alliance’s 12(b)(6) arguments because the Court’s
April 21, 2021 Order “granted Defendants’ motion on the sole ground of subject matter
jurisdiction and denied the remainder.” Pl.’s Mem. of P. & A. in Opp’n to Defs.’ Second Mot.
Dismiss (“Pl.’s Mem. Opp’n”) at 17, ECF No. 24. Not so. “When a defendant files a motion to
dismiss under Rule 12(b)(1) and Rule 12(b)(6), this Circuit has held that the court must first
examine the Rule 12(b)(1) challenges, because if it must dismiss the complaint for lack of
subject matter jurisdiction, the accompanying defenses and objections become moot and do not
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IV.
Because of First Amendment protections, courts scrutinize defamation cases “against the
background of a profound national commitment to the principle that debate on public issues
should be uninhibited, robust, and wide-open.” New York Times Co. v. Sullivan, 376 U.S. 254,
270 (1964). This is especially true when, as here, the plaintiff is a public figure. 4 Protected
speech against public figures can “include vehement, caustic, and sometimes unpleasantly sharp
attacks.” Id.“Under District of Columbia law, a defamation claim requires: (1) a false and defamatory
statement; (2) published without privilege to a third party; (3) made with the requisite fault; and
(4) damages.” Fairbanks, 314 F. Supp. at 90. To plead “requisite fault,” a public figure must
allege “that the defendant published the defamatory falsehood with actual malice, that is, with
knowledge that it was false or with reckless disregard of whether it was false or not.” Liberty
Lobby, Inc. v. Dow Jones & Co., 838 F.2d 1287, 1292 (D.C. Cir. 1988) (cleaned up). “Reckless
disregard” means that the speaker acted with a “high degree of awareness of [the statement’s]
probable falsity.” Garrison v. Louisiana, 379 U.S. 64, 74 (1964). This is a “subjective”
standard. McFarlane v. Sheridan Square Press, Inc., 91 F.3d 1501, 1508 (D.C. Cir. 1996).
The Alliance argues that BYD failed to adequately plead that it made any of its three
allegedly defamatory statements with actual malice. Mot. Dismiss at 2. It submitted several
exhibits in support of its arguments. BYD responds that the Court should not consider any of
need to be determined.” Schmidt v. U.S. Capitol Police Bd., 826 F. Supp. 2d 59, 64 (D.D.C.
2011) (cleaned up). The Court did not reach the merits of the 12(b)(6) arguments in its prior
order because it determined it lacked jurisdiction. Only now that BYD has overcome the
12(b)(1) hurdle must the Court consider 12(b)(6).
4
BYD concedes it is “at least a limited purpose public figure.” Pl.’s Mem. Opp’n at 19 n.3.
7
them, arguing “Defendants’ Exhibits are not documents attached as exhibits or incorporated by
reference in the Complaint.” Pl.’s Mem. Opp’n at 19 n.2.
The Court disagrees. The Alliance’s first five exhibits consist of the three articles
containing the allegedly defamatory statements at issue plus two research reports that served as
the impetus for the Alliance’s statements. Decl. of Bezalel A. Stern in Supp. of Defs.’ Mot. to
Dismiss the Am. Compl. (“Stern Decl.”) ¶¶ 2–6, ECF No. 23-2. One of these research reports,
the ASPI Report, is mentioned by name in BYD’s amended complaint. Am. Compl. ¶¶ 15–18.
The Alliance’s sixth and final exhibit is the source code for one of the blog posts containing one
of its allegedly defamatory statements. Stern Decl. ¶ 7. The source code is part of the blog post.
BYD thus incorporated all these exhibits into its amended complaint. And despite repeatedly
arguing that the Alliance fails to provide legal authorities establishing that its exhibits are part of
the record, BYD never disputes their authenticity. The Court will therefore consider them in
adjudicating the Alliance’s FRCP 12(b)(6) motion. See Kaempe v. Myers, 367 F.3d 958, 965
(D.C. Cir. 2004) (“It is also clear that these documents—which were appended to [Defendant’s]
motion to dismiss and whose authenticity is not disputed—may be considered here because they
are referred to in the complaint and are integral to [Plaintiff’s] conversion claim.”).
The Court next addresses each of the Alliance’s statements in turn.
A.
The Alliance’s first allegedly defamatory statement appeared in a March 2020 blog post
on the Alliance’s website. The post, titled “Some of the World’s Biggest Brands Depend on
Forced Labor” (Forced Labor Story), reports on purported associations between global brands
and Uyghurs in China who had allegedly been “transferred from re-education camps to a
network of 27 Chinese factories for state-sponsored forced labor.” Ex. B at 3. The blog post
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links to articles published by Reuters and the New York Times, but its primary source and focus
is a report written by the Australian Strategic Policy Institute (ASPI). Id. The post’s sole
reference to BYD states: “It should come as little surprise that several known bad actors are also
profiting from this forced labor, including . . . Build Your Dreams (BYD).” Id. at 4.
BYD contends that the Forced Labor Story “is not supported by any facts whatsoever,
including any facts contained in the ASPI report.” Am. Compl. ¶ 19. Calling the Forced Labor
Story “a complete fabrication by Defendants,” BYD states that “all ASPI reported is that BYD
had business dealings with a company (Dongguan) that happens to own a subsidiary (Hubei) that
allegedly used forced labor. . . . BYD, in fact, has not had any business dealings with Hubei.”
Id. ¶ 20. In BYD’s telling, a close reading of the ASPI Report provides “support for the
proposition that Defendants did not rely in good faith on the ASPI Report when they wrote and
published the Forced Labor Story, and in fact entertained serious doubts as to the truth of
Defendants’ own statements about BYD.” Pl.’s Mem. Opp’n at 21.
But more is needed. BYD pleads no nonconclusory facts alleging the Alliance knew
what it was reporting was false or questioned its truth. See Hourani v. Psybersolutions LLC, 164
F. Supp. 3d 128, 141 (D.D.C. 2016) (“To allege actual malice, a plaintiff must assert that the
defendant realized that his statement was false or that he subjectively entertained serious doubt
as to the truth of his statement.”) (cleaned up), aff’d, 690 F. App’x 1 (D.C. Cir. 2017). The
closest BYD comes to pleading actual malice is its claim that because the Alliance “linked [to]
the ASPI Report [in] the Forced Labor Story, [it] must have known that the ASPI Report did not
establish that BYD profited in any way from forced labor.” Am. Compl. ¶ 27.
More, even granting BYD’s contention that the Alliance misrepresented the ASPI Report,
it does not reasonably follow that the Alliance knew it was misrepresenting it. It is just as
9
likely—if not more—that the Alliance merely had a different interpretation of the ASPI Report.
BYD offers a barely disguised legal conclusion. And the Court is “not bound to accept as true a
legal conclusion couched as a factual allegation.” Trudeau v. Fed. Trade Comm’n, 456 F.3d
178, 193 (D.C. Cir. 2006) (cleaned up).
BYD doubles down on this argument in its briefing. It explains that “[t]he theory of
actual malice pleaded is that [the Alliance] had the ASPI Report in [its] possession, obviously
read it, and yet . . . knowingly or recklessly wrote and published two statements that completely
misstated the conclusions of the ASPI Report. . . . It is an entirely reasonable inference that [the
Alliance] . . . entertained serious doubts about the truth of such statements.” Pl.’s Mem. Opp’n
at 19. Once more, BYD asserts the Alliance must have acted knowingly or recklessly just
because its statements were (according to BYD) false. But if BYD’s pleadings were sufficient,
there would be no reason for courts to require plaintiffs to show defendants spoke with
“knowledge that [their speech] was false or with reckless disregard of whether it was false or
not.” Liberty Lobby, 838 F.2d at 1292 (cleaned up). A court could assume the requisite state of
mind if a plaintiff pled that a defendant’s statements were false.
The Court will not accept BYD’s invitation to rewrite the law of defamation. To draw
reasonable inferences in BYD’s favor, the Court needs facts alleging the Alliance’s awareness
of, or disregard for, the truthfulness of its statement. BYD gives the Court only speculation.
This speculation is especially glaring considering the ASPI Report’s ample support for
the Forced Labor Story’s claim about BYD. The ASPI Report’s Executive Summary states:
“ASPI’s research has identified 83 foreign and Chinese companies directly or indirectly
benefitting from the use of Uyghur workers outside Xinjiang through potentially abusive labour
[sic] transfer programs as recently as 2019: . . . BYD.” Defs.’ Mot. to Dismiss Ex. A (“Ex. A”)
10
at 8, ECF No. 23-3. Elsewhere, the ASPI Report states that 105 Uyghur workers were
transferred to Hubei, a subsidiary of Dongguan, which in turn directly supplies BYD. Id. at 37.
BYD claims this relationship is too attenuated to show that it benefits from forced labor, and it
maintains that it has no relationship with Hubei. Am. Compl. ¶ 20. But Figure 17 of the ASPI
Report contradicts this claim and depicts Hubei directly supplying BYD. Ex. A at 27.
The ASPI Report also provides endnotes for many of its claims. BYD contends that the
endnotes do not provide enough support. Pl.’s Mem. Opp’n at 21. But to defeat a defamation
claim, the Alliance need not have tracked down and verified that each endnote supports each
claim. Because the actual malice standard is subjective, what matters is not whether the
endnotes actually support the claims in ASPI’s Report but whether the Alliance thought they did.
St. Amant v. Thompson, 390 U.S. 727, 731 (1968) (analyzing whether “defendant in fact
entertained serious doubts as to the truth of his publication”).
To be sure, the Forced Labor Story applies its own veneer to the ASPI Report. The Story
reports that BYD “profit[s]” from forced labor, for example. Ex. B at 4. The word “profits”
does not appear in the ASPI Report. But the ASPI Report does say BYD “directly or indirectly
benefit[s]” from forced labor. Ex. A at 8. And BYD must plead the existence of more than
minor linguistic differences to make out a claim for defamation. Liberty Lobby, Inc. v. Rees, 852
F.2d 595, 600–01 (D.C. Cir. 1988) (“[M]inor inaccuracies will not give rise to a defamation
claim when the ultimate defamatory implications are themselves not actionable. . . . [A]ctual
malice is not established in cases in which the statement is substantially accurate”).
BYD fails to make out a claim for defamation as to the Alliance’s first statement.
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B.
The Alliance’s second allegedly defamatory statement is another blog post. The post,
titled “California has a $1 Billion Contract for PPE with BYD, a Company Controlled by the
Chinese State,” was published in the early days of the COVID-19 pandemic. Ex. C at 2. It
focuses on the lack of American-made personal protective equipment (PPE) and individual
states’ difficulties in acquiring medical supplies. Id. at 3–7. Illinois, for example, “was able to
get some [PPE] out of China by handing some dude a $3.4 million check in a McDonald’s
parking lot off I-55.” Id. at 4. The post acknowledges that, with stories such as these, the need
for PPE was dire. But it asks why BYD, an “automaker,” is now manufacturing medical
supplies. Id. at 3. And it highlights the company’s early woes, including its failure to receive
federal certification for its N95 masks. Id. This failure forced BYD to refund California $500
million. Id.BYD’s primary complaint about the post is its headline, claiming that BYD is
“controlled” by the Chinese government. Am. Compl. ¶ 21. Pointing to “extensive information
online that establishes that BYD has private ownership and is not state-owned,” BYD quotes
McFarlane for the proposition that “[a]lthough failure to investigate will not alone support a
finding of actual malice . . . the purposeful avoidance of truth is in a different category.” Pl.’s
Mem. Opp’n at 22–23 (quoting McFarlane, 91 F.3d at 1510).
But BYD alleges no facts showing the Alliance’s awareness of BYD’s purported private
ownership. See McFarlane, 91 F.3d at 1508 (“[B]ecause the actual malice inquiry is
subjective . . . the inference of actual malice must necessarily be drawn solely upon the basis of
the information that was available to and considered by the defendant prior to publication.”)
(emphasis added). BYD baldly asserts that the Alliance “knew that BYD is a private
12
corporation” and “[n]evertheless . . . knowingly or recklessly wrote and published the false
statements.” Pl.’s Mem. Opp’n at 22 (emphasis in original). This is a legal conclusion and does
not pass muster.
More, the Radarlock Report is full of allegations that reasonably could have led the
Alliance to the opposite conclusion. The Report, titled “Building the China Dream: BYD &
China’s Grand Strategic Offensive,” Defs.’ Mot. to Dismiss Ex. E (“Ex. E”) at 2, ECF No. 23-7,
states, among other things, that:
• BYD is “part of a government-directed and -supported ‘innovation center’ that seeks
explicitly to combine ‘domestic and foreign resources’ to build up a Chinese-dominated
next-generation vehicle industry.” Id. at 7.
• The Company’s leadership “boasts direct ties to the [Chinese Communist Party’s]
industrial policy apparatus and [military-civil fusion] project.” Id.• A joint venture between BYD and a state-owned electronics company “helps the State to
integrate and guide the various technological arms that Beijing deploys and combines in
the Network Great Power Strategy.” Id. at 11–12.
• “In 2018, [BYD] announced ‘strategic cooperation’ with the China Academy of Launch
Vehicle Technology . . . the largest research and production base of missile weapons and
launch vehicles in China. Press releases from the time announced this cooperation as a
‘new step’ for both entities in ‘military-civil fusion’ (MCF).” Id. at 13.
• “BYD—through the web of state- and military-affiliated entities that it supports—allows
Beijing access to and a position of leverage over global supply chains, technology flows,
and, ultimately, data.” Id. at 17.
The Alliance’s claim that BYD is “control[led]” by the Chinese government is a
reasonable gloss on these statements. Ex. C. Even granting BYD’s claim that it is a private
company, the Court agrees that “[b]eing a private corporation . . . is not exclusive of, or a bar
against, being ‘under the control of’ or being an ‘arm of the state.’” Reply in Supp. of Defs.’
Mot. to Dismiss (“Repl. Supp. Mot. Dismiss”) at 15, ECF No. 25. Especially in China. Even if
this were a close call, under the First Amendment, close calls go against public figures. See
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Fairbanks, 314 F. Supp. 3d at 90 (“The First Amendment requires public figures suing in
defamation to demonstrate by at least a fair preponderance of the evidence that the allegedly
defamatory statement is false, with close cases decided against them.”) (cleaned up). BYD thus
does not plausibly allege the Alliance’s second statement was defamatory.
C.
The Alliance’s third allegedly defamatory statement is in a press release. The release
bears the title, “Congress Must Act After New Evidence Links CRRC and BYD to Chinese
Government and Military.” Ex. D. It cites the same Radarlock Report discussed above, and it
says that BYD “is both deeply subsidized by Beijing and work[s] hand-in-hand with Party
leaders, China’s military, and Huawei to penetrate the U.S. market.” Id. at 2. The press release
quotes the Alliance’s President Scott Paul as saying that U.S. lawmakers “now have irrefutable
evidence that CRCC and BYD are simply an arm of China’s military and government.” Id. It
also urges Congress to block BYD’s sales in the United States, citing “the wealth of new
evidence linking CRRC and BYD to China’s ‘military-civil fusion’ regime that leverages
China’s commercial and military capabilities in an effort to dominate the U.S. market.” Id. at 3.
Invoking now-familiar arguments, BYD contends the press release is defamatory because
“BYD is not an ‘arm’ of either China’s military or its government” but “is a privately held,
privately run corporation that happens to be chartered and located in mainland China.” Am.
Compl. ¶ 22. BYD alleges—without pleading any supporting facts—that the Alliance published
the press release “in an effort to spread mistruths about BYD . . . and thereby encourage
discrimination against BYD and its products to impede its ability to compete fairly in the
marketplace for supply contracts in the United States.” Pl.’s Mem. Opp’n at 22. The Alliance
14
must have known its statements were false, BYD claims, because “there is extensive information
online that establishes BYD has private ownership and is not state-owned.” Id. at 22–23.
BYD does not plead the Alliance possessed subjective knowledge of the “extensive
information online” purportedly showing BYD’s private ownership. See McFarlane, 91 F.3d at
1508 (“[T]he actual malice inquiry is subjective.”). If BYD meant to argue that the Alliance
ignored this information or failed to investigate—and therefore acted recklessly—it misconstrues
the standard. See Hourani, 164 F. Supp. 3d at 141 (“It is not enough to prove simply that the
defendant failed to investigate or check the accuracy of a false statement, he must have had a
subjective awareness of the probable falsity of the publication.”) (cleaned up). Recall that the
Radarlock Report contained ample information to support the claim that BYD has ties to the
Chinese government and military. See supra IV.B.
In any event, BYD’s claim about the press release is time-barred. The statute of
limitations for defamation claims in the District is one year. D.C. Code § 12-301(4) (2019).
“Defamation occurs on publication, and the statute of limitations runs from the date of
publication.” Wallace v. Skadden, Arps, Slate, Meagher & Flom, 715 A.2d 873, 882 (D.C. 1998)
(cleaned up). As explained below, the press release was published on October 25, 2019. BYD
therefore needed to sue prior to October 25, 2020, but it did not file its initial complaint until a
month later. See Compl.
BYD argues the Alliance’s press release is undated, but the Alliance provides three
indicators of its date: (1) publicly available source code; (2) a screenshot of the press release with
the date included; and (3) a link to a dated external article published the same day as the press
15
release. Because the external article is no longer available, the Court only relies on the first two
indicators.
BYD rejects the source code as evidence because “[n]o authority is cited” for the
proposition that source code “is the proper subject of judicial notice.” Pl.’s Mem. Opp’n at 26.
But a court “may take judicial notice of facts contained in public records of other proceedings,
and of historical, political, or statistical facts, and any other facts that are verifiable with
certainty.” Johnson v. Comm’n on Pres. Debates, 202 F. Supp. 3d 159, 167 (D.D.C. 2016)
(cleaned up). Anyone with a web browser can view a webpage’s source code, so it is “verifiable
with certainty.” And notably, BYD does not dispute the validity of the source code. Instead,
BYD argues that the Alliance does not “take into account the possibility that the Press Release
was subsequently modified in a manner to qualify as republication.” Pl.’s Mem. Opp’n at 26.
Citing Jankovic v. International Crisis Group, 494 F.3d 1080 (D.C. Cir. 2007), BYD explains
that if the Alliance modified and republished the webpage, it could reset the statute of limitations
to run from the date of republication. Id.Several problems doom BYD’s argument. First, BYD forgets that it bears the burden of
pleading sufficient “factual content [to allow] the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. BYD pleads no facts
from which the Court can infer that the Alliance republished or even might have republished the
press release. It only raises the “possibility” that the press release was republished. Pl.’s Mem.
Opp’n at 26. The Court will not draw inferences based on mere possibilities.
Second, BYD does not even address the screenshot of the press release the Alliance
included in its memorandum in support of its motion to dismiss. See Defs.’ Mem. at 35. Instead,
BYD claims the Alliance “concede[s]” that the press release is “undated,” and for support cites
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its own complaint. See Pl.’s Mem. Opp’n at 25. The Alliance concedes no such thing. Instead,
the Alliance directs the Court to access the press release through the “Press Release directory” on
its website. Defs.’ Mem. at 35. Accessed this way, the press release shows it was published on
October 25, 2019. Id.The Court finds the date of the press release is not subject to “reasonable dispute” and
takes judicial notice that the press release was published on October 25, 2019. Hurd, 864 F.3d at
686. BYD’s claim about the press release is time-barred.
V.
The Alliance asks the Court to dismiss the complaint with prejudice. Mot. Dismiss at 2.
But “[a] dismissal with prejudice is warranted only when a trial court determines that the
allegation of other facts consistent with the challenged pleading could not possibly cure the
deficiency.” Firestone v. Firestone, 76 F.3d 1205, 1209 (D.C. Cir. 1996) (cleaned up). It
remains possible that BYD can cure the deficiencies in its complaint by alleging facts showing
that the Alliance published its two blog posts with actual malice.
For these reasons, the Alliance’s motion to dismiss will be granted in part, and the court
will dismiss BYD’s complaint without prejudice. BYD has now had two bites at the apple. It
should expect that a third bite would be its last.
2021.08.06
17:41:06
-04'00'
Dated: August 6, 2021 TREVOR N. McFADDEN, U.S.D.J.
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