Hawran v. Hixon (2012) 209 Cal.App.4th 256
This is the "Corporate press release/CFO Defamation" case.
Hawran ranks up there with City of Colton, previously discussed in my 8/27/12 blog, as one of the more significant SLAPP cases of 2012. This case is a treasure trove of commercial speech, defamation, and privilege law combined with a heavy twist of meticulous "gravamen" analysis. Moreover, the trial judge was the Hon. William S. Dato, perhaps, the brightest sitting trial judge in San Diego. The Appellate Opinion was penned by Justice O'Rourke, undoubtedly one of the brightest sitting Justices on our Courts of Appeal, along with the brain team of concurring Justices McIntyre and Irion. Judgment affirmed.
Sequenom is a publicly traded diagnostic testing and genetics analysis company, whose common stock trades on NASDAQ. Hawran was its CFO from April 2007 to his resignation on September 25, 2009. In the Spring of 2009, Sequenom publicly admitted that previously reported research and development results for a certain diagnostic test for fetal Down's Syndrome (Trisomy 21 or "T21") were mishandled by employees on the Sequenom science team. Thereafter, Sequenom's stock price declined, derivative and securities suits were filed, and Sequenom commenced its own internal investigation, led by a special litigation committee (SLC). In April 2009, sequenom issued its first press release concerning the delay in the launch of the T21 test due to the mishandling and, a day later, filed a Form 8-K reporting to the SEC Sequenom's formation of the SLC. In June 2009, Sequenom was alerted the SEC had commenced an investigation into matters related to the T21 issue.
In September 2009, defendants Sequenom and its Directors, Hixon, Lerner, and Lindsay made Hawran an offer that if he resigned as CFO, he would not be associated with the mishandling and would be separated from others involved in the test data mishandling. In reliance on those representations, Hawran resigned on September 25, 2009.
In September 2009, Sequenom filed another Form 8-K and issued a second press release announcing the completion of the SLC's independent investigation. In part, the September press release stated Sequenom had failed to put in place adequate protocols and control for the conduct of studies related to the program but that the Board of Directors had begun to implement various remedial measures. The Company has terminated the employment of its president and CEO and its vice President of R & D effective immediately. The portion of the press release subject to Hawran's claims read as follows:
"The company has obtained the resignation of its CFO, Paul Hawran, and one other officer. While each of those officers and employees has denied wrongdoing, the SLC's investigation has raised serious concerns, resulting in a loss of confidence by independent members of the company's board of directors in the personnel involved."
In August 2012, Hawran sued Directors Hixon, Lerner, and Lindsay and then filed a First Amended Complaint (FAC), a week later, adding Sequenom as a defendant. The First Amended Complaint sets forth causes of action for defamation, invasion of privacy/false light, negligent and intentional interference with prospective economic advantage, violation of the UCL, and negligent and intentional misrepresentation.
Hawran alleged Sequenom used the T21 test mishandling to constructively fire him for his prior complaints to the Board members about improper tax reporting. Hawran alleged his personal and professional reputation was irreparably damaged, and his ability to earn a living impacted, by the September press release, which falsely stated he had denied any wrongdoing, blamed him for the data mishandling, and directly and implicitly called into question his ethics, management capabilities, and performance as Sequenom's CFO. He alleged the press release defamed him and painted him in a false light, and substantially interfered with his prospective employment opportunities and that he had been unable to find alternative employment due to defendant's interference.
Defendants moved to strike the first amended complaint under section 425.16. They argued section 425.16 applied to each cause of action because the September press release was issued in connection with an SEC investigation and also addressed a matter of public concern rendering it a protected writing under subdivisions (e)(2), (e)(3), and (e)(4). On appeal, Hawran did not challenge the trial court finding that his causes of action were based on the press release, which was connected to issues under review in the SEC proceeding under subdivision (e)(2).
COMMERCIAL SPEECH EXEMPTION UNDER CCP 425.17, SUBD. (c)
Hawran's main contention was that section 425.16 did not apply to his claims because the commercial speech exception under CCP § 425.17, subd. (c) applied to bar defendants' SLAPP motion. The commercial speech exception of section 425.17, subd. (c) exempts a cause of action from a special motion to strike under section 425.16 when all of the following conditions are satisfied: (1) the cause of action is against a person primarily engaged in the business of selling or leasing goods or services; (2) the cause of action arises from a statement or conduct by that person consisting of `representations of fact' about `that person's or a business competitor's' business operations, goods, or services'; (3) the statement or conduct was made either for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions, in the person's goods or services or in the course of delivering the person's goods or services; and (4) the "intended audience" for the statement meets the definition set forth in CCP § 425.17, subd.(c)(2) [i.e. an actual, or potential buyer or customer, or a person likely to repeat the statement to, or otherwise influence, an actual or potential buyer or customer]
Hawran contended, the September press release, the subject of each cause of action, concerned Sequenom's business operations in that it was devoted almost exclusively devoted to explaining what went wrong in its operations concerning the development and testing of a new genetic product and the operational steps defendants were taking to address the problem, and to announce a conference call to discuss these matters with investors, customers, and other interested parties. Moreover, Hawran introduced evidence as to the intent and purpose of Sequenom's press releases generally and explained Sequenom's custom and practice as to its distribution. Evidence was produced that the September press release was intended for the consumer and designed to maintain and increase sales and profits.
The court rejected Hawran's commercial speech argument and held that CCP 425.17(c) did not exempt his causes of action from defendant's anti-SLAPP motion because Hawran's interpretation of the September press release was overbroad. The is where the court engaged in meticulous "gravamen/arising from prong" analysis to focus solely on that portion of the press release that is alleged to form the basis of defamation liability. In so doing, the court analogized to the recent High Court decision in Simpson-Strong-Tie v. Gore, which rejected Simpson's contention that the exemption should apply so long as the statement giving rise to the cause of action was `accompanied' by factual representations about the defendant's business operations, goods, or services. In Hawran, the Court found that the "allegedly defamatory portions" of the press release are not representations of fact about "Sequenom's" business operations, goods or services. Instead, each cause of action specifically references and is based upon the assertedly false and defamatory statements in the September press release concerning Hawran's resignation and purported denial of wrongdoing. "They do not arise from the press release's other statements concerning the deficiencies of Sequenom's test protocols or controls, or the remedial measures taken."
The court reasoned, in accord with Simpson, that "section 425.17's commercial speech exemption is not triggered by the presence of other representations of fact concerning sequenom's business operations or services contained in the press release, if Hawran does not seek to impose liability based on those statements."
"Though the targeted statements that Sequenom "obtained the resignation of" Hawran and that he "has denied wrongdoing" arguably may broadly concern or relate to Sequenom's corporate events or business decisions, `NARROWLY CONSTRUING THE EXEMPTION AS WE MUST, WE CANNOT SAY THESE STATEMENTS ARE `ABOUT' SEQUENOM'S BUSINESS OPERATIONS, GOODS, OR SERVICES."
Given that the Legislature has expressly declared that section 425.16 "shall be construed broadly", the logical corollary illustrated by the Hawran case is that CCP § 425.17, and any other exemptions from SLAPP, must be narrowly construed. See our High Court opinion in Club Members for an Honest Election v. Sierra Club (2008) 45 Cal.4th 309.
PRONG TWO
FAIR AND TRUE REPORT PRIVILEGE CC § 47(d)
On prong two, the court found that Hawran presented sufficient evidence that the individual director defendants were, in part, responsible for the publication of the press release. But defendants argued that the fair and true report privilege of CC § 47, subd. (d) for fair and true reports in, or made to, a public journal of statements made in the course of an official proceeding. The Court squarely rejected this argument. Assuming the press release was disseminated to a Newswire (a public journal), this does not mean the press release constitutes a communication "of" or "about" the SEC investigation or of anything said in the course thereof. Indeed, the September press release does not even mention the SEC investigation, much less capture its substance, gist, or sting. While the Form 8-K filing with the SEC may constitute a writing "before" an official proceeding, the Form 8-K is not itself an official proceeding. The fact information in the press release was also disclosed to the SEC in the legally required Form 8-K does not transform the press release into a report "about" the SEC proceeding or statements made in the course thereof.
LITIGATION PRIVILEGE OF CC § 47(b)
For similar reasons, the court rejected defendant's litigation privilege argument based on the Form 8-K filing with the SEC. The argument failed because the press release, unlike the Form 8-K was published to the public at large beyond the participants necessary to promote the truth seeking function of the SEC proceeding. Secondly, Hawran's causes of action are not based on statements made in the Form 8-K but on those made in the September press release, which differ from those made in the Form 8-K.
COMMON INTEREST PRIVILEGE OF CC § 47(c)
The Court then rejected defendant's qualified common interest privilege of CC § 47, subd. (c) primarily because the press release was disseminated to a newswire that made the release available to the general public worldwide, which greatly exceeded the group of interested parties - investors and prospective investors in Sequenom.
Aside from the privilege defenses, Hawran was able to establish a probability on each of his claims. The challenged statements about Hawran in the press release were provable false factual assertions about Hawran's professional competence and ethics. Hawran produced evidence of falsity, malice, intent, causation and damages to support each of his claims. Ironically, while the court's painstakingly narrow construction of the press release defeated Hawran's commercial speech exemption, that same narrow interpretation of the press release also saved his claims from the clutches of defendant's various privilege defenses enabling him to show a probability of prevailing with the admissible evidence he produced in support of his case-in-chief.
The "corporate press release/CFO defamation" case in Hawran is truly a phenomenal opinion to read.
Thursday, December 20, 2012
Saturday, November 3, 2012
IALA UNDERSTANDING SLAPPS MCLE - L.A. WED 11/7/12 6:30PM
IRANIAN AMERICAN LAWYERS ASSOCIATION IS SPONSORING A SLAPP MCLE THIS WED 11/7/12 FROM 6:30PM TO 8:30 PM AT UNIVERSITY OF WEST LOS ANGELES SCHOOL OF LAW 9800 LA CIENAGA BLVD. 12TH FLOOR INGLEWOOD, CA 90301
PLEASE JOIN ME, JAMES J. MONEER, ESQ., AND BENJAMIN G. SHATZ, ESQ., A CERTIFIED APPELLATE SPECIALIST WITH MANATT PHELPS, FOR A 2 HOUR JAM PACKED SLAPP SEMINAR FROM BOTH THE PLAINTIFF'S AND DEFENSE PERSPECTIVES COVERING ALL MAJOR SLAPP TOPICS INCLUDING "OFFICIAL PROCEEDING" SLAPPS, "PUBLIC ISSUE SPEECH" SLAPPS, "CYBER SLAPPS", "GRAVAMAN" ANALYSIS, MIXED CAUSE OF ACTION ANALYSIS, SLAPP DISCOVERY MOTIONS, SLAPP FEE MOTIONS, SLAPP PROCEDURES, EXEMPTIONS FROM SLAPP INCLUDING ILLEGALITY, CCP 425.17 EXEMPTIONS FOR PUBLIC INTEREST SUITS AND COMMERCIAL SPEECH, AND SLAPPBACKS UNDER CCP 425.18. BOTH FOUNDATIONAL AND THE MOST CURRENT CASES WILL BE DISCUSSED AS WELL AS SLAPP STRATEGY AND SLAPP MALPRACTICE ISSUES.
To register please contact IALA for more info at 818-783-3444 or email: info@ialalawyers.org.
2 hours MCLE Credit. Cost $65.00
PLEASE JOIN ME, JAMES J. MONEER, ESQ., AND BENJAMIN G. SHATZ, ESQ., A CERTIFIED APPELLATE SPECIALIST WITH MANATT PHELPS, FOR A 2 HOUR JAM PACKED SLAPP SEMINAR FROM BOTH THE PLAINTIFF'S AND DEFENSE PERSPECTIVES COVERING ALL MAJOR SLAPP TOPICS INCLUDING "OFFICIAL PROCEEDING" SLAPPS, "PUBLIC ISSUE SPEECH" SLAPPS, "CYBER SLAPPS", "GRAVAMAN" ANALYSIS, MIXED CAUSE OF ACTION ANALYSIS, SLAPP DISCOVERY MOTIONS, SLAPP FEE MOTIONS, SLAPP PROCEDURES, EXEMPTIONS FROM SLAPP INCLUDING ILLEGALITY, CCP 425.17 EXEMPTIONS FOR PUBLIC INTEREST SUITS AND COMMERCIAL SPEECH, AND SLAPPBACKS UNDER CCP 425.18. BOTH FOUNDATIONAL AND THE MOST CURRENT CASES WILL BE DISCUSSED AS WELL AS SLAPP STRATEGY AND SLAPP MALPRACTICE ISSUES.
To register please contact IALA for more info at 818-783-3444 or email: info@ialalawyers.org.
2 hours MCLE Credit. Cost $65.00
2012 (e)(4) SLAPP INTERNET DEFAMATION CASES - CHAKKER AND SUMMIT BANK
Perhaps the most significant (e)(4) Cyber-SLAPP defamation case this year is Summit Bank v. Rogers (2012) 206 Cal.App.4th 669. Rogers was a former VP at a community bank. The bank filed the SAC, the operative complaint, which alleged a single cause of action against Doe defendants for defamation based on anonymous internet posts on the "Rants & Raves section of Craigslist". The essential allegations were that "Doe defendants published false statements about the Bank with the intent to defame the Bank's good name and reputation." The Bank eventually learned Roger's identity after the court granted the Bank's request to serve a subpoena on Craigslist to discover the poster's identity. Rogers admitted he made the post but argued his posts concerned a matter of public interest under subdivision (e)(4) of section 425.16 - the Bank's financial condition. He further argued that the Bank could not prevail because his posts were unactionable opinion and the gist of his posts was substantially true. The posts in dispute read as follows:
"Being a stockholder of this screwed up Bank, this year there was no dividend paid. The bitch CEO that runs this Bank thinks that the Bank is her personal Bank [sic] to do with as she pleases. Time to replace her and her worthless son. ....
...What's up at this problem Bank. The CEO provides a [sic] executive position to her worthless, lazy fat ass son Steve Nelson. This should not be allowed. Move your account now. ...
...The FDIC and the California Department of Financial Institutions are looking at Summit Bank. This is the third time in less than a year. This is not a good thing, move your accounts ASAP. ...
...I banked at Summit Banks [sic[ Hayward Office. Service was poor and Summit Bank closed this office. Whats [sic] up with that. All the customer [sic] were left high and dry. This is a piss poor Bank. I would suggest that anyone that banks at Summit Bank leave before they close. Move your account now before it is too late."
Looks simple enough doesn't it. These posts concern a Bank's financial condition, which is clearly a matter of public interest under subdivision (e)(4) of Code of Civil Procedure Section 425.16. On prong two, it appears that these posts do not state facts that are provably false and, to the extent they do, they are substantially true. So where is the wrinkle? The Bank made a sound argument that although their defamation claim attacks defendant's speech made in connection with an issue of public interest, the posts were illegal as a matter as a matter of law because the posts violated Financial Code section 1327 on its face, which is a crime. FC 1327 was passed way back in 1907 as part of an overall plan to ensure the financial stability of Banks. FC 1327 makes it a crime to "make an untrue statement or rumor which is directly or by inference derogatory to a Bank's financial condition." Of course, the Bank relied on the illegality as a matter of law doctrine originally expounded by our High Court in Flatley v. Mauro (2006) 39 Cal.4th 299. Looking at the posts and squaring them up with the plain language of FC 1327, Roger's posts were, on their face, conclusively, and beyond any dispute, illegal as matter of criminal law. (See G.R. v. Intelligator (2010) 185 Cal.App.4th 606, which limited Flatley's illegality exemption to violations of criminal law.) The illegality doctrine is one the least understood and most overused arguments by plaintiffs to claim exemption from a SLAPP motion. It is most often unavailing because there is usually some factual dispute as to whether the defendant's speech or petition activity was illegal as a matter of criminal law. Here, however, the illegality exemption appears to apply on all fours and the Bank would have ordinarily prevailed and defeated Roger's SLAPP motion. But the Court of Appeal went further into the analysis and struck down the very basis of the Bank's illegality argument by ruling that FC 1327, on its face, violated the First Amendment to the United States Constitution on a number of grounds including: (1) FC 1327 is subject to strict scrutiny and constituted an impermissible content-based restriction on speech; (2) FC 1327 is unconstitutionally vague and overbroad. After an exhuastive analysis of First Amendment Constitutional and State defamation law, the Court of Appeal ruled that the Bank's SLAPP motion should be denied. The Court also went into a detailed analysis of the context of the posts on the internet, which were in a chat room specifically designed for former and current employees to "Rant & Rave" about their current or former bosses. Moreover, the mere fact that the posters on this message board like many others on the internet were anonymous makes it more likely that the challenged statements will be construed by the courts as unactionable opinion, hyperbole, rhetoric etc anonymous internet posts on message boards are not the place whether the average reader expects to find facts.
The next cyber-SLAPP defamation case to come down in October of 2012 is Chakker v. Mateo (filed 10/4/12 Case No. D058753) 2012 DJDAR 13830. Chakker built on the principles set forth in Summit Bank by recognizing that the internet as a whole is a public forum. Although subd. (e)(3) of section 425.16, which covers speech made in a public forum in connection with an issue of public interest, is now and has been entirely superfluous with respect to prong one of the anti-SLAPP analysis since subd. (e)(4), which covers speech made in connection with an issue of public interest (eliminating public forum requirement), was added to the statute in 1997 along with the broad construction requirement, Chakker has expressly made the public forum element potentially dispositive in SLAPP defamation cases involving internet speech on prong two. Among the factors considered by the Summit Bank Court, Chakker looked at the language and context of the posts on two internet chat rooms and held that the fact that the posts were made in an internet chat room open to the public makes the statements more likely to be treated as unactionable opinion rather than as provably false factual assertions. Chakker fathered a child with defendant's daughter, Nicole Mateo. The grandmother of the child, Wendy Mateo, made derogatory statements about Chakker's forensics business on one website where the public may comment on the reliability and honesty of various providers of goods and services and another post, derogatory of his character, on a social networking website, which provided an open forum for members of the public to comment on a variety of subjects. Chakker sued the grandmother for defamation. The posts, which refer to Chakker, read as follows:
"You should be scared. This guy is a criminal and a deadbeat Dad. As you can see, I am the child's grandma, so I know. If you should eve [sic] come across this person, be very careful. He may be taking steroids so who knows what could happen." "I would be very careful dealing with this guy. He uses people, is into illegal activities etc. I wouldn't let him into my house if I wanted to keep my possessions and my sanity."
Other statements accuse him of fraud, deceit, and picking up street walkers and homeless drug addicts.
First, the court went into an exhaustive analysis of why the internet as a whole is a public forum and why such statements are more likely to be treated as opinion. Then, the court noted that any internet posts commenting on the reliability or quality of goods or services on consumer review websites constitute issues of public interest. The free flow of consumer information is always an issue of public interest. So SLAPP applied under subd. (e)(4). As to the social networking site, the court used a vortex or public figure or "vortex" analysis to find that the posts about Chakker on the social networking site constitutes an issue of public interest to the other members on that site because Chakker posted his own profile on the "topix" site, which generated responses from othe rmembers to which defendant then responded with her own comments about Chakker's character - an issue of public interest to other members on the site who may be considering whether or not to interact with him. The court found again, based primarily on context, that the posts constituted speech in connection with an issue of public interest under subd. (e)(4) sufficient to trigger the anti-SLAPP provisions on prong one and found that the statements were unactionable opinion based primarily on the interactive internet context of the her posts both about Chakker's business and his personal character. The Court further noted that the language itself lacks the kind of formality and polish where a reader would expect to find facts and when coupled with the context of the internet chat rooms make the posts unactionable opinion. Finally, it is obvious to any reader that the posts were made by the jilted ex-girlfriend's mother and that she obviously had a proverbial "axe to grind" such that no reader would expect to find factual information or objective opinions in these posts.
Both Summit Bank and Chakker go through an exhaustive review of the anti-SLAPP, First Amendment, and defamation jurisprudence as applied to internet speech. They are great cases to read.
"Being a stockholder of this screwed up Bank, this year there was no dividend paid. The bitch CEO that runs this Bank thinks that the Bank is her personal Bank [sic] to do with as she pleases. Time to replace her and her worthless son. ....
...What's up at this problem Bank. The CEO provides a [sic] executive position to her worthless, lazy fat ass son Steve Nelson. This should not be allowed. Move your account now. ...
...The FDIC and the California Department of Financial Institutions are looking at Summit Bank. This is the third time in less than a year. This is not a good thing, move your accounts ASAP. ...
...I banked at Summit Banks [sic[ Hayward Office. Service was poor and Summit Bank closed this office. Whats [sic] up with that. All the customer [sic] were left high and dry. This is a piss poor Bank. I would suggest that anyone that banks at Summit Bank leave before they close. Move your account now before it is too late."
Looks simple enough doesn't it. These posts concern a Bank's financial condition, which is clearly a matter of public interest under subdivision (e)(4) of Code of Civil Procedure Section 425.16. On prong two, it appears that these posts do not state facts that are provably false and, to the extent they do, they are substantially true. So where is the wrinkle? The Bank made a sound argument that although their defamation claim attacks defendant's speech made in connection with an issue of public interest, the posts were illegal as a matter as a matter of law because the posts violated Financial Code section 1327 on its face, which is a crime. FC 1327 was passed way back in 1907 as part of an overall plan to ensure the financial stability of Banks. FC 1327 makes it a crime to "make an untrue statement or rumor which is directly or by inference derogatory to a Bank's financial condition." Of course, the Bank relied on the illegality as a matter of law doctrine originally expounded by our High Court in Flatley v. Mauro (2006) 39 Cal.4th 299. Looking at the posts and squaring them up with the plain language of FC 1327, Roger's posts were, on their face, conclusively, and beyond any dispute, illegal as matter of criminal law. (See G.R. v. Intelligator (2010) 185 Cal.App.4th 606, which limited Flatley's illegality exemption to violations of criminal law.) The illegality doctrine is one the least understood and most overused arguments by plaintiffs to claim exemption from a SLAPP motion. It is most often unavailing because there is usually some factual dispute as to whether the defendant's speech or petition activity was illegal as a matter of criminal law. Here, however, the illegality exemption appears to apply on all fours and the Bank would have ordinarily prevailed and defeated Roger's SLAPP motion. But the Court of Appeal went further into the analysis and struck down the very basis of the Bank's illegality argument by ruling that FC 1327, on its face, violated the First Amendment to the United States Constitution on a number of grounds including: (1) FC 1327 is subject to strict scrutiny and constituted an impermissible content-based restriction on speech; (2) FC 1327 is unconstitutionally vague and overbroad. After an exhuastive analysis of First Amendment Constitutional and State defamation law, the Court of Appeal ruled that the Bank's SLAPP motion should be denied. The Court also went into a detailed analysis of the context of the posts on the internet, which were in a chat room specifically designed for former and current employees to "Rant & Rave" about their current or former bosses. Moreover, the mere fact that the posters on this message board like many others on the internet were anonymous makes it more likely that the challenged statements will be construed by the courts as unactionable opinion, hyperbole, rhetoric etc anonymous internet posts on message boards are not the place whether the average reader expects to find facts.
The next cyber-SLAPP defamation case to come down in October of 2012 is Chakker v. Mateo (filed 10/4/12 Case No. D058753) 2012 DJDAR 13830. Chakker built on the principles set forth in Summit Bank by recognizing that the internet as a whole is a public forum. Although subd. (e)(3) of section 425.16, which covers speech made in a public forum in connection with an issue of public interest, is now and has been entirely superfluous with respect to prong one of the anti-SLAPP analysis since subd. (e)(4), which covers speech made in connection with an issue of public interest (eliminating public forum requirement), was added to the statute in 1997 along with the broad construction requirement, Chakker has expressly made the public forum element potentially dispositive in SLAPP defamation cases involving internet speech on prong two. Among the factors considered by the Summit Bank Court, Chakker looked at the language and context of the posts on two internet chat rooms and held that the fact that the posts were made in an internet chat room open to the public makes the statements more likely to be treated as unactionable opinion rather than as provably false factual assertions. Chakker fathered a child with defendant's daughter, Nicole Mateo. The grandmother of the child, Wendy Mateo, made derogatory statements about Chakker's forensics business on one website where the public may comment on the reliability and honesty of various providers of goods and services and another post, derogatory of his character, on a social networking website, which provided an open forum for members of the public to comment on a variety of subjects. Chakker sued the grandmother for defamation. The posts, which refer to Chakker, read as follows:
"You should be scared. This guy is a criminal and a deadbeat Dad. As you can see, I am the child's grandma, so I know. If you should eve [sic] come across this person, be very careful. He may be taking steroids so who knows what could happen." "I would be very careful dealing with this guy. He uses people, is into illegal activities etc. I wouldn't let him into my house if I wanted to keep my possessions and my sanity."
Other statements accuse him of fraud, deceit, and picking up street walkers and homeless drug addicts.
First, the court went into an exhaustive analysis of why the internet as a whole is a public forum and why such statements are more likely to be treated as opinion. Then, the court noted that any internet posts commenting on the reliability or quality of goods or services on consumer review websites constitute issues of public interest. The free flow of consumer information is always an issue of public interest. So SLAPP applied under subd. (e)(4). As to the social networking site, the court used a vortex or public figure or "vortex" analysis to find that the posts about Chakker on the social networking site constitutes an issue of public interest to the other members on that site because Chakker posted his own profile on the "topix" site, which generated responses from othe rmembers to which defendant then responded with her own comments about Chakker's character - an issue of public interest to other members on the site who may be considering whether or not to interact with him. The court found again, based primarily on context, that the posts constituted speech in connection with an issue of public interest under subd. (e)(4) sufficient to trigger the anti-SLAPP provisions on prong one and found that the statements were unactionable opinion based primarily on the interactive internet context of the her posts both about Chakker's business and his personal character. The Court further noted that the language itself lacks the kind of formality and polish where a reader would expect to find facts and when coupled with the context of the internet chat rooms make the posts unactionable opinion. Finally, it is obvious to any reader that the posts were made by the jilted ex-girlfriend's mother and that she obviously had a proverbial "axe to grind" such that no reader would expect to find factual information or objective opinions in these posts.
Both Summit Bank and Chakker go through an exhaustive review of the anti-SLAPP, First Amendment, and defamation jurisprudence as applied to internet speech. They are great cases to read.
Sunday, September 9, 2012
PINCUS COMPHREHENSIVE 6-HOUR ANTI-SLAPP SEMINAR ON 10/19/12 IN LA
Practice in ignorance of the anti-SLAPP laws and practice at your peril. If you practice a little or a lot of California civil litigation- you need to know SLAPP. If you don't, you can expect to be sued for malpractice and malicious prosecution contemporaneously under CCP 425.18. Anti-SLAPP jurisprudence is a novel, complex, and rapidly expanding area of law due mainly to the immediate appeal right by losing defendants from orders denying anti-SLAPP motions in whole or in part. The statute has now been amended 6 times since it was first effective in 1993 and over 400 published court of appeal decisions in California have interpreted its provisions - this includes at least 25 opinions from the California Supreme Court. SLAPP also applies to state law claims in federal court with slightly different rules. 30 states now have anti-SLAPP statutes on their books. Many plaintiff's lawyers to this day are dumbfounded when I explain the rules of SLAPP to them. The responses I get are: Really!! It can't be that way!! It must be unconstitutional!!! I tell them no, no, and no and I can give you a case rejecting each argument you raise and yes the statute is definitely constitutional as interpreted by a number of High Court opinions.
Recently, conflicts abound in a number of areas but most saliently in the area of mixed SLAPP causes of action and the confusion with the so-called "principal thrust or gravamen" doctrine. Also, the illegality as a matter of law doctrine and the commercial speech exemption appear to be the most misunderstood concepts in SLAPP jurisprudence. What is protected petitioning activity? What constitutes conduct in furtherance of the right of free speech in connection with an issue of public interest? How does a plaintiff demonstrate a "probability of prevailing" with competent admissible evidence when there is an automatic stay on discovery upon filing of the motion? What about cyber SLAPPs, review sites, HOA disputes, unlawful detainer, and invasion of privacy? How to cogently make and oppose SLAPP fee motions. Learn to avoid malpractice and a SLAPPback malicious prosecution under CCP 425.18 and much more. Get up to speed on the latest SLAPP cases and recent trends along with an invaluable anti-SLAPP handbook and seminar materials.
PLEASE JOIN ME FOR A 6-HOUR COMPREHENSIVE ANTI-SLAPP SEMINAR SPONSORED BY PINCUS PROFESSIONAL EDUCATION ON OCTOBER 19, 2012 AT THE LA ATHLETIC CLUB IN DOWNTOWN LA. There will be four panelists including myself, Ben Shatz, Esq. an appellate specialist at Manatt Phelps LA, Phil Goar, Senior Judicial Attorney at the sEcond Dist. Div. One Court of Appeal and the Hon. Amy Hogue, Judge of the LA Superior Court.
MENTION MY NAME AS A FRIEND OF THE SPEAKER AND GET A 25% DISCOUNT OFF THE PRICE OF THE SEMINAR. Go to www.pincusproed.com for more info.
Sincerely,
James J. Moneer, Esq.
Recently, conflicts abound in a number of areas but most saliently in the area of mixed SLAPP causes of action and the confusion with the so-called "principal thrust or gravamen" doctrine. Also, the illegality as a matter of law doctrine and the commercial speech exemption appear to be the most misunderstood concepts in SLAPP jurisprudence. What is protected petitioning activity? What constitutes conduct in furtherance of the right of free speech in connection with an issue of public interest? How does a plaintiff demonstrate a "probability of prevailing" with competent admissible evidence when there is an automatic stay on discovery upon filing of the motion? What about cyber SLAPPs, review sites, HOA disputes, unlawful detainer, and invasion of privacy? How to cogently make and oppose SLAPP fee motions. Learn to avoid malpractice and a SLAPPback malicious prosecution under CCP 425.18 and much more. Get up to speed on the latest SLAPP cases and recent trends along with an invaluable anti-SLAPP handbook and seminar materials.
PLEASE JOIN ME FOR A 6-HOUR COMPREHENSIVE ANTI-SLAPP SEMINAR SPONSORED BY PINCUS PROFESSIONAL EDUCATION ON OCTOBER 19, 2012 AT THE LA ATHLETIC CLUB IN DOWNTOWN LA. There will be four panelists including myself, Ben Shatz, Esq. an appellate specialist at Manatt Phelps LA, Phil Goar, Senior Judicial Attorney at the sEcond Dist. Div. One Court of Appeal and the Hon. Amy Hogue, Judge of the LA Superior Court.
MENTION MY NAME AS A FRIEND OF THE SPEAKER AND GET A 25% DISCOUNT OFF THE PRICE OF THE SEMINAR. Go to www.pincusproed.com for more info.
Sincerely,
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Tuesday, August 21, 2012
Colton Conflicts with the Mann Rule in Prong Two Mixed Cause of Action SLAPP cases
On October 24, 2011, I drafted a detailed blog entitled "In defense of the The Mann Rule." I recommend that readers review this article before reading the article that follows on prong two mixed cause of action SLAPP jurisprudence as this is a developing body of law that is now officially in conflict at least in some prong two mixed cause of action cases. Recall the basic rule from Mann v. Quality Old Time Service (4th Dist./ Div. 1 2004) 120 Cal.app.4th 90, 106 - Plaintiff need only prove up any part of its claim in order to defeat a section 425.16 special motion to strike. Plaintiff need not prove up all theories or allegations presented within a single cause of action and the court need not parse the cause of action into successful and unsuccessful claims. If plaintiff can prove any part of the claim, whether the allegation is based on protected SLAPP or unprotected activity having nothing to do with SLAPP, the entire cause of action stands. Then I discussed the 20-pages of dicta expounded by Justice Needham in Walllace v. McCubbin (2011) 196 Cal.App.4th 1169 where He criticized the Mann rule at length and offered a different approach to treatment of mixed causes on prong two. This alternative approach recently became law with modifications on May 30, 2012 in City of Colton v. Singletary (4th Dist./Div. 2 2012) 2012 WL 1940648, which like Wallace is a lengthy exposition that has created conflicts of authority in at least three areas of anti-SLAPP jurisprudence including a conflict with the Mann rule in some mixed cause of action cases on prong two. Although the opinion is nearly 30 westlaw pages, the facts are simple: The City essentially alleged two mixed causes of action based on the same factual allegations of misconduct. The fourth cause of action was for unfair business practices under Bus. & Prof. Code section 17200 and the sixth cause of action sought injunctive relief. There is also an element of illegality as a matter of law that was considered by the court but rejected because there was not a conclusive admission or irrefutable evidence of the illegal conduct and that a prior plea bargain in a criminal matter is neither an admission nor res judicata in a civil matter. See fn 4. The City and Singletary originally entered into the first agreement in 1992 whereby Singletary agreed to construct all the infrastructure in the City as part of a subdivision plan. Subsequently, a new councilmember, Grimsby, was elected. Singletary then bribed Grimsby with cash to secure a second 1999 contract with the City in which the City agreed to construct the infrastructure. Singletary sued to have the City construct the infrastructure per the 1999 agreement and the City cross-complained for damages as a result of Singletary bribing the councilmember and not constructing the infrastructure per the 1992 agreement. Singeltary filed an anti-SLAPP motion challenging the City's cross-complaint, which was granted as to the fourth and sixth causes of action only. The fourth cause of action seeking an injunction: (1) requiring Singletary to construct the remaining infrastructure; (2) restitution for that part of the infrastructure already completed by the City; and (3) an injunction requiring Singeltary to "cease and desist" from seeking to profit from his own admitted bribery of Gimsby. It was this third allegation in the fourth cause of action that arose from protected activity as it was clearly based on Singletary's filing of the lawsuit to enforce the 1999 contract obtained by bribery. The first two allegations had nothing to do with protected SLAPP activity. Singeltary argued that the fourth and sixth causes of action were clearly based both on Singltary's bribes and on his current lawsuit - a mixed cause of action. To the extent the claim is based on the lawsuit, it is protected by the anti-SLAPP statute as an oral or written statement made before and in connection with issues under review in a judicial proceeding under subds. (e)(1),(2) and the filing and maintenance of a lawsuit is also absolutely immune from civil liability under CC 47, subd. (b). But the bribe and his failure to perform the 1992 contract are not protected acts, they are not barred by any privilege, and the causes of action clearly have merit to the extent based on these allegations. Under the Mann rule, the entire cause of action would stand because plaintiff was able to prove up any part of it. But the Colton court rejected the Mann rule in this instance and essentially held that the court should split the cause of action and allow that portion of the claim based on nonprotected activity to go forward without inquiry into the merits on prong 2 (because this part of the cause of action would not have been subject to the SLAPP motion if it had been alleged on its own) and then strike only that portion of the claim arising from Singeltary's filing of his lawsuit to enforce his ill-gotten contract. So under Colton, the court must split a mixed cause of action where plaintiff is able to establish a probability of prevailing as to at least one act or show that SLAPP does not apply to at least one act. This approach has a number of complexities as discussed in my prior blog based mainly on the administrability problems that arise. The fee issues create more complexities but can be resolved with existing anti-SLAPP fee principles expounded in the Mann II case - Mann v. Quality Old Time Service (2006) 139 Cal.App.4th 328. Aside from the administrability problems created by this approach, as pointed out in Justice Richli's dissent, the Legislature does not authorize courts to rewrite pleadings or strike particular allegations. Hence, he concludes this approach violates the plain language of the statute. On the other hand, the Colton approach appears to comport with the intent of the Legislature, and the "broad" plain language construction of Code of Civil Procedure Section 425.16 by striking all claims and only those claims and parts thereof that arise from activity targeted by the statute and lack merit while allowing all other claims and parts thereof to survive the anti-SLAPP motion unscathed. These "parts" of causes of action are really separate counts that, if proven, would be sufficient in themselves to support the cause of action. See Wallace, supra, for an extensive discussion of the primary rights theory and the difference between a "claim", "cause of action" a "count".
Other conflicts created by Colton:
1. CCP 425.16(d) - Public Enforcement exception: Colton disagreed and disapproved of the City of Long Beach v. Citizens for Neighborhood Empowerment (2003) 111 Cal.App.4th 302. Colton rejected City of Long Beach's expansion of the public enforcement exmeption to claims by municipalities brought in the name of the municipality. Subd (d) expressly applies only to those claims "brought in the name of the people of the State of California" by a public prosecutor. As a result, the City of Colton's argument that its claims brought on behalf of the City of Colton and its citizens is not subject to the exemption from SLAPP.
2. Conflict regarding appealability of SLAPP fee awards: Colton is now the third case on this point to rejecting Doe v. Luster (2006) 145 Cal.App.4th 139, 145-150. Doe that SLAPP fee awards are not separately appealable orders and that only the judgment for attorney's fees awarded under section 425.16(c) is appealable. Colton and the other more recent cases hold that orders granting SLAPP fee motions are separately appealable without a judgment because the fee award was made pursuant to CCP 425.16, which has an immediate appeal right.
This is a conflict that should be resolved by the California Supreme Court eventhough Wallace acknowledged that the High Court expressly approved of the Mann rule in Oasis West Realty v. Goldman (2011) 51 Cal.4th 511. The issue was presented in a different context and was not being challenged in that case.
Other conflicts created by Colton:
1. CCP 425.16(d) - Public Enforcement exception: Colton disagreed and disapproved of the City of Long Beach v. Citizens for Neighborhood Empowerment (2003) 111 Cal.App.4th 302. Colton rejected City of Long Beach's expansion of the public enforcement exmeption to claims by municipalities brought in the name of the municipality. Subd (d) expressly applies only to those claims "brought in the name of the people of the State of California" by a public prosecutor. As a result, the City of Colton's argument that its claims brought on behalf of the City of Colton and its citizens is not subject to the exemption from SLAPP.
2. Conflict regarding appealability of SLAPP fee awards: Colton is now the third case on this point to rejecting Doe v. Luster (2006) 145 Cal.App.4th 139, 145-150. Doe that SLAPP fee awards are not separately appealable orders and that only the judgment for attorney's fees awarded under section 425.16(c) is appealable. Colton and the other more recent cases hold that orders granting SLAPP fee motions are separately appealable without a judgment because the fee award was made pursuant to CCP 425.16, which has an immediate appeal right.
This is a conflict that should be resolved by the California Supreme Court eventhough Wallace acknowledged that the High Court expressly approved of the Mann rule in Oasis West Realty v. Goldman (2011) 51 Cal.4th 511. The issue was presented in a different context and was not being challenged in that case.
Sunday, May 27, 2012
Abuse of Anti-SLAPP motions/Appeals met with Sanctions and State Bar Report
In prior blogs, I have commented at length on the controversy among various Courts of Appeal regarding the perceived abuses of the anti-SLAPP procedure by defendants, in particular, the immediate appeal right set forth in CCP 425.16, subd.(i) along with the free stay that comes with the appeal under CCP 916.. In Varian Medical Systems v. Delfino (2005) 35 Cal.4th 180, our High Court noted that our Legislature has spoken by adding the immediate appeal right and broad construction provisions. Varian also observed that any Legislative solution to the problem of any perceived defense abuse of SLAPP appeals does not appear to be forthcoming. Instead, our High Court has encouraged Courts of Appeal to "expedite" any appeals from orders denying anti-SLAPP motions. In the recent SLAPP case, Personal Court Reporters, Inc. v. Gary Rand (Rand II) (filed 4/20/2012; No. B229358) 2012 DJDAR 5059, plaintiff, court reporters sued attorney Rand for breach of contract and common counts for failing to pay a $32,323.00 bill for court reporting services rendered. Rand filed an anti-SLAPP motion pursuant Code of Civil Procedure Section 425.16 arguing that because the court reporting services were performed in the course of the prior litigation and because Rand complained that the fees charged were "illegal, excessive, and unnecessary", the breach of contract arises from his prior petitioning activity. The defense said hogwash - this is a simple breach of contract action based on the act of failure to pay a bill. The court agreed and ruled that the failure to pay a bill cannot conceivably be a protected act of petition or free speech especially in light of the underlying California Back Specialists Medical Group v. Rand (Rand I) (2008) 160 Cal.App.4th 1032 [Medical providers took a lien against proceeds in a PI case where Rand was representing plaintiff. Rand obtained and enforced judgment, and disbursed the proceeds without paying off the lien holders. Medical providers sued claiming Rand failed to satisfy a valid lien. Rand filed a SLAPP motion. Court of Appeal held that cause of action arose from validity and satisfaction of liens, which were never in issue or being reviewed in the prior action.] In both cases, the court found that merely because the cause of action was "triggered" by the prior action does not mean that the liability arose from defendant's participation in that action. Following a recent trend, the Second District Division 4, sanctioned the attorney $22,000.00 in attorneys fees payable to plaintiff for filing a frivolous SLAPP appeal after the trial court had already denied the SLAPP motion and awarded sanctions for the trial court motion, which was affirmed. But in addition, the Court of Appeal reported the attorney to the State Bar. Hence, the concerns first articulated by Justice Richman in Grewal v. Jammu (2011) discussed in my prior 2012 blog on the Hecimovich v. Encinal case, regarding the perceived abuses of the anti-SLAPP procedure are being dealt with swiftly, firmly, and effectively by the appellate courts. Many Courts of Appeal are now issuing an order in every appeal from an order denying an anti-SLAPP motion asking the parties to submit to an expedited briefing schedule to ensure that the briefing process is complete within a certain period of time, usually six months. Hence, Justice Richman's cry for a wholesale repeal of the anti-SLAPP statute's immediate appeal provision set forth in section 425.16, subdivision (i) appears to be unwarranted.
Wednesday, May 9, 2012
RUTTER GROUP ANTI-SLAPP SEMINARS JUNE 2012 SF, LA, SD, OC
PLEASE JOIN ME AT THE RUTTER GROUP'S JUNE 2012 ANTI-SLAPP SEMINAR WITH MY DISTINGUISHED CO-PANELISTS, JUSTICE WILLIAM F. RYLAARSDAM, 4TH DIST./DIV. 3 COURT OF APPEAL, HON. RICHARD KRAMER, SF SUPERIOR COURT, HON. ELIZABETH ALLEN WHITE, LA SUPERIOR COURT. THOMAS R. BURKE, ESQ., DAVIS, WRIGHT, TREMAIN - SF, AND JAMES J. MONEER, ESQ. - SAN DIEGO.
THE SF SEMINAR ON 6/6 AND THE LA SEMINAR ON 6/7 WILL BE LIVE PRESENTATIONS IN THE EVENING. THERE WILL BE VIDEO REPLAYS LATER ON IN JUNE IN SAN DIEGO, SHERMAN OAKS AND COSTA MESA.
SEE WWW.SLAPPLAW.COM HOMEPAGE FOR ALL DETAILS
There has been a flood of new anti-SLAPP cases over the past three years. Every time a SLAPP motion is granted in California, there is often an angry SLAPP plaintiff/cross-complainaint who not only had their lawsuit dismissed prematurely but also gets hit with a hefty SLAPP fee award. This state of affairs has lead to an inevitable rise in legal malpractice actions against the SLAPP plantiff's former attorneys. Morever, both the plaintiff and his.her attorneys are subject to a SLAPPback malicious prosecution action under CCP 425.18.
Learn SLAPP basics and get current on recent SLAPP cases with hypotheticals and discussions from experienced judges and practicitioners so you can maximize results with your SLAPP motions, avoid pleading your client into a hefty six figure SLAPP fee award and a SLAPPback malicious prosecution action and minimize your firm's malpractice exposure. Learn how to use experts to make and oppose SLAPP fee motions and give expert testimony at trial in SLAPP malpractice cases that pays for itself many times over.
THE SF SEMINAR ON 6/6 AND THE LA SEMINAR ON 6/7 WILL BE LIVE PRESENTATIONS IN THE EVENING. THERE WILL BE VIDEO REPLAYS LATER ON IN JUNE IN SAN DIEGO, SHERMAN OAKS AND COSTA MESA.
SEE WWW.SLAPPLAW.COM HOMEPAGE FOR ALL DETAILS
There has been a flood of new anti-SLAPP cases over the past three years. Every time a SLAPP motion is granted in California, there is often an angry SLAPP plaintiff/cross-complainaint who not only had their lawsuit dismissed prematurely but also gets hit with a hefty SLAPP fee award. This state of affairs has lead to an inevitable rise in legal malpractice actions against the SLAPP plantiff's former attorneys. Morever, both the plaintiff and his.her attorneys are subject to a SLAPPback malicious prosecution action under CCP 425.18.
Learn SLAPP basics and get current on recent SLAPP cases with hypotheticals and discussions from experienced judges and practicitioners so you can maximize results with your SLAPP motions, avoid pleading your client into a hefty six figure SLAPP fee award and a SLAPPback malicious prosecution action and minimize your firm's malpractice exposure. Learn how to use experts to make and oppose SLAPP fee motions and give expert testimony at trial in SLAPP malpractice cases that pays for itself many times over.
Monday, April 16, 2012
Wang revisited: Are malicious prosecution claims based on citizen's arrest always exempt from SLAPP?
In the recent Johnson v. Ralph's Grocery Store (filed 4/5/12 No. D058312) 2011 DJDAR 4385, the court revisited Wang v. Hartunian (2003) 111 Cal.App.4th 744 regarding the issue of whether malicious prosecution claims arising from a citizen's arrest are subject to anti-SLAPP treatment under CCP 425.16. In 2003, I filed an amicus letter petitioning for Supreme Court review of the Wang decision because I believed that all malicious prosecution actions were subject to anti-SLAPP treatment on prong one and that the Wang court's rational - i.e. that Hartunian's citizen's arrest constituted "noncommunicative conduct" - is fundamentally flawed. In Wang, Hartunian called police to report Wang's violation of a restraining order on his property. When police arrived they were not convinced that Wang had committed a crime and declined to arrest him. The police asked if Hartunian wanted to make a citizen's arrest. Hartunian said he did and filled the required form for making a citizen's arrest. At this point, police merely took Wang into custody pursuant to Penal Code 847(a) and then released him thereafter. The court noted that while the police are never required to make an arrest at the request of a private citizen, they are required to take persons into custody who have been subjected to a citizen's arrest. Wang relied heavily on Drum v. Bleau, Foz & Assoc. (2003) 107 Cal.App.4th 1009 overruled by (Rusheen v. Cohen (2006) 37 Cal.4th 1048) for the proposition that Hartunian's citizen's arrest was "noncommunicative conduct" and thus neither subject to the litigation privilege of CC 47(b) nor the anti-SLAPP statute. Although Hartunian's request to take Wang into custody was clearly communicative, Hartunian had already made a citizen's arrest of Wang. Thus, the gravamen of a citizen's arrest was noncommunicative. But as we shall see, our High Court in Rusheen, supra, turned Drum and Wang on their heads. If communicative conduct to a government agency is inextricably iontertwined with noncommunicative as it is with levying on a bank account because it requires court papers to execute, then the gravamen is communicative and the activity is protected by the anti-SLAPP statute and may be subject to dismissal under the litigation privilege of CC 47(b).
The basic rule of prong one anti-SLAPP jurisprudence has not changed in light of Johnson or Wang - all malicious prosecution actions are subject to anti-SLAPP treatment under subdivisions (e)(1) and (e)(2) (SLAPPback malicious prosecutions under CCP 425.18 are subject to limited anti-SLAPP treatment) even if they are alleged to arise from a so-called "citizen's arrest". The Johnson court distinguished Wang on the ground that Wang alleged a claim for false arrest based on the allegedly wrongful citizen's arrest. But Wang also alleged causes of action for malicious prosecution and abuse of process based solely on Hartunian's citizen's arrest of Wang. See Wang, supra, 111 Cal.App.4th 749 (fn 1). But Wang completely ignored the effect of the malicious prosecution and abuse of process claims as if they were not pleaded and failed to address those claims entirely. Johnson distinguished Wang in that (1) the former did not allege a false arrest claim based on the citizen's arrest but alleged only malicious prosecution and IIED claims based thereupon; (2) even if Johnson had alleged a false arrest claim, the malicious prosecution claims would still be subject to anti-SLAPP treatment based on the allegedly wrongful criminal proeedings that had been initiated against Johnson and stricken for failure to show a probability of prevailing.; (3) In Wang, the only conduct alleged was Hartunian's allegedly wrongful citizen's arrest whereas Johnson alleged that a wrongful criminal prosecution terminated in her favor, that it was initiated without probable cause and malice by Ralph's and its employees and agents.
So what is the lesson from this morass? First, to the extent the malicious prosecution and abuse of process claims in Wang are based on the allegedly wrongful citizen's arrest, Wang is highly suspect in light of Rusheen. Secondly, all malicious prosecution and abuse of process claims are subject to anti-SLAPP treatment on prong one. In Johnson, the malicious prosecution claim was based on wrongful criminal proceedings initiated against her. In Wang, no criminal proceedings were ever initiated against Wang.
If a wrongful citizen's arrest is alleged to have resulted in wrongful proceedings, the gravamen is a malicious prosecution claim and will be treated as such and subject to anti-SLAPP scrutiny. If, however, a claim for false arrest is alleged based on a wrongful citizen's arrest as happened in Wang, I believe that under Rusheen, the false arrest or any other claim based on a wrongful citizen's arrest may be subject to anti-SLAPP treatment because a citizen's arrest necessarily involves a communication to police and an attempt to prompt government action as a matter of law even though other aspects of the arrest may be "noncommunicative" just as the act of levying on a judgment involves mixed noncommunicative and communicative acts to achieve a governmental purpose.
The basic rule of prong one anti-SLAPP jurisprudence has not changed in light of Johnson or Wang - all malicious prosecution actions are subject to anti-SLAPP treatment under subdivisions (e)(1) and (e)(2) (SLAPPback malicious prosecutions under CCP 425.18 are subject to limited anti-SLAPP treatment) even if they are alleged to arise from a so-called "citizen's arrest". The Johnson court distinguished Wang on the ground that Wang alleged a claim for false arrest based on the allegedly wrongful citizen's arrest. But Wang also alleged causes of action for malicious prosecution and abuse of process based solely on Hartunian's citizen's arrest of Wang. See Wang, supra, 111 Cal.App.4th 749 (fn 1). But Wang completely ignored the effect of the malicious prosecution and abuse of process claims as if they were not pleaded and failed to address those claims entirely. Johnson distinguished Wang in that (1) the former did not allege a false arrest claim based on the citizen's arrest but alleged only malicious prosecution and IIED claims based thereupon; (2) even if Johnson had alleged a false arrest claim, the malicious prosecution claims would still be subject to anti-SLAPP treatment based on the allegedly wrongful criminal proeedings that had been initiated against Johnson and stricken for failure to show a probability of prevailing.; (3) In Wang, the only conduct alleged was Hartunian's allegedly wrongful citizen's arrest whereas Johnson alleged that a wrongful criminal prosecution terminated in her favor, that it was initiated without probable cause and malice by Ralph's and its employees and agents.
So what is the lesson from this morass? First, to the extent the malicious prosecution and abuse of process claims in Wang are based on the allegedly wrongful citizen's arrest, Wang is highly suspect in light of Rusheen. Secondly, all malicious prosecution and abuse of process claims are subject to anti-SLAPP treatment on prong one. In Johnson, the malicious prosecution claim was based on wrongful criminal proceedings initiated against her. In Wang, no criminal proceedings were ever initiated against Wang.
If a wrongful citizen's arrest is alleged to have resulted in wrongful proceedings, the gravamen is a malicious prosecution claim and will be treated as such and subject to anti-SLAPP scrutiny. If, however, a claim for false arrest is alleged based on a wrongful citizen's arrest as happened in Wang, I believe that under Rusheen, the false arrest or any other claim based on a wrongful citizen's arrest may be subject to anti-SLAPP treatment because a citizen's arrest necessarily involves a communication to police and an attempt to prompt government action as a matter of law even though other aspects of the arrest may be "noncommunicative" just as the act of levying on a judgment involves mixed noncommunicative and communicative acts to achieve a governmental purpose.
Friday, March 9, 2012
Appealability of SLAPP orders in Federal Court under collateral order doctrine depends on state law
If you file a SLAPP motion in federal court these days and that motion is denied, do you have an immediate appeal right under the collateral order doctrine first set forth in Cohen v. Beneficial Industrial Loan Corp. (1949)? More recently, Batzel v. Smith (9th Cir. 2003) 333 F.3d 1119 was the first SLAPP case to reach the 9th Circuit, address this question, and apply the collateral order doctrine to the immediate appeal provision set forth in California's anti-SLAPP law. The 9th Circuit, however, reached an opposite conclusion in Englert v. MacDonell (2009) and held that the collateral order doctrine did not apply to Oregon's anti-SLAPP law. In Metabolic Research v. Ferrel (9th Cir 2012) 2012 DJDAR 1862, the 9th Circuit reached a similar conclusion holding that the collateral order doctrine did not make orders denying SLAPP motions under Nevada law appealable. The key to each of these decisions is the plain language of each state's respective anti-SLAPP statutes. Because California law has the biggest and baddest anti-SLAPP statute, with limited exceptions, it will be applied to pendent state law claims in federal court just as it is in California Court. Conversely, because Oregon and Nevada have more wimpy anti-SLAPP statutes that do not provide for an immediate appeal for a losing SLAPP defendant, the collateral order doctrine is not going to create an immediate appeal right in federal court.
Sunday, February 19, 2012
Yes, Defamations really can be SLAPPs - Hecimovich case Highlights Need for Immediate Appeal in SLAPP cases
The newly published Hecimovich v. Encinal School Parent Teacher Organization (2012 No. A130852) 2012 DJDAR 1901 has all the right ingredients for a textbook SLAPP suit. First, it has seven causes of action all arising essentially from the same communicative conduct regarding an alleged problem volunteer coach of a 4th grade basketball team - communications connected to an issue of public interest under subdivision (e)(4) of section 425.16 of the Code of Civil Procedure. Second, the complaint alleged claims clearly subject to anti-SLAPP treatment, each sounding in defamation without pleading any specific communications or factual assertions that were defamatory. Third, the complaint was filed by a pro per attorney against the PTA and four of its members. Finally, the trial judge determined that the gravamen of plaintiff's complaint was defamation and went on to hold that defamation cannot be a protected activity within the anti-SLAPP analysis. and denied the anti-SLAPP motion on prong one without reaching the merits on prong two. Can you guess the result? In an insightful opinion penned by Justice Richman, the First District, Division Two Court of Appeal resoundingly REVERSED.
One point worth noting is that Justice Richman in another recent case, Grewal v. Jammu (2011) 191 Cal.App.4th 977, which also discussed in the Encinal case, pointed out how defendants were abusing the automatic appeal right set forth in subdivision (i) of section 425.16 and section 904.1(a)(13) of the Code of Civil Procedure and that the Legislature should consider repealing that provision, which was first enacted as urgency legislation in October 1999 as AB 1675. A number of cases have have noted the apparent increase in meritless SLAPP appeals by losing defendants but have not gone so far as to urge a wholesale repeal of that provision. For example, our High Court in Varian Medical Systems v. Delfino (2005) 180 Cal.4th 180, 195-196 noted the vast potential for losing SLAPP defendants to abuse the automatic appeal right by filing a meritless SLAPP appeal solely for purposes of delay as the immediate appeal right comes with a free automatic stay on all trial court proceedings "embraced within the appeal" under CCP 916 as Justice Richman rightly pointed out in Grewal. But the remedy suggested by our High Court in Varian, supra, was not a Legislative one. Rather, it was a judicial remedy. While, our High Court acknowledged the potential for losing SLAPP defendants to abuse the immediate appeal right and take advantage of the free stay, the High Court noted that the Legislature has already spoken commanding a broad construction of the statute and adding the immediate appeal right. They were presumably aware of the legal effect of the appeal depriving the trial court of subject matter jurisdiction of all issues "embraced within the appeal." Thus, the Court reasoned, we can only "encourage" Courts of Appeal to resolve appeals filed by losing SLAPP defendants/cross-defendants as expeditiously as possible. Pursuant to our High Court' admonition, I have seen many Courts of Appeal, on their own motion, put such appeals on the fast track for expedited briefing and disposition. Moreover, Courts of Appeal have more frequently been awarding SLAPP fees to prevailing plaintiffs where the trial court determines that the SLAPP motion and/or SLAPP appeal was frivolous or brought solely for delay under CCP 425.16(c), which incorporates the old CCP 128.5 standard by reference with respect to awards of attorney's fees to prevailing SLAPP plaintiffs. Carpenter v. Jack-in-Box (2007) 151 Cal.App.4th 454.
In one of the first anti-SLAPP cases to be appealed under the new amendment in October 1999, I represented a defendant on a SLAPP motion that was clearly based on a newspaper article that quoted my clients version of a pending lawsuit he had against his former employer and his employer was also quoted in that same article. My client sent the article to all of the company shareholders - no one else - they were all interested in the outcome of the dispute against the company in which they all hold a direct financial stake. The complaint alleged intentional interference with contract and prospective advantage and was plainly meritless as it had no evidentiary support. We originally filed a petition for writ or mandate from the trial court order denying the SLAPP motion. The petition was summarily denied without any reasons as most writ petitions are. But a few days later, the immediate appeal right set forth in AB 1675 passed in October 1999 as urgency legislation. We appealed, obtained complete reversal as to all seven causes of action, and obtained a substantial fee award as a result. Although I see Justice Richman's point about the increased potential for losing SLAPP defendants to abuse the appeal right in recent years, given safeguards in place, I believe that the immediate appeal right along with the mandatory fee provision are fundamental to the anti-SLAPP statute's stated purpose of "encouraging" citizens to participate in matters of public significance and to deter abuse of the judicial process with meritless SLAPP suits. One reason for the immediate appeal right is to prevent unnecessary trials and discovery procedures which rack up enormous fees and take time - thereby exacerbating the chilling of the pending SLAPP suit. More importantly, it is more urgent that the Court of Appeal intervene early in the process to get it right.
The point of this digression? The Hecimovich case presents a cogent example of why the immediate appeal right is necessary in SLAPP cases, where First Amendment free speech and petition rights are being targeted by the lawsuit. First, in my 18 years of handling SLAPP cases, it has been my observation that defamation and malicious prosecution cases are the most difficult torts to analyze from a legal and factual perspective. Along with abuse of process, these two are the most complicated and least understood torts at common law. They don't teach us these torts in law school and we have only begun to teach anti-SLAPP jurisprudence to our Law students. (At least I have been teaching anti-SLAPP, malicious prosecution, and defamation law to Civil and UD Clinic students at University of San Diego School of Law since 2001). Malicious prosecution, defamation, and abuse of process are made for the Courts of Appeal. Because First Amendment rights are more fundamental than other rights and because a meritless lawsuit based on protected petition or speech activity is an evil at which the statute is aimed, it is imperative that SLAPP targets/defendants retain this immediate appeal right subject to an expedited appeal and having to pay SLAPP fees to the plaintiff for a frivolous defense SLAPP appeal.
As the Court pointed out in the Encinal case, a google search of "problem coaches in youth sports" yielded 108,000,000 hits - s subject of tremendous public interest. It now appears that google has become the standard for what is an issue of widespread public interest under subdivision (e)(4) of the anti-SLAPP statute. This is to be distinguished from the issue of public interest to a limited but defined portion of the community under subd. (e)(4) discussed in Ruiz v. Harbor View Community Association (2005) 134 Cal.App.4th 1456 discussing Damon v. Ocean Hills Journalism (2000) 85 Cal.App.4th 474.
But the obvious nature of the SLAPP suit becomes readily when one looks at the merits on prong two. None of the causes of action were sufficiently plead. Plaintiff failed to offer evidence of the allegedly defamatory communications, malice, or any of the other elements of his various contract and tort claims. Finally, plaintiff could not overcome the defendants showing as a matter of law that any assertedly illegal communications were protected by the common interest privilege of CC 47(c) as they were published only to interested members of the PTA who had control of hiring and firing of volunteer coaches like Hecimovich and produced evidence of malice.
The SLAPP 101 lesson goes back to the early cases like Wilcox v. Superior Court (1994) 27 Cal.App.4th 809, 817-824 and Dowling v. Zimmerman (2001) 85 Cal.App.4th 1400, 1415-1417 - The favored causes of action of the SLAPP plaintiff are Defamation, Intentional Infliction of Emotional Distress, fraud, intentional interference with contract or prospective advantage and various business torts. The sine qua none of a SLAPP suit is its lack of merit Add to this list, malicious prosecution and abuse of process, which are almost always subject to anti-SLAPP treatment. Jarrow Formulas v. La Marche (2003) 31 Cal.4th 728; Rusheen v. Cohen (2005) 37 Cal.4th 1048. Even breach of contract and declaratory relief claims can be SLAPP suits. Navellier v. Sletten (2002) 29 Cal.4th 82, 90-94; Equilon Enterprises LLC v. Consumer Cause (2002) 29 CAl.4th 53. It is not the label but the facts alleged as the basis for liability for each cause of action that determines whether a given cause of action may be subject to a special motion to strike on prong one.
On a final note, this is precisely the kind of case that may draw a SLAPPback malicious prosecution suit under CCP 425.18. Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260; Hutton v. Law Offices of Herbert Hafif (2007) 150 Cal.App.4th 157.
One point worth noting is that Justice Richman in another recent case, Grewal v. Jammu (2011) 191 Cal.App.4th 977, which also discussed in the Encinal case, pointed out how defendants were abusing the automatic appeal right set forth in subdivision (i) of section 425.16 and section 904.1(a)(13) of the Code of Civil Procedure and that the Legislature should consider repealing that provision, which was first enacted as urgency legislation in October 1999 as AB 1675. A number of cases have have noted the apparent increase in meritless SLAPP appeals by losing defendants but have not gone so far as to urge a wholesale repeal of that provision. For example, our High Court in Varian Medical Systems v. Delfino (2005) 180 Cal.4th 180, 195-196 noted the vast potential for losing SLAPP defendants to abuse the automatic appeal right by filing a meritless SLAPP appeal solely for purposes of delay as the immediate appeal right comes with a free automatic stay on all trial court proceedings "embraced within the appeal" under CCP 916 as Justice Richman rightly pointed out in Grewal. But the remedy suggested by our High Court in Varian, supra, was not a Legislative one. Rather, it was a judicial remedy. While, our High Court acknowledged the potential for losing SLAPP defendants to abuse the immediate appeal right and take advantage of the free stay, the High Court noted that the Legislature has already spoken commanding a broad construction of the statute and adding the immediate appeal right. They were presumably aware of the legal effect of the appeal depriving the trial court of subject matter jurisdiction of all issues "embraced within the appeal." Thus, the Court reasoned, we can only "encourage" Courts of Appeal to resolve appeals filed by losing SLAPP defendants/cross-defendants as expeditiously as possible. Pursuant to our High Court' admonition, I have seen many Courts of Appeal, on their own motion, put such appeals on the fast track for expedited briefing and disposition. Moreover, Courts of Appeal have more frequently been awarding SLAPP fees to prevailing plaintiffs where the trial court determines that the SLAPP motion and/or SLAPP appeal was frivolous or brought solely for delay under CCP 425.16(c), which incorporates the old CCP 128.5 standard by reference with respect to awards of attorney's fees to prevailing SLAPP plaintiffs. Carpenter v. Jack-in-Box (2007) 151 Cal.App.4th 454.
In one of the first anti-SLAPP cases to be appealed under the new amendment in October 1999, I represented a defendant on a SLAPP motion that was clearly based on a newspaper article that quoted my clients version of a pending lawsuit he had against his former employer and his employer was also quoted in that same article. My client sent the article to all of the company shareholders - no one else - they were all interested in the outcome of the dispute against the company in which they all hold a direct financial stake. The complaint alleged intentional interference with contract and prospective advantage and was plainly meritless as it had no evidentiary support. We originally filed a petition for writ or mandate from the trial court order denying the SLAPP motion. The petition was summarily denied without any reasons as most writ petitions are. But a few days later, the immediate appeal right set forth in AB 1675 passed in October 1999 as urgency legislation. We appealed, obtained complete reversal as to all seven causes of action, and obtained a substantial fee award as a result. Although I see Justice Richman's point about the increased potential for losing SLAPP defendants to abuse the appeal right in recent years, given safeguards in place, I believe that the immediate appeal right along with the mandatory fee provision are fundamental to the anti-SLAPP statute's stated purpose of "encouraging" citizens to participate in matters of public significance and to deter abuse of the judicial process with meritless SLAPP suits. One reason for the immediate appeal right is to prevent unnecessary trials and discovery procedures which rack up enormous fees and take time - thereby exacerbating the chilling of the pending SLAPP suit. More importantly, it is more urgent that the Court of Appeal intervene early in the process to get it right.
The point of this digression? The Hecimovich case presents a cogent example of why the immediate appeal right is necessary in SLAPP cases, where First Amendment free speech and petition rights are being targeted by the lawsuit. First, in my 18 years of handling SLAPP cases, it has been my observation that defamation and malicious prosecution cases are the most difficult torts to analyze from a legal and factual perspective. Along with abuse of process, these two are the most complicated and least understood torts at common law. They don't teach us these torts in law school and we have only begun to teach anti-SLAPP jurisprudence to our Law students. (At least I have been teaching anti-SLAPP, malicious prosecution, and defamation law to Civil and UD Clinic students at University of San Diego School of Law since 2001). Malicious prosecution, defamation, and abuse of process are made for the Courts of Appeal. Because First Amendment rights are more fundamental than other rights and because a meritless lawsuit based on protected petition or speech activity is an evil at which the statute is aimed, it is imperative that SLAPP targets/defendants retain this immediate appeal right subject to an expedited appeal and having to pay SLAPP fees to the plaintiff for a frivolous defense SLAPP appeal.
As the Court pointed out in the Encinal case, a google search of "problem coaches in youth sports" yielded 108,000,000 hits - s subject of tremendous public interest. It now appears that google has become the standard for what is an issue of widespread public interest under subdivision (e)(4) of the anti-SLAPP statute. This is to be distinguished from the issue of public interest to a limited but defined portion of the community under subd. (e)(4) discussed in Ruiz v. Harbor View Community Association (2005) 134 Cal.App.4th 1456 discussing Damon v. Ocean Hills Journalism (2000) 85 Cal.App.4th 474.
But the obvious nature of the SLAPP suit becomes readily when one looks at the merits on prong two. None of the causes of action were sufficiently plead. Plaintiff failed to offer evidence of the allegedly defamatory communications, malice, or any of the other elements of his various contract and tort claims. Finally, plaintiff could not overcome the defendants showing as a matter of law that any assertedly illegal communications were protected by the common interest privilege of CC 47(c) as they were published only to interested members of the PTA who had control of hiring and firing of volunteer coaches like Hecimovich and produced evidence of malice.
The SLAPP 101 lesson goes back to the early cases like Wilcox v. Superior Court (1994) 27 Cal.App.4th 809, 817-824 and Dowling v. Zimmerman (2001) 85 Cal.App.4th 1400, 1415-1417 - The favored causes of action of the SLAPP plaintiff are Defamation, Intentional Infliction of Emotional Distress, fraud, intentional interference with contract or prospective advantage and various business torts. The sine qua none of a SLAPP suit is its lack of merit Add to this list, malicious prosecution and abuse of process, which are almost always subject to anti-SLAPP treatment. Jarrow Formulas v. La Marche (2003) 31 Cal.4th 728; Rusheen v. Cohen (2005) 37 Cal.4th 1048. Even breach of contract and declaratory relief claims can be SLAPP suits. Navellier v. Sletten (2002) 29 Cal.4th 82, 90-94; Equilon Enterprises LLC v. Consumer Cause (2002) 29 CAl.4th 53. It is not the label but the facts alleged as the basis for liability for each cause of action that determines whether a given cause of action may be subject to a special motion to strike on prong one.
On a final note, this is precisely the kind of case that may draw a SLAPPback malicious prosecution suit under CCP 425.18. Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260; Hutton v. Law Offices of Herbert Hafif (2007) 150 Cal.App.4th 157.
Monday, January 30, 2012
Libel Suit Based On YouTube Video not a SLAPP
The San Francisco Recorder published an article on 1/27/12 about a recent unpublished SLAPP case Brain Research Labs LLC (BRL) v. Thomas Howard Clarke, et al. (filed 1/26/12 No. A127544) from the First Dist. Div. 3. In BRL, Clarke a lawyer published a nine minute video on Youtube whose purpose was to solicit potential clients for a class action against BRL, the maker of Procera alleging that Procera is a dangerous and ineffective supplement and that BRL's claims about Procera are false and illegal. Hence, the solicitation of potential clients for a class action for false advertising, inter alia. In the video, the Court noted a number of libelous statements. Also, attorney Clarke and his client were interviewed in a short segment on KTVU about the case. Each of these communications formed the basis of BRL's libel and intentional interference action, inter alia. The attorney, defendant Clarke, filed an anti-SLAPP motion pursuant to CCP 425.16. As to prong one, the Court also determined that the commercial speech exemption under CCP 425.17(c) does not apply under the recent High Court ruling in Simpson-Strong-Tie Co. v. Gore (2010) 49 Cal.4th 12, 22. The Court reasoned per Simpson that because Clarke's statements in the video and KTVU segment were about BRL and Procera and not about Clarke's goods or services. Hence, the commercial speech exemption under CCP 425.17(c) did not apply.
Accordingly, the court found that the statements in the video about Procera and BRL concerned a matter of significant public interest as the public has an interest in consumer information and the burden shifted to BRL to show a probability of prevailing.
As to prong two, the court revisited the recent controversy over the application of the Mann rule, which holds that the plaintiff need only prove up any part of its claim and need not prove up all counts or theories within a single cause of action to prevail on prong two of a SLAPP motion. Mann v. Quality Old Time Service (2004) 120 Cal.App.4th 90, 106. The BRL Court noted the High Court's recent decision in Oasis West Realty v. Goldman (2011) 51 Cal.4th 811, 820-821, which recently applied and reaffirmed the Mann rule despite recent criticism of the Mann rule in Wallace v. McCubbin (2011) 196 Cal.App.4th 1169, 1195-1212 and Justice Jones disagreeing with majority on Mann rule pp. 1216-1220. (See my previous blog on the Mann rule controversy fall 2011 for a thorough discussion).
The defense asserted the litigation privilege of CC 47(b) and common interest privilege of CC 47(c). The Court rejected each of these defenses based primarily on the Rothman v. Jackson (1996) 49 Cal.App.4th 1134, a great read for libel cases where attorneys seek to litigate in the press. In order to be privileged under CC 47(b), the communication "must function intrinsically, and apart from any consideration of the speaker's intent, to advance a litigant's case, i.e. the litigant's ability obtain the remedies which can be awarded by courts."
The crux of defendant's argument is that the Youtube video as a whole is an attorney solicitation of client's for a potential class action suit in the future. But the court found that "there is no evidence in the record that defendants contemplated in good faith , and seriously considered filing, any litigation other than the Rotenberg action" (the main underlying action pending against BRL). "Accordingly, whether the Youtube video is privileged depends solely on its functional connection to the Rotenberg action."
Under the well-settled Nguyen v. Proton Technologies (1999) 69 Cal.App.4th 140, 142-143, 148, 150-152, the court found that even if the Youtube video as a whole is categorized as an attorney solicitation, not all of the individual statements made within the video are protected by the litigation privilege. Because the statements in the Youtube video did not focus solely on Procera but also discussed on other supplements made by BRL and other manufacturers that had no nexus to the Rotenberg action.
The video and the statements within it were overbroad and exceeded the scope of issues necessary to advance the objectives of the Rotenberg action.
More importantly, under Rothman, supra, publishing the video on Youtube made it accessible to the general public and could be accessed by anyone, regardless of whether he or she had a potential claim or interest in participating in the litigation. Hence, the publication of the attorneys solicitation was "excessive."
Similar reasoning applies to the CC 47(c) common interest privilege.
As a result, the Court affirmed the trial court order denying the SLAPP motion as to BRL's claims.
In my opinion, this case is a great read because it covers a host of well-established litigation and common interest privilege cases while addressing many recent SLAPP cases regarding the mixed cause of action analysis on prong one, the commercial speech exemption of CCP 425.17(c), and the Mann rule on prong two.
I have represented many SLAPP defendants as well as plaintiffs in libel actions as well as many attorney defendants in malicious prosection and abuse of process claims where the various privileges have been raised. Contrary to the opinions of some of the attorneys quoted in the S.F. Recorder article, I do not see any real cutting-edge issues in the BRL case other than the application of well-established litigation privilege cases (primarily Rothman and Nguyen v. Proton) to a 21st century medium of the internet. I do not see any real distinction between a settlement demand letter in Proton and the Youttube video. Nor do I see a distinction between the excessive publication i.e. "litigating in the press" in Rothman and the Youtube video or the KTVU interview of Clarke here. Either way the analysis is the same.
Your comments are welcome!!!
Accordingly, the court found that the statements in the video about Procera and BRL concerned a matter of significant public interest as the public has an interest in consumer information and the burden shifted to BRL to show a probability of prevailing.
As to prong two, the court revisited the recent controversy over the application of the Mann rule, which holds that the plaintiff need only prove up any part of its claim and need not prove up all counts or theories within a single cause of action to prevail on prong two of a SLAPP motion. Mann v. Quality Old Time Service (2004) 120 Cal.App.4th 90, 106. The BRL Court noted the High Court's recent decision in Oasis West Realty v. Goldman (2011) 51 Cal.4th 811, 820-821, which recently applied and reaffirmed the Mann rule despite recent criticism of the Mann rule in Wallace v. McCubbin (2011) 196 Cal.App.4th 1169, 1195-1212 and Justice Jones disagreeing with majority on Mann rule pp. 1216-1220. (See my previous blog on the Mann rule controversy fall 2011 for a thorough discussion).
The defense asserted the litigation privilege of CC 47(b) and common interest privilege of CC 47(c). The Court rejected each of these defenses based primarily on the Rothman v. Jackson (1996) 49 Cal.App.4th 1134, a great read for libel cases where attorneys seek to litigate in the press. In order to be privileged under CC 47(b), the communication "must function intrinsically, and apart from any consideration of the speaker's intent, to advance a litigant's case, i.e. the litigant's ability obtain the remedies which can be awarded by courts."
The crux of defendant's argument is that the Youtube video as a whole is an attorney solicitation of client's for a potential class action suit in the future. But the court found that "there is no evidence in the record that defendants contemplated in good faith , and seriously considered filing, any litigation other than the Rotenberg action" (the main underlying action pending against BRL). "Accordingly, whether the Youtube video is privileged depends solely on its functional connection to the Rotenberg action."
Under the well-settled Nguyen v. Proton Technologies (1999) 69 Cal.App.4th 140, 142-143, 148, 150-152, the court found that even if the Youtube video as a whole is categorized as an attorney solicitation, not all of the individual statements made within the video are protected by the litigation privilege. Because the statements in the Youtube video did not focus solely on Procera but also discussed on other supplements made by BRL and other manufacturers that had no nexus to the Rotenberg action.
The video and the statements within it were overbroad and exceeded the scope of issues necessary to advance the objectives of the Rotenberg action.
More importantly, under Rothman, supra, publishing the video on Youtube made it accessible to the general public and could be accessed by anyone, regardless of whether he or she had a potential claim or interest in participating in the litigation. Hence, the publication of the attorneys solicitation was "excessive."
Similar reasoning applies to the CC 47(c) common interest privilege.
As a result, the Court affirmed the trial court order denying the SLAPP motion as to BRL's claims.
In my opinion, this case is a great read because it covers a host of well-established litigation and common interest privilege cases while addressing many recent SLAPP cases regarding the mixed cause of action analysis on prong one, the commercial speech exemption of CCP 425.17(c), and the Mann rule on prong two.
I have represented many SLAPP defendants as well as plaintiffs in libel actions as well as many attorney defendants in malicious prosection and abuse of process claims where the various privileges have been raised. Contrary to the opinions of some of the attorneys quoted in the S.F. Recorder article, I do not see any real cutting-edge issues in the BRL case other than the application of well-established litigation privilege cases (primarily Rothman and Nguyen v. Proton) to a 21st century medium of the internet. I do not see any real distinction between a settlement demand letter in Proton and the Youttube video. Nor do I see a distinction between the excessive publication i.e. "litigating in the press" in Rothman and the Youtube video or the KTVU interview of Clarke here. Either way the analysis is the same.
Your comments are welcome!!!
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