Submitted: June 7, 2019
[Copyrighted Material Omitted]
Judson Scaggs, Jr., Barnaby Grzaslewicz, and Elizabeth A.
Mullin, of MORRIS NICHOLS ARSHT & TUNNEL, Wilmington,
Delaware; OF COUNSEL: David H. Wollmuth, R. Scott Thompson,
Michael C. Ledley, Sean P. McGonigle, William A. Maher,
Nicole C. Rende, and Jay S. Handlin, of WOLLMUTH MAHER &
DEUTSCH LLP, New York, New York, Attorneys for Plaintiff.
J. Walsh, Jr., Jennifer C. Wasson, David A. Seal, and Robert
J. Kumor, of POTTER ANDERSON & CORROON LLP, Wilmington,
Delaware; OF COUNSEL: Eva W. Cole, John E. Schreiber, Molly
M. Donovan, Joseph A. Litman, and Mikaela E. Evans-Aziz, of
WINSTON & STRAWN LLP, New York, New York, Attorneys for
Equity will not enjoin a libel .
Opinion involves a single issue: the Defendants, business
competitors of the Plaintiff, made statements about the
Plaintiff to third parties. The Plaintiff believes itself
traduced. It seeks solely equitable relief for the alleged
common-law slander: injunction of future (potential)
defamatory utterances by the Defendants.
Amended Complaint alleges another tort for which injunctive
relief is sought, tortious interference with prospective
business relations, which has withstood the Defendants
Motion to Dismiss. The matter is before me on the
remainder of that Motion, on which I withheld judgment,
concerning the Plaintiffs request that I find common-law
defamation, and enjoin future defamatory utterances, as
described above. This Opinion considers whether equity
will entertain such a request to enjoin future defamatory
Equity will not enjoin a libel.
of equity are legendarily pithy expressions of general
Chancery practice. Law (and particularly its more flexible
component, equity) is a creature of nuance and
fine-but-significant gradations, and pithiness, like garlic,
may both enhance the savor of a discourse, and at the same
time mask its subtle flavors. Maxims, in other words, are
often best defined by their exceptions. It is true,
nonetheless, that generally, equity will not enjoin future
speech on the ground that such speech, if uttered, may be
Court of Chancery is a court of limited jurisdiction; when
addressing a common-law tort, this Court may act only if
equity is required in remedy, due to an insufficiency of
remedies at law. Moreover, because of the implications
on speech of the application of remedies, legal or equitable,
to tortious speech, slander and libel are seen as denizens of
the Superior Court, and are subject to the findings made
there by juries regarding the speech of their peers. Thus,
Chancery is said to have no jurisdiction over libel. This
principle was recently affirmed by Vice Chancellor Slights,
who dismissed a defamation case (subject to transfer to
Superior Court) on that ground.
single case in this jurisdiction supports a so-called
trade-libel exception to the rule that Chancery will not
jurisdiction over a request to enjoin a libel: J.C.
Pitman & Sons, Inc. v. Pitman . Pitman has
recently been subject to scholarly consideration by Vice
Chancellor Laster;  nonetheless, I confess I find the
Pitman decision somewhat opaque. I conclude,
however, that Pitman stands for the following
proposition: The general rule is that equity lacks
jurisdiction over a request to enjoin common-law defamation.
In a limited subset of cases, however, a separate tort (in
Pitman, the tort of unfair business competition) is
alleged where relief at law is insufficient, and where the
equitable remedy sought is, incidentally, an injunction of a
"trade libel"— that is, a libelous statement
to consumers that falsely disparages a plaintiffs goods or
services. In such a case, the matter is within this Courts
jurisdiction, because the underlying behavior being examined
without a jury is not mere speech, but involves other
tortious activity where tradition and constitutional
considerations do not require the findings of a jury.
Further, this Court may enjoin that tortious behavior, even
if the injunction incidentally enjoins the trade libel. In
other words, under Pitman, where this Court has
jurisdiction over business torts, it may, in an appropriate
case, enjoin their threatened continuation, even if the
injunction suppresses speech. In this case, for instance, the
Plaintiff has adequately pled tortious interference with
business relations; if it proves that claim, it may seek
equitable remedies, as appropriate.
to the Plaintiffs argument, addressed below, I do not read
Pitman to support a separate count of
common-law slander, as the Plaintiff contends, nor does
Pitman support the kind of forward-looking
suppression of new defamatory statements of the variety
Plaintiffs broad request to enjoin future speech raises
substantial state and federal constitutional questions.
However, I need not reach these questions, as I find I am
without jurisdiction on the basis that equity will not
enjoin a libel .
explain my reasoning further, below.
Motion to Dismiss stage, I assume as true the facts pled in
the Amended Complaint.
Preston Hollow Capital LLC ("Preston Hollow") is a
Delaware limited liability company. Preston Hollow invests in
high-yield municipal bonds. It was formed in 2014 and
currently has approximately $1.8 billion in assets and $1.3
billion in equity capital.
Nuveen LLC is a Delaware limited liability
Nuveen Investments, Inc. is a Delaware
Defendant Nuveen Securities LLC is a Delaware limited
Nuveen Asset Management LLC is a Delaware limited liability
company. I refer to the Defendants,
collectively, as "Nuveen." Nuveen is "one of
the worlds largest institutional investors in municipal
bonds, with municipal fixed income ...