No, their defense is that Media Matters was passing this off to advertisers as representative of what normal Twitter users were seeing. I don't know much about

No, their defense is that Media Matters was passing this off to advertisers as representative of what normal Twitter users were seeing. I don't know much about US law specifically, but in most countries if a third party (usually but not always a competitor) goes to one party in an agreement and lies to them in order to induce them to cut business from a second, then that's libel/slander and can yield damages against the untruthful party. In this case Media Matters has clearly been untruthful. What they did is barely different from just outright Photoshopping the images together, or sticking a misleading caption on a cropped photo. The legal question is therefore only to what extent US law / first amendment protects such unethical behavior, not whether they did it at all.