Michael Avenatti loses $250 million Fox News defamation appeal

By Jonathan Stempel

(Reuters) – A U.S. appeals court on Thursday refused to revive Michael Avenatti’s $250 million defamation lawsuit against Fox News Network over its coverage of the 2018 arrest of the now-imprisoned celebrity lawyer and critic of Donald Trump.

The 3rd U.S. Circuit Court of Appeals in Philadelphia rejected Avenatti’s claim that his case belonged in a Delaware state court because he added a new defendant from his home state of California, depriving the federal judge who dismissed the lawsuit last August of jurisdiction.

Avenatti sued Fox News, part of Rupert Murdoch’s Fox Corp, in November 2020, saying its extensive coverage of his arrest on suspicion of domestic violence, including false statements that he was also charged, was a malicious effort to destroy his reputation.

A week later, after Fox News moved the case to federal court from Delaware Superior Court, Avenatti added correspondent Jonathan Hunt as a defendant over the same alleged defamation, and soon tried moving the case back.

In Thursday’s 3-0 decision, Circuit Judge Marjorie Rendell said Avenatti had a right to amend his original complaint, but that his maneuver wasn’t necessary and the trial judge had power to stop Avenatti’s “manipulation” of the case.

“Avenatti had already accused Fox News and its other hosts of repeating substantively identical statements,” she wrote. “The fact that Avenatti discussed Hunt in the initial complaint without naming him as a defendant also supported a finding of improper purpose.”

A lawyer for Avenatti did not immediately respond to requests for comment. Fox News and its lawyers did not immediately respond to similar requests.

Avenatti became famous representing porn actress Stormy Daniels in legal battles against Trump, the former U.S. president.

He is serving five years in prison after being convicted of embezzling from Daniels and trying to extort Nike Inc, and last month pleaded guilty in an unrelated case to five counts of wire fraud and obstruction.

The case is Avenatti v Fox News Network LLC et al, 3rd U.S. Circuit Court of Appeals, No. 21-2702.

(Reporting by Jonathan Stempel in New York; Editing by Diane Craft)