Recent Cases

Suing Someone for Suing Will Almost Always be a SLAPP

Anti-SLAPP attorney
I’ve been writing about SLAPP actions and anti-SLAPP motions for so long that I start to believe that surely by now attorneys must be aware of what constitutes a SLAPP. Apparently not.

When a client wants me to get defamatory content removed from the Internet, they normally ask me to send a cease and desist letter. Normally, I refuse. Most attorneys will happily take the client’s money and send a cease and desist letter, but I have seen hundreds of such letters, brought to me by clients asking me to do something about the defamation after another attorney sent an unsuccessful cease and desist letter. Long ago I learned that cease and desist letters are very ineffective. Often, the defamer will even post the letter as a badge of honor, to show that he succeeded in getting the victim’s goat, to the point that he retained counsel.

I think the reason cease and desist letters are so ineffectual is because they are perceived as toothless threats. In most instances, the defamer will ignore the letter and sit back and wait to see if the victim is really willing to pursue the matter in court. But if you send that cease and desist letter along with the complaint, giving the defamer five days to comply, they become very effective. Now he knows that the victim has already taken the time and expense to have the attorney draft the complaint, and is ready to pull the trigger.

So I followed this draft complaint approach for a client who had terrible things published about him on multiple blogs, and I could not believe how the defamer’s attorney responded. When the defamer did not comply within the five day deadline, we filed and served the complaint, and the defamer’s attorney responded with an answer and cross-complaint. The attorney brought an action for the emotional distress his client was suffering as a result of my demand letter, the draft complaint and the subsequent legal action.

This was the quintessential SLAPP, but there was a problem. The cross-complaint was so poorly drafted, I worried that if I filed the anti-SLAPP motion it might fail just because we could not determine exactly what the defamer was suing for. I needed the defamer’s attorney to better state his SLAPP, so I demurred to the cross-complaint pointing to the lack of specificity in the allegations.

The defamer’s attorney fell into the trap. Not only did he amend the cross-complaint to make very clear that cross-complainant was suing for the emotional distress he suffered from the demand letter and draft complaint, he added a new cause of action for abuse of process. Follow this logic. He contended that since my demand letter and draft complaint were sent to the defamer with the intent to make him take down the defamatory posts, the complaint was only then filed because he refused to do so. Therefore, the defamer’s attorney reasoned, the complaint was filed for an improper purpose. Instead of seeking damages, the complaint was seeking to have the defamatory comments removed, and therefore was an abuse of process. (The complaint did, of course, seek damages, but counsel contended that since the cease and desist letter had not demanded damages, then the complaint was not really intended to recover damages.) You can’t make this stuff up.

Now the cross-complaint was ripe for an anti-SLAPP motion. In opposition to my motion, defense counsel argued that the facts were identical to Flatley v. Mauro, where an attorney’s demand letter was found not to be protected by the litigation privilege because it amounted to extortion. One problem though – the cease and desist letter did not ask for any money. Thus, defense counsel was arguing that my cease and desist letter was extortion even though it did not ask for money, and the subsequent complaint was an abuse of process because the cease and desist letter had not asked for money. Talk about damned if you do, damned if you don’t.

Of course the court granted the anti-SLAPP, and the attorney moved to be relieved, leaving the client to fight the motion for attorney fees in pro per. Wow. It was an interesting motion to draft, because I did not need to say one word about the falsity of the statements published by the defamer. The first prong of the SLAPP analysis was easily met because the cross-complaint dealt with my client’s seeking redress, and the second prong was equally automatically met since the cross-complainant could never show a likelihood of succeeding because his action was barred by the litigation privilege.

Yes, some SLAPPs can be harder to spot than others, but to all attorneys, if you find yourself preparing a cross-complaint based on the fact that someone sued your client, that’s probably a SLAPP. Malicious prosecution is still a viable cause of action, but only after having successfully defended the original action, and only then if all the elements can be met.

Peer Review Process for Doctors is a Protected Activity Under SLAPP Statute

Anti-SLAPP Motion against doctor
The California Court of Appeal just ruled that I know what I’m talking about when it comes to SLAPP law, and that I have saved many doctors from filing actions that would have been met with successful anti-SLAPP motions and thereby cost them many thousands of dollars, paying the other side’s attorney fees.

OK, the Court didn’t actually mention me by name, but that’s the way I read it. You see, most doctors (depending on their practice) want and need medical privileges at one or more hospitals. Without those privileges, their practices are really crippled. So when a hospital decides to revoke those privileges, it is a big deal for the doctor.

Following the revocation, the doctors want to do something, anything, to pressure the hospital’s board to reinstate the privileges. That often brings them to my door, wanting to sue for defamation, claiming that someone said something that cost them their privileges, and that they suffered damages as a result.

I have always refused such cases, because I am of the opinion that under normal circumstances, the entire medical peer review process qualifies as an official proceeding. Therefore, it falls under both the anti-SLAPP statute and the absolute privileges of Civil Code section 47. No matter how you try to plead the action, it will come back to the fact that the decision to fire the doctor was a protected activity.

Leading us to the case of radiologist John Nesson versus Northern Inyo County Local Hospital District. Read the rest of this entry »

Defamation Action Victory by Steve Wynn Against Joe Francis

Defamation by Joe Francis

Defamation Case Victory for Steve Wynn

Joe Francis is infamous as the creator of the “Girls Gone Wild” video series. He is unprecedented in his ability to sabotage his life.Can you say, “self-destructive behavior”?

The most recent example came down today in the form of a $7.5 million damage award against Francis and in favor of Steve Wynn and Wynn Las Vegas. This part is speculation, but I’m guessing that he lost some money at Wynn’s casino (he did, in fact, run up a $2 million debt to the resort, but I don’t know if that was from gambling), and convinced himself that the casino was cheating him. Back to the facts, he began telling tales of how Wynn deceives his high-end customers.

Wynn didn’t like the implication that he was a cheater, and sued Francis for defamation way back in 2008. That litigation finally concluded yesterday, with the judge determining that Wynn had suffered five million in compensatory damages, and also awarded $2.5 million in punitive damages.

Defamation actions are not only about the money. You clear your name through a defamation action by putting the claims on trial. In other words, Francis claimed Wynn was a cheat, Wynn said he wasn’t, and the trial determines who is telling the truth. Therefore, Steve Wynn now has a judicial determination that the claims by Joe Francis were false. If Wynn’s attorneys did their jobs, they should have also obtained an injunction preventing Francis from ever again claiming Wynn cheated him. (That’s what I always do here in California, but Nevada could have different laws in that regard.) By creating that order, Francis can be held in contempt and put in jail if he continues to tell his tales.

This $7.5 million judgment is on top of the $2 million plus interest and fees Francis already owes to Wynn Las Vegas as determined by the Nevada District Court in 2009.

The typical response by a defamation defendant under these circumstances will be to appeal, probably claiming that he could not put on a proper defense because the court denied his outrageous discovery requests or something.

Australian Defamation Case Illustrates Life Without the CDA

Internet Defamation on Twitter

"That J-Lo, she be crazy!"

I have frequently written here on the pros and cons of the Communications Decency Act (“CDA”). Without it, no website could permit comments, but by the same token it allows unscrupulous website operators to encourage defamatory postings, and then use those postings to extort payments from the victims.

Because of the latter reality, many have suggested to me that they would like to see the CDA abolished. But a case out of Australia demonstrates just how ridiculous things get without the CDA.

Those Australians are people of few words, so I had to read a number of news accounts to piece together what had occurred. A blogger by the name of Marieke Hardy apparently picked up an anonymous on-line bully. For undisclosed reasons, Hardy decided that she had determined the identity of her mystery bully, so she posted the following comment on Twitter:

“I name and shame my ‘anonymous’ internet bully. Liberating business! Join me.”

The “tweet” then provided a link back to her blog, and there on the blog she identified Joshua Meggitt as the bully. Problem was, Meggitt was not the bully.

Meggitt sued for defamation. Hardy settled with him, allegedly for around $15,000. But Meggitt wants more. Meggitt is suing Twitter for defamation for the tweet by Hardy.

Do you see how absurd things quickly become without the CDA? If Twitter is responsible for every comment, then to avoid defamation it would have to put a delay on all comments, and hire thousands of employees to review the comments. As each comment passed in front of the reviewer, he or she would need to make a quick decision about whether that comment could possibly be defamatory, and only then clear it for publication.

I want you to imagine that scenario. You are one of the Twitter reviewers. Thankfully Twitter limits each tweet to 140 characters, so there is not much to review, but you must apply your best judgment to each comment to see if anyone could be offended. So up pops the following:

“That J-Lo. She be crazy.”

Do you hit the approve or disapprove button? Was the “crazy” comment meant in a good or bad sense? Even if the person making the comment meant only that the singer Jennifer Lopez is crazy good, if you approve the comment then every person in the world who goes by the name J-Lo could potentially sue for defamation, claiming that the post accuses them of having mental problems.

But the dispute between Hardy and Meggitt takes the scenario to an even more absurd level. Applying those facts to our hypothetical, what you really received was:

“That J-Lo. http://tinyurl.com/48y28m7″

What do you do with THAT?! Twitter requires you to review and approve or deny 120 tweets per hour. To keep your job you only have less than 30 seconds to make a decision. You quickly click on the link to see why J-Lo is crazy, and you are confronted with a four and a half minute video! Do you have to watch the entire video to make sure it contains nothing defamatory? You don’t have time for that. REJECTED!

And here, all the tweeter wanted to do was pass along a great video by J-Lo.

Under the best possible circumstances, Twitter would be relegated to approving only the most milk toast comments with no possible defamatory implication. In reality though, Twitter could not possibly exist if it could be held liable for every comment posted.

To all of you who just responded with a resounding, “Who cares about Twitter?”, that’s not really the point. I’m talking big picture here.

It will be very interesting to see how the courts in Australia handle this case.

Anonymous Blogger Turns Case International, and Results in Anti-SLAPP Motion

International Anti-SLAPP MotionAn international defamation action has ended up here in California. Out of the UK, Tyneside councillors (that’s the way they spell it over there) are very upset that an anonymous blogger who calls himself “Mr. Monkey” has been defaming them.

The council has backed a three-year hunt to discover the identity of Mr. Monkey, with the legal fees now exceeding six figures. So far, since they did not retain Morris & Stone, the attempts to uncover the identity of Mr. Monkey have been unsuccessful.

Enter Coun Ahmed Khan, a councillor from a rival political party. The four plaintiff councillors successfully moved to have Khan’s personal computer records disclosed, because they apparently suspected him of being Mr. Monkey. Khan denies that he is the primate in question, but has cried “enough is enough,” and wants to put an end to the search.

To that end, he brought what I can only characterize as an offensive anti-SLAPP motion (not offensive as in crude, but as in the opposite of defensive). He intervened in the San Mateo Superior Court action and filed an anti-SLAPP motion, asserting that even though he is not Mr. Monkey, the comments of Mr. Monkey are protected and the action should therefore be dismissed.

Motion DENIED. Indeed, the court found the motion to be so frivolous that it awarded attorney fees of £40,000 to the plaintiffs. (I once obtained a judgment in Los Angeles Superior Court in British pounds. It’s worth it just to see the court clerks try to figure out how to enter it into the system and calculate interest and the like.)

Khan has now appealed the denial of his anti-SLAPP motion and the award of attorney fees.

Sending Demand Letter Out of State Can be Problematic

Anti-SLAPP Motion by Attorney

How Matabolic views the case

The case of Metabolic Research, Inc. v. Scott J. Ferrell, et al. is turning out to be a fascinating case on several levels, including liability considerations for attorneys and SLAPP issues. Briefly, here are the facts as set forth in a recent opinion of the Ninth Circuit Court of Appeals.

Scott J. Ferrell is an attorney practicing in Orange County, California. He apparently believes that a supplement being made by Metabolic and sold by GNC (Stemulite) is bad stuff. To that end, he sent demand letters to Metabolic and GNC in Pennsylvania and Nevada, accusing them of violating the California Consumer Legal Remedies Act by way of false advertising, and threatening to sue them (presumably in California)* if they did not stop their (allegedly) evil ways and agree to an injunction to that effect.

In California, Ferrell’s letter would likely have been determined to be part of the litigation process and therefore protected, UNLESS it was deemed to be extortion. (See Flately v. Mauro.) In California, the issue would have proved very interesting, because while Ferrell was not demanding any money, the hallmark of true extortion, the injunction he was demanding was so onerous – including a requirement that all profits be disgorged – that Metabolic claimed it would have put it out of business. Nonetheless, in California it might have been decided that the letters did not cross the line, and Ferrell would have been safe from suit.

But Ferrell’s letters were sent outside of California. In November 2009 Metabolic filed a lawsuit in Nevada State Court against Ferrell, charging extortion and racketeering based on his demand letter. Ferrell removed the case to Federal Court (I never would have done that for the reasons that follow), and then brought a motion to dismiss based upon Nevada’s anti-SLAPP statute, claiming that the lawsuit amounted to a SLAPP because it was suing him for engaging in litigation.

Motion DENIED. The District Court found that “Nevada’s anti-SLAPP legislation only protected communications made directly to a governmental agency and did not protect a demand letter sent to a potential defendant in litigation.” Again, as would be appropriate in California but not necessarily elsewhere, Ferrell took an immediate appeal.

Appeal DENIED. Federal courts do not like interlocutory appeals, and will find a way to reject them. The court did an in-depth review of Nevada’s anti-SLAPP statute, and concluded there was no right of immediate review of a denial of an anti-SLAPP motion. The court referred to this as a “run of the mill anti-SLAPP motion” (ouch), and held that a District Court judge affords sufficient safeguards to protect defendants from SLAPP actions without the added protection of an immediate appeal. However, to twist the knife a little, the Ninth Circuit threw in that Ferrell could have proceeded by way of a writ of mandamus, and that it was offering “no opinion on how we might have decided” such an application had it been pursued.

Lesson 1: Consider that when you send a demand letter out of State, you may be subjecting yourself to an action in that jurisdiction.

Lesson 2: (And I have seen this over and over) Don’t remove a case to Federal court just because you can. The motion may well have been decided the same way in State court, but I would not have wanted it decided there.

* That’s not me presuming, the court opinion used those words.

District of Columbia Struggling With Anti-SLAPP Law

The District of Columbia instituted an anti-SLAPP procedure back in March but the judges are having a heck of a time figuring it out. (Don’t feel bad D.C., California has had a SLAPP statute since 1992, and some judges still don’t get it.)

Judge Rufus G. King III of the D.C. Superior Court got it right. A local television station did a report on the ridiculous amounts of overtime that was being paid to certain government officials. In one reported case of a fire department Lieutenant, his annual salary was $90,000 but he had earned as much as $119,000 in overtime pay one year.

That Lieutenant took exception with the fact that the news story had used terms like “racked up” and “month after month”, claiming those statements were defamatory. His attorney apparently failed to explain or he refused to understand that only the “gist” of the statement need be true in order to defeat a defamation action, so he filed a defamation action against the television station, and the station quite properly brought an anti-SLAPP motion.

Judge King ruled that the report was a matter of public interest and therefore fell under the anti-SLAPP statute, and that the Lieutenant failed to demonstrate a likelihood that he could establish damages. Motion GRANTED, case DISMISSED. Good job D.C.

But then there was Judge Richard Leon. You may recall that a U.S. Department of Agriculture official named Shirley Sherrod left her job after a video was released, seemingly showing her confessing to discriminating against white farmers. It later came to light that the comments were arguably taken out of context due to the editing of the video. Sherrod didn’t appreciate that, and sued blogger Andres Breitbart, among others, asserting in her complaint that the “deceptively edited” clip constituted defamation. Breitbart responded by bringing an anti-SLAPP motion, asserting that the posting of the clip was an act of protected speech.

Sure sounds like a SLAPP to me, but Judge Leon denied the motion out-of-hand with only a two sentence order. The U.S. Court of Appeals for the D.C. Circuit was stumped by that one as well, and today ordered Judge Leon to explain himself.

Less than a week ago, Judge Robert L. Wilkins out of the U.S. District Court for the District of Columbia was not nearly as concise as Judge Leon, and issued a 55-page opinion denying an anti-SLAPP motion, finding “that the special motion to dismiss procedure under the Anti-SLAPP Act does not apply to a federal court sitting in diversity.”

 

An Emotional Distress Claim Should Not Be Undertaken Lightly

Woman in business suit holding stress mug.

The case of Mallard v. Progressive Choice Ins. Co. beautifully illustrates a point I discuss with all clients who want to make an emotional distress claim, while at the same time illustrating an important SLAPP rule of law.

Sometimes I will get a call from a potential client within minutes after they were fired. They want to sue for wrongful termination and they want to sue NOW!

But 15 minutes after an employee has been fired, what are the damages? When I ask the caller that question, they answer, “I was fired!” Yes, but what are your damages? “I was fired!”

Rather than to go on all day in this fashion, I explain. Damages are something you can put a dollar sign in front of. Being fired is not a damage, although obviously it can CAUSE damages. But 15 minutes after a termination, an ethical attorney should explain that there are no real damages at that point.

If the employee was making, say, $25 an hour, and they were fired two hours before their shift ended, then the damages at that moment they are calling me are $50, at least in terms of lost wages. But let’s carry it out a little. Let’s assume for our hypothetical that the employee had seen the writing on the wall and had already sent out some feelers for a new job before the axe fell. She makes a few calls, and a week later she starts a new job with the same title that pays $30 per hour with better benefits. What are her damages then?

Well, she went a week without being paid, so she lost $1,000 in wages. Her old employer should at least cut her a check for $1,000, right? But wait a second. Because of the termination, she will made $10,000 more for the year than if she hadn’t been fired. Fair’s fair. If you thought her employer should pay her for what she lost as a result of the termination, then it is only fair that she should pay to the employer the money she gained as a result of the termination, right?

I’m speaking tongue in cheek of course, but I want you to think in terms of the real damage to our terminated employee. Last week I discussed all the damages that flow from a wrongful termination, and if you look at that list, assuming our employee did not suffer any setback to her career track, then there are no real damages.

“But what about emotional distress damages?”, the caller asks. That’s a valid question. If your employer wrongfully terminated you, you might have suffered some emotional distress damages. Again, an ethical attorney then needs to explain what you open yourself up to when you claim emotional distress.

Which leads us to today’s case review.

Progressive Insurance issued an automobile insurance policy to Winly Mallard. She was involved in an auto accident, and her medical expenses exceeded the policy limits, so she proceeded under her insurance policy’s uninsured motorist claim because the driver of the other car involved in the accident did not have liability insurance.

A quick aside here. All the commercials you see with the helpful insurance agents are bull. Yes, you will be fine if you are in an accident that involves only property damages and perhaps some minor medical expenses, but if you ask for anything challenging, the insurance company will fight your coverage.

That was what happened to Winly Mallard. An attorney by the name of Rivers J. Morrell III was retained by Progressive with regard to Mallard’s claim. Morrell propounded form interrogatories to Mallard on Progressive’s behalf. In addition to listing her injuries to her neck and back, Mallard also stated that she had difficulty sleeping, and suffered “[s]hock” and “[n]ervous anxiety.” In addition, she stated she was pursuing a claim for loss of earning capacity.

There it is. Just like a wrongfully terminated employee who wants to assert emotional distress, Mallard had put at issue her mental health. Is she having trouble sleeping because of the accident and/or injuries, or is there something else that could be troubling her? Morrell wanted to know, so her mental health records were subpoenaed from health care providers identified in her verified responses.

Understandably, Mallard felt very invaded. She filed a complaint alleging claims for invasion of privacy and abuse of process against Morrell and Progressive, based on the act of subpoenaing third parties to obtain Mallard’s mental health records. Mallard served only Morrell with the complaint.

Morrell filed an anti-SLAPP motion to strike the complaint, which was opposed by Mallard. The trial court granted the anti-SLAPP motion and ordered the complaint dismissed with prejudice as to both defendants. Mallard appealed.

The trial court granted Morrell’s motion for attorney fees and costs, awarding him $13,756.64 in attorney fees and costs under section 425.16, subdivision (c). Mallard appealed, but the Court of Appeal agreed that the action against the attorney was a SLAPP, and upheld the judgment.

Morals of this story: A determination of an insured’s uninsured motorist coverage is always by way of an arbitration. Apparently Mallard’s attorney thought that an arbitration would not fall under the right of redress aspect of the anti-SLAPP statute, but he was wrong. As I discussed here, the standard is very broad – even a trial in Zimbabwe is considered an official proceeding.

Second, clients must be made aware that making an emotional distress claim leaves them open to very intrusive questions and discovery. That does not by any means mean that it is never appropriate to assert such a claim, but it should only be done after much consideration.

Even Nuns Defame; Credibility Key to Any Trial

"Notre Dame des Anges" an 1889 painting by William-Adolphe Bouguereau. (Provided photo) / AL
The report of this defamation caught my eye because of the parties involved. There is a standard joke among attorneys, that if you find yourself suing widows, orphans or nuns, your practice has probably taken a bad turn. In this case, nuns were being sued for defamation.

It started when the nuns decided to sell an old painting they had laying around. The painting was in really bad shape, not even worth hanging, but it turned out to be by a well regarded artist, William-Adolphe Bouguereau. So the nuns had it appraised by an art dealer named Mark LaSalle. Based on his appraisal, the nuns agreed to sell the painting to Mark Zaplin for $450,000. Zaplin had the painting restored to its former glory, a fact that I think is crucial to this case, and turned around and sold it for $2.15 million, netting a tidy little profit.

The nuns sued LaSalle and Zaplin under a number of theories, claiming that Zaplin had been a straw buyer, and that LaSalle was working in concert with Zaplin and had conned the Daughters of Mary by intentionally under-appraising the painting in order to buy it at a bargain price. The two Marks counter-sued for defamation, because the nuns had made these same claims to the media. (In case you’re new here, you can never sue for defamation for things said in conjunction with a lawsuit, since those statements are privileged, but you can sue if the same statements are made to the media.)

Here is the part I find interesting and the main reason for this article. The nuns had a witness. An art dealer by the name of Paul Dumont claimed to know both LaSalle and Zaplin, and testified that LaSalle had told him that they could “make a handsome profit by giving the sisters a low appraisal value of between $350,000 and $450,000 and presenting a buyer who would pay the amount of our deliberate and intentionally inaccurate appraisal.” He claimed that LaSalle had asked him to find a “money man” who would act as a straw buyer.

Wow. Pretty strong stuff. So the nuns must have won, right? Actually, they went down in flames (can I say that about nuns?). A New York jury found against them on all of their claims, and instead awarded LaSalle $250,000 for defamation against Dumont and a church Bishop, and awarded Zaplin $75,000 against Dumont for defamation. LaSalle will also recover punitive damages.

But how can that happen with a witness who is specifically corroborating the story of the fraudulent appraisal and straw buyer? And therein lies the moral of this story. Read the rest of this entry »

Gloating Over $5,000 Settlement Costs Parents $234,011.87

Canadian Teacher, eh?
Some callers to my office, wanting to sue for defamation because someone said terrible, false and hurtful things about them, are disappointed to learn that they cannot seek legal action because the speech falls under a privilege. By definition, “privileged” speech can never be defamatory, and therefore cannot support a defamation action.

Examples? Speaking at a City Council meeting, testifying in court, or filing a police report – all privileged speech. (There are of course exceptions to every rule of law, but my New Year’s resolution was to write shorter articles.) So, if someone trashes you from the witness stand in court, there is nothing you can do about it from a defamation standpoint. (Although the person could be criminally liable for perjury. Sorry, couldn’t let that one go.)

“BUT,” I tell the caller, “if the person steps out of court and makes the same statements, you have them.”

I ran across this case out of Canada that so beautifully illustrates the point, eh. A teacher allegedly says terrible things about a student in front of the class. Parents sue. On the day of trial, parents agree to settle for $5,000 with no admission of wrongdoing by the teacher.

But then they felt compelled to gloat. The walked out to waiting media, and said: “She’s a marked lady and before she makes any more unprofessional moves, she’ll have to think twice.”

Wait a second parents, you just agreed that there was no admission of liability, so how is she marked or unprofessional?  Now it was the teacher’s turn to be miffed. The teacher sued, and a court awarded $234,011.87. The parents appealed, but the appeal court not only upheld the verdict, it added insult to injury by spotting an error in the trial court’s math, and added $552. Ouch.

The parents could have said the exact same thing INSIDE the courtroom, and the media could have reported those statements, and the parents would have been fine. But when they left the courtroom, they stepped out of the defamation immunity bubble and got nailed.

Aaron Morris, Attorney
Aaron Morris
Morris & Stone, LLP

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