A great anti-SLAPP decision that has been five years in the making. In this podcast, we discuss the case of Makaeff v. Trump University, which contains an outstanding discussion of limited public figures and meeting the standard for showing actual malice. Here are the facts:
Between August 2008 and June 2009, Tarla Makaeff attended approximately seven real estate investing and finance seminars, workshops, and classes hosted by Trump University and spent a total of approximately $60,000 on the programs. Although Trump University asserted Makaeff was satisfied with the services Trump University provided to her, noting that Makaeff frequently provided excellent reviews of the programs, Makaeff stated the Trump University programs she attended were unsatisfactory. Specifically, Makaeff alleged the programs were shorter than advertised, she was provided only a toll-free telephone number instead of a one-year mentorship of “expert, interactive support,” and her Trump University mentors were largely unavailable and offered no practical advice when she did speak with them.
In addition, Makaeff alleged she was told by Trump University staff to raise her credit card limits to purchase real estate, but once she did, she was pressured by Trump University staff to instead use her elevated credit to purchase the Trump Gold Elite seminar for $34,995. Makaeff also claimed she was told by Trump University staff that her first real estate transaction after signing up for the Trump Gold Elite program would earn her approximately the amount she spent on the Trump Gold Elite program, which it did not. Additionally, Makaeff alleged Trump University instructed her to engage in illegal real estate practices, such as posting advertising “bandit signs” on the sides of roadways. On June 18, 2009, Makaeff received a letter from the Orange County District Attorney’s Office informing her that posting bandit signs in California without lawful permission could subject her to fines, a misdemeanor charge, and up to six months in jail.
Makaeff brought a class action lawsuit against Trump University on April 30, 2010. On May 26, 2010, Trump University filed a defamation counterclaim against Makaeff, alleging Makaeff “published statements to third parties about Trump University orally, in writing and on the Internet that are per se defamatory, including many completely spurious accusations of actual crimes.” Trump University alleged Makaeff’s defamatory statements were a substantial factor in causing actual and significant economic damages amounting to or exceeding $1,000,000. Madaeff responded with an anti-SLAPP motion, which was originally denied, but on appeal the Ninth Circuit determined that Trump University was a limited public figure, and send the case back to the District Court for a determination as to whether Trump University could still state a prima facie case, given the higher “actual malice” standard.
How was the case decided? Listen to the podcast to find out.
Cases discussed in the podcast (in bold), taken from the opinion:
To prove actual malice, a defamation plaintiff must show by clear and convincing evidence that the defendant knew her statements were false at the time she made them, or that she acted with reckless disregard of the truth or falsity of the statements made. Gertz v. Robert Welch, Inc., 418 U.S. 323, 328, 94 S. Ct. 2997, 41 L. Ed. 2d 789 (1974). The clear and convincing standard “requires that the evidence be such as to command the unhesitating assent of every reasonable mind.” Rosenaur v. Scherer, 88 Cal. App. 4th 260, 105 Cal. Rptr. 2d 674, 684 (Ct. App. 2001). “A defamation plaintiff may rely on inferences drawn from circumstantial evidence to show actual malice.” Christian Research Inst. v. Alnor, 148 Cal. App. 4th 71, 55 Cal. Rptr. 3d 600, 612 (Ct. App. 2007) (citing Reader’s Digest Assn v. Superior Ct., 37 Cal. 3d 244, 208 Cal. Rptr. 137, 145-46, 690 P.2d 610 (1984)).
Actual malice is a subjective standard. See St. Amant v. Thompson, 390 U.S. 727, 731, 88 S. Ct. 1323, 20 L. Ed. 2d 262 (1968). “[R]eckless conduct is not measured by whether a reasonably prudent man would have published, or would have investigated before publishing. There must be sufficient evidence to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of [her] publication.” Id.
Actual malice “has nothing to do with bad motive or ill will,” and “may not be inferred alone from evidence of personal spite, ill will or intention to injure on the part of the writer.” Harte-Hanks Commc’ns, Inc. v. Connaughton, 491 U.S. 657, 666 n.7, 109 S. Ct. 2678, 105 L. Ed. 2d 562 (1989). However, in appropriate cases, factors such as “[a] failure to investigate, anger and hostility toward the plaintiff, reliance upon sources known to be unreliable, or known to be biased against the plaintiff . . . may . . . indicate that the publisher [herself] had serious doubts regarding the truth of [her] publication.” Reader’s Digest, 208 Cal. Rptr. at 145-46 (citations omitted).
Trump University claims this case is similar to Nguyen-Lam v. Cao, 171 Cal. App. 4th 858, 90 Cal. Rptr. 3d 205 (2009), in which the California Court of Appeals upheld a trial court’s conclusion that malice could be inferred “where, for example, a story is fabricated by the defendant, is the product of his imagination, or is based wholly on an unverified anonymous telephone call.” Id. at 869 (citing Christian Research Institute v. Alnor, 148 Cal. App. 4th 71, 85, 55 Cal. Rptr. 3d 600 (2007)) (internal quotation marks omitted). Trump University argues Makaeff, like the defamation defendant in Nguyen-Lam, “has no ‘place to go for her belief’ that Trump University illegally took the property of anyone, stole anyone’s identity, or opened any credit card without approval.” (Dkt. No. 300 at 15-16.)
The Court finds Nguyen-Lam distinguishable from the present matter. In that case, the California Court of Appeals considered a defamation defendant who had learned about the defamation plaintiff, then a candidate for a public position, only through media reports yet accused her of being a Communist. 171 Cal. App. 4th at 868-69. The evidence in Nguyen-Lam indicated the defamation defendant had no personal knowledge of the defamation outside of the media reports, none of which had mentioned Communism, and thus had no basis for his claim that the defamation plaintiff was in fact a Communist. Id. at 869.
Trump University points to evidence of Makaeff’s anger and hostility toward Trump University, as well as a motive to get a refund, as evidence of actual malice. (Dkt. No. 300 at 17) (citing Christian Research Institute v. Alnor, 148 Cal. App. 4th 71, 84-85, 55 Cal. Rptr. 3d 600 (2007) (“anger and hostility toward the plaintiff . . . may, in an appropriate case, indicate that the publisher himself had serious doubts regarding the truth of his publication”); Harte-Hanks Commc’ns, Inc., 491 U.S. 657, 669, 109 S. Ct. 2678, 105 L. Ed. 2d 562 (“it cannot be said that evidence concerning motive or care never bears any relation to the actual malice inquiry”); Widener v. Pacific Gas & Elec. Co., 75 Cal. App. 3d 415, 436, 142 Cal. Rptr. 304 (1977) (finding an engineer’s motive of wanting to suppress the making of a film and his anger with the film’s producer “sufficient evidence from which the jury could have found that [the engineer] knew [his libelous statement about the producer] was false, or was recklessly indifferent as to whether his statement was accurate or not”)).