Court rejects suit over "60 Minutes" terrorism funding story

The First Amendment protects statements in a “60 Minutes” story about the alleged use of a chicken processing company as a cover for terrorism financing in the United States, a federal court ruled earlier this week.

A U.S. district judge in Washington, D.C., dismissed on Wednesday a defamation lawsuit against CBS and a self-described “terrorist hunter” book author who appeared on the newsmagazine in May 2003. The 13-minute segment focused on the author’s five-years of research into Muslim terrorism financing in the United States and the federal government’s use of her tips in its terrorist financing investigations.

Relying in part on information provided by the woman — named Rita Katz, but disguised on the broadcast and referred to as “Sarah” — federal law enforcement officers executed search warrants on a poultry producer and processor in Georgia. The “60 Minutes” segment centered on the investigation, conducted one year earlier. No criminal charges resulted from the investigation.

Mar-Jac Poultry Inc. alleged that the broadcast defamed the company by implying that it engaged in money laundering activities in an effort to support terrorists or terrorist organizations. Katz conveyed this defamatory implication, according to Mar-Jac, by her assertion that chicken is the “best cover for money laundering” because the numbers of dead chickens can be manipulated through a process that evades detection and renders proof of the misreported numbers unobtainable.

“But no reasonable jury could find that Ms. Katz’s statements about laundering money through misreporting dead chickens were anything but rank speculation, surmise or hyperbole, engendered, perhaps, by her thrill at being involved in an uncover [sic] capacity,” the court said in Mar-Jac Poultry, Inc. v. Katz.

Although Mar-Jac’s name was never spoken during the broadcast, it was displayed several times throughout the piece, including on a chart Katz created to demonstrate the terrorist financing ring she discovered and on a large sign with the company’s name and a drawing of a chicken that filled the entire screen during one portion of the broadcast. Thus, a jury could conclude that the statements were “of and concerning” Mar-Jac, the court held. A panel could also find the broadcast defamatory, it added.

However, the First Amendment protected the broadcast, which “touched upon a topic of significant public concern,” and required dismissal of the charges, the court ruled. Specifically, Katz’s “loose, figurative, or hyperbolic language” — for example, “if one wanted, one could report ten million dead chickens a year" — did not imply a verifiably false fact but merely indicated a belief or hypothesis. (The emphasis is in the opinion.)

“Looking at the Broadcast as a whole, any defamatory implication that money flowed through Mar-Jac to terrorists was presented as mere speculation,” the court said. “Any further implication that Mar-Jac acted knowingly in laundering money to assist terrorists or terrorist groups remained so unspoken that it, too, could only be — at best — speculation and surmise. Accordingly, the challenged statements in the Broadcast are protected by the First Amendment.” (The emphasis is in the opinion.)

Because the court ruled that the defamation claim failed under the First Amendment, it did not address CBS’ defenses that it was protected because the broadcast did not endorse the accuracy of any of Katz’s statements and was a privileged fair report of a governmental investigation.