Appeals court tosses $130,000 verdict against James O’Keefe in 2016 sting

A federal appeals court on Friday wiped out a $130,000 judgment won by Democratic consultant Robert Creamer and his businesses against conservative journalist James O’Keefe over a 2016 undercover video sting, ruling that the jury’s damages award violated the First Amendment.

The U.S. Court of Appeals for the D.C. Circuit found that the award improperly mixed the legal consequences of Mr. O’Keefe’s undercover reporting with the unlawful conduct of one operative who lied her way into an internship. Judge Karen LeCraft Henderson, a George H.W. Bush appointee, wrote for the panel that the jury’s damages award violated the First Amendment by punishing the defendants for publishing a news story, in the appeals court’s opinion.

Mr. O’Keefe, the founder and former chief executive of Project Veritas, released the video “Rigging the Election” weeks before the 2016 presidential vote. It alleged that Mr. Creamer’s firm, Democracy Partners, was working with Democratic operative Scott Foval to stage violence at rallies for then-candidate Donald Trump. Much of the video relied on footage from other undercover Project Veritas reporters, but roughly two minutes came from Allison Maass, who used a fake name and fabricated resume to land an unpaid internship at Democracy Partners in September 2016.

A jury in Washington awarded $120,000 in 2022 on the fraudulent-misrepresentation claim, while the parties stipulated to another $10,000 in statutory damages on the wiretapping claims, after the jury found that Ms. Maass was a fiduciary of Democracy Partners and had secretly recorded conversations there for the purpose of breaching that duty. Mr. Creamer, the husband of Rep. Jan Schakowsky (D-Ill.), argued the infiltration cost his firm, Strategic Consulting, contracts with the American Federation of State, County and Municipal Employees and Americans United for Change.

The appeals court disagreed with how the trial judge let the jury calculate those losses. Citing the Supreme Court’s 1982 ruling in NAACP v. Claiborne Hardware, the panel held that when a defendant’s protected speech is mixed with unprotected conduct, a plaintiff must show the unlawful conduct — not the speech — was the dominant cause of the harm. Testimony from AFSCME’s government affairs director indicated the video’s scandal, not the internship infiltration, was the primary reason contracts were canceled, the court found.

The panel also reversed the wiretapping verdict outright, ruling that Ms. Maass never held enough delegated authority at Democracy Partners to be considered its fiduciary — a requirement for that claim. Judge Robert Wilkins, an Obama appointee, dissented in part, warning the ruling could unsettle basic obligations of confidentiality that interns typically owe employers, though he agreed the damages award could not stand as calculated.

Mr. O’Keefe, who left Project Veritas in 2023 to start a new undercover-video outlet, said the ruling would bolster him against other pending lawsuits from subjects of his reporting. An attorney for Mr. Creamer and Democracy Partners, Joseph Sandler, said in a statement to Washington Examiner that his clients were “disappointed in the ruling” and are weighing next steps.