Palm Coast Travel v. Elliott [1]

Palm Coast Travel sued travel journalist Chris Elliott after he reported Elliott.org [2] that Florida regulators had warned three travel insurance agencies, including Palm Coast, that offering policies from bankrupt Prime TravelProtection Services might violate state law. The complaint includes claims for defamation and tortious interference with contract.

In a March 2009 blog post [3], Elliott quoted a Florida Department of Financial Services spokeswoman as saying the state had ordered the agencies to “stop transacting business” and that “they’re on notice that further activity is pending [by the state]." Florida then issued a press release [4] that clarified what steps regulators had taken: “As a result of ongoing investigations into complaints about the sale of unauthorized travel insurance in Florida, Chief Financial Officer Alex Sink has notified three travel agencies that she intends to order them to stop selling insurance.” Elliott added this information as an update to his post.

In December 2009, Palm Coast sued Elliott claiming that his reporting defamed the company:

Elliott included among his reporting recent regulatory investigations of customer complaints regarding Prime Travel Protection and Jerry Watson. Elliott’s reporting included publication of false information regarding Palm Coast, which has and will continue to damage Palm Coast’s business unless it is properly remedied.

Among the statements Elliott published were falsehoods that stated that Palm Coast had been ordered to cease doing business by the State of Florida. No such order exists, and therefore that report was false.

Further, Elliott, when purporting to “clarify” his deliberately false statement regarding the State of Florida’s investigation of travel insurance, did not fully remedy the false impression he fostered regarding Palm Coast’s role.

Elliott’s falsehoods were directed at, among other aspects of Palm Coast’s business, its reputation in the trade or industry of travel. Moreover, Elliott did not properly correct, clarify, or retract his falsehoods, despite proper notice.

In the same lawsuit, Palm Coast also sued Peter Lay, one of its customers, for allegedly making false statements to Florida regulators about his experience with Palm Coast.

In March 2010, both Elliott [5] and Lay [6] filed motions to dismiss the complaint, arguing that it fails to state a cause of action for defamation or tortious interference. Lay also argued that the court lacks personal jurisdiction over him.

Update:  On June 26, 2010, Elliott announced on his blog [7] that the case had settled:

I offered my apologies for passing along the wrong information, however unintentional. Lee Smolinski, Palm Coast Travel's president, accepted.