The US judge overseeing the defamation lawsuit filed by Grifols against Gotham City Research following the report released on January 9, 2024, has rejected the short-selling fund's claim to "privilege" of secrecy of its sources as a journalist, according to the ruling to which Europa Press had access this Thursday.
In his resolution, the magistrate maintains that Gotham has not demonstrated at any time that an information professional obtains their income "indirectly through writing reports."
"If the defense qualifies itself as a professional journalist, we see little difference between them and a person who publishes writings on their LinkedIn with the 'hope' that these writings will cause an employer to hire them in the future," the judge added in his written statement.
The court thus dismisses the defense's argument, which alleged that Gotham partners Daniel Yu and Cyrus de Weck are financially supported by the publication of these reports and that, therefore, they should be protected by New York's 'Shield Law', a regulation that protects journalists from the obligation to reveal their sources and materials.
The judge emphasizes that the law requires the professional journalist to earn their livelihood directly from journalistic activity, whereas in Gotham's case, their profit comes from other elements, such as maintaining a short position in a stock before it falls on the stock market, a circumstance that occurred with Grifols shares after the report was released.
Second ruling on evidence gathering
In a second decision, the same judge authorizes Grifols to extend the temporal period during which it can gather documentation to determine if the short-selling fund acted "with actual malice" when publishing the report, that is, if it was aware that the disseminated information did not conform to the truth.
In this way, the magistrate allows the Catalan company to access documents containing direct references to the $95 million loan granted to Scranton Enterprises, the family office of the Grifols family.
Grifols is therefore empowered to request all materials that may clarify Gotham's intention, provided they fall within the year following the filing of the lawsuit.