Are Damages For Defamation, Libel or Slander Discharged by Bankruptcy?
The jury issued its verdict last year in the Virginia defamation lawsuit between Johnny Depp and his ex-wife Amber Heard. After three weeks of trial, the jury concluded that Ms. Heard’s statements were defamatory. The verdict has left many people asking whether damages awarded in a defamation case are dischargeable in bankruptcy. Ordinarily, when a person files bankruptcy and receives a discharge, this means that the bankrupt party’s debts are eliminated and do not need to be repaid.
Dischargeability depends upon what else the jury concludes. The Bankruptcy Code says that debts based on liability “for willful and malicious injury by the debtor to another entity or to property of another entity” are specifically excluded from the scope of the bankruptcy discharge.
The Depp v. Heard jury found that Ms. Heard had acted intentionally and with actual malice to cause harm to Mr. Depp. This means that the jury’s award of damages is likely not dischargeable in bankruptcy.
To exclude a debt from the bankruptcy discharge, the “willful” and “malicious” nature of the bankrupt party’s actions must each be proven independently. Bankruptcy law defines the term “willful” as “a deliberate or intentional injury, not merely a deliberate or intentional act that leads to injury.” Merely showing that someone committed a conscious act that resulted in an injury is not sufficient. The act must be shown to have been done with the intent to cause the injury.
I often encounter complex issues regarding the dischargeability of various types of debts in bankruptcy. One area that frequently raises questions is whether damages arising from libel, slander, and defamation can be discharged. Understanding this issue requires a detailed analysis of the elements of these torts, particularly the willful and malicious nature of the conduct, in light of the non-dischargeability criteria under 11 USC § 523.
Elements of Libel, Slander, and Defamation
Defamation is a broad term that encompasses both libel and slander. It involves making a false statement about someone to a third party, which harms the person's reputation.
Libel refers to defamatory statements made in a fixed medium, such as writing, pictures, or electronic broadcasts.
Slander pertains to defamatory statements made orally or through other transitory forms.
To prevail in a defamation lawsuit, a plaintiff typically must prove the following elements:
1. A false statement purporting to be fact.
2. Publication or communication of that statement to a third party.
3. Fault amounting to at least negligence.
4. Damages or harm caused to the person's reputation.
Willful and Malicious Injury under 11 USC § 523(a)(6)
Under 11 USC § 523(a)(6), a debt is non-dischargeable if it is for "willful and malicious injury" by the debtor to another entity or to the property of another entity. The terms "willful" and "malicious" are crucial in determining whether a debt arising from defamation, libel, or slander is dischargeable.
- “Willful” injury involves a deliberate or intentional injury, not merely a deliberate or intentional act that leads to injury. The debtor must have intended the consequences of their act.
- “Malicious” injury involves a wrongful act done consciously and knowingly without just cause or excuse.
Proving Non-Dischargeability in Bankruptcy
To establish that a defamation-related debt is non-dischargeable under § 523(a)(6), the plaintiff must demonstrate that the debtor's defamatory act was both willful and malicious. This means the plaintiff must show that the debtor acted with intent to cause harm or with knowledge that harm was substantially certain to occur.
Application to Libel, Slander, and Defamation
- Intentional Acts: In cases of libel and slander, the plaintiff must prove that the defamatory statement was made intentionally. Accidental or negligent defamation generally does not meet the threshold for non-dischargeability under § 523(a)(6). The debtor must have intentionally made the false statement knowing it would cause harm.
- Willful Injury: For a defamation claim to be non-dischargeable, the debtor's intent behind the defamatory statement must be scrutinized. For example, if the debtor published a false and damaging statement with the intent to harm the plaintiff's reputation, this can be considered willful injury. However, if the statement was made without such intent, it may not meet this criterion.
- Malicious Conduct: The plaintiff must also demonstrate malice, meaning the debtor made the defamatory statement with a conscious disregard of the plaintiff's rights or with the certainty that harm would result. This malicious intent is often more challenging to prove but is critical for non-dischargeability.
Conclusion
Determining whether damages from libel, slander, and defamation are dischargeable in bankruptcy hinges on the specific facts of the case, particularly the debtor's intent and the nature of the conduct. The plaintiff must meet the high burden of proving that the defamatory act was both willful and malicious as defined under 11 USC § 523(a)(6).
For debtors and creditors alike, understanding the nuances of these requirements is essential. Creditors seeking to challenge dischargeability must be prepared to provide compelling evidence of the debtor's willful and malicious intent, while debtors should be aware of the potential for such claims to survive bankruptcy if their conduct meets these stringent criteria.