Paramount (Almost) Beats 'Wolf of Wall Street' Defamation Lawsuit

The Wolf of Wall Street - H 2013

On Friday, a New York federal judge rejected various legal claims made over the Oscar-nominated Martin Scorsese film The Wolf of Wall Street, but is giving a former executive at the disgraced brokerage house of Stratton Oakmont another chance to assert the film was libelous.

Andrew Greene, who was on the board of directors at Stratton Oakmont when Jordan Belfort resigned after a federal law enforcement crackdown, filed the lawsuit in February 2014.

According to his complaint, he was the basis for the toupee-wearing character of Nicky "Rugrat" Koskoff, played by actor P.J. Byrne, who memorably was the subject of mean comments from others including Leonardo DiCaprio's Belfort, who remarked, "Swear to God, I want to choke him to death."

Greene says the film changed his nickname from "Wigwam" to "Rugrat," but that his likeness was unmistakable and that the film "portrayed [him] as a criminal, drug user, degenerate, depraved, and/or devoid of any morality or ethics."

Paramount, Red Granite Pictures, Appian Way and Sikelia Productions moved for dismissal in April 2014 and the litigation has hardly moved an inch after changing judges.

Today, U.S. District Judge Joanna Seybert suddenly came forth with an opinion on the motion to dismiss. (Read here in full.)

She rejects a claim over Greene's supposed common law right of privacy because she says no such protection exists under New York law. As for the state's civil rights statute that's analogous to — but not quite — a right of publicity law, she rejects Greene's attempt there too.

"New York courts have consistently dismissed Section 51 claims based on the use of a fictitious name, even if the depiction at issue evokes some characteristics of the person or the person is identifiable by reference to external sources," she writes. "Accordingly, even assuming Plaintiff shares some physical similarities with the Koskoff Character or is identifiable because of his position at Stratton Oakmont, his Section 51 claim still must be dismissed."

Greene comes much closer on his defamation claim — which can be categorized in the libel-in-fiction section.

Judge Seybert notes this is a complicated one because "the plaintiff must simultaneously assert that the character is 'of and concerning' him and her because of their similarities, but also must deny significant aspects of the fictional character, i.e., the defamatory aspects of the character. Accordingly, New York courts have required the plaintiff in a libel by fiction case to show that the description of the fictional character ... [is] so closely akin to the real person claiming to be defamed that a reader [or viewer] of the [alleged defamatory work], knowing the real person, would have no difficulty linking the two. Superficial similarities are insufficient."

Paramount argued that anybody who read Belfort's memoir would know the Koskoff character in Wolf of Wall Street was a composite and everyone else would never make a connection.

"There are a few issues with this argument that render it unsound, at least at this stage of the litigation," the judge responds. "First, by Defendants’ own admission, the Movie is not a purely fictional work. It is based on a true story. Thus, it is plausible to allege that someone who was aware of Stratton Oakmont’s fraud and Plaintiff’s role at the company could reasonably associate the Koskoff Character with Plaintiff."

Nevertheless, Greene has no chance of winning on the libel claim at this juncture because he's fallen short on another aspect. The judge says the film "unquestionably touches on a matter warranting public exposition," meaning that even if Greene is later adjudicated to be a private rather than public figure, under case law precedent, he'll have to show "gross negligence" on the producers' part.

The judge says that Greene's lawsuit as it is currently written only asserts that the defendants "acted with mere negligence, not gross negligence," so she dismisses the libel claim, but she's also giving Greene a chance to file an amended complaint on this cause of action.

So as of now, all of Greene's claims against Paramount over Wolf of Wall Street have been dismissed, but the lawsuit isn't quite over.