Gloucester Publisher May See Reversal of $30M Judgment

When I was writing for Law.com's Legal Blog Watch, I wrote several posts (here is one) about the case of Jane Daniel, a Gloucester, Mass., woman who was hit with a $33 million verdict against her and her small publishing company, Mt. Ivy Press. The 2001 verdict was awarded to Misha Defonseca and her ghostwriter Vera Lee as the result of disputes over copyright and promotion of Defonseca's memoir, Misha: A Memoire of the Holocaust Years. The book told the story of how Defonseca survived the Holocaust on her own as a young girl, in part through her "adoption" by a pack of wolves. The book was a bestseller in Europe and was the basis for a film.

Several years later, through the detective work of Daniel and genealogical researcher Sharon Sergeant, documents were unearthed showing Defonseca's tale to be as tall as it seemed. Based on these new revelations, Daniel and Mt. Ivy filed a new lawsuit in 2008 seeking to set aside the $33 million judgment, alleging that Defonseca and ghostwriter Lee had perpetrated a fraud on the court. The trial court judge dismissed the case, concluding that it alleged no "extraordinary circumstances" that would warrant relief.

Today, the Massachusetts Appeals Court reinstated the case, but only against Defonseca. It concluded that, if Daniel is able to prove her allegations at trial, then they constitute "extraordinary fraud."

"The plaintiffs have alleged an extraordinary fraud that touched every part of Defonseca's case against them and resulted in a huge verdict. It is true, as the defendants point out, that the book's authenticity was not the central issue at trial. Despite this, it is difficult to imagine that this information, had it been known to Daniel and Mt. Ivy, would not have provided a meritorious defense to at least some of the claims, especially those claims based on the contract.

"Defonseca's entire case, and the manner in which she procured the judgment, was buttressed on what is now admitted to be a lie. The pleadings she filed were false and based on false information. The affidavits she submitted were premised on her phony life story. Her testimony at trial reiterated, and reinforced, her sympathetic but ultimately false tale."

These allegations entitle Daniel to seek relief from the judgment, the Appeals Court said. In addition, the allegations, if true, constitute fraud on the court:

"There are some falsehoods that are so emotionally inflammatory that they impede the jury's ability impartially to evaluate facts and adjudicate a case. Falsely claiming to be a victim (and survivor) of the Holocaust is such a one, particularly where--as here--the claim is the foundation of a book that the publication, distribution, and marketing of were the subjects of the suit. Defonseca perpetrated this falsehood, and it lay at the center of the case."

As for Lee, the ghostwriter, the Appeals Court said that there is no indication that she knew or had reason to know that Defonseca's memoir was fraudulent. Because there is no evidence that she did anything wrong, there is no basis to lift the judgment in her favor.

The ruling is not the end of the case. Daniel will still have to prove her case in court. Today's decision sends the case back to the trial court and allows it to move forward.

Here is today's full opinion: Mt. Ivy Press v. Defonseca.