N.Y. Civ. Rights Law § 78

§ 78. Mitigating circumstances in action for libel or slander. In an\naction for libel or slander the defendant may prove mitigating\ncircumstances, including the sources of his information and the grounds\nfor his belief, whether or not he has pleaded or attempted to prove any\ndefense. A defendant in default for want of an answer may prove such\nmitigating circumstances upon a reference or inquiry to ascertain the\namount of the plaintiff's damages. Matter tending only to mitigate or\nreduce damages is a partial defense and may be set forth in the answer.\n