Martha Stewart, the heroine of home life, is arrested and charged with the crime of “Insider trading” of stock in Martha Stewart, Inc. In the course of the trial, Martha testifies under oath. When asked if she ever bought or sold stock on the basis of insider information, Martha states: “I have never traded stock using insider information, but Oprah trades all the time using such information. Oprah consults a psychic who reads the Wall Street Journal and “sees” into the company’s secret information. Oprah then trades stock based on this information.”

Nick Nosey is a reporter at the trial. He knows for a fact that Oprah Winfrey would never use inside information as the basis of a stock trade in fact, he knows that Oprah does not own and never has owned any stock at all. Nonetheless, he captions his daily newspaper column on the Stewart trial with the phrase “Martha Stewart Accuses Oprah of Insider Trading”. In the article, Nosey merely repeats the headline and then writes about the lawyer’s summations and a description of Ms. Stewart’s outfit and demeanor. Nosey wrote that Ms. Stewart seemed nervous and distracted when asked about the stock transactions that were the basis of her arrest.

1. Oprah Winfrey is furious. She consults you, a lawyer who specializes in Defamation lawsuits, about the possibility of suing Martha Stewart and Nick Nosey for defamation, What would you advise Ms. Winfrey? Be sure to discuss fully and consider any defenses defendants might raise.
2. Martha Stewart consults you, a lawyer who specilizes in Defamation lawsuits, about the possibility of suing Nick Nosey for his statement that Ms. Stewart seemed “nervous and distracted.” Ms. Stewart says this makes it sound as though she were not telling the truth at trial. What would you advise Ms. Stewart? Be sure to discuss fully and consider any defense that Nosey could raise.