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Does Dorian Satoshi Nakamoto have a case against Newsweek?

James Niccolai | March 20, 2014
Legal experts say it would be hard for Nakamoto to build a strong case.

Nakamoto would also need to show that Newsweek knew its conclusion was wrong and published anyway, or that it acted with reckless disregard for the truth.

"It essentially requires the person to prove not only that the reporter engaged in shoddy journalism, but also that the reporter harbored subjective doubts about the accuracy of what was being published," said Pyle, who represents media companies in libel and other cases but has not done work for Newsweek.

The author of the piece, Leah McGrath Goodman, has defended her reporting. Proving through depositions and discovery that she published without regard for the truth would probably be difficult, Pyle said.

Moreover, Nakamoto would need to overcome California's tough anti-SLAPP law, which helps protect the First Amendment rights of media organizations such as Newsweek. The anti-SLAPP law would shift the burden to Nakamoto, early in the case, to demonstrate that he has a likelihood of prevailing.

"In other cases, the plaintiff sues, it goes into discovery and the plaintiff is able to develop the case over a period of time, subject to a low threshold of getting it into court. But with the anti-SLAPP law, there's a higher burden placed on the plaintiff early on in the case to demonstrate he has a claim."

If Dorian Nakamoto were to lose a case on an anti-SLAPP ruling, he would be liable for Newsweek's legal fees, Pyle said.

Another possible route is a claim of defamation. While false light claims focus on "subjective" harm — the notion that Nakamoto suffered distress as a result of something untrue being written about him — defamation claims deal with harm suffered to reputation in the community, causing someone to lose their job or be ejected from a club, for instance.

That too might be a high bar to cross, Pyle said. "This probably would not survive as a claim of defamation, because the article is claiming he is an ingenious cryptographer who created a digital currency that took off and went through the roof." And a defamation claim would still be subject to an anti-SLAPP challenge.

Steven Krone, a law professor at Southwestern Law School, said the comments in Nakamoto's letter suggest it's possible he plans to make both false light and defamation claims against Newsweek.

The comment that the article harmed his prospects of gaining employment could speak to the defamation claim, while the remark about the stress caused to him and his family could speak to false light.

Krone suggested that a false light claim was probably more viable than a defamation claim. "Mr. Nakamoto might or might not be able to demonstrate that being falsely identified as the creator of Bitcoin harmed his reputation," he said.


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