Van-Go Transport Co., Inc. v. New York City Board of Education

Van-Go Transport Co., Inc. (Van-Go), Sterling Coach (Sterling), and Celebrity Transit (Celebrity) (together, the companies) were businesses that provided bus and van transportation. The two principals of the companies were Paul and Isaac Dachs (Dachs). Sterling and Celebrity submitted proposals for a contract with the New York City Board of Education (the board). The board did not award the contract to Sterling or Celebrity. In a letter to Sterling and Celebrity, the board cited the possibility of criminal activity, specifically, the offering of gratuities to government officials. A business submitting certain types of bids to the city was required to use the city’s computerized Vendex system, and to submit a completed Vendex questionnaire with its bid. Part of the questionnaire asks whether the bidder had previously been the subject of an investigation. In a later bid submitted through the Vendex system, Celebrity and Dachs were required to disclose that their previous proposal was denied because of the board’s unsubstantiated allegations of offering gratuities to government officials. This information was placed in the data files for all three companies and Dachs. The companies and Dachs (plaintiffs) brought a defamation action against the board (defendant). The board moved for summary judgment on the defamation claim, arguing that the defamatory action was barred because the companies and Dachs placed the defamatory statements into the Vendex system themselves.